STEINBERG, ADMIN. v. Gonzales

Henderson, J., delivered the opinion of the Court. This appeal is from a judgment for $4,826.95 entered by the court in an action tried without a jury upon a guaranty. The guarantor contends that the court erred in overruling a demurrer to the amended declaration, and that the proof was fatally defective in that it did not show any effort on the part of the appellee to collect the sums due from the primary obligors. On September 9, 1955, the appellee entered into a mutual release and settlement agreement with Raphael H. Poiley and Rosal Metal Products Manufacturing Company, Inc. (Rosal), reciting that Gonzales and Poiley were the holders of the outstanding stock of Rosal, each to the extent of 50%, and that Gonzales had made certain claims against Poiley arising out of Poiley’s use of the corporate funds.

The terms of the agreement were that Poiley should pay Gonzales $15,000.00 in cash, the sum of $6,150.00 within twelve months in quarterly installments of $1,537.50 each, and $1,500.00 to Mr. and Mrs. Schaeffer on account of a mortgage held by them on the home of Gonzales. It was stated in explanation of the last item, that the mortgage had been executed by Gonzales in 1952 for the benefit of Rosal, in the amount of $5,000.00, a balance of $3,800.00 being due thereon at the date of the ¹⁰³ agreement, of which $1,500.00 had been received by Rosal, but that there was a dispute as to whether the balance of $2,300.00 had been so received. The parties agreed that Gonzales should only have to pay $2,300.00 on the mortgage, and Poiley should bear one-half of that amount. It was agreed that “Gonzales shall never have to pay interest on any amount of principal in excess of the Eleven Hundred ($1150.00) and Fifty Dollars.” Poiley’s undertaking to pay $1,150.00 was included in the sum of $6,150.00 above mentioned.

In consideration of these undertakings Gonzales agreed to assign his stock to Poiley and to release him and the corporation from all claims, provided he should receive a satisfactory guaranty for the payment of the $6,150.00. Rosal signed as a co-promisor of Poiley’s undertakings, and agreed to sign promissory notes for that sum, along with Poiley, and to cause the Schaeffers to execute a release of mortgage to the extent of $1,500.00. Attached to this agreement, which was witnessed by Meyer Steinberg, attorney for Poiley and Rosal, was a guaranty executed by Steinberg reading in part: “I * * * do hereby personally guarantee the payment of the Six Thousand One Hundred Fifty Dollars ($6,150.00) which is to be paid by Raphael H. Poiley and Rosal Metal Products Mfg. Co., Inc., within twelve (12) months from the date hereof * * * on the following dates: December 9, 1955; March 9, 1956; June 9, 1956; and September 9, 1956.” In a separate guaranty he further personally guaranteed that the mortgage “shall not be foreclosed * * * as long as Raymond Gonzales pays thereon the sum of Twenty-Three Hundred ($2,300.00) Dollars, one-half (½) of which is included in the above guarantee of Six Thousand, One Hundred and Fifty ($6,150.00) Dollars; * * * .” The declaration alleged that the guaranty was unconditional, and that the first of the four payments was made when it fell due but the other three were not.

It alleged demands upon the primary