London & San Francisco Bank, Ltd. v. Parrott

Citations

• 125 Cal. 472
• 58 P. 164
• 1899 Cal. LEXIS 885

Syllabus

<p>Banks—Letter of Credit and Guaranty—Notice.—A written instrument requesting a bank to give continued credit to a third party in a specified amount and continually guaranteeing the payment of the original and future credits, and the continuance or renewal of liability therefor, to the extent of such specified amount, in proportionate sums by the subscribers, is both a letter of credit within sections 2858 and 2865 of the Civil Code, and an absolute guaranty within section 2795 of that code; and the subscribers are not entitled to notice of the credits and liabilities thereafter given or incurred, nor to notice of the acceptance of the guaranty.</p> <p>Id.—Construction of Code—Communication of Consent—Absolute Guaranty—General and Specific Provisions—Conflict. The general provisions of section 1565 of the Civil Code, in the title on contracts, requiring the consent of parties to a contract to be “communicated by each to the other,” have no application to the special contract of absolute guaranty to another person of the debt or default of a third person, provided for in the separate title upon guaranty; but the conflicting provision of section 20.75 in the latter title, dispensing with notice of the acceptance of an absolute guaranty, must control upon that subject.</p> <p>Id.—Liability of Gbantoe— Construction of Guaranty—The rule that a guarantor is entitled to stand upon the strict terms of his contract, imports merely that his liability is not to be extended by implication beyond its terms as ascertained by the same rules of construction which apply to other written instruments.</p> <p>Id.—Reasonable Intebpbetation—Ambiguity of Teems—The language used by the guarantor is to receive a fair and reasonable interpretation to effect the objects and purpose of the guaranty; and if it is fairly susceptible of tw'o interpretations, • either of which is within the spirit of the guaranty, the guarantor cannot say the guarantee was not justified in acting upon either, or