Appellee lenders sued appellant guarantor for breach of an agreement to repurchase two of three lots that were pledged by a debtor as security for a loan. When the debtor defaulted, the lenders bought the parcels and demanded that the guarantor repurchase them as had been agreed. After the Superior Court of Los Angeles County (California) denied specific performance but held that the lenders were entitled to money damages, the guarantor appealed.
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Lenders and a debtor agreed that loan repayment would be secured by deeds of trust on three parcels. The debtor drafted a repurchase agreement providing that he would buy the property back from the lenders in the event they ended up owning it through foreclosure, and the guarantor provided similar assurances. The debtor defaulted and the lenders bought two of the three parcels but did not buy the third parcel, based on the guarantor’s assurance that he would “take care of it.” When the lenders demanded that the guarantor repurchase the parcels, he refused. They sued for specific performance, which was denied, but they were granted money damages. The guarantor appealed but the court affirmed. It ruled that while the lenders’ purchase of all three parcels was a condition precedent to the obligation to repurchase, the guarantor had waived his right to insist on satisfaction of the condition precedent. The court also affirmed the lower court’s disposition of the guarantor’s usury defense, agreeing that the lenders’ claim was an action on a contract, not to enforce a note, and because the guarantor was not a party to the allegedly usurious note, he could not attack it.
Finding that all conditions precedent to the guarantor’s obligation either were satisfied or were waived, the court affirmed the judgment of the lower court that the lenders were entitled to money damages for the guarantor’s breach of a contract under which he agreed to repurchase certain property.