Lutz v. Gatlin

The defendant, Howard Gatlin, appeals from a judgment holding him liable as a guarantor on a $4,000 promissory note payable to the plaintiff, Dr. Walter Lutz.

On March 10, 1972, Dr. Lutz loaned $4,000 to Design Specialties, Inc. (Design) for 90 days. Design was a Washington corporation in which Mr. Gatlin held a one-third interest. Design was the sole owner of Centaur Inn of Eureka (Centaur), a California corporation. The note was not paid when due. On September 5, 1972, Dr. Lutz agreed to surrender the promissory note to Design in exchange for a promise to assign a 5 percent equity interest…