(Instn. No. 103, citing Brunswick Corp. v. Hays (1971) 16 Cal.App.3d 134 [ 93 Cal.Rptr. 635]; see infra and Cal. U. Com. Code, §§ 9105, subd. (1)(d) and 9507, subd. (1).) Are the Limited Partners Entitled to the Protections of Section 9504 as "Debtors"?

The average lawyer would naturally suppose that any ambiguities would be construed against the party who selected the language, who normally is the lender. Cathay Bank, however, cites us to two cases ( Brunswick Corp. v. Hays (1971) 16 Cal.App.3d 134 [ 93 Cal.Rptr. 635], and Berg Metals Corp. v. Wilson (1959) 170 Cal.App.2d 559 [ 339 P.2d 869]) which indicate otherwise. Each of these cases contains a quotation to the effect that ambiguities in guaranty contracts are interpreted against guarantors.

. . ." ( Brunswick Corp. v. Hays (1971) 16 Cal.App.3d 134, 138 [ 93 Cal.Rptr. 635]; see also Wiener v. Van Winkle (1969) 273 Cal.App.2d 774, 786 [ 78 Cal.Rptr. 761].) Even assuming for the sake of analysis that the JPA funds were in fact true insurance rather than self-insurance, Colonial cites no case treating the creditor's own purchase of loss insurance as "security" for the performance of the principal's obligation.

"The obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; and if in its terms it exceeds it, it is reducible in proportion to the principal obligation." (Civ. Code, § 2809; see Brunswick Corp. v. Hays (1971) 16 Cal.App.3d 134 [ 93 Cal.Rptr. 635].) Accordingly, if the judgment against Gonshor has not been satisfied, the court may consider staying execution pending outcome of further proceedings against Hospitality.

Sections 2845 and 2849 have often been found to have been waived by language contained in documents. (See, e.g., Brunswick Corp. v. Hays (1971) 16 Cal.App.3d 134, 138 [ 93 Cal.Rptr. 635]; Wiener v. Van Winkle (1969) 273 Cal.App.2d 774, 786-787 [ 78 Cal.Rptr. 761]; Engelman v. Bookasta (1968) 264 Cal.App.2d 915, 916-917 [ 71 Cal.Rptr. 120]; American Guaranty Corp. v. Stoody (1964) 230 Cal.App.2d 390, 396 [ 41 Cal.Rptr. 69].) Sections 2845 and 2849 generally provide a surety with the right to require a creditor to proceed first against the debtor or to pursue any other remedy the surety could not pursue and also entitle the surety to the benefit of all security held by the creditor for performance of the debtor's obligation.

"Thus, the obligation of . . . a surety is identical to that of the principal debtor." ( Brunswick Corp. v. Hays (1971) 16 Cal.App.3d 134, 137 [ 93 Cal.Rptr. 635] .) "[A]nd where judgment has been entered against the principal a greater amount may not be recovered from the surety in a subsequent action brought against him [citations]." ( State Ath. Com. v. Mass. Bonding etc. Co. (1941) 46 Cal.App.2d 823, 827 [ 117 P.2d 75].)

( United States, etc. v. Kurtz (E.D.Pa. 1981) 525 F. Supp. 734, 745-746, affd. (3d Cir. 1982) 688 F.2d 827, cert. den. sub. nom., Kurtz v. United States, etc. (1982) 459 U.S. 991 [74 L.Ed.2d 387, 103 S.Ct. 347].) Kurtz concluded that a guarantor could therefore waive the protections which otherwise might be afforded by section 9504, subdivision (3), of the California Uniform Commercial Code. (At p. 746, citing Brunswick Corp. v. Hays (1971) 16 Cal.App.3d 134, 138 [ 93 Cal.Rptr. 635], and Wiener v. Van Winkle (1969) 273 Cal.App.2d 774, 787 [ 78 Cal.Rptr. 761]; see also Union Bank v. Ross (1976) 54 Cal.App.3d 290, 294 [ 126 Cal.Rptr. 646]; American Security Bank v. Clarno (1984) 151 Cal.App.3d 874, 882 [ 199 Cal.Rptr. 127].) We believe Kurtz correctly decided the waiver issue.

We need not consider whether the substantive liability of a surety is in fact coextensive with that of the principal (see Mortgage Finance Corp. v. Howard (1962) 210 Cal.App.2d 569, 572 [ 26 Cal.Rptr. 917] ), or whether the situation is controlled by Civil Code section 2809 which provides only that the obligation of the surety may be no more burdensome than that of the principal. (See U.S. Leasing Corp. v. duPont (1968) 69 Cal.2d 275, 290 [ 70 Cal.Rptr. 393, 444 P.2d 65]; Brunswick Corp. v. Hays (1971) 16 Cal.App.3d 134, 137 [ 93 Cal.Rptr. 635].) If we assume that Hartford's obligation as surety was coextensive with that of Bentley, the principal in a suretyship situation, nevertheless Hartford's rights of subrogation are in no way diminished.

Under basic suretyship law, a surety's obligations cannot be more burdensome than those of its principal, and "where the principal is not liable on the obligation, neither is the guarantor." United States Leasing Corp. v. duPont, 69 Cal.2d 275, 444 P.2d 65, 75, 70 Cal.Rptr. 393, 403 (1968); Brunswick Corp. v. Hays, 16 Cal.App.3d 134, 138, 93 Cal.Rptr. 635, 637 (1971); Cal.Civ.Code § 2809 (West 1974). In the case of a construction bond, a surety is liable when a principal has defaulted on the contract. Balboa Ins. Co. v. United States, 775 F.2d 1158, 1161 (Fed. Cir. 1985); Pacific Employers Ins. Co. v. City of Berkeley, 158 Cal.App.3d 145, 152, 204 Cal.Rptr. 387, 390 (1984).

For in Kurtz, Judge Becker endeavors to ascertain what the California courts would hold if the same question were presented. In addition to surveying a number of circuit court decisions involving SBA loans, the Kurtz court noted "the willingness of the California courts to allow guarantors to waive Civil Code protection of their security interests," citing Brunswick Corp. v. Hays, 16 Cal.App.3d 134, 93 Cal.Rptr. 635 (Ct.App. 1971); Wiener v. Van Winkle, 273 Cal.App.2d 774, 78 Cal.Rptr. 761 (Ct.App. 1969). 525 F. Supp. at 746.