Great Western Bank v. Kong – Case Brief Summary (California)

In Great Western Bank v. Kong (2001) 90 Cal.App.4th 28, the court held:

"The assignee partners do not acquire the assignor's rights with respect to the judgment. Rather, the assignment of a joint and several debt to one or more of the co-obligors extinguishes that debt." (Ibid.)

The court explained the assignment of a joint and several debt to a co-obligor extinguishes that debt because the assignment amounts to payment, and the evidence of the debt, i.e., the note or judgment, becomes of no further effect. (Id. at p. 32.)

This rule only applies where the co-obligors share primary liability. (Id. at pp. 32-33.)

There is no question, "The surety or guarantor can maintain an action on the original obligation against the party primarily liable for its payment." (Ibid.)