5 P.2d 956 | Cal. Ct. App. | 1931
THE COURT.
This action was brought by the Bank of Italy Trust and Savings Association (hereinafter referred to as the bank) against Claude R. King, as temporary receiver for Thomas Day Company, a corporation, and Whitman Symmes, who is the appellant here. It was based on two promissory notes, both negotiable in form, executed by the corporation to the bank. One note, dated November 5, 1925, was for the principal sum of $15,000, and the other, dated December 17, 1927, was for the sum of $6,000. Before their delivery to the bank appellant wrote on the back of each instrument the following:
"For value received I hereby guarantee payment of the within obligation and all renewals or extensions thereof, and I hereby waive presentation, demand, protest, notice of protest and notice of nonpayment.
"WHITMAN SYMMES." *718
Prior to the commencement of the action the sum of $1,000 was paid on the latter note, leaving a total of $20,000 of principal and interest unpaid on both instruments. [1] Receiver King was appointed as such by the United States District Court of the Northern District of California, and the bank filed with him a claim for the amounts unpaid on the notes. The claim was rejected, whereupon the above court granted the bank leave to sue thereon.
In such a case no personal judgment could properly be awarded against the receiver, who is not personally liable, but only against him in his official capacity, to be paid in the due course of the administration of his trust (Painter v.Painter,
Both appellant and the receiver set up in their answers certain transactions which were alleged to entitle them to credits on the notes in suit. Before the trial the bank entered into a stipulation with the receiver which read as follows: "For and in consideration of the allowance of the claim of the Bank of Italy National Trust and Savings Association against the receiver of the Thomas Day Company in the sum of seventeen thousand five hundred ($17,500.00) dollars, in which amount said receiver agrees to allow said claim, said Bank of Italy National Trust and Savings Association hereby agrees to dismiss as against said receiver the above entitled and numbered action. . . . Said Bank of Italy National Trust and Savings Association hereby expressly reserves its right of recourse against Whitman Symmes, one of the defendants in said action, said Whitman Symmes being an endorser on the note which is the subject of said action; and this stipulation to dismiss the above action as to said receiver is not to affect said suit against said Whitman Symmes in any way whatsoever."
Following this a dismissal was filed, which reads as follows: "The above cause of action having been fully settled as to defendant Claude R. King, receiver, is hereby dismissed as to said defendant Claude R. King. This dismissal does not in any respect affect said action as against defendant Whitman Symmes."
By a supplemental answer filed by appellant it was alleged that the above stipulation and dismissal operated to exonerate him from all liability on the notes. *719
The court found that there should be credited on the notes the sum of $3,064.59, the net amount realized by the bank from the sale of certain property on June 20, 1928, with interest thereon in the sum of $428.06, a total of $3,493.55. It further appears that the receiver subsequent to the dismissal paid to the bank on account of the claim $1750, of which $1653.35 was applied as interest and $96.65 upon the principal. The court accordingly allowed the latter sum as an additional credit, the total credits as found being $3,590.20.
Notwithstanding its findings as above the court entered judgment against appellant for $17,500, and as grounds for the appeal it is contended that appellant was a guarantor merely, and that the court erred in its conclusion that the effect of the stipulation and dismissal was not to exonerate him, and that the judgment in the respects above mentioned is not supported by the findings.
[2] Section
We think it sufficiently appears that appellant intended to be bound as a guarantor and not as an indorser. But, however this may be, section 3266a of the Civil Code provides that "the person primarily liable on an instrument is the person who by the terms of the instrument is absolutely required to pay the same; all other parties are secondarily liable". And, according to section
[3] In this connection it appears to be well settled that the remedy against a guarantor, depending, as it does, upon a separate contract and not on the terms of the instrument, is not primary but secondary (8 Cor. Jur., Bills and Notes, sec. 113, p. 72; Northern State Bank v. Bellamy, supra; Briscol v.American Southern Trust Co.,
[4] In view of the above it seems that regardless of whether appellant was a guarantor or an indorser, or assumed the obligations of both, the fact that plaintiff expressly reserved the right to proceed against him would bring the case within the provisions of section
Appellant contends, however, that the provisions of section
It was the object of the Negotiable Instruments Law (Civ. Code, sec.
[6] The purpose of the act being as stated and section
[7] There is still another reason for sustaining the conclusion of the trial court. If it be assumed that section
Plaintiff concedes that contrary to the findings appellant was not allowed in the judgment the full amount of the credits, and consents that the judgment be modified by deducting this difference. The judgment is accordingly modified by deducting therefrom the sum of $1090.20, and as so modified is affirmed. It is further ordered that each party bear his own costs of appeal.
A petition for a rehearing of this cause was denied by the District Court of Appeal on December 31, 1931, and an application by appellant to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court on January 28, 1932. *723