170 P. 407 | Cal. | 1918
A.G. Spalding appealed from a judgment whereby he was held liable upon a contract of guaranty regarding two of four certain notes therein specified. Pending appeal Mr. Spalding died and the executrix of his last will, Elizabeth Churchill Spalding, has been substituted as appellant.
It appears from the evidence that C.L. Hyde and Jess Knight were the managing stockholders of a corporation known as Knight and Hyde Mining Company. They applied to the president of the respondent corporation for a loan. He refused to loan money upon the note of the corporation, but agreed to furnish credit up to ten thousand dollars upon the execution and delivery of four notes, for two thousand five hundred dollars each, signed respectively by C.L. Hyde, Jess Knight, Mary Hyde, and Lillie J. Knight (the two latter being the wives respectively of the men of like surnames), provided A.G. Spalding would guarantee the payment of these obligations. The consideration for these notes was not *219 to pass to the makers but to the Mining Company. Mr. Spalding was interested in the success of the Mining Company, — whether as a stockholder or a pledgee of stock as collateral for loans does not clearly appear. The cashier of respondent bank prepared four notes and a contract of guaranty. These were taken to San Diego from Redondo and the last-named instrument was signed by Mr. Spalding. There is a conflict of testimony regarding the question whether or not he inspected copies of the notes before signing the said contract, but it is conceded by appellant that under our rule we must assume the court's decision upon this matter was an adoption of the testimony to the effect that he did examine the copies. The notes and guaranty all bore date of December 24, 1909. The guaranty was as follows:
"Redondo, Cal., Dec. 24, 1909.
"For value received, I hereby guarantee to First National Bank of Redondo, California, the payment of certain promissory notes amounting to Ten Thousand dollars ($10,000.00) in favor of the First National Bank of Redondo, California, signed by the following persons, to wit:
"Jess Knight .................. $2500.00 "C.L. Hyde .................... 2500.00 "Lillie J. Knight ............. 2500.00 "Mary Hyde .................... 2500.00
"Due one day after date and bearing interest at the rate of eight (8) per cent per annum, with all costs of collection including reasonable attorney's fees, and authorize extensions of time to maker, and same shall not affect my liability.
"Demand, notice of nonpayment and protest waived.
"A.G. SPALDING."
Each note was a duplicate of the other three except the signature, and was a promise to pay one day after date the principal sum with interest at the rate of eight per cent per annum from date until maturity, and from maturity at the rate of one per cent per month. Each contained the following sentence: "Should suit be commenced, or an attorney employed, to enforce the payment of this note, I agree to pay five per cent on amount unpaid as attorney's fees. Principal and interest payable in gold coin of the United States."
The court found that on December 24, 1909, and prior to the acceptance of the notes by plaintiff, Mr. Spalding guaranteed their payment; and that all of the notes except that *220 executed by Mr. Knight were after the date thereof delivered to and accepted by plaintiff. New notes were subsequently executed by Mary E. Hyde and Jess Knight, providing for ten per cent on the amount unpaid, instead of five per cent as in the originals, for attorney's fees, but as the judgment was in favor of defendant regarding the alleged guaranty of the payment of these two notes we need not be greatly concerned with them on this appeal.
It was found that the notes were deposited with the Knight and Hyde Mining Company after December 24, 1909, to be delivered by it to plaintiff with request that their dates be changed to correspond with the times when the consideration should pass from plaintiff to the Knight and Hyde Mining Company, and that pursuant to said request plaintiff altered the dates, the two notes involved in this appeal being redated as follows: The note signed by Lillie J. Knight January 13, 1910, and that signed by C.L. Hyde February 16, 1910. The court further found that the only authority or right for said alterations "so far as the defendant is concerned was and is the provision in said contract of guaranty wherein said defendant authorized the plaintiff to give the makers of said notes extension of time and that such extension should not affect his liability."
Appellant's first contention is that the notes described in the guaranty are not substantially the same as those actually executed. The guarantor specified notes bearing interest at eight per cent, but those actually signed being one-day notes, bore interest at eight per cent for only a day and thereafter at a higher rate. The notes specified a certain percentage of any unpaid balance as attorney's fee; the contract of guaranty a "reasonable" fee. The notes provide for payment in gold coin of the United States, while the guaranty does not so specify. Further, appellant interprets the contract as applying to the four notes as one obligation and not to each individually. Appellant insists that all of these differences are substantial and exonerate the guarantor.
None of these objections is valid. While it is true that contracts of this sort may not be varied by parol, it is always competent, nevertheless, to consider the circumstances of their execution in learning the intent of the guarantor. The fact that Mr. Spalding had copies of these very notes before him when he signed the contract of guaranty makes this just *221
the sort of an agreement that we would have to interpret if the guaranty were indorsed upon the notes themselves. The contract referred in terms to the notes. It did not purport to set them out in all of their parts, the language clearly being not designed to limit the scope of the guaranty but to describe the notes. The guaranty should not be construed separately from the notes, but the instruments should be read together in the light of surrounding circumstances so that the true intention of the parties may be ascertained. (Civ. Code, secs. 1642, 1647;First Nat. Bank of Redlands v. Bowers,
The only other question requiring decision is whether or not the change in the date of the two notes signed by Mrs. Knight and Mr. Hyde amounted to such material alteration as to excuse the guarantor from performance of his expressed obligation. The authorization given by Mr. Spalding for extensions of time to the maker of each note, such extensions not to affect his liability, was in the broadest and most unequivocal language. If under it, new notes had been executed after the originals had been long in the possession of the plaintiff after delivery, he would have been in no position to complain, for it is well settled that the taking of a renewal note does not exempt the principal or the guarantor except upon agreement that such will be the effect of the new writing. (London andSan Francisco Bank v. Parrott, supra; Brown v. Olmsted,
No other matters discussed in the briefs require analysis or comment.
The judgment is affirmed.
Wilbur, J., and Victor E. Shaw, J., pro tem., concurred.