298 P. 100 | Cal. Ct. App. | 1931
The plaintiffs had judgment against the defendants in the court below, from which judgment the defendants appeal upon the judgment-roll alone.
The record shows that on or about July 1, 1926, the appellants and respondents executed and delivered their promissory note for $900 to the Bank of America, at its office in Grass Valley, California. On or about the seventeenth day of January, 1930, the respondents herein paid to said bank the sum of $939.69, being the balance of principal and interest then due and unpaid on said note. The bank, upon receiving payment, indorsed upon the note the words "without recourse", and delivered the note thus indorsed to the respondents. Thereafter, the respondents brought this action, and judgment was entered in their favor as above stated.
The contention of the appellants is that this action, based upon the promissory note referred to, cannot be maintained. *359 By reason of the contention advanced upon this appeal and our views hereinafter expressed, it is necessary to set out the complaint in full, which is in the words and figures following, to wit:
"Plaintiffs complain of defendants and for cause of action allege:
"`$900.00 Grass Valley, California, "`July 1st, 1926.
"`In U.S. Gold Coin.
"`Six months after date (without grace), for value received in United States Gold Coin, we or either of us promise to pay to the order of the Bank of America of California, successor to Nevada County Bank, at its office in Grass Valley, California, the sum of Nine Hundred Dollars ____ with interest thereon at the rate of seven (7) per centum, per annum from date until paid, principal and interest payable in United States Gold Coin only; said interest payable quarterly, and if not paid as it becomes due, to be added to the principal and become a part thereof, and to bear interest at the same rate. And in case said interest, or any part thereof, is not paid within ten days after same shall become due, the whole of said principal sum shall forthwith become due and payable at the election of the holder of this note.
"`(Signed) ROY J. KING, "`BESSIE L.H. KING, "`T.M. HARRIS, "`D.E. MATTESON.
"`No. 7208 Due ____. "`U.C.'
"Wherefore, plaintiffs pray judgment against said defendants for the said sum of $939.69, in lawful money of the United States, with interest thereon at the rate of 7% per annum from the 17th day of January, 1930; and for such other and further relief as is meet in the premises.
"NILON, HENNESSY KELLY, "Attorneys for Plaintiffs, "Grass Valley, California."
The findings and conclusions of the court include twenty-two paragraphs, but may be summarized as follows: That the plaintiffs and defendants made and delivered to the bank the promissory note set out in the complaint; that plaintiffs received no compensation therefor, but the same was an accommodation note on the part of said plaintiffs; that the defendants negotiated the note before maturity; that the defendants did not pay said note at maturity, and plaintiffs were compelled to, and did, on the seventeenth day *361 of January, 1930, pay the sum of $939.69 to the payee named in said note as the balance of principal and interest then owing and unpaid on said note, and received from said payee its indorsement and assignment of said note; that the payee indorsed said note "without recourse", and delivered the same to the plaintiffs; that the plaintiffs are the present holders and owners of said promissory note; that no part of the principal and interest on said note has been paid except $100 on the principal thereof, and interest on said note up to the second day of August, 1927, and that the sum of $939.69, with interest thereon from the seventeenth day of January, 1930, at the rate of seven per cent per annum, remains wholly owing and unpaid thereon; that said transaction, on the seventeenth day of January, 1930, hereinbefore referred to in paragraph No. IV of said findings, constituted the purchase of said promissory note by said plaintiffs, and did not constitute a payment of said promissory note; that each of said plaintiffs and Roy J. King were, at the date of said promissory note, stockholders in that corporation known as the "Grass Valley Gold Mines Company"; that said promissory note was not made or delivered for the accommodation of said corporation; that the making and delivery of said note was done in pursuance of an agreement had between each of said plaintiffs and said defendants, but was not all made at one time, nor as one transaction; that the moneys derived from said note were paid to said defendant Roy J. King, but were not expended by said defendant, or anyone else, for and on behalf of said corporation; that the moneys derived from said note were expended for and on behalf of the defendants; that all of said transactions were made with the knowledge and consent of the plaintiffs; that the defendants received a valuable consideration for the making and delivery of said note; that said promissory note — plaintiffs' exhibit "A," and the promissory note, defendants' exhibit 1 — did, and each of them does, constitute a renewal of the original promissory note; that the original promissory note — plaintiffs' exhibit "B" — and each of said renewal notes, were signed, executed and delivered by the parties in pursuance of an agreement by and between the parties to this action, made and entered into on or about the eighteenth day of December, 1922, whereby it was understood and agreed by and between *362 said parties that said original note should be executed by the defendants as principal makers, and by the plaintiffs as accommodation makers.
The defense to the action was that the promissory note referred to in plaintiffs' complaint was executed and delivered for the accommodation of a certain mining corporation known as the "Grass Valley Gold Mines Company", of which corporation the plaintiffs and the defendant Roy J. King were alleged to be stockholders.
[1] Under the terms of the promissory note set out in the plaintiffs' complaint all of the defendants whose names appeared thereon were primarily liable to the payee therein named. Section 3266a of the Civil Code reads: "The person primarily liable on an instrument is the person who, by the terms of an instrument, is absolutely required to pay the same." By the provisions of sections
In Waldron v. Lyon,
Again, in Lavers v. Jones,
[2] There are no allegations in the complaint that any money has been paid by the plaintiffs for the uses and purposes of the defendants, nor are there any findings to the effect that any money has been paid by the plaintiffs for the uses and purposes of the defendants, or of either of them. The pleading does not show that any recovery is sought by reason of having paid any money for the uses, purposes or *365 benefit of the defendants. The whole action and all the findings of the court are based upon the payment of the obligation to the bank, which obligation became of no further force or effect upon its payment. It may be assumed that a cause of action inassumpsit immediately arose in favor of the plaintiffs as against the defendants, but there is nothing in the complaint upon which to base such a finding. Respondents call our attention to the second paragraph of the complaint, which reads: "That plaintiffs received no consideration therefor, but the same was an accommodation note on the part of said plaintiffs, given to said defendants at their special instance and request, and upon their promise that they would pay it at maturity." There is nothing in this allegation to the effect that the payment found to have been made by the plaintiffs was for the uses and purposes of the defendants. There is nothing in the paragraph which we have quoted which would change the cause of action from that upon the note set out in the complaint, and which it is alleged was unpaid, and which still remains wholly due, owing and unpaid, to a cause of action sounding in assumpsit. [3] It follows, necessarily, from what we have said, and the authorities cited, that the complaint does not state a cause of action. Under such circumstances it cannot be held that section 4 1/2 of article VI of the Constitution applies. That section is not intended to create a cause of action upon an instrument where none exists; that section only can be resorted to, to support a judgment, where a cause of action that exists has been erroneously pleaded.
The judgment is reversed.
Thompson (R.L.), J., concurred.
A petition for a rehearing of this cause was denied by the District Court of Appeal on May 9, 1931, and a petition by respondents to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court on June 8, 1931. *366