86 Cal. 449 | Cal. | 1890
— This action was brought to recover from defendant the sum of $6,136.50, with interest thereon from March 28, 1883. It is alleged, in the amended complaint, that C. M. Hitchcock, plaintiff’s testator, indorsed a promissory note, made by defendant, payable to said Hitchcock, for the sum of four thousand five hundred dollars, solely for the accommodation of defendant; that defendant assigned the note to the London and San Francisco Bank, Limited, and received therefor the sum of four thousand five hundred dollars; that defendant paid, on account of the interest due thereon, the sum of $231.25, but never paid any portion of the principal; that the note was duly protested, and notice thereof given to the indorser; that Hitchcock paid the sums of $6,132.50, the amount due on the note, and four dollars, costs of protest, to the bank, on March 28, 1883; and that defendant has never reimbursed him for any part thereof. The defendant denied that the note was indorsed for his accommodation in any greater sum'than $3,631.28, the balance of said note being for money he had paid out for the use and benefit of said Hitchcock at his special instance and request; denied that the four-
The court found that the note was made and assigned as alleged; that §231.25 only had been paid on account of interest, and nothing on account of the principal; and that the offset to the note, and the counterclaim set up by defendant, had both been adjudicated against defendant in a former action. The court found certain facts, — which will be noted further along,—showing demand, refusal to pay, protest, and notice thereof to Hitchcock, and payment by him to the bank. The court found also that Hitchcock paid the defendant’s note by giving his own note for the sum due thereon, including cost of protest, and that it was accepted and received by the bank, and an entry made in its books to the effect that the note had been paid. At the time of the trial, the note thus given by Hitchcock had not been paid; and appellant claims that, there having been no payment in money, an action for money paid out cannot be maintained.
The payment of money is not necessary to the ex-tinguishment of an obligation. A debt may be paid by the giving of a note, if it be offered and accepted as payment. ( Weston v. Wiley, 78 Ind. 54; 2 Daniel on Negotiable Instruments, 232.) The evidence shows very clearly that the Hitchcock note was offered by him and received by the bank upon the express understanding that it was a payment in full of the McElrath note.
Appellant claims that, in paying'the four-tliousand-five hundred-dollar note, Hitchcock was a mere volunteer, not having been duly “fixed” as an indorser by proper demand, protest, and notice of dishonor. As stated by him, “ the question for the court to determine is pre
Appellant admits that an indorser may waive his own rights so as to make himself liable to the holder, but claims that if he be once discharged from liability by reason of the failure of the holder to give proper notice of dishonor, he cannot thereafter by any admission or promise prejudice the rights of the maker; and if he pay the note he does so as a stranger, and must be regarded as a volunteer.
This contention is based upon an erroneous theory of the use and purpose of notice of non-payment of a negotiable instrument. An indorser’s undertaking is not an absolute one. It is conditional; and notice of dishonor is provided for his benefit. It is intended to protect him from loss which may occur by reason of delay in making demand of payment of the maker, or which he may sustain by having no notice of the fact that his principal has failed or refused to pay. When he waives this right to notice, he does not create a new liability which requires a new consideration, like the waiver of absolute and strict conditions precedent in contracts as they are construed at common law. lie has the right to either affirm or disaffirm his liability, and with the exercise of the right thus provided for his benefit and left to his discretion no one can complain. (Burgh v. Legge, 5 Mees. & W. 418; 2 Daniel on Negotiable Instruments, sec. 1147.)
The finding of the court that the defendant’s claim of offset and counterclaim had been adjudicated in a former action prior to the trial of this action is not supported by the evidence. The court could not dispense with formal proof of its judgment in another action, and take judicial notice of the fact that the affirmative matters
Fox, J., Sharpstein, J., McFarland, J., and Thornton, J., concurred.
Rehearing denied.