Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1890-03-01

mace BIZ Offering the money to the creditor, or
his agent authorized 70 receive It, and II ne LOT
any reason tails 70 accept H. then 9y oeposlsing
the amount in the name OF the creator IN some
bank of deposit within this state o. COCO repute
and giving notice thereof 70 the creator OF MS
agent, &C. c., 1,4s5-1.t00) Though the defend
ant was the agent OF the plalnti % eo1sce tle
note, yet as it was payable IN money only; the
defendant had no authority to receive anything
other than money in payment. Ana the MAKER
of the note knowing the nature and extent Oh
his obligation is bound to know II; ana there
fore the note is not discharged and the payee
may maintain an action thereon NUGGET vs..
Day, q Cal, 1s9; wharton on agency, 2lOl
The case Of the Troy City Bank vs.. Grant, Hill
4 DEMO- 49, was case in all its material feat
ures like the one under consideration. The
holder of a prOmissory note sent II Wnen cue
to a bank at which it was payable, and the
bank enormously supposlng the maker mao
funds in the bank, credited the holder with the
amount but on discovering its mistake the next
day corrected it and served the indorsers win
notice OF non-pSyment and IN en- action py the
holders OF the note against the in1oIsers Il was
decided that the note was not paid, and tnat
the action could be maintsined as the liability
on the note still continued. In the case OF De
Mayer VS.. state National Bank, Neo;, ll4, Is a
case IN which money was recovered aiter u
had been paid by the bank under circumstances
similar the facts this case and IN the eSse OF
Grsely vs. Bartlett Greenl. l12, where goods
were consigned 70 factor or agent 10 sell, ana
he sold them on q credit 10 merchant IN good
credit AGl tOUA LIS LO-C 0D-S ~
himself for the purchase money and credited
the amount of the note in account with his
principal and on settlement paid the money TO
his principal, aud the maker OF the mole oeeom'
ing insolvent befJTe the note fell due, whereby
the claim was lost the Court decided that the
factor or agent could recover nom MS principal
the money paid him. and in the case OF BROCK
myer vs.. Washington National Bank, - Fac.
Rep, S55, where savings bank delivered to q
national bank money, drafts, notes and otner
securities 10 pay q creditor, the Court decided
that the relation between the debtor bank ana
the national bank is that OF principal ana agent,
and until the creditor assents TO or acts upon
the transaction no rights accrued to him, and
the assent of the creditor viii not be presumed
when he has 10 notice or knowledge OF II, ana
therefore the creditor could not recover from
the national bank In that case the debtor
bank had become insolyent, and the national
bank had surrendered the property 10 It's PTes1-
dent IN the case OF Low vs.. Warden, a Csi.,
81 a note was deposited with bank Tor eolIee-
ton. and afterwards the maker deposited sutii-
Gent money in the bank TO pay II. but after
wards. By an cement with the President OF
the bank to extend the time o. payment, ne
drew the money out on his Own cheek, ana the
Court decided that the President exceeded his
authority as he was only an agent TO collect,
and the creditor could recover on the note as
the transaction did not constitute payment. AS
the defendant had no authority 10 cancer the
no.e without receiving the money thereon, in
this case the writing the word cancelled on
it is immaterial and may be explained IN an
action On the note. &c. p 1eS2) II then
the circumstances proved IN TINS Case 40 nov
constitute payment the defendant IS nos Aaole
in this action.
But there is another view to be taken of this
case, which is fatal to the plaintiffs. Section
1874 of the Civil Code, usually called the statute
Of Frauds, provides that ell contracts or prom
ises to answer for the debt, default or misear-
rage Of another are invalid unless in writing,
signed by the party to be charged or ms agent,
except in cases provided in Sections 2Iy4 OF this
ftoIa Tbar cpnfiofl rrpVidpS thai "a promise 10
answer for the obligation OF another IN the
cases therein enumerated, is an original obllgs-
ton of the promisor, and need not be IN writ
ing" among which are the cases where the
promise being for an anteeedent obligation of
another, is made upon the consideration that
the party receiving il cancelsth antecedent ool-
CATION, accepting the new promise as suosti-
tute thereof, or upon the consideration that the
party receiving il releases the property of
another from levy, or his person from lmprls-
onment under an execution or Judgment o.
tanned upon the antecedent obligation; or upon
a consideration benenclal TO the promlsof,
whether moving from either party to the ante
cedent obligation, or from ano her person.
This defines the consideration which Will sup
port promise to answer for the debt OF smother
by which an original obligation is created: and
to bring q case within this exception and ex.
elude it from the operation Of tn general rules
of the Statute of Frauds, the Obligation created
by the promise of the pIOm1sor TO the crecltor
must be an original and not collateral oohga-
ton to the antecedent debt; and such an
original obligation is presumed to extlngu1sh
the anteeedent debt, though this presumption
may not be conclusive in all esses. No injury
to the creditor will support the promise by
which an original obligation is created, except
the release of the Gnteeedent debt by the
creditor or g. release by MIN OF prop
erty of another from levy, or his person
from imprisonment under an execution
on a judgment obtained upon the anteeedent
debt: and in all other cases the consideration
must be beneficial, moving 10 the promisor from
either party to the antecedent debt or from some
0 ther person. But whatever the consideration
may be- the obligation created .oy the promise
must be original and not collateral to the ante
cedent or former debt.
The true rule for the construction of the pro-
visions of our Code under consideration was an
nouneed by the Supreme Court OF Connecticut
ia the care of Parker VS.. Benton (35 Conn, 3i9),
in considering a similar sta ute OF frauds The
Court said in that case We have no DISPOSE
ton to relax the rules of construction applica.
bic 10 the statute of frauds Or Ia any manner TO
weaken that statute. Our views on that subject
are fully expressed by Judge Dutton il Clapp VS..
Lawton 81 Conn., 9ol; and II TINS was as
claimed, analogous TO that, we should come TO
the same conclusion in respect to 1t, but this
case differs essentially from that There third
party received the properly of the debtor and
promised him generally to pay his debts. None
OF the creditors were parties 70 the arrangement,
and the original Indebtedness continued as be-
fore. Here the contract was riPartite-betYeen
the debtor, a creditor and third person; and it
contemplated the llSSldIZe OF l0G OIlSlud1
debtor and a new obligatio by the third party
of the particular creditor. zen new OBJ igation
and Indebtedness is not Y. -.E!n the statute.
The Reig obligation described in IL IS decision
corresponds to the original obligation provided
for in Section 279i of the Civil Code. And to
create such HclB or OriqinGL obligation there must
be tripartlte agreement, or, al least. promise
to the creditor. In Halsted vs.. Francis t3l Mich,
l13) the Court decided that not only the promise
of the third person must be made to the creditor
TO nav the debt of another to him, but it must be
made on present consideration, In the case
of Bidde VS. BriggOlara, 81 Cal. S54 the plaintiff
was defeated though the defendant in pur-
chasing property agreed to assume and pay
mortgage debt thereon, because tae plaintiff,
the creditor, was not party 70 tae agreement
or promise, and there are many cases 10 the
same effect (MeLaren VS.. Hutchinson, is Cal,
81; same case, p Cal, 1SS; Gyle VS. Schroeder,
% Cal, 55S; Comstock vs. Reed II Cal, 2S6;
WEIGH VS. Kenny, 49 Cal, 49, Evans VI. Riddle,
8 Cal, 43j; Argenta IS. Brannan 5 Cal, 35l;
Millen VS.. Whipple, ] Cray, 3l7; Willard VS..
Baldwin, 3 Gray, 49,; Rogers vs.. Union Stone
Company, $50 Mass, 5sl; Blunt vs.. Boyd,
Barb 20s.l There are many other authorities
which sustain the proposition that there must
be q contractual relation or privity between the
prorniSOr and the creditor to create an original
obligation, the one to the other; ana 10 create
such relation of psivity the promise must be
made to the creditor: but there is line OF cases
which hold to the contrary, and assume that
ccnfractnai relation OF Trlvity is created be-
tween the promisor and the creditor OF another
by all agreement Win OF q promise % the DEBTOR
10 when the creditor was not party. This
proposition involves legal solieism, A con.
ira tual relation or pTivity can only Dc created
between the parties TO the contract This prin-
cipal is recognized in Daniel on Neg. ms; 1880,
where the author said at is undoubtedly in
the power OF the bank to authorize over-checks
or checks without any funds whatever, upon
negotiations with the drawer. Such dealings
would be in the nature Of loan; and the bank
would be bound, If the arrangement were con
summated upon a iegal contract But mere
permission to overiraw not communicated TO
the checkholder, would certainly be OF no avail
in legal effect, and such permission would rot
warrant drawer in stating absolutely. solely
on faith thereof that his cEeck was good.
From 8 review of the authorities, il is clear
that third person is not bound to answer for
or psy deb. OF another, until the creditor be-
Games party 10 the agreement ana sssents
thereto. And this being So the third party, as
the defendant in this case, may withdraw the
promise or proposal 10 become bound 70 pay the
debt of smoker at any time before the proposal
is communicated 10 or accepted by the creditor;
il is 50 provided in sll cases of contracts by the
Civil Code, 1856. And the posting OF a letter
containing the proposal addressed TO the cred
-