Court Opinion

ID: 3298614
Source: CourtListenerOpinion
Date Created: 2016-07-05 17:15:37.050767+00
Date Added: 2024-06-11T12:24:58.071812
License: Public Domain

I concur in the judgment of affirmance. I am not satisfied that the court below correctly decided on the evidence that the Randall Banking Company did not have knowledge of the real consideration of the note. But, without expressing any opinion on that question, I think that the outlawed debt, coupled with the three years' extension of the time of payment, was a sufficient consideration to uphold both the note of the husband and the mortgage of the wife given to secure its payment.
Plaintiff's action was apparently begun in reliance upon the principles laid down in Chaffee v. Browne, 109 Cal. 211. *Page 252 
The cases of Wright v. Byrne, 129 Cal. 617, Sullivan v. Sullivan,99 Cal. 187, and Rosenberg v. Ford, 85 Cal. 610, are also cited to support the proposition that the mortgage was without valid consideration. It is conceded by the appellant that a debt barred by the statute of limitations is a good and sufficient consideration for a new note of the debtor for the amount. This has been often decided. (McCormack v. Brown, 36 Cal. 184;1Lambert v. Schmalz, 118 Cal. 35; Chabot v. Tucker, 39 Cal. 436;Wells v. Harter, 56 Cal. 344; Concannon v. Smith, 134 Cal. 20;Womack v. Womack, 7 Tex. 397.2) The theory of the plaintiff seems to be, that although the moral obligation to pay the pre-existing debt was a sufficient consideration for the note, payable three years after its date, so far as the husband, who was the original debtor, is concerned, yet that it is not sufficient to support a mortgage given by the wife on her separate property to secure the note, although the wife signed as a joint maker, and executed the mortgage concurrently with the execution of the note. The authorities relied upon do not support such contention.
In Chaffee v. Brown, 109 Cal. 211, there was no new note or new promise given for the debt. The debt was a mere open account for goods sold and delivered to the husband. The mortgage was given by the wife on her separate property a considerable time after the debt had matured, and not in consequence of any threat to sue, nor in consideration of any extension of time or other benefit or detriment to either of the parties. The mortgage contained no promise to pay the debt. There was a recital that the mortgagors were jointly and severally indebted to the mortgagee in the sum named, but this was properly held to be nothing more than an acknowledgment of the existence of the pre-existing debt. It is clear that it could not constitute a new promise. The case was nothing more than an application of the familiar principle that where a debt has been already created the entering into an obligation to pay the same by a third person as surety, after the creation of the debt, and without any new consideration, such as delay or extension of time, it is not a binding obligation upon the surety. (Comstock v. Breed, 12 Cal. 288. ) In Wright v. Byrne, 129 Cal. 617, *Page 253 
a succeeding guardian gave her note in renewal of the existing note of a former guardian, apparently upon the mistaken idea that it was her duty to do so, and without any new consideration or the cancellation of the old debt. Upon the principle above stated, it was properly held that there was no consideration. InSullivan v. Sullivan, 99 Cal. 187, the wife gave an agreement to pay a debt of her deceased husband which was barred by the statute of limitations. It was held that, even though the debt had not been barred by the statute, she would not be bound by her promise, because she was under no moral or legal obligation to pay the debt, and there was no other consideration upon which the agreement could be founded. In Rosenberg v. Ford, 85 Cal. 610, the wife, erroneously supposing she was bound to pay the debt of her husband, and for no other consideration, executed a mortgage upon her property to secure the same, including other debts also, and it was held that, so far as the mortgage related to the debts of her husband, it was invalid. None of these cases decided the proposition contended for by the plaintiff and the intervener in this case.
If the consideration was sufficient to support the promise of the husband upon the new note, clearly it must be held to be sufficient to support the mortgage given by the wife to secure the same contemporaneously with the execution of the note. A married woman may enter into any engagement or transaction with another person respecting property which she might if unmarried. (Civ. Code, sec. 158) The wife in this case, therefore, occupies the same position with respect to the transaction as if she were a stranger. The debt, not being her own, and the property being her separate property, she stands as surety of the husband for the payment of this debt. (Spear v. Ward, 20 Cal. 659; Bull v.Coe, 77 Cal. 54;1 Alexander v. Bouton, 55 Cal. 15.)
It is suggested that she is not a surety within the meaning of section 2831 of the Civil Code, which declares that "a surety is one who at the request of another, and for the purpose of securing to him a benefit, becomes responsible" for the performance of some act by the principal. The reason given for this contention is, that the husband received no *Page 254 
benefit, and hence the contract of suretyship is not binding. This is based upon the language of finding IV, following the language of Chaffee v. Browne, 109 Cal. 211, that upon the execution of the note and mortgage "the said Thomas McDonald received nothing, said Margaret H. McDonald received nothing, and said A.W. Randall parted with nothing. The sole consideration for the execution of said note and mortgage was the antecedent debt from said Thomas McDonald to A.W. Randall." But these general statements must be considered in connection with the preceding specific finding that the note taken was payable three years after date. If any benefit other than the consideration of the original debt is necessary, we must bear in mind that the law favors and encourages the paying of an honest debt, even if it is barred by the statute, and that Thomas McDonald, being of a mind to pay this debt, being liable to suit upon it at any time, in which he must defend or submit to judgment, and desiring to execute a promise to pay it, did receive a benefit when he obtained the period of three years within which to make payment, and also immunity from suit for that time, and that this also was a part of the consideration for the note. The general words of the finding cannot override the specific facts thus found, and indeed admitted by the appellants in their brief. (Savings andLoan Society v. Burnett, 106 Cal. 536; People v. Reed, 81 Cal. 76;1Geer v. Sibley, 83 Cal. 4.)
This section of the Civil Code should not be construed to provide that a note, executed by one as principal and concurrently by another as surety, is not binding on the surety, unless the principal at the time of its execution receives thebenefit referred to, or is not binding on the surety when the note is given for a consideration received by the principal prior to its execution, and for which he had given an obligation still outstanding. Any benefit whatever to the principal sufficient to support the contract as to him is sufficient to support the contract as to the surety. If given for a pre-existing debt, evidenced by a note not canceled, but left to remain in force, the consideration of the original debt, with the additional credit obtained by means of the new note, *Page 255 
is the benefit referred to by the section. If the old note is outlawed, the benefit is the same, — that is, the original consideration of the outlawed debt and the additional credit, which defers the cash payment. Any other construction would imply that the code commissioners intended not merely to give a new and better definition of the contract of suretyship, as the law had previously settled it, but to make an innovation, to enact some new rule, with all the uncertainty that would follow its interpretation and administration. No such intention is apparent, none is expressed in the note to the section, and the contrary is implied. (Field's N.Y. Civ. Code, sec. 1558, note; Civ. Code, annot. ed. of 1872, sec. 2831, note.) It could not have been intended to establish the proposition that a note executed by a surety at the request of the principal, and simultaneously with him, may have a consideration sufficiently valuable, as the law defines the term valuable, to make the note the valid contract of the principal, which is not also sufficient to support its validity as to the surety, or that the "benefit" which the contract of the surety secures to the principal is something more than, and additional to, the consideration which is sufficient to support the contract as to the principal. In Savage v. Fox,60 N.H. 17, the court decides as follows (quoting from the syllabus,
which is fully supported by the opinion): "It is not necessary to show a consideration as between the payee of a note and the surety, if the contract of suretyship is contemporaneous with the contract between the payee and the principal. If there is a consideration sufficient to support that contract, it will be sufficient to support the contract of the surety." (See, also, 3 Kent's Commentaries, 122; Robertson v. Findley, 31 Mo. 388; Wainv. Walters, 5 East, 10; Pearce v. Wren, 12 Smedes  M. 97;Leonard v. Vredenburg, 8 Johns. 38;1 Bickford v. Gibbs, 8 Cush. 154.) In all the field of judicial decision I confidently assert that no case can be found to the contrary.
The case must not be confused with those cases where no new obligation is made by the principal debtor, and the contract of suretyship is entered into by the surety after the execution of the contract of the principal. Thus, if A gives *Page 256 
his note to B to-day, payable in six months, with no agreement to give security, and a month hence, at B's request, and without any new consideration or new contract with A, C signs the note, intending to become bound as surety thereon, the obligation does not bind him. (Leverone v. Hildreth, 80 Cal. 139; Jackson v.Jackson, 7 Ala. 791.) In these cases it is said that a pre-existing debt will not support a promise to pay by a surety without a new consideration moving to him, and the language must be construed with reference to the facts to which it relates. (3 Kent's Commentaries, 122.) But if A and B had agreed at the time the note was made that a surety should be obtained on the note, the fact that the surety may have signed a week or a month after the delivery of the note would not affect its validity as to him, if he signed in pursuance of the original agreement. (Pauly v.Murray, 110 Cal. 13; McNaught v. McLaughry, 42 N.Y. 22.1)
In this case the husband and wife executed a note and mortgage, payable three years after date, for the pre-existing debt of the husband, which was barred by the statute of limitations. It is conceded that the consideration for the note is good as to the husband, and upon the principles laid down in the above authorities there can be no valid reason why it is not good also as to the wife who executed the note with him. This being the case, the foundation of the plaintiff's case fails, and the mortgage should not be canceled.
1 95 Am. Dec. 170.
2 58 Am. Dec. 119.
1 11 Am. St. Rep. 235.
1 15 Am. St. Rep. 22, and note.
1 5 Am. Dec. 317, and note.
1 1 Am. Rep. 487.