Cober v. Connolly

[742]

EDMONDS, J.

In an action to quiet title and to require a reconveyance of real property, judgment was rendered for the respondents when they proved that they had rendered services and delivered merchandise to one of the payees of a promissory note under an agreement that the value of the services and merchandise should be credited upon the note. The appellants, one of whom is also a payee of the note and the other the trustee named in the deed of trust securing it, contend that the makers of a promissory note providing for payment in cash may not extinguish the obligation by the performance of such an agreement with one of several joint payees.

The respondents Cober, husband and wife, executed their promissory note in the sum of $850, in favor of Keith C. Eversole, W. D. L. Held, and the appellant Connolly. As security for its payment, they conveyed certain real property to the appellant Mendocino County Title Company, as trustee. The payees of the note were named as the beneficiaries of the deed of trust. Later, Eversole agreed to accept from the respondents job printing, the publication of legal notices, hotel cards, and newspaper subscriptions, as ordered by him, in payment of the obligation.

During the next five years Cober furnished to Eversole, upon his order, printing and advertising to the value of $1,255. About $290 of that amount represented goods delivered to Eversole; the remainder of the charges was for printing delivered to other persons. Cober also paid $25 or $30 in cash. The respondents did not tell Connolly of this arrangement and he had no notice of it. Eversole did not account to Connolly and is now insolvent.

The respondents subsequently demanded a reconveyance of the property from the appellant corporation. Upon the latter’s refusal to comply with their demand, they commenced the present action, alleging that the promissory note had been paid in full. By their answer, the appellants denied payment of the note and prayed for judgment against the Cobers for the full amount of the principal sum with accrued interest. The trial court found that the respondents had paid the note in full, and gave judgment as demanded by them.

According to the appellants, although section 1475 of the Civil Code provides that payment to one of two or more payees extinguishes the obligation, the basis for the statutory rule is founded upon principles of agency. Since one co-payee acts as an agent for the other payees, payment to