Young v. Sorenson

Opinion

FLEMING, J.

Action on a promissory note.

In January 1963 Charles and Marcille Sorenson gave a promissory note to Red Rowe Productions for $11,500 at 7 percent interest, principal and interest payable in installments of $100 a month. In February 1963, as part of a divorce settlement between Ralph Rowe and Irene Young, Ralph Rowe caused Red Rowe Productions to assign the Sorensons’ promissory note to Young, and he guaranteed payment of the note “to the extent of $10,000 only.” Thereafter, Ralph Rowe made monthly payments of $100 to Young. The Sorensons made sporadic payments on the note, but made them to Red Rowe Productions. In 1964 Young offered to sell the note back to the Sorensons at a discount, but the Sorensons declined, stating they preferred their present payment arrangements. The Sorensons continued intermittent payments to Red Rowe Productions until November 1969. In June 1971 Rowe made his one-hundredth $100 payment (a total of $10,000) to Young. Including accumulated interest, more than $7,000 remained due on the note. Neither Rowe nor the Sorensons made further payments.

In September 1971 Young brought the present action against Rowe, Red Rowe Productions, and the Sorensons to recover the balance due on the note. In a nonjuiy trial the court found her action against the Sorensons barred by the statute of limitations and her claim against Ralph Rowe as limited guarantor of the note satisfied by his payment of $10,000.

Young appeals the judgment contending (1) payments by the Sorensons to Red Rowe Productions tolled the statute of limitation on her action against them, and (2) the trial court erred in admitting in evidence a document claimed to be a reporter’s transcript of the Rowe-Young divorce proceedings and relying upon it to limit Ralph Rowe’s guarantee to $10,000.

[914]

1. Code of Civil Procedure section 337 provides a four-year period of limitation for commencing an action on a promissory note. However, “part payment of a debt or obligation is sufficient to extend the bar of the statute. The theory on which this is based is that the payment is an acknowledgment of the existence of the indebtedness which raises an implied promise to continue the obligation and to pay the balance.”