California Court of Appeal Feb 15, 1906 No. Civ. No. 135.Published
Before: McLAUGHLIN, J. —
Synopsis
APPEAL from a judgment of the Superior Court of Siskiyou County, and from an order denying a new trial. J. S. Beard, Judge.
The facts are stated in the opinion of the court.
McLAUGHLIN, J.
In the complaint in this action it was in substance alleged: That on February 27, 1900, the defend
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ant obtained from N. H. Eddy the sum of $1,500 as a loan for his exclusive use and benefit. That to evidence and secure said indebtedness and its repayment, said defendant procured plaintiff’s intestate to join him in the making of a promissory note signed by defendant and James and Nancy Carpenter. That to further secure said indebtedness, said intestate, at the special instance and request of said defendant, and for his exclusive use and benefit, executed and delivered to Eddy a mortgage on real estate owned by her. That the defendant never paid any part of said debt save certain specific sums mentioned. That said Nancy Carpenter died intestate, and that plaintiff was appointed and, in due time, qualified as administratrix of her estate. That defendant refused to pay the note or procure the discharge of the mortgage, and plaintiff was compelled to pay the sum of $1,700 due on said note in order to procure such discharge. That plaintiff requested defendant to repay the said sum to said estate, but he refused to pay any portion thereof. The answer, by failure to deny the averments of the complaint in this regard, admits that the defendant obtained the money as a loan for his exclusive use and benefit,' and that the note and mortgage given to evidence and secure such indebtedness were likewise executed for his use and benefit. The only denial in this behalf is confined to a traverse of the allegation that defendant procured said intestate to join him in making the note, and that she did so for the purpose of securing his indebtedness. Coupled with this form of denial is an affirmative allegation that “said Nancy Carpenter assumed said indebtedness, and became the principal maker upon said promissory note, and defendant became a surety on said promissory note as between him and said Nancy Carpenter.” There is no denial touching the execution, delivery, or purpose of the mortgage. The only assault made on the averments in this behalf is to the effect that the intestate was not the sole owner of the mortgaged premises, but was a joint owner thereof with James Carpenter. The averments touching payments made on the note are not denied, but defendant “denies that as between the parties to this action and Nancy Carpenter, on the second day of July, 1904, there was due and unpaid from said defendant to N. H. Eddy on said note, the principal sum thereof and the interest amounting to $1,700,” and further “denies that as between the parties to this action or Nancy
Carpenter there was due upon said second day of July, 1904, or at any time, any sum from said defendant to N. H. Eddy.” There is no attempt to deny that plaintiff paid the note, but there is a denial of the legal conclusion that such payment was made for the use and benefit of defendant. Upon the trial the plaintiff introduced the note and mortgage, together with evidence to prove the payment of the note by plaintiff, and then rested. Thereupon a motion for a nonsuit, based on the insufficiency of the evidence, and the nonjoinder of James Carpenter as a party defendant, was made and denied. The defendant, after a preliminary question had been asked and answered, for the evident purpose of meeting a belated objection, which was sustained, asked leave to amend the answer by inserting at the end of the first paragraph the following averment, to wit: “And defendant became a surety on said promissory note as between him and Nancy Carpenter, and said Nancy Carpenter gave to defendant the money received on said promissory note as a gift.” Permission was granted as to the first clause, and denied as to the concluding cause relating to a gift. The defendant then offered evidence touching conversations had with Nancy Carpenter at the time of the execution of the note and mortgage, and subsequent thereto, but objections to such evidence were sustained. Defendant appeals from the judgment against him and from an order denying his motion for a new trial.
The court did not err in its ruling on the motion for a non-suit. It being admitted that the defendant obtained the loan for his own exclusive use and benefit, and that the note was executed to “evidence and secure to N. H. Eddy said indebtedness and its repayment,” there can be no doubt as to the legal relation existing between the makers of the note. And it being also admitted that the mortgage executed at defendant’s request was for his sole use and benefit, and was an hypothecation of real property owned by his comakers jointly, as further security for the payment of such indebtedness, the case falls squarely within well-settled rules of law constituting the defendant the principal debtor, and his comakers sureties for the payment of his debt. (Civ. Code, sec. 2831; Bouvier’s Law Dictionary (Rawle’s Revision), p. 1073; Brandt on Suretyship, secs. 1, 2, 38; Randolph on Commercial Paper, sec. 897 et seq.; 27 Am. & Eng. Ency. of Law, p. 431 et seq.; 1 Am. & Eng. Ency. of Law, p. 334 et seq.;
Montgomery
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v.
Sayre,
91 Cal. 207, [27 Pac. 648];
O’Conor
v.
Morse,
112 Cal. 34, 53 Am. St. Rep. 155, [44 Pac. 305].) The relation of principal and surety, and defendant’s liability for the amount paid by the administrator of the estate of one of his sureties, follow as conclusions of law from the facts admitted, and the denials and averments in the answer to the contrary created no issues.
(Ohm,
v.
San Francisco,
92 Cal. 449, 450, [28 Pac. 580] ;
Callahan
v.
Broderick,
124 Cal. 83, [56 Pac. 782].) The debt was his, and when it was paid by the administrator to relieve the estate from liability, and the property of the estate from the mortgage lien, an entirely new and distinct debt, due from principal to surety, was created, and the defendant became liable to the estate for the full sum paid with interest at the legal rate. (27 Am. & Eng. Ency. of Law, p. 486 et seq.; Brandt on Suretyship, sec. 229; Randolph on Commercial Paper, secs. 978, 979;
Ryland
v.
Commercial etc. Bank,
127 Cal. 526, [59 Pac. 989].) It clearly appears from the admitted facts that James Carpenter was also a surety, and this being true, his estate was not a necessary party to the action. (Brandt on Suretyship, 229;
Ryland
v.
Commercial etc. Bank,
127 Cal. 526, [59 Pac. 989].)
The court did not abuse its discretion in refusing to permit the amendment above mentioned. It was a belated attempt to introduce an entirely new element into the case, and there were many cogent reasons why such an amendment, in this particular connection and form, was properly disallowed. It was incomplete and incongruous, and, viewed in the light of the preceding clauses, was an averment of the impossible. If that portion of the amendment which was allowed was true, then the part rejected could not be true. It is impossible to conceive how the intestate could have been the donor, and the defendant the donee, of money obtained by the latter as a loan, under the circumstances disclosed by the record. If money so obtained can, under any state of facts, be treated as a gift from a third party to the borrower, it can hardly be considered as such when the borrower and the alleged donor have given their joint and several promise to return or repay the sum received. The idea that the defendant could be obligated, either as principal or surety, to repay money received by him as a gift involves a contradiction. An obligation to return or repay the thing received is irreconcilably in conflict with the theory of a gift. While defend
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ant’s obligation to repay the money endured there could be no such thing as a gift. He could not be released from such obligation without the consent of Eddy, and a complete change of the contractual relations evidenced by the written contract. Therefore, if it be conceded that such a release could be classed as a gift, there was no hint of any such change, release, or transfer in the offered amendment. A gift was impossible under the conditions disclosed by the pleadings at the time the amendment was offered. (Civ. Code, secs. 1146,
1147; Hart
v.
Ketchum,
121 Cal. 429, [53 Pac. 931];
Knight
v.
Tripp,
121 Cal. 679, [54 Pac. 267] ;
Pullen
v.
Placer County Bank,
138 Cal. 175, [94 Am. St. Rep. 19, 66 Pac. 740, 71 Pac. 83].) If such conditions had changed, the defendant should have removed the conclusion embodied in the rejected amendment from the realm of the impossible by stating the substantive facts which would make a legal gift possible. The evidence relating to the intestate’s declared intention to make a gift of the money and to pay the note and mortgage herself was properly rejected. So far as such evidence related to a gift, it was not only contrary to the facts admitted, but was an attempt to vary the clear and precise terms of a written contract by parol. (Civ. Code, secs. 1698, 1639; Code Civ. Proc., sec. 1856;
Adams
v.
Wallace,
119 Cal. 70, [51 Pac. 14].) Courts are not bound to admit evidence supporting admissions in the pleadings, and her expressed intention to pay the note amounted to no more than an expression of intention to perform the legal duty resulting from her express promise. If the rejected evidence was offered for the purpose of showing that the intestate intended to make a gift of the money, and to consummate such intention by paying the note and relieving defendant from his obligation, it was clearly inadmissible. (Civ. Code, secs. 1146, 1147;
Knight
v.
Tripp,
121 Cal. 679, [54 Pac. 267].)'
It being admitted that the intestate had hypothecated real property in which she had an interest, the extent of that interest was entirely immaterial. For this, as well as other reasons, the inventory and appraisement filed in the estate of James Carpenter was properly excluded. The findings are supported by the evidence.
The judgment and order are affirmed.
Chipman, P. J., and Buckles, J., concurred.
AI Brief
AI-generated · verify before citing
Holding. The court held that a borrower who obtains a loan for his exclusive benefit is the principal debtor, and those who join him in executing a note and mortgage to secure that loan are sureties; consequently, the borrower is liable to the estate of a surety who pays the debt. The court further held that the trial judge did not abuse his discretion in denying a belated amendment to the answer that contradicted the established facts of the loan.
Issues
Whether a borrower who obtains a loan for his exclusive benefit is the principal debtor relative to those who sign the note and mortgage as security.
Whether the estate of a co-surety is a necessary party to an action brought by the administratrix of another surety against the principal debtor.
Whether the trial court erred in refusing to allow a defendant to amend his answer to allege that the loan proceeds were a gift.
Disposition. affirmed
Quotations verified verbatim against the opinion
“The debt was his, and when it was paid by the administrator to relieve the estate from liability, and the property of the estate from the mortgage lien, an entirely new and distinct debt, due from principal to surety, was created”
“It clearly appears from the admitted facts that James Carpenter was also a surety, and this being true, his estate was not a necessary party to the action.”
“The idea that the defendant could be obligated, either as principal or surety, to repay money received by him as a gift involves a contradiction.”