San Francisco Mercantile Union v. Muller
Before: Hall
Synopsis
Promissory Note—Consideration—Release of Maker as Surety on Contractor’s Bond by Owner—Liens—Subsequent Settlement. Where the owner of a building released the defendant from liability on the eontraetor’s bond in consideration of his note given at the time when there were mechanics’ liens under the contract, aggregating nearly three times the amount of the note, it was supported by a sufficient consideration, which was not affected by the subsequent fact that a settlement effected by the owner of the building with the lien claimants enabled the owner to secure the completion of the building at the original contract price.
Id.—Compromise of Doubtful Claim—Sufficient Consideration.— The compromise of a doubtful claim is a valid consideration for a promise or a new contract; and where at the time of the giving of the promissory note sued upon, in consideration of a release of liability upon the bond, it was uncertain what the defendant’s liability upon the bond might be, the note was given and received in compromise of a doubtful claim, and is supported by a sufficient consideration.
Id.—Finding Against Consideration of Note Unsupported.—It is held that the finding of the court, that the defendant 'as maker of the note received no consideration therefor, is unsupported by the evidence.
ip.—Claim of Fraud in Note—Defense not Pleaded.—In order to support the claim that the note was procured by fraud, one relying thereon must specially plead the fraud, and it is a sufficient answer to such claim that no such defense was pleaded.
Id.—Bond not Originally Void—Common-law Bond.—The claim that the bond was originally void as one given under section 1203 of the Code of Civil Procedure is held not supported by the record, but that the bond is clearly a valid common-law bond given for the protection of the owner.
[175]
HALL, J.
This is an appeal by plaintiff from a judgment in favor of defendant.
Plaintiff sued on a promissory note executed by defendant to one Jacob Gorfinkel and by him assigned to plaintiff.
Defendant admitted the execution of the note, denied the assignment to plaintiff, and pleaded that there was no.consideration for the note. The court found in favor of plaintiff as to the assignment, but found that defendant received no consideration for the execution and delivery of said note, and for that reason gave judgment for defendant.
It is. insisted by appellant that the evidence does not support the finding that defendant received no consideration for the execution and delivery of the note, and this presents the only matter to be determined upon this appeal.
We think the contention of appellant must be sustained.
It is shown without dispute that one Lena Sander Hare let a contract to one Bell, whereby he agreed to erect a building for her for the sum of $5,450. This contract was dated October 29, 1908, on which day it was filed in the office of the county recorder.
The said Bell, as principal, and said defendant Muller and one Smith, as sureties, executed to said Lena Sander Hare a bond for the faithful performance of said contract, whereby they bound themselves unto Lena Sander Hare as owner and sole obligee in the sum of $1,350 that said Bell would construct and complete said building in accordance with the terms of said contract, and would deliver said building to said Lena Sander Hare free from all liens, claims or other encumbrances for which said Bell might be responsible. Bell commenced the construction of the building under the contract, but after receiving payments under his contract to the amount of $2,000 he abandoned the same. Lena Sander Hare, through her attorney Maurice Carey, immediately notified defendant of the abandonment of the contract by Bell, and Muller for a time considered the proposition of completing the building himself, but in the meantime mechanics’ liens under the HareBell contract, aggregating close to $1,700, were filed for record in the office of the county recorder. This fact was also communicated to Mr. Muller. Finally Mr. Carey, as the attorney for Mrs. Hare, sent Jacob Gorfinkel, who was connected with
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