Gladwin v. Gladwin

Terry, C. J. delivered the opinion of the Court Field, J. concurring.

Defendants, Gladwin, Hugg & Co. gave to the plaintiff a note to cover the amount of liabilities incurred by plaintiff by indorsements made for the accommodation of Gladwin, Hugg & Co. At the time of executing the note, Gladwin, Hugg & Co. were about to fail, and the note was given for the purpose ot enabling plaintiff to secure himself by attaching property. The [332]consideration of the note was the liability incurred by plaintiff as the indorser for defendants, and his express promise to assume and pay such liabilities. The note, which was dated the 17th of May, was delivered to plaintiff on the 18th, and an attachment issued on the same day, which was levied on the property of Gladwin, Hugg & Co. Subsequently, an attachment issued at the suit of Garrison & Co. against Gladwin, Hugg & Co. and was levied on the same property. Garrison then intervened in this action, and seeks to acquire precedence over plaintiff’s attachment, on the ground that the note given to plaintiff is within the statute of frauds and void as to the conditions of the maker.

It appears from the evidence and finding of the Court below, that there was no actual fraud in the transaction, and the question involved is, whether the promise of plaintiff to assume and pay certain liabilities which he had incurred as indorser for defendants, and which were not at the time due, was a sufficient consideration to support a promissory note on demand.

We think the case is within the principle announced by this Court in Dana v. Stanford, (10 Cal. 269.) In that case an insolvent, in order to secure a sum due, and, also, to protect his grantee against outstanding liabilities incurred as accommodation indorser, executed a mortgage upon his entire property. This mortgage was held to be good as against the creditors of the insolvent, and we can see no reason why a party who may create a lion on his property to secure a creditor or sunety may not execute a note which will enable the party to acquire a lien by legal process.

But the precise question here presented has been passed upon in the highest Courts of our sister States. The case of Little v. Little, (13 Pick. 426,) is in all respects analogous to the one at bar. A note on demand was executed in favor of plaintiff to cover the amount of outstanding liabilities incurred by plaintiff for the accommodation of the maker. These liabilities were not at the time due, and the note was executed to enable the plaintiff to secure himself by attachment. A subsequent attaching creditor contested the validity of the note, and plaintiff was nonsuited. Upon appeal the Court said :