Chafoin v. Rich (1888) · DecisionDepot

Chafoin v. Rich

Name: California Superior Court Tentative Rulings
Creator: DecisionDepot
License: https://creativecommons.org/licenses/by-nc/4.0/

California Supreme Court Dec 10, 1888 No. No. 11409Published

Before: Belcher

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Holding. A surety on a promissory note is liable as a maker and is not entitled to notice of presentment and non-payment, as the Civil Code does not grant sureties the rights of an indorser.

Issues

Must a payee present a note and give notice of non-payment to a surety to fix the surety's liability?
Does the Civil Code change the rule that a surety is liable as a maker without notice of demand and non-payment?

Disposition. reversed and remanded

Quotations verified verbatim against the opinion

“A surety was held to be liable as a maker, and not to be entitled to notice of demand and non-payment.”

“Being a surety, he had all the rights of a guarantor. But the general rule established by the code is, that guarantors are liable without demand or notice.”

Synopsis

Appeal from a judgment of the Superior Court of San Mateo County.

The action was brought upon a joint note for the sum of four thousand dollars, payable three months after date, executed by A. G. Rich and Michael Dubs, to Martin Chafoin, June 16, 1883. The defendant Dubs pleaded that he signed the note as surety for Rich, with the knowledge and consent of plaintiff, and that the plaintiff had failed and neglected to notify the defendant of the non-payment of the note by Rich until February, 1884, and did not demand payment of defendant until July, 1884. The defendant Dubs recovered judgment in the court below, and the plaintiff appealed.

Belcher, C. C. The question presented for decision in this case is this: If a promissory note is executed by two persons as apparent makers, but one of them is in fact a surety for the other, and is known to be such by the payee, must the payee, in order to fix the liability of the surety, present the note and demand payment thereof from the principal at or about the time of its maturity, [477]and promptly give notice to the surety of its non-payment ? or in other words, has the surety the rights and liabilities of an indorser?

Before the adoption of the codes, it was held that one who signed his name to a negotiable instrument as a guarantor had the rights of an indorser, and must have notice of presentment and non-payment. (Riggs v. Waldo, 2 Cal. 485; 56 Am. Dec. 356; Geiger v. Clark, 13 Cal. 579; Jones v. Goodwin, 39 Cal. 493; Crooks v. Tully, 50 Cal. 254.)

This rule did not, however, apply to sureties. A surety was held to be liable as a maker, and not to be entitled to notice of demand and non-payment. (And v. Magruder, 10 Cal. 282; Dane v. Corduan, 24 Cal. 157; 85 Am. Dec. 53; Shriver v. Lovejoy, 32 Cal. 574; Damon v. Pardow, 34 Cal. 278.)

Has the rule as to sureties been changed by the codes ? It is claimed for respondent that it has, and the court below seems to have so held.

There are many provisions in the Civil Code in reference to sureties, guarantors, and indorsers, but those bearing on the question in hand are as follows:—

“See. 2832. One who appears to be a principal, whether by the terms of a written instrument or otherwise, may show that he is in fact a surety, except as against persons who have acted on the faith of his apparent character of principal.”

“Sec. 2840. A surety is exonerated,—1. In like manner with a guarantor,” etc.

“ Sec. 2844. A surety has all the rights of a guarantor, whether he becomes personally responsible or not.” “Sec. 2787. A guaranty is a promise to answer for the debt, default, or miscarriage of another person.” “Sec. 2807. The guarantor of payment or performance is liable to the guarantee immediately upon the default of the principal, and without demand or notice.” “ Sec. 2819. A guarantor is exonerated, except so far as [478]

Chafoin v. Rich

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