California National Bank v. Ginty

Van Fleet, J. Action to recover on two promissory notes, one for seven thousand three hundred and fifty dollars, dated December 20, 1890, due in six months, with interest at ten per centum per annum, signed by Livingston, Clarke & Co., John Ginty, and M. A. Luce; and the second for five thousand dollars, of even date with the first and like rate of interest, due three months from date, signed by Livingston, Clarke & Co. only; and to subject certain primavera logs, pledged as security for the payment of said notes, to sale, and the application of the proceeds to the satisfaction of the indebtedness. Judgment went for plaintiff for the amount of the notes and interest as stipulated, and directing a sale of the logs.

There are cross-appeals, the defendants Ginty and Luce appealing from the judgment and an order denying them a new trial, and the plaintiff appealing from that part of the judgment which directs the manner in which the proceeds of the pledged property shall be applied.

The appeal of Ginty and Luce involves but two [150]questions: 1. Whether they were .correctly held to be principals upon the note signed by them; and 2. Whether the court below ruled properly in allowing interest on said note. The defense relied upon by them was that they signed the note for seven thousand three hundred and fifty dollars, as sureties for Livingston, Clarke & Co., with the knowledge of that fact by plaintiff, and with the understanding that plaintiff was to hold them as sureties only; that plaintiff had released Livingston, one of the principals on said note, and that they as sureties were thereby discharged of any liability. The court found that, as to plaintiff, Ginty and Luce executed the note as principals thereon, and that plaintiff dealt with them as principals and not as sureties; that as between Livingston, Clarke & Co. and Ginty and Luce the latter were sureties, and that this fact was known to plaintiff at the time of the execution of the note. The court also found that the release of Livingston was with the consent of Ginty and Luce. It is contended by these appellants that the evidence is insufficient to support the finding that they executed the note as principals and that the plaintiff dealt with them as such. An examination of the evidence satisfies us that this contention cannot obtain. Indeed, taking all the circumstances attending upon the transaction from its origin into consideration, and it is doubtful if an opposite conclusion to that reached by the trial court could find substantial sanction in the evidence. However that may be, there is at least a substantial conflict on the point, and under the well-settled rule of this court the finding cannot be disturbed. It is further urged, however, that the fact that plaintiff was aware at the execution of the note that these defendants were merely sureties for Livingston, Clarke & Co. was sufficient of itself, independently of any agreement by plaintiff to that effect, to make said defendants sureties as to the plaintiff. We do not understand such to be the law. To the contrary, we understand the rule to be that where one signs as principal he will be held as