Citizens' Bank of Los Angeles v. Jones

California Supreme Court May 31, 1898 No. L. A. No. 438Published

Before: Fleet

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Holding. The court held that a written contract of indorsement cannot be varied by parol evidence of a prior or contemporaneous verbal agreement, and that an optional payment clause in a certificate of deposit does not accelerate the maturity date for the purpose of charging an indorser.

Issues

Whether a written contract of indorsement can be varied by parol evidence of a verbal agreement regarding the time of presentment.
Whether a certificate of deposit payable at a fixed date, but with an option for earlier payment, matures at the earlier date for the purpose of charging an indorser.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The stipulation therein that it would be paid at the end of six months “if desired” was an option solely for the benefit of the payee, to be availed of at his election.”

Synopsis

Appeal—Review of Evidence—Substantial Conflict—Specifications.— Where the evidence upon an issue is substantially conflicting, the finding of the court will not be disturbed upon appeal; nor can the sufficiency of the evidence to sustain a finding be reviewed upon appeal, where there is no specification attacking such finding.

Negotiable Paper—Liability of Indorser—Parol Evidence.—The contract between the indorser and indorsee of a negotiable instrument is a written one, which merges ail oral negotiations, and cannot be varied or changed by parol evidence of a verbal promise or agreement made at the time of or previous to the indorsement; nor can it be varied by proof of any subsequent oral promise' made without consideration.

Id.—Certificate of Deposit—Term of Credit—Option of Holder—Oral Aqreement with Indorser.—A certificate of deposit in a bank which was by its terms payable to order within twelve months from its date, with interest, or within six months thereafter if desired, did not mature until the expiration of the twelve months’ period, and the option for payment at the end of six months was solely for the benefit of the payee, to be availed of at his election, which. privilege, the instrument being negotiable, passed to the indorsee; and, in an action by the indorsee against the indorser, brought upon demand and notice at the expiration of the twelve months’ period, parol evidence is inadmissible to show that it was orally agreed between the indorser and indorsee that demand should be made at the end of the six months’ period, and that if it had been so made, it would have been promptly paid by the bank. Such evidence is equally inadmissible, whether the oral promise of the indorsee was made before or after the indorsement of the certificate.

VAN FLEET, J. Appeal by defendant from the judgment and an order denying a new trial.

The action was to recover from defendant, as indorser, on á certain certificate of deposit. The certificate was in these words:

“No. 5937.

“First National Bank of Helena, Montana.

“(Not subject to check.)

“October 19, 1895.

“G. M.'Jones has deposited in this bank ($1,000.00) one thousand dollars, payable to the order of self, on return of this certificate twelve months after date with interest at the rate of six per cent per annum for the time specified only. Payable in. 6 mo. if desired with interest at 6 per cent. No interest after due.

/ «No. 70430. GEO. F. COOPER,

“Cashier.”

.It'was indorsed “G. M. Jones.”- The complaint alleged its presentation, with demand of payment, to the maker,, on October ,19,- 1896; that payment was not made, and that due -notice of such demand was given the defendant. . ,

[32]The answer alleged that defendant’s indorsement to plaintiff was made, on or about March 6, 1896, and was with the understanding and agreement that plaintiff should present the certificate to the maker for payment at the end of six months from its date; that at the last-mentioned date the maker thereof was in a flourishing condition and'meeting all its obligations as they matured, and that had the paper been then presented it would have been promptly paid; that it was the duty of plaintiff- by reason of said agreement to make demand at said date, and by its failure to do so it had assumed all future risks of collection.

The court found the facts alleged in the complaint to be true and those stated in the answer untrue; and gave judgment for the plaintiff.

Appellant’s main contention seems to be in effect, although not so stated in terms, that the finding against his special defense is not in accord with the evidence. We regard the evidence as substantially conflicting as to the making of any such agreement as that set up in the answer. But if this were otherwise, appellant is not in a position to assail the finding upon this issue, since the record contains no specification attacking it. There is but one specification in the record, and that is directed in express terms to the first finding, which refers solely to the averments of the complaint.

Citizens' Bank of Los Angeles v. Jones

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