Opinion
Department Two
Appeal from a judgment of the Superior Court of Kings County. Justin Jacobs, Judge.
COUNSEL:
It was error to refuse to allow appellant to prove that the note was an antecedent debt, and that he signed it simply as surety. ( Civ. Code, sec. 2832.) The court erred in giving conflicting instructions. (Brown v. McAllister , 39 Cal. 573.) The court erred in instructing the jury that the surrender of the note was essential to a novation. ( Civ. Code, secs. 1530, 1531.) Misleading instructions are ground for a new trial. (Slaughter v. Fowler , 44 Cal. 199; Powers v. Wheatley , 45 Cal. 114; Whitman v. Steiger , 46 Cal. 257.)
Horace Smith, for Appellant.
Rowen Irwin, and Newman Jones, for Respondent.
The answer did not set forth facts sufficient to constitute a defense by way of novation or release of the surety, it not being averred that the postponement of the sale was not made by and with the consent of the surety, and the plaintiff was entitled to judgment on the pleadings. (Hook v. White , 36 Cal. 299.) Any error in the admission of evidence was cured by the instruction of the court that the evidence showed that defendant Rose was surety on the note. The instructions were not misleading.
JUDGES: Haynes, C. Searls, C., and Vanclief, C., concurred. Henshaw, J. Temple, J., concurred in the judgment.
OPINION
HAYNES, Judge
[42 P. 160] This appeal is from the judgment upon the judgment-roll and a bill of exceptions.
The action was upon a promissory note made by the defendants to the plaintiff on September 1, 1892, payable one year after date, for the sum of eighteen hundred and seventy-two dollars, with interest at ten per cent. It was stipulated in the note that in case any suit should be instituted thereon the makers should pay such additional sum as the court might adjudge to be reasonable as attorney's fees therein. Marques made default. Rose answered, alleging that he executed the note as surety for the defendant, and that the consideration of the note was an antecedent debt, which, at the date of the note, Marques owed to the plaintiff. He further alleged that on or about September 10, 1893, Marques was the owner of about nineteen hundred sheep and other property, and that on said date he placed them in the hands of one Biddle for sale, and that plaintiff and said Marques agreed between themselves that Biddle should hold said sheep and sell the same, and out of the proceeds of said sale pay the plaintiff the principal and interest of said note, and that in pursuance of said agreement Biddle advertised said sheep for sale, and, with the consent of plaintiff, postponed the sale, and that he had not yet sold said sheep or any part of them. It was also alleged that Biddle would have sold said sheep at the time advertised for the sale if plaintiff had not consented that the sale should not take place until the price of sheep should increase; and that if sold at the time advertised for the sale, sufficient would have been realized to pay and discharge said note; that said sheep were then, and are now, of the reasonable value of two thousand nine hundred dollars, and that Biddle still held them under said agreement between the plaintiff and defendant Marques.
The action was tried by a jury, and resulted in a verdict for the plaintiff for the full amount claimed, and judgment was entered thereon. Upon the trial appellant was sworn on his own behalf, and was asked the following question: "Did Marques owe this same debt before? Was Marques indebted to Pimental at the time you signed the note?" The plaintiff objected to the question, that it was immaterial, and that the allegation in the answer, that it was given for an antecedent debt, was surplusage. The court sustained the objection, and defendant excepted. The witness was also asked: "You signed it simply as surety?" and a similar objection was made thereto, and sustained, and the defendant excepted, and these rulings are assigned for error. The ruling was clearly erroneous ( Civ. Code, sec. 2832); but the question, however, remains, Was defendant injured by this ruling? The court instructed the jury that "The evidence in this case shows that Rose was a surety on the note." So far as the fact of suretyship, therefore, was concerned, the instruction was as beneficial to the defendant as any testimony upon that point could have been. Appellant contends, however, that the ruling compelled him to try the case upon the view taken by the court of the facts set up in the answer, which was that the answer set up a novation of contract rather than a release of the defendant as surety. If appellant was in fact released from his liability as surety, such release must have been based upon some act of plaintiff, or some agreement between the parties in relation to the sheep; and upon that point there was no restriction in the examination of the witnesses, and the bill of exceptions discloses no objection or ruling which could possibly have prevented a full disclosure of all the facts; and therefore appellant was not injured by the ruling of the court above noted. The ground upon which Rose claims that he was released as surety is that his principal, the defendant Marques, placed his property out of his control and conveyed it to Biddle as pledgee for the security of plaintiff, and that this operated to discharge him from liability as surety, though it might not establish a novation. A brief statement of the evidence in relation to the contract alleged in the answer is necessary for the consideration of all the questions in the case.
The agreement between the defendant Marques and Biddle was made March 13, 1893, before the note here in suit matured. Under this agreement Marques transferred to Biddle sheep to the number of about nineteen hundred and eighty-seven ewes, and about fifteen hundred young lambs, and certain horses and a wagon. At the time of this contract there was a prior lien upon the property in favor of Shubert, Beal & [42 P. 161] Co., which Biddle agreed to pay off and discharge; that the property so transferred was to be sold by Biddle "to the best advantage, either at private sale or public auction, and out of the proceeds pay the amount you have advanced to Messrs. Shubert, Beal & Co.; pay to the party holding the note that M. P. Rose indorsed for me of eighteen hundred dollars and interest; also, note of four hundred and sixty-seven dollars and fifteen cents, owing Manuel V. Maydne, dated October 13, 1892, due November 1, 1892; also, any other notes or accounts due. Then when sale is made, if any money is left, the said J. D. Biddle is to pay the balance to the said Alberto Marques or his order or assigns, sheep to be sold as soon as circumstances will permit, or as soon as J. D. Biddle deems advisable."
Under this agreement Biddle discharged the lien of Shubert, Beal & Co., and took possession of the sheep, but at what precise date does not appear. It does appear, however, that a few days after Marques' note to plaintiff became due, Marques, Rose, Pimental, and Biddle met at Biddle's office. Biddle testified that the agreement between Marques and himself above referred to was read to the plaintiff. This the plaintiff denies, but the agreement, or at least that the fact that the property above mentioned was left in the hands of Biddle to be sold for the purpose of paying the note in question was communicated to him, is not disputed.
Taking the evidence, however, most strongly in favor of appellant, it may be said that plaintiff agreed to the arrangement with Biddle to sell the sheep, and that Marques and Rose relied upon the sale of the sheep to meet their obligation to the plaintiff. At the first interview between these parties defendant Rose wanted twenty days' time for Biddle to sell the sheep, claiming that it was necessary to properly advertise the sale; the plaintiff thought fifteen days long enough, and it was agreed that fifteen days' notice should be given. That at that time, owing to the financial crisis which affected the whole country and the suspension of banks and refusal of other banks to loan money, it was found to be impracticable to sell the sheep without a great sacrifice, and it is claimed that plaintiff consented that Biddle should exercise his discretion in regard to selling, and that he did not want to see the property sacrificed.
However this may be, there is no testimony in the case tending to show that appellant did not consent to the delay in selling the property. Nor do I find any evidence tending to show that the plaintiff regarded the arrangement between Marques and Biddle otherwise than as a means of raising money for the payment of his claim, or, at the most, as additional security for its payment. Nor do I find any evidence that the plaintiff consented to "the substitution of a new debtor in place of the old one with intent to release the latter"; that is, that the plaintiff did not consent or agree to look wholly to the sale of the sheep, or to release the plaintiff from his liability as surety upon the promissory note.
Upon these questions, therefore, I conclude that appellant, having consented to the delay in selling the sheep, was not released as surety, and that there was no novation of the obligation. Appellant also contends that the court erred in its third instruction given at request of the plaintiff. This instruction is as follows: "In order to establish a defense set up by defendant in his answer herein, defendant Rose must prove by a preponderance of evidence that the plaintiff Pimental consented to the postponement of the sale of sheep advertised by Biddle." The exception to this instruction seems to be based upon the theory that the agreement between Marques and Biddle, and the assent of plaintiff to it, operated of itself to discharge appellant as surety. We have already seen, however, that there was no novation, and therefore the instruction is not obnoxious to the criticism of appellant. It is said, however, upon this point that "if Rose had consented to the postponement of the sale a different question would be presented which the instruction does not deal with." I find nothing in the bill of exceptions which indicates that Rose did not consent to the postponement of the sale, nor do I see any conflict between the instruction above quoted and instruction number 5 given at request of defendant, as it is certainly very clear that if there were in fact a novation, Rose could not be affected by any delay in disposing of the sheep, whether with or without the consent of the plaintiff, nor did the court err in refusing to give the fourth instruction asked for by the defendant, inasmuch as said instruction omitted one material fact necessary to satisfy the legal definition of novation, namely: That the agreement between Marques and Biddle should not only be assented to by the plaintiff, but that the plaintiff consented to the substitution of this obligation for the obligation evidenced by the promissory note, or that he consented to take Biddle as a new debtor in place of the appellant, whose obligation was fixed by the terms of the promissory note, and that with the intent to release him.
The court further instructed the jury, of its own motion, as follows: "Bear in mind, gentlemen of the jury, that the consent of the plaintiff to the substitution of one contract for another is an essential thing in the action, and the surrender or extinguishment of the note is another essential thing." This instruction, it is contended, is erroneous, and that inasmuch as the evidence discloses the possession of the original note by plaintiff, the jury must have known there had been no surrender of the note, and that therefore under this instruction were bound to find for the plaintiff. We agree with counsel for appellant that the "surrender" of the note was not essential to the novation, though by novation the obligation of the note, as such, would be "extinguished." The note would only remain to mark the extent of the new obligation, and would have no legal existence beyond that. The court having used the words "surrender or extinguishment" in this connec tion, the jury could not have been misled by [42 P. 162] the use of the word "surrender." The judgment appealed from should be affirmed.
For the reasons given in the foregoing opinion the judgment appealed from is affirmed.