Page images
PDF

time beyond, within which a successor might be nominated. It is claimed that the order of the board “continuing Wm. H. Allen as Secretary” had no greater effect than their silence would have had, and if they had not acted, he would have continued as secretary until his successor was appointed or he was removed. It may be doubted whether the plaintiff could render the defendants liable on the bond for any period by merely omitting to name a successor. But here, his term having expired, the directors reappointed Allen. The bond in suit does not provide (as does the bond in some of the cases cited) that the obligors shall be responsible for malfeasance of William H. Allen “during the time he shall continue secretary,” or "while he shall continue to act as secretary,” or other like words. The recital is : “Whereas, William H. Allen is secretary,” etc. Surely the obligors (sureties) did not intend to bind themselves to answer for all defalcations of their principal which might happen during his natural life, in case he should be reappointed and act as Secretary for the rest of his life. Is that the meaning of their contract, fairly interpreted? They were not compelled to anticipate that no other person than Allen would be appointed at the expiration of Allen's term. Counsel for appellant concede that if, by the charter of the company or laws of the state, the office of Allen was limited to one year, the defendants would not be liable beyond the year, and that when the bond is general, but the period of the office limited by the by-laws of the company, the sureties are not liable for a default after the expiration of the limited time. Welch v. Seymour, 28 Conn. 387; Chelmsford v. Demarest, 7 Gray, 1; South Carolina Soc. v. Johnson, 1 McCord, 41. But it is contended that when “the tenure of office is until his successor is elected or qualified or accepts,—which may be a sufficient qualification—then the sureties are bound for a default occurring at any time before the principal is succeeded, or, in the words of this court in 45 California, when [while] he is yet ‘in office.’” The case in 45 California referred to by counsel (Placer Co. v. Dickerson, 45 Cal. 13) was an action on a county treasurer's bond. Dickerson was elected treasurer, to hold from the first Monday of March, 1866, to the second day of March, 1868. He continued in office until the third day of March, 1868, when he turned over the books, vouchers, moneys, etc., to his successor, who had demanded them the previous day. There is no pretense that his successor began to act as such, or had assumed the office on the third of March, when the defalcation occurred. It occurred while Dickerson assumed to act as treasurer under his election prior to the commencement of his term. The facts in that case were different from those in the present. In this case, William H. Allen was reappointed—named—as successor. The argument always returns to the question, “What does the contract mean?" It was the apparent intention of both parties that at the expiration of his year (if he was not sooner removed) some one should be named to succeed Allen as secretary, upon whose appointment the liability of the obligors should cease, so that they should not be responsible for subsequent acts of the secretary. The plaintiff performed its duty in the premises by appointing Allen as his own successor. When he began to act under the reappointment, the liability of defendants on the bond ceased. As we have seen, it does not appear that the charter or any by-law fixed the term of secretary at one year or any definite term. The directors had power to appoint a secretary to hold until the further order of the board. The liability of the defendant William H. Allen on the bond is no greater than, nor is it different from, that of the other defendants. Of course, he is Jiable in a direct action for moneys of the plaintiff he has misappropriated. But the liability of each of the defendants, who executed the specific contract, is the same. A principal in a bond is no further bound than his sureties. Bigelow v. Bridge, 8 Mass. 274. Appellant's counsel suggests: “Suppose a principal forged the name of a surety: the surety would not be liable, but the principal would be.” In that case the principal would be liable because he executed the bond; the alleged surety would not be liable because he did not execute it. Judgment affirmed.

We concur: Ross, J.; McKEE, J.

(67 Cal. 536) Good v. MoULTON and others. (No. 9,783.) Filed September 28, 1885. 1. DEED–VALIDITY WHERE CoNSIDERATION NOT EXPRESSED. A deed is operative and valid, though no consideration be expressed therein, and will have the effect to convey the legal title to the grantee, whether made to defraud creditors or not. 2. MARRIED WOMAN’S PROMISSORY NOTE—VALIDITY OF. A married woman may make a promissory note, and, in the hands of an innocent purchaser for value before maturity, it will be valid and binding upon her, although, as between herself and the payee, it had been agreed that payment of the note would never be demanded or required. 3. MARRIED WOMAN–LIABILITY ON ACCOMMODATION NOTE. An accommodation note, made by a married woman, is binding on her, and enforceable against her separate property, in the hands of a holder for value, even though he knew how it was made. 4. IMMATERIAL EVIDENCE—ADMISSION, WHEN ERROR. The admission of immaterial evidence is error warranting a reversal when it is calculated to mislead the jury.

Commissioners’ decision.

Department 1. Appeal from superior court, city and county of San Francisco.

H. M. Alberry, for appellant.

Hart & White, for respondent.

BELCHER, C. C. This is an action upon a promissory note, made by the defendant Lina Moulton to the defendant D. L. Moulton, and by him indorsed to the plaintiff. The case was tried before a jury, and the verdict and judgment were in favor of the defendants. The plaintiff moved for a new trial, and his motion was granted as to the defendant D. L. Moulton, and denied as to the defendants Lina and L. F. Moulton. The plaintiff appeals from the judgment and order in so far as it denied his motion for a new trial, and the defendant D. L. Moulton appeals from the order granting a new trial as to him. By their answer, the defendants alleged that the defendant D. L. Moulton, being at the time financially embarrassed, was advised by the plaintiff, who was his attorney, for the purpose and with the intent to delay his creditors, to transfer and convey, without consideration, all his property to the defendant Lina, and that she should hold the same until a settlement was made with his creditors, or until their claims should be barred by the statute of limitations, and then reconvey it; that the plaintiff further advised and directed that, in order that it might appear that a proper and sufficient consideration for the transfer of the property had been paid, and that the transfer had been made in good faith and not to hinder and delay creditors, the note in suit should be made and indorsed and then left with him; that in pursuance of the plaintiff's advice, the defendant D. L. Moulton conveyed his property to the defendant Lina, and then the note was made, indorsed, and given to the plaintiff, but without any consideration therefor, and with the express understanding and agreement that it should never be presented for payment. At the trial it appeared that the defendant Lina was the daughter of defendant D. L., and the wife of defendant L. F. Moulton, and that she and her husband resided on a farm, distant somewhere between 12 and 20 miles from the land conveyed to her by her father, and that in December, 1880, she had conveyed the land so conveyed to her to one Harris for the expressed consideration of $16,000. D. L. Moulton was called as a witness for the defendants, and testified substantially to all the facts set up in the answer, and then, against the objection of the plaintiff, was permitted further to testify that he never delivered possession of any property under the deed to Lina, and that she never received any benefit from the sale of the land, and never got any property out of the whole transaction. The foreman on the ranch of the defendant L. F. Moulton was then called as a witness, and, referring to the land conveyed to defendant Lina, was asked: “Now state whether or not that land ever came under the dominion or control, or whether any occupation or exercise of control or use of that land was had by Mrs. Lina Moulton 2” And, again, he was asked: “Was anything said to you, or did you ever have any directions from any one there,—Mr. Moulton or Mrs. Moulton,—respecting any action to be taken regarding this particular land?” Harris, the purchaser of the land, was also called as a witness, and, referring to the land conveyed to him by defendant Lina, was asked: “Did you find her in possession of that property when you went there?” These questions were all objected to by the plaintiff as irrelevant, incompetent, and immaterial, and the objections were overruled and exceptions taken. The plaintiff was called as a witness in his own behalf, and testified that he was not the attorney of the defendants, and that he did not advise the making of the conveyance to defendant Lina, or know of its being made until sometime after its execution; that D. L. Moulton was indebted to witness, and witness was urging payment; that Moulton told witness he had conveyed his land to Lina, and that she owed him $2,500 for the purchase money; that Moulton asked witness to accept her note in payment, and he agreed to do so; that the note was accepted by him in good faith in payment of an indebtedness of an equal amount, the evidences of which were at the time surrendered and canceled; and that it was never agreed or understood that the note was not to be presented and paid at its maturity. It is very evident, we think, that the court erred in admitting the testimony objected to. The deed to defendant Lina was a good and operative deed, notwithstanding no consideration was expressed in it, —sections 1092, 1614, Civil Code; 2 Hil. Real Prop. (3d Ed.) 291,– and it passed the legal title of the property to her, whether it was made to hinder and delay creditors or not. She had power to make her promissory note for a part or all the purchase money, and to obligate herself for its payment; and a note so made, in the hands of an innocent purchaser for value before its maturity, is valid and binding upon her, whatever may have been the arrangement between herself and

her father about its payment.

The real issues before the jury were: Did the plaintiff receive the note in suit without consideration and knowing it was not to be paid, as testified to by D. L. Moulton, or did he receive it in good faith and for its face value, and expecting it to be paid at its maturity, as testified to by him 2 Upon these issues the testimony objected to was wholly irrelevant and immaterial, and tended to mislead the jury. At the request of the defendants the court instructed the jury as follows:

“If the jury believe from the evidence that the note sued on and introduced in evidence was executed by Mrs. Lina Moulton for the accommodation of D. L. Moulton merely, and without consideration, and that at the time she was a married woman, and that the plaintiff knew such facts, then he cannot recoVer.”

The instruction in effect told the jury that if Mrs. Moulton was a married woman, and, without consideration, executed the note for the accommodation of D. L. Moulton, and the plaintiff knew these facts, then their verdict must be for the defendants. This was error. In this state a married woman may enter into any engagement or transaction respecting property which she might if unmarried. Section 158, Civil Code. A promissory note is an engagement respecting property which a married woman may make, though it can be en

v.8P, no.2–5

forced only as against her separate property. Marlow v. Barlew, 53 Cal. 456; Alexander v. Bouton, 55 Cal. 15. If Mrs. Moulton had been unmarried, she could have made a promissory note for the accommodation of her father without receiving any consideration for so doing, and the note so made, in the hands of one who received it for value, would, beyond question, have been valid and binding upon her though the holder knew how and why it was made. But the fact that she was married does not at all change the rule or limit her power in this respect. It does not appear why the court below granted the motion for new trial as to the indorser of the note, and denied it as to the maker. There was no reason for granting it as to one and not the other, except that defendant Lina was a married woman, and therefore, as claimed by counsel, not bound by her note. Being bound by it, as we have seen, if the testimony was insufficient to justify the verdict as to one, it was equally so as to both, and the new trial should have been granted as to both. In our opinion the judgment and order as to Lina Moulton should be reversed and the cause remanded for a new trial, and the order as to defendant D. L. Moulton should be

affirmed.
We concur: Foot'E, C.; SEARLs, C.

BY THE CourT. For the reasons given in the foregoing opinion the judgment and order as to defendant Lina Moulton is reversed and cause remanded for a new trial, and the order as to D. L. Moul

ton is affirmed.

(2 Cal. Unrep. 537)

PEOPLE v. LowDEN. (No. 11,002.)
Filed September 28, 1885.

QUO WARRANTo FoR UsurpATION OF FRANCHISE—ANswer: IN. In quo warranto proceedings for usurpation of a corporate franchise, if the verified complaint alleges facts showing the illegality of the pretended corporation, such facts must be specifically denied by the answer, and a denial of the legal conclusions drawn from the facts merely, is not sufficient. 2. PLEADING—LEGAL CONCLUSIONS. An allegation in a pleading that a corporation was duly, regularly, and legally formed, and that it has continued to act as such, is a mere averment of a legal conclusion and raises no issue. 3. QUo WARRANTo Fort UsuRPATION of FRANCHISE-BURDEN of PRooF. In a proceeding for usurpation of franchise of a corporation, the burden of proof is on the defendants to show that the corporation was legally formed, and that its existence is legal, and in such proceeding the answer should set forth the facts showing the same. 4. SAME—PRIOR PROCEEDINGS, whEN A BAR. Proceedings brought by the attorney general to determine the rights of defendants to exercise a franchise as a corporation are not barred by a prior application for a writ of mandate to compel a board of supervisors to fix rates of toll to be taken on a road claimed by the alleged corporation. 5. QUO WARRANTo—MAINTENANCE BY ATTGRNEY GENERAL–ESTOPPEL. The fact that the person on whose relation the proceeding of quo warranto,

[ocr errors]
« PreviousContinue »