The answer avers payment by Reel & McGraw, and upon this issue the verdict is founded on sufficient evidence. The answer also avers that Cave executed the note as surety, and this is found for defendant on sufficient evidence.
Thetransaction at the maturity of the note between McGraw and Carey (outside of it as a payment) exonerates the defendant under the provisions of Section 2839 of the Civil Code. If it was not in fact a performance of the principal obligation, it was an offer of such performance, coupled with the present ability to perform. The Court said, in Hayes v. Josephi , 26 Cal. 545: " It is true that a tender by the principal debtor does not discharge the debt, and he is bound to keep his tender good. * * * But there are substantial reasons why a tender should operate as a discharge of a mortgage or surety which do not apply to the debtor personally."
The rule, since the Code, is that the real relation (except as against innocent third persons) may be shown by parol as against the apparent relation. ( C. C., § 2832.) In Harlan v. Ely , 55 Cal. 343 (case of a joint note), the Court said: " It was lent to both. The character which it was agreed should be performed by defendant in the transaction with plaintiff was that of principal. If plaintiff had advanced his money without notice of the suretyship, they could have held defendant as maker. If they had agreed to take him as surety, they could only have held him as such, although he appeared as principal upon the written instrument. The present is a case beyond the statute, in which the Court below reached the conclusion that the defendant had not appeared in duplicate character in his transaction with plaintiff, but that his real and apparent relation to them was the same."
In the case at bar, the jury found as a fact upon all the testimony, that the real relation between defendant and plaintiff was that of suretyship, and not that of principal, which, upon the face of the written instrument, it appeared to be. With this relation found by the verdict, there are a number of sufficient facts found to exonerate the defendant. 1. Plaintiff agreed with defendant to make the principal pay the note at maturity. 2. Plaintiff had the power to perform this agreement, and violated it, without any motive, other than one exclusively between itself and Reel & McGraw as a customer of its bank. 3. It was the duty of the bank to apply the $ 1,700 in its hands to the payment of the note. " Where the means of satisfying the debt subsequently come into the hands of the creditor, and he does not avail himself of such means, butparts with them without the knowledge or consent of the surety, the surety is discharged," is what the Supreme Court said in Hayes v. Josephi , 26 Cal. 542, quoting, in support, Baker v. Briggs, 8 Pick. 121; S. C., 19 Am. Dec. 311; Hayes v. Ward, 4 Johns. Ch. 122; S. C., 8 Am. Dec. 554; 8 Serg. & R. 457; 13 id. 157. Carey's duty to apply the $ 1,700 was reinforced by his special promise to Cave. 4. It was the avowed purpose of the principal to apply the $ 1,700 to the payment of the note, and if this purpose was not consummated, as we contend it was, it was thwarted upon the motion of plaintiff, when he said to McGraw: " You leave Uncle Brad's note, and you can draw what money you require; " and this was a gross and inexcusable violation of plaintiff's duty. ( C. C., § 2840.) 5. The $ 1,700 in cash in plaintiff's hands, and its avowed willingness to accept Reel & McGraw's check for the full amount due on the note (saying nothing of the acceptance of the check and the surrender of the note), was an exoneration of the defendant from all liability as surety. 6. The leaving of the note, that is, giving it back after it had been surrendered, was in pursuance of a newcontract between Reel & McGraw and plaintiff, to which defendant was a stranger.
It is further werred in the answer that plaintiff secured the claim by attachment upon personal property more than sufficient to satisfy its demand, and afterwards, without defendant's knowledge or consent, and to favor other creditors, released the attachment. ( C. C., §§ 2840, 2845.)
OPINION The Court:
There was evidence tending to show that the note in suit was paid by Reel & McGraw and surrendered to them, although subsequently retaken by the plaintiff from Reel & McGraw, and held by it without the knowledge or consent of the defendant Cave. If the jury believed such evidence, notwithstanding the evidence in conflict, the verdict was correct. In such case we will not disturb the verdict. There was evidence, also, tending to show that the plaintiff had sufficient property of Reel & McGraw attached to secure the payment of the note, and that the attachment was released without the knowledge or consent of the defendant Cave. Cave being an accommodation maker, should not, under such circumstances, be injured by the acts of plaintiff.
No error appearing, the order is affirmed.