Savings Bank of San Diego v. Central Market Co.

Citations

• 122 Cal. 28
• 54 P. 273
• 1898 Cal. LEXIS 521

Syllabus

<p>¡Promissory Note—Joint Makers—Corporation and Stockholders.—A promissory note, joint in form, executed by a corporation, and by seven individuals, “as stockholders,” is the joint note of the corporation and of the individuals whose names are signed thereto.</p> <p>Id.—Liability of Individual Signers—Immaterial Designation. The question as to the liability of the individuals who signed the note “as stockholders” is to be determined upon an inspection of the note; and as it imports upon its face an agreement by them to pay the note, and not merely to ratify its execution by the corporation, the fact that they promised to pay “as stockholders” is immaterial. It is also immaterial that the designation of “trustee” was further appended to two of the signatures.</p> <p>Id.—Payment—New Note—Express Agreement.—In the absence of an express agreement that a new note should be received as payment of a former note, the note cannot operate as such to extinguish the obligation of the former note.</p> <p>Id.—Novation.—In order that the acceptance of a new note may operate to discharge a former note by novation, there must be an express agreement that the new obligation shall be substituted for the former.</p> <p>Id—Note Secured by Second Mortgage—Loss of Security—Personal Action.—A personal action upon a note secured by a second mortgage is not prohibited by section 726 of the Code of Civil Procedure, after the security of the mortgage has been lost without the fault of the mortgagee, and through the failure of the mortgagor to pay the first mortgage, resulting in the foreclosure thereof, and sale of the mortgaged premises to pay the same.</p> <p>Id—Foreclosure of First Mortgage—Parties—Rights of Junior Mortgagee.—Upon foreclosure of a first mortgage, a junior mortgagee, who is made a party, is not bound to set up his mortgage and seek a foreclosure thereof by way of cross-complaint, especially when to do so would require the presence of. other parties. By making default in the