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that the contract shall not be reasonably interpreted as other contracts are. In interpreting the terms of a contract of suretyship, the same rules are to be observed as in the case of other contracts.-Weinreich Estate Co. v. Johnston, 28 Cal. App. 144, 151 Pac. 667.

5. Sureties are never bound beyond the strict letter of their contract; they have the right to stand upon the precise terms of their agreement, and there is no authority for extending their liability beyond the stipulation to which they have chosen to bind themselves.-W. P. Fuller & Co. v. Alturas School District, 28 Cal. App. 609, 153 Pac. 743.

-Interpretation of contract. — In interpreting the language of the undertaking for the purpose of gathering its scope or the measures of the liability of the sureties, we must do so by treating or viewing the contract and the undertaking as a whole or as constituting an indivisible contract. In other words, we must, in order to ascertain the nature and extent of the liability to which the sureties have bound themselves, examine the undertaking by the light of the agreement of whose terms it guarantees the faithful performance.-W. P. Fuller & Co. v. Alturas School District, 28 Cal. App. 609, 153 Pac. 743.

8 2837.
1. Construction as contract of suretyship

Rules of interpretation.-A contract of suretyship is to be construed the same as other contracts, for the purpose of determining the intention of the parties; to ascertain this intent resort is first had to the contract itself, and if the intention of the parties is doubtful under the terms of the instrument, recourse may be had to the surrounding circumstances to determine its meaning.-Schwab v. Bridge, 27 Cal. App. 204, 149 Pac. 603.

2. The old rule of strictissimi juris applies only to the extent that no implication shall be indulged in to impose a burden not clearly inferable from the language of the contract, but does not apply so as to hold

§ 2840.

1. Release or exoneration of surety.-A surety, by virtue of the provisions of section 2840 of the Civil Code, is not discharged from liability by departures from the contract by the obligee without the surety's consent, when such variations have not had the effect of so prejudicing the surety as to injure or impair his remedies in any degree or of lessening his security, in any measure, or are not in any sense inconsistent with his rights under the bond-Dunne Investment Co. v. Empire State Surety Co., 27 Cal. App. 208, 150 Pac. 405.

2. A surety is exonerated in like manner with a guarantor, for section 2840 of the Civil Code so expressly provides, and a guarantor is exonerated, except in so far as he may be indemnified by the principal, "if by any act of the creditor, without the consent of the guarantor, the original obligation of the principal is altered in any respect, or the remedies or right of the creditor against the principal, in respect thereto, in any way impaired or suspended.”—Dunne Investment Co. v. Empire State Surety Co., (Sup. Ct.) 27 Cal. App. 223, 150 Pac. 411.

3. Where the original obligation of the principal is so altered, or the remedies or rights of the creditor against the principal so impaired or suspended, no inquiry will be allowed as to whether or not the surety was in fact injured thereby.-Dunne Investment Co. v. Empire State Surety Co., (Sup. Ct.) 27 Cal. App. 223, 150 Pac. 411.

TITLE XIV.

LIEN.

a

8 2897.

signing a paper which declared that he held

chattel mortgage on 1. Priority of liens.-The lien of a ware

the property, the houseman for storage is prior to the lien

purpose of which was to enable the ware

houseman, if the mortgagor demanded the of a mortgagee of the goods who has given

property, to refuse her demand and retain his consent to their storage.-Schmidt v. Bekins Van & Storage Co., 27 Cal. App. 667,

possession of it for the mortgagee, does not

affect the superiority of the warehouseman's 155 Pac. 647.

lien.--Schmidt v. Bekins Van etc. Co., 27 Cal. 2. A warehouseman has a lien on mort

App. 667, 155 Pac. 647. gaged goods for his storage charges thereon superior to that of the mortgagee, where it is made to appear that the mortgagee

8 2911. was not only present at the time the goods 1. Lien of mortgage — Extinguished by were removed from their original location bar of statute. — Notwithstanding that the and loaded on wagon belonging to the lien of a mortgage is extinguished by the warehouseman and

made no objection barring of the debt by limitation, the mortthereto, but two months thereafter signed a gagor can not without paying his debt quiet paper prepared by the warehouseman stating his title against the mortgagee. This rule that the goods were stored with the mort- is not applicable to one who acquired the gagee's consent; and the fact that at the mortgaged land by purchase for a considtime of signing such paper he was unable eration after the lapse of the time within to read the same and thought he was only which an action to foreclose a mortgage

a

could have been brought and at a time when the records showed that the mortgage lien

had become extinguished.–Faxon v. All Persons, 166 Cal. 707, 137 Pac. 919.

CHAPTER II.

MORTGAGE,

$ 2924. Transfer, when mortgage, when pledge.

2920 1. Mortgage-What is a.–At common law a mortgage was a conveyance of title upon condition subsequent. That title became absolute and indefeasible upon breach of the condition. No right of redemption existed. The sole recourse was a resort to equity for relief against the forfeiture. Moreover, the mortgagee had his right to go to law to recover the amount of the mortgage debt and to enforce his recovery by imprisonment of the debtor. Nor did the doing of any

of these acts impair his mortgage security.Martin v. Becker, 169 Cal. 301, Ann. Cas. 1916D 171, 146 Pac. 665.

2. A mortgage is a pledge or security for a debt, whatever may be the form which the transaction takes, whether a simple mortgage deed in form or a mortgage with a power of sale, or a deed in trust or a deed absolute on its face, accompanied by an agreement in writing to reconvey or to sell or to do any other thing upon the payment of a certain sum of money.-Alexander v. Bosworth, 26 Cal. App. 589, 147 Pac. 607.

8 2924. TRANSFER, WHEN MORTGAGE, WHEN PLEDGE. Every transfer of an interest in property, other than in trust, made only as a security for the performance of another act, is to be deemed a mortgage, except when in the case of personal property it is accompanied by actual change of possession, in which case it is to be deemed a pledge.

[Power of sale to be exercised when.] Where, by a mortgage hereafter created, of any estate in real property, other than an estate at will or for years, less than two, or in any transfer in trust hereafter made of a like estate to secure the performance of an obligation, a power of sale is conferred upon the mortgagee, trustee, or any other person, to be exercised after a breach of the obligation for which such mortgage or transfer is a security, such power shall not be exercised (except where such mortgage or transfer is made pursuant to an order, judgment, or decree of a court of record, or to secure the payment of bonds or other evidences of indebtedness authorized or permitted to be issued by the commissioner of corporations, or is made by a public utility subject to the provisions of the public utilities act), until, (a) the mortgagee or beneficiary shall first record, in the office of the recorder of the county wherein the mortgaged or trust property or some part thereof is situated, a notice of such breach and of his election to sell or cause to be sold such property to satisfy the obligation; (b) not less than three months shall thereafter elapse; and (c) the mortgagee, trustee or other person authorized to make the sale shall give notice of the time and place thereof, in the manner and for a time not less than that required by law for sales of real property upon execution.

History: Enacted March 21, 1872; amended March 30, 1874, Code
Amdts. 1873-4, p. 260; May 10, 1917, Stats, and Amdts. 1917, p. 300. In

effect July 27, 1917. $ 2925.

of the instrument employed by the parties

may be, if it was intended merely as security 1. Deed intended as a mortgage.-A deed

for the payment of a debt, the law fixes its absolute in form may be shown by parol

character as a mortgage only; it is

not evidence to be a mortgage in fact, although

at all a matter of contract, but of law.no actual fraud is imputed to the mortgagee.

Power & Irr. Co. of Clear Lake V. Capa y -Goiden v. Fischer, 27 Cal. App. 271, 149 Pac.

Ditch Co., 226 Fed. 634. 797.

2. A deed intended as a mortgage for a debt from the grantor to the grantee does

$ 2957. pass the legal title between the

Chattel mortgage-Affidavit of good parties nor confer a right of possession upon faith (subd. 1).The signature of the parthe grantee, but merely operates as a mort- ties to an affidavit that a chattel mortgage gage between them.--Power & Irr. Co. of is made in good faith and without intent Clear Lake v. Capay Ditch Co., 226 Fed. 634. to defraud creditors is unnecessary, if the 3. No matter how strong the language oath is taken by a competent official certify

not

as

1.

on

V.

ing to the same.-In re Johnstone, 220 Fed. the obligation, and provides that in case 218.

of failure of the payee

to furnish such 2. A chattel mortgage is not rendered additional security as called for, or in case valid by the fact that the parties go before of nonpayment of the obligation, that the a notary public with the purpose and intent payee may sell the stock without notice, it of making the affidavit required by section can not be contended in an action to recover 2957 of the Civil Code, if neither of them

the note that the pledge sale which sign nor swear to the affidavit.-In re John- was made was illegal for want of actual nostone, 220 Fed. 218.

tice to the pledgor, on the theory that the 3. The certificate of a notary public that waiver was limited to the condition which the parties to a chattel mortgage were duly might arise upon the failure of the pledgor sworn and deposed that it was not given to furnish additional security, if called for. to defraud creditors is not conclusive, when -Williams v. Parker, 30 Cal. App. 71, 157 they have not signed the affidavit.-In re Fac. 550. Johnstone, 220 Fed. 218.

$ 3006. $ 2972.

1. Pledgee's sale of securities-Construc1. Mortgage on crop-Lien lost, when.

tion.-The provision of section 3006 of the The lien of a mortgage on a crop of grapes Civil Code that a pledgee can not sell any is not lost by the delivery of the crop to a

evidence of debt pledged to him is designed packing house for marketing by the mort

for the benefit of the pledgor, who may gagor in his own name in violation of an

waive it.-Gault v. Wiens, 32 Cal. App. 1, agreement, because the mortgagor becomes

161 Pac. 996. the agent of the mortgagee. Nor is the lien lost by the wrongful removal of the

8 3046. crop from

the land, independent of any agreement; such a lien still exists against 1. Vendor's lien.-The vendor's lien is in the consignee of the mortgagor unless he the English and American law exceptional can clothe himself with the character of an

in character. It was an importation from innocent purchaser for value.-Crosby the Roman civil law, and found its recogFresno Fruit Growers' Co., 30 Cal. App. 308, nition in the English system through its 158 Pac. 1070.

courts of chancery. The equitable principle

was that the person who had secured the $ 2986.

estate of another ought not in conscience 1. Pledge or sale.--When personal prop

to be allowed to keep it and not pay full conerty is delivered as security, the transaction

sideration money, and that to enforce that is a pledge, but if goods are delivered by a

payment it was just that it should be made

a charge upon debtor to his creditor in payment of the

the estate so taken. But debt, the transaction has the effect of a sale,

being from its nature a secret lien. being and the same is true if goods are delivered

thus an intrusion upon and an exception to by the debtor to the creditor to be sold

every principle of our jurisprudence, which and the proceeds applied on the debt with

frowns upon secret transactions of all kinds,

courts have criticised its existence, a return of the surplus.--Rauer v. Rued, 27 Cal. App. 556, 150 Pac. 780.

some states by statute have destroyed it,

and every court has been swift to declare $ 3000

that the taking by the vendor of any security is

waiver of the lien. -- Martin V. 1. Pledgec-When may exercise power of

Becker, 169 Cal. 301, Ann. Cas. 1916D 171, sale.-While it is true that the relation ex

146 Pac. 665. isting between parties to a transaction

2. A vendor who retains the legal title where collateral is placed in the hands of

under an executory contract for the sale the pledgee as security for the payment of a

of land does not waive his lien by bringing debt, with power of sale in case of default,

an action at law for the recovery of the is in the nature of a trust relation, and

purchase price.-Ehrhart v. Mahony, 170 Cal. that the power must be exercised in good

148, 148 Pac. 934. faith, yet, where the pledgee makes the sale in the manner provided by law and in accordance with the conditions of the con

$ 3051. tract, and it is not shown that he did or 1. Lien for services on property-Concaused to be done anything for the pur- struction.--One making repairs to an autopose of preventing a fair sale, the pledgor mobile at the request of one legally in poshas no right to complain. Under such cir- session of the automobile under the terms cumstances the pledgee may take the mar- of a contract for the conditional sale thereof ket as he finds it and exercise his power is entitled to a lien for the work done and of sale accordingly.--Williams v. Parker, 30 materials furnished.-Davenport v. Grundy Cal. App. 71, 157 Pac. 550.

Motor Sales Co., 28 Cal. App. 409, 152 Pac.

932. 8 3003.

2. -Constitutionality. Such section of 1. Waiver of notice of sale. - Where a the code is not unconstitutional because promissory note recites the fact of deposit creating a lien under such circumstances.with the payee of certain shares of cor- Davenport v. Grundy Motor Sales Co., 28 porate stock as security for the payment of Cal. App. 409, 152 Pac. 932.

some

a

["Title XV of part IV of division third of the Civil Code is hereby repealed and a new title XV of part IV of division third of said code is hereby added to read as follows": Stats, and Amdts. 1917, p. 1531. In effect July 31, 1917.)

TITLE XV.

NEGOTIABLE INSTRUMENTS.

Chapter I. Negotiable instruments in general.

II. Bills of exchange.
III. Promissory notes and checks.
IV. General provisions.

CHAPTER I.

NEGOTIABLE INSTRUMENTS IN GENERAL.

Article I. Form and interpretation.

II. Consideration,
III. Negotiation.
IV. Rights of the holder.

V. Liabilities of parties.
VI. Presentment for payment.
VII. Notice of dishonor.
VIII. Discharge of negotiable instruments.

ARTICLE I.

FORM AND INTERPRETATION.

$ 3082. Form of negotiable instrument.
8 3083. Certainty as to sum; what constitutes.
8 3084. When promise is unconditional.
$ 3085. Determinable future time, what constitutes.
$ 3086. Additional provisions not affecting negotiability.
$ 3087. Omissions; seal; particular money.
$ 3088. When payable on demand.
$ 3089. When payable to order.
$ 3090. When payable to bearer.
$ 3091. Terms when sufficient.
§ 3092. Date, presumption as to.
$ 3093. Antedated and postdated.
$ 3094. When date may be inserted.
$ 3095. Blanks; when may be filled.
$ 3096. Incomplete instrument not delivered
$ 3097. Delivery; where effectual; when presumed.
8 3098. Construction where instrument is ambiguous.
$ 3099. Liability of person signing in trade or assumed name.
$ 3100. Signature by agent; authority; how shown.
$ 3101. Liability of person signing as agent, etc.
$ 3102. Signature by procuration; effect of.
$ 3103. Effect of indorsement by infant or corporation.

$ 3104. Forged signature; effect of. 8 3082. FORM OF NEGOTIABLE INSTRUMENT. An instrument to be negotiable must conform to the following requirements:

1. It must be in writing and signed by the maker or drawer; 2. Must contain an unconditional promise or order to pay a sum certain in money;

3. Must be payable on demand, or at a fixed or determinable future time; 4. Must be payable to order or to bearer; and

5. Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty.

History: Enactment approved June 1, 1917, Stats, and Amdts. 1917, p. 1532. In effect July 31, 1917.

8 3083. CERTAINTY AS TO SUM; WHAT CONSTITUTES. The sum payable is a sum certain within the meaning of this act, although it is to be paid

1. With interest; or
2. By stated installments; or

3. By stated installments, with a provision that upon default in payment of any installment or of interest, the whole shall become due; or

4. With exchange, whether at a fixed rate or at the current rate; or

5. With costs of collection or an attorney's fee, in case payment shall not be made at maturity.

History: Enactment approved June 1, 1917, Stats, and Amdts. 1917, p. 1533. In effect July 31, 1917.

$3084. WHEN PROMISE IS UNCONDITIONAL. An unqualified order or promise to pay is unconditional within the meaning of this act, though coupled with

1. An indication of a particular fund out of which reimbursement is to be made, or a particular account to be debited with the amount; or

2. A statement of the transaction which gives rise to the instrument. But an order or promise to pay out of a particular fund is not unconditional.

History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1533. In effect July 31, 1917.

8 3085. DETERMINABLE FUTURE TIME, WHAT CONSTITUTES. An instrument is payable at a determinable future time, within the meaning of this act, which is expressed to be payable

1. At a fixed period after date or sight; or
2. On or before a fixed or determinable future time specified therein; or

3. On or at a fixed period after the occurrence of a specified event, which is certain to happen, though the time of happening be uncertain.

An instrument payable upon a contingency is not negotiable, and the happening of the event does not cure the defect.

History: Enactment approved June 1, 1917, Stats, and Amdts. 1917, p. 1533. In effect July 31, 1917.

8 3086. ADDITIONAL PROVISIONS NOT AFFECTING NEGOTIABILITY. An instrument which contains an order or promise to do any act in addition to the payment of money is not negotiable. But the negotiable character of an instrument otherwise negotiable is not affected by a provision which

1. Authorizes the sale of collateral securities in case the instrument be not paid at maturity; or

2. Authorizes a confession of judgment if the instrument be not paid at maturity; or

3. Waives the benefit of any law intended for the advantage or protection of the obligor; or

4. Gives the holder an election to require something to be done in lieu of payment of money.

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