Santa Ana Sugar Co. v. Smith , 116 Cal. App. 422 ( 1931 )

I concur in the judgment. There are two principal questions in the case. The first relates to the admissibility of testimony offered by defendant to prove that he was not legally obligated on the notes signed by him. The second relates to the validity of defendant's guaranty of his wife's notes, these notes having been outlawed at the time when the guaranty agreement of defendant was made.

The notes executed by defendant were promises to pay money, "in gold coin of the United States". Each note contained this further statement: "All amounts hereafter coming due to me from said Santa Ana Sugar Company are hereby assigned to it to be applied in payment of this note until it is fully paid." Defendant's answer admits that the moneys received by him were advances made to him for the purposes of planting and cultivation of his beets "Until the crop was ready for marketing, when the plaintiff would purchase such crop from the defendant". It is thus established that the oral evidence received by the court, to the effect that in certain contingencies the defendant would be excused from liability, was testimony received for the purpose of modifying the express provisions of the notes. The objections to such evidence should have been sustained.

The second question seems to be not very difficult, when one keeps in mind the fact that the notes given by defendant's wife had become outlawed before the guaranty agreement was made. This fact at once excludes such cases as Anderson v. Shaffer,98 Cal.App. 457 [277 P. 185], which are authority for the proposition that where the obligation of the principal debtor has been allowed to expire by limitation after the time of making of the guarantor's promise, the creditor may not, under such circumstances, enforce the guaranty. But there is no rule or policy of law which should prevent one from entering into an agreement of guaranty of payment of a barred debt, where the guaranteed obligation is not itself tainted with any element of illegality.

I also agree with the conclusion that the evidence does not support the finding of the lower court that defendant was not competent to make the contracts, or the finding that they were made under duress.