Opinion
L.A. No. 696.
June 25, 1900.
APPEAL from a judgment of the Superior Court of San Luis Obispo County. E.P. Unangst, Judge.
The note secured by the mortgage was dated March 27, 1895, and was for the sum of four thousand five hundred dollars, with interest thereon from date until payment, at the rate of eight per cent per annum, payable semi-annually, and, if not so paid, then to be added to and become part of the principal. The indorsement of the note and assignment of the mortgage was made by the payee to the plaintiff April 24, 1895, prior to the maturity of any payment of interest on the note. Further facts are stated in the opinion.
John E. Richards, and Samuel M. Shortridge, for Appellant.
The complaint is insufficient as against the demurrer. It is a well-settled rule of pleading that in an action brought to recover upon a promissory note, it is essential that the plaintiff should allege that the note has not been paid. (Ryan v. Holliday, 110 Cal. 335; Notman v. Green, 90 Cal. 172; Scroufe v. Clay, 71 Cal. 123; Hurley v. Ryan, 119 Cal. 71; Bank of Shasta v. Boyd, 99 Cal. 604.) It is also the well-established rule in this state that pleadings are to be construed most strongly against the pleader. (Callahan v. Loughran, 102 Cal. 476; Glide v. Dwyer, 83 Cal. 477; Hays v. Steiger, 76 Cal, 555; Collins v. Townsend, 58 Cal. 608.) No mere presumption of evidence upon the trial, from possession of the note, can be indulged in favor of the pleader, who must definitely allege its nonpayment.
C.W. Cobb, Graves Graves, and D.W. Burchard, for Respondent.
Possession and ownership of the note are averted both in the original payee, before the indorsement, and in the indorsee thereafter, and the law raises a presumption of nonpayment against the maker from such possession and ownership. (Farmers' etc. Bank v. Christensen, 51 Cal. 571; Turner v. Turner, 79 Cal. 565. ) Under the facts of the case, any possible error in overruling the demurrer could not have substantially prejudiced the mortgagor, and cannot therefore be ground for reversal. (Code Civ. Proc., sec. 475; Gassen v. Bower, 72 Cal. 555; Shade v. Sisson etc. Co., 115 Cal. 371; Sloane v. Southern Cal. Ry. Co., 111 Cal. 686; Smith v. Smith, 119 Cal. 183; Alexander v. Central Lumber Co., 104 Cal. 532.)
This is an action on a promissory note and to foreclose a mortgage executed by the appellant Shortridge to the defendant Herbert S. Hall, who indorsed and delivered said note and assigned said mortgage to plaintiff.
The defendants, other than Shortridge, made default. Shortridge demurred to the complaint for want of facts and on the ground that it was uncertain in its allegations as to nonpayment. On his demurrer being overruled he answered, and on a trial plaintiff obtained judgment against him, from which he appeals, and in support thereof relies solely on the insufficiency of the complaint. The complaint shows that the note was drawn payable "on or before two years after date," and that some twenty-seven days after its execution the defendant Hall "assigned said note by indorsing the same on the back thereof, and delivering the same to this plaintiff." The allegation of nonpayment of the note is as follows: "That interest was paid thereon to the twenty-seventh day of March, 1896; which said payments have been indorsed on the said promissory note, and the sum of four thousand five hundred dollars, United States gold coin, the principal sum in said promissory note and mortgage, together with interest thereon at the rate of eight per cent per annum, compounded as in said note provided, from the twenty-seventh day of March, 1896, still remains due and unpaid from the said defendant, Charles M. Shortridge, to this plaintiff."
Appellant's contention is that the complaint fails to show that the note was not paid: 1. By the appellant to Hall while he was the payee and holder thereof; 2. By Hall to the plaintiff herein during the time that he was liable thereon as an indorser, and after said note became due.
The allegation of delivery of the note by Hall to plaintiff at the time it was indorsed, and that plaintiff was subsequently the owner and holder of it shows prima facie that the note had not been paid prior to such indorsement and delivery, for the possession of the note in the payee or indorsee is prima facie evidence that it has not been paid. (Turner v. Turner, 79 Cal. 565. ) If the note had been paid by any person it would have operated as a discharge of it, and also of the mortgage, and appellant might have pleaded such payment as a defense to the action. He did nothing of the kind, though he further defended the action. Therefore, it is not unreasonable to presume that he had no such defense, and that he was in no way misled or otherwise injured by the action of the court in overruling his demurrer. This case should be distinguished from such cases as Ryan v. Holliday, 110 Cal. 335, and other cases cited by appellant, in which there was an entire absence of any allegation in the complaint as to nonpayment. The most that can be said against the complaint herein is that it is not as clear and certain as it should have been in its allegation showing a breach of the contract sued on. It contains, however, in addition to other allegations tending to show nonpayment of the note, a clear statement that the principal and part of the interest on the note is unpaid to the plaintiff by the one from whom it is primarily due. We think the complaint sufficient to support the judgment against this appellant, and if the court erred in overruling the demurrer such error should be disregarded because it did not mislead defendant, was merely technical in its character, and was in no way prejudicial to any substantial fight of defendant. (Gassen v. Bower, 72 Cal. 555; Holland v. McDade, 125 Cal. 353.)
We advise that the judgment be affirmed.
Cooper, C., and Smith, C., concurred.
For the reasons given in the foregoing opinion the judgment is affirmed.
Harrison, J., Van Dyke, J., McFarland, J.