Friedlander v. Bank of California

51 P. 24, 119 Cal. 93, 1897 Cal. LEXIS 858
CourtCalifornia Supreme Court
DecidedNovember 23, 1897
DocketS. F. No. 819
StatusPublished

This text of 51 P. 24 (Friedlander v. Bank of California) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Friedlander v. Bank of California, 51 P. 24, 119 Cal. 93, 1897 Cal. LEXIS 858 (Cal. 1897).

Opinion

GAROUTTE, J.

Friedlander owed the Bank of California about five hundred thousand dollars, and Chapman owed the bank about two hundred thousand dollars. Each gave his notes to the bank for the amount of his indebtedness, with the other as an indorser. To secure the payment of all these notes Chapman conveyed to the bank about seventy-four thousand acres of land'and certain collateral securities. Friedlander conveyed to the bank as security for the notes twenty-four thousand eight hundred and eighty acres of land, and also certain collaterals. These transfers to the bank were made upon an express trust to the effect that the bank should sell the land and apply the proceeds to the payment of this indebtedness. Some months after these transactions Friedlander’s financial affairs became desperately involved, and thereupon another agreement was made. By this agreement, for valuable considerations received, the bank returned to Friedlander all his personal securities, and released and discharged him from any liability upon the aforesaid notes other than as to the lands transferred by him to the bank under the original trust contract made at the time the notes were given. This agreement in no way touched upon or affected the rights and liabilities of Chapman. Thereafter, the bank, without objection, entered into the possession of these lands, but the trust at that time had in no part been executed. Subsequently,. Friedlander died, and prior to the commencement of the present action the land conveyed to the bank by him in no way entered into the administration of his estate. In August, 1879, about three years after these notes were given, none of the lands held by the bank under the aforesaid trust having been sold, Chapman made overtures to the bank to be released from his indebtedness. These overtures resulted in an absolute deed from him to the bank of the land originally conveyed by. him as security. This deed was accompanied by a surrender to him, upon the part of the bank, of all the notes given by him and Friedlander under the original transaction. By this absolute deed of Chapman’s lands and the delivery of all these notes by the bank to him, it is claimed upon the part of the Friedlander estate that the entire seven hundred thousand dollars of indebtedness was paid and discharged, and that thereby Friedlander’s lands became released from the trust and re[96]*96verted to the estate. It is upon this theory that the estate, by its administrator, brought the present action for an accounting, the land having been sold in the mean time by the bank. Upon the other side, the bank insists that by the transfer of Chapman’s land to it, and a delivery of the notes to Chapman, he alone was released and discharged of liability upon the notes, and that Friedlander’s land is still held subject to the original trust. Whether Chapman’s indebtedness alone to the, bank was discharged by his transaction, whereby the bank took title in fee' to Chapman’s lands, or whether the liabilities of both Chapman and Friedlander upon the notes were discharged by the transaction, is the question in this case.

As to the nature and character of the transaction entered into between Chapman and the bank in August, 1879, the court made findings of fact. By these findings it is declared that Chapman did not satisfy or discharge the indebtedness of Friedlander to the bank, or any part of it, and that no part of the indebtedness of Friedlander to the bank, or any portion of the promissory notes of Friedlander, were canceled, released, or discharged, and that the indebtedness of Friedlander evidenced by said notes had never been paid. The court further declared that by the transaction of August, 1879, the Bank of California released Chapman from personal liability upon all the notes made by him and Friedlander, and returned said notes to Chapman for that purpose only. These findings of fact are square to the point at issue, and, if supported by the evidence, plaintiff has no case. It may be further suggested that there is no direct conflict in the evidence. It also appears that Chapman was not a witness.

The case revolves around the deal entered into and consummated between the bank and Chapman in August, 1879. At that time Friedlander’s land was held by the bank under the trust to satisfy this seven hundred thousand dollars of indebtedness. Did this deal release it from the heavy burdens then resting upon it? The contract between the bank and Chapman is an ordinary contract. There is nothing in it to take it out o£ the general rules pertaining to the construction of contracts. Such being the fact, the question presents itself, What were these two parties trying to do? What was their intention in entering into [97]*97this contract? By a mistake as to the law, contracts often cover more ground and have a different effect than the actual intention of the parties compassed in making them.- But this is no such case, and the intention of these parties, as evidenced by what was said and done at the time, determines the particular result accomplished. No writing was entered into at the time between these parties indicating the scope and purpose of the transaction, and hence it is to be judged alone by the things done. There is no question but that this transaction could have occurred exactly as it did occur, and Friedlander’s liability to the bank still be kept alive. Apt words would have done it, for the parties had the power and the right to do it. In other words, if the transaction between Chapman and the bank was one looking solely to the release of Chapman from this vast indebtedness, then such purpose only was accomplished. If the contract of the parties was one looking toward the lifting of burdens from Chapman’s shoulders solely, then certainly the burdens of other people were not affected bv it; and burdens resting upon Fried-lander prior to the transaction would rest upon him the same subsequent thereto. At the ineipiencv of the transaction this burden of indebtedness rested upon Friedlander’s land, and, if it was not in the minds of the parties as an element entering into the making of the contract, it still rested upon the land thereafter.

Friedlander was a stranger to the transaction between Chapman and .the bank. His name was never mentioned; his indebtedness was never mentioned. The contract was the result of a letter written by Chapman to the bank, wherein Chapman asked the privilege of giving to the bank a deed in fee of all his land held by it as security, in exchange .for a release and discharge to him of his indebtedness to the bank upon these notes. He stated in the letter that this indebtedness was crushing him, and that if he could not be freed from it he. would have to give up the struggle. It thus will be observed that Chapman was looking after his own interests entirely. He had ample troubles of his own, and Friedlander’s indebtedness was in no way occupying his attention. By the proposition submitted to the bank he offered to give all his land for his own discharge. He did not ask for Friedlander’s discharge. It certainly would be out [98]*98of the ordinary course in which banks do business if this bank voluntarily and without consideration of any kind released Friedlander’s land from liability. Yet this must be appellant’s contention. Upon the heels of this letter a meeting of the parties was had. Chapman gave to the bank an absolute deed of his land, and the notes evidencing the entire indebtedness were delivered to him. A director in the bank, who participated in the transaction, testified: “The bank finally released him from his debts and his obligations, and took the acres of land which he had given as security.

Free access — add to your briefcase to read the full text and ask questions with AI

Cite This Page — Counsel Stack

Bluebook (online)
51 P. 24, 119 Cal. 93, 1897 Cal. LEXIS 858, Counsel Stack Legal Research, https://law.counselstack.com/opinion/friedlander-v-bank-of-california-cal-1897.