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supervision of an agent whose techni- him to judge whether it has been percal knowledge is sufficient to enable formed in a satisfactory manner.5 upon it to do that which it could not pairs, and see that the boilers were do at all, and which those whom it em- maintained in safe condition; in this ployed could do well; it would have particular duty he was the defendant. been negligence in defendant if it had Donlan, a mechanic in the employ of undertaken to do that for which it was Munroe & Sons, was sent to this mill wholly unfit. Surely, in sound reason, to work on the boilers; he worked if it would have been negligence to there under the direction of Williams, employ known incompetent mechanics, made such examination as Williams it would have been no less negligence

directed and supervised.. .. There for the manager, conscious of his own was evidence that a proper examinaignorance, to attempt, on personal ex- tion by a competent man like Williams amination, to make the repairs him- would have disclosed this unsafe conself.”

dition and the necessity of condemning The review of the cases collected or replacing these boilers, as they in § 1055 of Labatt's Master & Servant were very old.

From Wilmay also be consulted. The New York liams's own statement, he was an excases there mentioned seem to be in- pert for the very purpose of examinaconsistent with an earlier ruling in tion and repair of boilers.

He was the same state, to the effect that error not a mere mechanic employed to do a would have been predicable if the trial particular job of work; he was the judge had refused to charge that the defendant, supervising and caring for defendant could not justify on the sole one very important part of defendant's ground that he had purchased the machinery, and if he neglected his boiler from reputable manufacturers, duty his neglect was that of defendand that this circumstance is merely ant. This is the obvious distinction one which the jury may properly con- between this case and that of Andersider as tending to exculpate him from son v. Hays Mfg. Co. (Pa.). (See note the charge of negligence. Losee v. 4, supra.]

If it be argued that Buchanan (1873) 51 N. Y. 476, 10 Am. it was Donlan's neglect that caused Rep. 623.

the accident, and that he was a me5 In James McNeil & Bros. Co. v. chanic employed by Munroe & Sons, Crucible Steel Co. (1904) 207 Pa. 493, the answer is that Donlan worked un56 Atl. 1067, where the plaintiff's mill der the direction and supervision of was injured by the explosion of certain Williams, who knew what Donlan did boilers, which had been inspected and and what he neglected to do. The repaired by a mechanic sent by a firm, argument based on the assumption the grounds upon which the company that Munroe & Sons, as independent owning the boilers was held liable contractors, inspected and repaired were thus stated: “Here the repre- the boilers, and then turned them over sentative of defendant, Williams, was to defendant as safe, loses its force in an engineer of more than twenty the face of the evidence that their meyears' experience as an inspector of chanic worked under the direction and boilers in this plant;

it was

supervision of Williams, who in that his especial duty to inspect them, to particular was the defendant corporahave them cleaned, to pronounce on re

tion."

C. B. L.

MARY M. BOGART, Respt.,

V.
GEORGE K. PORTER COMPANY et al.

FRED L. BORUFF et al., Appts.
BENJAMIN F. PORTER et al., Interveners.
California Supreme Court (In Banc) - February 15, 1924.

(- Cal.

223 Pac. 959.) Limitation of actions when statute runs undertaking to pay debt to

third person. 1. The Statute of Limitation begins to run in favor of one who under

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takes to pay another's unmatured obligations to a third person when, upon maturity of the obligations, he fails to pay them.

[See note on this question beginning on page 1056.] - contract for benefit of third person. ly and unnecessarily extend the bring

2. The statutory periods of limita- ing of the suit by deferring such detion are not excluded by a statutory mand or acceptance, but must make it provision that a contract made ex- within a reasonable time. pressly for the benefit of a third per- [See 17 R. C. L. 757.] son may be enforced by him at any

Contract · for benefit of strangers time before the parties thereto rescind necessity of acceptance. it.

7. Failure of a creditor whose debt - effect of bringing action against a third person has undertaken to pay, obligor.

to accept the proposal within a rea3. The bringing of an action against sonable time, revokes the proposal by the obligor upon an obligation which operation of law. another has undertaken to pay does Attorney and client notice to atnot toll the running of the Statute of

torney effect. Limitations in favor of the latter.

8. One is chargeable with knowl- right of one assuming mortgage edge of his attorney, employed to colto benefit of statute.

lect a claim, that payment of it has 4. A grantee who assumes and been assumed by a third person. agrees to pay a mortgage on the prop- [See 2 R. C. L. 962; 1 R. C. L. Supp. erty may take advantage of the limita- 667. See also note in 4 A.L.R. 1592.] tion period which has elapsed in his Principal and agent - notice acquired favor since his undertaking.

prior to agency

effect on princi[See 17 R. C. L. 792. See also note

pal. in 21 A.L.R. 496.]

9. Knowledge possessed by an agent Estoppel to contest assumed debt. while he occupies that relation and is

5. A grantee who by a covenant in executing the authority conferred uphis deed expressly recognizes the ex- on him as to matters within the scope istence and validity of a particular of his authority is notice to his prindebt, and assumes and agrees to pay cipal, although it may have been acthe same, is estopped thereby to claim quired before the agency, if it was that the debt was not valid or subsist- present in his mind at the time he ing when he assumed it.

acted for the principal. [See 19 R. C. L. 369; 3 R. C. L. Supp. [See 21 R. C. L. 842.] 934.]

Contract acceptance of offer de[See also note in 21 A.L.R. 490.] lay. Limitation of actions when demand 10. An unexplained delay by a credto be made.

itor of more than six years in accept6. Where a demand or acceptance ing an offer of a third person to satisis necessary before suit to perfect a fy his claim prevents the acceptance right of action, one cannot indefinite- from being within a reasonable time.

APPEAL by defendants Boruff et al., from a judgment of the Superior Court for the City and County of San Francisco (Troutt, J.) in favor of plaintiff in an action brought to recover the amount alleged to be due on a promissory note. Reversed.

The facts are stated in the opinion of the court.

Messrs. Knight, Boland, Hutchin- Wald's Pollock, Contr. p. 267; Danson, & Christin, and Alan C. Van iels v. Johnson, 129 Cal. 415, 79 Am. Fleet, for appellants:

St. Rep. 123, 61 Pac. 1107; Roberts v. The only purpose of $ 1559 of the Fitzallen, 120 Cal. 482, 52 Pac. 818; Code was to give the third party bene- Williston, Contr. § 398; Washer v. Inficiary a right of action which did not dependent Min. & Development Co. 142 exist at common law. It did not have Cal. 703, 76 Pac. 654; Robertson v. the effect, nor was it intended to have Stuhlmiller, 93 Iowa, 326, 61 N. W. the effect, of exempting such a con- 986; Anguish v. Blair, 160 App. Div. 52, tract from the operation of the Stat- 145 N. Y. Supp. 392; Kuhl v. Chicago ute of Limitations.

& N. W. R. Co. 101 Wis. 42, 77 N. W. (- Cal. 223 Pac. 959.) 155; Mueller Lumber Co. v. McCaffrey, Lockwood v. Canfield, 20 Cal. 126; Goff 141 Iowa, 730, 118 N. W. 903.

v. Ladd, 161 Cal. 257, 118 Pac. 792; The cause of action is barred by the Davis v. Davis, 19 Cal. App. 797, 127 Statute of Limitations.

Pac. 1051; Lundeen v. Nowlin, 20 Cal. Roberts v. Fitzallen, 120 Cal. 482, 52 App. 415, 129 Pac. 474; Montgomery v. Pac. 818; Sherwood v. Gill, 36 Cal. Dorn, 25 Cal. App. 666, 145 Pac. 148. App. 707, 173 Pac. 171.

Plaintiff's cause of action is not Knowledge obtained by an attorney barred by the Statute of Limitations. is the knowledge of the client.

Chicago & N. W. R. Co. v. Jenkins, Watson v. Sutro, 86 Cal. 516, 24 Pac. 103 Ill. 597; Roberts v. Fitzallen, 120 172, 25 Pac. 64; Bierce v. Red Bluff Cal. 484, 52 Pac. 818; Negaubauer v. Hotel Co. 31 Cal. 160.

Great Northern R. Co. 92 Minn. 184, Ignorance of facts which is not due 104 Am. St. Rep. 674, 99 N. W. 620, 2 to fraudulent concealment does not Ann. Cas. 150; Ward v. Waterman, 85 constitute a bar to the running of the Cal. 488, 24 Pac. 930; Hurwitz v. Statute of Limitations.

Gross, 5 Cal. App. 618, 91 Pac. 109; Williston, Contr. § 2020; Lougee v. Konda v. Fay, 22 Cal. App. 724, 136 Reed, 133 Iowa, 48, 110 N. W. 165; Pac. 514; Lundeen v. Nowlin, 20 Cal. Shearer v. Park Nursery Co. 103 Cal. App. 417, 129 Pac. 474; Grant v. Burr, 415, 42 Am. St. Rep. 125, 37 Pac. 412. 54 Cal. 298; Boyce v. Fisk, 110 Cal.

Messrs. F. J. Solinsky and Edward 113, 42 Pac. 473; 3 Pom. Eq. Jur. 4th R. Solinsky, for respondent Bogart: ed. ( 1206, p. 2888; Key West Wharf

Section 1559 of the Civil Code is but & Coal Co. v. Porter, 63 Fla. 448, 58 the codification of well-established So. 599, Ann. Cas. 1914A, 173; Alt v. principles of law and equity, and con- Banholzer, 36 Minn. 57, 29 N. W. 674; firms to a third person, for whose Miller v. Thompson, 34 Mich. 10; Allen benefit an agreement has been made, v. Freear, 50 Cal. App. 645, 195 Pac. a right of action against the promisor. 748; Stanton v. Carnahan, 15 Cal. App.

Union P. R. Co. v. Durant, 95 U. S. 530, 115 Pac. 339. 576, 24 L. ed. 391; Eldridge v. Turner, Mr. Philip C. Boardman for defend11 Ala. 1049; Preachers' Aid Soc. v. ants. England, 106 Ill. 125; Miller v. Bil- Messrs. Hutchinson, Van Fleet, & lingsly, 41 Ind. 489; Mory v. Michael, Christin for interveners. 18 Md. 227; Forbes V. Thorpe, 209

Myers, J., delivered the opinion of Mass. 570, 95 N. E. 955; Peer v. Kean,

the court: 14 Mich. 354; Hart v. Equitable Life Assur. Soc. 172 App. Div. 659, 158 N.

Defendants appeal from a judgY. Supp. 1063; Sweeney v. Houston, ment in favor of plaintiff in an ac243 Pa. 542, L.R.A.1915A, 779, 90 Atl. tion upon a promissory note. The 347; Johnson v. Collins, 14 Iowa, 63; sole contention urged by them upGoodwin v. Bowden, 54 Me. 424; Dash- on this appeal is that the cause of away Asso. v. Rogers, 79 Cal. 211, 21 action was barred by the Statute Pac. 742; Minor v. Baldridge, 123 Cal. of Limitations. 187, 55 Pac. 783; Gray v. Ellis, 164

After the former decision of this Cal. 481, 129 Pac. 791; Hitchcock v. Lukens, 8 Port. 333; Taylor v. Taylor,

case, a rehearing was applied for by 20 Ill. 650; Keene v. Sage, 75 Me. 138;

the respondent upon the ground that O'Neal v. School Comrs. 27 Md. 240;

we had failed to consider one of the Putnam v. Field, 103 Mass. 556; Hos- points made by her upon the oral ford v. Kanouse, 45 Mich. 620, 8 N. W. argument, and that we had, in effect, 567; Smith v. Robins, 149 C. C. A. 324, overruled the case of More v. Hutch236 Fed. 114; Palmer V. Bray, 136 inson, 187 Cal. 623, 203 Pac. 97. Mich. 85, 98 N. W. 849; Green v. Mc

The rehearing was granted in order Donald, 75 Vt. 93, 53 Atl. 332; Silver King Coalition Mines Co. v. Silver

that we might give further considKing Consol. Min. Co. 122 C. C. A. 402,

eration to the point stressed upon 204 Fed. 169, Ann. Cas. 1918B, 571; the application therefor, and re-exWasher v. Independent Min. & Devel- amine our former conclusions in the opment Co. 142 Cal. 703, 76 Pac. 654; light of their claimed conflict with Johnson v. Collins, 14 Iowa, 65; Mor

the More Case. After such re-exgan v. Overman Silver Min. Co. 37 Cal. 537; Whitney v. American Ins. Co.

amination we adhere to those con127 Cal. 470, 59 Pac. 897; Flint v.

clusions upon the points then under Cadenasso, 64 Cal. 83, 28 Pac. 62; consideration, and are satisfied that

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they present no real conflict with the and Benjamin F. Porter, interveners rules announced in the More Case. herein. At this time there still re

On August 5, 1905, George K. mained in the company undistribPorter executed and delivered to 0. uted certain lands situated in difH. Bogart, plaintiff's assignor, the ferent counties of the state, which, note here sued on, which is for the together with certain personal propsum of $2,575.20. The instrument erty, amounted in value to about is made payable eighteen months $65,000. On September 30, 1911, from the date thereof, to wit, March this property was transferred and 5, 1907. After the execution of the conveyed to the Merchants' Bank & note, and about September 10, 1906, Trust Company, a corporation, now Porter caused the incorporation of the Hellman Commercial Trust & the George K. Porter Company. Savings Bank, defendant herein, This company was formed principal for the purposes of sale, and for the ly to take over, hold, own, manage, payment out of the proceeds thereof and control the properties of Porter. of the taxes thereon and other inIn pursuance of this plan Porter a cidental expenses connected therefew days thereafter granted and with, and also for the payment of all conveyed to the company all of his the indebtedness of the Porter Comreal and personal property whereso- pany.

pany. Thereafter this last-named ever situated. The company, as part company failed to pay its license tax of the consideration for this convey- and forfeited its charter, and its diance and transfer, agreed to and did rectors, Kate C. Boruff, Fred L. assume the payment of all the out- Boruff, Louis P. Boardman, and J. standing indebtedness of Porter E. Pearce, became its trustees by opexisting at the time of said convey- eration of law. Under all of these ance. This agreement was never circumstances, and upon the promise rescinded. Shortly thereafter, on of the Porter Company to pay all November 16, 1906, Porter died. of the outstanding indebtedness of The claim of Bogart upon the note George K. Porter, this action was was duly presented within the statu- commenced January 20, 1917, tory period to the executors of the against the George K. Porter Comestate of Porter. It was rejected, pany, its trustees, above named, and and a suit was duly commenced up- against the Hellman Commercial on the note, which action is still Trust & Savings Bank, as the holder pending and undetermined. On of certain assets of the Porter ComJanuary 27, 1909, Bogart assigned, pany charged with the payment of transferred, and set over to his wife, its indebtedness under the conveythe plaintiff herein, all of his right, ance, as above indicated. The facts, title, and interest in and to the said as above stated, are interpreted in note and in and to the action based the light most favorable to respondthereon for its collection, then pend- ent's contentions and in support of ing against the executors of Porter's the judgment. estate. About this time the affairs Appellant's contend that, whether of the George K. Porter Company the gist of plaintiff's actions be conbecame involved and litigation re- sidered to be upon the original note sulted. A settlement was effected, which matured in 1907, or upon the under which a division of the assets assumption thereof by the George of the corporation was made among K. Porter Company in 1906, or upon its stockholders. In pursuance of the implied assumption thereof by this settlement the company con

the bank in 1911; in either event it is veyed all the real property located barred by the Statute of Limitations, in the county of Los Angeles, valued this action having been commenced at the sum of $750,000, in equal more than four years subsequent to parts, to its three principal stock- all of those dates. Respondent conholders, Kate C. Boruff, one of the tends that her cause of action rests defendants, and Estelle C. Christin upon the agreement of the George

for benefit of third person.

- Cal.,

223 Pac. 959.) K. Porter Company in 1906, where- recognized finds its source in the by it assumed and agreed to pay all agreement of the immediate parties of the outstanding indebtedness of thereto (George K. Porter and the the said George K. Porter; that un- George K. Porter Company), from der the well-recognized rule of which the law, operating upon the equity, which has been enacted as a acts of the parties, creates the duty, rule of law in § 1559 of the Civil establishes a privity, and implies the Code, providing that “a contract promise and obligation on which the made expressly for the benefit of a action is founded. Washer v. Indethird person may be enforced by him pendent Min. & Development Co. 142 at any time before the parties there- Cal. 703, 76 Pac. 654. Other cases to rescind it,” her right of action is proceed upon the theory: exempted from the operation of any “When a grantee contracts with of the Statutes of Limitation. Her his grantor to pay the latter's debt position is that the phrase “at any or obligation in payment, or in part time before the parties thereto re- payment, for the conveyance, the scind it" expresses the only limita- creditor or obligee may accept and tion upon her right to maintain her appropriate that contract to himself action, and that all statutes of limi- and maintain a suit in equity to entation are excluded thereby. We force it. In that event the grantee

cannot accept this becomes the principal debtor and the Limitation of actions contract view.

view. The rule of grantor the surety, and the creditor's law there expressed suit stands on the equitable doc

is a rule of substan- trines that the creditor may have the tive law, and is not adjective or benefit of any security or obligation procedural. It means that the cause given by the principal debtor to the of action arises in favor of the third surety. .” Silver King Coaliperson upon the making of such a tion Mines Co. v. Silver King Consol. contract, and that such a cause of Min. Co. 122 C. C. A. 405, 204 Fed. action subsists until the parties 169, Ann. Cas. 1918B, 571; 3 Pom. thereto rescind their contract. It Eq. Jur. 4th ed. p. 2891; Williams v. does not mean that the right to com- Naftzger, 103 Cal. 438, 440, 37 Pac. mence and maintain an action upon 411; Daniels V. Johnson, 129 Cal. such cause of action is exempted 415, 418, 79 Am. St. Rep. 123, 61 from the Statutes of Limitation. Pac. 1107. This conclusion is fortified by a con- "In fact, the relief granted is sideration of the various provisions merely the application towards the of title 2, pt. 2, of the Code of Civil payment of the debt by a court of Procedure, relating to the time of equity of the mortgagor's property, commencing civil actions. The consisting of the promise running legislature has there specified the to him from the grantee of the limitations applicable to a wide mortgaged premises.' 1 Williston, variety of actions, and then, to re- Contr. p. 724. but the possible inference that ac- Under the rule of the cases which tions not therein specifically de- hold that the right of action "finds scribed are to be regarded as ex- its source in the agreement of the empt from limitations, it has speci- immediate parties thereto," it is apfied a four-year limitation upon parent that the obligation from the "an action for relief not herein- promisor (grantee) to the third perbefore provided for" (§ 343); and son (creditor) arises at once upon where it has intended that an action the making of the agreement. The shall be exempt from limitations it law instantly “creates the duty, eshas said so in clear and unmistak- tablishes a privity, and implies the able language. Code Civ. Proc. ß promise and obligation on which 348; Civ. Code, § 309.

the action is found." The cause of It is the theory of some of the de- action therefore arises at once, and cisions that the right of action thus the right of action thereon accrues

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