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when statute

to third person.

when the obligation is breached. If upon an instrument in writing, it the original indebtedness does not outlawed at the expiration of four mature until after the assumption years after it accrued. Code Civ. thereof by the promisor (grantee), Proc. § 337, subd. 1, § 312. the breach would occur and the right The obligation herein was kept of action accrue when, upon the alive by the commencement of the

maturity of the action upon the note against the esruns-undertak

original indebted- tate of George K. Porter, deceased, ing to pay debt ness, the promisor which suit is still pending and un

failed to pay the determined. This undoubtedly has same. Roberts v. Fitzallen, 120 Cal. the effect of keeping the right of 482, 52 Pac. 818. If the original in- action alive as against that estate, debtedness had matured prior to the but not as against

-effect of bringassumption thereof, the obligation any other parties ing action would be breached immediately up- liable

upon

the against obligor. on its creation, and the right of ac- note. Conceding that the indebtedtion would accrue at that time. ness evidenced by this note was a Davis v. Davis, 19 Cal. App. 797, part of the indebtedness assumed 127 Pac. 1051; Daniels v. Johnson, and agreed to be paid in 1906 by supra.

the George K. Porter Company, the Under the rule of the cases which latter became, in effect, a joint and proceed upon the theory that the several obligor upon that note, the grantee (promisor) becomes the same as if it had been a signer principal debtor and the grantor thereof, and the rule would ap(promisee) his surety, and that the ply that the pendency of an accreditor (third person) is entitled in tion against one of several joint equity to enforce that obligation and obligors stops the running of the apply it to the satisfaction of his Statute of Limitations only as to claim, it is clear that the basis of his him who was the party defendant at action is the obligation from the the time it was filed. Jeffers v. grantee to his grantor. That ob- Cook, 58 Cal. 147, 150; Spaulding v. ligation is fully created when the Howard, 121 Cal. 194, 198, 53 Pac. contract to assume the debt is en- 563; Harrison v. McCormick, 122 tered into, and the right of action

Cal. 651, 55 Pac. 592; Sherman v. S. thereon would accrue at the time

K. D. Oil Co. 185 Cal. 534, 548, 197 and under the conditions as above

Pac. 799. stated. This conclusion is supported by a consideration of the pro

Respondent relies upon the rule visions of $ 2854 of the Civil Code,

stated in 3 Pom. Eq. Jur. 4th ed. p. that "a creditor is entitled to the

2888, as follows: "That a grantee benefit of everything which a sure

who thus assumes payment, in whole ty has received from the debtor or in part, of a mortgage as a porby way of security for the perform- tion of the purchase price of the ance of the obligation, and may, up- land conveyed to him, cannot conon the maturity of the obligation, test the validity of the mortgage compel the application of such se- on any ground and thus evade the curity to its satisfaction.” (Italics liability which he has assumed." added.)

Respondent construes this rule to It follows that under either of the

mean that such a grantee cannot deof plaintiff's cause of action herein, fend against the enforcement of such her right of action thereon, as

a mortgage even upon the ground against the George K. Porter Com

that the action thereon is barred as pany, accrued upon the maturity of

to him by the Statute of Limitations. the obligation which the latter had But the rule does not go thus far assumed, which matured March 5, either in its language or in its mean1907. Assuming it to be founded ing. It means only this: That a

gage to benefit of statute.

(- Cal.

223 Pac. 959.) grantee who thus assumes payment validity of any such claimed mort

of a mortgage can- gage, lien, or indebtedness. -right of one assuming mort

not contest the "If the promisor's agreement is to validity thereof, as a be construed as a promise to dis

valid and subsist charge whatever liability the proming obligation at the time he as- isee is under, the promisor must cersumed it; or, in other words, that tainly be allowed to show that the he will not be heard to claim promise[e] was under no liability. that it was not at that time a val- Thus, one who, in return for an asid and subsisting obligation. That signment of property, assumed all this is the extent and the limitation the grantor's debts, would certainly of the rule is made manifest by an be allowed to dispute the validity of examination of the numerous cases any debt. On the other hand, if the which are cited by the author to promise means that the promisor this portion of his text. All of those agrees to pay a sum of money to A, cases, with the exceptions here- to whom the promisee says he is inafter noted, were cases wherein the debted, it is immaterial whether the grantee sought to contest the valid- promisee is actually indebted to that ity of the mortgage upon a ground amount or at all. The promisee has which, if successful, would have es- decided that question himself. tablished its invalidity at the time Where the promise is to pay a spehe assumed it, such as failure or cific debt,-for example, to assume want of consideration therefor, a specific mortgage,-especially if fraud, undue influence, nonexecu- the amount of it is deducted from tion, usury, etc. The rule is but a the consideration paid by the promiparticular application of the general sor for the mortgaged property, rule of estoppel by deed. A grantee this construction will generally be who by a covenant in his deed ex- the true one. Most of the cases acpressly recognizes the existence and cordingly refuse to allow one who

validity of a partic- has assumed a specific debt to set up Estoppel-to contest assumed ular debt or other usury or other defenses, of which

obligation, and as- the debtor might have availed himsumes and agrees to pay the same, is self.” 1 Williston, Contr. § 399. estopped thereby to claim that such This limitation of the rule was debt or obligation was not valid or recognized and impliedly approved subsisting at the time he so recog- by this court in Alvord v. Spring nized and assumed it, but the es- Valley Gold Co. 106 Cal. 547, 553, 40 toppel thus arising goes no fur

Pac. 27. So, also, it was held in Dather than the admissions of the cove- vis v. Davis, 19 Cal. App. 797, 127 nant out of which it arises. This is Pac. 1051, that such a grantee canapparent from the cases cited by the not set up that the mortgage debt, author. For example, in Sherman when he assumed it, was barred by v. Goodwin, 12 Ariz. 42,95 Pac. 121; the Statute of Limitations, because Robinson Bank v. Miller, 153 Ill. to do so would be to contradict the 244, 27 L.R.A. 449, 46 Am. St. Rep. covenants of his deed, which recog883, 38 N. E. 1078, and Drury v.

nized the debt as a then valid and Holden, 121 Ill. 130, 13 N. E. 547, it subsisting obligation. That the rule was held that where the deed does

here in question rests upon the docnot specifically describe the partic

trine of estoppel by deed is also exular debt, but contains a general

pressly recognized in the cases of

Hurwitz v. Gross, 5 Cal. App. 614, clause whereby the grantee assumes

618, 91 Pac. 109, and San Ramon “all mortgage and other liens stand

Valley Bank v. Walden Co. 53 Cal. ing against the property," or "all

App. 534, 536, 200 Pac. 662, as well the outstanding indebtedness of the

as in the case of Alvord v. Spring grantor," such grantee is not es- Valley Gold Co. supra. topped thereby from contesting the "The nature of a creditor's right

debt.

against one who has promised the such a grantee could not set up want debtor to pay the debt is also in- of consideration between the asvolved in determining when the signee and the assignor of the mortStatute of Limitation bars the credi

gage as a defense to a suit by the tor's action. On principle the credi- assignee. The case there cited as tor must have a claim that has not authority for the quoted dictum been barred against the original (Crawford v. Edwards, 33 Mich. debtor (see also Daniels v. Johnson, 354) went no further. The same is 129 Cal. at page 418, 79 Am. St. Rep. true of the case of Key West Wharf 123, 61 Pac. 1107], and the latter & Coal Co. v. Porter, 63 Fla. 448, must also have such a claim against 58 So. 599, Ann. Cas. 1914A, 173. the promisor. But courts which Allen v. Freear, 50 Cal. App. 645, allow a direct right to the creditor 195 Pac. 748, was a suit in equity against the promisor hold that brought by a creditor of one Batethough the creditor's original claim man to impose a trust upon certain is barred, he may nevertheless en- property. Bateman, who had beforce a claim against the promisor, come financially involved in the conif the statutory period has not run duct of a grocery business, conveyed since the debt was assumed." 1 the same to Freear in trust to conWilliston, Contr. 398. (Italics duct the business, pay Bateman's added.)

debts from the proceeds thereof, and No case has been cited herein, then to reconvey to Bateman a onenor have we found any, which de- half interest therein, and upon no cides that the Statute of Limitations other consideration. Freear sold will not run in favor of a grantee, the business in violation of the trust, upon his contract to assume a debtreceiving therefor a note and mortor that a grantee who is sued upon gage, upon the proceeds of which it a debt, the payment of which he has was sought to impose the trust. assumed by a covenant in his deed, Freear pleaded the Statute of Limiis estopped to defend upon the tations, and the district court of apground that the statute has run peal held that, the trust being a posiupon his obligation since the ma- tive one, though resting in parol, the turity thereof. There are cases statute could not run until a repuin which language is used which diation and knowledge thereof. It seems to support this conclu- then added : "Moreover, Freear sion, but upon analysis it is found having received the property under that such language goes beyond the the express agreement to pay the points decided, and is irrelevant to debts of Bateman, and there being the facts there under consideration. no repudiation thereof, it does not For example, in Davis v. Davis, su- lie in his mouth to plead the statute pra, the court cites a Michigan case as against Bateman's creditors. He as holding “that where a vendee as- cannot be heard to say that while sumes the payment of a mortgage the debt is due from the person with indebtedness, he waives all defenses whom he contracted, that the statthereto except payment." That ute has intervened"-citing Washer question was not involved in the Da- v. Independent Min. & Development vis Case. The sole question there Co. 142 Cal. 703, 76 Pac. 654, Wilwas whether such a vendee could de- liams v. Naftzger, 103 Cal. 438, 440, fend on the ground that the in- 37 Pac. 411, and Davis v. Davis, sudebtedness was not a valid obliga pra. tion at the time he assumed it, and If this language is to be given the the court correctly held that he could broad effect contended for by renot. The Michigan case there cited spondent herein, it is not supported (Terry v. Durand Land Co. 112 by the cited cases or by any others Mich. 665, 71 N. W. 525) did use the which have been called to our attenlanguage above quoted, but all that tion. Under the facts in that case it decided in this connection was that the Statute of Limitations had not (- Cal. 223 Pac. 959.) run under any tenable theory of original appeal, then upon applicathe nature of the cause of action. tion for rehearing in the district The language above quoted was not court of appeal, and again upon apnecessary to the decision, and is not plication for hearing by this court to be regarded as authority herein. after decision by the district court

It is to be noted that there is no of appeal. The point was menelement of trust in the instant case, tioned and the More Case cited for so far as the question of the liability the first time in the oral argument of the George K. Porter Company is at the hearing by this court after concerned, and the respondent so decision by the district court of apconcedes. There is neither allega- peal, but nothing was said to indition nor evidence nor finding which cate that the point was not discussed would support the inference that a or that case cited in the briefs on trust relationship existed on the file. The former opinion was writpart of that defendant. It clearly

It clearly ten in response to the arguments appears that the conveyance of presented in the briefs, and there. property from Porter to the Porter fore did not dispose of the point now Company was not upon any trust, urged. but, on the contrary, passed to the The case of More v. Hutchinson grantee upon a valuable considera- was dealing with the peculiar Stattion—not merely the legal title, but ute of Limitations applicable to the entire beneficial interest in the stockholders' liability, which forms property conveyed, and the trial an express exception to the general court found that “the said corpora- rule with respect to the time when tion thereupon became the owner of the statute begins to run. Code Civ. all the said property."

Proc. § 359. The general rule is In the case of More v. Hutchin- that the statute runs from the time son, 187 Cal. 623, 203 Pac. 97, su- when the cause of action accrues pra, it was held that the rule that (Code Civ. Proc. § 312), or, in othsuit may be brought by the third er words, when the creditor is enperson upon the contract entered titled to commence and maintain an into for his benefit, immediately up- action thereon. But the statute unon the execution of the contract, der consideration in the More Case arises from the fact that the suit it- runs from the time when the liabilself is deemed an acceptance of the ity was created, which may be, and contract, and until such acceptance frequently is, an entirely different there is no liability on the part of point of time. This distinction was the person making the contract, but pointed out in the case of Hunt v. such contract, as far as the third Ward, 99 Cal. 612, 37 Am. St. Rep. person is concerned, amounts to a 87, 34 Pac. 335, which was cited in mere offer or proposal. On the au- the opinion in the More Case. The thority of that case it is now argued Statute of Limitations there under that the assumption by the George consideration looks to the time when K. Porter Company of the debts of the defendant's liability arose, but Porter was a mere offer or proposal the general rule is that a statute of which did not give rise to any obli- limitation looks to the time when gation in favor of plaintiff until the the plaintiff's right to commence the acceptance thereof by plaintiff ; that action accrued. plaintiff never accepted it until the “The theory of our Statute of commencement of this action, and Limitations is that a creditor has therefore the Statute of Limitations four years (or other time, as the could not have run. This point was case may be) on any day of which not made nor was that case cited in he may, of his own volition, comany of the briefs on file herein, al- mence an action.” Union Collection though the case had been briefed Co. v. Soule, 141 Cal. 99, 74 Pac. three different times by both parties 549. upon this appeal; first, upon the Plaintiff herein had nearly seven

Limitation of actions when

years, on any day of which she give rise to an obligation unless and might, of her own volition, have until accepted by plaintiff, it follows commenced this action. The brings that the duty rested upon the plaining of the suit constitutes the ac- tiff to accept such proposal within ceptance which creates the obliga- a reasonable time, tion and perfects the right of ac- and upon her fail- Contract-for tion.

Morgan v. Overman Silver ure to do so the pro- strangers Min. Co. 37 Cal. 534, 537; More v. posal was revoked necessity of Hutchinson, supra. So, with refer- by operation of law. ence to a promissory note payable on Civ. Code, $ 1587, subd. 2; 1 Willisdemand, the bringing of the suit is ton, Contr. § 54. The “proposal” a sufficient demand, and the statute herein was made in 1906, and not runs not from the time of the de- accepted by plaintiff until 1917. It mand, but from the execution of the is suggested that plaintiff did not note. Brummagim v. Tallant, 29 know of its existence until "a year

Cal. 503, 89 Am. or two” before this action was com

Dec. 61. Where a menced. But it conclusively apdemand to be demand or accept- pears from the record that her atmade.

ance is

necessary torney, who was especially charged before suit to perfect a right of ac- with the collection

Attorney and tion, a party cannot indefinitely and of this particular client-notice to unnecessarily extend the bar of the indebtedness, was

attorney-effect. statute by deferring such demand or fully cognizant of all of the facts as acceptance, but must make it within early as 1910, and she is chargeable a reasonable time. Thomas v. Pa- with that knowledge. 1 Cal. Jur. cific Beach Co. 115 Cal. 136, 142, pp. 846–854, and cases cited. Coun46 Pac. 899; Meherin v. San Fran- sel for respondents urge that the cisco Produce Exch. 117 Cal. 215, knowledge acquired by Mrs. Bo217, 48 Pac. 1074; Dennis v. Bint, gart's attorney, Mr. Louis P. Board122 Cal. 39, 44, 68 Am. St. Rep. 17, man, of the existence of the resolu54 Pac. 378; Harrigan v. Home L. tion of assumption of indebtedness Ins. Co. 128 Cal. 531, 548, 58 Pac. which is the foundation of the pres180, 61 Pac. 99; People v. California ent action, was acquired by him not Safe Deposit & T. Co. 41 Cal. App. while he was acting as her attorney, 727, 731, 183 Pac. 289, and cases but while he was acting as director there cited.

and vice president of the corporaIt is argued that the instant case tion, and they urge that she is not is not governed by the rule last men chargeable with this knowledge untioned, because it is not a case der the rule that "a client, as prinwherein the acceptance is required cipal, is not bound by knowledge obmerely to perfect a right of action tained by his attorney as agent in upon a cause of action already ex- the course of other employment"isting, but presents a situation, as citing Wittenbrock v. Parker, 102 in the More Case, wherein the ac- Cal. at page 101, 24 L.R.A. 197, 41 ceptance is necessary to create the Am. St. Rep. 172, 36 Pac. 374. That obligation itself which constitutes rule is not applicable to the facts the cause of action. So, also, was of this case.

It appears by the the case of Thomas v. Pacific Beach uncontradicted testimony of Mr. Co. supra, but, granting this conten- Boardman himself that he was acttion, and giving full application ing as Mrs. Bogart's attorney durherein to the rule of the More Case, ing all of the time from the date of and conceding that the contract of the assignment of the note to her the George K. Porter Company, by her husband in 1909 until shortwhereby it assumed and agreed to ly before the commencement of the pay Porter's debts, was, as to the present action; that as such attorplaintiff, nothing more than a mere ney he was in charge, by express offer or proposal, which could not arrangement with her, of all pro

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