Gould v. Keith

CLAUDE J. GOULD, Respondent, v. KARL H. KEITH et al., Defendants; R. B. COLEMAN, Appellant.

COUNSEL

Bordwell, Mathews & Wadsworth for Appellant.

Syril S. Tipton and Elmer E. Sawyer for Respondent.

OPINION

Gould, J., pro tem.

Legal principles logically elucidated by the late Chief Justice Shaw in Stroud v. Thomas, 139 Cal. 274 [72 P. 1008, 96 Am.St.Rep. 111], and in Braun v. Crew, 183 Cal. 728 [192 P. 531], determine adversely to appellant, the points involved in this appeal. [1] It is true that appellant as endorser of the mortgage note would be released from liability by any unauthorized alteration of the obligation assumed; but when respondent as payee of the note entered into an agreement with the maker to reduce the rate of interest and to extend time of payment, this agreement, as per the finding of the trial court, was not supported by a consideration [9 Cal. App. 2d 285] and was therefore unenforceable and respondent was not thereby bound to forbear suit during the time specified in the extension. If it did not modify the original note it had no effect upon the liability of the endorser. [2] Furthermore, the acceptance by the payee of the note of $35 instead of $40 on past due interest did not change the terms of the contract with regard to the guarantor, but amounted merely to an executed oral gift by the payee of the $5. The judgment, therefore, was properly entered against such endorser.

Judgment affirmed.

Crail, P. J., and Wood, J., concurred.