tion 1307 of the Civil Code, on which they rely, reads: "When any testator omits to provide in his will for any of his children, or for the issue of any deceased child, unless it appears that such omission was intentional, such child, or the issue of such child, must have the same share in the estate of the testator as if he had died intestate, and succeeds thereto as provided in the preceding section." At the time this will was made and published, and provision made for his son Howard Barter, the mother of these contestants was alive, and they were not "the issue of any deceased child." Their mother, then living, was intentionally omitted from the will and unprovided for, and was not therefore protected by the statute. The object of that section is not to protect any grandchildren except those who, as presumptive heirs at law, would be entitled, had no will been made, to inherit at the time the will is published and made. That is the time when the children of the testator or the children of a deceased child are supposed, if not mentioned in the will, to have been omitted by oversight, because, at such time, their mother being dead, they would be presumptive heirs at law of their grandfather. But if, at the time the will was published, the mother had been living, she would have been an heir at law at her father's death, unless intentionally omitted from the will. The statute intended to put a child, or the children of a deceased child, on the same footing at the time when the will is made and published, and when the intentions of the testator are to control in the construction of his will. When the will in question was made the testator had no need to remember or mention the children of a living child, in order to prevent them from inheriting, at his death, as his heirs at law. Having intentionally omitted their mother, alive at the making and publishing of the will, the children had no rights under the section quoted, and obtained none when she died before the testator. It follows then that the judgment appealed from should be affirmed, and we so advise.

We concur: VANCLIEF, C.; GIBSON, C.

PER CURIAM. For the reasons given in the foregoing opinion, the judgment appealed from is affirmed.

(86 Cal. 449)

STANLEY et al. v. MCELRATH. (No. 12,187.)

(Supreme Court of California. Nov. 26, 1890.) NEGOTIABLE INSTRUMENTS-RIGHTS OF INDORSER

JUDICIAL NOTICE-COUNTER-CLAIM.

1. Where one pays a note, on which he is indorser, by executing his own notes to the holder, who accepts them as payment, and either cancels or delivers up the former note so as to extinguish the maker's liability to him, this is such a payment of the note as will entitle the indorser to maintain an action against the maker for the amount so paid.

2. The requirement of notice of dishonor by protest or otherwise to the indorser of a negotiable note is for the indorser's own benefit and may be waived by him without prejudice to his sight of recovery against the maker, in case he pays the note after such waiver.

PATERSON, J. This action was brought to recover from defendant the sum of $6,136.50, with interest thereon from March 28, 1883. It is alleged in the amended complaint that C. M. Hitchcock, plaintiff's testator, indorsed a promissory note, made by defendant, payable to said Hitchcock, for the sum of $4,500, solely for the accommodation of defendant; that defendant assigned the note to the London & San Francisco Bank, limited, and received therefor the sum of $4,500; that defendant paid on account of the interest due thereon the sum of $231.25, but never paid any portion of the principal; that the note was duly protested, and notice thereof given to the indorser; that Hitchcock paid the sums of $6,132.50, the amount due on the note, and $4, costs of protest, to the bank on March 28, 1883; and that defendant has never reimbursed him for any part thereof. The defendant denied that the note was indorsed for his accommodation in any greater sum than $3,631.28, the balance of said note being for money he had paid out for the use and benefit of said Hitchcock at his special instance and request; denied that the $4,500 note was protested, or notice of dishonor given; and denied that plaintiff had ever paid the same or any part thereof. By way of counter-claim, defendant alleged that plaintiff was indebted to him in the sum of $4,000 for services as attorney and counselor, performed at his special instance and request.

The court found that the note was made and assigned as alleged; that $231.25 only had been paid on account of interest, and nothing on account of the principal; and that the offset to the note, and the counter-claim set up by defendant, had both been adjudicated against defendant in a former action. The court further found certain facts-which will be noted further along-showing demand, refusal to pay, protest, and notice thereof to Hitchcock, and payment by him to the bank. The court found that Hitchcock paid the defendant's note by giving his own note for the sum due thereon, including cost of protest, and that it was accepted and re ceived by the bank, and an entry made in its books to the effect that the note had been paid. At the time of the trial, the note thus given by Hitchcock had not been paid; and appellant claims that, there having been no payment in money, an action for money paid out cannot be maintained. The payment of money is not necessary to the extinguishment of an obligation. A debt may be paid by the giving of a note, if it be offered and accepted as payment. Weston v. Wiley, 78 Ind. 54; 2 Daniel, Neg. Inst. p. 232. The evidence shows very clearly that the

Hitchcock note was offered by him and received by the bank upon the express understanding that it was a payment in full of the McElrath note.

Appellant claims that, in paying the $4,500 note, Hitchcock was a mere volunteer, not having been duly "fixed" as au indorser by proper demand, protest, and notice of dishonor. As stated by him, the question for the court to determine is precisely the same as if the same question arose upon an attempt by the bank to hold Hitchcock upon his indorsement. An indorser may be made liable either by showing demand, non-payment, and notice of dishonor, or by showing that, while the amount due on the note was an existing debt, enforceable against the maker, the indorser by his acts waived any want of or defect in demand, protest, and notice, and promised to pay the note. The record shows the proper demand and protest for non-payment, and we think the notice sufficient to "fix" Hitchcock as an indorser. The notice of protest directed to Hitchcock was sent by the notary in due time, and reached Mrs. Hitchcock at the residence of the family the next day. The notice was brought into court by the plaintiff, and identified by the notary as the notice sent by him on the day demand was made. The fact that Mr. Coyt and the mail clerk took the letter from the mail bag in violation of a regulation of the postal departinent, if such be the fact, is immaterial. It is sufficient that the notice reached its destination and served its purpose. Mrs. Hitchcock received it on Saturday evening, and on the following Monday visited the defendant, who promised then, and on several occasions afterwards, to pay the note. The officers of the bank acted with due diligence and care. They were told by Mr. Coyt that Mrs. Hitchcock actually attended to the doctor's business, and had his power of attorney. The notice was actually delivered to "a person of discretion [Mrs. H.] at the place of residence or business of such party [Hitchcock] apparently acting for him. This was sufficient. Section 3144, Civil Code; Kellogg v. Factory, 57 Cal. 327; McFarland v. Pico, 8 Cal. 626; Thompson v. Williams, 14 Cal. 160; Pierce v. Schaden, 55 Cal. 406; 2 Daniel, Neg. Inst. §§ 872, 1003. But as there was no postoffice communication between San Francisco and Hitchcock's place of residence, and as Hitchcock-with knowledge of the fact-by his acts and his promise to pay waived any defect in the notice, his liability became fixed, and the bank could have recovered the amount of the note in an action against him. Section 3155, Civil Code; Keyes v. Fenstermaker, 24 Cal. 333; Curtis v. Sprague, 51 Cal. 239. Appellant admits that an indorser may waive his own rights so as to inake himself liable to the holder, but claims that, if he be once discharged from liability by reason of the failure of the holder to give proper notice of dishonor, he cannot thereafter by any admission or promise prejudice the rights of the maker; and, if he pay the note, he does so as a stranger, and must be regarded as a volunteer. This contention is based upon an erroneous theory of the v.25P.no.1-2

use and purpose of notice of nov-payment of a negotiable instrument. An indorser's undertaking is not an absolute one. It is conditional; and notice of dishonor is provided for his benefit. It is intended to protect him from loss which may occur by reason of delay in making demand of payment of the maker, or which he may sustain by having no notice of the fact that his principal has failed or refused to pay. When he waives this right to notice, he does not create a new liability which requires a new consideration like the waiver of absolute and strict conditions precedent in contracts as they are construed at common law. He has the right to either affirm or disaffirm his liability, and, with the exercise of the right thus provided for his benefit and left to his discretion, no one can complain. Burgh v. Legge, 5 Mees. & W. 418; 2 Daniel, Neg. Inst. § 1147. The finding of the court that the defendant's claim of offset and counter-claim had been adjudicated in a former action prior to the trial of this action is not supported by the evidence. The court could not dispense with formal proof of its judgment in another action, and take judicial notice of the fact that the affirmative matters set out in defendant's counter-claim and offset had been therein adjudicated. As no evidence was offered, however, by defendant, in support of his claim of offset or counter-claim, the failure of the court to find on the merits of the issue thus raised was without prejudice to appellant, and the finding that was made was immaterial. The court allowed 10 per cent. interest on $4,500 of the $6,136.50,-amount of the note given by Hitchcock to the bank,from March 28, 1883,-date of said note,and interest on the residue at the rate of 7 per cent. This was error. Plaintiff is entitled to recover the amount paid on the Hitchcock note, with interest thereon at 7 per cent. only. Waldrip v. Black, 74 Cal. 409, 16 Pac. Rep. 226. The judgment is reversed, and the cause is remanded, with directions to the court below to enter judgment against defendant for the amount of $6,136.50, with interest thereon at 7 per cent. per annum, from March 28, 1883, and costs of suit, including the costs of this appeal.

1. In an action to quiet title by the grantee of a deed against a judgment creditor of the granter, who had purchased the land at execution sale, a finding that the deed, made by a mother while ill, and in the expectation of early death, to her daughter, was made with the intention, on the grantor's part, that it should not take effect except in case of her death, and, in such case, that it should operate in lieu of a will, and take effect after her death, will not support a defense that it was made to defraud creditors, although coupled with a finding that, after the grantor's recovery, it was placed on record for the purpose of defrauding creditors.

plaintiff further knew that said Laura A. Mowry, when she delivered said deeds to plaintiff, intended that they should be operative only in the event of her death from said illness, and that, in the event of her recovery therefrom, they should be inoperative, and of no effect." This finding was insufficient for two reasons: First. It was not responsive to the issue presented by the answer. Instead of finding an agreement to hold in trust and reconvey, as alleged, it finds an intention on the part of the grantor that the deed should not take effect, except in case of her death, and that the plaintiff knew of such intention. The difference between the allegation and the finding is too apparent to need comment. We do not wish to be understood as intimating that if this finding had conformed to the allegation of the answer it would have warranted the conclusion reached by the court below. The second objection to this finding is that if it should be construed as sufficient to uphold the issue made by the answer it would not support the judgment. Here was an absolute deed to the property delivered to the grantee. Its legal effect was to vest in the plaintiff the title to the property free from any conditions. The effect of the finding, if upheld, is to vary the terms of the deed, and render it one upon condition, and defeat its operation by parol proof of an intention on the part of the grantor that it should have an effect different from that apparent on its face. This cannot be done. Mr. Devlin, in his work on Deeds, says: "Whether a deed passes the tit or not must be determined by its legal effect. If it has been executed and delivered, its effect is determined by its language. When so executed and delivered, its legal effect, as to the passing of the title, is not altered by the fact that one object of the transaction was to save the expense and trouble of administration upon the grantor's estate after his death; and, where a grantor executed a deed for this purpose to his wife, the fact that she placed the deed, after delivery, where her husband equally with herself could have access to it does not change its legal effect as a conveyance. Devl. Deeds, § 284. And, again: "A deed cannot be delivered to the grantee as an escrow. If it be de livered to him, it becomes an operative deed, freed from any condition not expressed in the deed itself, and it will vest the title in him, though this may be contrary to the intention of the parties. One of the grounds upon which the rule is based is that parol evidence is inadmissible to show that the deed was to take effect upon condition. 'A deed,' says HARRIS, J., 'can only be delivered as an escrow to a third person. If it be intended that it shall not take effect until some subsequent condition shall be performed, or some subsequent event shall happen, such condition must be inserted in the deed itself, or else it must not be delivered to the grantee. Whether a deed has been delivered or not is a question of fact, upon which, from the very nature of the case, parol evidence is admissible. But whether a deed, when delivered, shall take effect absolutely, or only upon the performance of some condi

tion not expressed therein, cannot be determined by parol evidence. To allow a deed absolute upon its face to be avoided by such evidence would be a dangerous violation of a cardinal rule of evidence. The deed in this case being absolute upon its face, and having been delivered to the grantee himself, took effect at once. It could not have been delivered to take effect upon the happening of a future contingency, for this would be inconsistent with the terms of the instrument itself. Without regard, therefore, to any understanding which may have existed between the parties at the time the deed was deliv. ered, it must be held as an absolute conveyance, operative from that time."" Id. § 314. This is a rule of law well understood, and is amply supported by decided cases, many of which will be found in the section of the work on Deeds above cited. In this view of the case, we need not decide each point made or attempted to be made in the unnecessarily long and tedious brief of counsel for appellant. A great deal of space is taken up in an attempt to show that the findings are not sustained by the evidence, but, coming to the conclusion we have, this question becomes immaterial. Conceding that the findings were sustained by the evidence, as we have said, no defense was made out. It is further contended that the court failed to find on certain issues. This is no doubt true, but the appellant should not complain of this, as the failure to find some of the facts alleged in the first defense, mentioned above, leaves the judgment without sufficient support. The judgment of the respondent was recovered on an undertaking on appeal to this court, and was taken on motion without notice to Mrs. Mowry. It is contended that such a judgment, taken without notice, was void, and that, there fore, respondent's defense was without any foundation. But this point was de cided against appellant in Meredith v. Association of Baltimore, 60 Cal. 617, and, how ever doubtful we may be as to the correctness of that decision, it has been acted upon as a correct exposition of the law, no doubt, in this very case, and we think it should be adhered to. There are other technical questions raised and discussed, but they do not deserve attention. Judgment and order reversed.

We concur: BEATTY, C. J.; Fox, J.: SHARPSTEIN, J.

I concur in the judgment: PATERSON, J.

MCFARLAND, J. I concur in the judg ment of reversal, because, after a more exhaustive examination of the evidence, 1 think that it does not support the findings as to the circumstances under which the deeds to plaintiff from the mother were made. I do not think, however, that the findings (that prolific source of artificial and needless troubles) are themselves insufficient to support the judgment. They find the real facts as alleged in the answer; and, if there is any difference between the answer and the findings, it is a difference only as to legal effects. But I dissent from that part of the prevailing