Hathaway v. Patterson

By the Court: In the action of Hathaway v. Brady, an attachment was issued and levied on certain real and personal property of said Brady. For the purpose, of releasing the personal property from the attachment, Brady deposited with the Sheriff five thousand dollars in gold coin, and such property was thereupon released. Hathaway recovered judgment, and Brady appealed therefrom to this Court. Pending the appeal, W. W. Crane, Hathaway’s attorney, and Patterson & •Stow, Brady’s attorneys, stipulated in writing that the money which Brady had deposited with the Sheriff, should be withdrawn and handed over to Patterson & Stow, and should be held by them in the same manner as the Sheriff held the same; and that the change of the custody of said sum should “not in any manner affect the rights of the parties, but on the contrary the rights of the parties in reference to said sum shall be in all things the same as though said sum had remained and continued to remain in the hands of said Edmuudson ” (the Sheriff.) The money was accordingly delivered to Patterson & Stow. Afterwards, and on the same day on which the stipulation ivas made, it was agreed between Crane and Patterson & Stow that Crane should receive one half of said sum, and that Patterson & Stow should retain the other half, and that for such sums each should give to the other a promissory note. This agreement was carried into effect. The two notes were in the same form. The-note in suit is as follows: “ San Francisco, August 26th, 1863. “ One day after the. entry of an order in the Supreme Court affirming judgment in the Third District Court, Alameda County, of Hathaway v. Brady, or if such judgment is not affirmed, one day after demand, without grace, we promise, for value received, to pay W. "W. Crane, at our [299] office in San Francisco, in United States gold coin, of the present standard of fineness and value, two thousand five hundred dollars, with interest, payable in like gold coin, atone and one fourth per cent per month. “PATTERSOU & STOW.” The judgment of Hathaway v. Brady was affirmed on the 23d day of October, 1863. In the following month an execution was issued, and Crane paid over to the Sheriff the money he had received, with the interest thereon at the rate mentioned in his note; but the payment was made without the knowledge or consent of Brady or Patterson & Stowu The note of Patterson & Stow wras assigned by Crane to the plaintiff, shortly before the commencement of the action. Patterson & Stow still hold Crane’s note. The foregoing facts, together with some others, ivere before this Court in Hathaway v. Brady, 26 Cal. 581, in which the plaintiff attempted to reach the money for which the note in suit was given, by proceedings supplementary to execution, and it was there held that the proceedings were not sufficient to entitle the plaintiff to an order requiring Patterson & Stow to pay over the money due on their note. The point now made is, that the action is barred by the Statute of Limitations. The judgment in Hathaway v. Brady was affirmed, as already mentioned, on the 23d day of October,-1863. The action was commenced on the 24th day of October, 1867. The note became due one day after the date of the affirmance of that judgment. The defendants had all of the twenty-fourth day of October in which to pay the money. Had an action been brought on the note on that day, it could not have been maintained, because it had not then accrued. The action, therefore, is not barred by the statute. The defendants claim the right to set off against their note, the note of Crane, and also an amount due them from [300] Brady for professional services, etc. But we are of the opinion that that position cannot be maintained. Looking at the facts of the transaction, which occurred up to the time when the stipulation was signed, and the money paid over by the Sheriff' to the defendants, and they signed the instrument, by which they acknowledged that they had the money in accordance with the stipulation, “ and in the same manner and with like effect as if the same continued in the hands of said Edmundson,” there is no room for doubt that they held the money to abide the event of the appeal in Hathaway v. Brady. They became trustees of the money for both parties, and under the terms of the stipulation it was their duty to apply4the money to the satisfaction of the judgment, if Hathaway prevailed on the appeal; but if the appeal should be disposed of in Brady’s favor, and he should prevail in the action, then it would become their duty to pay it over to him. The purpose of the further arrangement, under which the money was divided and the notes given, as we understand it, was not to abrogate that portion of the stipulation, by which the rights of the parties in reference to the sum of money were to remain the same as they would have done, had the money remained in the hands of the Sheriff, but it was to place the money where it would bear interest during the litigation. There was no motive, so far as we can perceive, from the facts in the case, to induce the plaintiff to release one half of the security which he held for the payment of his demand against Brady; but common prudence would dictate to him, that the whole money should be so placed that it would be ready to be applied to the payment of his judgment if "it should be affirmed. In Hathaway v. Brady, 26 Cal. 581, the Court gave the same construction that we now do, to the stipulation and to the subsequent arrangement, under which the notes were made. In view of this construction it would be absurd to permit the notes to be set off against each other; [301] and we are also of the opinion that the demands which the defendants have against Brady, cannot be set off against the note in suit, for that could not be effected without a violation of the agreement under which they received and hold the money. Judgment and order affirmed. Mr. Chief Justice Wallace did not participate in the decision of this cause.