Stockton Sav. & Loan Soc'y v. Hildreth

Contract—Concurrent Conditions.—Where the debtor of a bank became insolvent, and a brother of the debtor agreed to pay one-half the debt if the bank would release the debtor: held, that the payment and the release were concurrent conditions to be performed at the same time, and the bank could not recover upon the agreement without executing or offering to execute the release.—[Reporter.]

Appeal from the District Court of the Fifth Judicial District, San Joaquin County. Action upon a contract—the facts being thus: In May, 1875, E. J. Hildreth and William Helm made their joint and several promissory note to the plaintiff, a banking corporation, for five thousand dollars, payable one day after date. In February, 1876, Hildreth, upon his own petition, was adjudged a bankrupt under the laws of the United States, and his estate passed to an assignee. While the proceedings were pending, the defendant, a brother of the bankrupt, agreed with the creditors that if they would release his brother from all demands he would pay them fifty per cent, in cash, or sixty per cent, in notes, at their option. The creditors accepted this proposition. The plaintiff accompanied its signature with this proviso : “ With the express understanding and reservation that William Helm, a co-maker of the note held by ‘ the Stockton Savings and Loan Society,’ a corporation formed under the laws of this State, against the said bankrupt and said William Helni, and upon which proof had been made against the estate of said bankrupt, shall not be released from any liability on the said note, and files his agreement and consent herewith, this corporation, by and with such consent of said William Helm, will release the said bankrupt upon said liability upon receiving fifty cents on the dollar of said claim in cash.” All the creditors having signed the agreement, the proceedings in bankruptcy were dismissed. The plaintiff brought this action to recover from the defendant fifty per cent, of the bankrupt’s debt. The complaint does not allege that Helm had consented .to the compromise, nor does it show any release or offer of release by plaintiff of the bankrupt from the debt. The defendant filed a general demurrer, which was overruled. He then answered, admitting all the allegations of the complaint, and asking judgment in his favor thereupon. The Court rendered judgment for the plaintiff, and the defendant appealed.