(166 Cal. 405) BENENATO ▼. MCDOUGALL et al. (S. F. 6168.) (Supreme Court of California. Nov. 25, 1913. Rehearing Denied Dec. 24, 1913.) was to be altered and improved, as well as calling for greater and more elaborate alterations and improvements than were necessary and proper considering the amount to be expended, and providing for an elaborate finish of the same, and defendants, at the time of the delivery of said plans and 1. CONTRACTS (§ 196*)-ARCHITECTS-SKILL. An architect by every contract implies his possession of skill and ability, and agrees to ex-specifications to plaintiff, and at all the times ercise them reasonably and without neglect. [Ed. Note.-For other cases, see Contracts, Cent. Dig. §§ 856-860; Dec. Dig. § 196.*] 2. DAMAGES (§ 18*) ARCHITECTS NEGLI GENCE-PROXIMATE CAUSE. Where plaintiff engaged defendants to draw the plans for the remodeling of a building, instructing them that the work should not amount to over $7,000, and they skillfully drew plans, but informed plaintiff that they could not estimate with accuracy the cost of construction, he cannot recover damages because the cost of construction exceeded the limit, where several contractors refused to do the work for the price fixed, and the ones engaged refused to make an estimate, but did it on percentage, for the error, if any, by the architects, was not the proximate cause of his injury, as, in view of Civ. Code, 19, he had notice of facts which would put him on inquiry before he let the contract. [Ed. Note. For other cases, see Damages, Cent. Dig. 37; Dec. Dig. § 18.*] Department 2. Appeal from Superior Court, City and County of San Francisco; Frank J. Murasky, Judge. Action by A. Benenato against C. C. McDougall and others. From a judgment of nonsuit and an order denying his motion for a new trial, plaintiff appeals. Affirmed. Devoto & Richardson and Devoto, Richardson & Devoto, all of San Francisco, for appellant. Hiram W. Johnson and Percy E. Towne, both of San Francisco, for respondents. MELVIN, J. Plaintiff appeals from a judgment of nonsuit, and from an order denying his motion for a new trial. mentioned herein, well knew that the cost of the alterations and improvements on the existing building on the property leased, in accordance with the said plans and specifications drafted and presented to plaintiff by defendants, would exceed the sum of $16, 000." [1, 2] While the plaintiff and his agent, Coleman, both testified that one of the defendants gave them assurance of a maximum cost of less than $7,000, there was no allegation nor proof that the architects had any control of the letting of contracts. There was no pretense that the plans were not skillfully drawn; but the gist of the action seems to be that they involved an expense of construction beyond the estimate of the architects. If the defendants had entered into a contract to plan and construct the improvements at a given figure, there might be some basis for this suit; but such is not the pleading nor the proof. Plaintiff testified that he visited two contractors, each of whom declined to take a contract to do the work for $7,000. He then visited Farnsworth & Marish, who refused to make a contract to do the work for any specific amount. However, he entered into an agreement with them to do a large proportion of the work on a percentage basis. Other contracts were made for various parts of the work; but in no case were the architects consulted, plaintiff and Coleman having charge of all agreements and money matters relating to the The defendants are architects who were building. No contract of warranty, express employed by plaintiff to draw plans for the or implied, was pleaded or sought to be provraising and alteration of a certain building ed; the whole theory of plaintiff being that of which plaintiff was lessee, and upon which the drawing of the plans requiring expensive he was bound under the terms of the lease constructive work amounted to negligence. to expend at least $7,000. Damages were This theory was not sustained by the evisought for the alleged negligence of de- dence. No bids were called for; but the fendants. It is averred in the complaint plaintiff took the whole matter of constructhat defendants were employed by plaintiff tion into his own hands. He was told by to prepare the plans and specifications, and contractors that building conditions were that they promised plaintiff such plans as such as to make it practically impossible would provide for a building to cost less to estimate with any degree of accuracy the than $7,000; that they were instructed to cost of construction. Under the circumkeep the cost below $7,000, as that was all stances we cannot see that the mistaken esthe money plaintiff had for the purpose of timate of the architects was the proximate raising and altering the building. The avercause of the loss sustained by plaintiff in bement in regard to the damages is as follows: ing compelled to surrender his lease because "Plaintiff alleges that defendants, disregard- he lacked financial ability to complete the ing the specific instructions given to them as work. Before the work commenced he had aforesaid, carelessly and negligently drafted | means of knowing and sufficient notice to apthe plans and specifications by providing in said plans and specifications the most expensive lumber and hardware for the stores and flats into which the existing building prise a prudent man of the fact that he could not complete the work for the sum of money which he had intended to invest. Section 19 of the Civil Code provides that: the parties to a contract must meet before there Notes, Cent. Dig. § 165; Dec. Dig. § 96.*] NOTES-RIGHT TO ENFORCE. "Every person who has had actual notice | fendant did not know of them, for the minds of of circumstances sufficient to put a prudent man upon inquiry as to a particular fact, has constructive notice of the fact itself in all cases in which, by prosecuting such inquiry, he might have learned such fact." One to whom an architect gives an estimate of cost may not recklessly proceed, as did this plaintiff, to make contracts which may and probably would make the cost of construction far above that estimated, and then hold the architect responsible for the surplus expenditure. Appellant cites many authorities which hold that an architect by every contract implies his possession of skill and ability and a promise to exercise them reasonably and without neglect. That is unquestionably the rule; but the fault charged here is not lack of architectural ability, but negligence in estimating probable cost. It is suggested that Columbus Co. v. Clowes, 1 K. B. (1903) 247, is similar in principle to the case at bar; but we fail to note any resemblance. In that case the architect took some one's word for the dimensions of the site which was to be covered by the building, carelessly refraining from taking actual measurements. His plan was therefore too small for the area to be covered. Nominal damages were allowed, as plaintiffs, having been unable to use any plans, owing to financial difficulty, never did construct any building on the real property which they had leased for that purpose. We are of the opinion that the nonsuit was properly granted. The judgment and order are therefore affirmed. The party for whose accommodation a note is executed cannot enforce it against the accommodation maker. Notes, Cent. Dig. § 165; Dec. Dig. § 96.*] Promises that defendant who executed a note should be reimbursed, and that she should lose nothing, constitute no consideration there for. [Ed. Note.-For other cases, see Bills and Notes, Cent. Dig. § 165; Dec. Dig. § 96.*] 6. BILLS AND NOTES (§ 96*)-ACTIONS-CONSIDERATION-WHAT CONSTITUTES. Where defendant, at the solicitation of the cashier of a bank in which her son was interested, executed an accommodation note, a mere hope that it would benefit her son does not constitute a consideration. [Ed. Note.-For other cases, see Bills and Notes, Cent. Dig. § 165; Dec. Dig. § 96.*] 7. BILLS AND NOTES (§ 520*)-ACTIONS-EVIDENCE-FRaud. In an action on a note, given to a bank, evidence held sufficient to show that its execution was induced by the fraud of the bank's officers. [Ed. Note.-For other cases, see Bills and Notes, Cent. Dig. §§ 1813, 1832, 1836, 1837; Dec. Dig. 520.*] "FRAUD" 8. BILLS AND NOTES (8 103*) We concur: HENSHAW, J.; LORIGAN, J. formance constitutes actual fraud. (166 Cal. 386) WILLIAMS v. HASSHAGEN (STATE SAV- That a pledge of stock with the maker of SUMPTION OF CONSIDERATION. While there is a presumption of consideration arising out of the execution of a note, the presumption is rebuttable, and is the weakest possible evidence, and so is overthrown by direct testimony of the maker that there was no consideration. [Ed. Note.-For other cases, see Bills and Notes, Cent. Dig. 88 1652-1662; Dec. Dig. & 493.*] 3. BILLS AND NOTES (§ 96*)-CONSIDERATION -WHAT CONSTITUTES. [Ed. Note.-For other cases, see Bills and Notes, Cent. Dig. §§ 233-240; Dec. Dig. § 103.* ACTIONS For other definitions, see Words and Phrases, vol. 3, pp. 2943-2954; vol. 8, p. 7666.] 9. BILLS AND NOTES (§ 103*) FRAUD-WHAT CONSTITUTES. To entitle defendant to a cancellation of an accommodation note on the ground of fraud, it must appear that she executed it upon reliance on the misrepresentations of the payee, for Civ. Code, § 1568, declares that consent shall be deemed to have been obtained through fraud only, when it would not have been given had not such cause existed. Notes, Cent. Dig. §§ 233-240; Dec. Dig. § [Ed. Note. For other cases, see Bills and 103.*] 10. BILLS AND NOTES (§ 520*)—ACTIONS-EVIDENCE-SUFFICIENCY. In a suit on a note, where the maker sought cancellation on the ground of fraud, evidence held sufficient to sustain a finding that she signed the instrument in reliance on the fraudulent misrepresentations of the agent of the 'payee. [Ed. Note.-For other cases, see Bills and Notes, Cent. Dig. §§ 1813, 1832, 1836, 1837; Dec. Dig. § 520.*] Where defendant executed an accommoda- 11. BANKS AND BANKING (§ 116*)—AUTHORtion note in favor of a bank, the bank's cancel- ITY OF CASHIER. lation of notes due from defendant's son and an- Knowledge of the cashier and general manother constitutes no consideration, where de-ager of a bank is knowledge of the bank; and, For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes actions. when it took an accommodation note procured | Hasshagen was an old woman, 76 years of by his fraud, knowledge of the fraud is imput- age, and not accustomed to business transable to the bank, and it cannot claim as a bona fide purchaser even though the cashier received some personal benefit out of the transaction. [Ed. Note.-For other cases, see Banks and Banking, Dec. Dig. § 116.*] 12. BILLS AND NOTES (8 527*)-ACTIONS-EVIDENCE-SUFFICIENCY. In a suit on a note, where defendant crosscomplained, praying a cancellation of the note as obtained by fraud and without consideration, and seeking to recover from the payee bank payments on other notes belonging to her, which had been hypothecated as security for the note sued on, evidence held sufficient to support a finding in defendant's favor that the collateral notes were deposited as security for the note sued on, and had been paid to the bank, and that the bank had not paid the amount to the cross-complainant. [Ed. Note.-For other cases, see Bills and Notes, Cent. Dig. 88 1847-1855; Dec. Dig. 8 527.*] Her son was the president of the banking corporation. W. C. Hays was the manager of the bank. It was admitted that the promissory note, which was for $34,000, together with a check for $19,000 signed by the Hasshagens, was received by the State Savings & Commercial Bank in payment of four promissory notes of W. C. Hays, T. A. Bechtel, C. T. Hasshagen (respondent's son), and F. V. Kington, all officers of the bank, the aggregate amount of the notes being $53,000. These notes were canceled on June 24, 1909, the date of Mrs. Hasshagen's note to the bank. Upon the subject of want of consideration the old lady, testifying in her own behalf, said: "Mr. Hays, he came to my house and always begging that I sign the note. I said Department 2. Appeal from Superior that I would come down to the bank at anCourt, City and County of San Francisco; other time there. I went to the bank. He George H. Cabaniss, Judge. said, 'I assure you that you will not lose anyAction by William R. Williams, Superin- thing by it if you sign this note.'" "I did tendent of Banks, against Adeline Hasshagen, in which the State Savings & Commercial Bank intervened. From a judgment for defendant, and also on her cross-complaint, plaintiff and intervener appeal. Affirmed. F. A. Cutler and Arthur Crane, both of San Francisco, for appellants. Edward C. Harrison and Maurice E. Harrison, both of San Francisco, for respondent. not receive any money or any property of any kind from Mr. Hays or from any one else for, that note. I never knew that the bank held a note of Mr. Hays. I did not know at the time I signed that note that the bank held a note of Mr. Kington's or of Mr. Bech I did tel." Cross-examination: "I don't think there was anybody else but Mr. Hays present when I signed the note. Mr. Hays said to me 'Sign this note, and I promise you you will lose MELVIN, J. The superintendent of banks, nothing by it.'" At another time during the having taken charge of the affairs of the trial she testified: "At the time I executed State Savings & Commercial Bank, an in- the promissory note here sued upon I had no solvent corporation, commenced this action knowledge of the failing circumstances of the State Savings & Commercial Bank. I knew against Adeline Hasshagen upon a promissory note signed by her and payable to said bank-nothing about its financial condition, my son ing corporation. The bank was permitted to didn't discuss his business with me. intervene. The defendant pleaded want of not know that the bank held any note of his. consideration for the promissory note and They all told me the bank was prosperous fraud in its procurement, these same defens- and I believed it." And again: "As a mates being urged against the plaintiff and the ter of fact I did not receive anything for bank, and in her cross-complaint she sought I never received any stock. judgment for the cancellation of the note, for never talked with any one about having any recovery of certain of her securities which of that stock assigned to me. had been hypothecated with the note, and for any of the stock." moneys which had been collected on said securities. The defendant was given a favorable judgment upon both defenses, and upon her cross-complaint the judgment was in her favor upon all of the issues. Both plaintiff and intervener appeal from the judgment and from an order denying their motion for a new trial. the note. I I never saw [1] Appellants assert that the stock of the bank which had been pledged as collateral security for the four notes was transferred to Mrs. Hasshagen, and that therefore the note was supported by a consideration. It is true that some days after the signing and delivery of the note the bank's secretary wrote to Mr. Harrison, who The principal contention upon which the was Mrs. Hasshagen's attorney, informing appellants ask for a reversal of the superior him that the bank held his client's note for court's action is that the evidence fails to $34,000, and that certain stock, certificates sustain the findings in favor of the respond- for which were delivered with the latter, ent, both as to want of consideration and upon was "to be held by Mrs. Hasshagen pending the issue of fraud. We will first examine the settlement of the above note." There was the testimony relating to want of considera- no direct statement in the letter, nor was tion, but first we will set down some facts there any testimony at the trial, that this which are shown without contradiction. Mrs. stock constituted a consideration for the note. Mr. Harrison testified to the possession by him, in Mrs. Hasshagen's behalf, of certain stock which he desired to vote with other stockholders in an effort to oust W. C. Hays from the directorate of the bank. Of this he said: "The certificates of shares of stock which I said were turned over to be utilized for that purpose was not derived by Mrs. Hasshagen by virtue of the $34,000 note which she gave to the bank." The counsel for appellants refer to this stock as "pledged with respondent and returned." We can see no reason why the payee of a note should pledge its own stock with the maker unless there were some agreement by which the maker was to be indemnified against any claim on the note. But whether this was such an agreement of indemnity or not, the pledge of its stock to the maker of the note would not support the theory that said stock was given by way of consideration for the note. [2] But appellants seem to rely upon the legal presumption of a consideration arising from the note itself, from the promise of Hays to reimburse Mrs. Hasshagen, from the benefit which she supposed her son would obtain from the transaction, and from the cancellation of the four promissory notes. While it is true that the execution of the note imports a consideration, the presumption that a consideration passed for the execution of the instrument is merely prima facie. It is disputable and may be overcome by direct proof. "But disputable inferences or presumptions, while evidence, are evidence the weakest and least satisfactory. They are allowed to stand, not against the facts they represent, but in lieu of proof of them. The facts being proven contrary to the presumption, no conflict arises; the presumption is simply overcome and dispelled." Savings & Loan Socy. v. Burnett, 106 Cal. 529, 39 Pac. 922. [3-5] In the case here considered, in view of the evidence of the circumstances surrounding the making and delivery of the note, the presumption of a consideration is overcome. Of course the cancellation of the old notes would not amount to a consideration, if Mrs. Hasshagen knew nothing about them-and she swore that she was ignorant of their very existence. The minds of the parties to a contract must meet before there may be any such consideration. Shadburne v. Daly, 76 Cal. 359, 18 Pac. 403. The promises of W. C. Hays to "reimburse" the old lady, or to see that she lost nothing by signing the note, were not valid considerations. In the absence of fraud they might have amounted to an assurance that she was making an accommodation note for the payee, and that she would not be required to pay it. The party for whose accommodation the paper was made may not sue the accommodation party. 7 Cyc. 725, 726; Coghlin v. May, 17 Cal. 516. [6] Nor did her hope that her son might profit by the use of the note in the purchase of stock from another bank amount to a consideration. Mere motive or inducement or hope of profit is not consideration. "If a motive alone were equivalent to a consideration, every promise made, free from fraud, duress, and the like, would necessarily be enforceable without any consideration." Page on Contracts, § 275. See, also, 9 Cyc. 320. There was, therefore, sufficient evidence to support the court's finding that there was a want of consideration for the note. [7] Fraud was also sufficiently established. We have adverted to the advanced age of Mrs. Hasshagen and her ignorance of business and her statement that she knew nothing of the existence of the notes which were discharged by the substitution of the note which she had signed and the securities which she had deposited. The court found upon evidence amply sufficient that Hays falsely represented to her that he intended to use her note for the purchase of stock of the National Bank of the Pacific; that his motive was to get her to deposit the securities and sign the note so that he might substitute them for the promissory notes of himself and his codirectors; that he concealed his design from her; that she was ignorant of his true purpose; that at the time of the practicing of the fraud upon her, Hays was the cashier and manager of the bank, and directed its affairs, and "that if said cross-complainant had not believed all said representations so made to her as aforesaid by said Hays to be true, or if she had known that her said promissory note and securities were being taken by said corporation in satisfaction of the said note of its said directors, she would not have signed the said note for $34,000, or deposited her aforesaid securities with said bank." A few quotations from her testimony will suffice: "Mr. Hays was always asking me to sign. I think I had signed other papers before for the bank at Mr. Hays' request, but he always came to my house, and he sat there and he begged and he begged with reference to some other papers, too, but this paper, Mr. Hays did not give me $34,000. He didn't give me anything. He promised that I should have my money back again; that is what he promised me. The money that I signed for, or I should not sign the note. Because he would What see I would not lose." "Q. use did you think Mr. Hays or the bank could put that note to? Why did you think he wanted you to sign? A. They wanted for to buy other stock in a bank; that is what they wanted it for. Q. It was your note, $34,000, that would buy the stock? A. Yes, sir. They would fix it up, so he begged me so much to sign that. Q. Did you expect to get any money or any stock or anything else of value because you had signed that note, or did you expect afterwards that they would give you back the note? A. I thought I would not lose anything; I thought Mr. Hays | Hays was the manager, and had general would pay me back again; that is what I thought. I thought Mr. Hays would pay me always; that is what he always told me." "A. * He always said I would not lose anything. For which reason I thought I would get everything back. That he would pay up everything again. charge of the business of the bank. He "con- "Mr. Harrison: In other words, whatever your understanding of the transaction was resulted from Mr. Hays' statement to you that you would never lose anything; is that true? A. That is just what I thought; I should not lose anything. He didn't say ex-spondent hypothecated as security for the actly in what way I would not lose anything. He said he would do so well he would see I should not lose anything at all. He said they would do well. He did not give me any writing. He did not give me any contract in writing. "Mr. Harrison: His honor wants to know what you expected Mr. Hays to do with the note? A. Well, I thought they would buy the bank; that is what he told me; he said they would buy the other bank; and he go there too; to fix it up. note sued upon certain promissory notes, among them a note of the Auburn Motor Car Company for $3,000. The court found that this was true, and appellants contend that absolutely no evidence was introduced show. ing that the Auburn Motor Car Company note was deposited as security for the note in suit. Mr. Grange testified that Mrs. Hasshagen owned a certain note of the Union State Bank for $12,500, secured by certain instruments, which were the same securities mentioned in the cross-complaint, including the note of the Auburn Motor Car Company. S. P. Young testified that there was in the bank a note of the Auburn Motor Car Com[8] This evidence sufficiently sustains the pany for $5,000 on which $2,000 was paid findings. The effort of the corporation to April 23, 1909, and $3,000 July 9, 1909. The collect the note instead of returning it ac-letter of the bank's secretary and cashier, Mr. cording to the promise of Hays is sufficient evidence of that fraud which arose from the making of a promise without intention of performance. Subdivision 4, 1572, Civ. Code. The fraud practiced by Hays was also of the kinds mentioned in the three first subdivisions of that section. "Mr. Harrison: He told you something about buying out some other bank did he? A. Yes, sir." [9, 10] Appellants deny the existence of any evidence that the note would not have been signed except for the representations of Hays. Of course, it is a necessary constituent element of actual fraud that the consent of the person defrauded would not have been given save for the false representations. Section 1568, Civ. Code. But the aged crosscomplainant, after describing the importunities and promises of Hays, said: "Mr. Hays came there so often, and then he always asked me, and then he assured me that it was all right. I should not be afraid; it was all right. That is the reason I signed it." In addition to this direct statement there was evidence sufficient to justify the court in drawing the conclusion that the false statements of Hays must have been the inducing cause of Mrs. Hasshagen's action, and that without his misrepresentations no contract would have been made. [11] Appellants suggest that Hays was a mere agent, and that his fraud is not imputable to his principal. It is to be remembered in the first place that the intervener is the corporation itself and not a transferee, for It is also to be kept in mind that value. Bechtel, dated July 13, 1909, written to Mr. The judgment and order are affirmed. HENSHAW, J. (166 Cal. 409) In re GOODFELLOW'S ESTATE. (S. F. 6474.) (Supreme Court of California. Nov. 26, 1913. Rehearing Denied Dec. 26, 1913.) 1. WILLS (§ 753*)-"SPECIFIC LEGACIES." Testatrix's will bequeathed $12,000 to G., and the second paragraph recited that testaestablishment of a theological school, "and as trix's father intended to give $20,000 for the his heirs have not yet been able to disentangle the estate so as to make this gift possible, there$12.000 for G., to proceed to obtain the sum of fore I wish my executors, after securing the $5,000 from my share" of her father's estate and place it in the care of a church conference; said conference being pledged never to use said $5,000 except as part of an endowment fund for a school for Methodist ministers, and further provided, "I hereby express my hope that my |