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GAFFIGAN v. LAWTON ET AL.*
On October 17, 1932, plaintiff commenced this action and served process on the defendant National Surety Company. This defendant demurred generally and set up the statute of limitations. The demurrer was sustained without leave to amend, and plaintiff appeals on the judgment roll.
Plaintiff furnished labor and material to defendant Lawton, a building contractor under contract with one Gerske. The surety company posted a bond under the terms of section 1183, Code of Civil Procedure, for the payment of all claims for labor and material incident to the contract. Plaintiff's services were rendered between July 24 and August 20, 1928. The building was completed October 31, 1928. It was alleged that the defendant Lawton promised to pay the plaintiff upon the completion of the building.
The single question of law involved is, where an oral contract to furnish labor and material in the construction of a building is barred by the statute of limitations in two years (section 339, Code Civ. Proc.), may the surety who has given a written bond in accordance with the statute plead the two–year statute of limitations, or is the suit on the bond governed by the four–year statute (section 337, Code Civ. Proc.), relating to a liability founded upon an instrument in writing? The trial court held that the surety could plead the two–year statute, and we are in accord with that ruling.
The contract of suretyship is in the nature of a collateral agreement to pay the debt of another and is accessory to a principal obligation contracted by the other. Hence an unqualified release of the principal debtor is a discharge of the surety. It is generally admitted that a surety may set up in defense to an action against him any matter that operates as a discharge of the principal, and in this connection it has been held that, when the original debt has become barred by the statute of limitations, the surety may plead the statute in bar to a suit on the bond. 21 R. C. L. p. 1080; 23 Cal. Jur. 1050, 1101; Towle v. Sweeney, 2 Cal. App. 29, 33, 83 P. 74; County of Sonoma v. Hall, 132 Cal. 589, 590, 594, 62 P. 257, 312, 65 P. 12, 459; Paige v. Carroll, 61 Cal. 211, 215.
The Towle Case is directly in point. There the action was on a bond posted by building contractors to insure their payment of all claims for labor and materials incident to the building contract. The plaintiffs furnished the contractors certain materials which were used in the construction of the building. In their suit against the sureties the defendants set up the statute of limitations. In holding the plea good the appellate court said (page 33 of 2 Cal. App., 83 P. 74, 75): “The obligation of the defendants as sureties * * * is accessory and collateral to the obligation of their principals, and can be enforced against them only to the extent that the same obligation could have been enforced against [the principals].” As the surety's obligation is “accessory to that of the principal, if the principal is not liable, he is not, for there can be no accessory if there is no principal; and the surety may avail himself of any defense to the claim that would have been available to the principal.”
The condition of the bond is “for the payment in full of the claims of all persons performing labor upon * * * such work.” It is made to inure to the benefit of all such persons and they are given a right of action to recover upon the bond in a separate suit upon the bond. But the “payment of claims” presupposes valid and enforceable claims. Under the general principle that a surety can avail himself of the defenses available to his principal, a claim which is barred by the statute is not an enforceable one if the statute is pleaded. Hence, though the suit may be a separate action on the bond, it is in effect an action to enforce the primary obligation. If the creditor has discharged the primary obligation either directly or by nonaction, the collateral agreement of the surety is likewise discharged.
Paige v. Carroll, supra, was decided in July, 1882. That was an action against the sheriff and his sureties for damages arising from the seizure and sale of property belonging to the plaintiff. The surety's obligation was in writing. The sheriff's liability was statutory, and the time within which suit could be brought against him was limited to two years. Section 339, Code Civ. Proc. Sureties pleaded the statute of limitations applicable to suits against the sheriff. In sustaining the plea the Supreme Court said: “We can not believe that the object was to allow a longer period for commencing an action against him [the sheriff] and his sureties for such liability, than is allowed for commencing an action against him alone for it.”
The effect of the theory advanced by appellant on this appeal would be that, though the principal would be released at the end of two years, the liability of the surety would be extended two years longer because its obligation is in writing. It is unreasonable to assume that, if such were the intention of the Legislature, it would not have expressed that intention in clear language in view of the contrary holdings in the cases cited.
Judgment affirmed.
NOURSE, Presiding Justice.
We concur: STURTEVANT, J.; SPENCE, J.
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Docket No: Civ. 9196.
Decided: January 11, 1934
Court: District Court of Appeal, First District, Division 2, California.
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