GOULD v. KEITH (1935)

Legal principles logically elucidated by the late Chief Justice Shaw in Stroud v. Thomas, 139 Cal. 274, 72 P. 1008, 96 Am. St. Rep. 111, and in Braun v. Crew, 183 Cal. 728, 192 P. 531, determine adversely to appellant the points involved in this appeal. It is true that appellant as indorser of the mortgage note would be released from liability by any unauthorized alteration of the obligation assumed; but when respondent as payee of the note entered into an agreement with the maker to reduce the rate of interest and to extend time of payment, this agreement, as per the finding of the trial court, was not supported by a consideration and was therefore unenforceable and respondent was not thereby bound to forbear suit during the time specified in the extension. If it did not modify the original note, it had no effect upon the liability of the indorser. Furthermore, the acceptance by the payee of the note of $35 instead of $40 on past-due interest did not change the terms of the contract with regard to the guarantor, but amounted merely to an executed oral gift to the payee of the $5. The judgment, therefore, was properly entered against such indorser.

Judgment affirmed.

GOULD, Justice pro tem.

We concur: CRAIL, P. J.; WOOD, J.