1. The objection of defendant to the introduction in evidence of the judgment-roll in the action of Riverside Land & Irrigating Company v. Cornelius Jensen was properly overruled. That was an action brought by the plaintiff here against the testator and predecessor in interest of this defendant to quiet plaintiff's title to certain lands, including the premises in controversy in this action, and in which final judgment was entered quieting plaintiff's title to the land in suit. It was not required of plaintiff to plead said judgment in order to be entitled to prove it. The complaint was in the usual form and was sufficient (Rough v. Simmons, 65 Cal. 227; Heeser v. Miller, 77 Cal. 192; Castro v. Barry, 79 Cal. 447); and such an allegation would have been improper, as it is never necessary in such an action to plead deraignment of title. That is matter of evidence purely. While as a general rule it may be necessary to plead estoppel by former judgment, that rule does not apply when, as under our system, no opportunity is afforded the plaintiff to plead it. It had no proper place in the complaint, but plaintiff could not be precluded from the benefit of it as matter of evidence on that ground. He was entitled to give it in evidence with the same effect as if given an opportunity to plead it specially. (Clink v. Thurston, 47 Cal. 27; Wixson v. Devine, 67 Cal. 345.)

2. The evidence in the case entirely failed to establish the defense of the statute of limitations, and the court below correctly found against defendant upon that issue. The effect of the judgment against Cornelius Jensen, defendant's predecessor, was to estop the latter, and the defendant who claims under him, from asserting title adverse to plaintiff anterior to the entry of that judgment (Freeman on Judgments, secs. 300, 309; Marshall v. Shafter, 32 Cal. 195; People v. Center, 66 Cal. 559, 562); and the period that elapsed intermediate the final judgment in the action of Riverside Land & Irrigating Company v. Cornelius Jensen and the commencement of the present action was not sufficient to

ripen the adverse holding of this defendant into title by limitation. It follows, also, that the court below did not err in its rulings upon questions of evidence affecting this plea.

3. Nor did the court err in refusing defendant leave to amend her answer by setting up that the premises in dispute were included in the former judgment by mistake. Assuming that such defense could have availed defendant in avoiding the otherwise conclusive effect of that judgment, there was an entire want of any such showing as would have justified the court in granting such leave.

Judgment and order affirmed.

HARRISON, J., and GAROUTTE, J., concurred.

[No. 19353. Department One.-July 16, 1895.] CALIFORNIA NATIONAL BANK OF SAN DIEGO, RESPONDENT AND APPELLANT, v. JOHN GINTY ET AL., APPELLANTS AND RESPONDENTS.

PROMISSORY NOTE-PRINCIPAL AND SURETY.-One who signs a promissory note as a principal is liable as such to the payee, notwithstanding the latter knew that as between the one thus signing and the principal debtor the former was in fact only a surety. ID.-NATIONAL BANK-RATE OF INTEREST.-Under section 5197 of the United States Revised Statutes, and section 1918 of the Code of Civil Procedure, a national bank situated and doing business in this state is authorized to charge and receive such rate of interest as may be agreed upon.

DEBTOR AND CREDITOR-COLLATERAL SECURITY-APPLICATION OF SECURITY.-Where a creditor holds two notes or obligations, one better secured than the other, and has collateral security for both alike. he has a right, in the absence of any modifying agreement, to have the collateral applied upon the obligation which is most precarious by reason of being least secured.

ID.-RENEWAL OF OBLIGATION.-Certain property was pledged for the security of a debt evidenced by a note signed by three persons as principals. Subsequently a part payment of the debt was made, and for the balance two notes were given, one of which was signed by all of the parties to the original note and the other by only one of them. After the first delivery of the property in pledge no change was made

by the parties as to the purposes or conditions upon which it was pledged. Held, That the pledged property should be applied to the payment of the note having the single maker, and that the right of the payee of the notes to such application was not affected by the fact that, as between themselves, two of the makers of the first note were sureties for the other, and that the pledge was intended to be security for their protection as such sureties.

PRACTICE-NEW TRIAL-JUDGMENT.-A motion for a new trial is not necessary to review an objection to a judgment which appears upon the face of the findings.

APPEALS from a judgment of the Superior Court of San Diego County and from an order refusing a new trial GEORGE PUTERBAUGH, Judge.

The facts are stated in the opinion of the court.

Luce & McDonald, and C. H. Rippey, for John Ginty, et al., Defendants.

Hunsaker, Britt & Goodrich, for Plaintiff.

VAN FLEET, J.-Action to recover on two promissory notes, one for seven thousand three hundred and fifty dollars, dated December 20, 1890, due in six months, with interest at ten per centum per annum, signed by Livingston, Clarke & Co., John Ginty, and M. A. Luce; and the second for five thousand dollars, of even date with the first and like rate of interest, due three months from date, signed by Livingston, Clarke & Co. only; and to subject certain primavera logs, pledged as security for the payment of said notes, to sale, and the applica tion of the proceeds to the satisfaction of the indebtedness. Judgment went for plaintiff for the amount of the notes and interest as stipulated, and directing a sale of the logs.

There are cross-appeals, the defendants Ginty and Luce appealing from the judgment and an order denying them a new trial, and the plaintiff appealing from that part of the judgment which directs the manner in which the proceeds of the pledged property shall be applied.

The appeal of Ginty and Luce involves but two

questions: 1. Whether they were correctly held to be principals upon upon the note signed by them; and 2. Whether the court below ruled properly in allowing interest on said note. The defense relied upon by them was that they signed the note for seven thousand three hundred and fifty dollars, as sureties for Livingston, Clarke & Co., with the knowledge of that fact by plaintiff, and with the understanding that plaintiff was to hold them as sureties only; that plaintiff had released Livingston, one of the principals on said note, and that they as sureties were thereby discharged of any liability. The court found that, as to plaintiff, Ginty and Luce executed the note as principals thereon, and that plaintiff dealt with them as principals and not as sureties; that as between Livingston, Clarke & Co. and Ginty and Luce the latter were sureties, and that this fact was known to plaintiff at the time of the execution of the note. The court also found that the release of Livingston was with the consent of Ginty and Luce. It is contended by these appellants that the evidence is insufficient to support the finding that they executed the note as principals and that the plaintiff dealt with them as such. An examination of the evidence satisfies us that this contention cannot obtain. Indeed, taking all the circumstances attending upon the transaction from its origin into consideration, and it is doubtful if an opposite conclusion to that reached by the trial court could find substantial sanction in the evidence. However that may be, there is at least a substantial conflict on the point, and under the well-settled rule of this court the finding cannot be disturbed. It is further urged, however, that the fact that plaintiff was aware at the execution of the note that these defendants were merely sureties for Livingston, Clarke & Co. was sufficient of itself, independently of any agreement by plaintiff to that effect, to make said defendants sureties as to the plaintiff. We do not understand such to be the law. To the contrary, we understand the rule to be that where one signs as principal he will be held as

such, notwithstanding the creditor knew that as between the one thus signing and the principal debtor the former was in fact only a surety. The principle is well settled. (Harlan v. Ely, 55 Cal. 340, Aud v. Magruder, 10 Cal. 282; Damon v. Pardow, 34 Cal. 278; Shriver v. Lovejoy, 32 Cal. 575.) Ginty and Luce having signed as makers, and being such as between themselves and the plaintiff, it becomes immaterial to discuss the question as to what the effect of the release of Livingston by plaintiff would have had upon their rights as sureties.

The objection that the court erred in allowing plaintiff interest upon its notes is based upon the contention that under section 5197 of the Revised Statutes of the United States it is not competent for a national bank to charge or reserve a higher rate of interest upon its loans than that fixed by the law of the state as the legal rate-seven per cent; and that by contracting for a higher rate the plaintiff forfeited its right to the entire interest provided for. This question depends upon whether a national bank can lawfully charge a rate of interest in excess of that allowed by the federal statute, when such excess can be lawfully contracted for under the statute of the state in which the bank is situated and doing business. The question has been expressly decided in the affirmative by this court. (Hinds v. Marmolejo, 60 Cal. 229; Farmers' Nat. Bank v. Stover, 60 Cal. 387.) In Hinds v. Marmolejo, supra, it is said: "That the true interpretation of the act of Congress is that, in those states and territories having no statute upon the subject of interest, the national banks are allowed a rate not exceeding seven per centum; while, in those states and territories having a statute on the subject, they are authorized to charge and receive interest at the rate allowed other banks and individuals." And it is held that in view of section 1918 of our Civil Code, giving parties the right to contract for a higher rate, national banks are also at liberty to receive such rate as may be agreed upon. This doctrine was af