[No. 19491. Department Two.-August 27, 1895.] COUNTY OF SAN LUIS OBISPO, RESPONDENT, v. C. A. FARNUM ET AL., APPELLANTS.

PUBLIC OFFICERS-AUDITOR-LICENSE COLLECTOR-STATUTE OF LIMITATIONS.-While it is no part of the official duties of a county auditor to receive from the license tax-collector money collected by him for license taxes due the county, yet, if he does so, he is liable to the county therefor in an action for money had and received. Such liability is barred in two years, under subdivision 1 of section 339 of the Code of Civil Procedure.

APPEAL from a judgment of the Superior Court of San Luis Obispo County. V. A. GREGG, Judge.

The facts are stated in the opinion of the court.

Graves & Graves, and Wilcoxon & Bouldin, for Appellants.

F. A. Dorn, for Respondent.

HAYNES, C.--This is an action upon the bond of C. A. Farnum, as county auditor of the county of San Luis Obispo, to recover the sum of eight hundred and ninety-six dollars and ten cents, alleged to have been received by him, as auditor, from the license tax-collector of said county, the same being moneys collected for license taxes due the county from various individuals, and which Farnum had failed to pay over to the county treasurer; the other defendants and appellants, R. E. Jack and I. Goldtree, being the sureties upon said bond.

The complaint alleges that said moneys were received by Farnum at divers times, unknown to plaintiff, between January 2, 1889, and January 3, 1891, which dates cover and include the entire term for which said bond was given. This action was commenced May 29, 1893.

The defendants demurred to the complaint: 1. That the facts stated do not constitute a cause of action; and 2. That the cause of action stated is barred by the pro

visions of section 337, and subdivision 1 of section 338, and subdivision 1 of section 339 of the Code of Civil Procedure.

The demurrer was overruled; the defendants answered, denying all the allegations of the complaint, and alleging that the cause of action is barred by the provisions of the code above mentioned.

The court found for the paintiff, and entered judgment against all the defendants for the sum of seven hundred and thirty-nine dollars and eighty cents. This appeal is by all the defendants from said judgment upon the judgment-roll.

As to the liability of appellants Jack and Goldtree, as sureties upon the bond of Farnum, as auditor, this case cannot be distinguished from the case of San Luis Obispo County v. Farnum, No. 19488, ante, p. 562, this day filed, and upon the authority of that case this judgment must be reversed as to the sureties upon said bond.

In that case it was held, however, that, treating the allegations of the complaint in relation to the bond as surplusage, there was, nevertheless, a cause of action stated against Farnum; and that though he did not receive the money in his official capacity as auditor, it was money belonging to the county which he had no right to retain, and therefore affirmed the judgment as to him. In that case, however, there was no question made upon the statute of limitations, while here it is directly pleaded.

The court below could not have found the sureties liable unless he concluded that Farnum was liable upon his bond, and if so, the limitation of four years under section 337 of the Code of Civil Procedure applied. But the money having been received by Farnum without authority of law, and not officially, no liability upon his bond was created. If he were liable upon the bond, his sureties must have been liable also. But it was money belonging to the county, which he had no right to re ceive, but having received it he was liable personally in an action for money had and received, and that action was barred in two years under subdivision 1 of section

339 of the Code of Civil Procedure. Assuming, therefore, that the money was received on the last day of his term of office, January 3, 1891, the action was not brought within two years, and the demurrer should have been sustained upon that ground as well as upon the first.

The judgment should, therefore, be reversed as to all the defendants.

VANCLIEF, C., and BRITT, C., concurred.

For the reasons given in the foregoing opinion the judgment appealed from is reversed.

MCFARLAND, J., TEMPLE, J., HENSHAW, J.

[No. 19531. Department Two.-August 27, 1895.] WITMER BROTHERS COMPANY, RESPONDENT, v. IVAR A. WEID, APPELLANT.

CONTRACTS-SUBSCRIPTION TO STREET RAILROAD-ESCROW-RESCISSION-NOTICE.-Where notes were made to secure the payment of a subscription in aid of a proposed street railroad, in consideration of the construction thereof on a specified route passing through the land of the maker of the notes, and the notes were deposited in escrow with a third party, to be delivered, upon performance of the conditions specified in the contract, to the person constructing the road, a mere notice to the person holding the notes in escrow that the maker had rescinded the subscription contract on the ground that the terms thereof had not been complied with, without any notice of such rescission or of his intention to rescind to the person agreeing to construct the railroad, cannot operate as a rescission thereof. ID. DELIVERY OF NOTES-CONSTRUCTION OF CONTRACT-TIME, WHEN NOT OF ESSENCE.-Where the conditions of the subscription in aid of the street railroad were that one-half thereof, represented by two months' notes, was to be paid when the grading was done and the iron was on the ground, and the balance, represented by four months' notes, was to be paid on the completion of the road on the first day of its operation, and the conditions upon which the notes were placed in escrow were similar, all conditions precedent, not expressly enumerated, are excluded, and an agreement in the contract that the road should be extended to a specified point "within four months, weather permitting," not being expressly made a condition precedent, nor declared to be of the essence of the contract, is not to be construed as making the time therein specified of the essence of the contract.

ID. DELIVERY OF NOTES-ORDER OF AGENT-WAIVER OF CONDITION.— -An agent having a power of attorney sufficient to authorize him to order the notes to be delivered may waive any condition as to the construction of the road within the time mentioned in the contract, by a written order that the notes in escrow should be delivered to the constructor of the railroad at the time of its completion, where there is no averment or proof of mistake of the agent or principal or of any fraud in the transaction.

ID. FAILURE OF CONSIDERATION-TIME FOR COMPLETION OF ROADSETTLEMENT OF SUBSCRIPTION.-Where the notes were delivered upon the completion of the road, and the time of its completion was not made of the essence of the contract, the delivery of the notes precludes any plea of failure or partial failure of the consideration expressed in the contract in reference to advantages to be derived from the extension and operation of the road; and, in the absence of fraud or mistake, the delivery of the notes upon the completion of the road is a conclusive settlement of all obligations of both par ties arising from the subscription contract, and a delay of three and a half months in completing the road at the time of the settlement must be considered as of no injurious consequence, or as excusable. ID.-DECLINE IN MARKET VALUE OF LAND-RECOUPMENT INSUFFICIENT PLEADING EXCLUSION OF EVIDENCE.-An answer, in an action upon the notes, averring that there was a decline in the market value of the land between the written date of the contract and the completion of the road, but not averring that such decline occurred during the period within which the road was to have been constructed by the terms of the contract, nor that the delay in constructing the road caused any decline in the market price of the land, nor that the defendant would have sold his land at any price even if the road had been completed within the contract period, is insufficient to sustain any recoupment of damages on account of delay, and the court may properly exclude proof of its averments.

APPEAL from a judgment of the Superior Court of Los Angeles County and from an order denying a new trial. WALDO M. YORK, Judge.

The facts are stated in the opinion.

H. G. Weyse, for Appellant.

The instrument creating the authority of an agent must govern in interpreting the scope of the agent's authority, and those dealing with an agent must look to the instrument creating the authority to ascertain whether his authority is adequate or not, and must keep strictly within the limits fixed to the agent's authority, or the principal will not be bound. (Mecham on Agency,

pp. 274, 303, par. 393.) As the notes were delivered in violation of the terms of the contract, they never became fully executed. (McLaughlin v. Clausen, 85 Cal. 322.) Whether or not time is of the essence of the contract depends upon the intention of the parties. (Pomeroy on Specific Performance, sec. 384; Green v. Covillaud, 10 Cal. 328; 70 Am. Dec. 725.) If time is essential, then the act to be done must be done on or before the date specified for the performance, or all rights are lost. (Pomeroy on Specific Performance of Contracts, par. 373.) The court erred in refusing to allow defendant to prove loss and damage by introducing evidence to show that the value of the land at the time the contract was entered into, and at the time when the same was to have been completed, was far greater than when it was actually completed. (Sedgwick on Damages, 7th ed., 119.)

P. W. Dooner, for Respondent.

As the notes were to be delivered when the certificate of the contracting engineer was given that certain acts had been performed, without specifying any time, time was not of the essence of the contract. (Addison on Contracts, sec. 522; Pomeroy on Contracts, 376.) The principal cannot disavow nor the agent qualify the lawful acts of the agent. (Civ. Code, secs. 2304, 2307, 2315, 2318, 2319, 2332, 2342; Story on Agency, secs. 126, 133; McNeil v. Shirley, 33 Cal. 203; Jones v. Marks, 47 Cal. 242; De Rutte v. Muldrow, 16 Cal. 505.)

VANCLIEF, C.-Action on two promissory notes made. by defendant to James McLoughlin, each for five hundred dollars, with interest after maturity at rate of one per cent per month, and assigned by McLoughlin to plaintiff.

The judgment was in favor of plaintiff for the full amount of principal and interest of both notes. Defendant appeals from the judgment, and from an order denying his motion for a new trial.