(83 Cal. 7) HOLTON . NOBLE et al. (No. 13,256.) Supreme Court of California. Jan. 28, 1890.) ACTION FOR RENT-COUNTER-CLAIM-FRAUDULENT REPRESENTATIONS-APPEALABLE ORDER. 1. In an action to recover rents due under a lease, a plea as a defense of false representations made by plaintiff as to the number of acres planted in certain crops is no defense, where defendant failed to plead such deficit as a counter-claim, or to aver damage by the false representations. 2. Representations as to the harvest land sown in certain crops would produce are matters of opinion, and cannot be regarded as fraudulent. 3. An agreement to accept a smaller sum in discharge of a larger, and to take a note extending the time for payment, does not extinguish the larger sum, unless the agreement is executed by giving the note or making the payment. 4. An order allowing judgment on the pleadings is not appealable, but it may be reviewed on appeal from the judgment. Department 2. Appeal from superior court, Fresno county; J. B. CAMPBELL, Judge. Grady & Austin, for appellants. Meux & Edwards, for respondent. 'THORNTON, J. Appeal by defendants. This action was brought to recover rent due on a written lease executed by plaintiff to defendants for one year, commencing January 5, 1888, and ending the 5th of January, 1889. The lease was for two years, commencing on the day above mentioned, in 1888, and ending on the 5th day of January, 1890. The stipulated rent was $3,200 a year for the first year, payable on the 20th day of December, 1888, and for the second year on the same day of December, 1889. The defendants went into possession under the lease, and occupied the premises until the 20th day of January, 1889. The defendants filed an answer, in which they set forth that, before the lease was entered into, plaintiff made certain false representations to the defendants as to the number of acres of the land on which there was a good stand of alfalfa; that he represented that there were 180 acres in good stand of alfalfa, while in truth and in fact there were not more than 80 acres. It is further averred that plaintiff represented that the land so sown in alfalfa would produce at least 8 tons of hay to the acre, while in fact said 80 acres would or did produce, with the best tillage and care, less than 4 tons per acre, and the balance of said 180 none; that plaintiff also represented that the 40 acres of grape vines on the land would produce at least from a ton to two tons of raisins per acre, while in fact the 40 acres produced only 6 tons of raisins; that defendants relied on the said representations of plaintiff, and for this reason, and not otherwise, leased the land; that the only reason why they did lease this land was that they believed the statements so made by plaintiff to be true. The alleged representations of the plaintiff as to the amount that the alfalfa and grape vines would produce were clearly matter of opinion, and cannot be regarded as fraudulent. It may be conceded that the representation as to the number of acres in the land was a fraudulent representation, and defendants, if they had properly pleaded it as a counter-claim, might have been allowed to reduce the stipulated rent by the amount of damage sustained. But they neither aver that they were damaged by such representations, nor do they set forth to what amount they were damaged. The alleged fraud is pleaded as a defense to the action, without any showing that defendants were damaged at all. Fraud, without damage, furnishes no ground for action, nor is fraud without damage a defense. It is averred in the answer that plaintiff agreed to take $2,400 in full payment of the $3,200 rent sued for, and to extend the time of payment of the rent mentioned for the period of six months on a note. The answer shows that this agreement was never executed. The money was never paid, nor was a note executed, as alleged to have been agreed. Unless the agreement to accept the smaller sum in discharge of the larger was carried out, the obligation to pay the larger sum was never extinguished or discharged. There was no execution of the agreement or accord, and hence the original obligation remained unaffected. The accord may be binding on the parties, but it does not discharge the obligation it is made to satisfy until it is executed. Execution alone is satisfaction. The averments in the answers set forth no defense to the action in whole or in part. Hence the motion of plaintiff for judgment on the pleadings was properly granted, and the judgment must be affirmed. The defendants also appeal from the order of the court below allowing judgment on the pleadings. This is not an appealable order, and therefore the appeal from it is dismissed. This order may, however, be reviewed on an appeal from the judgment, and this has been done, as appears above. The record shows no error, and the judgment is affirmed. (3 Cal. Unrep. 199) JUDSON v. LYFORD et al. (No. 12,032.)1 (Supreme Court of California. Dec. 20, 1889.) JUDICIAL SALE-RIGHTS OF PURCHASER. 1. D., against whom plaintiff held a judgment, succeeded, on his wife's death, to one-third of her lands, and conveyed his interest to defendant in trust to be leased, and one-half of the profits applied to his support during his life, and at his death the whole to go to his children. After the execution of the trust-deed, plaintiff levied an execution on D.'s interest in the land, and at the sale bid it in, taking a sheriff's deed. Afterwards, plaintiff received the balance due on the judgment, and entered a satisfaction in full. Held, that at the time of the sale under execution the legal title was in defendant, and plaintiff, under the sheriff's deed, took nothing but D.'s equitable interest therein, which ceased on D.'s death. 2. Whatever may have been plaintiff's right, as a creditor, to set aside the deed of trust because given to hinder and defraud creditors, it was lost by his purchasing the "right, title, and interest of D." in the property, and accepting the balance due on the judgment, and acknowledging satisfaction thereof, and he thereafter had no other stand1 Reversed in banc. See 24 Pac. 286, 84 Cal. 505 ing than that of a purchaser at an execution sale, | nothing of the indebtednness of D. at the subject to the rule of caveat emptor. Department 1. Appeal from superior court, Marin county; E. B. MAHON, Judge. E. F. Swortfigner, (Walter Van Dyke, of counsel,) for appellant. Sawyer & Burnett, for respondents. PATERSON, J. On the 7th day of November, 1881, a judgment was entered in the superior court in favor of Michael Lynch, and against T. B. Deffebach, for the sun of $9,446.74, and on the day following it was assigned by Lynch to the plaintiff herein. On September 15, 1883, Mrs. Deffebach died, and T. B. succeeded to an undivided one-third of her estate, the same being the lands described in the complaint. On October 10th following, Deffebach conveyed the property to defendant Lyford, as trustee, in trust for him (said D.) and his four minor children. By the terms of the trust Lyford, as trustee, was to sell sufficient of the interest of D. to pay off all debts of the estate of Mrs. D., deceased; lease the remainder of his (said D.'s) interest upon such terms as said trustee should think proper; and out of the rentals pay taxes, and expenses of caring for the property, render one-half of the surplus profits to said D. for his support during his natural life, and upon his death to apply the whole of the surplus to the support and education of the children; further, to convey, upon T. B. Deffebach, Jr's., becoming of age, or, in the event he should not live so long, then when the youngest child living should become of age, to the said children or the survivors of them, said property, share and share alike. An execution on the judgment was issued out of the superior court on the 13th day of November, 1883, and levied on all the right, title, and interest which Thomas B. Deffebach had in said property on said 18th day of November, and on December 15th, following, was executed by a sale of the property to this plaintiff for the sum of $9,500. At the time of this levy the lien of the judgment upon this land, if any there had ever been, had ceased. No redemption having been made, a certificate and sheriff's deed were issued to plaintiff in due time and in due form. Deffebach died on June 24, 1884. The defendant Lyford is the administrator of the estate of T. B. D., deceased, and is also guardian of the minor children. After the answers of the defendants were filed herein, to-wit, on November 13, 1884, the plaintiff having received from the defendant the balance due upon the judgment in the case of Lynch v. Deffebach, entered a satisfaction in full of the judgment therein. This action was commenced on August 21, 1884, to set aside the deed of trust from Deffebach to Lyford as fraudulent and void, and to quiet the title of plaintiff to the premises. The court found that D. was not insolvent at the time of the death of his wife; that the deed to Lyford was without any moneyed consideration; that Lyford knew | | time he accepted the trust; that the trustdeed was not made in fraud of plaintiff, or of his rights, or with the intent to hinder, delay, or defraud creditors; that the equity held by D., and purchased by plaintiff, ceased upon the death of D., and that plaintiff is not the owner of the property described in the complaint, or any part of it, or interest therein. Judgment followed for defendant, and plaintiff appealed. Upon the facts admitted, proved, and found, the judgment is right and should be affirmed. The equitable interest retained by D. was subject to execution. Section 688, Code Civil Proc. Lyford. the trustee, was to receive the rents, and apply them to the maintenance of the cestui que trust, and after the death of D. was to convey to the children; he therefore held the legal title. Robinson v. Grey, 9 East, 1; Silvester v. Wilson, 2 Term R. 444. Plaintiff purchased, and the sheriff's deed conveyed to him, only the right, title, and interest of D. For this interest he paid $9,500, leaving a balance of about $1,600 due on the judgment. As an execution purchaser he can claim no more than the equitable interest left by D. on November 13, 1883. Caveat emptor is the rule. Plant v. Smythe, 45 Cal. 162; Freem. Ex'ns, §§ 301, 309; Boggs v. Fowler, 16 Cal. 564; Abadie v. Lobero, 36 Cal. 398. The plaintiff cannot now be heard to say that the interest he purchased was not worth what he paid for it. He must stand by his bargain. The court will not consider the fact that the interest he purchased was terminated by the death of D., soon after the sale, and that by reason thereof plaintiff has not been able to realize the actual amount due on his judgment. But it is claimed by appellant that the purchaser here was, at the time the trust-deed was executed, a creditor of the grantor, and therefore the general rule that the purchaser takes upon himself all risks as to title does not apply. A complete answer to this is found, we think, in the facts that there was no actual fraud, that the deed was not void per se, and that the relation of creditor. and debtor no longer exists. When the plaintiff accepted the balance due on the judgment and entered a satisfaction in full, the relation of debtor and creditor ceased, and he has no other standing in court than that of a purchaser at execution sale. Whatever may have been his right as a creditor to set aside the deed because given to hinder, delay, or defraud creditors, it was lost by reason of his own acts in purchasing, in terms, “the right, title, and interest of T. B. Deffebach," accepting the balance due on the judgment, and acknowledging that he had received satisfaction in full. The court found that, in consideration of the payment by Lyford, as administrator of the deficiency,- $1,598.60,- plaintiff executed and acknowledged full satisfaction of the judgment. This finding is not assailed. D. did not convey all of his property to Lyford. He retained an equitable interest. The sheriff did not sell the land. He sold and conveyed simply the right, title, and interest of D. Plaintiff paid $9.500 for that interest, as his deed shows, and the judgment became satisfied to that extent. When the administrator paid the balance, and satisfaction was entered, D. was no longer a creditor, and the rule of caveat emptor became no less applicable to his case than to that of every other purchaser under execution sale. Freem. Ex'ns, § 340; Abadie v Lobero, supra. Judgment and order affirmed. GRAY v. DIXON. (No. 13,411.) The act of congress (21 U. S. St. at Large, 140, 141) providing that a person who has procured the cancellation of any pre-emption, homestead, or timber culture entry shall be notified of such cancellation, and shall have 30 days within which to enter said lands, does not embrace the case of one who has procured the cancellation of an entry under the desert land act; and the fact that defendant procured the cancellation of such an entry made by another, and at the same time filed his own application under another act, gives him no preference over the right of plaintiff, who also filed an application for entry; and plaintiff, having made the first settlement, is entitled to recover the land. Department 2. Appeal from superior court, San Bernardino county; JOHN L. CAMPBELL, Judge. Charles R. Gray, pro se. Curtis & Otis, for respondent. took possession of the demanded premises for the purpose of making it his home by residence, occupation, and cultivation, and continued thereafter to reside on said land, and built a house thereon, and procured the same to be surveyed, and filed an affidavit in compliance with the provisions of an act entitled "An act to provide the mode of maintaining and defending possessory actions on public lands in this state, approved April 20, 1852." He made improvements of the value of $200 on the land. When plaintiff settled upon and took possession of said land, it was wholly unoccupied and unimproved public land of the United States, except that there was a small, uninhabitable house, without doors or windows, thereon, which had been erected by defendant, and about one-half of an acre of said land had been plowed. Defendant never occupied or resided on said land prior to September 9, 1886. Plaintiff, though not a party to the controversy between defendant and Ward in the land department, made a motion therein on the 24th day of December, 1886, for a review of the decision therein, and offered to prove his (plaintiff's) settlement, residence, and improvement on said land, which motion was denied by the commissioners of the general land-office; and from that ruling plaintiff appealed to the secretary of the interior, who granted plaintiff's application to be heard, and on such hearing said secretary decided: First, that the defendant herein had the preference right to the entry of said lands under his application made on the 19th day of December, 1881; second, that the application of plaintiff herein to enter said land under the homestead laws should be allowed, subject to defendant's preference right to enter the same; third, that, if plaintiff's claim of settlement should be found unfounded in fact, then the application of said Ward to enter said land under the timber culture law should be allowed, subject to said defendant's preference right to enter the said land under his said application of December 19, 1881. Plaintiff, when he settled upon said land, possessed all the qualifications necessary to entitle him to make his application for 160 acres of land under the homestead laws of the United States. On the 9th day of Sep SHARPSTEIN, J. Ejectment. Judgment for defendant. Plaintiff's motion for a new trial overruled. Appeal from the judgment and order overruling motion for a new trial. Prior to the 4th day of May, 1877, the demanded premises were a part of the public lands of the United States. At that date one Ward applied for and made entry under the act to provide for the sale of desert lands of the section which embraces said premises. On the 19th day of December, 1881, defendant initiated a contest against said entry for abandonment and failure to comply with the law, and at the same time filed his application for said land under the soldiers' and sail-tember, 1886, defendant entered on and took ors' homestead act. The contest resulted in the cancellation of Ward's entry; and he relinquished his claim to enter under the desert land act, but applied to enter said land under the timber act. His application was rejected by the local land-office. He applied to the general land-office, and the commissioner thereof decided that his application should have been allowed, subject to the preference right of the defendant herein to enter said land under the soldiers' and sailors' homestead act. From that decision Ward appealed to the secretary of the interior, whose action thereon is not stated. December 4, 1885, plaintiff settled upon and possession of the demanded premises, and began the erection of a dwelling-house thereon, which was soon finished; and in October, 1886, he moved his family into it, and continued to dwell therein, claiming all said demanded premises as his own, and has prevented plaintiff from making any more improvements thereon. Defendant plowed and sowed portions of the land previously plowed and sowed by plaintiff. On the 15th of August, 1888, defendant made his final proof at the Los Angeles land-office, under the homestead laws of the United States, and paid $400, for which he received the following: "No. 3,226. Receiver's Office at Los Ange les, Cal., Aug. 15, 1888. Duplicate. Re- After the decision of the secretary of the interior, May 7, 1888, plaintiff obtained from the officers of the Los Angeles land-office the following: "Township No. 2 S., range No. 4 W., district of Part of section Section N. of S. W. 4. N. of S. E. 4. 8 Appli. Home, Chas. R. Gray. June 9, 1888. Subject to right of John C. Dixon, authorized by Sec'ry letter of P. of May 12, 1888. "United States Land-Office, Los Angeles, Cal., June 9, 1888. I, the undersigned, register of the United States land-office at Los Angeles, California, do hereby certify that the above and foregoing is a true and correct copy of abstract of entry of Chas. B. Gray, made and entered on the books of said landoffice, and as the same now appears thereon, on a comparison with said books. H. W. PATTON, Register U. S. Land-Office, Los Angeles." land-office; from which decision of said commissioner appellant appealed to the secretary of the interior. The court does not find that the secretary ever distinctively heard or denied that appeal, but finds that nearly a year afterwards he took up the case of the three claimants, Ward, appellant, and respondent, and decided that the application of appellant herein to enter said land under the homestead laws should be allowed, subject to respondent's preference right to enter the same. Whether that decision of the secretary of the interior is a valid determination of the respective rights of appellant and respondent herein, in the premises, is the main question' presented by the record before us. The "preferred" right of respondent, as it is denominated, is based upon the fact of his initiating on the 19th of December, 1881, a contest against the right of Ward to enter said land under the desert land act, and at the same time filing an application to enter the land himself under the soldiers' and sailors' homestead act. The act of congress entitled "An act for the relief of settlers on public lands" contains this provision: "In all cases where any person has contested, paid the land-office fees, and procured the cancellation of any pre-emption, homestead, or timber culture entry, he shall be notified by the register of the land-office of the district in which such land is situated of such cancellation, and shall be allowed thirty days from date of such notice to enter said lands: provided, that said register shall be entitled to a fee of $1 for the giving of such notice, to be paid by the contestant, and not to be reported." 21 U. S. St. at Large, 140, 141. That act, in terms, does not mention entries under the desert land law, such as the re The foregoing facts were found by the court below, and the principal contention of appellant here is that they are insufficient to support the judgment. If, at the time appel-spondent is found to have initiated his conlant built his house and went to reside on the land in controversy, it was subject to private entry, we think the findings show a sufficient compliance with the law on his part to entitle him to recover in this action. He seems to have done all that the law requires a preemption claimant to do to perfect his preemption claim to the land. But, when he offered to file his homestead application to enter said land under the homestead laws of the United States at the Los Angeles landoffice, although said application was in due form, and accompanied by the affidavit required by law in such cases, and he tendered all fees and commissions required by law on his said application, the officers of said landoffice rejected his said application, and he thereafter, and within the time allowed by law and the rules and regulations of the department of the interior, duly perfected an appeal from the action of said officers of the Los Angeles office to the commissioner of the general land-office, who affirmed the action of said officers of said Los Angeles LAND, J. | test against, and obtained the cancellation of by the land department. Although we cannot perceive any reason for the omission of desert land entries in the above enumeration, the fact of its omission makes the rule, expressio unius, exclusio alterius est, applica ble; and we must hold that respondent acquired no "preference right" to enter the land by successfully contesting the right of Ward to enter it under the desert land act. With the "preference right" eliminated, it is a case in which two persons have settled upon the same tract of land; and the right of pre-emption is in him who made the first settlement, and he, indubitably, is the appellant. This being so, the judgment should be in his favor. Judgment reversed, and cause remanded, with directions to the court below to enter judgment in favor of plaintiff for the recovery of the demanded premises, upon the findings of fact filed herein. We concur: THORNTON, J.; MCFAR (82 Cal. 650) HYMAN . COLEMAN et al. (No. 11,448.) (Supreme Court of California. Jan. 30, 1890.) JURISDICTION-STOCKHOLDER'S LIABILITY - LIMITATION OF ACTIONS. 1. Where seven defendants are sued, and the complaint demands a several judgment against five of them for less than $300, the superior court in California has no jurisdiction as to these five. 2. In an action against the stockholders of a corporation on its renewal notes, which are claimed to have extinguished the old notes, the complaint should allege that defendants were stockholders of the corporation when the renewals were made. 3. Where renewal notes are given by a corporation, the statute of limitations begins to run in favor of the stockholders from the maturity of the first notes, and an action against the stockholders. is barred in three years from the time the first notes matured, under Code Civil Proc. Cal. §§ 338. (subd. 1,) 359, which prescribe that actions against the stockholders of a corporation must be brought within three years after the discovery of the facts on which the liability was created. Commissioners' decision. In bank. Appeal from superior court, city and county of San Francisco. Severance & Travers, for appellant. T. M. Osmont and C. P. Robinson, for respondents. BELCHER, C. C. This is an action to recover from the defendants, as stockholders of a corporation, their several proportions of an indebtedness due plaintiff from the corporation. The complaint contains two counts. In the first it is alleged that plaintiff advanced and loaned to the corporation, on the 7th day of October, 1879, the sum of $2,000, for which the corporation then and there executed to plaintiff its promissory note, payable in one year after date, with interest, and that "said promissory note was renewed by said corporation each year, by the surrender of all former notes given by said corporation to plaintiff, and the execution and delivery of new notes to plaintiff for the amounts found due upon the said indebtedness." It further alleges that the capital stock of the corporation was divided into 1,000 shares, and states the number of shares owned by each defendant on the 7th of October, 1879. The second count alleges another loan by plaintiff to the corporation of $1,000 on the 16th day of December, | 1879, and the execution of its promissory note for that sum, payable one year after its date, with interest, and a like surrender and yearly renewal of same by the corporation. It further states the number of shares of the capital stock of the corporation owned by each defendant on the last-named date. The complaint then alleges that on the 8th day of September, 1883, an accounting as to the amount of the aforesaid unpaid indebtedness was had between the corporation and plaintiff, and that plaintiff then surrendered the notes which he held, and the corporation executed to him for such indebtedness four new notes, dated December 16, 1883, and payable one year after date with interest. This ac tion was commenced in April, 1885, and is based upon three of the last-named notes, one of the four having been paid. The defendants demurred to the complaint upon the grounds that it did not state facts sufficient to constitute a cause of action, and that the cause of action was barred by the statute of limitations. The court sustained the demurrer, and rendered judgment for defendants, and the plaintiff appealed. 1. The plaintiff demanded a several judgment against five of the seven defendants, who appeared, for less than $300. The superior court had therefore no jurisdiction of the action against these five, and as to them the judgment must be affirmed for that reaDerby v. Stevens, 64 Cal. 287. son. The only question, then, is, did the renewals operate to extend the time of payment of the original indebtedness, and thereby prevent the statute of limitation from beginning to run, in favor of those who were stockholders when that indebtedness accrued, until the last notes matured, on the 16th of December, 1884? It is settled law in this state, that, under our constitution and statutes, each stockholder of a corporation is liable for his proportion of the corporate debts, contracted while he was a stockholder, as a principal debtor, and not as a surety. Canal Co. v. Woodbury, 14 Cal. 265; Neilson v. Crawford, 52 Cal. 248; Bank v. Hill, 59 Cal. 107; Morrow v. Superior Court, 64 Cal. 383, 1 Pac. Rep. 354. The liability commences and a right of action accrues against the corporation and stockholders at the same time. Davidson v. Rankin, 34 Cal. 503; Mitchell v. Beckman, 64 Cal. 117. Suspension of the remedy against the corporation does not suspend the remedy against or affect the liability of the stockholders. Young v Rosenbaum, 39 Cal. 646. A judgment against the corporation does not create a new liability, nor extend the time prescribed by the statute of limitations for bringing suit against the stockholders. Larrabee v. Baldwin, 35 Cal. 168; Stilphen v. Ware, 45 Cal. 110. The liability of stockholders is created by statute, and an action to enforce that liability must be brought within three years after the cause of action accrues. Code Civil Proc. $$ 338, (subd. 1,) 359; Green v. Beckman, 59 Cal. 545; Moore v. Boyd, 74 Cal. 167, 15 Pac. Rep. 670. In New York it has been held that the renewal of a note by a corporation does not extend the time prescribed by statute for suing a stockholder. In Parrott v. Colby, 6 Hun, 57, the court said: "We think the liability of stockholders in such cases cannot be revived or extended by any renewal or extension of the indebtedness which the creditors may make with the corporation." This decision was affirmed on appeal in 71 N. Y. 597; and |