Schiffman v. Atlas Mill Supply Inc.

LILLIE, J.

Plaintiff, executor of the estate of Bertha Sehiffman, deceased, filed suit on a $4,000 promissory note executed October 31,1955, by defendant corporation to Bertha. Defendant admitted execution and delivery of the note, receipt of the money, and that it was never repaid; but asserted, and the trial court so found, that Bertha’s conduct on or about

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January 27, 1956, and thereafter prior to her death, “amounted to an executed oral agreement that the debt and obligation was forgiven, and deemed paid and satisfied.” (Findings of Fact, p. 6.) Judgment was entered in favor of defendant; plaintiff appeals. He contends that Bertha’s oral agreement to forgive the debt was without valid consideration and unenforceable.

In 1955, Myles, Bertha’s brother, was president of defendant Atlas Mill Supply Inc., which appears to have been a family corporation in which members of the Sehiffman family held stock or were officers, and to which they loaned money. Myles was owner of the majority of the outstanding corporate stock; Esther, Myles’ wife, was also an officer; they had loaned the corporation over $80,000; Bertha loaned it $4,000 and plaintiff, Ted, another brother and herein executor of his sister’s estate, had also loaned it funds. The $4,000 loaned by Bertha was evidenced by a promissory note dated October 31, 1955, payable on demand. Thereafter, in November 1955, due to business and financial reverses, Myles suffered a nervous breakdown and was taken to a sanitarium. Esther began efforts on behalf of Myles to negotiate a sale of the stock of the corporation to third persons. During this time, plaintiff talked to her “a lot” about selling the corporation and “tried to negotiate for a sale of the business for her.” Between November 1955, and January 27, 1956, Esther, plaintiff, Bertha, Ida and the “whole family” were “trying to see how they could salvage” the business and “get out of this as clean as they can, as quick as they can.” Bertha was in Esther’s home daily and they had numerous discussions concerning a sale of the corporation, especially during December 1955. Esther told Bertha that in order to effect a sale it would be necessary to cancel all of the corporation’s debts to the family and that Mr. Silver and Mr. Goldman, prospective purchasers, would not even discuss buying the business “until we would forgive all of the notes payable to the officers and family.” Bertha told Esther, “If you can lose close to $100,000 then I can certainly take a loss and forgive the $4,000 note so that my brother can get well.” On the morning of January 27, 1956, the day the agreement for the sale (Exhibit A) of defendant corporation to Silver and Goldman was signed by Myles at the sanitarium, Esther showed the agreement to Bertha and discussed it with her; she pointed out to Bertha that she and Myles were taking about an $86,000 loss; Bertha told her if they could do that, “the least she could do was to forgive the