California Supreme Court Sep 5, 1900 No. Sac. No. 713.Published
Before: Gray
Synopsis
The facts are stated in the opinion.
M. B. Harrison, Peter J. Shields, and Hiram W. Johnson, for Appellant.
GRAY, C.
Plaintiff had judgment hy default against defendant Parsons. The defendant Bowles answered, and on a trial the verdict and judgment were against him. From said judgment and from an order denying him a new trial the defendant Bowles appeals.
The complaint in the case sets forth facts showing a sale and delivery to defendants, and each of them, of a one-half interest in a saloon and fixtures and materials for carrying on said saloon, and alleges that the consideration for said sale was $250 and an agreement on the part of defendants, and each of them, to pay certain debts owing by plaintiff and defendant Parsons amounting in the aggregate to $814.60. It is also averred -that the promise to pay the $250 is evidenced by a promissory
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note executed by defendants to plaintiff for said sum of $250 and interest at eight per cent per annum from December 3, 1897. It is alleged that no part of the note has been paid except $100 on February 4, 1898, and that defendants and each of them have refused on demand to pay said indebtedness of $814.60, and that defendants have had more than a reasonable time to pay the same, and no part thereof has been paid, and that the creditors are pressing plaintiff for payment. The prayer is for judgment: 1. For said sum of $814.60; 2. For said sum of $250 due on the note, with interest as in said note specified, after deducting said sum of $100 paid on February 4, 1898.
The original answer to the complaint expressly admits the willingness of appellant to pay the balance due on the note, and contains an offer to allow plaintiff to take judgment against him for the amount alleged by plaintiff to be due on said note. In the amended answer, upon which the case was tried, the defendant denies the purchase of the property and the promise to pay anything on account thereof, and alleges that plaintiff sold the property, to defendant Parsons alone. Appellant then admits the execution of the note, but avers that he signed it only as surety to enable Parsons to purchase the saloon. It is not claimed by appellant, either in the answer or elsewhere, that he has any defense to the note. On the trial the jury returned a verdict in the following form: “We, the jury in this cause, find for the plaintiff Paul Meyer in the sum of $814.60; also $150 with interest.”
1. Appellant contends that if all that is claimed by plaintiff is true, yet he is not entitled to recover the $814.60, because he has not paid the same himself, and because the agreement was not that appellant should pay the plaintiff that amount, but that he should pay it to the creditors.
In answer to this it is sufficient to say that the promise to pay the creditors was made to plaintiff, and that on a failure to keep that promise plaintiff is entitled to recover whatever damages he has sustained by reason of such failure. He is not compelled to rescind nor to treat the contract as rescinded, but may rely upon the contract and recover damages for its breach, and this is, as we understand it, just what he is endeavoring to
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do in this suit. His damages in that regard are the same whether he has already paid the creditors or must yet inevitably pay them. There is no question but that he is yet liable to the creditors, and the extent of his right of recovery is not affected by the possibility, that the creditors may not exact all that they are entitled to in discharge of their claims. The extent of appellant’s liability is the amount that he agreed to pay for the property: and plaintiff can recover this full amount even though he has not paid it himself. (2 Sedgwick on Damages, sec. 789, and cases there cited;
Banfield v.
Marks, 56 Cal. 185.)
It is needless to determine whether the creditors of plaintiff and Parsons have a right of action against appellant or not, for, be that as it may, there being no novation plaintiff certainly has a right of action, and the right of the creditors to an action against the appellant, if any exists, can he extinguished by paying the creditors, and, as is said in
Rector etc. of Trinity Church v. Higgins,
48 N. Y. 532, 539: “A court of law is vested with such equitable power that, upon application after such payment, proceedings for the collection of the judgment, except as to the costs, would be stayed, and, upon payment of the costs, satisfaction of the judgment would be ordered.” But even where it is held that the course suggested above cannot be pursued, still the position in which the appellant finds himself is deemed to be the result of his own fault, and should not prevent us from giving to the plaintiff the benefit of the contract he has made.
(Furnas v. Durgin,
119 Mass. 500, 508.
1
)
2. The contract between plaintiff and defendants was not one to answer for the debt or default of another, but was a contract of sale accompanied with a delivery of the property sold; it was not, therefore, within the statute of frauds.
3. Two instructions given to the jury are complained of because they leave out of consideration entirely, the defendant Parsons and ignore the question of partnership. The defendant Parsons had made default, and the trial was not being had for the purpose of testing his liability, but only to determine the liability of Bowles. It was not necessary, therefore, to enlighten the jury as to the liability of Parsons. Nor was it
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necessary to say anything to them about any partnership relation either between Meyer and Parsons, or between Parsons and Bowles. The defendants are not sued as partners, and there is no plea or theory of partnership in the case that it was necessary to explain to the jury. Meyer was responsible to the creditors for the whole amount of the indebtedness of himself and Parsons, and the appellant Bowles was in turn responsible to plaintiff for the full amount of the damages resulting from the breach of the contract involved in the suit, and both these propositions are true conceding all that can be claimed as to the existence of partnerships. If it be conceded that the statement “The creditors could not hold Bowles” was not sound as a proposition of law, still this could not have injured appellant, because, as we have already seen, the plaintiff is entitled to recover whether a right of action against appellant existed in favor of the creditors or not. As to the matters pointed out by appellant, therefore, there was no prejudicial error in the instructions.
4. The value of the amount of the stock in the saloon at any time other than when the sale was made could not possibly throw any light on any matter in issue, and the objections to evidence looking to those matters were properly sustained.
5. The verdict was not as certain as it might have been as to the matter of the interest on the note, but, as to said note, the plaintiff was entitled to judgment on the pleadings, no defense thereto having been set up. The alleged uncertainty in the verdict is therefore immaterial.
6. Both plaintiff and Parsons testified substantially that Parsons and Bowles together bought Meyer’s interest in the saloon and agreed to pay the debts of the firm composed of Meyer and Parsons. Some of the answers of Meyer, separated from the rest of his testimony, might bear the construction given it by the appellant that he intended to say that the sale was made to Parsons alone, but, reading his .testimony, altogether, it is clear that he intended to testify and did testify that “Bowles and Parsons bought me out. The note was signed by both. That was the understanding between us; both of them bought me out.” And, again, he said, “They promised to pay the bills below.” Parsons’ testimony is to the same effect
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and entirely free from ambiguity, and other witnesses testified to corroboratory facts. Bowles himself must have known of the facts in reference to the sale, but for some unexplained reason he does not testify at all. The evidence clearly shows the sale to Parsons and Bowles and that they promised to pay the debts of Meyer and Parsons.
7.
On the cross-examination of Parsons he was asked: “Did you not bring an action against Mr. Bowles for this very same thing in addition to that two hundred and fifty dollars he assumed to Meyer, and the three hundred dollars he paid you when he surrendered up your note, and then, as you have sworn here in your complaint, that he assumed the payment of the thousand dollars for you at that time? Also when he bought you out? Do you tell this jury that he assumed both of these?” An objection by the plaintiff was made to this question, and appellant excepted to the court’s action in sustaining the same. It is somewhat difficult to discover the meaning of the above question, but it seems reasonable to suppose that it refers to a suit brought by Parsons against Bowles on account of a sale by the former to the latter of the interest of the former in the saloon; for it appears that such a sale took place some months after the sale involved in this case; and to properly understand the last part of the question it should read like this: “Do you mean to tell this jury that Bowles and you first assumed and agreed with Meyer to pay the indebtedness of Meyer and Parsons, and then when he bought you out Bowles again agreed with you to assume and save you harmless from that same indebtedness?” If the above is the meaning of the question it certainly contains an inquiry as to an immaterial matter; and if such is not its meaning we do not understand it, and in cither event we find no error in the ruling of the court. The fact that no ground was stated by counsel for the objection to the question does not alter this view.
We advise that the judgment and order appealed from be affirmed.
Chipman, C., and Haynes, C., concurred.
For the reasons given in the foregoing opinion the judgment and order appealed from are affirmed.
Henshaw, J., McFarland, J., Temple, J.
1
20 Am. Rep. 341.
AI Brief
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Holding. A plaintiff may recover the full amount of a debt that a defendant contractually agreed to pay as consideration for a sale, even if the plaintiff has not yet paid the creditors themselves. Such a contract is not within the statute of frauds as it is a contract of sale rather than a promise to answer for the debt of another.
Issues
Whether a plaintiff can recover damages for a defendant's breach of a promise to pay third-party creditors before the plaintiff has paid those creditors.
Whether a contract to pay third-party debts as consideration for a sale is within the statute of frauds.
Whether instructions to a jury regarding the liability of a defaulting co-defendant are necessary.
Disposition. affirmed
Quotations verified verbatim against the opinion
“The extent of appellant’s liability is the amount that he agreed to pay for the property: and plaintiff can recover this full amount even though he has not paid it himself.”
“The contract between plaintiff and defendants was not one to answer for the debt or default of another, but was a contract of sale accompanied with a delivery of the property sold; it was not, therefore, within the statute of frauds.”