Lambert v. Schmalz

California Supreme Court Sep 4, 1897 No. S. F. No. 570Published

Before: Belcher, Haynes, Henshaw, McFarland, Searls, Temple

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Holding. A debtor's moral obligation to pay a debt discharged in insolvency constitutes sufficient consideration for a new, clear, and unconditional promise to pay, which revives the debt. However, the judgment was excessive because it included unauthorized percentage fees and failed to properly account for interest and payments made after the new promise.

Issues

Whether the defendant made a clear, distinct, and unconditional new promise to pay a debt discharged in insolvency.
Whether the trial court erred in the calculation of the judgment amount regarding interest and unauthorized percentage fees.

Disposition. reversed and remanded

Quotations verified verbatim against the opinion

“it is well settled that when an action is brought to recover such-a debt it must be based upon the new promise, and to support the action it must appear that the promise was clear, distinct, unconditional, and unequivocal.”

Synopsis

APPEAL from a judgment of tbe Superior Court of tbe City and County of San Francisco and from an order denying a new trial. John Hunt, Judge.

Tbe facts are stated in tbe opinion.

A new promise to pay a discharged debt must be express, clear, distinct, unconditional, and unequivocal. (Meech v-Lamon, 103 Ind. 513, 515; 53 Am. Rep. 540; Allen v. Ferguson, 18 Wall. 1; Bennett v. Everett, 3 R. I. 152; 67 Am. Dec. 498; Apperson v. Stewart, 27 Ark. 619; Tolle v. Smith, 98 Ky. 464; Elwell v. Cumner, 136 Mass. 102; Biglow v. Norris, 141 Mass 14; Dennan v. Gould, 141 Mass. 16; La Tourrett v. Price, 28 Miss. 702; Stern v. Nussbaum, 4!7 How. Pr. 489; Craig v. Seitz, 63 Mich. 727; Brewer v. Boynton, 71 Mich. 254.) The promises proved were to pay twenty-five dollars per month, and as soon as he was able to pay it all. There is no allegation of either of these promises, nor of ability of the defendant to pay. (McCormick v. Brown, 36 Cal. 180; 95 Am. Dec. 170; Tolle v. Smith, supra; Richardson v. Bricker, 7 Colo. 58; 49 Am. Rep. 344; Mason v. Hughart, 9 B. Mon. 480; La Tourrett v. Price, supra; Sherman v. Hobart, 26 Vt. 60.) A declaration of intention or expectation to pay the debt does not amount to a new promise. (Brewer v. Boynton, supra; Lawrence v. Harrington,. 122 N. Y. 408; Elwell v. Cumner, supra; Meeck v. Lamon, supra; Dennan v. Gould, supra; Pierce v. Seymour, 52 Wis. 272; 38 Am. Rep. 737; Patterson v. Neuer, 165 Pa. St. 66.) A part payment is not sufficient to authorize the implication of a new promise to pay. (Lawrence ¶. Harrington, supra; Institution for Saving v. Little-field, 6 Cush. 210; Starlc v. Stinson, 23 N. H. 259; Allen v. Ferguson, supra; Hilliard on Bankruptcy, sec. 53.)

BELCHER, C. On December 13, 1893, the defendant, for a valuable consideration, executed to the plaintiff his promissory-note for the sum of seven hundred and fifty dollars, payable ninety days after date, with interest at the rate of two per cent per month from date until paid. On June 12, 1894, the defendant was discharged in insolvency “from all his then existing debts, and among others the said indebtedness on said promissory note above mentioned.” In the months of January and February, 1894, defendant paid on the note the interest due in those months, in April following he made a payment of twenty-five dollars, and between the months of July, 1894, and March, 1895, inclusive, he made several other payments aggregating one hundred and seventy-four dollars. He afterward refused to make any more payments, and thereupon plaintiff commenced this action. The complaint alleged, among other things, “that subsequent to the said discharge in insolvency and at various times in the months of July and August, 1894, the said defendant, Will[35]iam Schmalz, promised and agreed to and with tbis plaintiff that he would pay to this plaintiff the full amount of said promissory note, to wit, the sum of seven hundred and fifty dollars,” and that pursuant to said promise he afterward paid to plaintiff several specified sums of money; “that no part of the said sum of seven hundred and fifty dollars, which the said defendant promised to pay as aforesaid, has been paid, save and except the above mentioned amounts and also interest in the amount of fifteen dollars for January, 1894, and fifteen dollars for February, 1894.” Wherefore judgment is asked for the sum of seven hundred and fifty dollars, and interest thereon from the 13th day of February, 1894, and costs.

The answer denied the principal averments of the complaint, and prayed judgment that the plaintiff take nothing by his action.

The case was tried by the court without a jury, and the court found, among other things, “that all the allegations of said complaint are true and have been fully sustained by the testimony herein, free from all exception as to its competency, admissibility and sufficiency”; and that the plaintiff was entitled to judgment against the defendant for the sum of seven hundred and fifty dollars, “with percentage and costs of suit.”

Judgment was accordingly so entered, from which and from an order denying a new trial the defendant appeals.,

Appellant contends that the findings were not justified by the evidence; and whether, subsequent to his discharge in insolvency, he made any promise to pay the alleged indebtedness to the plaintiff sufficient to remove the bar of the discharge is the principal point presented for decision.

Lambert v. Schmalz

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