Hamilton v. Bates

TEMPLE, C. This appeal is from a judgment of nonsuit, rendered in favor of the defendant, the Coronado Beach Company, and was taken within sixty days after the rendition of the judgment. The action was brought to recover $2,152 for goods sold and delivered to Ben S. and Josie A. Miller. The respondent was sued upon the supposition that for a valuable consideration, paid to it by one F. E. Bates, it had promised to pay all the indebtedness of the Millers. Plaintiff claims that the contract is one made expressly for his benefit, upon which he may therefore sue, as provided in section 1559, Civil Code. Ben S. Miller and Josie A. Miller, his wife, had purchased a large amount of land from the Coronado Beach Company, for which they held contracts, the purchase money not having been paid. They had built upon the land purchased a hotel called the “Hotel Josephine.” About January 27, 1888, being unable to pay their indebtedness, they entered into a verbal arrangement with Bates,, who had become liable for a large amount of their indebtedness, by which Bates was to take their property and sell it, and from the proceeds pay their debts. It is a matter of dispute as to whether Bates then undertook and promised to pay all the indebtedness of the Millers. The purchase money due the respondent, for which they held the land as security, was $40,785.41. Bates had previously become responsible for about $1,900 of the Millers’ debts, and they owed about $8,000 more, which are called “floating debts.” The debts sued upon are a part of this floating indebtedness, for which Bates was certainly not liable prior to the arrangement with the Millers, above alluded to; and I think there is no evidence in the ease upon which the court could have found that Bates then assumed such debts. Subsequently to the verbal arrangement it was [373]agreed that respondent should convey the title to the land to Bates, who should secure the purchase money by a mortgage to the respondent. Accordingly the deed and mortgage were executed, and at the same time an instrument in writing by all the parties, reciting the change in the relation of the corporation to the property, and wherein Bates agreed to save the respondent harmless from loss through certain claims against the property, and particularly against the attachment of the Chadboume Furniture Company and the floating indebtedness of the Millers. Afterward, March 10, 1888, the Millers executed a release in favor of Bates, whereby they released Bates from all claims on account of the conveyance to him of said property, provided Bates should pay all their indebtedness in-the county of San Diego, not exceeding in the aggregate $70,000. This was not signed by Bates, and was probably intended to release him from that part of the first verbal arrangement in which it was agreed that, in case of a surplus after payment of the debts, such surplus should be equally divided between Bates and the Millers. Before this last instrument was executed, however, to wit, February 23, 1888, Bates had become convinced that he would be unable to manage the debts of the Millers, or prevent the property from being sold under the attachments. He therefore informed Babcock, who was president and manager of the respondent, of his inability. Babcock then asked what he could do to induce the corporation to assume the indebtedness of the Millers. It was then finally arranged between Bates and Babcock, acting as president and manager of respondent, that Bates would pay to respondent $15,000, and hold the property for the Beach Company, or convey it to anyone at request of that company; that, in case the debts were paid, the corporation should have and retain one-half of any surplus that might remain, and Bates should have the other half; in consideration of which Babcock agreed for the corporation that it would pay all the indebtedness of the Millers.. Bates paid to Story, who was acting with Babcock, for the corporation, of which he was vice-president, the $15,000. This was charged to the corporation, and most of it, it is shown, was afterward paid out in the name of the corporation upon the debts of the Millers in discharge of attachments upon the property.