McClellan v. Sanford

Dixon, C. J.

Thе facts and circumstances of the transaction between Duryee and the defendant Sanford, as disclosed by all the testimony, tend very strongly to show that the clause of the deed in question was correctly inserted, and correctly represents the actual agreement of the parties. Sanford testifies that he bought the land, and аgreed to pay and did pay $1,400 for it, in goods at cost prices, and was to take it subject to the mortgage; and he repeats in his testimony that “ the land was not considered worth any the less for the mortgage being on it.” Duryee testifies to the same thing, and gives the reason: “ as it was supposed the railroad company wоuld pay it.” The railroad company was then sound and solvent, or supposed to he by both the parties. Neither party apprehended its insolvency or ultimate inability to pay the mortgage, and both believed it would be abundantly able to pay and would pay it. Entertaining no doubts upon the subject, they negotiated on that basis; and hence the mortgage was regarded as no incumbrance. Sanford was indifferent to it, and was as willing to take the land with the mortgage upon it, or subject to the mortgage, as if no such incumbrance had existed. “ The ¡oremises were not,” as he at another time testifies, “ considered worth any the less on account of the mortgage being on them.”

Such being the views of the parties and the light in which the transaction is to be examined, it is difficult to perceive why Sanford should not have entered into the agreement in question, or have assumed and promised Duryee to pay the mortgage, or why he should have objected to receiving the deed with the сlause in question in it. And particularly is it difficult to perceive this when it furthermore appears, as part of the same transaction, that Duryee was to transfer to him $1,200 of the railroad stock for which' the mortgage was given, that being a sum equal to the portion of the mortgage which the deed recites he agreed to рay. This stock must also have been considered valuable. Sanford himself testifies that he bought some full paid stock about the time he purchased the land, for seventy-five cents on the dollar, and that it was quoted at eighty-two cents in New York. The value of the mortgage stock does not appear, nor does it seem to have had an established price in market. It may have been unsalable at the time, and probably was; still, considering the railroad company as sound and solvent, and likely to remain so, it must have been regarded as of very considerable value in the end. Indeed, Mr. Sanford so testifies. Por, speaking of the land being considered оf no less value on account of the mortgage, he at one time says it was “ because it was supposed the stock would be worth something.” If this was the sole ground for considering the mortgage no incumbrance (though we do not think it was), it. must have been, ‍‌‌‌​​‌‌​‌‌‌​‌​​‌​‌‌‌​​​‌​‌​‌​​‌‌​​‌‌​​‌‌‌‌‌​​‌​​‍because the parties supposed the mortgage stock would ultimatеly be at par or above par, for otherwise it would not pay the mortgage debt. . At all events, it is very clear that they considered the mortgage as no incumbrance, and the stock of considerable value. Under these circumstances, it is not easy to see why Mr. Sanford should have hesitated to enter into the promisе, or why he should have made any point upon the particular form of the agreement. On the contrary, the reasons why he should or might have made the promise, and why Mr. Duryee should or might have insisted on his doing so, seem very obvious. If, on the one hand, we regard the land as the principal object of Mr. Sanford’s purchase, as his testimony would seem to justify, and the transfer of the stock as incidental and so as to secure or indemnify him against any possible loss which might arise from the mortgage, then it was most natural that Mr. Duryee should have required and that Mr. Sanford should have willingly undertaken to be personally responsible for the payment of the mortgage debt. Considering the stоck as valuable, and at least equivalent to the mortgage debt, or that part of it to which Mr. Sanford’s land was subject, and as full and ample security against loss by the mortgage, it would indeed be very strange, judging from the motives by which persons would ordinarily be actuated in such a case, if Mr. Duryee had not required Mr. Sanford to become personally liable for so much of the mortgage debt. Transferring to Mr. Sanford, to become absolutely his, securities considered of equal value with the mortgage, as indemnity against it, it would seem almost unaccountable if be bad not obtained from Mr. Sanford a promise to pay tbat part of tbe mortgage debt. Mr. Duryee, by reason of a like clause in tbe deed from Boorman to himself, was still personally liable to tbe mortgagee or holder of tbe mortgage for $1,200 of the mortgage debt, notwithstanding be had, in effect, paid it by the transfer of stock to Mr. Sanford; and, in the event of tbat liability being enforced, his only recourse upon Mr. Sanford would be through the medium of such promise. He would most naturally, therefore, have requirеd it for his own indemnification, ‍‌‌‌​​‌‌​‌‌‌​‌​​‌​‌‌‌​​​‌​‌​‌​​‌‌​​‌‌​​‌‌‌‌‌​​‌​​‍since without it he would be subject to double payment with no right to fall back on the party to whom he had first paid.

But if, on the other hand, we regard the transaction as a purchase by Mr. Sanford of both the land and the stock, there were still the same motives for requiring the promise, and the same inducements for giving it. The stock, as we have seen, was considered by the parties of value equal to the sum represented by the mortgage, and in addition to this they had no doubt that the railway company would pay the mortgage as it had agreed. Had. their expectations in this respect beén realized, as they seemed confident thеy would be, then Mr. Sanford would have been a great gainer by the purchase. He would have had $1,200 in stock worth so many dollars, besides any dividends which might have been declared, and he would have had the land free from incumbrance, and all for $1,400 paid in goods. These were certainly no small inducements for the promise, and no slight reаsons for Mr. Duryee’s ,having insisted on it, if he in fact did so.

We have referred to these facts and circumstances attending the transaction, not because they are to be regarded as outweighing clear and positive proof that the promise was not made, or that the clause was inserted in the deed by mistake, but beсause, in our 'judgment, the case contains no such proof. The proof seems to us to be vague and unsatisfactory, and, giving it tbe utmost effect, to leave the matter in much doubt; and in such a case it will be conceded, we think, that considerations of the kind above mentioned will have considerable weight. The testimony here to show the mistake is entirely that of the parties themselves to the transaction, and we may almost say that of Mr. Sanford alone. Mr. Duryee’s testimony with respect to the agreement or promise to pay the mortgage is but of the negative kind. In common with Mr. Sanford he testifies positively that the deed was to be made subject to the mortgage, or that portion of it which was equal to the amount of stock transferred, but he does not so testify with regard to the agrément to pay it. As to that, he exhibits a want of memory, and only says that, so far as he can recollect, nothing was said between him and Mr. Sanford about his assuming any portion of the mortgage debt. This is mere negative testimony, or testimony based on a want of recollection. He does not testify that such agreement was not made. To this last point, therefore, which is the very point upon which the question must turn, we have only the testimony of Mr. Sanford, which, like that of his co-defendant Duryee, was given over fourteen years after the еvents in controversy transpired, and when there was much reason for supposing that neither ‍‌‌‌​​‌‌​‌‌‌​‌​​‌​‌‌‌​​​‌​‌​‌​​‌‌​​‌‌​​‌‌‌‌‌​​‌​​‍could remember to testify with accuracy and positiveness to what did take place, or what the actual agreement or understanding between them was. And when to this testimony of Mr. Sanford we oppose the facts testified to by the witness Barlow, who drew the deed and inserted the clause in question by direction of Mr. Duryee, and after inquiry as to the nature of the agreement made of Mr. Duryee, in whose mind the facts were then fresh, and who must be presumed to have stated them correctly, as he had no motive for misstatement, or, if he had, was almost sure of immediаte detection by Mr. Sanford, to whom the deed was to he delivered — it would seem that the fact of mistake, which the law requires to be most clearly and unequivocally proved, has by no means been so established. And when also we consider the fact that Mr. Sanford accepted the deed and retained it in his possession for over thirteen years, and until after this action was commenced, making no objection to it on account of the clause in question, though he says he did not discover it, and the further fact that he testifies under great pressure of interest, which, though it may not have consciously affected his testimony, as we have no doubt it did not, yet may have done so unconsсiously; we say, when these facts are also considered, that the foundation for adjudging a mistake seems still more shadowy and uncertain.

In a recent case, Kent v. Lasley, 24 Wis. 654, this court had occasion to express a doubt whether a deed absolute on its face could be turned into a mortgage by the unaided testimony of the grantor, however intelligent and credible he might be as a witness. We thought it would be a most dangerous precedent to establish. The similarity between cases of that kind and cases like the present is noticed in the opinion, and the former rules and practice, and the nature and extent of proof required in chancery in order to overcome or set aside a written instrument as evidence of the agreement between the parties, are stated. The decisions of this court in cases of mistake, showing that the written paper ought to be treated as a full and correct expression of the intent until the contrary is established beyond reasonable сontroversy, are also cited. There is no difference in principle between the two classes of cases, and both stand on the same footing with respect to the nature and degree of evidence required. The same convincing proofs must be given in both, or the written contract will not be disturbed. And what was therе said in relation to overturning a deed upon the testimony of the grantor alone, is equally applicable where the proposition is to set aside or annul any of its provisions upon the testimony of the grantee alone.' We greatly doubt whether it ought in any case to be done, and believe it would be a most dangerous precedent to establish. But if any such case could be presented, we are quite satisfied this is not one. There are too many circumstances weighing against the testimony of Mr. Sanford to allow us to do it; and, hard though the case may be, he must abide by the deed as written.

The other branch of Mr. Sanford's defense, namely, that there was a failure of consideration because the stock was never assigned to or received by him, requires less consideration. We entertain little doubt that all the assignment or transfer intended by the parties or necessary to carry out their agreement was,. in fact, executed and delivered. The stock was represented by a singlе certificate for 20 shares at $100 each, originally .issued to Morehouse, the mortgagor, and from necessity, upon a transfer of a part only of it, the certificate would not also be delivered, or, at least, might not be. The several parties in interest could not all hold the certificate at the same time, аnd Mr. Sanford seems to have been willing to receive a separate assignment from Duryee, as Duryee and the previous assignees had done, the original certificate remaining in the hands of Mr. Barlow in trust for the parties interested. That this was the manner of transferring the stock sufficiently appears, we think, from Mr. Sanford’s own testimony. He says: “There was a certificate, or sort of one, that the railroad company would furnish stock, which I had.” And ‍‌‌‌​​‌‌​‌‌‌​‌​​‌​‌‌‌​​​‌​‌​‌​​‌‌​​‌‌​​‌‌‌‌‌​​‌​​‍again he says: “I got the assignments from Duryee, and left them with a man by the name of Gilbert, of Tomah.” The fact of Mr. Sanford’s becoming so indifferent, and not pursuing the matter so as to obtain certificates of stock in his own name, is sufficiently accounted for by reason of the stock having soon after become utterly worthless.

The only remaining question is upon the statute of frauds, and whether the agreement is void because it “ by the terms is not to he performed within one year from the making thereof,” and is not “ subscribed by the party charged therewith.” R. S. ch. 107, § 2. The agreеment is contained in the deed from Duryee to Sanford, which deed was not signed or sealed by Sanford. “ It is, therefore,” as was held by this court in Bishop v. Douglass, 25 Wis. 696, “ a mere promise which acquires its binding force by acts in pais, without any signature or sealing whatever.” The question is, whether the agreement falls within the clause of the statute above referred to, because not to be performed within one year, or whether its having been fully performed on one side, by the execution and delivery оf the deed, takes it out of the statute. The authorities upon this question are divided, though with a decided preponderance in favor of the validity. In Massachusetts, New Hampshire, Vermont and New York, it is held that a promise to pay, not reduced to writing and subscribed by the party, is within the statute, and no action can be maintainеd upon it, if not to be performed within one year, although made upon a full and valuable consideration executed by the promisee and received by the promisor at or before the time. Marcy v. Marcy, 9 Allen, 8; Emery v. Smith, 46 N. H. 151; Pierce v. Estate of Paine, 28 Vt. 34; Broadwell v. Getman, 2 Denio, 87; Lockwood v. Barnes, 3 Hill, 128. On the other hand, the English courts and the courts of many of the states hold the very opposite doctrine — that perfоrmance on one side at the time, or within the year, takes the contract out of the statute, and that it may be enforced. Cherry v. Heming, 4 Exch. (Welsby, Hurlstone & Gordon) 631; Donellan v. Read, 3 Barn. & Ad. 899 [23 E. C. L. 215]; Hoby v. Roebuck, 7 Taunt. 157 [2 E. C. L. 57]; Boydell v. Drummond, 11 East, 152; Souch v. Strawbridge, 52 E. C. L. 806; Smith v. Neale, 89 E. C. L. 66; Berry v. Doremus, 30 N. J. Law R. (1 Vroom), 403; Haugh v. Blythe's Executors, 20 Ind. 24; Curtis v. Sage, 35 Ill. 22; Morgan v. Bitzenberger, 3 Gill (Md.) 350; Johnson v. Watson, 1 Kelly, 348; Rake’s Adm’s v. Pope, 7 Ala. 171. It will be observed, on examining these cases, that in some the question was nearly identical with the present, except that the promise was not evidenced by anything written in the deed; and that in all it wаs held that a verbal promise to pay beyond the year, if made upon an executed consideration, whether lands conveyed or goods and chattels sold and delivered, or other consideration of value, is valid. The doctrine of these cases is, that the provision of the statute now being considered applies only to contracts not to be performed on either side within the year.

It might be of some interest, perhaps, to pursue the investigation, and state the reasons upon which these different lines of decision proceed, were it not for the fact that the same question has been already settled by an adjudication of this court, and that in accordance with the rule established by the cases to which reference is last above made. As it is, we only remark of the cases holding the opposite rule, that whilst they adhere to a strict and literal construction of the statute in order to close the door to the mis-chiefs which they suppose the statutе was designed to prevent by excluding parol evidence after the lapse of one year, they yet seem to leave the door wide open to the same mischiefs by allowing parol evidence to be introduced to show what the contract was, and what the price or sum agreed to be paid, for the purpose of enabling the promisee or creditor to recover upon a quantum meruit or quantum valebat. The advantage of this course of decision is not perceived; and if ‍‌‌‌​​‌‌​‌‌‌​‌​​‌​‌‌‌​​​‌​‌​‌​​‌‌​​‌‌​​‌‌‌‌‌​​‌​​‍it were, we should not be inclined to depart from a rule already laid down, especially when it is sustained by so much and such respectable authority. Coyle v. Davis (20 Wis. 564, 569) presented the question upon much the same state of facts, and it was there held that the oral agreement to indemnify or relieve the mortgagor from personal liability in consideration of his conveyance of the equity of redemption, was valid and obligatory; and by that decision the present case must be governed. The promise is not within the statute of frauds, and is, therefore, binding and available against Mr. Sanford in this action.

By the Court. — Judgment affirmed.

Case Details

Case Name: McClellan v. Sanford

Court Name: Wisconsin Supreme Court

Date Published: Jun 15, 1870

Citation: 26 Wis. 595

Court Abbreviation: Wis.