14 Colo. 104 | Colo. | 1890
This litigation grows out of the misunderstanding of the parties in regard to important transactions between them. After the making of the contract by appellant and appellee of June 1,1876, on the 8th of November of the same year, appellee, being indebted to the Colorado National Bank and Charles B. Kountze in the sum of about $30,000, assigned the contract made with appellant, and with it the appellee’s judgment against the Mining Company Nederland, and all rights and equities in the contract, and transferred them to Kountze. This transaction was one entirely between Corning and Kountze, Chaffee not having been a party; and it is not shown that he had any knowdedge of it, or in any way participated or was present. As far as is shown, matters remained in this condition until April, 1879, when, Chaffee
The first question presented for determination is what the character of the assignment from Corning to Kountze of the 8th of November, 1876, was, and the intention of the parties, and its legal effect. It is contended in argument by appellant’s counsel that it was an absolute sale and transfer of the judgment againstihe Mining Company Nederland, and likewise of all Coming’s right, title and, interest in and to the contract between himself and Chaffee, while, on the part of Coming, it is urged that the transaction was a transfer by assignment to Kountze as collateral security of the indebtedness. The assignments were made by the execution by Coming of two different instruments contemporaneously, — one, of the judgment, absolute and unconditional in its character; the other, of the contract, in substance as follows: That, in consideration of one dollar paid, and in further consideration of the premises to be kept and performed by Kountze, etc., Kountze is empowered — First, to receive all moneys due or to become due; second, to receive a deed of the interest of Coming in the property described in the contract, if such deed should be made; third, out
Taking the provisions and language of this assignment, unsupported by other testimony, it is apparent that it was not, nor intended to be, an absolute sale and transfer, divesting Corning of all interest in the contract with Chaffee, and substituting Kountze in his stead. Such construction, instead of being in harmony, would directly contradict the expressed intention of the parties. Corning and Kountze were the only parties to the contract of assignment. No question arose between them as to the legal effect or the intention of the parties. It was by both, at all times, treated and regarded as a transfer and assignment as collateral security for the payment of the indebtedness, not as abrogating the contract between Corning and Chaffee by substituting Kountze in the place of Corning, but leaving the contract between them in full force. There is another view of the matter; Corning, by the contract with Chaffee and the mutual agreements and covenants, had disposed of all interest in the matters to Chaffee. Chaffee, by virtue of the contract, was the owner of the very property and rights in action that are claimed to have been transferred to Kountze. What Corning was to receive under the contract was money — nothing else — absolutely; and, under any circumstances, the amount of the judgment against the Nederland Company, and any money he might pay for the purchase of claims, with interest on the same, was to be repaid. Chaffee was to have the title to the prop-arty,— hold and work it,— and his trust might be dis
Upon the trial, C. B. Eountze testified, in answer to a question in regard to the judgment of Corning against the Mining Company Nederland: “ We simply held it as collateral. We had not bought it. It was ours as a collateral.” He further says: “ Upon the 8th of November, 1876, Coming’s debt to me was still unpaid. The assignment was taken only as collateral security for the debt. Corning owed myself and the bank; and on the 17th of April, 1879, we were still holding it as collateral security.” Corning testified to its having been assigned to and held by Eountze as collateral security. Corning and Eountze having been the only parties to the contract or assignment, and both agreeing as to what the transaction
It is clear that by the subsequent assignment made by Kountze to Chaffee, the latter could take by the assignment no greater or better title than Kountze had held. In the assignment of Kountze to Chaffee of April 17, 1879, of the contract between Corning and Chaffee of June 1, 1876, is the following language: “And held by him as collateral security for indebtedness due to myself, and the Colorado National Bank of Denver, from said Corning; * * * it being the intent of this assignment to give to said Jerome B. Chaffee all the rights I have in said contract, and none other.” Consequently, by virtue of the transaction with Kountze, aside from anything that may have occurred in connection with Corning, Chaffee, having paid and discharged the debts of Corning by compromise or composition, and succeeding to the securities, held them, by virtue of the assignment, only as collateral for the sum of money advanced; he was substituted for Kountze, and held the same collateral security for a less sum of money by reason of the
The act of Chaffee in making the payment of $30,000 at the time can only be regarded as falling within one of the three following propositions: First, that it was a loan of that amount to Corning, to be subsequently settled and adjusted; second, that by the deal with Eountze all parties were relegated to their original status under the contract, with $30,000 of the money due Corning paid by Chaffee; or third, that, by a subsequent contract made between Chaffee and Corning at the time of the payment to Eountze, the former contract was abrogated, and it was agreed that the amount paid Eountze should be accepted by Corning as payment in full under the contract and Chaffee discharged from all further liability.
The testimony is very vague and indefinite. Chaffee was in New York, dealing with a representative of Eountze, while Eountze and Corning were in Denver. It is unnecessary to say that Corning could not be bound by any understanding or agreement between Chaffee and Eountze to wdiich he was not a party. It is evident that, in contemplation of law, there was no contract between Chaffee and Corning. At the very time of closing the transaction, each was acting on a theory of his own, and at variance with that of the other. Corning supposed it to be a loan, and it appears that C. B. Eountze so supposed it; and they thought it necessary for Corning to make a note for the amount, which he did, and delivered
The second of the above propositions needs no discussion. It results as a conclusion of law, unless the new contract was established.
The third proposition is not without difficulty, and its solution practically disposes of the case. If a contract was made, the two parties radically disagree as to what it was. Chaffee construes it to have been such that, by payment of the $30,000 to Kountze in the way of compromise, and the discharge of Corning from further liability, and the transfer of securities held by Kountze, he took them divested of all obligations assumed in the contract, and that the payment of the $30,000 by him canceled his obligation to pay the judgment of Corning against the Mining Company Nederland, of $32,490, in January, 1876, with interest to April, 1879, amounting to” over $10,000, making the aggregate debt at that time
In order to have abrogated or annulled the contract existing between Chaffee and Corning for the payment of the entire amount of Coming’s judgment and interest, and a portion of any surplus that might remain on the sale of the property which Chaffee had obligated himself to pay absolutely, there must have been a new contract taking the place of the old one, whereby Corning agreed to accept a less sum in full, and on the receipt of such sum release Chaffee from further liability. This would have required a proposition on the part of Chaffee to purchase, cancel and discharge all debts and obligations of Coming’s to Kountze and the Colorado National Bank, in consideration of Corning accepting the same in full satisfaction of all liability on the part of Chaffee arising or growing out of the contract, and an acceptance of the proposition by Corning. Was there a contract of that kind, or of any kind, established by the evidence?
Chaffee testified: “Augustus Kountze, of New York, agreed with me that he would take $30,000 in full for his debt against Corning, and also in full for the contract that I had that he had assigned. He would assign it over to me for $30,000; but I was not exactly satisfied with taking that assignment, knowing that I had been a trustee in the matter, and for that reason I had it referred back here to Mr. Moffatt to get Mr. Coming’s consent to that assignment from Mr. KountzS to me; and, if he could get that consent, I told him I would give him the $30,000. I would give Kountze the $30,000, which should pay in full the Corning debt, provided Corning would agree to it and make no claim upon me whatever. That was Coming’s debt to Kountze and the bank. The
This is all the testimony of any importance on the point, and it certainly is not sufficient to establish such gi contract as is contended for by appellant. There is no evidence that Chaffee, or any one, informed Corning that the $30,000 to be paid was to be in full of all claims growing out of the contract; and the only evidence that such was the understanding of Chaffee is his own, when he states that to have been the understanding or contract between him and Augustus Kountze. It is needless to say that any understanding or agreement between himself and Kountze could not affect the interest of Corning unless he was a party to it, or informed of the extent of the transaction as claimed by Chaffee. Chaffee may. have supposed and intended that the fact would be communicated to Corning here, but there is no evidence that it ever was; nor can such knowledge be predicated upon his consent to the transaction. He was informed that Chaffee proposed to pay off his entire indebtedness of over $10,000 for $30,000, and that his notes were to be canceled and delivered to him, — a transaction clearly for his benefit; and his only care was to assure himself that he was fully released from such indebtedness. • The consent obtained, and the extent of it, can only be determined by
It has already been shown that, had the indebtedness of Corning, and the securities for it, been transferred to Chaffee, he would have been subrogated, and his relation to the indebtedness and securities would have been the same as that of Kountze. Such was not the case. The debt, which was the principal, had been canceled. Hence the two were separated. “ ‘ Collateral,’ in its common use and acceptation, means additional, subsidiaxy security given to secure the principal obligation. It is a separate obligation.” It is said in Coleb. Coll. Secur. § 2: “Such collateral security stands by the side of the principal promise as an additional or cumulative means for securing the payment of the debt.” Judge Redfield, in a note to Le Breton v. Peirce, 1 Am. Law Reg. (N. S.) 38, saj^s: ‘‘The etymology of ‘ collateral security ’ indicates that it is something running along with, and, as it were, parallel to, something else of a similar character. It is collateral to the original indebtedness. ”
It will be seen that by the consent of Corning, and the transfer of the collateral, it could not have been transferred as security for, and to the amount of the indebtedness formerly held by, Kountze, as that had been extinguished. Hence it was, by the acts of the parties,
The errors assigned are practically disposed of, except the first: “ That the court erred in refusing to allow defendant to prove by Kountze that the judgment of Corning against the Mining Company Nederland was part of the consideration for which defendant paid Kountze $30,000, and that the judgment was paid off and settled by this $30,000, and was so understood between Kountze and Chaffee at the time.” The assignment embraces two propositions. In regard to the first, it may be said that Kountze was examined and testified at length in regard to what the transaction was, and of the facts within his knowledge. From the facts and documents executed by Kountze the whole matter had been explained. The defendant could not have been prejudiced by the refusal of the court. It could have been, at most, but the opinion of Kountze from the facts already before the court. The latter part was very properly excluded. It only asked for the opinion of the witness as to the legal effect of the transaction, which could only be determined by the court. The last clause, as to how it was understood be
The judgment of the district court should be affirmed.
Richmond and Pattison, CO., concur.
Por the reasons stated in the foregoing opinion the judgment is affirmed.'
Affirmed.
having tried the cause as district judge, did not participate in this decision.