64 P. 639 | Kan. | 1901
The opinion of the court was delivered by
The insurance policy in the New York Life Insurance Company had been paid up since 1874, and was the property of Eliza J. Price, the beneficiary named therein. The unconditional assignment to the bank of January 19, 1894, was void, because such bank could not have an insurable interest in the life of John M. Price. (Life Ins. Co. v. Sturges, 18 Kan. 93.)
Parol evidence was admissible for the purpose of showing that, although such assignment was absolute on its face, the real intent of the parties was that the insurance policy should be turned over to the bank under such assignment for the purpose of collateral security merely. To show such an intention, it was necessary to prove an agreement to that effect between the bank and the owner of the policy, Eliza J. Price, for there was no evidence in the case that John M. Price had authority to act as her agent in that behalf, and his agency could not be presumed from the mere fact that he was her husband. The only evidence in the record showing any agreement other than an unconditional assignment on the part of Mrs. Price is the stipulation bearing date May 21, 1897, and entered into some time after that date. That stipulation, if based upon a sufficient consideration, might be held to be a ratification of a former agreement which seems to have been entered into with John M. Price, to the effect that the bank should hold the policy as collateral security, subject, however, to the reservation that it should only be held as collateral security for the payment of whatever should
The court holds in this case that at the time of the execution of such stipulation that judgment was extinguished; that the debt thereby evidenced had been merged in the judgment rendered later by the district court of Atchison county in action No. 7908, between the same parties. For the reasons for such decision and the authorities upon which the same is based, reference is hereby made to the opinion of Mr. Justice Greene in the case of Price v. Bank, ante, p. 735, 64 Pac. 637. The only consideration for such stipulation is the agreement on the part of the bank to forbear to issue execution on said judgment in No. 7907 for the period of ten-months from the date of its rendition. Because the judgment was extinguished, because it no longer existed, the plaintiff had no right to cause an execution to issue on it within ten months or at any other time. An agreement to forbear to do an act which a party has no legal right to do cannot constitute a sufficient consideration for a promise and undertaking on the part of another.
“In order to constitute forbearance a valuable consideration there must be a subsisting legal right in the claimant which he agrees to forbear, for if the claim be invalid or illegal the forbearance is ineffectual.” (6 A. & E. Encycí. of L., 2d ed., 742.)
See, also, Gould v. Armstrong, 2 Hall (N. Y.) 90; Chit. Contr. 35, 36; Bates v. Sandy, 27 Ill. App. 552 and cases cited; Haynes v. Thom, 8 Foster (N. H.) 386; May v. Coffin, 4 Mass. 341, 347; Warder & Al. v. Tucker, 7 Mass. 449; Robinson v. Jewett, 116 N. Y. 40, 22 N. E. 724; Widiman v. Brown, 83 Mich. 241, 47 N. W. 231; Cowper v. Green, 7 Mees. & W. 633; Mc
In the case of Wade v. Simeon, 2 C. B. 548, the declaration averred that the plaintiff had brought an action, and in consideration of the new promise had forborne to prosecute the case thus commenced. The court held that the previous action could not have been maintained, and in the opinion said :
“In order to constitute a binding promise the plaintiff must show a good consideration ; something beneficial to the defendant or detrimental to the plaintiff. Detrimental to the plaintiff it cannot be, if he has no cause of action ; and beneficial to the defendant it cannot be ; for, in contemplation of law, the defense upon such an admitted state of facts must be successful.”
In the case of Graham v. Johnson, L. R. 8 Eq. 36, the defendant held a bond executed by the plaintiff which the latter was entitled to have canceled as being voluntary. At the plaintiff’s request the defendant forbore suit on the bond, the plaintiff agreeing to pay from an expected inheritance. It was held, nevertheless, that the plaintiff was entitled to a decree of cancelation and that the promise to pay the defendant was not binding. In rendering the opinion the court said:
“The question I have to consider is, whether, assuming, as I must assume, that the plaintiff when he made the promise was ignorant that the court of cháncery would restrain an action on the bond without requiring him to pay off what had been paid by Barlow to the obligee, his promise made in consideration of Barlow’s forbearance to sue is binding on him, I think it is not.”
We have examined the cases of Callisher v. Bischoffscheim, L. R. 5 Q. B. 449, and Ockford v. Barelli and another, 25 L. T. (n. s.) 504, which are sometimes quoted as antagonizing, though they do not overrule Wade v. Simeon, supra, and Graham v. Johnson, supra. They were considered and decided as cases of compromise and are clearly distinguishable from the case at bar.
In N. H. Savings Bank v. Colcord, 15 N. H. 119, the court held that forbearance to sue is not a good consideration for a promise where there is no debt in existence.
In Gould v. Armstrong, supra, the court held: “A promise to forbear from prosecuting a suit which could not be maintained would, of course, be without consideration, and so not binding.”
In Chitty on Contracts, supra, the rule is laid down that, in order to render the agreement to forbear and the forbearance of a claim a sufficient consideration for a new promise, it is essential that the demand forborne should be sustainable at law or in equity, and the consideration will fail if the demand is without foundation.
In Haynes v. Thom, supra, the court held: “A promissory note, given to discharge a merely supposed liability or to avoid an ideal danger, which has no foundation in fact or in law, is without consideration.”
And in the same case the court said:
‘ ‘ If the note was given under a misapprehension of the defendant's liability, and with no valid consideration passing between the parties, he is not bound to*753 pay it. An ideal danger, which has no foundation in fact or in law, can form no consideration for a note.”
In Appeal of Lukens, supra, the supreme court of Pennsylvania held : “Abandonment of legal proceedings which are without merit is no consideration for the revocation of a valid and binding contract.” The case of Prout v. Pittsfield Fire District, 154 Mass. 450, 28 N. E. 679, was purely one of compromise. The court said : “The plaintiff's claim, whether on a final determination it might or might not be found to be valid, was sufficiently substantial to furnish a good consideration for the compromise.” In the same opinion it was remarked:
“The case of Palfrey v. Portland, Saco & Portsmouth Railroad, 4 Allen, 55, is to be distinguished on the ground that there it was plain that the plaintiff had no real claim to be compromised; and Wade v. Simeon, 2. C. B. 548, rests on the same ground.”
In Robinson v. Jewett, supra, it was decided that the performance of an act which the party is under a legal obligation to perform cannot constitute a consideration for a new promise. In Moon v. Martin, 122 Ind. 211, 23 N. E. 668, the court sustained a compromise of a suit actually commenced, and held that the discontinuance of the suit was a sufficient consideration for a promise to pay money. But in the same case the court held:
“A promise to give something for the compromise of a claim about which there is merely a dispute and controversy, and for which there is no legal foundation whatever, is not sufficient to sustain a suit at law. (Jarvis v. Sutton, 3 Ind. 289; United States Mortgage Co. v. Henderson, 111 id. 24, 12 N. E. 88, and cases cited ; Emery v. Royal, 117 id. 299, 20 N. E. 150, and cases cited.) ”
“It is laid down, both in Parsons on Contracts and in Chitty on Contracts, that an agreement to forbear to prosecute a claim which is wholly and certainly unsustainable at law or in equity is no consideration for a promise. . . . This proposition appears to be so well established that further citation of authorities seems to iis unnecessary.”
In Schroeder v. Fink, supra, defendants’ father died owing plaintiff and the latter threatened suit. In consideration of his forbearance, defendants gave their note in compromise of the claim. The estate of de.ceased was insolvent and plaintiff could have no action against defendants. In the action upon the new note, the court held that there was no consideration for the new promise and that defendants could not be held liable to pay. In Gunning v. Royal, supra, it was held that “the existence of a dispute or controversy between parties is not a sufficient consideration to support a promise to pay money in settlement of it, where no valid demand for anything whatever exists in favor of the promisee.” In Davisson v. Ford, supra, the syllabus reads : “If there is no foundation for such claim of liability, then the promise made to settle this assumed liability has no sufficient consideration to sustain it and no suit can be based on such promise.” At page 627 the court said :
“But to make such consideration good it is not only necessary that the dispute should be one in which one party sets up that there was a liability on the other, but if it be assumed that such liability exists, when in fact or law there is no foundation for such liability, a promise made by the party who is thus claimed to be liable, but who clearly is not liable either in law or equity, would be a promise made on no valuable or sufficient consideration, and it could not be enforced bv suit.”
*755 "As the consideration must have some value and reality, the assumption of a supposed danger or liability, which has no foundation in law or in fact, is not a valuable or sufficient consideration, nor is the performance of that which the party was under a previous valid legal obligation to do; and where one, through mistake of the law, acknowledges himself under an obligation which the law does not impose, he is not bound by such promise.” (1 Pars. Contr. 437.)
In the case at bar the bank did not stipulate to refrain from doing any act which it had a legal right to do. Mrs. Price, supposing herself liable to pay the judgment rendered in No. 7907, agreed to turn over to the bank the insurance policy in controversy in this case, with the understanding that the proceeds of such policy should be applied by the bank in satisfaction of such extinguished judgment. As the judgment itself had no legal existence the funds could not have been so applied. She acknowledged herself "under an obligation which the law does not impose,” for which reason she "is not bound by such promise.”
For these reasons the judgment of the district court will be reversed, and the case remanded, with directions to enter judgment in the court below in favor of Eliza J. Price and against the First National Bank of Atchison, Kansas, in accordance with this opinion.