Vogel v. Melms

31 Wis. 306 | Wis. | 1872

Lead Opinion

The following opinion was filed at the January term, 1872.

Cole, J.

The only question of any difficulty in this case is that which arises upon the statute of frauds. If the alleged undertaking of the defendant is not a promise on his part to answer for the debt or default of another, within the meaning of that statute, then it is plain the other exceptions taken on the trial, to the sufficiency of the complaint and the admission of the evidence in respect to the insolvency of "William Melms, must be overruled.

It appears to us that the instructions given were applicable to the facts which the evidence tended to establish, and the only question is, therefore, whether they were correct as propositions of law. It must be conceded that their correctness is sustained by many respectable authorities, and they are clearly in harmony with the decision of this court in Shook v. Vanmater, 22 Wis., 532. In that case the plaintiffs surrendered to Baker securities which they held to indemnify them from loss as accommodation makers of a promissory note signed by them and Baker, which was made payable to one Humphrey, upon receiving from the defendant his promise in writing — -but expressing no consideration • — • that he would save them harmless from damages and liabilities in consequence thereof. This promise was held to be an original undertaking, made upon a sufficient consideration, and not within the statute. We were well aware that there was considerable conflict of decision upon this question; but we then thought, and still are of. the opinion, that a preponderance of authority sustains the doctrine, that a promise to indemnify a surety for becoming responsible for the principal, which is made by a third party at whose request and upon whose credit the surety enters into his engagement, is not within the statute. A number of cases are cited in the opinion in Shook v. Vanmater in support of the ruling there made ; and it would be very easy to cite more to the same effect. Nor is it difficult to find cases on the other side, which hold that the statute, in words and spirit, embraces this class of engagements. It is evident that a choice must be made between two lines of conflicting decisions, and we have adopted the rule which seemed to us sustained by the weight of authority. The law upon this subject is still quite' unsettled even in the English courts, as is strikingly illustrated by the history of a very recent case to which we were referred by the counsel for the defendant — that of Mountstephen v. Lakeman, Law Reports, 5 Queen’s Bench, 612, where it was held that a promise to be answerable for the debt of another person is within the statute although that other person never becomes legally indebted to the promisee; and that it is sufficient to bring the promise within the statute, that, at the time the promise is made, the promisor and promisee expect that a legal obligation towards the promisee will be incurred by a third person. Yet it is stated in the American Law Review for April, 1872, p. 591, that this case has been reversed in the exchequer chamber, where Willes, J., in delivering judgment, after quoting the note to Birkmyr v. Darnell, 1 Salk., 27, “ From all the authorities it appears, conformably to the doctrine in that case, that if the person for whose use the goods, etc., are furnished, be liable at all, any other person’s promise is void except in writing,” — adds : “That may very well be modified to the extent of adding the words, if he be liable at all, or if his liability be made the foundation of the contract between the plaintiff avcl the defendant.'1'

But the doctrine of the case of Shook v. Vanmater is decisive of the case before ns, since, under the instructions, the jury must have found that the defendant promised to indemnify and save the plaintiff harmless from the indorsement of the note in question, and that the plaintiff did indorse it, relying upon this promise alone, and there can be no doubt there was a sufficient consideration for this promise, if we are right in assuming that it is an original, independent undertaking on the part of the defendant, and not collateral to anything promised by William Melms. It is true, the counsel for the defendant attempted to distinguish this case from that of Shook v. Vanmater, on the ground that here the promise of indemnity was contemporaneous with .the liability incurred by the surety, while in that case such promise was to indemnify against a liability theretofore incurred. But we do not perceive any satisfactory reason for making a distinction on that ground. Prof. Parsons, in his work on contracts, 3d vol. (fifth edition), p. 22, note (p), says: “ It has been made a question whether a promise by A to indemnify B for guarantying a debt due from C to D is within the statute. It is clear, upon the authorities already cited, that such a promise is not within the statute as being a promise of answer for the debt of C. Eor that purpose it must have been made to D, to whom the debt was due. * * * The question would seem to depend upon the time when the promise of C, the person for whom the guaranty was given, arises. And this, again, will depend upon the particular circumstances of the case. If these are such as to authorize the inference that C made an actual 'promise to indemnify his guarantor at the time v hen the undertaking of A was given, or prior thereto, the reasonable presumption is, that the promise of A was intended to be collateral. If, on the other hand, there is nothing in the case from which an actual promise by C can be inferred, and he can only be liable on a promise raised by operation of law from B having been compelled to pay money on his account, it would seem to be clear that the promise of A must be original. Eor the promise of C arises upon a subsequent and independent fact, after tbe promise of A bas become a complete and valid contract.”

In tbe case before us, as already observed, tbe jury must bave found that tbe indorsement was made solely and exclusively upon tbe promise of tbe defendant to indemnify tbe plaintiff against that liabibty. There is nothing in tbe case from which a promise on tbe part of William Melms to indemnify tbe plaintiff can be inferred. And if there were anything of tbe kind, tbe question bas been fairly submitted to tbe jury on tbe evidence, and they bave in effect found that no such promise was made.

These remarks substantially dispose of all tbe questions arising upon tbe instructions which the court gave, and those which it refused to give at tbe request of tbe defendant, except tbe third instruction for the plaintiff. It is insisted that this instruction was erroneous because it left to' tbe jury to find whether Leopold Melms received or got control of tbe money which came from tbe city, while there was no evidence to ¡support such a finding. The court however only held, that, if the defendant promised tbe plaintiff that be would use tbe money which should come into bis bands to pay tbe note and save him harmless for the indorsement thereof, and if tbe plaintiff, relying upon such promise, did so indorse it, then tbe defendant was in duty bound to make that application of tbe funds to tbe extent of such money received from tbe city on tbe bridge contract. We cannot see bow tbe defendant could bave been prejudiced by that instruction; for upon tbe assumption that tbe defendant did not get any money or control any, there would be nothing in bis bands to apply to tbe payment of this note, and tbe jury would so find under tbe direction of tbe court.

Upon tbe whole record we think tbe judgment is correct,' and must be affirmed.

By the Court.— Judgment affirmed.

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Rehearing

The appellant moved for a rehearing. The motion was denied, and the following opinion filed, at the June term, 1872

Cole, J.

Notwithstanding the able argument made in support of the motion for a rehearing, we still think the jury were properly directed as to the law which controlled the case. It is said that the third special instruction asked on the part of the defendant embodies the law as this court has laid it down in the opinion already filed. This is a misapprehension. We thought the charge of the court was substantially correct, and embraced the rule sustained by the weight of authority. The third instruction, which, it is insisted, should have been given, was to the effect that if the jury found from the evidence that William Melms, the maker of the note, requested the plaintiff to indorse it, and promised to pay it, then airy promise of the defendant in respect to indemnity was collateral to the promise of William Melms, and was within the statute. Now the difference between this instruction and the law as given is material.

The court held that if the defendant promised to indemnify the plaintiff and save him harmless from the indorsement of the note, and William Melms also made the same promise, still, if the whole credit was in. fact given to the defendant’s promise, and the plaintiff relied upon that alone when he endorsed the note, then he could recover.

This of course makes the case turn upon the question, upon whose credit and promise 'the plaintiff assumed the liability. If he assumed it wholly upon the promise of the defendant, without any reference whatever to the promise of William, and not relying upon the promise of the latter at all, then the undertaking of the defendant was not collateral to that of William. Suppose the plaintiff knew William to be utterly ' irresponsible and did not and would not act upon his promise, but did endorse the note solely relying upon the promise of the defendant to indemnify him: would then the fact that William also requested him so to endorse the note and promised to pay it, render tbe engagement of tbe defendant a collateral undertaking and bring it within tbe statute ? It seems to us not. Eor tbe whole credit would have been given to tbe defendant, and upon bis promise alone would tbe plaintiff assume tbe liability. And this, we think, is tbe error in tbe third instruction : that though tbe plaintiff did not and would .not indorse tbe note at William’s request, yet if that request was made when be acted upon tbe request of tbe defendant, relying upon tbe latter’s promise alone to indemnify, then the defendant’s promise in respect to indemnity was collateral to the promise of William. This precise question is so clearly and ably discussed by Chief Justice Parker, in Holmes v. Knights, 10 N. H., 175, that we cannot do better than refer to that case as a correct exposition of the rule of law which we adopt and which we think is sustained by tbe weight of authority.

Tbe counsel criticises tbe remark in tbe opinion that “ there was nothing in tbe case from which a promise on the part of William Melms to indemnify the plaintiff can be inferred.” The meaning that was intended to be conveyed was, that there was no evidence of any actual promise made by William Melms upon which tbe plaintiff relied when be endorsed tbe note, and that tbe jury must have so found under the charge of tbe court. They must have found that the plaintiff did not assume the liability upon any request or promise made by William, but wholly upon the request of the defendant and upon his promise to indemnify and save him harmless from the consequences of the endorsement.

This is all we deem it necessary to say upon the motion for a rehearing.

By the Gourt. — The motion is denied.