Westmoreland v. Porter

Westmoreland v. Porter. Assumpsit. 1. Statute of frauds; when promi seto answer for debt of another not n'ith-¡n. — A promise to pay the debt of another is not within the statute of frauds', where the promisor ’is interested in property on which the creditor has a lien for the payment of the debt, and, in consideration of the promise, the lien is relinquished, and its relinquishment enures to the proinisbr’s benefit- 2. Same ; forbearance to enforce debt not sufficient to take promise out of its influence. — The mere forbearance by a creditor to enforce his debt, while a sufficient consideration to support a guaranty of the debt by another, is not sufficient to take the guaranty out of the influence of the statute of frauds. 3. Same. — Hence, an agreement in writing by which a merchant A having a lien on a crop grown on rented land for advances, subordinate \ to an unsatisfied lien for rent, acknowledges himself the tenant’s surety for the rent, in consideration of a forbearance by the landlord to enforce his lien, which is not expressed, is void under the statute. , , , 4. Same; 'when agreement not within. — If, however, a part of the con-,/ sideration of such agreement was a release by the landlord of a portion.] of the rent, and such release enured- to the surety’s benefit, this would] take the agrément out of the influence of the statute, although not ex-, pressed in the writing. ■' 5. Rescission of executed contract; consideration for. — A contract.’ which has been executed by one party, only leaving an obligation-to pay; on the other, can not be rescinded by mutual consent, without other! -consideration; but its obligation can only he discharged by full payment, release, or accord and satisfaction. Appeal from Lawrence Circuit Court. Tried before Hon. H. C. Speaice. This was a suit by Theo. Westmoreland against R. B. Porter, to recover damages for tbe alleged breach of an agreement in writing executed by the defendant on 29th December, 1880, by which he “acknowledged” himself “security” for the payment to the plaintiff, within thirty days, of $650, as a balance due from one J. M. McGehee for the rent of plaintiff’s plantation. in Lawrence county, for tbe year 1880; the complaint alleging the circumstances under which the agreement was made, and the consideration supporting it. It is admitted in the complaint that the defendant was entitled to a credit of $276.70, of date 1st July, 1881. The defendant pleaded, in short by consent, (1) “the general issue, with leave to give in evidence any special matter which would be a good defense, if well pleaded and proved; ” (2) “ statute of frauds; ” (3) “failure of consideration;” and (4) “no consideration for the instrument sued on.” The cause was tried on issues joined on these pleas, the trial resulting in a verdict and judgment for the defendant. The plaintiff proved on the trial that, on 1st October, 1879, he rented to J. M. McGehee a certain plantation in Lawrence county, known as the “Lightfoot plantation,” for the year 1880, McGehee executing to him an instrument in writing, by which he promised to “pay” the plaintiff, on 15th November, I860, twenty bales of cotton of a designated weight and classification, for tbe rent of said place for said year, and agreed “that the crop produced on said plantation is bound for the payment of said amount, for the rent thereof.” The evidence introduced on his behalf further tended to show that, in December, 18S0, McGehee owed the defendant $800 or $1000, for advances made by tbe latter to the former, to enable bim to make a crop, for which he had a lien on the crop, “ secondary to the lien for rent; ” that on 28th December, 1880, one Lane, as attorney for the plaintiff, went to “ Town Creek, in Lawrence county, near which place the Lightfoot plantation is situated,” for the purpose of collecting the amount which Mc-Gehee owed the plaintiff for rent, “by attachment or otherwise, as might seem best,” he taking with him the instrument executed to the plaintiff by McGehee; that at the time of his arrival at Town Creek, there were five or six bales of cotton, part of the crop grown on said plantation, at the depot for shipment, and Lane notified the railroad agent that he had a lien on it, and not to ship it; tMj*, on Lane’s arrival at Town Creek, he saw the defendant, ¡üSj.dvisedUiiui of the purpose of his visit, when the defendaSttld hjMftfi: his lien for advances, and insisted that if thi^jpfcer sl^H^it an attachment against the crop, it would be so wasted ^Kgathering, aud so consumed by costs, that he, defendant, woura be unable to collect anything on his debt; that thereupon McGéhee was sent for, and, after a conference between the three parties, “for the . purpose, on the part of McGehee and Porter, of making some arrangement that would obviate the necessity of attaching the crop, an agreement was reached between them, Porter, Mc-■Gehee and Lane, by which the value of the note for twenty bales of cotton was fixed at $1050; that Porter, in the presence, and with the concurrence and agreement of McGehee, '[proposed] that if Lane, as plaintiff’s attorney, would reduce the note from $1050 to $850, McGehee would raise $200, the estimated value of the cotton at the depot, on said cotton, and would pay it on the note, thus reducing the amount still due on the note to $650, and would turn over the crop to Porter,” McGehee consenting thereto, and forbear his right of attachment, and give McGehee thirty days additional time on the note, he, Porter, would become McGehee’s security for the payment of said balance of $650 within thirty days;” that Lane, acting for the plaintiff, acceded to this proposition ; made a memorandum on the back of the instrument executed by McGehee to the plaintiff, called a note by the parties, agreeing “ to receive $850, as payment for within note from J. M. Mc-Gehee;” received from McGehee $200, the estimated value of the cotton at the depot, and indorsed on said instrument a credit therefor; forbore plaintiff’s right of attachment, “ and gave McGehee thirty days further time to pay the note; and turned over to Porter, with McGehee’s consent and agreement-, the crop on the Lightfoot place, and McGehee’s note for collection to the defendant, Porter, who thereupon became Mc-Gehee’s surety for the payment of the balance of $650, and evidenced this contract of suretyship by a paper-writing in the words and figures following, to-wit: ‘Received of Theo. West-moreland a rent note for collection. By agreement said note was changed from ten bales of low middling cotton, and ten bales of good ordinary, to §850, which is to be received las rent for Westmoreland’s place. I also acknowledge myseli security for the payment of §650, balance due on said note, said ' payment to be made in full within thirty days from date. (Signed') R. B. Porter.’ ” “ December 29th, 1880.” This is the instrument sued on. It was also shown that Mc-(4ehee was, and had be$h, “ since and including the winter of 1880-81,” insolvent. The defendant to examSfed as a witness in his own behalf, and, after testifyjBgtoua^ftfertiie advances made by him to McGehee, ftirtluflKtifiej^Kat “ he agreed to become Mc-Gehee’s surety T^Rno banBce ’ of §650, to prevent the crop from being comjPned in costs, etc., of attachment, but that there was no reduction in the note of McGehee from §1050 to-§850, but the latter amount was the estimated value of the note; that Lane turned over the crop to him under said agreement, and delivered to him McGehee’s note, but that the indorsement now on it about changing note to §850 was not on the note when he received it; ” that he afterwards returned the note to the plaintiff; that in latter part of January, 1881, having been unable to “ make headway ” gathering the crop on account of the weather, he notified the plaintiff to come down and make his money; and that plaintiff came to Town Creek in response to the notification, when he had a conversation with him, plaintiff. Defendant was then asked by his*counsel, “ whether or not, in this conversation, the plaintiff released him, defendant, from his contract as McGehee’s surety, or whether it was then and there mutually agreed between plaintiff and defendant that said contract should be rescinded.” To this question the plaintiff objected, but his objection was overruled, and he excepted. To this question the witness then answered, “that, in this conversation, he told Westmoreland, the plaintiff, that he had been unable to gather the crop; that he was certain he, witness, would not get any thing out of it on his debt, and that he wanted plaintiff to release him from his contract, as McGehee’s surety, for the payment of §650, and make the money out of the crop; that there was enough crop to pay the rent; and that, thereupon, plaintiff said he would release witness, and rescind the contract of suretyship, and go on McGehee for the original contract for twenty bales of cotton.” To this answer the plaintiff objected, but his objection was overruled, and he excepted. It was then shewn by the testimony of the witness that McGehee was not present at the conversation, ‘ind was not .consulted as to the release or the rescission of the said contract; and that the agreement to rescind “was without the payment to the plaintiff of any money or thing of value therefor, and that the plaintiff received nothing for relinquishing his rights under the contract.” Thereupon the ''plaintiff moved to exclude from the jury the defendant’s testimony touching the “ release or rescission but-the court overruled the motion, and to this ruling the plaintiff excepted. The plaintiff also reserved exceptions to the admission in evidence, against his objection, at defendant’s instance, declarations made by the plaintiff to third parties, tending to show that he had released the defendant from liability on his said contract of suretyship, and had rescinded the same. It was also shown on behalf of the defendant that on 27th January, 1881, the plaintiff sued out an attachment against McGehee, to recover $850, for the rent of said place for the year 1S80; that the attachment was levied on McGehee’s crop raised on said ydace during said year; and from the sale of the crop levied on, the plaintiff realized $276.70. In rebuttal, the plaintiff introduced evidence tending to corroborate the evidence already introduced by him, and tending to show that he had never released the defendant from, and had never rescinded said contract of suretyship. The foregoing is the substance of the evidence introduced on the trial of said cause, material to the questions decided by this court. The plaintiff reserved numerous exceptions to portions of the general charge, to charges given at defendant’s request, and to the refusal of the court to give charges requested by the plaintiff ; but as the only questions raised by these exceptions and passed on by this court are, (1) whether the contract of suretyship was within the statute óf frauds, and (2) whether there had been a valid rescission of that contract, or a valid release of the defendant from liability thereon, it is not deemed necessary to further extend this report by setting out the charges to which the exceptions relate. The rulings on the admissibility of evidence, above noted, and in charging the jury are here assigned as error. MoClellaN & MoOleluaN and E. II. Fostek, for appellant. (1) The contract sued on was an executed contract. W hile an executory contract maj? be avoided by mutual consent to a rescission, without any extraneous consideration, an executed contract can not be rescinded at all. To avoid an executed contract, there must be, in substance, a release ¡ and a release must, in all cases, be supported by a valuable consideration, extraneous to the contract itself. This point elaborately discussed, with citation of following authorities: Robinson v. BuTloclt, 66 Ala. 554; Nesbitt v. McGehee, 26 Ala. 748; Hunt v. Barfield, 19 Ala. 117; Walker v. Greene, 22 Ala. 679 ; Add. on Con. 1072, 1074, 1110; 54 Ala. 127; 7 Ala. 182; 18 Ala. 254; 21 Ala. 424; 15 La. 520; 9 Mass. 78; 15 Mo. 315; 42 Pa. St. 165; 4 Stew. & Port. 192; 17 Johns. (N. Y.) 340. (2) The contract was not within the statute of frauds. See 6 Ala. 694; 19 Ala. 100 ; 20 Ala. 309 ; 21 Ala. 721; 54 Ala. 122; 1 Brick. .Dig. p. 386, § 169; 46 Ala. 45. W. P. Chitwood, contra. (1) The contract sued on was rescinded by mutual consent. This proposition discussed at length, with citation of following authorities: 2 Pars, on Con. (2 fed.) 190-1; 1 lb. 391 ; 1 Brick. Dig. p. 394, § 233; Glover v. McGilvray, 63 Ala. 508 ; Oooper v. 'Me I twain, 58 Ala. 296 ; Burkham, v. Mastín, 54 Ala. 122. (2) The contract was within the statute of frauds, and void. — Code, 1876, § 2121; Rigby v. Norwood, 34 Ala. 129. [MAJORITY — SOMERVILLE, J.] SOMERVILLE, J. -The agreement sued on purports on its face to be one of mere suretyship on the part of the defendant, Porter, in which he obligates himself to pay the plaintiff an antecedent debt of six hundred and fifty dollars, due to the plaintiff by one McGehee. The agreement itself is signed by the defendant alone, and does not express any consideration. One of the questions arising in the case is, whether this agreement is void within the influence of the statute of frauds, as “ a special promise to answer for the debt, default or miscarriage of another.” It is required that agreements of this class shall not only be in writing and subscribed by the party to be charged, but that the written note or memorandum shall express the consideration.—Code, 1876, § 2121; Rigby v. Norwood, 34 Ala. 129 ; Horton v. Wollner, 71 Ala. 452. There is an important class of cases, now fully recognized by all the authorities as not falling within the statute, which in mere form appear to be promises to answer for the debt of another, but which are, in reality and legal contemplation, promises to pay the debt of_thepromisor himsblf, and which would be binding upon him 'Its''a verbal obligation independently of any writing. This court has followed the line of decisions in this country which bring within this class all promises ostensibly to pay the debt of another, which constitute an original undertaking, based on a new and independent consideration, whether of benefit or detriment, moving between the newly contracting parties.—Thornton v. Williams, 71 Ala. 555 ; Lehman v. Levy, 69 Ala. 48 ; Dunbar v. Smith, 66 Ala. 490 ; Burkham v. Mastin, 54 Ala. 122 ; 2 Brick. Dig. p. 31, § 234, and cases cited. Our rulings on this point follow the doctrine announced in Leonard v. Vredenburg, 8 John. (N. Y.) 29, which, however, in its broadest scope, seems not to be the prevailing rule in this country.—Browne on Stat. Fr. §§ 207, 212; Validity Verb. Agr. (Throop), § 613. We do not desire, at this late day, to disturb the authority of these numerous adjudications. None of the courts raise any controversy about those cases where the original debtor is discharged and the debt released, and a new debt and debtor substituted in their stead by a contract in the nature of novation. This class of cases is universally excepted from the influence of the statute of frauds. Thornton v. Guice, 73 Ala. 321; Underwood v. Lovelace, 61 Ala. 155 ; Browne on St. Fr. § 193. The class which we are now discussing is of another kind than the last mentioned. It embraces agreements which are in form mere promises of guaranty or suretyship, the original debtor not being discharged or released. The essential and real function of such new agreement, however, is to pay a new debt contracted by the promisor upon a new consideration of beuefit to himself and moving from the promisee, and although this becomes his own debt, he agrees to discharge it by paying a debt due by another, which is a mere incident of the transaction. “The substance of the transaction is undertaking to-pa,y his own debt in a particular way.”—Browne on Stat. Frauds, §§ 214a, 212; Blount v. Hawkins, 19 Ala. 100 ; Dunbar v. Smith, 66 Ala. 490. “ The debt of another,” as said in Wolff v. Koppell, 5 Hill (N. Y.), 458, “ comes in incidentally as a measure of damages.” And in such cases, the whole transaction, viewed as a new and independent contract, must be of such a character that it would support a promise by the defendant to the plaintiff to pay the same sum of money without reference to the existence of any debt from another, or a third person. Chandler v. Davidson, 6 Blackf. 367 ; Browne on Stat. Fr. § 212, and note 1, § 214a; Emerson v. Slater, 22 How. (U. S.) 28; 3 Addison’s Contr. §§ 1111-1112. A common illustration of this general class is found in cases where the defendant, or party sought to be charged, has received property or funds placed in his hands, and belonging to the original debtor, which he holds in a sort of trust capacity, and from which he has promised to pay the original debt.—Browne Stat. Fr. §§ 214e, 209 et seq. ; Lee v. Fontaine, 10 Ala. 755; Throop on Verbal Agr. § 584, et seq. ; Fullam v. Adams, 37 Vt. 391. Still another illustration is found in cases where a creditor has a lien on his debtor’s property, and a third person, having a subordinate lien, or other interest in the same property, promises the creditor to pay the debt in consideration of the relinquishment of the lien, which thus enures to his, the promisor’s, benefit. These cases very clearly are promises to pay the promisor’s own debt, and not mere guaranties of the debt of another. — 3 Parsons’ Contr. 25; Browne on Stat. Fr. §§ 214c, 214c. . The rule governing this particular class of cases is thus expressed in a recent treatise where the authorities are all reviewed with discrimination and ability. “ A promise to pay the debt of another,” observes this author, “ is not within the statute, if its consideration was the abandonment to the promisor of a security for the payment of the debt, consisting of alien upon, or interest in property, to which the promisor then had a subordinate title.” — Validity Verb. Agreements (Throop), § 571 ei seq. , The old rule was that a verbal promise to pay another’s debt would be supported by a mere surrender of a lien on the property of the original debtor, whether made for his benefit, or that of the new promisor. Perhaps a case of this kind would come within the rule settled by our own decisions. But the great current of modern authority clearly sustains the view, that the new promisor must have an 'interest of some kind in the property to which the lien attached, so that its surrender will enure to liis benefit. lie thus becomes the purchaser of the lien, or of the interest of the promisee in the property thus encumbered at a price measured by the amount of the original debt, which he agrees to pay. - This-precise point, however, as to the person in whose favor" the lien is surrendered, we need not decide, contenting ourselves with a citation of some of the authorities bearing on the question.—Browne on Stat. Frauds, §§ 214c, 224d; Validity Verb. Agr. (Throop) §§ 594, 595, et seq., 603 ; Nelson v. Boynton, 44 Mass. (3 Metc.) 396 ; Dexter v. Blanchard, 93 Mass. (11 Allen) 365 ; Mallory v. Gillett, 21 N. Y. 412 ; Brown v. Weber, 38 N. Y. 187; Landis v. Royer, 59 Penn. 95 ; Corkins v. Collins, 16 Mich. 478 ; Dunbar v. Smith, 66 Ala. 490. Whatever may be the correct principle as to this point, there|' can be no doubt of the proposition, that where the promisor is interested in the property, and the relinquishment of the lien r does enure to his benefit, the promise does not come within; the statute of frauds, and not only need not express the consideration if in writing, but need not be in writing at all. The agreement here sued on is, as we have said, in form a guaranty, or promise of suretyship. There are but two facts which can be urged, with any degree of force, as constituting a consideration for it. The first is the forbearance of the plaintiff to enforce his demand by the levy of an attachment on McG-ehee’s crops, whether for a definite or indefinite period of time. The second is the alleged relinquishment of two hundred dollars of the original debt of MeGehee, which enured to ■ the benefit of the defendant pro tcmto, he having a second lien on the same crops for advances, subordinate only to that of the plaintiff which was for rent. It is not contended, nor does the-evidence tend to show that the lien of the landlord was otherwise waived or surrendered. While the forbearance of a creditor to enforce his demand is undoubtedly a sufficient consideration for the guaranty of the debt by another, yet it is precisely one of that class of considerations which is required by the statute to be expressed in the written agreement of guaranty, and is uniformly held not to take the defendant’s promise out of the influence of the statute.—Musick v. Musick, 7 Mo. 495 ; Hilton v. Dinsmore, 21 Me. 410; Browne Stat. Fr. § 190, note 2, and cases cited. The agreement itself expressing no consideration, it clearly came within the statute of frauds, and was, therefore, void, nnless the jury believed that there was a release of some portion of the original rent debt due by McGehee, which, if released at all, it is not denied, enured to the benefit of the defendant. It is only in the latter aspect that it can be properly regarded as an agreement by the promisor to pay his own debt, and, therefore, not within the statute, or as supported by a valid consideration. We discover no error in the charge of the court, or any of its rulings, touching this branch of the case, which, at least, was prejudicial to the appellant. It was further insisted by the defendant in the court below that the contract or agreement sued on was released or rescinded by mutual agreement of the defendant and the plaintiff. The evidence tends to show that this was agreed to be done by a mere declaration of the parties, without any consideration whatever moving from the promisor to the promisee. It is unnecessary that we should enter into any discussion as to the circumstances under which contracts may be rescinded or modified by mutual consent, without other consideration. The cases are numerous in which the general rule on this subject has been stated.—Cooper v. McIlwain, 58 Ala. 296 ; Burkham v. Mastin, 54 Ala. 122 ; 1 Brick. Dig. p. 394, & 233; Bishop on Contr. §§ 665-672. It is enough to say that if the contract has been performed,! or exeented on one side, and only money remains to be paid on! the other, the case is manifestly like that of any other debt, and can only be discharged in like manner,—Bishop on Contr. § 672.1 It is a fundamental principle of our system of jurisprudence, that “ an agreement to abandon a claim, unless there be a consideration shown, is a mere nudum pactum.”—1 Addison on Contr. $ 363. If the present contract can be sustained as valid, so far as the evidence shows, it must be upon the theory of a purchase by the defendant of a certain interest from the plaintiff in the crops of his tenant, McGehee. This was executed by a delivery. There can, therefore, be no essential or sound distinction between this case, and the ordinary one of a contract for the sale of goods, where the goods have been sold and delivered. In such cases it is well settled that a naked agreement 4 that the contract be rescinded or annulled will not discharge or release the purchaser from his liability to pay the purchase-money.—Edwards v: Chapman, 1 M. & W. 231; 1 Add. Contr. (Amer Ed.) 1878, § 363. This can only be done by full payment, release, or accord and satisfaction.—Nesbitt v. McGehee, 26 Ala. 748; Holloway v. Talbot, 70 Ala. 389. In this view of the case, it is immaterial whether McGehee was legally or in fact a party to the agreement sued on or not. The evidence did not tend to show any rescission or release of the debt due the plaintiff, the alleged agreement to rescind being a mere nudum pactum, without binding force on the plaintiff, because unsupported bv any consideration. The court errad in its rulings on this branch of the case, and the judg-mSt must be reversed and the cause remanded.