Ballard v. Burton
| Decision Date | 03 June 1892 |
| Citation | 24 A. 769,64 Vt. 387 |
| Parties | JOSEPH BALLARD v. OSCAR A. BURTON |
| Court | Vermont Supreme Court |
JANUARY TERM, 1892
Judgment reversed; judgment for the plaintiff to recover nine hundred and sixty-two dollars, with interest to be computed at the rate of four per cent. per annum from the date of the certificate to the date of the writ, and six per cent. thereafter, and his costs in the County Court, less the dividends paid on the certificate by the receiver and the defendant's costs in this court.
Farrington & Post, and Wilson & Hall, for the defendant.
The defendant's motion for a verdict was properly overruled. It appears from testimony, not controverted, that the defendant was a stockholder and director of the First National Bank of St Albans. The plaintiff and his sister had money deposited there, evidenced by certificates of deposit. There was a run on the bank, and the plaintiff presented these certificates and demanded the money evidenced by them. There was a sufficient amount of money at hand to pay the sums demanded but the officers of the bank desired to retain it and asked the plaintiff to leave it. Thereupon he told them he would accept of a new certificate signed by the defendant otherwise he wanted the money. They gave him such a certificate, and he surrendered up to the bank the old certificates. The plaintiff subsequently paid his sister the amount of her certificate, which was included in the new certificate. The cashier of the bank understood the plaintiff was to forbear for a reasonable time the exercise of his right to draw the money, and the plaintiff did forbear until the bank closed its doors and its funds went into the hands of a receiver. At this time the bank was insolvent. The evidence fails to show that a definite period of forbearance was agreed upon, but no question is made but that the plaintiff did forbear for a reasonable time.
The uncontroverted evidence clearly entitled the plaintiff to a holding by the court that there was a sufficient consideration for the defendant's promise. The request by the officers of the bank that the plaintiff leave the money, his reply, the giving of a new certificate, the surrender of the old ones, and the forbearance of the plaintiff admit of but one interpretation. The plaintiff, in consideration of a new certificate signed by the defendant, surrendered the old certificates and agreed to, and did, forbear the exercise of a legal right to then draw his own and his sister's money. In view of the uncontroverted facts and circumstances in the case, any other construction of the contract would be meaningless. It is a rule in construing contracts that they are to be so understood as to have legal and actual operation, and a construction which would be senseless in view of the circumstances of the case, or wholly inapplicable, should never be adopted. Story on Contracts, sec. 640; Atwood v. Cobb, 33 Mass. 227; Evans v. Sanders, 8 Port. 497 (33 Am. Dec. 297.) Words are not to be construed in a frivolous or ineffectual sense when a contrary exposition can be given them; they should have a reasonable construction according to the intent of the parties. Chitty on Contracts, 79.
In Gunnison v. Bancroft, 11 Vt. 490, it is held that language used by one party to a contract, is to receive such a construction as he at the time supposed the other party would give to it, or such a construction as the other party was fairly justified in giving to it.
In Judevine v. Goodrich, 35 Vt. 19, where one, in reply to the request of another for a license to do something in respect to the former's property, did not intend to accede to the request, but purposely used language susceptible of a double interpretation in this respect, with the intention that the other party should derive the impression that he did accede to the request, and the other did derive such impression and relied on it, it was held that he was bound to the same extent as if he had, in express words, granted the license.
When the plaintiff said to the officers of the bank, in reply to their request that he leave the money, that he would accept a new certificate signed by the defendant, otherwise he wanted his money, they had the right to understand him as offering to leave the money for a reasonable time if such a certificate were furnished. They accepted of his offer, furnished the certificate, he accepted of it, and forebore for a reasonable time the exercise of his right to draw the money. All parties seemed to have understood that such was his undertaking, and what was said and done admits of no other interpretation, and such will be deemed to have been the contract. It is insisted that the defendant's promise was without consideration because no time of forbearance was agreed upon. A promise to forbear and give further time for the payment of a debt, although no certain or definite time be named, if followed by an actual forbearance for a reasonable time, is a valid and sufficient consideration for a promise to pay the debt by a person other than the debtor. King v. Upton, 4 Me. 387; Elton v. Johnson, 16 Conn. 253; Howe v. Taggart, 133 Mass. 284; Prouty v. Wilson, 123 Mass. 297; Robinson v. Gould, 65 Mass. 55; Moore v. McKenney, 83 Me. 80, (21 A. 749.)
In Howe v. Taggart, supra, Field, J., in delivering the opinion of the court, says: "It seems to have been assumed in this Commonwealth that an agreement to forbear bringing suit for a debt due, even although for an indefinite time, and even although it cannot be construed to be an agreement for perpetual forbearance, if followed by actual forbearance for a reasonable time, is a good consideration for a promise."
In Moore v. McKenney, supra, decided by the Supreme Court of Maine, in 1890, the defendant wrote his name upon the back of the note declared upon, intending thereby to guarantee its payment. He did this in consideration of the plaintiff's promise to forbear and give further time for the payment of the note; no time of forbearance was agreed upon, and it was held that the court properly ordered a verdict for the plaintiff. Walton, J., in delivering the opinion of the court, says:
In King v. Upton, supra, the promise counted on was to pay the debt of another, in consideration that the creditor would "forbear and give further time for the payment of the debt," naming no time. The plaintiff averred that he did thereupon forbear, and the consideration was held sufficient.
In Calkins v. Chandler, 36 Mich. 320 (24 Am. Rep. 593), it is held that an agreement to pay the debt of another, in consideration that the creditor would forbear and give further time for payment, is founded upon a good consideration, although no definite time of forbearance is named.
In Hakes v. Hotchkiss, 23 Vt. 231, it is said, "If no agreement be made as to the length of time, during which the promissee will forbear, the law will presume, that he undertakes to forbear for a reasonable time; and this is sufficiently certain and is a good consideration."
Parsons in his work on contracts, vol. 1, p. 442, says, "Nor need the agreement to a delay be for a time certain, for it may be for a reasonable time only and yet be a sufficient consideration for a promise. "
The Revised Statutes of the United States, sec. 5242, relating to banks, provides, among other things, that all payments of money made after the commission of an act of insolvency, or in contemplation thereof, with a view to prevent the application of its assets in the manner provided in that chapter, or with a view to the preference of one creditor to another, except in payment of its circulating notes, shall be utterly null and void. It is insisted by the defendant, that a payment by the bank at the time the plaintiff called for his money would have been void under this provision of the statute; that the plaintiff lost nothing by his agreement and forbearance; and that neither the bank nor the defendant were benefited thereby. Notwithstanding this statute and the insolvency of the bank, the plaintiff waived a legal right in consideration of the defendant's promise. Before he agreed to forbear, the certificates were not subject to any defence, and he could have negotiated them, and they would have been payable on presentation at the bank. By surrendering them and taking a new certificate impaired by his agreement to forbear, he made his claim subject to a defence that would be likely to effect its negotiability and value. Had the plaintiff drawn his money it is not certain that the receiver would have called for it, or that he would have recovered it by an action. A...
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