Cincinnati Traction Co. v. Cole

• Decision Date: 07 March 1919
• Docket Number: 3186.
• Citation: 258 F. 169
• Parties: CINCINNATI TRACTION CO. v. COLE et al.
• Court: U.S. Court of Appeals — Sixth Circuit

258 F. 169

CINCINNATI TRACTION CO. v. COLE et al.

No. 3186.

United States Court of Appeals, Sixth Circuit.

March 7, 1919

Joseph Wilby, of Cincinnati, Ohio, for plaintiff in error.

Charles H. Stephens, Jr., of Cincinnati, Ohio, for defendants in error.

Before KNAPPEN and DENISON, Circuit Judges, and COCHRAN, District judge.

COCHRAN District Judge.

The positions in the lower court of the parties to this writ were the reverse of what they are here. The trial was by jury, and the principal error assigned is the overruling of defendant's motion for a directed verdict. The motion was not made until after the court's charge to the jury. Thr right to make it that late is challenged; but, as we hold that the motion was properly overruled, it is not necessary to determine this question. It may be noted, however, that the situation would have been different had the court refused to hear the motion.

The motion was based upon two grounds. One was that the promise the basis of the action, was one to answer for the debt of another, and, not being in writing or evidenced thereby, was void under the Ohio statute of frauds (section 8621, General Code of Ohio), which is in the usual form of such statutes. We proceed to consider this ground before stating the other.

The promise was claimed to have been made on or about November 9 1909. If made at all, the conditions under which it was made were these: The Heffron Construction Company had then nearly completed a contract with defendant, made March 30th previously, by which it was to do certain work on its premises for $15,561.75, of which $9,548.78 had been paid upon monthly estimates, to an assignee of the Heffron Company, and possibly as much as $2,000 more had been earned, the larger part of which was retained percentage. That company was indebted to plaintiffs in the sum of $2,949.20 for lumber used in that work. Plaintiffs had a right to take out a lien on defendant's premises therefor, which would be unaffected by the assignment or payments thereunder. Section 8334, General Code of Ohio. The defendant, by its contract, had the right to retain out of subsequent payments an amount sufficient to indemnify it against this lien, and, in case of deficiency, had recourse against the Heffron Company and a surety company to make it good.

Plaintiff's evidence tended to show that the making of the promise came about by their refusal to deliver more lumber needed to complete the contract, that it was made in consideration of their promise to continue delivering and not to take out a lien, and that it was to pay plaintiffs, at least conditionally (i.e., if the Heffron Company did not), both for the lumber previously delivered and that thereafter delivered. Thereafter plaintiff delivered lumber which came to $524.71, making the whole amount due them $3,474.06, for the recovery of which the action was brought.

Defendant denied having made such a promise; but it is undisputed that in January, 1910, after plaintiffs had finished delivering, defendant, by letter, absolutely assured them that they would be paid, and their evidence tended to show that they were not advised that it would not comply with its assurance until it was too late to take out a lien. According to what plaintiff's evidence tended to show, there was a sufficient consideration to uphold defendant's promise. It is not claimed that there was not. It is questioned whether plaintiff's promise, which constituted the consideration thereof, covered the not taking out of a lien. As to this we do not deem it necessary to say more than that we think that plaintiff's evidence justified the conclusion that it did. But the promise to continue to deliver lumber was sufficient of itself to uphold the promise in its entirety, for the plaintiffs were under no obligation to the Heffron Company so to do.

The plaintiff in error bases its contention that the promise sued on was within the statute and hence void, solely upon the fact that, so far as plaintiff's evidence tended to establish the making thereof, it was only a conditional promise; i.e., a promise to pay if the Heffron Company did not. If this did not bring it within the statute, it does not contend that it was within it. The charge of the lower court to the jury presupposed that it was a question for them whether such was the character of the promise. They were told that, if such was its character, there could be no recovery, and that they could find for plaintiffs only in case they determined that the promise was an absolute one; i.e., 'to pay-- not if the Heffron Company did not pay, but pay anyhow. ' They were further charged that the written assurance was not sufficient to take the promise out of the statute, for two reasons, to wit, want of authority on the part of the officer of defendant, who had given it, to give it, and the necessity of parol evidence to explain a reference in the letter from plaintiffs, to which it was an answer.

The position of plaintiff in error, that the only promise which plaintiff's evidence tended to establish was a conditional promise, is difficult to combat. The sole witness thereto testified, on cross-examination, that the 'precise language' used was, 'we will pay this account if Heffron Construction Company does not,' and that the language was in substance, 'We will see that this account is paid if the Heffron Construction Company does not pay it. ' His testimony on direct examination is not inconsistent with such having been the language used, and all other pertinent evidence, apart, perhaps, from the absolute assurance referred to, tended to make out a conditional promise; and we will dispose of the case on the assumption that such was the character of the promise. The plaintiff in error is now so cocksure that, this being so, the promise was within the statute and it was entitled to a directed verdict, that we eliminate every other consideration bearing on its being so entitled on this ground, in order that we may meet it where it has chosen to rest its case. Possibly it was not always of this view, i.e., not until after the lower court had charged that, if such was the character of the promise, there could be no recovery. This may account for its not having requested the peremptory instruction until after the jury had been charged.

The plaintiff in error's contention amounts to this: that every conditional promise to pay the debt of a third person is within the statute. Is this so? To answer this question it is necessary to interpret the statute. A statute may be viewed as a symbol. A symbol has been defined to be 'a soul in a body.' Rather, perhaps, it should be put that it is a body with a soul. Its phraseology is its body, and its thought is its soul. Sometimes the thought of a statute and its phraseology do not coincide. Where such is the case, it is its thought, and not its phraseology, which is the statute. The sole description of what is covered by the statute here is 'a special promise to answer for the debt, default, or miscarriage of another person. ' We take it that it is the thought of the statute that it is only a conditional promise to pay the debt of a third person-- i.e., to pay it if he does not-- that is covered by the statute; for it is only such a promise that is a promise to answer for the debt of another within its meaning. It follows that an absolute promise to pay a debt of a third person is not within the statute. Gibbs v. Blanchard, 15 Mich. 292; National Bank v. State Bank, 93 Iowa, 650, 61 N.W. 1065, 57 Am.St.Rep. 284; Lakeman v. Mount Stephen, L.R. 7 Eng. & Ir.App. 17.

In Wald's Pollock on Contracts (3d Ed. by Williston) p. 170, it is said:

'A promise to be primarily liable, or to be liable at all events, whether any third person is or shall become liable or not, is not within the statute, and need not be in writing.'

But it does not follow that, because a conditional promise only is within the statute, every such promise is within it, or, to go back to the phraseology of the statute, that because a promise to answer for the debt of another person only is within the statute that every promise to do so is within it. Whether every such promise is within it depends on its thought; for, as stated, the thought of the statute, and it alone, is the statute. A close observation of its phraseology takes note of the fact that it says nothing whatever as to the person to whom the promise is made. Seemingly, therefore, a promise of the character called for, made to any person, is within it. But, indisputably, such is not the case. Amongst the differences as to what is within the statute there is none here. In the case of Eastwood v. Kenyon, 11 A. & E. 438, it was held that a promise for a sufficient consideration made to the debtor to pay his debt is not within the statute. Lord Denman said:

'The statute applies only to promises made to the person to whom another is answerable.'

Wald's Pollock on Contracts (3d Ed. by Williston) p. 170, puts it that a promise is not within the statute 'unless it is made to the principal creditor.'

The case of Eastwood v. Kenyon, decided in 1840, is the first case in which this question seems to have arisen. The position was not argued out. It was taken per saltum. The only possible ground upon which it can be based is that a promise which is not made to the person to whom the third person is answerable-- i.e., to the creditor-- is not within the thought of the statute. That such a promise is not within its thought suggests that possibly there may be other promises to answer for the debt of a third person which are not within its thought, and hence not covered by the statute. And so we find. The clause of the statute of frauds involved here is the second clause of the...