Cowan v. Browne

Decision Date05 April 1922
Docket Number4585.
Citation206 P. 432,63 Mont. 82
PartiesCOWAN ET AL. v. BROWNE.
CourtMontana Supreme Court

Appeal from District Court, Hill County; Jack Briscoe, Judge.

Action by David Cowan and another, as copartners under the firm name of Cowan & Son, against the Havre National Bank, for which Frank Browne, receiver, was substituted as party defendant. Judgment for plaintiffs, and defendant appeals. Reversed and remanded, with directions.

Galen J., dissenting.

H. S Kline and C. B. Elwell, both of Havre, for appellant.

Stranahan & Stranahan, of Havre, and Norris, Hurd & Hauge, Great Falls for respondents.

H. H EWING, Judge of the Eighth Judicial District, sitting in place of Justice REYNOLDS, disqualified. This cause of action is stated in three counts. In the first, the plaintiffs allege that they are copartners, and the Havre National Bank, defendant, is a corporation; that on the 29th day of September, 1917, Ever Nielsen was indebted to the plaintiffs in the sum of $1,833.27; that immediately prior to the 29th day of September, 1917, Ever Nielsen had made arrangements with the defendant, hereinafter referred to as the Bank, where the Bank was to take charge, supervision, and control of all the real and personal property of Nielsen for the purpose of selling and disposing of the same and of applying a part of the proceeds to the payment of the indebtedness of Nielsen to the Bank, and of applying sufficient of the balance to the payment of the indebtedness of Nielsen to the plaintiffs, and the Bank, in pursuance of this agreement and arrangement, on or shortly after the 29th day of September, 1917, sold Nielsen's property and received the proceeds thereof, amounting to the sum in excess of $32,000; that Nielsen made and executed an order in writing in favor of plaintiffs, directed to the Bank, requiring it to pay the plaintiffs the sum due them from Nielsen; that said order was thereupon presented by plaintiffs to the Bank, and it promised and agreed with plaintiffs that, after the payment of the indebtedness of Nielsen to the Bank, it would pay from the proceeds of the sale of Nielsen's property the obligations of Nielsen to the plaintiffs; that on September 29, 1917, the indebtedness of Nielsen to the Bank did not exceed $7,500, leaving a large sum of money over and above the amount necessary and required to pay the indebtedness of Nielsen to the Bank and to the plaintiffs; that, notwithstanding the promises of the Bank to pay plaintiffs their indebtedness from the proceeds, it refused, and does now refuse, to pay the plaintiffs their indebtedness, or any part thereof; and that the whole sum is due and payable.

The second count sets forth the same facts as the first, except that in this count the Bank is alleged to be a trustee, as follows:

"That by reason of the action of the Bank in accepting the real and personal property of Nielsen, and the sale thereof and the receipt of the proceeds under the conditions that the Bank should use sufficient of the proceeds to pay the indebtedness of Nielsen to the Bank and to the plaintiffs, the Bank became, was, and is a trustee for the use and benefit of these plaintiffs in applying sufficient of the proceeds of the sale to pay the indebtedness of Nielsen to the plaintiffs," and that the Bank has failed to execute the trust.

In the third count plaintiffs set forth the same facts as in the first, except that they rely upon an oral agreement made by the Bank to pay their demand against Nielsen. They allege that the balance of Nielsen's property was advertised to be sold on September 29, 1917; that on that date, and prior to the sale, the plaintiffs informed the Bank that, unless it would guarantee the payment of Nielsen's indebtedness to them, they would forthwith, and prior to the sale of the property by the Bank, cause to be filed in court an action against Nielsen, and a writ of attachment to be issued in the action, and cause sufficient of the property of Nielsen which the Bank intended to sell to be levied upon and garnished to satisfy the claim of the plaintiffs; that thereupon the Bank stated and represented to the plaintiffs that, if they would forbear the collection and enforcement of their indebtedness against Nielsen at that time, and would refrain from filing the complaint and would desist from having the property of Nielsen seized under a writ of attachment, the Bank would pay the plaintiffs the amount of the indebtedness of Nielsen to them from the proceeds of the sale of the real and personal property of Nielsen which the Bank proposed to make shortly thereafter; that the Bank further represented to the plaintiffs that the property of Nielsen would sell for a sum largely in excess of the amount necessary to pay the indebtedness of Nielsen to the Bank, and that a sufficient surplus would remain after paying the indebtedness of Nielsen to the Bank to pay the indebtedness of Nielsen to the plaintiffs, and that the Bank promised and represented that it would pay from the balance to plaintiffs Nielsen's indebtedness to them as hereinbefore stated; that, by reason of the promises and representations of the Bank to the plaintiffs, they refrained from filing their action against Nielsen and from causing his property to be levied upon to satisfy their indebtedness against him, and that the plaintiffs relied upon and believed all the representations and promises of the Bank made to them and acted thereon; that the Bank at the time knew that the plaintiffs would and did rely upon the promises and agreements of the Bank and refrained from filing the action against Nielsen and attaching his property by reason of such promises and representations, and not otherwise.

The answer is, in effect, a general denial. By stipulation the cause was tried by the court without a jury. Plaintiffs prevailed in the district court. The Bank appealed from the judgment and from an order denying its motion for a new trial.

It is first contended by the Bank that the third count, the one upon which the plaintiffs relied in the district court, does not state facts sufficient to constitute a cause of action, for the reason that it is not alleged that there was any agreement on the part of the plaintiffs to forbear to sue and attach. We have examined this count carefully, and do not believe the point is well taken. There is recited therein the promise on the part of the Bank through Ritt, its cashier, that the plaintiffs' claim would be paid out of the proceeds of the sale after the obligation of Nielsen to the Bank was satisfied, if the plaintiffs would forbear the filing of suit, attaching the property and stopping the sale. It is further alleged that plaintiffs did, by reason of the representation made to them by the Bank, forbear to sue Nielsen and attach his property, and that the Bank at the time knew that plaintiffs would and did rely upon the promises and agreements of the Bank, and refrained from filing their action against Nielsen and attaching his property by reason of the promises and representations of the Bank, and not otherwise.

Mere forbearance to sue, without an agreement to that effect, is not a sufficient consideration for a promise of another to pay the debt of the person liable; but such agreement may be either express or implied.

"It is well settled...

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