Durgin v. Smith

• Court: Michigan Supreme Court
• Writing for the Court: MONTGOMERY, J.
• Citation: Durgin v. Smith, 115 Mich. 239, 73 N.W. 361 (Mich. 1897)
• Decision Date: 15 December 1897
• Parties: DURGIN v. SMITH ET AL.

73 N.W. 361

115 Mich. 239

DURGIN v. SMITH ET AL.

Supreme Court of Michigan

December 15, 1897

Error to circuit court, Wayne county; George S. Hosmer, Judge.

Assumpsit by William G. Durgin against Frank G. Smith and others. Defendants had judgment, and plaintiff brings error. Reversed.

Bowen, Douglas & Whiting, for appellant.

Moore &amp Goff, for appellees.

MONTGOMERY J.

At the close of the plaintiff's testimony the circuit judge directed a verdict for the defendants, and plaintiff brings error. The plaintiff counted on and offered testimony tending to show the following state of facts: In February, 1894, a corporation known as F. G. Smith, Sons & Co. was engaged in the business of buying and selling jewelry, silverware, etc at Detroit. Plaintiff was engaged at Concord, N. H., in the manufacture and sale of sterling silverware. The corporation of F. G. Smith, Sons & Co. was indebted to plaintiff in the sum of $4,601.99. F. G. Smith, Sons & Co. had given a chattel mortgage on their stock, and the failure of the corporation was imminent. The plaintiff visited Detroit, and it was agreed by F. G. Smith, Sr., and F. G. Smith, Jr., that they would pay him the entire amount of the F. G. Smith, Sons &amp Co. indebtedness, with interest at 6 per cent. semiannually until it was all paid, and plaintiff on his part agreed to sell them what goods they wanted, and they were to pay cash at 30 days for all they bought, and plaintiff also agreed to let them have his goods exclusively in Detroit. The Smiths afterwards organized a new corporation, under the name of F. G. Smith & Sons, and plaintiff furnished this corporation his goods in pursuance of the engagement. We have stated the purport of plaintiff's testimony, in case the jury should adopt the construction of it most favorable to his case, as we are bound to do in this hearing. It should be stated that it is a question for the jury as to whether the promise was intended as a promise by the Smiths on their own behalf, or whether on the other hand, it was understood and intended as a promise of F. G. Smith, Sons & Co., and also whether the promise of plaintiff to furnish exclusively to the new concern the goods of his manufacture was given in consideration of the Smiths' promise to pay all indebtedness. The question is whether, accepting the statement of plaintiff, and giving it the construction most favorable to him, it was an engagement entered into by the Smiths on their own behalf or on behalf of the new company to pay the debt of the old concern. It is clear, as we think, that the promise did not bind the new concern of F. G. Smith & Sons in the first instance. This new corporation was not then formed, and when formed it had stockholders who were not concerned in the old company, and who are not shown to have assented to any such arrangement. If reliance is placed on a letter written by F. G. Smith, Jr., the same informality exists, i. e. want of authority to make such engagements on behalf of the new company. The circuit judge was of the opinion that no liability was shown on the part of defendants Smith for two reasons: (1) If the promise be treated as an original one, it was void for lack of mutuality. (2) If it be treated as a collateral promise, it was invalid for want of consideration. The first conclusion was based upon the view that the promise of the plaintiff to furnish his goods to the new concern was not to be performed within one year. The promise made by plaintiff did not, in terms, provide for a longer period than one year. It was an agreement to continue to furnish the new concern goods exclusively upon certain terms. Section 6185 provides that any oral agreement, which by its terms is not to be performed within one year of the making thereof, shall not be binding. This engagement on the part of plaintiff is not within the statute. It was operative for such terms as the defendants chose to avail themselves of. It might be less than a year. Sword v. Keith, 31...