Eastman v. Miller

• Decision Date: 11 April 1901
• Citation: 85 N.W. 635,113 Iowa 404
• Parties: GEORGE H. EASTMAN, Trustee, Appellant, v. G. W. MILLER
• Court: Iowa Supreme Court

85 N.W. 635

113 Iowa 404

GEORGE H. EASTMAN, Trustee, Appellant, v. G. W. MILLER

Supreme Court of Iowa, Des Moines

April 11, 1901

Appeal from Buena Vista District Court.--HON. F. H. HELSELL, Judge.

ACTION for judgment on three promissory notes executed by the defendant to the plaintiff for the deferred payments on real estate sold by the plaintiff to the defendant under a written contract. Defendant answered, admitting the execution of the notes, and that they were unpaid, and alleging as defense an oral agreement with the plaintiff whereby defendant was released from liability on said notes. Plaintiff demurred to the answer on the ground that there was no consideration to support the alleged agreement. The demurrer was overruled, to which plaintiff excepts. Verdict and judgment were rendered in favor of defendant. Plaintiff appeals.

Reversed.

F. F Faville and A. D. Bailie for appellant.

Milt H Allen for appellee.

OPINION

GIVEN, C. J.

I.

The defense alleged is, in substance, as follows: That defendant sold and conveyed said contract of purchase to one Dunbar, who assumed and agreed to pay the deferred payments thereon as represented by said notes. "That since the said assignment and sale of the said contract by defendant the same has been frequently assigned and transferred to parties who are now unknown to defendant, but each of whom, as defendant is informed and verily believes, agreed to pay and assume the payment of said notes. That, after said assignment to Dunbar, plaintiff commenced a suit against defendant upon said notes. That while said cause wes pending plaintiff and defendant had a settlement of the said matters pertaining to said action. That by the settlement this defendant was to pay the costs of the said suit, and was to aid and assist to the best of his ability in the collection of the said notes from the then holder of the land. That, in consideration of defendant's doing so, the plaintiff was to relinquish all claims against the defendant upon the said notes, and the said notes were to be fully settled as to this defendant, and plaintiff was to proceed to collect the same off and against the then holder of the said contract for the said land." Defendant alleges that in pursuance of said agreement he paid the costs of said action, that plaintiff caused the same to be dismissed, and that defendant has been, and still is, ready to aid plaintiff in the collection of said notes from the owner of the land. In an amendment he alleges that said agreement was oral. The plaintiff demurred on the ground that the matters alleged do not constitute a defense, "for the reason that such agreement as alleged is without consideration and of no binding force or effect." The question raised by the demurrer is whether the answer shows a consideration for the alleged oral agreement. A consideration consists of some benefit or advantage accruing to the promisor, or of some loss or disadvantage incurred by the promisee. A consideration is an essential ingredient to the legal existence of every simple contract. This consideration consists, as defined by Smith, in his treatise on Contracts (page 87), in "any benefit to the person making the promise, or any loss, trouble, or inconvenience to, or charged upon, the person to whom it is made. That a promise to do what a person is bound to do by law is not a good consideration for another undertaking, and that the person is not bound to fulfill his promise to pay another for doing what he is bound by law to do, is well settled. * * * If the only consideration for the promise of the grantor is the performance by the debtor, or promise to perform, some act which he is legally bound to perform, the promise is without consideration." These statements of law are taken from Ayers v. Railroad Co., 52 Iowa 478, 3 N.W. 522, and are conceded by counsel to be the law. The defendant was liable on the notes, and therefore liable for the costs of the former action; hence an agreement to pay said costs was an agreement to do what he was in law bound to do, and afforded no consideration for the alleged agreement. It was to defendant's interest that payment of the notes should be enforced against the assignees of the contract under which the land was purchased, but he was under no legal obligation to aid or assist in so enforcing their payment. If it should be said that his promise to so aid and assist was a full consideration for the agreement, then the demurrer was properly overruled; but, in the view we take of the case on its merits, we do not determine this question.

II. Whatever agreement was had between these parties was made while the former action was pending, and in an interview between them in the presence of A. D. Bailie attorney for the plaintiff in that action. The defendant's contention is that in consideration of his paying the costs of that action, and agreeing to aid and assist in enforcing collection against the then holder of the land, the plaintiff agreed to relinquish all claims against the defendant upon said notes; while the plaintiff claims that he agreed to dismiss said action, the defendant paying the costs, to afford the defendant opportunity to procure payment of the notes by the holder of the land. At the time of their agreement an instrument in writing as follows was executed: "Storm Lake, Iowa October 21st, 1896. In consideration of the payment of eleven and 75 hundredths dollars costs, the case of Geo. H. Eastman, Trustee, vs. G. W. Miller, shall be, and the same is hereby, dismissed, as against the said defendant, G. W. Miller. And the said G. W. Miller hereby agrees to render the said Geo. H. Eastman, trustee, all the assistance possible in his efforts to recover upon the notes and contracts against the present holder of the land, for which the notes in suit are given. [Signed] A. D. Bailie, Attorney for Plaintiff." Mr. Bailie, called and examined by the defendant, testified as follows: "Mr. Miller said something about some other parties being then interested in the land, and believed that he could get them to pay the notes. He did not know much about the parties, but he thought they were good for the amount of the notes. He said he would like to have a chance to get any advantage that it might be to him out of those parties, and asked if we would not defer action until he could see what he could do. It was in the presence of Mr. Eastman--the three of us together. I asked Mr. Eastman what I should do, and in the presence of Mr. Miller, the...