First National Bank of Hagerman v. Peterson

• Decision Date: 06 July 1929
• Docket Number: 5163
• Parties: FIRST NATIONAL BANK OF HAGERMAN, a Corporation, Respondent, v. J. W. PETERSON, Appellant
• Court: Idaho Supreme Court

279 P. 302

47 Idaho 794

FIRST NATIONAL BANK OF HAGERMAN, a Corporation, Respondent, v. J. W. PETERSON, Appellant

No. 5163

Supreme Court of Idaho

July 6, 1929

ELECTION OF REMEDIES-WHEN APPLICABLE-PLEADINGS-AMENDMENTS-STATUTE OF FRAUDS-CHATTEL MORTGAGES-TRANSFER OF PROPERTY-ASSUMPTION OF DEBT-CONSIDERATION-SALES-BREACH OF WARRANTY-WRITTEN CONTRACT-PAROL EVIDENCE.

1. An action by mortgagee of chattels against mortgagors is not an election of remedies, precluding suit against purchaser of mortgaged chattels on his agreement to pay purchase money to mortgagee, the two causes of action being separate and distinct, and the DOCTrine of election having no application.

2. Error cannot be predicated on the denial of permission to amend answer, where proposed amendment stated no defense.

3. Agreement by purchaser of mortgaged chattels to pay purchase price to mortgagee or lienor or their agent is not a promise to answer for debt of another within statute of frauds (C S., sec. 7976, subd. 2).

4. Agreement of one purchasing mortgaged chattels with consent of mortgagee and lienor to pay purchase price to agent of mortgagee was not unsupported by consideration.

5. In the absence of fraud or mistake, a contemporaneous oral warranty cannot be engrafted on a written contract of sale where such agreement on its face purports to evidence the entire agreement of the parties, irrespective of whether it is silent as to warranty or not.

6. One purchasing mortgaged chattel with consent of mortgagee under agreement to pay purchase price to mortgagee's agent, and taking over mortgaged chattels and consuming them, waived any claim of breach of seller's warranty of quality.

7. Under C. S., secs. 5687, 5688, providing that, when contract is silent, seller of personal property impliedly warrants that goods are merchantable and conformable to sample or description, the buyer may not, under allegations that seller warranted hay to be of merchantable quality, prove false and fraudulent representations as to quality of hay.

8. Evidence held sufficient to warrant jury finding that buyer's defense that hay was not of merchantable quality was without merit.

9. Where buyer's counterclaim, in action for purchase price of crop of hay, charged his damages to wrongful act of sellers without segregating damages for which cropper or lienor were liable, and proof failed to establish amount chargeable to each, there was no error in denying recovery on counterclaim.

10. Buyer of mortgaged hay, under agreement with consent of mortgagee that purchase price be paid to junior mortgagee as agent for senior mortgagee, cannot complain that senior mortgagee, real party in interest, is not party to suit by junior mortgagee to enforce contract, where evidence showed that claim of senior mortgagee had been paid by plaintiff out of part payments made by purchaser.

APPEAL from the District Court of the Fourth Judicial District, for Gooding County. Hon. H. F. Ensign, Judge.

Action for recovery of money. Judgment for plaintiff. Affirmed.

Judgment affirmed, costs to respondent.

C. A. North and Ray Agee, for Appellant.

In order to come within the exception contained in C. S., sec. 7977, subsection 2, and take an oral promise to pay the debt of another out of the provisions of C. S., sec. 7976, there must be a consideration from the promisee moving to or benefiting the promisor. (Reed v. Samuels, 43 Idaho 55, 249 P. 893; Citizens' State Bank v. Schulte, 123 Kan. 119, 254 P. 381.)

In order to come within the exceptions contained in C. S., sec. 7977, subsection 1, and take an oral promise to pay the prior debt of another out of the provisions of C. S., sec. 7976, the evidence must show that there was a novation, to which the original debtor, the original creditor and the new promisor are all parties, and the original obligation owing by the original debtor to the original creditor must be extinguished and canceled and the promise of the new promisor taken in lieu thereof, and the new promisor must be released from his obligation to the original debtor. If any one of these conditions are not met, there is no novation and no consideration for the promise. (C. S., sec. 7977, subsec. 1; 27 C. J., p. 154, par. 38; 29 Cyc., p. 1133-D; Storer v. Heitfeld, 19 Idaho 170, 113 P. 80; Independent School Dist. v. Porter, 39 Idaho 340, 228 P. 253; Lutz v. Dunn, 189 Wis. 325, 207 N.W. 713.)

Where a written contract is silent as to warranty, parol testimony is always admissible to show the representations and warranties made by the seller to the purchaser at the time of the sale. (Gussner v. R. Miller & H. Shuper, 44 N.D. 587, 176 N.W. 359; Barnett v. Hagan, 18 Idaho 104, 108 P. 743; Sorensen v. Webb, 37 Idaho 13, 214 P. 749; Schmershall v. Foster, 37 Idaho 247, 215 P. 979.)

In case of an assignment of a thing in action, the action by the assignee is without prejudice to any set-off, or other defense existing at the time of the assignment, and the debtor may set up any counterclaim in such action, which he could set up against the original creditor. (C. S., sec. 6635; 5 C. J., p. 962, par. 150; Northwestern etc. Bank v. Rauch, 8 Idaho 50, 66 P. 807; Kimpton v. Studebaker Bros. Co., 14 Idaho 552, 125 Am. St. 185, 14 Ann. Cas. 1126, 94 P. 1039; Blaine County Nat. Bank v. Timmerman, 42 Idaho 338, 245 P. 389.)

James & Ryan, for Respondent.

An oral promise by the purchaser of mortgaged chattels to pay off the mortgage is not within the statute of frauds. (27 C. J., p. 163, sec. 56; Mulvany v. Gross, 1 Colo. App. 112, 27 P. 878; Siekman v. Moler, ante, p. 446, 276 P. 309.)

A creditor's forbearance to enforce a mortgage or other lien will be a sufficient consideration to take a parol promise to pay the debt of another out of the statute, where the primary purpose was to obtain a resulting benefit to the promisor. (27 C. J., p. 151, sec. 34, note 35.)

When the appellant agreed to pay the crop mortgages on the hay held by the International Mortgage Bank and the respondent bank, and this agreement was accepted by said banks, and the appellant fed up the mortgaged hay, which resulted in the loss of these liens on such hay, appellant waived his claim of breach of warranty in so far as the rights of these banks, based upon such mortgages, are concerned. (California Press Mfg. Co. v. Stafford Power Co., 192 Cal. 479, 32 A. L. R. 114, 221 P. 345; 27 R. C. L., pp. 904-909, 40 Cyc. 258, 263.)

The doctrine of election of remedies cannot be applied between one of the parties to a contract and a third person, a stranger thereto, being applicable only to the parties to the contract. (20 C. J., p. 18, notes 20, 21; Tanner v. Johnson, 119 Ark. 506, 178 S.W. 376.)

A contemporaneous oral warranty cannot be engrafted on a written contract of sale where such contract on its face purports to evidence the entire agreement of the parties, irrespective of whether it is silent on the matter of warranties or not. (22 C. J., p. 1119, note 83, and many cases there cited; 23 R. C. L., p. 1399, sec. 224, note 11, and many cases there cited; White, Ward & Erwin v. Hager, 112 Tex. 516, 248 S.W. 319; Appalachian Power Co. v. Tate, 90 W.Va. 428, 111 S.E. 150; 35 Cyc., p. 379, note 86; Anderson v. International Harvester Co., 27 Ga.App. 533, 109 S.E. 417; Washington & L. R. Co. v. Southern Iron etc. Co., 28 Ga.App. 684, 112 S.E. 905; E. R. Spotswood & Son v. Lafayette-Phoenix Garage, 207 Ky. 477, 269 S.W. 514; Lasher Co. v. LaBerge, 125 Me. 475, 135 A. 31; Lamb v. Otto, 51 Cal.App. 433, 197 P. 147; Germain Fruit Co. v. J. K. Armsby Co., 153 Cal. 585; 96 P. 319, par. 3 of syllabus and on page 322 col 2; Mark P. Miller Milling Co. v. Butterfield-Elder Imp. Co., 32 Idaho 265, 181 P. 703; Willard v. Ostrander, 46 Kan. 591, 26 P. 1017.)

T. BAILEY LEE, J. Budge, C. J., and Givens, Wm. E. Lee and Varian, JJ., concur.

OPINION

T. BAILEY LEE, J.

Plaintiff and respondent, First National Bank of Hagerman, sued J. W. Peterson, defendant and appellant, to recover a money judgment.

Plaintiff plead in substance: That during the year 1926 Earnest Jacobsen and Niels Jacobsen farmed the Buckeye Ranch belonging to one Foster Crane, and situate in Gooding county Idaho, Crane to receive a share equal to one-half of all crops raised. That on April 6th the Jacobsens executed their crop mortgage to the International Mortgage Bank, covering their shares of the crop to secure advances not to exceed $ 2,000; that said bank made advances which with interest figured to December 30, 1926, aggregated $ 1,737.40; that on July 26th the Jacobsens gave plaintiff a second mortgage to secure a loan of $ 600 and such advances as plaintiff might supply them, not to exceed $ 1,250; that, in addition to their promissory note for said $ 600, they later, on September 3d and October 4th, gave plaintiff their notes for the respective sums of $ 500 and $ 600, moneys advanced, and received a final advancement of $ 132.16, for which no note was given; the indebtedness with interest figured to December 30 being $ 1,471.49. That about November 11th, Crane and the Jacobsens, with the knowledge and consent of respondent bank and the International Mortgage Bank, entered into a written contract with the defendant, Peterson, for the sale to him of certain alfalfa hay then in stacks on the Buckeye ranch, for which defendant agreed to pay $ 11.50 per ton for 729.89 tons, and $ 10.50 per ton for 71.77 tons, the total of $ 9,124.31 to be paid immediately, Crane to receive one-half of the purchase money; that plaintiff and the International Mortgage Bank, as owners of said mortgages, consented and agreed to such sale, in consideration whereof defendant agreed to pay plaintiff, as agent for said International Mortgage Bank, the sum due under the latter's...