Gannon v. Bronston

• Decision Date: 16 December 1932
• Parties: GANNON v. BRONSTON.
• Court: Kentucky Court of Appeals

55 S.W.2d 358

246 Ky. 612

GANNON v. BRONSTON.

Court of Appeals of Kentucky

December 16, 1932

Appeal from Circuit Court, Fayette County.

Action by T. F. Gannon against J. M. Bronston. Judgment for defendant, and plaintiff appeals.

Affirmed.

L. G Campbell, of Lexington, for appellant.

L. F Zerfoss, of Lexington, for appellee.

DRURY C.

Appellant sued Bronston upon a note; he was unsuccessful, and has appealed. This is the note sued on:

"$500.00 Lexington, Ky. Nov. 15th, 1915.

One hundred Eighty days after date we promise to pay to the order of T. F. Gannon Five Hundred Dollars for value received, negotiable and payable at Second National Bank, Lexington, Ky. with interest at the rate of 6 per cent. per annum from date until paid.

"P. D. Foster,

"J. M. Bronston.

"Fred D. Foster."

The petition is in proper form, and demurrer to it was properly overruled.

Bronston in his answer admitted the execution of the note; then said, in substance: That he and the two Fosters were partners engaged in the retail meat business, and they had executed this note to Gannon for stock sold the partnership; that shortly after its maturity this partnership got into financial difficulties and these partners were contemplating bankruptcy; that it was then agreed among them and with Gannon for Bronston to surrender his interest in the meat business to the Fosters and to retire from the partnership, for the Fosters to continue the business and to assume and pay the whole of this note, and for Gannon to so accept them and to release Bronston from all obligation on this note. His answer concludes as follows:

"Defendant says that he relied on the assurances of the plaintiff to release him from further obligation on the note sued on, and that P. D. Foster and Fred D. Foster would pay same, and relying on the promise of plaintiff to release him on said note, that he quit the business conducted by Bronston and the Fosters and since that time paid no further attention to it and thereby lost his interest therein and that to all the facts above stated the plaintiff was fully cognizant and fully agreed to the arrangement without reservation.

Wherefore Defendant prays that plaintiff's petition be dismissed, for his costs and for all other proper relief."

From this it will be seen Bronston is pleading a release from obligation on this note, and is pleading that Gannon is estopped to assert same against him. Bronston does not use the word "estoppel" in this plea, but he does plead facts which, if true, would constitute an estoppel.

Gannon's demurrer to this answer was overruled, and this he alleges was error, because, as he contends, the execution of this release was not alleged to have been done with the formality required by section 3720b-122, Ky. Stats., which we will discuss later.

In the first paragraph of his reply, Gannon denied everything asserted in the answer, and in a second paragraph he pleaded: "That he never at any time received from the defendant any consideration for the alleged so-called release, and it is not, and was not in writing, and is therefore invalid, and void in law, nor was the note sued on delivered up."

Bronston denied Gannon's plea of no consideration, and the case went to trial before a jury. The witnesses for the defense were Bronston and Fred D. Foster, and their testimony supported all the allegations of the answer. Gannon was the sole witness for himself. In his testimony, he denied everything testified to by witnesses for the defense, denied having had anything to do with getting Bronston out of this partnership, but said the first he knew of Bronston's retirement was on one Monday morning about May 15, 1916, when he asked about Bronston, and was told by Mr. P. D. Foster, "We got rid of him." He testified that the Fosters continued the business until September 1, 1917, then turned the shop over to him, that on October 17, 1917, the Fosters went into bankruptcy, and he had never received anything on this note from either of the Fosters or from Bronston, nor had he sought to make Bronston pay it until he filed this suit on September 9, 1930, although Bronston lived in the same town with him all that time.

The court gave the jury this instruction: "The jury will find for the plaintiff T. F. Gannon in the sum of $500.00, with interest at six per cent. from November 15, 1915; unless you believe from the evidence that the plaintiff Gannon agreed with the defendant Bronston to accept P. D. Foster and Fred D. Foster as obligors and discharged Bronston, from further liability on said note."

The jury found for Bronston. Gannon's motion for a judgment notwithstanding the verdict was overruled, and thereupon he filed a motion for a new trial, upon that and divers other grounds, which was also overruled. All of these grounds are in essence merely different ways of saying this: Admitting Bronston and the Fosters as partners owed Gannon $500, an indebtedness they had contracted in the conduct of a retail meat business, and if it be true that the partners were not getting along harmoniously, were in financial difficulties, were contemplating bankruptcy, and at a meeting of the partners and Gannon it was orally agreed, if Bronston would surrender his interest and get out, that Gannon would release him and look to the Fosters for payment of the note and the Fosters agreed to this and undertook to pay the note, but after 15 1/2 months of effort failed and have been discharged in bankruptcy, this release of Bronston is not valid for two reasons: First, because there was, so he says, no consideration moving to Gannon for making it; and, second, because the note was not then surrendered to either Bronston or the Fosters, nor was this release evidenced by any writing whatever. Based on this, Gannon contends the court erred in overruling his demurrer to Bronston's answer because Bronston had not alleged that Gannon's agreement to release him was in writing, erred in overruling his motion for a directed verdict because Bronston did not allege or prove this alleged agreement was in writing, and erred in overruling his motion made under section 386 of the Code of Practice in Civil Cases for a judgment notwithstanding the verdict because, Bronston having failed to allege this agreement to release him was in writing, the pleadings, as Gannon construes them, entitle him to a judgment.

Consideration for making this agreement sufficiently appears in both the pleadings and the proof. It is true Gannon got no money by it, but he got what he wanted; he got what he bargained for; he got Bronston out of this partnership, which he then hoped would result in such restoration of harmony that the Fosters would make a success of it and would be able to pay his note.

Gannon is alleged to have released Bronston in return for Bronston's retirement from the partnership then existing between him and the Fosters; thus the situation is squarely within the definition of consideration and its sufficiency given in Restatement of the Law, subject "Contracts." "Sec. 75. Consideration for a promise is *** the creation, modification or destruction of a legal relation *** bargained for and given in exchange for the promise."

There was evidence such a promise was made and that pursuant thereto Bronston retired from the partnership, and, if this evidence be true, and the jury has found it is, the contract was then complete, for, in the subject of "Contracts," in the Restatement of the Law, it is written: "Sec. 74. A contract is made at the time when the last act necessary for its formation is done, and at the place where that final act is done."

The doing by the promisee of something lawful which he does not otherwise have to do is sufficient consideration to support the agreement of the promisor. For example, see Talbott v. Stemmons' Ex'r, 89 Ky. 222, 12 S.W. 297, 11 Ky. Law Rep. 451, 5 L. R. A. 856, 25 Am. St. Rep. 531, where an agreement, of Mrs. Stemmons to pay her grandson $500 if he would discontinue the use of tobacco was upheld. See, also, 13 C.J. p. 315, § 150, and 6 R. C. L. p. 652 et seq., §§ 66, 67, 68, etc., and Hamer v. Sidway, 124 N.Y. 538, 27 N.E. 256, 12 L. R. A. 463, 21 Am. St. Rep. 693.

The surrender by Bronston of his interest in this partnership was sufficient consideration to support Gannon's agreement to release him on this note, if Gannon made such an agreement, and the jury has found that he did; so the defense of no consideration is without merit.

The facts in this case cannot be distinguished from the facts in Akers v. Phillips, 58 S.W. 790, 22 Ky. Law Rep. 813, and the instruction in this case compares most favorably with the instruction in the Akers Case; hence this judgment must be affirmed unless some change has been made in our laws since the Akers Case was written.

The change in our law which it is claimed makes the Akers Case no longer applicable is found in our Negotiable Instruments Law (Acts 1904, c. 102); the particular section relied on being section 122 thereof, which is section 3720b-122, Ky. Stats., which we are now copying and in doing so we shall italicize a portion, which it is claimed governs the questions before us: "The holder may expressly renounce his rights against any party to the instrument before, at or after its maturity. An absolute and unconditional renunciation of his rights against the principal debtor made at or after the maturity of the instrument discharges the instrument. But a renunciation does not affect the rights of a holder in due course without notice. A renunciation must be in writing, unless the instrument is delivered up to the person primarily liable thereon."

As we will want to refer to it later, we are going to give here a copy of section 62 of the...