Haas v. Dudley

• Citation: 48 P. 168,30 Or. 355
• Parties: HAAS v. DUDLEY et al. [1]
• Decision Date: 16 March 1897
• Court: Supreme Court of Oregon

48 P. 168

30 Or. 355

HAAS v. DUDLEY et al. ^[1]

Supreme Court of Oregon

March 16, 1897

Appeal from circuit court, Multnomah county; H. Hurley, Judge.

Action by Jacob Haas against W.L. Dudley and others to recover for breach of contract. From a judgment in his favor, plaintiff appeals. Affirmed.

Some time prior to September 29, 1892, the plaintiff purchased of one Shaw certain real property situate in Mt. Tabor Garden addition, in Multnomah county, Or., upon which there was a mortgage to secure the payment of $5,812, and as part of the purchase price assumed and agreed to pay $5,712 of the sum so secured. On the date named, plaintiff sold to the defendants W.L. Dudley, T.C. Powell, T.A. Jordan, and W.A. Cardwell a portion of such real property, consisting of 163 lots, and conveyed the same by deed to the defendant Powell, as trustee, for the use and benefit of all the defendants leaving of such property 175 lots unsold. The deed contains a warranty against all incumbrances except the mortgage above referred to, and a stipulation to the effect that the grantee assumes the payment of $5,712 thereof. At the same time, and as part of the same transaction, the defendants entered into an undertaking with plaintiff, whereby it was stipulated among other things, that: "Whereas, said Jacob Haas is so selling and conveying to said T.C. Powell, for our benefit only, one hundred and sixty-three lots of said property by him purchased from said Edson L. Shaw, and retains one hundred and seventy-five lots of said property, as shown by said deed from Shaw; and whereas, we are to assume and pay and save said Haas harmless from all of said mortgage, and in the event of his selling or disposing of any said remaining lots, to discharge said mortgage as to such lots Now, therefore, *** we further, and for the same consideration hereinabove expressed, jointly and severally promise and agree to and with said Jacob Haas, his heirs, grantees, and assigns, that we will at any time when Jacob Haas, his heirs, grantors, or assigns, shall sell or desire to sell or dispose of any of the remaining lots or blocks or the whole thereof in said 'Mt. Tabor Garden' still owned by him at the date of this instrument, fully pay, satisfy, and discharge said mortgage, so far as it may be a lien upon said lot or lots he may desire to sell or release, so that he can, in so far as said mortgage is a lien thereon, sell and convey the same free from incumbrances. And we agree to assume and pay off said mortgage in so far as said Haas, his heirs, grantees, and assigns, are concerned, or in any way liable and save him and them wholly harmless therefrom, and satisfy, release, and discharge the same in so far as it forms any lien upon the remaining lots in said tract yet owned by said Haas, or by him conveyed to said T.C. Powell." Thereafter plaintiff sold some of the remaining lots which the defendants failed to have released from the lien of the mortgage as agreed, and later on the mortgage was foreclosed, the property covered by it sold, and the demand thereby satisfied, leaving no surplus. The court instructed the jury at the trial that the measure of plaintiff's recovery was the value at the time of the foreclosure sale of the 175 lots so reserved by him. The plaintiff asked for the following instruction, which was refused: "I instruct you that the measure of damages in this case is the amount fixed by the contract signed by the defendants and introduced in evidence by plaintiff and agreed then to be paid, with the interest thereon, less any amounts which you may find that the defendants, or either of them, have paid thereon since the date of the said contract, if you find that any payments have been made." There were objections to the introduction of testimony which saved to plaintiff the same questions raised upon the instruction given and the one asked and refused. The verdict was in favor of plaintiff for $1,407, and judgment accordingly, from which he prosecutes this appeal.

F.A.E. Starr, for appellant.

R. Stott, for respondents.

WOLVERTON J. (after stating the facts).

Two questions are presented: First. What is the nature of the defendants' obligation upon which plaintiff seeks to recover? Is it an absolute obligation to pay plaintiff's liability, or is it merely an undertaking of indemnity? And second, what is the measure of plaintiff's relief? An undertaking to pay the debt for which another is obligated or has assumed to pay may be sued upon by the obligee and recovery had to the limit of the undertaking, or in so far as the same remains undischarged, as soon as default has been suffered; and this regardless of whether the obligee has paid the debt or not. Hodgson v. Bell, 7 Term R. 97; Penny v. Foy, 8 Barn. & C. 11; Loosemore v. Radford, 9 Mees. & W. 657; Lethbridge v. Mytton, 2 Barn. & Adol. 772; Robinson v. Robinson, 24 Law T. 112; Ham v. Hill, 29 Mo. 275; In re Negus, 7 Wend. 498; Port v. Jackson, 17 Johns. 239; Merriam v. Lumber Co., 23 Minn. 322; Lathrop v. Atwood, 21 Conn. 116; Hume v. Hendrickson, 79 N.Y. 127; Hall v. Nash, 10 Mich. 303; Redfield v. Haight, 27 Conn. 31; Furnas v. Durgin, 119 Mass. 500. It was early objected that, if the obligee was permitted to recover before he had discharged the debt due the principal creditor, the obligor might be required to pay the same debt twice. Such was the objection made in Loosemore v. Radford, supra, upon the following state of facts: Two persons being jointly indebted upon a promissory note, one as principal and the other as surety, the principal covenanted with the surety to pay the amount of the note to the payees on a given day, but made default, and was sued upon his covenant. In determining the liability, Baron Parke says: "This is an absolute and positive covenant by the defendant to pay a sum of money on a day certain. The money was not paid on that day, nor has it been paid since. Under these circumstances, I think the jury was warranted in giving the plaintiff the full amount of money due upon the covenant. If any money had been paid in respect of the note since the day fixed for the payment, that would relieve the plaintiff pro tanto from his responsibility. The defendant may perhaps have an equity that the money he may pay to the plaintiff shall be applied in discharge of his debt; but at law the plaintiff is entitled to be placed in the same situation under this agreement as if he had paid the money to the payees of the bill." In Robinson v. Robinson, supra, by an indenture of dissolution of a partnership, the defendant, who acquired the partnership property, covenanted to pay and satisfy within 18 months all the debts of the partnership, and to indemnify and save plaintiff harmless from all costs, losses, claims, and demands which he might incur or become liable for in respect of the partnership debts. In an action against defendant upon this covenant, Lord Campbell held that the measure of damages was the whole amount of the debts which he had not paid, whether they had been paid by the plaintiff, or he had given promissory notes for them, or not. In Ham v. Hill, supra, under a similar state of facts, where the covenant was "to assume all partnership liabilities of said firm incurred between April 1, 1858, and July 1, 1858, and to pay the same whenever payment is demanded legally by the creditors of said firm," Ewing, J., speaking for the court, said: "As to the measure of the damages in this case, if the plaintiff is entitled to recover, we see no reason why he should not recover the sum due by the bond. Of course, if the bond has been paid in part, or otherwise satisfied, the defendant will be entitled to the benefit of such payment or satisfaction. The presumption is that the plaintiff gave full consideration for the bond, and, if it is not discharged, the defendant should pay the amount of it." In Furnas v. Durgin, supra, there was an exchange of lands, and the defendant accepted of plaintiff a deed to...