Hoile v. Bailey

• Decision Date: 20 November 1883
• Citation: 58 Wis. 434,17 N.W. 322
• Parties: HOILE v. BAILEY, IMPLEADED, ETC. HOILE v. MCCULLOCH, IMPLEADED, ETC.
• Court: Wisconsin Supreme Court

58 Wis. 434

17 N.W. 322

HOILE

v.BAILEY, IMPLEADED, ETC.

HOILE

v.MCCULLOCH, IMPLEADED, ETC.

Supreme Court of Wisconsin.

Filed November 20, 1883.

Appeals from circuit court, Portage county.

G. W. Cate, for respondent, Joseph I. Hoile.

Raymond & Haseltine and Winfield Smith, for appellants, David C. Bailey, impleaded with McCulloch & Bratt, and Henry D. McCulloch, impleaded with Bailey & Bratt.

CASSODAY, J.

The failure to furnish a complete, consecutive, and succinct statement of the facts involved, with appropriate references, has made it extremely difficult to comprehend the merits of the real contention on either side. After a very thorough reading and rereading of the printed case, and as careful an examination of the voluminous unprinted record as time will permit, we are still in doubt as to some of the facts involved. Upon such doubtful questions of fact we are, therefore, necessarily forced to acquiesce in the findings of the trial court. These facts, together with such as are clearly established by the record, are stated above, and need not be here repeated. The conclusions of fact and law to be drawn from such statement remain to be considered. This is an action for the strict foreclosure of the contract executed February 8, 1879, whereby Bratt purchased of Hoile the lands and mills in question. Bailey and McCulloch each separately defended, and each bring separate appeals. Both are urging, however, that the plaintiff has lost his cause of action, if he ever had any, by reason of the strict foreclosure of the contract given by Ebenezer Whitney on the sale of the land, November 22, 1875, and the deed from him to McCulloch, Ootober 23, 1879, whereby it is claimed that the title became absolutely vested in the latter, discharged of all claim of the plaintiff, and all liens and incumbrances accruing after the date of that contract. It appears that the title was allowed to become absolute in Ebenezer Whitney, and the deed from him to McCulloch was made in pursuance of an agreement and understanding made and had with them and Bailey in behalf of the firm of Bailey & Bratt, as above stated. From what was said and done at the time, and subsequentiy, there can be no question but what the title was allowed to be made absolute, and the deed given and accepted for the use and benefit of Bailey & Bratt.

It is well settled that where the owner of the equity or redemption procures another to advance money and bid in his property on sheriff's sale, and take the title thereof for the benefit of such owner, with the understanding that he will reconvey the same to such owner on repayment of the money so advanced and interest, the transaction, in equity, constitutes a mortgage. Sweet v. Mitchell, 15 Wis. 641;Spencer v. Fredendall, 15 Wis. 666;Wilcox v. Bates, 26 Wis. 465. The same principle has been applied to a case where lands were purchased from a third person for the use and benefit of one in possession. Starks v. Redfield, 52 Wis. 349; [S. C. 9 N. W. REP. 168.] Here McCulloch merely advanced the money and took the title as security at the request, and for the use and benefit, of Bailey & Bratt, and for that purpose and with that understanding the title was allowed to become absolute in Ebenezer Whitney. Thereby Bailey & Bratt became, in equity, debtors to McCulloch for the money so advanced and to be advanced, and he became their creditor. Whenever property is transferred, no matter in what form or by what conveyance, as the mere security for a debt, the transferee takes merely as a mortgagee, and has no other rights or remedies than the law accords to mortgagees. Id. 352. Under the facts and authorities, McCulloch must be regarded as a mere mortgagee of Bailey & Bratt, or at least of Bratt.

2. It is claimed on the part of Bailey, who negotiated the transaction, that he never, in fact, purchased nor agreed to purchase any interest in the equity of redemption; and that if he did so agree, yet that the agreement was by parol and void under the statute of frauds. But the trial court has found that he did make such an agreement, and the evidence to the contrary is not sufficiently convincing to justify us in disturbing that finding.

Was the agreement void under the statute by reason of its being in parol? In consideration of Bratt's equitable interest in the lands, mills, buildings, and his other property being put into the firm as partnership property, Bailey agreed, as such partner, to assume with Bratt the payment of the debts of Bratt to Hoile and the several claims which Bratt had assumed and agreed to pay. Upon that agreement being made, Bailey, as a partner with Bratt, immediately entered into complete possession of the mills, buildings, and real estate as such partner, and the firm thereupon cut and removed from the land large quantities of logs and timber, and manufactured the same into lumber and other things, and sold and converted the same to their own use. Does the fact bring the case within subdivision 2, § 2307, Rev. St., which declares that “every special promise to answer for the debt, default, or miscarriage of another person,” “shall be void, unless such agreement, or some note or memorandum thereof, expressing the consideration, be in writing and subscribed by the party charged therewith.” This language has given rise to much contrariety of opinion in different courts, and sometimes in the same court, not only as to the several classes which do and which do not come within its provisions, but also as to the precise language in which to state the rule of law applicable to a given class. We have no purpose of reviewing, much less of attempting to reconcile, these decisions, nor of considering the law applicable to any class of cases except the one here presented.

In Young v. French, 35 Wis. 116, the present chief justice stated one distinction between cases within and without the statute thus: “Where the party promising has for his object some benefit and advantage accruing to himself, and on that consideration makes the promise, this distinguishes the case of an original undertaking from one within the statute.” This is quoted approvingly by Mr. Justice LYON in the recent case of Clapp v. Webb, 52 Wis. 641; [S. C. 9 N. W. REP. 796.] The facts in each of those cases differ from the facts here, but the distinction thus stated is substantially the same as that announced by Chief Justice SHAW in Nelson v. Boynton, 3 Metc. 400, which was followed in Alger v. Scoville, 1 Gray, 397;Draper v. Putnam, 7 Allen, 174;Burr v. Wilcox, 13 Allen, 273;Ames v. Foster, 106 Mass. 403. To the same effect is the able opinion of POLAND, C. J., in Fullam v. Adams, 37 Vt. 403. The rule thus stated also received the sanction of Chief Justice SAVAGE in these words: “In all these cases, founded on a new and original consideration of benefit to the defendant or harm to the plaintiff, moving to the party making the promise, either from the plaintiff or original debtor, the subsisting liability of the original debtor is no objection to recovery.” Farley v. Cleveland, 4 Cow. 439. “This language” was said by COMSTOCK, C. J., in the leading case of Mallory v. Gillett, 21 N. Y. 419, to have “greater precision than that of Chief Justice KENT” in the much-criticised case of Leonard v. Vredenburgh, 8 Johns. 29. In the case of Mallory v. Gillett, supra, the meaning of this statute was ably discussed, both in the opinion of the majority and minority of the court, and although the two opinions are in direct conflict upon the question there involved, yet they substantially agree, among other things, as to the rule of law applicable to the case here presented. That rule of law may be summarized thus: Where B. purchased property of A. on credit, and thereupon sold the same to C., who, in consideration therefor, and as a part of the purchase price thereof, promised to pay B.'s debt to A. upon the former purchase, such promise on the part of C. is nothing more nor less than an agreement to pay his own debt, although the incidental effect of such payment would be to pay and discharge B.'s debt to A.

A different rule might be inferred from a remark of DIXON, C. J., in Dyer v. Gibson, 16 Wis. 559, where the consideration moved from the plaintiff to the defendant, and not from the original debtor to the defendant, as here. He there said: “The distinction is between cases where the person promising has for his object a benefit accruing to himself, in which the original debtor has no interest, and from which he derives no advantage, and cases where his primary and leading object is to become surety for the debt of another without benefit to himself, but for the exclusive advantage of the other parties to the contract.” But the same learned judge, in the later case of Putney v. Fanham, 27 Wis. 187, virtually eliminated the words in italics from the proposition. In that case the defendant purchased certain property of one Corbett, and as a part of the purchase price agreed with him to pay certain debts incurred by Corbett on a former purchase of the same property, and although the original debtor did have an interest in the sale to the defendant, and did derive an advantage from his promise, yet DIXON, C. J., observed, that “it was a guaranty in form, but not in substance or effect, within the meaning of the statute of frauds. It was not a mere promise by the defendant to be responsible for the debts of Corbett to those parties, and to pay those debts, but a promise by him to pay his own debt in that particular way. It was a promise founded upon a new and sufficient consideration owing to the promisor from the debtor at the time the promise was made. Such a promise or agreement is not within the statute of frauds.” This enunciation is in strict harmony with the rule above stated. The mere fact that Bailey did not contract with Hoile personally, and that the consideration for the promise of the former did not move to him from Hoile,...