Kladivo v. Melberg

• Decision Date: 21 November 1929
• Docket Number: No. 39487.,39487.
• Citation: 227 N.W. 833,210 Iowa 306
• Parties: KLADIVO v. MELBERG.
• Court: Iowa Supreme Court

210 Iowa 306

227 N.W. 833

KLADIVO

v.MELBERG.

No. 39487.

Supreme Court of Iowa.

Nov. 21, 1929.

Appeal from District Court, Benton County; B. F. Cummings, Judge.

Action at law by Joseph Kladivo against Axel Melberg to recover on oral agreement by defendant to sign note for defendant's son and to indemnify plaintiff for signing it as surety. The last-substituted petition alleges: That Ernest Melberg and wife, Olie, were attempting to borrow $5,000 from Frank and Mary Wlach. That Ernest is son of defendant. That the Wlachs would not loan the money to Ernest and wife without security. That defendant orally agreed with plaintiff that, if plaintiff would sign a note for $5,000 from Ernest and wife to the Wlachs as surety, “that defendant would sign said note for his said son and would indemnify the plaintiff from loss or damage on account of signing said note as surety. * * *” That relying thereon plaintiff signed the note, and, by reason thereof, Ernest received the $5,000. That long afterwards plaintiff learned that defendant had refused to sign the note. That about the 25th of February, 1922, Ernest, and about July 23, 1923, Olie, took bankruptcy, and were discharged from the debt. That about December 4, 1923, the Wlachs obtained judgment against plaintiff, which plaintiff paid, by reason whereof he has been damaged in the sum of $6,471.01, with interest, for which he demands judgment. The note set out is dated October 22, 1922 (1920?), payable three years after date for $5,000, with interest at 8 per cent. Demurrer based upon the statute of frauds was overruled, whereupon defendant answered by general denial. Plaintiff's evidence was received over objection, and, on its conclusion, on defendant's motions, was stricken out, verdict directed, and judgment rendered in favor of defendant. Plaintiff appeals. Reversed.

Evans, Stevens, and Kindig, JJ., dissenting.

Tobin, Tobin & Tobin, of Vinton, for appellant.

Nichols, Nichols & Milroy, of Vinton, and C. H. E. Boardman, of Marshalltown, for appellee.

MORLING, J.

The arguments here present two questions, first, whether the evidence is sufficient to support a finding of a consummated agreement between plaintiff and defendant; and, second, if so, whether the agreement is within the statute of frauds.

[1] While one of the grounds of motion to direct was, and defendant suggests in argument, that the agreement claimed by plaintiff to have been made was abandoned because defendant was not asked to sign and did not sign the note, no such defense is raised in the pleadings. Abandonment is the relinquishment, renunciation, or surrender of a right. Its existence depends on intention and act evidencing intention to abandon. The act of relinquishing must be unequivocal and decisive. Words and Phrases First Series, vol. 1, p. 4; Words and Phrases, Second Series, vol. 1, p. 2. In our view of the case, the evidence does not sustain the claim of abandonment. The evidence is apparently fragmentary in not showing fully the negotiations between the parties. This may be due to concentration of attention on the defense of the statute of frauds.

The evidence, consisting of the testimony of plaintiff and the two Wlachs and as part of plaintiff's cross-examination his original and first-substituted petition is, in substance, as follows: Plaintiff says that Ernest, who was then alone, “first spoke to me about the note to be signed. * * * The next day * * * Axel Melberg was with him. * * * Ernest said that his father and his wife and he would sign the note. * * * Axel Melberg * * * said if I sign that note that I don't lose nothing. That he pay everything. After that talk I went with the Melbergs to Wlachs. It was in the evening. * * * Axel Melberg * * * says he will sign the note for his son. The next day I signed the note. * * * I never signed it if the old man would not say he sign it and if he never promise me first I would never lose anything if I sign it. If I sign it he would pay it or I never would sign it. * * * I did not see Axel Melberg for a year or three years afterwards. I knew when I signed it that he hadn't signed it. I went to him and asked him to sign the note. That was three years after the first time I seen him. * * * He (defendant) says to me, during the driving, he says if I sign the note instead of him I will never lose anything he pay it.” Plaintiff says, on cross-examination: “Axel Melberg said if I sign the note he sign it too; * * * he would see that I didn't lose anything;” that he expected defendant to sign it. His original and first-substituted petition (apparently drawn by a former attorney) do not allege any agreement for indemnity.

Frank Wlach testifies that defendant, Ernest, and plaintiff came to his house. Ernest “wanted to borrow $5,000 and came over there through Mr. Kladivo. I told them they could have it provided he would give me good security. * * * He said his father would go on the note. * * * The father said he would sign it. That was the substance of the arrangement or talk that was made there that night. * * * The note was for $5,000.” Mrs. Wlach says that Ernest “wanted to borrow the money and my husband said he would let him have the money if the note was properly executed, and Mr. Axel Melberg said he would sign the note. Mr. Joseph Kladivo was present at the time. * * * The next day they ‘phoned me first--I was expecting Mr. Axel Melberg, Mrs. Ernest Melberg and Mr. Ernest Melberg--that they would all three come, but only Mr. Ernest Melberg came. * * * Mr. Ernest Melberg and Mr. Kladivo went down with me to the bank, and I got the money, and delivered it to Ernest Melberg * * * on account of the note that was given me.” The note was apparently drawn at this time and in part at least by plaintiff. Plaintiff and the Wlachs are related. The son's wife signed.

[2][3] I. Plaintiff is entitled to the benefit of that interpretation of his evidence and to all inferences therefrom, if reasonable most favorable to his case, and, if reasonable minds may differ as to the conclusions to be drawn from the evidence, he is, if any of such conclusions would sustain right of recovery, entitled to go to the jury. The court should not without compelling reason deprive the plaintiff of the right to have the jury ascertain, if it may be done within the limits of the evidence and all reasonable inferences to be drawn from it, the real intent of the parties and to give effect to it. See Gould v. Gunn, 161 Iowa, 163, 140 N. W. 380.

[4] The last-substituted petition is founded on contract. It alleges that defendant agreed (1) to sign the note, and (2) to indemnify plaintiff from loss on account of signing it as surety. No question of inconsistency in the agreement as testified to or of variance or of pleading is raised. Plaintiff was required to prove no more than necessary to make out a case. Agreement to sign as cosurety with plaintiff would involve the duty of making contribution and be in effect agreement for partial indemnity. Edmondson v. Ballard, 149 Va. 798, 141 S. E. 776. As between the parties to this action, defendant, according to the petition, had the duty of indemnifying. According to the evidence, defendant might be found to have assumed the responsibility of paying the note and of indemnifying the plaintiff against all liability. Plaintiff's loss caused by defendant not signing (if the agreement was merely to sign as cosurety without the further promise to fully indemnify) would have been one-half the amount which plaintiff was compelled to pay. His loss from defendant's failure to pay or indemnify in full, if such was the agreement would have been the full amount paid by plaintiff because thereof.

The contract, according to the evidence, was, if plaintiff signed the note with defendant's son, (1) defendant would sign it; (2) defendant would pay the note and would see that plaintiff would lose nothing because of signing it; (3) it might be found that plaintiff was to sign the note instead of defendant and defendant was to pay it, and plaintiff to lose nothing from signing it.

[5] Whether defendant did or did not sign the note, it might be found upon the evidence that defendant induced plaintiff to sign and agreed to fully indemnify him for doing so. Whether or not the length of time of the loan, or the rate of interest, was specifically agreed to by defendant or to his knowledge, does not appear. Defendant contends that he is not shown to have agreed to the amount of the loan, but taking the evidence in its entirety, as we must as of a continuous transaction, it may be found that the loan as understood by defendant was to be for $5,000.

Defendant's argument that he is not shown to have agreed to the time or rate of interest of the loan would have more force if the agreement contended for were merely that he was to sign as a cosurety with plaintiff, but the testimony is that defendant agreed to sign the note and to pay it, and plaintiff would lose nothing, and, if plaintiff signed instead of defendant, plaintiff would never lose anything--defendant would pay.

[6] The question is whether the evidence as matter of law shows no more than an incomplete agreement looking to the making of a complete contract in the future, one merely envisaging the execution of a note by defendant and plaintiff as cosureties whether, until defendant agreed specifically to the time and rate of interest or other conditions of the note, the agreement was incomplete, or whether the jury might find that the defendant positively agreed to the negotiation of a loan of $5,000 and the execution of a note representing it, and agreed to indemnify plaintiff if he would sign a note. This question was not raised by defendant's motion to direct, one ground of which was that any oral statement by defendant to plaintiff that he would indemnify was abandoned and abrogated. We have held that the trial court may disregard the absence of specific grounds of motion to direct and...