Price's Adm'x v. Price's Adm'x

• Citation: 111 Ky. 771,66 S.W. 529
• Parties: PRICE'S ADM'X et al. v. PRICE'S ADM'X. [1]
• Decision Date: 05 February 1902
• Court: Kentucky Court of Appeals

66 S.W. 529

111 Ky. 771

PRICE'S ADM'X et al. v. PRICE'S ADM'X. ^[1]

Court of Appeals of Kentucky.

February 5, 1902

"To be officially reported."

Petition for rehearing. Denied.

Morton & Darnall, for appellants.

John B James, Geo. S. Shanklin, and W. S. Pryor, for appellee.

HOBSON J.

A bare promise, without consideration, by a creditor, to give his debt to his debtor at his death, is unenforceable. Knott's Adm'r v. Hogan, 4 Metc. 99. But if a creditor holding a debt of $4,000 should agree with the debtor to release the debt for an annuity of $500 a year as long as he lived, the agreement would be valid; for a different obligation would be created, which would take the place of the original one. The question to be determined in this case is, to which of these classes does it belong? The writings, executed at the same time, and to be read together are as follows: "One day after date I promise to pay to D. L. Price, or order, sixty-two and 50/100 dollars every three months during his natural life, it being the interest on four thousand dollars which I owe him. S. Price." "Received of S. Price all demands to this date, except sixty-two dollars and fifty cents to be paid every three months during my life, it being the interest on four thousand dollars which he owes me, and which he is to have at my death. D. L. Price." These writings are inartificially drawn, and in construing them the court must give proper effect to each clause, so that the real intention of the parties will be regarded. The substance of them taken together is this: S. Price agrees to pay D. L. Price $62.50 every three months during his life, and in consideration of this D. L. Price acquits him of all demands. It will be observed that the writing signed by S. Price does not obligate him to pay anything except the quarterly sums of $62.50, and that he was not intended to be bound for anything further is shown by the fact that no note was taken from him for the $4,000, although the parties lived for something like 20 years after the transaction. It is true that in the writing signed by S. Price these words are used at its conclusion: "It being the interest on $4,000 which I owe him," and the writing signed by D. L. Price concludes with these words: "It being the interest on $4,000 which he owes me, and which he is to have at my death." But the latter writing begins with the words, "Received of S. Price all demands to this date." There is no necessary inconsistency between these clauses, and that construction of the instrument is to be preferred which does not make them conflict. Taking all the clauses together, the fair meaning of the whole of the two papers is that S. Price at that date owed D. L. Price $4,000, and that D. L. Price released him from this debt in consideration of the quarterly payments which he agreed to make. The concluding words of the last writing, "which he is to have at my death," were intended by the parties to express the idea that the quarterly payments were to be made, as long as D. L. Price lived, on account of the debt, but that at his death all obligation should cease. Unless we adopt this construction, we must reject altogether the words in the second writing, "Received of S. Price all demands to this date," which necessarily import an acquittance in præsenti; and also give no force to the fact that S. Price obligated himself for the payment of nothing except the quarterly installments.

Such being the construction of the contract, is it valid? It is in substance, an undertaking of S. Price to pay D. L. Price an annuity of $250 a year in quarterly installments in consideration of the release of the debt of $4,000 due by him. The contract to pay the annuity was not one for the use or forbearance of money. The annuity was not paid for the use of the money, or for forbearance of D. L. Price to collect it. The consideration of the payment of the annuity was the satisfaction of the debt. No question of usury, therefore arises. If the agreement was made in compromise of matters of difference and dispute between the two brothers, this was a sufficient consideration; and by section 472, Ky. St., the real consideration of a writing may be shown. But, independently of the question of compromise of disputed matters alleged in the answer, the papers on their face show a sufficient consideration. The legal interest on $4,000 was $240 a year. By the contract D. L. Price secured $250, payable quarterly. This was more than the interest on the money, and, as the payments were to be made as long as he lived, constituted a sufficient consideration to uphold the contract. The rule is clear that a valuable consideration, however small, is sufficient to sustain a contract. Thus, in Bishop on Contracts, after referring to this rule, the learned author says, in section 41: "Hence in reason, and, it is believed, substantially on the authorities, the consideration should be something to which a jury can attach pecuniary value; though, like the value of a thing stolen in larceny, it may be less than the smallest coin or denomination known to the law." Further on, in section 45, he says: "Yet inadequacy of value may be strong evidence of fraud, should that question be raised; or it may suggest fraud, and in a gross case it may be the controlling circumstance in establishing the fraud." Whether the consideration for this contract between two brothers, situated as they were, is so inadequate as to suggest fraud, cannot be considered upon demurrer. To raise this question, fraud must be pleaded, and then all the facts attending the execution of the contract may be shown. But on the face of the papers the payee got something of substantial value, which was more than the interest on his money, and the consideration thus appearing is sufficient to uphold the contract on its face. If the contract was based on a sufficient consideration, then the payee was bound by it, and he cannot recover the $4,000 contrary to its terms. If the contract was invalid, and without consideration, the payee was never bound by it, and might have sued for his debt of $4,000 the day it was made; and, more than 15 years having elapsed after this before the bringing of the suit, it is barred by limitation, unless the payments of the annuity take the case out of the statute. The authorities are uniform that a payment which is made by the debtor under the impression that he is paying something else has never the effect of reviving the debt. Thus, in U.S. v. Wilder, 13 Wall. 254, 20 L.Ed. 681, the court said: "The principle on which part payments take a case out of the statute is that the party paying intended by it to acknowledge and admit the greater debt to be due. If it was not in the mind of the debtor to do this, the statute, having begun to run, will not be stopped by reason of such payment." A part payment only arrests the running of the statute where from it a promise to pay the debt may be inferred, for the reason that the waiver of the statute rests with the debtor, and it is a question of intention whether he waived it or not. Thus, in Hodge v. Manley, 60 Am. Dec. 257, the court said: "By the later English authorities, in order to remove the statute bar, the mere fact of part payment is not of itself conclusive. The payment must have been made as part payment of a greater debt, and under circumstances that will warrant the jury in finding a promise to pay the remainder of the debt. Wainman v. Kynman, 1 Exch. 118; Tippets v. Heane, 1 Cromp., M. & R. 252; Waugh v. Cope, 6 Mees. & W. 824. It is unnecessary now to say whether the rule to that extent would be adopted in this state, but we entertain a clear conviction that payment of specific items of charge, unaccompanied by any circumstances showing a recognition of any other account, will not be sufficient to remove the operation of the statute. The payment must at least have been made on the general account, and with a view to affect the general balance, thereby acknowledging the existence of an open, running account, which is to be the subject of the future adjustment." In Brown v. Latham, 42 Am. Rep. 568, the court, speaking of the acknowledgment that would stop the running of the statute, said: "Mere payment is not such an acknowledgment. It must appear that the payment was a partial one, leaving a part of the debt unpaid, and that the debtor so understood it. If this does not appear, the payment does not show his acknowledgment of his liability and willingness to make another payment." The rule was also expressly declared by this court in Richardson v. Chanslor's Trustee, 103 Ky. 425, 45 S.W. 774. The payments in this case were made upon the annuity, and not upon the debt of $4,000. They show no understanding on the...