Resseter v. Waterman

• Decision Date: 19 June 1894
• Citation: 151 Ill. 169,37 N.E. 875
• Parties: RESSETER v. WATERMAN.
• Court: Illinois Supreme Court

151 Ill. 169

37 N.E. 875

RESSETER

v.WATERMAN.¹

Supreme Court of Illinois.

June 19, 1894.

Appeal from appellate court, second district.

Assumpsit by O. A. Resseter against William Waterman. Plaintiff obtained judgment, which was reversed by the appellate court. Plaintiff appeals. Reversed.Dixon & Bethea, for appellant.

O'Brien & O'Brien, for appellee.

This was an action of assumpsit in the circuit court of Lee county, brought by appellant against appellee, to recover damages alleged to accrue to appellant by reason of the failure of appellee to perform his promise to obtain a chattel mortgage upon the personal property of one Ole Severson to secure the payment of certain indebtedness of John and said Ole Severson to appellee, and for which appellant was security. The declaration alleged, in substance, that on April 12, 1889, Waterman promised Resseter that if he (Resseter) would sign a promissory note for $250, dated February 15, 1889, payable to the order of Waterman, one year after date, as surety for the said Seversons, he (Waterman) would forthwith obtain a chattel mortgage upon all the personal property of said Ole Severson to secure the payment of said note, and to secure the payment of a previous note for $250, dated November 15, 1888, given by the said Severson to Waterman, and also signed by plaintiff as surety. It is also alleged that said Ole Severson had, during the period covered by the agreement, sufficient unincumbered personal property to secure the payment of both said notes, and that he was then and afterwards ready and willing to give a chattel mortgage sufficient to indemnify the plaintiff as surety, and for that purpose, of which the defendant had notice; that the defendant promised to indemnify and save harmless the plaintiff as surety, and plaintiff, confiding in the said promises, executed, as surety, and delivered to defendant, the said note of February 15, 1889; that said notes, afterwards, and before the maturity thereof, were negotiated by the defendant; that both said Seversons are insolvent, and plaintiff solvent, and legally bound to pay said notes; that the defendant did not and would not take a chattel mortgage from said Ole Severson, and did not and would not indemnify plaintiff, as promised; and that plaintiff, relying upon such promise, did not himself procure a chattel mortgage, etc. It is further alleged that the holder of said notes, Ella Waterman, had, May 1, 1890, obtained judgment thereon for $750, which was a lien upon the plaintiff's property, and that he will be forced and obliged to pay the same, etc. The defendant pleaded the general issue of non assumpsit, the plea of non damnificatus, and also set up the statute of frauds. Trial was had by a jury, who returned a verdict in favor of the plaintiff for $583, and judgment entered for the amount. On appeal to the appellate court the judgment was reversed, without remandment of the cause; and, that court having granted a certificate of importance, the plaintiff below appeals.

SHOPE, J. (after stating the facts).

In this case there is no longer any controversy about the facts. They are, by both the circuit and appellate courts, found to be substantially as contended for by the plaintiff. But the appellate court, conceding the case to be with the plaintiff upon the facts, held that the agreement was one to answer for the debt, default, or miscarriage of another, and, not being in writing, was within the statute of frauds, and therefore void. The principal question presented for our consideration is whether or not the agreement in question is obnoxious to the provision of the statute of frauds ‘that no action shall be brought, * * * whereby to charge the defendant upon any special promise to answer for the debt, default or miscarriage of another person,’ unless the promise be in writing, and signed by the party to be charged, etc. Rev. St. c. 59, § 1. A consideration of this question opens the field of discussion and classification of the various cases illustrating the application of the rule of liability under this clause of the statute, and the nice and well-considered distinctions which have been drawn and followed; but the necessity therefor does not exist, and we forbear entering thereon. See Leonard v. Vredenburg, 8 Johns. 29;Farley v. Cleveland, 4 Cow. 432;Mallory v. Gillett, 21 N. Y. 412;Anderson v. Spence, 75 Ind. 315; Nelson v. Boynton, 3 Metc. (Mass.) 396. It may be said to be the settled rule that, where the agreement is original and independent, it is not within the statute; if collateral, it is. Eddy v. Roberts, 17 Ill. 505;Geary v. O'Neil, 73 Ill. 593;Hartley v. Varner, 88 Ill. 561. And the agreement may be regarded as original, and not within the statute, although it directly involves the interests of or concerns a third party, or may relate to an act, or the performance thereof, by one not a party to the contract. Supra, and cases cited. It is therefore necessary to ascertain whether or not the agreement in question was an original and independent one,-a question which has been found by the courts, in a vast number of cases, to be one not of easy determination, and, happily, in this case, one of no serious difficulty.

It is contended that the promise of Waterman, made in consideration of appellant executing as surety the $250 note dated February 15, 1889, to obtain a chattel mortgage on all of Ole Severson's personalty to secure the payment of that note, and also another one for like amount, previously given by the same party with appellant as surety, was a promise to answer for the debt, default, or miscarriage of another; that is, that there was an implied obligation upon the part of Ole Severson to indemnify and hold harmless his surety, and that the promise of appellee was purely collateral thereto. This position we think is not tenable. In order that the promise can be held to be within the statute, it is essential that there be a binding and subsisting obligation or liability to the promisee, to which the promise is collateral; in other words, ‘that the party for whom the promise has been made must be liable to the party to whom it is made.’ 3 Pars. Cont. 21, note p; Hargreaves v. Parsons, 13 Mees. & W. 561, 14 L. J. Exch. 250; Eastwood v. Kenyon, 11 Adol. & E. 438; Westfall v. Parsons, 16 Barb. 645;Preble v. Baldwin, 6 Cush. 549; Pratt v. Humphrey, 22 Conn. 317; Alger v. Scoville, 1 Gray, 391;Barker v. Bucklin, 2 Denio, 45;Perkins v. Littlefield, 5 Allen, 370;Tighe v. Merrison, 116 N. Y. 263, 22 N. E. 164, and cases cited. In Hargreaves v. Parsons, supra, it was said by Parke, B.: ‘The statute applies only to promises made to the persons to whom another is already, or is to become, answerable. It must be a promise to be answerable for a debt of, or a default in some duty by, that other person, towards the promisee.’ In Perkins v. Littlefield, supra, Bigelow, J., said: ‘It is the well-settled doctrine that the provision in the statute is applicable only to promises made to persons to whom another is answerable.’ Not only must this be so, but it is quite as well settled that the liability of the person for whom the promise is made, to the promisee, must be one which is capable of enforcement; and the doctrine is stated to be (Throop, Verb. Agr. § 127) ‘that the principle requires that the liability to which that of the promisor is supposed to be collateral should be one which can be enforced by proceedings at law or in equity; and therefore, unless it appears that some person, other than the promisor, has incurred an actual liability with respect to the subject-matter of the promise, the agreement is not within the statute, although the third person may be under an imperfect or merely moral obligation to respond’ (Downey v. Hinchman, 25 Ind. 453;Read v. Nash, 1 Wils. 305; Smith v. Mayo, 1 Allen, 160; Tighe v. Morrison, supra); for, if the third party be not liable to answer, it could not be said that the undertaking of the promisor was one to ‘answer’ for the former's ‘debt or default,’ and therefore within the statute. There being no liability of the third party to the promisee, the promisor would have nothing to answer for; and his promise, therefore, would necessarily be an original and independent undertaking, and not a collateral one. No express agreement that Severson should save harmless his surety is shown or pretended; and, while he might properly be regarded as under an implied obligation to indemnify his surety, he was not bound to do so. Neither at law nor in equity was such implied obligation susceptible of being enforced. No bill would lie to compel performance, nor action for damages for its nonperformance. Upon this implied obligation, the surety, after discharging the indebtedness, would have his action over against his principal. It is manifest, and requires no citation of authority to show, that the only obligation upon the part of Severson was that arising by operation of law,-to reimburse, and make good to his surety, the amount expended in payment of his debt. It is a familiar rule that the surety can maintain no action against his principal until he pays the debt. In the absence of express agreement, his only remedy, then, would be assumpsit for the money actually paid, and interest. And, even where the principal has expressly promised to indemnify and save his surety harmless, the latter can maintain no action on the promises unless he can show that he has given his own notes, or made other like arrangements equivalent to payment of the indebtedness. 3 Pars. Cont. 186, 187, notes. As said by Mr. Parsons (3 Cont. 21, note p): ‘The question would seem to depend upon the time when the promise of C., the person for whom the guaranty is given, arises; and this, again, will depend upon the particular circumstances of the case. If these are such as to authorize the inference that C. made an actual promise to indemnify his guarantor at the time when the...