Roberts v. First Nat. Bank of Fargo

Decision Date15 June 1899
Citation79 N.W. 993,8 N.D. 474
PartiesROBERTS v. FIRST NAT. BANK OF FARGO (BEMIS BROS. BAG CO., Intervener).
CourtNorth Dakota Supreme Court
OPINION TEXT STARTS HERE
Syllabus by the Court.

1. Part payment of an existing indebtedness which is due is not consideration for a new promise. Accordingly, held, that the promise of a creditor to his debtor, which is made at the time of a partial payment by the latter, that he will “take care of” a certain judgment against the latter in favor of a third person, is without consideration, so far as it is dependent upon such payment.

2. The consideration for a promise may be found in some prejudice either suffered or agreed to be suffered by the promisee, other than such as he is at the time lawfully bound to suffer. Held, that the facts stated in the opinion do not show that the promisee either suffered or agreed to suffer any prejudice, and hence the promise, which has no other support, is therefore without consideration.

3. A chose in action may be transferred either by parol or by written assignment.

4. It appears that on January 30, 1896, one R. made a written assignment to the plaintiff of a money demand owned by her against the defendant bank; further, that prior thereto, and on January 25, 1896, the account was garnished by the intervener, who is her creditor. There is some evidence tending to show that she had assigned the account to plaintiff by parol about a month prior to the written assignment. Held, that under this conflict of evidence the material inquiry as to when the account was transferred so as to vest title thereto in the plaintiff was entirely a question for the jury.

5. The court, in substance, instructed the jury that, if they found that at a time prior to the garnishment an oral agreement for the sale of the account to plaintiff was reached, then they must find for plaintiff. Held, that this instruction was erroneous, for the reason that it permitted the plaintiff to recover upon the account, as against the intervener's garnishment thereof, even though the title thereto may not have vested in plaintiff prior to such garnishment; further, in not confining plaintiff's right to an actual purchase of the account, as distinguished from an agreement to purchase.

Appeal from district court, Cass county; Charles A. Pollock, Judge.

Action by William A. Roberts against the First National Bank of Fargo. The Bemis Bros. Bag Company intervened. Judgment for plaintiff. From an order granting a new trial, he appeals. Affirmed.Ball, Watson & Maclay, for appellant. Newman, Spalding & Stambaugh, for respondents.

YOUNG, J.

At the trial of this action in the district court the jury returned a verdict for plaintiff for $3,842.29. The defendant and intervener made a motion for a new trial, which was granted. This appeal is from the order granting the new trial. Plaintiff is seeking to recover the balance of a debt originally owed by the defendant bank to his mother, Matilda M. Roberts, and assigned to him prior to the commencement of this action. The intervener, the Bemis Bros. Bag Company, is a creditor of Matilda M. Roberts, and it asserts a claim to such balance as may be due from the bank, basing its right thereto upon a garnishment of the account which it claims to have made prior to the alleged assignment to plaintiff. The facts giving rise to the alleged indebtedness of the bank to Matilda M. Roberts may be stated as follows: Originally Matilda M. Roberts was indebted to the defendant bank in a large sum, upon certain promissory notes executed by her as maker. In addition she was liable to the bank as guarantor on three separate notes of other parties, which are named in the record as the Vidger & Huff, Foley, and Norcross notes, and which she had discounted at the bank. All of the foregoing indebtedness was secured by her mortgage upon property owned by her in Fargo, and known as the “Fargo Roller Mills.” The defendant bank had instituted foreclosure proceedings to subject this property to the payment of the debt secured. Mrs. Roberts resisted the foreclosure, and answered in the action. On July 25, 1890, a compromise settlement of the pending suit was made, which furnishes the cause of action which plaintiff sets up in his complaint. By the terms of this settlement, Mrs. Roberts was to withdraw her answer, and permit the bank to take judgment in the foreclosure action for the amount secured by the mortgage, which judgment amounted to $22,669.85; also, to give a quitclaim deed of the mill property to the bank, and surrender possession thereof to it immediately. There is practically no disagreement as to the foregoing facts, but it is the bank's contention that in addition thereto Mrs. Roberts was to get the Vidger & Huff, Foley, and Norcross claims, which it then held with her guaranty, and which does not appear to have been released, in the form of new notes, guarantied as before, and deliver them to the bank in lieu of the old notes, and that this has not been done. It is conceded that the bank agreed to pay Mrs. Roberts the sum of $4,000 upon the performance by her of certain conditions, some of which we have mentioned, and a large portion of which it is beyond dispute that she kept. It appears that she withdrew the answer which had been interposed in the foreclosure proceedings; also, that she gave possession of the mill property to the defendant; further, that she prepared and executed a quitclaim deed, and offered to deliver it to defendant. It is conceded, also, that a portion of the $4,000 was paid to Mrs. Roberts, or to C. A. Roberts, her husband, for her, but the exact amount is in dispute. The motion for new trial was not addressed to the discretion of the court, but was made entirely upon questions of law, and the order of the court granting the same must stand or fall according to the correctness of such determinations. Such reference to the facts as we make is only for the purpose of presenting the real questions before us.

In addition to other defenses,-including the interposition of the Vidger & Huff, Foley, and Norcross claims as offsets, to which reference has already been made,-defendant alleged, also, as an offset, that from and after April 22, 1893, it was the owner of a certain judgment rendered and entered against Matilda M. Roberts in favor of the Fargo Building Association on February 21, 1885, upon which there is claimed to be due the sum of $545.05, with 7 per cent. interest since April 27, 1885. This is known as the “Inman judgment.” Plaintiff resists the allowance of this judgment as an offset upon the ground, as he asserts it, that the defendant bank had agreed to pay it, or at least to save Matilda M. Roberts harmless from it. To make this point clear, it is necessary to state that in 1887, which was prior to the transactions to which we have referred, Matilda M. Roberts was indebted to the bank in the sum of $35,000. In that year she borrowed $20,000 from one M. B. Erskine, and used the proceeds of the loan to reduce the amount she owed the bank. As security for this loan, she executed a mortgage upon certain real estate owned by her in the city of Fargo. In all of the negotiations and matters connected with this loan, Mrs. Roberts was represented by C. A. Roberts, her husband. It also appears that George Q. Erskine represented the mortgagee's interests, and attended to the security. George Q. Erskine was also vice president of the defendant bank. The Inman judgment was a first lien upon the property which Mrs. Roberts was about to include in the mortgage for the $20,000 loan. It is at this stage of the negotiations, and under these circumstances, when the mortgage was about to be given, that it is claimed that George Q. Erskine promised C. A. Roberts that the bank would either pay this judgment, or at least hold Mrs. Roberts harmless from it. Upon this branch of the case the court, in substance, instructed the jury that it was plaintiff's contention “that the defendant bank agreed to save the said Matilda M. Roberts harmless from anything due on said judgment,” and that the allowance of the judgment as an offset depended upon the question “whether or not the bank agreed to save Mrs. Roberts from liability on account of said judgment.” In granting a new trial the court embodied in its order, as one of the reasons for granting it, the following: “The court should not have submitted to the jury the question whether the defendant bank agrees to assume, and relieve Matilda M. Roberts from liability for, the payment of the Inman judgment, for the reason that, as matter of law, there was no consideration for such alleged promise or agreement.” Counsel for the bank also urge other legal reasons in support of the decision of the trial court that in was error to submit to the jury the question as to the assumption by the bank of liability as to this judgment. It is unnecessary to set them out here, for we are convinced that the court's order was properly made, upon the particular ground specified, namely, that there was no consideration for the alleged promise. It is true, the bank received the $20,000 derived from the loan which Mrs. Roberts made from M. B. Erskine, and applied it upon her indebtedness. But in receiving it the bank obtained only what it was legally entitled to, and in paying it Mrs. Roberts only performed in part an existing legal obligation. It is a well-settled principle that the doing of an act which is required by previous agreement does not furnish a consideration for a new contract. For this reason it is held that the payment of a part of an indebtedness which is due is not consideration for a new promise. Parmelee v. Thompson, 45 N. Y. 58;Kellogg v. Olmsted, 25 N. Y. 189; Royal v. Lindsay, 15 Kan. 445; Ayres v. Railroad Co., 52 Iowa, 478, 3 N. W. 522; Bish. Cont. §§ 48-50. This is conceded by counsel for plaintiff, and no claim is therefore made that the payment of the $20,000 created a consideration to support the...

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