Rowell v. Smith

• Decision Date: 10 January 1905
• Citation: 102 N.W. 1,123 Wis. 510
• Parties: ROWELL v. SMITH.
• Court: Wisconsin Supreme Court

123 Wis. 510

102 N.W. 1

ROWELL

v.SMITH.

Supreme Court of Wisconsin.

Jan. 10, 1905.

Syllabus by the Judge.

1. A judgment is conclusive between the parties thereto and their privies in a second action on the same claim or cause of action, as to all questions that were, or might have been, litigated in the first action, and is likewise conclusive in a second action upon a different claim or cause of action, as to every proposition within the issues at first, which was presented for adjudication and decided. In this rule the mere personal effect is confined to the parties, while the term “privity” suggests mutual succession or relation to the same property or property right. Hart v. Moulton et al., 80 N. W. 599, 104 Wis. 354, 76 Am. St. Rep. 881.

2. Where a person not a party to an action will be liable to another who is a party if the latter's claim or defense shall fail, and such person has notice of the action and opportunity to participate therein in defense or maintenance of his position, he will be bound by the result the same as if he were a party to such action.

3. A cause of action to enforce a supposed valid agreement to answer for the debt, default or miscarriage of another is different from one based on the circumstance resulting in the supposed valid agreement to compel specific performance of a verbal agreement to make a valid guaranty or to reform one defectively written so as to make the same accord with the intention of the parties.

4. The doctrine of election of remedies applies only where there are two or more appropriate ways to vindicate the right of a controversy, but the relations between the parties necessary to the pursuit of one successfully, are such that concurrent existence of those necessary to the pursuit of the other or others is impossible.

5. Unsuccessful use of a remedy, supposed to be, but in effect not, appropriate to vindicate the right of a particular matter, either because the facts turn out to be different than plaintiff supposed them to be, or the law applicable to the facts is found to be different than supposed, though the first action proceeds to judgment, does not preclude plaintiff from thereafter invoking the proper remedy.

6. Neither the doctrine of election or res adjudicata applies to the situation suggested in the preceding paragraph, though if the second remedy invoked is in equity and the defendant would be seriously prejudiced by plaintiff's mistake if he were permitted to proceed the second time, the court might apply principles of estoppel in pais if deemed necessary to prevent injustice.

7. Where more than one remedy to deal with a single subject of action exists and they are inconsistent with each other, after the choice of one with knowledge, or reasonable means of knowledge, of the facts, the other no longer exists.

8. Where more than one remedy to deal with a single subject of action exists and they are not inconsistent all may be used concurrently, but a satisfaction in one is a satisfaction in all.

9. Where only one remedy exists to deal with a single subject-matter, but through mistake one not appropriate is invoked, the proper remedy is not thereby waived.

10. Mere delay for any length of time, short of a period sufficient to extinguish the right under the statute of limitations, does not bar an action in equity to vindicate such right.

11. Mutual mistake, either of fact in making a contract or of law or fact in reducing the same to writing, is remediable, in the absence of a waiver of the right in that regard or estoppel to the assertion of it.

12. A verbal agreement to make a collateral promise can no more be dealt with in equity to save the collateral promisee from the consequences of noncompliance with the statute of frauds, than a written agreement in that regard, which is fatally defective for noncompliance with such statute.

13. A court of equity will not take jurisdiction to compel specific performance of a verbal agreement to make a valid contract of guaranty where it would not reform such a contract, through mutual mistake defectively reduced to writing.

14. A mere collateral promise to answer for the debt, default or miscarriage of another, invalid because not reduced to writing, or because defectively so reduced, is not susceptible of part performance as between the principal contracting parties so as to afford the collateral promisee a right of action in equity to compel the making of a valid guaranty in writing, or to reform the one defectively made.

15. The doctrine that where a contract required to be made in a particular way to be valid under the statute of frauds is not so made, a court of equity will deem the statute “uplifted” and enforce the obligations growing out of the circumstances of the situation so as to prevent the consequences that would otherwise flow from such statute, where if that were not done, it would be used as an instrument of fraud instead of one to prevent fraud does not apply, the effect would be to essentially nullify the statute.

16. In applying the maxim “There is no wrong without a remedy” courts of law and equity as well must regard wrong, so called, which is not remediable because of the statute on the subject, as not wrong at all in a judicial sense.

17. The doctrine as to part performance taking a transaction out of the statute of frauds so that the relations between the parties may be dealt with judicially to prevent injustice, is grounded on the idea that the opposite party by the statute and such part performance has obtained title to something of value for which, independently of the statute, he should render an equivalent for.

18. The doctrine mentioned in the last paragraph cannot apply as between the parties to a mere collateral promise which is within the statute of frauds, because as to such neither part nor full performance by the collateral promisee enriches the collateral promisor.

Appeal from Circuit Court, Portage County; Chas. M. Webb, Judge.

Action by G. D. Rowell against Franklin T. Smith, administrator. Judgment for defendant, and plaintiff appeals. Affirmed.

Action for equitable relief. Plaintiff sold one Goodrick 470 shares of the capital stock of the Valley Iron Works Manufacturing Company, and A. L. Smith, since deceased, 170 shares of such stock under an agreement that the purchase price to the former amounting to $5,000, should be paid in accordance with five $1,000 notes due in two, three, four, five and six years, the first three thereof to be guarantied by said Smith. Pursuant to the verbal agreement in that regard plaintiff delivered the stock, Goodrick signed the five notes and Smith placed on the back of the first three to fall due the words:

“I hereby guarantee the payment of the within note.

A. L. Smith.”

--Omitting by mistake, as is alleged, the words “for value received” from the body of the guaranty; the notes were delivered in the form indicated to the plaintiff and the Goodrick stock was placed in Smith's possession to secure him against loss on account of the guaranty. Smith and Goodrick were jointly interested in purchasing the stock to the end that they might control the policy of the corporation. Before the maturity of the two-year note plaintiff transferred it to a bona fide holder for value, and thereafter before such maturity Smith recognized his agreement to guaranty the payment thereof by duly waiving demand for payment of the same and protest for nonpayment, and placing thereon, in due form, a guaranty for such payment, expressing a sufficient consideration to satisfy the statute of frauds. Plaintiff at the time of the commencement of this action was the owner of the notes and Goodrick was insolvent.

The foregoing circumstances were pleaded by the plaintiff in the form of four separate causes of action against the personal representatives of Smith, followed by a prayer for relief as follows:

(1) Specific performance of the agreement to guaranty the second and third notes. (2) For reformation of such notes. (3) Judgment upon the note validly guarantied. (4) Judgment for $2,000, on account of the purchase price for the stock represented by the second and third notes. (5) Such other relief as to the court might seem just.

The defendant demurred to each of the pretended causes of action upon four grounds: Want of equity, insufficiency of facts, defect of parties plaintiff and misjoinder of causes of action.

The demurrer was overruled. Defendant then answered to this effect: The alleged guaranty was without consideration and void under the statute of frauds. Before the commencement of this action and on the 6th day of September, 1898, suit was commenced on the notes in question which was thereafter, without trial, discontinued. The Commercial National Bank of Appleton, indorsee from plaintiff on the four-year note commenced an action against the decedent and Goodrick in the circuit court setting forth in the complaint the circumstances alleged in the complaint herein characterizing the making of the guaranty. The action was tried resulting in a judgment dismissing the same as to Smith, and on appeal to the Supreme Court the judgment was affirmed. Lawrence University, a corporation, indorsee of the plaintiff, April 12, 1899, commenced an action against Smith and Goodrick in the circuit court on two of the notes mentioned in the complaint, being the one payable in two years, and the one payable in three years. The decedent appeared and answered and thereafter, before the cause was reached for trial, it was discontinued.

Upon the issues joined the cause was tried resulting in findings of fact as to the circumstances under which the alleged guaranty was made in harmony with the complaint. Among other things the court found specifically, thus:

When the transaction between plaintiff, Goodrick and Smith in regard to the stock was closed up, Smith and the plaintiff were represented by their respective attorneys. The guaranty, as signed, was...