Schmidt v. Griffith

• Decision Date: 10 May 1920
• Docket Number: 388
• Citation: 221 S.W. 476,144 Ark. 8
• Parties: SCHMIDT v. GRIFFITH
• Court: Arkansas Supreme Court

221 S.W. 476

144 Ark. 8

SCHMIDT v. GRIFFITH

No. 388

Supreme Court of Arkansas

May 10, 1920

Appeal from Franklin Circuit, Ozark District; James Cochran, Judge reversed.

Judgment reversed and cause dismissed.

Robert J. White, for appellants.

If the option and lease contracts have any probative force it is to explain the intention of the parties of the list of debts assumed and what they want in that list contract between appellants and the Alix Coal Company. These, taken with the evidence of Coffer and R. A. Schmidt, show that appellants never intended to pay or assume appellee's debt, but the only agreement entered into, or intended, was to protect the property against liens or claims which might become liens by suit or otherwise. The Alix Coal Company did not owe Griffith anything and there was no reason for them to exact such promise, as they could not, and did not, recover any benefit from such a promise, and there was no consideration directly moving appellants to make such promise to Alix Coal Company for appellant's benefit, under Kirby's Digest §§ 5999-6002. See 65 Ark. 27; 86 Id 212-218; 9 L. R. A. (N. S.) 889.

There being no sufficient testimony to prove an agreement made by appellants with Alix Coal Company to pay appellee's debt, a new trial should have been granted and the cause dismissed. 73 Cal. 522; 76 F. 130.

If this action would lie at all on a promise made by appellants to Alix Coal Company for the benefit of appellee, it would be in assumpsit for the full amount of the debt beyond the jurisdiction of the justice of the peace. 169 S.W. 959.

Partain & Carter, for appellee.

The agreement with the Alix Coal Company to pay all the debts of the Schmidt-Blakely Coal Company except the one excepted was an unconditional promise to pay appellee's debt, and they are bound by it.

Where a promise is made for the benefit of a third person, the beneficiary may sue for a breach thereof. 46 Ark. 132; 31 Id. 144; Ib. 411; 90 Ark. 351; 25 Id. 196; 93 Id. 346; 107 Id. 118; 112 Id. 260.

OPINION

MCCULLOCH, C. J.

The facts of the case are these: appellee is a creditor of the Schmidt-Blakely Coal Company, a domestic corporation engaged in coal mining, the debt being evidenced by certain promissory notes executed to cover a pre-existing debt. Appellants were president and secretary, respectively, and the owners of practically all of the stock of said corporation, and in January, 1919, they entered into a written contract whereby they sold and delivered all of the property of the Schmidt-Blakely Coal Company to certain individuals, who organized another corporation, called the Alix Coal Company, for the purpose of operating the mines. In the contract of sale the new corporation, the Alix Coal Company, assumed payment of certain specified debts of the Schmidt-Blakely Coal Company, which were mentioned in a list attached to the contract. This list does not contain the debt to appellee, but in another clause of the contract appellants undertook and agreed with Alix Coal Company to "protect it against any other claims against the Schmidt-Blakely Coal Company and Superior Coal Company, arising prior to January 15, 1919, either paying same or allowing same to be deducted from moneys due us, after settling through suit or legal adjustment."

There was a preliminary contract between the parties giving the purchasers an option, which was afterward accepted, and the contract from which the above quotation is taken was the writing which evidenced the consummation of the sale. The option contract contained a stipulation that "if this option is exercised, the said R. A. Schmidt and Charles Schmidt are to deliver the property herein mentioned free and clear of all liens, charges and obligations of every character and description, and that they are to pay and satisfy all demands, debts and obligations of every character and description, due from and by the Schmidt-Blakely...