Thompson v. Wheatland Mercantile Company

• Decision Date: 13 November 1901
• Parties: THOMPSON v. WHEATLAND MERCANTILE COMPANY
• Court: Wyoming Supreme Court

66 P. 595

10 Wyo. 86

THOMPSON v. WHEATLAND MERCANTILE COMPANY

Supreme Court of Wyoming

November 13, 1901

ERROR to the District Court, Laramie County, HON. CHARLES W BRAMEL, Judge of Second District, presiding.

Action on written contract for the payment of money brought by the Wheatland Mercantile Company, a corporation, against Herbert J. Thompson. Judgment was rendered for plaintiff, and defendant brought proceedings in error. The facts are stated in the opinion.

Reversed.

W. R Stoll, for plaintiff in error.

Plaintiff below declared on an absolute promise to pay, but the contract proved is a promise to pay upon certain conditions each of which was complied with by the defendant; hence, the plaintiff's claim was unproved in its general scope and meaning, and there was a failure of proof within the meaning of Section 2644, R. S. The instrument relied on is not even a contract. The party suing thereon paid no consideration released nothing, suffered nothing, promised nothing, and had nothing to do under the instrument. It did not sign the contract and was not a party to it. The mere promise of one to pay the debt of another is nudum pactum. (Pike v. Van Riper (N. J.), 30 A. 529.) The signature of the Taits added nothing to the contract. The instrument is ambiguous, and that construction should be given to it that the parties themselves gave to it, the same being reasonable. (Wilson v. Roots (Ill.), 10 N. E., 204; 1 Brandt on Sur. & Guar., Sec. 92 et seq.; Ellis v. Hanson (Mo.), 16 S. W., 198; Meech v. Ensign, 49 Conn. 191; Hendrick v. Lindsay, 93 U.S. 143; People v. Murphy (Ill.), 6 N. E., 488; Rose v. Carb. Co., 60 M. App., 28; Crown C. & T. Co. v. York, etc., Co., 67 Ill.App. 666; Davis v. Ravenna Creamery Co., 67 N. W., 436; W. I. L. Co. v. City, 30 id., 733; Davis v. Shaffer, 50 F. 764; Jenkinson v. Monroe (Mich.), 28 N. W., 663; R. R. Co. v. Blackmar (Minn.), 47 N. W., 172; Hosmer v. McDonald (Wis.), 49 N. W., 112; Lynch v. Scroth, 50 Ill.App. 668; Burgess v. Badger (Ill.), 14 N. E., 850; City v. N. Y. R. C. Co., 28 N. Y. Sup., 614; White v. Amsden (Vt.), 30 A. 972; Tanenbom v. Feist, 26 N. Y. Sup., 748; Pexton v. Smith (Neb.), 69 N. W., 690; M. & M. S. Co. v. Frazer (Ind.), 36 N. E., 378; Hill v. Duluth (Minn.), 58 N. W., 992.) It appears from the evidence that the term "equity" used in the instrument meant the excess that might be obtained for the Tait land over and above fifteen dollars an acre, which amount was to be paid for the land to Tait's grantor. There is no conflict in the evidence as to the construction of the writing.

The case of the plaintiff below was not established by a preponderance of evidence. Its case cannot be established by showing what certain persons thought. No promise was established as alleged in the petition. There was in fact no consideration for the promise of the plaintiff in error, since the Taits had no equity to transfer. There was no equity in the land, and Thompson received nothing whatever for his promise. When a thing transferred is shown to have no existence present or potential or to have ceased to exist before the agreement is completed, and the parties are ignorant of the fact, no obligation is created. There is then a mutual mistake of fact, which avoids the contract. (7 Ency. L. (2d Ed.), 115, and cases cited.) Where consideration is title to real estate and there is no title, the consideration fails. (3 Ency. L., 830; 6 id. (2d Ed.), 673; id., 677-679; id., 789.)

This is not a case where the party sued has promised a debtor that he will pay his debt to another. The promise is that either the debtor or himself will pay, and the promise is made to the creditor. It is not brought within any class of cases where it is held that the beneficiary may sue the promisor. But the right of action is entirely subordinate to the terms of the contract as made. The beneficiary cannot acquire a better standing to enforce the agreement than that occupied by the contracting parties themselves. His right to recovery is subject to the equities between the original parties, and in no case is he permitted to recover where as between the promisor and promisee there has been want or failure of consideration, or for any other reason the contract is void. (7 Ency. L., 109; Ellis v. Harrison (Mo.), 16 S. W., 198; Dunning v. Leavitt, 85 N.Y. 30; Branden v. Hughes, 22 La. Ann., 360; Trimble v. Strother, 25 O. St., 378; Parlin v. Hall, 2 N. D., 473; Crandall v. Payne, 154 Ill. 627; Anderson v. Fitzgerald, 21 F. 298; Bank v. Grand Lodge, 98 U.S. 123; Wheat v. Rice, 97 N.Y. 302; Corne v. Lewin, 95 N.Y. 423; Phalin v. Barney, 11 Vt. 82.) A guarantor is not chargeable beyond the strict terms of his obligation; and is always to be discharged by failure of consideration upon which the contract is founded. (9 Ency. L., 81; 1 Brandt on Suret. & Guar., 93, 94, 122, 123.)

Any instrument, not itself importing a consideration, made expressly payable out of a particular fund, is not payable unless the fund is in existence. (2 Ency. L., 324; I Daniels on Neg. Istr., 161; Chitty on Bills, 41-44; Story on Prom. Notes, 22, 25, 27; Lyman v. N. P. Elevator Co., 62 F. 891.) In this case there was no fund out of which payment was to be made according to the agreement.

Clark & Breckons, for defendant in error.

Where one party sells property to another and the latter agrees with the vendor to pay the purchase price to a third party, such third party may sue the promisor, although he has parted with nothing of value. In England it is held that such a contract may not be enforced, but the rule is different in this country. (Lawrence v. Fox, 20 N. Y.; Hendrick v. Lindsay, 93 U.S. 143; Bishop v. Stewart, 13 Nev. 25; Miliana v. Toginni (Nev.), 7 Pac., 279; Brewer v. Maurer, 38 O. St., 543; Strong v. Marcy, 33 Kan. 109; Company v. Wagner (Cal.), 7 Pac., 705; Johannes v. Company, 66 Wis. 57; Knowles v. Erwin, 43 Hun, 150; Moore v. Hubbard, 15 Ind.App. 84; Duer v. Ruediger, 65 M. App., 407; Kaufman v. Bank, 31 Neb. 667; McCarty v. Blevins, 5 Yerg. , 195; Urquhart v. Brayton, 12 R. I., 169; Farrow v. Turner, 2 A. K. Marsh, 495; Hecht v. Caughran, 46 Ark. 135; Coleman v. Whitney, 62 Vt. 129; Shotwell v. Company, 31 Ala. 727; Dodge v. Mass., 82 Ky. 445; Eddy v. Roberts, 17 Ill. 508; Thompson v. Dearborn, 107 Ill. 93; Wood v. Moriarty, 15 R. I., 521; Lamb v. Donovan, 19 Ind. 41; Horn v. Fuller, 6 N. H., 511; Sharp v. Meyer, 20 Neb. 226; Rogers v. Gosnell, 58 Mo. 590; Bolln v. Metcalf, 6 Wyo. 1.) Therefore, if any benefit was conferred upon Thompson by Mrs. Tait, in consideration of which the promise was made, the Mercantile Company had the right to sue thereon. The transfer made by Mrs. Tate to Thompson was the moving cause for Thompson's promise. She was possessed of certain rights, and upon the performance of certain conditions had the right to the title to the land. In the meantime she had the right to the use and possession of the land, including the use of water for its irrigation. She possessed then certain valuable rights. These rights were assigned to Thompson, and the transfer formed the consideration for Thompson's promise. It is evident that there was sufficient consideration for the promise.

What is the meaning and effect of the contract? In the first place the agreement is to pay a certain sum of money. And the time for payment is named in the contract, viz., on or before November 1, 1896. The only doubt is as to the manner of payment. The intention that the promise to pay is to be limited by the ability of the crops or equity in the land to produce the amount cannot be gathered from the instrument itself. There is no direct expression to that effect. The meaning and effect is that at all events, on or before November 1st, the money will be paid, but if in the meantime the land yields sufficient crops, or is sold for a sufficient sum, then the amount will be paid. Under this construction the contract is not an idle formality. The contract amounted to an absolute promise. (Muncy v. Dantel, 19 Wall., 560; Cota v. Buck, 7 Metc., 588; Sears v. Wright, 24 Me. 279; Palmer v. Hummer, 10 Kan. 464; Mense v. Osborn, 5 Mo., 544; Crooker v. Holmes, 65 Me. 195; Walker v. Woolen, 54 Ind. 164; Gardner v. Barger, 4 Heisk., 670; Court v. Steckman, 74 Pa. St., 14; Kincaid v. Higgins, 1 Bibb., 396; Ubsdell v. Cunningham, 22 Mo. 124; Lewis v. Tipton, 10 O. St., 88.) The same construction must be given to the instrument when the acts and declarations of the parties are considered. This sort of evidence is out of place in this case, as the contract is not ambiguous. But if it is resorted to, then the evidence fully sustains the conclusion of the trial court.

The motion for new trial was not overruled until the term following the trial, and hence the bill of exceptions was not presented until some time during the term after the trial. Was this sufficient to authorize consideration of the bill? (Hicks v. Pearson, 19 Oh., 436; Dayton v. Hinsey, 32 id., 262; Kline v. Wynne, 10 Oh. St., 228.)

W. R. Stoll, for plaintiff in error, in reply.

In assigning her interest in the land to Thompson Mrs. Tait assigned something she had no right to enforce against her vendor. She, therefore, conveyed nothing substantial. But she assigned merely her equity, and she had none. The authorities cited by counsel for defendant in error are not in point. In this case there was no liability of any nature from Thompson to the company outside the contract. The contract being ambiguous, a proper subject of inquiry was the construction placed thereon by the parties. The filing of the motion for new trial, alleging insufficiency of the evidence to support the judgment, carried the objection over the term until the term at which it was overruled, and the exception to such...