Whipple v. Parker

• Decision Date: 08 July 1874
• Citation: 29 Mich. 369
• Court: Michigan Supreme Court
• Parties: John L. Whipple v. George H. Parker

29 Mich. 369

John L. Whipple v. George H. Parker

Supreme Court of Michigan

July 8, 1874

Heard April 8, 1874

Error to Wayne Circuit.

Assumpsit. Plaintiff brings error. Reversed.

Judgment reversed, with costs, and a new trial awarded.

S Larned and Henry M. Cheever, for plaintiff in error.

George H. Prentis and G. V. N. Lothrop, for defendant in error.

Christiancy J. Cooley and Campbell, JJ., concurred. Graves, Ch. J., did not sit in this case.

OPINION

Christiancy, J.

Before proceeding to the main questions in this case, we will dispose of the questions raised by the eleventh and twelfth assignments of error. The evidence showed a settlement between the parties, February 23, 1866, when the following receipt was given by Parker:

"Detroit, February 23, 1866.

"This is to certify that I have this day settled with J. L. Whipple, jumped accounts to date.

"George H. Parker."

The parties were joint owners or tenants in common of a tug. The defendant offered in evidence a bill of one hundred and fourteen dollars and thirty-four cents, for supplies furnished the tug in 1865, to which plaintiff objected on the ground that it was cut off by the settlement and receipt of February 23, 1866. But the defendant was allowed to prove (under his notice of set-off), against plaintiff's objection, that this bill was not presented until April 2, 1866, when defendant paid it. The witness was also shown a wood draft drawn by plaintiff, on the master of the tug, November 4, 1865, for wood furnished the tug prior to that date, and was asked who paid it, to which plaintiff's counsel objected for the like reason; but defendant was allowed to show that it was not presented for payment till August 7, 1866, when he paid it.

We see no error in this ruling, for, though the receipt shows that the parties "jumped accounts," it cannot, without evidence to that effect, reasonably be supposed that the defendant intended to include or acknowledge payment for what he had not yet paid, and which at the time did not constitute an item of account against the plaintiff, but accrued afterwards; especially as it does not appear that he knew of the existence of either of these outstanding claims against him and the plaintiff at the time.

The two main questions in the case are: First, Whether there was competent proof that the company or association, called the Whipple Manufacturing Company, was a corporation; and, if not, a subordinate question, whether the plaintiff could recover without such proof; and, Second, Whether the contract proved was void under the statute of frauds; and, if so, then another subordinate question, whether the plaintiff would still be entitled to recover (under the common counts), upon a quantum meruit.

We shall consider first the question upon the statute of frauds, and if necessary, that suggested as subordinate to it; because, if the contract and the nature of the case upon the evidence be such, that in consequence of the statute of frauds, the plaintiff was not entitled to maintain his action at all, either directly upon the contract under the special count in the declaration, or upon the quantum meruit, then the first question mentioned in reference to proof of the corporation, and the secondary question connected with it, will become immaterial.

The contract, which the evidence tended to show, was substantially that, in consideration that the plaintiff would procure the defendant to be admitted as a partner in the Whipple Manufacturing Company, and to have one-fourth interest in the same (one-half the plaintiff's interest for which the plaintiff had paid), and in the business to be carried on and the profits to be made by it, without defendant being called upon for any compensation until the end of three years, he, the defendant, would, at the expiration of three years, pay whatever that interest should be worth; or rather, as I think, by reasonable construction (when considered in connection with all the circumstances), whatever the business as developed at the end of three years, should show that the said quarter interest was fairly worth at the time the contract was made, and the interest given to the defendant. The evidence also shows that whatever the plaintiff was to do, was expected to be, and was, in fact, then presently and at once performed, by making the defendant the owner of one-fourth interest in the company, for which the plaintiff had already made arrangements to pay; and which, in the organization of the company, then presently organized, he did pay, and of which the defendant received the benefit without having paid any compensation; but for which, as stated above, he agreed to pay at the end of three years.

By our statute of frauds "every agreement, contract or promise shall be void which by its terms is not to be performed in one year from the making thereof, unless such agreement, contract or promise, or some note or memorandum thereof, be in writing and signed by the party to be charged therewith, or by some person by him thereunto lawfully authorized."--Rev. Stat. of 1846, ch. 81, § 2 (Comp. L. of 1871, § 4698).

By the sixth section of the same chapter, "the consideration of any contract, agreement or promise required by the chapter to be in writing, need not be expressed in the written contract, agreement or promise, or any note or memorandum thereof, but may be proved by any other legal evidence."

It is manifest that this last section, in respect to the statement and proof of the consideration, has no direct application to any case where no part of the contract on the part of either party has been put in writing, but only to cases where the contract on the part of the party "to be charged therewith" (usually, if not always, the defendant, whose portion of the contract or whose promise is put in writing and signed by him), though this section may have some effect, and throw some light upon the question here, which has been so much discussed, and which does not seem yet to be wholly settled elsewhere upon the authorities, whether under the statute of frauds the contract or agreement on the part of both parties is not to be treated as one entire contract, and therefore all the stipulations of both required to be in writing,--a question which it is unnecessary to discuss here, though it is proper to notice that this provision seems to favor the construction before and since this provision frequently adopted by the courts, that the "agreement required by the statute of frauds to be in writing was only the agreement of the party to be charged, and for the breach of some part of which the action is brought, and that an action might be sustained by the other party, though his portion of the agreement was not in writing, provided the contract on his part was to be and was fully executed and performed, either immediately or within the year.

But the consideration for the agreement, promise or stipulations of the party to be charged and which are in writing, may, and perhaps generally does, consist of counter promises or executory stipulations to be performed by the other party; and if these are not, by his portion of the contract, to be performed till after the expiration of a year, it may well be doubted whether this statute, dispensing with a written statement of the consideration, would apply to the case, and allow such a consideration to be proved by parol; and if he were sued upon his portion of the contract, he would be the party to be charged. But as there is no written contract, these questions do not arise here, and I shall not discuss them.

It has sometimes been said that if the unwritten contract was to be performed on one side within the year, especially if it were even in fact so performed, this takes the contract out of the statute as to both, though the other party was not to perform his part till after that period.-- Donellan v. Read, 3 Barn. & Adol., 899; and this has been followed by several cases, both in England and some of the United States, in which it seems to have been intimated that, if the consideration was actually paid by one party, he might maintain an action upon the verbal contract or undertaking of the other party, though that was not to be performed till after the expiration of the year. But I confess my inability to see how the fact of the consideration having been paid down, or within the year, or yet to be paid, affects at all the question whether the defendant's undertaking, contract or promise sued upon, was to be performed within or after the year; or if only to be performed after the expiration of the year, how the action can be maintained against the "party charged thereby;" or, under our statute, how the contract can be valid and the defendant be "charged therewith," unless that portion of the contract, at least, upon which his obligation arises, is in writing. To hold otherwise, would, it seems to me, be a direct and palpable violation of both the letter and purpose of the statute, and a clear disregard of the considerations and policy which led to its enactment. Nor can I see what bearing the question of consideration has upon this particular point, whether the action can be maintained upon the special contract itself.

But if the contract has been executed by the other party, and he has received the consideration, and accepted its benefit, an action may be...