Wolke v. Fleming

• Decision Date: 26 September 1885
• Citation: 103 Ind. 105,2 N.E. 325
• Parties: Wolke v. Fleming and others.
• Court: Indiana Supreme Court

103 Ind. 105

2 N.E. 325

Wolke

v.Fleming and others.

Supreme Court of Indiana.

Filed September 26, 1885.

Appeal from Allen superior court.

T. E. Ellison, for appellants.

Coombs, Bell & Morris, for appellee.

Elliott, J.

On the twenty-fifth day of November, 1868, Louis Wolke executed to Robert Lowry a written lease demising to him real estate in the city of Fort Wayne for the term of 10 years. The lease was recorded on the twenty-second day of February, 1869. Lowry entered into possession and remained in possession until September 17, 1870, and on that day executed a written assignment to Tucker, Dunn & Henderson. These assignees undertook to perform all the covenants and conditions of the lease. Subsequently Tucker assigned his interest in the leasehold to Frank Furste, who assumed the obligations of Tucker. In 1873 Furste sold and transferred to William Fleming his interest in the business conducted on the demised premises, and put Fleming into possession. The latter agreed, as the complaint alleges, “as part of the consideration of such sale and transfer, to pay the rent, and assumed the covenants of said lease.” The lease contains a covenant binding the lessees to pay $1,200 per annum rent for the demised premises. The rent has not been paid since November 25, 1874, and the premises have been injured by the wrongful act of the tenants in possession.

It is not averred that the assignments to Furste or to Fleming were in writing, nor is it averred that the lessees have been in possession of the premises since November 25, 1874. Fleming, by the purchase of the interest of Furste, became a member of the firm originally composed of Tucker, Dunn, and Henderson, but subsequently changed by the withdrawal of Tucker and the admission of Furste. The appellant succeeded by inheritance to the ownership of the real estate demised. The assignments to Furste and to Henderson are not alleged to be in writing, and they are therefore deemed to have been by parol. Budd v. Kraus, 79 Ind. 137.

The appellee's argument prevailed below, and is renewed here. It rests upon these propositions: First. Fleming's contract is a promise to answer for the default of another, and is within the statute of frauds. Second. The contract of Fleming is within the statute of frauds, because it is one that cannot be performed within one year. Third. An assignment of a lease conveys an interest in real property, and must be in writing.

Of these propositions in their order:

The first proposition is assumed with much confidence, and the question treated as if it were free from difficulty. We do not share counsel's confidence, for we perceive serious difficulty in the question. Fleming's contract is for the benefit of a third person, and his promise is part of the consideration of the sale and transfer of the leasehold interest to him. It is a promise to a third person and not to the creditor. There is an express promise to pay the rent, for this is the effect of his assumption of the obligations of his assignor. We have, then, a contract wherein the assignee of a leasehold agrees, as part of the consideration of the sale and transfer of that interest to him, to pay rent to the owner of the fee. It is difficult, if not impossible, to perceive any difference between such a contract and that of a grantee in a deed who assumes to pay an existing incumbrance on the land. Here, the party for whose benefit the promise is made stands in relatively the same position as a mortgagee; the consideration of the promise for his benefit is the sale of the leasehold interest to the promisors, and the debt which the latter assumes is part of the purchase money. It has been many times decided that the assumption by a grantee of the debt of his grantor is not within the statute of frauds. Josselyn v. Edwards, 57 Ind. 212;Campbell v. Patterson, 58 Ind. 66;Hoffman v. Risk, Id. 113; Carter v. Zenblin, 68 Ind. 436;Davis v. Hardy, 76 Ind. 272, authorities cited p. 274; Rodenbarger v. Bramblett, 78 Ind. 213;Durham v. Craig, 79 Ind. 117, see p. 122; Pounds v. Chatham, 96 Ind. 342. In McDill v. Gunn, 43 Ind. 315, the reasons upon which this doctrine rests are stated, and among the cases cited and approved is that of Barker v. Bucklin, 2 Denio, 45. In that case the defendant bought a pair of horses of his brother, agreeing, as part of the purchase price, to pay a debt of his brother to the plaintiff, and it was held that the contract was not within the statute, the court saying: “Such promise was no more within the statute of frauds than it would have been if the defendant had promised to pay the price of the horses directly to his brother, of whom he purchased them.” The case of Helms v. Kearns, 40 Ind. 124, declares the same doctrine as the cases cited; the court, in the course of the opinion, saying: “The contract was with the debtor to pay his debt to the creditor. Such a contract, it is well established, is not within the statute of frauds.” In the case of Fisher v. Wilmoth, 68 Ind. 449, the point decided appears in this statement of the court: “As to the appellants, the substantial allegations in both paragraphs are that they, for a valid consideration to them paid, agreed with Mauche and Fisher to make certain payments to the plaintiffs, which they failed and refused to make. Such promises are not within the statute of frauds, and are hence binding upon the parties making them.” The court in another case said: “Here the appellant promises the appellee, not that she will pay a debt of a third person to the appellee, but that she will give him certain property and money if he will do a certain act, viz., extinguish the debt due to him from a third person. He executes the contract on his part. It was a valid contract, good between the parties, on good consideration, mutually, and it was not on the part of appellant a promise to pay the debt of another; it was valid, as to her, though not in writing.” Palmer v. Blain, 55 Ind. 11.

In direct line with these cases, and fully maintaining their doctrine, are the cases of Louisville, etc., Co. v. Caldwell, 98 Ind. 245;Indiana, etc., Co. v. Porter, 75 Ind. 428;Headrick v. Wisehart, 57 Ind. 129;Crim v. Fitch, 53 Ind. 214. A recent writer says: “The rule adopted in this class of cases is that the agreement to pay and discharge the debt of another, made with the debtor or some person on his behalf, if founded upon a new and valid consideration, is an independent undertaking, and does not come within the letter or spirit of the statute.” Wood, Frauds, 198. In support of the text, decisions are cited from nearly all of the courts of the Union. Other treatises upon the statute of frauds lay down the rule substantially in the same terms as those employed by the writer from whom we have quoted. Browne, St. Frauds, (4th Ed.) § 160 b; Reed, St. Frauds, § 115.

The case before us falls fully within the principle declared by these authorities, for Fleming promised a third person, upon a new and valuable consideration, to pay Furste's obligation to his creditor. Anderson v. Spence, 72 Ind. 315; S. C. 37 Amer. Rep. 162; Wood, Frauds, 290. If Fleming had undertaken to pay the rent to Furste, no one would claim that the case was within the statute; and the fact that instead of promising to pay it to Furste directly, he agreed to pay it to Wolke, the creditor, cannot affect the question. So far as the claim for rent is concerned, we deem the complaint good as against the objection under direct discussion. Whether it is good in so far as it seeks a recovery for injury to the demised premises is a question not considered or decided.

The second proposition stated presents a different question from that discussed. To parry the force of the appellee's argument upon this proposition, appellants' counsel relies upon the doctrine of part performance; but he leans on a broken reed, for the doctrine of part performance has no application to contracts that cannot be performed by either party within a year. Wood, Frauds, 492; Reed, St. Frauds, § 2081; Add. Cont. 317, § 212. Fleming's contract cannot, it is evident, be performed within one year, for the rent which he agreed to pay is not due within that period. The intention of the parties, as indicated by their contract, is that the promisor, Fleming, shall not perform his part of the contract within a year. It is the intention that governs. Wood, Frauds, 463, and authorities cited, note. If, however, the contract were conceded to be within the statute, still there could be a recovery for the value of the consideration actually received, for it is quite well settled that one who has rendered services or transferred property under a contract voidable under the statute may recover the value of the services or or property under the quantum meruit...