Van Wagner v. Terrett

By the Court, Brown, J. The instrument in writing, which is the subject of the plaintiff’s action, is not a bill of exchange,' within the law merchant, because it is not for the payment of money, absolutely and at all events, but its payment depends upon a contingency. (Chitty on Bills, 134.) The acceptance by the defendant, Gilbert H. Terrett, is not the guaranty of a debt due from Jane B. Jones, the drawer, to David H. Van Wagner, the payee, because the relation of principal and surety did not exist at the time the draft was accepted, and is not created thereby. Bo question, therefore, arises, under the statute of frauds, in regard to the validity of Terrett’s promise, or in regard to the want of any consideration expressed upon the face of the instrument which contains the promise. (Johnson v. Gilbert, 4 Hill, 178. Mather v. Perry, 2 Denio, 162.) The promise of the defendant is an original undertaking, and being executory, a consideration may be proved by extrinsic evidence. (Cowen & Hill’s Notes, 1473, and cases there cited.) I now propose to consider, briefly, the nature of the defendant’s undertaking, and its legal effect. By an agreement in Writing, bearing date the 27th of March, 1856, Jane B. Jones, the person who drew the draft, entered into a contract with the defendant to erect five brick houses, on the north side of Putnam avenue in the city of Brooklyn, upon lots which were, by the contract, to be sold and conveyed by Terrett to Mrs. Jones. He was to furnish her with a building loan of $3500, payable by installments, as the buildings progressed, to secure the payment of which loan, together with the purchase money for the lots, he was to have certain bonds and mortgages, particularly described in the agreement. By the terms of the agreement, the first payment of $500, on account of the loan, was to be made by the defendant, to Mrs. J ones, when the first tier of beams was put upon the buildings, and the walls were up all around. The second payment of $500 was to be paid by him, to Mrs. Jones, when the second tier of beams was put upon the buildings, and the walls were put up all around. [185] The time and manner of making other payments are not material to the present inquiry. The plaintiff furnished Mrs. Jones with materials used in the construction of the houses, and received from her the draft or order in controversy. It is dated on the 6th of May, 1856, and was directed to and presented to the defendant, on the 7th May, who signified his acceptance by writing over the face thereof, “ Brooklyn, May 7th, 1856, accepted, G-. B. Terrett.” It directs the drawee to “pay D. H. Van Wagner, or order, §350 when the second tier of beams are on the five brick houses to be built on the north side of Putnam avenue, eighty feet west of Bedford avenue, as per contract between us, dated March 27th, 1856, and charge the same to me, which is to be applied to the second payment.” It appeared by the proof, that on the 1st of July, 1856, before this action was commenced, the partition and the end walls of the buildings were put up, and the second tier of beams were also on the buildings, but the front and rear walls were no higher than the top of the basement story, and that Mrs. Jones failed to execute the contract any further, but abandoned the same in the month of August following. Here we have the real question to be determined. If the money mentioned in the draft became payable when the second tier of beams were on the building, irrespective, of the condition of the walls, then the plaintiff is entitled to recover, and the judgment must stand. But if, in addition thereto, the walls of the buildings were also to be put up all around, so as to conform to the requisitions of the contract, then the condition upon which the money was to become payable has not been performed, the plaintiff has no claim to recover, and the judgment must be reversed. The draft is very particular and specific in its direction, and means a great deal more than a mere request to pay over the specified sum of money. Mrs. Jones had no money in the hands of Terrett subject to her draft, nor did she expect to have any, except the- second payment that would [186] become dtie to her under the contract. If she had drawn without a design to appropriate the particular fund, and in the hope that Terrett would accept in any event, no reference would have been made to the contract, or to any of the payments which might become due under it, because none would have been necessary. But by referring to the contract by its subject and date, and appointing the time for the payment of the money “ when the second tier of beams are on the buildings, as per contract,” and then directing the amount to be applied on the second payment, she signifies the clearest intention to make the money payable out of the second payment, whenever it became due and payable according to the terms of the contract. By his acceptance, in general terms, upon the face of the paper, -the defendant undertook to pay the money upon the happening of the event or the performance of the condition therein referred to. I attach no great force or efficacy to the words “ as per contract,” because we are to look at the relation which the drawer and acceptor maintained towards each other, the objects which they had in view, as well as the scope and tenor of the instrument, for the purpose of ascertaining their intention. The counsel for the plaintiff insists that the contract between Mrs. Jones and the defendant is referred to in the draft merely to designate the particular account to which the money, when paid, was to be charged. And he refers to Kelley v. The Mayor of Brooklyn, (4 Hill, 265.) There the draft was for $1500, payable absolutely, with a direction to charge to the Bedford road assessment. The court held the instrument to be an ordinary bill of exchange, and the clause “ charge to the Bedford road assessment," a mere direction as to the mode of reimbursement. In the present case the paper is not a bill of exchange, and the reference to the contract out of which the money was to proceed, and the direction making it applicable to the second payment, must be read in connection with the other parts of the instrument, to ascertain the intention of the parties. I am, accordingly, of [187] opinion that the draft, by its terms, was payable out of the second payment mentioned in the contract of the 27th March, 1856, and the condition upon which the defendant’s obligation to make that payment depended, never having been performed, that the plaintiff cannot recover in this action. [Dutchess General Term, May 11, 1858. Brown, S. B. Strong and Emott, Justices.] The judgment should be reversed, and a new trial at the circuit granted, with costs to abide the event.