Meech v. Smith

By the Court, Savage, Ch. J. The questions are, 1. Was the plaintiff entitled to interest on his account ? 2d. Was the contract within the statute of frauds? 3d. Did the plaintiff exceed his powers, and was he liable therefor ? 4th. If liable, is he so in this form of action ? [318] On the question of interest I think the court erred. Interest is always properly chargeable when there is either an express or an implied agreement to pay it. The facts offered to be proved are sufficient, in my judgment, to authorize a jury to infer that there was an agreement to pay interest; it was the uniform custom of all those engaged in the same business to charge interest ; it was the custom of the plaintiff to charge it; he had charged it in former accounts against the defendant, and it had been paid without objection, before the contract was made on which this suit is brought. In the case of Trotter v. Grant, 2 Wendell, 415, there was no evidence that the defendant knew the plaintiffs custom to charge interest, nor had he ever settled an account in which interest was charged ; there were in that case no sufficient facts from which an agreement to pay interest could be implied, and the account being unliquidated, interest could not be recovered. The facts in this case are different, and interest should ,have been allowed. Was the contract within the statute of frauds 1 It is a parol agreement to pay the debt of a third person, and is therefore within the terms of the statute. The rule, however, has long been settled, that though such a promise be by parol, if it arises out of some new and original consideration of benefit or harm moving between the newly contracting parties, it is not a case within the statute ; it then becomes a new and original contract. Such a promise is void in such cases only when the debt of the third person is the only consideration, or when the new consideration is not sufficient to support the contract. This subject has been frequently before this court since the case of Leonard v. Vredenburgh, 8 Johns. R. 37; most of the cases were reviewed in Farley v. Cleveland, 4 Cowen, 434, in which case, and indeed in several of the cases, the consideration of the new promise moved from the original debtor, but that equally supports the new promise, as a consideration moving between the newly contracting parties. This rule has been recognized by all writers on contracts, and has been recognized by the highest court' in this state ; it is therefore as much the law of the land as the statute itself. The only question, therefore, is whethei the case comes within the rule 1 There must not only [319] be a promise, but that promise must be founded upon a new consideration, sufficient in law to sustain the promise. A consideration, to be sufficient at common law, must be either a benefit to the party promising, or some trouble or prejudice to the party to whom the promise is made. 1 Comyn. on Contr. 13. In this case it was a benefit to the plaintiff to have employment for his boats engaged in the business of transportation. This was a sufficient consideration. Although I consider the contract binding between the parties to it, it does not follow that it was so on Dows, Meach & Co., for whom it purported to be made. The agent was authorized to make such contracts as were within the scope of his authority, and according to his own oath, when examined as a witness, he had no authority to make the contract in question. The plaintiff, therefore, exceeded his powers, and of course made himself liable, the contract being a valid one in law. It is contended that if liable, the plaintiff must be charged in an action on the case; such an action, I apprehend, could not be sustained. There has been no tort committed; the transaction between these parties was a contract, and that contract being valid in law, must be obligatory on some one» either the principal or the agent, and the agent having made it without authority from his principals, they were not bound ; it follows that the agent himself is bound. I am of opinion, therefore, that the court erred in refusing interest to the plaintiff on his account, or rather, is not submitting the evidence to the jury, as sufficient to justify them in finding an agreement to pay interest. I am also of opinion that there was no error in allowing the defendant’s claim by way of set-off. The damages were sufficiently liquidated, and arose upon contract; and as the cause was commenced before a justice, where the defendant must set-off all demands, even greater latitude would be allowed if necessary in applying the doctrine of set-off. The judgment must therefore be reversed, with costs to abide the event, and a venire de novo must be awarded by the Monroe common pleas, unless the defendant deducts from his verdict the amount of interest on the plaintiff’s account; and in that event, the judgment is affirmed with single costs.