Cobleigh v. Pierce

Piekpoint, J. It appears from the bill of exceptions that the defendant' entered into an agreement with his creditors, the plaintiff among the number, to the effect that the defendant would — 793 — settle the claims of the several creditors at twenty-five cents on the dollar, payable in six months from the date of the agreement, with satisfactory security therefor, which the creditors agreed to accept in full of their claims, provided all the creditors should become parties to the obligation, and the same be settled within thirty days from said date. This agreement was in writing, dated October 7th, 1856, and signed by most of the creditors, the plaintiff being one. It also appears that on the 14th of November, 1856, the defendant agreed to pay the plaintiff, and did then pay her, on her debt against the defendant, the sum of one hundred and twenty dollars and twenty-eight cents, being twenty-five cents on the dollar of the whole debt, and also agreed to pay or secure to her the balance due on her debt, if she would deliver to him the note she held against him for such debt, and that she received the said one hundred and twenty dollar’s and twenty-eight cents on said note, and permitted the defendant to take the said note. The defendant has not paid the balance of said note, and the present action is brought to recover the remainder. The plaintiff claims that she is not bound by the agreement entered into on the 7th of October, on the ground that all the creditors of the defendant did not become parties to it, according to the express terms of it. The case shows that the defendant was indebted to the Rutland & Burlington railroad company in about the sum of twenty dollars which he thought of at the time he procured the signatures of his other creditors, but that he did not request or procure the signature of said company/JIAlso that he was indebted to other creditors for very small amounts, that were not in his mind at the time, and that such creditors did not sign the agreement. The agreement is explicit in its terms, that all the creditors shall become parties to it, and it is upon that condition only, that it is to become binding upon those who do sign it. It is conceded that the railroad company was a creditor of the defendant, but it is said that the failure of the defendant to obtain the signature of the company cannot have the effect to invalidate the agreement, inasmuch as the company had a lien upon property of the defendant in their hands for the payment of this — 794 — debt. Oil examining the minutes of the judge who presided at the trial below, and which are made a part of the case, it appears that the company had no lien for the security of a part of this debt, and did not assert a lien for the other part of it, so that this argument fails ; but even if it were true that the company had a lien on the property for the whole debt, would that vary the case ? They are none the less creditors for that, and are equally included in the terms of the agreement. The defendant, it is true, might have more difficulty in procuring their signature for that reason, but that is a risk he took upon himself when he made the contract. If he would have avoided such difficulty he should have made known the facts to his creditors, and inserted in his agreement an exception of such creditors as held security for their debts ; in that case the other creditors would have had an opportunity to determine for themselves whether or not they would become parties to the arrangement. Possibly they might all have done so, but for this court to add so important an exception to the contract by construction, when the language used is so explicit and the agreement so free from all doubt and uncertainty, either on the face of it, or arising from any extraneous circumstances, would be carrying the doctrine of construction to a point where it would be difficult to sustain it by authority or sound reason, especially where there is no evidence tending to show that any one of the creditors, at the time they signed the agreement, knew of any such reason why such an exception should be made. If, then, this contract is to be understood to mean what it says, what effect is the failure of the defendant to procure the signature of the company, to have upon the validity of this contract as between these parties ? The rule is well settled that where contracts of this character contain a stipulation that all the creditors shall become parties to it; if any of the creditors do not join in it, the contract is void as to all. This is fully sustained by the authorities cited by the counsel for the plaintiff, and is recognized in the case' of Dauchy v. Goodrich, 20 Vt. 127. This being so, we think the plaintiff had the right to refuse to carry out the agreement, and to insist upon the full amount due on the note. — 795 — We think she had the right also to repudiate this agreement on the ground that the business was not settled, either by giving satisfactory security or for the payment within six months, or by paying the money within thirty days from the date of the agreement. This doctrine is recognized in Spooner v. Whiston, 17 E. C. L. 547. We think also that the alleged transaction between the defendant and Burton, if true, as the plaintiff offered to prove, was such as fully to justify the plaintiff in refusing to carry out the arrangement. Burton’s debt was two hundred and forty-one dollars and fifty cents ; he signed the agreement only as to two hundred dollars of that debt, and this the plaintiff offered to show, he did only on the terms that the defendant would agree to pay him not only the forty-one dollars and fifty cents, but also the whole of the remaining two hundred dollars. Under this arrangement it is true that Burton could claim only the twenty-five per cent, on the two hundred dollars, and could not enforce the agreement to pay the balance in full, as such agreement was a fraud on the other creditors, and void. Still before the defendant attempted to arrang'd the matter with the plaintiff, as stated in the bill of exceptions, the defendant had in fact paid to Burton the whole of the forty-one dollars and fifty cents, so that he was receiving a much larger dividend on his debt than the other creditors. This fraud was thus consummated and would as fully justify the plaintiff in refusing to comply with the agreement as though the money for this balance had been paid to Burton in the first place, to induce him to sign the agreement. The testimony offered tending to prove these facts should have been admitted. But it is said, conceding all this to be so, and that the plaintiff had the right to treat the arrangement as no longer binding upon her, still she has not availed herself of this right, but has waived it, and received the stipulated portion of her debt, and surrendered the note. That a creditor under such circumstances may waive this right, is conceded ; if it is waived, the party cannot afterwards avail himself of it for any purpose. This is fully established in this State, in the case of Dauchy v. Goodrich, above referred to. — 796 — The question then arises, did the plaintiff waive this right, which we have already seen she possessed. This would seem to be a question of fact to be determined by the jury, and one which the county court could not properly determine, except upon a conceded state of facts, and then only as a matter of law arising upon such facts. Indeed the county court did not pass upon this question. They put the case upon the ground that the testimony was not sufficient to show that the plaintiff had the right to avoid the agreement. Of course there was nothing to waive, and this question could not arise. We having taken a different view of the subject, and established her right, there seems to be no other ground that can be made available to defeat that right, except that of waiver. And unless we can see from the case as it is made up, that the undisputed facts are such asj amount to a waiver, as a matter of law, the case must be remanded. . An unqualified acceptance of the money, and surrender of the note, after the expiration of the thirty days, would undoubtedly be a waiver of the right to object on that ground, as the transaction could not have taken place without her knowing that the agreement in this respect had not be.en complied with ; and, if having this knowledge, she voluntarily executes the agreement on her part, she would be bound by it. So too, if she knew that the creditors had not all signed the agreement, or knew of the transaction between the defendant and Burton. But it is not quite obvious on what ground it can be claimed that she waived her right founded on the existence of these facts, unless she knew of them and the rights resulting from them. But the case shows that she had no knowledge of those facts. If it did appear that she had knowledge of the facts, it does not appear conclusively that when she received the money, and delivered the note to the-defendant, she did it in pursuance of the agreement, intending to carry it out, and to waive all objection to it. But on the contrary,, the plaintiff’s evidence tended to prove that when she received the money, and delivered the note, it was upon an express agreement that the whole should be paid. Taking this, in connection with the offer of the plaintiff to show, that on payment of the money, she declined to deliver the note to the defendant, but claimed to hold it for the residue of its amount, and that she — 797 — allowed him to take it only to show to his Boston creditors, and ■upon his express promise to pay her the balance, (which evidence is clearly admissible upon this question of waiver,) and it is perfectly clear that the subject is one for the determination of the jury alone. Judgment reversed and case remanded.