E. D. Keyes & Co. v. Allen & Maynard

MUNSON, J. The chattel mortgage taken by the defendants covered all the property of the firm of Humphrey & Macomber. It contained a recital that the firm had several creditors whose indebtedness the defendants had assumed and agreed to pay. It was conditioned for the repayment of such sums as the defendants might advance in liquidating this indebtedness. Soon after the mortgage was executed the plaintiffs called upon the defendants with reference to the payment of their claim. Maynard made no promise of payment; but Allen said he understood they were holden for the account and that they should pay it. Relying upon this promise, the plaintiffs refrained from filing a petition in insolvency. It has been found that Maynard did not authorize the making of this promise to the plaintiffs, and a judgment in his favor has been rendered below. This determination as to Maynard’s liability does not affect the liability of his co-defendant. It is true that Allen promised payment as of an obligation resting equally upon himself and Maynard; but, as he had no authority to bind Maynard, his promise must be given the same effect as if made for himself alone. If the promise is such as will support an action, the plaintiffs are entitled to a judgment against Allen for the full amount of their claim. Greene v. Burton, 59 Vt. 423. The promise was not invalid for want of consideration. [671] The receipt of property from one person for the benefit of another will sustain a promise of payment to the person for whose benefit the property is received. It is said, however, that all the property mortgaged by Humphrey & Macomber was exhausted in the paj'ment of claims for which the defendants had given their indorsements before the making of this promise to the plaintiffs. Assuming that this sufficiently appears, it does not determine that the promise to the plaintiffs was withoitt consideration. The conveyance, of the property by mortgage was a consideration for the promise, even though the security was insufficient to cover all the obligations assumed. Nor was the conveyance deprived of this effect by the course of the defendants in permitting the mortgagors to sell the goods and apply the avails. This manner of disposing of the mortgaged property will not enable the mortgagees to say that they have received nothing from the debtors. An enforcement of the promise is not barred by the statute of frauds. The defendants having assumed the payment of the partnership debts in consideration of the mortgage, and the defendant Allen having thereupon promised to pay this debt, the case presented is not one within the statute. The defendants had placed themselves under a valid obligation to pay the debts of the firm before the making of this promise to the plaintiffs. The undertaking of the defendants, as recited in the mortgage, was 'not contingent upon a disposal of the property, nor restricted to the amount of its avails. This promise to the plaintiffs was for the payment of a debt which had already become, by arrangement with the debtor, an obligation of the promissor. A promise to pay the debt of another, when there -has been an assumption of the debt by the promissor, in consideration of a conveyance from the debtor, is to be treated as an independent undertaking notwithstanding the continuance of the original [672] liability. Wait v. Wait 28 Vt. 350; Fullam v. Adams, 37 Vt. 391.; Bailey v. Bailey, 56 Vt. 400. The finding that Allen in making this promise to the plaintiffs did not intend to make himself liable for the payment of anything more than might be realized from the property of the firm is not sufficient to relieve him from liability. It appeal's that the promise was absolute in terms and that the plaintiffs had no reason to believe it was intended to be otherwise; and that they in fact regarded the undertaking as absolute, and relied upon it as such to their ■detriment. It is certain that these findings leave no ground upon which the defendant can now be permitted to assert an intended limitation which he failed to express. Judgment- affirmed.