Hooff v. Paine

GREGORY, J., delivered the opinion of the court. — 483 — A. A. Hooff and Annie B. Brown, trading as Brown and Hooff, instituted action upon a negotiable note for $885.20, against Franklin Paine and Helen Paine. The defense was that no consideration existed for the note. The court sustained the defense and dismissed the action. There is no dispute about the facts. Franklin Paine desired to erect a dwelling upon his lot and for that pur-' pose entered into a contract with a Mr. McDonald, who as general contractor agreed to furnish all supplies and to construct the building. The plaintiffs, Brown and Hooff, were subcontractors and furnished to McDonald, the general contractor, lumber and other materials in the amount for which the note was given. These supplies were used by the general contractor in constructing the building. Paine, the owner, had nothing to do with contracting this bill and apparently did not know of it until he was called upon by Mr. Hooff. They met upon the premises and both inspected the building which was not completed at this time. Hooff informed Paine that unless he (Paine) would give Hooff a negotiable note for the amount due by the general contractor to the subcontractors, Brown and Hooff, they would file a mechanic’s lien upon the property. The owners erroneously thought the subcontractors had the right to file such a lien. They, therefore, wrote a letter to the subcontractors in which they agreed to execute the note under the threat to prevent the lien being filed. At the time the note was given the owners owed the general contractor nothing and under the Virginia law, Code, section 6428, the subcontractor had no. right to file a mechanic’s lien. Later, Paine, after consulting an attorney, was informed that the owner was not responsible to a material man for materials furnished a general contractor and used in a building except to the extent of the amount owed by the owner to the general contractor. About three weeks after the note had been given, Paine wrote the plaintiffs demanding the return of the note which he claimed had been given without consideration. At the time this letter was written and received, there still remained sufficient time under — 484 — the statute for the filing of a mechanic’s lien by the plaintiffs. No credit was extended to the defendants upon the faith of the note. All of the materials furnished by the subcontractor had been furnished prior to the giving to the note. The general contractor, failed to complete the building in accordance with the contract and the owners were compelled to finish it at their own cost. The plaintiffs at the trial introduced the note and rested. The defendants based their defense entirely upon want of consideration with the result as previously stated. The question presented may be stated as follows: Are the owners of realty, who have had a general contractor erect a building thereon, liable upon a note given to a subcontractor for supplies which he furnished the general contractor, under the threat that if the note were not given the subcontractor would file a mechanic’s lien on the property, when at the time the note was given the general contractor had abandoned the work and was due nothing by the owners, and the subcontractor had no legal right to file such a lien? The plaintiffs take the position that the note constitutes a promise by the defendants to pay the debt of the general contractor, and being in writing it met the requirements of the statute of frauds and a consideration would be imported. This position is not tenable because the promise was not to pay the debt of another. It was a direct, unconditional and original promise of the Paines to the plaintiffs. For this reason we think the statute of frauds is not involved in this case. . - We are of opinion that the note did not constitute a novation of the debt due by McDonald to the plaintiffs, because McDonald not only did not agree to a novation but actually was opposed to it, as evidenced by his direction to Paine not to make any settlement of his (McDonald’s) debt with the plaintiffs. McDonald has not been released as the debtor by reason of the note. There remains for our determination the single question of whether or not the note was founded upon a valuable con — 485 — sideration. It is urged by counsel for the plaintiffs that they forbore the filing of a mechanic’s lien and that this constitutes a sufficient consideration to support the note. The defendants answer that the plaintiff had no valid right to file a mechanic’s lien, and therefore, their forbearance could not sustain a promise. The law is well settled that forbearance, or the promise of forbearance, to prosecute a well-founded or doubtful claim is a sufficient consideration for a contract. On the other hand, the forbearance to prosecute an invalid, worthless or unfounded claim is not a consideration recognized by the law as valuable. 12 Am. Jur., Contracts, section 84, section 85, section 86 and section 87; 8 Cor. Jur., Bills and Notes, section 373; Elliott on Contracts, Vol. 1, section 235; City Street Improvement Company v. F. E. Pearson, 181 Cal. 640, 185 P. 962, 20 A. L. R. 1317. In 13 Cor. Jur., “Contracts,” section 197, is found this very lucid statement of the general rule: “The principle followed in perhaps the majority of cases is that one has a right to sue where his claim is reasonably doubtful, and that forbearance to enforce a claim which might reasonably be thought doubtful is a sufficient consideration, on the ground that ‘the reality of the claim which is given up must be measured, not by the state of the law as it is ultimately discovered to be, but by the state of the knowledge of the person who at the time has to judge and make the concessions.’ From this it is clear that, if the right is not doubtful, there is no consideration, for there is neither benefit to the promisor nor detriment to the promisee, and, therefore, forbearance or a promise to forbear to insist on a claim clearly unenforceable cannot be a consideration. This is true, for example, of a promise to forbear from claims under an illegal contract, such as a gambling contract, or one involving the commission of a crime, or one which is without consideration, or which is barred by the statute of limitations; or of the discontinuance of a vexatious lawsuit brought to harass the attorneys of an infant who have ob — 486 — tained a final judgment against a railroad company, and to delay the collection thereof.” In Michie’s Digest of Virginia and West Virginia Reports, Vol. 2, “Contracts,” section 23, page 879, this statement is taken from the case of Bank of Ohio Valley v. Lockwood, 13 W. Va. 392, 427, 31 Ann. Rep. 768: “An agreement to forbear for a time proceedings at law, or in equity, to enforce a well-founded claim is a valid consideration for a promise. But this consideration fails, if it be shown, that the claim is wholly and certainly unsustainable at law or in equity. * * * .” In Tozier v. Woodworth, 135 Me. 46, 188 A. 771, Tozier was a qualified tax collector in the town of Unity and he sought to collect taxes of Woodworth. The lien for the taxes which he endeavored to collect had expired but Woodworth thinking there was a valid lien for the taxes, orally promised to pay them. Later he discovered that the lien had expired prior to the time that he made his promise. When sued he defended upon the ground that there was no consideration for the oral promise which was the subject of the suit, and the court held that his position was correct. The holding of the court was that the tax collector’s forbearance to sue to recover the pre-existing taxes did not constitute a valid consideration for the promise to pay the taxes because the collector at the time the promise was made had no cause of action against the promisor at law or in equity. The assessors’ warrant to the tax collector for the tax was dated April 26, 1924, and the time to enforce the tax lien on the realty had expired under statute before the grantee promised on May 14, 1935, to pay the pre-existing taxes. Therefore, the collector’s forbearance to sue did not cause the loss of the lien nor constitute good consideration for the promise. Another late case is Goodbody et al. v. Margiotti, 323 Pa. 529, 187 A. 425, 191 A. 582, 583, in which the court speaking through Justice Stern said: “A promise to forbear the exercise of a right which does not exist cannot constitute consideration for a contract, nor for the same reason, could such forbearance give rise to a promissory estoppel.” — 487 — The reports contain many interesting cases concerning forbearance as a consideration for a contract. The great weight of authority sustains the view which we have expressed. In this case the note sued upon represented a debt which the defendants were under no obligation to pay. It was not their debt and the execution and delivery of the note did not cause any detriment to the plaintiffs. They simply agreed to waive their right to file a mechanic’s lien, a right which they did not have. The judgment of the lower court is therefore affirmed. Affirmed. Spratley, J., concurs in result.