Lane v. Richards

Sherwin, J. The appellants claim that the contract of November 22, 1886, is of a dual character, — that it'is both a guaranty of performance on the part of Johnson, and a direct undertaking of indemnity on the part of Richards; while the appellee contends that it is a contract of guaranty only and that it was wholly without consideration. — 27 — i consideraSSTiff plT’ roi evidence, — 26 — Section 3069 of the Code provides that “all contracts in writing signed by the party to be bound * * * shall import a consideration,” and the appellants urge that a valid consideration for this obligation is imported therein. — 27 — If no consideration were named in the contract, or if its language relating thereto were so ambiguous as to be incapable of construction, there can be no doubt as to the applicability of the statute. But here the parties have undertaken to and have expressly stated in the instrument the consideration upon' which it rests, and this recital in itself clearly and distinctly negatives the fact that any other, larger or different consideration was in the minds of the parties. The statute was not intended to and does not furnish the consideration for contracts, and, in our judgment, it was only intended to import a consideration when the parties had failed to express it themselves; otherwise the solemn declaration in a contract that it rested upon a cert¡ain consideration would be denied, and the contract relating thereto would be annulled ^y force of the statute, and a foreign consideration substituted therefor. The rule is well settled in this state that an express consideration clearly named in a written contract cannot be altered by parol. Gelpcke v. Blake, 19 Iowa, 264; De Goey v. Van Wyk, 97 Iowa, 491. But were we to adopt the view of the statute contended for by the appellants, whenever the expressed consideration should be held invalid the statute would at once provide another and a valid one, regardless of the contract of the parties. So far, then, as the contract in question is one of guaranty, it must be held to be without consideration. Lane’s rights and liabilities under the Johnson contract were in no wise changed thereby. Ayres v. Railroad Co., 52 Iowa, 474; Walker v. Irwin, 94 Iowa, 448. Under the contract between Johnson and Lane and Richards the two- latter parties were not bound to pay any part of the principal remaining unpaid on the purchase price of the land, but, as before stated, they had the option to do so. It does not appear that Lane, in his lifetime, paid anything more than he was obliged to pay by bis contract. The last clahse, however, of the contract of .November 22d, — 28 — is one of absolute indemnity, and whatever money might have been paid thereunder by Lane, which he was not bound to pay by the Johnson contract, could be recovered. 2. same: when personal conment of funds ífgSrep resentatives. II. But is the contract one which authorized the plaintiffs to exercise the option which had been given their decedent, and to pay money which they were not bound to pay? If Lane had contracted to pay this . . . no serious question could arise as to J^ the rights and duties of the plaintiffs after his death. But he and Eichards were engaged in a speculative venture. They had both assumed the risk of losing the money which they had then paid, and the further sum which they had obligated themselves to pay. But the payment of any greater sum was optional with both. In other words, each was left to act as his individual judgment might dictate. Each had the right to rely, to a certain extent, at least, on the deliberate judgment of the other, so far as taking future risks were concerned. Strictly speaking, it cannot be said that the contract as to the optional payments was an executory one, and therefore might be performed by the personal representatives of the deceased, because there was in fact no contract for a further payment on the part of Lane, and Eichards’ promise of indemnity to him was, in effect, that if, in the exercise of his personal judgment, he advanced money for which he was not bound, he would indemnify him. There is nothing in the contract indicating an intent on the part of either that the option in question might be exercised by another, or pass to Lane’s representatives, and the undertaking of Eichards survive his death. The character of the entire transaction was such that, in our opinion, a presumption arises that the contract was personal, and that the death of Lane terminated it, and that the plaintiffs had no right to make future advancements on the strength thereof. Marvel v. Phillips, 111 Mass., 399 (38 N. E. Rep. 1117 (26 L. R. A. 416, 44 Am. St. Rep. 370); Cox v. — 29 — Martin, 75 Miss. 229 (21 South. Rep. 611 36 L. R. A. 800, 65 Am, St. Rep. 604); Chamberlain v. Dunlop, 126 N. Y. 45 (26 N. E. Rep. 966, 22 Am. St. Rep. 839); 1 Beach, Modern Law Contract, section 231. This view of the case renders it unnecessary to discuss the minor questions argued by the appellee. The judgment is aeexrmed.