Yale v. Edgerton

By the Court MoMillaN, J. The complaint in this action avers, in substance, that on the 1st of March, 1858|, Edgerton, the defendant, loaned the plaintiff, Tale, $300, which Tale promised to pay on the first of June, 1858, with certain interest, and at the same time assigned and delivered to the defendant a chattel mortgage, before that time executed by one A. B. Vaughn to the plaintiff, upon certain pei’sonal property, consisting of a steam mill, and the machinery connected therewith, and also the debt of said Vaughn to the plaintiff, which said chattel mortgage was given to secure, amounting at that time to about $1600; that on the 1st of June, 1858, plaintiff paid $50 on the amount due from him to the defendant, and the time for the payment of the balance was extended until the 1st of September, 1858, the balance (§250) to draw interest at the rate of one per cent, per month; that on the 22d of March, 1859, the defendant still holding the chattel mortgage and debt as collateral security for the payment of the said bal201 anee of said loan, it was agreed between tbe defendant, the said Yaughn, and the plaintiff, for a good and valid consideration, that the defendant should discharge and satisfy the said chattel mortgage, and the debt of Yaughn secured by it then due, and amounting with interest at that time to the sum of $1700, and that he should pay to the plaintiff out of the first issue of the People’s Bank (which was about to be established under the laws of Minnesota by the defendant or under his control,) the balance of said sum of $1700, which should remain after deducting therefrom the amount of said loan to the plaintiff then remaining unpaid, and interest thereon ; that the defendant did in pursuance of said agreement satisfy and discharge the chattel mortgage, and the debt secured by it; that the mortgage was adequate security for the payment of the mortgage debt, that the only consideration for the plaintiff’s consent to the discharge and satisfaction of said mortgage and debt, was the promise of the defendant to pay him the balance as aforesaid. That the first issue of the- notes of the People’s Bank was made on or about the 1st of June, the said bank having been established by or under the control of the defendant; that the defendant has not paid the balance or any part of it. The further facts as developed on the trial are, that the defendant had a certain arrangement with the M. & C. V. R. R. Co., by which he was to pay it certain moneys, and the R. R. Co. was indebted to Yaughn; the B. B. Co. drew an order, waiving acceptance, to the order of Yaughn on Edgerton, and the mortgage and mortgage debt was released and discharged by Edgerton with the consent of the plaintiff — the plaintiff’s testimony tending to show that his consent to the release and discharge of the mortgage and debt, was solely on consideration of the defendant’s promise to pay him, as alleged in the complaint — the defendant’s [202] testimony tending to show tbat be never promised to pay the plaintiff as alleged, but that the order was accepted by Yale as the consideration for the discharge of the mortgage, and was left with defendant, with the understanding that he would collect it in the course of his negotiations with the Railroad Company if he could. The jury having found for the plaintiff, the facts as claimed by the plaintiff must be regarded as established in the consideration of the exceptions in this case. The action is clearly based upon the promise of the defendant to pay the plaintiff the balance of the debt secured by the mortgage after deducting the loan from the former to the latter. The second objection raised by the defendant is therefore not well taken. As the consideration of the defendant’s promise is the consent of the plaintiff to the release and discharge absolutely of the mortgage and the mortgage debt by the defendant, it is a sufficient consideration, and the promise is an original one, and is not within the statute of frauds. To constitute a promise to answer for the debt, default or miscarriage of another person within the meaning of the statute of frauds, the promise must be a collateral one — there must be in existence an original liability upon which the collateral promise is founded. Where the debt which constitutes the consideration of the agreement is entirely discharged, the promise is a new and original one, and not a collateral one. It was not necessary therefore that the agreement relied on by the plaintiff in this case, should have been in writing, and there is no evidence that it was. Parol evidence of the contract was therefore proper. These views determine adversely to the defendant the first, eighth and ninth points raised by him. Although the testimony as to the value of the property embraced in the mortgage may be regarded as immaterial, [203] we are unable to see that any injury could have resulted from it, since perhaps the only effect of the evidence is to establish a fact which in law is presumed. The admission of immaterial evidence which works no harm, furnishes no ground for a new trial, Hingworth vs. Greenleaf, 11 Minn. R. 235. The fact that Yaughn was a director of the M. & C. V. R. R. Co., had been proved, without objection, by the plaintiff, before Yaughn was called to the stand, but if it had not been,' the objection could not have prevailed. Whether Yaughn was legally a director of the company or not, was not in issue, and that he was acting as a director, could be proved by himself, or any other person. The fact that Yaughn and the other directors were here off and on in February and March, 1859, at the times of the company holding meetings at the International Hotel, and had business with the defendant, and that the character of the business was to negotiate bonds with Mr. Edgerton to raise funds for the company, that the bonds were State railroad bonds issued to the company; the fact that Edgerton paid the company $10,000, some of it in currency; some in city currency made negotiable by being endorsed by Edgerton, and that Yaughn received some of the money to pay off the company hands, and might have had some for himself, are all facts which could be proved by any person having a knowledge of them, and are merely stated as introductory or explanatory of the testimony with reference to the making of the draft by the E. E. Company on Edgerton in favor of Yaughn, upon which the chattel mortgage and debt was satisfied and discharged. Circumstances which are introductory or explanatory of a principal fact to be established, where proved by competent testimony, are admissible evidence. [204] It is also to be observed in this case that the defendant himself, when called as a witness, gave a much fuller and clearer statement of the circumstances attending the making of the draft. There was no attempt on the part of the plaintiff to prove the contents of the agreement between Mr. Edgerton and the Railroad company. The fourth objection of the defendant is not well taken. The complaint alleges that the People’s Bank, at the time of the promise by defendant to plaintiff, to wit: March 22d, 1859, was about to be established under the laws of the State of Minnesota, by the said defendant or under his control, and that the first issue of bank notes of the People’s Bank, above mentioned, was made on or about the first day ot June, A. D. 1859, the said bank having been'established by or under the control of the defendant. The answer of the defendant admits and states “ that the first issue of the bank notes of the People’s Bank mentioned in said complaint was made on or about the 1st day of June.” We think the allegations in the complaint taken together are sufficient to constitute an averment of the incorporation of the People’s Bank; -but if there is any doubt of this, the admission and averment in the answer, taken in connection with the complaint is sufficient for that purpose. As the action is based upon the absolute promise of the defendant to pay the amount on the first issue of the notes of the People’s Bank, and the defence is an express denial of the promise, it is manifestly immaterial in either case whether the Eailroad company had funds in the hands of the defendant to pay the Yaughn order — the offer by the defendant to ¡move they had not was therefore properly rejected. Affidavits, made by the plaintiff in other proceedings had some years before the commencement of this action, having [205] been introduced in evidence by the defendant to contradict the plaintiff’s testimony on the trial, we are unable to see why the ruling of the court, that the plaintiff might be al lowed to explain the circumstances under which the affidavits were made, was not correct. In any event, none of the answers of the witness on this subject could injure the defendant. An error in the form of the interrogatories to the witness is no ground for a new trial. The order of the District Court denying the defendant’s motion for a new trial is affirmed.