Case Title: Eilertsen v. WEBER

Citation: 198 Or. 1, 255 P.2d 150

Docket Number: 

State: oregon

Court: Oregon Supreme Court

Date: 1953-04-08T00:00:00Z

Document:
Affirmed April 8, 1953.
*3 Richard Bryson, of Eugene, argued the cause for appellants. On the brief were Bryson & Bryson, of Eugene.
John P. Ronchetto, of Portland, argued the cause for respondent. With him on the brief were Thomas R. Mahoney, of Portland, and Herman P. Hendershott, of Eugene.
Before LATOURETTE, Chief Justice, and LUSK, BRAND, TOOZE and PERRY, Justices.
AFFIRMED.
PERRY, J.
This is an action at law to recover in quantum meruit for work and labor performed. The plaintiff prevailed and the defendants appeal.
The defendants assign as error the trial court's refusal to grant their motion for a directed verdict, their contention being that the oral promise of the defendant *4 Vernon F. Weber to pay the sum recovered is a promise to answer for the debt, default or miscarriage of another and is within § 2-909, subsection 2, OCLA (statute of frauds) and therefore all oral evidence of the promise is incompetent; on the further ground that there was a complete failure of consideration for the promise of the defendants; and further, that the court erred in refusing to give an instruction to the effect that if the jury found that the defendant Weber's promise was an original promise for the completion of the work, then they must segregate plaintiff's demand, that is, the value of the work that he had already done prior to the defendants' promise and what he earned thereafter, and, if they are unable to make a determination of the value of the work done before the promise and that following the promise, then the verdict should be for the defendants.
The defendants, some time in May or June, 1948, entered into an agreement with a Mr. Abbott to construct a building in Florence, Oregon. Plaintiff, being a plumbing and heating contractor, was given a subcontract to install the plumbing and heating in the building. The total amount due for labor and materials on the completion of the work, plus extras, was the sum of $8,857.17. The plaintiff was paid $3,000 on October 18, 1948, by the contractor, Mr. Abbott, and, on March 7, 1949, the defendant Vernon Weber paid him $1,500. The plaintiff completed his work, and, having been paid nothing except as set out above, instituted this action for the balance which he claimed of $4,357.17.
It is the defendants' contention that the plaintiff, as a subcontractor employed by the general contractor, performed the work and furnished the material under *5 his contract with the general contractor; that Weber's agreement, if any, was a collateral agreement to indemnify the plaintiff; that it was not in writing, and therefore came within the statute of frauds. § 2-909, subs. 2, OCLA, supra.
The plaintiff contends that, the general contractor having failed to pay his moneys as they became due as the contract progressed and having refused to proceed further, his contracts with Abbott, the general contractor, were at an end, and that he continued with the work only because of the new promise of the defendant Vernon F. Weber, as agent for all the defendants, to pay him for the work then completed and for the work to be done.
In determining whether the trial court erred in denying defendants' motion for a directed verdict, this court cannot weigh the conflicting evidence but is required to consider the evidence in the record and every legitimate inference that can be drawn therefrom in a light most favorable to the plaintiff. Dudleston v. Chiravollatti, 184 Or 405, 198 P2d 858; Fish v. Southern Pacific Co., 173 Or 294, 301, 143 P2d 917, 145 P2d 991, and authorities cited therein.
The plaintiff testified that he was an experienced heating and plumbing contractor, and, further, as follows:
The plaintiff then proceeded to set the fixtures and complete the work to be done. He made several demands upon Dr. Weber after the work was completed but received no further payments.
The plaintiff testified further:
Mr. Dobson, who was employed by the plaintiff, testified as follows:
Mr. Hanson, labor foreman for the general contractor, Grant Abbott, testified as follows:
*11 Defendant Vernon F. Weber testified as follows:
From this evidence we believe the jury could draw these reasonable inferences: (1) That Mr. Abbott, plaintiff's contractor, had failed to pay plaintiff as agreed; (2) That the plaintiff considered the contract with Abbott at an end; (3) That he was justified in refusing to further furnish materials or perform work upon defendants' building; and (4) That the defendants, through Vernon F. Weber, as agent for all defendants, desiring to have the work continue, for the benefit of all defendants, directly promised to pay plaintiff the unpaid portion due him for his labor and materials furnished in the past and the labor and materials to be furnished in the future.
1-3. In determining whether or not, under a given state of facts, the agreement constitutes an original or a collateral promise (the words "original" and "collateral" being used by the courts for convenience to distinguish those agreements which come within the terms of the statute, collateral being those that must be in writing, and original those which need not be), the intentions of the parties control, this to be gathered from the words of the promise, the situation of the parties, and all of the circumstances surrounding the transaction. Whether a promise is original or collateral, before there is any delivery of materials or services *12 by a creditor, may ordinarily be determined by this test: Did the parties understand that the seller was extending credit for the materials or labor on the credit of the party sought to be charged, or to him only as a guarantor of payment should another fail to pay? McMillan v. Dickover, 119 Or 116, 117, 248 P 154, and cases cited therein.
4. Where the language used, together with all of the facts and circumstances, is not controverted, the question is one of law as to whether the oral promise was original or collateral. But if there is a doubt created as to whom the credit was extended, then it is a question of fact for the jury to determine. McMillan v. Dickover, supra; Masters v. Bidler, 101 Or 322, 331, 198 P 912.
5. The jury, by its general verdict, found, under all of the circumstances then existing and the language used, that the agreement of Vernon F. Weber was original and not collateral. And it is apparent to us from the evidence hereinbefore set out that the plaintiff was no longer willing to look to the general contractor Abbott for payment, and, considering the evidence in the light most favorable to the plaintiff, each of the parties understood that the plaintiff was not relying upon the general contractor for the work done subsequent to the promise of the defendant Weber, but was looking to the defendant primarily for payment for the materials and labor furnished subsequent thereto.
Having determined that the promise made was original and not collateral as to the materials and labor furnished subsequent to the promise made by the defendant Weber, there remains this question: Was the promise found to have been made by defendant *13 Weber collateral as to the materials and labor furnished prior to the promise and under the original contract with the general contractor Abbott? If so, there is no evidence by which the amount due for materials and labor prior to the promise can be segregated from the materials and labor furnished subsequent to the promise; therefore, the verdict of the jury for the full amount of the plaintiff's claim cannot stand.
6. While there is a divergence of views by the courts, Annotations, 99 ALR 79, et seq., the prevailing rule seems to be that a subsequent promisor may be bound by his oral promise to answer for the antecedent debt, default or miscarriage of another when it can be said that there is a direct benefit moving to the promisor; that is, there must be a new and independent consideration for this subsequent promise to withdraw it from the prohibition of the statute, a consideration which is beneficial to the promisor and desired for his personal benefit or some business reason. 2 Williston on Contracts, Rev ed, § 472, p 1358; Umpqua Valley Bank v. Wilson, 120 Or 396, 252 P. 563.
As stated in 1 Restatement of the Law, Contracts, § 184, p 244:
Based upon this proposition of a new agreement with a real benefit accruing to the promisor, the writers of the Restatement of the Law of Contracts have set forth Illustration 1, supra, and the majority of the courts and textwriters have said, in substance, that "A promise to pay for past and future labor in order that the laborer will continue work which is of direct benefit to the promisor has been held valid in its entirety as not within the statute." 37 CJS 541, Statute of Frauds, § 28, subsection c. See 2 Williston on Contracts, § 481, p 1379; 49 Am Jur 471, Statute of Frauds, § 130.
7. The evidence in this case shows that the defendants were constructing this building to be rented to tenants and to be used by themselves for their professional offices, and that they were anxious to have the building completed for these purposes. They were in fact receiving a direct business benefit, and, therefore, there was sufficient evidence as a foundation for the jury's determination that this was an original obligation of the defendants to pay both for past services rendered and materials furnished and those furnished subsequent to the oral promise.
Nothing stated herein is contrary to the holding of this court in Mackey v. Smith, 21 Or 598, 606, 28 P *15 974, for, while the matter of an oral promise to pay the antecedent debt of another was disallowed by the trial court and the debt subsequent to the oral promise was allowed, the appeal was taken only as to the merchandise furnished subsequent to the oral promise. However, this court, in dicta, recognized the rule of direct benefit, saying:
We find no merit in the defendants' contention that the complaint does not state facts sufficient to constitute a cause of action.
Finding no error in the record the judgment is affirmed.