Case Name: Fosila, Respondent, vs. O'Donnell, imp., Appellant
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1904-01-12
Citations: 120 Wis. 336
Docket Number: 
Parties: Fosila, Respondent, vs. O’Donnell, imp., Appellant.
Judges: 
Reporter: Wisconsin Reports
Volume: 120
Pages: 336–345

Head Matter:
Fosila, Respondent, vs. O’Donnell, imp., Appellant.
December 16, 1903
January 12, 1904.
Written instruments: Ambiguity: Parol evidence: Statute of frauds: Assumption of debt as part of consideration: Evidence: Immaterial error: Attorney and client: Conversations, in absence of client: Accord and satisfaction: Authority to bind client: Ratification: Tender bach of amount received: Instructions to jury: Judgment.
1. Where one person, on purchasing property of another, agrees to apply the consideration in part payment of the debts of the latter, but the written memorandum fails to fully specify all the stipulations made as to the debts assumed, it may be shown by pai'ol testimony what debts the purchaser agreed to pay.
2. An agreement by one person to pay certain debts of another as the consideration for the transfer of property to him by the latter is not in the nature of a special promise to answer for the debt, miscarriage, or default of another, and need not be. in writing.
3. Error in refusing to admit evidence is cured by subsequent admission of the evidence.
4. Evidence of interviews between the attorneys who acted for plaintiff and defendant in a former suit between them, in which it was claimed the matter in controversy in the present action was compromised, which did not take place in the presence of plaintiff or her agents and were not shown to have related to matters within the authority of plaintiff’s attorney, is held to have been properly excluded on plaintiff’s objection.
5. An attorney can bind his client-in an attempted accord and satisfaction only upon an express authorization.
6. An attorney made an accord and satisfaction of several notes of his client without express authority, and neither the client nor her agents had knowledge of its terms when the proceeds weré turned over to her, hut supposed the amount received to have heen taken in satisfaction of one note only, and, upon notice of the payor’s claim that the settlement included all the notes, thé client promptly disavowed the attorney’s acts. Held, that retention of the amount so paid, and failure to tender repayment upon discovery of the payor’s claim, did not constitute an affirpaance of the attorney’s acts or a ratification of the accord and satisfaction.
7. Specific error for failure to instruct on the questions at issue can he assigned only upon refusal to give an instruction formally requested in writing.
8. Plaintiff, the owner of three notes which defendant had assumed and agreed to pay, commenced an action upon the first note, which action was dismissed by stipulation, entered into, however, by plaintiff’s attorney without authority, in consideration * of payment to plaintiff of a sum less than the amount due on the note in suit, defendant believing the stipulation to be an accord and satisfaction of plaintiff’s claim against him upon all three of the notes, and plaintiff receiving and retaining said sum upon the belief that it was in satisfaction of the note in suit only. Plaintiff subsequently brought an action on the other two notes and recovered judgment. Held, that the court should apply the amount paid under the supposed accord and satisfaction in part satisfaction of plaintiff’s demand.
Appeal from a judgment of tbe circuit court for Langlade county: JohN GoodlaNd, Circuit Judge.
Modified and affirmed.
This is an action to recover on two promissory notes executed by tbe defendant Prosser to tbe plaintiff, one for $200 and tbe other for $245, both bearing date of August 19, 1891. Tbe notes were given as a part of .the purchase price of a lot in the city of Antigo. At tbe time of tbe execution of’ tbe notes respondent executed a land contract whereby she-agreed upon tbe payment of tbe notes to convey tbe land to J. W. Prosser, one of tbe defendants. Prosser took possession of tbe premises and occupied them for a livery business- In the month of March, 1893, the defendant O’Donnell purchased, for a consideration of $2,000, a one-half interest in the livery business and property, including the real estate. $1,625 was to be applied on other debts of Prosser and the balance on these notes. At this time there were three notes due respondent from J. W. Prosser. On the 21st of September, 1893, the partnership between Prosser and O’Donnell was dissolved, O’Donnell purchasing the whole business, including the lot purchased from respondent. Respondent brought action on one note for. $200 against Ptosser and O’Donnell, January 14, 1896, in the municipal court of Langlade county, and recovered judgment therein. An appeal was taken to the circuit court, where while the suit was pending the following stipulation .was made:
“It is hereby stipulated by and between the plaintiff and the defendant, Timothy O’Donnell, that in the consideration of the payment of seventy-five dollars ($75.00) and the disbursements of the action by the said defendant, Timothy O’Donnell, that this case is hereby settled and dismissed as to the said Timothy O’Donnell, defendant, and without prejudice to the plaintiff to enter judgment against the defendant, J. W. Prosser, the action not being dismissed as against him. It is. also understood and agreed and stipulated that in consideration of said settlement by said Timothy O’Donnell, defendant, that the plaintiff, Kate Fosha, waives all other and further claims she may have against the said Timothy O’Donnell but without prejudice to the plaintiff- as to any further claims of any nature she may have against the defendant, J. W. Prosser.
“Dated this 23rd day of August, A. D. 1899.
“J. H. Trever, Attorney for Plaintiff.
“T. W. Hogan, Attorney for Defendant, Timothy O’Donnell.”
The $75 was paid by appellant O’Donnell and was received by respondent from her agent, Mitchell, who received it through her attorney. She still has the same in her possession.
Eespondent asserts tbat sbe bad no personal knowledge or information of tbe contents of tbe stipulation, and understood it was to settle no more than tbe note then in litigation, and asserts tbat sbe was so informed by ber attorney wbo •signed it for ber.
Tbe jury found tbat appellant agreed to pay tbe notes in question as part of tbe consideration of tbe purchase price of tbe partnership business from Prosser; tbat respondent and ber agent, Mitchell, bad not authorized Trever, ber attorney, to sign tbe stipulation of settlement in tbe case then pending between ber and appellant; and tbat sbe bad no knowledge of tbe contents of tbe written stipulation when tbe money was paid thereon.
It appeared by tbe evidence tbat respondent and ber agent understood tbat tbe stipulation covered no more than tbe matters in controversy in tbat suit, and tbat they treated the stipulation as payment only of tbe note and tbe disbursements in tbat action. During the pendency of this action sbe bad denied tbat sbe authorized it to be made to tbe effect alleged and claimed by defendant in bis answer.
Tbe court awarded judgment on tbe special verdict in respondent’s favor for tbe amount of the note. This is an appeal from tbat judgment.
For tbe appellant there was a brief by T. W. Hogan and W. F. White, and oral argument by Mr. Hogan.
For tbe respondent there was a brief by Foster & Mor son, •and oral argument by O. H. Foster.

Opinion:
SiBBBCKER, J.
The cause of action set out in tbe complaint is to recover on two promissory notes against defendant Prosser as tbe maker, and against tbe defendant 0JDon-nell upon tbe ground tbat be agreed to pay them out of tbe money due Prosser from him. Tbe defendant O'Donnell •defends upon two grounds: (1) Tbat be at no time agreed to pay bis debt to Prosser by paying these notes held by plaint iff; and (2) that whatever claim plaintiff may have had against him was fully compromised and paid under written settlement between them in a former action brought on another note arising out of the same transaction.
One of the issues was whether the defendant O'Donnell in purchasing the interest of Prosser's livery business in March and September, 1893, agreed to apply the consideration ($2.,000) paid by him in discharge of Prosser's liabilities on these notes held by plaintiff. The written memorandum of the agreement between the defendant O'Donnell and Prosser did not fully specify all the stipulations made as to what debts O'Donnell agreed to pay out of the moneys due Prosser for the sale' of the livery business and stock. It was therefore proper to receive oral testimony to ascertain what debts the defendant O'Donnell had agreed to pay. This-in no wise contradicted the written agreements between the defendants embodying a part of the transaction of the purchase of the livery property and the application of the consideration to the payment of Prosser's debts. Brader v. Brader, 110 Wis. 423, 85 N. W. 681; Cuddy v. Foreman, 107 Wis. 519, 83 N. W. 1103.
It is further asserted that if such was the understanding it was a promise to answer for the debt, default, or miscarriage of another, and is therefore void, because not in writing, expressing the consideration, and subscribed by the party to be charged. The effect of the transaction was that the defendant O'Donnell agreed to pay his debt to Prossery by assuming, with respondent's assent, the payment of these notes due her. Such an agreement it is held is not in effect an undertaking in the nature of a "special promise to answer for the debt, miscarriage or default of other persons,'' though it is collateral to the liability of the original debtor to pay the same debts. The agreement is not a mere promise to answer for another's liability contemplated by the statutes requiring such agreements to be in writing, expressing the consideration, and signed by the party sought to be charged. It is an agreement that the defendant O'Donnell will pay his debt to Prosser in a particular manner, by discharging these notes held by plaintiff, based upon the consideration between him and Prosser at the time the agreement was made. When this promise was accepted by plaintiff the liability was established, and she could maintain her action against him alone or she might join Prosser with him as defendant. Morgan v. South Milwaukee L. V. Co. 97 Wis. 275, 72 N. W. 872; Putney v. Farnham, 27 Wis. 187, and -cases cited; Hoile v. Bailey, 58 Wis. 434, 17 N. W. 322.
The action of the trial court was'proper as regards the . questions presented upon the first three grounds assigned as error.
Error is specifically assigned upon several rulings of the court in admitting testimony tending to show that O'Donnell agreed to pay the notes out of his debt to Prosser arising from the purchase of tho lively business and property, including the lots sold to him by plaintiff under the land contract. As above stated, whether such an agreement had been made was an issue, and, since the agreements relating thereto were not all reduced to writing, it was proper to receive oral testimony to show the part which defendant O'Donnell had agreed to pay. The testimony objected to came within this class, and was properly admitted by the court.
Questions put to defendant while on the stand for the evident purpose of giving him an opportunity to deny making any agreement to pay these notes were excluded by the court, and exceptions taken. It appears that the court reversed its own ruling on this question, and thus any error it committed in this respect was corrected by permitting him to state fully his denial and explanation of the transaction by which it is claimed he promised or agreed to pay these notes.
Complaint is made that appellant was prejudiced upon the frial by excluding the testimony of defendant's attorney, Mr. Hogan. Tbis testimony related to interviews between him/ and plaintiff's attorney respecting tbe settlement of tbe action between tbe parties. Upon examination of tbe record it appears tbat tbe trial court properly excluded tbe evidence upon tbe ground tbat tbe interviews were in tbe absence of plaintiff and ber agents, and for tbe further reason tbat nothing appeared to show tbat tbe inquiry related to matters, within tbe authority of ber attorney. Nor were appellant's-rigbts affected by tbe action of tbe court in refusing to admit in evidence tbe records and file of tbe former suit, when first offered, since tbe court received them in evidence before the-defendant rested bis case. We cannot perceive tbat tbis was prejudicial in any respect. .
It is contended tbe court erred in refusing to submit the-special verdict requested, in tbe form tbe verdict was submitted, in tbe instructions given, and in omitting to instruct upon certain phases of tbe case. Tbe errors assigned upon these grounds relate to tbe second defense above mentioned, namely, tbat there was an accord and satisfaction of tbe cause of action alleged by tbe plaintiff. Tbe plaintiff stands before tbe court as denying tbe settlement alleged to have-been made by ber attorney, asserting tbat it was made without authority; tbat tbe payment of $15 to ber attorney was received by ber without knowledge of its terms, and upon the-representations and tbe understanding tbat it was in satisfaction and settlement of tbe claims involved in tbat action; and tbat she was not informed tbat this accord and satisfaction was claim'ed to include tbe notes in question until tbe defendant so alleged in bis answer in tbis action.
Plaintiff's attorney bad no authority under bis retainer to bind bis client in an attempted accord and satisfaction; he-can exercise such a power only upon an express authority. Mallory v. Mariner, 15 Wis. 172; Kelly v. Wright, 65 Wis. 236, 26 N. W. 610; Mygatt v. Tarbell, 85 Wis. 457, 55 N. W. 1031. It therefore devolved upon appellant to estab- lisb that Trever, respondent's attorney, had been given express authority to make this settlement, or, if he had no such authority when it was made, that respondent had ratified it. Upon the first question the evidence of respondent and her agents was positive that no such authority was given. The attorney who was called as a witness by appellant declared that he had conferred with her agents and consulted them as to what conditions were in the settlement before it was executed by him. Upon this state of the proof the court submitted this issue to the jury in the special verdict. The jury found that respondent's attorney had not been authorized to make the settlement embodied in the written stipulation, and that neither she nor her agents had knowledge of its terms and conditions when the $75 was paid her. The respondent at no time tendered repayment of the $75 so received. It is contended that this constitutes an affirmance of her attorney's acts, and thereby ratifies the settlement as an accord and satisfaction of the notes in question. We cannot assent to this claim in view of the situation of the parties under the facts and circumstances of the case. That respondent stood in the attitude of repudiating the settlement is manifested by her cóurse in commencing this action on the notes and by offering to litigate the question upon the trial. She had a right to a trial of the issue in this case, whether the alleged settlement included these notes. Her position in the action was positive notice to appellant that she controverted his defense of an accord and satisfaction. The stipulation was not so plain and clear on its face as to preclude all inquiry into the situation of the parties and the circumstances under which it was made, for the purpose of aiding the court to determine, in the light thereof, whether the parties making it intended it should be deemed an accord and satisfaction of the notes sued upon. This cast the burden on appellant of establishing the fact that she ratified the acts of her attorney, and thus was bound by the stipulation.
Considering tbe evidence,' aside from ber failure to tender back tbe $75, it appears tbat sbe promptly and actively declared ber nonassent and condemnation of tbe unauthorized acts of ber attorney. Appellant's affirmance of tbe settlement in tbis action precluded bim from voluntarily taking back tbe money, and compelled bim to refuse.it if tendered. Eespondent's claim tbat tbe stipulation and payment under it was a settlement only of tbe note sued onjm tbat action entitled ber to bold tbe money until tbat question was determined upon tbe trial of tbis case, and sbe was not, therefore, called upon to restore tbe amount so paid ber until tbe court found and determined sbe bad in fact not ratified the accord and satisfaction. We are led to tbe conclusion tbat respondent's conduct and acts from tbe time she was notified of appellant's claim as to tbe settlement do not constitute a ratification of tbe unauthorized accord and satisfaction which ber attorney attempted to make for ber. Mechera, Agency, § 153; Mobile & M. R. Co. v. Jay, 65 Ala. 113; Ætna Ins. Co. v. Northwestern I. Co. 21 Wis. 458; Wheeler v. Northwestern S. Co. 39 Fed. 347; Waite v. Vose, 62 Me. 188; Owings v. Hull, 9 Pet. 607; Thacher v. Pray, 113 Mass. 291; Lester v. Kinne, 37 Conn. 9.
Tbe facts established by tbe evidence were sufficiently clear to justify tbe jury in answering tbe special questions covering tbis issue in tbe negative. Nor is error shown to have been committed in framing tbe verdict or in tbe instructions given -by tbe court.
Error is assigned upon tbe ground tbat tbe court failed to give any instructions upon tbe burden óf proof as to tbe questions litigated. No specific instructions were requested either in writing or orally. "Specific error can be assigned only upon refusal to give an instruction formally requested in writing." Hacker v. Heiney, 111 Wis. 313, 87 N. W. 249, and cases cited.
Under tbe peculiar circumstances of tbe case tbe question arises, Was appellant entitled to a direction tbat respondent make restitution of the $75 paid bj him under the stipulation, or should the court; in view of the fact that respondent was entitled to judgment for the amount of the notes, direct that it be applied in part satisfaction of this demand ? The fact 'appears, as found bj the jury, that a liability existed in respondent's favor upon these notes. Appellant, who must be presumed to be solvent, paid this .sum to respondent with intent to discharge this liability in full under the stipulation of settlement. We do not perceive how the application of this sum in part payment to the same debt could be unjust to appellant, nor is there anything in respondent's conduct which should prevent such an application from being made. She in no way misled appellant to make this payment, hut in good faith received the money to be applied on his debt. She should not, therefore, be estopped from receiving what, in the light of the circumstances and relation of the parties, can in equity be awarded her. Under the circumstances we think the sum of $75 in respondent's hands should be applied in part payment of the judgment recovered by her for the amount of the notes. Friend Bros. C. Co. v. Hulbert, 98 Wis. 183, 73 N. W. 784; Ludington v. Patton, 111 Wis. 208, 86 N. W. 571; Gay v. D. M. Osborne & Co. 102 Wis. 641, 78 N. W. 1079; Gates v. Raymond, 106 Wis. 657, 82 N. W. 530; Nye v. Swan, 49 Minn. 431, 52 N. W. 39.
The judgment should be modified, directing the application of the $75 as part payment of the amount recovered.
By the Court. — The judgment is modified by reducing the damages to $776.33, and the total to $831.48, and as so modified the judgment is affirmed; the appellant to recover costs in this court.