Case Name: BOLLN v. METCALF
Court: Supreme Court of Wyoming
Jurisdiction: Wyoming
Decision Date: 1895-10-25
Citations: 6 Wyo. 1
Docket Number: 
Parties: BOLLN v. METCALF.
Judges: Hayford, Dist. J., concurs.
Reporter: Wyoming Reports
Volume: 6
Pages: 1–24

Head Matter:
OCTOBER TERM, 1895.
BOLLN v. METCALF.
Promissory Notes — Consideration-Duress—Evidence—Partnership— Principal and Surety.
1. The settlement of an action, either begun or threatened, unless it be founded on á fraudulent or fictitious claim, is a valid consideration for promises by a third person to pay the claim.
2. The service made or threatened of an attachment in such action does not constitute duress.
3. Promissory notes given by a third person to one who is a surety upon the bond of a defaulting officer, to indemnify such surety, will be held as security or indemnity for the benefit of a co-surety equally with the payee named in the notes.
4. Even if the surety named as payee intended the indemnity for his own benefit to the exclusion of his co-surety the law will apply it for the benefit of both.
5. The notes being for the entire amount of the defalcation of the officer, and as equity will make the burden of payment and the benefit of indemnity equal between the sureties by contribution, the surety receiving the notes from the third person, would not he fully indemnified by anything less than the payment of the amount of the defalcation.
6. In a suit upon such notes in the name of the- payee, he is entitled to recover the full amount, notwithstanding that he and his co-surety together may have paid the amount of the defalcation in the discharge of their obligation under the bond.
7. In the absence of fraud or collusion, a judgment is conclusive evidence, even against a stranger, of the relation of debtor and creditor between the parties thereto, and of the amount of the indebtedness.
8. The maker.of the notes and the defaulting officer having been partners conducting a mercantile establishment, and the purpose of the former, in giving the notes to indemnify the surety, being to save the partnership property from attachment in a suit by the sureties against their principal (the officer) it is immaterial whether or not an action had been commenced, or a writ of attachment issued.
9. Held, also, that the trial court properly excluded from the consideration of the jury questions which were raised by the defense respecting the actual commencement of an action against the officer by the sureties and the validity of the writ of attachment issued therein..
10. In a suit upon the said notes, it is immaterial that the maker’s former partner — the defaulting officer— had no real interest in the partnership property on account of his having received from the firm more than his interest amounted to.
Groesbeck, O. J., Dissenting.,
[Amended petition filed in District Court, March 21, 1892.
Decided Oct. 25, 1895.
Rehearing denied April 16, 1896].
ERROR to District Court for Converse County, Hon. Richard H Scott, Judge.
This was an action brought by George W. Metcalf against George Bolin upon two promissory notes. The defenses interposed were, in addition to a denial of the allegations of the petition, want of consideration, duress, false representations connected with the alleged duress, and that the notes did not constitute the entire contract. After the introduction of all the testimony, the defendant requested the court to give certain instructions to the jury, and also moved the court to submit .to the jury certain questions of fact for their separate answers thereto in the nature of a special verdict. All of the requested instructions were refused. The motion to submit special questions was denied, and the court directed the jury to return a verdict for plaintiff for $370.45. Judgment was awarded upon the verdict returned as directed, and defendant prosecuted error. George Bolln and one Rastaetter were partners conducting a mercantile business. The latter was treasurer of a school district. He was a defaulter in said office and absconded. Metcalf and one Schlichter were sureties on his official bond. After Rastaetter absconded, and before his sureties had paid any money by reason of the bond, they claimed to have brought suit against Ras-taetter for the recovery of the amount of the default, secured the issuance of an attachment, and caused it to be levied or threatened to be levied upon the partnership property of Bolln and Rastaetter. The levy was released, or the threat was not carried out, upon Bolln giving to Metcalf the notes in suit. A contract referring to the notes was signed, which is copied in the opinion. Subsequently suit was brought on the bond of Rastaetter, and judgment rendered against the sureties, — Metcalf and Schlichter,— which they paid. The notes were for the amount of the defalcation. The defendant in the case at bar insisted that the attachment suit had not, in reality, been commenced; that the writ which was levied or threatened to be levied was not valid; and that Metcalf and Schlichter had no actual cause of action when they sued out the attachment if it was issued. The other facts appear in the opinions.
H. Donzelmann for plaintiff in error.
It was error to permit the introduction in evidence of the petition in the case of the county commissioners in the suit upon the bond of the defaulting officer, because that was res inter alias acta. There was evidence tending to show that the pretended levy upon the stock of goods of plaintiff in error was not made upon any valid writ of attachment. Likewise, that the goods were the sole property of plaintiff in error; and that no legal cause of action in favor of the plaintiffs — sureties — in the suit against the defaulting officer. This all shows that the purpose of defendant in error was to extort from plaintiff in error money or the promise to pay money. This constituted duress sufficient to avoid the notes. (Cooley on Torts, 2d ed., p. 593; Chandlery. Sanger, 114 Mass., 364; Sartnell v. Wharton, 28 Yt., 370; Richardson v. Duncan BK H., 508; Colwell v. .Peden, 3 Watts, 327; Adams v. Reeves, 68 N. C., 134; 1 Story’s Eq., 239; Bennetv. Ford, 47Ind., 264; Spaidsv. Barrett, 57111., 289; Fashay v. Ferguson, 5 Hill, 158; Steph., nisi prius 1.358; Chase, v. Divinal, 7 Greenl., 134; Oates v. Hudson, 6 Exch., 346; Nelson v. Suddarth, 1 H. & M., 350; Adams v. Schiffer, 11 Colo., 15; Yyne v. Glenn, 41 Mich., 112; Oliphant v. Markham, 79 Tex., 543; White v. Heylman, 34 Pa. St., 142; Atlee v. Backhouse, 3 Mees. & W., 650; Sasfertas v. Jennings, 1 Bay (S. C.), 470; Collins v. Westbury, 2 id., 211; Crawford v. Cato, 22 Ga., 594; Gates v. Dundon, 18 N. Y., Supp., 149; Devlin v. Burns, 147 Pa. St., 168.)
On petition for Rehearing.— A partnership at will may be dissolved by either partner at any time, and his intent may be gathered from his acts. (Pars, on Part., 438; Whitman v. Leonard, 3 Pick., 179; Arnold v. Brown, 24 id., 94; Ayer v. Ayer, 41 Yt., 349; Hamill v. Hamill, 27 Md., 686; Durbin v. Barber, 14 O., 315.) The partnership between Bolln and Rastaetter was one at will, and it was not necessary for Bolln to apply to a court for dissolution upon the absconding of Rastaetter. (Pars. Part., 499; Koenig v. Adams, 37 Kan., 55; Blaker v. Lands, 29 id., 552.) Bolln had given public newspaper notice of the dissolution, so that Metcalf, when he commenced the attachment suit, had notice of such dissolution. It was requisite for him to have proved that Rastaetter had an interest in the goods in Bolin’s possession, subject to attachment. It was prejudicial error to exclude testimony offered by Bolln to show the absence of any interest in Rastaetter. As a rule, a judgment is not admissible in evidence for or against a stranger to the action in which it was rendered. (12 Am. & Eng. Ency. L., p. 149 d. n. 4.) Bolln was not in privity with Rastaetter, the principal defendant in the suit. (2 Black on Judg., Sec. 549.) The judgment was not competent evidence of the amount Metcalf did pay, nor for which he was liable. (2 Black, J. 555, 573; Freeman on J., 181; Brandt on Sur. & Guar., Sec. 216; 12 Am. & Eng. Ency. L., p. 100; Means v. Hicks, 65 Ala., 241; Fletcher v. Jackson, 23 Yt., 592.)
The so-called indemnity was given to secure Metcalf against loss. If he had received the notes under any agreement with Bastaetter, the principal debtor, or from him, or if Bolin had given them under an agreement with Bastaetter, then the rule laid down by the court in original opinion as to the rights of the co-surety would apply. But under the peculiar circumstances of the case at bar, Metcalf was not obligated to hold Schlichter — his co-surety — harmless. (Harris on Subr., Sec. 174, 803; Liggett v. McClellan, 39 0. St., 627.) The notes were without consideration. Metcalf had not agreed to relinquish his claim against Bastaetter. The mere taking of collateral security for an existing indebtedness does not per se extend the time of payment, or suspend the remedy on the original indebtedness. (Gehu v. Heimcewiz, 11Wend., 312; Bank v. Ives, 15 id., 501; Stalker v. McDonald, 6 Hill, 93; Austin v. Curtis, 31 Yt., 64; Wood v. Bobinson, 22 N. Y., 564; Corey v. White, 52 id., 138; Bangs v. Mosher, 23 Barb. 479.)
Gibson Clark, for defendant in error.
In a suit by the sureties on the bond against the principal— Bastaetter — the judgment against them would have been admissible. (2 Black on Judg., Sec. 574.) It was equally admissible against Bolln on the indemnity notes to show the amount of the defalcation of Bastaetter, especially as under the agreement between Bolln and Metcalf, the former was entitled to credit for any amount of the notes in excess'of the defalcation. (Ins. Co. v. Wilson, 34 N. Y., 275; Konitsky v. Meyer, 49 id., 571; 1 Brandt on Sur., Sec. 214; 12 Am. and Eng. Ency. L., pp. 98, 99, and notes.) Had the court submitted the question to the jury respecting the issuance of the attachment, and had the jury found that it had not been issued, it would have been the duty of the court to vacate such finding under the evidence; hence it follows that there was no error in taking the question from the jury. (Corning v. Troy, etc., 44 N. Y., 577; 11 Am. and Eng. Ency. L., p. 246 and note 4; id., pp. 244, 245 and note; Thompson v. Press Co., 37 Minn., 285.) The absconding of Eastaetter did not have the effect of vesting in Bolln the sole ownership of the partnership property. (17 Am. and Eng. Ency. L., p. 1108 and note; 2 Bates on Part., 1097-1112; Trafford v. Hubbard, 15 E. I., 326.) The sureties had the right to commence the attachment suit. (Eev. Stat., Sec. 3051; Gansv. Thompson, 11 O. St., 579.) The levy of the attachment did not constitute duress (Taylor v. Cottrell, 16 Ill., 93) because where a party threatens nothing which he has not a legal right to perform, there is no duress. (Skeate v. Beals, 11 Ad. and El., 983; Clark on Contr., 361, note; Preston v. Boston, 12 Pick., 14; 6 Am. and Eng. Ency. L., pp. 60 and 61; Kingsbury v. Sargent, 83 Me., 230; Storer v. Mitchell, 45 Ill., 213; Wilcox v. Howland, Pick., 167; 2 Bates on Part., See. 1105.) Under the 5th defense stating that Eastaetter was not short in his accounts, the burden was upon Bolln to establish the truth of such statement. (2 Pars, on N. and B., 145 and 537; Smalley v. Bristol, 1 Mich., 153; Averill v. Field, 3 Scam., 390; 1 Daniel Keg. Instr.,' Sec. 159.) A debt from a third person is in general good consideration for a note. (1 Pars, on N. and B., 195; 1 Daniel Keg. Instr; Sec. 185.) The plaintiff having made out his case by producing the notes sued on, and proving their execution, the consideration being presumed, he was entitled to judgment unless the defendant overcame the proofs by a preponderance of- evidence to the contrary. (2 Greenleaf Ev., See. 172 and note; People v. Day, 123 Mass., 520.) A compromise of a disputed claim, or the discontinuance of a suit already brought, will uphold a promise, although: the demand was unfounded; (3 Am. and Eng. Ency. L., p. 837 and notes; Crans v. Hunter, 28 N. Y., 389.) The waiver of any legal or equitable right is a sufficient consid eration for a promise. (1 Pars, on Contr., 444.) The notes were based upon a sufficient consideration. Me Kinley v.' Watkins, 13 Ill., 140; Sigswortb v. Coulter, 18 id., 204-Miller v. Hawker, 66 id., 186; 1 Pars. N. and B.-, 196 and 198; Mull y. Van Frees, 50 Cal., 547; People y. Day, 123 Mass., 520; Foster v. Fulton, 6 id., 58; Delane v. Bartlett, 6 Cush., 364; Russell v. Cook, 3 Hill, 504.)

Opinion:
Conaway, Justice.
This is an action brought in the district court by defendant in error on two promissory notes, the execution of which in his favor by plaintiff in error is admitted. The notes were executed under the following circumstances: One Charles Rastaetter was treasurer of school district number six in Converse County, and defendant in error and John Schlichter were sureties on his bond. Rastaetter was, or had been, partner of plaintiff in error in a mercantile business. Shortly prior to April 7, 1890, Rastaetter absconded, and was defaulter in the funds of the school district to the amount of $542.82. The notes are of that date and for that amount — one for $300.00 at sixty days and the other for $242.82 at four months, both with interest at twelve per cent per annum from maturity.
At the time of the execution of the notes, defendant in error and Charles Schlichter, sureties of Rastaetter, were attempting to have an attachment served upon the interest or supposed interest of Rastaetter in the property of the partnership consisting of Rastaetter and plaintiff in error. Upon the execution of the notes these proceedings were discontinued. It is claimed that this suit in attachment, if commenced at all, was not in proper form, and that the notes were given without consideration and under duress ; but it is immaterial whether the action was in proper form, or whether it was commenced at all, or not. The parties had a right to prosecute an action by attachment against Rastaetter to obtain indemnity as his sureties, and the alleged mistake in the form of action is immaterial. The settlement of an action, either begun or threatened, unless it be founded on a fraudulent or fictitious claim, is a valid consideration for promises by a third party to pay the claim, and the service or threatened service of an attachment in such action is not duress of goods. So the defense of no consideration and of duress fails.
Defendant in error testifies that pending attachment proceedings he told Bolin, who wished to avoid the service of the attachment of the interest or supposed interest of the absconding partner, that in order to discontinue the attachment suit he (plaintiff in error) must have security. He further testifies that the notes sued on were given to indemnify him ; that he thereupon stopped the attachment proceedings and the suit against Rastaetter, and "this closed up the entire transaction." This portion of the testimony is not contradicted, and is relied upon by both parties.
At the time of the execution of the notes, the following written agreement was signed by defendant in error:
"Whereas George Bolin has this 7th day of April, A. D. 1890, made two notes for the amount and sum of five' hundred and forty-two dollars, being the amount claimed to be short by Charles Rastaetter as treasurer of school district number six. It being hereby agreed by the payee of said notes that if the said amount found to be due said district is less than aforesaid amount it shall be allowed and credited on said notes."
The defalcation was for the exact amount of the notes, and the sureties, defendant in error and Charles Schlichter, afterward paid a judgment for that amount against them and in favor of the school district. The security or indemnity, which defendant in error had obtained, was these notes of plaintiff in error for the exact amount of the defalcation of Rastaetter. And this security or indemnity was for the benefit of his co-surety, Charles Schlichter, equally with himself. Even if defendant in error intended this indemnity for his own benefit to the exclusion of his co-surety, the law will apply it for the benefit of both. (24 Am. & Eng. Ency. of Law, p. 815, subdiv. 7, note 3, and authorities cited.) Brandt on Suretyship, Sec. 268; Harris on Subrogation, Sec. 207.
This legal proposition is nowhere questioned or doubted by any authority, so far as we are advised, and it is not necessary to discuss the question, as there are no conflicting authorities to weigh. It is immaterial in what proportion the two sureties paid the defalcation. Equity will make the burden of payment and the benefit of the indem-. nity equal between them by contribution. And defendant in error could be fully indemnified by nothing less than the payment of the amount of the defalcation.
In our opinion the judgment of the trial court should have been rendered in favor of defendant in error for the entire amount of the notes. It was for a less amount, but he has not appealed. The other party can not complain that the amount of the judgment against him is too small. Judgment affirmed.
Justice Potter, having announced his disqualification to sit in the hearing of this cause, the other justices called in Judge Hayford of the second judicial district.
Hayford, Dist. J., concurs.
Groesbeck, O. J., dissents.