Court Opinion

ID: 5415621
Source: CourtListenerOpinion
Date Created: 2022-01-08 16:17:07.33965+00
Date Added: 2024-06-11T08:30:59.711458
License: Public Domain

Finch, J.
(dissenting). This is an.action on an oral contract to pay for lumber purchased by a third party. At the trial the two main questions presented were: first, whether the defendant ever promised to pay for the lumber, and second, if he did, whether the promise was such as to take it without the Statute of Frauds.
The lumber was purchased from the plaintiff on October 26,1914, by the Simar Realty Company, which was erecting five houses. Defendant had entered into a building loan agreement with the Simar Realty Company on October 14, 1914. The building loan agreement provided for the advancing of $32,500 in seven installments; for the delivery to the defendant of mortgages for' this amount and the immediate maturing of the mortgages in the event of the placing of any lien upon the premises. In addition, it appears that the defendant was to obtain six per cent interest *256and a five per cent commission on the amount of money loaned. Plaintiff’s contract with the Simar Realty Company for the sale of the lumber provided for payment out of the third and fourth installments of the building loan. (The contract is express as to the payment being taken out of the fourth payment and is ambiguous as to whether it should be taken out of the third payment, but the testimony of the plaintiff shows that it was to be taken out of the third payment also.) Between November twenty-fourth and twenty-seventh and shortly before the third installment (the enclosure installment) was paid to the realty company, and while there was no default in the payment to plaintiff by the Simar Realty Company, plaintiff’s general manager, Butler, called on the defendant and threatened to file a materialman’s lien for the lumber furnished. At that time all the lumber called for by the contract (about $1,900 worth) had been furnished with the exception of between $35 to $71 worth. Butler testified that when he threatened to file the lien defendant asked him not to do so, saying it would.be bad for everybody, and asked Butler to.wait until defendant could confer with the realty company. Butler testified further that complying with the defendant’s request he did not file a lien. The $35 to $71 worth of lumber was shortly thereafter delivered. It is a fair deduction from the evidence that the call of Butler upon the defendant, at which call Butler testifies the promise sued on was made,.did not take place until the $35 to $71 worth of lumber had been delivered. But whether this was so or not is immaterial here, because so far as the record shows there had been no default in the payments to the defendant by the Simar Realty Company, and hence any lumber that was delivered was delivered pursuant to the. .fact that the plaintiff was bound to deliver ,the *257same under its contract with the Simar Eealty Company, and hence the delivery of this lumber cannot be considered as constituting any consideration. Butler further testifies that a few days after the alleged promise he telephoned to the defendant and the latter said he had given the money to the realty company to pay plaintiff, and that thereafter the realty company did pay plaintiff $500, leaving still unpaid $1,465. Defendant testifies that he had only one conversation with Butler, and that when the latter threatened to file a lien defendant advised him not to do so, but to get an order on defendant from the realty company directing payment. Defendant denied that he ever promised to pay for the lumber. Defendant was in part corroborated by two other witnesses, who claimed that they heard one conversation between Butler and defendant, but their testimony is not altogether satisfactory. The strongest corroboration of defendant is the letter written by plaintiff a few days after the alleged promise by defendant to pay for the lumber, in which is stated: “ We ask you to please be kind enough to notify us when you are apt to make payment on account of this building loan;” apparently for the purpose of obtaining money from the latter company. Butler testifies, however, that the letter was written at defendant’s request. The court left it to the jury to say which was the correct version of the transaction between plaintiff and defendant. Since it was entirely a question of the credibility of the witnesses, their finding should be accepted.
The court charged, as a matter of law, that, if Butler’s testimony was true, there was sufficient beneficial consideration moving to the defendant to take the contract out of the operation of the Statute of Frauds, requiring the contract to be in writing. This presents the important question in this case. Under the *258authorities it makes no difference whether the debt was antecedently or subsequently contracted. Mechanics & Traders’ Bank v. Stettheimer, 116 App. Div. 202. The inquiry is whether the promisor by the making of the promise becomes a principal debtor, primarily liable, or whether the promisor is only to become collaterally liable. The language of the promise in the case at bar, i. e., “ I will pay you out of the enclosure payments ” is sufficient to comprise an original undertaking, and therefore we must look at the surrounding circumstances to see whether it should be construed as an original promise, independent of the original debt, or collateral to it. The controlling circumstances in determining the nature of the promise, that is, whether it is an original promise or a collateral one, is. found in the fact that the promisor received at the time of the making of the promise not only a consideration sufficient to constitute the promise a binding contract, but that in addition there was consideration beneficial to the promisor and accruing directly to him. The promisor had a mortgage on the premises, and according to the testimony the plaintiff threatened to file a lien and abstained at the request of the promisor. The filing of such lien would have directly affected the interest which the promisor had in the premises under his mortgage and would have caused a complete termination of the building loan agreement under which he advanced' two. payments and was to advance five more. It is not clear from the record whether when Butler said, “ I won’t be in any worse position; there’s no building loan contract on record, and my lien would come ahead of anything that was on record except the mortgage there,” he referred only to the underlying mortgage on the premises or to the mortgages which had been recorded under the building loan agreement, and which might *259be construed as good up to the amount of money advanced under the building loan. In any event the testimony can be taken as meaning that from the moment of the filing of the lien the proceedings under the building loan would be terminated, and this the defendant admitted. According also to the testimony of the defendant he was to receive five per cent of the amounts advanced by way of compensation for making the building loan in addition to six per cent interest. Within the authorities these facts are sufficient to hold the promise in this case as an original promise and not within the Statute of Frauds.
For the foregoing reasons the defendant received a beneficial consideration sufficient within the authorities to take the promise out of the Statute of Frauds. White v. Rintoul, 108 N. Y. 222; Mallory v. Gillett, 21 id. 412; Raabe v. Squier, 148 id. 81; Schwoerer & Sons, Inc., v. Stone, 130 App. Div. 796; Alley v. Turck, 8 id. 50.
The judgment and order should be affirmed, with costs.
Judgment reversed, with costs.