Court Opinion

ID: 9884895
Source: CourtListenerOpinion
Date Created: 2023-10-06 03:22:38.612668+00
Date Added: 2024-06-11T07:48:42.092537
License: Public Domain

SHINN, P. J. — I dissent.
The fact that the debts were outlawed is beside the point. The question is whether Gallagher assumed his mother’s debt to Mrs. Hillar unconditionally, or limited his liability to making payments out of commissions he would receive. I think a proper interpretation of the agreement must be controlled by the intentions and understanding of the parties at the time Mrs. Hillar surrendered the notes of Mrs. Lund. Gallagher testified by deposition that his purpose was to save his mother from worry and annoyance but, be that as it may, the consideration for surrender of the notes was his agreement *376to pay his mother’s debt and the detriment suffered by Mrs. Hillar in releasing Mrs. Lund from her obligation. That he did assume and agree to pay the debt cannot be questioned. He was to pay it in full at the rate of $200 or more per month from his own funds, but the agreement does not, independently of the understanding of the parties, answer the question whether the understanding was that Mrs. Hillar would receive no more than a share of the commission Gallagher collected. Thus we come to the question whether the debt was payable only out of a special fund, as Gallagher contends.
The transaction under review cannot be compared to the common situation in which an outlawed debt is acknowledged by a mere writing without a new consideration.
It is not a question of the revival of a debt but whether a debt of honor was wiped out by an empty promise. Here there were existing debts which were neither conditional nor uncertain as to amount. They were combined in a new promise. Gallagher entered into a new agreement by which he transferred property which was expected to provide funds for payment of the debt.
When Gallagher says the intent of the agreement was to limit the rights of Mrs. Hillar to receipt of a share of the commissions he would collect, it is to say that the agreed debt of $5,850 was satisfied by the mere execution of the assignment, regardless of the amount to be realized under it, and even if it produced nothing. I cannot agree. It does not appear as a matter of law and has not been decided as a question of fact.
The basic question for the trial court was whether the assignment, itself, satisfied the debt, in this sense, or was given merely as security. Since, as to this question the agreement is ambiguous and furnishes no satisfactory answer, it was necessary for the court to find, as a fact, whether it was the intention of the parties that the assignment was given and accepted as fulfillment of Gallagher’s obligation, or merely as security. There was evidence, consisting of the depositions of Mrs. Leonard and Gallagher, which shed some light upon the intentions of Gallagher, at least, since he testified that he told Mrs. Leonard, when the assignment was executed, that if the commissions failed to pay out she would be left out in the cold. This was merely a circumstance to be considered in determining whether the assignment was given and accepted as payment of the debt in full, or only as security. A correct decision could only have been based upon what the court *377found to have been the intentions and understandings of the parties. The court made no finding upon this crucial issue. And it is impossible to determine from the findings and the judgment what meaning and effect the court gave to the writings, or in other words, what were the intentions and understandings of Gallagher and Mrs. Hillar.
From the time Gallagher assumed his mother’s debt there was a single, indivisible debt of $5,850. This was the subject of the agreement and also of the letter.
The court rendered judgment against Gallagher for a part of the debt. This implies that the court found that the rights of Mrs. Hillar were not limited to a share of the commissions received by Gallagher or, in other words, the debt was not paid by the assignment. Upon the other hand, in the court’s view, the share of the debt originally owed by Mrs. Lund no longer existed. This implies a finding either that that part of the debt originally owed by Mrs. Lund had been satisfied by the execution of the agreement and the payment of $600, or that Gallagher had never assumed it. These conflicting findings are irreconcilable, illogical and fatally inconsistent. Whether the court gave any consideration to the extrinsic evidence, we do not know, but in any event, the judgment has no sound basis in the findings, express or implied. The nearest the court came to expressing its view of the understanding of the parties as to the meaning and effect of the agreement was the conclusion that the agreement of July 12, 1960, was “an assignment of commissions merely designating the source of funds from which payments were to be made,” which is not consistent with the view that assignment, itself, was payment of the debt, regardless of the amount of money actually received.
Certainly it does not appear, as a matter of law, that Gallagher’s obligation went no further than the payment of a share of what he might receive of his commissions. He drew the agreement, and it was therefore to be interpreted in favor of Mrs. Hillar. It was to be interpreted in favor of honesty and fair dealing. It is my understanding that the law leans that way. I do not believe Gallagher intended to accomplish cancellation of the notes by selling Mrs. Hillar a “pig in a poke.” Mrs. Hillar could not have expected any sharp practice. After all, Gallagher and his mother were friends to whom she had loaned money in their adversity, and the fact that Gallagher was making money when he made *378the agreement must have assured her that her debt would be paid in full.
The debt was to be paid at $200 or more per month, not byFeld in recognition of Mrs. Hillar’s interest in the commissions, but by Gallagher. It is said there is no provision in the agreement that Gallagher would pay more than a share of the commissions he would receive. True. But why should there have been? The debt of $5,850 was acknowledged. The significant fact is that there is no provision that his obligation was limited to a portion of what he would receive. If that had been the agreement, it should have been so stated.
Gallagher’s letter is the best evidence of his intentions at the time he made the agreement. There was nothing before the court to indicate that Gallagher had an intention to obtain cancellation of the notes without paying the debt. If his letter was a promise to pay part of the debt, as the court found, it was a promise to pay all of it. If he owed any part of it he owed all of it. In assuring Mrs. Hillar he would not leave her “holding the bag” he was speaking of “the whole deal we made,” and not merely a part of it. At no time did he deny his liability for his mother’s share of the entire indebtedness. As against the claims of Mrs. Hillar, he could not escape his liability by a plea that the assumption of his mother’s debt was without consideration. It was the assumption of that debt that had enabled him to obtain cancellation of her notes. He could not go back on his promise.
In view of the conflicting implied findings and the failure of the court to find facts which would furnish support for the judgment, the case should be retried.
A finding whether the parties intended and understood the assignment was made in satisfaction of the debt, or any part of it, regardless of the sums paid in money, or was given only as security, will furnish a guide to other essential findings.
I would reverse the judgment.
A petition for a rehearing was denied July 20, 1965, and the opinion was modified to read as printed above. Shinn, P. J., was of the opinion that the petition should be granted. Appellant’s petition for a hearing by the Supreme Court was denied August 18, 1965.