Court Opinion

ID: 8183724
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:05:54.511535+00
Date Added: 2024-06-11T16:40:20.181249
License: Public Domain

Lvov, J.
The only interest plaintiffs had in the lumber and shingles in question they acquired by their bill of sale thereof, which was given as security for the indebtedness of the Lincoln Lumber Company to them. They were, *19therefore, mortgagees of the property. All the remaining interest therein was in the receiver of the company, which interest he might lawfully dispose of. Hence the leave given by plaintiffs to the receiver to sell the property and use the proceeds in the business of the receivership was not a sale of the property, but only a release of their lien thereon. Its effect was to enable the- receiver to dispose of the property absolutely, whereas,, but for such release, he could only have disposed of it subject to plaintiffs’ lien thereon.
It is very clear to our minds that defendant applied to plaintiffs for leave to sell the mortgaged property and use the proceeds in the course of his business as receiver, and promised to pay therefor at a future time, not in his personal capacity, but as receiver duly appointed by the court to settle and close the business of the insolvent company; and that the plaintiffs released their lien thereon to the receiver for the benefit of the company and its creditors, and in the first instance accepted the promise of the receiver to pay for the lumber in his official capacity. Such is the plain, unmistakable purport of the transaction's between them. Thus far the plaintiffs, and the defendant as receiver only, were the contracting parties.
We assume, however, that the defendant, in his individual capacity, also verbally promised to pay plaintiffs for the lumber and shingles in question at the time above indicated, and that on the faith of such personal promise, and in consideration thereof, plaintiffs released their lien .thereon to him as receiver. Hone of the transactions above mentioned reduced or in any manner affected the demand of plaintiffs against the Lincoln Lumber Company. That remained a valid, subsisting indebtedness against the company. The undertaking of defendant as receiver was to pay that debt to the extent of the value of the property in question thus sold by him. The personal undertaking of defendant was *20'collateral thereto,-and. was, sub tan tially, that if as receiver he failed to make such payment, he should be personally liable therefor. Under all the authorities, this is an undertaking to answer for the debt of another. This raises the question whether there is any fact or circumstance in the case which takes this collateral verbal promise out of the ' operation of the statute of frauds.
It has been- held by this court many times that such a verbal promise is void by the statute of frauds (R. S. sec. 2307) unless it was made upon some new consideration of benefit accruing or moving directly to the promisor. If made upon such consideration, it is not within the statute. The cases which so hold are cited in Hoile v. Bailey, 58 Wis. 434, and Weisel v. Spence, 59 Wis. 301. The subject is so fully considered in those two and the other cases there cited, and the rule is so firmly established, that further discussion of the subject here is not required. Was there any consideration accruing or moving to the defendant for his personal agreement above mentioned? Defendant was not a creditor of the lumber company. It had none of his property when it failed. Theretofore he had no dealing whatever with it. It does not appear that his compensation as receiver was in any manner affected by the release of plaintiffs’ lien on the property. When he surrendered his trust and was discharged therefrom the court allowed him a gross sum for his services as receiver, but there is no suggestion in the testimony that such allowance was increased because of the release of such lien. In brief, there is no testimony in the case showing, or tending to show, that the defendant personally received anything or derived any benefit -whatever from the release by plaintiffs of their lien on the property in question. The release was to the receiver, and the whole consideration therefor accrued to the benefit of the insolvent company and its creditors, who are represented by the receiver, and not to the defendant individually.
*21Some confusion has crept into the argument of the learned counsel for plaintiffs, growing out of the fact that the receiver and the alleged personal promisor are one and the same person. The case'is the same as it would have been had some person other than the defendant been the receiver to whom plaintiffs released their lien on the property, and had the defendant, in consideration of such release and that alone, also agreed verbally that he would make such payment if the receiver did not. In such case it cannot be doubted that the verbal agreement of defendant would he void under the statute, he receiving no consideration for such promise. "While in form he would have been surety for the default of the receiver, in substance he would have been surety for a portion of the debt of the lumber company to plaintiffs. Such, in principle, is the present case. It must be held, therefore, that for the reasons stated the agreement sued upon in this action is void, and hence that the nonsuit was properly ordered.
By the- Gourt. — The judgment of the circuit court is affirmed.