Merrill v. Smith , 12 Ala. 569 ( 1847 )

ORMOND, J.

The question arising under the demurrer to the special eounts of the declaration, and those arising under the decision of the court upon the legal effect of the contract, are in effect the same, and will be considered together.

The statute of frauds has nothing to do with the question here presented. The contract between the plaintiff and defendant, is in effect a purchase by the latter, from the former, of certain judgments against him, and William Merrill, he stipulating for the right to use the judgments in any manner he might think proper, and guaranteeing the plaintiff, against all costs which had then, or might thereafter accrue. This guaranty against the costs, was not a promise to pay the debt of auother, but was a promise to pay his own debt, and for which he was individually responsible, so far as costs had then accrued. So far as costs might accrue in future, it was in effect a covenant against the acts, both of himself and his co-defendant, the consideration of which was, the transfer of the judgments to him, with the right to use the name of the plaintiff, to reimburse himself, by the aid of the judgments then existing, the money he had paid as the surety of his. brother. A promise to indemnify against the act of another, is in no just sense a promise to pay, or “ answer for the debt, default, or miscarriage of another person,” and is not within the letter, or spirit of the statute of frauds.

To bring a case within this clause of the statute, there must be a debt, or default of another, against the failure, or omission to perform which, the promissor stipulates. Thus where an action had been brought by A. against B. for an assault, and C. promised A. that if he would withdraw the record, he would pay him a sum of money, this was held not to be within the statute. [Read v. Nash, 1 Wilson, 305; see also, Stephens v. Squires, 5 Mod. 205; Harris v. Hinchback, 1 Burr. 372.]

So here, the promise was not to answer for any thing which William Merrill was bound to do, or perform, but it was an indemnity against future costs, on the judgments which it was supposed might accrue, in the attempt on the part of Jacob, to enforce them against William Merrill. It was in truth, a promise to answer for the consequence of his own acts; for as he had by the transfer of the judgments acquired a right to control them, and had stipulated to be responsible to the plain tiff for all future costs, he was bound to see that no use was made of the judgments prejudicial to the plaintiff. He certainly could not himself prosecute a writ of error to .reverse the judgment he had thus purchased, and charge the plaintiff with the costs, neither can he defend himself upon the .•ground, that he did not consent to the prosecution of such writ by his co-defendant; for, as already stated, the agreement is in legal effect a covenant on his part against such an :act. This results necessarily from the transfer of the judgments to him, which deprived the plaintiff of all power of <of controlling them, and the promise of the defendant to pay the costs which had then, or might thereafter accrue. By •this, he became by substitution owner of the judgments, in the place of the plaintiff, and responsible in future, as the plaintiff would have been, if the transfer had not been made.

It is very clear, that the written evidence of the transfer was competent testimony, of the terms upon which the transfer was made; being delivered to the defendant, as the evidence of the title to the judgments, and received by him, it is in the nature of an admission by him, that the stipulations there recited had been agreed to by him. It was testimony of the same grade as the parol evidence offered, of the terms ■of the contract.

There was no objection to the proof, that the consideration was the payment by the defendant, of the amount of the judgment, in “Alabama money,” by which we understand, the bank notes of the State Bank and its branches. Nor was this varied by the production of the note then executed for the payment of the amount promised, without specifying the medium in which it might be discharged. It is certainly true, that if suit had been brought upon the note by the plaintiff, the defendant could not have averred against it, that there was an agreement to receive bank notes, at par value, in payment. But that is not the question here. It is what was the consideration of the transfer, and what was actually received. Considered in this aspect, the note is in the nature of a receipt, and having performed its functions, and been discharged according to the true contract of the parties, it cannot have the effect of an estoppel, precluding the parties from showing the truth of the case. But we are unable to perceive the importance, or necessity for this proof. The transfer of the judgments was a sufficient consideration for the promise to indemnify the plaintiff against the costs, whether the amount due on the judgments was paid in depreciated bank notes, or in gold and silver.

The legal effect of the contract between the plaintiff and defendant, could not be varied by the proof, that the defendant, before entering into it, was advised by a lawyer, that it would not subject him to the payment of the costs of the judgments, This does not prove a mistake of fact, if such testimony were admissible in a court-of law, to vary the terms of a contract; but if it amounts to any thing, is an attempt to vary, or alter its legal effect, by proof that the defendant was mistaken as to its legal effect. Considered in this aspect, it is clear it was properly rejected.

We do not perceive any error in the record. Let the judgment be affirmed.