Jepherson v. Hunt , 84 Mass. 417 ( 1861 )

Bigelow, C. J.

We are of opinion that the agreement of the defendant to pay .interest on the amount of damages stipulated to be due from the Southbridge and Blackstone Railroad Company was an original and not a collateral undertaking, and does not come within the statute of frauds as being a promise to answer for the debt, default or misdoings of another person. Gen. Sts. c. 105, § 1, cl. 2. Assuming that the papers marked (A) and (B) did not amount to a binding contract, we are to look into the evidence to ascertain what was the agreement which the parties subsequently entered into. This is stated in substance in the position taken by the plaintiff at the trial, which was adopted by the court in the instructions given to the jury. It was that the damages sustained by the plaintiff, by the taking of his land for the construction of the railroad, were fixed by a valid agreement between the corporation and the plaintiff at the sum of one hundred and fifty dollars; and that after this agreement was made the defendant orally agreed that he would pay interest on said sum according to the written stipulation contained in paper (A), waiving the condition in relation to the proposed decree of the commissioners inserted in paper (B). At the -time the defendant entered into this agreement, there was no interest due and payable to the plaintiff from the railroad corporation, either as matter of contract, or as damages resulting from the withholding a sum of money which was justly owing to the plaintiff. The parties interested —the plaintiff and the railroad corporation — had then agreed that the amount of damages to be paid for the land taken by the latter should be assessed at the gross sum of one hundred and fifty dollars, and that this amount should be awarded to the plaintiff by the commissioners in like manner and to the same effect as if the damages had been ascertained and adjudged by them according to the provisions of law. This was the substance and effect of the agreement of March 31,1856, between the plaintiff and the railroad corporation, on which the oral agreement of the defendant to pay interest, as stipulated by paper marked (A,) was based. There was no stipulation for the payment of interest by the corporation. If the parties intended that the sum of one hundred and fifty dollars should bear interest during the interval which must necessarily elapse between the date of the agreement and the award of the commissioners, which was to be made in pursuance of its stipulations, it would have been the subject of a distinct promise. But none such was inserted. Nor was there any legal liability for interest until the contemplated award was made by the county commissioners. St. 1849, c. 124. The liability of the corporation to the plaintiff for damages was fixed at a specific sum, which was to be the amount which the commissioners were to award, according to the agreement of March 31, 1856. No addition of interest could therefore be made to it, until after the commissioners had made their award. Clearly then the plaintiff could claim no interest of the corporation on the ground that they had neglected to pay money which was due to him. The damages which he had agreed to take were not payable, until the commissioners had made their award. In this respect, they were placed by the agreement of the plaintiff and corporation on the same footing as they would have stood, if no stipulation concerning the amount had been made, and they had been ascertained and assessed by the commissioners in the usual manner under the provisions of the statutes. They would bear interest only from the time when the award was made. Nor can it be contended that the plaintiff was entitled to interest by reason of any omission to apply to the commissioners for the entry of the award of damages according to the agreement. On the contrary, it is expressly found that the plaintiff and defendant both assented to the delay in obtaining the adjudication of the commissioners. On these facts it cannot be contended that the promise of the defendant is within the statute of frauds. It was not an agreement to pay the debt of another, because no interest was owing from the railroad corporation to this plaintiff; nor to answer for the default or misdoings of a third person, because the corporation could be guilty of no neglect or omission by which they would be liable for interest until after an award of damages by the commissioners. The same result would follow, on the supposition that the oral agreement by the defendant to pay interest was made befóte the execution of the agreement between the plaintiff and the corporation, if it was based, as the negotiations between the parties seem to show, on the understanding that the damages sustained by the plaintiff were to be fixed at a specific sum by a stipulation between himself and the corporation. The case therefore is the ordinary one, of a promise by a party to pay a sum of money to another on a valid consideration.

We assume that the consideration was sufficient to support a promise, because no point seems to have been made at the trial in relation to the validity of the consideration, nor is the evidence bearing upon it stated in the exceptions. But if it be true that the plaintiff agreed to forbear prosecuting his claim against the corporation for damages for a certain period of time in consideration of a direct benefit which would thereby accrue to the promisor, the agreement of the defendant would be taken out of the statute on another ground. The rule is well settled, that when the leading object of a promisor is to induce a promisee to forego some lien, interest or advantage, and thereby to confer on the promisor a privilege or benefit which he would not otherwise possess or enjoy, an agreement made under such circumstances, and upon such a consideration, is a new, original and binding contract, although the effect of it may be to assume the debt and discharge the liability of another. Nelson v. Boynton, 3 Met. 402. Alger v. Scoville, 1 Gray, 391, 395. Wood v. Corcoran, 1 Allen, 405. The application of this principle to the case at bar would take the agreement of the defendant out of the operation of the statute, although the corporation might have been liable to the plaintiff for the payment of interest, if the evidence shows that the contract was made on a new and original consideration of benefit to the defendant.

The only other question raised by the exceptions relates to the construction which the court gave to that clause in the contract, by which the payment of interest by the defendant to the plaintiff was made to depend on the condition, that the railroad should “ be kept in operation.” These words, we think, should be interpreted with reference to the subject matter of the con tract, the circumstances which surrounded the parties at the time it was entered into, and especially in view of the interest which the defendant and those for whom he acted had in securing the construction of the railroad and obtaining facilities thereby for transporting passengers and merchandise. Construed in this way, it is clear that these words were not used in a loose or popular sense, as signifying that the interest was to be paid so long as the road was not disused or abandoned, nor as relating solely to the nature or extent of the franchise, which the railroad had acquired, in the plaintiff’s land; but that they were intended by the parties as stipulating for the payment of the interest, while the road was beneficially operated for the reasonable accommodation of the plaintiff and those for whom he acted in negotiating the contract. In this particular, we are of opinion that the ruling of the court was erroneous, and on this ground the entry must be

Exceptions sustained.