Utah Savings & Trust Co. v. Bamberger , 31 Utah 139 ( 1906 )

STEAUP, J.

This is an action brought by appellant against the respondent on a promissory note made and delivered by the respondent to J ames 3?. Woodman, appellant’s intestate. The principal defense alleged in the answer is that in consideration of the respondent paying, or causing to be paid, certain notes and certain undertakings in condemnation 'proceedings jointly executed by Woodman and the respondent as sureties, the note sued on was canceled and surrendered. A trial before the court and a jury resulted in a verdict and a judgment in favor of the respondent. The case was. before us on a former appeal, reported in 29 Utah 370, 81 Pac. 887, where may be found a complete statement of the material facts. Upon the evidence then before us we held that “the gist of the express terms of the oral contract [the alleged agreement to cancel and surrender the note sued on] is that, in consideration of Bamberger paying or causing to be paid the bank notes and condemnation bonds, Woodman agreed to surrender and cancel the note sued on. The doing of the one thing was the consideration for the doing of the other. It is not claimed that Bamberger paid the bank notes, but that he caused them to be paid. Before it can be successfully claimed that he caused them to be paid, it must be shown that he did something which produced or effected the result of payment. Otherwise the consideration moving from him failed. The evidence is wanting that he did anything which produced or effected this result. What he did in the premises was done as an officer [receiver] of the court, and in the performance of a legal duty thereby commanded of him, and the performance of this duty produced and effected the result of payment, which performance and result obtained was not at all dependent upon the agreement made between him and Woodman, nor at all affected thereby. To the contrary, all the evidence in the record showing what Bamberger did by way of organizing the new company, paying the' money into its treasury for its capital stock, and with which the new company purchased the property of the old company at the receiver’s sale, and of winding up the business of the old road, which resulted in the payment of the bank notes and condemnation bonds, were all done prior to the making of the said oral agreement. In other words, what Bamberger did was not done by virtue or in pursuance of this oral agreement, or as and for an act of himself.”

It is now claimed that the record on this appeal shows that the condemnation bonds were not paid out of the receiver’s fund, but that they were paid by Bamberger in pursuance and by virtue of the oral agreement. .While true the evidence shows that they were not paid out of the receiver’s fund, still the evidence in the record is insufficient upon which to base the claim that they were paid because or in consequence of the oral agreement. The Great Salt Lake & Hot Springs Railway Company brought certain condemnation suits in Davis county to condemn land for its right of way. Upon the institution of the suits, it applied for and obtained possession and occupancy of the land' sought fe> be condemned pending the actions, in consideration of which Bamberger and Woodman, stockholders of the company, executed a bond or undertaking as sureties for the railway company, to the effect that it would pay the adjudged value and all damages in case the land be condemned, all damages from the occupation before judgment in case the premises are not condemned, and all costs; and if the railroad company should pay the said judgments, damages, and cost's, then the undertaking to be null and void. After these suits had been commenced, and while pending and undetermined, in certain proceedings had, Bamberger was appointed a receiver of the railway company. A corporation was organized by him, called the “Salt Lake & Ogden Railway Company,” of which he held and owned all the capital stock. The affairs of the old railway company were wound up, aud all its property, franchises, and rights of way were sold to the hew company, the Salt Lake & Ogden Railway Company. With the proceeds of sale the debts of the old railway company were paid, including the bank notes. Thereafter the new railway company prosecuted the condemnation suits to judgment. Some of the judgments were paid by the new company, and others by Bamberger, but all were. paid as soon as the verdicts were rendered. Those paid by the railway company were paid by it from moneys paid by Bam-berger into its treasury, or from overdrafts on banks arranged for and secured bv him. By reason of these transactions the claim is now made that Bamberger paid the bonds or undertakings, executed by himself and Woodman as sureties, because and in pursuance of the oral agreement had been between them. ' ■

In the first place, it will be observed that no liability on the bonds or undertakings had ever arisen. . The.judgments in the condemnation suits were paid as soon as the verdicts were rendered. There is no fact nor circumstance in the case which in the least indicates that such payments, were made to avoid liability on the bonds, or to save Woodman harmless from such a liability. To the contrary, all the evidence in the case shows that the payments were made in consideration of acquiring the lands condemned, and, as testified to by Bamberger himself, for the benefit of the new railway company owned by himself, and to secure the right of way. In other words, owning all the capital .stock of the company, instead of his going through the formality of giving himself notice and of levying an assessment against himself, he paid or furnished the money with which to pay the verdicts in the condemnation suits as soon as they were rendered, not because of any agreement had between himself and Woodman, but to acquire the right of way for the railway company owned by him. Upon reading this record, the conclusion is irresistible that not anything that was done by Mr. Bamberger with respect to the payment of the verdicts was in the least induced by the oral agreement, but that all that was done by him was wholly independent thereof. We see no substantial difference between the evidence on this appeal and on the former appeal. Upon the evidence in this record the trial court ought to have directed a verdict for plaintiff.

The judgment of the court below is reversed, and the case remanded for a new trial. The appellant is given costs.

McCAJEtTY, J., concurs. BABTOH, C. J., dissents.