Carpenter v. Fulmer ( 1903 )

Siebecker, J.

Error is assigned upon the action of 'the court striking out that part of Fulmer’s answer alleging a setoff in his favor on the note owned by him for $850 and interest, given by John F. and IT. C. Keeton. The plaintiff is no party to this note in any form. It furthermore appears that IT. C. Keeton is a party to- this note as maker, but is not a party to this action. ITow thi^ note could be treated as a proper setoff in an action between the parties to this contract we cannot perceive. Carpenter, the party plaintiff in this action, was in no wise liable on the note, nor is H. C. Keeton, the joint maker of the note, in any way connected with, or liable on the contract. The nature of a setoff is predicated upon the grounds that it constitutes, in effect, a cross-action by defendant against plaintiff, and requires that there be mutuality of claims. In cases of statutory setoff the right “thereto must exist between all the parties plaintiff and all the parties defendant, and from and to those persons only who are parties to the action, except in cases for equitable consideration. See Pendleton v. Beyer, 94 Wis. 31, 68 N. W. 415. The matters alleged did not constitute a setoff between “the parties. Dart v. Sherwood, 7 Wis. 523; McConihe v. Hollister, 19 Wis. 269; 22 Am. & Eng. Ency. of Law, 280.

It is further contended that the court erred in awarding judgment on the agreement and bond against Peter McGov-ern, on the ground that no liability was shown against McGovern as surety on the bond. In support of this contention appellants assert that the provisions of the contract and bond should be interpreted together as the agreement of the parties covering this transaction, and that the terms of the bond must be strictly construed in the surety’s favor to ascertain his liability. Applying these rules to the contract and bond before us, what is the effect of the agreement evidenced by the contract and bond ? It is stipulated in the contract that the $3,000 to be paid by Fulmer in the manner specified was to be secured by a bill of sale of the cedar poles and posts then in the lumber yard at Florence; that they were to remain in Fulmer s possession, to be sold by him, and the proceeds to be deposited to the credit of plaintiff and Keeton to the amount of $3,000 in the State Bank of Florence for the payment of the amount unpaid on said contract, in the following manner: $1,5'00 on or before July 1, 1900, and $1,500 on or before October 1, 1900, and he to retain all sums realized .above said amounts. These poles and posts were left in Ful-mer’s possession to the purpose that he sell them and deposit the proceeds from the sale thereof in the manner and to the-respective amounts specified on or before the 1st of July and the 1st of October, 1900, to plaintiff and Keeton’s credit. The-condition of the bond, among other things, states: “Should the property [poles and posts] when sold not bring the amount of $3,000, the said D. M. Fulmer and Peter McGovern will pay the deficiency, if any, in the manner above set forth;” and that “this bond is given to secure the performance of a certain contract entered,” - etc., between the parties; and,, further, that the parties to this agreement should well and truly carry out all of the above agreement without fraud or delay. Interpreting the terms of the contract and bond as applied to this transaction, the result is that Fulmer was to make sale of the poles and posts, deposit what proceeds he received to plaintiff’s and Keeton’s credit in the bank to the amount specified in the contract as a payment of the unpaid consideration, and, if a sufficient amount was not so deposited, then Fulmer, and McGovern, as his surety, were required to pay whatever amount was necessary to pay the $1,500 in-stalments when due without delay. It must, therefore, follow that McGovern was bound, as surety on the bond, to pay whatever remained unpaid on each instalment of $1,500 at the-time it became due. Nothing appears that any sum was so deposited to the plaintiff’s and Keeton’s credit at the bank. The failure to do this is a breach of the contract and bond, and gives plaintiff the right to demand payment from the-principal and his surety. The judgment of the trial court was properly awarded.

By the Court. — Judgment affirmed.