Price's Admx. v. Price's Administratrix

Opinion of the court by

JUDGE GUFFY

Reversing.

The appellee instituted this action in the Fayette circuit court against the appellants. It is alleged in the petition that on the 1st of January, 1879, S. Price executed and delivered to D. L. Pride the following writing, to-wit: “January 1, 1879. One day after date I promise- to pay to D. L. Price or order sixty-two dollars 50-100 every three months during his natural life; it being the interest on four thousand dollars which I owe him. Witness: Geo. P. McCann. [Signed] S. Price.” It is further alleged that at-the same time D. L. Price executed and delivered to S. Price a writing relating to the same matter, which reads as follows: “January 1, 1879. Received of S. Price all demands to this date, except sixty-two dollars and fifty cents to be paid every three months'during my life; it being the interest on four thousand dollars which he owes me, and which he is to have at my death. Witness: Geo. P. MoOann. [Signed] D. L. Price.” Said latter writing was held-by S. Price during his life. It is further alleged: ' That by the terms of said agreement said $4,000 was loaned by said I). Li. Price to .said- S. Price during the natural life of said I). L. Price, and the said $4,000 was at the death of said D. L. Price to pass to said S.. Price as a devise. Said writing signed by D. L. Price being in the nature of a bequest by said D. L. Price to said S. Price, and said D. L. Price, so regarding it, afterwards gave him written notice that he (D. L. Price) revoked the .same; and in his last will he- again revoked the said will or bequest, and devised the said $4,000 to said Ann M. Price. That said $4,000 mentioned in said writings as owing by said1 S. Price to D. L. Price became due and payable at the death of said D. L. Price, on the 16th day of August, 1899, and the said $4,000 was .them . money had and received by defendant, Sallie G. Price, as ' administratrix, for the use of the said plaintiff, to be paid by the said defendant to the said plaintiff, no part of which has been paid. It is further alleged in the petition that S. Price died the owner of certain real estate. In the second paragraph of - the petition the plaintiff,- in substance, alleged: That S. Price, by -his promissory note dated January 1, 1879, and executed and delivered to D. L. Price, agreed to pay him every three months thereafter during said I). L. Price’s natural life $62.50, as quarterly interest on $4,000, borrowed money, at six and dne-fourth per cent, per annum. All of said indebtedness then due had been paid up. to October 1, 1898, but no part of the same accruing after that date has been paid, but remains due, owing, and unpaid, after taking out tibe usury, to-wit, $210, from October 1, 1898, to August 16, 1899. That D. Ii. Price died August 1|6, 1899. The appellant demurred to the first paragraph of plaintiff’s petition, which was overruled. Thereupon appellants filed their answer, in which the execution of the two written -instruments in the ■petition mentioned was admitted, and the one executed by D. L. Price filed with the answer. It is further alleged that the two said instruments were executed and delivered by the parties at the same time to evidence one contract, and should be taken and considered together, as forming one contract and agreement. The answer is a substantial denial that by the agreement the $4,000 Was loaned by D. L. Price to S. Price, or that it was to pass to the said S. Price as a devise from D. L. Price, or that said written instrument signed by I). E. Price was in the nature of a bequest made by D. L. Price to S. Price, or that D. E. Price so regarded it when he signed said paper, or that the said $4,000, as owing by said Price, became due or payable at the death of .said D. L. Price, and that said! $4,000 was money had and received! by defendants for the use of plaintiff, or to be paid to her, or that the plaintiff is a creditor of the estate of said Price- in the s'aid sum of $4,000, or any part of the same-. It is further ' alleged that said written instruments were executed and delivered by the parties thereto under the following circumstancs, and the promises and agreements therein made were based upon and were given solely for the following considerations, and none other, to-wit: At and prior to the date- of said written instruments of January 1, 1879, the said D. L. Price and his brother the said S. Price had the four following unsettled matters of business pending between them, to-wit: (1) The said I). L. Price claimed to be the owner of a valuable trotting horse named Sentinel, then in the possession of S. Price, which claim S. Price controverted and denied. (2) The said D. L. Price claimed a balance due him from S. Price growing out of a former partnership between them in the practice of medicine, which claim., or the amount of said claim, was disputed and controverted by said S. Price. (3) The said D. L. Price claimed an interest in the China store in Lexington, Ky., conducted under the firm name and style of Price & Co., which claim S. Price disputed and denied. (4) S. Price claimed that the said D. L. Price was indebted to him in a considerable sum for the use and rent of a farm-owned by said S. Price which had been rented and occupied by said D. L. Price -and his family. This claim', or the amount thereof, was disputed and controverted by D. L. Price. That, arising out of all the above-named disputed matters, said D. L. Price on January 1, 1879, claimed tha.t his brother S. Price was indebted to him (the said D. L. Price) in a balance of $4,000. S. Price denied the . amount of such .claim. It was then proposed and agreed between them that if said S. Price would agree to pay to the said D. L. Price during the balance of his natural life the sum of $250 annually, to be paid in quarterly install ments of $62.50 by the said S. Price, then upon the death of D. L. Price, the claim above asserted of $4,000 by D. IL. Price, the amount of which was denied by S. Price, should go and belong to the «aid S. Price, and that all matters between them as above cited should be considered settled. Upon this understanding and agreement the two written instruments were executed and delivered; and defendants aver that the said S. Price, wishing to adjust and settle said disputed matters with his brother, D. L. Price, and in consideration iof the promise made to him by said I). L. Price that the said $4,000 should belong to him at the death of said D. L. Price, entered into and executed the said agreement of January 1, 1879, and that acting upon the agreement thus made on January 1, 1879, and in consideration alone of the promise and agreement then made upon the part of said D. L. Price that the said $4,000 mentioned should belong to the said S. Price upon the death of said D. L. Price, the $62.50 quarterly payments called for by said agreement have been paid to «aid D. U. Price up to October 1, 1898; and defendant® aver that under and by «virtue of said contract of January 1, 1879, the $4,000 mentioned in said two papers passed and belonged to said S. Price. To this answer plaintiff filed a demurrer upon the ground that it did not state facts sufficient to support a defense, and also filed special demurrers to certain portions of the answer not necessary to specify. Afterwards the several general demurrers to the entire answer were sustained by the court. Afterwards appellants filed 'an amended answer. 'The first paragraph makes more specific and full the transaction's referred to in the original answer, and avers that, in consideration of the quarterly payments aforesaid, D. L. Price agreed to surrender at .his death any claim or demand against said S. Price on account of the indebtedness of S. Price to D. L. Price. Also the answer specifically idenies that there was any agreement between the parties whereby S. Price borrowed of said D. L. Price any sum of money. It is also denied that I). L. Price regarded the said writing signed by D. L. Price as a testa,mentary paper, or regarded the $4,000 therein as a bequest to said S. Price, or that said D. L. Price gave to S. Price any written notice or any notice of his alleged revocation of said bequest, or that in his last will he revoked said bequest and devised said $4,000 to Ann M. Price, and denied that said sum became due at the death of D. L. Price, or at any time, and denied that said $4,000, or any part thereof, was at the death of I). L. Price money had and received by the defendant Sallie G. Price for the use of the- plaintiff. The third paragraph of the amended answer is a plea of the statute of limitations. To this answer plaintiff filed a demurrer, and to each of the paragraphs, which were all' sustained by the court. Defendants having declined to plead further, the court rendered a judgment in favor of the plaintiff against the administratrix of S. Price for, the sum of $4,000, with interest from January 1, 1879, until paid, at six per cent., payable quarterly at the end of each three months up to July 1, 1899, and with interest at straight six per cent, from July 1, 1899, until paid, subject, however, to credits of $62.50 paid quarterly from January 1, 1879, up to October 1, 1898. The judgment, however, was not a personal judgment against Sallie G. Price, but a judgment against the estate of S. Price, and to be made out •of property and funds belonging to said estate, etc. The ■defendants objected and' excepted to all the ■ foregoing judgment, and prayed an appeal’ to the court of appeals, which whs granted.

It is contended for appellee that the writing executed by D. L. Price is at most .a will or devise* or a promise to give or devise the $4,000 debt in question, and that D. L. Price could legally revoke the devise, or might legally refuse to execute Ms promise to give. It is undoubtedly true that a naked promise to devise or bequeath anything to a party may by the testator or promisor be revoked, or he may refuse to execute a promise to give, and that the party expecting the devise or gift is without remedy; but it is also true that, if a party receives a valuable consideration for such promise, the promisee is not without remedy. Or, in other words, a party can not, when he receives a valuable1 consideration therefor, refuse to comply with his contract. It is also contended for appellee that parol evidence is not admissible to vary or contradict a writing, and it is also contended that a writing can not be attacked by the answer and parol evidence unless fraud or mistake is pleaded. This contention is undoubtedly sound. It is argued at ’length for appellee that the writing in question' is a promise to pay, and that the answer contradicts the writing, without averring any fraud or mistake; hence the demurrers were properly sustained. It seems to be the further contention of appellee thiat the $4,000 became due at the1 death of D. L. Price; hence the statute of limitation can not avail, for the reason that the cause of action to recover the' $4,000 did not accrue five years before the institution of the suit. It is contended for appellants that the contract involved in this suit was a contract, and not a will; that parol testimony is admissible in construing ambiguous writings, when it does not contradict or vary the express terms thereof; that the consideration of a written instrument may be attacked by answer and parol evidence; that the annuity secured by the papers in question is a proper subject for contract.

The second contention of appellants is not open- to serious controversy, and the same may be said of the third! and the fourth contentions. The first contention can best be determined by the contract itself. We have carefully considered the extensive briefs of counsel filed, and are not disposed to controvert many, if any, of the propositions of law announced by counsel. The question to b'e considered is, what is the law applicable to the case before us? It seems to be admitted that the two papers constitute one and the same transaction, and must be read together and considered .as constituting one transaction. It will be seen that the paper signed1 by S. Price is not a promise to pay anything, execept $62.50 every three months during the natural life of D. L. Price It is true, it is further said in the paper, “it being the interest on the $4,000 which I owe him;” and it may be taken as true that S. Price acknowledged, by signing the paper, that he did in fact owe D. L. Price the $4,000, and, if this be so, then D. L. Price had a cause of action, and could have instituted suit and recovered judgment against S. Price for the $4,000; and S. Price also had the right at that time to have paid $4,000, and thereby discharged' his indebtedness to the said D. L. Price. But it seems that neither party desired an immediate payment or -settlement,and, instead'of D. L. Price proceeding to collect the $4,000, he made the agreement shown by the two papers on file. S. Price seems not to have desired to pay the-$4,000 at that time; henee he executed the paper in question. It is certain that D. L. Price could- not have collected $62.50 quarterly upon the demand1. The $4,000 would not draw interest payable quarterly, nor would it draw exceeding six per cent., while the writing shows that six -and one-fourth per cent, interest is to be paid. It is true that an agreement, without a consideration, to accept less t'h'an the full amount of the debt, is not enforceable'; and it may be further remarked that the acceptance of less than the whole of a debt is not a bar to the collection of the residue. But it has often been held that the acceptance of property in satisfaction of a debt was obligatory upon the creditor, and extinguished the debt, although the property in fact might not be worth the amount of the debt satisfied by the acceptance thereof. In this case S. Price agreed to pay $62.50 quarterly until the death of D. L. Price, and it seems that he actually paid $4,937.50 under that contract. It will be seen that D. L. Price on. January 1, Í879, executed the following receipt: “Received of S. Price all demands of this date, except $62.50 to be -paid every three months during my life; it being the interest on $4,000 which he owes me, and which he is to have at my death.” It seems clear that the contract between the -parties was that S. Price undertook to pay the sum named during the specified term, and that D. It Price accepted that agreement in satisfaction of the $4,000;. and the expression as to a debt or the amount owing does not at all destroy the validity of the contract, nor render invalid the receipt. It nowhere appears that D. L. Price had any note or evidence of the $4,000 indebtedness; hence the expression, “w-hich 'he is to have at my death,” can not reasonably mean -anything else but that the debt was settled, or, in other words, that the new contract was. to extinguish the $4,000 then owing; and it might be argued that the reference to the debt was used simply as showing the consideration for the promise to pay the several sums named. We think that the writings, taken together, constitute a valid and enforceable contract, if in fact they were not satisfaction at once of the $4,000 claim; and we think that D. L. Price, after having received more than $4,900 in execution of' the agreement, can not now be heard to repudiate the receipt given by him, or escape the manifest meaning and wording of the papers signed by the parties. It results from the foregoing that the court erred in sustaining the demurrer- to the answer of defendants. The court also erred in overruling the demurrer of appellants to the first paragraph of the petition.

We deem it unnecessary to determine the plea of the statute of limitations, f>or the reason that, under the views already expressed, it is unnecessary to decide that question.

Judgment reversed and cause remanded, with direction to sustain the demurrer to the first paragraph of plaintiff’s petition, and to overrule plaintiff’s demurrers to appellants’ answer and amended answer, an)d for proceedings consistent with this opinion.

Opinion by Judge Hobson overruling petition for rehearing :

, A bare promise, without consideration, by a creditor, to give his debt to- his debtor at his death, is unenforceable. Knott’s Adm’r v. Hogan, 4 Metc., 99. But if a creditor holding a debt of $4,000 should agree with the debtor to release the debt for an annuity of $500 a year as long as he lived, the agreement would be valid; for a ■different obligation would be created, which would take the place of the original one. The question to be determined in this case is> to which of these classes does it belong? The writings, executed -at the same time, and to be read together, are as follows: “One day after date I promise to pay to I). L. Price, or order, sixty-two- and 50-100 dollars every three months during his natural life, it being the interest on four thousand 'dollars which I owe him. S. Price.” “Received of S. Price all demands to this date, except sixty-two dollars and fifty cents- • to be paid every three months during my life, it being the interest on four thousand dollars which he owes me, and which he is to have at my death. D. L. Price.” These writings are in-artificially drawn, and in construing them the court must give proper effect to each clause so that the real intention of the parties will be regarded. The substance of them taken together is this: S. Price agrees to pay D. L. Price $62.50 every three months during his life, and in consideration of this, T). L. Price acquits him of all demands. It will be observed that the writing signed by S. Price does not obligate him to pay anything except the quarterly sums of $62.50, and that he was not intended to be bound for anything further is .shown by the fact that no note was taken from him for the $4,000, although the parties lived for something like twenty years after the transaction. It is true that in the writing signed by S. Price these words are used at its conclusion: “It being .the interest on $4,000 which I owe him,” and the writing signed by D. L. Price concludes with these words: “It being the interest on $4,000 which he owes me, and which he is to have at my death.” But the lat-the writing begins with the words, “Received of S. Price-all demands to this date.” There is no necessary in-. consistency between these clauses, and that construction of the instruments "is to be preferred which does not make them conflict. 'Taking all the clauses together, the fair meaning of the whole of the two paper® is that S. Price at that date owed1 D. L. Price $4,000, and that D. L. Price released him from this debt in consideration of the quarterly payments which he agreed to make. 'The concluding words of the last writing, “which he is to have at my death,” were intended by the parties to express the idea that the quarterly payments were to be made, as long as D. L. Price lived, on account of the debt, but that ait. his death all obligation should cease. Unless we adopt this construction, we must reject altogether the word® in the second writing, “Received of S. Price all demands to this date,” which necessarily import an acquittance m praesenti; and also give no force to the fact that S. Price obligated himself for the payment of nothing except the quarterly installments.

Such being the construction of the contract, is it valid? It is, in substance, an undertaking of S. Price to- pay D. L. Price an annuity of $250 a year in quarterly installments in consideration of the release of the debt -of $4,000 due by him. The contract to pay the annuity was not •one for the use or forbearance of money. The annuity was not paid for the use of the money, -or for forbearance • of D. L. Price to collect it. The -consideration of the payment of the annuity was the satisfaction of the debt. No question of usury, therefore, arises. If the agreement was made in compromise of matters of difference and dispute between the two brothers, this was a sufficient consideration; and by section 472, Kentucky Statutes, the real consideration of a writing may be shown. But, independently of the question of -compromise of disputed matters alleged in the answer, the papers on their1 face show a sufficient consideration. The legal interest on SI,000 was $240 a year. By the contract, D. L. Price secured $250, payable quarterly. This1 was more than the interest on the money, and, as the payments were to be made as long as he lived, constituted a sufficient consideration to uphold the contract. The rule is clear that a valuable consideration, however small, is sufficient to sustain a contract. Thus, in Bishop on Contracts, after referring to this rule, the learned author says, in section 41: “Hence in reason, and, it is believed, substantially on the authorities, the consideration should be something to which a jury can attach pecuniary value; though, like the value of a thing stolen in larceny, it may be less than the smallest coin or denomination known to the law.” Further on, in section 45, he says: “Yet inadequacy of-value may be strong evidence of fraud, should that question be raised; or it may suggest fraud, and in a gross case it may be the controlling circumstance in establishing the fraud.” Whether the consideration for this contract between two brothers, situated as they were, is so inadequate as to suggest fraud, can not be considered upon demurrer. To raise this question, fraud must be pleaded, and then all the facts attending the execution of the contract may be shown. But on the face of the papers the payee got something of substantial value, which was more than the interest on his money, and the consideration thus appearing is sufficient' to uphold the contract on its face. If the contract was based on a sufficient consideration, then the payee was bound by it, and he can not recover the $4,000 contrary to its terms. If the «contract was invalid, and without consideration, the payee was never bound by it, and might-have sued! for his debt of $4,000 the day it was made; and, more than fifteen years having elapsed after this before the bringing of the suit, it is barred by limitation, unless the payments of the annuity take the case out of the statute. The authorities are uniform that - a payment which is made by the debtor under the impression that he is paying something else has never the effect of reviving the debt. Thus, in U. S. v. Wilder, 13 Wall., 254, 20 L. Ed., 681, the court said: “The principle on which part payments take a case out of the statute is that the party paying intended by it to acknowledge and admit the greater debt to ■ be due. If it was not. in the mind of the debtor to do this, the statute, having begun to run, will not be stopped by reason of such -payment.” A part payment only arrests the running of t'he statute where from it a promise to pay the debt may be inferred, for the reason that the waiver of the statute rests with the debtor, and it is a question of intention whether he waived it or not. Thus, in Hodge v. Manley, 60 Am. Dec., 257, the -court said: “By the later English authorities, in order to remove the statute bar, the mere fact of part payment is not of itself conclusive. The payment must have been made as part payment of a greater debt, and under circumstances that will warrant the jury in finding a promise to pay the remainder of the debt. Wainman v. Kynman, 1 Exch., 118; Tippets v. Heane, 1 Cromp., M. & R., 252; Waugh v. Cope, 6 Mees. & W., 824. It is unnecessary now to say whether the rule to that extent would be adopted in this State, but we entertain a clear conviction that payment of specific items ■of charge, unaccompanied by any circumstances showing a recognition of any other account, will not be sufficient to remove the operation of the statute. The payment must at least have been made ou the general 'account, and with a view to affect the general balance, thereby acknowledging the existence of an open, running account, which is to be the subject of the future adjustment.” In Brown v. Latham, 42 Am. Rep., 568, the court, speaking of the acknowledgment that would stop the running of the statute, said: “Mere payment is not such an acknowledgment. It must appear that the payment was a partial one, leaving a part of the debt unpaid, and that the debtor so understood it. If this does not appear, the payment does not show his acknowledgment of his liability and willingness *to make another payment.” The rule was also expressly declared by this court in Richardson v. Chanslor’s Trustee, 103 Ky., 425 (20 R. 121) 45 S. W., 774. The payments in this case were made upon the annuity, and not upon the debt of $4,000. They show no understanding on the part of the debtor that the debt of $4,000 was to be paid, and no recognition of it can be inferred 'from them. On the contrary, they were paid under the contract, which, by its terms, negatives the idea that anything else was to be paid.

The petition overruled.