Honsinger v. Mulford

PUTNAM, J.

On the conflicting evidence in this case, the jury were authorized to find that on September 2,1890, the Mutual Benefit Ice Company, a domestic corporation, was indebted to plaintiffs in the sum of $6,000 then due, and that plaintiffs were about to commence an action upon said claim; that defendant was the principal stockholder in said corporation, and its president; that in an interview with two of the plaintiffs, at the date above mentioned, defendant requested them to extend the time of payment of said indebtedness, and agreed, if such extension was granted, to personally become liable for and pay the said claim when it became due under the arrangement then made; that, relying upon such agreement of defendant, plaintiffs extended the time of payment of such debt, and took two notes of the corporation set out in the complaint, payable at a future date. The agreement of defendant to pay the claim of plaintiffs was not in writing, but in the complaint it was not stated whether it was written or oral. On the trial the defendant objected to evidence tending to show the alleged agreement made between plaintiffs and defendant at the time in question, on the ground that such an agreement, to be valid, must be in writing, and that the oral agreement of defendant to pay the debt of the corporation was void under the statute of frauds, and after-wards moved to strike out such evidence for the same reason, and upon plaintiffs’ resting, and again at the termination of the trial, moved to dismiss the complaint on the ground.that the promise of defendant on which the action was based was not in writing, and was therefore within the statute of frauds and void. This motion was denied. The case was submitted to the jury by the trial court, and a verdict rendered in favor of the plaintiffs.

The agreement of defendant to pay plaintiffs’ claim against the Mutual Benefit Ice Company on their extending the time of payment was founded upon a sufficient consideration. Meltzer v. Doll, 91 N. Y. 365; Coal Co. v. Blake, 85 N. Y. 226-232; Hamer v. Sidway, 124 N. Y. 538, 27 N. E. 256. Hence the plaintiffs were entitled to recover on the defendant’s promise, unless the objection made by the defendant, on the trial, to the recovery, on the ground that the promise of defendant, not being in writing, was within the statute of frauds and void, should have been sustained by the trial court. As we have seen, it did not appear by the allegations in the complaint whether defendant’s promise was in writing or oral. Hence we think defendant, not having set up the statute of frauds in his ■answer, waived the benefit of that statute. In Hamer v. Sidway, supra, Parker, J., says:

“It does not appear on the face of the complaint that the agreement is one prohibited by the statute of frauds, and therefore such defense could not be made available unless set up in the answer."

And the learned justice cites Porter v. Wormser, 94 N. Y. 431, in which case the same doctrine is stated in the opinion of Andrews, J. (page 450). In Wells v. Monihan, 129 N. Y. 164, 29 N. E. 232, Finch, J., says:

“As far as the defense in this case rests upon the statute of frauds, it must fail, for two reasons. No such defense has been pleaded, and it is not raised by the averments of the complaint; and, without one or the other of these conditions, the defense, if existing, cannot be made available.”

But if any doubt existed before as to whether it was necessary to plead the statute of frauds as a defense, or otherwise the benefit ■of the statute was waived, no such doubt can be entertained since the late decision of the court of appeals in Crane v. Powell, 139 N. Y. 379, 34 N. E. 911. That case in effect holds that, unless the statute is pleaded, objection upon the trial to verbal proof of the contract will not avail the defendant. If it appears from the complaint that the contract on which plaintiff seeks to recover is within the statute, defendant must demur. If the invalidity of the contract does not appear from the complaint, defendant must take the ■objection by answer, and if the objection is not taken, either by demurrer or answer, it is waived. In the case cited no objection was taken by defendant to verbal proof of the contract, as being within the' statute of frauds, although at the close of the evidence he moved to dismiss the complaint on that ground. In his opinion, O’Brien, J., adverted to that fact, and said:

“But the Important question, in the case, and upon which we prefer to let the decision rest, is whether, in the light of the adjudged cases, it is not necessary for a defendant who intends to avail himself of the benefit of the statute, as a defense to an action for damages for breach of a verbal agreement, within the sttute, to specifically plead it.”

The learned judge further said:

“In this state cases may be found where the opinion is expressed that the defendant may avail himself at the trial of the benefit of the statute, under the general issue, by objection to verbal proof of the contract. Some of these -cases, and perhaps the principal ones, have already been cited to show when and how the defendant is deemed to have waived the benefit of the statute by admitting the allegations of the complaint. It is proper, I think, to observe that they are cases where the complaint was admitted in some way, or ■the decision was before the Oode, or founded upon authority antecedent to it. The recent cases in this court sustain the view that it is necessary to .plead the statute. * * * The statute of frauds is a shield which a party may use, or not, for his protection, just as he may use the statute of limitations, the statute against usury, that against betting and gaming, and others 'that might be mentioned. I take it to be a general rule, of universal application, that the statutes last mentioned are not available to a party unless specifically pleaded, and there is no reason for making the statute of frauds an exception to the rule. The present system of procedure is founded upon the idea that litigants should, when possible, know in advance the precise questions they must meet on the trial. When a contract is set out in the complaint as the cause of action, and the defendant intends to assail it on some special or statutory ground, the general spirit of the system is not complied with unless notice is given of this intention to the opposing party by the pleadings. * * * When the defect in the plaintiff’s cause of action appears on the face of the complaint, the defense must be interposed by demurrer. Code, § 488. When the complaint does not, as in this case, disclose an invalid agreement upon its face, but it is in fact invalid for some reason, the defendant must take the objection by answer (section 498); and, if the objection is not taken in either way, the defendant is deemed to have waived it (section 499). The conclusion is thus reached that the defendant waived the benefit of the statute in this case by omitting to plead it.”

Under the above authorities, we are oí opinion that defendant waived the benefit of the statute of frauds by not setting up the invalidity of the contract as a defense, and hence that the trial court did not err in submitting the case to the jury.

We have examined the exceptions taken by the defendant on the trial to the charge of the court, and to its. rulings in excluding and receiving evidence, and do not think that either of such exceptions requires a reversal of the judgment.

Judgment affirmed, with costs.

HERRICK, J., concurs.