Johnson v. Hall Signal Co.

Barrett, J.:

Charles R. Johnson’s contract with the plaintiff to pay him out of the moneys received from the defendant was but his personal covenant, and did not constitute an assignment of any part of the moneys. (Rogers v. Hosack's Exrs., 18 Wend. 319, 334.) Hence his cause of action, if any, arises out of the verbal agreement alleged in the complaint. The allegation is simply of an agreement by the defendant, made directly with the plaintiff, to pay him his share of the money remaining due. For such a contract there would seem to be no consideration whatever. Treating the agreement, however, though not so averred, as one made by the defendant with the Johnson estate for the plaintiff’s benefit, it would seem to afford him a cause of action under the doctrine of Lawrence v. Fox (20 N. Y. 268). Whether there is sufficient proof df such a cause of action is the question to be decided.. In determining it, it must be remembered that this is not an equitable action to which the Johnson estate is a party, founded upon a tripartite verbal agreement to substitute for the original contract two verbal contracts, one with the plaintiff for the payment of one sum, and one with the Johnson estate for the payment of another ; and thus, under such tripartite verbal agreement, to apportion the remaining payment between the plaintiff and the Johnson estate. It is an action at law, by the plaintiff against the defendant alone, upon an independent verbal agreement. The Johnson estate is not a party thereto, and is not bound by the result. This being so, the evidence should at least be- clear .and unequivocal that that estate did make the alleged verbal agreement, and did thereby release its rights under the original contract pro tanto against the defendant. Otherwise the latter might be held to a double liability. The question, then, is, did the parties agree in the manner thus claimed to -sever the contract price specified in the written contract ?

In scanning the plaintiff’s proof on the latter head, it is noteworthy at the outset that there is no -pretense of any affirmative promise or agreement by either Miller or the defendant’s officers to pay this specific money to the plaintiff. The latter’s contention is that he refused to sign the extension which the defendant desired unless such an agreement was made with him, and that there was an assent to this demand. It was thus necessary that the precise nature of that demand should be distinctly shown. In describing the interview of July J, 1894, in his direct examination, the plaintiff says that three notes had been made out to the order of the Johnson estate for one-lialf' of the amount then due by the defendant, and that, “I would not consent to sign that document (the extension agreement) unless I received my pro rata share direct.” This language, naturally construed, relates simply to the payment then to be made. What followed enforces this view. Miller consenting, notes were made out to the plaintiff’s order for his share of that payment, and a receipt was drawn stating that the notes given to him and Miller “ are in full for one-half of the sum now due on the contract of said Hall Signal Company for purchase of Johnson Railroad Company stock,” and embodying a stipulation that “ the time for the payment of said remaining sum so due * * * is and is to be extended to July Jth, 1895, when the saméis to be payable with interest.” There is no intimation here that the future installment is to be paid in any other manner than the original contract provided, viz., to the Johnson estate. Reference is made to the original contract, and the extension is of the time to pay the money “ so due,” that is, of the defendant’s obligation to the Johnson estate. The reason for getting the plaintiff’s signature, as Miller’s undisputed testimony shows, was to forestall any claim which he might have against the Johnson estate on account of' the extension. If the parties had intended to vary the original contract by severing the future payment, they would certainly have so stated in this receipt, which embodied the results arrived at in this interview. There is not a syllable in the plaintiff’s direct testimony as to any agreement to sever the balance of the purchase money, or to pay the plaintiff his share thereof when it became due. That was evidently taken for granted as the supposed legal result of the then present agreement with respect to the notes and the extension. On cross-examination, however, after repeated uvgings to state all that occurred at the interview, the plaintiff, did say that he objected to signing the extension “ unless my share *1 * * was paid to me direct, and that the hala/nce should he paid to me direct.” These last quoted words constitute the only evidence in the case of the verbal agreement upon which alone the judgment can rest.

The remarkable omission of any reference to this agreement on the direct examination necessarily tends to discredit the casual statement thus made on the cross-examination. This omission can only be explained- on the theory that both the plaintiff and his counsel believed that the former became vested, as an equitable assignee under Charles E. Johnson’s contract with him, with a direct cause of action against the defendant, and that this cause of action required no verbal agreement on the defendant’s part to sustain it. They consequently sought no such verbal agreement. The complaint describes Charles E. Johnson’s contract with the plaintiff as “ a written assignment ” by the former of his claim for the purchase price of the stock, furnished by the plaintiff, and prior to the interview of July 7, 1894, the plaintiff had made written demands upon the defendant for direct payment, apparently under the advice of counsel.. The probative force of the-plaintiff’s testimony is thus diminished by this evident belief on his part, at the time of the interview, that he had a claim against the defendant, founded upon a writing. In his view, his rights were already in existence, and this naturally made him unobservant as to whether the defendant actually and affirmatively agreed to do that which he thoroughly believed they were already bound to do.

Finally, this testimony of the plaintiff, in itself a mere incidental observation of doubtful sufficiency, is contradicted by the other three persons present at the'interview—■ Miller, Hall, the defendant’s president and Gilmore, its treasurer. Gilmore and Miller flatly deny that the plaintiff refused to sign the extension agreement unless the future payment should be made to him direct; and Hall says he has no recollection that the plaintiff said he should expect such payment, and that at all events no such agreement was made with him. And these witnesses did not have the same direct, personal interest in the result of the action as did the plaintiff.

Taking into consideration the plaintiff’s direct interest; his failure to testify to this agreement on his direct examination ; the casual and inconclusive nature of the single observation which he made on cross-examination, and which alone even tends to support his claim; his evident belief that the defendant was bound without any such agreement; the entire absence of any such agreement in the receipt, in which it would naturally have been embodied if made; and the explicit contradiction of the plaintiff’s testimony by three less interested witnesses, it is impossible to hold that he made out his case by a fair preponderance of evidence. .A Written contract under seal between two contracting parties cannot well be modified by mere implication or what the respondent here calls a tacit understanding, so as to sever the obligation and require part payment to á stranger to the instrument. Such a rearrangement of the original contract relations can only be established by adequate proof of a substituted contract. And that here is clearly wanting.

The judgment and order should be reversed and a new trial ordered, with costs to the appellant to abide the event.

Van Brunt, P. J., and Ingraham, J., concurred ; Bumsey and O’Brien, JJ., dissented.