Lambert v. Schmalz , 118 Cal. 33 ( 1897 )

BELCHER, C.

On December 13, 1893, the defendant, for a valuable consideration, executed to the plaintiff his promissory-note for the sum of seven hundred and fifty dollars, payable ninety days after date, with interest at the rate of two per cent per month from date until paid. On June 12, 1894, the defendant was discharged in insolvency “from all his then existing debts, and among others the said indebtedness on said promissory note above mentioned.” In the months of January and February, 1894, defendant paid on the note the interest due in those months, in April following he made a payment of twenty-five dollars, and between the months of July, 1894, and March, 1895, inclusive, he made several other payments aggregating one hundred and seventy-four dollars. He afterward refused to make any more payments, and thereupon plaintiff commenced this action. The complaint alleged, among other things, “that subsequent to the said discharge in insolvency and at various times in the months of July and August, 1894, the said defendant, William Schmalz, promised and agreed to and with tbis plaintiff that he would pay to this plaintiff the full amount of said promissory note, to wit, the sum of seven hundred and fifty dollars,” and that pursuant to said promise he afterward paid to plaintiff several specified sums of money; “that no part of the said sum of seven hundred and fifty dollars, which the said defendant promised to pay as aforesaid, has been paid, save and except the above mentioned amounts and also interest in the amount of fifteen dollars for January, 1894, and fifteen dollars for February, 1894.” Wherefore judgment is asked for the sum of seven hundred and fifty dollars, and interest thereon from the 13th day of February, 1894, and costs.

The answer denied the principal averments of the complaint, and prayed judgment that the plaintiff take nothing by his action.

The case was tried by the court without a jury, and the court found, among other things, “that all the allegations of said complaint are true and have been fully sustained by the testimony herein, free from all exception as to its competency, admissibility and sufficiency”; and that the plaintiff was entitled to judgment against the defendant for the sum of seven hundred and fifty dollars, “with percentage and costs of suit.”

Judgment was accordingly so entered, from which and from an order denying a new trial the defendant appeals.,

Appellant contends that the findings were not justified by the evidence; and whether, subsequent to his discharge in insolvency, he made any promise to pay the alleged indebtedness to the plaintiff sufficient to remove the bar of the discharge is the principal point presented for decision.

"When a debt has been discharged by proceedings in insolvency, or has become barred by the statute of limitations, the remedy to enforce the payment of the debt is gone, but the moral obligation to pay it still remains and is a good consideration for a new promise to make such payment. (Chabot v. Tucker, 39 Cal. 434; McCormick v. Brown, 36 Cal. 180; 95 Am. Dec. 170.) And it is well settled that when an action is brought to recover such-a debt it must be based upon the new promise, and to support the action it must appear that the promise was clear, distinct, unconditional, and unequivocal.

In case of insolvency or bankruptcy tbe new promise may be oral, but, under our statute, to remove the bar of the statute of limitations the promise must be in writing. (Code Civ. Proc., sec. 380.)

It was proved that the note in question was given for money loaned, and that shortly after receiving it plaintiff turned it over to Miss Delia Desmond, with whom his daughter was boarding, with authority to collect the interest thereon for three months to pay the daughter’s board; that plaintiff then went east, and on January 31st defendant filed his petition in insolvency; that in January and February defendant paid the interest to Miss Desmond, as before stated.

Miss Desmond testified that on March 13th she went again to collect the interest, and defendant then said: “I cannot make this payment to-day. I have failed”; that she appeared alarmed, and he said: “Don’t be alarmed; I will pay Mr. Lambert every dollar of his money.” And this evidence was confirmed by the daughter who was present and heard the conversation.

Plaintiff was a witness in his own behalf and testified:

“Q. State what conversation you had and what promises, if any, were made by the defendant in regard to the payment of this note. Take the last promise he made, and state the date of it and what it was. A. It was continuous. I returned from the east about the early part of March, 1894. I called at his place of business, and he told me that he had applied for a discharge from his debts; but not to feel alarmed, he would pay me every dollar of my money. At that time he paid me nothing. After that he paid me as I said before. After he had started in business again he told me to call at his place the first of every month and he would hand me twenty-five dollars.”

“The Court.—When was that promise made? A. I think that was the 1st of August, or September, or October, or in that vicinity, 1894; I am not sure of the date. In August, 1894, he paid me $35 on the first of the month, $35 the first of September, and $25 the first of October; I cannot be accurate about the dates; it may be a month subsequent or prior; but he paid me for three or four months promptly, and finally he stopped paying, and I commenced this suit against him.”

“Q. Before you commenced this suit did you have a conversation witb bim about tbe payment of tbis debt? A. Yes, sir; be always told me be would pay it; at least balf a dozen times; and tbey were thoro uglily unconditional promises, and our relations were sucb tbat I believed be intended to do it. These promises were made constantly after tbe 12th of June, 1894. I demanded payment of bim before I commenced suit; I was not paid.”

The witness was cross-examined at considerable length, but tbe answers elicited were in effect only reiterations of tbe statements made by bim on bis examination in chief.

■ Tbe question then is, Does it appear from the evidence tbat there was sucb a clear, distinct, unconditional and unequivocal new promise to pay the debt as was necessary to enable plaintiff to maintain tbe action?

At tbe end of tbe trial tbe learned judge of tbe court below stated: “I think in view of all tbe circumstances, and I am satisfied from tbe testimony, tbat there was a clear and unconditional promise to pay tbe amount of tbe indebtedness”; and this conclusion we think must be sustained.

It is true tbe statements made by defendant prior to bis discharge, that be would pay plaintiff every dollar of bis money, did not constitute sucb a promise as would remove the bar of tbe discharge, but tbey were proved without objection and may properly be considered as showing an intention to pay tbe debt in any event, and as supporting tbe evidence of promises subsequently made. So, too, the payments afterward made did not alone remove tbe bar of tbe discharge, or show tbat plaintiff bad any existing cause of action, but tbey were testified to by both plaintiff and defendant, and clearly indicated tbat defendant recognized tbe fact tbat be was under some obligation to pay tbe debt.

Tbe only other point made is tbat tbe judgment as entered was for a larger sum than plaintiff was entitled to recover under tbe new promises, as alleged and proved. Tbe judgment was for the sum of seven hundred and fifty dollars, “together witb tbe further sum of thirty-seven and 50-100 ($37.50) dollars percentage,” and costs of suit. Tbe complaint alleges tbat in tbe months of July and August, 1894, defendant promised to pay plaintiff “tbe full amount of tbe said promissory note, to wit, tbe sum of seven hundred and fifty dollars,” but there is no allegation tbat be promised to pay more than tbat sum, and tbat, witb the interest that subsequently accrued thereon, must therefore be the limit of his liability.

From the time the new promise was made and became binding the indebtedness bore interest at the legal rate. Assuming that ■ that promise was made in July, 1894, the interest up to the time the judgment was entered would amount to only about seventy-four dollars. The payments made before the discharge were properly applied to the payment of the interest then accrued on the note, but the payments made after the new promise were sufficient to pay the said sum of seventy-four dollars interest and one hundred dollars of the debt. And so far as we can see there was no ground for awarding the plaintiff $31.50 “percentage.”

It follows, we think, that the judgment and order appealed from should be reversed and the cause remanded for a new trial, unless the respondent shall, within twenty days after the remitti-tur is filed in the court below, satisfy the judgment to the extent of $131.50 and the interest accrued on that sum, in which event the judgment so reduced should stand affirmed, without costs to either party in this court.

Searls, C., and Haynes, C., concurred.

For the reasons given in the foregoing opinion the judgment and order appealed from are reversed and the cause remanded for a new trial, unless the respondent shall, within twenty days after the remittitur is filed in the court below, satisfy the judgment to the extent of $131.50 and the interest accrued on that sum, in which event the judgment so reduced shall stand affirmed, without costs to either party in this court.

McFarland, J., Temple, J., Henshaw, J.

Hearing in Bank denied.