Dant v. Head , 90 Ky. 255 ( 1890 )

OHIEE JUSTICE LEWIS

delivered the opinion op ti-ie court.

September 12, 1881, 'appellee, in consideration of fonr thousand dollars, sold and conveyed to appellant his interest in a tract -of land leased jointly with B. P. Bryant from R. ‘C. O’Bryan for ten years, beginning ■ June 1, 1879, upon which was a distillery.

The deed, in addition to the contract for sale of the .realty, contained .the .following: “It is hereby covemanted and 'agreed that said P. M. Head, party of the first part, for and in consideration of one hundred dollars per annum, payable at the end of each year during the time of the present lease from R. C. O’Bryan, which is eight years from June 30, 1881, sells, conveys and confirms unto said J. B. Dant, his heirs, executors and assigns, all his right, title and interest in or to a certain distiller’s brand, known to the trade as ‘ F. M. Head & Oo.’ To have and to hold all and singular the above mentioned premises, together with all and singular the appurtenances,” &c.

November 28, 1883, appellee instituted this action for judgment on the second installment of purchase price of the brand mentioned, which became due September 12, 1883, the first having been paid, and judgment also upon the remaining six installments, to take effect as they respectively become due. The judgment rendered was for recovery of the second installment, together with interest, and that defendant be required to show cause by the next term of court why he should' not be adjudged to pay these other installments, which the plaintiff suggested to the court had then become due and remained unpaid. Power to enforce payment of the other installments from time to time was reserved.

Section 135, Civil Code, provides: “A party may be allowed on motion to file a supplemental pleading alleging material facts occurring after the filing of the former pleading ; but if a plaintiff, having a lien for a debt due and a debt not due upon property which he seeks to subject, state both claims in his petition, he may, upon a suggestion of record that one of them has become due, pendente lite, have judgment for a sale of the property therefor.”

A plaintiff may, under that section, by supplemental pleading, allege another or other notes of the same series, and given for the same consideration as the one sued on, have become due during pendency of the action, and have judgment therefor. But it does not seem to us a mere suggestion on record of such fact was intended to authorize judgment on a note not due when the action was commenced, except when a lien on property to secure it exists. It thus results the only, judgment appellee was entitled to as the the record stands, if any at all, was for amount and interest of the installment sued on.

The main defense set up in the answer, to which a general demurrer was sustained, is, that the agreement sued on is not enforceable, because within operation of section 1, chapter 22, General Statutes, as follows: “No action shall be brought to charge any person * * * * upon any agreement which is not to be performed within one year from the making thereof, unless * * agreement * * * or some memorandum or note thereof be in writing, and signed by the party to be charged therewith, or by his authorized agent; but the consideration need not be expressed in writing; it may be proved when necessary, or disproved by parol or other evidence.”

It was definitely settled by this court as early as Roberts v. Tennell, 3 Mon., 247, that a parol agreement to pay money, though not to be done within a year, is not void if the consideration be legal. In that case a distress warrant for rent, payable in two years, was issued, and the court said: “On a verbal lease for more than a year no action will lie; but as the statute has not declared the lien void, any use may be made of the lease by either party, except that of maintaining an action upon it. The lessee, therefore, in case he enters in virtue of the lease, may use it for the purpose of showing he is no trespasser; and after he has enjoyed the leased premises for a term, he will be liable for the rent, not upon the express contract, but upon the contract implied by law from his use and occupation of the premises; and in such an action either party, we apprehend, may avail himself of the express contract to show the amount of rent to be recovered.”

In the same case it was held an action can not be maintained upon an agreement the borrower shall repay at the end of two years money loaned, because, by the terms of the agreement, it is not to be performed within a year from the making thereof. But it was said : “To give the statute the effect of making the contract void, and thereby utterly preventing the lender from recovering the money lent, or if' he be allowed to recover the money upon the implied contract resulting from the loan, to give to the statute the effect of not permitting the borrower to prevent the recovery of the money lent before it is due, or of a higher rate of interest than is due by the terms of the contract, would be extending the operation of the statute beyond its letter, and instead of making the statute the means of preventing frauds, it would be converting it into an instrument of fraud and injustice. It most certainly could not be said to be demanded by the reason and spirit of the statute.”

In Berry, &c., v. Graddy, Adm’r, 1 Met., 553, by a verbal agreement, Belt, the decedent, induced appellee, who had married his niece, to abandon his determination to remove from the State and incur expense of purchasing a farm, by vetbally agreeing to pay a certain amount of the price in three annual installments. Graddy was to and did perform his part of the agreement within a year, and his right as administrator to credit for the amount was held to be unquestionable, according to the doctrine settled in Roberts v. Tennell. But although it was then said to have been decided in England and some of the American courts that in such case the statute of frauds does not apply, and an action will lie for non-performance of the agreement by the other party, it was not deemed necessary to decide whether or not the doctrine could be Sustained on principle, the right of Graddy to the amount claimed being placed on the common law right of retainer for the debt due under the verbal contract.

In Montague v. Garnett, 3 Bush, 298, it was held there was a distinction between contracts executed in part or whole, and one wholly to be executed by both parties; but the right of the plaintiff to recover for the pork and corn loaned to the defendant was based alone upon the implied contract to return or pay for the articles, simply because the agreement was not to be performed within a year, although the statute was then said to have been “never designed to enable one man to get property of another by virtue of a parol contract, and then refuse to either execute the contract or return the property.”

It now seems to us the statute was intended and does properly apply only to an agreement that is not to be performed by either party Avithin a year, but not to one Avhioh is to be or has been performed by one or either of them within such period, and that construction has been adopted elsewhere. (Atchison, T. & S. R. Co. v. English, 16 Pacific Rep., 82; McClellan v. Sanford, 26 Wis., 595; Curtis v. Sage, 35 Ill., 22; Berry v. Doremus, 30 N. J. Law, 403 ; Haugh v. Blythe, 20 Ind., 24; Smalley v. Green, 52 Iowa, 241; Blanding v. Sargent, 33 N. H., 239.) For if the practical effect and operation of the statute is, as has been uniformly held by this court, in every case where one party has performed an agreement Avithin a year, to hold the other party liable on such agreement, although he is not to perform within a year, such should be construed and held to be the meaning and import of the language used. In fact, the statute properly applies to agreements that are wholly executory; and one which has been performed by one of the parties within a year is, to that' extent, executed, and can not, with propriety, be called an agreement to be performed within a year. In this case the agreement 'is set out in the deed which was accepted by the appellant, and recorded. The distiller’s brand, which is the consideration for the amount he agreed to pay, was received, used, and is still his property, and to permit him to evade payment under cover of the statute would serve to pervert the purpose of ' it without any reason. The defense that the distiller’s brand was not a subject of sale and transfer, and, therefore, formed no consideration for the alleged agreement, because the use- thereof by another than P. M. Head & Co. was deceptive, is not valid; for it is well settled that a trade-mark affixed to articles manufactured at a particular place' may be lawfully sold and transferred with the establishment. But it is stated in the answer that appellee fraudulently represented the distiller’s brand to be of good repute, and it was purchased bjT appellant upon faith of that representation, although appellee had, by the manufacture of a large quantity of inferior whisky, impaired and destroyed the value of the brand, which fact he fraudulently concealed from appellant.

It seems to us that allegation, if true, constitutes a defense, and it was error to sustain the demurrer to ■ the answer, and the judgment must be reversed for further proceedings consistent with this opinion.