Dillingham v. Scott
Dillingham v. Scott
Opinion of the Court
This case has been before this court on writ of error, the judgment rendered, jury waived, for the plaintiff being reversed and a new trial ordered. Ante, p. 4-21. At the second trial the jury rendered a verdict for the plaintiff and the case now comes for review on exceptions.
On the writ of error this court stated the question then before it to be “whether the accommodated party on whom the law casts the obligation to reimburse the accommodation party is necessarily the party whose debt is paid with the note or its proceeds or whether it may be shown by oral testimony to be some other party who requested the transaction to be made and who received an indirect benefit from it”; and, observing that “a person may be accommodated within a broad use of that term without being the accommodated party in the legal sense,” and regarding the evidence upon the material matters as undisputed, held that “the accommodated party upon whom the law casts the implied obligation of reimbursing the accommodation party is the party who, in accordance with the prior understanding of the parties, receives the direct benefit of the accommodation paper or its proceeds, and that this result follows even though * * * the motive actuating the accommodation maker was wholly the desire to accommodate some other party requesting the loan of credit,” and, more specifically, that “the plaintiff and the defendant were both accommodation parties and the Kona Sugar Co., Ltd., was the accommodated party and the only party under implied obligation to reimburse the accommodation maker.” It added, however, that “it is true that between accommodation parties, one of whom has paid the note, parol evidence of an express contemporaneous agreement that their liability shall be different from that expressed on the face of the paper is admissible and that plaintiff may recover on such express contract if
At the new trial the plaintiff presented, without any amendment to the declaration, the claim that there was an express contemporaneous agreement different from that set forth on the .face of the note. The first question raised by the exceptions is whether under the declaration evidence of such express contract was admissible, — whether, in other words, the declaration set forth a cause of action based upon such promise.
The declaration alleges that the plaintiff executed and delivered to the defendant the promissory note in question, describing it; that the note, “although purporting on its face to be for a valuable consideration, was wholly without consideration and for the purpose, of enabling said defendant to obtain the sum of money in said promissory note set forth for his own use and benefit, said jiromissory note having been executed and delivered as aforesaid by said plaintiff for the accommodation of the defendant;” that at the time of the delivery of the note the defendant in consideration of its execution and delivery “promised and agreed with the plaintiff that he would pay to the holder of said promissory note at maturity the amount due thereon and save plaintiff harmless from any claim or demand thereon;” that before maturity the note was transferred for value by defendant to H. Hackfeld & Co., Ltd.; that at maturity Hackfeld & Co. was its bona fide holder for value; that the defendant wholly failed to pay the note and that plaintiff was required to and did pay the whole of its amount to Hackfeld & Co.; and that upon demand defendant has failed to reimburse the plaintiff.
Reading the language of the declaration in its ordinary meaning an express promise on defendant’s part to pay the
The next question is whether the plaintiff so conducted the trial as to violate in the presentation of evidence or in his statements in the presence of the jury or otherwise the spirit of the former decision of this court. After a careful examination of the record we find no such violation. While the word “accommodation” was used a few times by counsel and witnesses in the course of the testimony it was evidently used in its popular sense and its use could not have been prejudicial to the defendant. The cáse was presented by the plaintiff on the sole contention that an express oral contract was made by the defendant to save plaintiff harmless and no reliance was had by the plaintiff or could properly have been understood by the jury to have been had by him upon the theory of an implied obligation on the part of the defendant as the accommodated party. The instructions likewise, in so far as the plaintiff requested them, omitted all reference to the theory of any such implied obligation on the part of the defendant. Considerable was, indeed, said by the court to the jury on the
Some of the instructions requested by the defendant were modified and others refused, but as given they do not, as is now contended by the defendant, leave it to the jury to determine who was the accommodated party or to find against the defendant upon an implied obligation as the accommodated party.
Some only of the rulings of the trial court on the instructions will be specifically referred to. Defendant’s requested instruction No. 6 was “If you find from the evidence that the note in question was given to pay a debt of the Kona Sugar Company, Limited, so understood by the parties at the time of its execution or if it was stated by defendant to plaintiff at the time, and if the paper was so used as intended, I then instruct you that the note was an accommodation note, that the plaintiff E. E. Dillingham was the accommodation maker, that defendant M. E. Scott was the accommodation indorser and that the Kona Sugar Company, Limited, was the accommodated party. I further instruct you that between accommodation parties themselves, plaintiff and defendant, the note itself shows a contract in writing, of a primary obligation of plaintiff to pay'and that payment by plaintiff discharged the liability of defendant and that if defendant had paid the note he could in turn have recovered on the contract of the note
It is further contended by the defendant that the instructions given were erroneous in ommitting -any reference to the defense of the statute of frauds and in permitting the plaintiff to recover upon the alleged oral contract irrespective of whether or not the promise made was original or collateral. It may be noted in passing that this defense was not pleaded and that no request w-as made for any instructions on the point. The only mention of the subject-made in the proceedings below was by way of an objection to the admission of evidence of the oral contract. Whether this defense was properly available at the trial need not be determined in view of our conclusion upon its merits. The contemporaneous oral agreement, if any, proven by the evidence was that the defendant would save the plaintiff harmless if the plaintiff should by reason of the execution and delivery of the note be required to pay the same, and under the instructions the jury was not given liberty to find for the plaintiff unless they found that this promise was made. Upon any other state of facts, as found by the jury, the latter was instructed in effect to find for the defendant. Such an agreement, made by the defendant to the iffaintiff, was an original undertaking and was not a promise to
It may be added that there was evidence sufficient to sustain a finding that a contemporaneous oral agreement was entered into as claimed by the plaintiff.
The exceptions are overruled.
Reference
- Full Case Name
- B. F. DILLINGHAM v. M. F. SCOTT KONA DEVELOPMENT CO., LTD., AND F. B. McSTOCKER, GARNISHEES
- Status
- Published