Hallenbeck v. Kindred — 14 N.Y. St. Rep. 69

Majority

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De Witt Hallenbeck, Resp’t, v. Charles F. Kindred, App’lt. 1

(Court of Appeals,

Filed March 20, 1888.)

Headnote

1. Contract—Determination op terms op oral contract a question op pact.

The evidence as to the terms of an alleged oral agreement was conflicting and the referee refused to find as requested by the defendant. Held, not an error of law. That it was a question of fact.

2. Deed—Covenant to assume contract op grantor—Not a personal COVENANT MERELY TO GRANTOR.

By the terms of a certain deed, in which reference was made to a con-' tract, the defendant herein, as grantee in said deefl, assumed said contract and covenanted to fulfill and perform all the conditions of said contract to be performed by the grantor, and at all times to indemnify said grantor against the same. Held, that the covenant was not a mere personal one to indemnify the grantor. That the plaintiff as a creditor of said grantor for things covered by said contract could adopt and take the benefit of said covenant.

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Appeal from a judgment of the supreme court, general term, fifth department, affirming a judgment in favor of the plaintiff, entered upon the report of a referee.

The plaintiff sued on four claims assigned to him by different persons. Three were accounts for goods sold to the manager of the Long Point Hotel during the season of 1884, and the fourth claim was for money alleged to have been loaned by S. K. Nester to the defendant in June, 1884. •

Prior to April 1, 1884, S. 3L Nester was the owner of Long Point Hotel, on Seneca Lake, and made a contract with one J. E. Allen, to manage it for the season of 1884. That contract was verbal, but was similar to the contract Allen previously had with the Cayuga Lake Company.

On April 17, 1884, Nester entered into a written agreement with the defendant, in which Nester agreed to exchange the Long Point Hotel property for certain real estate of the defendants in Dakota, and defendant was to assume and carry out the Allen contract. This contract .was never fulfilled by either Nester or the defendant, but was discharged by their written agreement of July 21, 1884.

After this discharge there was no renewal of the contract. The exchange of properties was finally made and the deed of the Long Point Hotel property was delivered to the defendant.- The defendant accepted the deed under a new agreement and on the basis of new terms.

The deed was dated April 21, 1884, and contained among other things, the following: “This conveyance is made, subject to a contract for the occupancy of said premises, made by the said Samuel K. Nester on the one part and John E. Allen, of Auburn, New York, on the other part. Reference being hereby made to said contract, and the said party of the second part to this conveyance does hereby assume said contract, and does hereby covenant and agree to fulfill and perform all of the conditions of said contract to be performed by said Nester, and at all times to indemnify said Nester against the same and said party of the second part, is to receive all the benefits of said contract, which otherwise would have been received by said Nester:”

After accepting the deed from Nester,, the defendant, sent a letter to Allen at Long Point, stating that 0 M. Hertig, Esq., of Valley City, Dakota, would represent the defendant, as grantee of Nester. The goods and merchandise mentioned in the complaint were sold to the Long Point Hotel or to Alien, the manager thereof, and the moneys loaned were, .used by Allen in the running expenses of the hotel. The defendant claimed that he never authorized

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any of the persons to give credit to the hotel in his behalf, nor Allen to incur liabilities, and that nothing was said by Wester to him about assuming past liabilities on account of the hotel.

Henry G. Danforth, for app’lt; D. B. Backenstose, for resp’t.

—The facts found by the referee are sufficient to entitle the plaintiff to a recovery, and there is sufficient evidence to sustain them. Unless there have been errors committed on the trial the judgment must be affirmed. The counsel for the defendant insists that there were such errors, and among them he claims that the referee erred in refusing to find that the terms of the lease (which defendant assumed in his deed) between Wester and Allen, as stated in the land contract between Wester and defendant, were binding upon the parties to this action. The counsel for defendant excepted to such refusal, and he now argues that such terms thus stated were binding upon the parties hereto, and that the defendant was, therefore, not liable to the plaintiff because Wester, by the terms oi the lease as stated in the land contract, had not agreed with Allen to furnish any capital or pay any of the expenses of the hotel, and the defendant had only assumed the lease as its terms were stated in the said land contract.

The exception taken to the refusal of the referee to find as requested is claimed to be fatal to the plaintiff’s judgment.

It seems to us, however, that the question in this case was one of fact and not of law.

Wester and defendant' had, on the ltth of April, 1884, entered into a contract for the sale and purchase of the hotel property, and in that contract this language is used: “It is further agreed" and understood that the agreement now existing between the said Wester and John E. Allen, of Auburn, W. Y., concerning a lease of said hotel, shall be carried out for the term of one year; the terms of said lease being that said Allen carries on the said hotel and divides profits, the said Kindred taking the place of the .said Wester therein; the said Kindred to furnish no capital for carrying on the same.” It is said on the part of the plaintiff that the last clause of the above statement, viz.: “the said Kindred to furnish no capital,” does not purport to be a part of the terms of the lease between Wester and Allen.

However that may be, it would seem that the preceding statement as to what those terms were, “that the said Allen carries on the said hotel and divides profits,” means the same thing, that Allen is to furnish the capital, for how else is he to “carry it on?” A man that is to carry on a

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hotel and divide the. profits with another, would be supposed to. be the man who furnished the capital or procured it, and that the one who simply took a portion of the profits was not to be responsible for furnishing any portion of the capital. Under such circumstances, if defendant had taken a deed in pursuance of this agreement, and had assumed to carry out the lease upon the terms stated in the above language, it would be at the least very doubtful if. there were any liability on the part of the defendant to furnish any capital, even though the agreement between Nester and Allen did call for capital from Nester. But the evidence shows that both parties to the agreement for the sale and purchase of this hotel property were unable to perform, and on the 21st of July, 1884, they both executed a release and discharge from the contract and restored each other “to their rights as fully and completely as if the same had never been executed.” This release was delivered prior to the delivery of the deed by Nester to defendant of the property in question.

After the discharge there was no renewal, defendant says, of the contract between Nester and himself, and the agreement under which he received the deed which was delivered, and upon the assumption clause in which this action rests, defendant says was a new agreement and on the basis of new terms. What those terms were does not appear, but defendant says there were no further statements by Nester to him in regard to Allen’s occupancy beyond those mentioned or incorporated in the land contract above set forth; and the claim of the learned counsel for the defendant is that Nester having represented what the terms of the lease were, he could not be heard to claim they were anything different, and that plaintiff stands in the same position. That might be true if the evidence simply showed a positive representation as to the terms of the lease and an assumption of the deed upon the basis of its .truth. But there is undisputed evidence that the contract for the purchase of the land, in which the representation is contained, was wholly discharged and a new contract, and upon new terms, entered into, and there is no evidence that in entering upon the new contract or in taking the deed with the assumption clause therein, the defendant at all relied upon any representation as to the terms of the lease, which was contained in the old and abandoned contract.

Further than this, although the defendant said he had no statements from Nester in regard to Allen’s occupancy beyond those mentioned or incorporated in the land contract, yet after the land contract had been extinguished and each party to it had been released therefrom, and pending new

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negotiations for the sale and purchase of the land, Nester says that defendant asked him about the contract he had with Allen, and that he told defendant it was the same as Allen had for the Cayuga Lake hotel; that he (Nester) had never seen the contract, but, as near as he could tell him, the basis upon which he conducted that house was that Allen was to take it and carry it on for $1,000 a year and divide profits, if any; that he did not exactly understand what that contract was.

The contract in reference to the Cayuga Lake hotel was put in evidence, and by its terms Allen was to be paid $250 per month for taking charge of and conducting the hotel from June to October first, and all the expenses of the hotel were to be paid by the other party to the contract, and the profits, if any, after paying expenses, were to be divided between the contracting parties. Nester, by this evidence, states he does not know definitely what the precise terms of the contract are, but states facts from which defendant can inform himself as to the terms, and he thus leaves the matter entirely to the defendant.

If this evidence were to be believed, then the counsel for defendant could hardly maintain that the statement as to the terms of the occupancy by Allen, as set forth in the land contract should, as matter of law, bind both parties, for Nester in the above interview gives to the defendant an entirely different statement of the terms of the occupancy by Allen, and according to such statement Nester was to furnish capital to Allen.

What effect the statement of the terms of the Allen lease, as set out in the land contract between Nester and defendant, had upon the mind of the latter, when taken in connection with the above evidence of Nester, and whether the defendant understood when he took this deed what the real terms were, and whether in fact he was in any degree misled in entering into the second contract by any alleged misrepresentations of the terms of the Allen lease, were upon the whole evidence questions of fact, and hence the referee committed no error of law in refusing to find as requested.

The only other question argued was whether or not the covenant contained in the deed was a mere personal one to indemnify the grantor, and which the plaintiff could not take the benefit of.

That it was a contract such as the plaintiff could adopt and take the benefit of, this court in a series of decisions has held, and the covenant does not come within any of the exceptions to the general rule laid down in such decisions. See Lawrence v. Fox ( 20 N. Y., 268 ), Pardee v.

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Treat ( 82 N. Y., 385 ), Bowen v. Beck ( 94 N. Y., 86 ), Schley v. Fryer ( 100 N. Y., 71 ).

The judgment should, therefore, be affirmed, with costs. All concur, except Daneorth, J., not voting.