McCafferty v. Decker — 19 N.Y. Sup. Ct. 455

Majority

p. 455

WILLIAM McCAFFERTY, Respondent, v. NICHOLAS H. DECKER, Appellant.

Headnote

Promise made for benefit of third party — consideration for — enforcement of

The defendant contracted with a railroad company to build its road, and agreed that in all cases of non-payment of laborers by the contractor the company might pay and deduct the same from the amount due the contractor. Defendant subsequently sublet a portion of the work to P. & H., who assigned the subcontract to one McKee, who absconded without paying the amount due to his laborers. The plaintiif had sold goods to the laborers on credit. After McKee absconded the defendant paid the laborers the amount due for wages, less what was due to the plaintiff, they agreeing to this deduction provided he would pay it to the plaintiff.

In this action brought by the plaintiff to recover the amount so deducted, held, that, conceding that there was a promise by the defendant to pay the money to the plaintiff that the same could not be enforced as there was no consideration therefor, the defendant not having owed the workmen and no liability oñ his part having arisen under his contract with the railroad company as no lien had been put on the road and the company had paid nothing.

Appeal from a judgment in favor of the plaintiff, entered upon the verdict of a jury, and for an order denying a motion for a new trial made upon the minutes of the justice before whom the action was tried.

This action was brought by plaintiff to recover for goods sold to one McKee and others.

The defendant entered into a contract to build a portion of Spuyten Duyvil and Port Morris Railroad, the contract providing, among other things: It is further agreed that the railroad C( mpany shall, in

p. 456

all cases of non-payment by the contractor, of all and any sums of money unpaid to laborers for labor at any time actually performed in constructing said railroad, be authorized to pay the same to such laborer or laborers, as the same shall be due; and if any suits are commenced under any statute now or hereafter to be passed against said company for laborers’ 'wages on said railroad, the said company may pay all damages, recoveries, costs, expenses and counsel fees, and charge the same to said contractor; and the company may, from time to time, retain what shall be necessary for their protection, and the contractor shall make up and pay to said railroad company any deficiency.

The defendant contracted with John E. Fisher and A. S. Ilart to build a portion of said road embraced in his contract with the railroad company. The latter contract was assigned to Alexander McKee, of Allentown, Penn.

The goods, to recover the purchase-price whereof this action is brought, were sold by plaintiff in October, 1870, first, to McKee; second, to laborers of McKee; and, third, to persons who boarded laborers of said McKee.

McKee, after he had been paid what was due him upon said contract, and shortly before the time of payment of laborers for the month of October, absconded; and about the seventeenth of November the defendant, through his nephew, Franklin Decker, paid, with the money of defendant-, the balance extended upon McKee’s pay roll as due to laborers, deducting from the wages due to each laborer the amount due to the plaintiff. The laborers consented to the reduction, provided the defendant would pay it to the plaintiff. The ' defendant having failed to pay the plaintiff, this action was brought to recover the same.

Odie Close, for the appellant.

C. C. & S. F. Prentiss, for the respondent.

The defendant was the contractor to build the Spuyten Duyvil railroad. He underlet a part of the work to Fisher and Hart, and their contract was assigned by them to McKee, who absconded with

p. 457

out paying his laborers, his storekeepers or his boarding-masters. Thereupon the defendant undertook to pay the laborers, and sent his clerk and his nephews to do so. The mode of procedure was stated by the plaintiff in his statement, as follows': “As each laborer’s name was called the clerk said you have worked so many days? Yes, sir. There is so much due to McOafferty out of these wages, are you willing it should be deducted? Yes, provided you will pay it over to Mr. McOafferty; and it went on in that way during the first day with all the laborers. Q. Now on the second day? A. On the second day. Q. The eighteenth? A. On the eighteenth the boarding-house keepers were settled with. Q. The balance of the laborers and the boarding-house keepers ? A. The balance of the laborers and boarding-house keepers; I had some claims against the boarding-house keepers, and I then presented these claims, and when the accounts were made up the clerk said to the boarding-house keepers, there is so much due Mr. McOafferty from your account, are you willing I should pay it over to him ? Yes, provided you pay it over to him. Q. On the previous day, had these accounts due the boarding-house keepers been deducted from the amounts due the laborers ? A. Yes, sir.”

The manner is thus stated by one of the defendant’s witnesses who assisted in making the payment, and the statement, is uncontradicted:

“ Q. You took from these laborers receipts in full for their wages for the month of October ? A. No, sir; we just took receipts for what was paid them ; the balance was extended; say, for instance, a man worked twenty-six days at a dollar a day and that was twenty-six dollars, his board bill was ten dollars and his cash five dollars, it would leave a balance of eleven dollars due the laborer; he- was paid eleven dollars and he receipted for eleven. Q. In full? A. No, sir; he would just sign his name received eleven dollars; that is all the receipt there was to it.”

Now this action is brought by the plaintiff for the recovery of the money due him from the laborers and the boarding-house keepers, upon the claim that the defendant has retained the same from the wages of the workmen and promised to pay it to him, and a recovery has been had in favor of the plaintiff upon that theory. The judge charged the jury that the defendant was not liable unless he retained the money due with the consent of the

p. 458

workmen, to whom tbe balance was paid, and promised to pay it to the plaintiff.

Money is always retained when it is not paid out, and in that sense tbe defendant retained tbe money which tbe plaintiff now claims to recover, and in no other sense. It did not belong to tbe laborers and tbe defendant did not owe it to them and was under no legal obligation to pay it to them. They left nothing in bis bands for they bad nothing there to leave. Tbe defendant kept no money that belonged to any person but himself. "What bo paid bis workmen was bis own and what be did not pay them was bis own. lie paid them what be did and promised to pay tbe balance of tbe amount due them to tbe plaintiff.

"Was there any consideration for that promise? Tbe defendant received no benefit. No consideration moved to him, and no barm went to t-lio plaintiff, for be relinquished neither bis claims nor any security for tlieir payment. Tbe promise of tbe defendant was not given or taken as a substitute for tbe original demands of tbe plaintiff, and there was no request for any forbearance to sue. There was, therefore, no consideration to sustain tbe promise and it was void. Tbe agreement does not reach tbe statute of frauds, but is made void by general principles of law.

It has been said that tbe defendant used tbe plaintiff’s claim to pay bis own debt, or a debt be assumed to pay, and has thus incurred a liability to pay tbe plaintiff. If this proposition were true, tbe conclusion would not follow, but it is not true. In no sense lias tbe defendant used tbe plaintiff’s claim. All be did wa3 to pay tbe workmen a certain sum of money, take a receipt for it, and promise to pay tbe balance that was due them to tbe plaintiff. He did not pay tbe workmen in full, and did not take from them receipts in full.. He only took receipts for what be paid and left a balance unextinguished and tbe plaintiff’s claim undisturbed. lie neither used it nor interfered with it in any way, except to promise to pay it.

But suppose be did use it and prejudiced the plaintiff in respect to it in any way. Tbe only effect is to make a consideration for tbe defendant’s promise, and so carry the case to tbe statute of frauds, to be determined by it, and then we have tbe case of a promise upon sufficient consideration, not in writing, to answer- for tbe debt

p. 459

of a third person. Such a promise is within the statute of frauds In Mallory v. Gillett ( 21 N. Y., 412 ), the plaintiff had a lien upon a canal boat for repair's put upon it, and in consideration of the relinquishment of the lien and forbearance to sue the claim, the defendant made a promise, not in writing, to pay the claim, and the Court of Appeals held that the promise was void under the statute, because no new consideration moved to the defendant and the promise was not in writing. That is decisive of this case on this point.

There is a class of cases of which Lawrence v. Fox ( 20 N. Y, 268 ) is a good illustration, which holds that where one person, for a valuable consideration, makes a promise to another for the benefit of a third, that third person may maintain an action on the promise; but the Court of Appeals has recently decided in the case of Vrooman v. Farner, not yet reported, that “ to give a third party who may derive a benefit from the performance of the promise a right of action there must be, 1st. An intent by the promisee to secure some benefit to the third party; and, 2d. Some privity between the two, the promisor and the party to be benefited, and some obligation or duty owing from the former to the latter which would give him an equitable claim to the benefit of the promise or an equivalent from him personally. There must be a sufficient consideration passing between the promisor and his immediate promisee, and then the third person must adopt the promise and then bring himself into privity with the promisor, but not otherwise. If there is no consideration, the promise is void as in all other cases.”

Now, in this ease there was no consideration passed to the defendant for his promise. If he had owed the workmen, and they had left the money which he owed them, or any part of it> in his hands on a promise to pay it to the plaintiff in discharge of their liability to him, then the plaintiff could have adopted that promise and maintained his action against the defendant upon the principles of Lawrence y.Fox and kindred cases. But he did not owe the workmen, and the principles of those cases cannot be invoked in the plaintiff’s aid.

The liability of-the defendant to pay the laborers under his contract with the railroad company has no effect on the case. The laborers had power to put a lien on the railway, which would compel the

p. 460

company to pay tliem, and tlien tbe company could obligo tbe defendant to reimburse it under bis agreement. But no sucb lien was put on tbe road, and therefore no sucb liability attached, and no liability of tbe defendant can be worked out in that way.

Judgment reversed. New trial granted, costs to abide tbe event.

Gilbert, J., concurred in tbe result; Barnard, P. J., not sitting.

J udgment and order denying new trial reversed and new trial granted, costs to abide event.