Fisher v. Hopkins

Cohaway, Justice.

These two cases in error in this court arise from a single action in the district court.

Edwin W. Hopkins brought his action in that court against Charles E. Fisher, and John M. Chadwick and Charles E. Fisher, administrators of the estate of Jehu J. Chadwick, deceased. He obtained judgment against them. Charles F. Fisher brings the cause to this court for review by his individual petition in error. John M. Chadwick and Charles E. Fisher, administrators of the estate of Jehu J. Chadwick, deceased, also bring the cause to this court for review by their separate petition in error.

The petition of plaintiff Hopkins filed in the trial court alleges a joint and several contract of Charles F. Fisher and Jehu J. Chadwick with himself. Before the commencement of this action Jehu J. Chadwick died, and the action is against his administrators and Charles F. Fisher as joint defendants. The administrators of the estate of Jehu J. Chadwick, deceased, demurred to this petition on the ground that it does not state facts sufficient to constitute a cause of action against them in not alleging the insolvency of Charles F. Fisher, the surviving joint contractor; and that there is an improper joinder of causes of action against Charles F. Fisher individually and against these administrators.

At common law the rule was absolute that the estate of the deceased joint contractor was not liable to the obligee in the joint contract except in case of the insolvency of the surviving joint obligor. If the survivor was solvent there was a plain and adequate remedy by action at law against him. In such ease the liability of the estate of the deceased joint obligor was to contribute to him after the debt was collected from or paid by him. In ease of his insolvency the obligee in the joint contract could bring his action in equity against the administrators of the deceased joint obligor. But the petition alleges a joint and several contract. It is not claimed that these rules apply or ever applied to such a contract.

But the same point is raised by an instruction to the jury *388 requested by tbe defendant administrators and refused by tbe trial eonrt. Tbis instruction is as follows:

“Tbe plaintiff cannot recover against tbe administrators of Jehu J. Chadwick, deceased, in this action, upon a joint agreement or contract jointly made, by Charles F. Fisher and Jehu J. Chadwick.”

There is evidence in the record from which the jury might have found that the contract in question was joint and not joint and several as alleged. And there is no allegation in the petition of the insolvency of the survivor. Therefore, if the common law rule prevails, the instruction should have been given, and the refusal to give it was error which might have been very prejudicial.

The question is thus fairly presented whether under our code the common law rule prevails that the administrators or executors of a deceased co-obligor in a joint contract are liable to the obligee in an action on the contract only in case of the insolvency of the survivor. This is a question upon which our American courts are in direct and hopeless conflict. It is a question of first impression in this State, and it is our duty to endeavor to ascertain and adopt the view which is most in harmony with the provisions of our code of civil procedure, and best adapted to carry out those provisions in their true meaning and intent.

The one sufficient reason for the rule of the common law that the surviving joint obligor and the representatives of the estate of the deceased could not be joined as defendants in an action at law was the inability of a court of law to render separate and different judgments in a single action — against the survivor to be satisfied de bonis propriis, and against the administrators of the estate of the deceased to be satisfied from such estate in due course of administration. From the same reason it .followed that the survivor alone was liable in an action at law, and that if he were solvent and the action thus available for the collection of the debt the plaintiff need go no further and he was not permitted to do so.

In the code states this the only reason for the rules of the common law upon this subject has entirely disappeared. *389 There is no longer any objection to joining causes of action ■which; were formerly distinguished as legal and equitable. Our courts are no longer hampered as to the form of the judgments they may render in one single form of action, called a civil action. But sometimes a rule of law survives after the reason for it is gone. This may be the ease where the reason for the rule has been abolished by legislation, unless concurrent legislation also furnish a new rule.

With all due respect for the opinions of some eminent courts whieh seem to hold differently, we are of the opinion that codes such as ours, doing away with the reason of the common law rule under consideration as to joinder of parties defendant, also furnish, in terms sufficiently clear, a new rule to be followed in its stead. As to parties defendant we have the following broad provision:

“Any person may be made a defendant who has or claims “an interest in the controversy adverse to the plaintiff, or who “is a necessary party to a complete determination or settlement of a question involved therein.” Rev. Stat., See. 2395.

The defendants in the case at bar all deny any liability on their part to the plaintiff in the action. The primary question to be determined is whether they are so liable. If it be determined that they are liable, the next question is the amount of such liability. In both these questions the defendant administrators are interested in their representative capacity precisely to the same extent as their decedent would be interested were he alive. It is just as necessary for them to defend for the estate as it would be for him to defend for himself. If the action were against the survivor alone they would still be interested. It does not change the extent of their liability whether they are held to pay to the obligee in the joint contract or to the surviving obligor by way of contribution. To a complete determination or settlement of the questions involved they are necessary parties. Their interest in the amount of the judgment, whether the action be against the survivor alone or not is direct. It is also adverse to the plaintiff. If the action were against the survivor alone their liability to contribute could be no more than their proportion *390 of the judgment collected from him. If he succeeded in defeating the action, there would be no contribution. It seems evident that it is the true intent and meaning of this provision of the code, and, indeed, authorized by its express language, that all of these parties should be joined as defendants, and that their rights and liabilities should be determined in a single action. The evident policy of the legislation is to avoid a multiplicity of suits and to reach an end to litigation.

The English courts no longer follow the old common law rule making the solvent surviving joint obligor alone liable to the obligee in the joint contract. They permit the action to be brought against the administrators in the first instance, whether the survivor be solvent or not. Several of the American States hold with the English courts. See Pom. Rem. & Remedial Rights, Secs. 302, 303 and 304; Bliss on Code Pleading, Secs. 105, 106; Braxton v. The State, 25 Ind., 82 ; Burgoyne v. Ohio Life Ins. Co., 5 Ohio St., 586 ; Trimmier v. Thompson, 10 Richardson (S. C.), 164.

A number of code States hold differently, but we think not with the better reason. See Voorhis v. Childs, Executor, 17 N. Y., 354 ; Sherman v. Krenel, 42 Wis., 33 .

We are of the opinion that the trial court did not err in overruling the demurrer nor in refusing the instruction quoted.

In order to discuss some further assignments of error it is necessary to have before us the issues made by the pleadings.

The petition of plaintiff Hopkins sets up a contract as made on or before October 15, 1884. It alleges that as a consideration and inducement to him to purchase stock in the North Crow Land and Cattle Company, Charles F. Fisher and Jehu J. Chadwick did jointly and severally agree to and with said plaintiff that if he would purchase stock in said company and pay cash therefor, if he became dissatisfied with such purchase, they would, at the end of three years from the purchase, take the stock back at his option, and pay him his money invested therein with ten per cent, per annum interest from the time of investment. It is further alleged that on *391 October 15, 1884, be received 150 shares of such-stock, and paid to said Fisher and Chadwick $13,000.00 therefor; and that thereafter, on or before September 15, 1885, he became dissatisfied with his pnrchase and notified said Fisher and Chadwick that he would exercise his option of returning said stock to them and receiving from them therefor the said sum of $13,000.00 with interest thereon at the rate of ten per cent, per annum from October 15, 1884. A payment of $3,000.00 of this sum on May 19, 1887, and another payment of $300.00 on September 33, 1888, is alleged, and it. is further alleged that no other payments have«been made. Charles F. Fisher in his separate answer, and John M. Chadwick and Charles F. Fisher, administrators of the estate of Jehu J. Chadwick, deceased, in their separate answer, deny that any such agreement was ever made, and deny that any payments were ever made on such an agreement. What they allege on these points they state in the following language:

“And for a second and further defense by said defendants to said cause of action set forth in said amended petition, the defendant alleges that on or about the tenth day of September, A. D. 1885, at the county aforesaid the said plaintiff being then and there the holder and owner of one hundred and fifty shares of the capital stock of the North Crow Land and Cattle Company, did then and there agree to and with said defendant Charles F. Fisher and said Jehu J. Chadwick to sell and deliver to them all of his said shares of the capital stock of said company in consideration of the promises and agreements of the said defendant Charles F. Fisher and the said Jehu J. Chadwick then and there made to take the same and pay said plaintiff therefor the amount which he, the said plaintiff, had paid for the said shares of stock together with interest thereon at the rate of ten per cent, per annum from the date when he the said plaintiff had taken the said shares of stock and advanced the money to pay for the same, such payment to be made by said defendant and Jehu J. Chadwick as soon and fast as they were able financially to do so without sacrificing their interests in or the property of said North Crow Land and Cattle Company.”

*392 The jury were instructed -that such an agreement as this, if entered into by said Fisher and Chadwick, does not contemplate that they could take all the time that they may desire and that may he convenient for them to take, hut that the law will imply that that means a reasonable time; so that if you further believe that a reasonable time for the disposition of the property has elapsed since the agreement of the said Chadwick and Fisher to purchase the stock of the plaintiff you must find for the plaintiff.” This is assigned as error. We think this instruction is not erroneous. It is not a sacrifice of property to put it upon the market and sell it at the market price. All the time necessary to do this is a reasonable time. But it is urged that there is no proof that a reasonable time for the sale of the property had elapsed when this action was begun. The contract is alleged and testimony introduced tending to prove it as of date September tenth, 1885. It is shown by uncontroverted testimony that this action was commenced about the first of October, 1889. Here is a lapse of a little more than four years — certainly ample time.

It was claimed in argument that in order to recover on this contract financial ability to pay on the part of the obligors should be shown, and that this instruction of the court to the jury does not require such a showing and is therefore erroneous. It should be remembered that the plaintiff Hopkins in his pleadings and in his testimony denied the existence of such contract. He alleged and proved a contract for money to become due three years from the date of his purchase of the stock of the company. Defendants set up á different contract made at a subsequent time, fixing no certain time when any money should become due. It was incumbent on them to establish their defense.

Charles F. Fisher testifies that the time of the first payment under the contract was to be within two years from its date. Jehu J. Chadwick in conversation with Mrs. Kate E. Hopkins and others stated that the money on the contract was due in the fall of 1887. This is all inconsistent with the idea that payment was made conditional on the financial *393 ability of the parties. Really the contract set np by the defendants would seem not to question but rather to assume, the financial ability of the obligors to fulfill their contract. The evidence also shows that they had abundant means to do so. These means consisted of a large number of neat cattle and horses, a large quantity of land, forty miles of fence, ranch improvements, implements, etc. The obligors furnished all this property to the North Crow Land and Cattle Company. They continued in the control of the property and the business. The capital stock of the company was placed at $100,000.00. Hopkins paid eighty cents on the dollar for his stock. This all bears on the question of their financial ability. The fact that they received $12,000.00 from Hopkins is very material in this connection. The testimony of defendant Fisher shows, an entire misapprehension of the effect of such a contract as he alleges and attempts to prove. He seems to assume that it gave himself and Chadwick the right to carry on the business without contraction and without limit as to time, and that they were under no obligation to pay under the contract unless they could do so from the profits of the business. In answer to the question, “What was the agreement as to when the money should be obtained,” he says: “By selling off company property. For instance if we sold off a bunch of horses for ten thousand dollars, any amount that was needed out of that to pay running expenses or indebtedness was first to be deducted, and then the balance applied to him.” This construction would destroy the essential elements of a contract. It would make it of no binding force. It would leave the obligors at liberty to sell or not and to pay or not at their option. It is simply a claim of the right to take the stock of Hopkins and pay for it if they should find it profitable or desirable to do so, otherwise not to take it or pay for it.

The inconsistency of the testimony of Fisher with the contract which he sets up in his pleading, and the inherent improbability that Chadwick would make such a losing contract as that alleged to have been made on Septemt Br tenth, 1885, would seem to leave the preponderance of the evidence *394 largely in favor of the contract allege'd by plaintiff Hopkins. The record does not reveal upon which contract the jury based their verdict. Really it is not material. The amount of indebtedness is precisely the same under one as under the other. It is $12,000.00 with interest at ten per cent, per annum from October 15th, 1884, less the payment mentioned. The answers of defendants show their liability after the lapse of a reasonable time for the disposal of the necessary amount of property. They do not show the lapse of time nor the amount of the liability. If they did the answers alone would sustain the verdict and the judgment. These particulars are supplied by uncontroverted evidence.

There are some other assignments of error, but under these views they become immaterial.

The form of the judgment as to the administrators is objectionable. It is against John M. Chadwick and Charles F. Fisher, administrators of the estate of Jehu J. Chadwick, deceased. This might be considered as a personal judgment against these administrators for waste, to be satisfied de bonis propriis. Ho such a cause of action or any personal cause of action against the administrators as such is alleged or proven. The cause of action against the administrators is the contract to which the decedent was a party. The judgment against the administrators should be reformed and should be that the administrators pay in due course of administration' the amount ascertained to be due. Session Laws 1890-91, page 272, See. 13. This section seems to be a legislative enactment of a pre-existing rule of law. See Rice v. Innskeep, 34 Cal., 224 ; Senescal v. Booton, 34 Pac. Rep. (N. M.), 446, and cases cited.

These causes are remanded to the district court with directions to modify the judgment as to the administrators in accordance with this opinion. When so modified the judgment of the district court will stand affirmed, each party to pay his own costs in this court.

G-ROEsbeck, C. J., and Claek, J., concur.