Conrad v. Clarke

119 N.W. 214, 106 Minn. 430, 1909 Minn. LEXIS 777
CourtSupreme Court of Minnesota
DecidedJanuary 8, 1909
DocketNos. 15,881—(152)
StatusPublished
Cited by9 cases

This text of 119 N.W. 214 (Conrad v. Clarke) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Conrad v. Clarke, 119 N.W. 214, 106 Minn. 430, 1909 Minn. LEXIS 777 (Mich. 1909).

Opinion

BROWN, J.

Action to recover $546.49, an amount claimed by plaintiff to have been .earned by her while in the employ of the Fred C. Genge Company, a corporation, and which she alleges defendant orally agreed and promised to pay, in consideration that she would remain in the service of the company. Defendant’s answer put in issue the alleged promise, and interposed a counterclaim, based upon a promissory note theretofore made and delivered to him by plaintiff in the sum of $2,000. To this counterclaim plaintiff replied, admitting the making and delivery of the note, but alleging that it was wholly without consideration, and so made and delivered to defendant as an accommodation. Plaintiff had á verdict in the court below, and defendant appealed from an order denying his alternative motion for judgment notwithstanding the verdict or a new trial.

The assignments of error are reduced in appellant’s brief to five distinct contentions: (1) That the promise upon which plaintiff relies for recovery was collateral to the obligations of the corporation, and [432]*432void under the statute of'frauds, because not in writing; (2) that the evidence offered' by plaintiff for the purpose of showing that she received no consideration for the note, the basis of defendant’s counterclaim, that it was made solely for the use and accommodation of defendant, varied the terms of the note, and was therefore inadmissible ; (3) that the evidence did not show a want of consideration, or (4) that the note was accommodation paper; and (5) that the evidence shows that plaintiff’s wages were fully paid before the commencement of the action. Only the first two of these questions require special mention. If the evidence offered for the purpose of showing a want of consideration and that the note was accommodation paper was admissible, it was ample to take the question to the jury, and the record presents no reason for disturbing their conclusion. The fifth point, that plaintiff’s claim has been paid, was not an issue under the pleadings, nor was it litigated on the trial. It is not, therefore, entitled to consideration on this appeal.

1. We come, then, to the first of defendant’s contentions, viz., that the promise relied upon by plaintiff was collateral, and void under the statute of frauds, because not in writing. The facts controlling this question are as follows:

Plaintiff had for some time been in the employ as bookkeeper and confidential office manager of the F. C. Genge Company, a copartnership engaged in the manufacture of furniture. The firm had become indebted to a bank in the sum of $42,000 and was apparently not over-prosperous. In August, 1905, defendant guaranteed the payment of this indebtedness and became interested in the success of the firm and its business. In February, 1906, a corporation was formed under the name of Fred C. Genge Company, which took over the entire business and affairs of the firm. Defendant was still interested under his guaranty of payment in the success of the new concern, and in a substantial way aided in the conduct of its affairs. At the time of the formation of the corporation, plaintiff having had some difficulty in obtaining her salary from the old firm, informed defendant of the fact and announced that she intended to leave and obtain employment elsewhere. Whereupon defendant, who was familiar with plaintiff’s position and her qualifications for the particular work, promised that, if she would remain with the new company and continue her work, [433]*433he personally would pay her the salary she was entitled to. Upon the strength of this promise, and in reliance thereon, plaintiff continued in the service of the corporation.

While there is a controversy in the evidence on the subject of defendant’s promise, it. is amply sufficient to sustain the jury in finding the facts as outlined; from which, within our decisions and the authorities generally, there is no question but that defendant’s promise was an original one, and not collateral, unless plaintiff in fact extended credit to the corporation, and not to defendant. Maurin v. Fogelberg, 37 Minn. 23, 32 N. W. 858, 5 Am. St. 814; Crane v. Wheeler, 48 Minn. 207, 50 N. W. 1033; Nichols, Shepard & Co. v. Allen, 22 Minn. 283; Sheldon v. Butler, 24 Minn. 513; King v. Franklin Lumber Co., 80 Minn. 274, 83 N. W. 170; Bean v. Lamprey, 82 Minn. 320, 84 N. W. 1016; Schmitt v. Murray, 87 Minn. 250, 91 N. W. 1116. There is evidence tending to show that she solely relied upon defendant for payment of her compensation, and the question whether she gave credit to the corporation or to defendant was properly submitted to the jury. The mere fact that she was employed by the corporation and charged her salary to it on the books, or that she made efforts to collect from the corporation, is not conclusive that she gave it credit in whole or in part. Defendant had interests to protect by a continuance of the business of the corporation, and to further his interests and protect them he urged plaintiff to continue in the work, with which she was fully familiar, and the jury was amply justified by the evidence in finding, not only his promise to pay, but her exclusive reliance thereon for her compensation.

2. Was parol evidence admissible to show that the promissory note, the basis of defendant’s counterclaim, was without consideration and made for the accommodation of defendant? We answer the question in the affirmative. The note was given and payable to defendant, and he presents it as a claim against plaintiff. The controversy is therefore between the original parties, and the defense interposed by plaintiff is, within all the authorities, available to her. Ruggles, Nourse, Mason & Co. v. Swanwick, 6 Minn. 365 (526); Turle v. Sargent, 63 Minn. 211, 65 N. W. 349, 56 Am. St. 475; Pray v. Rhodes, 42 Minn. 93, 43 N. W. 838. The question would be en[434]*434tirely different had the note passed into the hands of an innocent third person. Rea v. McDonald, 68 Minn. 187, 71 N. W. 11.

That the note was given to defendant without consideration and to enable him to make use of it to secure funds to conduct the business of the corporation is fully disclosed by the evidence. Plaintiff signed this and other notes, and defendant gave her money to be used in thé affairs of the corporation, and it stands admitted on the record that ?the whole thereof was expended for the uses and purposes of the concern. She received no part or portion thereof for her personal use. The case is unlike Dickson v. Harris, 60 Iowa, 727, 13 N. W. 335, cited by appellant. There was no question in that case but that the maker of the note there in suit received the amount thereof in money from the payee. When sued he attempted to impeach the writing by evidence that it was intended as a receipt for money which he, the maker, received and agreed to pay over to a creditor of the payee’s son. , The court held the evidence inadmissible. Such is not this case. Here plaintiff, the maker, received no money whatever for the note. The money given her-was in her capacity as secretary of and for the purposes and uses of the company. Higgins v. Ridgway, 153 N. Y. 130, 131, 47 N. E. 32. Had she applied any part of it to her personal use, she would have been guilty of a misappropriation of trust funds committed to her charge. Nor does the fact that the note in suit was a renewal of a former note change the situation; the rights of the original parties being alone involved. The evidence supports the findings of the jury. We discover no error in the record.

Order affirmed.

On February 9, 1909, the following opinion was filed:

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Bluebook (online)
119 N.W. 214, 106 Minn. 430, 1909 Minn. LEXIS 777, Counsel Stack Legal Research, https://law.counselstack.com/opinion/conrad-v-clarke-minn-1909.