Mid-Atlantic Appliances, Inc. v. Morgan

73 S.E.2d 385, 194 Va. 324, 35 A.L.R. 2d 899, 1952 Va. LEXIS 235
CourtSupreme Court of Virginia
DecidedDecember 1, 1952
DocketRecord 3998, 3997, 3999
StatusPublished
Cited by5 cases

This text of 73 S.E.2d 385 (Mid-Atlantic Appliances, Inc. v. Morgan) is published on Counsel Stack Legal Research, covering Supreme Court of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mid-Atlantic Appliances, Inc. v. Morgan, 73 S.E.2d 385, 194 Va. 324, 35 A.L.R. 2d 899, 1952 Va. LEXIS 235 (Va. 1952).

Opinion

Spratley, J.,

delivered the opinion of the court.

On April 11, 1951, plaintiff in error, Mid-Atlantic Appliances, Inc., a corporation, filed the following notice of motion for judgment against John W. Morgan:

‘ ‘ The plaintiff, Mid-Atlantic Appliances, Inc., a corporation, moves the Court for judgment against the defendant John W. Morgan for Pour Thousand Twenty-nine Dollars and Forty Cents ($4,029.40) due the plaintiff upon defendant’s contract, for that:
“On or about the 21st day of March, 1951, defendant, President and a Director of G-rant’s, lile., a Virginia corporation, 3536 Mt. Vernon Avenue, Alexandria, Virginia, promised and agreed to assume and pay in full the plaintiff’s open account claim against said Grant’s, Inc., in the amount of Pour Thousand Twenty-nine Dollars and Forty Cents ($4,029.40) for and in consideration of the following:
“1. that plaintiff withhold suit against Grant’s, Inc., upon its, the plaintiff’s, open account claim, suit then being imminent.
“2. that defendant be given voting control of said Grant’s, Inc., through transfer to him of the share holding in said corporation of Margaret Grant. The condition of defendant’s promise was that he, the defendant, would assume voting control of Grant’s, Inc., and assume personally and pay the existing obligation to the plaintiff, if after ten days from said 21st day of March, 1951, a purchaser had not been found who would buy defendant’s entire interest in Grant’s, Inc.
“Pursuant to the agreement and understanding, said share *326 holding of Margaret Grant was deposited in escrow to be delivered to defendant at the end of ten days, in order that defendant might assume voting control in the event that he had not in that time sold his interest. And further pursuant thereto, plaintiff corporation refrained from instituting legal action against Grant’s, Inc. Defendant has not however accepted delivery of said share holding, or assumed voting control of Grant’s, Inc., nor has he paid the plaintiff corporation’s claim as he had promised to do, nor has any purchaser, in said ten day period or thereafter, purchased the interest of defendant in Grant’s, Inc. And defendant has refused, and still refuses, to pay or personally endorse the obligation of the said Grant’s, Inc., to plaintiff.”

On the same day plaintiffs in error, Washington Wholesalers and Southern Wholesalers, Inc., filed separate notices of motion for judgment against Morgan, based upon exactly similar causes of action. The only difference was in the names of the respective plaintiffs and the amounts sought to he recovered.

In response, Morgan filed in each case a plea of the statute of frauds, setting out that the promise and undertaking alleged in the notice of motion was a promise to answer for the debt of another, and that “no promise, contract, agreement, representation, assurance, or ratification in respect of or relating to the said supposed cause of'action in the said notice of motion for judgment mentioned, nor any memorandum or note thereof, was or is in writing, or was or is signed by the said defendant or his agent.” Code of Virginia, 1950, § 11-2 (4).

It was stipulated by counsel for the parties that the alleged promise of Morgan was not in writing, and “that the defendant would admit that there was a promise solely for the purpose” of considering the issue raised by his plea. Since the same question of law was involved in each proceeding, the cases were heard together under an agreement that they were to be subject to like determination.

Upon consideration of the notice of motion, the plea of the statute of frauds, and the terms of the stipulation, ■ the trial court held that since the notice failed to “allege that the original liability was extinguished by a novation, or that, as a result of any promise by Morgan, the parties released Grant’s, Inc., from its liability,” it was of opinion that pleadings set up *327 cases based upon collateral and not original promises, and, therefore, come within the statute of frauds.” It accordingly sustained the plea of the statute of frauds, and dismissed the three cases.

The sole error assigned was that the court erred in its ruling and judgment. ,

Plaintiffs in error contend that defendant’s promise was an original independent undertaking on his part and given with the objective of direct benefit to himself as a consideration of the promise, and was, therefore, not within the statute of frauds. They argue in this court, for the first time, that whether or not the promise was given for the direct benefit of the promisor was an issue of fact to be determined by a jury from all the surrounding circumstances.

Numerous cases coming within that branch of the statute of frauds here under consideration have been before this court and the courts of other jurisdictions. The broad statements and general expressions used in the various decisions with reference to the particular facts involved in the individual case, and the subtle distinctions sometimes made, present a lack of uniformity of views as to the effect of a new consideration on a promise to answer for the debt of another. However, in Virginia, we have consistently followed the basic rule stated in Noyes v. Humphreys, 11 Gratt. (52 Va.) 636, 643: “Every collateral promise to answer for the- debt, default or misdoing's of another person, is within the statute, and void if not in writing ; but original undertakings need not be in writing, not being within the statute. The difficulty is in determining under which head the undertaking in any particular case is to be classed.”

Eeviewing the above case and a number of other cases, Judge Burks, in Way v. Baydush, 133 Va. 400, 408, 112 S. E. 611, in considering the difference between a collateral and an original undertaking, said this:

“In Noyes v. Humphreys, 11 Gratt. (52 Va.) 636, the prior cases in this jurisdiction are cited and it appears from them that the holding in this jurisdiction is that if the original contractor remains liable and the undertaking of the new party is merely that of surety or guarantor, the undertaking of the latter is collateral and within the statute of frauds. We do not propose to depart from that holding in this case. ’ ’

In Friedlin v. Crockin, 122 Va. 521, 95 S. E. 432, the owner *328 of property leased it to a corporation. Before the corporation took possession under the lease, its stockholders determined to dissolve the corporation and the lessor was notified that her property would not he occupied under the lease. The lessor claimed that one of the stockholders of the corporation verbally promised that he and the two other stockholders would he responsible for the rent until another tenant could he found for the property. The lessor brought suit against the stockholders as individuals and upon their joint promise to he responsible for the rent.

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Bluebook (online)
73 S.E.2d 385, 194 Va. 324, 35 A.L.R. 2d 899, 1952 Va. LEXIS 235, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mid-atlantic-appliances-inc-v-morgan-va-1952.