Opinion
Decided April 7, 1930.
Contracts — Consideration — Promise to pay obligation promisor already bound to pay, insufficient — Cumulative promise, made upon new consideration, valid and binding — Slight benefit or disadvantage to parties sufficient consideration for additional credit agreement — Original claim not barred by statute of limitations — Pleading — Language of petition construed liberally in favor of pleader.
1. Promise to do thing which promisor is already bound to do by contract is insufficient to constitute consideration for the new promise.
2. Where legal obligation exists, cumulative promise to perform it, made upon new consideration, is valid and binding.
3. Language of petition must be construed liberally in favor of pleader.
4. Seller, as part consideration for promise to extend additional credit, may require promise that old obligation be paid within six months.
5. Benefit to creditor or disadvantage to debtor, although slight, is sufficient consideration to support agreement to extend additional credit.
6. New promise to pay existing indebtedness in consideration for extension of further credit by creditor held sufficiently supported so as to start running of statute of limitations anew.
ERROR: Court of Appeals for Ottawa county.
Messrs. Stahl, Stahl Stahl, and Mr. N.C. Rosentreter, for plaintiff in error.
Messrs. Graves Duff, for defendants in error.
The plaintiff, the William Lipstraw Company, brought an action in the court of common pleas of Ottawa county on March 30, 1928, to recover the amount of $368.10, claimed to be due it from the defendants, Charles Seufert and others, as partners. The trial resulted in a directed verdict for the plaintiff in the amount of $12.70, based on the pleadings, and judgment was rendered thereon, to which the plaintiff prosecutes error.
In the second amended petition the plaintiff, after making formal allegations as to its being incorporated and the defendants being partners, and as to plaintiff becoming the owner by assignment of the claim in question, avers that there is due it from the defendants the sum of $368.10, which it claims with interest from March 31, 1922, and which it avers is founded on a verbal contract of that date. The plaintiff further avers that on the date named, when the defendants were indebted to it in a large amount for coal, and desired further credit, the parties agreed upon the amount due and mutually agreed that, if the William Lipstraw Company would grant to defendants a further credit for the merchandise they then desired to obtain, and grant a further extension of time, the defendants would, within six months from that date, pay for the merchandise then obtained and for all the merchandise theretofore obtained from plaintiff, and that they then and there agreed upon the amount of $359.32 as the amount then due. The plaintiff also avers that upon said agreement being entered into it did, upon consideration of said promise, deliver to the defendants 2,510 pounds of coal of the value of $8.78, and that no payments have been made and there is now due the plaintiff the sum of $368.10, with interest at 6 per cent. from March 31, 1922.
The answer admits the formal allegations of the petition and the assignment of the claim to the plaintiff and that there is due it the sum of $8.78, and denies every other allegation.
From the allegations of the second amended petition it is apparent that the amount coming to the plaintiff was due and payable before March 31, 1922, and it is urged that the promise to pay the past-due account was a mere cumulative promise, without consideration, and hence invalid, and that the original claim is barred by the statute of limitations.
It has long been a settled rule of law that a promise to do a thing which the promisor is by a subsisting contract bound to do is not a sufficient consideration to support a promise made to the person upon whom the liability rests to induce him to perform what he is already bound to do. This plain and simple rule of law has long obtained, as appears in the text-books and innumerable decisions. In no place is it stated with more directness than in Shannon v. Universal Mortgage Discount Co., 116 Ohio St. 609, 157 N.E. 478, 482, 54 A.L.R., 992, where it is held that a promise to pay a debt for which the promisor is already bound does not constitute a consideration sufficient to support a new contract.
This well-recognized principle of law, however, must be taken in connection with another well-established principle, that, if a new consideration exists, then the promise so made is valid and binding. Among the authorities quoted with approval by Day, J., in the case just cited, is 6 Ruling Case Law, page 664, paragraph 73, in which the following language occurs: "Where a legal obligation exists, a cumulative promise to perform it, unless upon a new consideration, is a nullity."
In order to determine whether a new consideration is averred in the second amended petition, we must advert to its language, which must be construed liberally in favor of the pleader. It appears from these averments that the defendants were already indebted to the plaintiff in the amount of $359.32 for coal, and desired to purchase additional coal on credit. Under the averments the plaintiff would be entitled to prove that while he had coal for sale, and was desirous of selling same, he was unwilling to sell more coal to the defendants on credit, and informed them of that fact and of the fact that he would not sell them more coal on credit unless they would unconditionally assure him that they would pay the amount then due within six months, and that, if they would do so, the plaintiff would extend the time of payment on the overdue account for said period of six months. The plaintiff would have the right to require that such payment and extension of time be a provision of the new contract to sell additional coal to the defendants on credit. The plaintiff would gain thereby the benefit derived by him in disposing of the coal, and the defendants would secure on credit the coal which they desired. The general rule of law is that, if there be any benefit to the creditor, it will be a consideration to support the agreement, and, even though a slight benefit to the one or disadvantage to the other, it will be sufficient in law. The transaction involved more than a mere cumulative promise to pay an already overdue indebtedness. It involved the agreement of one party to sell and an agreement of the other to buy coal, conditioned upon the payment of the accrued indebtedness, and this formed a separate and distinct consideration, and the contract, if proved, would be upon a valid and sufficient consideration.
For the reasons given the pleading stated a good cause of action, and the judgment must be reversed and the cause remanded for a new trial.
Judgment reversed and cause remanded.
WILLIAMS and LLOYD, JJ., concur.