FARMERS & MERCHANTS NAT'L BANK v. LEE

FARMERS & MERCHANTS NAT'L BANK v. LEE
1942 OK 414
132 P.2d 931
192 Okla. 9
Case Number: 30682
Decided: 12/08/1942
Supreme Court of Oklahoma

FARMERS & MERCHANTS NATIONAL BANK
v.
LEE, Ex'x.

Syllabus

¶0 1. PLEADING - Sufficiency of petition to withstand demurrer.
In passing upon a demurrer to a petition, all facts well pleaded, together with all inferences which may be reasonably drawn therefrom, must be taken as admitted to be true for the purpose of the demurrer.
2. FRAUDS, STATUTE OF - Promise for consideration to pay existing debt of another need not be in writing.
An agreement, for a sufficient consideration, to assume payment of an existing debt of another need not be in writing. 15 0. S. 1941 § 325.
3. EVIDENCE--Action against estate of mother on deceased son's note on which she had endorsed direction that her executor pay same-Parol evidence to prove entire agreement and consideration for mother's promise.
Where an order in writing signed by a mother, endorsed on the note of her deceased son and directing her executor to pay such note, is silent as to consideration and the circumstances under which the order was signed, the holder of the note may, in a suit to establish the note as a claim against the mother's estate, allege and prove the entire parol agreement resulting in the signing of the order.
4. CONTRACTS - WILLS - Agreement of mother to pay son's debt out of her estate at her death held not testamentary and demurrer to petition in action against her executor was erroneously sustained.
A mother, for a valuable consideration, signed a written memorandum on the back of her deceased son's promissory note held by a bank, as follows: "I hereby authorize and direct the Executors of my estate to pay this note to the Farmers & Merchants Bank, out of any residue left in my Estate." After the death of the mother, a claim therefor was presented to the executrix of her last will and testament and same was rejected. Suit was instituted to establish the debt as a claim, and the petition alleged facts showing the entire agreement, resting in parol, constituting a consideration and inducement for the signing of the order and the assumption of payment of the note. Held, a present valid indebtedness, payable after the death of the mother, was sufficiently alleged, and the transaction as alleged was not testamentary, and it was error to sustain a demurrer to the petition.

Appeal from District Court, Kingfisher County; 0. C. Wybrant, Judge.

Action by the Farmers & Merchants National Bank of Hennessey against Rosetta Bozworth Lee, executrix of estate of Isabelle Bozworth. Demurrer to petition sustained, and plaintiff appeals. Reversed, with directions.

Louis Reilly, of Kingfisher, for plaintiff in error.
Shutler & Shutler, of Kingfisher, for defendant in error.

HURST, J.

¶1 This is a suit by the bank on a rejected claim under 58 0. S. 1941 § 339. The trial court sustained a demurrer to the petition, and the bank elected to stand on its petition and refused to plead further. Thereupon the cause was dismissed. Plaintiff appeals.

¶2 The petition contained these allegations: That J. S. Bozworth, son of Isabelle Bozworth, was indebted to the bank on a promissory note, which was secured by a chattel mortgage on some horses, farm machinery, and crops; that the horses and machinery were used by the son to farm crops on the mother's land, and the mortgaged crops were on her land; that prior to the maturity of the note, the son died leaving his mother as his sole heir; that the horses and machinery so mortgaged were necessary to enable the mother to properly cultivate her land; that the mother was without money to pay the note and secure a release of the mortgage; that the mother agreed that if the bank would forego its right to foreclose its mortgage, she would see to it that the indebtedness "would be paid at some time in the future, and in any event out of her estate after her death should occur"; that the bank agreed, and thereupon the mother signed a written memorandum on the back of the note, as follows:

"Oct . 3, 1929. I hereby authorize and direct the Executors of my estate to pay this note to the Farmers & Merchants National Bank, out of any residue left in my Estate. (Signed) Bell Bozworth. Witness to her signature signed in our presence this 3rd day of October 1929. (Signed) L. A. Ferrell, 1. J. Cashion.";

-that the bank, in consideration of said agreement, refrained from foreclosing the chattel mortgage; that the mother died testate on July 25, 1940; that its claim was duly presented to defendant as executrix of her last will and testament, and by her rejected; that the stipulated residue of her estate is available for the payment of said debt. To the petition was attached a copy of the claim, in which a copy of the note and the endorsement thereon, the substance of the agreement, and the keeping of the agreement by the bank, were set forth.

¶3 The parties agree that but one question is presented for decision, Did the agreement as alleged, including the memorandum endorsed on the note, create a present binding indebtedness against Isabelle Bozworth with the time of payment only postponed until after her death, or is the transaction testamentary in character? If the former the petition states a cause of action, if the latter it does not. The question is one of first impression in this state.

¶4 In support of its argument that the petition states facts which created a present binding indebtedness against

¶5 Isabelle Bozworth, and that the transaction is not testamentary, the ban cites, among other cases, Patterson v Chapman, 179 Cal. 203, 176 P. 37, 2 A. L. R. 1467, and Gostina v. Whitham 148 Wash. 72, 268 P. 132. And in support of her contention that the petition is based upon a claim testamentary in character, the defendant cites, among other authorities, Cover v. Stem, 67 Md 449, 10 Atl. 231, 1 Am. St. Rep. 406 The defendant insists that the distinguishing feature is that in the cases holding that the instrument sued on such as that in the Cover Case, which were held to be testamentary, neither expressly nor impliedly recited a consideration, while in those cases where the instruments involved were held not to be testamentary, such as that involved in the Patterson Case, a consideration was expressly or impliedly recited. The bank answers by saying that it is not suing on the memorandum endorsed on the note only, but on the agreement, for a consideration, to assume the payment of the son's indebtedness, and that under such circumstances it is not necessary for the signed instrument constituting only part of the transaction to recite a consideration, but that a consideration may be alleged to exist so as to establish a binding obligation.

¶6 In most of the cases cited by the parties the actions were on written instruments only, or the instruments were admitted to probate. Not so here.

¶7 We are of the opinion, and hold, that the petition stated a cause of action, and that the agreement sued on is not testamentary.

¶8 In passing on a demurrer to a petition, all allegations thereof, together with all inferences that may be reasonably drawn therefrom, are taken as true. Crews v. Garber, 188 Okla. 570, Ill P. 2d 1080. Therefore, we must assume that Isabelle Bozworth, for a consideration beneficial to her, promised to answer for the debt of her son, and agreed that it would be paid out of the residue of her estate after her death, and that she accordingly signed the order on the back of the note. Such a promise need not be in writing. 15 0. S. 1941 § 325; Bennington Lumber Co. v. Attaway, 58 Okla. 229, 158 P. 566; Lindley v. Kelly 47 Okla. 328, 147 P. 1015. There is no inconsistency between the endorsement or order signed by her and the oral agreement as alleged. Therefore, the agreement, resting partly in writing and partly in parol, does not violate the parol evidence rule. Holmes v. Evans, 29 Okla. 373, 118 P. 144; Jesse French Piano,& Organ Co. v. Bodovitz, 73 Okla. 87, 174 P. 765, 10 R. C. L. 1019, 1030; 20 Am. Jur. 973-975; 22 C. J. 1144, §1531; 13 C. J. 304, § 127. The agreement is not void for uncertainty as to the time of payment. 12 Am. Jur. 559; 2 A. L. R. 1472, note. Nor is the contract rendered unenforceable because payment is postponed until after the death of Isabelle Bozworth. 24 C. J. 293; 12 Am. Jur. 857; 2 A. L. R. 1471, note.

¶9 Reversed, with directions to overrule the demurrer to the petition.

¶10 WELCH, C. J., and OSBORN, BAYLESS, GIBSON, DAVISON, and, ARNOLD, JJ., concur. CORN, V. C. J., and RILEY, J., absent.