Davis v. Patrick, 141 U.S. 479 (1891)
U.S. Supreme CourtDavis v. Patrick, 141 U.S. 479 (1891)
Davis v. Patrick
Argued October 22-23, 1891
Decided November 9, 1891
141 U.S. 479
In determining whether an alleged promise is or is not a promise to answer for the debt of another, the following rules may be applied: (1) if the promisor is a stranger to the transaction, without interest in it, the obligations of the statute are to be strictly upheld, (2) but if he has a personal, immediate and pecuniary interest in a transaction in which a third party is the original obligor, the courts will give effect to the promise.
The real character of a promise does not depend altogether upon form of expression, but largely upon the situation of the parties, and upon whether they understood it to be a collateral or direct promise.
When, in an action to recover on a contract, testimony is admitted without objection showing the alleged contract to have been made, but on a day different from that averred in the declaration, and the court directs a verdict for the defendant without amendment of the declaration, such ruling is not erroneous by reason of the variation.
The case was stated by the Court as follows:
This case was commenced on the 24th day of November, 1880, by the filing of a petition in the District Court of Knox county, Nebraska. Subsequently it was removed to the circuit court of the United States, and at the May term, 1883,
of that court, a judgment was rendered in favor of the plaintiff. That judgment was reversed by this Court at its October term, 1886. Davis v. Patrick, 122 U. S. 138. A second trial, in January, 1890, resulted in another verdict and judgment for the plaintiff, and again the defendant alleges error. The petition counts on two causes of action. No question is made by counsel for plaintiff in error with respect to the first count or the rulings thereon, the only error alleged being in reference to the second count. That count is for the transportation of silver ore from the Flagstaff mine, in Utah territory, to furnaces at Sandy, in the same territory. In the first trial, it was claimed that Davis, the defendant, was the real owner of the Flagstaff mine, and therefore primarily responsible for all debts contracted in its working. The relations between Davis and the Flagstaff Mining Company were disclosed by a written agreement, of date December 16, 1873. By that agreement, it appeared that Davis, on June 12, 1873, had advanced to the company 5,000 at the rate of six percent interest, a sum then due; that it had sold to Davis, and agreed to deliver at the ore house of the company, free of cost, 5,195 tons of ore, of which it had only then delivered 200 tons, although Davis had paid in full for the entire amount. The agreement also recited that Davis was to advance an additional amount, if needed, not exceeding 10,000. It then provided that the mine should be put under the sole management of J. N. H. Patrick, to be worked and controlled by him until such time as the ore sold had been delivered and the sums borrowed had been repaid, with interest. This control was irrevocable, save at the instance of Davis. Coupled with this agreement was a full power of attorney to Patrick. This Court held that such contract established between Davis and the mining company simply the relation of creditor and debtor, and did not make him in any true sense the owner. For the erroneous rulings of the trial court in this respect, the judgment was reversed. In the second trial, this construction of the relations of Davis to the Flagstaff Mining Company was followed by the court, and the jury instructed that the contract put in evidence between Davis and the mining company created simply the relations
of creditor and debtor, and did not make the former liable for expenses created in working and operating the mine, and the trial proceeded upon the theory that during the time the services sued for were being rendered, Davis was the party mainly and pecuniarily interested in the working of the mine, and that he assumed to Patrick a personal responsibility for such services, and the real question tried was whether Davis' promises were collateral undertakings to pay the debts of another, and void because not in writing.