Cowenhoven v. Howell

36 N.J.L. 323 | N.J. | 1873

The opinion of the court was delivered by

Beasley, Chief Justice.

One of the important objects of the statute of frauds is to prevent ony one from becoming bound for the debt of another, unless a written certificate, duly signed, of such obligation, can be produced. The wisdom and practical value of this enactment have never been denied, hut the difficulty has been to discriminate between such undertakings as are primary in their nature, and such as are secondary, that is in aid of the liability of some other .party. Many of the judicial decisions are in conflict on this subject, but I think it can, at present, be said that the rule, applicable to this class of cases, has been placed at length on a stable foundation. That rule is, that in case of a promise to become liable for an existing debt or obligation, there must, in order to sustain such promise, and render it unobjectionable in view of the statute, be a substantial consideration moving to such promisor. In such transactions, the simple fact that a good consideration for the assumption exists, is not sufficient; but superadded to this, such consideration must be apparently beneficial to the party undertaking to pay the debt and assume the obligation. By force of the statute, an unwritten promise to pay the debt of another, is inefficacious; the new assumption, consequently, if it is to have any legal obligation, must not have such an object in view as its primary purpose, but the primary purpose must be to promote the interest of him who takes the burthen upon himself. Hence it is, that in such transactions, a mere detriment to the promisee, the original obligation remaining unextinguished, will not support a promise of this character. Such a consideration would be good at common law, independently of the effect of the statute, because before the passage of the act, any legal agreement to pay the debt of another was valid, but now such an agreement must be in writing. The consequence is, that agreements which will have the effect to discharge the debt of another, must be founded in a motive of interest, selfish in the promisor. The distinction is between a promise, the object of which is to promote the interest of another, and one in which the object is to promote the interest of the party making the promise. The former is within the operation of the statute. The latter is unaffected by it.

The principle is clearly exemplified by a long series of decisions. Among these may be mentioned the case of Fish v. Hutchinson, 2 Wil. 94. The plaintiff had sued a third person for a debt, and the defendant, in consideration of the staying of such action, promised to pay the money owing. Here was obviously a good consideration for the promise, as the suspension of the action was a loss to the promisee; nevertheless as it was a naked undertaking to pay the debt of another person, the judgment was that it could not be enforced by reason of the statute. To the same effect is the case of Nelson v. Boynton, 3 Metc. 396, the decision resting on identical grounds. The basis of that suit was a promise to-pay the note of a third person which was in suit, and which was secured by an attachment oh his property, in consideration of the holder of the note discontinuing his suit. In this,, as in the former case, the discontinuance of the action constituted a sufficient consideration, but for the reason before-assigned, it being an assumption of another’s debt, and nothing more, the suit fell to the ground.

Many other decisions of the same complexion might be vouched in support of the principle thus illustrated, but I shall not cite them, as they can be very readily found by a reference to any of the ordinary text books. The two examples which have been presented, show clearly that a consideration of mere detriment to the promisee,-when the undertaking is to pay the debt of another, and the original obligation to pay such debt continues, will not take such promise out of the reach of the statute.

But a citation or two from the obverse line of cases, where it has been held the statute was inapplicable, will serve further to elucidate the rule already propounded. In this class, Wiliams v. Leper, 3 Burr. 1886, is a leading case. The plaintiff, as landlord, was about to distrain for rent certain goods in the possession of the defendant, who was a broker employed to sell the goods; and the latter promised the landlord to pay the rent if he would abstain from proceeding. This undertaking was held to be valid on the ground that the broker, being ,in possession and having a personal interest to protect, was moved to enter into the agreement by these considerations. The theory put in force was that the promise proceeding from such a motive, personal to the promisor, was original and not collateral. The same reasoning led to a similar result in Johnson v. Gilbert, 4 Hill 178. The facts were, the plaintiff had paid a debt for the defendant, and the latter transferred to him a note of a third party with a guaranty of payment. This guaranty was void, if the case was within the statute, but the court thought that it was not, as the defendant did notstand as a naked surety for a third person. The cases decided in this court of Clark v. Hall, 6 Halst. 78, and Kutzmeyer v. Ennis, 3 Dutcher 371, rest upon this same foundation.

These authorities sufficiently explain the application of the rule above defined, that the promise which is incidentally to discharge the debt of a third party in order to be without the statutory provision, must not only have a new consideration to support it, but such consideration must so move to the promisor as to make the transaction a matter of personal concern to himself. In this way only can it be made an original and substantive assumption.

Under the operation of this rule the correctness of the ruling in this case at the circuit becomes clearly indisputable. The defendant had no interest whatever in the debt which he agreed to pay. The entire consideration of the promise was the relinquishing of the lien by the defendant, and it has been shown that such a detriment, although a good consideration to support an undertaking, is not such a one as will remove the transaction to a position not reached by the statute. The non-suit must stand.

It is proper to remark that the rule above adopted is not applicable to that class of affairs where the effect of the new promise is to extinguish the liability of the original party before the obligation of the new promise attaches. As in case of a promise to pay the debt if the promisee will discharge the primary debtor from a capias ad respondendum. In such event the discharge from the writ by operation of law, destroys the debt, so that there is nothing to which the new assumption can stand as collateral. In cases of this class it has been repeatedly decided that the statute did not apply. Goodman v. Chase, 1 B. & Ald. 297; Fitzgerald v. Dressler, 7 C. B. (N. S.) 374; Kelsey v. Hibbs, 13 Ohio (N. S.) 340; Butcher v. Stewart, 11 M. & W. 857 ; Meridan Britannia Co. v. Zingsen, 48 N. Y. 247.

Cited in Wills v. Shinn, 13 Vr. 138; Blackford v. Plainfield Gas Light Co., 14 Vr. 438.