69 P. 1027 | Or. | 1902
Lead Opinion
after stating the facts, delivered the opinion of the court.
It is contended by defendant’s counsel that the agreement of their client to pay the sums remaining due on the original certificates of deposit and check, .at the time specified, was a collateral undertaking to answer for the debt of the Portland Savings Bank, which was pre-existing and still subsisting, and could only be enforced when evidenced, as it was, by a writing, and that a modification of such guaranty could only be secured in the same formal manner; but, the alleged alteration thereof having been made by parol, the court erred in refusing to grant a judgment of nonsuit. Plainitff’s counsel, however, maintain that defendant’s assignment of the original certificates of deposit and cheek, though in form a promise to answer for the
Our statute of frauds, so far as applicable to the ease at bar, contains this provision: “In the following cases the agreement is void, unless the same or some note or memorandum thereof, expressing the consideration, be in writing and subscribed by the party to- be charged, or by his lawfully authorized agent; evidence, therefore, * *' shall not be received other than the writing, or secondary evidence of its contents, in the cases prescribed by law; * * (2) An agreement to answer for the debt, default, or miscarriage of another”: Hill’s Ann. Laws, § 785. A well-recognized exception to this rule exists, however, where a debtor assigns funds or securities, or transfers property, to another, who, in consideration of the receipt thereof, orally promises to pay the debtor’s obligations to a third person, in which case the latter may maintain an action on such agreement though not a party thereto: Baker v. Eglin, 11 Or. 333 (8 Pac. 280); Hughes v. Oregon Ry. & Nav. Co. 11 Or. 437 (5 Pac. 206); Parker v. Jeffery, 26 Or. 186 (37 Pac. 712); Brower Lumber Co. v. Miller, 28 Or. 565 (43 Pac. 659, 52 Am. St. Rep. 807). The reason for this deviation from the express provision of the statute is based upon the assumption that the oral promise attaches to the obligation growing out of the receipt of the fund, security, or property, rendering the agreement enforceable by the person for whose benefit it was made: Feldman v. McGuire, 34 Or. 309 (55 Pac. 872).
In Farley v. Cleveland, 4 Cow. 432 (15 Am. Dee. 387), one Moon, being indebted to the plaintiff, sold and delivered a quantity of hay to the defendant, who, in consideration thereof, orally promised to pay the plaintiff the sum Moon owed him, but, not having done so, plaintiff brought an action to recover on the promise, and it was held, approving the classification made by Mr. Chief Justice Kent, that where a promise to pay the debt of a third person arises out of some new consideration of benefit to the promisor or harm to the promisee, moving to the promisor either from the promisee or the original debtor, such promise is not within the statute of frauds, though the original debt still subsists and remains entirely unaffected by the new agreement. In Mallory v. Gillett, 21 N. Y. 412, it was held that an oral promise to pay an existing and continuing debt of another, in consideration of the creditor’s releasing a lien which he held as security for the payment of said debt, though it was a promise supported by a new and an original consideration existing between the new contracting parties, resulting in harm to the promisee, was nevertheless collateral; and that the language of Mr. Chief Justice Kent in his third classification was misleading, and should be qualified so as to require that the new consideration should move to the promisor and be beneficial to him. In Brown v. Weber, 38 N. Y. 187, the rule announced in Mallory v. Gillett, 21 N. Y. 412, was limited
Though the language used by Mr. Chief Justice Kent in Leonard v. Vredenburgh, 8 Johns. 29 (5 Am. Dec. 317), in the third class stated by him, is regarded as dicta and generally
In Fullam v. Adams, 37 Vt. 391, Mr. Chief Justice Poland, discussing the section of the statute of frauds under consideration, says: “If the real substance of the promise be to perform some duty or obligation of the party making the promise, it is not within the statute, though in form it is a promise to pay another’s debt, and the result of its performance may affect the payment of the debt of another. And we believe it will be found that in all the eases now regarded as sound, where it has been held that a parol promise to pay the debts of another is binding, the promisor held in his hands funds, securities, or property of the debtor devoted to the payment of the debt, and his promise to pay attaches upon his obligation or duty growing out of the receipt of such fund. ’ ’ Elsewhere in the opinion the writer, referring to the decisions of other courts, in which it was held that the oral promise of a party to pay the débt of another, under certain circumstances, was not within
In that case it will be observed that no distinction is made between the classes of cases in which funds, securities, or property of the debtor have been assigned or transferred to a person for the purpose of paying the debt of the former and those in which a person, on account of his own debt, assigns a debt due him from another. In the first case the property of a debtor, subject to a lien, may be surrendered to a.person who promises to pay the debt which is a charge thereon, or the debtor may himself transfer his property to another, who, in consideration of the receipt thereof, promises to pay a specified sum which the debtor owes to another person. The surrender of the property subject to the lien is, in effect, the assignment of a legal charge against the property; while the transfer of the property by its owner, for the purpose indicated, creates an equitable
Applying these elementary prinicples to the case at bar, when defendant purchased from plaintiff the flouring mill, and assigned in part payment thereof the certificates of deposit and check, the payment of which he guarantied, it rendered the commercial paper thus indorsed in the nature of collateral security for the payment of his own debt, which was not discharged by such assignment.
The cause of action stated in the complaint is the breach of the defendant’s promise, made January 8, 1894, modified by the alleged agreement to surrender the certificates of deposit and check and to take other certificates in lieu thereof, the payment of which, it is averred, defendant orally guarantied, in case the bank failed to pay any part of them within the time limited. The guaranty averred in the complaint as originally made and subsequently modified is express, and exists in pursuance of a contract alleged to have been entered into between the parties. It would appear that the guaranty set out in the averments of new matter in the reply was to be implied from an opinion alleged to have been entertained by the defendant in respect to the solvency of the Portland Savings Bank and its ability to meet the payment of its obligations, if its creditors would not insist upon an immediate payment of their demands. The cause of action stated in the complaint being based upon an express guaranty, and that alleged as new matter in the reply being implied only, a departure is manifest, and, this being so, the court erred in failing to strike out the averments in the latter pleading of which the defendant complains.
It follows from these considerations that the judgment is reversed and a new trial ordered, in view of which we have deemed it proper to consider such questions as are likely to arise thereat. Reversed.
Rehearing
On Motion for Rehearing.
delivered the opinion.
It has been made to appear by a petition for a rehearing of this cause that the following paragraph on the first page of the statement of facts upon which the opinion heretofore rendered was based, to wit: ‘ ‘ The bank, having secured many of the extensions desired, resumed business about April 30, 1894, when