Budd v. Thurber

Beach, J. In considering this case it is needful to keep in view the fact that the agreement of the defendants was [214] not made with the holder of the Haneox note. Had it been, a question would have arisen, controlled by the provisions of the statute of frauds, which enacts that every special promise to answer for the debts of another shall be void, unless such agreement or some note or memorandum thereof be in writing and subscribed by the party to be charged therewith. The case at bar is not affected by the enactment'. The action is not brought by the creditor (the holder of the unpaid note) upon a parol promise made to him by the defendants, to pay it, but by the assignee of Haneox, the debtor, with whom the contract was found by the jury to have been made. The case in brief would seem thus: Haneox was primarily indebted to the holder upon the notes he had executed as maker for the accommodation of Holcomb, and held security for his indemnity. The defendants agreed, if he would assign to them this security, they would pay the paper whereon he was bound. He did so, and they failed to perform their part of the contract. This engagement was certainly made upon sufficient consideration, to wit, the possession and control of the mortgage and bond then assigned to them. Had an action been brought by the bank as holder of the paper against the defendants, a recovery would have been had under the principle “ that when one person for a valuable consideration engages with another to do some act for the benefit of a third, the latter, who would enjoy the benefit of the act, may maintain an action for the breach of such engagement ” (Schermerhorn agt. Vanderheyden, 1 Johns. R., 140; The Del. & Hud. Canal Co. agt. The Westchester County Bank, 4 Den., 97; Brewery agt. Dyer, 7 Cush., 337; Lawrence agt. Fay, 20 N. Y. R., 268 ; Huber agt. Ely, 45 Barb., 169 ; Wyman agt. Smith, 4 N. Y. Superior Court R., 331; May agt. The National Bank of Malone, 16 Sup. Ct. R., 108). The holder of the notes being thus able to avail himself of the defendant’s agreement, I see no reason why Haneox, with [215] whom the agreement was made, should not, especially so, he having paid the note. The plaintiff here, by assignment, succeeds to his rights (Claflin, agt. Ostrom, 54 N. Y. R., 581). The facts in the above case were as follows: Hanford and Charles Ostrom were partners, and indebted to the plaintiff. On the dissolution of the firm by written agreement, Han-ford assigned all interest to his partner, and the latter agreed to pay plaintiff’s debt among others. The defendant executed to Hanford a written guaranty that Charles Ostrom would perform all his covenants in the agreement. The plaintiff’s debt being unpaid, they took an assignment of all Hanford’s interest in and claim under the agreement and guaranty. In sustaining a judgment for plaintiffs, the court say: “ So too, Charles Ostrom having failed to pay the plaintiff’s debt, committed a breach of his covenant with Hanford, which gave the latter a cause of action against him, and also against the defendant, his surety, and this cause of action he assigned to the plaintiff.” It appears from the record that the premises covered by the mortgage, assigned by Hancox to the defendants, are now owned by them, although by what proceeding obtained is not clearly disclosed by the proofs. Hnder these circumstances it would be manifestly inequitable to relieve them from the. performance of their promise. The order must be reversed with costs.