Lampson v. Estate of Hobart

[700] The opinion of the court was delivered by RedEield, Ch. J. The decisions are so conflicting upon the question what is requisite to take a promise to pay the debt of another out of the statute of frauds, that it is impossible to reconcile them. Some go so far as to say, that where the undertaking is upon any new and independent consideration, subsequent to the creation of the original debt, it is never to be regarded as -within the statute. Upon this rule of construction, if the promise of guaranty of another’s debt were made subsequent to the date of the original debt, it would make no difference whether it were in writing or not. For if in writing, it would not be valid, unless upon consideration ; and according to this rule, it is always valid when made subsequent to the original promise, if upon any sufficient consideration. This would virtually repeal the statute. The English cases, and most of the American cases do not go this length. But there are some of considerable weight which do. Of this class is the case of Russel v. Babcock, 14 Maine 140. And some cases go so far as to hold that the dissolution of a levy or attachment, in faith of a promise to pay the debt, by a third party, is not binding unless in writing. Nelson v. Boynton, 3 Met. 396. The truth, perhaps, lies between these extremes, but it is not easy to define its precise limits. It seems, however, to be admitted upon all hands, that if the new contract is one in which the original debtor is not interested, and from which he derives no advantage, and the benefit accrues, as in the present case, chiefly or altogether to the new party assuming the debt, and the contract is wholly between the new parties, it is to be treated as a new and independent transaction, and not affected by the statute. Upon this ground, although it were to be conceded that the original debt remained the same, the new contract might be enforced, as the original debt would thus virtually become that of the party thus assuming the debt. It is not, of course, extinguished as to the original debtor, but virtually becomes the property of the new party. For whether this is stipulated or not, it is in effect so, since -whatever is realized upon it goes to discharge the new promise, fro tanto, and if nothing is collected until the new party pays the amount, it then becomes absolutely his. It is necessary, too, that a parol promise of this kind, to be bind [701] irig, should be absolute, and not dependent on the failure of the debtor to pay, and such this is. This case seems to us not very different, in principle, from what it would have been if the plaintiff had surrendered a subsisting lien which he held for the security of his debt, either by pledge, or mortgage, or attachment, or levy, and had done- this for the benefit of the defendant. In such case it would be strange if he could not recover. All the cases almost hold that he could. The other claim seems to us to have been already once allowed against the estate of the defendant, in favor of a co-surety, by the plaintiff’s consent. Judgment affirmed.