People's Bank v. Adams

The opinion of the court was delivered by Wilson, J. The questions in this case arise upon general demurrer to the declaration. We hold that the declaration is insuf [198] ficient, first, because it does not show any consideration for the defendants’ promise, and second, because the alleged promise is within the statute of frauds. The substance of the descriptive averments of the alleged cause of action is that one J. Jackson, and other parties interested with him in certain mines, parted with and disposed of a great portion of their interest in said mines, to and in favor of the defendants, by conveying the same to a corporation or company in which the defendants were large proprietors and shareholders ; that the defendants, in consideration of said conveyance, then and there promised the said Jackson they would pay to the plaintiffs the draft mentioned in the declaration, which said Jackson owed to the plaintiffs, and that afterwards the defendants called on the plaintiffs and verbally promised them to pay to them the amount of said draft. In assumpsit no consideration can be implied on demurrer to the declaration, but it should contain a statement of facts showing a sufficient consideration to support the alleged promise. The declaration in this case does not allege that the defendants purchased the property and directed that it be conveyed to said corporation, or even state that it was conveyed to the corporation at the defendants’ request. It assumes that conveying the mines to the corporation was disposing of them to and in favor of the defendants, and this assumption rests solely upon the alleged fact that the defendants were proprietors and stockholders in said corporation. But the corporation and its rights and liabilities are distinct from those of the defendants, and their property, rights and liabilities are distinct from those of the stockholders. The fair construction of the declaration is, that the defendants, after the conveyance, and in consideration that it had been made, promised Jackson that they would pay his .debt to the plaintiffs, and also promised them they would pay it. But construing the declaration as stating the promise to Jackson to have been made at the time of the conveyance and in consideration of it, would lead to the same legal conclusion, for the facts stated do not, at common law, constitute even a technical consideration for the promise. Nor would this be sufficient to uphold a parol promise by the defendants to pay Jackson’s debt. Where the promissor has re [199] ceived and holds funds or property for the purpose of paying the debt of another, and as the consideration of his promise to pay such debt, the promise is good though not in writing. In Fullam v. Adams, 87 Vt., 391, the court say, “ The true principle why the promise to the creditor is valid without writing is, the party making the promise holds the funds of the debtor for the purpose of paying his debt, and as between him and the debtor it is his duty to pay the debt, so that when he promises the creditor to pay it, in substance he promises to pay his own debt and not that of another.” By the conveyance the corporation received the property. It does not appear that the defendants received any funds or property devoted to the payment of Jackson’s debt, or that they received any by said conveyance. The fact that the defendants were proprietors and stockholders in the corporation to which the conveyance was made, is not sufficient to uphold a verbal promise by defendants to pay Jackson’s indebtedness to the plaintiffs. If the declaration had alleged that the conveyance was made to the corporation at the defendant’s request, without further alleging such facts as would show that by the conveyance or transaction the defendants received funds or property devoted to the payment of said debt, and in consideration of the receipt of such funds or property they promised the plaintiffs to pay the debt, it would be insufficient to except the defendants’ promise from the operation of the statute. The plaintiffs may amend their declaration, under the usual rules as to costs. The judgment of the county court is reversed proforma, and the cause remanded.