Kelsey v. Hibbs

Gholson, J. The draft which gave rise to the controversy .in this case, was payable “ on the 6 — 9 January, 1852.” The only doubt we feel is whether any evidence was necessary to enable the court to determine what was the intention of the parties in inserting the figures 6 — 9 in the body of the draft. To their explanation by the testimony of bankers and merchants, we see no objection, and do not think the court erred in refusing to instruct the jury,'that the draft matured on (the 12th of January, 1852, but on the contrary we think that — 351 — tbe last day of grace expired on the 9th day of January, 1852, and that to show this the figures were used. Ah to the sufficiency of the proof to show that the plaintiff in the action received due notice of the nonpayment of the draft, in the view we take of the plaintiffs claim, and of the issue in the pleadings, that question can not be made by the defendant. The damage sustained by the plaintiff for the breach of the obligation of the defendant, is shown, prima facie, by the judgment and its payment. If, as alleged in the answer of the defendant, the damage of the plaintiff proceeded from his failure to make defense, when defense might have been successfully made, such proof should have come, from the defendant. This brings us to the consideration of the important question, what was the nature of the plaintiff’s claim, as shown by the pleadings and evidence ? Or, in other words, how does it appear that an obligation rested on the defendant to make good to the plaintiff the damage and loss he sustained by indorsing the draft ? And it should be observed before entering upon the inquiry, that both in the pleadings and in the evidence, the case of the plaintiff proceeds on the ground of an obligation by contract, express or implied. Upon no fair interpretation can it be regarded as a case of fraud or deceit. It is not claimed that the plaintiff indorsed the draft as surety for one man under a belief, which the defendant induced, by trick, device or false representation, that he was becoming surety for another. The plaintiff, in fact, entered into a contract, as the in-dorser or surety of the antecedent parties on a bill of exchange. He does not deny but affirms the validity of that contract. Neither in point of fact nor of law, as shown by the pleadings or evidence, was the defendant bound by that contract. His name is not on tbe bill. It is not claimed that he was liable to the holder of the bill, in any manner, for its pajment,: nor could such a claim be made, unless on the ground of some contract between the plaintiff and defendant, to the benefit of which the holder might have been subrogated. It is equally clear, that any contract between the plaintiff — 352 — and the defendant, which the pleadings state or the evidence tends to show, had reference to that bill of exchange, and the liability upon it of the plaintiff. That contract could only relate to the creation of liability or to its consequences. The defendant might have contracted to do something which would affect the nature and character of the liability about to be created, or as to the consequences of a liability known and ascertained at the time. Now, the only contract, affecting the creation of the liability, which could be imagined as resulting from what passed between the parties, as disclosed by anything in the pleadings or evidence, would be a contract on the part of the defendant to put his name on the bill as a prior indorser. What would be the effect of such a contract we need not deoide, for'the pleadings were not framed, nor was the evidence’ offered with a view to any such contract. We are thus brought to the conclusion that the contract stated in the pleadings, and the one which the evidence tended to prove, could only have related to the consequences of the liability on the bill assumed by the plaintiff. And it is difficult to see how it could be other than a contract of indemnity. It has often been a subject of discussion, whether a verbal promise, in which the debt, default or miscarriage of a third person is involved, be within the statute of frauds and void, or be an independent contract and valid; and the cases on the subject present considerable conflict. Certain principles bearing on the inquiry are conceded in the authorities. And, first, the sufficiency of the consideration does not take the case out of the statute. There was no occasion for a statute to make void a naked promise, unsupported by a considera tion, although such promise should be in writing. And, next, there is no distinction, whether the debt or obligation of the third person be one created at the time of the making the promise, or one which previously existed. When the promise involves the debt -or default, of a third person, the consideration of the promote may he importan* in deciding whether it can be reg^rde'j c-remdog an independent contract. When the dob* or obligation or a third — 353 — person is created, and the promisee at the time, upon the request of the promisor, becomes liable therefor, there is a consideration of damage to the promisee. It has been supposed that this would come within the third class of cases stated by Kent, C.J., in Leonard v. Vredenburg, as arising under the statute, and which he says would not be embraced. That class is thus stated: “ When the promise to pay the debt of another arises out of some new and original consideration of benefit or harm moving between the newly con tracting parties.” 8 Johns. 29-39. The general manner in which this class of cases is described has, as stated in a recent case in New York, given rise to some misapprehension, and has probably misled in the decision of subsequent cases. Mallory v. Gillett, 21 N. Y. 412-418. It is perhaps sufficiently qualified by a previous statement, that “if a promise to pay the debt of another be founded on a new and distinct consideration, independent of the debt, and one moving between the parties to the new promise, it is not a case within the statute.” 8 Johns. 39. The authority cited by Kent, C.J., for his conclusion that the third of the classes of cases stated by him is not within the statute, is 1 Saund. 211, note 2. The part of the note referred to is as follows : “ But where the promise is founded upon some new consideration, sufficient in law to support it, and is not merely for the débt, etc., of another, such an undertaking, though in effect it be to answer for another person, is considered as an original promise, and not within the statute.” Citing Read v. Nash, 1 Wils. 305; 5 Mod. 205; Stephens v. Squire, 3 Burr. 1886; Williams v. Leper, 1 B. & A. 297. The same expression, new and original consideration, the use of which by Kent, C.J., has led to misapprehension, is found substantially in the note from Saunders. The expression new consideration is, in the note, qualified by “ not merely for the debt, etc., of another.” In a subsequent edition of Saunders’ Reports, published in England, after the decision in Leonard v. Vredenburg, the indefiniteness in the note is corrected. In a note, in that edition, it is said: “ Whether each particular case comes within this clause of — 354 — the statute or not, depends not on the consideration for the promise, but on the fact of the original party remaining liable, coupled with the absence of any liability on the part of the defendant or his property, except such as arises from his express promise.” This rule was, in the case of Butcher v. Steuart, 11 Mees. & Welsh. 857, 870, cited by one counsel, and admitted by the other to be correct; and in the case of Green v. Cresswell, 10 Ad. & El. 453, 459, the rule was referred to by counsel, and Lord Denham said: “ There does not appear any objection to the test laid down in the note to 1 Williams’ Saunders, 211 c.; and it is decisive in, favor of the objection. The original party remained liable; and the defendant incurred no liability except from his promise.” It will be observed that the test thus referred to, and which has been quoted above, in terms, rather refers to a debt or obligation created before the promise; but, as has been stated, this makes no difference. The case of Green v. Cresswell, in which the test was held to be applicable, was one where the obligation was created at the time of the promise. It was a promise to indemnify the plaintiff, if he would become bail for a third person. He became bail, sought to make the promisor liable, but failed, because he could not show that the defendant had incurred any liability, except from his promise. To create such liability on the part of the defendant or his property, there must certainly, in the language of Kent, O.J., be “ a new and distinct consideration, independent of the debt, and one moving between the parties to the new promise.” It is said, in the case of Mallory v. Gillett, above cited, in which the classification of Kent is elaborately explained and defended, and in a summing up of the exceptions to the statute, that the consideration “ may come from the debtor, as where he puts a fund in the hands of the promisor, either by absolute transfer, or upon a trust to pay the debt, or it may be in his hands charged with the debt as a prior lien, as in the case of Williams v. Leper, and many others. So the consideration may originate in a new and independent dealing between the promisor and the creditor, the undertaking to answer for the debt of another being one — 355 — •of tbe incidents of that dealing.” 21 N. Y. '433. In the case of Nelson v. Boynton, 3 Matc. 396-402, it is said: “ The rule to be derived from the decisions seems to be this, that cases are not considered as coming within the statute, when the party promising has for his object a benefit which he did not before enjpy, accruing immediately to himself; but where the object of the promise is to obtain the release of the person or property of the debtor, or other forbearance or benefit to him, it is within the statute.” And in the case of Durham, v. Aeledge, 1 Strob. 5, 7, it is said that the conflicting cases may be reconciled by the rule which Leigh, in his Nisi Prius, 1031, has deduced from some of the English decisions, that if the promise be founded on a new and distinct consideration, co-extensive therewith, and moving not to the third party, but to the party making the promise, it is not within .the statute. In this case, the only consideration which is disclosed, is the damage to the plaintiff from a liability incurred upon the request of the defendant. If there be any other — if from what passed between the parties, the plaintiff could have inferred, that there was any other, he has not been able to state it in his pleadings, or exhibit it in his proof. It could not, therefore, have been a distinct consideration, independent of the debt, moving between the parties. If there was “ any liability on the part of the defendant or his property,” arising from any arrangement between him and the debtor, it is not disclosed, so that its extent and sufficiency, as a consideration, might be determined. We certainly can not conclusively infer from a mere request to “ indorse for me ” a bill drawn by a third person, that the party making the request had received a distinct consideration creating a liability upon him or his property. We should have to make the double inference, that there was a consideration, and that, in its character and extent, it was sufficient to prevent the application of the statute. In short, tested by any of the rules shown by the authorities which have been cited, the case of the plaintiff shows only a promise to indemnify against the default of a third person. — 356 — Such being the case of the plaintiff, and there being no note or memorandum in writing, the decision in the case of Easter v. White, 12 Ohio St. Rep. 219, decisively shows that the statute of frauds applies, and that there is no legal obligation on the defendant. And we think the court erred in not so charging the jury, on the request of the defendant. The judgment of the district court must, therefore, be reversed. Judgment reversed. Sutlief, C. J., and Peck, Brinkerhoee and Scott, J3 , concurred.