First National Bank v. Dohm

The opinion of the court was delivered by Dixon, J. The question presented by the foregoing statement of facts is, whether the note given by Mrs. Dohm failed to bind her, upon the ground that it was a promise to pay the debt, or'answer for the default or liability of another .person, within the proviso of section 5 of our Married Woman’s act. jRev., p. 636. This clause of the proviso is, in substance, undistinguishable from one of the provisions of the statute of frauds, which' requires- a writing in order to charge a promisor to answer for the debt, default or miscarriagé of another person, and should [365] receive the same construction. In applying this provision, two rules have been formulated, either of which would exclude the present transaction from the statute of frauds. One is, that if the defendant’s promise was made upon a substantial consideration moving to himself, for his own use and advantage, it creates an enforceable obligation, although not reduced to writing; the other is, that where the effect of the new transaction is to extinguish the claim of the promisee against the original debtor, the statute is inapplicable. In support of these rules, it is enough to refer to Browne Fraud, §§ 193, 201, 210, and Cowenhoven v. Howell, 7 Vroom 323, and eases there cited. In the bargain now under review, Mrs. Dohm, in effect, purchased from the bank the note of her husband endorsed by Gray and the judgment which had been entered thereon, and although no formal transfer of the judgment was made to her, she became the equitable owner of the same. This was a substantial benefit enuring to herself. By thus transferring to Mrs. Dohm the substantial title to the note and judgment, the bank also ceased to have any claim on the original contract against either Dohm or Gray, so that there was no debt, liability or possible default from any other person to the bank, to which Mrs. Dohm’s promise could be collateral. ' -"We, therefore, are of opinion, that Mrs. Dohm’s note was not a promise to pay the debt or answer for the default or liability of another person, but was an- original promise to pay the price of property purchased by her, and hence created a legal obligation. Consequently, the judgment of the Common ■Pleas should be reversed, and the judgment of the justice should be affirmed.