Drovers' Deposit National Bank v. Tichenor

BaeNes, J. The appellant contends that' the agreement sued on is void because it was a promise to pay the debt of another and the writing does not express the consideration therefor and because there was no consideration in fact to support the promise. The complaint alleges that defendants agreed, in consideration of the plaintiff purchasing the notes referred to in the statement of facts, that they would pay the same at maturity, and that in performance of said agreement and relying on the same and in consideration thereof plaintiff paid $9,983.50 to the Tiehenor-Grand Company for the note involved in this suit. The demurrer admits these averments to be true. By Exhibit B the defendants agreed “to pay the notes at maturity according to the tenor thereof,” because they were interested in the business of the corporation which owned the notes and desired to assist it in obtaining credit and money from the plaintiff. As to the plaintiff, the transaction did not involve any preexisting obligation. Neither the maker of the note nor the payee nor the defendants owed the plaintiff anything when the agreement sued on was made. The complaint sets forth that the plaintiff, relying on the promise to pay made by the defendants, parted with $9,983.50. This is not a mere eol255 lateral agreement to answer for the debt or default of another, but an original promise by the defendants to pay what became under their agreement their own debt. Shook v. Vanmater, 22 Wis. 532; Vogel v. Melms, 31 Wis. 306; Young v. French, 35 Wis. 111; Weisel v. Spence, 59 Wis. 301, 18 N. W. 165; Green v. Hadfield, 89 Wis. 138, 61 N. W. 310; Champion v. Doty, 31 Wis. 190; Hall v. Wood, 3 Pin. 308; West v. O’ Hara, 55 Wis. 645, 13 N. W. 894; McNaughton v. Conklings, 9 Wis. 316. It will be noticed that the signers of Exhibit B called it a guaranty. The nature of the instrument should determine its character, rather than the name which the parties applied to it. The agreement in form is not to guarantee payment of the notes if the maker did not pay them, but the defendants say: “We do hereby promise and agree to pay said notes.” There is no alternative provided for. While the word “guaranty” ordinarily means an undertaking to answer for the debt or the performance of a duty by another in case such other fails to pay or perform, colloquially it is frequently used in reference to an original undertaking. The cases recognize the fact that the word is often used as a synonym for “promise,” and to denote an absolute agreement. Esberg-Bachman L. T. Co. v. Heid, 62 Fed. 962, 963; Packer v. Benton, 35 Conn. 343, 348; Delsman v. Friedlander, 40 Oreg. 33, 66 Pac. 297, 298; Thayer v. Wild, 107 Mass. 449, 452; Gaster v. Ashley, 1 Ark. 325, 333. . If the agreement should be construed as one wherein the signers undertook to answer for the debt of another, the complaint states a good cause of action. The contract was made in Illinois and the note was payable in London. It is alleged that while the English and Illinois statutes of frauds require such a promise to be in writing, they do not require that the consideration for the promise be expressed in the writing. In this they are unlike our statute (sec. 2307). There must, however, be a consideration in fact in order to support a [256] promise under the English and Illinois statutes. A consideration may consist of a benefit to the promisor or a detriment to the promisee. Messenger v. Miller, 2 Pin. 60; Eycleshimer v. Van Antwerp, 13 Wis. 546; Hewett v. Currier, 63 Wis. 386, 23 N. W. 884; Dohr v. Wolfgang, 151 Wis. 95, 97, 138 N. W. 75; Gegare v. Fox River L. & L. Co. 152 Wis. 548, 557, 140 N. W. 305. The complaint shows' that plaintiff parted with nearly $50,000 of its money on the strength of the defendants’ promise. This is a pretty substantial consideration. The appellant seems to think that the consideration must move from the promisor directly to the promisee and must be beneficial to the latter in order t'o satisfy the statute. This is no doubt due to a misapplication of a rule of law which has been established in a class of cases very different from the one we are considering. It has been held that where a promise is collateral and is not in writing, or the writing does not express the consideration, and where the promisee has already parted with his money or property, the promise is not within the statute if the promisee actually pays to the promisor a consideration beneficial to the latter for his undertaking. Manifestly this rule has nothing to do with the case before us. Neither do we intend to intimate that the agreement, read in connection with the allegations of the complaint, is not valid under our statute of frauds. Aside from the interest which the defendants had in the corporation, it appears that the money was paid after the agreement was made and on the strength of it. See Williams v. Ketchum, 19 Wis. 231; Young v. Brown, 53 Wis. 333, 10 N. W. 394; Eastman v. Bennett, 6 Wis. 232; Waldheim v. Miller, 97 Wis. 300, 72 N. W. 869; Coxe Bros. & Co. v. Milbrath, 110 Wis. 499, 86 N. W. 174; Miami Co. Nat. Bank v. Goldberg, 133 Wis. 175, 113 N. W. 391; Sentinel Co. v. Smith, 143 Wis. 377, 127 N. W. 943. By the Court. — Order affirmed.