It is not infrequently assumed or stated that a promise to pay a debt or perform a duty if another person fails to do so, is within the statute, but that a promise may be made orally if it is absolute in terms to pay the debt of a person primarily liable irrespective of any prior default by the latter. It is probably true that a promise conditional on the prior default of a primary debtor is generally within the statute, for if the transaction were such that the promisor could be properly called in any sense an original debtor, he would naturally undertake absolutely to pay a debt, the burden of which he has assumed as his own; and there are expressions by able judges which seem to indicate that they regarded this test as final.5
3Drovers' Deposit Nat. Bank e. Tichenor, 156 Wis. 251,146 N. W. 777. See also Guild v. Conrad,  2 Q. B. 886. So in Kelseye v.Munson, 198 Fed. 841, 117 C. C. A. 483, an agreement by two copartners, A and B, with C & D to induce them to sign as sureties a note made by B which was to be discounted at a bank, that the note should be a partnership debt, was held not within the statute because made to secure capital for the partnership; and the sureties having paid the note were allowed to prove it in bankruptcy against the partnership estate. It will be observed that this is in effect a case of several liability to C & D to indemnify them, created at the time the note was discounted, for A 4 B promised as a firm and B was continuously bound individually by his signature on the
5 In Peckham v. Faris, 3 Doug. 13, 14, Lord Mansfield said: "In Jones v. Cooper, [1 Cowp. 227] the court was of opinion, that whenever a man is called upon only in the second instance, he is within the statute; otherwise, where he is to be called upon in the first instance.
In Guild v. Conrad,  2 Q. B. 885, 892, Lindley, L.J.,said: "If it was a contract to pay if the Demerara firm did not pay, then it is void undo the Statute of Frauds as not being in writing. But if, on the other hand, it was a promise to put the plaintiff in funds in any event, then it is not such a promise as is within the Statute of Frauds," and the other members of the court make the same distinction.
In Davys v. Buswell,  2 K. B. 47, Vaughan Williams, L. J., seemed to regard the test as affording but a prima fade indication of whether the promise is within the statute, saying: "As I understand it, in any case where in substance and in fact, an obligation has been undertaken by a person to the creditor to pay a debt due from another person, for which that other remains responsible, in the event of his making default, prima facie that is a guarantee, and the case comes within the fourth section of the Statute of Frauds." And the test laid down in Wms. Saund. 211 e, quoted in this case as accurate (see supra, Sec. 462, infra, Sec. 474), is inconsistent with a rule which would make the absolute or conditional character of the promise a conclusive test. In
Brown v. Weber, 38 N. Y. 187, 189, the court said:
"The language shows that the test to be applied to every case is, whether the party sought to be charged is the principal debtor, primarily liable, or whether he is only liable in case of the default of a third person; in other words, whether he is the debtor, or whether his relation to the creditor is that of surety to him for the performance, by some other person, of the obligation of the latter to the creditor. In the former case the promise is not within the statute, because the party promising is not undertaking for the performance by another, of some duty owing by the other, but for the performance of his own obligation; but, in the latter case, it is within the statute, because the liability is contingent upon, whether another performs his obligation, for whose performance the party sought to be charged has undertaken. There has never been any dispute as to the above principles, but the difficulty has been in determining to which class the cases that have been adjudged belonged."
But the cases the court supposes do not cover the whole ground. One who promises absolutely may be a surety.
In Davis v. Patrick, 141 U. S. 479, 488, 35 L. Ed. 826, the court said, quoting from the opinion in Emerson v. Slater, 22 How. 28, 43,16 L. Ed. 360: "Whenever the main purpose and object of the promisor is not to answer for statute if the person whose performance is guaranteed is under no liability to the promisee,9 which indicates that it is not merely the form of the new promise, but the existence of a primary obligor which is important. It is, however, especially as a negative test that the form of guaranty is inadequate. Certainly a new promise to pay the debt of another is often, if not generally, within the statute though the new promise be not in terms conditional upon prior default by the person primarily liable.10 In most of the cases hereafter discussed of new promises to pay existing debts, the promises were in terms absolute, yet the court resorted to inquiries as to the purpose and consideration of these promises and whether they extinguished the original debt in order to decide whether the statute was applicable; and specifically promises to make or accept negotiable paper are within the statute,11 though neither the promise to sign nor the obligation which would be incurred by signing are conditional on prior default.
It is not, however, universally true that a guarantee conditional on another's default is within the statute.6 An assignment accompanied by a guarantee that the obligor of the assigned claim will pay it, is not within the statute;7 nor is the contract of a del credere factor with his principal.8 These cases must be regarded as exceptional and withdrawn from the operation of the statute for reasons of policy. But a promise in the form of a guarantee of performance by another is not within the another, but to subserve some pecuniary or business purpose of his own, involving either a benefit to himself or damage to the other contracting party, his promise is not within the statute, although it may be in form a promise to pay the debt of another, and although the performance of it may incidentally have the effect of extinguishing that Lability," and added, perhaps somewhat inconsistently (at p. 489), "Counsel for Davis place stress on the form of expression attributed by Patrick to Davis, to wit: 'I will be personally responsible; I will see you paid;' and contends that the import of such language is that of a collateral promise. There is force in this contention, as it implies that some one else was also bound, but the real character of a promise does not depend altogether upon the form of expression, but largely on the situation of the parties; and the question always is, what the parties mutually understood by the language, whether they understood it to be collateral or a direct promise." In Warner v. Willoughby, 60 Conn. 468, 471, 22 Atl. 1014, 25 Am. St. Rep. 343, the court said: "It seems to have been understood by the parties and the court alike that the defendant did not agree that, if the plaintiff would forbear proceedings to place a lien upon the premises described, the defendant would pay him the seven hundred dollars or any part thereof for which he had contracted to do the work. No such promise is alleged or testified to.
On the contrary the promise alleged and testified to is substantially the promise of which the court treated in its charges and instructed the jury to be a valid and binding one though not in writing, namely, a promise to see the plaintiff paid for his work, to pay if Mr. Humphrey did not. This is clearly not a direct undertaking to answer in the first instance. It was not understood by the parties that Humphrey was not liable to pay the plaintiff under the contract, or that his liability was affected by the undertaking of the defendant. Humphrey continued liable and in fact paid a large part of the contract price. The undertaking upon which the plaintiff relied was that of a person not before liable, for the debt or duty of another who continued liable to pay for the work performed under the contract. It was a collateral undertaking and within the statute of frauds." In Lampaon v. Hobart's Estate, 28 Vt. 697, 700, it is said: "It is necessary, too, that a parol promise of this kind, to be binding, should be absolute, and not dependent on the failure of the debtor to pay, and such
6 In Westmoreland v. Porter, 75 Ala. 452; Raabe v. Squier, 148 N. Y. 81, 42 N. E. 516, oral promises conditional on default of a debtor were held valid because made for beneficial consideration. The cases seem open to criti-
7 See infra, Sec. 484. 8Ibid.