This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
In turning from an abstract statement of the principles which determine the applicability of the statute, to a consideration of the adjudications themselves, we find that while the cases are far from harmonious, they can be more nearly reconciled than would appear from the conflict in the theories. In discussing these cases, the words of this clause applicable to each class of cases will constantly be considered. The clause in effect requires (1) a debt of a third person, (2) the continued existence of such debt, (3) a promise to "answer for" such debt, (4) which must be made to the creditor to whom such debt is due, and (5) the transaction, as a corollary from these elements must not be & promise merely to pay the debt of the promisor. (1) The statute includes only promises to answer for the "debt default or miscarriage "of another. Accordingly if C is not liable to B, the statute has no application since as between A and B there is no "debt of another."1 Thus a contract whereby A, who is organizing a corporation, in order to induce B to subscribe to stock therein, agrees to purchase such stock,2 to find a purchaser therefor,3 or to guarantee dividends thereon,4 is not within the statute of frauds.5 So is a contract whereby the widow agrees to make up the difference out of her share of the estate in consideration that certain heirs will forbear suit against other heirs for allowing advancements made by decedent to such other heirs.6 So an agreement by A, who claims to have control over the debtor's (B's) property to surrender certain property of debtor to C who was about to become surety for B, as indemnity, is an original contract between A and C, and is not within the statute.7 For this reason a promise to indemnify one against loss, as in the case of insurance, which may be incurred in the future without any liability on the part of any third person therefor is not within the statute.8 So where A, who was getting up a school exhibition, asked B to assist him and to procure music therefor and promised to indemnify him for his expenses if enough for that purpose was not raised by subscription, A's promise was not within the statute since there was no third person liable to B and hence no debt of another.9 So where A demanded a certain sum for constructing a railway, and the railway company offered a smaller sum, the promise of a third person to pay to A a certain sum in addition to that offered by the railway company to induce him to undertake such contract is not within the statute.10 So, where a married woman's contract is void, a promise to answer for her debt is not within this clause of the statute.11 If, however, C's liability is voidable, but not void, as where C is a minor,12 A's promise is within the meaning of this clause.
3 White v. Rintoul, supra.
4 Mallory v. Gillett, 21 N. Y. 412. To the same effect see Nelson v. Boynton, 3 Metc. (Mass.) 396; 37 Am. Dec. 148.
5 Brown v. Weber, 38 N. Y. 187, 189; quoted in White v. Rintoul, supra. See also Ackley v. Parmen-ter, 98 X. Y. 425; 50 Am. Rep. 693.
1 Kilbride v. Moss, 113 Cal. 432; 54 Am. St. Rep. 361; 45 Pac. 812; McKinney v. Armstrong, 97 111. App. 208; Voris v. Loan Association, 20 Ind. App. 630; 50 X. E. 779; Boos v. Hinkle, 18 Ind. App. 509; 48 N. E. 383; Stewart v. Patton, 65 Mo. App. 21; Walker v. Norton, 29 Vt. 226.
2 Kilbride v. Moss, 113 Cal. 432; 54 Am. St. Rep. 361; 45 Pac. 812.
3 Green v. Brookins, 23 Mich. 48; 9 Am. Rep. 74.
4 Moorehouse v. Crangle, 36 O. S.
130; 38 Am. Rep. 564; Thompson v. Whitney, 20 Utah 1; 57 Pac. 429.
5 Contra, that a contract to pay to the vendee the amount paid by him for his stock if the corporation does not return it to him is within the statute. Gansey v. Orr, 173 Mo. 532; 73 S. W. 477.
6 Fain v. Turner, 96 Ky. 634; 29 S. W. 628.
7 Waid v. Hobson, 17 Colo. App. 54; 67 Pac. 176.
8See Sec. 634.
9 Walker v. Morton, 29 Vt. 226.