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.
If A has in his hands money or property belonging to C, out of which he has authority to pay C's debt to B, A's promise to B to accept an order drawn by C upon such fund is not within the statute.1 So, orders which operate as payment of the original liability may be accepted orally,2 this being really a form of novation.
If A has no funds of C's in his hands and is not indebted to C, his promise to accept C's order to B is within the statute.3 Thus, a promise by a widow, who is the beneficiary of an insurance certificate taken out by her husband in a beneficial association, to pay his debts out of this fund, is within the statute,4 since this fund is not property which ever belonged to the deceased husband. Since a bill of exchange merges the liability of the drawee to the drawer, it may be accepted orally without violating the statute of frauds,5 except in those jurisdictions where by special statute acceptance of a bill of exchange must be in writing.6 However, a promise by the drawee of a bill of exchange to a prospective purchaser thereof to repay to him the amount expended by him in purchasing such bill is not within this statute.7 A promise by one not indebted to another to indorse bills drawn by such other in favor of his creditor, on consideration that such creditor would refrain from issuing execution, is within the statute.8
1 Durkee v. Conklin, 13 Colo. App. 313; 57 Pac. 486; Lavell v. Frost, 16 Mont. 93; 40 Pac. 146. If A is indebted to C, his promise to accept C's order to B is said to be unnecessary. Barnett v. Lumber Co.,
43 W. Va. 441; 27 S. E. 209.
2 Cook v. Wolfendale, 105 Mass. 401; Parkhurst v. Dickerson, 21 Pick. (Mass.) 307; Washburn v. Cordis, 15 Pick. (Mass.) 53.
3 Killough v. Payne, 52 Ark. 174; 12 S. W. 327; Chapline v. Atkinson, 45 Ark. 67; 55 Am. Rep. 531; Win-burn v. Building Association, 110 la. 374: 81 X. W. 682; Willis v. Shinn, 42 X. J. L. 138.
4 Fisher v. Donovan. 57 Neb. 361;
44 L. R. A. 383; 77 X. W. 778.
5 Townsley v. Sumrall, 2 Pet. 170; Kennedy v. Geddes. 3 Ala. 581; 37 Am. Dec. 714; Nelson v. Bank, 48
111. 36; 95 Am. Dec. 510; Louisville, etc., Ry. v. Caldwell, 98 Ind. 245; Cook v. Baldwin, 120 Mass. 317; 21 Am. Rep. 517; Dunavan v. Flynn, 118 Mass. 537; Pierce v. Kittredge, 115 Mass. 374; Spauld-ing v. Andrews, 48 Pa. St. 411; Fisher v. Beckwith, 19 Vt. 31; 46 Am. Dec. 174.
6Flato v. Mulhall, 72 Mo. 522; Haeberle v. O'Day, 61 Mo. App. 390; Nichols v. Bank, 55 Mo. App. 81; Risley v. Bank, 83 N. Y. 318; 38 Am. Rep. 421. By statute in Pennsylvania acceptance of a bill draft or order for the payment of money exceeding twenty dollars cannot be enforced unless it is in writing. Na-tional State Bank v. Linderman. 161 Pa. St. 199; 28 Atl. 1022: Maginn v. Bank, 131 Pa. St. 362; 18 Atl. 901.