This section is from the book "A Treatise On The Construction Of The Statute Of Frauds", by Causten Browne. Also available from Amazon: A treatise on the construction of the Statute of frauds.
2 2 Peters, 170, 182.
§ 173. Having now seen that the promise of a guarantor, within the Statute of Frauds, must be a special or express promise, raising a liability which did not exist already, and intended primarily to discharge that liability, our next inquiry is, what engagements, if not in form promises to pay another's obligation, are substantially so; for the statute being designed to repress fraud, cannot be evaded in its spirit by mere changes in the language of parties, or by the form under which they disguise their transactions.
§ 174. In the case of Carville v. Crane, in New York, the defendant promised, in consideration that the plaintiff at his request would sell and deliver a bill of goods to third parties, to indorse their note at six months, for the price. The case was in assumpsit upon this promise, and came before the Supreme Court on demurrer; and it was decided to be manifestly, in substance, an engagement to answer for the debt, and that, the promise not being in writing, the action could not be sustained. Cowen, J., delivering the opinion of the court, said: "It was a promise to become their [the third parties'] surety for the debt. ... To say, then, that this is not in effect a promise to answer their debt, would be a sacrifice of a substance to sound. It would be devising a formulary by which, through the aid of a perjured witness, a creditor might get round and defraud the statute. He may say, 'You did not promise to answer the debt due to me from A.; but only to put yourself in such a position that I could compel you to pay it.' Pray, where is the difference except in words."1 A verbal acceptance of, or a verbal promise to accept, a bill of exchange, where the acceptor has funds of the drawer in his hands, is, as we have seen, entirely without the operation of the statute, from the consideration that the drawee's engagement is in fact to pay his own debt to the drawer, the owner of the funds, and perhaps by virtue of another rule to be hereafter considered; namely, that the promise to pay another's debt, contemplated by the statute, is to pay it out of the promisor's own estate. But there seems to be no sound reason why a verbal acceptance or promise to accept for the mere accommodation of the drawer, and without value received, should not, upon the grounds stated in Carville v. Crane, be treated as within the statute. The acceptor or promisor certainly puts himself in such a position that the payee can compel him to pay the debt. Such is the opinion expressed in the same case, and it seems to be followed in a subsequent decision in the Superior Court in the same State, where, upon the defendant's offering to prove that he had no funds of the drawer in his hands at the time of making the promise to pay an order to be drawn upon him, and the rejection of such evidence at the trial, the judgment was reversed. The remarks of the court, it is true, indicate that, if the promise had been held good, it would have been upon the ground that the possession of funds of the drawer by the defendant was in the nature of a new consideration moving to him; but the result of the case certainly is that a verbal accommodation acceptance is not, as such, saved from the operation of the statute.1 In Pillans v. Van Mierop, decided in the Queen's Bench in 1765, the same view is expressed by Lord Mansfield. The defendants, in the expectation of having funds of the payee in their hands, agreed with the plaintiffs to honor their draft, to be thereafter drawn, to reimburse them for money lent him; after the loan and before the draft was made, the proposed payee failed, and the defendants notified the plaintiffs that their draft would not be accepted, but the latter nevertheless drew, and their draft was dishonored. The agreement being by written correspondence, no question was made upon the Statute of Frauds, but the decision was simply that an acceptance of a draft to be drawn was good. Lord Mansfield, however, said he had no idea that "promises for the debt of another" were applicable to the present case; that this was a mercantile transaction; that the credit was given upon a supposition "that the person who is to draw upon the undertakers within a certain time has goods in his hands, or will have them. Here [the plaintiffs] trusted to this undertaking: and there is no fraud. Therefore it is quite upon another foundation than that of a naked promise from one to pay the debt of another."2
1 As to D'Wolf v. Rabaud, 1 Peters 476, see § 175 a. The case of Townsley v. Sumrall, 2 Peters 170, seems to be in conflict with the best recent authorities.
1 Carville v. Crane, 5 Hill, 484. And see Gallager v. Brunei, 6 Cowen (N. Y.) 346; Mallet v. Bateman, L. R. 1 C. P. 163; Gallagher v. Nichols, 60 N. Y. 438; Manley v. Geagan, 105 Mass. 445. In Taylor v. Drake, 4 Strobh. (S. C.) Law, 431, it was held, as in Carville v. Crane, that a verbal promise to indorse was within the statute; and see Williams v. Caldwell, 4 S. C. 100; Wills v. Shinn, 42 N. J. Law, 138; Chapline v. Atkinson, 45 Ark. 67; Smith v. Easton, 54 Md. 138. And see Dee v. Downs, 57 Iowa 589.
1 Pike v. Irwin, 1 Sandf. 14. To the same effect are Quin v. Hanford, 1 Hill (N. Y.) 32; Morse v. Mass. Nat. Bank, 1 Holmes (C. C.) 209; Wakefield v. Greenhood, 29 Cal. 597. But see Jarvis v. Wilson, 8 Reporter 264.
2 Pillans v. Van Mierop, 3 Burr. 1666. Upon a rehearing of the case at the next term, Lord Mansfield, p. 1672, used the following language: "The true reason why the acceptance of a bill of exchange shall bind, is not on account of the acceptor's having or being supposed to have effects
§ 175. The principle of Carville v. Crane seems to apply to a promise to execute a bail bond for the appearance of a debtor, in those cases where it is held that there exists a duty upon the part of the debtor to answer for his default to the promisee; inasmuch as the promise to execute the bail-bond would then bind the party making that promise to put himself in a position where he would be answerable for the default of the debtor in his duty of appearing.1 In an early case in Connecticut, where the defendant, in consideration that an officer would release one whom he had arrested for debt on final process, promised to see the prisoner forthcoming in the morning, or pay the debt, it was decided on error to be within the statute, as a promise to answer for the debt or duty of another. But it may be doubted whether there was here any debt or duty of the third person to the defendant's promisee, and if not, the decision was not correct.2