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.
1 Hamar v. Alexander, 2 Bos. & P. n. r. 244.
§ 186. The special promise intended by the statute is, in the next place, such as raises an obligation to pay out of the promisor's own estate. That clause which relates to the engagements of executors and administrators to answer damages, or, in other words, to pay debts of the decedent, is express to the same effect; but for an obvious reason. Their promises to pay out of the decedent's estate, though special, it would clearly not be within the policy of the statute to require to be put in writing. We cannot, therefore, draw from that difference in the phraseology of the two clauses any argument against the rule as just stated, and as to be presently illustrated. Meanwhile it may be here remarked that whether a bare promise by an executor or administrator to pay a debt of his decedent will be regarded as a promise to answer from his own estate, or not, seems to depend upon his having or not having assets from the estate at the time of promising. If he have not assets, his promise must be fulfilled, if at all, out of his own estate, and the statute would require it to be in writing. If he have assets, he would have a right to charge them with the damages recovered against him upon such promise; and so, though the judgment might be against him personally, the damages would ultimately be answered out of the estate of the decedent, not out of his own, and the spirit of the statute would not require the promise to be in writing. Accordingly, it is held that an executor's or administrator's plea in bar to an action against him on such a promise should allege that he has no assets, as otherwise it does not appear that a memorandum in writing is necessary.1 And in this view, it may be considered immaterial whether the promise be in terms to pay out of his own estate, but that the true question is, whether by his promise he has assumed an obligation which is to be a charge upon his personal and private resources. For undoubtedly the statute, in this whole matter of collateral engagements, was designed to prevent the fraudulent assertion of claims against third parties who were, except for their alleged promises, not personally liable at all.
1 Thompson v. Bond, 1 Camp. 4, by Lord Ellenborough. In a subsequent case, Smith v. Harris, 2 Stark. 48, Lord Ellenborough held the words, "that plaintiff might lend one H. £20 or £30, and that he would be perfectly safe, and that he (defendant) would see the plaintiff paid," to amount to nothing more than a guaranty within the Statute of Frauds. I do not understand his Lordship, as it seems Mr. Fell does (Law of Mercantile Guaranties, 235, note), to differ with the previous decisions upon this point, but that he considers the words used as having no meaning farther than a promise to answer for H. If the words used are put in the first person, thus: "You will be perfectly safe; I will see you paid," it is still more manifest that there is no distinct affirmation as to the fact of responsibility. The rule in Hamar v. Alexander is also incidentally stated (though that case is not referred to) in Gallager v. Brunei, 6 Cowen (N. Y.) 346, per Woodworth, J. And see also Haslock v. Fergus-son, 7 Ad. & E. 86. Since the publication of the second edition of this work, it has been held that a verbal guaranty that certain notes sold by defendants to plaintiffs were good and collectible, and the makers responsible, - that the maker of a certain mortgage sold at the same time was responsible and able to pay, - that the land mortgaged was ample security and the title perfect and unencumbered. - was valid without writing; the statute in regard to parol representations of credit, etc., being confined to cases where the representations formed no part of a contract. Huntington v. Wellington, 12 Mich. 10.
1 Pratt v. Humphrey, 22 Conn. 317 The same view is contained in the case of Stebbins v. Smith, 4 Pick. (Mass.) 97, in which it is farther held that the executor's giving bond to the Judge of Probate is an admission of assets in his hands. The decision in Stebbins v. Smith seems to have been overlooked in the subsequent case of Silsbee v. Ingalls, 10 Pick. 526, where, however, the court did not find it necessary to hold the promise (notwithstanding the admission of assets) to be within the statute, for if it had not been, the plaintiff could have had no relief in equity, the statute not depriving him of his remedy at law. Again. Hay v. Green, 12 Cush. 282, without noticing Stebbins v. Smith, asserts broadly that an oral promise by an administrator to pay a distributive share in the estate to an assignee of the heir-at-law is not good. And Smith v. Carroll, 112 Pa. St. 390, to the same effect cites Hay v. Green, but not Stebbins v. Smith.
§ 187. It is obvious that an engagement in terms to apply the debtor's own funds, received or to be received by the defendant, to the payment of the demand against him, creates a duty as agent rather than as surety; the defendant's promise is not to pay the debt, but merely to deliver certain property to the nominee of the original debtor; and the right of action of such nominee against the defendant for a breach of his promise is not at all affected by the Statute of Frauds.1 And though the form of the defendant's engagement be different, as for instance to pay if he should receive funds of the debtor to the amount of the debt, still it is clear the statute does not apply, as the debtor's own funds are in effect relied on for payment.2 And, in general, where the defendant has in his hands money or property of the debtor, deposited with him for the purpose of paying the debt, he may be sued upon his special promise to pay it, without the production of evidence in writing.1 It is, of course, necessary that such money or property should be within his control; he must be himself the bailee of it, and not the mere agent of others who are such bailees.2 If he is to sell or otherwise convert such property with a view to payment, he is acting as the trustee of the debtor who placed it in his hands, and of those to whose benefit the proceeds are to be applied.3 And it has even been decided that a promise thus to sell property and pay a creditor, coupled with a guaranty that it should sell for enough to pay him, was not such a promise to pay as was covered by the statute.4 The mere possession of property or funds belonging to the original debtor, not deposited with the defendant for the purpose of paying the debt, will not, however, withdraw his verbal promise to pay it from the operation of the Statute of Frauds.1 It has been held in Pennsylvania that where the defendant represented that he had funds of the debtor, and promised to pay the debt from them, the promise was original, even if in fact he had no such funds.2