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 Ex parte Lane, 1 De Gex 300. See Corbin v. McOhesney, 26 111. 231
2 Lane p. Burghart, 1 Q. B. 933; Goodman v Chase, 1 Barn. & Ald. 297. So where the consideration is only a promise to discharge; a mere executory agreement. Butcher v. Steuart. 11 Mees. & W. 857; Cooper v. Chambers, 4 Dev. (X. C.) 261.
§ 194. It must be observed here, that though there is no doubt that, when the original debtor has been discharged, the defendant's promise is good without writing, it is necessary to be careful in applying the converse of the rule; namely, that in order that the defendant's promise should be good without writing, the original debtor should be discharged. This is undoubtedly true in cases of mere guaranty, where the relation of the defendant to the plaintiff is principally and essentially that of surety for the debt owing to him, and nothing else. But there are many cases in which the plaintiff may not have discharged his original debtor, and may still have a double remedy, and yet the promise of the defendant be good without writing; its object and character being other than that of guaranteeing the debt, though the discharge of the debt may be incidental to the performance of that promise. These cases form a most important topic in the present chapter, and are hereafter separately discussed.2
1 The entry of such discharge on the books of the plaintiff, and his debiting the new promisor with the amount, will be sufficient. Corbett v. Cochran, 3 Hill (S. C.) 41; Langdon v. Hughes, 107 Mass. 272. See Harris v. Young, 40 Ga. 65. But an agreement to submit a demand to arbitration is not such an extinguishment of it that a guaranty made in consideration of such an agreement shall be taken out of the statute. Harrington v. Rich, 6 Vt. 666. The case of Mallet v. Bateman, L R. 1 C. P. 163 should, it would seem have been decided for the plaintiff on the ground that by the agreement between the parties the plaintiff's claim against the third party was virtually extinguished. Holm v. Sand-benr, 82 Minn 427.
2 See post, §§ 207 et seq. Mr. Chitty, after referring to some of these cases remarks that they would probably be held otherwise now, because the original debtors therein were not discharged; but doubtless he had not had occasion to give them very close attention. The distinction is recognized in 1 Saund. 211 b (note to Forth v. Stanton). "The question whether each particular case comes within this clause of the statute or not, depends on the fact of the original party remaining liable, coupled with the absence of any liability on the part of the defendant or his property, except such as arises from his express promise."
§ 195. That the two liabilities must concur, when the promise of the defendant is to answer for the third person's discharge of his liability contemporaneously incurred (or for what may be technically called his default or miscarriage), is even more clearly true than in the case of a guaranty of an old debt.1 If, for instance, goods are sold upon the sole credit and responsibility of the defendant, though delivered to a third person, there is no liability to which that of the defendant can be collateral, and consequently it does not require a memorandum in writing.2 In such case, the common action of indebitatus assumpsit is the proper remedy against him, and a special count upon the promise is not necessary, as it would be if his undertaking were collateral. On the same principle, it has been held that when one advances money at the request of another (and on his promise to repay it) to pay the debt of a third party, as the payment creates no debt against such third party, not being made at all upon his credit, the liability of the party on whose request and promise it was made is original and not collateral, and not within the Statute of Frauds.3
§ 196. It was held in the Supreme Court of Vermont, that where the original debtor's liability is contingent, and, the contingency occurring, he is discharged, the defendant's guaranty made before it occurred was discharged with it. "The accessory obligation must necessarily fall with the principal obligation."4 And, conversely, if the obligation, either on the part of the third party or on the part of the defendant, is simply contingent at the time of the contract, the happening of the contingency in the interim can have no effect to draw the case within the operation of the statute.1 The case of Buckmyr v. Darnall2 is strongly illustrative of this point. There the defendant, in consideration that the plaintiff at his request would hire a horse to one English to ride to another town, promised that English should return him again. At the first hearing of the case, a majority of the judges thought the defendant's promise was not within the statute, because English was not liable upon any contract; but that, if any action could be maintained against him, it must be for a subsequent wrong in detaining the horse or actually converting it to his own use. The last day of the term, the Chief Justice delivered the opinion of the court. He said the objection had been made by some of the judges that if English did not deliver the horse, he was not chargeable in an action on the promise, but in trover or detinue, which are founded upon the tort, and for matter subsequent to the agreement. But it was held by all that, as English might be charged in the bailment in detinue on the original delivery, and detinue was the adequate remedy, the promise of the defendant was collateral and within the reason and the very words of the statute. This case has been already referred to, as showing that the defendant's assumpsit may be collateral to a third person's liability in tort, but it determines also by implication, that that liability must begin to run with the defendant's assumpsit; for it was only upon the ground that detinue would lie, the root of which action was the original delivery, raising at the instant a contract for the redelivery, that the judges found themselves enabled to apply the statute.