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 Burr v. Wilcox, 13 Allen (Mass.) 269; Fish v. Thomas, 5 Gray (Mass.) 45; Fitzgerald v. Dressier, 7 C. B. n. s. 374; Wills v. Brown, 118 Mass. 137; Young v. French, 35 Wisc. 1ll; Mitchell v. Griffin, 58 Ind. 559; Weisel v. Spence, 59 Wisc. 301; Kelley v. Schupp, 60 Wise. 76; Hewett v. Currier, 63 Wisc. 386; Morrison v. Hogue, 49 Iowa 574; Helt v. Smith, 74 Iowa 667; Dunbar v. Smith, 66 Ala. 490; Westmoreland v. Porter, 75 Ala. 452; Fears v. Story, 131 Mass. 47; Joseph v. Smith, 57 N. W. Rep. (Neb.) 1012. It was held in Rees v. Jutte, 153 Pa. St. 56, that when the defendant's parol promise is to pay a debt of another composed of separate and independent accounts, some of which are liens on the defendant's property and some of which are not, it is valid and enforceable only as to the accounts which were liens when the promise was made.
§ 202. The plaintiff as insurance broker had effected various policies of insurance for one Grayson, and was under accommodation acceptances for him, and had a lien on the policies to indemnify himself against the acceptances. A loss happened, and Grayson needing the policies to present in order to get the money, the plaintiff was applied to, to give them up for that purpose to the defendant, who was Grayson's agent at that time for the management of his insurance affairs. Some of the acceptances were outstanding, particularly one for X181 1s., on which Grayson as drawer and the plaintiff as acceptor had been sued; and the defendant undertook verbally, in consideration of the policies being made over to him, to pay that particular acceptance and the costs, and to deposit money with a banker for the satisfaction of the others as they became due. The plaintiff delivered up the policies, but the defendant did not pay the acceptance or costs. Beside the special count upon the agreement, the declaration contained a count for money had and received, upon which, as Lord Ellenborough observed, the plaintiff was entitled to recover, as the defendant had received a much larger amount from the underwriters. But after recapitulating the facts, and without reference to the common count, his Lordship remarked that in entering into the agreement the defendant "had not the discharge of Grayson principally in his contemplation, but the discharge of himself. That was his moving consideration, though the discharge of Grayson would eventually follow. It is rather, therefore, a purchase of the securities which the plaintiff held in his hands. This is quite beside the mischief provided against by the statute; which was that persons should not by their own unvouched undertaking without writing charge themselves for the debt, default, or miscarriage of another." And the plaintiff had judgment.1
§ 203. It is to be carefully noted that in this case the very lien or security which the creditor held was procured by the defendant for his own use, and it is thus that the transaction acquires the character attributed to it by the court of a sale by one party and a purchase by the other. The circumstance that the payment of the price by the latter is to take the form of discharging the debt of another person is treated by the court as merely incidental, and as not depriving the arrangement of its other and primary and essential character. The true meaning of this decision is well illustrated by reference to a late case in the Court of Exchequer, where it was attempted to be applied. The facts substantially were that the plaintiff had been employed, by a then part-owner of the ship "Mathesis," to procure a charter for the vessel under an agreement that, in consideration of his paying a certain sum due from the ship for repairs, he should have a lien upon her certificate of register, and should collect and receive the freight. The "Mathesis" made her voyage and returned to England, and it turning out that there was difficulty in effecting a settlement between various parties having various interests in or claims upon the ship, they all, including the plaintiff, executed a writing by which, among other things, the defendants agreed to pay the plaintiff his commissions on the charter-party when ascertained, and all together agreed that no person signing the agreement should put or cause to be put any stop on the freight, and that, if such stop was put on, the defendants undertook to have the same removed. This was the writing produced in evidence, and in regard to which the defendants contended that it purported to be an agreement to answer for the debt, default, or miscarriage of another, within the Statute of Frauds, and did not disclose upon the face of it any consideration moving from the plaintiff, and was therefore nudum pactum. They contended also that there was a variance between it and the declaration, which set forth the plaintiff's lien, and that the defendants were the brokers for parties who during the voyage had become owners of the ship, and that it became desirable for them to obtain immediate possession of the ship, and they were therefore anxious that the plaintiff should abandon his right of receiving the freight, and that, in consideration of the premises, and that the plaintiff would relinquish his right to collect the freight, the defendants promised and agreed to pay him his commission; that the plaintiff did relinquish his right of collecting the freight, but that the defendants would not pay him his commission: allegations evidently framed to bring the case within the rule in Castling v. Aubert. The court, however, held there was a variance, and that the contract proved was within the Statute of Frauds; Pollock, C. B., saying: "It is not an agreement by the defendants to pay, in consideration of the plaintiff abandoning his rights, . . . but ... in consideration of his not asserting any lien upon the freight, without regard to the question whether he was or was not entitled to such lien." 1 In another and later case, where the discontinuance of a suit was the consideration of the defendant's promise, and it was contended that the statute did not apply, because a new consideration moved between the parties to the guaranty, the Court of Queen's Bench held otherwise, Patteson, J., remarking that the cases on that point had "been where something has been given up by the plaintiff and acquired by the party making the promise; as the security of goods for a debt."2