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 Ante, §§ 200 a-205, and § 214 c; Small v. Schaefer, 24 Md. 143.
2 Ante, § 212; Fullam v. Adams, 37 Vt. 391; Manle v. Bucknell, 50 Pa. St. 39; Kelsey v. Hibbs, 13 Ohio St. 340; Dillaby v. Wilcox, 60 Conn. 71; Warner v. Willoughby, 60 Conn. 468.
1 Ante, § 206; Stoudt v. Hine, 45 Pa. St. 30; Woodward v. Wilcox, 27 Ind. 207. In one of the most intelligent and instructive opinions that have been delivered upon this subject of guaranties under the Statute of Frauds (Fullam v. Adams, 37 Vt. 397), Chief Justice Poland treats the cases of promises to pay the debt of another who still remains liable, as all reducible to the one principle that the promisor is liable because by the arrangement he becomes the holder of a fund or security which is appropriated to the payment of the debt, and clothed with a duty or trust in respect thereto which the law will enforce in favor of the party to whom the promise is made. He says, "It has been often decided, that where the purchaser of property promises to pay the price to a creditor of the vendor, such promise is binding, though not in writing, and the vendor still remains liable for the debt. . . . And where a debtor transfers funds or property to another for the purpose of paying his debt, and the person thus holding the debtor's funds or property promises the creditor to pay his debt, such promise is held good, though not in writing. . . . We apprehend the true principle why the promise to the creditor is valid without writing, is the same in both these classes of cases. In both, the party making the promise, holds the funds of the debtor for the purpose of paying his debt, and as between him and the debtor, it is his duty to pay the debt, so that when he promises the creditor to pay it, in substance he promises to pay his own debt, and not that of another; and though the debtor still remains liable for the debt, his real relation is rather that of a surety for the party whose duty it is, and who has promised to pay his debt, than of a principal for whom the other has become surety or guarantor. He holds a fund in trust, under a duty to pay it to the creditor, and he makes an express promise to perform it. . . . The cases which decide that where a creditor holds a security for his debt, and surrenders it to a third person, for his own benefit, upon his promise to be answerable for the debt, stand really upon the same substantial principle."