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 Caballero v. Slater, 14 C. B. 300.
3 Stead v. Liddard, 1 Bing. 196; Colriham v. Showier, 3 C. B. 312; Adams v. Bean, 12 Mass. 136; Bailey p. Freeman, 11 Johns. (N. Y.)221; Douglass v. Howland, 24 Wend. (N. Y.) 35; Lecat v. Tavel, 3 McCord (S. C.) Law 158; Dorman v. Bigelow, 1 Fla. 281; Simons v. Steele. 36 N. II. 73. See, however, Draper v. Snow, 20 N. Y. 331; Otis v. Hasel-tine, 27 Cal. 80. But an indorsement, etc., subsequently to the making and delivery of the principal obligation is not sufficient, without itself showing the consideration. Hall v. Farmer, 2 N. Y. 553, affirming on error the judgment of the Supreme Court, in 5 Denio 484; Brewster v. Silence, 8 N. Y. 207, affirming the judgment of the Supreme Court, in 11 Barb. 141; Rigby v. Norwood, 31 Ala. 129; Gould v Moring, 28 Barb. (N. Y.) 444; Wood v. Wheelock, 25 Barb. (N. Y.) 625. Or even at the will in like manner be held to appear, namely, the plaintiff's becoming a party to the principal agreement; and the fact that the two instruments were so connected in time, and that their delivery formed one entire transaction, may be proved by parol evidence.
§ 407. Such was the decision of the Supreme Court of New York, pronounced by Chief Justice Kent, in the case of Leonard v. Vredenburgh. There the defendant wrote and signed, at the foot of a promissory note, purporting to be for value received, the words, "I guaranty the above." The facts were that the maker of the note had applied to the plaintiff for certain goods upon credit, but the plaintiff had refused to furnish them to him without security, whereupon the note was made, with the defendant's guaranty appended, the whole delivered to the plaintiff, and the goods furnished as desired. At the trial, the plaintiff offered parol testimony to show this connection between the making of the note and the giving of the guaranty; but the Chief Justice himself rejected it, as an attempt to prove the consideration of the guaranty by parol. On subsequent argument before the full court, he united with them in a different conclusion, and the opinion then delivered by him is one of important bearing upon this branch of our investigation. He remarks that, admitting the origin of the contract to be such as the plaintiff offered to show, there was no necessity for, nor was there in fact, any consideration passing directly between him and the defendant, and of course none was to be proved; that it was one original and entire transaction, and the sale and delivery of the goods supported the promise of the defendsome time, if the principal obligation is made in payment of a pre-existing debt. Hall v. Farmer, supra. The cases of Lequeer v. Prosser, 1 Hill (N. Y.) 256; and Manrow v. Durham, 3 Hill (N. Y.) 584, seem to hare been overruled by the two just cited. Moog v. Strang, 69 Ala. 98. It is held in New Jersey (Freeh v. Yawger, 47 N. J. Law 157) that an indorsement of a note after maturity is good, notwithstanding that the consideration does not appear otherwise than from the fact of the indorsement.
§ 408. It will be observed that such a case as the above differs from those in which a guaranty is on its faoe expressed to be for the security of credit which is to be allowed to the third party, in this, that it merely refers to another writing from which that credit appears; the parol evidence being admitted for the purpose of establishing, between the two, that unity of time and transaction which would be manifest if they were both comprised in one instrument. And such seems to be the light in which the distinguished judge whose words we have been quoting regarded it. But in another part of that opinion he remarks upon the case before him, that the purchaser's note "given for value received, and, of course, importing a consideration on its face, was all the consideration requisite to be shown. The paper disclosed that the defendant guarantied this debt of J. [the purchaser]; and if it was all one transaction, the value received was evidence of a consideration embracing both the promises." Are we then to conclude that the principal agreement, with which a memorandum of guaranty is thus shown to have been connected as one transaction, must itself express on its face, or necessarily import, a consideration? The whole tenor of the opinion seems to show that the case was not determined upon that reasoning, and we may therefore be pardoned for suggesting a doubt in regard to it. If it were enough that the principal agreement expressed or imported a consideration, it would seem to follow that a guaranty written upon it at a subsequent date would be supported by such consideration; but this is clearly not so.1 It must be written contemporaneously with it and as part of the same transaction. But if so written, is it not enough, although the principal agreement do not itself express or import a consideration? Suppose the case of an engagement from A. to B., which would be good by parol, but is in fact reduced to writing, and contains no statement or implication of the consideration upon which it is founded beyond the fact that a credit has been given to A. by B.; and upon this engagement, at the same time, and as part of the same transaction, C. writes a guaranty that it shall be performed; it is submitted that C. is liable, his memorandum showing the consideration of his guaranty, namely, B. 's acceptance of A. 's engagement. That engagement is binding upon A., though the consideration be not stated or necessarily implied in the writing, but proved by parol; and consequently the acceptance of it by B. is a valid inducement to support C. 's guaranty that it shall be performed.2
1 Leonard v. Vredenhurgh, 8 Johns. (N. Y ) 40; Union Bank of Louisiana p. Coster, 3 N. Y. 203; D'Wolf v. Rabaud, 1 Pet. (U. S.) 476. The first of these cases is sometimes said to have decided that the rule in Wain p. Warlters did not apply to guaranties made contemporaneously with, and for the purpose of, procuring the credit to be given to the third party. See Smith v. Ide, 3 Vt. 290; Lecat v. Tavel, 3 McCord (S. C.) Law 158. But this appears to be a misapprehension of that case, which really decided, not that the memorandum of such guaranties need not show any consideration, but that it need not show a separate one from that which supported the third party's obligation. The decision has lately been disapproved, but it would seem unnecessarily, in the N. Y. Court of Appeals. Brewster v. Silence, 8 N. Y. 207.