Palmetto Mfg. Co. v. Parker & Anderson , 123 Ga. 798 ( 1905 )

Cobb, J.

“ Where a creditor, his debtor, and a third person who owes the debtor agree in parol that such third person shall be substituted for the debtor and that the latter shall be released, the case is not within the statute of frauds, so as to require the agreement to be in writing, but the debt is extinguished as to the debtor, and the third person becomes, by substitution, the debtor in his place.” Sapp v. Faircloth, 70 Ga. 690. See also, to the same effect, Brown v. Harris, 20 Ga. 403; Harris v. Young, 40 Ga. 65; Anderson v. Whitehead, 55 Ga. 277; Steadwell v. Morris, 61 Ga. 101; Ferst v. Bank of Waycross, 111 Ga. 229. In order, therefore, to take such a transaction without the operation of the statute of frauds, it must appear that the person substituted for the debtor was, by agreement between the creditor, the debtor, and himself, substituted for the original debtor, who was released from the promise. In other words, it must be shown that the person substituted as the debtor in the place of the person released, became such as the result of an agreement in which all three concurred. In every case, either there must be an express promise to pay the creditor by the person assuming the debt, or the conduct of such person must be such as that a promise to pay the debt can be implied. Of the latter character was the case of Davis v. Tift, 70 Ga. 52.

In the light of these principles, what is the legal effect of the petition in the present case ? It is clear from the allegations that Parker, the original debtor, and the defendants entered into an agreement by which they were to pay Parker’s debt to the plaintiff. In furtherance of this agreement they retained from money due by them to Parker the amount of such debt. It is obvious, therefore, that, as between Parker and the defendants, they were under a legal duty to apply the amount retained to the debt due the plaintiff. If Parker has not been released from the debt to plaintiff, and he is compelled to pay to the plaintiff, he would have his action against the defendants for a breach of their undertaking with him. The sixth paragraph of the petition alleges that the plaintiff was informed of the agreement between Parker and the defendants, and “ agreed and consented ” for the defendants to be substituted for Parker. Clearly this was not intended to amount to an averment that the defendants made any promise to the plaintiff to pay to it the amount of Parker’s debt. Properly construed, the allegations are simply that the plaintiff heard of the agreement between Parker and the defendants, and interposed no objection, but approved such an arrangement and was willing to abide by it. The allegation that the defendants were notified by the plaintiff that it consented to the agreement, in the absence of an allegation that the defendants and Parker then concurred in the substitution, would not prevent the case from being obnoxious to the statute of frauds. There was no error in sustaining the demurrer.

Judgment affirmed.

All the Justices concur, except Simmons, O. J, absent.