Stewart v. Campbell , 58 Me. 439 ( 1870 )

Appleton, C. J.

The plaintiff had a debt against one Sprowl. Sprowl had a debt against one Dyer, and a lien therefor upon a vessel he, Dyer, was building for these defendants and others.

According to the plaintiff’s testimony, Dyer came to his place of business and agreed to pay the amount which Sprowl owed him. Subsequently, on the same day, he informed him that he was unable to do it. The plaintiff advised Sprowl of this, who told him that he should have the benefit of his lien-claim upon the vessel, but never assigned the same. Sprowl went to see David W. Campbell, one of the defendants, who returned with him, when, according to the plaintiff’s testimony, the following conversation, which was all they had together, took place. “ I think,” testifies the plaintiff, “ the first words Mr. Campbell said were, that Sprowl had told him I was going to stop the vessel. He said they had built a large interest in the vessel, and did not want her stopped for so small a bill, for they had paid too much money in to have the vessel detained; that Dyer -was away, and that if he, Dyer, did not pay the money, as he had told Sprowl and me, that they would see it paid. I asked Mr. Campbell if he wanted it charged to the company, and he said he did not, for he knew Dyer would pay the money.”

The plaintiff did not discharge Sprowl, nor does he say he did, nor did Sprowl release Dyer or his lien on the vessel, or agree to so do, though he did not enforce it as he would have done had it not been for the expectation that the debt in suit would have been paid. Dyer did not pay the plaintiff, but collected of the defendants the amount due from them, so that they have no funds of his in their hands.

By R. S., c. 41, § 1, it is provided that “ no action shall be maintained ... to charge any person upon any special promise to answer for the debt, default, or misdoings of another, . . . unless the promise, contract, or agreement, on which such action is brought, or some memorandum thereof, is in writing and signed by the party sought to be charged therewith, or by some person thereto lawfully authorized.”

It is difficult to perceive why the promise of the defendants, if made as the plaintiff claims, is not within the clear and explicit language, and the true intent and meaning of the statute. The debt of Sprowl to the plaintiff, and that of Dyer to Sprowl, remained due and outstanding, and could be enforced at any moment. The defendants still remained indebted to Dyer, and the lien of Sprowl was undischarged. If the promise was to pay the debt of Sprowl to the plaintiff, that debt and the lien of Sprowl having never been discharged, it is the verbal promise to pay the debt of another, and is the very case for which the statute makes special provision.

That suck is the true construction of the statute is established by the almost entire concurrence of judicial authorities. “ But if C. had requested A. to forbear to sue B. for the debt, and A. had forborne accordingly, that was a good consideration at common law to support the promise, and is good since the statute if the promise be in writing.” Forth v. Stanton, 1 Wms. Saund. 213. In Watson v. Randall, 20 Wend. 201, it was decided that an agreement to forbear to sue a debtor is a good consideration of the promise of a third person to pay the debt; but to render the promise obligatory, it must be in writing. “ While the debt remains a subsisting demand against the original debtor,'the promise of a third person is collateral, and must be in writing. The authorities are all uniform,” remarks Nelson, C. J., in delivering the opinion of .the court, “ that the promise to pay, in consideration of forbearance, is within the statute. When there is a verbal promise to pay the amount of the debt of another, in consideration that the creditor will forbear to sue for a limited time, the forbearance is a new consideration upon which the promise is founded. But such cases are held to be within the statute.” In Nelson v. Boynton, 3 Met. 396, it was held, that a promise to pay the debt of a third person, which was in suit, and secured by an attachment of personal property, in consideration of the holders discontinuing the suit, is within the statute, and so not binding unless in writing. “ To bind one, therefore,” remarks Shaw, C. J., “ for the debt or default of another, two tilings must concur; first, a promise on good consideration; and, secondly, by evidence thereof in writing.” The same principles are fully established in Stone v. Symmes, 18 Pick. 467, and Curtis v. Brown, 5 Cush. 488. This view of the statute was adopted in Harrington v. Rich, 6 Venn. 666. In Jones v. Walker, 13 B. Mon. 357, the supreme court of Kentucky held, that if the debtor be discharged, and the defendant promise to pay the creditor the debt thus discharged, that it is not within the statute; but when the original debt is not extinguished, nor the original debtor discharged till payment is made by the party promising to pay, it is within the statute. In Waggoner v. Gray, 2 Hen. & Mumf. 603, the facts were these: one Gray, the defendant’s intestate, being indebted to Slaughter, and Slaughter to Waggoner, the plaintiff, Gray, in consideration of his debt to Slaughter, promised the plaintiff to pay the debt of Slaughter to him; but the plaintiff did not thereupon discharge Slaughter, and the promise of the defendant was held to be collateral and void by the statute of frauds. “ The distinction,” says Roane, J., “seems to be, that when the person, in whose behalf the promise is made, is not discharged, but the person promising agrees to see the debt paid, so that the promise has a double remedy, the promise is collateral, and must be in writing.” This view of the law was subsequently affirmed in Ware v. Stephenson, 10 Leigh, 155, and in Noyes v. Humphries, 11 Grattan, 643. The general rule is, that as long as the debt of the person, for whom the promise is made, remains, the promise is collateral. “ The statute,” remarks Parke, B., in Hargreaves v. Parsons, 13 Mees. & Welsh. 560, “ applies only to promises made to the persons to whom another is already or is to become answerable. It must be a promise to be answerable for a debt or default in some duty by that other person towards the promisee.”

There is a species of novation, called delegation, in the civil law, which “ is effected by the intervention of another person, whom the debtor, in order to be liberated from his creditor, gives to such creditor, or to him whom the creditor appoints, and such person so given becomes obliged to the creditor in place of the original debt- or.” Burge on Suretyship, 173. But it is necessary that there should be the concurrence of the person delegating, that is, of the original debtor and of the person delegated, or the person whom he appoints. The intention of the creditor to discharge the first debt- or and , accept the second in his place, must, in order to give effect to the delegation, be perfectly evident.” Ib.>174. There are authorities which show that the circumstances constituting, under the Roman law, a delegation, sustain the promise of a third person to pay • a debt of another to his creditor, when that debt has been extinguished, and the debt of the person promising has been substituted ■upon sufficient consideration therefor. But there must be the mutual assent of all parties to make the substitution effectual at common law. Butterfield v. Hartshorn, 8 N. H. 348. In Tatlock v. Harris, 3 D. & E. 180, Buller, J., says, “ suppose A. owes B. ¿£100, and B. owes C. ¿£100, and they meet, and it is agreed between them that A. shall pay C. ¿£100, B.’s debt is extinguished, and C. may recover the same against A.” “ If,” says Cloudman, J., in Bird v. Gammon, 3 Bing. N. C. 883, “ debtor, creditor, and a third party agree that the third party shall be substituted for the debtor, the debtor is exonerated. Fairlee v. Benton, 8 B. & C. 395, has decided that, establishing to that extent an exception to the rule that debts cannot be assigned.” 1 Parsons on Contracts, 187. Such promises are not within the statute; but in the present case no such promise is proved on the part of the defendants, for no debts have been discharged, nor was the promise of the defendant unconditional, according to the statement of the plaintiff to whom it was made.

In accordance with those views are the decisions of this court. It was held, in Plummer v. Lyman, 49 Maine, 229, that a parol promise to accept an order from a debtor in favor of his creditor, between whom and the maker of the promise there had been no privity, was within the statute of frauds as a promise to pay the debt of another. Thus, where A. had a claim on a vessel for materials used in building it, and B. held the vessel to secure him for advances made to the builder, a promise by B. to accept the order of the builder in favor of A., for the amount of his claim, cannot be enforced, unless it appears to have been for some consideration, such as a discharge of A.’s lien on the vessel, or his promise to discharge it, or release his claim upon the builder. In the case at bar there was no discharge of lien or promise to discharge or release of the defendant of the amount in controversy. In Richardson v. Williams, 49 Maine, 558, A. being indebted to B., C. verbally promised B. to pay him the amount, and charged it to A. without the consent of the latter. It was held that B., not having released or assigned his debt, the promise was without consideration, and that such promise was within the statute of frauds, and not binding. In Furbish v. Goodenow, 98 Mass. 297, it was decided, that- an oral promise to pay the debt of another is within the statute of frauds, if the original promisor remains liable, and no consideration moves from the creditor to the new promisor, although there is a valuable consideration moving from the original debtor to the new promisor. But here there is no consideration moving from anybody to the defendant.

But it is urged that these views are at variance with the current of judicial decisions in this State, and reliance is placed upon numerous decisions by our courts. In Russell v. Babcock, 14 Maine, 139, it was held, that an agreement to delay the collection of an execution was a sufficient promise by a third person to pay the same, and that such promise need not be in writing. But this decision would repeal the statute, and it has since been overruled. Referring to this decision in Hilton v. Dinsmoor, 21 Maine, 410, Shepley, J., uses the following language: “ If this was in reality the ground of the decision in that case, and the abstract of the reporter is to that effect, we are constrained to say it is unsupported by the authorities.” To the same effect was the case of Doyle v. White, 26 Maine, 341.

In Dearborn v. Parks, 5 Greenl. 81, the debtor of the plaintiff left funds in the hands of .the defendant, with which he was to pay his (the debtor’s) debt to the plaintiff. ■ The defendant receiving these funds, or being allowed for them in settlement, as if paid to the plaintiff, promised to pay them to the plaintiff. The plaintiff, therefore, had funds in the defendant’s hands, placed there for his benefit, for which he might well maintain a suit. In Hilton v. Dinsmoor, 21 Maine, 210, the consideration of the defendant’s promise was forbearance to sue, and funds placed by the debtor in the defendant’s hands with which he was to pay the debt. The court held the promise in consideration of forbearance was within the statute, but the funds having been placed in the defendant’s hands by the plaintiff’s debtor, the promise of the defendant in consideration thereof was not within the statute. In Rowe v. Whittier, 21 Maine, 545, notice was taken of the fact that the plaintiff had not discharged his debt against his debtor, which he sought to enforce against tlie defendant. “ If,” says Whitman, C. J., “ the claim was a legal one against Patten & Co. (the debtors of the plaintiff), it does not appear that they were discharged from it in consideration of the promise made by tlie defendant, and if it had so appeared, the defendant not being otherwise liable, his promise would not have been obligatory under the statute of frauds without a memorandum in writing.” In Brown v. Atwood, 7 Greenl. 356, where S. sold a vessel to A., who promised in consideration thereof to pay B. a debt due from S., upon which promise B. brought his action against A., it was held that such promise was good, though not in writing, for it was a promise to pay his own debt, though enuring to the benefit of B. The plaintiff had funds in the defendant’s hands, left by his debtor, and might well call them out. In Maxwell v. Haynes, 41 Maine, 559, the plaintiff’s debtor sold out to defendant, leaving funds in Ms hands to pay his debt to the plaintiff. In all these the defendant held funds of tlie debtor in bis hands designated and set apart for the payment of Ms debt, and held by tlie defendant for that purpose. In Fullam v. Adams, 37 Verm. 391, Poland, C. J., referring to this class of cases, says, “ And we believe it will be found that in all tlie cases now regarded as sound, when it has been held that a parol promise to pay the debt of another is binding, tlie promisor held in his hands funds, securities, and property of the debtor devoted to the payment of the debt, and bis promise to pay attaches upon his obligation or duty, growing out of tlie receipt of tlie fund.”

blow this action cannot be sustained upon the doctrines of the cases last referred to upon wliich reliance is placed for that, purpose. The debt of the defendant to Dyer was not discharged, and he has since paid it. The same is the case with tlie claim of Sprowl against Dyer, and of the plaintiff against Sprowl. No action or right of action is discharged, and there never has been a time when each creditor might not have successfully maintained an action against his debtor.

Nor can the plaintiff recover on the ground that funds have been placed in tlie defendants’ hands to meet this specific debt. Dyer placed none there, nor did Sprowl, nor in fact have the defendants the funds of anybody with which to meet this debt.

If Sprowl neglected to enforce his lien, it was not in consequence of any agreement not to do it, or any release of it. The case shows nothing that would have been a bar to its enforcement at any time.

There is a class of cases, as in Alger v. Scoville, 1 Gray, 391, in which it was held, that the promise to a debtor to pay his debt to a third person is not a promise to answer for the debt of another within the statute. So in Pike v. Broivn, 7 Cush. 136. In Eastwood v. Kenyon, 11 A. & E. 446, it was held, that a promise by the defendant to the plaintiff to pay A. B. was not within the statute. “ The facts were,” says Lord Denman; “ that the plaintiff was liable to a Mr. Blackburn on a promissory note; the defendant for a consideration, which may for the purpose of the argument be taken to have been sufficient, promised the plaintiff to pay and discharge the note, to Mr. Blackburn. If the promise had been made to Mr. Blackburn, doubtless the statute would have been applied, and it would then have been strictly a promise to answer for the debt of another; and the argument on the part of the defendant is, that it is not less the debt of another because the promise is made to that other, viz., the debtor and not to the creditor, the statute not having in terms stated to whom the promise contemplated by it is to be made. But upon consideration we are of opinion that the statute only applies to promises made to the person to whom another is answerable.” But the promise here is not made to Dyer nor to Sprowl, and when made, as in the present case, is within the statute.

According to the facts, as stated by the plaintiff in his testimony, and the law as applicable to these facts, he cannot on his own showing maintain this suit. Still less can he do it, if the testimony of the defendant is deserving credit.

The defendant’s testimony is as follows: “ Sprowl wanted me to go into Mr. Stewart’s, and he spoke about this lien-claim; as near as I-can recollect, I told him that I did not know whether he had a claim on the vessel. I had only his word for it, but rather than have any trouble about the claim, I would pay Stewart, provided he would first satisfy me that it was due from Dyer. I required him to settle with Dyer so that we could charge Dyer. Whatever promise I made was upon this condition. I so understood it and so intended to be understood. We paid no bill, that I recollect of, ■without their being first audited by Dyer or on his order.” No order from Dyer was obtained, nor did Sprowl settle with him. After some time elapsed, Dyer presented his bill, which the defendants paid.

Upon the defendant’s version of the transaction he is exempt from liability. His promise was to Sprowl, if to any one, and it was upon condition. The condition was never performed, so that no liability ever attached, and the suit is not in the name of Sprowl. The statement of the defendant has the greater marks of probability, and is more in accordance with the natural course of business. The burden is on the plaintiff to prove the facts necessary to establish his case, and we think he has failed to do it, and upon this ground, if on no other, the plaintiff must fail.

Kent, J., concurred.

Walton, J.

It is perfectly wmll settled in this State that when a promise to pay the debt of another is founded on a new consideration beneficial to him who makes the promise, such a promise is not within the statute of frauds. “ A person who receives a consideration may be bound by any lawful promise founded upon it, and that promise may as well be to pay another’s debt as to do any other act.” This promise may be absolute or conditional; to pay money or perform labor; and having a valuable consideration of its own to rest upon, it is a new, original, and independent undertaking, and may, like any other lawful contract, be enforced in law, or damages recovered for the breach of it.

Thus, where the defendant took a conveyance of land, and in part consideration thereof promised to pay a note from the grantor to a third person, it was held that the promise was not within the statute of frauds. Dearborn v. Parks, 5 Greenl. 81.

So, where the debtor sold a vessel to the defendant, who, in consideration thereof, promised to pay the plaintiff’s debt, it was held that the promise was obligatory, though not in writing. Brown v. Atwood, 7 Greenl. 356.

And it was held in one case, that an agreement to delay the collection of an execution against one was a sufficient consideration for a promise by another to pay the amount thereof, and that such a promise was not within the statute of frauds. But the correctness of this decision may well be doubted, unless it can be sustained upon the ground that the defendant had security for his undertaking. There was evidence that he said the debtor had secured him. Russell v. Babcock, 14 Maine, 138.

In a later case, where the defendant promised to pay the debt of a third person in consideration of property put into his hands, as well as forbearance to sue, the promise was held not to be within the statute of frauds; but it was denied that forbearance alone would take the case out of the operation of tlje statute. Hilton v. Dinsmore, 21 Maine, 410.

And in a still later case, where the debtor had been logging for the defendants, and in the spring sold out all his “ fixings ” to them, and they promised to pay all his bills, it was held that their promise was obligatory, and one of the creditors recovered his debt in a suit against them. Maxwell v. Haynes, 41 Maine, 559.

In a recent case in Massachusetts, it was held that an oral promise to pay the debt of another is within the statute of frauds, if the original debtor remains liable and no consideration moves from the creditor to the new promisor, although there is a valuable consideration moving from the original debtor to the new promisor. Furbish v. Goodnow, 98 Mass. 296. But it is conceded in the opin7 ion of the court in that case that the law is otherwise in New York, Vermont, and Maine.

In a recent case in New York, the court of appeals reviewed the authorities in a full, clear, and able manner, and the court held that “ a person who receives a consideration may be bound by any lawful promise founded upon it, and that that promise may as well be to pay another’s debt as to do any other act.” Three members of the court were in favor of adhering to an earlier decision in, which it had been held that injury to the creditor alone weis a sufficient consideration to uphold such a promise, as where he relinquished security ; but a majority of the court held that it must be a beneficial consideration moving to the party promising. Mallory v. Gillett, 21 N. Y. 412.

The difficulty in this case is, that the evidence fails to establish any consideration whatever for the defendants’ promise. At least, such is the opinion of a majority of the court. It is true, that the plaintiff’s debtor pretended to have a lien on the defendants’ vessel, but the evidence fails to establish such lien; or, if he had one, that he discharged it. So far as appears, therefore, there was no consideration whatever for the defendants’ promise, if one was in fact made, which they emphatically deny. It is clear, therefore, that the plaintiff cannot recover. Plaintiff nonsuit.

Cutting, Dickerson, and Danforth, JJ., concurred in the result.