Brumm v. Gilbert ( 1899 )

Truax, J.

This is an action to recover upon a written agreement, guaranteeing the debt of a third person. It is alleged in the complaint, among other things, that on the 14th day of January, 1895, at the'city of Paris, France, the defendant, for a valuable consideration, made, executed, and delivered to the plaintiffs’ assignors, the following instrument: “ I guarantee the ‘ Eew account ’ of Mr. W. 0. Gilbert, my husband, with Messrs. Abaye Eison Bimar & Go., amounting to this date to One hundred and twenty thousand francs, representing the disbursements made by the firm of Abaye Eison Bimar & Co., since the first day of Janu-' ary, one thousand eight hundred and ninety-one. It is well understood: 1. That all the profits obtained from Mr. Gilbert’s business from and after this day shall be applied to the discharge of this account. 2. That in case of the death of Mr. Gilbert, Messrs. Abaye Eison Bimar & Co., who are to collect his life insurance, will discharge me completely from the present guaranty. 3. In case that, contrary to the expectation of Mr. Gilbert, he should not be able to pay off this account, between now and the end of Der cember, 1896, and should oblige you to require the execution of this guaranty, I shall only be able to acquit myself towards you by paying you one-half of my income, amounting to six thousand francs a year, not possessing, any capital of which I can dispose. I will therefore require the necessary and- proportionate delay. Made at Paris the fourteenth day of January, one thousand eight hundred and ninety-five. (Signed) M. Gilbert. ■ I authorize the above; (signed) W. C. Gilbert; ” that on the 14th day of January, 1895, the said W. 0. Gilbert was indebted- to the firm of Abaye -Eison Bimar & Co., in the sum of 120,000 francs; that the defendant made and executed the above agreement for the purpose of guaranteeing said indebtedness; that on the 5th day of December, 1896, said Abaye Eison Bimar & Go. assigned their claim against said W. G. Gilbert to the firm of E. Eison Bimar & Co., and also assigned all their right, title and interest in and under the above agreement; that on the 1st day of January, 1898, E. Eison Bimar & Co., assigned the said claim against W. C. Gilbert to these plaintiffs, and also all their, right, title and interest in and under the above agreement; that said W. 0. Gilbert has not paid any part of bis said indebtedness, and that this defendant has been requested to pay 6,000 francs for the year 1896, and 6,000 francs for the year 1897, but has failed to pay the same or any part thereof. The defendant demurs upon the ground that the facts stated do not constitute a cause of action.

The instrument above given is a promise to pay the existing debt of another, and I am of the opinion that it is void on its face, because it does not state a consideration. Fío consideration for the promise.is expressed in the instrument itself and none can be spelled out or implied from any of its provisions. The principal debtor is not relieved from any liability, no extension of time is granted to him, no credit is extended, no security surrendered. It is an absolutely naked promise on the part of the defendant to pay the existing debt of another. The Statute .of Frauds requires that every promise to answer for the debt, default or miscarriage of another person shall be void unless such agreement or some note or memorandum thereof is in writing and subscribed by the party to be charged. From the earliest times the. courts of this state, following Wain v. Warlters, 5 East, 10, have held, with but few exceptions, that the agreement must contain the whole contract, including the recital of a consideration, and that one could not go outside óf the written instrument to ascertain the consideration. Sears v. Brink, 3 Johns. 210; Kerr v. Shaw, 13 id. 236; Castle v. Beardsley, 10 Hun, 343; Thompson v. Blanchard, 3 N. Y. 335; Clarke v. Richardson, 4 E. D. Smith, 174; Wood v. Wheelock, 25 Barb. 625; Sackett v. Palmer, 25 id. 179; Wright v. Weeks, 25 N. Y. 155; Barney v. Forbes, 118 N. Y. 580. The leading case to the contrary, Speyers v. Lambert, 1 Sweeney, 338, was overruled by the Court of Appeals in Barney v. Forbes, supra.

This case is to be distinguished from that class of cases in which the contract of guarantee is made at the same time that the original indebtedness is incurred, or prior to the incurring thereof. In this case the plaintiffs have set forth a copy of the instrument. Its terms cannot be varied. It is complete in itself, and under the authorities above cited nothing can be added to it. It does not contain all the elements required by the Statute of Frauds, and for that reason is void. The mere taking of the guarantee by plaintiffs’ assignor did not of itself extend the time of payment of the original indebtedness, .or suspend the remedy thereon. Gahn v. Niemcewicz, 11 Wend. 312; Smith v. Ives, 15 id. 182; Stalker v. McDonald, 6 Hill, 93; Austin v. Curtis, 31 Vt. 64; Wood v. Robinson, 22 N. Y. 564; Cary v. White, 52 id. 138; Place v. McIlvain, 38 id. 96; Fellows v. Prentiss, 3 Den. 512.

But, even if it did extend the time of payment of the original indebtedness, it would not furnish a valid consideration for the promise of the defendant. FTeither forbearance to sue the original debtor, nor the surrender to him by .the creditor of a-seeurity for the debt, although made at the request, of the promisor, is sufficient to take the case out of the statute. Smith v. Ives, 15 Wend. 182; Watson v. Randall, 20 id. 201; Mallory v. Gillett, 21 N. Y. 412; Ackley v. Parmenter, 98. id. 425; White v. Rintoul, 108 id. 222. To take the case out of the, statute,, said the Court of Appeals, in Ackley v. Parmenter,: supra, there must be a consideration moving to the promisor, either from the creditor or the debtor, and beneficial to him, thus imparting to the promise the character of an original undertaking.

The case of Smith v. Ives, supra, is very much like-the case at bar. The declaration in that case contained several counts. The first ivas on a guaranty bearing date March 13, 1829. By this guaranty the defendant engaged to guarantee to the plaintiff the . eventual payment of a note, dated June 5, 1828, payable February 1, 1829, given by one Torrey to the plaintiff for the sum of $59. It was alleged that this guaranty was in writing, indorsed on the back of the note, signed by the defendant, and given for a valuable consideration. In the second count the plaintiff alleged that at the request of the defendant he forbore to collect the said note of the maker, and that the defendant on the 13th of March aforesaid, in consideration that the plaintiff would forbear to sue the maker on the note, promised by writing subscribed by him and indorsed on the note to pay to the plaintiff the amount-of the note. The defendant pleaded, among other things, that no consideration was expressed in the writing made by the defendant, and to this plea the plaintiff demurred. It is true that the -case was decided-in 1836 after the amendment of 1830, which added to the statute the words, “ expressing the consideration ”, but the cause of action arose before that amendment, and it was’ held in this case,, as it has frequently been held since, that the amendment of 1830, was declaratory of what was the true meaning of the old statute. It was held that in a promise to guarantee the payment of a note overdue when the promise is made, expressing no consideration, forbearance to sue will not- be implied as the consideration moving to the promise,- and that forbearance to sue is not a new consideration, taking the case out of the statute. ■

The view that I have taken on this point renders it unnecessary-for me to consider the other questions that .are raised by the defendant., • This -is the- second time that a demurrer to the com- • plaint in this action has been sustained. In view of that fact, and because the present demurrer goes to the very right of plaintiffs to maintain an action upon the instrument set forth in the amended complaint, I shall not give plaintiffs the right to amend.

Demurrer sustained, with , costs.