Taylor v. Pratt , 3 Wis. 674 ( 1854 )

By the Court,

Cjrawfokd, J.

The second section °* chapter 16, of the Revised Statutes, provides that “every special promise to answer for the debt, de-fau^ or miscarriage of another person” shall be void, “ unless such agreement or some note or memorandum thereof, expressing the consideration, be in writing, and subscribed by the party charged therewith.” ■ Aside irom the adjudications of other courts upon a similar provision of the statutes of other governments, it seems to us that there is but little l oom for doubt as to the true import and construction to be placed upon this language. But there is a conflict of opinion to be found in the decisions of the courts of some of the States and of England. ■

The language of our statute in that every agreement shall be void in certain cases enumerated, unless in writing, <&c. The component parts of a valid agreement are defined thus : 1. Persons or parties able to contract. 2. A thing or subject concerning which the contract is to be made. 3. A lawful consideration, or quid pro quo. 4. Apt and proper words to express the agreement clearly and explicitly. 5. The assent of the contracting parties. (vide Comyn on Contracts, 2 ; Chitty on Con. 2 ; Coke Lit. 35 b.; Bouvier's Law Dic. Tit. Agreement.

This being the definition of the necessary parts of an agreement, when the statute requires that it shall be in writing to be valid in certain cases, it but adds another quality to it; but the writing cannot fully express an agreement without setting forth the consideration, which is one of its essential parts and wifch-out which it would be a mere. -nudum pactum. The leading case of Wain vs. Walters, 5 East 10, which gave a construction to the provision of the English statute of frauds on this subject, proceeds upon this doctrine. The case of Saunders vs. Wakefield, 4 Barn and Ald. 595, re-affirmed the doctrine that the con-sidération must be set out in the writing, and the cases of Jenkins vs. Reynolds, 3 Brod and Bing 14 ; Morley and others vs. Boothby and Clark, 3 Bing 107, and numerous other adjudications in the English courts, show that the principle of Wain vs. Walters is the settled law there.

It is to be observed, however, that the English statute (29 Car. chap. 3, sec. 4) differs in words from our statute, because the former does not expressly require the consideration to be set. out in the memorandum'or note, while the latter expressly provides that the note or memorandum shall contain a statement or expression of the consideration.

Now, when we recur to the policy and object of the statute before us; to its plain language, and to the fact that to permit parol proof of the consideration would be a palpable violation of the rule of ev-idenee established by the statute-itself, we are irresistibly led to the conclusion that the enforcement of the statute requires that not only the contract, promise, or agreement, but also the ingredient which renders it efficacious, namely : the consideration must be embraced in the writing, note, or memorandum, else it is void. The language of Mr. Justice G'rose in the case above cited, is very forcible. . He said, “If it were only necessary to show what one of them” (the parties to the agreement) “ was to do, it would be sufficient to state the promise, made by the defendant who was to be charged with it. But if we were to adopt this construction, it would be the means of. letting in those very frauds and perjuries which it was very object of tbe statute to prevent, for with - out tbe parol evidence, tbe defendant cannot be c]jarge(j Upon tbe written contract, for want of a consideration in law to support it. Tbe effect of tbe pa-rol evidence then is to make bim liable ; and thus be would be charged with tbe debt of another by parol testimony, when tbe statute was passed with tbe very intent of avoiding such a charge by requiring that tbe agreement by which musk be understood the whole agreement, should be in writing.”

Tbe Supreme Court of New York in the case of Sears vs. Brink and Brink, 3 John. 210, held “that tbe consideration, as well as tbe promise, must be in writing. Tbe statute provides that tbe party shall not be charged, unless tbe agreement upon which tbe action shall be brought be in writing. ■ This means tbe whole agreement, of which tbe consideration forms an essential and material part,” and 'Mr. Justice Nelson, in Rogers vs. Kneeland, 10 Wend. 219, 250, says that tbe construction adopted in Sears vs. dir ink and Brink, “ has been followed in all subsequent cases,’ and it requires not only that tbe promise should be in writing, but that there be a consideration also in writing to take tbe case out of tbe fourth section of tbe statute.” Again, in Smith vs. Ives, 15 Wend. 182, Chief Justice Savage emphatically declares that “ ever since tbe case of Sears vs. Brink it has been uniformly held, in this court, that to take a case out of tbe statute of frauds, not only tbe promise, but tbe consideration for tbe promise must be in writing.” Tbe same learned Judge, in Parker vs. Wilson, 15 Wend. 343, in noticing tbe difference betweencthe old statute of frauds of New York, which was a transcript of tbe English statute, in respect to tbe question of guaranty of the debt of another person, and the provision of the subsequent revised statute of that State, (in' all respects like our own State) holds that “ the only difference is between the words express and imph/, but that is a very material one in the present case. “ I consider” (says he) “ the statute cannot be misunderstood ; the consideration must be expressly contained in the agreement. The consideration is an important part of every agreement, and necessary to its validity; and the Legislature intended that it should plainly appear upon the face 'of the instrument.”

Without an'examination of the several adjudications of the New York courts on this’'subject, which will not be found to be uniform or consistent, we may safely assume that the weight of authority in tha't State is against the validity of a guaranty, unless the consideration is expressed in the writing.

It is useless to examine the cases to which we have been referred, arising on blank endorsements of promissory notes, as they bear no analogy to the question now before us, which is confined to the point of the sufficiency of the written undertaking of the plain tiffs in error, It may be insisted that if the payee named in a promissory note made by A. should decline to take it, without the further security of another party’s guaranty of the tnote before its delivery, and a guaranty is accordingly written upon it, that then the consideration of the original promise becomes a consideration [for the undertaking of the guarantor. We know that several cases may be cited in support .of this view of the question, but we believe that such a view is a departure from the manifest intention of the statute. There is no legal impediment in tlie way of becoming liable for the debt of another person, but there is a legal requirement that'the consideration for such liability, whatever it may be, whether moving or becoming beneficial to the guarantor, or moving from or becoming injurious to the guarantee, shall be expressed in writing.

The first class of cases designated by Chief Justice Kent in Leonard vs. Vredenburgh, 8 John. 29, com prises “ cases in which the guaranty or promise is col" lateral to the principal contract, but is 'made at the same time and becomes an essential ground of the credit given to the principal or direct debtor.” This class the learned Judge ¡daces within the. statute of frauds. How, by reference to the .bill of exceptions, we find, that in the court below the plaintiff offered to prove that which would have brought his case exactly within the first class of'cases, pointed out by Chief Justice Kent, in the case just cited. We have heretofore (in Emerick vs. Sanders, 1 Wis., 77, 100,) expressed our concurrence in the view of Judge Kent that the class of cases referred to falls within the op' eration of the statute; and it is sufficiently apparent in the present case, that “the principal or direct debtor” was Samuel K. IJamill, to whom the credit was given, and for whom the plaintiffs in error be> came collaterally liable.

Undoubtedly an action might have been maintained by the defendant in error against Samuel E. Hamill upon his note, and this being so, the contract, promise, or undertaking of the plaintiffs in error was a collateral one, requiring,1 a consideration to be expressed in writing.

Whenever a liability is against the original debt or or promissor remains, the undertaking of another to meet the requirements of- that contract or indebtedness must not only be for some adequate consider-atian, but must be in writing, expressing that eration. Fish vs. Hutchinson, 2 Wils. 94 ; Anderson vs. Hayman; 1 H. Black, 120 ; Watson vs. Wharam, 2 D. & E. 80 ; and other cases cited in Emerick vs. Sanders, 1 Wis. H. W.

In the case of Brown vs. Curtiss, 2 Coms, 225, the promissory note, payable .to Biwn, was transferred by him with the folio Aving endorsement: ‘‘I guaranty the payment of the Avithin” and Mr. Justice Bronson in his opinion says, “If the case is within the statute, it is imposssble to'get oxer the objection that no consideration is expressed in the guaranty.” lie then proceeds to discredit the authority of Manrow vs. Durham, 3 Hill, 584, and takes the case then before him out of the operation of the statute, upoii the ground that the payee, BroAvn, by his guaranty in substance engaged to pay Ms “own debt in a particular AAray.” Bearing in mind that G. F. BroAvn still remained liable on the note as the maker thereof, and that the payee, Chester BroAvn, Avas sought to be charged, not as endorser, but upon an independent contract,it is vary difficult to appreciate the reasoning by which the case can be placed.beyond the operation of the statue. It might be urged that Chester Brown gave his guaranty of G. F. BroAvn’s note for his oavii debt, and this indebtedness Avould constitute a sufficient cernid oration for the guaranty, but admitting this to be the case, the statute nevertheless applies. He may pay his oavu indebtedness by guaranty of the debt of another, but the very fact that, that other person still remains liable, is of itself an incontrovertible test that the second contract or promise, Avhile it is based upon a good consideration, is to secure the debt 01 liability of another, and therefore within the words 0f tpe statute. The case of Hall vs. Farmer, 2 Coms. 553, js jn a]i respects like the present case, and there it was held that the consideration should have appeared in the writing.

The question presented in this case is, we believe, a new one in our courts, although one well understood by the profession, and in deciding it we are free from the restraints of former decisions of our own courts, and at liberty to pronounce what seems to us to be the only legitimate construction which can be given to the provision of the statute before us. The conflicting views taken of the subject at different times by the courts of other States have produced a disagreeable uncertainty in those States, as to what the law on the subjct really is, and to avoid doubts of a similar kind in this State, we think it is only necessary to construe the words of the statute according to their plain and ordinary meaning.

We hold that where there is a liability by one party to another, and a third party becomes surety for the party bound, the agreement, promise, or contract of such third party must not only be in writing, but the writing must express the consideration for the promise or contract. ' When this is done,, the guarantor is bound as well as the original proinissor, and the intention of the statute is satisfied.

We believe the court below erred in rendering judgment against the plaintiffs in error, and therefore its judgment must be reversed with costs, and the cause must be remanded for further proceedings in accordance: with this opinion.