Case ID: njl_20/html/0337-01.html
Source: Caselaw Access Project
Author: {"author": "Whitehead, J. Randolph, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

LAING v. LEE.
    1. In an action against a defendant, upon a promise to answer for the debt of another, the memorandum need not contain a statement of the consideration in express terms; if the consideration can be inferred from the whole tenor of the writing, it is sufficient.
    2. The promise will be binding on the defendant, notwithstanding the consideration moves from the original debtor, and not from the plaintiff; and notwithstanding the original debtor remains liable.
    8. Whether it be necessary that the consideration appear in any way by the memorandum, either by inference or otherwise; Qusere.
    ' This was a case certified and sent from the Circuit Court of the county of Middlesex, for the advisory opinion of this court.
    The action was brought to recover from the defendant, the amount alleged to be due from him, on a special promise, to pay the debt of a third person.
    
      Isaac P. Freeman and Chauncey C. Williams, during the years 1841 and 1842, and until the 1st of January, 1843, were partners, carrying on business in New Orleans under the name and firm of “ I. P. Freeman & Co.,” and at Rahway, New Jersey, under the name and firm of “ Freeman and Williams.” While engaged in business, they became indebted to the plaintiff in the sum of $5723.44, for goods sold and delivered by the plaintiff to the firm.
    On the first of January of the same year, the firm was also indebted to the defendant; and the latter having gone to New Orleans for that'purpose, at or about this time, purchased the stock •of goods, assets and business of the firm in that city as well as at Rahway, and assumed their debts; some of these debts he paid, for others he gave his own notes and in reference to the claim of the plaintiff’, he addressed to him a letter, in which after stating the embarrassed condition of the firm he continued as follows ; “Having a considerable interest myself and Mr. Freeman wishing to save all he possibly could for the benefit of the creditors, and to save the stock and assets from going into the bankrupt court (which it would have done, if they had been sued,) they have sold out to me all the stock and assets of the business; which it is my intention to use every exertion to make the best and most of, as soon as possible, for the benefit of the creditors. Mr. Freeman will remain here through the spring, and attend to collecting up the debts as fast as possible, and I hope he will be able to collect and secure a considerable amount before he leaves, and I intend to job off the stock at the least possible expense and hope to make considerable out of it. If it had gone into the bankrupt court here, the creditors would not have got one dollar; it would have been sacrificed and not brought enough to pay the expenses of court.”
    “ My intention is to make the most of it for the creditors, and you may consider me as security or indorser, for the amount owing you by Messrs. I. P. Freeman & Co.''’ This letter was signed by the defendant, and sent to the plaintiff through the mail.
    The defendant upon his return from New Orleans, was called upon for payment of the amount due to the plaintiff; he refused so to do, and the present action was brought.
    
      E. Y. Rogers, for the plaintiff.
    
      J. J. Chetwood, for the defendant.
   Whitehead, J.

It is not necessary to the decision of this cause, that we should express an opinion upon the question, whether under the 14th section of the statute of frauds Elm. Dig. 216, the consideration for the promise, as well as the promise itself must be in writing, in order to bind a guarantor. Admitting the English construction of this section, that the term agreement includes both the promise and consideration, and that both must be in writing to take the case out of the statute, which however is denied by some of the courts in this country, the plaintiff is nevertheless entitled to recover. The consideration for the defendant’s promise, in this case, can be fairly inferred from his letter to the plaintiff. We are not in this respect left to mere conjecture. He writes that Freeman and Williams the original debtors had sold to him their stock of goods in New Orleans, and “ I intend to job off the stock at the least possible expense, and hope to make considerable out of it. My intention is to make the most of it for the creditors, and you may consider me as security and endorser for the amount owing you, by I. P. Freeman & Co.”

The consideration of the defendant’s engagement or guaranty, although not stated in express terms, may fairly be inferred to be the sale of their stock of goods to him. This has been repeatedly adjudged to bo sufficient. See cases collected in 2d Saund. on pl. and ev. 548. It does not invalidate the defendant’s engagement in this case, that the original debtors remain liable. Farley v. Cleveland, 4 Cowen Rep. 432. Nor does it affect the liability of the defendant that the consideration, which moved him to make the promise, was received from the original debtors and not from the plaintiff. It is sufficient “ if it spring out of any new transaction, or move to the party promising upon some fresh and substantial ground of a personal concern to himself.” Roberts on Frauds 232, 4 Cowen Rap. 432, and the cases there cited, Ellwood v Monk, 5 Wendell 235.

In my opinion, the circuit court of Middlesex should be advised that the defendant is liable upon his guaranty.

Randolph, J.

This cause comes before us, on a case agreed upon by the parties and certified by the Chief Justice, from the Middlesex circuit; and the only point for consideration is, whether the defendant, in his letter to the plaintiff respecting the affairs of I. P. Freeman & Co., has rendered himself liable, under the statute of frauds, for a debt due from that firm to the plaintiff. The rule is well settled by the English cases, that a promise or agreement to answer for the debt, default or miscarriage of a third person, must be by writing, containing the consideration of the promise or agreement. Chitty on Contracts 409, note 2, and cases cited, Wain v. Warlter, 5 East. 10 and 4 B. and A. 595. The courts in Massachusetts, Maine and Connecticut, seem to entertain a different rule, as would also appear to be the case in this state so far as 2 South 570 goes. But it has never.been held that the consideration must be expressly stated in the memorandum or agreement; if it can be collected from it or clearly inferred it is sufficient; Chitty on Contracts 411 and cases cited, 10 Wend, R. 218, 5 Wheeler Am. com. law 505, title Guarantee, 1 Bing. 216, 8 Eng. com. law R. The defendant’s letter manifestly discloses a state of facts, calculated to be a benefit to the party promising, and if the promise was not fulfilled, an injury to the promisee, either of which constitutes a valuable consideration; Com. Dig. action on the case in Assumpsit B. 11. Judgment should therefore be rendered in favor of the plaintiff.

Circuit Court advised to render judgment for the plaintiff.

Hobnbloweb, C. J. and Nevius, J. concurred; Cabpenteb, J. did not hear the argument and gave no opinion.