Opinion ID: 1896318
Heading Depth: 2
Heading Rank: 5

Heading: whether phillips' claim as to subsequent oral modifications was barred by the statute of frauds.

Text: ¶ 20. The chancellor held that Phillips' claim relating to any oral modifications made after the execution of the memorandum agreement was barred by the statute of frauds [2] and the more specific statute of frauds which relates to limited partnerships. [3] The chancellor held that the memorandum agreement unambiguously established the liability of the partnership, i.e., Plantation Pointe, for any cash advances made by Phillips, and that the partnership was specifically distinguished from Fitzner personally. ¶ 21. Under the Plantation Pointe limited partnership agreement, neither of the partners (Phillips nor Fitzner) were liable to third parties for debts of the partnership. As a limited partner, Fitzner had no liability or duty to make capital contributions to the partnership. A promise by a limited partner to contribute to the limited partnership is not enforceable unless set out in a writing signed by the limited partner. Miss.Code Ann. § 79-14-502(a) (Rev.2001). The only writing with respect to partners' contributions to the partnership was the memorandum agreement which specifically stated that Phillips would be paid from the proceeds of the sale of Plantation Pointe. Personal liability for the debt was not assumed by Fitzner. Because Fitzner was not personally liable to repay Phillips, any alleged oral promise made by Fitzner would be a special promise to answer for the debt or default or miscarriage of another person and therefore squarely within the prohibitions of Miss.Code Ann. § 15-3-1(a). ¶ 22. A promise to pay another's debt is a collateral obligation, as opposed to an original obligation: The question to be kept in mind always is whether or not the person making the promise is entering into an original or collateral obligation. If it be the former, the Statute of Frauds does not apply; if the latter, it does.    If the party to whom a consideration moves becomes personally liable for the payment of the debt, the promise of any other person to pay it, though the promise be made at the same time, and upon the same consideration, is a collateral undertaking to pay the debt of another, and within the statute.... Allen v. Smith & Brand, 160 Miss. 303, 133 So. 599, 601-02 (1931). If Fitzner promised Phillips to repay Phillips for his unequal contributions to Plantation Pointe, the promise was a collateral undertaking to pay Phillips' debt, and therefore controlled by the statute of frauds. Phillips made his contributions to Plantation Pointe, not to Fitzner. Phillips himself treated the cash injections as capital contributions as evidenced by Plantation Pointe's tax returns. Phillips advanced money to the partnership and received credit on his capital account from the partnership. The only writing in evidence states that the partnership is responsible for the repayment of the contributions. Thus, this issue is without merit.