Opinion ID: 1368807
Heading Depth: 2
Heading Rank: 6

Heading: was the agreement to repay the alaska feed debt, including interest, subject to the statute of frauds?

Text: Merdes argues that even if the court determines that there was an agreement to pay interest, the statute of frauds applies and his promise is therefore unenforceable under provisions requiring a writing where there is a special promise to answer for the debt of another. [9] Underwood argues that the statute of frauds is inapplicable because Merdes obtained independent consideration for the promise; that is, the withholding of suit. We agree with Underwood. [10] An agreement to pay the debt of another does not come within the statute of frauds where the surety promisor's main purpose or leading object is to benefit his own pecuniary or business position. See generally Restatement (Second) Contracts § 116 (1981). [11] Here the record demonstrates that the agreement to pay the debt was given for Merdes' own business advantage. It served the function of forestalling litigation against OHM, a corporation in which the Merdes were initially 80% shareholders and later became 100% shareholders, as well as benefitting his credit reputation. [12] The judgment of the superior court is REVERSED and REMANDED for further proceedings. [13] MATTHEWS, J., dissents.