a debtor had been taken in execution, and Chase, in consideration that the creditor would discharge him out of custody, promised to pay his debt. It was held, that this promise need not be in writing; for that by discharging the debtor out of execution, the debt was gone; it being, as you are probably aware, a rule of law, that if a debtor be once taken in execution and discharged by his creditor's consent, that operates as a satisfaction of the debt; and therefore that the debtor, having ceased to be liable, the promise to pay the amount was not a promise to pay any sum for which another person was responsible, and therefore did not require to be reduced to writing. (a)

(a) The result is thus given at the end of an elaborate note, to which Mr. Smith presently refers, in Williams's Saunders :-The question, whether each particular case comes within the clause of the statute or not, depends not on the consideration for the promise, but on the fact of the original party remaining liable, coupled with the absence of any liability on the part of the defendant or his property, except such as arises from his express promise. 1 Saund. 211 e, note 1. See also Lane v. Burghart, 1 Q. B. 933, 41 E. C. L. R.; Bird v. Gammon, 3 B. N. C. 883, 32 E. C. L. R.; Bushell v. Beavan, 1 B. N. C. 103, 27 E. C. L. R.

The principle is not very evident on which the Courts have thus held that the liability of the original party must continue, after the promise is made, in order to bring it within the statute. In the first place the words of the statute do not require it; it provides merely that no action shall be brought "to charge the defendant upon any special promise to answer for the debt, default, or miscarriage of anperson, unless," &c. Now these words are satisfied by a promise to answer for a debt existing when the promise was made. Nor

other

1 Sharp v. Specknagle, 3 Serg. & Rawle, 463; Palethorpe v. Lesher, 2 Rawle, 274; Snevily v. Read, 9 Watts, 396; Lathrop v. Briggs, 8 Cowen, 171; Runsom v. Keyes, 9 Id. 128; and this, although he may have been discharged on terms not afterwards complied with; 1 Term. 558, 6 Id. 525; 7 Id. 420.

Butcher v. Stewart, 11 Mees. & Welsby, 857, was very similar in its facts to Goodman v. Chase, and was decided upon its authority.

[*46-*47]

*It was at one time thought that a verbal promise even to answer for the debts of another for which that other remained liable, might be available if founded on an entirely new consideration conferring a distinct benefit upon the party making

is it less a promise to answer for that debt, nor does it cease to be one, because the debt may afterwards be no longer recoverable from the person who incurred it; and although the debt be extinguished, the default at any rate remains, and the case in question is precisely that of answering for a "default." But the action is brought upon the promise, and not upon the debt or the default; and if it were a debt at the time of the promise, it seems to be within the letter of the statute. It is also within its spirit; for a creditor would not be less likely to set up a fraudulent claim against a third person because he had lost his remedy against the original debtor; therefore, the prevention of fraud and perjury, which the statute was designed to effect, is as much needed in the one case as in the other. It is submitted that the fact that the liability is to be exclusively borne by the guarantor, is an additional reason for requiring written evidence that the promise was advisedly made. The courts, however, have held that it is essential to the operation of this clause, that the undertaking shall be not only collateral at the time it was made, but that it shall continue to be so; and that the original demand shall remain in full force. Lord Ellenborough, C. J., said, in the above-named case of Goodman v. Chase, "By the discharge of the original debtor with the plaintiff's consent, the debt as between those persons is satisfied[?] **** Then, if so, the promise by the defendant here is not a collateral but an original promise, for which the consideration is the discharge of the debt as between the plaintiff and Chase." And upon the distinction between absolute and collateral promises the subsequent decisions have turned. See Butcher v. Stewart, 11 M. & W. 857, per Parke B.; Green v. Cresswell, 10 Ad. & Ell. 453, 37 E. C. L. R., per Lord Denman, C. J.

Thus the law now is, that where the transaction leaves a continuing liability on the original debtor, as in the case of discontinuance of an action against him, as in Tomlinson v. Gell, then the promise must be in writing; but where it extinguishes or discharges the original debt, and transfers the liability, as in Goodman v. Chase, the promise to pay it to the guarantor need not be in writing, though the debt existed when the promise was made.

such promise. This idea is, however, confuted by Serj. Williams in an elaborate note to the case of Forth v. Stanton, which I have already cited; and the rule there laid down by him, and which has ever since been approved of, is, that the only test and criterion by which to determine whether the promise needs to be in writing is the question whether it is, or is not, a promise to answer for a debt, default, or miscarriage of another for which that other continues liable. If it be so, it must be reduced to writing, nor can the consideration in any case be of importance except in such cases as Goodwin v. Chase, in which the consideration. to the person giving the promise is something which extinguishes the original debtor's liability. (a) You

(a) It is so stated in the middle of the note, but less broadly at the end of it, in the last edition; for the cases where the guarantor has an interest in his promise have given rise to some conflict of opinion, which Mr. Serj. Williams resolves as just cited (p. 45); where he couples with the continuing liability of the original party "the absence of any liability on the part of the defendant or his property, except such arises from his express promise;" both of which conditions he holds requisite to bring a guarantee within the statute. Thus, where there is a purchase of an interest by the guarantor, or where the creditor is induced by the promise of the guarantor to surrender a lien or other security for his debt, the relation of the parties is changed; Chit. 513; the undertaking assumes the character of an original contract between the guarantor and the creditor; and the case is no longer within the mischief of the statute. (See Williams v. Leper, 3 Burr. 1886, and Thomas v. Williams, 10 B. & Cr. 664, where the cases are reviewed by Ld. Tenterden, C. J.) So, where the goods sold are transferred by consent of the parties to the guarantor, for this is a new sale. (Browning v. Staltard, 5 Taunt. 450.) Wherever the guarantor is liable on other grounds than his guarantee, the promise need not be in writing. The liability on the original debt need not have arisen at the time of the promise, provided it arose afterwards, and that it remained; it may be a prospective liability constituting the consideration for the promise. The common case of becoming responsible for goods to be supplied to another on the faith

will see Serj. Williams's criterion approved of in Green v. Cresswell, 10 A. & E. 453, 37 E. C. L. R., and Tomlinson v. Gell, 6 A. & E. 564, 33 E. C. L. R.'

of that promise, is within the statute; likewise, a promise to bear harmless one who shall be bail for another. (See Green v. Creswell, 10 Ad. & Ell. 453, 37 E. C. L. R.) If the debtor be not liable, whether the debt be present or prospective, neither can the guarantor, as in the case of a contract by an infant not for necessaries. 1 Burr. 373.

To guard against the danger arising from the facility by which loose or ill-remembered words might be tortured into a contract on the part of him who used them, the common law wisely provided that a liability should not depend upon mere words unaccompanied by a consideration for their basis. And as the danger was felt to be the more strong where the words related not to an undertaking by a party for his own benefit, but on behalf of a third person, the fourth section of the Statute of Frauds superadded a writing to the common law requirement of a consideration. Whether such a provision has been conducive of more benefit than harm may well be doubted (see Holmes v. Knights, 10 N. H. 176), for the decisions to which it has given rise are as remarkable for their multitude as for the difficulty of their perfect classification.

The cases may naturally be divided into those where the promise of guarantee was concurrent with the principal contract, and those where it was subsequent to its creation.

1. Under the first of these classes, the common law is satisfied wherever the promise is made at the same time as the principal contract, and is an essential inducement to it. No other consideration is necessary than that moving between the creditor and the original debtor, Kirby v. Coles, Cro. Eliz. 137; and it matters not whether the promise be absolute, or conditional and dependent upon default of the other; (Leonard v. Vredenburg, 8 Johnson, 29; Snevily v. Johnson, 1 Watts & Serg. 307.)

The fourth section of the Statute of Frauds however altered the common law to this extent, where the promise is conditional and dependent upon the default of the other, it must be in writing; where, however, it is not thus conditional and dependent, but is direct and absolute, the case rests as at common law, and the statute does not apply. But there is a class of cases which, proceeding upon the suggestion of Mr. Serjt. Williams, supra, seem to determine that however direct and absolute the contract of the defendant may be, it shall not be deemed to be a direct undertaking, so as to take the case out

*In the very late case of Eastwood v. Kenyon, 11 A. & E. 446, 39 E. C. L. R., the Court

[*48]

of the statute, unless all liability is withdrawn from the other party, and thrown entirely upon the shoulders of the defendant; in other words, although there may be a joint contract, yet if the consideration move only to one, unless all the credit is given to the other, the engagement of that other is collateral and not direct-it is, therefore, within the statute, and he is not liable unless his promise and its consideration appear in writing; Rogers v. Kneeland, 13 Wendell, 114; Brady v. Sackrider, 1 Sandford, 515; Cahill v. Bigelow, 18 Pick. 369; Elder v. Warfield, 7 Harris & Johns. 397; Blake v. Parlin, 22 Maine, 395; Aldrich v. Jewell, 12 Vermont, 126; Smith v. Hyde, 19 Id. 56; Taylor v. Drake, 4 Strobhart, 437; Ware v. Stephenson, 10 Leigh, 167; Rhodes v. Leeds, 3 Stew. & Porter, 212; Faires v. Lodanc, 10 Alab. 50; Holmes v. Knights, 10 N. Hamp. 177; Proprietors v. Abbott, 14 N. Hamp. 159.

It has been said, that it may admit of question whether the application of this principle has not been carried too far in some cases, and whether what was in truth, as between the parties, the collateral liability, has not by means of it been transformed into a principal liability, and the real principal debtor thereby discharged through the operation of the statute; Holmes v. Knights, 10 N. H. 178; and practically it may often happen that a tradesman, thinking to increase his security by charging the goods to both parties, by that very means under the application of the rule sanctioned by the weight of authority, loses his remedy against one of them.

It has, moreover, been suggested upon great apparent soundness of principle (in Mr. Hare's note to Birkmyr v. Darnell, 2 Smith Lead. Cas. 311, 4th Am. ed.), that the question of the defendant's liability being direct or collateral, is not necessarily wholly dependent upon the withdrawal of all credit from, and the consequent non-liability of the party who receives the consideration; in other words, that there may be a direct liability, even where the other party is also liable. Thus, where two jointly purchase goods, the liability of one is no degree lightened by the fact of the other being also liable, nor, where the liability is thus co-extensive, is it changed in any way by the goods being intended for one rather than for the other, each being still directly liable, the contract cannot be said to be "to answer for the default of another," and the case would seem to be unaffected by the statute.

Thus, in Wainwright v. Straw, 15 Vermont, 215, it was held that