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CH. XVII.8.3. may have been the chief inducement to the plaintiff to supply the goods, is collateral, and must be reduced into writing (g). Thus, where the plaintiff was induced to send goods to a person with whom he was unacquainted, by the defendant's verbal promise that "he would see the plaintiff paid ;" and the plaintiff debited the party receiving the goods; it was held that the defendant's promise was within the statute: and the Court overruled a distinction which had formerly been taken, between a promise to pay given before, and one given after the delivery of the goods (h); and held that the statute applied in all cases, where the person for whose use the goods are supplied is liable at all (i).

Whether the engagement was original or collateral-that is, whether it was binding on the party in the first instance and at all events, or only in case the other party made default-depends on the contract between the parties (k). And this is to be collected, not merely from the particular words of the defendant's promise, but from the general circumstances of the transaction. Thus, where an action was brought against a lieutenant in the navy, to recover 5761. for clothes, &c., supplied to the crew of his ship; and the promise was, "to see the plaintiff paid at the paytable;" the Court-in deciding that this was a collateral engagement, and therefore within the statute-relied on the improbability that the defendant, considering his situation, could have intended to render himself primarily responsible for so large a sum; and they thought that, from the nature of the case, the plaintiff must have relied on the power of the officer over the fund out of which the men's wages were to be paid, and have given credit to that fund rather than to the defendant (1).

And where A., at the request of B., entered into a recognizance of bail for the appearance of C., to answer a criminal charge; it was held that this was not a promise to answer for the debt, default, or miscarriage, of another person," within the statute (m).

66

Guarantees (Statute of Frauds).

Nature of
engagement
must be ascer-
tained from
contract and
surround-
ing circum-
stances.

The statute does not apply where guarantor originally liable.

(b) Non-application of Statute where Guarantor originally Liable.

The statute does not apply, if the defendant were himself, either alone or jointly with others, originally liable for the demand which forms the subject of his subsequent promise (n).

(g) Per Bayley, B., Simpson v. Penton (1834), 2 C. & M. 430.

(h) See per Lord Mansfield, C.J., Jones v. Cooper (1774), Cowp. 227.

(i) Matson v. Wharam (1787), 2 T. R. 80; 1 R. R. 429; and see Anderson v. Hayman (1789), 1 H. Bl. 120; 2 R. R. 734.

(4) Per Bayley, B., Simpson v. Penton

(1834), 2 C. & M. 430.

(1) Keate v. Temple (1797), 1 B. & P.

158.

(m) Cripps v. Hartnoll (1863), 4 B. & S. 414, Ex. Ch. ; reversing the decision of the Court of Queen's Bench in S. C., 2 B. & S. 697.

(n) See Sutton v. Grey, [1894] 1 Q. B.

285.

Guarantees (Statute of Frauds).

This appears from Coutourier v. Hastie (0), in which the statute CH.XVII.s.3. was held not to apply to an agent buying goods on del credere commission (see ante, p. 222) and from Sutton v. Grey (p). In the latter case the plaintiffs, who were stockbrokers, agreed orally with the defendant, that he should introduce clients to them and that they should transact business on the Stock Exchange for the clients so introduced on the term that the defendant should receive half commission and pay the plaintiffs half the losses on the transactions. It was held that the agreement was valid though oral, so as to entitle the plaintiffs to recover half of a particular loss, on the ground that the defendant had an interest in the transactions equally with the plaintiffs (p). It had been already ruled that if the original credit was given to the defendant, then, although the goods were delivered to or for the use of another person, the statute does not apply (q).

An agreement to convert a separate into a joint debt, is not within the statute; the effect of such agreement being to create a new debt, in consideration of the former being extinguished ("); though the statute applies if the original demand be allowed to subsist, and the parties merely stipulate for an indulgence to the debtor-such as, that an action commenced shall be stayed (s).

If the third party be not by law liable for the demand-as in Promise made the case of goods, not being necessaries, furnished to an infant- for infant, &c. the defendant's promise cannot be considered as collateral, and consequently need not be in writing (t).

(0) Coutourier v. Hastie (1853), 8 Ex. 40.

The statute applies only to promises made to persons to whom To whom the another is already, or is expected to become liable; and the promise must promise must be, to be answerable for a debt of, or a default in some duty by that other, towards the promisee (u). Therefore, a promise by the defendant to the plaintiff, to pay to A. B. a debt due from the plaintiff to A. B., is not within the statute (x).

surety.

A promise by a surety to a third person, to indemnify him if Promise by he also will become surety for the principal, is not within the statute (y); nor is a promise by the defendant, in consideration of the plaintiff accepting certain bills of exchange, to indemnify him from liability to make payments in respect of such bills (z).

(p) Sutton v. Grey, [1894] 1 Q. B. 285, C. A.

(q) Croft v. Smallwood (1793), 1 Esp. 121; and see per Abbott, C.J., Edge v. Frost (1824), 4 D. & R. 243; Dixon v. Hatfield (1825), 2 Bing. 439.

(r) Ex parte Lane (1846), 1 De Gex, 300.

(8) Fish v. Hutchinson (1759), 2 Wils. 94; King v. Wilson (1731), Str. 873.

(t) Harris v. Huntbach (1757), 1 Burr. 373; and see Duncombe v. Tickridge (1848), Aleyn, 94.

(u) See Mountstephen v. Lakeman (1874), L. R., 7 H. L. 17.

(x) Eastwood v. Kenyon (1840), 11 A. & E. 438.

(y) Thomas v. Cook (1828), 8 B. & C. 728; approved in Guild v. Conrad, [1894] 2 Q. B. 855, C. A.

(z) Guild v. Conrad, [1894] 2 Q. B. 885, C. A.

Contourier v.
Hastie.

Sutton v.
Grey.

CH. XVII.s.3.

Guarantees (Statute of Frauds).

Review of exceptions from the

statute.

Harburg
India Rubber
Comb Co. v.
Martin.

The authorities which have established exceptions from sect. 4 of the Statute of Frauds in its relation to an oral "promise to answer for the debt of another," were fully reviewed by the Court of Appeal in Harburg India Rubber Comb Co. v. Martin. There the defendant, being a director of and large shareholder in a company which he had financed, orally promised the plaintiffs, who were its judgment creditors as yet unsuccessfully proceeding to execution, that he would indorse bills for the debt. It was held that the promise was not a contract of indemnity and that the case was not excepted from sect. 4 by reason of the defendant's interest in freeing his company's goods from execution (a).

The consideration need not appear on the face of the memorandum.

(c) Consideration need not be Stated.

Before the Mercantile Law Amendment Act, 1856, 19 & 20 Vict. c. 97, it was fully settled that, to render a guarantee in writing valid under the 4th section of the Statute of Frauds, the consideration for the promise must appear on the face of the instrument, either in express words, or by necessary implication; and that the omission could not be supplied by parol evidence (¿).

Mercantile

But by the Mercantile Law Amendment Act, 1856, 19 & 20 Law Amend. Vict. c. 97, s. 3, it is enacted;-that no special promise to be

ment Act, 1856.

made by any person after the passing of that Act, to answer for the debt, default, or miscarriage of another person, being in writing, and signed by the party to be charged therewith, or some other person by him thereunto lawfully authorised, shall be deemed invalid to support an action, suit, or other proceeding, to charge the person by whom such promise shall have been made, by reason only that the consideration for such promise does not appear in writing, or by necessary inference from a written document.

Although, since the statute, parol evidence may be given to supply the consideration, such evidence cannot be given to explain the promise; and, therefore, unless the whole promise be in writing, the memorandum will not be sufficient (c).

Signature of

The guarantee, to be good, must be "signed by the party to be memorandum. charged therewith," or by his agent. But where the defendant wrote and signed a guarantee which contained a mistake, and, on the mistake being discovered, he wrote a memorandum across the original guarantee, correcting such mistake, but did not sign this memorandum: it was held, that his original signature was a signature of the whole, and so satisfied the statute (d).

(a) Harburg India Rubber Comb. Co. v. Martin, [1902] 1 K. B. 778; 71 L. J., K. B. 529; 86 L. T. 505; 50 W. R. 449, C. A., reversing judgment of Mathew, J.

(b) Wain v. Warlters (1804), 2 Sm. L. C.;

5 East, 10; 7 R. R. 645; Price v. Richardson (1846), 15 M. & W. 539.

(c) Holmes v. Mitchell (1859), 7 C. B., N. S. 361.

(d) Bluck v. Gompertz (1852), 7 Exch. 862.

SECT 4.-Extent of Surety's Liability.
Let us now consider the extent to which the surety is liable.
And on this subject the leading principles are as follows:-

Time for

1st. If a person be surety for the fidelity of another in an office of limited duration, or the appointment to which is only for a limited period, he is not obliged beyond that period (e). Therefore, where a bond was taken under an Act of Parliament, which he is conditioned for the due collection of certain rates and duties at liable. all times thereafter; and it did not appear on the record that the collector's appointment was limited, or his office annual, but the Act made it annual; the Court held that the surety was obliged for a year only (ƒ).

And where the defendant became bound to the plaintiffs, as surety for the faithful execution of his office by one A., who had been appointed under the Poor Relief Act, 1819, 59 Geo. 3, c. 12, s. 7, assistant overseer for the parish of M.; and A. was afterwards appointed, under the Poor Law Amendment Act, 1844, 7 & 8 Vict. c. 101, s. 62, collector of poor rates for the same parish it was held that A., having accepted the latter appointment, had ceased to hold the former, and that the liability of the defendant as his surety was at an end (g). So, if the rates, &c., collected, be not such as are authorised by the Act, the surety is not liable (h); nor is he liable where, owing to an error in the appointment of the principal, the latter was not duly authorised, under the Act, to collect the sums which he is charged with having received (i).

So, if the surety's engagement relate to a particular office, it extends only to such things as were included in the office when the engagement was entered into. Thus, a person who became surety for a collector of the customs' revenue, upon his appointment in 1691, was held not liable in respect of the custom on coals, which was first imposed in 1698 (k). And in like manner it has been held, that in construing an agreement in the form of a bond, by which a surety became liable for the due fulfilment of an agent's duties, therein particularly enumerated, a general clause in the obligatory part of the bond, must be controlled by reference to the prior clauses, specifying the extent of the agency (1).

(e) See Bamford v. Iles (1849), 3 Exch. 380; Leadley v. Evans (1824), 2 Bing. 32. (f) Peppin v. Cooper (1819), 2 B. & Al. 431; and see Mayor, &c., of Cambridge v. Dennis (1858), E., B. & E. 660.

(g) Malling Union v. Graham (1876), L. R., 5 C. P. 201.

(h) Nares v. Rowles (1811), 14 East, 510. And see Webb v. James (1840), 7 M. & W. 279.

CH. XVII. s. 4.

Extent of Surety's Liability.

To what

extent the

surety is

liable.

Acts or

defaults of principal, for which surety

is liable.

(i) Keep v. Wiggett (1850), 10 C. B. 35' (k) Bartlett v. Attorney-General (1709), Parker, 277; and see Pybus v. Gilb (1856), 6 E. & B. 902; Bonar v. McDonald (1850), 3 H. L. C. 226; Leigh v. Taylor (1827), 7 B. & C. 491.

(1) Napier v. Bruce (1842), 8 C. & F. 470. But where the surety's engagement related to the continuance of one G. in the office of "clerk" to a banker; and

CH. XVII. s. 4.
Ertent of
Surety's
Liability.

Liability of Co-sureties in different amounts.

Ellesmere Brewery Co. v. Cooper.

Limited liability.

Surety to or for one person, not liable to or for partner.

Rules where guarantee to or for firm.

Partnership
Act.

So, if the guarantee relate to the performance of a particular contract, the surety is only liable for such damages as are occasioned, strictly, by the failure of the principal to perform that contract (m). But the principal must perform the contract strictly, otherwise the surety will be liable (n).

And where the principal is charged, as bailee, with having received a specific sum of money, which he ought to have paid over within a certain time, but which he did not pay over; the surety will not be liable, if it appear that the principal lost the money by robbery, without any default of his own (0).

here two or more persons join as sureties for a common principal, but bind themselves in different amounts in event of the principal being in default, they are liable to contribute to the satisfaction of the creditor's claim in proportion to their respective liabilities, and not in equal amounts (p).

The guarantee of the surety may also be expressly limited in amount to a sum fixed less than the principal debt, even though that debt is a floating balance (q).

If a person engage as surety for a particular individual, e.g., to be accountable for monies received by him; the engagement is understood to extend to the receipts of that individual alone; and not to those of himself and a partner (1); and a surety "to A." for the fidelity of a clerk, is not liable in respect of a breach of trust, upon an employment of the clerk by A.'s executors (s).

Before the Mercantile Law Amendment Act, 1856, when security was given to a house, e.g., to a banking-house, and not to the members of the firm by name, the surety would still continue liable, notwithstanding a change of partners (t).

But by sect. 18 of the Partnership Act, 1890, 53 & 54 Vict. c. 39, re-enacting more briefly sect. 4 (repealed by that Act) of the Mercantile Law Amendment Act, 1856, it is enacted that

"A continuing guaranty or cautionary obligation given either to a firm or to a third person in respect of the transactions of a firm is, in the absence

the defence was, that he had been ap-
pointed "manager," the plea was held
bad, because it did not show that G.
ceased to be clerk when he became
manager, Anderson v. Thornton (1842),
3 Q. B. 271; and see Skillett v. Fletcher
(1867), L. R., 2 C. P. 469, Ex. Ch.

(m) Warre v. Calvert (1837), 7 A. & E.

143.

(n) See London, Brighton and South Coast Rail. Co. v. Goodwin (1849), 3 Exch. 736.

(0) Walker v. British Guarantee Association (1852), 18 Q. B. 277.

(p) Ellesmere Brewery Co. v. Cooper, [1896] 1 Q. B. 75.

(a) See Hobson v. Bass (1871), L. R., 6 Ch. 792; Gray v. Seckham (1872), L. R., 7 Ch. 680; distinguished in Ellis v. Emmanuel (1876), 1 Ex. D. 157, C. A.

(r) Mills v. Guardians of Alderbury Union (1849), 3 Exch. 590; Montefiore v. Lloyd (1863), 15 C. B., N. S. 203; Bellairs v. Ebsworth (1811), 3 Camp. 52; Wright v. Russell (1774), 3 Wils. 530; S. C., 2 Bl. 934; and see Leathley v. Spyer (1870), L. R., 5 C. P. 595.

(s) Barker v. Parker (1786), 1 T. R. 287; 1 R. R. 201.

(t) Barclay v. Lucas (1783), 3 Doug. 321.

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