(a) A verbally states to B: "If you will sign C's note, as surety, payable to X, and are compelled to pay it, I will reimburse you." (b) A verbally states to B: "If you will sign a note with me, payable to X, and are compelled to pay it, I will reimburse you."

§ 66. Thomas v. Cook. In Thomas v. Cook, W. Cook and Morris were in a partnership, which was dissolved by agreement, Morris retiring. Morris would, of course, be liable for the prior partnership debts, incurred while he was a member of it. To protect him, it was agreed between W. Cook and Morris, that W. Cook and two other persons should execute to Morris a bond of indemnity to save Morris from liability of these partnership debts. This bond of indemnity was given in accord with this understanding. Neither agreement yet mentioned was the subject of the suit in Thomas v. Cook. But, in order to induce the plaintiff to sign this bond of indemnity to Morris, along with W. Cook and the defendant, the defendant verbally promised the plaintiff, and in consideration therefor, that if the plaintiff would sign the bond of indemnity to Morris "with the defendant and W. Cook," the defendant would save the plaintiff harmless from all damages and costs which the plaintiff might have to pay by reason of becoming liable on the indemnity bond to Morris, as obligee. The bond of indemnity was signed by the plaintiff and the defendant, as sureties for W. Cook, principal. The plaintiff was compelled to pay £400 to Morris on the bond of indemnity. Plaintiff then recovered £100 from the estate of W. Cook, he being since deceased. This left a deficiency of £300, and the plaintiff brought this action of assumpsit against the defendant to recover on his verbal promise to save the plaintiff harmless from all payments he might incur by reason of the plaintiff signing the bond of indemnity to Morris. The defendant made two contentions: (a) that plaintiff could not recover on the verbal promise because of the fourth section of the statute of frauds.14 (b) The defendant contended that if he were liable at all, it was only as a co-surety for contribution

14 (1676) 29 Car. II, Sec. 4. American states have similar statutes, most of them differing but

little in wording from the English statute of frauds. See Ill. R. S. Ch. 59, Sec. 1.

on the count for money paid, which would limit his liability to £150. The trial court directed a verdict for the planitiff for £300, holding the defendant liable on his verbal promise. The defendant obtained leave to move to reduce the judgment to £150, which would be the extent of his liability for contribution as a co-surety. But the rule nisi obtained for this purpose was discharged, and the defendant was held on his verbal promise, for the reason, stated Parke, J., that this was "an original contract between these parties, that the plaintiff should be indemnified against the bond."

§ 67. Green v. Cresswell. In Green v. Cresswell,15 Reay had brought a civil action against Hadley, and Hadley failing to pay, a capias was issued, directing the sheriff to arrest Hadley. Bail was indorsed thereon in the sum of £35. The sheriff arrested Hadley as directed. To secure his release, the defendant requested the plaintiff to become bail and surety for Hadley on a bail bond, conditioned that Hadley would put in special bail. The plaintiff signed Hadley's bail. The effect was that the plaintiff bound himself either to satisfy the creditor of the claim for the debt and costs, or surrender Hadley into custody, provided judgment be against him in that action, and the debtor failed to pay. To induce the plaintiff to sign Hadley's bail bond, the defendant verbally promised that he would save the plaintiff harmless, and indemnify him for all costs and damages he might incur by such an act. The bail bond, which the plaintiff signed, was made to the sheriff, as obligee, but he assigned it to Reay, who sued the plaintiff, and recovered damages and costs. To recover the loss sustained by the plaintiff as a result of his signature on the Hadley bail bond, plaintiff brought this action of assumpsit on the defendant's verbal promise to save him harmless, and which formed the inducement for the plaintiff's signing the bond of Hadley. The trial court held this was a case outside the statute of frauds and that the defendant was liable on his promise. This judgment was arrested, and Lord Denman, contrary to the trial court, held the defendant was not liable because this was a case within the statute of frauds, and the promise should have been in writing in order to make the defendant liable.

15 (1839) 10 Ad. & Ell. 453, 113 Eng. Rep. Reprint 172.

§ 68. Comparison of Thomas v. Cook and Green v. Cresswell. These two cases were decided by the same court but eleven years apart. The form of action in each case was assumpsit. In spite of the general statement of the proposition of law in Thomas v. Cook 16 by Bayley, J., that "a promise to indemnify does not, as it appears to me, fall within either the words or the policy of the statute of frauds," it is submitted the rule stated is not applicable to that case. And regardless of Lord Denman's criticism of the "reasoning" of Thomas v. Cook, some authorities contend that Green v. Cresswell did not overrule that case. The facts in the two cases are dissimilar, and it is believed the conclusion in each case might be supported if the correct principles were applied.17

Thomas v. Cook is correct in the conclusion reached, said the highest court of New Jersey, not for the reason on which the opinion was placed, that it was a promise to indemnify, but because the defendant promised the plaintiff that if the plaintiff

16 (1828) 8 Barn. & Cres. 728, 108 Eng. Reports Reprint 1213.

17 The Supreme Court of New York, it must be admitted, eight years prior to Green v. Cresswell, concluded to the contrary, after considering very similar facts, on the ground that "this is clearly an original undertaking." But to decide that it is an original undertaking is no test, for what constitutes an original undertaking is the question. The defendant in the New York case requested the plaintiff to enter into an obligation under seal to enable a third person to procure credit. Plaintiff was compelled to pay, sued the defendant to recover on his verbal promise, which the court said was an origi nal undertaking. Chapin v. Merrill (1830) 4 Wend. (N. Y.) 657.

Such a view is clearly correct if the promisor had a pecuniary interest to serve in making the promise to indemnify another. The pri

mary purpose is the benefit to the promisor, and the statute of frauds does not apply, even if incidentally it should be a promise to answer for the debt of another. Boyer v. Soules (1895) 105 Mich. 31, 62 N. W. 1000; Smith v. Delaney (1894) 64 Conn. 264, 29 Atl. 496, 42 A. 8. R. 181.

Twenty-four years before Green V. Cresswell, the Massachusetts court used language contrary to it, in a case involving identical facts, except that the principal, who was imprisoned, gave property to the defendant to indemnify him. He was sued on his verbal promise to indemnify the plaintiff, who became bail, and was forced to pay. And while the court said this was an original promise, it is submitted that the fact that the defendant was given property to indemnify him differentiates the case from Green v. Cresswell. Perley v. Spring (1815) 12 Mass. 297.

would sign the bond with him, the defendant, then the defendant would save him harmless.18 The defendant was verbally promis. ing to save the plaintiff harmless, if the plaintiff would become liable with the defendant and W. Cook on a bond to Morris. In other words, plaintiff, defendant, and W. Cook were to become liable simultaneously to Morris. It was not a promise, therefore, "to answer for the debt, default or miscarriage of another person," as provided by the statute of frauds, but a promise to answer for the defendant's own default.

All statutes in derogation of the common law are to be strictly construed.19 The statute of frauds is in derogation of the

18 See Hartley v. Sandford (1901) 66 N. J. L. 627, 50 Atl. 454, 55 L. R. A. 206, in which it was said of Thomas v. Cook that "the promisor was himself a signer of the bond against which he promised to indemnify the promisee, and thus the promise was, in a reasonable sense, to answer for that which, as to the promisee, was the promisor's own debt."

In the report of Green v. Cresswell in 4 Jurist 169, 170, Lord Denman is recorded as having interpolated a similar observation during the argument of counsel, in answer to the contention that Thomas V. Cook there applied: "It (Thomas v. Cook) was the case of a cosurety." Patterson, J., made the same distinction: "I do not see in that case whose default or miscarriage the defendant had to answer for, except his own. The consideration for the promise moved from him; and all the parties, including the plaintiff were to be guilty of a default before the indemnity arose. There was no collateral security."

Browne, Statute of Frauds (1895, 5th Ed.) Sec. 161-a, says: "It is to be noticed that in Thomas v. Cook the plaintiff and defendant became

cosureties, while in Green v. Cresswell the defendant was not himself on the bond; and this difference between the facts of the two cases has been supposed to distinguish them, upon the ground that where the defendant is cosurety he is, as such without any special promise, liable already to contribute, and that his special promise to pay the whole may be regarded as but a matter of regulation of contribution between the two sureties." See also Rose v. Wollenburg (1896) 31 Ore. 269, 44 Pac. 382, 384, 39 L. R. A. 378, 65 A. S. R. 826.

.

1 Reed, Statute of Frauds (1884) Sec. 76, said of Thomas v. Cook: and the fact that a third person is to be surety jointly with the promisor and the plaintiff, and that the indemnity covers such person's obligation also, does not make it a guaranty; and it is important that this should be stated, because that case is sometimes cited as going on still another ground, viz., that a promise to indemnify one for becoming a surety is not within the statute of frauds."

19 Souter v. The Sea Witch (1850) 1 Cal. 162, 163; Sibley v. Smith (1853) 2 Mich. 486, 490.

common law. Therefore, it is not applicable to any case unless clearly it comes within the provisions of the statute.

That a verbal promise by one to answer for his own debt, or to indemnify another who becomes bound on an obligation with the promisor, is not within the statute, is well settled. As the Supreme Court of Ohio said many years ago:

if a surety on an obligation, upon his promise of indemnity, procures another to go surety with him on the same instrument, the promise is not within the statute, for the indemnity promised is to secure his own default.''20

It is believed that the facts of the Ohio case cited are identical with Thomas v. Cook, and the general rule above quoted could have been the ground for the decision in the English case.

In Green v. Cresswell, the verbal promise of the defendant was to become effective contemporaneously with the commencement of the plaintiff's liability with Hadley-another person. To secure a benefit for Hadley was the prime purpose of the defendant's promise. There was no pecuniary interest of the promisor to be subserved by his verbal promise. It was, therefore, a promise to answer for the default of another person, and not that of the promisor, as it was in Thomas v. Cook.21

20 Ferrell v. Maxwell (1876) 28 Oh. St. 383, 386-387, 22 Am. Rep. 393; Horn v. Bray (1875) 51 Ind. 555, 19 Am. Rep. 742.

Unfortunately, this correct distinction was not followed in Bissig v. Britton (1875) 59 Mo. 204, 21 Am. Rep. 379, where it appears the defendant signed the replevin bond with the plaintiff, to whom defendant made a verbal promise to indemnify. This was erroneously held to be within the statute, and the view was approved subsequently in Hurt v. Ford (1897) 142 Mo. 283, 44 S. W. 228, 41 L. R. A. 823.

The Virginia court of appeals fell into the same error, partially by following as a precedent Bissig v. Britton (1875) 59 Mo. 204, 21

Am. Rep. 379. Wolverton v. Davis (1888) 85 Va. 64, 6 S. E. 619, 17 A. S. R. 56.

21 This is the reasoning of the Pennsylvania supreme court. In Nugent v. Wolfe (1886) 111 Pa. St. 471, 4 Atl. 15, to induce plaintiff to become bail for a stay of execution on judgment against Powers and Co., defendant verbally prom ised to save him harmless. Plain tiff was nonsuited in an action brought on the verbal promise. The court said: "So far as appears, it was the proper debt of Powers & Co., and the substance of defendant's agreement is that he would see that they paid it; and, if they failed to do so, he would pay it for them. It was literally a prom