pal's funds in his hands, can be enforced against the promisor. The statute affects verbal undertakings made with the creditor to pay the debt of another out of the promisor's own funds. When he agrees to pay out of the principal's funds possessed by him, he becomes a trustee, and there is a duty to allocate to the promisee the funds of the principal.42 The assent of the creditor is not necessary, if the verbal promise is made to the principal to discharge the latter's indebtedness with funds intrusted to the promisor for that purpose. The funds are impressed with a trust for the benefit of the obligee, who can sue at law.43 It has been held that if the principal, prior to any promise to the creditor, gave the money to the promisor without any intention that it should be applied to the discharge of his debt to the promisee, a new consideration moving between the principal and the promisor is necessary to enable the enforcement of the promise by the obligee. Consideration between the promisor and the promisee, such as a detriment to the promisee, would be insufficient, unless the main purpose is to benefit the promisor. The pre-existing consideration between the principal and the verbal promisor for the transfer of the money or property to the latter, will not take out of the statute the promise made to the creditor to pay the debt of the former.44 If the agreement is that the obligee is to be paid out of money belonging to the principal which may come into the promisor's hands at a future date, no assurance being given that there will be any such funds in his possession, although the debtor consents to it and there is consideration, the verbal promise is a defense if the funds are not received by the promisor. It is an agreement to pay the debt of another person.45 However, if, 42 Baldwin Coal Co. V. Davis (1900) 15 Colo. 371, 62 Pac. 1041; Ledbetter and Harris v. McGhees and Co. (1889) 84 Ga. 227, 10 S. E. 727; Meyer v. Hartman (1874) 72 Ill. 442; Mitts v. McMorran (1887) 64 Mich. 664, 31 N. W. 521; Dock v. Boyd and Co. (1880) 93 Pa. 92. 43 Justice v. Tallman (1878) 86 Pa. 147. 44 McKenzie v. Puget-Sound National Bank (1894) 9 Wash. 442, 37 Pac. 668, 43 A. S. R. 844. 45 Belknap v. Bender (1878) 75 N. Y. 446, 31 Am. Rep. 476; Peele v. Powell (1911) 156 N. C. 553, 73 S. E. 234, see on rehearing 161 N. C. 50, 76 S. E. 698; Shaaber et al. v. Bushong and Co. (1884) 105 Pa. 514. with knowledge of all the facts, the promisor leads the obligee to believe that he possesses funds or property of the principal, thereby causing the latter to delay in attempting to collect from the obligor by agreeing to pay his debt out of such funds, a deficiency in the assets will be no defense.46 If the undertaking is verbally made that no money will be paid the principal without notifying the promisee, it is original. It was not made to pay another's debt, but to give notice before making settlement with another, in order that the promisee might enforce payment from the principal by attaching the money in the possession of the promisor.47 The mere physical possession by the promisor of the funds of the debtor, not deposited with him for the purpose of paying the debt, will not withdraw the promise from the statute of frauds, although the creditor may be entitled to the right of subrogation.48 And the mere possession of funds belonging to the principal obligor, without proof of his request or consent to the verbal promise that his debt be paid therefrom, will not make the verbal promisor liable to the creditor as promisee. The consent of the principal debtor, express or implied, is necessary to take the verbal promise out of the statute of frauds.49 § 52. Coexisting liability of principal and guarantor. A promise by the defendant may be original and yet not an absolute one. All promises, where there is no principal debtor, are original and absolute on the part of the verbal promisor. But some promises are original, when there is an existing liability of a principal debtor. Such promises are original, but not absolute.50 Such cases are illustrated by those coming within what 46 McKenzie v. Jackson (1842) 4 Ala. 230, 236. 47 Towne V. Grover (1830) 9 Pick. (Mass.) 306. 48 Hughes v. Lawson (1876) 81 Ark. 613, 614. 49 Richardson v. Williams (1861) 49 Me. 558; Gower v. Stuart (1879) 40 Mich. 747. 50 Brown v. Weber (1868) 38 N. Y. 187, 190. It was correctly said in Richardson Press v. Albright (1918) 224 N. Y. 497, 121 N. E. 362, 364, that: "When the primary debt continues to exist, the promise of another to pay the debt may be original, or it may not be; but it is regarded as original only when the party sought to be charged clearly becomes, within the intention of the parties, a principal debtor primarily liable."' is occasionally referred to as the main purpose rule, hereinafter discussed in detail. Usually it may be stated as a rule, referring to the above diagram, that if the promise represented by the line a-b exists, then the promise represented by the line b-c, being collateral to a-b, and intended to be effective only if the promise a-b is not fulfilled, in order to be enforceable must be evidenced by writing signed by the defendant. In fact, at one time it appears the arbitrary test was that if the third party remained liable, the defendant could not be held on a verbal promise.51 § 53. Where the principal has a defense or is not liable. Suppose that C, for a consideration, verbally promises B that he will pay a debt for A, who is a minor, or a married woman, or who has a defense so far as B is concerned. Is such promise binding? This will depend upon whether A's contract with B is void or voidable. If A's promise to pay B is void, no legally 51 In the opinion in Rintoul v. White (1888) 108 N. Y. 222, 15 N. E. 318, it is stated: "When, by some authorities, it was said that a verbal promise to pay the debt of another was always collateral and invalid if the primary debt continued to exist concurrently with the promise, a simple and easy test was furnished to determine whether the statute did or did not apply. But when that test was discarded, and it became the law that a promise to pay another's debt might be original, although that debt subsisted, and was in no manner extinguished, the presence of such continued liability raised a cloud of doubt and ambiguity which, perhaps, will never be entirely dissipated." There is a real defense enforceable contract ever existed. available to any one standing in A's shoes. But if such contract is voidable, then the verbal special promise between C and B coexists with A's promise to B. Therefore, under the statute of frauds, it cannot be enforced. True, the minor or married woman or person whose contract is voidable, may see fit to set up the defense of infancy or coverture, if sued by B. But if the view of the jurisdiction is that infancy renders the contract voidable only, then it is a personal defense, of which no third person can avail himself. Certainly at the time C made his special promise to B, the contract between A and B was binding; and nothing which occurred subsequently will make the verbal undertaking of C enforceable.52 It follows that if there is no legal liability on the part of the one for whom the promise is made, even though another person not contemplated by the promisor or promisee owes a legal duty to discharge the debt, the promisor's verbal undertaking is an original one, and the statute of frauds affords him no shield. For example, a promise by C to pay for articles furnished by B for A's burial, if A's nephew failed to pay, is original because there is no privity of contract between B and A's nephew. C's promise to pay if the legal representative of A's estate failed to pay would probably make this a collateral promise.53 A verbal agreement by C to procure A to sign a written guaranty to B, which A refused to sign, is an original undertaking not affected by the statute, since no principal was ever bound.54 52 Dexter v. Blanchard (1865) 11 Allen (Mass.) 365; Scott v. Bryan (1875) 73 N. C. 582; Kun's Executor v. Young et al. (1859) 34 Pa. 60; Brown et al. v. Farmers' and Merchants' National Bank of Cleburne (1895) 88 Texas 265, 31 S. W. 285, 33 L. R. A. 359; see notes to the last case in the L. R. A. report; International Text-Book Co. v. McKone et al. (1907) 133 Wis. 200, 113 N. W. 438. In King v. Summitt et al. (1881) 73 Ind. 312, without stating whether the minor's promise was void or voidable, it was held contra to the text on the ground that to be with 58 Mease v. Wagner (1821) 1 McChord (S. C.) 395. 54 Bushell et al. v. Beaven (1834) 1 Bingham (N. C.) 103, 131 Eng. Reports Reprint 1056. § 54. Consideration for the verbal promise. Suppose that the line ab (Sec. 52) continues in existence, and the defendant verbally makes a promise, represented by the line b-c, to be responsible for the indebtedness of the principal, but the defendant's promise was induced by a consideration consisting (1) of a detriment to the plaintiff-obligee-creditor; (2) by a consideration which is incidentally a benefit to the defendantobligor-promisor-guarantor; (3) by a consideration which is principally beneficial to the defendant-obligor-promisor-guarantor, and gives him some property, money, or advantage of great value; would the defendant be liable? Without attempting to refine, we may accept the brief popular definition of consideration to be "a detriment incurred by the promisee or a benefit received by the promisor at the request of the promisor."' 55 It is thus seen that so far as the requisites are concerned, speaking very generally, consideration is sufficient to sustain a contract if there is either a detriment to the promisee or a benefit to the promisor. But let us analyze the cases to see whether in the classes of cases mentioned, the consideration is sufficient to render unnecessary a writing in order to hold the promisor under section 4 of the statute of frauds. § 55. Where the consideration is a detriment to the promisee. Suppose the plaintiff had a valid claim against A, or that he had a lien on A's property. The defendant, in consideration of the plaintiff's forbearance to sue A, which plaintiff had a legal right to do, verbally promised the plaintiff to pay A's debt. The plaintiff forebore to sue A, and the defendant failing to pay, the plaintiff brought an action on the defendant's verbal promise. Here the defendant would not be liable, because it came within the cases intended by the statute to be in writing.56 It will be noted here that the lines a-b and b-c coexist (see Sec. 52), and the promise is a legal detriment to the plaintiff, because he gave up the right he had to proceed against A. But suppose the defendant verbally agreed that if the plaintiff would not proceed with his proposed action against A, he, 55 Williston on Contracts (1920) Sec. 102. 56 Kirkham v. Marter (1819) 2 B. & A. 613; Krutz v. Stewart (1876) 54 Ind. 178. |