Sheppard v. Newton.

52 S.E. 143, 139 N.C. 533, 1905 N.C. LEXIS 163

• Court: Supreme Court of North Carolina
• Decided: November 15, 1905
• Status: Published

Opinion

HoKe, J\,

after stating tbe case: His Honor below directed a nonsuit, bolding tbat on tbe foregoing testimony, recovery by tbe plaintiff was prevented by tbe Statute of Frauds, Code, sec. 1552, wbicb provides, among other things, tbat no action shall be brought to charge any defendant upon a special promise to answer tbe debt, default or miscarriage of another person, unless tbe agreement shall be in writing.

When a defendant has made a contract or promise of this character, otherwise binding and seeks protection under tbe provisions of this statute, it must be shown tbat tbe debt is tbat of a third person, and tbat such person continues liable for tbe same. If tbe debt claimed is an original obligation of tbe defendant, or if tbe creditor, in accepting tbe obligation or promise of. tbe defendant and in consideration therefor, has released a third person who was tbe original debtor, the statute has no application. This instance of tbe doctrine is well expressed by Butter, J., in Packer v. Benton, 35 Conn., 350, where tbe promise to wbicb this feature of tbe statute applies is thus defined: “An undertaking by a person not before liable, for tbe purpose of securing or performing tbe same duty for wbicb tbe party, for whom tbe undertaking is made, continues liable.”

A statement on tbe same subject, somewhat more extended and very satisfactory, will be found in Clark on Contracts, p. 67, as follows: “There must either be a present or prospective liability of a third person for which the promisor agrees to answer. If the promisor becomes himself primarily and not collaterally liable, the promise is not within the statute, though the benefit from the transaction accrues to a third person. If, for instance, two persons come into a store and one buys and the other, to gain him credit, promises the seller ‘if he does not pay you, I will/ this is a collateral undertaking and must be in writing; but if he says, ‘Let him have the goods and I will pay/ or ‘I will see you paid/ and credit is given to him alone, he is himself the buyer, and the undertaking is original. In other words whether the promise in such a cáse is within the statute depends on how the credit was given. If it was given exclusively to the promisor, his undertaking is original; but it is collateral, if any credit was given to the other party.” To like effect-are the decisions of our own court. Whitehurst v. Hyman, 90 N. C., 487; White v. Tripp, 125 N. C., 523.

Applying these principles to the foregoing statement of the evidence, the court is of opinion that there was error in. directing a nonsuit, and the plaintiff is entitled to have his cause submitted to the jury on the question whether the defendant is not answerable as the original or present debtor on the plaintiff’s demand.

New Trial.