William Sanders, Respondent, v. D. Anthony Gillespie, Appellant

William Sanders, Respondent, v. D. Anthony Gillespie, Appellant. (Submitted December 2, 1874; decided December 15, 1874.) Plaintiff being the first and defendant the second indorser of a promissory note, defendant agreed orally that if the plaintiff would pay the note at maturity he would deliver to plaintiff goods to the amount so paid. Plaintiff thereupon agreed in writing to pay and did pay the note. In an action upon the parol agreement, held, that itwas valid and defendant liable thereon; that there was a good consideration, as in consideration thereof plaintiff assumed a different relation and a more onerous duty; that the contract was not within the statute of frauds as it was not to answer for the debt, default or miscarriage of another, but an independent agreement based upon a new consideration moving between the contracting parties. Appeal from judgment of the General Term of the Supreme Court in the fourth judicial department, affirming a judgment of the Onondaga County Court in favor of plaintiff, entered upon the report of a referee. This was an action for breach of an alleged parol contract. The plaintiff had been charged as the indorser of a promissory note. He had been sued in an action with the maker, but had so bargained with the creditor as that judgment had been taken against the maker only. He had further agreed with the creditor, that on the payment of a part of the debt, further time was given for the payment of the residue. A new note for the amount of the residue was then made by the judgment debtor, and indorsed by the plaintiff as first indorser and by the defendant as second indorser. The defendant then agreed orally with the plaintiff, that if the plaintiff would pay the note at maturity, the defendant would deliver to the plaintiff goods to the same amount from the store of the defendant. The plaintiff agreed in writing to pay the note, and .fulfilled his agreement. Defendant delivered a portion of the goods, and then refused to deliver the residue. Ruger & Jenny for the appellant. The agreement was void by the statute of frauds. (Simson v. Patten, 4 J. R., 422; Jackson v. Raynor, 12 id., 291; Mallory v. Gillett, 21 N. Y., 412; Van Slyke v. Pulver, Lalor, 47; Watson v. Randall, 20 Wend., 201.) The agreement was without consideration. (Gibson v. Renne, 19 Wend., 389; Kellogg v. Olmstead, 25 N. Y., 189 ; L'Amoureaux v. Gould, 7 id., 349; Smith v. Bartholomew, 1 Met., 276; Cronhurst v. Laverack, 8 Exch., 208.) W. Sanders, respondent, in person. The transaction did not come within the statute of frauds. (Stodard v. Graham, 23 How., 532; Brown v. Weber, 38 N. Y., 187; Mallory v. Gillett, 21 id., 412.) [MAJORITY — Folger, J.] Folger, J. It is objected by the defendant, that his oral agreement was without consideration. It seems to me otherwise. The plaintiff, in consideration of that agreement, assumed a different relation and a more onerous duty. As indorser of the note, he was liable to pay it, only on the contingency that the maker did not, and that the holder of the note took measures duly to charge him and to fix his liability. His obligation was collateral. By his agreement with the defendant, his obligation became primary and direct. He became the principal debtor as between them. He indeed gave up the liability of the maker to himself. It was a further burthen which he took upon himself, and thus furnished a consideration for the agreement of the defendant. (L'Amoureaux v. Gould, 7 N. Y., 349.) It is further objected, that as the agreement of the defendant was not in writing, it was void by the statute of frauds (2 R. S., 135, § 2, sub. 2), in that it was a special promise to answer for the debt, default or miscarriage of another. I do not think that this objection is tenable. The agreement of the defendant was not collateral. It was an original and o o independent agreement of himself with the plaintiff. It was between the two and confined to them. The plaintiff did not own the debt against the maker of the note, nor was the promise of the defendant to pay that debt to the plaintiff. It did not provide for or depend upon the default or miscarriage of the maker of the note. The liability of the defendant did not depend upon the failure to perform of the makér. (Brown v. Weber, 38 N. Y., 187.) The plaintiff had no cause of action as yet against the maker, and might never have. The debt of the maker of the note was an original debt, and had the defendant, by an oral agreement, specially promised to pay that debt, his agreement would have been collateral. Had the defendant said to the plaintiff, if you will take and advance on this note, I will see that the maker pays it, this would have been a promise to answer for the debt, default or miscarriage of the maker. But when he said, you are not now primarily liable to pay that debt, it is not yours to pay; but if you will agree with me to become primarily liable, if you will make it yours to pay and pay it, I will repay you, and it is paid by the plaintiff; here comes in a new and original consideration of benefit or harm moving between newly contracting parties. It then falls within the third class of cases, of the decision in Leonard v. Fredenburgh (8 J. R., 29); or the first class in Mallory v. Gillett (21 N. Y., 412), for it was an agreement to indemnify one who was a guarantor for a third person to some one else. The judgment should be affirmed with costs. All concur, except Allen, J., not voting. Judgment affirmed.