Opinion
Decided May 5, 1936.
If the main purpose of a promise is to subserve a pecuniary or business purpose of the promisor and not merely to answer for the debt of another, though the effect of performance of the promise will be to discharge that debt, the promise is not "a special promise to answer for the debt of another" within the meaning of P.L., c. 327, s. 2.
BILL IN EQUITY, for the appointment of a receiver to dispose of a quantity of apples owned by the defendant Foster, mortgaged to the plaintiff Beede, and stored in a warehouse of the claimant Taylor.
The plaintiff was duly appointed receiver and subsequently presented his final account to the court, showing a balance in his hands of $729.21. This sum the plaintiff seeks to apply upon the defendant's mortgage note which he holds. The claimant seeks to have it applied in satisfaction of his unpaid bill for storage, amounting to $621.43. The case was referred to a master, who, by agreement of the parties, was authorized to adjudicate the reciprocal rights and liabilities of the plaintiff and claimant. The master found that the claimant did not receive the apples as a public warehouseman, but rented a building to the defendant for storage purposes. He accordingly ruled that the claimant had no lien upon the funds in the receiver's hands. He further ruled, however, that the plaintiff had become personally responsible to the claimant for the rental of the building.
The parties having agreed that the funds in the receiver's hands "should be considered as trusteed by the claimant," the court, (Lorimer, J.), in accordance with the master's findings, ordered that the plaintiff, as receiver, pay to the claimant the sum of $520.33. To this order the plaintiff excepted.
The facts upon which the master based his ruling that the plaintiff was personally responsible to the claimant for the rental of the storage building were reported by him as follows:
"While the apples were being picked and shortly after deliveries had been commenced, Mr. Taylor went to Mr. Foster's farm in Canterbury and there met the plaintiff, Beede. At that time he ascertained definitely that Mr. Beede had a mortgage on the apples. Taylor had had some previous experience in taking mortgaged property into his storehouse and he then told Mr. Beede that if Foster wasn't able to pay the rent he should look to him for it, and in reply Mr. Beede said, `I will expect you to get your money, if not from Mr. Foster, you will from me.'
"The rent of the building ran from October 15, 1932. On or about November 15, 1932, Mr. Taylor sent a bill for the first month's rent to the plaintiff . . . . Upon receiving this bill, Beede wrote a letter to Taylor in which he denied liability for the rent. A few days later Beede went to Manchester and had a talk with Taylor in Taylor's office. Taylor then told Beede that Foster had paid no rent; that he did not want the bill to run and again said he would have to look to Beede to pay the rent if Foster did not and also for the electricity, and Beede again said, `I will see that you get your rent.'
"Beede had a personal interest in seeing to it that the apples were properly stored and cared for by reason of his loan to Foster for which the apples were his only security and also by reason of his undertaking to assist in disposing of the apples."
"From the time that Taylor discovered that there was a mortgage on the apples and in permitting the apples to remain in the storage warehouse after his talk with Beede in Manchester, he was relying upon Beede's agreement to pay."
Foster Lake and Gordon S. Lord (Mr. Lord orally), for the plaintiff.
McLane, Davis Carleton (Mr. William L. Phinney orally), for the claimant.
The plaintiff contends that his oral agreements to see that the rent was paid to the claimant constituted "a special promise to answer for the debt . . . of another" which, in the absence of a memorandum in writing, is unenforceable under the second section of the statute of frauds. P.L., c. 327, s. 2. The parties are in agreement as to the test by which the soundness of this contention shall be judged, which is well settled by the former decisions of this court.
"Whenever the main purpose and object of the promisor is not to answer for another, but to subserve some pecuniary or business purpose of his own involving either a benefit to himself or damage to the other contracting party, his promise is not within the statute." Wills v. Cutler, 61 N.H. 405, 409.
"The distinction is between a promise the object of which is to promote the interest of another, and one in which the object is to promote the interest of the party making the promise. The former is within the operation of the Statute, the latter is unaffected by it." Janvrin v. Powers, 79 N.H. 44, 46; Machinist v. Green, 79 N.H. 366,367. To the same effect are Riley v. Bank, 86 N.H. 329; Lang v. Henry, 54 N.H. 57, 61; Britton v. Angier, 48 N.H. 420; Robinson v. Gilman, 43 N.H. 485; Allen v. Thompson, 10 N.H. 32. This is in accordance with the general rule prevailing in this country, which has been stated as follows:
"Where the consideration for a promise that all or part of a previously existing duty of a third person to the promisee shall be satisfied is in fact or apparently desired by the promisor mainly for his own pecuniary or business advantage, rather than in order to benefit the third person, the promise is not within" the statute "unless the consideration is merely a premium for the promisor's insurance that the duty shall be discharged." Am. Law Inst. Restatement of Contracts, s. 184; 2 Williston, Contracts (Rev. ed.) s. 472.
Judged by this test, both the ruling of the master and the order of the court were correct. The finding of the master that "Beede had a personal interest in seeing to it that the apples were properly stored and cared for by reason of his loan to Foster for which the apples were his only security and also by reason of his undertaking to assist in disposing of the apples," is decisive of the case. From this finding it is plain that the main purpose of the plaintiff in making the promises above referred to was "to subserve some pecuniary or business purpose of his own." Wills v. Cutler, supra. Consequently his agreement is not within the statute.
Exception overruled.
All concurred.