support must be found in the doctrine that where the consideration of a promise to answer for the debt, default, or miscarriage of another is a substantial benefit moving to the promisor, then the statute does not apply. This rule was recognized in Kutzmeyer v. Ennis, 27 N. J. L. 371, and Cowenhoven v. Howell, 36 N. J. L. 323. To support those decisions on this rule, it must be held that the payment of a corporate debt is substantially beneficial to the stockholders or directors of the corporationa proposition which seems to be denied in other tribunals. Browne, Stat. Fr. §164. In the promise now under consideration there was no such element, and no case has been found in our reports involving the present question. We should therefore decide the matter on principle, or as nearly so as related adjudication will permit. Looked at as res nova, it seems indisputable that the defendant's promise was within the statute. It was to respond to the plaintiff in case the defendant's son should make default in the obligation which he would come under to the plaintiff as soon as the plaintiff became surety for him, an obligation either to pay the debt for which the plaintiff was to be surety, or to reimburse the plaintiff if he paid it. In this statement of the nature of the promise there is, I think, every element which seems necessary to bring a case within the purview of the statute. The parties, in giving and accepting the promise, contemplated (1) an obligation by a third person to the promisee; (2) that this obligation should be the foundation of the promise, i.e., that the obligation of the son to the promisee should attach simultaneously with the suretyship of the plaintiff, and thereupon should arise the obligation of the promisor for the fulfillment of the son's obligation; and (3) that the obligation of the promisor should be collateral to that of the son, i.e., if the latter should perform his obligation, the promisor would be discharged, while, if the promisor was required to perform his obligation, that of the son would not be discharged, but only shifted from the promisee to the promisor. An examination of the cases will show that not many of them are in conflict with this view, when they are free from differentiating circumstances. In the leading case of Thomas v. Cook, 8 Barn. & C. 728, such a circumstance appears in the fact 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. On this difference may be explained the decisions in Jones v. Letcher, 13 B. Mon. 363; Horn v. Bray, 51 Ind. 555, 19 Am. Rep. 742; Barry v. Ransom, 12 N. Y. 462;

Sanders v. Gillespie, 59 N. Y. 250; Ferrel v. Maxwell, 28 Ohio St. 383, 22 Am. Rep. 393; and others-resting on the rule applied in Apgar v. Hiler, 24 N. J. L. 812. The remark of BAYLEY, J., in Thomas v. Cook, that a promise to indemnify was not within either the words or the policy of the statute, has caused much of the confusion existing on this subject, but it is more than counterbalanced by the observations of Lord DENMAN in Green v. Cresswell, 10 Ad. & El. 453, and POLLOCK, C. B., in Cripps v. Hartnoll, 4 Best & S. 414, to the effect that a promise to indemnify may be also an undertaking to answer for the debt or default of another, and that when it is it comes within the operation of the statute. Another circumstance taking cases out of the simple class with which we are concerned is that mentioned in Kutzmeyer v. Ennis, 27 N. J. L. 371, 376, viz., the existence of a new consideration beneficial to the promisor, or, as it is sometimes expressed, moving to the promisor. Such cases are Smith v. Sayward, 5 Me. 504; Lucas v. Chamberlain, 8 B. Mon. 276; Mills v. Brown, 11 Iowa 314; Reed v. Holcomb, 31 Conn. 360; Smith v. Delaney, 64 Conn. 264, 29 Atl. 496; Potter v. Brown, 35 Mich. 274; Comstock v. Norton, 36 Mich. 277; Harrison v. Sawtel, 10 Johns. 242, 6 Am. Dec. 337; Sanders v. Gillespie, 59 N. Y. 250, Tighe v. Morrison, 116 N. Y. 263, 5 L. R. A. 617, 22 N. E. 164. Cases of still another character are sometimes cited in support of the statement that contracts to indemnify are outside of the statute, such as: Cripps v. Harnoll, 4 Best & S. 414; Reader v. Kingham, 13 C. B. N. S. 344; Anderson v. Spence, 72 Ind. 315, 37 Am. Rep. 162; Keesling v. Frazier, 119 Ind. 185, 21 N. E. 552; Beaman v. Russell, 20 Vt. 205, 49 Am. Dec. 775. But these judgments rest on the same idea as Thompson v. Coleman, 4 N. J. L. 216-that there existed no other liability to the promisee than that of the promisor, and so manifestly the statute was not applicable. On the other hand, there is sufficient judicial authority for the proposition that an undertaking to indemnify a person for becoming surety for another is, in the absence of any modifying fact, a promise within the statute. Green v. Cresswell, 10 Ad. & El. 453; Simpson v. Nance, 1 Speers L. 4; Brown v. Adams, 1 Stew. (N. J.) 51, 18 Am. Dec. 36; Kelsey v. Hibbs, 13 Ohio St. 340; Clement's Appeal, 52 Conn. 464; Bissig v. Britton, 59 Mo. 204, 21 Am. Rep. 379; Nugent v. Wolfe, 111 Pa. 471, 56 Am. Rep. 291, 4 Atl. 15; Draugham v. Bunting, 31 N. C. (9 Ired. L.) 10; Hurt v. Ford, 142 Mo. 283, 41 L. R. A. 823; 44 S. W. 228; and May v. Williams, 61 Miss. 126, 48 Am. Rep. 80-were decided on this basis. In the case last mentioned, PORTER, J., stated the true rules very clearly and concisely. No doubt, there are opposing

cases which cannot be explained on any distinguishing circumstances. Such seem to be Chapin v. Merrill, 4 Wend. 657; Jones v. Bacon, 145 N. Y. 446, 40 N. E. 216; Dunn v. West, 5 B. Mon. 376; Vogel v. Melms, 31 Wis. 306, 11 Am. Rep. 608; and Wildes v. Dudlow, L. R. 19 Eq. 198. But some of these cases merely follow Thomas v. Cook, 8 Barn. & C. 728, without noticing the distinction which later discussion has justified, while others appear to have been induced by the injustice of a refusal to enforce a promise on the strength of which the promisee incurred his liability, rather than by a ready purpose to execute the will of the legislature.

No doubt, injustice may result from the enforcement of the statutory rule; but that rule sprang from a conviction that its adoption would prevent more wrong than it would permit, and its enactment in England and perhaps every state in this Union indicates the generality of this assurance. Said Mr. Justice STERRETT in Nugent v. Wolfe, 111 Pa. 471, 56 Am. Rep. 291, 4 Atl. 15: "The object of the statute is protection against 'fraudulent practices commonly endeavored.to be upheld by perjury,' and it should be enforced according to its true intent and meaning, notwithstanding cases of great hardship may result therefrom." With more detail did Chief Justice SHAW, in Nelson v. Boynton, 3 Met. 396, 37 Am. Dec. 148, say: "The object of the statute, manifestly, was to secure the highest and most satisfactory species of evidence in a case where a party, without apparent benefit to himself, enters into stipulations of suretyship, and where there would be great temptation on the part of a creditor, in danger of losing his debt by the insolvency of his debtor, to support a suit against the friends or relatives of a debtor-a father, son or brother-by means of false evidence, by exaggerating words of recommendation, encouragement to forebearance, and requests for indulgence into positive contracts.

Our conclusion is that the promise proved at the trial was insufficient to sustain the action, that the judgment for the plaintiff should be reversed, and that, in accordance with the reservation at the trial, a verdict and judgment should be entered in favor of the defendant.

$274. The Fourth Section of the Statute of Frauds.-A variety of tests have been applied by the courts in determining what promises to satisfy the obligations of another are within the 4th section of the Statute of Frauds. The promise to indemnify one who becomes surety for the debt of a third per

son in reliance on the promise of indemnity is one of the many situations in which courts disagree as to the applicability of the Statute of Frauds. The case of Hartley v. Sandford represents the minority view. Cf. Tighe v. Morrison (1889), 116 N. Y. 263; Guild v. Conrad [1894], 2 Q. B. 885.

Among the tests that have been relied upon by courts to determine what cases of guaranty, suretyship, indemnity, and similar undertakings fall within the terms of the Statute of Frauds, to answer for the debt, default, or miscarriage of another," are the following:

(1) The "main purpose" test-Was the promisor's main purpose to advance his own pecuniary interests or to secure the payment of the debt of another? Kirby v. Kirby (1915), 248 Pa. 117.

(2) The "new and beneficial consideration" theory-that a new and beneficial consideration moving to the promisor takes the promise out of the operation of the statute. This test seems applicable only if the new consideration is approximately equivalent in value to risk assumed. Williston on Contracts, Vol. I. $473.

(3) The question whether the promise was a mere incident to some other legal transaction clearly outside the scope and purpose of the Statute of Frauds-e. g.,

(a) An incident to the contract of employment, that the employee will make good defaults in the accounts of customers whom he brings to his employer. Sutton & Co. v. Gray, [1894], 1 Q. B. 285.

(b) A stipulation in the employment of a del credere agent that in accordance with the custom of merchants he shall answer to his principal for the accounts of his customers. Couturier v. Hastie (1852), 8 Exch. 40, 55; Bullowa v. Orgo (1898), 57 N. J. Eq. 428.

(c) The obligations of parties secondarily liable on negotiable instruments.

(4) The question whether the promisee is the creditor of the original debtor. If the promise is made to the debtor or to a third person, it is outside the scope of the Statute and enforceable. Eastwood v. Kenyon (1840), 11 A. & E., 438.

(5) The absence of novation. Novation is not within the Statute, since the new promisor becomes the only debtor, the old debtor being discharged. Smith Bros. & Co. v. Miller (1907), 152 Ala. 485.

Court of Appeals of New York, 1855. [13 N. Y. 232.]

By Court, DENIO, J.: If this were the first time that an instrument of this character had been before a court, and we were now called upon to construe it without the light of adjudged cases, the first inquiry would naturally be whether the limit of . five hundred dollars related to the amount of purchases to be made by M. E. McKee or to the defendant's ultimate liability; and I think it clearly qualifies the responsibility of the defendant, and not the amount of M. E. McKee's future transaction with the plaintiff. It is as if he had said: "I will be responsible to the amount of five hundred dollars for what stock M. E. McKee has had or may want hereafter," etc. I also think that the words "what stock," in their relation to future purchases, have the force of whatever stock or whatever amount of stock he may want hereafter; and the word "stock" alone denotes the supply of materials for the business of the party spoken of. The word "hereafter" seems to be used in an indefinite sense. It is not at any particular time in the future, but as if it were written at any time hereafter. The words "may want" are significant as to the character of the future dealings in contemplation, and they mean the same thing as may need or require, or may have occasion for. M. E. McKee was a shoemaker, and the plaintiff was a leather manufacturer; and reading of the paper as relating to their respective occupations, and giving the language the interpretation which I have suggested, and leaving out what is said of past indebtedness as immaterial, the following paraphrase would appear to me to express its true meaning: "Sir, I will be responsible to the amount of five hundred dollars for whatever amount of materials in his line M. E. McKee may at any time hereafter require." This is not a refined or artificial interpretation, but is what the plaintiff, or any other person to whom such a paper might be addressed would naturally and in my opinion unavoidably, understand from it. If this is the meaning which the paper naturally conveys, it is the sense which the court is bound to apply to it.

The cases are not entirely harmonious as to the principles of construction which ought to govern in this class of cases, but the weight of authority is altogether in favor of construing