§ 197. New promise after action brought. On principle there is a difference between the validity of a new promise made after action brought where the defence is infancy, and where the defence is the Statute of Limitations or bankruptcy, since in the latter cases prior to the new promise there is not even a voidable obligation. An infant's promise is valid until repudiated.84 Accordingly a right of action exists against him at the time the action is brought, even though no new promise has been made. The effect of the new promise is merely to defeat the defence of infancy if it is pleaded. This view is accepted by some of the decisions and a new promise is held sufficient though made after begining of the action.85 But other decisions based in the main on an early English case decided before the nature of an infant's obligation was fully understood hold that the new promise in order to be effective must be made before action brought. Where, however, the obligation is barred by the Statute of Limitations, it is in reality the new promise which is the basis of the creditor's right. Accordingly until the new promise is made, no right of action exists in favor of a creditor whose claim is barred. The courts, therefore, now generally hold a new promise, after action brought, insufficient. The same reasoning is involved where a discharge in the bankruptcy is concerned. Here also a promise after action brought is insufficient.89 87 § 198. A new promise made on Sunday, or by an insolvent. If under the local law a contract cannot be made on Sunday, 84 See Duncan v. Dixon, 44 Ch. Div. 211, 213, also infra, § 231. 85 Slator v. Trimble, 14 Irish C.L. 342; Best v. Givens, 3 B. Mon. 72; Snyder v. Gericke, 101 Mo. App. 647, 74 S. W.377. 86 Thrupp v. Fielder, 2 Esp. 628; Thornton v. Illingworth, 2 B. & C. 824; Hyer v. Hyatt, 3 Cr. C. C. 276; Ford v. Phillips, 1 Pick. 202; Freeman v. Nichols, 138 Mass. 313; Merriam v. Wilkins, 6 N. H. 432, 25 Am. Dec. 472; Hale v. Gerrish, 8 N. H. 374. 87 See supra, §§ 179, 181, 196. 88 Bateman v. Pinder, 3 Q. B. 574; Bradford v. Spyker's Adm., 32 Ala. 134; Martin v. Jennings, 52 S. C. 371. Under theview formerly prevailing that the statute merely raised a presuption of payment, the English court decided in a case, now overruled, that a new promise after action brought would enable the creditor to recover. Yea v. Fouraker, 2 Burroughs, 1099, and some early cases in the United States have applied the same doctrine. Love v. Hackett, 6 Ga. 486; Oliver v. Gray, 1 H. & G. 204; Danforth v. Culver, 11 John. 146; Stevens v. Hewitt, 30 Vt. 262. 89 Thornton v. Nichols, 119 Ga. 50, 45 S. E. 785. neither an express new promise nor one implied from a part payment on that day should be sufficient basis for a creditor's recovery of a barred debt.90 If a new promise to pay a debt barred by the Statute of Limitations is made in any form by an insolvent who subsequently goes into bankruptcy its validity need not be questioned so far as it imposes a merely personal liability upon the debtor, enforceable from after-acquired property if the debtor is not discharged; but the right of a creditor who has received such a promise to share in the assets of the bankrupt has been denied, and it seems justly if the creditor has reasonable cause to believe his debtor insolvent, on the ground that the allowance of proof of the obligation in bankruptcy would effect a preference.91 It was so held in Hussey v. Roquemore, 27 Ala. 281; Bumgardner v. Taylor, 28 Ala. 687; Dennis v. Sharman, 31 Ga. 607; Clapp v. Hale, 112 Mass. 368, 17 Am. Rep. 111; Whitcher v. McConnell, 59 N. H. 470; Haydock v. Tracy, 3 W. & S. 507. But see contra, Ayres v. Bane, 39 Iowa, 518; Thomas v. Hunter, 29 Md. 406, where the new promise was held merely evidence to support an action on the original indebtedness. In Iowa by statute any written admission of indebtedness is sufficient to revive the debt. This statute was relied on by the court and may justify the decision in that State. 91 In In re Salmon, 239 Fed. 413, 414, L. Hand, J., went farther, saying: "I have found only two cases dealing with the question—In re Banks, 207 Fed. 662, 665, in which Judge Ray makes the question turn upon the creditor's knowledge of the insolvency, there having been a payment; and In re Blankenship, 220 Fed. 395, where Judge Bledsoe allowed a written acknowledgment to revive the debt, the creditor being ignorant of the bankrupt's financial condition.. "I cannot agree that a bankrupt, finding himself in a desperate financial position, may revive an outlawed claim by a written acknowledgment or a part payment. If the situation is looked at without the usual fiction, such an act creates anew the obligation quite as much as though the bankrupt on the eve of bankruptcy were to execute a bond without consideration in a jurisdiction where no consideration is necessary to support a bond. The result is no different if the usual fiction is accepted under which the payment is taken. as evidence of a new promise to pay the indebtedness. Under that theory it still remains equally true, as in the case of a bond, that the new promise alone recreates the obligation. Such a promise seems to me to fall within the term 'incumbrance' in section 67 e of the Bankruptcy Act, and within the word 'charge' of section 35 of the New York Personal Property Law (Consol. Laws, c. 41). By it alone the assets of the bankruptcy are charged with an obligation which was either nonexistent before, or against which there was a valid defence, it makes no difference which. It is unnecessary to consider whether § 199. A new promise based on a previous agreement within the Statute of Frauds. A contract within the Statute of Frauds is not void but merely unenforceable; 92 and a memorandum made after the original contract removes the statutory difficulty and makes the original contract enforceable.93 But it is possible to suppose either that a new promise to perform the originally unenforceable contract is oral or, if written, that it is not an accurate or complete memorandum of the earlier transaction. Two objections may be made to the enforcement of the new promise. First, that it lacks consideration and, second, that it is in violation of a policy of the law laid down in the Statute of Frauds. As to the first difficulty, it may be said that the question is not materially different from that presented by new promises after debts have been barred by other technical rules of law, except that a contract within the Statute of Frauds though it may be said to exist even if no memorandum has been made 94 has never been enforceable.95 The same objection, it should be observed, however, applies to promises by sureties who have never been charged owing to some condition precedent.96 Whatever may be said of the first difficulty, the second would certainly seem to prohibit the enforcement of an oral promise. Even if it be admitted that the Statute of Frauds is intended wholly for the benefit of a defendant, it undertakes to free him from the chance of being held liable because of perjured testimony as to oral promises which he is alleged to have made. This policy of the law can hardly be carried out by allowing a plaintiff to testify that the defendant not only made an oral agreement originally but that he subsequently made another oral promise to carry or not the creditor, Hamilton H. Salmon, was put on inquiry as to the bankrupt's insolvency, the distinction taken in Re Banks, supra, because the question is only whether the bankrupt may gratuitously destroy a part of his estate, i. e., a valid defence, in the interest of a third person, and to the prejudice of his creditors. The case is analogous to a voluntary transfer in fraud of creditors, where it is never necessary to show that the transferee had 92 See infra, §§ 527 et seq. 94 See infra, § 527. 95 This circumstance would exclude it from the terms of the rule stated in the note to Wennall v. Adney. See supra, § 147, and infra, § 202. 90 See supra, § 157. 97 out the first agreement. The argument is not so strong against written promises, which definitely state the terms of the promise, though they do not sufficiently state the whole of the original transaction to serve as a memorandum. The question has arisen in regard to various sections of the statute and the decisions are far from uniform. A promise to perform an oral antenuptial agreement has been held invalid; "7 as has a subsequent promise made to perform an oral guaranty; 98 but other decisions hold the defendant bound upon a negotiable instrument indorsed or made by him in performance of an oral promise within the statute or in satisfaction for its breach.99 Such decisions are slight authority for the proposition that any subsequent written promise is sufficiently supported by a prior contract within the statute, and are no authority at all for the validity of a subsequent oral promise. It has, however, been directly held in at least one case that a subsequent informal written promise is enforceable.1 A new written promise signed by the party to be charged, the only considera "In Lloyd v. Fulton, 91 U. S. 479, 485, 23 L. Ed. 363, a promise after marriage to carry out an oral antenuptial agreement was said to be invalid. So in Richardson v. Richardson, 148 Ill. 563, 36 N. E. 608, 26 L. R. A. 305, a promissory note, made after his marriage by a husband, was held not sufficiently supported by a prior oral antenuptial agreement. It should be observed in this connection that even if an oral antenuptial agreement is actually carried out after marriage, the settlement is treated as a voluntary conveyance. Re Holland, [1902] 2 Ch. 360; Lloyd v. Fulton, 91 U. S. 479, 23 L. Ed. 363; Winn v. Albert, 2 Md. Ch. 169; Albert v. Winn, 5 Md. 66; Deshon v. Wood, 148 Mass. 132, 19 N. E. 1, 1 L. R. A. 518; Borst v. Corey, 15 N. Y. 505. Whereas a trust unenforceable because of the Statute of Frauds may be carried out by the promisor, and his trustee in bankruptcy cannot set the conveyance aside. Bailey v. Wood, 211 Mass. 37, 97 N. E. 902, and cases cited; and gen erally an executed conveyance will not be regarded as voluntary when given in satisfaction of an oral agreement within the statute. Sedgwick v. Tucker, 90 Ind. 271. 98 Hall v. Soule, 11 Mich. 494. The subsequent promise was in writing but did not sufficiently state the terms of the original bargain to serve as a memorandum of it. So in Ribock v. Canner, 218 Mass. 5, 105 N. E. 462, payments in part performance of an oral guaranty were held not to validate the guaranty. 99 Rogers v. Stevenson, 16 Minn. 68; Nelson v. Diffenderffer, 178 Mo. App. 48, 163 S. W. 271; Paul v. Stackhouse, 38 Pa. 302; Rankin v. Matthiespen, 10 S. Dak. 628, 75 N. W. 196; Kinzie v. Harper, 15 Ont. L. R. 582. 1 Wills v. Ross, 77 Ind. 1, 40 Am. Rep. 279. The subsequent promise was in a letter which did not so state the terms of the original bargain as to be a sufficient memorandum by itself. tion for which was the rescission of a prior oral contract unenforceable because not to be performed within a year, has also been held binding; 2 as have promises by one who originally entered into an oral contract for the purchase or sale of an interest in land, to carry out his agreement or reimburse the promisee for his failure to do so.3 On the other hand, an oral subsequent promise to pay for services of a real estate broker, has been held not binding in a State which required the original transaction to be in writing. And a subsequent promise to pay damages for failure to carry out an oral contract for the sale of goods which was within the Statute of Frauds has also been held invalid for insufficient consideration.5 $200. Ratification and adoption. There are other classes of cases usually referred to the heads of ratification and adoption which in their essence involve the making of promises which are enforced by the law although supported by no present consideration. Thus where a contract has been made by one who purports to be, though he is not agent for another, the ratification of the agreement by the latter for the first time subjects him to legal liability. If he is regarded by the law as simultaneously becoming the promisee 2 Stout v. Ennis, 28 Kans. 706. 3 In Harris v. Clark, 94 Iowa, 327, 62 N. W. 854, and Poole v. Horner, 64 Md. 131, 20 Atl. 1036, the defendant had orally contracted to pay the profit derived from a real estate transaction, to the plaintiff, and, after having made a profit, again promised to pay the money and was held legally bound to fulfil his promise, though the original agreement was held an oral trust within the statute. In Brown v. Latham, 92 Ga. 280, 18 S. E. 421, a son in consideration of land conveyed promised orally to reconvey it. It was held that this state of affairs was sufficient to support a promise after the father's death to pay the defendant's sister a share of the value of the land. In Farnham v. O'Brien, 22 Me. 475, a promise to reimburse the plaintiff for expense incurred in preparing to carry out an unenforceable oral agreement to make a lease was sustained. Stout v. Humphrey, 69 N. J L. 436, 55 Atl. 281. This decision was followed in Bagnole v. Madden, 76 N. J. L. 255, 69 Atl. 967. Though in the latter case the subsequent promise was written, the New Jersey court held that a proper construction of the local statute required the original bargain to have been in writing. In Muir v. Kane, 55 Wash. 131, 104 Pac. 153, 26 L. R. A. (N. S.) 519, such a subsequent written promise was enforced; as was a note subsequently given in payment in Mohr v. Rickgauer, 82 Neb. 398, 117 N. W. 950. 5 Hooker v. Knab, 26 Wis. 511; Nichols v. Mitchell, 30 Wis. 329. |