Hill was employed to work on a property, the defendant being retained by the building owner as surveyor to receive and pay over to Hill monies due to him. When Hill required materials for his work, these were supplied by the plaintiff on the defendant’s promise to pay the plaintiff for them out of the monies which he received to pay Hill. Although Hill himself agreed with this arrangement, the defendant nevertheless failed to pay the plaintiff out of the monies available. When the plaintiff then sued him for breach of the agreement the defendant sought to invoke s.4. The plaintiff’s argument was: ‘This is not a promise to answer for the debt or default of another, within the meaning of the Statute of Frauds. It is not a promise to be answerable out of the defendant’s own funds, but to pay out of the funds of another, on receiving his directions for that purpose. . . Such a contract is direct, and not collateral, and therefore binding without being in writing.’
Parke B said: ‘Even if there was an original debt from Hill the case is no more than a prospective assignment of a particular fund, with an attornment [an acknowledgment], so to speak, of the defendant to that assignment.’ The defendant’s counsel continued: ‘The general rule is, that the undertaking is collateral, wherever there is an original debt’ to which Parke B replied: ‘That is the general rule, but with exceptions . . ‘
Held: ‘Lord Abinger, C.B. On reading the declaration, the first thing that struck me was, that no debt necessarily appeared on the face of it to be due from Hill at all; it is quite consistent with all that is stated on the record, that he was never liable to the plaintiff. That alone is an answer to the objection raised by the defendant. But further, if the defendant contracted, not to pay Hill’s debt out of his own funds, but only faithfully to apply Hill’s funds for that purpose, when they should come to his hands, that contract would not be within the operation of the statute. Parke, B. I am of the same opinion. There is nothing on the face of the declaration to imply a contract by the plaintiff with Hill. If that be so, it is clear the defendant’s contract was an original, not a collateral one, and so not within the statute. But even if that were otherwise, this is nothing more than a prospective assignment of funds which were to come to the defendant’s hands for Hill, and an attornment, as it were, by the defendant to that assignment: and the authorities show that, in such case, the contract is not within the statute. On this ground also the plaintiff is entitled to the judgment of the court. Alderson and Gurney, Bs., concurred.
Judges:
Parke B, Lord Abinger CB
Citations:
(1835) 2 CM and R 627
Jurisdiction:
England and Wales
Contract
Updated: 26 November 2022; Ref: scu.199771