Commercial National Bank of Appleton v. Smith

On its face the' guaranty was confessedly bad, under subd. 2, sec. 2307, Stats. 1898, because it failed to express any consideration. It was so held early in the history of this state, and the rule so announced has never been departed from. Taylor v. Pratt, 3 Wis. 674. In a later case (Parry v. Spikes, 49 Wis. 384) the question was again *577reviewed, and the conclusion in Taylor v. Pratt was affirmed; the court holding that a written guaranty upon a promissory note, though referring to the note, and made at the time with it, and constituting a ground of the credit to the maker, is void, by the statute of frauds, if it fails to express the consideration. These cases are conclusive against the plaintiff unless the facts attempted to be set out in the amended complaint are sufficient to take the case out of the operation of the statute. The plaintiff bases its contention upon Dyer v. Gibson, 16 Wis. 557, and subsequent cases, wherein it is held that the promise of one person, though in form to answer for the debt of another, if founded upon a new and sufficient consideration, moving from the creditor and promisee to the promisor, and beneficial to the latter, is not within the statute of frauds, and need not be in writing subscribed by him and expressing the consideration. The difficulty we find with the plaintiff’s case is that, admitting all the facts alleged to be true, they do not bring this case within the rule above stated. Smith purchased some of Eowell’s stock on his own account. Goodrich purchased the remainder on his own account. Goodrick had no interest in Smith's stock. Smith had no interest in Goodrick’s stock. Rowell parted with nothing, and Smith received nothing to make him Rowell’s debtor. The incidental benefit, if any, which might accrue to Smith-by having Eowell out, and Goodrich in, as a stockholder of the corporation,' will not take the case out of the statute. Clapp v. Webb, 52 Wis. 638. In this case it is said: “Under repeated decisions of this court, the alleged promise is within the statute of frauds unless it was founded upon a new and independent consideration passing between the newly contracting parties, and independent of the original contract. . . . We are not aware of the existence of any rule of law which authorizes the inference that, merely because the promisor may be incidentallv benefited by his promise, his obiect in mak*578ing it, and the consideration therefor, is such incidental benefit.” A careful reading of the amended complaint fails to disclose any fact or circumstance sufficient to charge Smith as a guarantor, under the rule of the cases mentioned.

By the Court.— The judgment of the circuit court is affirmed.