H2O

4.1.3.1 Haigh v. Brooks

by Kessler, Gilmore & Kronman
1

10 Adol. & El. 309, 113 Eng. Rep. 119

2

HAIGH AND ANOTHER
against
BROOKS.

3

1839

4

[309] Declaration in assumpsit, stating that defendant promised, in consideration that plaintiffs, at his request, would give up to him a certain guarantee of £10,000 on behalf of L., then held by plaintiffs. Averment, that plaintiffs gave up the guarantee, but defendant did not perform his promise. Plea, that the guarantee was a promise to answer for the debt of another, and that there was no agreement, &c., in writing, wherein any sufficient consideration was stated (according to stat. 29 Car. 2, c. 3, s. 4). And that the supposed guarantee was contained in the following written memorandum signed by defendant:—"Messrs. H." (the plaintiffs). "In consideration of your being in advance to L. in the sum of £10,000 for the purchase of cotton, I do hereby give you my guarantee for that amount on their behalf. J. B." Held, by the Court of Queen's Bench, on demurrer, that the words of the guarantee did not necessarily imply a past advance; and that, if they left it even doubtful whether a future advance was not guaranteed, a promise made in consideration of giving it up was valid. But, held, further, that at all events it appeared on the pleadings that the plaintiffs had delivered something to the defendant, on the faith of his promise, which he at the time considered valuable, and this being so, and no fraud imputed, he could not afterwards excuse a breach of the promise, by alleging that the thing given up was not of the value he had supposed. Judgment affirmed all error, by the Court of Exchequer Chamber. Held, by the Court of Error, that the guarantee did not necessarily imply a past advance; and that the plaintiffs, on a trial, might have offered evidence to shew that future advances had been contemplated. Held also, Maule B. dubitante, that the paper on which the guarantee was written appeared by the declaration and plea to have been given up by plaintiffs to defendant; and that this alone was consideration for a promise. Held, by the Court of Queen's Bench, that, on the trial of an issue of fact raising the question whether or not the above guarantee bad been delivered up, the guarantee might be given in evidence, though unstamped.

5

[S. C. 2 P. & D. 452; 9 L. J. Q. B. 194. See Souch v. Strawbridge, 1846, 2 C. B. 808. Followed, Goldshede v. Swan, 1847, 1 Ex. 160. Adopted, Edwards v. Jones, 1849, 8 C. B. 445; Bainbridge v. Wade, 1850, 16 Q. B. 98; Broom v. Batchelor, 1856, 1 H. & N. 263.]

6

Assumpsit. The first count of the declaration stated that heretofore, to wit on, &c., "in consideration that the said plaintiffs, at the special instance and request of the said defendant, would give up to him a certain guarantee of £10,000 on behalf of Messrs. John Lees and Son, Manchester, then held by the said plaintiffs, he the said defendant undertook, and then faithfully promised the said plaintiffs, to see certain bills, accepted by the said Messrs. John Lees and Sons, paid at maturity; that is to say, a certain hill of exchange" bearing date, &c., drawn by plaintiffs upon and accepted by the said Lees and Sons, payable three months after date, for £3466. 13s. 7d., and made payable at, &c.: and also a certain other bill, &c.: describing two other bills [113 Eng. Rep. 120] for £3000 and £3200 drawn by plaintiffs upon and [10 Adol. & El. 310] accepted by Lees and Sons, and made payable at, &c.: averment, that plaintiffs, relying on defendant's said promise, did then, to wit on, &c., "give up to the said defendant the said guarantee of £10,000" Breach, non-payment of the bills, when they afterwards came to maturity, by Lees and Sons, or the parties at whose houses the bills respectively were made payable, or by defendant, or any other person, &c.

7

Third plea, to the first count: "That the said supposed guarantee of £10,000, in consideration of the giving up whereof the defendant made such supposed promise and undertaking as therein mentioned, and which guarantee was so given up to the said defendant as therein mentioned, was a special promise to answer the said plaintiffs for the debt and default of other persons, to wit the said Messrs. John Lees and Sons in the said first count mentioned; and that no agreement in respect of or relating to, the said supposed guarantee or special promise, or any memorandum or note thereof, wherein any sufficient consideration for the said guarantee or special promise was stated or shewn, was in writing and signed by the said defendant, or any other person by him thereunto lawfully authorized. And the said defendant further saith that the said supposed guarantee, in consideration of the giving up whereof the defendant made the said supposed promise and undertaking in the said first count mentioned, and which was so given up as therein mentioned, was and is contained in a certain memorandum in writing signed by the defendant, and which was and is in the words and figures and to the effect following, that is to say :—'Manchester, 4th February, 1837. Messrs. Haigh and Franceys. Gent.— In consideration of your being [10 Adol. & El. 311] in advance to Messrs. John Lees and Sons, in the sum of £10,000 for the purchase of cotton, I do hereby give you my guarantee for that amount (say £10,000), on their behalf. John Brooks.' — And that there was no other agreement or memorandum or note thereof, in respect of, or relating to, the said last-mentioned supposed guarantee or special promise: wherefore the said defendant says that the supposed guarantee, in consideration whereof the said defendant made the said supposed promise and undertaking in the said first count mentioned, was and is void and of no effect; and therefore that the said supposed promise and undertaking in the said first count mentioned was and is void and of no effect." Verification.

8

Demurrer, assigning for cause, "That it is admitted by the plea that the memorandum, the giving up of which was the consideration of the guarantee in the said declaration mentioned, was actually given up to the said defendant by the said plaintiffs, and the consideration was therefore executed by the said defendant, and that, even if the original memorandum was not binding in point of law, the giving up was a sufficient consideration for the promise in the declaration mentioned." Joinder.

9

The demurrer was argued in last Hilary term[1].

10

Sir W. W. Follett for the plaintiff. The undertaking declared upon is, on the face of it, sufficient to satisfy the Statute of Frauds, 29 Car. 2, c. 3, s. 4. It is said, however, that the consideration is really insufficient, because the guarantee delivered up was one which could [10 Adol. & El. 312] not have been sued upon consistently with the statute. But, assuming that to be so, a promise in consideration of delivering up such a guarantee might still be good. The defendant might, for substantial reasons, wish to have the guarantee back His mercantile character was pledged by it. It might, on various other accounts, be important to him that such a paper should not remain in the plaintiff's hands: and, if the bargain was made upon any consideration, the Court will not inquire into its adequacy. This principle was lately recognized in Hitchcock v. Coker[2]. Such a promise might be made in consideration of delivering up a letter; no one but the defendant might be able to judge how far the possession of it was valuable; but, if the letter was given up at his request, the rule would apply, that any thing so given, to the plaintiff's detriment, or the benefit of the defendant, is consideration for an assumpsit. Suppose the undertaking given up had been one rendered unavailing by the Statute of Limitations, no action would have lain upon it, but the attempt to enforce it could not perhaps have been resisted without injury to the defendant's mercantile character; the relinquishment of it, therefore, would have been [113 Eng. Rep. 121] good consideration for a promise. The present is a similar case. Release from a moral obligation is consideration enough for an express promise. If it were necessary that something should be foregone to which there was a legal right, the delivery of the mere written paper, which contained the first guarantee, was sufficient in this case. The plaintiffs are entitled to put some value on the possession of such a paper, though not legally available; as they might on the possession of a cancelled bond, or bills [10 Adol. & El. 313] accepted by the defendant on wrong stamps. It is not, indeed, clear in this case that the first guarantee was void. In Boehm v. Campbell (3 B. Moore, 15. 8 Taunt. 679), a similar guarantee was held to shew a sufficient consideration, though the advance for which the security was given had been already made, and it did not appear more distinctly than in the present case that time was to be granted. Supposing it even questionable whether the former undertaking bound the defendant, yet the discharge from a claim, or waiver of a defence, on which the promisee might or might not have been legally entitled to succeed, is consideration enough to support an assumpsit; Longridge v. Dorvilie (5 B. & Ald. 117), Stacy v. The Bank of England (6 Bing. 754). Here, however, it appears, at all events, that the original guarantee may have been given under circumstances which rendered it morally binding; and that brings it within the principle of Lee v. Muggeridge (5 Taunt. 36), and other cases in which promises supported by moral obligation have been held sufficient.

11

Sir J. Campbell, Attorney General, contra. First, the original guarantee was void; and, if so, then, secondly, the promise declared upon is without consideration. First, the guarantee of February 4, 1837, expresses only the past consideration of the plaintiffs "being in advance." The cases cited in note 1 to Osborne v. Rogers (1 Wms. Saund. 264), shew that this is not sufficient ground for an assumpsit, no request being alleged. A valid consideration was essential to a promise at common law; and, when the Statute of Frauds required that thee agree [10 Adol. & El. 314] ment, in certain cases, should be written, it thereby became necessary, not only that a proper consideration should exist, but that the writing should distinctly shew it: Wain v. Warlter's (5 East, 10), Saunders v. Wakefield (4 B. & Ald. 595), Jenkins v. Reynolds (3 Brod. & B. 14), Cole v. Dyer (1 Cro. & J. 461. 1 Tyrwh. 304), Wood v. Benson (2 Cro. & J. 94. 2 Tyrwh. 93), James v. Williams (5 B. & Ad. 1109). A consideration cannot be intended; it must be actually expressed, or necessarily to be implied; Hawes v. Armstrong (1 New Ca. 761), Raikes v. Todd (8 A. & E. 846). Secondly, the guarantee being void, the undertaking substituted for it, without any new consideration, is void also. The case is no better than if a second guarantee had been given in the words of the first. A consideration, to support a promise, must have some value in point of law; Smith and Smith's case (3 Leon. 88), and other authorities cited in note [b] to Barber v. Fox[3] Rann v. Hughes[4] illustrates the same point. A man may have in his possession a letter of which improper use might be made; but his delivering it up is no legal consideration. An unfounded action may create annoyance; but the renouncing it is no consideration in law for a promise. Where, indeed, there is a reasonable doubt, in point of law, whether the promisee would or would not succeed if the litigation were prosecuted, the case is different: that was so in Langridge v. Dorville (5 B. & Ald. 117), and Stacy v. The Bank of England (6 Bing. 754). In Shortrede v. Cheek[5] the consideration disclosed was, [10 Adol. & El. 315] that the plaintiff should withdraw a promissory note, on which he had an unquestioned right of action: and Parke J. said, "There is no doubt that the giving up of any note upon which the plaintiff might have sued, would be a sufficient consideration." It is argued that foregoing a security upon which the Statute of Limitations had attached would be a consideration; but there an action would lie on the security if the statute were not pleaded. Whether the giving up a bill drawn on a wrong stamp would be a consideration or not may be questionable; but the objection is not one of which the Court would take judicial notice: here the Court must take notice that the guarantee is invalid. It is contended here that the promise is binding, because grounded on a moral obligation; but that obligation rests on a promise which is itself not binding; the new engagement, then, cannot have more force than the original one. In the cases where a moral obligation has been held sufficient ground for an express promise, the obligation has been something more [113 Eng. Rep. 122] than a nudum pactum: thus, in Lee v. Muggeridge (5 Taunt. 36), money had been advanced by the plaintiff at the request of the promisor. But the doctrine, that a moral obligation is sufficient consideration for a subsequent promise, is not free from doubt. Lord Tenterden said, in Littlefield v. Shee (2 B. & Ad. 811), that it must be "received with some limitation." The instances which have been considered as establishing that doctrine are brought together in note (a) to Wennall v. Adney (3 Bos. & P. 249), and seem to resolve themselves into these classes. First, where there has been a legal obligation antecedent to the promise; as the duty of overseers to provide for the [10 Adol. & El. 316] poor. Secondly, where there was an antecedent equitable liability, as that of an executor to pay legacies; but the doctrine, as applicable to these cases, appears to have been overruled. Thirdly, where a debt existed before the promise, but the remedy was barred by statute; as in the eases of certificated bankrupts or discharged insolvents; or where the Statute of Limitations has attached: in these instances the party indebted may waive the statutory bar and oblige himself, by a promise, to pay the debt. Fourthly, where a promise merely voidable has been ratified; as in the case of a person of full age promising to pay a debt contracted during his infancy[6]. In all these cases, so far as the doctrine is established, there has been an actual benefit received, or a debt, or other ground of legal obligation, antecedent to the promise relied upon: not merely a nudum pactum, as in the present instance, where the party originally promising had received no benefit, nor had the plaintiffs incurred any loss or prejudice at his request. The money had been advanced when the guarantee was given; then the defendant says, "forego the guarantee, and I will see you paid." The prior moral obligation was only that which every man is under to keep his word. Nash v. Brown[7], Holliday v. Atkinson (5 B. & C. 501), and Bret v. J. S. and his Wife (Cro. El. 755), (cited in note [5] to Barber v. Fox (2 Wms. Saund. 137 e. 5th ed.), all shew that moral considerations, where no actual benefit has been received by one party, or prejudice sustained by the other, and no legal duty has attached, are not sufficient [10 Adol. & El. 317] ground for an assumpsit. As to the delivery, in this case, of the mere paper, it is not pretended that the paper bad any value: the contract of guarantee, not the paper containing it, was the object really in question.

12

Sir W. W. Follett in reply. It may be collected from the guarantee in this ease, as it was from that in Boehm v. Campbell (3 B. Moore, 15. 8 Taunt. 679), that the consideration for giving it was forbearance; and, if that appears with certainty, though not expressed in direct terms, the guarantee was sufficient. Boehm v. Campbell (3 B. Moore, 15. 8 Taunt. 679), is not over-ruled by Bailees v. Todd (8 A. & E. 846). This Court, in the latter ease, could not see clearly that the consideration stated in the guarantee was that alleged in the declaration: but two of the learned Judges were inclined to think, with Alderson B. who tried the cause, that "I hereby undertake to secure to you the payment of any sums of money you have advanced" to H. D. implied a future forbearance by the plaintiffs. So far, that case is favorable to the present plaintiffs: and the words relied upon by them, "I do hereby give you my guarantee for that amount," are stronger than those used in Bailees v. Todd (8 A. & E. 846). And, if it was only doubtful whether such a guarantee was not available, the giving it up was a good consideration. If the invalidity of it was not a point as clear as that the eldest son inherits, the Court will not measure the degree of doubt. It has scarcely been disputed that the giving up of bills drawn on wrong stamps, or a contract on which the Statute of Limitations had attached, would be sufficient consideration: but those cases do not essentially differ from the present. The [10 Adol. & El. 318] bills are void from the first, and cannot be made valid; though the promisor may have good reason for wishing to get them into his possession. It is suggested that the bar created by the Statute of Limitations may be waived; but so also may that under the Statute of Frauds. It is clear that, to support a promise of this kind, there need not have been an original liability in the promisor; for that is not so in the case of the bills, or in that of the contract made during infancy. That a promise may be founded on sufficient consideration, though no benefit has accrued to the promisor, appears from Stevens v. Lynch (12 East, 38), where the drawer of a bill, knowing that time had been given to the acceptor, undertook to pay on the acceptor's default, and an action was held maintainable on that undertaking. But, supposing the guarantee in this case to have been [113 Eng. Rep. 123] totally void, the giving up of a paper on which no action would lie may be sufficient consideration for a promise. Here the plaintiffs, though not entitled to recover on the guarantee, might have brought trover for the document if unlawfully taken out of their hands. In considering whether or not such an action would lie, the value would be of no importance; it is enough for the present argument, if the plaintiffs could have recovered a shilling. Suppose the defendant had said, "If you will not bring trover, I will pay the bills;" an action would clearly have lain on such an agreement, and the case would not have differed from the present. The consideration here is, not the releasing of an action on the guarantee, but the giving it up; whatever its value may have been, the bargain is binding. [Coleridge J. It is decided in Scott v. [10 Adol. & El. 319] Jones (4 Taunt. 865), that trover lies for an unstamped document if it is capable of being made good by stamping.] Any paper may be the subject of an action of trover.

13

Cur. adv. vult.

14

Lord Denman C.J., in this term (June 6th), delivered the judgment of the Court.

15

The action was brought upon an assumpsit to see certain acceptances paid, in consideration of the plaintiffs giving up a guarantee of £10,000 due from the acceptor to the plaintiffs. Plea, that the guarantee was for the debt of another, and that there was no writing wherein the consideration appeared, signed by the defendant, and so the giving it up was no good consideration for the promise. Demurrer, stating for cause that the plea is bad, because the consideration was executed, whether the guarantee were binding in law or not. The form of the guarantee was set out in the plea. "In consideration of your being in advance to Messrs. John Lees and Sons, in the sum of £10,000 for the purchase of cotton, I do hereby give you my guarantee for that amount (say £10,000), on their behalf. John Brooks."

16

It was argued for the defendant that this guarantee is of no force, because the fact of the plaintiffs being already in advance to Lees could form no consideration for the defendant's promise to guarantee to the plaintiffs the payment of Lees's acceptances. In the first place, this is by no means clear. That "being in advance" must necessarily mean to assert that he was in advance at the time of giving the guarantee, is an assertion open to argument. It may possibly have been intended [10 Adol. & El. 320] as prospective. If the phrase had been "in consideration of your becoming in advance," or "on condition of your being in advance," such would have been the clear import[8]. As it is, nobody can doubt that the defendant took a great interest in the affairs of Messrs. Lees, or believe that the plaintiffs had not come under the advance mentioned at the defendant's request. Here is then sufficient doubt to make it worth the defendant's while to possess himself of the guarantee; and, if that be so, we have no concern with the adequacy or inadequacy of the price paid or promised for it.

17

But we are by no means prepared to say that any circumstances short of the imputation of fraud in fact could entitle us to hold that a party was not bound by a promise made upon any consideration which could be valuable; while of its being so the promise by which it was obtained from the holder of it must always afford some proof.

18

Here, whether or not the guarantee could have been available within the doctrine of Wain v. Warlters (5 East, 10), the plaintiffs were induced by the defendant's promise to part with something which they might have kept, and the defendant obtained what he desired by means of that promise. Both being free and able to judge for themselves, how can the defendant be justified in breaking this promise, by discovering afterwards that the thing in consideration of which he gave it did not possess that value which he supposed to belong to it? It cannot be ascertained that that value was what he most regarded. He may have had other objects and motives; and of their weight he was the only judge. [10 Adol. & El. 321] We therefore think the plea bad: and the demurrer must prevail.

19

Judgment for the plaintiffs.

20

There was also, in this ease, an issue of fact, raising the question whether or not the plaintiffs had given up the original guarantee. On this issue the parties went [113 Eng. Rep. 124] to trial at the Liverpool Spring Assizes, 1839, before Alderson B. The plaintiffs called on the defendant to produce the guarantee. On production it appeared to be unstamped, and Cresswell, for the defendant, therefore objected to its being read. Alderson B. admitted it; and the plaintiffs had a verdict. Cresswell moved for a new trial in the ensuing term, on account of the admission of that evidence; and he cited Jardine v. Paine (1 B. & Ad. 663). Patteson J. mentioned Coppock v. Bower (4 M. & W. 361), and Waliss v. Broadbent (4 A. & E. 877). The rule was afterwards made absolute by consent. The cause was tried again at the Liverpool Spring Assizes, 1840, before Erskine J. The guarantee was not produced, having been destroyed since the last trial; but the learned Judge (assuming it not to have been stamped) allowed evidence to be given of its contents; and, on this ground, Cresswell, in the ensuing Easter term, moved for a new trial[9]. He referred to Crisp v. Anderson (1 Stark. N. P. C. 35), and Gillett v. Abbott (7 A. & E. 783).

21

Cur. adv. vult.

22

[1] January 18th. Before Lord Denman C.J., Littledale, Williams, and Coleridge Js.

23

[2] 6 A. & E. 438. And see Archer v. Marsh, 6 A. & E. 959.

24

[3] 2 Wms. Saund. 137 e. 5th ed. See Jones v. Waite, 5 New Ca, 341.

25

[4] Note (a) to Mitchinson v. Hewson, 7 T. R. 350.

26

[5] 1 A & E. 57. See Wilkinson v. Byers, 1 A. & E. 106.

27

[6] See Meyer v. Haworth, 8 A. & E. 467.

28

[7] Chitty on Bills, 74, note x. 9th ed. (1840), by Chitty and Hulme.

29

[8] See the discussion on the words "for giving his vote," in Lord Huntingtower v. Gardiner, 1 B. & C. 297.

30

[9] April 16th. Before Lord Denman C.J., Littledale, Patteson, and Coleridge Js.

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June 05, 2014

"Haigh v. Brooks"

4.1.3.1 Haigh v. Brooks

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Kessler, Gilmore & Kronman

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