Merritt v. Coffin , 152 Ala. 474 ( 1907 )

ANDERSON, J.

There can he little or no doubt, as to the soundness of appellee’s insistence, that where the contract relied upon, is shown by the hill, to come within the statute of frauds, it is subject to demurrer.— Thompson v. New South Co., 135 Ala. 630, 34 South. 31, 62 L. R. A. 551, 93 Am. St. Rep. 49; Bolling v. Munchus, 65 Ala. 58; Phillipie v. Adams, 70 Ala. 373.

The most serious question presented by this appeal, is whether or not the contract, or rather what purports to be a guaranty by certain sureties, comes within the statute of frauds. — § 2152 of the Code of 1896. The original contract (and upon which appears the guaranty) expresses a consideration, (the surrender and cancellation of complainant’s notes and mortgages) and if the consideration so expressed, can be looked to in support of the collateral contract of guaranty, it would be sufficient. If the contract was executed and delivered before the execution of the guaranty and the latter failed to sufficiently refer to and adopt the former as a part thereof, then the collateral contract would come within the statute of frauds, unless it expressed a consideration independent of the one expressed in the original contract. Or if parol testimony had to be resorted to in order to read a consideration into the collateral contract, it would come within the statute of frauds.— Carter v. Odom, 121 Ala. 162, 25 South. 774, Lindsay v. McRae, 116 Ala. 544, 22 South. 868; Moses v. Lawrence, Co. Bank, 149 U. S. 298; Read v. Roman, 107 Ala. 566, 18 South. 211.

The guaranty in the case at bar is on the original contract, refers to it, does not appear to have been executed at a later date, and indeed, specifically guarantees a performance “as per terms set forth.” It therefore appears from the face of the two contracts, that the guaranty was contemporaneous with the original contract and that the consideration of the original was adopted by the guaranty by reference to the terms and conditions therein referred to and contained. Such being the case, the considerations expressed in the original, will save the collateral from the statute of frauds.—Forst v. Leonard, 112 Ala. 297, 20 South. 587; Simmons v. Steele, 36 N. H. 73; Highland v. Dresser, 35 Minn. 345. The guaranty is uncertain as to by whom performance is guaranteed, but be this as it may, a sufficient consideration is recited to support it, in either event, and the purpose of the bill is to show the real intention of the parties and reform the contract accordingly.

The case of Lindsay v. McRae, 116 Ala. 542, 22 South. 868, the one relied on by the chancellor, is unlike the case at bar. There the court held, that the surrender of the mortgage was sufficient consideration to support the defendant’s contract, but this fact was not recited therein and could not be shown by parol evidence. The court did not consider whether the obligation and note could he considered together in aid of each other or as one contract. Moreover, the note doubtless failed to recite the surrender of the mortgage and could not, therefore, aid the obligation, if they could have been taken together, hut which we need not hold in this case. If in that case a note was given by the mortgagor, which recited a surrender of the mortgage, and the Lindsays, contemporaneous with the execution of the note, guaranteed by endorsement thereon' a performance as “per terms set forth” we do not think the court would have held that the Lindsays were not liable.

The case of Webb v. Hawkins Co., 101 Ala. 632, 14 South. 407, has no application to the case at bar. There the promise to answer for the debt or default of another, was not even in writing.

The case of Bolling v. Munchus Co., 65 Ala. 561, decides just what we hold in the case at bar. The failure to express the consideration, or rather a valuable consideration, is as fatal to the validity of the agreement, as would be the failure to reduce it to writing. In the case at bar, we hold that the guaranty is so associated with the original contract and identified therewith, that the consideration expressed in the latter can be looked to, in support of the former.

The hill seeks to reform the contract so as to make it conform to the intention of all parties thereto and to correct a mutual mistake made in the writing. — 6 Pom. Eq. 675. Beformation is proper, although the defect might have been aided by parol and so made available as a defense at law. — Green v. Dickson, 119 Ala. 346, 24 South. 422, 72 Am. St. Rep. 920.

The trustee in bankruptcy, Coffin, was a proper, if not a necessary, party.

The decree of the chancellor is reversed and the cause remanded.

Tyson. C. J., and Haralson, Simpson, Denson and McClellan, JJ., concur.