109. Contracts for the Creation, Assignment, and Surrender of Estates in Land. By the statute of frauds all estates created or transferred must be in writing, and usually the law also requires that they shall be sealed and witnessed, and that they shall also be acknowledged and made of public record. Usually estates less than a freehold are not required to be acknowledged nor registered, but it is good practice nevertheless to have both ceremonies carried out, except perhaps in case of short leases. All such instruments should be signed by both parties. Bids at auction sales of house-lots or land, being verbal, are within the statute of frauds and not binding. Being voluntary, they are usually carried out, but cannot be enforced. A parol promise by a grantor to warrant and defend the title to the land sold is void, being within the statute."

The question often arises as to what is a lease, or such an estate in land. as to require a written instrument, and upon that question there are decisions both ways. Without doubt all agreements for the permanent occupation of another's lands or any part thereof should be in writing. So it has been held that permission to erect upon the land of another a permanent structure, such as a building or a bridge, or leave to occupy with a railroad, a canal, a dam, or to overflow by a dam, to dig a drain or lay a pipe, to dig and carry away coal, ore, stone or dirt, or to haul logs across, amounts to a lease, since it is a grant of an interest in the land itself, and must be in writing. There are cases which hold to the contrary that where oral permission has been given to build a permanent structure upon lands, as a party-wall, a bridge, an aqueduct, a dam, etc., that although mere licenses are ordinarily revocable at any time, yet having been acted upon they are valid, binding, and irrevocable. The fact that there are such decisions affords no excuse for one to accept such a license and invest his money on the strength of it, if he can get a lease in writing, even by paying for it.

3

110. Promises to Answer for the Debts of Another.-The statute also requires all contracts or agreements to answer for the debt, default, or misdoing (miscarriage) of another party to be in writing, or some memorandum to be made in writing, and signed by the party to be charged. The provision varies slightly in the different states, but the law is generally that promises to pay other's debts or to be surety for their undertakings must be in writing. The statute includes every kind of liability that may be enforced in a civil action, but the promise must be to the creditor himself, and not to the debtor-i. e., the one who is himself liable, the latter promise is not within the statute of frauds. A promise by the debtor himself to pay is not within the statute, even though another is also liable, and even though one debtor promises to pay if the other debtor does not pay. Therefore the promise of

'Boyd v. Greene (Mass.), 39 N. E. Rep. 277; and see Lobit v. McClave (Tex.), 28 S. W. Rep. 726.

924.

Kelly v. Palmer (Neb.), 60 N. W. Rep.

38 Amer. & Eug. Ency. Law 667.

a partner to pay a firm debt is not within the statute, while a stockholder's promise to pay a corporation debt is within the statute.

The promise must be to pay with his own funds, and not out of the funds of the debtor that are in his possession, and a debt, it seems, is not funds or property in this sense. The promise must be for a good consideration.

111. Application of the Law to Construction Work.-In construction contracts, cases often arise where the contractor has failed to pay his men or is unable to get materials to go on with his work, and the owner or person to be benefited by the performance of the contract has promised to pay for the labor and materials if the workmen and material men will continue at work and to supply the necessary materials of construction. When the owner makes such promises it is important to ascertain whether he himself undertakes to assume the obligation or whether he insures the payment of the contractor's debt. If the owner seeks to obtain a direct benefit or advantage to himself, as to relieve his property from a lien, it is generally held an original obligation, and therefore not within the statute.' If it be the evident intention to insure the payment of a debt of another, then it is within the statute, and must be in writing. Some courts have based their decisions upon the fact whether there was a new and distinct consideration for the promise, and if it inured directly to the benefit of the promisor, in which case it was not within the statute; while other courts have ignored these facts, as well as the parties' intentions, and called it a collateral obligation if the original party (contractor) remained liable, making the promise within the statute unless the agreement was a substitute for the original liability.

There are many cases on both sides,' but there is a safe and sure way for the owner or his engineer, which is to make such agreements in writing, and to make it clear whether the undertaking is to cancel the obligation of the contractor and to substitute the owner, or whether the original obligation is to continue and the owner become a surety for its performance.

Some cases will illustrate the law. Thus when a contractor having an apparent purpose to quit unless payment was made or assured was told by a third party to go on with the work and he would see that he got his pay it was held that as to the work already performed the promise, not being founded on any consideration, was a collateral undertaking to pay the debt of another, which, not being in writing, was void.' The same decision was reached when a third party told the contractor to go on and finish his work and he himself would pay for it. In another case an oral agreement by the owner to pay a subcontractor, on the abandonment of the contract by the

1 Seguine e. Spaeth (Com. Pl.), 35 N. Y. Supp. 847.

28 Amer. & Eng. Ency. Law 682

3 Gable v. Graybill, 1 Pa Super. Ct. Rep.

29; Warwick v. Grasholtz, 3 Grant 224.

Gill v. Herreck, 111 Mass. 501 [1873]; Lachman v. Irish (Sup.), 25 N. Y. Supp. 193.

original contractor, an amount already due him from the latter and an additional sum for extras if he would complete the work, is not void as being a promise to answer for the debt of the contractor.' An interesting case is reported where an owner had written to a subcontractor as follows: "By direction of the contractor and at the request of C. I hereby hold $2700, which I hereby agree to pay you when the work has been delivered and put in proper and workmanlike manner; $2500 of which is to be charged on my contract with the contractor on account of his contract with C., and $200 on account of his contract with me, for your labor in putting said work in said place." It was held a guaranty to pay the debt of C., and not an original obligation by the owner."

When a contract provided that if the contractors failed to furnish material the owner would supply the material and deduct the cost from the price, and a materialman, after furnishing certain material on the contractor's credit, refused to furnish more, and an arrangement was made whereby, on the contractor's written order to the owner, the architect was to make the estimates and payments directly to the dealer, it was held that the agreement was not within the statute of frauds, as it was not a promise to pay plaintiff's debt, but to benefit defendant by the immediate acquisition of materials for the building.'

A subsequent promise by an owner to a materialman to see that materials furnished in the construction of the owner's house upon the credit of the contractor were paid for is not enforceable, and it will not support a personal judgment against the owner. Such a promise was held a mere

verbal collateral contract.*

If a contractor, not being paid by an owner, has abandoned the contract and afterwards resumed it, and did certain extra work on the verbal promise of a third party to pay him, but the evidence showed that he still looked to the owner for his pay, and not to a third party except as guarantor, the promise of the third party, not being in writing, is void both as to the extra work and that done under the contract."

A verbal agreement on the part of a supply company to furnish a sub. contractor materials for his subcontract, the bills when O.K.'d to be paid by the contractor, is an original agreement on the part of the supply-men, and not an agreement to pay the debt of the subcontractor. It has been held, however, that a promise by a contractor to his subcontractor's men if they will continue at work is an original undertaking on a sufficient consideration which need not be in writing.' Promises by a husband

'McLaughlin v. Austin (Mich.). 62 N. W. Rep. 719; Andree v. Bowman. 13 Md. 241. Bierschenk v. Stokes, 26 N. Y. Supp. 88; and see Emerson v. Slater, 22 How. 28. * Bice v. Marquette, etc., Co. (Mich.), 55 N. W. Rep. 382; Calkins v. Chandler, 36 Mich 324, folined.

Farnham v. Davis (Me), 9 Atl. Rep. 725 [1887].

5 Brester v. Pendell, 12 Mich. 221 [1864] 6 Barras v. Pomeroy Coal Co. (Neb.), 5 N. W. Rep. 890.

379.

Suello. Rogers (Sup.), 24 N. Y. Supp

for the wife's individual debt, or by the wife for the husband's debt, have been held to be within the statute, and void if not in writing.'

In an action by a materialman against a contractor for lumber furnished. for a house it is no defense that the owner assumed the debt unless there was a novation which released defendant."

The statutes usually require all contracts in consideration of marriage to be in writing, or that there be a written memorandum of the terms of the agreement signed by the party or his authorized agent. Such contracts are marriage settlements or any agreement which makes the marriage the consideration. It does not include mutual promises to marry.'

STATUTE OF LIMITATIONS.

112. Objects and Reasons for the Statute. The time within or the period in which the obligation of a contract can be enforced, or within which an action or suit can be brought for a breach of a contract, is limited in the United States, England, and Canada by certain statutes of limitations. The object of these statutes is to require people to enforce their rights within. a reasonable time or to abandon them. They are calculated to give security and repose to business, and to relieve the parties from the necessity of preserving indefinitely their receipts and other evidence of settlement. It provides against the evils that arise from loss of evidence and the failing memory of witnesses, and relieves the defendant from the burden of keeping track of witnesses and preserving documentary evidence in the constant apprehension of being called upon to defend himself in an action at law, while the claimant is required to employ reasonable diligence in prosecuting his claims. The statutes may prove an obstacle to just claims, as where a party may not be able to pay during the period, but afterwards becomes affluent, or where it is within the power of the defendant to avoid and evade a suit during the statutory period.*

The statute had its inception in the convenient rule made by courts that after twenty years a presumption arose that debts and even bonds had been paid or released unless the delay was explained by the creditor and he showed that they had not been paid. In fact, independently of any statute of limitation, courts of equity have inherent powers to refuse relief after undue and unexplained delay, and when injustice would be done by granting the relief asked, and the doctrine applies to suits relating to land."

113. Statute Does Not Destroy the Contract Obligation, but Affects the Remedy or Means of Enforcing It.-The statute does not and cannot affect

the contract obligation, it is no part of the contract, but it denies the claimant a means of enforcing his right in a court of law after he has delayed a certain number of years to enforce it. It affects the action only, and not a defense. Thus a defendant may show that a contract was procured by fraud, though the statutory period has passed. A counter-claim or cross-complaint is not a defense in this sense. The statute has only to do with the remedy for a breach of the contract, for without a breach there is no action on a contract. When the statutory period has elapsed no action can be brought in a court of law, and courts of equity decline to entertain suits when an action at law is barred unless there are circumstances showing fraud or oppression.

Much difference of opinion has been expressed as to whether the statute affects the right of the claimant so that if the statutory period be changed (extended) it restores the claimant's right to sue. Whether or not this be so, it is well settled that the statute does not destroy the obligation, and that it affects only the remedy, and not the merits of the claim.'

114. Disabilities that May Prevent the Operation of the Statute-Personal Disabilities.-Since the defense of the statute is given on the presumption that the claimant has been guilty of laches, it follows that if no delay can be imputed to the claimant, then the statute ought not to apply. If the Ability to bring an action has been taken away from the claimant, or he has been disabled from bringing an action of law, i. e., if he (she) were in infancy, insane, idiotic, or under coverture, except where women have the right to sue and be sued, or his (her) residence was in a foreign country or state, such disability must have existed when the right of action accrued, for if the statute had commenced to run no subsequent disability would interrupt it. If a contractor dies even a day after his cause of action accrued, that day was sufficient to set the statute in motion, and if an infant heir were left the infant cannot plead his disability, though there was no time during the whole period when he was of age and able to bring an action. This may seem unjust, but the rule seems a necessary rule to insure the security and repose for which the statute was created. For the same reason one disability cannot be tacked or added to a previous disability partly or entirely run out.

Therefore if a woman is an infant when her right of action accrues, and before she becomes of age she marries, becomes insane before her husband dies, and then dies leaving infant children, only the first disability of infancy will prevent the statute from setting in, and it will bar the statute only so long as the woman was an infant. Such a case shows how the very object of the statute might be subverted if such a rule were not maintained. Several generations might live under disabilities in families in which early marriages, insanity, and short lives were hereditary.

113 Amer. & Eng. Ency. Law 693-704.