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Decisions of the Superior Courts of New South Wales, 1788-1899

Roemar v. Polack (1844) NSW Sel Cas (Dowling) 420; [1844] NSWSupC 11

parol evidence rule - guarantee

Supreme Court of New South Wales

Dowling C.J., Burton and Stephen JJ, 15 April 1844

Source: Dowling, Select Cases, New Series, Vol. 2, S.R.N.S.W. 2/3267, p. 51

Where a guarantee was given for due payment of a promissory note; held that the Court would not allow parol evidence to establish the particular consideration for the guarantee which was not expressed in writing.*

Special Assumpsit. The declaration stated that on 2nd February 1843 defendant in consideration of £45.17 then paid to him by plaintiff had guaranteed to plaintiff the due payment of a promissory note in the favor of one H. Moore for £916.19.2. On the 26 August then next Moore being unable to pay the note when due, thereupon on that day (defendant's guarantee being then in full force) in consideration of the premises and of the said sum of £45.17.0, and that plaintiff would take the sum of £229.4.9 in cash in part payment of the note and would grant Moore three months for the payment of the residue of £916.19.3 by taking Moore's note for £687.14.6 payable to plaintiff or his order on the 19th November. Then next defendant promised to pay plaintiff the last mentioned note within 21 days after the same became due unless Moore should previously retire it.

Averment of the taking of the cash and of Moore's note for £687.14.6 and the non payment thereof by him, although duly presented at maturity, of which defendant had notice. Breach in the non payment of the note by defendant within 21 days after maturity, the same not having been previously retired by Moore. The defendant pleaded the S tatute of Frauds , for that the agreement declared upon was not in writing. The plaintiff replied that it was in writing and set out in the following terms:

Mr Charles William Roemer.

Sir,

In consideration of the sum of £45.17 which I received from you on the 2nd February last, I did guarantee to you the payment of Henry Moore's promissory note in your favor for £916.193 due today, and whereas Henry Moore is unable to pay the same, I have consented that you should take in payment for said promissory note the sum of £229.4.9 in cash and the said Henry Moore's promissory note for £687.14.6 in your favor due 29th November next. And I now undertake in consideration of the above named sum of £45.17, which I received from you on the 2nd February last, to pay Henry Moore promissory note in your favor for £687.14.6 due on the 29th November next, within one and twenty days of the day on which the said promissory note of £687.17.6 will become due, unless Henry Moore has previously retired the same. And I hereby also hold you harmless against your indorsement on the said promissory note of £687.14.6.

Sydney 26th August 1843.

A. Polack.

To this replication the defendant demurred assigning causes that the guarantee thereby set out was a departure from the contract stated in the declaration; that it shewed other and different consideration from those stated in the declaration; that it shewed no valid consideration for the promise alleged; that it shewed a different promise from that declared upon; that the only consideration shewn in the guarantee set out is a consideration for a different contract from that stated in the declaration; and that it is uncertain what the consideration for the guarantee was. Joinder in demurrer.

Dowling C.J. The true point for determination on these proceedings is whether the guarantee set out in the replication is not a departure from, and at variance with that stated in the declaration. No objection has been made to the framing of the declaration. That may therefore be taken to be well drawn. But the objection is that it states more than is expressly in the writing signed by the defendant and by which alone he binds himself.

The substance of the declaration is that in consideration of £45.17 paid him on the 2nd February the defendant had guaranteed the payment of Moore's note for £916.19.3 on the 26th August, and Moore being made to pay it thereupon the defendant in consideration of the premises and in consideration of the said sum of £45.17, and that plaintiff would take £229.4.9 in cash in part payment, and give Moore three months for the payment of the residue by taking Moore's note for £687.14.6 payable on the 29th November, the defendant promised &c.

The obligatory part of the promise by the defendant is contained in the guarantee dated 26th August. Has the plaintiff truly set it out? The guarantee set forth in the replication begins by reciting a former contract between the defendant and the plaintiff and states what the conversation for it was. That contract being at an end and the consideration for it exhausted, the defendant goes on to recite that Moore being unable to pay he (defendant) had consented that the plaintiff should take part cash and the remainder of the amount of the first notes in another note of Moore's and then enters into a new obligation, touching on the payment of the latter note and says "I now undertake" in consideration of what? "In consideration", not of a new sum of £45.17, but of the £45.17 which he had received under the old contract, then ended and the consideration exhausted to pay the new note within 21 days after maturity if it should be dishonored by Moore.

Looking at the guarantee according to its terms there does not appear to be any consideration to support the new promise. The declaration alludes to the premises as the consideration. What premises? That on the 2nd February the defendant had been paid £45.17 for his guaranteeing the payment of Moore's notes for £916.19.3 on the 26th August and that Moore had been unable to pay it. That guarantee was not then in full force, for it was then ended and the consideration absorbed. The premises therefore do not support the new contract and there is nothing in the written guarantee to bear out the statement of the rest of the consideration. The rest of the consideration is an agreement that in addition to the premises, the plaintiff would take cash in part payment of the original note and would give three months forbearance for the payment of the residue by taking another note. This no doubt would be a good consideration if the written warranty contained any proof that such was the defendant's contract. The guarantee set out is not that which has been declared upon. The instrument proffered says nothing about three months forbearance. All that the defendant says is that in consideration of £46.17 paid under a past and ended contract, he will undertake to pay the new note within 21 days after it is at maturity and dishonored.

Doubtless the meaning of the parties may be gathered by conjecture, but the Court is not at liberty to conjecture their meaning. There is here no written evidence that part of the consideration was the forbearance to press Moore and give him further time. The statute requires a written agreement, memorandum or note and it has been holden that the term "agreement" includes the consideration upon which the promise is founded, and therefore that it is necessary that the consideration should appear upon the face of the written guarantee , Wain v. Walters (1804) [ Wain v. Walkers (1804) 5 East. 10; 102 E.R. 972]. There may be here a good promise in writing but there is no written evidence of the consideration which it must contain and cannot be supplied by parol evidence.

The objections here are that in the first place there is no consideration to support the new promise, and in the second that the consideration set out in the declaration is not evidenced by the written contract itself. Therefore there appears to us to be a departure in the replication from the contract stated in the declaration. We have looked into the cases cited in support of the demurrer of Hawes v. Armstrong (1835) [ Hawes v. Armstrong (1835) 1 Bing. N.C. 761; 131 E.R. 1311], Lysaght v. Walker (1831) [ Lysaght v. Walker (1831) 5 Bli. N.S. 1; 5 E.R. 208], Head v. Baldrey (1837) [ Head v. Baldrey (1837) 6 Ad. & E. 459; 112 E.R. 175], Raikes v. Todd (1838) [ Raikes v. Todd (1838) 8 Ad. & E. 846; 112 E.R. 1058], Thomas v. Williams (1830) [ Thomas v. Williams (1830) 10 B. & C. 664; 109 E.R. 597] and Cole v. Dyer (1831) [ Cole v. Dyer (1831) 1 C. & J. 148 E.R. 1504] and find that they bear out the principle on which this case must be decided.

We are not at liberty to reject any part of the written evidence of the contract. It was contended that we might throw out as insensible what immediately follows the words "I now undertake" viz "in consideration of the above named sum of £45.17" but supposing we did so, it would still be uncertain what was the consideration for the promise. Agreeing that the intention of the parties may be collected from the instrument still what is presented by the evidence of intention is capable of a diverse interpretation, so as the authorities cited shew the Court cannot give judgment. We cannot by implication come at the meaning of the parties, unless it is such a necessary implication, importing not natural necessity, but so strong a probability that an intention to the contrary cannot be supposed. Now here there may a contrary intention supposed from part which the plaintiff seeks to establish. It is left in uncertainty what was the consideration for the defendant's promise and we are compelled on authority to hold that the written guarantee is not sufficient to take the case out of the S tatute of Frauds.

The grounds of our decision are twofold. First, that there is a departure from the declaration in setting out in the replication an agreement varying from the one declared on. And secondly, that the replication does not meet and overcome the substantial allegation in the plea. That allegation is in substance that the promise stated in the declaration, namely a promise founded on a particular consideration is not in writing, and the replication does not shew that it is so; but shews a different promise or at least a promise founded on a different consideration.

Judgment must be given for the defendant.

Published by the Division of Law, Macquarie University