By: Bernard E. Gegan
Every agreement, promise or undertaking is void, unless it or
some note or memorandum thereof be in writing, and subscribed by
the party to be charged therewith, or by his lawful agent, if such
agreement, promise or undertaking:...(2) Is a special promise to
answer for the debt, default or miscarriage of another person.
So reads the suretyship part of the New York Statute of Frauds,
in language not substantively different from that enacted in
England in 1677. Its purpose was never better stated than by
Chief Justice Lemuel Shaw of Massachusetts in Nelson v.
Boynton:
The object of the statute manifestly was, to secure the highest
and most satisfactory species of evidence, in a case, where a
party, without apparent benefit to himself, enters into
stipulations of suretyship, and where there would be great
temptation, on the part of a creditor, in danger of losing his debt
by the insolvency of his debtor, to support a suit against the
friends or relatives of a debtor, a father, son, or brother, by
means of false evidence; by exaggerating words of recommendation,
encouragement to forbearance, and requests for indulgence, into
positive contracts.
This case is credited with originating what is usually called
the “main purpose” or “leading object” rule, according to which
some persons who are unquestionably sureties are denied the
protection of the statute. The rule recognizes that the evils
against which the statute was aimed are greatest when the promisor
acts to accommodate a friend or relative and gets no benefit from
the transaction. Contrariwise, when the promisor acts in his
self-interest and derives a benefit, the danger of fraud is
minimized, and the surrounding circumstances often corroborate the
making of the promise.
An examination of two major jurisdictions with differing lines
of development may yield some interesting results. New York
and Massachusetts represent contrasting approaches to the issues
presented by the “main purpose” exception. Widely adopted,
this rule has made little overt headway in New York, at least not
under that label. According to the New York Court of Appeals,
“The rule is not recognized in this state.” The rule in New
York does not have a convenient label and must be synthesized from
several leading cases. And, despite the deceptively simple
label, the law in Massachusetts has not always meant the same
thing. This Article will examine the New York cases in
several typical types of transactions involving the statute and
compare the results with the Restatement, which embraces
the “main purpose” rule, and especially with Massachusetts,
the jurisdiction credited with originating the rule. In
examining these fact patterns, an attempt will be made to keep in
view the purpose of the statute—a purpose sufficiently strong to
have survived the large-scale repeal that took place in England in
1954.