that takes the 1995 guaranty contract out of the Statute of Frauds.
Mr. Wright argues that, based on the integration clause of the guaranty contract, the entire consideration between the parties appears within the four corners of the contract. It is true there is no mention of the 1992 agreements or Mr. Swint's forbearance from a legal action in the guaranty contract. Mr. Wright's argument, however, ignores the fact that "Illinois courts have generally distinguished between collateral and original promises, not from the particular words used, but from all of the circumstances of the transaction." Ricci, 523 N.E.2d at 1221, 120 Ill. Dec. at 310. Thus, it is appropriate to look beyond the four corners of the contract to determine the consideration. Further, Mr. Wright's argument is particularly disingenuous in that it asks this court to give validity to one particular clause of the contract in order to invalidate the entire contract under the Statute. Mr. Swint's forbearance is properly considered and presents a genuine issue of fact as to whether the guaranty contract is barred by the Statute.
Additionally, Mr. Wright's motion would fail even if I chose not to consider the 1992 agreements and Mr. Swint's forbearance. If I were to look only to the 1995 guaranty contract as Mr. Wright proposes, then there is no evidence of a pre-existing debt. The only evidence presented in this case would be the sales consulting agreement and the guaranty contract, neither of which mention a pre-existing debt. Without evidence of a preexisting debt and since Mr. Wright entered into the guaranty contract at the same time Premiere Sales entered into the 1995 sales consulting contract and before any debt arose under sales consulting contract, the guaranty contract is an original or independent promise. As the Seventh Circuit has noted in applying the Illinois Statute of Frauds, for the Statute to be applicable "there must be an existing debt at the time of the alleged guarantor's assurances." Publishers Adver. Assocs., Inc. v. Wessel Co. Inc., 747 F.2d 1076, 1080 (7th Cir. 1984); see also Swartzberg, 437 N.E.2d at 865, 63 Ill. Dec. at 216 ("The provisions of the [Statute of Frauds] apply to promises, the main purposes of which are to assume or guarantee the debt of another...."); Raveret-Weber Printing Co., Inc. v. Wright, 301 Ill. App. 421, 23 N.E.2d 203, 206 (1st Dist. 1939)("[Under the Statute of Frauds], when the promise is made, there must be an existing debt."). Thus, even under Mr. Wright's proposed analysis, the guaranty contract would be an original or independent promise and not subject to the Statute of Frauds.
Finally, based on Mr. Swint's affidavit, there is a genuine issue of fact as to whether Mr. Wright and Premiere Sales owed significant sums of money to Mr. Swint and Swint Industries at the time the 1995 guaranty contract was executed. If, in fact, Mr. Swint entered into the 1995 agreements in an effort to help Mr. Wright to pay off his debt and in lieu of collecting the money owed, it would be inequitable to find Mr. Wright may now avoid the debt altogether. "It is well established in [Illinois] that the courts will not permit the Statute of Frauds, the only purpose of which is to prevent fraud, to be used where the effect will be to accomplish a fraud and if the facts are such that it would be virtual fraud to permit the defendant to interpose the statute, a court will not listen to the defense." Grundy County Nat'l Bank v. Westfall, 13 Ill. App. 3d 839, 301 N.E.2d 28, 32 (3d Dist. 1973); see also Fried v. Barad, 175 Ill. App. 3d 382, 530 N.E.2d 93, 97, 125 Ill. Dec. 175, 179 (1st Dist. 1988) ("[The Statute of Frauds] was not intended to effectuate or perpetuate an inequity or a fraud."). Thus, due to policy reasons, the Statute of Frauds may be inapplicable in this case.
Given the circumstances of this action, there is a genuine issue of material fact regarding whether the guaranty contract falls within the Statute of Frauds. Accordingly, Premiere Sales motion for summary judgment on Swint Industries's breach of the guaranty contract claim is denied.
Elaine E. Bucklo
United States District Judge
Dated: November 12, 1997