what I was meaning, mike, is that with horizontal nailers on the inside crossing between the posts, you achieve an admirable amount of shear strength by linking the posts together, which is reinforced by having the nailers attach to studs at the posts, and having them tied together in the middle.
If you make the outside horizontal instead, then you don't get any shear benefit worth noting from the framework, and instead you will have to incorporate a sandwiched structural sheathing. With horizontal inside frames, the only real purpose the intermediate sheathing would serve is to separate the 2 cavities for insulation purposes, provided the horizontal framework is somehow fastened to the vertical studs wherever they cross for rigidity (toenailing would work just fine).
At least this is how it seems to me, I may be totally wrong about the shear benefits given by horizontal framework.
It should also be noted that this system is not designed for application to a German style frame, but is designed for a standard American frame. If I were applying it to a German frame, the same concerns regarding shear strength would not apply.
