Brink v. Stratton — 112 A.D. 299

Majority

p. 299

Leander Brink, Appellant, v. William D. Stratton and Edward A. Brown, Respondents, Impleaded with Horace W. Corey.

Second Department,

April 20, 1906.

Headnote

Bills and notes — note taken in payment of former note — express contract to that effect — consideration.

When the holder of a demand note executed hy three makers, hy special contract, accepts a three months’ note of one of them in payment, it is a defense to an action on the demand note. The contrary is true in the absence of an express contract that the new note is taken in payment of the old.

The consideration for the new note is the holder’s forbearance to sue on the old note and the quantum of the consideration cannot be inquired into.

Appeal by the plaintiff, Leander Brink, from a judgment of the County Court of Orange county in favor of the defendants Stratton and Brown, entered in the office' of the clerk of the county of Orange on the 29th day of December, 1904, upon the verdict of a jury dismissing the complaint as to said defendants, and also from an order entered in said clerk’s office on the 29th day of December, 1904, denying the plaintiff’s motion for a new trial made upon the minutes.

John F. Bradner, for the appellant.

Thomas Watts [Abram F. Servin with him on the brief], for the respondents.

This action is upon the following note :

“ $850.00 Middletown, H. Y., July 1st, 1893.

“ On demand we or either of us promise to pay to the order of Leander Brink, Eight Hundred and Fifty Dollars at his office. Value received. With interest from date.

“W. D. STRATTOH,

“ E. A. BROWH,

COREY & CO.”

Of the three makers sued, Stratton and Brown answered. The learned county judge restricted them to their defense of payment.

p. 300

This was based upon the contention that the plaintiff expressly agreed to accept in payment of the note in suit the following note, made by Oorey & Co., who were of the makers of the first note:

“ $850.00 Middletown, N. Y., Aug. Ath, 1893.

• “Three (3):months after date we promise to pay to the order of John E. Corwin, Eight Hundred Eifty Dollars. Payable at the Banking House of John E. Corwin, Middletown, IT. Y., for value: received. With interest. COREY & CO.

“ (Indorsed):

“ Leander Brink.”

The plaintiff indorsed and discounted the second note, but it was not paid by Corey & Co. The .question of - the express agreement between the plaintiff" and Corey & Co. was submitted to the jury under-instructions that if they found it was made and- the note given and accepted thereunder there was no liability of the defendants Stratton and Brown upon the note in suit. The jury gave its verdict for the defendants. We think that the evidence is sufficient to sustain the verdict. - The learned counsel for the appellant now first raises the question that even if this agreement Were made the verdict cannot stand inlaw.' Notwithstanding that, the questionls first raised here I shall consider it. The argument of the learned counsel for the appellant is that the agreement was nudum-paetum . inasmuch as one of several debtors simply gave his note for the note which he executed with others. This contention is accompanied with the- citation of cases. Many of them are enumerated and discussed in the note' to the text of Parsons on Notes and' Bills (Vol. 2, p. 159). The plaintiff before or on the day of 'the ¡giving of the second note could have enforced the first note. Acceptance by express agreement of the second note in payment of the first note suspended, the plaintiff’s power to enforcé the debt for three, months from the date of the second note. I think that this is sufficient to support the express agreement. (See Pillans v. Van Mierop, 3 Burr. 1663, 1672, 1673, approved in Seaman v. Seaman, 12 Wend. 381 , which is cited in turn in 2 Kent’s Com. [14th ed.] 465; Whelan v. Swain, 132 Cal. 390 .)

The plaintiff, in payment of the first note which was-then due as a demand note, took the second note whereby he forebore to enforce.

p. 301

the debt for three months from its date. This was a different instrument from that which he held. (See Thompson v. Percival, 5 Barn. & Ad. 933.)

Moreover, in Sheehy v. Mandeville ( 6 Cranch, 264 ) Marshall, Ch. J., says : “ That a note, without a special contract, would not, of itself, discharge the original cause of action, is not denied. " But it is insisted that if, by .express agreement, the note is received as payment, it satisfies the original contract, and the party receiving it must take his remedy on it. This principle appears to be well set-, tied. The note of one of the parties or of a third person may, by agreement, be received in payment. The- doctrine of nudum pactum does not apply to such' a case; for a man may, if such be his will, discharge his debtor without any consideration.” (See, too, in comment Arnold v. Camp, 12 Johns. 410 , and Waydell v. Luer, 3 Den. 419 .) We cannot inquire into the quantum of the consideration. (O akley v. Boorman, 21 Wend. 588 ; Luddington v. Bell, 77 N. Y. 141 .) In Bates v. Rosekrans ( 37 N. Y. 410 ) the court say : “ That the giving of a new note by one of two joint and several makers, intended as a provision for the payment of a former note, not agreed to be taken in payment, and not in fact paid, constitutes no defense to an action upon the original note, is well settled. The principle is quite familiar and of frequent occurrence. (Highland Bank v. Dubois, 5 Denio, 558 ; Cole v. Sackett, 1 Hill, 516 ; Smith v. Rogers, 17 Johns. 340 .)”

This is recognition of the principle invoked by the defendants.

I advise affirmance of the judgment and order, with costs.

Hirschberg, P. J., Hooker, Rich and Miller, JJ., concurred.

Judgment and order of" the County Court of Orange county affirmed, with costs.

Cases cited

Seaman v. Seaman 12 Wend. 381 N.Y. Sup. Ct. p. 300
Oakley v. Boorman 21 Wend. 588 N.Y. Sup. Ct. p. 301
Smith & Marshall v. Rogers 17 Johns. 340 N.Y. Sup. Ct. p. 301