Majority
p. 150R. and H. Stewart against Eden.
Headnote
Taking a note out of the bank, where it has boon lodged for oolleolion, is a sufficient consideration to support assumpsit against a third person, though the note he afterwards protested for non-payment A note given as a collateral security for a judgment recovered, cannot be impeached on account' of usury in the suit on which the judgment was obtained.Assumpsit on a special agreement to pay a promissory note drawn by Jolin Pelletreau, in favor of John Wardell, and by liim endorsed to tbe plaintiffs. Tlie note, on tbe promise to pay which the action was founded, had been *given as collateral security, for payment of an unsatisfied judgment, obtained on a note for a larger amount, of which tbe plaintiffs were bona fide holders made to Charles Brigden, on a.usurious consideration. The note thus given, and on tlie promise to pay which the present action was founded, had been lodged in the bank for collection. On tbe day it fell due, tlie defendant wrote to tbe plaintiffs, “that if they thought proper to oblige him by withdrawing the note from the bank, be would bold himself responsible to them to settle it in some satisfactory way, by tbe Wednesday following; but, as the note was lent to him, or for his use, unless it was withdrawn, lie could not consider himself liable for its payment.” In consequence of this letter, tbe plaintiffs did withdraw the note from the bank, made a due demand on the maker, gave regular notice of non-payment to tbe endorser, who had become a bankrupt, and also informed the defendant that they Lad withdrawn the note, from the bank, pursuant to his request, and looked to him for payment. On these facts, a case was made for tbe opinion of tbe court.
Woods, for the defendant.
I make three points : 1. That the promise was without consideration; 2. That the plaintiffs did not comply with the request on which it was
p. 151
founded ; 3. That the usury in the first note, on which the judgment was obtained, affected and destroyed the second, so that a promise to pay, founded on such a basis, was void. The two first objections speak for themselves: it could never have been intended that the note was to have been merely withdrawn, and then protested. On the third, the case of Walton and /Shelly is decisive.[1]
Hiker, contra.
The withdrawing the note from the bank, on account of preserving the credit of the parties, was all that was asked. It was not required to exonerate the endorser. Forbearance is a good consideration. Mapes v. Sir Isaac Sidney, Cro. Jac. 683 ; Oro. Oar. 241 .[2] Wherever there is a moral obligation to pay, it is sufficient for an assumpsit. Hawes et Use v. Sounders, Cowp. 294, per Lord Mansfield. As to the usury, it is settled that though a usurious note be void in the hands of a bona fide *holder, yet, a new security given to such a person, for the usurious note, is good. Guthbevt v. Haley, 8 D. & E. 390.
Woods, in reply.
If the original consideration is bad, a new security cannot make it good. A void consideration cannot be confirmed: the first note was void, nothing, therefore, can set it up.
delivered the opinion of the court. We are satisfied there is no ground for the last objection, arising out of the original usury. The cases of Ellis v. Warnes, and Cuthbert v. Haley, are decisive authorities for the plaintiffs. The only questions are, whether here was a sufficient
p. 152
consideration for the promise, and whether the plaintiffs did withdraw the note agreeably to the intent, and according to the condition, of the promise. It is stated in the defendant’s lettewto the plaintiffs, that the note was lent to him, or for his use. By this, I understand him to say, that he was exclusively benefited by the money or credit raised by the original note, for to secure the payment of which- the one in question was given. He was, therefore, the cestui que trust, the real debtor who stood behind the parties to the transaction in their responsibility to the plaintiffs, lie was bound to indemnify them'for the sum the plaintiffs should recover; and if, instead of paymer through the medium of a third person, he came forward to assume directly the debt to the plaintiffs, he did no more than what he was under an equitable obligation to do. This is the only true and intelligible construction of the language in his letter, and the moral obligation he was under was a sufficient consideration for his promise. The condition that he annexed to his promise was literally complied with. The note was withdrawn from the bank ; and that is all that was requisite to bind him, considering he was under-the equitable obligation I have stated. We are not to look for the consideration of the promise, from the act of withdrawing the note. That perhaps, would not alone have created one, though considering the course of business and credit at the bank, the dishonor of a note, placed under the agency of the bank for collection, was a matter of real and serious consequence to the credit of the party; and much more so than if-it had happened without the purview of the bank. *We think it, however, sufficient for us to look' only to the literal fulfilment of the condition annexed to the promise, since we perceive a valid consideration'for the assumption without reference to that condition. We are of opinion, therefore, that the plaintiffs are entitled to reeover.[1]
Judgment for the plaintiffs.
[1] [1] In a snit on a bond to indemnify- the obligee for hia liability as makes *153 of a promissory noto held by a third person, and to pay off such note, tho defendant cannot set up usury in the note. Churchill v. Hunt, 3 Denio, 321 . "Where a usurious note had been transferred for a valuable consideration, and a new note given to an insolvent holder, held not to bo void. Kent v. Walton, 7 Wen. 256. A judgment in the hands of a Iona fide assigneo is not affected by usury between the original parties. Wardell v. Eden, 2 J. C. 258; S. C. 1 J. R. 531, note.