Kelly v. Theiss — 21 Misc. 311

Majority

p. 311

Bridget M. Kelly, Respondent, v. Katie Theiss, Impleaded, etc., Appellant.

(Supreme Court, Appellate Term,

September, 1897.)

Headnote

Bills and notes — Indorser to secure forbearance — Consideration — Parol proof of forbearance.

■ Where a complaint alleges that a promissory note was taken in payment of a pre-existing debt of the maker, and was indorsed in order to induce the holder to' extend the credit of the maker, the ■indorser cannot predicate a defense upon, the fact that, as the note was payable on demand,1 there was no forbearance of the pre-existing debt and consequently no consideration, as the court will presume that the holder intended to forbear for a reasonable time; and he would also be entitled to show by parol that he agreed to forbear for a definite period.

Kelly v. Theiss, 20 Misc. Rep. 718 , affirmed.

Appeal from a judgment of the General Term of the City Court or Hew York, which affirmed a judgment of the same court, at a Special Term, overruling a demurrer to the complaint as frivolous and awarding the relief asked for by the plaintiff.

Action by the payee of a promissory note against the indorser.

Fromme Brothers, for appellant.

Arthur J. Westermayr, for respondent.

The action was upon a promissory note, dated June 3, 1896, made by George Theiss and John Henry Theiss, in

p. 312

dórsed by the defendant Katie Theiss, and payable to the order of the plaintiff on demand after date. The complaint averred the delivery of the note, indorsed as stated, before maturity, and in payment of a pre-existing debt of the makers; that at the time of the indorsement and • delivery - the. defendant Katie Theiss intended to be bound for the payment of,the note at maturity and to induce the plaintiff, in consideration therefor, to extend the makers’ credit, and that the note' so indorsed was accepted by the plaintiff and the makers’ credit thereby in fact extended. ■ A demurrer for. insufficiency in substance was interposed to the complaint in behalf of the defendant Katie Theiss, the particular burden thereof being as claimed, that it affirmatively appeared from the complaint, the note being payable on demand, that there was no .forbearance of the makers’ pre-existing debt, and hence that there was no consideration for the indorsement. Upon the hearing, the demurrer was adjudged to be frivolous'and a recovery awarded to the plaintiff for the amount of the note. The judgment so rendered was affirmed in the court below and from such affirmance this appeal was taken. '

No argument is required to show the appellant’s position to be untenable. A bare perusal of the complaint, or allusion to its contents, demonstrates a consideration for the indorsement.

It is alleged, and the demurrer admits (Cutler v. Wright, 22 N. Y. 472 ), that the note was indorsed and accepted in extinguishment — that is to say — payment of a debt owing from "the maker at the time. ' Obviously, an inquiry is not to be, touching the adequacy of the consideration, but whether or not there was any consideration; and that the relinquishment of a right to proceed against the makers upon their pre-existing debt furnished a consideration is clear upon principle and authority. 18 Am. & Eng. Ency. of Law, 167; Noel v. Murray, 13 N. Y. 167 ; Carter, Rice & Co. v. Howard, 17 Misc. Rep. 381 .

Viewing the complaint, however, in the aspect assumed for the, appellant, that th¿ indorsement was accepted as a mere security for the payment of the makers’ debt, the allegations likewise import a "consideration. It is alleged that the indorsement was made to induce the plaintiff to extend the makers’ credit, that it was accepted for such purpose, and that the credit was accordingly extended.. That the note was by its' terms payable on demand did not conclude the plaintiff from showing by proper evidence that payment of the debt was .not, to be enforced for a stipulated time.

p. 313

The note did not contain all of the agreement under which it was given and accepted; and though no definite time for forbearance of the date was agreed upon or stated, it was still to be presumed that a reasonable time, to be measured by the circumstances of the case, was intended. Traders’ Nat. Bk. v. Parker, 130 N. Y. 415 .

The judgment should be affirmed, with costs.

Daly, P. J., and McAdam, J., concur.

Judgment affirmed, with costs.

Cases cited

Cutler v. Wright 22 N. Y. 472 N.Y. p. 312
Noel v. Murray 13 N. Y. 167 N.Y. p. 312
Traders' National Bank v. Parker 130 N. Y. 415 N.Y. 1892-01-20 p. 313