L'Amoreux v. Gould — 7 N.Y.3d 349

Majority

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L’Amoreux v. Gould.

Headnote

Consideration for assumption.

A promise by A., that if B. will do a certain act, A. will pay a sum of money, is not void for want of mutuality; if B. do the act, it is a sufficient consideration to support the promise, though he were not bound to do it.

Appeal from the general term of the Supreme Court, where a judgment had been entered in favor of the plaintiff, upon the report of a referee.

This an action of assumpsit upon a special contract in writing between the parties, bearing date the 26th August 1841.

The plaintiff was an indorser upon five promissory notes made by J. Woodward, amounting to $1140. On the 26th August 1841, two of them were over-due, and the others were running to maturity. The defendant held, as trustee, a judgment confessed by Woodward to secure certain creditors, and among others, the plaintiff, as indorser. On that day, the following agreement was entered into between the parties:

“James L’Amoreux, Esq., being an indorser on several notes drawn by J. Woodward, some of which have become due, and on some of them prosecutions have been commenced, and the subscriber having a judgment rendered in his favor against the said J. Woodward, entered in the supreme court, for securing certain creditors, agreeable to a certain declaration of trust in writing, in which the indorsers on the defendant’s paper are included in" the first class of creditors, and in which it is declared that such creditors shall be first paid: Now, in consideration of the premises, and in consideration that the said James L’Amoreux shall advance and pay the sum of one thousand dollars towards satisfying, or in part satisfying, the notes on which he is holden as indorser as aforesaid, and shall exhibit to the said Charles D. Gould the *evidence of such payment; the said Charles hereby agrees with the said James, that within one year from this date, he will cause to be raised under the said judgment given as aforesaid, the said sum of one thousand dollars, with interest, and will pay the same over to the said James, in satisfaction of the money so to be advanced toward satisfying said indorsements.

Charles D. Gould.

Dated August 26,1841 ’

The plaintiff paid the notes in question and exhibited the evidence thereof to the defendant; and this action was brought to enforce the agreement. The cause was tried before a referee, who decided in favor of the plaintiff ; and judgment having been entered on his report, this appeal was taken by the defendant.

Spmcer, for the appellant.

Hill, for the respondent.

The only question to be determined is, whether there was such a want of mutuality between the parties, that there was, in fact, no cause of action.

The proposition is stated by Chitty as broadly as the defendant’s counsel claims it, that if the one party never was bound on his part to do the act which forms the consideration for the promise of the other, the agreement is void for want of mutuality (Chitty Cont. 15); but the proposition is too broadly stated. It is confined to those cases where the want of mutuality would leave one party

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without a valid or available consideration for his promise. (A rnold v. Mayor of Poole, 4 Man. & Gr. 860.) For there are many valid contracts, not mutually * 3511 *^n<^nS a* tim time when made; as where A -* says to B., if you will furnish goods to C., I will pay for them, B. is not bound to furnish them, but if he do, he may recover on the promise. (2 Saund. 137 h; Matoon v. Burr, 7 Ad. & E. 19; Kenndevay v. Treleavan, 5 M. & W. 498.) And the question in this case is not, whether the plaintiff was bound to pay the $1000, but whether, if he did pay it, the defendant was without any valid or available consideration for his promise.

The agreement is, that if the plaintiff will pay $1000 on notes on which he is holden as indorser, &c. Now, I am not very clear, whether this means on notes on which he was absolutely fixed and liable as indorser by means of due protest, or those on which he was merely liable to he, in case of non-payment by the maker. The pleadings do not help us out of the difficulty at all, but the evidence shows, that three of the five notes were not due at the time the agreement was made,.and the agreement recites that he was indorser on several notes some of which had become due, &e. Those notes which had become due at-that time, and on which alone the plaintiff could then have become “holden” by due protest, did not amount to one-half of the $1000 that he was to pay, while all of the five notes which he had indorsed amounted to more than the $1000. I should infer, that the parties meant, by this equivocal expression, to refer to the fact of his indorsement only, and not to the fact of his being fixed as indorser. This is a material consideration, because, if the plaintiff was to pay the $1000 merely upon notes upon which he was finally fixed and “holden” by due protest, he would do nothing more, by paying that sum, than merely discharge an obligation which he was bound to perform, and that would form no consideration for the defendant’s promise. But if, on the

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other hand, he voluntarily paid the money, without reference to his being fixed as indorser, and in fact waived the various acts of demand and protest which were necessary to fix him as indorser, he thus assumed a liability and performed an act detrimental to himself, which would furnish a good consideration for the promise. And, inferring as I do, *from the facts ^ proved on the trial, and from the language of *- the agreement, that the parties meant all the notes, as well those not due, as those due and protested, I have no difficulty in finding a sufficient consideration to support the promise, in the fact of the plaintiff’s having paid the $1000, and thus enlarged his liability beyond what it was when the agreement was made.

This disposes of the only point not cured by the finding, and I am of opinion, the judgment ought to be affirmed.

Judgment affirmed.^[1]

1 A promise, void, when made, for want of mutuality of obligation, becomes binding, on a performance by the promissee of that, in consideration of which such promise was made. Willitts v. Sun Mutual Insurance Co., 45 N. Y. 45 . And see, to the same effect, Barnes v. Perine, 12 N. Y. 18 ; s. c. 9 Barb. 202 ; White v. Baxter, 71 N. Y. 254 ; Sanders v. Gillespie, 64 Barb. 628 ; Hammond v. Shepard, 29 How. Pr. 188 .