Powers v. Silberstein — 13 N.Y. St. Rep. 125

Majority

p. 125

Jesse W. Powers, Resp’t, v. Morris Silberstein, Impleaded, etc., App’lt.^[1]

(Court of Appeals,

Filed January 17, 1888.)

Headnote

1. Surety—Indulgence to principal debtor does not discharge.

The mere indulgence by a creditor of the principal debtor, will not discharge the surety. There must be an agreement for an extension made without the consent of the surety upon a valid consideration, which precludes the creditor meanwhile from enforcing the debt against the principal, thereby changing the position of the surety.

2. Same—Evidence—Admissibility of—Burden of proof.

The defendant,- who was sued as indorser on a certain note, sought to establish on the trial that the plaintiff, after the maturity of the note in question, agreed with the principal debtor to foibear the collection of the debt'if they would continue the plain tiff’s son in their employment, and that said debtor consented to and d.d retain him in their service. Held,, that tile burden of proving this defense was upon the defendant, but it could be proved by circumstances, and the acts and conduct of the parties were admissible to interpret the language if that was in any degree doubtful or o Escure.

Appeal from a-judgment of the general term of the superior court of the city of New York affirming a judgment in favor of plaintiff entered upon the verdict of a jury at the trial term.

John H. Drake, for app’lt; Frank M. Clute and Chas. B'landy, for resp’t.

The trial judge refused to submit to the jury the question whether there was an agreement between the plaintiff and Joy & Bowman, the makers of the note, made after its maturity without the consent of the defendant, the accommodation indorser, to extend the time of payment. If there was any competent evidence tending to sustain this defense, the ruling was erroneous. There are certain facts which are uncontradicted \ first, that the consideration of the note was a loan of 81,500, made by the plaintiff to Joy & Bowman, and that it was one of the inducements upon which the loan was made, that Joy & Bowman should take into their employment the son of the plaintiff, and second, that the loan was in fact continued

p. 126

from the maturity of the note in April, 1881, to the time of the failure of Joy & Bowman, about the commencement of 1884, on the payment by the firm of the annual interest on the note, and that no demand of payment of ‘the principal was made either of the makers or indorser until at or about the time of the failure of the firm, and that during this whole period the son of the plaintiff was continued in its employment. It is well settled that mere-indulgence by a creditor of the principal debtor, will not discharge the surety. There must be an agreement for an extension made without the consent of the surety, upon a valid consideration, which precludes the creditor, meanwhile, from enforcing the debt against the principal, thereby changing the position of the surety. Lowman v. Yates, 37 N. Y., 604 .

The defendant sought to establish on the trial that the plaintiff after the maturity of the note, agreed with Joy & Bowman to forbear the collection of the debt if they would continue the plaintiff’s son in their employment, and that Joy & Bowman consented to and did retain him in their service upon this consideration. The burden of proving this defense was upon the defendant, but, as in case of other' agreements, it could be proved by circumstances, and the acts and conduct of the parties were admissible to interpret the language, if that was in any degree doubtful or obscure.

It would be the duty of the judge to instruct the jury that the defense must be established to their satisfaction by a preponderance of evidence, but nevertheless, in case of conflict, or when different inferences might be drawn from the evidence, the question on which side the evidence preponderates is for the jury exclusively, subject to the power of the court to "set aside the verdict and submit the question to a new jury. Bagley v. Bowe, 105 N. Y., 179 ; 6 N. Y. State Rep., 842. We think the question of extension was for the jury. The loan, as stated, was in fact continued three years after the maturity of the note. The son was-continued in the employment of the makers. The witness Bowman testified that he saw the plaintiff soon after the note matured, and said to him, “ It will help our business if this money is not disturbed. Frank (the son) is getting along very well, and if you will let us have the money on a longer time or extension, we should like to have him remain with us,” to which the plaintiff replied, “that was all right;” and on his cross-examination he testified, “I told him (the plaintiff) I should like to have the money for another year. He consented,” and being asked, “What were his words,” answered, “He said, that is all right.” The plaintiff testified in general terms that he made no

p. 127

agreement to extend the note, but, oh the contrary, refused to do so. He did not deny that the employment of his son was an inducement to the original loan, nor that the subject of the continued employment was referred to in his conversations with Joy & Bowman after the note matured, nor does he assign any reason for continuing fhe note for three years after maturity without calling for payment. The defendant Silberstein and his son also testified to admissions of the plaintiff tending to support the defense of the extension. But without taking their testimony into consideration, which on another point was obviously discredited by the jury, we are of opinion that upon the conceded facts and the evidence of Mr. Bowman, the question whether there was an agreement for an extension should not have been withdrawn from the jury.

The judgment should, therefore, be reversed and a new trial ordered.

All concur.