Eylers v. Coen — 39 N.Y. St. Rep. 789

Majority

p. 789

John Eylers and John Hogan, Resp’ts, v. Mary Coen, App’lt.

(Supreme Court, General Term, Second Department,

Filed July 2, 1891.)

Headnote

Negotiable paper—Consideration.

Plaintiffs were sureties on a contract of defendant's husband with the city, which he failed to complete. Upon notice by the city that it would be taken out of his hands if not completed, plaintiffs took an assignment of the contract, and defendant gave them two notes to pay for labor and material on said contract to finish the work No money was raised on the notes, nor was the work completed. Held, that, as between the parties, the note was a mere promise to be security for money to be raised to complete the contract, and was without consideration.

Appeal from judgment of the city court of Yonkers, entered on verdict for plaintiffs, for the sum of $872.40.

Action on a promissory note for $800.

F. X. Donoghue, for app’lt; John C. Donohue, for resp’ts.

—The defendant’s husband was a contractor to do certain work for the city of Yonkers. The plaintiffs were his sureties for the performance of the work. The contractor failed to complete the work or to continue it, and the city notified the sureties that, if the contract was not finished, it would be taken out of Coen’s hands Coen then assigned his interest in the contract to the plaintiff Eylers, and promised to complete the work. In order to raise money Mrs. Coen “said she would sign a note, and to make up a note between the three of us to pay for the labor and materials on her husband’s contract.” This transaction was between the sureties and Mrs. Coen. A note for $500 was given by her to the plaintiffs to pay for labor and materials to finish the work under her husband’s contract. On the 17th of May, 1890, she gave a note for $300 for the same purpose, and on December 3, 1890, she gave the note in full for $800, to include the two notes of $500 and $300. Hogan, one of the plaintiffs, states the transaction to have been a little different; that the defendant promised at her giving of the first note that, as long as the contract was in her name, the sureties should not lose.

The defendant differs from the plaintiffs, but the judge has found a consideration, and the question must be whether a consideration is established by the plaintiffs’ testimony. It does not appear that the notes ever passed out of the plaintiffs’ hands; that any money was ever borrowed upon them, or either of them. No consideration was made out. As between the parties to this suit the defendant was a surety to the plaintiffs. She had no interest in the contract and only lent her name, so that the sureties could raise money to complete the work. In the hands of a bona fide holder for value the note would have been upheld. As between the parties, it is a mere promise to be security for money to be raised

p. 790

by the surety to enable him to complete the contract of their principal, and is without consideration.

The contract is not finished, and the case shows that the $500 note was given upon the expressed condition that' it was to pay for labor and materials “ to finish Poplar street ” under her husband’s contract, where the plaintiffs were “ sureties for the same contract”

The subsequent note, $300, was, no doubt, given under the same condition or understanding.

The note was not given for the benefit of the separate estate of the wife, and does not charge such estate in the note itself.

The judgment should be reversed and a new trial granted, costs to abide event

Dykman and Pratt, JJ., concur.