Brewster v. Short — 43 N.Y. St. Rep. 768

Majority

p. 768

Walter S. Brewster, Pl’ff, v. John C. Short, Def't.

(Supreme Court, General Term, First Department,

Filed February 18, 1892.)

Headnote

1. Bills and notes—.Guaranty—Consideration.

Want of consideration for the guaranty is no defense to an action against the guarantor of a promissory note where the guaranty was placed o„n the note before delivery and a sufficient consideration passed to the make:', even though the guarantor did not know of such consideration.

p. 769

2. Same—Evidence.

In such an action the court refused to allow the defendant to prove the facts and circumstances attending the 'giving of the note by the maker, who had since died. Held, no error, as the question plainly called for transactions between the witness and the deceased.

Motion by defendant for a new trial, a verdict having been, ■directed for the plaintiff and exceptions ordered to be heard in the ."first instance at general term.

James Parker, for the motion; Wallace Macfarland, opposed.

action was brought upon a guarantee for a note. The complaint set out the note and guarantee and delivery to one Thomas, and alleged that at the time of the making and. delivery of the note the defendant, in consideration of the loan of the sum of $1,500, made by the party receiving the note to a company, guaranteed in writing its payment. The complaint then alleged the assignment of the note and guaranty and demand of payment, etc.

The answer admitted the making and delivery of the note and guaranty, but alleged that it was given by the company for a loan by said Thomas to said company as a stockholder, solely to avert ■and prevent the failure of the company whereby Thomas’ stock would have become valueless.

Tiie defendant then denies that in consideration of said loan he ■guaranteed the note, and alleges that the guaranty was given after ¡said loan was made, and without consideration to the defendant, ¡and that defendant never received at any time any consideration .for the said guarantee. The answer also denies the transfer, etc., and alleges that the said note belongs to the executors of said Thomas.

Upon the trial the plaintiff proved an assignment pf said note for a nominal consideration by the executors of Thomas to the plaintiff, and rested.

The defendant sought to prove the facts and circumstances attending the giving of the note to Thomas. This was objected to .-as being a transaction with Thomas, who was dead, which was ¡sustained.

This was clearly right, as the question plainly called for transactions between the witness and the deceased.

The defendant then sought to prove that he did not receive any -consideration for his guaranty. This evidence was excluded as immaterial, among other grounds; as it clearly was, because under the pleadings it appeared that there was a good consideration for "the note.

It is laid down as a rule that in every form of suretyship upon promissory notes, whether by undersigning, endorsing or guaranteeing, the existence of a sufficient consideration between the maker and the payee establishes a sufficient consideration against the surety. McNaught v. McClaughry, 42 N. Y., 22 . This rule is approved in the case of the Erie County Savings Bank v. Coit, 104 N. Y., 532 ; 5 St. Rep., 790 . And it is further held that it is*

p. 770

immaterial whether or not the guarantor knew of the consideration passing between the maker and the payee. In other words,, if the holder can recover against the maker of a note, he can recover against the guarantor, unless such guarantee was placed upon the paper after delivery. In the case at bar consideration for the note is even alleged- in the answer, so that the maker is-liable, and consequently the guarantor is liable.

The exceptions must be overruled, and judgment directed for plaintiff on the verdict, with costs.

O’Brien, J., concurs.