Opinion
Argued October 11, 1881
Decided October 25, 1881
Samuel Hand for appellant. Francis Kernan for respondent.
The only question on this appeal is, whether there was a consideration for the defendant's indorsement of the note of September 27, 1876, upon which the action is brought. This note was made to take up a prior note for the same amount, dated May 24, 1876, at four months, held by the plaintiff, purporting to have been made and indorsed by the same parties, and was used for that purpose.
The genuineness of the indorsement of the note in suit was admitted, but the defendant Place denied the genuineness of the indorsement of the prior note, purporting to have been indorsed by him, and claimed that he indorsed the note in suit under a mistake, induced by the representation made to him, when the indorsement was made, that he was the indorser on the prior note. The referees found against him on the issue of the genuineness of the prior indorsement.
It is claimed, however, that, assuming the genuineness of the indorsement of the note of May 24th, there was no consideration to uphold the indorsement of that note, nor, consequently, of the note given in renewal. We think this point is not tenable.
The oral contract made between the bank and Wooster, in December, 1875, to carry the indebtedness of Wooster, arising out of his indorsements for the Burrs, for one year, was to be performed by his giving short paper, indorsed by the defendant Place and others, which the bank was to renew, from time to time, as it fell due. The note of May 24th, was given to renew paper taken by the bank under this arrangement. This prior paper was due, or about due, when that note was given. The bank could have sued that paper when due, and proof of the agreement to carry the debt, and that new notes had been tendered in renewal, would not have been a defense. The proof of the contract to carry, would not have been admissible to control the legal effect of the promise contained in the notes, to pay at a fixed time. The bank, if it had refused to perform its agreement to renew, would, I think, have been liable for the breach, but only on the theory, that the promise to carry the debt, was a collateral promise, independent of the written contract contained in the notes. It would have constituted no defense to an action upon the notes falling due within the year. At most it would have constituted a counter-claim to the extent of the injury sustained by its breach.
In this view there was ample consideration for the indorsement, by the defendant Place, of the note of May 24th. The bank, upon taking that note, canceled the prior paper and extended the payment of the debt. The note in suit was indorsed to be used at the bank to take up the note of May 24th. This was understood by Place, and it is immaterial, upon the question of consideration, at whose request this indorsement was made.
The judgment should be affirmed.
All concur.
Judgment affirmed.