Opinion
November, 1893.
Nelson S. Carr, for plaintiffs (respondents).
Samuel C. Mount, for defendants (appellants).
This is an appeal by defendants from a judgment entered herein in favor of the plaintiffs, and against the defendants, upon the verdict of a jury rendered at the direction of the court. The action was brought to recover the sum of $625, with interest from the 8th day of March, 1893, on a promissory note dated at the city of New York March 8, 1893, made by one George Blair, payable to the order of Joseph T. Farrington, and indorsed, transferred and delivered by the latter to the plaintiffs for value. The note is duly pleaded in the complaint. The answer substantially avers that the note in suit was indorsed by defendant Farrington without a consideration, and was diverted by his codefendant Blair from the purpose for which it was intended. The defendant Blair failed to appear in this action. The part payment, and the giving of another note of lesser amount in place of the $700 note, was a good consideration for the transfer of the note in suit. Newman v. Frost, 52 N.Y. 424; Mayer v. Heidelbach, 123 id. 332, 339. There was sufficient consideration for the indorsement of this defendant. See National Bank of Gloversville v. Place, 86 N.Y. 444.
ANDREWS, J., at page 447, says: "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 counterclaim 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." This case is exactly in point and controlling. See Young v. Lee, 12 N.Y. 551, 555; Phœnix Ins. Co. v. Church, 81 id. 218, 222.
We find no error on the part of the trial justice, and judgment should therefore, be affirmed, with costs.
VAN WYCK and NEWBURGER, JJ., concur.
Judgment affirmed, with costs.