Arend v. Smith
| Citation | 151 N.Y. 502,45 N.E. 872 |
| Parties | AREND v. SMITH. |
| Decision Date | 19 January 1897 |
| Court | New York Court of Appeals |
OPINION TEXT STARTS HERE
Appeal from supreme court, general term, Fifth department.
Action by L. F. W. Arend against Christopher Smith. From a judgment of the general term (30 N. Y. Supp. 1129) affirming a judgment for plaintiff, defendant appeals. Affirmed.
Stephen Lockwood, for appellant.
Edward C. Mason, for respondent.
On the 17th of February, 1893, the plaintiff was presided of a railroad corporation to which the defendant was indebted in the sum of $1,000, then past due, upon a subscription for stock issued to him by the company. The plaintiff, as president, demanded payment of the sum subscribed, and threatened suit by the company in case it was not paid, as he had on one occasion about a month before. The defendant said that he had plenty of property, but, owing to the hard times, he had no money, and could not then pay the debt. The plaintiff asked him for his note, and said that he could get it discounted, and the defendant replied that, when the note fell due, he would not be able to pay it. The plaintiff then said that, when the note became due, he would ‘renew it and renew it again,’ if the defendant so desired. The defendant thereupon made his promissory note for $500 at three months, and delivered it to the plaintiff, who at once indorsed it, procured it to be discounted at a bank, and paid the proceeds over to the railroad company to apply upon the debt of the defendant, who himself paid the sum charged by the bank for discounting the note. The plaintiff had no pecuniary interest in the debt or the note, except as an indorser for the accommodation of the defendant. On the 22d of May, 1893, when the note became due, the defendant could not pay it, and so informed the plaintiff, who told him to make out a new note, and added that he had better make it for $1,000, so as to pay the balance of the subscription, and that he, the plaintiff, would get it discounted. The new note was accordingly made for that amount, and delivered to the plaintiff by the defendant, who promised to pay the sum charged as discount as soon as it could be ascertained. Owing to stringency in the money market, the banks refused to discount the note, and the plaintiff notified the defendant that he must take care of the first note, but he omitted to do so. On the 6th of June the second note was returned to the defendant, who accepted it, and has retained it ever since. The plaintiff was compelled to pay the bank the amount of the first note, which was thereupon delivered to him, and this action was brought to recover the sum so paid from the defendant. The answer sets up as a defense the agreement to renew, and the violation thereof by the plaintiff, and the only question presented for decision is whether that agreement was supported by a sufficient consideration.
When the agreement in question was made, the defendant owed the plaintiff nothing, but he owed the railroad company $1,000, that was then due. He was under a lawful obligation to pay that debt, and the giving of a note to raise money for that purpose was an advantage to him only, as it extended the time of payment. As he did no more than his duty, no consideration...
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