Baird v. Herr, 6214.

• Decision Date: 24 April 1934
• Docket Number: No. 6214.,6214.
• Citation: 64 N.D. 572,254 N.W. 555
• Parties: BAIRD v. HERR et al.
• Court: North Dakota Supreme Court

64 N.D. 572

254 N.W. 555

BAIRD

v.HERR et al.

No. 6214.

Supreme Court of North Dakota.

April 24, 1934.

Syllabus by the Court.

1. Where one of two makers of a promissory note signs for the accommodation of the other, the consideration to the one accommodated is sufficient consideration to sustain the note against the accommodation maker.

2. One who is a joint and several maker of a promissory note, even though he signs for the accommodation of the other maker, is primarily liable on the note to a holder for value.

3. Following Langlie v. Loge et al., 59 N. D. 399, 230 N. W. 211, 71 A. L. R. 373, a payment by one of two makers of a joint and several note does not suspend the running of the statute of limitations against the other.

4. Even though a promissory note contains the written consent of joint and several makers that “time of payment may be extended or this note renewed without affecting their liability thereon,” the extension of the time of payment by the holder without the consent of any of the makers, or the renewal of the said note by a third party upon the death of one of the makers, and without the consent of the survivor, does not toll the running of the statute of limitations against the surviving maker.

Appeal from District Court, McIntosh County; Wm. H. Hutchinson, Judge.

Action by L. R. Baird, as receiver of the Zeeland State Bank of Zeeland, against Christ G. Herr and another. From a judgment in favor of the defendant George Herr, the plaintiff appeals.

Judgment affirmed.

Coventry & Thompson, of Linton, for appellant.

Max A. Wishek, of Ashley, and J. A. Heder, of Bismarck, for respondents.

BURR, Chief Justice.

On October 27, 1923, the defendant and one Christ G. Herr executed and delivered a note for $1,500 to the Zeeland State Bank due November 1, 1924. The note contained the following provision: “The several makers, signers, guarantors, and endorsers hereof hereby waive presentment, demand, notice of dishonor and protest, and consent that the time of payment may be extended or this note renewed without affecting their liability thereon.”

The defendant made no payments on principal or interest; but Christ G. Herr made payments on principal and interest from time to time up to and including January 6, 1927, and died, apparently, before October 7, 1929.

On October 7, 1929, Emil Herr, administrator, and Mrs. C. G. Herr executed a note to the bank for $400 covering the amount then due on the note. The bank retained the original note as collateral and marked it “renewed note.” There is nothing in the record showing who either of the makers is or what connection he has with the old note. This is left to surmise.

The plaintiff is receiver of the bank and brought action on the original note.

The defendant in his answer denies execution of the note, alleging he received no consideration for the same and that “the cause of action herein accrued more than six years prior to the commencement of this action and that the right of recovery against this defendant is barred by the statute of limitations.”

At the close of the trial both sides moved for a directed verdict, the defendant basing his motion solely on the alleged running of the statute of limitations. The jury was discharged and the court ordered judgment for the defendant for the dismissal of the action.

[1][2] The defense of the statute of limitations is the only one worth considering. The record shows defendant admitted signing the original note, and while he signed as an accommodation maker for the comaker there is ample evidence to show consideration to his comaker. This is sufficient consideration to bind the defendant. See Baird, etc., v. Keitzman et al., 60 N. D. 317, 233 N. W. 905;Page v. Steinke, 60 N. D. 685, 690, 236 N. W. 261;Bank of Hazelton v. Renschler et al., 62 N. D. 299, 302, 243 N. W. 280.

It is the contention of the plaintiff that because of the contract quoted from the note the defendant is bound by the renewal, and that this renewal was made within the period of the statute of limitations.

[3] It is settled in this jurisdiction that a payment by one of two or more makers of a joint and several note does not in itself suspend the running of the statute of limitations in favor of the other. See Langlie v. Loge et al., 59 N. D. 399, 230 N. W. 211, 71 A. L. R. 373.

[4] According to the contention of the appellant the case turns upon the construction of the provision quoted from the note-“consent that the time of payment may be extended, or this note renewed without affecting their liability thereon.”

In Bank of Conway v. Stary et al., 51 N. D. 399, 411, 200 N. W. 505, 510, 37 A. L. R. 1186, 1194, we held that an accommodation party was bound by the waiver contained in the note and by that agreement says “to the holder of the note that any extensions of time may be made, without notice to him, which, in the judgment and discretion of the holder or creditor, may be expedient or necessary under the circumstances.”

We are not required to determine just what was meant by “without affecting liability thereon.” Whether it means “note may be renewed by the other maker and I will be liable on the note for the time specified in the renewal,” or “the note may be renewed, by the other maker but I will still retain my defenses on the old note,” need not be determined. The agreement for renewal was an agreement between the payee and the makers, and one maker agreed with the other maker that the latter could renew without notice to the former.

But the renewal note was not made by any maker. Assuming “Emil Herr, adm.,” means “Emil Herr, administrator of the estate of Christ G. Herr deceased,” then the renewal was made by the administrator of the estate of a deceased maker and by a third party, presumably the widow of the deceased maker. Defendant's contract and agreement was that Christ G. Herr might renew and agree to an extension of time, without...