First Nat. Bank v. Watkins

• Citation: 28 N.E. 275,154 Mass. 385
• Parties: FIRST NAT. BANK v. WATKINS.
• Decision Date: 15 September 1891
• Court: United States State Supreme Judicial Court of Massachusetts

154 Mass. 385

28 N.E. 275

FIRST NAT. BANK v. WATKINS.

Supreme Judicial Court of Massachusetts, Berkshire.

September 15, 1891

The report was as follows: "This is an action of contract. At the trial the plaintiff proved the execution of the note and the indorsements thereon, and rested. Thereupon the defendant offered to prove that the note was made to one H.M Benedict by the defendant, and at the same time a mortgage of personal property was given to secure the note. The note was made payable at the plaintiff bank. Benedict indorsed the note in the bank, and made over his interest in the mortgage to the plaintiff, and thereupon both became the property of the plaintiff. The defendant afterwards sold his equity in the mortgaged property to a third party, and the plaintiff then agreed with him that it would look to the mortgage property alone for payment of the note. The plaintiff afterwards extended the time for the payment of the note, as appears on the back of the same, without the knowledge or request of the defendant. On the 4th day of April, 1890, the sum of $178.15 was paid, and indorsed upon the note. The defendant did not pay this sum of money, but claimed it was the amount realized from a foreclosure and sale of the mortgaged property, which had greatly depreciated in value since the maturity of the note, and which at the time of such maturity was of more than sufficient value to pay the note. Thereupon, at the request of plaintiff's counsel, the court ruled that if the defendant proved what was stated in his opening it would not amount to a defense to the plaintiff's claim, and ordered a verdict for the plaintiff for the full amount, and the case is now reported. If said ruling was right the verdict is to stand; otherwise to be set aside, and a new trial ordered."

COUNSEL

M Wilcox, for plaintiff.

E.M. Wood, for defendant.

OPINION

KNOWLTON J.

The exceptions were waived at the argument, and we have to consider only the questions presented by the report. The ruling of the superior court was made on the defendant's offer of proof in the opening of his counsel to the jury, and the argument in behalf of the plaintiff assumes that the agreement referred to in the offer was upon a sufficient consideration, and was enforceable as an independent contract. The contention chiefly relied on by the plaintiff is that such an agreement is not available in defense to a suit on the note, although if broken it would furnish a good foundation for an action for damages. We do not assent to this proposition. An agreement "to look to the mortgaged property alone for the payment of the note" would be, in effect, an agreement to discharge the defendant from all liability upon it, which, if made upon a valuable consideration, would be a good defense to a suit for payment of it. Although a new and independent contract, it would be unreasonable to permit a plaintiff, who had made such an agreement, to collect his note of the maker, and to compel the maker to seek his remedy by a suit to recover back from the payee as damages the sum which was paid. The tendency of the modern case...