Turle v. Sargent

• Decision Date: 16 December 1895
• Citation: 65 N.W. 349,63 Minn. 211
• Parties: TURLE v. SARGENT ET AL.
• Court: Minnesota Supreme Court

63 Minn. 211

65 N.W. 349

TURLE

v.SARGENT ET AL.

Supreme Court of Minnesota.

Dec. 16, 1895.

(Syllabus by the Court.)

1. If a third party, without any consideration personal to himself, gives his promissory note to a creditor as collateral to the mere naked debt of another, without any circumstance of advantage to the debtor, or disadvantage to the creditor, the note is without consideration. Bank v. Bell, 21 N. W. 470, 32 Minn. 409, followed, and Rosemond v. Graham, 56 N. W. 38, 54 Minn. 323, distinguished.

2. Held, further, that any renewal of such note, unless there is some consideration to support it, other than the mere surrender of the original note, is also without consideration.

Appeal from district court, St. Louis county; Charles L. Lewis, Judge.

Action by Walter Turle against William C. Sargent and others. Judgment for defendants. From an order denying a new trial, plaintiff appeals. Affirmed.

McCordic & Crosby, for appellant.

Cash, Williams & Chester, for respondents.

START, C. J.

1. This is an action upon a promissory note of the defendants for the sum of $5,826.67, payable to the plaintiff. The defendants admitted the making of the note, but alleged as a defense that there was no consideration for the same; and, further, that it was given in renewal of a former note for $8,000, given by defendant William C. Sargent, and that the only consideration for this last note was the agreement of the plaintiff not to prosecute criminally one William T. Hooker for misappropriating the sum of $8,000, belonging to the plaintiff. The reply was simply a general denial. Trial by the court without a jury, and judgment ordered for the defendants, and from an order denying his motion for a new trial plaintiff appealed.

The trial court found that no consideration was given for the note in suit, or for any of the notes of which it was a renewal, other than the consideration for the original note of $8,000. As to this original note the court found: That for some two years prior to the date thereof-February 1, 1890-the plaintiff and Hooker were partners in business, which was under the management of the latter, but the former furnished all the capital therefor. That while they were such partners Hooker misappropriated about $8,000 of the funds of the firm, but in fact, as between the parties, they were the funds of the plaintiff. Thereupon plaintiff threatened to the defendant William C. Sargent, the personal friend of Hooker, to cause criminal proceedings to be instituted against him for such misappropriation, unless the matter was adjusted; and that the only consideration for the giving of the original note was the agreement of the plaintiff not to so prosecute him. That this note was not given or taken in payment of Hooker's debt, or the amount of this misappropriation; neither was there any agreement for any extension of time to Hooker for the payment of his debt to the plaintiff in consideration of the giving of the note by the defendant. This note was renewed several times until September 29, 1892, when the sum $5,826.67, appearing to be due on the original note as renewed, was voluntarily and without any consideration therefor reduced to the sum of $5,826.67, and the note therefor in suit was signed by the defendant William C. Sargent, and indorsed before delivery by his mother, the defendant Mary C. Sargent, solely at his request, and without any consideration.

2. If the evidence justifies the findings of fact, the conclusion that the defendants are entitled to judgment is correct. The plaintiff, however, while conceding that the evidence supports the finding that the original note was given upon his agreement not to prosecute Hooker, denies that this was an illegal consideration, or that it was the only consideration for the note. As to the first, his claim is that, the plaintiff and Hooker being partners, it was a legal impossibility for the latter to embezzle partnership funds, and therefore his misappropriation of the funds was not a crime, and the agreement not to prosecute him was perfectly harmless. We are not prepared to concede this proposition, either as a question of law or morals. Gen. St. 1894, § 6710. But we are not called upon to decide the question, for, if the promise not to prosecute was not illegal, because it related to a supposed crime which it was impossible for Hooker to commit, it necessarily follows that a promise to refrain from doing that which it is legally impossible to do cannot be a valid consideration for the execution of a promissory note. Therefore if, as the court has found, there was no other consideration for this original note except such promise, it was wholly without any consideration. The plaintiff's counsel, however, insists that the inevitable inference from the special facts found by the court is that the note was given as collateral security for the pre-existing debt of Hooker to the plaintiff, and that this was a valid consideration to support the note. He reaches this conclusion of fact by assuming as his premise a fact which the trial court did not find, but negatived by its finding,-that there was no other consideration for the note except the agreement not to prosecute. This is the argument: “It is certain that the note was given either in payment of Hooker's debt or as collateral thereto. The court has found that it was not taken in payment, and we concede that the case justified this finding. It will be seen from ...