Case ID: ny-st-rep_32/html/0851-01.html
Source: Caselaw Access Project
Author: {"author": "Daniels, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Ellen Paul, individually and as Ex’rx, Resp’t, v. Augustus P. Stevens, Impl’d, App’lt.
    
      (Supreme Court, General Term, First Department
    
    
      Filed June 6, 1890.)
    
    Bills and notes — Consideration.
    Plaintiff loaned a sum of money to one Y. on his individual note, and such money was put in as his capital in a firm of which he and defendant were partners. Y. having retired and assigned his interest in the firm to his wife, 'plaintiff inquired of defendant concerning the interest on Y.’s notes and was assured it would be paid as before, and defendant gave her a note of the firm payable on demand in place of said note, which was destroyed. Held, that the inference from these circumstances was that this was considered a firm indebtedness, and that it was the understanding that the money was to remain in the firm and no immediate measures taken to enforce collection, and that the extension of time furnished a good consideration for the note as against this defendant.
    Appeal from a judgment recovered on a verdict of a jury directed by the court and from an order denying a motion for a new trial.
    
      A. Simis, Jr., for app’lt; Coleridge A. Ilart, for resp’t
   Daniels, J.

The verdict was directed for the amount unpaid upon a promissory note made on the 12th of October, 1885, payable to the plaintiff or order in the sum of $2,500. It was subscribed by the firm name of A. P. Stevens & Co., and it was alleged in the complaint that these defendants were associated together as partners in business finder that firm name, and made and delivered the note in question to the plaintiff. These allegations were not denied by the defendant’s answer, but he set up an affirmative defense to exonerate himself from liability upon the note, and he was received as the witness upon the trial by whose evidence alone these defenses were endeavored to be maintained.

It appeared by his evidence that he together with James A Van Da Linda were previously in partnership under the firm name of A. P. Stevens & Co., and that the plaintiff loaned to Van Da Linda the sum of $2,000, which he put into this firm as his capital, and gave the plaintiff his individual note for the payment of the indebtedness. Before the note in suit was given, James A. Van Da Linda retired from the firm and assigned his interest in it to the defendant, Julia Van Da Linda, his wife, and under this assignment, with the assent of the witness, she became associated with him in the business, and had so continued since the year 1884. After the retirement of James A. Van Da Linda, who had given the preceding note to the plaintiff, she had an interview with the defendant, Augustus P. Stevens, concerning the interest payable to her upon the indebtedness, in which he stated that the interest would be paid the same as it previously had been. Then she inquired what would happen to her if he should die, and he testified there was something in that, and he sat down and drew the note in controversy for this sum of $2,500, which included $500 of interest then unpaid on the note held by her, and delivered the note to the plaintiff, and that she then destroyed the other note. After that, interest was paid upon this note by checks drawn by this defendant from time to time, and the-principal remained in the business.

It was substantially on this state of the proof that the verdict was directed in favor of the plaintiff against the defendant, Augustus P. Stevens, and it disclosed sufficient to indicate the truth to be that he regarded the preceding loan as a debt of the firm, and had paid interest upon it according to that understanding, and that the note in suit had been given in place of the preceding note for the reason that James Van Da Linda had withdrawn from the firm, and that this defendant intended to carry the .indebtedness along as that of this firm. The note was payable on demand after date, but from the interview which this defendant states took place between himself and the plaintiff it was clearly the understanding that the money should be permitted to remain in the business of the firm, and that no immediate measures should be taken to enforce its collection.

That is evident from the fact of the assurance given that .the interest should be paid upon the debt the same as it had been while Mr. Van Da Linda was a member of the firm, and the inference was plainly supported that an extension of time was given for the payment of this money, and that formed a consideration between this defendant and the plaintiff, under the circumstances which appeared to have taken place supporting the making and delivery of this note.

For it has been repeatedly held that forbearance, or an extension, of the time for the payment of a debt is a good consideration for the making and delivery of an obligation of this description. Mutual Life Ins. Co. v. Smith, 23 Hun, 535; Grocers' Bk. v. Penfield, 7 id., 279, affirmed 69 N. Y., 502. A point similar upon its facts to that controlling the disposition of this case arose in Spalding v. Cargill, 53 N. Y. Supr. Ct., 453; 1 N. Y. State Rep., 787, where it was held that a substitution of a note for a previous obligation was sufficient to maintain it as a legal obligation. The benefit to the firm by leaving the money in its business for an indefinite period of forbearance created such a consideration.

From the evidence which was given it was also to be inferred, although the money had been loaned to Van La Linda himself, that it had been considered by this defendant as a firm indebtedness, and the interest had been paid upon it by him with that understanding, and the change in the form of the obligation from the preceding note in this manner given was no more than continuing the same liability and imposing the observance of the same ■obligations which had been previously accepted and fulfilled by this defendant. There "was sufficient, therefore in the case as against this defendant to maintain his liability for the indebtedness. ¡No question of fact was presented by the evidence and a verdict for the plaintiff was legally directed. In these essential respects the case differs from that of the other defendant, Mrs. Van Da Linda, and the judgment and order should be affirmed. Brady, J., concurs.