Case ID: ad_127/html/0435-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Smith, P. J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

First National Bank of Richfield Springs, Appellant, v. Eleanor C. Keller and Bertha M. Keller, Respondents.
    Third Department,
    June 18,1908.
    Contract —consideration—extension of time— forbearance of threatened suit.
    If an instrument has a consideration, it is equally valid whether or no the true consideration be expressed therein.
    The extension of time to pay a note is sufficient consideration for a mortgage given to secure the indebtedness.
    Where a bank was threatening to set aside a transfer of property from a mother to her daughters as in fraud of its rights as creditor, a mortgage of the premises to secure the debt given in consideration of the bank's refraining from bringing such action is supported by a sufficient consideration, where the bank does so refrain.
    Appeal by the plaintiff, the First National Bank of Richfield Springs, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of Otsego on the 1st day of February, 1907, upon the decision of the court, rendered after a trial at the Otsego Special Term, dismissing the complaint.
    
      Myron M. Crandall and William E. Seavey, for the appellant.
    
      Lynn J. Arnold and James J. Byard, Jr., for the respondents.
   Smith, P. J.:

This action is brought to foreclose a mortgage executed by the ■defendants and delivered to the plaintiff. The mortgage was given to secure a note made by one Frank H. Keller, and indorsed by M. J. Keller, his mother, dated January 8,1903, for three months, and,to secure renewals of said note. The defense is want of' consideration.

Under section 840 of the Code of Civil Procedure a seal upon an executory instrument is only'presumptive evidence of af sufíiciént consideration, which may be rebutted as if the instrument were not sealed. ' If the instrument in fact had a consideration it is equally valid,, whether or not the true consideration be stated therein. That consideration may be a benefit moving to the promisor, or it may be a forbearance or surrender of a right by the promisee. The liability for which it was given to secure was extended for three months from January 8, 1903. It is true that, this liability was a pre-existing one. For many years the bank had been carrying the note of Frank H. Keller, indorsed by M. J. Keller, and renewing it from time to time. At the time of the giving of this mortgage one of those notes was held by the bank, dated December 22, 1902. This note was for three months, and would not become due until March 22, 1903. It has been found that the note of January eighth, however, was given in substitution of that note. If so, it clearly extended the time of payment from March 22, 1903, until April 8, 1903, which extension is of itself a sufficient consideration to sustain this mortgage. There is some little confusion in the testimony upon .the evidence of Mr. McKee, who represented the bank, to the effect that he did not tell Eleanor Keller, the defendant, at the time of his conversation with her, that he would forbear in consideration of the execution of the mortgage. Thb- fact is that during his conversation With her the question of a mortgage was not proposed. He was insisting upon her signing the note as further security. And the mortgage was afterwards taken by the attorney for the bank without the knowledge of the bank as to just what form this security was to take. It clearly appears, however, that this note of January eighth was discounted upon the faith of the mortgage, as well as the several renewals thereof, and there was in fact actual forbearance of the claim of the bank as a consideration for the giving of the mortgage. The assurance was that such ' forbearance would be given them if they in some way secured the note.

There is another consideration, however, which seems to me to be clearly shown. Frank Keller was the son of M. J. Keller, and these defendants were her daughters. M. J. Keller had the title to real property, which represented about $4,000 in value. Shortly prior to January 1, 1903, she had conveyed all her property, real and personal, to these defendants, in consideration, as had been found, of services rendered by them in assisting her in running a hotel for some twenty years, aggregating upwards of $10,000. This transfer had come to the knowledge of the bank officials about January 1, 1903, and the defendant Eleanor Keller was called into the bank. She was told that the bank relied upon this property as security for the payment of this note; that now it had been transferred to the girls, the bank would be compelled to attempt to enforce the collection of the note out of the property, unless the defendants signed the note or gave some security therefor. It seems that the mother was not in good health, and the defendant was anxious that she should not be disturbed. She declined to assume a personal liability by signing the note, but afterwards executed the mortgage in question. She refers in her evidence to some assurance that there was no personal liability to be assumed by her. In fact there was none, as there would have been had she signed the note. She simply handed over the property as further security for the note. Her memory of what occurred at the bank has in it that vagueness which so often affects the- memory of persons when sued to enforce a liability which they have assumed. However, she refused to contradict the positive and clear assertions of Mr. McKee, and the conclusion from the whole evidence is irresistible. The bank was threatening to set aside the transfer; the mother was sick and these daughters did not want the mother disturbed by litigation; the mortgage was given in consideration that the bank would refrain from bringing such proceeding ; the bank did refrain. The contrary finding is to my mind clearly overborne by the weight of the evidence, and this is so even without the aid of the presumption of consideration to which the plaintiff is entitled by reason of the seal which the defendants have placed upon the mortgage. The judgment should be reversed on law and facts and a new trial granted, with costs to the' appellant to abide the event.

All concurred;. Sewell, j., not sitting.

Judgment reversed on law and facts and new trial granted, with costs to appellant to abide event,