Case ID: nys_30/html/0765-01.html
Source: Caselaw Access Project
Author: {"author": "LEWIS, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

(81 Hun, 203.)
    ETZ et al. v. PLACE.
    (Supreme Court, General Term, Fifth Department.
    October 17, 1894.)
    Statute op Frauds—Guaranty—Consideration.
    Where a seller agreed to accept in part payment a note of the purchasers guarantied by a responsible party, and they induced defendant to guaranty the note after fully explaining to her their contract with the seller, and the note was then delivered and accepted, the fact that the guaranty did not recite a consideration does not render it void under the statute of frauds, since the note and guaranty, being executed at the same time, were parts of the same transaction, and the consideration contained in the note was sufficient.
    Appeal from circuit court, Steuben county.
    Action by Charles W. Etz and James M. Welch against Almira M. Place on a promissory note. From a judgment entered on a verdict directed in favor of plaintiff, and from an order denying a motion for a new trial, made on the minutes of the court, defendant appeals. Affirmed.
    Argued before DWIGHT, P. J., and LEWIS, HAIGHT, and BRADLEY, JJ.
    J. H. & C. W. Stevens, for appellant.
    Milo M. Acker, for respondents.
   LEWIS, J.

The complaint states that E. J. Wright and A. K.

Ryno made their certain promissory note in writing, of which the following is a copy, to wit: “Alfred Center, N. Y., Nov. 16, 1891. Eight months áfter date we promise to pay Frank Hall or order two hundred dollars, value received, with interest, payable at University Bank, Alfred Center” (signed by the makers),—and that the defendant then and there, for a good and valuable consideration, duly guarantied the payment of said note, which was then delivered to the said payee, Frank Hall, who then became the owner and holder thereof for value received; and that thereafter, and before the note became due and payable, the payee, for value received, sold, transferred, and delivered the same to the plaintiffs. The note was not paid at maturity, and judgment was demanded against the defendant for the sum of $200 and interest. The answer of the defendant, among other defenses, pleaded the statute of frauds as a defense to the action. It was shown upon the trial that the makers of the note, Wright and Ryno, wishing to purchase a bakery from Hall, the payee of the note, upon credit in part, agreed that they would give the note mentioned in the complaint, and procure a responsible person to guaranty the payment thereof. They thereupon fully explained to the defendant the terms of their agreement with Hall, and she consented to guaranty the payment of the note. They made the said note, and the defendant, at their request, guarantied its payment by writing upon the back thereof as follows: “I guaranty the payment of the within note,”—with her signature thereto. The makers thereafter delivered the note with the said guaranty to Hall in part payment for the said bakery. The note was thereafter transferred to the plaintiffs, and. not being paid at maturity, this action was brought against the defendant. It came on to trial, and upon proof of the facts above stated a verdict was directed against the defendant for the amount of the note with interest.

It is the contention of the appellant that the plaintiffs failed to make a case against the defendant; that the defendant’s undertaking was to answer for the debt, default, or miscarriage of the makers of the note, and, it not appearing upon the face of the guaranty that it was made for a valuable consideration, it was void under the statute of frauds; and that it was not competent to prove by parol evidence the real consideration for the undertaking of the defendant. There would be much force in the appellant’s position if the guaranty had been a contract collateral to the note. If it had been given to secure the payment of a note which had theretofore had an inception, for a past-due debt, in such case the undertaking of the defendant would have been void. The undisputed facts are that the guaranty was made upon the note before it was delivered by the makers to the promisee. The payee required, as a condition of accepting the makers’ note in part payment for his bakery, that the payment thereof should be guarantied by a responsible person, and when the note was delivered to him in part payment for his property the defendant’s undertaking was indorsed upon it, and he parted with his property upon the strength of her undertaking. The defendant was aware, when she signed the guaranty, of the use which' was to be made of the note. The guaranty thus became a part of the principal contract; and the consideration stated in the note, though none was stated in the guaranty, became the consideration for the guaranty. The defendant, under the circumstances of the case, became the original debtor to the payee of the note, and not simply the guarantor of another’s indebtedness. Where the consideration is contained in a written instrument contemporaneously executed with the guaranty, and forming a part of the transaction, it will satisfy the requirements of the statute. Bank v. Kaufman, 93 N. Y. 278. We have examined the authorities to which our attention was called in the appellant’s brief, and think they can be distinguished from the case at bar. It would require very much time, and be a fruitless task, to undertake a review of the very many authorities to be found in the books discussing similar questions arising under our statute of frauds. The current of them, we think, will be found to sustain the views we have taken of the questions here presented. The following are some of the cases bearing upon the question before us: Bickford v. Gibbs, 8 Cush. 154; Benthall v. Judkins, 13 Metc. (Mass.) 265; Gates v. McKee, 13 N. Y. 232; Bank v. Coster, 3 N. Y. 212; Bank v. Coit, 104 N. Y. 537, 11 N. E. 54.

No place of payment was inserted in the note when defendant executed the guaranty, but thereafter, and before the delivery of the note to the payee, the words, “payable at the University Bank,” were written in the note without the knowledge or consent of the defendant. This bank was located in the village where the defendant and both makers of the note resided at the time, and was within a very short distance of their residences. We do not think the alteration was a material one. Bank v. Lanman, 19 N. Y. 477.

The defendant offered to show that when she signed the guaranty the makers agreed that before using the note they would procure the signature of a Mr. Shaw as one of the makers of the note, and that they failed so to do. As it is not claimed that the payee ever had any knowledge or information of such agreement, he cannot be affected thereby. The judgment and order appealed from should be affirmed. All concur.