Case Name: James K. Place et al., Appellants, v. William S. McIlvain, et al., Respondents
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1868-01
Citations: 38 N.Y. 96
Docket Number: 
Parties: James K. Place et al., Appellants, v. William S. McIlvain, et al., Respondents.
Judges: 
Reporter: New York Reports
Volume: 38
Pages: 96–102

Head Matter:
James K. Place et al., Appellants, v. William S. McIlvain, et al., Respondents.
Discharge of indorsers from liability. The defendants were indorsers on a note given by one Nichols to plaintiffs, which had been protested for non-payment. Subsequently, Nichols inclosed to plaintiffs his check, dated ahead, with a letter requesting them to hold same, and, when paid, he would call for the note. The plaintiffs, without communicating with Nichols, kept the check, which was not paid at maturity. In an action against the defendants as indorsers, their defense was a discharge from liability by reason of an extension of time given to the maker of the note.
12eld, that the letter, by fair construction, contained a request to give time for payment of the note until the maturity of the check, and that, by retaining the check until it matured, and then presenting it for payment, the plaintiffs assented to the request.
The plaintiffs were not at liberty to retain the check, without notice to the maker, for some other purpose than that implied in the request, and of which he had no knowledge, and to which he never assented. They were bound, upon receipt of the check, to retain it upon the terms proposed, or to return it to the maker, rejecting the terms.
When a creditor takes the note of his debtor, payable at a future day, he thereby suspends his right of action upon the debt until the maturity of the note (see cases cited in opinion of Grover, J.), and, taking the check of the debtor, so payable, is the same in principle,-and should be held to produce a like effect.
Extending the time of payment to the principal debtor, or, what is equivalent, suspending the right of action by the creditor, discharges the surety.
The plaintiffs having suspended the right to sue the maker upon the note until the maturity of the check, the indorsers were thereby discharged, and the judge, at the trial, erred in not directing a verdict in their favor, as requested.
N. B. — The general propositions in the opinion of Grover, J., are not contradicted in the dissenting opinion of Miller, J. The dissent relates to the ulterior question, whether the plaintiffs, by keeping the check as requested, and presenting it for payment at maturity, did thereby extend the time of payment of the note, or suspend their right of action upon it. The affirmative opinion would seem to hold, that this was a question of law which the judge could determine; the dissenting opinion, that it was a question of fact to be submitted to the jury.
This action was brought in the New York Common Pleas against the respondents, as indorsers on a promissory note drawn by one Nichols; and their defense was, that they were discharged from liability, by an extension of time given Nichols by the appellants.
The cause was first tried, December 23d, 1857, before Judge Ingraham, without a jury, on an agreed state of facts. He rendered judgment for the amount with interest, in favor of the plaintiffs, which judgment was reversed on appeal, and a new trial ordered.
On the second trial before Judge Hilton and a jury, February 15, 1860, the respondents’ counsel produced in evidence the agreed state of facts drawn up and submitted on the first trial, by the counsel for the respective parties, and on which judgment had been rendered in favor of the plaintiffs. All technical objections as to the authenticity of the evidence being waived, the judge permitted the plaintiffs to introduce evidence varying this statement' of facts, to which exception was taken.
The evidence showed on the second trial, that, at the maturity of the note, the maker sent to the plaintiffs, inclosed in a letter, his negotiable check, dated nine days ahead, in which he says: “ Please keep the check, and when paid I will call for the note.” He also stated, “ if you will accept this, you will confer on me a great favor.” The plaintiffs received both the letter and check, and deposited the check in their own bank; and they did this, because they supposed it might be paid. The check was not paid at maturity; no notice of its non-payment was ever given by them to its maker.
Hpon these facts, the respondents’counsel requested the court to direct a verdict in their favor, which was refused, and exception taken, and the cause was submitted to the jury, the judge leaving it for them to determine, as to the intent which controlled the plaintiffs in accepting the check; and they rendered a verdict in favor of the plaintiffs, to the amount of the note and interest.
■ A motion for a new trial at Special Term on exceptions, and also, on' the ground that the verdict was against evidence, was made by the respondents, and denied. They then appealed to the General Term, from the judgment entered on the verdict, and the judgment was reversed, and a new trial ordered. The plaintiffs then appealed to this court, with the usual stipulation as to judgment absolute in case of affirmance.
Messrs. A. H. Wallis & A. B. Lawrence, for the appellants.
Mr. E. T. Gerry, for the respondents.

Opinion:
Grover, J.
The principal question in this case arises upon the exception of the defendants to the refusal of the judge to direct a verdict for the defendants. The undisputed facts, upon which the request was based, were, that after the defendants were duly charged as indorsers upon the note in suit, the maker sent his check upon the Hanover bank for the amount of the note, payable to plaintiffs' order, post-dated some seven days, inclosed in a letter as follows: " I herewith inclose you my check on the Hanover bank for $490, for my note now under protest. Please keep the check, and when paid, I will call for the note. I have been disappointed today in getting the money, and of course quite short. If you will accept this, you will confer on me a very great favor, and if you have been put to any expense in consequence of not getting this money at maturity, I will re-imburse you." That the plaintiffs received the check on the day of its date, and retained it until maturity, and then presented it for payment, which was refused; that, until after this, no communication was made by the plaintiffs to the maker in regard to the check or note, and no notice given to the latter, of acceptance or rejection of the proposition contained in the letter inclosing the check. The verdict of the jury, under the charge given, finds, that there was no express agreement by the plaintiffs to give time to the maker, and no intention on their part to retain the check as their own property until maturity; but there was no evidence to sustain such findings, except as above stated. The letter, fairly construed, contains a request by the maker, to retain the check, and give time for the pay ment of the note until maturity; retaining the check until maturity, by the plaintiffs, and then presenting it for collection, shows that they assented to such request. They were not at liberty, so to retain it, without notice to the maker, without such assent, and, after having done so, it is not competent for them to allege that they retained it for some other purpose, of which the maker had no knowledge, and to which he never assented. The plaintiffs were bound, upon the receipt of the letter and check, to elect either to retain it upon the terms proposed, or to reject such terms, and return the check to the maker. Having retained the check, they must be regarded as assenting to the terms upon which it was sent by the maker. When a creditor takes the note of his debtor, payable at a future day, he thereby suspends his right of action upon the debt, until the maturity of such note. (Putnam v. Lewis, 8 Johns. 382; Myers v. Willey, 5 Hill, 463 ; Fellows v. Prentiss, 3 Denio, 518.) Taking the draft or check of the debtor so payable, is the same in principle, and should be held to produce the like effect. This was so held in Bangs v. Mosher, 23 Barb. 478. Extending the time of payment to the principal debtor by the creditor discharges the surety. ( 3 Denio, supra.) Suspending the right of action by the creditor, has the like effect, although but for a single day. (Same oases, and cases cited.) It follows, that theplaintiffs, having suspended the right to sue the maker upon the note, until the maturity of the check, the indorsers were thereby discharged. The judge, therefore, erred in not directing a verdict in their favor as requested. The order reversing the judgment and granting anew trial must be affirmed, and judgment final for the defendants upon the stipulation.