Case Name: Clark, who sues for the use, &c. vs. Small and Brown
Court: Tennessee Supreme Court
Jurisdiction: Tennessee
Decision Date: 1834-05
Citations: 6 Yer. 418
Docket Number: 
Parties: Clark, who sues for the use, &c. vs. Small and Brown.
Judges: 
Reporter: Tennessee Reports
Volume: 14
Pages: 418–424

Head Matter:
Clark, who sues for the use, &c. vs. Small and Brown.
Where a -collateral undertaking was subsequent to the creation of the debt and not the inducement to it, though the subsisting liability was the ground of the promise, without any distinct and unconnected inducement: Held, that the consideration for the original debt did not attach to this subsequent promise, but that some further consideration must be shown having an immediate reference to such undertaking, or the party will not be bound by the promise, though it be in writing.
When S. and F. had drawn bills of exchange, which were endorsed by C. and subsequently to said endorsement, they had, by their written agreement, undertaken with C. to pay said drafts and save said C. harmless, to which B. became security, not having before that time been a party to the contract in any way: Held, that S. and F. and B. were not liable upon this agreement unless some consideration other than tho preexisting debt or duty of S. and F. to C. was shown to have passed, and been the inducement to the contract.
The plaintiff sued-the defendants in an action of as-sumpsit on the following instrument, viz:
“Covington, April 14th, 1829. Know all men by these presents, that we are held and firmly bound unto James H. Clark in the sum of four thousand six hundred and fifty dollars, to the which payment we bind ourselves, our heirs and assigns. The condition of the above obligation is this, that the said James H. Clark has endorsed two drafts drawn by Small and Farmer, on Fisher, Burke and Watson, for the above amount dated 1st of January last. Now if the said Small and Farmer pay and take up said drafts, or cause to be paid those drafts, so that the above named James H. Clarke sustains no damage, then is the above named obligation to remain null and void, otherwise to remain in full force and virtue. Given under our hands the day and date above written. Small and Farmer. John T. Brown, security.”
The above instrument was endorsed by James H. Clark to Fisher, Burke and Watson, and by them to Roger Slocumb & Co. for a valuable consideration. The two drafts mentioned in said instrument fell due and were not paid by said Small and Farmer. It appeared in evidence that in the latter part of the year 1828, James H. Clark sold goods to Small and Farmer, and that the two drafts mentioned in the above instrument were drawn in favor of Clark by Small and Farmer, on Fisher, Burke •and Watson of New Orleans, and delivered by them to Clark in payment for the goods. That in January, 1829, Clark endorsed them to Fisher, Burke and Watson. That Brown had no interest or concern in the sále of the goods, nor was he a party to the two drafts, nor had he received any consideration for his securityship or guaranty other than appears on the face of said instrument.
The court charged the jury that “the guaranty in this case contains no evidence of consideration upon which to charge defendant, Brown, and if there is no other consideration the jury are bound to find for defendant Brown. The said guaranty does not of itself contain evidence of the consideration as to the other defendant, Small* upon which a finding by the jury can be had against him, but there must be other evidence.. Before they can find against him, they must be satisfied that he was under a moral obligation to give the guaranty, and then it must have been given in consideration of the endorsement of the bill in the declaration mentioned, at the request of defendant, Small, either express or implied; but a request cannot be implied unless the act to be done was a benefit to the party for whom the act was done, or loss to the other.” The jury found a verdict for defendants. The plaintiff moved for a new trial, and the same being overruled, he appealed in error to this court.
W. Stoddart and M. Brown, for plaintiff in error.
The court erred in the charge to the jury that the guaranty contained no evidence of consideration to charge the defendants. The guaranty recites that the plaintiff had endorsed the drafts of Small and Farmer on Fisher, Burke and Watson, and that they, Small and Farmer, and Brown as security, at maturity would pay them. On the face of the guaranty the plaintiff appears in the.light of an accommodation endorser; from the testimony he appears to have paid Small and Farmer value for the drafts. Take it in either point of view, the consideration of the promise of the defendants, was the previous endorsement of plaintiff for the accommodation of Small and Farmer, for value paid to them by him for the drafts. In either view, were not Small and Farmer legally bound, as repects plaintiffs, to see the debts paid? Having derived benefit from the past consideration, viz. the endorsement, a subsequent express promise to pay is evidence of a previous request, and the jury should have been so charged. Comyn on Contracts, SI, 32: 1 Sanders, 211, note 2: 264, note 1. As to Brown, if Small and Farmer were bound on the guaranty, Brown by going their security, admits, by becoming so, that the endorsement was at his request also, or, which is the same thing, by his own act he adopts the liability of Small and Farmer, and stands precisely in the situation as if he had also made the request, and is estopped from denying it. If this is not so, the same consideration which is sufficient for the promise of the principal, is insufficient for the promise of the security, who is intended to effectuate the contract-of the principal. 4 Taunton R. 611: 1 Comyn’s Digest, 298, in note, will it is believed, apply in this case.
Should it be said that Small and Farmer were already under legal obligation to pay the drafts, 'and the guaranty was only a repetition of an obligation already made or implied, the answer is, the obligation of Small and Farmer independent of the guaranty, was only made a conditional one, dependent on the failure of Fisher, Burke and Watson to pay, whereas this is a distinct, express and absolute promise to pay, without contingency or un certainty on the part of Small and Farmer, and as has already been stated, is founded on sufficient consideration, and binds them. 1 Sand. 372.
A. B. Bradford, for defendant in error.
1st. The court charged the jury that the guaranty in this case contained no evidence of consideration; that if there was no other evidence of consideration before them, they were bound to find for defendant, Brown. In support of this opinion we say: 1st. There is no consideration expressed in the writing above set forth or averred in plaintiffs declaration; and in all simple contracts, (except those arising under the law merchant,) whether written or verbal, the consideration must be averred and proved. See 5 Comyn, 133, and notes: 7 John. Rep. 321: 7 Term Rep. 350, note, Rann vs. Hughes: Chitty on Bills, 8 and 9, and notes: 7 John. Rep. 26: Pearson vs. Pearson, 11 Mass. Rep. 143. 2d. This was an engagement by Brown for third persons, to say the most, and if the guaranty had been executed at the time with the bill, unless incorporated with the execution of the bill, a consideration must be alleged for his undertaking. 4 John. Rep. 280, Baily and Bogart vs. Freeman.
This is a case in which the collateral undertaking is subsequent to the creation of the debt, and was not the inducement to it, though the subsisting liability is the ground of the promise, without any distinct and unconnected inducement. Here must be some further consideration shown, for the consideration for the original debt will not attach to this subsequent promise; indeed it is a mere naked promise to pay the already existing debt of another, which cannot be enforced. Leonard vs. Vre-denburgh, 8 John. Rep. 37.
2d. The said guaranty did not contain evidence of itself, of consideration as to the other defendant, Small, upon which a finding could be had against him; to bind him, there must be a moral or legal obligation to give the guaranty, and then it must have been given in consideration of the endorsement of the bill in the declaration mentioned, at the request of defendant, either express or implied; and a request could not be implied, unless there was benefit resulting to the party for whom the act was done, or a loss to the other party.
As to the charge in the court below as to Small, the other defendant, we say: 1st. There is no moral or legal obligation shown for the execution of the above guaranty by him, Small, by which a sufficient consideration is raised. Small and Farmer had drawn their bill in favor of James H. Clark, in January, 1829; the 14th of April thereafter they are called upon to secure Clark on his endorsement of the bill, the same not yet due, and they give Brown as security, reciting that Clark had endorsed the bill without showing that the endorsement and the guaranty were a part of the same transaction, or that the endorsement was made in consideration of the guaranty. 7 Johns. Rep. 88, Comstock vs. Smith, notes b and c.
2d. The signing the guaranty was not an act by which the defendants or either of them were benefitted, or the plaintiff had received detriment, and consequently no consideration for the promise. 1 Comyn’s Digest, 297, b 1; 303, b 10 and 11. Nothing valuable here flowed from the person to whom the promise was made, nor was the promise an inducement to the transaction, that is of endorsing the bill of exchange. See - vs. Potter, 2 Condensed Reports United States, 217: Fonblanque’s Equity, 272-3.
This action cannot be sustained in the name of Clark. By the act of 1801, ch. 6, sec. 3, this instrument is assignable, and the legal interest is divested out of Clark. See laws of Tennessee, 232: see also Hardin’s Reports, 562. Suit cannot be brought in the name of the assign- or of a paper assignable by law after he has assigned it.

Opinion:
Green, J.
delivered the opinion of the court.
It appears from the statement of the case, that the only consideration for the execution of the instrument on which the suit is founded, was the fact, that some months before that time, Clark had endorsed two, drafts drawn by Small and Farmer. As to Small and Farmer, the execution of this paper did not change their liability, or increase their obligation to provide the means for taking up the drafts, and to prevent Clark from sustaining damage should he be made liable upon his endorsements, they would be liable over to him. So far as they are concerned, this is all the obligation they incur by the instrument in question. But as to Brown, the case is very different. He becomes a party to the transaction for the first time by the instrument, and the question is, whether there was any consideration for his undertaking so as to render him liable.
In cases where a collateral undertaking is subsequent to the creation of the debt, and is not the inducement to it, though the subsisting liability is the ground of the promise, without any distinct and unconnected inducement, some further consideration must be shown, having an immediate respect to such liability, or the party will not be bound by the promise. The consideration for the original debt will not attach to this subsequent promise. 8 John. Rep. 39. If, therefore, Brown had executed this writing alone, without being associated in its execution with Small and Farmer, as a guarantee for their previously existing debt or liability, it is clear he would not be bound by it. For in that case, it would have been a collateral undertaking, subsequent to the creation of the liability of Clark by virtue of his endorsement, and not the inducement to it. As then Brown would not have been liable if he had executed the paper alone, so neither can he be liable having executed it jointly with Small and Farmer. They agree to take up the drafts or cause them to be paid, not on account of any new consideration, but because they had received the goods of Clark, and he had endorsed the bills they had drawn, and delivered them in payment. This undertaking therefore does not create upon them any new obligation. They were before bound by law to do what the agreement promises. It was executed then with a view to the obligation it might create upon Brown. It is true, a security is bound by his undertaking, if there be sufficient consideration to bind his principal, with whom he jointly undertakes. But as we have seen the execution of this paper did not create any obligation upon Small and Farmer, so by consequence it could not create any upon Brown. What damage to Clark or benefit to Small and Farmer resulted from it? None whatever. No previously existing obligation is destroyed in lieu of which this is substituted. No benefit is proposed and accorded to Small and Farmer, such as an agreement to wait, or to receive payment in a manner calculated to favor them. No moral obligation rested upon them to procure the payment to one friend, of his debt, by involving another in the liability as their security. As therefore, we think, that to render Brown liable, such a consideration must be shown as that if he had executed the paper alone, would have rendered it obligatory upon him, we affirm the judgment of the circuit court.
Judgment affirmed.