Opinion ID: 2112763
Heading Depth: 1
Heading Rank: 7

Heading: Existence of Debt

Text: The existence of the Barelmanns' debt is evidenced by the notes described in part II. These notes are negotiable instruments. See Neb.U.C.C. § 3-104 (Reissue 1980). According to Neb.U.C.C. § 3-307(2) (Reissue 1980), [w]hen signatures are admitted or established, production of the instrument entitles a holder to recover on it unless the defendant establishes a defense. As the Barelmanns admittedly signed the two notes in question, they could successfully defend this aspect of the matter only by showing either that these notes were invalid or that they had been paid. The promissory note executed on April 19, 1985, recites that its purpose was to Renew Operating Notes and Interest]. Inasmuch as no consideration is necessary for an instrument given as security for a debt already owed by the party giving it, it would appear that as of April 19,1985, the Barelmanns were indebted to the bank. See, First Nat. Bank of Omaha v. Kizzier, 202 Neb. 369, 275 N.W.2d 600 (1979); Neb. U.C.C. § 3-408 (Reissue 1980). However, the Barelmanns allege that Sharon Barelmann was not a party to the original note creating the indebtedness represented by the April 19 note, and, thus, the April 19 note is not valid as to her. This claim overlooks that the bank's agreement to refinance the loan would, in and of itself, be consideration, as there are no facts pled which show that the bank was under any obligation to agree to refinance the note originally executed by Russell Barelmann. In Hecker v. Ravenna Bank, 237 Neb. 810, 815, 468 N.W.2d 88, 93 (1991), quoting Buckingham v. Wrap, 219 Neb. 807, 366 N.W.2d 753 (1985), we stated: [Consideration is sufficient to support a contract if there is any detriment to the promisee or benefit to the promisor. Generally, a court will not inquire into the adequacy of consideration for a contract, inasmuch as consideration based on value of property or performance of a promise is a matter of personal judgment by parties to a contract. Ordinarily, a contract will not be held invalid for inadequacy of consideration alone, unless inadequacy is so great as to furnish of itself evidence of fraud. The promissory note executed on April 22, 1985, recites it covered fuel, hog feed, and expenses. There being no evidence it was not so issued, the document itself supports the conclusion that the consideration for its issuance was the advancement of $2,500 for the designated farm expenses. There being no proof that the notes in question were paid off or otherwise discharged or that they were executed as the result of some fraud or other deceit practiced by the bank, the district court properly determined that the Barelmanns were indebted to the bank.