Court Opinion

ID: 5460576
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:35:02.271351+00
Date Added: 2024-06-11T08:32:51.920154
License: Public Domain

By the Court,

Mullin, J.
The defendant is the accommodation indorser of the notes ip question. There was no consideration for either the making or indorsing said notes. They were made and indorsed to pepew other notes, but *580neither the defendant nor his son were parties to the notes to be renewed by the notes in suit.
[New York General Term,
May 4, 1863.
Sutherland, Clerke and Muffin, Justices.]
Schott, who procured the notes in suit to be made and indorsed, was indebted to the plaintiff on five notes then held by the plaintiff. Coman acted for the bank, and called on Schott to give new notes in lieu of those held by the bank. Five small notes were given, and Schott, after procuring the notes in suit, presented them to Coman in satisfaction of an equal amount of his own notes held by the bank. Oh consultation between Coman and the president of the bank it was concluded to discount the notes in question and surrender the notes of Schott. The notes in suit were accordingly entered on the books of the bank, but no notes were ever surrendered to Schott. They were entered on the books as held as general collateral security for the account of Schott. The notes were not received on any such arrangement. The notes of Schott are retained by the bank, and thus the notes were and are without consideration. Had the notes of Schott been surrendered, or had the notes been received by the bank upon any other valuable consideration, I do not think the defendant would have had any defense. But the only consideration was the surrender of the notes, and no such surrender was made before suit brought.
The justice before whom the cause was tried finds there was no consideration for the transfer to the bank, unless it was forbearance to sue. Ho such consideration is alluded to by any witness, and no such consideration can be presumed.
The bank attempts to hold the indorsement of the defendant as collateral security for the debt of another, although the agreement by which the bank obtaiped it was that it shquld be taken in payment. The law will not lend its aid to accomplish any such purpose.
' I am therefore of opinion that the judgment should be reversed and a new trial ordered; costs to abide the event.