Court Opinion

ID: 3593501
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:41:30.207144+00
Date Added: 2024-06-11T07:42:51.657957
License: Public Domain

The main question which we are to determine in the case at bar is, whether the taking of the check of Nichols by the plaintiffs operated to suspend their right of action, so as to discharge the indorsers. The rule is well settled, that the mere taking of an obligation having time to run, from the party primarily liable, or a bill or note over due, does not operate to discharge the indorser, *Page 100 
unless there is an agreement, express or implied, that the new obligation is in payment of the former one, or extending the time of payment in favor of some other party, who is liable thereon prior to the indorser. (Taylor v. Allen, 36 Barb. 294.) Mere indulgence by a creditor, without a valid and express agreement to extend the time of payment, is not enough; but it must be an agreement which is obligatory upon the creditor, and one which is founded upon a sufficient consideration. (Dorlen v. Christie,
39 Barb. 613, 614.) The evidence upon the trial of this case does not, I think, present such a state of facts as would have authorized the court below upon the trial, to say, that an agreement was established within the rules laid down; and to direct a verdict in favor of the defendants, as was requested by the defendants' counsel. The testimony upon the trial showed that the check of Nichols was sent in a letter to the plaintiffs, with a request that they should keep it, and when paid the maker would call for the note. The letter also stated, that the plaintiffs, by accepting the check, would confer a favor. No answer was made to the letter, but the check was retained until due, and then presented for payment, and payment refused. The foregoing facts, which are undisputed, and present the legal question involved, did not, in my opinion, constitute a legal agreement to delay the collection of the note. There was no arrangement either express or implied, that the plaintiffs should delay the payment of the note, and, if they had prosecuted the note after the check was received, and before it was presented for payment, the retention of the check would not have been a valid defense to a recovery upon the ground that it was a payment, or that the time had been extended. If any agreement to extend the time can by possibility be inferred, when was it made, and for what length of time was payment delayed? Could a suit brought the next day after it was received, or at any other time before the check was due against the maker, be necessarily defeated by reason of the note not being due? It will be seen, that it is exceedingly difficult to establish a valid agreement, either express or implied, to extend the time of payment of the note *Page 101 
from the reception of the check, its retention and presentation. These, as well as the other facts proved, which were controverted, have some weight and bearing upon the question arising as to the intent of the plaintiffs in keeping the check, which was submitted to the jury upon the trial; but they do not establish affirmatively or conclusively, as a matter of law, a positive or implied agreement to give time. Whether the check was received and retained, with the intention of extending the time of payment, and both parties so understood it, was a question which the judge upon the trial left for the jury to determine, and, as they have found against the defendants, I do not think their verdict can be set aside as the evidence stands. It may also be remarked, that it would be a novel doctrine to hold that the simple act of forwarding a check to a party, to be applied on a note, when the avails were realized, and its retention, with no specific agreement in regard to it, and no receipt given, should have the effect to discharge the indorsers, and lead to much embarassment and difficulty in reference to negotiable paper. If the check was retained and proved to be worthless, the indorsers would be released. If returned, as would seem to be essential, if the retention of it authorizes the inference that an agreement to extend the time was made, then the payment might be delayed, and, perhaps, the collection of the note of the maker, so as to injure the indorsers. No such extraordinary degree of vigilance is required, as to demand that the holder of a bill or note shall define his position immediately upon receiving a check, at the hazard of discharging the security, and, unless the surrounding circumstances in connection with the retention prove an extension of the time of payment, it is not necessarily to be presumed, that the time was extended.
Independent of the consideration to which I have adverted, there is, I think, another difficulty in establishing an agreement to delay, and that is, that the taking of the check by the plaintiffs was not a sufficient consideration, for the agreement to extend the time of payment. The plaintiffs received no advantage from it. It was not an additional security, *Page 102 
which insured or strengthened the payment of the debt which was then due. It was an obligation of the maker alone, and did not add a single iota to the safety of the plaintiffs' demand, and there was no consideration of benefit on the one side, or harm on the other, sufficient to sustain an agreement. The check itself was worthless, of no value whatever, and the making and forwarding of it, as was done, does not present a case like that of a note given upon settlement of an account for goods sold, where the demand is liquidated, which is a benefit to the creditor, or one where a new note or bill is given, whereby the creditor acquires a negotiable instrument, which may be used more advantageously than a note or bill past due. (Myers v.Willis, 5 Hill, 464.)
There was no error, I think, in admitting one of the plaintiffs to testify, upon the trial, that he did not tell Nichols that he would hold on until the note matured. Nichols had sworn that he did, and the evidence was admissible to contradict Nichols' testimony on this point if for no other purpose. It was, also, proper to show the circumstances under which the stipulation made upon the previous trial was executed, and that the admissions made were limited to that trial alone. The right to controvert the statement of facts agreed upon on the first trial, depends, perhaps, upon the fact whether the agreement was limited to that trial alone. There was a dispute in regard to this, and the testimony on the subject was conflicting, at least there was a question for the jury upon this point, and hence it was competent to introduce evidence which was in conflict with the stipulation, if it was not otherwise admissible.
I discover no error upon the trial, and I think the judgment of the General Term should be reversed, and the judgment of the trial court affirmed.
Judgment of General Term affirmed. *Page 103