Jaqua v. Montgomery

Frazer, J.

The court below sustained a demurrer to the second paragraph of the reply, and this ruling we are called upon to review.-

*37One paragraph of the complaint averred, that the defendant, on. the 28th of February, 1865, made his promissory note to one Antisdale, payable in one year, which Antis-dale assigned to the plaintiff before maturity; that after 'it became due, the defendant pi’omised the plaintiff to pay the note on the 1st -of September, 1866, in consideration that the latter would give day of payment and forbear to sue until that time; that the plaintiff, in consideration of said promise, so agreed and performed his agreement; that the time for payment has passed, and the defendant has failed to pay, Ac. The other paragraph was in the common form upon the note. The answer was in three paragraphs. The first and second of these impeached the note for want of consideration and fraud in obtaining it; for reply to which, the plaintiff, by the paragraph to which the demurrer was sustained, averred, that the plaintiff was induced to purchase the note by reason of a writing of even date therewith made by the defendant and delivered to the payee, to enable the latter to negotiate the note, as follows:

“Bearcreek, Tp., Ind., Feb. 28th, 1865.
“ This is to .show that the note given by me this day to •John S. Antisdale for §75 is all right and will be paid when it comes .due. (Signed) • J. C. Montgomery.”

The appellant argues that the defenses pleaded were insufficient, inasmuch as he took the note before its maturity without notice, and cites cases applicable to commercial paper. They are not applicable to this case, the note sued on not being of that class of obligations.

It is further insisted that the fact alleged in the reply constituted an estoppel. It is familiar doctrine, that where the maker of a note represents to one who he knows is about negotiating for the paper, that he has no defense to it, and upon the faith of such assurance the paper is purchased, he will be estopped from making defense. But that is not quite the case before us. The making of a promissory note imports in law a sufficient consideration, and it is a fair inference from its mere existence that the maker *38believes that he is liable to pay it, and that he honestly intends to pay it, when he executes it. When such a nóte is delivered to the payee, the maker puts it in his power to exhibit all this evidence of a valid obligation and real purpose to pay, to the whole world. He is thus enabled often to impose upon an unwary purchaser. And yet in such a case the consideration of the note may be questioned in the hands of an innocent holder. And if to the ordinary terms of the note were superadded an express declaration of what would otherwise be plainly implied, it would hardly increase the currency of the note in the market; and we suppose it would never be held to work an estoppel» We think that no case can be found which carries the doctrine of estoppel to- so great an extent. The fact that the assurance is written on a separate paper, though at the same time, should make no difference. The two instruments are as, truly a. single transaction as if the contents of both had been embodied in one. We have a plain statute allowing the same defenses to a note in the hands of an assignee that could be made as against the payee, and we do not think it should be rendered nugatory by doubtful estoppels. And yet it must be admitted that.the-difference is-not very marked between this:case and one where the maker should, an hour after giving the note,, innocently assure a person about to purchase it,, that he had no defense to it, not supposing that any existed.. In the latter case direct authority would probably compel us to apply the doctrine of estoppel, notwithstanding the statement was. made in ignorance of the facts, and under the influence of a reeent deception which there had been no opportunity to discover. But in the case before us we are not constrained by direct authority, and there is at least these slight differences between this and the case supposed: here the assurance was given at the same instant with the execution of the note, while there it was afterwards; here it was general and to nobody in-particular, there it was special and personal to one about to-act and who could not but be influenced, by it. We have *39doubted upon the question before us and considered it much, but a majority now concur in the opinion that there was no estoppel, our brother Elliott dissenting.

But the reply was nevertheless good enough for a bad answer, and hence there was error in sustaining a demurrer to it, if the answer was bad.

One paragraph of the complaint, as we have seen, counted upon a promise, made after the maturity of the note, to pay at a subsequent day in consideration of forbearance, and alleged such forbearance. If this new promise was valid and supported by a sufficient consideration, it constituted a new contract, binding in law and capable of enforcement. It was not a contract forbidden by law or public policy. Had it then a sufficient consideration to support it? Either a benefit to the promisor or an inconvenience to the promisee constitutes a valuable consideration. Upon the maturity of the note, if there was a valid defense to it, the plaintiff, an assignee, had the undoubted right to go, at once, upon the assignor. This was a valuable right, and its surrender or waiver would be a sufficient consideration for the new promise of the defendant. There would be plain injustice in allowing the defendant to attack the validity of the note at the end of the period of additional credit given in consequence of his new promise, and after he had, upon the faith of that promise, led the plaintiff to forego his remedy against the assignor. If he might thus disregard the new promise, he would, without incuring liability, have inflicted upon the plaintiff’ the injury of delay, to which might also be added ultimate loss, if loss should occur by such delay in pursuing his remedy against the assignor. The majority of the court, Gregory, C. J., dissenting, concur in the opinion that the first and second paragraphs of the answer were not good defenses to the second paragraph of the complaint, and that the demurrer to the second paragraph of the reply should have been sustained to those paragraphs of the answer.

*40Judgment reversed, with costs, and cause remanded, with •directions to proceed aeeoi’ding to this opinion.