Jaqua v. Montgomery

Gregory, C. J.

As stated in the opinion of the majority, I do not concur in the proposition, that the agreement of forbearance charged in the second paragraph of the complaint, renders the answer impeaching the consideration of the note bad on demurrer. If the note was nudum pactum, then the agreement of forbearance was without any consideration to support it. This proposition as between the maker and payee will hardly be disputed. A new promise made in consideration of a previous obligation entered into *44without any consideration, is not binding on the promisor, even where the obligation is surrendered at the time. Copp v. Sawyer, 6 N. H. 386; Hill v. Buckminster, 5 Pick. 391.

But it is claimed that this rule is not applicable as between the assignee and maker of the promisory note in suit. This note is governed by the statute, which provides that “whatever defense or set-off the maker of any such instrument had, before notice of assignment, against an assignor, or against the original payee, he shall have also against their assignees.” 1 G. & H. 448, sec. 3. In relation to this kind of paper, the assignee stands in the place of the payee as to every defense existing at the time of notice of the assignment. It is said that this promise to pay the note at the expiration of the time stipulated is binding on the maker for the reason that the assignee surrendered his right of action against his assignor and thereby suffered detriment. Can this proposition be maintained? 1 think clearly it cannot. The indorser of a note, under our statute, warrants two things: first, that the note is valid and the maker liable to pay it; secondly, that the maker of the note is solvent and able to pay it. Howell v. Wilson, 2 Blackf. 418.

The indorsee of a note, obtained from the maker without consideration, has a right, as soon as he discovers the imposition, to sue the indorser for having assigned him a note which the maker is not liable to pay. Id. The warranty as to the validity of the note is broken at the time it is made. The note is not valid.

Now all that can be claimed for the appellant is, that he relied upon the promise of the appellee and did not (as he might have done) sue the indorser. But the appellant was not legally bound to wait, and his doing so was voluntary on his part, without the consent of the appellee. Indeed, for aught that appears in the pleadings, the appellant may have successfully pursued his remedy against his indorser. There is no averment in the complaint on the subject, and certainly there can be no legal presumption that the appel*45lant refrained from doing that which he had a legal right to do. The assignee was in privity with the assignor; the maker, as to them, was antagonistic. It could not, in any legal sense, be said, that the maker was negotiating for and on behalf of the payee of the note; the former had no interest in the question of liability as between the assignee and assignor. The rule as to valuable considerations is very carefully and accurately stated by Mr. Chitty and by Judge Bouvier in his Law Dictionary. The latter states the rule thus: “Valuable considerations are those-which confer some benefit upon the party by whom the promise is made, or upon a third’ party at his instance or request; or from which some detriment is sustained, at the instance of the party promising, by the party in whose favor the promise is made.” See title Consideration, 1 Bou. L. D. 329.

Mr. Chitty states the rule thus:'“The general rule as to the sufficiency of the consideration seems to be, that it may arise either, first, by reason of a benefit resulting to the party promising, or to a third person, by the act of the promisee; or, secondly, by reason of the latter sustaining any loss or inconvenience, or subjecting himself to any charge or obligation, however small the benefit, charge, or inconvenience may be; provided such act be performed, or inconvenience or oharge incurred, with the consent, express or implied, of the promiser, or, in the language of pleading, at his request.” Chit. Con. 28.

This court, in Mathews v. Ritenour, 31 Ind. 31, recognizes the rule as stated by Judge Bouvier.

It is true, that in Pierce v. Goldsberry, 31 Ind. 52, this court held, Elliott, J., dissenting, that an oral agreement of the principal debtor to pay merely the same interest. that the note would have borne if the indulgence had been given voluntarily, is a sufficient consideration for a promise of forbearance for a definite time; but that was a valid note, based Upon a valid consideration.

In the case now before us, there was no new con*46sideration; the pleadings show that there was an oral agreement for forbearance for a time fixed.

J. B. Jaqua, J. W. Headington, and A. Jaqua, for appellant. ' J. N. Templar and A. M. Templar, for appellee.

It is clear to my mind, that if the appellant suffered any detriment in not pursuing his legal remedy against his indorser, it was his own act,'and not suffered at the instance of the appellee, and that therefore the promise of the latter to pay the note at the expiration of the time fixed was a nudum pactum.

I think the majority are very clearly right on the question of estoppel.

The instrument signed at the time the note was executed has not the first element of an estoppel. It is no more than what the note itself imported on its face. It was obtained by the same fraudulent act that procured the execution of the note. It was a part of the same contract and was as much a part of the note as if it had been incorporated in it. It was a statement upon which the appellant had no right to rely. Indeed, I think that such a paper accompanying an ordinary promissory note should have thé effect of exciting suspicion that all was not right. It looks too much like the act of the thief in attempting to cover up his crime.

I think the judgment ought to be affirmed.