Livingston v. Radcliff

By the Court, Barculo, J.

It can hardly be contended that the attorney, under his general authority to collect the note, was not authorized to receive a payment of part in money, and the residue in a note for two or three days of a person of undoubted responsibility.

The authority of the attorney being conceded, it becomes a question whether the evidence establishes the fact of payment. Platt, one of the makers of the note, went to the attorney on the 13th of June, paid $490, and gave his individual note for $600, which he requested him to take for two or three days. The attorney received the money and note and gave up the original note. Van Kuren, the plaintiff’s agent, who left the note for collection, was informed on the same day of the arrangement, and did not express any dissent. It seems to me that this evidence would fully authorize, if not require, a jury to find that the original note was paid. Suppose things had remained thus for a year, or even a month, could there be any doubt of the intention of the parties to make this a payment ? And yet length of time could not really make any difference in the character of the transaction. If it was a payment at all, it was so at the instant of its completion.

But it is contended that this arrangement was conditional, and subject to the approval of Yan Kuren; and that, he disapproving, Platt on the 15th rescinded the arrangement and restored things to their former state. As I understand the evidence, the only thing subject to the approval of Van Kuren, was the taking of Platt’s note for two or three days ; for Platt promised, if Yan Kuren was not satisfied with that, he would give the attorney the money for it. This seems to have been the understanding also of the attornies; for when one of them applied to Platt on the morning of the 15th, he told Platt that Yan Kuren would not assent to the arrangement, “and that he must pay the money on his note.” Up to this time no one seems to have supposed that Platt had a right to rescind the arrangement and take back his note and money. It was evidently an after thought, and probably originated in some difficulty between Platt and the other makers. If the arrangement was conditional, as claimed by the plaintiff, it is extraordinary that the attorney did not keep the original note until the approval of Yan Kuren had been obtained.

But- it is also contended that Platt’s note could not operate as a payment, because it was the note of one of the makers of the former note, and falls within the cases of Cole v. Sackett, (1 Hill, 516,) and Waydell v. Luer, (5 Id. 448.) But in addition to the circumstance that the last of these decisions was reversed by the court of errors, (3 Denio, 410,) it never had any application to the case of a liability created merely by note. It was applied to . the occasion of joint indebtedness arising out of partnership dealings. The supreme court held that the note of one partner, given for a partnership debt, antecedently due, would not extinguish the liability of the other partners. But the reason assigned for that decision is by no means satisfactory. It is said that there is no consideration for the discharge of the other debtors, on receiving the note of one. This at first view appears to be correct, so far as relates to the benefit received by the creditor; although the fallacy of that appearance has been shown by Senator Lott in his opinion delivered on the reversal of the decision in Waydell v. Luer. But there is another respect in which this reason is still more unsound: and that is in respect to the prejudice sustained by the discharged debtors.

“ A valuable consideration is one that is either a benefit to the party promising, or some trouble or 'prejudice to the party to whom the promise is made.” (2 Kent’s Com. 4.64.) Hence it follows, that if the debtors claiming to be discharged can show that on the giving of the individual note of one of the joint debtors, in satisfaction of the previous note, they furnished that debt- or with funds to pay a portion of the debt, or settled with him upon the basis of his having assumed the whole debt, they are troubled and prejudiced by the arrangement, and can hold the creditor to his agreement. Now in the case of Waydell v. Luer, it was expressly proven that Way dell took the individual note of Cort and gave up the firm note, knowing of the dissolution of the partnership ; that the other partners credited Cort in his general account with the amount of the note, as so : assumed by him; and Cort’s notes were renewed from tú time for two years, before the suit was brought. These! warrant the conclusion that the business of the partnershin been closed; that Cort had been furnished the funds td / 5 * this debt, and settled with by the other partners upon that basis.1 And yet after a lapse of two years, when Cort had probably : come insolvent by the laches of the plaintiff, it was held that there was no consideration for the discharge of the defendants. It seems to me it would have been better to have said to the plaintiff, “ You have voluntarily elected to give up the joint security and take the note of an individual. The defendants, acting upon that, have contributed their quotas toward the payment of this debt, by supplying the individual debtor with funds to pay the same. They are therefore in a worse position in consequence of this arrangement: they have been troubled and prejudiced, which constitutes a sufficient consideration for their discharge.”

So in the case of Cole v. Saclcett, the debtor claiming to be discharged, had settled with the other, allowing him for the amount of the debt assumed by him individually, and the creditor took his individual note, and gave up the film note. At that time the partner who assumed the debt was in good credit, but before suit he became insolvent. And in the case of Arnold v. Camp, (12 John. 409,) it appeared that Camp had given Downing, whose individual note was taken, property for the purpose of taking up the note. It seems to me that in all these cases there was an abundant consideration shown, according to the principles adverted to.

The case before us is one of a similar character. Platt made an arrangement with the other makers, or some of them, and in consequence thereof, he took up the original note and gave his own for a part; and the plaintiff accepted it in payment of the first note, which was given up to Platt. Here a consideration appears in the arrangement made between Platt and Rad-cliff, by which it seems that the latter had furnished the former a note to be discounted. In other words, provision had been made for the payment of this note; the means were put into Platt’s hands; he offered to become, and was accepted by the plaintiff as, the sole debtor. The consideration is clear and sufficient; and the discharge of the defendant, by giving up the old note, is valid and binding.

In all these cases the circumstances of the transaction show that the party discharged has, by reason of the arrangement, put himself into a position where he may or must be prejudiced if held liable for the debt: and this constitutes a legal consideration for the creditor’s discharge of him. Whether indeed, it would not be the duty of the court, in the absence of express proof, to presume from the nature of the transaction itself, the existence of a consideration of the character referred to, is a grave question which need not now be discussed.

The motion for a new trial must be denied.