Westfall v. Parsons , 1853 N.Y. App. Div. LEXIS 140 ( 1853 )

By the Court, T. R. Strong, J.

It is insisted on the part of the plaintiff, that the verbal agreement between Jabez Parsons and the parties to this action, which the defendant’s counsel proposed to prove, was invalid for want of consideration, and by the statute of frauds; and that if valid, it did not change the relation of the parties to the action, in respect to the debt, to each other, and make them, as between themselves, jointly liable for its payment.

The position taken in respect to the question of consideration is, that Jabez Parsons did not agree to do, or do any thing more than he was under a legal obligation to do, and than might have been compelled by the plaintiff and defendant as his indorsers. If this were so; if what was done by him was only co-extensive with an existing obligation on his part, I agree that it would not be a sufficient consideration for the undertaking of the plaintiff and defendant. (McDonald v. Neilson, 2 Cowen, 183.) But it is apparent that the case will not warrant this position. When the agreement was made, and the assignment executed, the note was not due, and neither payment nor provision for its payment could have been enforced. Besides, the agreement of the maker was not simply to pay the note, but to make an assignment of all his property to certain persons, and give this note a preference in payment over his other debts. It is hardly necessary to observe that no legal obligation to do this existed, and that the law afforded no remedy to compel it.

The statute of frauds was not applicable to the undertaking of the parties to this action. Their undertaking was with the debtor to pay his debt, and was founded upon a new and original consideration. The promise was not a collateral, but an original promise. In consideration of the assignment, and the preference given therein to the $1000 note, they assumed the payment of the note, trusting to the assignment for reimbursement of their advances. As between them and the debtor., the liability of the latter thereafter to the creditor, beyond the fund created, until the debt was paid, was as their surety. (Conkey v. Hopkins, 17 John. 113. Olmstead v. Greenly, 18 Id. 13. Myers v. Morse, 15 Id. 425. Farley v. Cleveland, 4 Cowen, 432, and cases there cited. Ellwood v. Monk, 5 Wend. 235. Barker v. Bucklin, 2 Denio, 45.)

But assuming the agreement in question was void by the statute of frauds, it was not illegal, and the assignment was made, and the $1000 note paid, in pursuance of it. The plaintiff has voluntarily performed the agreement on his part", and it cannot avail him now to allege that it was not binding upon him, and repudiate it. (Abbott v. Draper, 4 Denio, 51. Emmett, receiver, v. Reed, Selden’s notes of cases in court of appeals, No. 3, p. 47.)

In order to give a just construction to the agreement, as to the obligations assumed by the plaintiff and defendant, it is proper to look at their position in reference to the $1000 note when the agreement was made. Neither of them was then under an absolute liability to pay the note. The liability of each was contingent, and depended upon the default of the maker to pay at maturity upon due presentment, and due notice of such default to them. Payment of the note by the maker, or an omission of due presentment, or notice, would discharge them., Occupying this position, and being informed by the maker that he would not be able to pay the note when it should become due, they proposed to him to make the assignment, giving a preference to the note, which was done, and agreed in consideration thereof to pay the note, and look to the assignment for their pay. The promise was in terms joint, and I see no evidence of an intention that it should not create, as between the plaintiff and the defendant, a joint obligation. They were to pay, and look to the assignment for repayment. Their relation to the note as first and second indorser, was, I think, as between themselves, terminated by this new agreement. Neither could thereafter have recourse to the maker of the note beyond the assignment, nor could the plaintiff have recourse to the defendant beyond his liability as assignee, further than to enforce the payment of one half of the debt, and effect be given to the last branch of the agreement. If the plaintiff and defendant had jointly paid the debt, each advancing one half without either becoming fixed as indorser, and without any new agreement that the amount advanced by the plaintiff should be refunded to him, I am not aware of any principle upon which he could recover that amount of the defendant. It could not, with any propriety, be said that at that time, the obligation of the defendant to pay the note was greater than that of the plaintiff. And the claim of the plaintiff, under the circumstances of the present case, is certainly no better than it would be in the case supposed. The fact that the liability of the defendant as indorser, to pay the note at: maturity, was fixed, as to the holder, by the acceptance of the assignment, before the money was paid by the plaintiff, cannot aid the plaintiff in his claim to recover the whole amount paid, of the defendant, as the assignment was accepted in pursuance of the agreement, and the agreement must control as to the rights of the parties in respect to each other.

[Monroe General Term, December 5, 1853.

Welles, Johnson and T. R. Strong, Justices.]

If the views expressed are correct, the evidence offered, of the agreement referred to, and of payments by the defendant, should have been received.

The judgment must be reversed and a new trial granted, with costs to abide the event.