Peabody v. Munson

Mr. Presiding Justice Freeman

delivered the opinion of the court.

Appellee sues to recover upon a note made by appellant, which the latter does not dispute. It was given to take up a note guaranteed by appellant and was delivered and accepted in- satisfaction and discharge of appellant’s liability as such guarantor. To the note itself appellant interposes no defense. He claims, however, that appellee is liable to him as endorser of another note which was made by one Hillman, - the maker of the original note guaranteed, as stated, by appellant, and evidenced the same debt. Appellee testifies that the note was obtained from Hillman, the original debtor, for appellant’s benefit, to enable the latter to collect from Hillman if the opportunity should arise, the amount for which appellant had become liable to appellee by ■ guaranteeing Hillman’s note. Appellant admits that at the time when he gave appellee his own note, now in controversy, he obtained the surrender or destruction of the note which bore his guaranty.

The only substantial question involved is, as stated by appellant’s attorney, whether appellant is entitled to set off against his liability practically conceded upon his own note to appellee, an asserted liability to him by appellee as endorser of Hillman’s note. It is claimed that appellant exhausted his legal remedies against Hillman and is entitled to set off what he claims is appellee’s liability as endorser. It is evident that appellee received no consideration for his endorsement of Hillman’s note upon which it is now sought to hold him. The evidence tending to show that the endorsement was made only to transfer the note to appellant for whose benefit it was obtained, is not denied. Appellee then had and claimed no interest in the note or the debt it evidenced. He had accepted appellant’s note upon which this suit is brought in satisfaction of his claim against Hillman. He had obtained the note from Hillman for appellant’s benefit, acting in effect as the latter’s agent. The facts not denied rebut the presumption that appellee’s endorsement rests upon a good and valid consideration. The surrender of appellant’s guaranty was a sufficient consideration for the new note given by him to appellee. It was putting an existing obligation in a new form, but constituted no new or sufficient consideration for a new contract such as appellant is endeavoring to assert under his claim of set-off. Moran v. Peace, 72 Ill. App. 135-139; Reeves Co. v. Jewell Belting Co., 102 Ill. App. 375, 380.

The positive evidence is uncontradicted tending to show that appellee received no consideration for the endorsement made merely to transfer the legal title. Jones v. Albee, 70 Ill. 34, 37; Johnson v. Glover, 121 Ill. 283, 286. He cannot be held liable, therefore, under the plea of set-off.

Objection is made to the form of the order appointing the referee who is described as being a master in chancery. This is evidently a mere description. The reference was, so far as appears, regular. It is unnecessary to discuss other points referred to in the briefs.

The judgment of the Circuit Court will be affirmed.

Affirmed.