German-American Bank v. Niagara Cycle Fittings Co.

Follett, J.: ' The sole defense interposed is that the plaintiff, by extending the time to answer of the Hitchcock Manufacturing Company, the maker of the note, discharged the indorser, the defendant herein. ' This defendant indorsed and transferred the note to the plaintiff :for value, and when its liability became fixed by protest and notice, ¡it became an independent and principal debtor, and did not stand in ■the position of a mere surety for the maker of the note. (First National Bank v. Wood, 71 N. Y. 405, 411; Edw. Bills [3d ed.], § 765.) The holder of a promissory note owes the indorser no [452] active duty to secure or protect his interests. (Smith v. Erwin, 77 N. Y. 466.) When the note was dishonored it became the duty of the defendant to take it up, and to take such proceedings against the maker for its collection as should be deemed expedient. This the indorser failed to do, but threw the burden of enforcing the maker’s liability on the plaintiff, which it proceeded to do by an action, during the pendency of which the time to answer was extended thirty days. This did not amount to an extension of time of the payment of the note.. The indorser could at any time have paid the note and brought an action, and, notwithstanding the stipulation, the plaintiff., in the action could have withdrawn his action and begun a new one. In no sense can a mere extension of time to answer in an action be deemed an extension of time for the payment of an obligation upon which. the action is founded. This question seems to have been settled in this State. In Ducker v. Rapp (67 N. Y. 464)it was said: “An ordinary stipulation during a litigation to extend the time to answer would not affect a surety, nor would any agreement "for indulgence to pay, or otherwise, unless it was founded upon a good consideration, and operated to prevent the collection of the demand in any form.” The same was said in Ross v. Ferris (18 Hun, 210) and in Steinbock v. Evans (122 N. Y. 551). Under the rule contended for, a plaintiff in an action against a. maker of a. note, would discharge the indorser by giving or receiving an extension of time to take any step in the action which would delay, for a single day, the recovery of the final judgment. The holder of a promissory note owes no such duty to the indorser. The judgment should be affirmed, with costs. All concurred. Judgment affirmed, with costs.