Union National Bank v. Leary

Hatch, J.: When this case was before us upon the former appeal (77 App. Div. 332) we held that under the Statute of Frauds a consideration supporting the contract of guaranty was required to be expressed in the instrument; or be fairly inferable therefrom; that in arriving at a correct construction of the contract all of the facts and circum- ’ stances attendant upon its delivery, the reasons thereof and the purpose sought to be accomplished could be shown. And, applying such rule to the facts as they then appeared, we reached the conclusion that the instrument of guaranty fairly gave rise to the inference that the consideration for its execution was the agreement to forbear the enforcement of the notes the subject of the guaranty for a reasonable time, and that such agreement furnished a good consideration for the instrument sued upon. Upon this ground we reversed the judgment and ordered a new trial. The case as presented upon the new trial which has been had does not differ in any substantial respect from the case "as made upon the former appeal. While the facts and circumstances have been developed with more elaboration, yet in all éssential features the case remains the same. The additional testimony given by the defendant does not add in the slightest degree to the force and effect of the averments contained in the answer of the defendant and which we considered as having been established upon the former appeal. The additional testimony is a mere reiteration of these facts; and as they were held insufficient to relieve from liability under the guaranty upon the former appeal, so likewise they must now be held' ineffectual for such purpose. Only one additional consideration is involved in the disposition of this appeal. It now appears that upon- the 15th day of July, 1897, a receiver of the John Good Cordage and Machine Company was appointed, and in the order appointing such receiver was.'contained an injunction clause restraining all persons within the"State of New York from making claims against it or [383] from commencing, continuing or carrying on any suits or proceedings or issuing any execution, process or proceeding upon any judgment or order now obtained or that may hereafter be obtained against the corporation, or from levying upon, seizing* selling, advertising or taking any steps to levy upon, seize, sell or advertise any of its property. The contract of guaranty bore, date October 16, 1897, so that the injunction was in full force and operation within the State of New York at the time when the contract of guaranty was executed. The defendant, however, is a. corporation organized and existing by virtue of the laws of the-United States as a national banking corporation, and doing business, as such in the city of Lewisburg, in the State of Pennsylvania. Manifestly the injunction order did not operate to restrain the-plaintiff from instituting proceedings and prosecuting actions to judgment against the corporation, or from levying upon, seizing- and selling any of the property of the corporation which it might-reach outside of the limits of the State of New York. It does not appear, so far as 1 am able to discover, in this record whether the-John Good Cordage and Machine Company was a foreign or domestic corporation. It does appear, however, that a proceeding-was instituted for the appointment of a receiver in the State of New Jersey. It is fairly to be inferred therefrom either that the. corporation was organized under the laws of that State or that it had property within its jurisdiction which it was sought to embrace-within a receivership; but however this may be, there is nothing-whatever to show but that the plaintiff could have instituted an action and enforced any judgment which it might have obtained within the jurisdiction where it carried on its business and therein. ' the injunction granted in this State could not and did not operate. It seems, therefore, to stand admitted now, as upon the former-appeal, that the contract of guaranty was delivered for the purpose-, of procuring an extension and forbearance in the enforcement of the notes for a reasonable time, in consequence of which the decision delivered upon the former appeal is of controlling force- and decisive of all the questions now presented. Until this decision shall be reversed by superior authority it must be regarded as controlling in disposition of the questions presented by this appeal. It follows, therefore, that the direction of a verdict by the learned [384] court below was Correct, and the judgment based thereon should be affirmed, with costs. O’Brien and Laughlin, JJ., concurred; Van Brunt, P. J., concurred in result; Ingraham, J., dissented.