Stettheimer v. Meyer

By the Court, Johnson, J. The referee has found that the note in question was transferred to the plaintiff in consideration of the surrender by him of a note which he held against Zeislein, for borrowed money, and the payment to Zeislein of §40 in money, that being the difference between the amounts of the two obligations, without any knowledge on his part as to the origin of the note in question, or the purpose for which it was made. This was before the note in question became due. This, we think, constitutes the plaintiff a holder for a valuable consideration, within the case of Youngs v. Lee, (18 Barb. 187; S. C., 2 Kern. 551.) The only difference between the two cases is, that in the case cited the note given up had not then become due, while in the present, Zeislein’s note was over due when it was surrendered. The fact that the note was not due when it was given up, is noticed by the learned judge, who gave the opinion in the court of appeals, but it does not appear that the case turned upon that question. In this court that fact was not noticed, in the opinion, but the case is put expressly upon the ground that the debt had been extinguished by the agreement, and the evidence of it given up by the holder. We are unable to perceive any difference in principle between the two cases. In either case, it is the payment of the debt, and the surrender of the security or obligation for its payment, which constitutes the consideration of the transfer, and as a payment it is no more [218] effectual in the one case than in the other, and the surrender of the promise is alike prejudicial to the creditor in each. [Monroe General Term, December 3, 1860. Smith, Knox and Johnson, Justices,] We think the rule is now- settled that whenever a negotiable note is taken in good faith, before it becomes due, in payment and satisfaction of a pre-existing indebtedness, and the evidence of such indebtedness, or a security therefor, is at the same time surrendered or destroyed, the person taking such note becomes a holder for a valuable consideration. The judgment must therefore be affirmed.