Western Surety Co. v. Walter

GATES, J. Appeal from a judgment entered for defendants upon a directed verdict and from an order denying a new trial. There are no disputed facts. The material facts are that one Walter was the county treasurer of Hutchinson county; that he died December 15, 1915, and shortly thereafter it was discovered that he had misappropriated county funds, that he was owing the county the sum of $9,242.77; that on December 27, 1915, at the instance of the comity commissioners, the -widow, father, and two brothers of deceased executed and delivered to the treasurer of said county a promissory note, in the said sum, payable 90 days after date; that on January 11, 1916, there was paid on said note the sum of $5,361.80 by Anna Walter, the widow of said deceased; that on September 5, 1916, the appellant the surety on the official bond of deceased paid to the county the balance, to wit, the sum of $3,880.97, and the county commissioners adopted a resolution, assigning said promissory note to appellant; that on December 1, 1917, the administrator of the estate of said deceased paid the sum of $1,768.05 to appellant on said note. This action was brought -by appellant against the makers of said promissory note to recover the balance due after crediting the above payments. No money consideration moved' to the signers of the note. Their avowed reason for giving the note wfas the preservation of family pride, the desire to save the good name of deceased. It is the contention, of respondents, and evidently was the view of the trial court in directing the verdict for defendants, that there was no consideration for the giving of the note. It is the contention of appellant that there was at least an implied extension of time of payment of' the debt by the acceptance by the county commissioners of a promissory note payable 90 days in the future, and that' such implied extension, accompanied by actual forbearance, together with the desire of the makers to save the good name of deceased, was a sufficient consideration. Without expressing an opinion upon the question whether the preservation of family pride was alone a sufficient consideration for the giving of the note, we are of the opinion that the implied extension, accompanied by actual forbearance did constitute a consideration for the giving of the note. It is urged that, inasmuch as the surety wias not a party to the giving of the note, the county might on that very day 'have proceeded against [40] the surety, and therefore that no prejudice resulted to the county by any extension. What action the county might have taken against the surety is utterly immaterial. The fact is the debt was due on the day the note was given, and the county was then entitled to proceed against the estate of the deceased therefor.- It was not bound to proceed against the surety. By accepting the note, the county comimssioners tacitly agreed that they would not proceed against the estate of said deceased until after the 90 day period had elapsed. The implied extension as against the estate of deceased was “a detriment to the promisee,”, or in the language of section 840, Rev. Code, 1919, a “prejudice suffered by the prom'isee” which amounted to a consideration for the note. In Daniels on Neg. Inst. (6th Ed.) § 185, the author says: “There is no doubt that a debt due from a third person as from A. to B. is a good consideration for a note as fromi D. to B., provided there was an express agreement for delay or an implied agreement which would arise if the debt were then 'due, and the note were made payable at a future day.” In sustaining such a consideration the Washington court said in Galena Nat. Bank v. Ripley, 55 Wash. 615, 104 Pac. 807, 26 L. R. A. (N. S.) 993: “The undisputed facts and 'circumstances of this case lead to the inevitable conclusion that the consideration for the notes was the forbearance of the 'bank from prosecuting or pressing its valid claim -against the father’s estate. 'Such forbearance upon its part constituted a good and valid consideration.” In Fulton v. Loughlin, 118 Ind. 286, 20 N. E. 796, the court said: “An express or implied agreement to delay the collection of a precedent debt is-a sufficient- consideration to support the-promise of a third person.” In Zimbelman & Otis v. Finnegan, 141 Iowa, 358, 118 N. W. 312, the court said: “Moreover, a debt due from a third person is a good consideration for a note from a maker to the creditor, provided there was either an express or implied agreement for an extension of time.” Upon this appeal the only question argued is whether there [41] was consideration for the giving of the note. We conclude that the trial court erred in directing the verdict on that issue. The judgment and' order appealed from are reversed, and the case remanded for a new. trial.