Stewart v. Samuel Hidden

Wilson Oh. J. By the Court I think the demurrer should not have been sustained. There is no rule of law, or public policy, forbidding the owner and holder of a note made by a third person to transfer it without consideration. The transfer carries with it the debt; or in the language of the Chancellor in Contant vs. Schuyler, 1 Paige R. 318, “is a symbolical delivery of the debt due on the note, and ail the delivery of which the subject is capable.” The delivery to the donee, consummates the gift as effectually as if the donation consisted of a chattel. Edwards on Bills and Notes, 325 ; See also Bedell vs. Carll et al. 33 N. Y. 584. It can not make any difference, in principle, whether the gift is to the maker of the note or to a person not a party to it. . If to the maker, to carry out the [45] intention of the parties, the gift must be held, in law a cancellation of the note and the debt which it secures ; if to a stranger, he may recover against the parties to the instrument. In any case, the donee acquires the same rights that he would acquire by purchase. This view does not trench on the doctrine, which, it must be admitted, is supported by the weight of authority, that giving, and accepting a smaller sum of money in satisfaction of a larger one due, is not a valid discharge. The reason given for this rule is, that there is no consideration for the promise not to collect the part remaining unpaid. It may be admitted that the $500 paid here, waB only a part of the sum due, and therefore would not be a legal consideration for a promise to surrender the note, or extinguish the debt, for according to the weight of authority, such contract, being without consideration, could not be enforced; but this contract was executed, and the fact that there was no legal consideration, proves that it was the intention of the owner of the note to donate it, and the unpaid balance remaining due on it. This he had a right to do, for, u any person, competent to transact ordinary business, may give what he owns to any other person.” 1 Par. on Contracts, 234. The question as to the adequacy of the consideration cannot influence the decision of the case, for a consideration is only necessary to support an agreement or executory contract ; but a gift, made perfect by delivery, is regarded in the law as an executed contract, irrevocable by the donor. It is not necessary, therefore, to either deny, or affirm, as the law of this State, the rule that a smaller sum cannot be a satisfaction of a larger debt; but admitting for the purposes of this case its force and validity, we think, to use the language of the Supreme Court of Mass., that a “ rule, which obvi [46] ously may be urged in violation of good faith, is not to be extended beyond its precise import; and whenever the technical reason does not exist, the rule itself is not to be applied.” Brooks vs. White, 2 Met. 283. The agreement of the parties appearing to have been deliberately made and executed, without fraud, or undue influence, and not being in contravention of any established rule of law, or morals, the principles of our system of jurisprudence, as well as honesty, and fair dealing, require that it should be respected. It cannot be pretended here that the plaintiff has any equities superior to his grantor. ■ Judgment reversed, and cause remanded.