name, and not as an officer of North Bros. The subsequent letters of defendant, above quoted, tend to confirm the conclusion that he intended to assume personal liability, and finally defendant's attorney in this action stipulated that defendant would admit on the trial that he had assumed the indebtedness. I think there is no escape from the conclusion that plaintiff promised personally to pay the note. Defendant's testimony to the contrary is overborne by the weight of the documentary evidence.

[2, 3] It is urged on the part of defendant that there was no consideration for this promise, and that, if there were a consideration, it was not expressed in the writing (letter of January 12, 1910), and hence that letter was not a sufficient writing to satisfy the statute of frauds. These two questions can be discussed together. There is, of course, no question but that such a promise, to be binding, must be supported by a consideration; and it is also clear that the writing must show that there was a consideration. Barney v. Forbes, 118 N. Y. 580, 585, 23 N. E. 890; Seymour v. Warren, 179 N. Y. 1, 71 N. E. 260; Brumm v. Gilbert, 50 App. Div. 430, 64 N. Y. Supp. 144; Union National Bank v. Leary, 77 App. Div. 332, 79 N. Y. Supp. 219. It is not necessary, however, that the consideration be expressly stated. It is sufficient if the consideration be fairly inferable from the writing. In Seymour v. Warren, supra, plaintiff sued upon a contract not to be performed within a year, which was evidenced only by a letter written by defendants, wherein they proposed to take entire charge of certain premises owned by plaintiff, to keep them in order and pay all expenses until a certain date, and to pay plaintiff $75 a month. If, at the termination of the agreement, the rent should have been advanced, the monthly payment to plaintiff was to be increased in proportion. It was claimed by defendants that this writing did not express the consideration-that is, did not show what plaintiff was to do on her part-and hence was not sufficient to satisfy the statute of frauds. The Court of Appeals held, however, that the writing imported an agreement on the part of plaintiff that defendants should have the right to collect the rents. The court said:

"No particular form of words is necessary to be used for expressing the consideration. It is enough if, from the whole instrument, the consideration appears in express terms or by fair or necessary inference. As a general rule the statute is satisfied when the memorandum shows with reasonable clearness that the defendants' promise is designed to procure something to be done, forborne, or permitted by the party to whom it is made, either to or for the promisor or a third party."

In Union National Bank v. Leary, supra, the plaintiff sued upon a guaranty which, after reciting two notes of a corporation held by the plaintiff, proceeded as follows:

"I will be personally responsible for the payment of the two notes, with interest, within a reasonable time to the Union National Bank of Lewisburg."

In answer to the objection that this writing did not express the consideration, and hence was not sufficient to satisfy the statute of frauds, the court said that the rule was that the consideration must be "expressed in words or be fairly inferable" from the writing, and that:

"In arriving at a correct construction of the instrument all of the facts and circumstances connected with its delivery, the reasons therefor, and the purpose to be accomplished may be shown by oral proof. Coe v. Tough, 116 N. Y. 273, 22 N. E. 550; Barney v. Forbes, supra."

This doctrine was reaffirmed by the same court on appeal from the second trial (see 95 App. Div. 381, 88 N. Y. Supp. 652), and the latter case was affirmed in the Court of Appeals (see 183 N. Y. 546, 76 N. E. 1111).

[4] This is, I think, applicable to the instant case. The letter of guaranty, or of assumption, if you please, which is here involved, was written in response to urgent appeals on the part of the plaintiff for payment of the debt of North Bros. At once upon the receipt of defendant's letter promising to pay $100 a month, plaintiff desisted from further appeals until February 28th, and then merely wrote to remind the defendant of the delayed, though promised, payment of the second $100 installment; the first installment having been paid by him. The writing (letter of January 12, 1910), construed in the light of the surrounding circumstances, clearly imports that the consideration for defendant's promise to pay $100 a month was to be plaintiff's forbearance to proceed against the corporation. This seems to have been the actual consideration, and it is fairly inferable from the language of the letter. The memorandum was therefore sufficient to meet the requirements of the statute of frauds. Brumm v. Gilbert, supra, is distinguishable from the instant case, in that the guaranty showed on its face that all the profits from the principal debtor's business were to be applied to the payment of the debt from and after the date of the guaranty.

[5] The consideration was sufficient to support the promise. Union National Bank v. Leary, 77 App. Div. at page 336, 79 N. Y. Supp. 219; Brumm v. Gilbert, 50 App. Div. at page 432, 64 N. Y. Supp. 144.

[6] The only other question which need be noticed is whether defendant's letter of November 10, 1913, is sufficient to take the claim out of the statute of limitations. This letter is, I think, sufficient for that purpose. Despite the statement of defendant that "I do not agree that I am personally liable," there is an unqualified promise to pay, and that is enough. Shaw v. Lambert, 14 App. Div. 265, 43 N. Y. Supp. 470; Levy v. Popper, 106 App. Div. 394, 94 N. Y. Supp. 905; Rosofsky v. Lucas, 154 N. Y. Supp. 1.

I advise the affirmance of the judgment, with costs.

CLARK and CALLAGHAN, JJ., concur.

(102 Misc. Rep. 82)

BROAD & MARKET NAT. BANK OF NEWARK v. NEW YORK & EASTERN REALTY CO. et al.

(Supreme Court, Appellate Term, Second Department. December Term, 1917.) 1. BILLS AND NOTES 527(1)-DISCHARGE OF NOTE.

Under Negotiable Instruments Law (Consol. Laws, c. 38) § 200, providing that a negotiable instrument is discharged by its intentional cancellation by the holder, merely stamping it "Paid," or other cancellation of it, is not conclusive evidence of its discharge, for such cancellation may have been through error or mistake, in which case it is inoperative, under the direct terms of section 204.

2. BILLS AND NOTES 438-DISCHARGE OF NOTE.

Where a bank intentionally and uninfluenced by fraud accepted the check of a depositor on his account with it in payment of another's note, which was canceled, marked "Paid," and surrendered to the depositor. and the check was charged against the depositor's account and stamped "Paid," the note maker's obligation was discharged, although a check on another bank, previously credited to the depositor's account, turned out to be uncollectible, so that the depositor's account was insufficient to pay the check given to pay the note.

Appeal from Municipal Court, Borough of Brooklyn, Third District.

Action by the Broad & Market National Bank of Newark against the New York & Eastern Realty Company and another. From judgment for plaintiff, after trial without a jury, the named defendant appeals. Reversed and remitted, with directions.

Argued December term, 1917, before CLARK, BENEDICT, and CALLAGHAN, JJ.

Alexander Kahn, of New York City, for appellant.

Herbert H. Gibbs and Arthur J. Carleton, both of New York City, for respondent.

BENEDICT, J. The defendant the New York & Eastern Realty Company appeals from a judgment rendered against it in favor of the plaintiff for the total sum of $767.32, principal, interest, and costs.

The judgment is clearly erroneous. Only a question of law is presented. The facts, which were admitted, were as follows: On January 25, 1916, Benjamin Sicklick, who was the president of the appellant corporation, with its authority, made its promissory note to his individual order for $750, due in four months from date. This note he indorsed as an individual and discounted at the plaintiff's bank, where he had a personal account. The maker of the note was a corporation transacting business in Brooklyn, and Sicklick, its president, was engaged in a different kind of business in Newark, N. J., and kept his personal account in the plaintiff's bank in that city. This is the note that was sued on. At its maturity Sicklick gave to the plaintiff his own check for $50, together with another similar note for $700, made by the appellant and indorsed by him; the first note being thereupon surrendered after it had been stamped "Paid" by the plaintiff. The note for $700 was due in three months, and at maturity thereof it was

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

also stamped "Paid" and surrendered by the plaintiff, which in place of it received a third note of similar tenor for $700, due on November 27, 1916. When the third and last note fell due Sicklick gave to the note teller of the plaintiff bank his personal check for $700, drawn to the plaintiff's order on his personal account with the plaintiff. The note teller took this check to Mr. Williams, plaintiff's president, and the latter authorized the acceptance of the check in payment of the note, which was thereupon canceled, stamped, or punched "Paid" and surrendered to Sicklick. Mr. Williams testified that he accepted the check of Sicklick in payment of the note and surrendered the note to Sicklick, and then charged the check against the account of Sicklick, deducting that sum from his account on the books of the bank. The check was also stamped or punched "Paid" on November 28, 1916.

The plaintiff's contention is that, notwithstanding these facts, the appellant is liable as the maker of the original note because of the fact that Sicklick's check for $700, although charged against his account, was never in fact paid, because a certain check for $925, drawn on a bank in Bangor, Pa., and deposited in Sicklick's personal account with the plaintiff three days before the maturity of the last note of the series, was never collected. It was inferred that, without that deposit being made good, Sicklick's personal account did not have sufficient funds to satisfy his check or draft against it for $700. In other words, the plaintiff contends that the check for $925 was an uncollected asset erroneously credited to Sicklick's account, and that the plaintiff erred in accepting Sicklick's check on itself for $700 in payment for and surrendering the last note of the series, and in charging Sicklick's personal account with the check for $700 upon its books and marking the check "Paid."

[1] Section 200 of the Negotiable Instruments Law provides as follows:

"Section 200. Instrument; How Discharged. A negotiable instrument is discharged: * 3. By the intentional cancellation thereof by the holder."

It is true that the mere stamping of a negotiable instrument with the word "Paid," or the cancellation of it in any other way, is not conclusive evidence of its discharge; for the reason that such cancellation may have been done through error or mistake. Scott v. Betts, Lalor's Supp. 363, and note; Watervliet Bank v. White, 1 Denio, 608; Irving Bank v. Wetherald, 36 N. Y. 335.

Section 204 of the Negotiable Instruments Law provides that:

"A cancellation made unintentionally, or under a mistake, or without the authority of the holder, is inoperative; but where an instrument or any signature thereon appears to have been cancelled the burden of proof lies on the party who alleges that the cancellation was made unintentionally, or under a mistake or without authority."

[2] In the present case, however, the cancellation of the note was not unintentional, nor the result of a mistake. It is not claimed nor shown that there was any fraud or deceit on the part of Sicklick practiced upon the bank in obtaining the cancellation and surrender of the

notes, or any of them, and it was entirely competent for the bank to accept the check of its depositor in payment of the last note made by the appellant. If payment in such manner was accepted by it, the maker of the note was discharged. The evidence clearly establishes that fact. There was no conflicting evidence upon which the trial justice could have reached any different conclusion. Had there been, a different result of the appeal would necessarily follow.

Although I have not found any case in the courts of this state precisely similar to the instant case, the authorities to which I shall refer seem to me to be controlling upon the facts in this case.

In Pratt v. Foote, 12 Barb. 209, the facts were as follows: The cashier of a bank received from Foote, the maker of a note holden by the bank, payable on the 25th of November thereafter, the check of Scudder, the indorser, for the amount of the note, dated on the day when the note was payable, upon the understanding that if, when the check became due, it was made good, it would pay the note; but there was no agreement to receive the check as an absolute payment of the note. On the day the note fell due Scudder's account at the bank was largely overdrawn. Between the 20th and 24th of November large sums were deposited to the credit of Scudder, but his account still remained overdrawn. On the 25th of November Foote's note was entered in the books of the bank as having been paid, etc. Scudder's check was also charged to his account. In December Scudder failed, and Foote, on being informed at the bank that neither the note nor check had been paid, and that Scudder's check had not been made good, gave a new note for the debt. It appeared that at the time the note sued on was given Foote had no knowledge of the entries which had been made in the books of the bank in relation to the payment of his note. Upon giving the new note, the first note and the check was delivered up to him. Upon these facts Mr. Justice Wright, at the circuit, without a jury, rendered judgment in favor of the plaintiff for the amount of the note, with interest. From that judgment the defendant appealed, and the General Term affirmed the judgment; Mr. Justice Harris writing the opinion. In the course of the opinion Mr. Justice Harris made this statement:

"I agree with the learned judge who tried this cause that in the absence of other evidence the entries in the books would furnish controlling evidence that the note had been paid. But these entries are not conclusive, and, when taken in connection with all the other facts in the case, I think they do not sustain the position upon which the defendant relies, that the check was received as an actual payment of the note, or in lieu of such payment."

And he then discussed the point that the question of acceptance was a question of fact to be decided at the circuit, and, it having been decided against the defendant, the conclusion of the trial judge was fully warranted by the evidence. Upon appeal to the Court of Appeals this judgment was unanimously reversed. See 9 N. Y. 463, and 10 N. Y. 599. It was held by the court that, where there is no conflict or uncertainty of evidence, the conclusion to be drawn from the facts proved is a question of law; and the court held that the entries upon the books of the bank were of precisely the same effect as if the money