144 N.Y. 392
FACTS: Plaintiff appealed an order of the General Term of the Supreme Court in the Second Judicial Department (New York) that reversed the trial court's judgment for plaintiff in a claim for payment of a promissory note.
- Defendant endorsed a promissory note made between her husband and payee plaintiff as security for a preexisting debt.
-The promissory note, though not actually presented for two years, was due upon demand.
The court held that a contract must be supported by consideration, and defendant did not receive any consideration in exchange for her endorsement of the promissory note, because plaintiff did not promise to forego collection of the note for any period of time.
When the suit is between the endorser and the payee of a promissory note, the payee does not qualify as a bona fide holder of the note, and inquiry into adequate consideration in such a case can be made.
-The consideration is to be tested by the agreement, not what is done under it.-There was no agreement to forebear for a fixed time or for a reasonable time, but an agreement to forebear for such a time as the plaintiff would elect.
OUTCOME: Order that reversed judgment in favor of plaintiff and held for defendant affirmed because a promissory note must be supported by consideration where the suit is between the original parties to the agreement.
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