Louis W. Emerson and James A. Emerson, Doing Business under the Name and Style of Emerson & Company, Bankers, Respondents, v. George A. Sheffer, Appellant, Impleaded with Henrietta Sheffer, Defendant

Louis W. Emerson and James A. Emerson, Doing Business under the Name and Style of Emerson & Company, Bankers, Respondents, v. George A. Sheffer, Appellant, Impleaded with Henrietta Sheffer, Defendant. Third Department, May 2, 1906. Bills and notes — when makers of note given to secure payment of draft of insolvent partnership are liable thereon — forbearance to bring action on draft is sufficient consideration — effect of section 11 of the Bankruptcy Law on such consideration. The' maker and indorser of a promissory note given to secure the payment of the overdue draft of an insolvent partnership are liable thereon, although not members of the partnership, if the note was given on the consideration that the holder of the draft forbear bringing action thereon. Such promise of forbearance is shown by a statement of the holder of the draft that he was “ not particular about an immediate settlement” if the debt were secured. ' ' A contention that the promise of forbearance was of no value is not sustained on the theory that proceedings by the holder of the draft were stayed under section 11 of the Federal Bankruptcy Law, when no facts appear in the record showing when the partnership was adjudged bankrupt, or bringing the holders within the prohibition of the statute. Such facts must be shown affirmatively in order to bar a recovery on the note. Appeal by the defendant, George A. Sheffer, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of Warren on the 23d day of October, 1905, upon the decision of the court rendered after a trial at the Warren Trial Term without a jury. This is an action on a promissory note executed December 6, Í1Í9M, by the .defendant George A. Sheffer to the order of and indorsed .by Henrietta Sheffer, since deceased,, payable one' year from the date thereof and mow owned "by the plaintiffs. . .. ■ The cause was submitted to the learned trial justice on ,an agreed statement Of facts from which it appears that said note was given' to the plaintiffs as security for an . overdue draft held by ‘them against the firm of Willson5 Sheffer &■ Coonley; that on or ,-about the date of said note James A. Emerson, one of the plaintiffs, had a con versation with James H. Sheffer, .one of the members of said .firm of Wilson, Sheffer & Coonley, in which conversation said 'Emerson inquired of said Sheffer. what his firm was going to do about said draft; ' Sheffer said that he did not have any money to pay as the said firm of Wilson, Sheffer & ■Coonley were in bankruptcy at that time and that all 1ms assets had been .turned over to the. Bankruptcy Court; Emerson replied that he whs not. particular about, an immediate settlement if "Sheffer would secure the debt; r Sheffer said lie. had nothing to secure the indebtedness with unless ■ he could get a note from his wife or son Emerson, replied that he would - take such a note; Sheffer ,afterwards procured the note in question signed' by his son George A: Sheffer, and indorsed by his wife and delivered said note to Emerson; -such note was signed and indorsed by .the ¡maker and indorser respectively for the accommodation of said firm of Wilson, Sheffer & Coonley, said maker .and indorser not owing anything to the plaintiffs at the time such mote was given; the draft was not. surrendered by the plaintiffs to Wilson, Sheffer & Coonley. From such agreed statement the trial court found as a fact that the plaifctiffs agreed to -grant" the firm of Wilson, Sheffer & Coonley time to pay their indebtedness- on their draft if they would secure the same and that the note in question was accepted by the plaintiffs as, such security. George Lcmyer, for the appellant. S. M. West, for the respondents. [MAJORITY — Cochrane, J.:] Cochrane, J.: The defense urged against this note is that it lacks consideration in that the original indebtedness represented..by the draft of Wilson, Sheffer & .Coonley held by the plaintiffs was not extinguished or paid by said note and that there was no agreement to extend, the time of payment of said draft. The note was concededly given not in payment of the draft but as security therefor, and if the defendant is right in his contention that the time of payment of said draft was not extended, no recovery can be had on this note. Plaintiffs certainly did not agree to extend the time of payment of the original indebtedness for one year, the time which had to elapse before the maturity of the note. And no presumption of such agreement can be inferred merely from the fact of the acceptance of said note as security for the pre-existing indebtedness. But the plaintiffs, as an inducement to the firm of Wilson, Sheffer & Coonley to secure their indebtedness, told them that they w.ere “not particular about an immediate settlement,” and on the strength of this statement the note in question was delivered. 1 think this amounted to a promise on the part of the plaintiffs that they would forbear action on the draft and justifies the finding of the trial court that .an agreement of forbearance was made by them in consideration of the note in question. By such promise the plaintiffs placed it out of their power to proceed immediately on the draft. Yo specific time of forbearance was.mentioned. But it became the duty of the plaintiffs to wait a reasonable time before seeking enforcement of the original indebtedness.' Any time, however short, was a sufficient consideration for the note. (Milius v. Kauffmann, 104 App. Div. 442; Cary v. White, 52 N. Y. 142.) In the case last cited it.was said : “ If there was- an extension of time for a single day by a valid agreement, as a consideration of the- mortgage, there was a valuable consideration within the rule.” It is further urged by the defendant that even if the plaintiffs agreed to grant forbearance on their original claim against the, firm of Wilson,, Sheffer &, Coonley, such agreement.- was useless and of no value because said firm was in bankruptcy and that plaintiffs’ right to proceed on such claim was stayed under section 11 of' the Bankruptcy Law (30 U. S. Stat. at Large, 549), which, provides that an action on such a claim may be stayed for twelve months after, the date of the adjudication in bankruptcy, or if within that time the bankrupt applies for a discharge, then until the question of such discharge is determined. Yo facts, appear in, this record which show that the plaintiffs were within the prohibition of that statute;- It does not- appear when Wilson, Slieffer <& Coonley were adjudicated bankrupts. If . such adjudication had been made more than twelve months before" the execution of the note in question and said bankrupts had not within that time applied -for their discharge, or if, having applied for the same, such discharge had been refused, the prohibitory provision of the Federal statute above referred-to would not affect the plaintiffs. It was incumbent on the defendant to show affirmatively "tjie existence of such facts as would preclude the plaintiffs from enforcing their obligation against the bankrupt firm. The judgment should be affirmed, with.costs. Chester, J., concurred ; Smith, J., concurred in result; Parker, . P. J., not voting Kellogg, J., not sitting.- s J udgment affirmed, with costs.