May v. National Bank of Malone

If the contract of defendant could be considered as governed by the statute of frauds, it would still be good and binding. It is in writing, and signed by the party to be charged. The signature by the cashier of the defendant is sufficient under this statute. (Dykers v. Townsend, 24 N. Y., 57.) There was an adequate consideration, and it was unnecessary to express it in the contract. (Laws of 1863, chap. 464, p. 802.)

But the contract was not within the statute of frauds. It was an original undertaking by the defendant, founded upon an adequate consideration moving from Townsend & Hyde to it, to pay the debt of Townsend & Hyde to the plaintiffs. The proceeds of the note discounted by defendant for Townsend & Hyde were held for plaintiff — were put in defendant’s hand to pay plaintiff with, and defendant had assumed and promised to pay such debt therewith. The discounting of the note is admitted by defendant. This takes the case out of the statute of frauds. The distinction between original and collateral promises is fully considered and explained in the following leading cases in this State: Leonard v. Vredenburg (8 Johns., 39), and Mallory v. Gillett (21 N. Y., 412). From the distinctions therein pointed out, it is apparent that this is an original undertaking, and can be enforced by the plaintiffs. *112Many of the cases cited and commented upon by the learned judges in those cases are applicable here. I shall cite but one or two. In Barker v. Bucklin (2 Denio, 45), it is held that an action may be maintained on a promise made by the defendant to a third person for the benefit of the plaintiff, upon a consideration moving from such third person to the defendant, and without any consideration moving from the plaintiff. So in Lawrence v. Fox (20 N. Y., 268), it is held that an action lies on a promise, made by the defendant, upon valid consideration, to a third person for the benefit of the plaintiff, although the plaintiff was not privy to the consideration. Such promise is to be deemed made to the plaintiff if adopted by him, though he was not a party nor cognizant of it when made. (See also, Barker v. Bradley, 42 N. Y., 316.)

In the present case Townsend & Hyde had put the defendant in funds to pay plaintiff’s debt, requesting it to pay the same. The defendant acknowledges to Townsend & Hyde that it had done as requested, and had sent for the note to be returned for payment. It had, also, in consideration of such provisions made, promised the plaintiffs to pay their debt upon the note being returned to defendant; but, upon its return, refused to do so at the instance of Townsend & Hyde. >

I think the means, derived by the bank from Townsend & Hyde’s note discounted by it, were put there for the payment of plaintiffs’ debt, and upon a mutual understanding between the bank and Townsend & Hyde, to which each agreed, that plaintiff’s debt should be paid therefrom-. By such act the liability of the defendant was fixed. The bank, however, is still in possession of the note discounted, and of the funds derived therefrom. It will not be the loser if compelled to pay. The assets of Townsend & Hyde will pay the debt.

For the reasons given, I think judgment should be ordered for the plaintiffs against the defendant for $2,743.78, with interest thereon from February 23, 1876, with costs, as provided by section 373 of the Code.

Judgment ordered for plaintiff for $2,743.78, and interest from February 23, 1876.