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Corn Exchange National Bank and Trust Co. v. Taubel

Decided: October 5, 1934.


On defendant's appeal from a judgment of the Supreme Court.

For the appellant, Merritt Lane and Harry Cassman.

For the respondent, Louis B. LeDuc.


The opinion of the court was delivered by

HEHER, J. Defendant challenges a judgment entered upon a jury verdict rendered at the Atlantic Circuit in favor of plaintiff in this action upon a promissory note in the sum of $248,225, made by Clarence H. Taubel to plaintiff's order, and endorsed by defendant, his father, bearing date December 28th, 1931, and payable three months thereafter. The defense interposed was that defendant had become an accommodation endorser of the note at plaintiff's request, and in

consideration of its promise, made in writing on October 2d, 1930, not to seek enforcement of the obligation for a period of two years after September 26th, 1930, and that, consequently, the debt had not matured and the action was premature. The note in suit was the last of a series of renewals of an original note endorsed by defendant, also made by Clarence, bearing date September 26th, 1930, but not endorsed by defendant until the foregoing promise of October 2d was made. The last mentioned note was a renewal of a note made by Clarence -- the last of a series of single name time notes given by Clarence to evidence and secure (by collateral pledge) his indebtedness to plaintiff growing out of the discount of his negotiable paper.

The bank, while conceding an obligation in the premises, maintained that the extent of its undertaking was to renew from time to time during the two years period, by like negotiable paper, the note thus endorsed by defendant; that it was incumbent upon him to tender at maturity a renewal of the note in suit; that he failed in the fulfillment of this duty, and that, in the circumstances, defendant's obligation upon the matured note was then enforceable. The trial judge determined that this was the full extent of the bank's contractual obligation, and that the duty rested upon defendant and the maker of the note "to present to the plaintiff bank renewal notes * * * made by Clarence and endorsed by his father, during this period of two years." The evidence relating to the fulfillment by the parties of their respective obligations was in conflict, and the issue was submitted to the jury for determination.

The first insistence of appellant is that there was error in the denial of his motion for the direction of a verdict in his favor. This is predicated upon the contentions (1) that he was not obliged "to tender a renewal note endorsed by him," and that, even so, the bank, in this instance, assumed the duty of preparing, and tendering to him for signature, a renewal note, and tender by him was consequently excused; and (2) that he was not required to sign a renewal note "if tendered to him for signature by the bank," and at all events

not in the form submitted by the bank, for thereby "his relationship to the transaction would have been changed," and his obligation altered to his detriment. One of the grounds urged at the trial, in support of this motion, was that the bankruptcy of the maker "accelerated the obligation of the maker and also the endorser," and as well "accelerated the liability of the endorser as measured by the collateral contract," but this point is not advanced here, and need not be considered.

Therefore, the primary question is the ascertainment of the contractual rights and correlative duties of the respective parties. The bank did not regard the loan as amply secured. It demanded payment or additional security. The negotiations between its officers and Clarence resulted in the forwarding of a communication by the bank to appellant, under date of September 26th, 1930, advising him that if he would endorse "this obligation [there was a prior reference to the note made by Clarence which matured on that day], we would be perfectly willing to carry it along for eighteen months." On October 2d following, the bank, acquiescing in a counter proposal by appellant that the term be fixed at two years, by letter addressed to him, expressed a willingness "to carry this loan along for a period of two years," if he would "endorse this note." And in this missive also there was previous mention of the overdue note made by Clarence. Thereupon appellant endorsed a renewal note made by Clarence.

This is clearly an integrated contract. Appellant's endorsement of the note, immediately upon receipt of the letter of October 2d, was an unqualified acquiescence in the proposal therein contained -- it was a manifestation of assent to the writing as a definite and complete expression of the contract. This constituted an integration of the agreement. The writing, even though informal in character, was adopted by the parties as a statement of their bargain. They assented to the words used as binding upon them. 1 ...

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