
    The Utica City National Bank, Respondent, v. Gertrude L. Tallman, Appellant.
    
      Renewal note — given by the executors of the original matter and indoi'sed by them as individuals—when a consideration exists for the indorsement — what is not an agreement not to enforce it.
    
    The maker of a note which had been discounted by a bank died leaving a will by which] he bequeathed all of his real and personal estate, except a legacy, to his wife, Gertrude L. Tallman. When the note became due it was renewed by a note made by Gertrude L. Tallman and Frederick H. Lawrence as executors of Henry O. Tallman and indorsed by them in their individual capacity. Two similar renewal notes were subsequently executed, and upon the refusal of Mrs. Tallman to indorse a fourth renewal note the bank brought an action against Mrs. Tallman individually to recover upon the third renewal note.
    
      
      Held, that the acceptance of the renewal notes by the bank furnished ample consideration for Mrs. Tallman’s indorsement;
    That as it appeared that it was of great importance to Mrs. Tallman to defer payment of the note made by her i.usband until the assets of his estate could be marshaled and disposed of without a sacrifice, she was not an accommodation indorser;
    That a letter written by the president of the bank to Mrs. Tallman’s co-executor, stating: “I return note indorsed by Mrs. Tallman 'without recourse.’ The bank simply desired the note executed as I made it, that it might conform to our rules. We have no disposition or intention to trouble Mrs'. Tallman as an indorser, and are willing to carry by renewals the note for months that you may marshal assets of the estate agreeably to law. I trust with this explanation Mrs. Tallman will be willing to oblige, she being the sole beneficiary in the estate,” could not be construed to be a promise not to hold Mrs. Tallman liable on her individual indorsement;
    That she was not in a position to invoke the rule that' a note is not enforcible, except in the hands of a bona fide holder without notice, against a party who had no interest in the transaction which resulted in the giving of the note or who executed the same without receiving any consideration therefor, where the note has been delivered upon the condition that such party shall not be liable thereon.
    Appeal by the defendant, Gertrude L. Tallman, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Oneida on the 25th day of January, 1901, upon the report of a referee.'
    In May, 1896, the plaintiff discounted a note of $4,000 made by one Henry C. Tallman and indorsed by Frederick H. Lawrence, as executor of the estate of George C. Tallman, deceased, and by Edward A. Tallman. This note, which was dated May 26, 1896, and fell due on the twenty-seventh day of July following, was at its maturity renewed by a note of like amount made and indorsed bv the same parties. 5
    On the 10th day of December, 1896, when this renewal note matured, Henry C. Tallman paid the interest thereon and $1,500 of principal. He then gave a new note for $2,500 and interest which was indorsed by Edward A. Tallman, an accommodation indorser.
    Thereafter, and on the 16th day' of December, 1896, Henry C. Tallman died leaving a last will and testament in and by which he bequeathed to the appellant, Gertrude L. Tallman, who was his wife, all of his personal property, except a legacy of $2,500 to a church, and lie also devised to her all of the real estate of which he died seized. ■
    Mrs. Tallman and Frederick H. Lawrence were duly appointed executors of Henry C. Tallman’s will on the 8th day of March, 1897, and immediately entered upon the discharge of their official duties. .
    Thereafter, and on the 10th day of April, 1897, the note of Henry 0. Tallman, bearing date December 10,1896, fell due and the same was renewed by a note of $2,551.70. This note was made by the executors of Henry C. Tallman and was indorsed by such executors in their individual capacity.
    On the 30th day of August, 1897, Lawrence, as executor, paid the accrued interest, and protest fees upon this note and the same was thereupon renewed for four months, such renewal bearing date August tenth, on which day the note of which it was the renewal fell due.
    When this last-mentioned note- matured, viz., December 10, 1897, it was again renewed by a note of $2,500 made by the executors and indorsed by the appellant, Mrs. Tallman. This note was payable four months after date, but before its maturity Frederick H. Lawrence died, and as Mrs. Tallman declined to indorse a renewal note, this action was brought.
    
      Barclay E. V. McOa/rty, for the appellant.
    
      William P. Quin, for the respondent.
   Adams, P. J.:

The lengthy and somewhat discursive answer m this action sets forth with much detail a variety of defenses to the note in suit, but apparently the only ones upon which the appellant places much reliance, and certainly the only ones we deem it necessary to consider upon this review, are (1) that the appellant was an accommodation indorser, receiving no consideration for her indorsement; and (2) that :„her indorsement was obtained upon the representation and promise of the plaintiff that she should in no event be held liable thereon.

Upon; both of these issues the learned referee found adversely to the appellant and we are of the opinion that his. findings and conclusions are fully sustained by the facts and the law of the case.

' It is not disputed, so far as we can discover, that the original note of December 10, 1896, is an existing and valid claim against the estate of Henry C. Tallman, and it seems to be conceded that such estate consists of an undivided interest in certain real estate devised to Henry by his father, and of all the personal property which could be realized out of his father’s estate, of which estate Frederick H. Lawrence, one of the original indorsers, was the executor.

This real estate consisted mainly of the Hotel Castleton and other property on Staten Island and in Brooklyn, and also of western lands. There was likewise a large amount of hotel furniture and. numerous mortgages, contracts and other personal property, im attempting to dispose of which many complications had arisen, andJ the estate was consequently involved in some litigation and confusion..

With the exception of the church legacy of $2,500 Mrs. Tallmam was the owner of all this property, out of which the note in suit; would, of course, have to be paid.

It became, therefore, of great importance and interest to her to defer its payment until the assets of the estate of her husband could be marshaled and disposed of without a sacrifice.

It is impossible in view of the evidence before us to resist the conclusion that Mrs. Tallman was well aware of the situation of affairs and of the desirability of extending the time of payment of the obligation for which her husband’s estate was primarily liable until the same could be discharged without resorting to a forced sale of securities and other property, and it is equally apparent that it was to accomplish this very purpose that the note was renewed from time to time by the plaintiff. Such being the case, the renewals were simply extensions of the original obligation, and it follows that such extensions furnished ample consideration for the appellant’s indorsements. (Matter of Utica Nat. Brewing Co., 154 N. Y. 268; Traders' National Bank v. Parker, 130 id. 415; Finch v. Skilton, 79 Hun, 531.)

We do not overlook the fact that the plaintiff’s president upon being asked, when upon the witness stand, whether Mrs. Tallman ever received any consideration for her indorsement, answered “No;” but manifestly he had in mind the payment of a direct, pecuniary consideration by his bank, and not such a consideration as the law imputes, to transactions of- the character just adverted, to.

It is .undoubtedly now well settled in this State that; as between the original parties to a promissory note, a conditional delivery as well as; a want of consideration may be proved by parol, and that where such a note is without consideration and lias been delivered upon the condition that any party thereto shall not be liable thereon, it is not enforcible against that party except in the hands of a bona fide holder without notice. (Higgins v. Ridgway, 153 N. Y. 130; Benton v. Martin, 52 id. 570; Persons v. Hawkins, 41 App. Div. 171; Simmons v. Thompson, 29 id. 559 ; Andrews & Co. v. Hess, 20 id. 194.)

The:learned referee before whom this case was tried recognized the existence of this rule, but he was of the opinion that it had no application to the facts of this case, and in this view we are disposed to concur.

In all of the cases above cited the party who was seeking to avail himself of the above-mentioned rule either had no interest in the transaction which resulted in the giving of the note, or else he executed the same without receiving any consideration therefor.

. As lias already been' shown, such is not the case here, for the appellant had a direct interest in having the enforcement of her husband’s note deferred and that interest amounted to a consideration for her indorsement of the renewals. She was, therefore, in no true: sense an accommodation indorser, and consequently she is hardly in a position to invoke the rule just adverted to.

But aside from the question of consideration, we think the proofs fail to show any conditional indorsement and delivery as is claimed. Such a contention rests in a large measure upon a letter which was- . written to Mrs. Tallman’s co-executor, Mr. Lawrence, by the plaintiff’s president, in consequence of which the appellant asserts that she was induced to indorse .the note in suit.

It seems that a renewal note had-been sent to Mrs. Tallman for her to execute which she returned to the bank with her indorsement thereon, but “ without recourse.” This was unsatisfactory to Mr. Symonds, the president of the bank, and he thereupon wrote the following letter to Mr. Lawrence, viz.:

“ The Utica City National Bank, ) “Utica, N. Y., * * * Apr. 28, 1891. Í “ Mr. F. H. Lawrence :
“ My Dear Mr. Lawrence.—I return note endorsed by Mrs. Tallman £ without recourse.’ The bank simply desired the note executed as I made it, that it might conform to our rules. We have no disposition or intention to trouble Mrs. Tallman as an endorser, and are willing to carry by renewals the note for months that you may marshall assets of the estate agreeably to law. I trust with this explanation Mrs. Tallman will be willing to oblige, she being the sole beneficiary in the estate.
“ I am,
“Very truly, >
“CVS. SYMONDS, Pres.”

Assuming, as was doubtless the case, that this letter was brought to the attention of Mrs. Tallman, it certainly contains no definite, absolute assurance that her indorsement was desired as a mere matter of form, or that she would incur no personal liability by attaching her signature to the note. Indeed, such an interpretation of it would be quite inconsistent with the action of Mr. Symonds in refusing to accept Mrs. Tallman’s indorsement “ without recourse.” A much more reasonable interpretation, as we view it, is that the bank was willing to renew the note from time to time indefinitely, or at least until the executors of Henry C. Tallman could marshal the assets of the estate which they represented, and thus place themselves in a position to pay the note from the moneys of that estate. In this view of the case the writer, as he testified upon the trial, had no disposition or intention to trouble Mrs. Tallman, as an executor, or to-enforce collection of the note of her personally; for he doubtless expected, as he was justified in doing, that it would ultimately be paid out of her husband’s estate. That he did entertain this expectation is made apparent by certain letters which he subsequently addressed to Mr. Lawrence; for on the 6th day of January, 1898, we find him writing that gentleman as follows, viz.: “ As about a year has elapsed since the death of Mr. Tallman, may I ask how the affairs of his estate stand, and what chance there is of an early payment of the note we hold; ” and, again, on the thirteenth of the same month, he writes: “ In view of your letter touching the poverty of Mr. Tallman’s personal estate, may I ask if you will kindly execute the enclosed order for us. You can sign it as an executor ef H. 0- Tallman’s estate, with Mrs. Tallman as executrix, or, if preferred,, I presume either one of you alone will meet the requirements of validity. We will oblige in carrying the note along as :far as possible and do ail we corn, to meet yoiCr wishes consistent ■with official requirements.”

The order referred to in this letter was addressed to the administrator of the estate of George C. Tallman, requesting him to pay to the plaintiff from moneys in his hands due the estate of Henry C. Tallman a sufficient sum to cancel the note in suit.

These letters clearly indicate that the plaintiff was not only expecting this note to be paid by the estate of Henry C. Tallman, but that through its president it was doing everything possible to accomplish "that purpose; but at the same time they do not indicate nor is there any other evidence which, when fairly construed, does indínate thajt the bank relied exclusively upon that estate for the- payment 'df its note. On the contrary, Mr. Symonds, when called as a witness by the defendant, and asked if there was any idea of holding Mrs. Tallman personally upon her indorsement, replied: “ Certainly there was. * * * I was willing to abide my time and give

them a reasonable opportunity to marshall the assets of this estate to pay thenote; ” and, again, when asked what lie meant by saying in his letter to Lawrence that We have no disposition or intention to trouble Mrs. Tallman as an endorser,” he answered : “ I meant that as long as she chose to carry this note along in that form, we would be perfectly willing to wait and accommodate her until the assets of this estate were marshalled so that the note could be paid.”

It is but fair to say that there are some other portions df this witness’ evidence which, taken by themselves, would perhaps permit a different construction of the letter of April twenty-eighth, but when all the evidence bearing upon this branch of the case is considered it seems plain that the plaintiff’s president had no idea of securing: the indorsement of Mrs. Tallman as a matter of form only, althougli he had no expectation of ever calling upon her to fulfill her legal obligation, because he did not suppose that such a course would become necessary.

The rule which permits a party to a written instrument to prove by parol that the execution and delivery of that instrument, so far as he is concerned, was upon the condition that he should not be liable thereon, is one which, as already suggested, is now well established, but at the same time it is one which for obvious reasons ought not, in our judgment, to be applied unless such condition is established by the clearest and most convincing proof, and that certainly cannot be said of the present case.

Our attention has been directed to a number of exceptions taken to the admission and exclusion of evidence during the progress of the trial, but none of these, in our opinion, presents reversible error and but one requires especial notice.

The defendant offered in evidence a letter bearing date May 1, 1897, written by E. A. Tallman to Frederick H. Lawrence; this was objected to by the plaintiff’s counsel and the same was thereupon excluded. It seems that the writer of this letter was a director and vice-president of the plaintiff bank, and it was offered upon the assumption that it tended to strengthen the construction placed upon the letter of April twenty-eighth, written by the plaintiff’s president, Mr. Symonds. We have examined this letter with some care and find nothing in it which will support this contention; but were it not so, the letter in the circumstances of the case, would be inadmissible for any purpose. It does not purport to have been written by Mr. Tallman in his official capacity, and is not even written upon bank paper. So far as appears it was merely a friendly letter written by one person to another, and as such could have no effect upon the issues which were being tried, nor could it aid or prejudice either party to the action.

Our conclusion of the entire matter, therefore, is, that the judgment appealed from should be affirmed.

Judgment affirmed, with costs.

All concurred.

Judgment affirmed, with costs.  