Alexander v. Smith, 15 N.C. 364, 4 Dev. 364 (1833)

Dec. 1833 · Supreme Court of North Carolina

15 N.C. 364, 4 Dev. 364

Lawson H. Alexander v. William Smith.

Where A transferred to B, a note for $900, to secure the payment of $609, and it was agreed, if the $600 was not refunded within three months, the note should be the absolute property of B: Such contract, if intended as an absolute sale, is not void for the excess, for want of consideration ; hut whether intended as an absolute sale, or a pledge only, should be left to the jury.

The interest of A in such a contract is not negotiable, and his assignee cannot support an action at law against B, in his own name, without an express promise.

Upon an an attachment issued at the instance of the plaintiff against one Kimble, the defendant, Smith, was summoned as garnishee. In his garnishment he stated 110 “°n°y °r effects of Kimble’s in his hands. On an issue made up to try the truth of this garnish-incut, it appeared .that one Elms borrowed from Smith $600, to bo paid in three months, and to secure the re-. j>ayment, passed Smith a note of one Gibson, (who was perfectly solvent,) for $900. It was agreed, if the money Avas not repaid by the day- appointed, the note should be the absolute property of Smith. After this, and before the expiration of the three months, Elms sold his interest in the note to Kimble, for a valuable consideration, Kimble agreeing to stand in the shoes of Elms.— Smith was immediately informed of this transfer, and assented to'it. Kimble went to Virginia, where he was taken sick, and did not return, nor repay the $600 within the time prescribed. After his return from Virginia, Smith refused to treat with Kimble concerning the note, claiming it as his own. Smith collected the whole amount from Gibson.

Daniei, Judge, before whom the cause was tried at Mecklenburg, Fall Term 1831, instructed the jury, that upon the facts it made no difference whether the sale wore absolute or conditional — that Smith had in his hands monies over the $600 and interest, for which he gave no consideration, and notwithstanding the agreement, the promise being without consideration for the surplus, was not binding. And if Smith expressly agreed with Kimble that he should stand in the shoes of Elms, and have the same rights, the law would say he, Smith, held the excess over the $600 to the use of Kimble, for which Kimble might maintain assumpsit; and therefore it would be subject to the plaintiff’s attachment. Judgment being rendered for the plaintiff) Smith, the garnishee, appealed.

Winston for the plaintiff.

Bevereux for the defendant.

Rueein, Chief-Justice.

The case has beeen argued for the plaintiff upon the ground, that as the record states a loan to Elms, and the note was merely delivered without endorsement to Smith, the transaction was not a sale of the note, but either gave him a lien on it, or at most an authority to receive the money ; which as to all above the loan and interest, was money had and received to the use of Elms or Kimble. The position contended for is rendered immaterial by the instructions given by the Judge. He stated to the jury that it made no difference whether there was a sale or not, or whether it was conditional or absolute. This instruction was given upon the idea that as the sum paid or advanced by Smith, was only §600, there was no consideration extending to the excess of the bond above that sum. In this, the opinion of the court is, there was error. As far as the validity of a contract depends upon a consideration, one of any value, agreed upon by the jmrties, is sufficient. It need not be adequate or equal in value. If á bond for a larger sum be really sold for a smaller, the con tract is not void as to any part of the sum mentioned in thebond. Whether this was a sale or only a pledge, ought to have been left to the jury, if Elms had been suing Smith for the surplus; and so also, if Kimble had been prosecuting an action for it.

In reference to tbe right of Kimble to do so, the judge further instructed the jury, that he might, if Smith expressly agreed that he should stand in the shoes of Elms. Such an action could be sustained by an express promise only; for the claim of Elms was not negotiable, and the assignment to Kimble gave him only an equitable right. That was sufficient as a consideration to support a promise by Smith, to deliver the bond, or pay tbe money to Kimble. But Kimble must bring himself within the terms of the promise as made. In this respect his rights may be very distinguishable from those of Elms. The latter may claim upon grounds independent of the particular agreement; the former cannot. That agreement, as stated in the case, was that Kimble should stand in the shoes of Elms, and if he paid the ,§600 at the day agreed on,' Smith would deliver the note to him ; if not, it should he the absolute property of Smitlu Under this agreement Kimble could not claim the note or money, at law, unless he performed the acts stipulated oh his part. His sickness and absence from home did not dispense with the payment of the money within the time. Whether Smith could justly insist on such terms, or whether they would have been obligatory on Elms, at law, or are so on Kimble in another forum, is not the question. Kimble is obliged to abide by them at law ; because they constitute an essential part of the promise to him, and without or beyond the promise, he has no legal right. As Kimble could not maintain an action for the money as a debt, it is not subject to the attachment of the plaintiff; and there must be a new trial. This is the less to be regretted as the case is very imperfectly stated, and upon another trial it may be better understood, whether Elms was to pay the money, if Gibson failed, and what was meant by Kimble’s standing in his shoes, with or without repeating the terms of the original contract.

The* sickness and consequent absence of a party, is no excuse for non-perform-anee of his contract.

Per Curiam. — Judgment reversed.