Bank of the Ohio Valley v. Lockwood.

a nearer party, and the nearest party took the paper from the nearer party with a knowledge that it was open to this defense. But a very important exception to this rule prevails in the case of accommodation paper. The plain reason of this is, that the accommodation maker, acceptor or indorser intends to lend his credit, and does it as a favor to some party who pays him nothing. This party therefore can never sue him; or if he does, the want of consideration will be a perfect defense. But if this accommodated party uses the credit he has borrowed by selling the note or getting it discounted, the holder may say: "I bought the note, or discounted it, for the very reason that I knew you had lent your credit on it; and I took it on the faith of your credit." We must therefore understand the legal definition of an accommodation party to negotiable paper to be one who puts his name there without any consideration, with the intention of lending his credit to the accommodated party." 1 Pars. on Bills and Notes, 183, 184; Story on Prom. Notes (5th ed.), 1, 217, 218; Dan. Neg. Inst. 148, 149, 150.

We have seen, however, that when said altered note matured the plaintiff had a right of action against the maker of the note at bar; and the two notes given in renewal thereof, as alleged in said plea, each operated at least a suspension of the debt evidenced by the original, and of the right to sue the maker thereof therefor, until the maturity and dishonor of such renewal note. 2 Dan. Neg. Inst. 259, 260, 264, and authorities there cited.

As soon as the note or bill given in renewal is dishonored, the original debt revives; and the creditor may pursue his remedy for it or sue upon the bill or note. The bill or note, taken in conditional payment, became by its dishonor a collateral security, which the creditor may retain, and endeavor to collect, without forfeiting the right to proceed in the principal cause of action, subject to the obligation of surrendering up the bill or note at the trial. 2 Dan. Neg. Inst. 264; Lazier v. Nevin, 3 W. Va. 622, 627, 628.

The said special plea substantially shows that the plaintiff gave a consideration, deemed valuable in law, for the note given in renewal of the original altered note. By accepting the note given in renewal it gave extension of time at least to the maker of the origina! note, which time was until the maturity and dishonor of the note given in renewal. Or in other words, the plaintiff, by receiving said renewal note for a valuable consideration, agreed to forbear to sue the maker of the original note, as well as any of the indorsers,

Bank of the Ohio Valley v. Lockwood.

as to whom the original altered note was valid and binding; and the plea fails to allege that the alteration alleged was made without the knowledge or consent of the maker or of any of the indors ers, except Edwards and Lockwood.

An agreement to forbear for a time proceedings at law or in equity, to enforce a well-founded claim is a valid consideration for a promise. But this consideration fails, if it be shown that the claim is wholly and certainly unsustainable at law or equity. "It is not material that the party who makes the promise, in consideration of such forbearance, should have a direct interest in the suit to be forborne, or be directly benefited by the delay. It is enough that he requests such forbearance, for the benefit of the defendent will be supposed to extend to him; and it would also be enough to make the consideration valid, that the creditor is injured by the delay. But there must have been some party who could have been sued. And in cases in which the person to be forborne is not mentioned, but the forbearance may be understood to be forbearance of wheever might be sued, the promise founded on such consideration is binding, if there be any person liable to suit, though the defendant himself is not liable. In general, the waiver of any legal right, at the request of another party, is a sufficient consideration for a promise or the waiver of any equitable right." 1 Pars. Con. (5th ed.) 440, 443, 444, and cases there cited; id (2d ed.), 366, 367, 368, 369, and cases there cited in notes; 2 Dan. Neg. Inst. 147; Pars. Notes and Bills, 198, 199.

Any damage to another, or suspension or forbearance of his right, is a foundation for an undertaking and will make it binding, though no actual benefit accrue to the party undertaking. 3 Burr. 1673, and the opinion of Lord ELLENBOROUGH and the other judges in the case of Jones v. Ashbarnham, 4 East, 455, 463, 464, 465, 466. "Forbearance is not a good consideration for a promise, where there is no debt in existence; but if one be liable for a debt, general promises by several, in consideration of forbearance, are good and will bind all. When there has been a contract with the principal for delay, upon which the surety might claim his discharge, if the principal and surety subsequently agree upon a general contract to forbear the collection of the debt for a certain period, such contract, in the absence of fraud, is upon good consideration, the principal being liable, and will bind the surety as well as the principal." New Hampshire Savings Bank v. Coleved, 15 N. H. 119. "When a party

Bank of the Ohio Valley v. Lockwood.

is in possession of a negotiable instrument, the presumption is that he holds it for value, and the burden of proof is upon him who disputes it, an exception being when the defect appears on the face of the instrument. Goodman v. Simonds, 20 How. 343.

In the last-named case at pages 370 and 371, Justice CLIFFORD says: "When the settlement was made, the new notes were given in payment of the prior indebtedness, and the collaterals previously held were surrendered to the defendant, and the time of payment was extended and definitely fixed by the terms of the notes, showing an agreement to give time for the payment of a debt already overdue, and a forbearance to enforce remedies for its recovery; and the implication is very strong, that the delay secured by the arrangement constituted the principal inducement to the transfer of the bill. Such a suspension of an existing demand is frequently of the utmost importance to a debtor; and it constitutes one of the oldest titles of the law under the head of forbearance, and has always been considered a sufficient valid consideration. Elting v. Vanderlyn, 4 Johns. 237; Morton v. Burn, 7 Ad. & E. 19; Baker v. Walker, 14 M. & W. 465; Jennison v. Stafford, 1 Cush. 168; Walton v. Mascell, 13 M. & W. 453; Com. Dig., action Assumpsit, B. 1; Wheeler v. Slocum, 16 Pick. 52; Story on Prom. Notes, § 186, and cases cited. The surrender of other instruments, although held as collateral security, is also a good consideration; and this, as well as the former proposition, is now generally admitted, and is not open to dispute. Depeau v. Waddington, 6 Whar. 220; Hornblower v. Proud, 2 B. & A. 327; Ridout v. Bristow, 1 Cromp. & J. 231; Bank of Salina v. Babcock, 21 Wend. 499; Young v. Lee, 2 Ker. 551.”

Taking the allegations of said special plea to be true, as therein pleaded, it seems to me, that the plaintiff under the allegations of said plea must be considered and held to be a bona fide holder, for valuable consideration, of the promissory note sued upon; and that the matters of defense, pleaded in bar of the plaintiff's right to recover, as pleaded, are not sufficient in law, if true, to bar the plaintiff's right of recovery upon the promissory note, sued upon and in the declaration mentioned.

The Municipal Court of Wheeling therefore did not err in sustaining the plaintiff's demurrer to said special plea.

In 1 Par. Notes and Bills at pages 201, 202, he says: "A note given by a party in satisfaction of a liability, from which he was discharged in ignorance of the fucts which constituted such discharge, cannot be

Bank of the Ohio Valley v. Lockwood.

enforced against him, though he may have had the means of knowing these facts;" and he cites in note (r), on page 202, Bell v. Gardner, 4 Man. & G. 11; Bullock v. Ogburn, 13 Ala. 346; Mercer v. Clark, 3 Bibb, 224.

The case of Bell v. Gardner was an action by the payee against the maker of a promissory note; and in that case it was held, as stated in the syllabus, that "A negotiable security, given by a party in satisfaction of a liability, from which he was discharged in law, in ignorance of the facts which constituted such discharge, cannot be enforced against him, though he may have had the means of knowing these facts. Therefore, when a bill of exchange, endorsed by A for the accommodation of the drawer, was afterwards altered in a material point, with the consent of the drawer, and when the bill was at maturity, B, the then holder, made a demand upon A, who ignorant of the alteration, though he had ample means of knowing it, gave B a promissory note for the amount of the bill and expenses; held that it was a good defense to the action of the note by B, that at the time A gave it, he was not in fact aware of the alteration of the bill.

The case of Mercer v. Clark, 3 Bibb, was also an action by the payee against the maker of the note. The case cited in 13 Ala., I cannot now see, as the book is not before me, and is not in the State library; but my recollection, though not distinct, is, that the case therein cited is also an action by the payee against the maker of

the note.

It seems to be "a general principle of the law merchant, that as between the immediate parties to a negotiable instrument, parties between whom there is a privity, the consideration may be inquired into; and that as to them, the only superiority of a bill or note over other unsealed evidence of debt is, that it prima facie imports a consideration." 1 Dan. Neg. Inst. 576, § 769. "The same rule which admits inquiry into the consideration of negotiable paper between the original payer and payee, extends to admit such inquiry in any suit between parties, between whom there is privity. That is to say, between the immediate parties to any contract evidenced by the drawing, accepting, making or indorsing a bill or note, it may be shown that there was no consideration, or that the consideration has failed, or a set-off may be pleaded; but as to other parties remote to each other none of these defenses are admissible." Id., vol. 1 135, 174.

Baltimore and Ohio Railroad Company v. Jameson.

It is said, by Mr. Daniel, in the first volume of his work at page 163: "If the consideration of the original bill or note be illegal, a renewal of it will be open to the same objection and defense; and if the original instrument was obtained by fraud, a renewal of it by the original parties, without knowledge of the fraud, would stand upon the same footing. And he cites Sawyer v. Wisnell, 9 Allen, 39; Holden v. Cosgrove, 12 Gray, 216; Scudder v. Thomas, 35 Ga. 364.

These cases, and the principles therein decided, I do not think affect or oppose the conclusion to which I have arrived, as to the sufficiency of said plea.

[Omitting considerations of pleading and other minor matters.] All concur.

Judgment affirmed.

BALTIMORE and OHIO RAILROAD CO. v.

(13 W. Va. 833.)

JAMESON.

Set-off and recoupment — bond of indemnity — obligor's services.

In an action on a bond for the faithful and honest discharge of the obligor's duty as agent, the defendant may set off his services as such agent.

A

CTION on a bond with the following condition:

"Whereas, Jacob S. Jameson hath been appointed by said company as agent at Duffields, on the Baltimore and Ohio railroad: Now, the condition of this obligation is such, that if the said Jacob S. Jameson do not at all times hereafter, so long as he shall hold said office, well and faithfully perform the duties of the said office, so that said company shall suffer no loss, damage or injury on account of any act or acts, either of omission or commission, of the said Jacob S. Jameson, and without wasting, embezzling, spending, misapplying or unlawfully making way with the money, property or effects of the said company, or such as may come into his hands or under his control, while temporarily employed in any manner in the service of said company, while holding the office aforesaid, then if the said Jacob S. Jameson, or W. T. Jameson, or either of them, or their or either of their heirs, executors or administrators, shall make due and suffi cient recompense unto the said company for such loss, damage or