First National Bank v. Watkins

28 N.E. 275, 154 Mass. 385, 1891 Mass. LEXIS 133

• Court: Massachusetts Supreme Judicial Court
• Decided: September 15, 1891
• Status: Published

Opinion

Krowltor, J.

The exceptions were waived at the argument, and we have to consider only the questions presented by the report. The ruling of the Superior Court was made on the defendant’s offer of proof in the opening of his counsel to the jury, and the argument in behalf of the plaintiff assumes that the agreement referred to in the offer was upon a sufficient consideration, and was enforceable as an independent contract. The contention chiefly relied on by the plaintiff is, that such an agreement is not available in defence to a suit on the note, although if broken it would furnish a good foundation for an action for damages. We do not assent to this proposition. An agreement to “ look to the mortgaged property alone for the payment of the note ” would be, in effect, an agreement to discharge the defendant from all liability upon it, which, if made upon a valuable consideration, would be a good defence to a suit for payment of it; although a new and independent contract, it would be unreasonable to permit a plaintiff who had made such an agreement to collect his note of the maker, and to compel the maker to seek his remedy by a suit to recover back from the payee as damages the sum which was paid. The tendency of the modern cases is to allow such an agreement to be shown in defence, to avoid circuity of action. Howard v. Ames, 3 Met. 308, 311. Hood v. Adams, 124 Mass. 481, 485. Wadsworth v. Glynn, 131 Mass. 220. Hodgkins v. Moulton, 100 Mass. 309, was decided on a question of pleading; and in Waterhouse v. Kendall, 11 Cush. 128, and Traver v. Stevens, 11 Cush. 167, the question related to the consideration of the note, and differed materially from that in the case at bar.

The offer, as stated in the report, does not very clearly show whether the agreement referred to was founded on a sufficient consideration ; but the allegations of the answer are full in this particular, and the defendant’s counsel asserted in argument, and the plaintiff’s counsel did not deny, that the offer was in fact to show an agreement which would constitute a contract. If there was an agreement purporting to be made in reference to the defendant’s sale of the equity of redemption in the mortgaged property in the form of an offer that the defendant might, if he chose, refrain from paying the note, and from taking measures to secure payment of it out of the proceeds of the mortgaged property, and that the plaintiff would look to the property alone for the payment of it, and the defendant, relying upon the offer, did refrain from making any effort to have the property applied to the payment of the note when it became due, and thereby suffered detriment, there would be a sufficient consideration for the agreement. It would be an ordinary case of a unilateral contract growing out of an offer of one party to do something if the other will do or refrain from doing something else. If the party to whom such an offer is made acts upon it in the manner contemplated, either to the advantage of the offerer or to his own disadvantage, such action makes the contract complete, and notice of the acceptance of the offer before the action is unnecessary. Lent v. Padelford, 10 Mass. 230. Train v. Gold, 5 Pick. 380. Brogden v. Metropolitan Railway, 2 App. Cas. 666, 691. Weaver v. Wood, 9 Penn. St. 220. Patton v. Hassinger, 69 Penn. St. 311.

In view of all the circumstances, we think the report should be interpreted as presenting the question whether the agreement offered to be proved, if made for a good consideration, would be a bar to the present suit. The entry should be,

Verdict set aside.