NORTHERN LIBERTY MARKET COMPANY
v.
KELLY
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Northern Liberty Market Company entered into a compromise agreement with Kelly, exchanging twenty original promissory notes for a single new note, with the understanding that the original notes would not revive if the new note went unpaid unless the new note was first surrendered to Kelly. The Supreme Court held that the company could not simultaneously enforce both the original notes and the new note without surrendering the latter, as doing so violated the condition precedent to reviving the original claim, and therefore the company was entitled to recover only on the new note and a related guaranteed note.
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Mr. Justice Gray delivered the opinion of the court. He recited the facts as above stated, and continued:
The plaintiff insists that the original notes were valid, because a corporation, empowered to hold and convey real estate for the objects of its incorporation, may convey an estate in fee or any less estate in lands which it has purchased, and may therefore make a valid lease of them for any term of years, though extending beyond the limit of its corporate existence. But it is unnecessary to express a definitive opinion upon that point, because it is agreed in the case stated that the defendant gave, in compromise of the original twenty notes for $171.05 each, the new note for $1881.60. If the plaintiff had exceeded its corporate powers in making the original contract, yet it had authority to compromise and settle all claims by or against it under that contract. Morville v. American Tract Society, 123 Mass.
129. The compromise of the disputed claim on the original notes was a legal and sufficient consideration for the new note. Cook v. Wright, 1 B. & S. 559; Tuttle v. Tuttle, 12 Met. 551; Riggs v. Hawley, 116 Mass.
596. By the terms of the agreement of compromise, the. plaintiff’s cause of action on the original notes was. not to revive, in case of the new note not being paid at maturity, except upon the surrender of this note to the defendant. The plaintiff,' not having surrendered it, but holding and suing upon it as well as upon the original notes, has not performed the condition on which the revival of the right of action on the original notes depended.
It follows, that the plaintiff cannot recover in this action on the original notes for $171.05 each, but is entitled to recover on the new note for $1881.60, and also, for like reasons, on the note for $394.08, made by Cross and guaranteed by the defendant.
• Judgment reversed, a/nd case rema/nded with directions to enter judgment for the plaintiff on the twe^ty-fvrst and twenty-second coimts.
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Citator
Cited By
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Hoyt v. Wickham, 25 F.2d 777 (8th Cir. 1928)…ndered rights that the law, if appealed to, would have sustained.” Hennessy v. Bacon, 137 U. S. 78, 11 S. Ct. 17, 34 L. Ed. 605. See Williams v. First National Bank, 216 U. S. 582, 30 S. Ct. 441, 54 L. Ed. 625; Northern Liberty Market Co. v. Kelly, 113 U. S. 199, 5 S. Ct. 422, 28 L. Ed. 948. [5] In this compromise the parties acted in good faith. Such a compromise of a disputed elaim is a sufficient consideration for a note even though the elaim be doubtful and might ultimately have been defeated. This is…
Authorities Cited
- Thomas v. R.R. Co., 101 U.S. 71 (U.S. 1879)
- Pearce v. The Madison & Indianapolis R.R. Co. & the Peru & Indianapolis R.R. Co., 21 How. 441 (U.S. 1858)