Strong v. Sheffield

Strong v. Sheffield

1895 Court of Appeals of New York

• Strong, aggrieved promisee, uncle, is suing Sheffield, promisor, niece.
• Sheffield’s husband purchased Strong’s business on credit.
• Promisory note was demand note rather than time note. Ambiguity in case is whether there were two notes or only one.
• A note evidences monetary obligation; somebody’s promise to pay (with or without interest). Person making promise is maker of note, person to whom promise is made is payee of note.
• Demand instrument means payee can demand payment at any time, no fixed date in agreement.
• Negotiable instrument: “I promise to pay to the order of Strong”or “I promise to pay to strong or Strong’s assignees”, means a new party can become holder of note. (Not relevant in this case, since Strong was still holding note.)
• Facts are unclear as to whether there was a promisory note when Strong sold business to Nephew.
• Husband (of Sheffield, Nephew-in-Law) is maker of note, Strong is payee.
• Sheffield is (in modern terms) accommodation party, signing for the benefit of the husband (the accommodated party).
• Possible that wife signed as co-maker/accomodation party, or possibly as endorser. Doesn’t matter for this case because maker is primary obligor, then endorser contracts that they will take up and pay the instrument.
• Sheffield’s defense: no consideration. She made promise to pay but haven’t received anything back.
• Strong claims forbearance was consideration: he didn’t demand payment for two years.
• Court finds this is not consideration since there was no promise (even though there was performance). He could have demanded immediately at any time.

Author: international