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contractplaintiffdefendant
settlementplaintiffdefendantliabilitytestimonywill

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Coyle & Co. v. McCoy, 6 Teiss. 84, 1908 WL 1349, 6 Orleans App. 84

Facts

The dispute arose from two promissory notes for $106.80 each, executed by the defendant, which were payable after specified periods. The defendant contended that the notes were executed with the understanding that he would not be called upon to pay until he was able to do so, citing his current inability to meet the demand. Additionally, he claimed that the notes were issued without consideration, as the parties had differing views on who should bear the loss of a boat and coal that were sold to him.

A final settlement, and adjustment of the matter, which occurred in the fall of 1903, was, long after its occurrence made by the parties. The defendant recognized his liability, paid a part of it and now, when sued on the notes given to represent the balance due on his assumed obligation, he seeks to re-open the transaction.

Issue

The main legal issues were whether the defendant could introduce evidence of a contemporaneous oral agreement that contradicted the written terms of the promissory notes, and whether the notes were issued without consideration.

So far as concerns the first defense it may be said that in this particular the answer is nothing more or less than an allegation of the existence of a contemporaneous oral agreement that the term fixed in the absolute written instruments, for the performance of the obligation, is not the definite lapse of time written therein, but some other time.

Rule

The court applied the rule that a maker of a negotiable instrument is bound to pay according to its written terms, and that contemporaneous oral agreements cannot vary the terms of a written contract. Additionally, the court held that a valid consideration must exist to support the making of a promissory note.

The maker of a negotiable instrument by making it, engages that he will pay it according to its tenor. Sec. 30, Act 64 of 1904.

Analysis

The court found that the defendant's claim of a contemporaneous oral agreement was inadmissible as it sought to contradict the written terms of the notes. The court emphasized that the existence of a prior or contemporaneous oral agreement intended to alter a written agreement is without legal effect. Furthermore, the court determined that the notes were supported by sufficient consideration, as they were given in part payment for a boat load of coal sold to the defendant.

The defense of want of consideration is without merit forasmuch as the averments in defendant's answer, themselves as well as the testimony adduced, show that the notes sued on were given in part payment for a boat load of coal sold by plaintiffs to defendant in the fall of 1903 and which boat and coal were lost by sinking.

Conclusion

The court affirmed the judgment in favor of the plaintiff, ruling that the defendant's defenses were without merit and that the notes were valid and enforceable.

The judgment is affirmed.

Who won?

The plaintiff prevailed in the case because the court found that the promissory notes were valid and supported by sufficient consideration, and the defendant's defenses were legally insufficient.

There would be very little use in compromising controversies, if, after such compromise the whole matter remained open and it were a good defense to a note given in settlement that a meretorious defense existed to the original claim.

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