Mary Doxy v. Exchange Bank of Perry

Oklahoma Supreme Court1907-09-05

19 Okla. 18392 P. 150

Summary · law.co

Holding. The court affirmed the judgment against Mary Doxy, holding that her signature on the promissory notes created binding joint and several obligations on her person. The release of the bank's mortgage security in exchange for her signature provided sufficient consideration to bind her, regardless of whether the original makers consented to the arrangement or whether she received personal benefit from signing.

Mary Doxy signed three promissory notes that had been previously executed by others and secured by chattel mortgages. The notes were made jointly and severally by Miner Doxy and Conna Doxy, with Mary Doxy adding her signature months after their creation. The bank agreed to release the mortgage security in exchange for Mary Doxy's signature on the notes. The trial jury found that Mary Doxy had signed the notes under an agreement that the bank would waive its mortgage security, and the evidence supported this finding.

Mary Doxy challenged her liability, arguing that because she was signing for the debt of another party, she could only be bound if the original makers had requested her signature—a fact she disputed. The court rejected this argument, holding that her signature created a binding personal obligation on her. The court determined that consideration existed because the bank relinquished its secured interest in the property as a result of her agreement to sign the notes. This release of security and the benefit to the original makers constituted adequate consideration, even though Mary Doxy herself did not receive a direct personal benefit. The timing of her signature relative to the original notes was deemed irrelevant to her liability.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether a party can be bound by a promissory note signed after its original execution without the consent of the original makers
Whether consideration exists when the payee releases security rather than conferring direct benefit on the signatory
Whether a surety or co-signer's liability depends on personal benefit or can rest on benefit to third parties

Procedural posture

The trial court entered judgment against appellant Mary Doxy on promissory notes she had signed, which the jury found she had executed under an agreement that the bank would release its mortgage security.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Opinion of the court by

Burwell, J.:

On December 28, 1901, Miner Doxy and Conna Doxy executed and delivered to A. W. MeCandless their joint and several promissory note for two hundred dollars, due six months after date. This note before April 4, 1902, was transferred and assigned to the Exchange Bank ’of Perry, Oklahoma. On January 11, 1902, Conna Doxy executed and delivered to the Exchange Bank of Perry his promissory note for fifty-four dollars and seventy-five cents, due six months after date. On February 1st, 1902, Miner Doxy executed and delivered to the Exchange Bank of Perry his promissory note for thirty-eight dollars and seventy-five cents. These notes were all secured by chattel mortgages. The mortgagors removed the property included in the chattel mortgages from the county in violation of law and without the consent of the mortgagee. On April 4, 1902, the appellant, Mary Doxy, signed each of these notes, as appellee claims, under an agreement that it would waive the mortgage security held by it. The finding of the jury sustains this contention, and the evidence reasonably supports this finding.

It is first contended by the appellant that this is a contract to answér for the debt of another, and that she could not be bound on the note unless she had signed it at the request of the makers, which she denies. We cannot agree with this view of the law. It was not necessary that some valuable consideration or benefit flow to Mrs. Mary Doxy for the signing of these notes to make them binding upon her. The releasing of the property covered by the chattel mortgages which had been executed to secure the payment of the notes, and the benefit that such release would be to her sons, and the surrendering of such security by the bank, was a sufficient consideration for her signature to the notes. In the case of Wright v. McKilkrick (Kan.) 43 Pac. 977, the court of appeals of Kansas, speaking through Mr. Justice Garver, said: “It is, no defense to an action on a promissory note for the maker to say that there was no consideration which was beneficial to him personally; it is sufficient if the consideration was a benefit con ferred upon a third person, or a detriment suffered by the promisee, at the instance of the promisor.” See also Cyc. vol. 6, page 690, sec. 2.

Many other authorities might, be cited upholding this principle, but it is unnecessary, as no one will deny but that the releasing of security for the same debt, the extending of time of payment, or loss to the payee of the note, or the waiving of a legal right by reason of the execution and delivery of the note, is a sufficient consideration. The real test is: Did the payee part with value or waive a legal right by reason of the execution and delivery of the note? If he did, it is a sufficient consideration to authorize a recovery for the amount due thereon. The fact that Mary Doxey signed the notes some time after their execution and delivery is immaterial. When she signed them they became her personal promises, and she will not be permitted to say that the original makers of the notes did not request her to do so, when the bank waived its security under the mortgage by reason of her signature to them. The notes are joint and several, and she is bound, regardless, of whether or not the original makers consented to the arrangement between her and the bank. When she signed them they became her promises, and the waiving of the mortgage security was a sufficient consideration.

We have-considered all of the questions raised by appellant; but are of the opinion that the judgment of the lower court should be affirmed. It is so ordered, and the costs are taxed to appellant.

Burford, C. J., who presided in the court below, not sitting; Irwin, J., absent; all the other Justices concurring.