Young v. Grundy - 11 U.S. 548 (1813)
U.S. Supreme Court
Young v. Grundy, 11 U.S. 7 Cranch 548 548 (1813)
Young v. Grundy
11 U.S. 548
Although the consideration of a promissory note fail by reason of the failure of the payee to perform his part of the agreement upon which it was given, yet if a new agreement, as a substitute for the old one, be entered into between the original parties to the note, the failure of the original consideration creates no equity in favor of the maker of the note against the endorsee, even in Virginia.
Young brought a bill in equity against Grundy to be relieved from a judgment at law obtained by Grundy against him on a promissory note given by him in Virginia to one William Chambers, from whom it passed by several intermediate endorsements to Grundy. It was given in 1795 for part of the purchase money of a large tract of land in Virginia which Chambers and others contracted to sell and convey to Young. It was afterwards discovered that Chambers and others had been imposed upon and that they had title only to a very small part of the land they had sold to Young, whereupon a new agreement was entered into on 6 September, 1798, between Chambers and others and Young, by which the original contract was rescinded and compensation made to Young for the injury he had sustained by their breach of contract, and provision was made to reimburse him the monies he had paid and to take up paper of his equivalent to that which was then outstanding and which he had issued for the original purchase money.
Young in his bill contended that Chambers and others had not complied with this new agreement, but that they owed him more than enough to cover this note.
In the court below the injunction was dissolved, and upon final hearing the bill was dismissed. Young appealed to this Court.