Northern Liberty Market Co. v. Kelly - 113 U.S. 199 (1885)
U.S. Supreme Court
Northern Liberty Market Co. v. Kelly, 113 U.S. 199 (1885)
Northern Liberty Market Company v. Kelly
Submitted January 5, 1885
Decided January 19, 1885
113 U.S. 199
A markethouse company, incorporated for twenty years, with power to purchase, hold, and convey any real or personal estate necessary to enable it to carry on its business, built a markethouse on land owned by it in fee simple, and sold by public auction leases for ninety-nine years, renewable forever, of stalls therein at a specified rent. The highest bidder for one of the stalls gave the corporation several promissory notes in part payment for the option of that stall, received such a lease, and took and kept possession of the stall, and afterwards gave it a note for a less sum in compromise of
the original notes, and upon express agreement that if this note should not be paid at maturity, the corporation might surrender it to the maker and thereupon the cause of action on those notes should revive. Held that the new note was upon a sufficient legal consideration, and that the corporation, holding and suing upon all the notes, could recover upon this note only.
This was a writ of error to reverse a judgment for the defendant in an action brought on April 4, 1884, by a corporation formed for the purpose of erecting a markethouse in the City of Washington and carrying on a marketing business there, upon twenty promissory notes made by him to the plaintiff, dated January 1, 1875, for $171.05 each, two payable in fifty-two months, two in fifty-eight months, two in sixty-four months, and two at the end of each succeeding six months, the last two being payable in one hundred and six months after date, and all bearing interest at the yearly rate of eight percent; also upon a promissory note made by the defendant dated August 5, 1881, for $1,881.60, payable in ninety days after date, and upon a promissory note, dated March 11, 1881, for $394.08, made by one William S. Cross, and guaranteed by the defendant, and payable in sixty days after date; each of the last two notes bearing interest at the yearly rate of six percent.
The judgment was rendered upon a case stated by the parties, in substance as follows:
The plaintiff is and since May 18, 1874, has been a corporation, duly incorporated under the general incorporation act in force in the District of Columbia, Rev.Stat.D.C. §§ 553-593, by which it became a corporation for twenty years, and capable of suing and being sued, and of taking, holding and conveying any real and personal estate necessary to enable it to carry on its business. On January 1, 1875, being the owner in fee of a parcel of land in the City of Washington and having built a markethouse thereon, it offered for sale by public auction leases for ninety-nine years, renewable forever, of the stalls in the markethouse at a specified rent, the highest bidder being entitled to his option of the stalls. At the sale, the defendant was the highest bidder for a stall, and made and delivered to the plaintiff in part payment
of the purchase money for the option of that stall, the twenty notes for $171.05 each, and afterwards received from the plaintiff such a lease of that stall, and took and has since retained possession of the stall under the lease. On August 5, 1881, the defendant, with full knowledge of the foregoing facts, including the fact that by the terms of incorporation the plaintiff's corporate existence was limited to twenty years, made and delivered to the plaintiff the note for $1,881.60, in compromise of the twenty original notes, and upon express agreement that if this note should not promptly paid at maturity, the plaintiff might surrender it to the defendant, and thereupon the plaintiff's cause of action upon the original notes should revive. The note for $394.08 was made by Cross, and guaranteed by the defendant, under like circumstances and in consideration of the surrender of two other notes similar in amount and consideration to the twenty notes before mentioned. All the notes in suit remain unpaid otherwise than by the giving of the note for $1,881.60, and all are still held by the plaintiff.