Northern Liberty Market Co. v. Kelly

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Northern Liberty Market Co. v. Kelly
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Submitted January 5, 1885
Decided January 19, 1885
Full case nameNorthern Liberty Market Co. v. Kelly
Citations 113 U.S. 199 ( more )
5 S. Ct. 422; 28 L. Ed. 948
Court membership
Chief Justice
Morrison Waite
Associate Justices
Samuel F. Miller  · Stephen J. Field
Joseph P. Bradley  · John M. Harlan
William B. Woods  · Stanley Matthews
Horace Gray  · Samuel Blatchford
Case opinions
Majority Gray, joined by unanimous

Northern Liberty Market Co. v. Kelly, 113 U.S. 199 (1885), 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. [1]

Promissory note negotiable instrument, wherein one party makes an unconditional promise in writing to pay a determinate sum of money to the other

A promissory note, sometimes referred to as a note payable, is a legal instrument, in which one party promises in writing to pay a determinate sum of money to the other, either at a fixed or determinable future time or on demand of the payee, under specific terms.

Contents

A twenty-year-old incorporated markethouse company with power to purchase, hold, and convey 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.

A public auction is an auction held on behalf of a government in which the property to be auctioned is either property owned by the government, or property which is sold under the authority of a court of law or a government agency with similar authority.

The judgment was rendered upon a case stated by the parties, in substance as follows:

The plaintiff 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 entitled to an option on the stalls. The defendant was the highest bidder for a stall, and made part payment of the purchase money for the option of that stall, 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, knowing 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 be 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 William S. 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.

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References

  1. Northern Liberty Market Co. v. Kelly, 113 U.S. 199 (1885).
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