Hartman v. Danner , 1 Foster 267 ( 1873 )

The opinion of the court — Williams and Mercür, JJ., dissenting — was delivered July 2d 1873, by

Sharswood, J. —

The facts of this case as presented on this record appear to be, that on April 3d 1867, Duphorn, with Danner as his surety, executed and delivered a sealed note, binding them to pay Hartman five hundred dollars on or before April 3d 1868, with interest from date. At the time the note was given, Duphorn, without the knowledge of Danner, agreed to pay two per cent, extra interest, and gave his due-bill for the usury, which was afterwards paid. A short time before the note fell due Hartman agreed to extend the time for another year upon Duphorn’s giving his due-bill for two per cent, extra interest, which was also afterwards paid. In the spring of 1869 the time was again in like manner extended, Duphorn giving to Hartman and his wife ten dollars worth of goods for the extra two per cent., which would not have been due under this arrangement, supposing it to be valid, until April 1870. Danner was ignorant of these extensions. *

Had all this, or any of it, the effect of discharging the surety, Danner ? This evidently depends upon another question, were the agreements to extend the time founded upon a sufficient consideration so as to be legally binding upon the parties ?

A payment of part of a debt, either principal or interest, before it is legally demandable, will be a sufficient consideration to support an agreement to give time: Flynn v. Mudd, 27 Illinois 323; Manufacturers’ and Mechanics’ Bank v. Bank of Pennsylvania, 7 W. & S. 340. But such payment after maturity of the debt has not the same effect, for the plain reason that in a legal sense it is neither a benefit to the creditor, who is entitled to the whole, nor an injury to the debtor, who ought to have done this and more without any promise from the creditor: Pabodie v. King, 12 Johns. 426; Mason v. Peters, 4 Verm. 104; Halstead v. Brown, 17 Indiana 202; Weidman v. Weitzel, 13 S. & R. 96. For the same reason payment of part of a debt, though received in satisfaction, if without a release under seal, will not have the effect of extinguishing the whole : Latapee v. Pechollier, 2 W. C. C. Rep. 180; Greiser v. Kershner, 4 Grill & Johns. 305; Lowrie v. Verner, 3 Watts 319; Savage v. Everman, 20 P. F. Smith 319.

It is clear, as held by the learned judge below, that the due-bills to pay the usurious interest were void contracts under the statute, and could not be a good consideration for any undertaking based upon them: Payne v. Powell, 14 Texas 600. What effect then did the payment of the due-bill given just before the maturity of the note produce ? Assuming it to have been paid after the note had fallen due, it was in law a part payment on account of the debt and latyful interest. It cannot be doubted that either Duphorn or Danner, when sued on the note, could have insisted upon a credit for this amount. Such is clearly the provision of the Act of May 28th 1858, Pamph. L. 622 : “ It shall be lawful for such borrower or debtor, at his option, to retain and deduct such excess from the amount of any such debt.” . What the principal had a right to deduct as payment, the surety may certainly avail himself of. ' It follows, logically, that the payment of this due-bill — and the same principle applies to the subsequent payment in goods — having been made after the maturity of the debt, formed no sufficient consideration for the contract to give further time.

It may be, that when there is a contract to pay interest for a specified period on a debt already due, so that the debtor, without the consent of the creditor, is thereby precluded from paying the debt and interest until the term expires, there is an appreciable benefit to the creditor as well as injury to the debtor: Chute v. Patteo, 37 Maine 102. But nothing upon which to found such a point appears in the evidence in this case. By the original contract, the obligors could have discharged the debt at any time on or before April 3d 1868, and the extensions were evidently of that contract, with this provision.

It may appear to be a very refined technicality that a part payment on account of a debt twenty-four hours' before it is due, will, and'twenty-four hours after, will not form a sufficient consideration for an agreement to extend the time. We must remember, however, that the law pays no regard to the adequacy of consideration. There must be some legal benefit to the one party or injury to the other, though it may be of the slightest kind. It must be a benefit or injury, which the law can recognise and appreciate, not the performance in part or in whole of that which is already an ascertained and matured obligation.

The application of these principles to the answers to the points presented and the charge below, show that the learned judge fell into an error in holding that the payment of the usury, though it may have been after the maturity of the debt, constituted a sufficient consideration for the agreement to give time so as to discharge the surety.

Judgment reversed, and venire facias de novo awarded.¹

1 This case again tried and a verdict and judgment rendered for the plaintiff. On a writ of error to May Term 1874, the last judgment was affirmed.