Case ID: ny-sup-ct_8/html/0551-01.html
Source: Caselaw Access Project
Author: {"author": "Mulliit, P. J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

WILLIAM N. BURT , Respondent, v. URIAH SAXTON, Impleaded with others, Appellants.
    
      Sealed instrument — time of payment of may be extended by parol.
    
    The defendant was desirous of purchasing premises, upon which the plaintiff held a mortgage. Being unable to make the payments at the times specified in said mortgage, he called upon the plaintiff, who agreed, by parol, that if the defendant would purchase the premises, pay $200 the ensuing spring, and interest on all sums remaining unpaid annually thereafter, and would make certain improvements on them, he would extend the time of payment of the mortgage for twenty years. The defendant purchased the premises, assuming, by his deed, the payment of the mortgage, paid the $200, and made the specified improvements, but failed for two years to pay the interest.
    In an action brought to foreclose the mortgage, held, that the time of payment was extended by the verbal contract, and that there was no default in the payment of the principal; that the payment of the interest was a condition which the defendant must .perform, but that its non-payment was not such a breach of the condition as made the whole principal due.
    Appeal from a judgment of foreclosure and sale, in favor of the plaintiff, entered upon the report of a referee.
    In May, 1867, one Seth H. Bills executed and delivered to the plaintiff, his bond, in the penal sum of $4,000, conditioned to pay $2,000, as follows, viz.: $500 on the 1st September, 1867, and the remainder in three equal annual payments from said last-mentioned day, with annual interest. To secure the payment of this bond, Bills and wife executed and delivered to plaintiff, a mortgage on certain real estate in the town of Castile, county of Wyoming. This action was brought to foreclose this mortgage.
    The defendant, Saxton, before- the action was commenced, and in February, 1868, purchased the premises covered by the mortgage of Bills, and assumed the payment of the same as part of the price.
    Saxton, only, appeared and answered. He set up, by way of defense, that, being desirous to purchase said premises, he applied to Bills, and he consented to sell; but as he (S.) could not make the payments at the times specified in the bond, he called on the plaintiff and informed him of his wish to purchase. Plaintiff told him he wished he would purchase; that, otherwise, he might be compelled to take back the property, which he did not wish to do; and, upon being told that he (S.) could not pay according to the conditions of Bills’ bond, the plaintiff told him if he would pay the then ensuing spring, $200 on the mortgage, and interest, annually, on the whole sum unpaid, and, upon the condition that he (S.) would perform said agreement, and would make such improvements on the premises as would make the mortgage a first-class security, he would extend the time as long as he (S.) desired, not exceeding twenty years; and S. might, at his option, pay any part of the principal at any time within twenty years. At the time of this verbal agreement, there were due on the mortgage, $500 of principal, and about fifty dollars of interest. In pursuance of this agreement, S. purchased said premises of Bills, and, by a covenant inserted in the deed thereof from Bills to him, he assumed to pay said bond to the plaintiff; went into possession; paid $200 on the principal 5 and, during the two years then next ensuing, he made improvements on the premises, to the amount of about $2,000.
    The issues were referred for trial, and the referee found the facts aforesaid, and that defendant had not paid any interest on said bond and mortgage, save the payment of $200, but did pay $400 of principal; and that the premises had been increased in value by the defendants from $2,100, when he bought them, to $6,000, their value at the time of the trial.
    This action was commenced in 1870, and after the whole mortgage debt had become due, according to the condition of Bills’ bond.
    
      The referee held, as a conclusion of law, that the verbal agreement above mentioned, including the acts of the parties under it, did not operate to extend the time of payment, as originally stipulated in the mortgage, and he ordered judgment of foreclosure and sale, with costs.
    
      E. E, Fa/rman, for the appellant.
    The parol agreement operated to exend the time of payment of the mortgage. (Dodge v. Crandall, 30 N. Y., 294; Townsend v. Empire Stone Dressing Co., 6 Duer, 208; Lattimore v. Harsen, 14 John., 330; Delacroix v. Bulkley, 13 Wend., 71.)
    
      Thomas Corlett, for the respondent.
    A specialty, before breach, cannot be changed by parol. (Mitchell v. Hawley, 4 Denio, 414; Kuhn v. Stevens, 36 How., 275; Clough v. Murray, 3 Robt., 7.) The agreement was void by the statute of frauds. (Wilson v. Lester, 64 Barb., 431; Smith v. Devlin, 23 N. Y., 367.)
   Mulliit, P. J.:

It is well settled in this" State, whatever the rule may be elsewhere, that the time of performance of a contract under seal, may be extended by parol.

The court, in Clark v. Dales, adopted the ruling of the Supreme Court of Pennsylvania, that a new consideration is not necessary to give validity to an agreement to extend the time of performance; the waiver is enough for this purpose. It is said by the learned judge, in is opinion in the case cited, that the effect of an agreement to enlarge the time, is to substitute or adopt the extended time, for the time specified in the original contract. It then stands as a new agreement, whenever the mutual promises furnish a good consideration. If a consideration was essential to the agreement to extend the time of payment, the assumption of the mortgage debt by the defendant, Saxton, is sufficient to bind the plaintiff, and the extension is ample to bind the defendants. It is not intimated in any of the cases that hold that time of performance of a sealed or written contract may be extended by parol, is in conflict with the general rule that a written contract cannot be varied or modified by parol. We must hold, then, that the time of payment was extended by the verbal contract, and that there was no default in the payment of the principal of the indebtedness. Interest was unpaid at the commencement of the action, for which there might have been a foreclosure, but not for the whole debt. The payment of interest is a condition which the debtor must perform, but its non-payment is not such a breach of the condition as makes the whole principal due. But if the whole principal became due upon default to pay the interest, this case was not tried nor decided upon that theory. The defendant was- precluded from having his defense considered by the referee, and a new trial becomes indispensable.

The judgment must be reversed and a new trial granted ; costs to abide event.

Judgment reversed and new trial granted, costs to abide event. 
      
       Fleming v. Gilbert, 3 J. R., 528; Keating v. Price, 1 J.’s Cases, 22; Esmond v. Vanbenschoten, 12 Barb., 369; Clark v. Dales, 20 id., 42; Stone v. Sprague, id., 509; Flynn v. McKeon, 6 Duer, 203; Meehan v. Williams, 2 Daley, 367; Newton v. Wales, 3 Robt., 453.
     
      
       Supra.
     
      
      
         14 Serg. & Rawle, 241.