Case ID: foster_1/html/0267-01.html
Source: Caselaw Access Project
Author: {"author": "Sharswood, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Supreme Court of Pennsylvania. MIDDLE DISTRICT.
    JOHN HARTMAN v. JOEL B. DANNER.
    A payment of part of a debt made before it is legally due and demandable, is a sufficient consideration for an agreement to give time.
    Where a creditor agreed with the principal debtor to give time upon the payment of a portion of the principal, the whole being at the time of such payment due; held, that such contract is not binding, and does not have the effect of discharging the surety.
    When excessive interest is agreed upon, and such excess is separately provided for by due bills which, at maturity are paid, the amount so paid will be deducted from the principal and accrued legal interest, such credit can be claimed by the surety, although he had no knowledge of the transaction.
    Payment of part of a debt, though received in satisfaction of the whole, if without a release under seal, will not have the effect of extinguishing the whole.
    Error to the court of common pleas of Adams county.
   Opinion delivered by

Sharswood, J.

The facts of this case as presented on this record, appear to be, that on April 3, 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 3, 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 afterward paid. A short time before the note was due, Hartman agreed to extend the time for another year, upon Duphorn’s giving, his due bill for the 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 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, Dan-ner? This evidently depends upon another question : Were the agree-raents 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 suppose an agreement to give time. Flynn & Mudd, 27 Illinois 323; Manufacturers’ and Mechanics’ Bank v. Bank of Pennsylvania, 7 W. & S. 340. But such payment after the 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, or an injury to the debtor, who ought to have done this and more without any promise from the creditor. Paborn v. King, 12 Johns 426; Mason v. Peters, 4 Ver. 104; Halstead v. Brown, 17 Indiana 202; Widman v. Witzel, 13 S. & R. 96.

For the same reason, payment of a part of a debt, though received in satisfaction, if without a release under seal, will not have the effect of extinguishing the whole. Satapee v. Peckowin, 2 W. C. C. Rep. 180; Geiser v. Kershner, 4 Gill & Johns 305; Lowin v. Verner, 3 Watts 319; Savage v. Errman, 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. Payee v. Powell, 14 Texas 600. What effect then did the payment of due bill given just before the maturity of the note provide? 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 lawful interest. It cannot be doubted that either Duphorn or Danner, when sued on the note, could have insisted on a credit for the amount. Such is clearly the provision of the act of May 28, 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 one 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 time on a debt already due, so the debtor without the consent of the creditor, is thereby precluded from paying the debt and interest until the time expires, there is an appreciable benefit to the creditor, as tvell as injury to the debtor. Chute v. Patten, 37, 102. But nothing upon which to found such a point appeals in the evidence in this case.

By the original contract, the obligors could have discharged the debt at any time on or before April 3, 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 a consideration, there must be some benefit to one party or injury to the other, though it be of the slightest kind. It must be a benefit or injury which the law can recognize and appreciate, not the performance in part or in whole of that which is already an ascertained and actual obligation.

Dqmiel McConatighy, Esq., for plaintiff in error; McLean dr3 Woods, Esqrs., for defendant in error.

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