Case Name: DUSHANE VS. ALLEN
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1885-02-16
Citations: 2 Walk. 348
Docket Number: No. 225
Parties: DUSHANE VS. ALLEN.
Judges: 
Reporter: Reports of cases decided by the supreme court of pennsylvania which have been omitted from the regular reports
Volume: 2
Pages: 348–351

Head Matter:
DUSHANE VS. ALLEN.
An agreement whereby the holder of anote agrees to extend the time of payment in consideration of an agreement to pay usurious interest, is without consideration, and does not relieve the surety.
Error to the Common Pleas of Payette County. No. 225 Jan. Term, 1884.
This was an action, brought in the Court below by James Allen against A. O. Tinstman, doing business as A. Overholt & Co., and J. M. Dushane, security. Suit was brought on a note for $2,990.80, signed by A. Overholt & Co. and J. M. Dushane as security. It was dated 17th day of Jan., 1874, and due in one year. In Jan., 1875, about the time of the maturity of this note, James Allen called upon Tinstman, and had Tinstman make an agreement by which Allen, in consideration of the payment of the legal rate of interest of 6 per cent, and an amount equal to 4 per cent, additional, agreed to, and di d extend the time for payment of the note for one year. The agreement was written by Allen on the back of the note as follows: I agree to extend this note from Jan. 17, 1875 to Jan. 17, 1876. Dushane, the security, knew nothing of the matter. The additional amount for the legal rate of interest was paid by Overholt & Co. in the form of a check for $119.60. It was not presented, and was not paid. The charge of the Court was as follows, per:
Willson, P. J.
Gentlemen oe the Jury : — This is an action brought by James Allen against J. M. Dushane to recover the amount of a note hearing date the 17th day of January, 1874, and payable one year after date. The note was given for $2,990.08. It appears, from the evidence, and there is no contest in regard to it, that A. Overholt & Co., consisting altogether of A. O. Tinstman, was the principal debtor in the note, and that Dushane, the defendant, was' only a surety. The execution of the note has been admitted, and of course then the burden would be upon the defendant to show that it has been paid, or that he has in some way been relieved from any liability upon the same. For that purpose the defendant sets up that at the maturity of the note, or shortly after, Mr. Allen agreed with Mr. Tinstman for an extension of one year without the defendant’s knowledge or consent; and it is claimed also, that as a consideration for this agreement to extend the time of payment one year, Mr. Tinstman promised to pay Mr. Allen interest at the rate of ten per cent, per annum — the note itself bearing six per cent., and a check being given for $119.06, which it is claimed was just the excess over the legal rate of interest; and it is claimed on the part of the defendant, that this was of itself a sufficient consideration for the alleged agreement to give time, and that it thereby prevented Mr. Allen from pursuing Tinstman and collecting the note — tied his hands so that he could not make a movement towards enforcing the payment of the note at the time it was due. We instruct you that the alleged consideration was not sufficient to support an agreement to give time so as to prevent Mr. Allen from collecting the note at any time thereafter that he had thought proper to do so ; that if he had been notified at any time by the surety to proceed to collect the note he could have done so. It is also claimed on the part of the defendant that the acts of indulgence on the part of the plaintiff is not pursuing Mr. Tinstman at a time when he was good financially and the'money could have been made on the note, but keeping quiet until he became insolvent and was forced into bankruptcy, and making no demand either on him or Mr. Dushane, the surety, are such acts as would relieve the surety.
On this point we instruct you that such acts as these would not relieve the surety, Mr. Dushane, from his liability, amounting to nothing more than acts of indulgence or omissions, and he could have spurred Mr. Allen up to pursuing Mr. Tinstman by the legal course for the collection of the note. That being the ease, we are of the opinion that the plaintiff is entitled to recover, and the question for you to determine will be how much the plaintiff is entitled to recover on the note, it appearing from the evidence that it is the last of a series of renewals, the first note having been given in 1869 and renewed from time to time until this note in suit was given in 1874. It also appears from the evidence, the testimony of Mr. Tinstman, that the money, was loaned by Mr. Allen at the rate of ten per cent., and all over the legal rate, that is, six per cent., the defendant would be entitled to have deducted out of the true amount of this note at the time he signed it. Whatever usurious interest, that is, the excessive part of it, that had been paid prior to that time, or had been included in any of the notes given, ought to be taken out so as to ascertain what was the true amount of the note at the time Mr. Dushane signed it as surety; and then that amount would be the amount on which interest could be calculated from the expiration of the year when it became due. Of course in ascertaining the amount of the note at the time that Dushane signed it, as it was not due for one year after date, the legal rate ■of interest under their agreement would be included in the note, and then the note would begin to bear interest from its maturity. Some objections have been made to the testimony as to the usurious interest and the renewals of the note that it is. not ■sufficient to justify the Court in submitting it to the jury, but we consider the testimony of Mr. Tinstman competent testimony for you to consider, and therefore have refused the 'second point of the counsel for the plaintiff, which if affirmed, would have the effect of withdrawing from your consideration the testimony of Mr. Tinstman. So that finally, in our view of the case, the plaintiff is entitled to recover, and he is entitled to recover only the amount that yon find to be the true amount of the note after ■deducting the excess of interest paid over the legal rate. The ■counsel have made a calculation, and it appears that the amount due, after having made such deductions as I have referred to, is .$3,517.15, and for that amount you can render your verdict in favor of the plaintiff.
On Dee. 18,1883, the jury rendered a verdict for the plaintiff for $3,517.15. Dushane then took a writ of error, complaining ■of the ruling of the Court, to the effect that the course proposed by Allen did not discharge the surety.
Messrs. Boyle and Mestrezat, Esqs., for plaintiff in error
cited, Greely vs. Dow, 2 Metc. 178; Okie vs. Spencer, 2 Wh. 257. Hartman vs. Danner, 74 Penna. 36, does not apply to a case like the present. The acts of Allen, in extending the note released the surety; Dey vs. Martin, 16 Reporter 443; Green vs. Biddle, 8 Wheaton 84; Calvo vs. Davies, 73 N. Y. 211; Manufacturer’s Bank vs. Bank of Penna., 7 W. & S. 335; Dundas vs. Sterling, 4 Penna. 79.
Messrs. James Durby & R. H. Lindsey, Esqs. for defendant in error
argued that an agreement to pay usurious interest, after the maturity of a note, is not a sufficient consideration to .support an agreement to give time ; Hartman vs. Danner, 74 Penna. 36; Shaffer vs. Clark, 90 Penna. 94; Calvert vs. Good, 95 Penna. 67; Rumberger vs. Golden, 3 Out. 34. Any agreement to give time, without consideration is not binding on the creditor, and would not prevent the surety from paying the debt and recovering from the principal; Johnston vs. Thompson, 4 W. 446; Rhoads vs. Frederick, 8 W. 448; Brubaker vs. Okeson, 36 Penna. 519; Ashton vs. Sproule, 35 Penna. 492; Zane vs. Kennedy, 73 Penna. 182; Kindt’s Appeal, 102 Pa. 441; Stephens vs. The Bank, 88 Penna. 157. The mere indulgence of the principal debtor never discharges the surety ; U. S. vs. Simpson, 3 P. & W. 437; Mundorff vs. Singer, 5 W. 172; Richards vs. Commonwealth, 40 Penna. 146; Miller vs. Stem, 2 Penna. 288; Erie Bank vs. Gibson, 1 W. 143.

Opinion:
The Supreme Court affirmed the judgment of the Common Pleas on the 16th Feb., 1885, in the following opinion:
Per Curiam.
The unquestioned facts of this case bring it within the law as declared in Hartman vs. Danner, 74 Pa. 36; Shaffer vs. Clark, 90 Pa. 94; Rumberger vs. Golden, 3 Out. 34; and kindred cases and fully sustain this judgment.
Judgment affirmed.