Case Name: Lyman Peck and Fennimore Peck v. Russell Beckwith
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1860-11
Citations: 10 Ohio St. 497
Docket Number: 
Parties: Lyman Peck and Fennimore Peck v. Russell Beckwith.
Judges: Brinkerhoee, C. J., and Sutliee, Peck, and Gholson, JJ., con-curred.
Reporter: Ohio State Reports, New Service
Volume: 10
Pages: 403–405

Head Matter:
Lyman Peck and Fennimore Peck v. Russell Beckwith.
Where the payee and. holder of a promissory note, before its maturity, agrees with the maker to give further specified time for its payment, in con sideration of a sum of money then and there paid him by the maker, such agreement is a valid contract, and may be set up as a temporary bar in an action brought before the expiration of such further time, against the maker by an assignee who acquired the note after maturity, or with notice.
Error to the court of common pleas of Ashtabula county. Reserved in the district court:
The defendant in error brought his action on the 30th of January, 1858, in the court of common pleas, against the plaintiffs in ■error, as makers of a promissory note of which the following is a copy:
*“$500. New Lyme, March 21, 1854.
“ On or before the first day of January, a. d. 1857, we promise to pay Hiram Peck, or bearer, five hundred dollars, for value received, with interest annually.
“ Lyman Peck,
“Fennimore Peck.”
The plaintiff below sued as the owner and holder of said note under the indorsement of the payee, dated January 28,1857, and his petition was in the usual form.
The defendants answered in bar of the plaintiff’s claim, “ That ■before the promissory note in the petition mentioned became due,- .and before the purchase and assignment of the same to the plaintiff, by the said Hiram Peck, and while the said promissory note was in the possession of the said Hiram Peck, to wit, on or about the 20th day of December, a.d. 1856, he, the said Hiram Peck, then and there, in consideration of the sum of ten dollars, to be paid by the defendants, then and there agreed to forbear and give time to the .defendants, for the payment of said promissory note in the petition mentioned, until the fall of 1857 ; and the defendants aver that on said day, the defendants, confiding in the undertaking and agreement of said Hiram Peck, paid said sum of ten dollars, and the said Hiram Peck then and there, in consideration of said sum of money, agreed to forbear and delay the collection of said note-until the fall of 1857 ; of all which the said plaintiff had notice.”
The plaintiff, in reply, traversed these allegations; and the issues having been submitted to the court, the facts stated in defendants’ answer were found to be true; and thereupon the plaintiff moved for judgment against the defendants notwithstanding such finding. This motion was sustained, and judgment accordingly entered for the plaintiff; to which the defendants excepted, and now ask a reversal of said judgment, on the ground that the court erred in not rendering judgment in favor of the defendants, *after finding the facts stated in the answer to be true.
M Lee, for plaintiffs in error.
Where the payee of a promissory note enters into a contract with the maker to forbear the collection of the note for a specified time, in consideration of the payment of a sum of money, it is a valid-agreement. McComb v. Kitridge, 14 Ohio, 348; Loomis v. Wainwright, 21 Vt. 521; Bank of Steubenville v. Carroll, 5 Ohio, 207; Bank of Utica v. Ives, 17 Wend. 501; Cummings et al. v. Arnold et al., 3 Met. 487; Thurston and Hays v. Ludwig, 6 Ohio, St. 1; Lemon v. Powell, 12 Wheat. 661; Richardson v. Cooper, 12 Shep. (25 Maine), 450.
Simonds & Oadweü, for defendant in error.
1. An agreement by a creditor to give further time for the payment of a note past due, in consideration of the debtor’s agreement, to pay more than legal interest, is binding upon neither party. If the ten dollars was usurious interest, then we hold the contract to-be void. If it should be considered a payment to apply on the-principal, then it is void, as the debtor has done no more than he-was bound to do. 5 Duer, 202; 16 Vt. 220.
2. A valid and legal promise of forbearance is no bar to a suit on the note, although the contract to forbear be in writing and even under seal. The remedy is for a breach of the contract to forbear. 5 Porter (Indiana), 178; 6 Blackf. 282; 19 Johns. 129; 5 Blackf. 125.

Opinion:
Scott, J.
The payee of the note in this ease, obtained from the-makers before its maturity, the sum of ten dollars, in consideration of an agreement on his part, that the time for its payment should bo extended till the fall of the following year. Now, if it be claimed that the sum thus paid, when added to the legal interest payable on the note, rendered the contract usurious, and therefore void, it may *be answered that the statute does not make contracts for the payment of usurious interest wholly void, but allows the collection of interest, in such cases, at the legal rate; and directs the application of all payments of interest, in excess of. the rate allowed by law, to the discharge of the principal. And this payment of a portion of the principal, before the maturity of the note, would be a valuable consideration, sufficient to support the promise of the payee to extend the time for the payment of the residue.
Here, then, is an oral agreement, made upon a new and valuable consideration, by which the terms of a prior written contract, be 'l.ween the same parties, are varied, before broach. The parties were as competent to make the latter contract as the former. And that the second was by parol, makes no difference. McComb v. Kitridge, 14 Ohio, 348; Thurston v. Hays, 6 Ohio, St. 1; 6 Exch. 854 (Am. ed. note); 3 Met. 486, and the numerous authorities there cited. In McComb v. Kitridge the same doctrine is applied, even in the case of a note-past due.
"VYe hold, therefore, that the answer, in the court below, would have been good, as a temporary bar, against the action of the payee; and was equally available against the assignee, for the twofold reason that he acquired it after maturity, and with notice.
The judgment of the court of common pleas is reversed, and the petition of the plaintiff below dismissed without prejudice.
Brinkerhoee, C. J., and Sutliee, Peck, and Gholson, JJ., con-curred.