Court Opinion

ID: 7811625
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:13:29.536698+00
Date Added: 2024-06-11T16:30:29.292141
License: Public Domain

Hart, J., (after stating the facts). This court held that, in order to discharge a surety on a note by a new contract by the extension of the time of payment, the extension must be for a definite period, and. the new contract must be based upon a new consideration. Thornton v. Bowie, 123 Ark. 463; Colvin v. Glover, 143 Ark. 498; and Vestal v. Knight, 54 Ark. 97. Counsel invoke the rule applied in those cases to secure a reversal of the decree in the present case. There is something more in the present case, however, than the agrément to extend the note for one year in consideration that the Bennetts should pay the interest which was already due. The notes were given for the balance of the purchase price of 380.41 acres of land in Arkansas County, Ark. The land was in the possession of the Bennetts, and they were raising rice on it. The price of rice became so low that tlie Benuetts saw that they would not be able to pay the first note of $6,000 when it became due and the interest on the notes became due. They had already made a payment of $6,000 on the land, and offered to deed it back to Tallman if he would surrender their notes. . Tallman declined to do this. He had deposited one of the notes in the bank as collateral security for an indebtedness he owed .it. Tallman told Bennett that, if he would pay the interest on the notes and the taxes on the land, he would extend the note which was due for another year. Bennett agreed to do this. He paid Tallman the interest on the two notes in his possession and to the bank the interest on the note it held as collateral. He also paid the taxes on the land, which amounted to about $1,100. Under § 10082 of Crawford & Moses’ Digest, the taxes became a charge upon the land. Sec. 10083 provides a penalty of 25% upon the taxes so returned delinquent. Sec. 10086 provides for a sale of delinquent land for the taxes, penalty and costs therein. By agreeing to extend the notes for one year, Tall-man secured the payment of the taxes on the land. Otherwise it would have been forfeited for taxes and sold by the collector for the taxes, statutory penalty, and cost of sale. This constituted a consideration for the extension of the payment of the note for one year. In this connection it may also be considered that Bennett paid the interest on one of the notes to a bank which held it as collateral security for an indebtedness of Tallman. The agreement for the extension of the note for one year has all the essentials of a binding contract. Tall-man extended it for a definite period of time in consider ation that Bennett should pay the taxes on the land, thereby preventing the statutory forfeiture and sale thereof by the collector. This was an agreed equivalent for the extension and such consideration as would support it. It was something entirely additional to what he could have obtained without the extension agreement. Therefore the judgment will he affirmed.