note, so as to postpone suit or so as to discharge indorsers, where another bill or note, either of the maker or of a third person, is taken merely as collateral or additional security, and there is no agreement postponing the remedy, although indulgence may in fact be granted; but it is otherwise of course if there is an agreement for delay,89 or where the holder of overdue paper takes the note or acceptance of a third person payable at a future day and agrees to hold the original paper until maturity of the new paper.90 Taking as additional security for a matured note a new note payable on demand is not an extension.91 [638] 6. Taking Mortgage as Security. The receipt of a real estate or chattel mortgage merely as security for overdue paper or for new paper taken as collateral does not extend the time of payment, where the mortgage is taken merely as in the second note. Strickland v. Lowry Nat. Bank, 140 Ga. 653, 79 SE 539. (2) Where an indorser of a mortgage note wrote to the payee, when it was overdue, proposing that the sum be divided into four parts, and new notes made for the same, payable in six, twelve, eighteen, and twenty-four months, with interest, and the payee accepted the proposition, with the provision that the mortgage security was not to be affected, it was held that the new notes were not to be regarded as merely collateral security to the original note, but as an extension of time. Auffmordt v. Stevens, 46 Conn. 411. (3) But where a note was left with an attorney for collection of the maker, who left with the attorney other notes as collateral security, for which the attorney gave a receipt, stating that he was to hold them as collat eral security for the other note, and agreeing, as soon as he should collect enough of them, to pay such secured note to deliver it to the maker, with any balance there might be due him, it was held that this was not an agreement not to sue until the securities could be collected. Pennington v. Watson, Dudl. (Ga.) 97. (4) Taking a renewal note and interest thereon till maturity in advance from the maker of the original note, although the latter is not marked "paid" or "surrendered," is not taking of collateral security for payment of the original note, but an extension of time of payment of the note. Schnitzler v. Wichita Fourth Nat. Bank, 1 Kan. A. 674, 42 P 496. a 89. Martin V. Bell, 18 N. J. L. 167; Dorlon v. Christie, 39 Barb. (N. Y.) 610; Hastings First Nat. Bank v. Lamont, 5 N. D. 393, 67 NW 145; Shepley v. Hurd, 3 Ont. A. 549. [a] As evidence of extension.-It has been held that an agreement to extend the time of payment of an overdue bill or note will not be implied from the mere taking by the holder, as collateral security, of the note or acceptance of a third person payable at a future day. Fisher v. Denver Nat. Bank, 22 Colo. 373, 45 P 440; Buckner v. Watt, 19 La. 211. 90. Greene v. Bates, 74 N. Y. 333; Dorlon v. Christie, 39 Barb. (N. Y.) 610; Eisner v. Keller, 3 Daly (N. Y.) 485; Robertson V. Allen, 3 Baxt. (Tenn.) 233: Stuart v. Lancaster, 84 Va. 772, 6 SE 139. [a] Taking an assignment of a bond and mortgage, with six months to run, and agreeing that an overdue note shall be paid out of the proceeds of the bond and mortgage, or shall be reduced in amount if the maker pays it sooner, is an extension of the time of payment of the note and releases an indorser. Beard v. Root, 4 Hun (N. Y.) 356. 91. Continental L. Ins. Co. v. Barber, 50 Conn. 567; Peninsular Sav. Bank v. Hosie, 112 Mich. 351, 70 NW [8 C. J.-28] collateral security and without any agreement for an extension, and it can make no difference that the mortgage cannot be enforced until a definite time in the future."2 although there is some authority to the contrary.93 It is otherwise, however, if there is an express or an implied agreement for an extension.94 [639] 7. Taking Confession of Judgment or Power to Confess. If the holder of a note receives a bond and warrant of attorney from the maker for the purpose of entering judgment thereon and increasing his security, or a confession of judgment, the bond and warrant on the judgment will be considered only as collateral security and the indorser will not be thereby discharged.95 But it is otherwise if there is a binding agreement not to exercise the power or to enforce the judgment for a period beyond the maturity of the note." 96 890 (where the new note was payable | kill Nat. Bank v. Sleight, 1 App. Div. [a] "A demand note given in re- Colo.-Fisher v. Denver Nat. Bank, Conn.-Continental L. Ins. Co. v. Me.-Norton v. Eastman, 4 Me. 521. Tenn. Miller v. Knight, 6 Baxt. 503. [b] Option in holder.-Where the holder of commercial paper secured by a real estate mortgage takes a chattel mortgage as additional security and agrees to extend the time of payment of the debt, the fact that a clause in the chattel mortgage allows him, at his option, to foreclose either mortgage does not prevent the extension from discharging securities on the paper, as they have no option to defeat the extension, Kane v. Cortesy, 100 N. Y. 132, 2 NE 874. [c] Provision for foreclosure if deemed insecure.-Where in consideration of an agreement on the part of the holder of commercial paper, secured by a real estate mortgage to extend the time of payment of the debt, the mortgagor gives a chattel mortgage as additional security, the operation of the extension as a reTex.-Burke v. Cruger, 8 Tex. 66, lease of sureties is not affected by a 58 AmD 102. But see Wylie v. High-clause in the chattel mortgage that tower, 74 Tex. 306, 11 SW 1118 (hold- the holder may take possession and ing that, where, after the maturity sell the mortgaged chattels at any of a note and the mortgage securing time if he deems himself insecure. the same, a new mortgage was given Kane v. Cortesy, 100 N. Y. 132, 2 NE maturing at a subsequent date, there 874. was an extension of time for payment, although the new mortgage was given because the old one had not been sufficiently recorded). Vt.-Ripley v. Greenleaf, 2 Vt. 129 (where the holder of a note, having advanced other sums to the maker, took a new note for less than the former one, but exceeding the amount subsequently advanced, and a mortgage, which new note and mortgage were to secure both the old note and the subsequent advance, nothing being said as to the holder not suing on the old note and it was held that the transaction did not suspend the holder's right to sue on the old note). Ont.-Molson's Bank v. McDonald, 2 Ont. A. 102 [dism app 40 U. C. Q. B. 5291; Gore Bank v. Eaton, 27 U. C. Q. B. 332. Sask.-Campbell v. Heinka, 17 Dom LR 586. [a] Demand note secured by mortgage.-(1) An agreement extending the time of payment of an overdue note could not be implied from the fact that the holder took as additional security a demand note secured by a mortgage, although the note provided for interest payable semiannually. Continental L. Ins. Co. v. Barber, 50 Conn. 567. (2) Taking a chattel mortgage to secure an overdue note, the time of payment of which was extended thirty days, and also to secure the payment of several demand notes already secured by a real estate mortgage, was ground for implying an agreement to extend the time of payment of the demand notes, although the chattel mortgage could not be enforced until a definite time in the future. Fall no ![[ocr errors]](https://books.google.co.kr/books/content?id=8308AAAAIAAJ&hl=ko&output=html_text&pg=PA433&img=1&zoom=3&q=%22or+both,+according+to+its+tenor,+and+that+if+it+be+dishonored+and+the+necessary+proceedings+on+dishonor+be+duly%22&cds=1&sig=ACfU3U0K5ZxDzU85gunhMHBXHcrpA-9_Ig&edge=0&edge=stretch&ci=793,814,7,6){kind=small} 93. Harshaw v. McKesson, 65 N. C. 688. See also Rhodes v. Hart, 51 Ga. 320; Hastings First Nat. Bank v. Lamont, 5 N. D. 393, 67 NW 145 (both holding that under the circumstances the time for payment was extended). 94. Ga.-Rhodes v. Hart, 51 Ga. 320. N. Y.-Kane v. Cortesy, 100 N. Y. 132, 2 NE 874. N. C.-Harshaw v. McKesson, 65 N. C. 688. N. D.-Hastings First Nat. Bank v. Lamont, 5 N. D. 393, 67 NW 145. Tenn.-Lea v. Dozier, 10 Humphr. 447. [a] Thus where the maker of a note executes a deed of his property to the payee. which recites that as the latter is willing to wait a certain period on having his debt secured the property is assigned to him in trust to sell if the note is not paid within the period stated, the agreement of the payee to wait such time is necessarily implied. Lea V. Dozier, 10 Humphr. (Tenn.) 447. 95. Sizer V. Heacock, 23 Wend. (N. Y.) 81; Mohawk Bank v. Van Horne, 7 Wend. (N. Y.) 117: Day v. Leal, 14 Johns: (N. Y.) 404; Lock Haven First Nat. Bank v. Peltz, 176 Pa. 513, 35 A 218, 53 AmSR 686, 36 LRA 832; Guarantee Trust, etc., Co. v. Craig, 155 Pa. 343, 26 A 703. See also Ferguson v. Childress, 9 Humphr. (Tenn.) 382 (where the rule was recognized and applied). 96. Moodie v. Morrall, 8 S. C. L. 367 (holding that the holder of a note discharges the indorser by taking from the maker a confession of judgment to be paid, one half in six months and the balance in two years). [640] 8. Stipulations or Agreements in Legal Proceedings. There is no extension of the time of payment of a note where the holder merely extends the time for the maker to answer in an action thereon.97 Nor will any other stipulation or agreement in the course of legal proceedings on a bill or note discharge an indorser, if it does not amount to a binding agreement to extend the time of payment.98 Causing the arrest of the maker of a note and taking a bond as provided by statute do not discharge the indorser;99 but an indorser will be discharged if, after recovery of a judgment against him and the maker, a stay of execution is entered for a definite period.1 judgment and to issue execution in the ordinary course of the law.3 [§ 642] 10. Agreements with Creditors. A composition deed or other agreement between the maker of a note and his creditors, including the holder, by which the holder and other creditors agree to receive a certain percentage of all debts due from the maker in full discharge of the same, to be paid at a time beyond the maturity of the note, operates as an extension of the time of payment and discharges an indorser who does not consent. There is, however, no extension by an agreement between the holder of a note and other creditors, to which the maker is not a party.5 [§ 643] D. Consideration-1. Necessity for. An agreement for extension of the time of payment of a bill or note involves a promise by the holder to forbear, and this, like other promises, is not binding unless it is supported by a consideration, and such consideration is a valid and legal 5. Hebbard v. Morton, 11 La. 115., A 620; Williams v. Smith, 48 Me. See also supra § 632. [§ 641] 9. Taking Cognovit and Staying Execution. Taking the maker's or acceptor's cognovit, entering a judgment by confession, and a stay of execution for a definite time, is an extension releasing indorsers,2 unless the stay is for a period not exceeding the time it would take to obtain a 97. Ducker v. Rapp, 67 N. Y. 464; German-American Bank v. Niagara Cycle Fittings Co., 13 App. Div. 450, 43 NYS 602; Harlem Bank v. Falconer, 1 NYCity Ct 43. To same effect Steinbock v. Evans, 122 N. Y. 551, 25 NE 929; Ross v. Ferris, 18 Hun (N. Y.) 210. 98. Lowney v. Perham, 20 Me. 235 (where, in an action by the holder against the acceptor of a bill, it was agreed between the parties that defendant should be defaulted at the next term of the court, and if a stipulated sum should be paid before that time the cause should be continued one term more for judgment; if not paid judgment was to be rendered on the default; it was held that the first clause of the agreement, by which defendant was to be defaulted, could not be considered as giving time, so as to discharge an indorser, and that he was not discharged by the agreement for further continuance on payment, if not performed, as it was merely a conditional contract to give time); Tate V. New York State Bank, 96 Va. 765, 32 SE 476 (dismissal of suit on note held not an extension of time). 99. Lane v. Steward, 20 Me. 98. 1. Shields v. Reynolds, 9 W. Va. 483 (holding also that in such a case a court of equity will enjoin enforcement of the judgment against the indorser). See also infra § 641. 2. State Bank V. Wymond, 7 Blackf. (Ind.) 363; Bower v. Tiermann, 3 Den. (N. Y.) 378; Orleans Bank v. Barry, 1 Den. (N. Y.) 116; Hall v. Cole, 4 A. & E. 577, 31 ECL 259, 111 Reprint 904. 3. Sizer v. Heacock, 23 Wend. (N. Y. 81; Upington v. May, 40 Oh. St. 247; Ferguson v. Childress, 9 Humphr. (Tenn.) 382. 4. Lambert v. Shitler, 62 Iowa 72, 17 NW 187; Perry v. Armstrong, 39 N. H. 583. [a] In Louisiana (1) where, at a meeting of the creditors of an insolvent debtor, the maker of a note, a respite is granted to him for the payment of all his debts, the holder of the note voting for the same, there is such an extension of time for payment of the note as discharges an indorser or surety. Picquet v. Deinitry, 6 La. 120; Nolte V. His Creditors, 7 Mart. N. S. 9. (2) And the fact that the respite would have been granted even if the holder of the note had refused to vote is immaterial. Nolte v. His Creditors, 7 Mart. N. S. 16. (3) But consent by the holder of a note to a credit sale of property of the maker who has made a cessio bonorum does not constitute an extension of time. Leger v. Arcenaux, 5 Rob. 513. 6. Cross references: eration to discharge surety see Necessity of consideration to dis- 7. U. S. McLemore v. Powell, 12 Ala.-Huntsville Branch Bank V. Ark. Hazard v. White, 26 Ark. 155. D. C.-Gross v. Steinle, 20 D. C. Fla.-Bowen v. Darby, 14 Fla. 202; Fridenberg v. Robinson, 14 Fla. 130. Ga. Clark v. Bryce, 64 Ga. 486; Bonner v. Nelson, 57 Ga. 433; Goodwyn v. Hightower, 30 Ga. 249; Stallings v. Johnson, 27 Ga. 564. Ill. Crossman V. Wohlleben, 90 Ill. 537; Weaver v. Fries, 85 Ill. 356; Gardner v. Watson, 13 Ill. 347; Migely v. Migely, 162 Ill. A. 300; Henderson v. Dodgson, 9 Ill. A. 80 [aff 113 Ill. 360]; Hurd v. Marple, 2 Ill. A. 402. Ind. Davis v. Stout, 126 Ind. 12, 25 Iowa.-Marshall Field Co. v. Oren Kan.-Ingels v. Sutliff, 36 Kan. 444, Ky-Levy v. Roth, 103 SW 292, 31 135; Chute v. Pattee, 37 Me. 102; Mariner's Bank v. Abbott, 28 Me. 280; Bagley v. Buzzell, 19 Me. 88. Md.-Ives v. Bosley, 35 Md. 262, 6 AmR 411; Hoffman v. Coombs, 9 Gill 284; Planters' Bank v. Sellman, 2 Gill & J. 230. Mass.-Wilson v. Powers, 130 Mass. 127; Jennings v. Chase, 10 Allen 526. Mich.-McInerney v. Lindsay, 97 Mich. 238, 56 NW 603. Minn. Montgomery First State Bank v. Schatz, 104 Minn. 425, 116 NW 917; Huey v. Pinney, 5 Minn. 310; Michaud v. Lagarde, 4 Minn. 43. Miss.-Roberts v. Stewart, 31 Miss. 664; Wadlington v. Gary, 15 Miss. 522; Payne v. Commercial Bank, 14 Miss. 24. Mo.-Wiley v. Hight, 39 Mo. 130; Marks V. State Bank, 8 Mo. 316; Nichols v. Douglass, 8 Mo. 49; National Live Stock Commn. Co. V. Thero, 154 Mo. A. 508, 135 SW 961; Smith v. Warren, 88 Mo. A. 285. See also Provines v. Wilder, 87 Mo. A. 162. Mont.-Smith v. Freyler, 4 Mont. 489, 1 P 214, 47 AmR 358. Nebr.-Dillon v. Russell, 5 Nebr. 484. N. H.-Bailey v. Adams, 10 N. H. 162. N. J.-Meginnis v. Nightingale, 34 N. J. L. 461; Grover v. Hoppock, 26 N. J. L. 191. N. Y.-Parmelee v. Thompson, 45 N. Y. 58, 6 AmR 33; Hodgens v. Jennings, 148 App. Div. 879, 133 NYS 584; O'Hara v. Robinson, 63 Hun 569, 18 NYS 541; Fernan v. Doubleday, 3 Lans. 216; Van Rensselaer v. Kirkpatrick, 46 Barb. 194; New Berlin First Nat. Bank v. Church, 3 Thomps. & C. 10; Van Allen v. Jones, 23 N. Y. Super. 369; Hilderbrandt v. Fallot, 46 Misc. 615, 92 NYS 804: Manchester v. Van Brunt, 2 Misc. 228, 22 NYS 362 [aff 19 NYS 685]; M. Zimmerman Co. v. Kastner, 123 NYS 952; Huffman v. Hulbert, 13 Wend. 375; Miller Holbrook, 1 Wend. 317; Holmes v. Dole, Clarke 71. V. N. C.-Charlotte First Nat. Bank v. Lineberger, 83 N. C. 454, 35 AmR 582. Oh.-Turnbull v. Brock, 31 Oh. St. 649; Ward v. Wick, 17 Oh. St. 159; Farmers' Bank v. Raynolds, 13 Oh. 84; Jenkins v. Clarkson, 7 Oh. 72. Okl.-Adams v. Ferguson, 44 Okl. 544, 147 P 772. 17. Or.-Findley v. Hill, 8 Or. 247, 34 Sav. Rum one. It follows that if there is no sufficient consideration, the holder may suc at any time after the original instrument is due, and the extension does not release parties secondarily liable." v. Danner, 74 Pa. 36; Zane v. Kennedy, 73 Pa. 182; Ashton v. Sproule, 35 Pa. 492; Miller v. Stem, 12 Pa. 383. Tenn.-Sully V. Childress, 106 Tenn. 109, 60 SW 499, 82 AmSR 875; Cherry v. Miller, 7 Lea 305; Howell v. Sevier, 1 Lea 360, 27 AmR 771; East Tennessee Bank v. Hooke, 1 Coldw. 156. Tex.-Austin Real Est., etc., Co. v. Bahn, 87 Tex. 582, 29 SW 646, 30 SW 430; Lipscomb v. Walker, (Civ. A.) 175 SW 449 (holding that where the maker did not agree to forego his right to pay off a note, and did not execute an extension agreement prepared by the payee, there was no consideration for the extension agreement); Brunson V. Dawson State Bank, (Civ. A.) 175 SW 438; Astin v. Mosteller, (Civ. A.) 152 SW 495; Norris v. Graham, (Civ. A.) 42 SW 575; Bonnell v. Prince, 11 Tex. Civ. A. 399, 32 SW 855; Hall v. Johnston, G Tex. Civ. A. 110, 24 SW 861. Vt.-Bedford v. Chandler, 81 Vt. 270, 69 A 874, 130 AmSR 1057, 17 LRANS 1239; Lyndon Sav. Bank v. International Co., 78 Vt. 169, 62 A 50, 112 AmSR 900; Joslyn v. Smith, 13 Vt. 353. Wash.-Price v. Mitchell, 23 Wash. 742. 63 P 514. Wis.-Meiswinkle v. Jung, 30 Wis. 361, 11 AmR 572. Eng. Philpot v. Briant, 4 Bing. 717, 13 ECL 708, 130 Reprint 945. But see Gould v. Robson, 8 East 576, 103 Reprint 463. Can. Fleming v. McLeod, 39 Can. Compare Sovereign Bank v. Thomp- The time of payment must be given by a contract that is binding on the holder of the bill; a contract, without consideration, is not binding on him; the delay in suing is, under such a contract, gratuitous; notwithstanding such contract, he may proceed against the acceptor when he pleases, or receive the amount of the bill from the drawer or endorsers. As the drawer and endorsers are not prevented from taking up the bill by such delay, their liability is not discharged by it; to hold them discharged under such circumstances would be to absolve them from their engagements, without any reason for so doing." Philpot v. Briant, 4 Bing. 717, 720, 13 ECL 708, 130 Reprint 945, 3 C. & P. 244, 14 ECL 549. [a] Application of rule.-An express agreement of the parties that a renewal note is taken in full satisfaction of the old note extinguishes the original debt only when such agreement is supported by a consideration. Hamiter v. State Nat. Bank, 106 Ark. 157, 153 SW 94. [§ 644] 2. Payment or Promise to Pay What Already Bound to Pay. Part payment of the whole amount due on the instrument, after it has already become due,10 or the payment of matured interest,11 and promised to pay the balance soon. No further payments were made, and the payee died about three weeks later. It was held that the payee's promise to forbear was without consideration, and raised no new promise for the benefit of her estate, and the payee's executor could not recover the balance due. Bedford v. Chandler, 81 Vt. 270, 69 A 874, 130 AmSR 1057, 17 LRANS 1239. (3) The note of B to R, on which L was surety, was due six months after date, and concluded, "With interest at the rate of six per cent. after maturity," but it was part of the agreement between B and R, which by their mutual mistake was omitted from the note, that B should pay such interest on the sum loaned from date of the loan. It was held that the agreement of R, on the payment by B, six months after the date of the note, of the interest from the date of the note to that time, to extend the payment of the principal six months longer, and the like agreement of R on the payment by B, six months later, of the interest from maturity of the note to that time, being based only on payment of interest due, were without consideration, and so not binding. Levy v. Roth, 103 SW 292, 31 KyL 704. [c] Request for extension of time by the indorser after maturity of note does not create independent liability, being without consideration. Nevius v. Moore, 221 Mo. 330, 120 SW 43. Ill-Stuber v. Schack, 83 I11. 191; Edmonds v. Thomas, 41 Ill. A. 505. Ind.-Davis v. Stout, 126 Ind. 12, 25 NE 862, 22 AmSR 565; Berry v. Bates, 2 Blackf. 118. Iowa.-O. S. Kelly Co. v. Chinn, 75 NW 315. Kan.-Ingels V. Sutliff, 36 Kan. 444, 13 P 828; Prather v. Gammon, 25 Kan. 379; Royal v. Lindsay, 15 Kan. 591; Pemberton v. Hoosier, 1 Kan. 108. Mass.-Blackstone Bank v. Hill, 10 Pick. 129. Mich.-Briggs v. Norris, 67 Mich. 325, 34 NW 582. Miss.-Hunt v. Knox, 34 Miss. 655; Roberts v. Stewart, 31 Miss. 664. Mo.-Wolz v. Parker, 134 Mo. 458, 35 SW 1149; Petty v. Douglass, 76 Mo. 70. N. H.-Bailey v. Adams, 10 N. H. 162. N. Y.-Halliday v. Hart, 30 N. Y. 474; Manchester v. Van Brunt, 2 Misc. 228, 22 NYS 362; Manchester v. VanBrunt, 19 NYS 685; Miller v. Holbrook, 1 Wend. 317 (and a note given for the balance); Pabodie v. King, 12 Johns. 426. Oh.-Turnbull v. Brock, 31 Oh. St. 649; Jenkins v. Clarkson, 7 Oh. 72. Okl.-Cain v. Munger, 149 P 1086. Pa.-Hartman v. Danner, 74 Pa. 36. Contra Robertson v. Vogle, 1 Dall. 252, 1 L. ed. 123. Tenn.-Sully V. Childress, 106 Tenn. 109, 60 SW 499, 82 AmSR 875; McKamy v. McNabb, 97 Tenn. 236, 36 SW 1091; White v. Summers, 1 Baxt. 154. Tex.-Andrews v. Hagadon, 54 Tex. 571. Vt.-Wheeler v. Washburn, 24 Vt. 293; Mason v. Peters, 4 Vt. 101. [d] Accommodation indorsers are not discharged by an agreement for an extension of time for payment without their assent, where they fail to show that there was any consideration for the extension, or that the agreement was actually consum-grace-A payment made on a note on mated. M. Zimmerman Co. v. Kastner, 123 NYS 952. [e] Failure of consideration.The consideration for a renewal note does not fail because the agent of the maker, to whom the original note was delivered by the payee upon receipt of the renewal note, thereafter returned the old note to the payee who instituted thereon a suit which he later voluntarily dismissed. Perry v. Pye, 215 Mass. 403, 102 NE 653. 8. Ala.-Buckalew v. Smith, 44 Ala. 638. Ill.-Gardner v. Watson, 13 Ill. 347. Ind.-Dare v. Hall, 70 Ind. 545; Harter v. Moore, 5 Blackf. 367. Iowa. Roberts v. Richardson, 39 Iowa 290; Hunt V. Postlewait, 28 Iowa 427. Miss.-Hunt v. Knox, 34 Miss. 655; Roberts V. Stewart, 31 Miss. 664; Clarke County v. Covington, 26 Miss. 470. Mo.-Nichols v. Douglass, 8 Mo. 49. Nebr.-Burr v. Boyer, 2 Nebr. 265. N. J.-Grover v. Hoppock, 26 N. J. L. 191. N. Y.-Arend v. Smith, 151 N. Y. 502, 45 NE 872. Oh.-Farmers' Bank v. Raynolds, 13 Oh. 84. Surety [32 Cyc 199]. [b] Insuficient consideration.(1) A promise by the holder of notes after their maturity to extend the time of payment on an agreement by E the makers to apply thereon the proceeds of certain securities already pledged for their payment was not Tex.-Hunter v. Clark, 28 Tex. 159. enforceable for want of considera9. See cases supra notes 7, 8. tion. Knotts .v. Virginia-Carolina And see generally Principal and Chemical Co., 204 Fed. 926, 123 CCA 248. (2) The payee in a note binding the maker to pay to the payee, "and to no other person, executor, trustee, or assignee," a specified sum, with interest, demanded payment and threatened to sue on the note, and offered to take a new note. The maker refused to give a new note, and asked for time in which to pay. The payee allowed the matter to rest. At the expiration of about a month, the maker paid a part of the note, 10. U. S.-Low v. Underhill, 15 F. Cas. No. 8,561, 3 McLean 376, 2 WestLJ 360 (unless accompanied by some other act). Ala.-Black v. Slocumb Mule Co., 8 Ala. A. 440, 442, 62 S 308 [cit Cyc]. Ark.-Stone v. State Bank, 8 Ark. 141. Cal.-Liening v. Gould, 13 Cal. 598. Ga.-Bennett v. Williams, 54 Ga. 525. Compare Stallings v. Johnson, 27 Ga. 564. [a] Before expiration of days of or after the date when it became due by its terms, although before the expiration of the days of grace, is not made before maturity, so as to support an agreement for an extension. McKamy v. McNabb, 97 Tenn. 236, 36 SW 1091. [b] The extension is not supported by (1) payment of costs which have been adjudged against the maker (Parmelee v. Thompson, 45 N. Y. 58, G AmR 33); (2) payment of usurious interest, which is in legal effect a part payment of the principal due (Meginnis v. Nightingale, 34 N. J. L. 461); (3) or by a promise to part with the maker's note with forged sureties for the balance (Albright v. Griffin, 78 Ind. 182), (4) to pay out of certain property when sold (Grover v. Hoppock, 26 N. J. L. 191), (5) to pay the proceeds of execution sale under a judgment held by the maker (Wadlington v. Gary, 15 Miss. 522), or (6) to pay weekly installments (Van Rensselaer v. Kirkpatrick, 46 Barb. (N. Y.) 194). (7) On the other hand, a composition with creditors of the insolvent maker and a partial payment under the composition are sufficient. Freeman v. Profilet, 11 Rob. (La.) 33. (8) And it has been held that it is sufficient if the holder of a bill receives part payment of the amount due under an agreement to extend a bill. Robertson v. Vogle, 1 Dall. (Pa.) 252, 1 L. ed. 123. 11. Il-Booth v. Wiley, 102 Ill. 84; Crossman v. Wohlleben, 90 Ill. 537: Stuber v. Schack, 83 Ill. 191; Waters v. Simpson, 7 Ill. 570; Heenan v. Howard, 81 Ill. A. 629; Edmonds V. Thomas, 41 Ill. A. 505; Dennis v. Piper, 21 Ill. A. 169. Ind.-Holmes v. Boyd, 90 Ind. 332; Dare v. Hall, 70 Ind. 545; Halstead v. Brown, 17 Ind. 202; Weaver v. Prebster, 37 Ind. A. 582, 77 NE 674; is not a sufficient consideration. Likewise, since a Iowa.-Van Dusen v. Parley, 40 Mass.-Wilson v. Powers, 130 Mass. 127. Mich. Ferris v. Johnson, 136 Mich. 227, 98 NW 1014. N. H.-Russ v. Hobbs, 61 N. H. 93; Howard v. Fletcher, 59 N. H. 151. N. Y.-Kellogg v. Olmsted, 28 Barb. 96 [aff 25 N. Y. 189]. Tex.-Andrews v. Hagadon, 54 Tex. 571; Corbett v. Sweeney, (Civ. A.) 151 SW 858; Helms v. Crane, 4 Tex. Civ. A. 89, 23 SW 392. [a] Not a good consideration (1) even to support an agreement for extension as long as the interest is paid (Starret v. Burkhalter, 70 Ind. 285), (2) or even with an agreement that part of the future interest charged at the former rate shall be applied to the reduction of the principal (Wilson v. Powers, 130 Mass. 127). [b] Payment amounting to compounding of interest.-On the other hand an actual payment of interest on an overdue note every ninety days, amounting in effect to compounding interest several times a year, is sufficient, although the statute prohibits compounding of interest more than once a year. Commercial Bank V. Wood, 56 Mo. A. 214. 12. Ala. Huntsville Branch Bank v. State, 10 Ala. 915. Ill. Booth v. Wiley, 102 111. 84; Stuber v. Schack, 83 Ill. 191; Waters v. Simpson, 7 Ill. 570. Kan.-Royal v. Lindsay, 15 Kan. 591; Costello v. Wilhelm, 13 Kan. 229. Me.-Bagley v. Buzzell, 19 Me. 88. Md.-Planters' Bank v. Sellinan, 2 Gill & J. 230. N. H.-Russ v. Hobbs, 61 N. H. 93. N. Y.-Van Rensselaer v. Kirkpatrick, 46 Barb. 194; New Berlin First Nat. Bank v. Church, 3 Thomps. & C. 10. Oh.-Turnbull v. Brock, 31 Oh. St. 649. Wash.-Price v. Mitchell, 23 Wash. 742, 63 P 514. Wis.-Fanning v. Murphy, 126 Wis. 538, 105 NW 1056, 110 AmSR 946, 4 LRANS 666, 5 AnnCas 435. [a] A promise to pay the interest due on a note is no consideration for an extension. Price v. Mitchell, 23 Wash. 742, 63 P 514. [b] The promise of a maker of several notes that he will pay one of them when it shall mature is no consideration for an agreement by the holder to forbear and give time for the payment of the other notes; and the court will not open a default on appeal, where such an agreement to forbear is the only defense. Tryon v. Jennings, 12 AbbPr (N. Y.) 33, 22 How Pr 421. 13. Planters' Bank v. Sellman, 2 Gill & J. (Md.) 230; Van Rensselaer v. Kirkpatrick, 46 Barb. (N. Y.) 194. party to consent to remain liable if the creditor agrees to the maker's composition in bankruptcy and to accept a partial payment under it,17 and it is said that a relinquishment by the maker of his right to make payment of the note is sufficient.1s So a promise by the maker of a note to pay interest for which he is already liable is no consideration for an extension.19 [§ 645] 3. New Consideration-a. In General.20 There is a consideration, if the debtor does, or promises to do, anything further or different from what he is bound to do, and which is of detriment to him or benefit to the holder.21 Thus, there is a consideration if the debtor promises to pay in a different medium than is required by his contract,22 14. Juchter v. Boehm, 63 Ga. 71;| Jennings v. Chase, 10 Allen (Mass.) 526. 15. Henry v. Gilliland, 103 Ind. 177, 2 NE 360 (the promise of a maker to pay the balance already due as soon as he can colleet certain debts due him); Halstead v. Brown, 17 Ind. 202 (a promise to pay the interest already due); Jennings v. Chase, 10 Allen (Mass.), 526 (a promise to make monthly payments on the overdue principal); Findley v. Hill, 8 Or. 247, 34 AmR 578 (an agreement to pay it "in wheat after harvest"); McManus v. Bark, L. R. 5 Exch. 65 (an agreement to pay in installments a principal that is already overdue); Philpot v. Briant, 4 Bing. 717, 13 ECL 708, 130 Reprint 945, 3 C. & P. 244, 14 ECL 549 (the individual promise of an executor to pay the principal due from his estate). 16. Stallings v. Johnson, 27 Ga. 564. 17. McCracken v. Covington City Nat. Bank, 4 KyL 264. 18. Simpson v. Evans, 44 Minn. 419, 46 NW 908. [a] An agreement for indefinite forbearance is not sufficient without a corresponding agreement on the debtor's part for indefinite continuance of the debt. Bonnell v. Prince, 11 Tex. Civ. A. 399, 32 SW 855. [b] The mere dropping of an offer to pay in Confederate money without any definite waiver of his right so to do is no consideration for the holder's agreement to extend the note if the maker would desist from his offer to pay it in that way. Bonner v. Nelson, 57 Ga. 433. 19. Ill-Booth v. Wiley, 102 Ill. 84; Crossman v. Wohlleben, 90 Ill. 537; Stuber v. Schack, 83 Ill. 191; Waters v. Simpson, 7 Ill. 570; Edmonds v. Thomas, 41 Ill. A. 505; Dennis v. Piper, 21 Ill. A. 169. Ind.-Holmes v. Boyd, 90 Ind. 332; Starret v. Burkhalter, 70 Ind. 285; Halstead v. Brown, 17 Ind. 202. N. H.-Russ v. Hobbs, 61 N. H. 93. S. D.-Whiffen v. Hollister, 12 S. D. 68, 80 NW 156. Tex.-Andrews v. Hagadon, 54 Tex. 571; Helms v. Crane, 4 Tex. Civ. A. 89, 23 SW 392. [a] "The entire debt at the time of this payment being past due, and the interest then accrued amounting to more than the amount paid, and defendants not having paid or agreed to pay any more than they were under obligation to pay at that time, and not having paid any greater rate of interest than was provided by the terms of the note and mortgage, there was not, in any aspect of the case, a consideration passing from the maker of the note to the payee sufficient to support the alleged promised extension." Maker v. Taft, 41 Okl. 663, 669, 139 P 970, 52 LRANS 328 and note. (Bugh v. Crum, 26 Ind. A. 465, 59 NE 1076, 84 AmSR 307), (2) even though the new note has an additional maker (Russ v. Hobbs, 61 N. H. 93), (3) or an additional sum is paid (Meginnis v. Nightingale, 34 N. J. L. 461), (4) although it would be otherwise if the back interest was compounded in the new note (Bugh v. Crum, 26 Ind. A. 465, 59 NE 1076, 84 AmSR 307). 20. See generally supra §§ 350379. 21. Colo.-Drake V. Pueblo Nat. Bank, 44 Colo. 49, 96 P 999. Ga.-Stallings v. Johnson, 27 Ga. Kan.-Royal v. Lindsay, 15 Kan. 564. 591. Mo.-Provines v. Wilder, 87 Mo. A. 162. N. Y.-Bank of Metropolis v. Jarvis, 65 App. Div. 257, 73 NYS 529. Vt.-Bedford v. Chandler, 81 Vt. 270, 273, 69 A 874, 130 AmSR 1057, 17 LRANS 1239 [cit Cyc]. Wash.-Merchants' Bank v. Bussell, 16 Wash. 546, 48 P 242. Compare Bucklen v. Johnson, 19 Ind. A. 406, 49 NE 612 (where under the particular facts there was no consideration to bind the promisor). See also supra § 347. [a] Illustration. The delivery of a patent to land to the payee of a note is a sufficient consideration for the promise of the latter to extend the time of payment of the note, since, although the patent is of no value to the payee, it would cause expense on the part of the maker to procure another patent. Drake v Pueblo Nat. Bank, 44 Colo. 49, 96 P 999. [b] The obtaining by a creditor of the assets of a firm in payment of the private indebtedness of one of its members, if legally acquired by the consent of all of the members of the firm, furnishes a valuable consideration for a promise of further extension. Provines v. Wilder, 87 Mo. A. 162. [c] “An individual obligation may be a higher security than that of a partnership.-A debt due from partners may not always be as substantial and safe as a debt against one of them, for such partnership debt must be first collected out of the copartnership assets, and not out of the individual property of the sev eral partners until all these are exhausted, and then only after the individual debts are fully paid." Clarke v. House, 16 NYS 777, 779. 22. Huntsville Branch Bank v. Steele, 10 Ala. 915 (government bonds); Thrall v. Mead, 40 Vt. 546 (holding that, where a note is payable in specific property, there is a consideration where the extension is based on an agreement made before maturity, changing the mode of payment). [b] Giving a new note for the [a] Option to pay in bonds.-But accrued interest (1) is not sufficient there must be a promise, and not a as in property,2 23 or promises to pay interest 23. Millaudon v. Arnous, 3 Mart. N. S. (La.) 596 (holding that, where the holder of a matured note agrees to purchase property from the maker, to be delivered on a certain date in settlement of the note, such agreement constitutes an extension time of payment). of 24. Royal v. Lindsay, 15 Kan. 591. 25. Cal.-Smith v. Pearson, 52 Cal. 339; Quanchi v. Ben Lomond Wine Co., 17 Cal. A. 565, 120 P 427. Ind.-Huff v. Cole, 45 Ind. 300. 591. La.-Shaw v. Nolan, 8 La. Ann. 25; Calliham v. Tanner, 3 Rob. 299. 76. Nebr.-Kittle V. Wilson, 7 Nebr. Ont.-Farrell v. Oshawa Mfg. Co., 9 U. C. C. P. 239; Arthur v. Lier, 8 U. C. C. P 180. 26. Bugh v. Crum, 26 Ind. A. 465, 59 NE 1076, 84 AmSR 307. See also Lexington Commercial Bank v. Wood, 56 Mo. A. 214 (dictum). But see Leeper v. McGuire, 57 Mo. 360 (where evidence of such agreement was excluded on proper grounds). 27. Stallings v. Johnson, 27 Ga. 564. 28. U. S. Bank v. Hatch, 6 Pet. (U. S.) 250, 8 L. ed. 387. 29. Dunham v. Downer, 31 Vt. 249. 30. Agee V. Steele, Ala. 948 (holding an oral promise within the clause of the statute of frauds as to eontracts for the sale of an interest in land to be no consideration for a promise of extension); Turner V. Williams, 73 Me. 466; Philpot v. Briant, 4 Bing. 717, 13 ECL 708, 130 Reprint 945, 3 C. & P. 244, 14 ECL 549 (holding that an oral promise by an executrix to pay a note or an acceptance of her testator out of her own estate was void, under the statute of frauds, and no consideration for a promise by the holder of the paper to extend the time for payment). 31. See Frauds, Statute of [20 Cyc 284]. 32. Ind.-Lemmon v. Whitman, 75 Ind. 318, 39 AmR 150. Ky.-Davenport V. Guenther, 16 KyL 128. Mass.-Veazie v. Carr, 3 Allen 14. Oh.-McComb v. Kittridge, 14 Oh. 348 (payment of a specific sum originally agreed on at the making of the note). Tenn.-Washington V. Tait, 3 Humphr. 543 (holding that, if the bank notes in which the note was payable were greatly depreciated and the debtor gave his note for the amount of depreciation, it is sufficient). Wis.-Hamilton v. Prouty, 50 Wis. 592, 7 NW 659, 36 AmR 866. [al Commissions paid to the holder for his trouble in attending to the matter are not sufficient. Prather v. Gammon, 25 Kan. 379. erty from the holder,29 are sufficient. An oral promise within the statute of frauds has been held to be no consideration for an extension,30 but as to this matter, in general, there is a conflict in the decisions.31 .33 Payment of money. A sum of money paid as a bonus, even after the maturity of the paper;32 a part payment made before the instrument matures; a payment of interest made in advance, before or after maturity,34 even though usuri[b] Payment of a nominal sum | Kaler v. Hise, 79 Ind. 301; Starret and back interest is not sufficient. v. Burkhalter, 70 Ind. 285; Abel v. Meginnis v. Nightingale, 34 N. J. L. Alexander, 45 Ind. 523, 15 AmR 270; 461. Hamilton v. Winterrowd, 43 Ind. 401; Dickerson v. Ripley County, 6 Ind. 128, 63 AmD 373. See Agnew v. Agnew, 38 Ind. A. 16, 77 NE 952. But see Weaver v. Prebster, 37 Ind. A. 582, 77 NE 674 (holding that an agreement by a payee to extend the time for the payment of the note for a year, in consideration of the maker paying the interest a few days before the maturity of the note, is without consideration). [c] Payment of the money for an extension must be actually made (1) and not merely credited (Edmonds v. Thomas, 41 Ill. A. 505), (2) and it is not enough merely to give a note for such payment (Schroeppel v. Shaw, 5 Barb. 580 [aff 3 N. Y. 446]). (3) So a duebill for the payment of usurious interest as a bonus is not sufficient, although the payment was afterward actually made before the extension expired. Howell v. Sevier, 1 Lea (Tenn.) 360, 27 AmR 771. [d] If an agreement is for an extension to take effect when a payment is made, the actual payment will constitute a good consideration. Low V. Underhill, 15 F. Cas. No. 8,561, 3 McLean 376. 33. Ind.-Rigsbee v. Bowler, 17 Ind. 167. See also Buck v. Smiley, 64 Ind. 431. Iowa.-Cox v. Carrell, 6 Iowa 350. Pa.-Hartman v. Danner, 74 Pa. 36. [b] Part payment during days of [c] Crediting payment before maturity.-Where the holder of a note agreed with the maker that, if he would pay a certain amount in cash, he might have ninety days longer on the balance, and the maker remitted the cash to the bank where the note was held for collection, it was held that the fact that the bank credited the payment on the note on the day before maturity, contrary to the intent of the parties who intended a payment only at maturity, did not establish an agreement for extension, as the payment made, being intended as a payment only at maturity, which was the maker's only duty under his contract, was no consideration for the promise to extend the time for payment. Sully V. Childress, 106 Tenn. 109, 60 SW 499, 82 AmSR 875. 34. Ark. Vestal V. Knight, 54 Ark. 97, 15 SW 17. Cal.-Smith v. Pearson, 52 Cal. 339. 776. Ga. Randolph v. Fleming, 59 Ga. Ill. Prussing v. Lancaster, 234 Ill. 462, 84 NE 1062 [aff 139 Ill. A. 33]; Crossman v. Wohlleben, 90 Ill. 537; Maher v. Lanfrom, 86 II. 513; Flynn v. Mudd, 27 I11. 323; Warner v. Campbell, 26 Ill. 282; Wyatt v. Dufrene, 106 Ill. A. 214. Ind. Starret v. Burkhalter, 86 Ind. 439; Williams v. Scott, 83 Ind. 405; Kan.-Royal v. Lindsay, 15 Kan. 591. Ky-Armendt v. Perkins, 32 SW 270, 17 KyL 1327. La. Calliham v. Tanner, 3 Rob. 299. Me.-Lime Rock Bank v. Mallett, 34 Me. 547, 56 AmD 673, 42 Me. 349; Mariner's Bank v. Abbott, 28 Me. 280. Miss.-Dubuisson V. Folkes, 30 Miss. 432. Mo.-Nelson V. Brown, 140 Mo. 580, 41 SW 960, 62 AmSR 755; Merchants' Ins. Co. v. Hauck, 83 Mo. 21; St. Joseph F. & M. Ins. Co. v. Hauck, 71 Mo. 465; Stillwell v. Aaron, 69 Mo. 539, 33 AmR 517; Hosea v. Rowley, 57 Mo. 357; Milam First Nat. Bank v. Wells, 98 Mo. A. 573, 73 SW 293; American Nat. Bank v. Love, 62 Mo. A. 378; Nevada First Nat. Bank v. Gardner, 57 Mo. A. 268; Commercial Bank v. Wood, 56 Mo. A. 214. Nebr.-Kittle v. Wilson, 7 Nebr. 76. N. H.-Wright v. Bartlett, 43 N. H. 548; New Hampshire Sav. Bank V. Colcord, 15 N. H. 119, 41 AmD 685; Grafton Bank v. Woodward, 5 N. H. 99, 20 AmD 566. N. Y.-Billington v. Wagoner, 33 N. Y. 31; Gloversville Nat. Bank v. Place, 15 Hun 564. Oh.-Gard v. Neff, 39 Oh. St. 607; Atkinson v. Talbott, 1 Disn. 111, 12 Oh. Dec. (Reprint) 518. Pa. In re Bishop, 195 Pa. 85, 45 A 582; Siebeneck V. Anchor Sav. Bank, 111 Pa. 187, 2 A 485; Grayson's App. 108 Pa. 581; Calvert v. Good, 95 Pa. 65. Tenn.-Stone's River Nat. Bank v. Walter, 104 Tenn. 11, 55 SW 301. Vt.-Dunham V. Downer, 31 Vt. 249; People's Bank v. Pearsons, 30 Vt. 711. Wash.-Binnian V. Jennings, 14 Wash. 677, 45 P 302. Wis.-Welch v. Kukuk, 128 Wis. 419, 107 NW 301; Grace v. Lynch, 80 Wis. 166, 49 NW 751. [a] Extent to which extension supported.-(1) The payment of interest in advance will not support an extension beyond the time paid for (Armendt v. Perkins, 32 SW 270, 17 KyL 1327), (2) and it has been held that payment of interest to accrue is not in itself a binding agreement for an extension (Hosea v. Rowley, 57 Mo. 357, said in Stillwell v. Aaron, 69 Mo. 539, 33 AmR 517, to "have been misunderstood by the court below"; Nevada First Nat. Bank V. Gardner, 57 Mo. A. 268), (3) but that there must be independent proof of the agreement (American Nat. Bank v. Love, 62 Mo. A. 378). (4) On the other hand, a receipt for interest in advance, indorsed on the note, has been held to be sufficient evidence of an extension (Mennet v. Grisard, 79 |