43 N.H. 548 | N.H. | 1862
It is objected that the promise of the defendant, being conditional, should have been declared on specially, and that the proof does not support a count on the original promise; but we think the law is settled the other way in-this State. Betton v. Cutts, 11 N. H. 170; Titus v. Ash, 21 N. H. 129, 144; Ang. on Lim. 249. Upon showing, then, that the condition was complied with, the debt against the defendant would be revived, and the making of the note by Case being shown, a joint promise was established; and it would avail nothing to show that, in another jurisdiction, Case might set up a defense personal to himself. But there was evidence, we think, tending to prove an agreement, by the plaintiff, to give indulgence to the principal for the period of six months; and this would bind the plaintiff, notwithstanding the debtor retained the right to pay within that time. Such an agreement, upon good consideration, like a covenant to forbear to sue the principal, or to stay execution for a certain period, would tie the hands of the credit- or and discharge the surety. It is urged that such ought not to be the effect where the principal retains the right to pay the debt at any time, upon the ground that it still leaves with the surety the power to pay the debt and take measures for his indemnity. If the taking away this power was the sole ground for the rale which discharges the surety, as might be inferred from some of the adjudged cases, there would be great force in the suggestion; but we apprehend that the doctrine stands upon a much broader foundation, namely, that the surety by an agreement accessory to the*principal obligation, having undertaken to be responsible for the performance by his principal of a specific agreement, can be held for no other;
Upon these principles it is laid down in Miller v. Stewart, 9 Wheat. 685, per Story, J., that to the extent and manner, and under the circumstances pointed out in his obligation, the surety is bound, but no farther; and it is not sufficient that he may sustain no injury by the change in the contract, or that it may even be for his benefit, for he has a right to stand upon the very terms of his contract, and a variation is fatal. These principles are fully recognized in Ch. on Bills 409, and cases cited, where it is said that the reason why the surety is discharged is, that by the agreement for indulgence the principal is rendered less active in endeavoring to pay the debt, than if he continued liable to an immediate action. The same doctrine is recognized in Ch. on Con. 465, and notes; Rees v. Berrington, 2 Ves. Jr. 540, and notes; English v. Darley, 2 B. & P. 61; Claridge v. Dalton, 4 M. & S. 226; Hewitt v. Goodrich, 2 C. & P. 468; Orne v. Young, Holt N. P. C. 84; Chitty on Bills 413, and notes; Hall v. Cole, 4 A. & E. 577. In this case a cognovit was taken, by which time was given to the principal; and it was held that the surety was discharged. To the same effect is Isaac v. Daniel, 8 A. & E. (N. S.) 500, where, after a suit was commenced, the plaintiff, for a sufficient consideration, agreed to stay all proceedings for two months; and it was held that the surety was discharged. So is 3 Stark. Ev. 1389, note 1, where it is said that an agreement to stay execution three months will discharge a surety, citing Ward v. Johnson, 6 Munf. 9; 2 Am. L. C. 415, 417, and cases cited; and 2 Am. L. C. 428, citing Clippinger v. Creps, 2 Watts 45. See, also, Wheat v. Kendall, 6 N. H. 504; Savings Bank v. Colcord, 15 N. H. 119; Watriss v. Pierce, 32 N. H. 514. In Hoyt v. French, 24 N. H. 198, it is said that both the creditor and principal must be bound by the agreement for indulgence, in order to discharge the surety;
It is urged, also, that the proof went to show that the debtor might pay at any time, in which case a deduction should be made on the extra interest paid, the effect of which might be that all would be refunded. Supposing this to be true, we think there was sufficient consideration for the plaintiff’s promise, notwithstanding there was a condition annexed to his holding the money. Still it was in fact paid, and he was entitled to hold the whole, unless the debtor paid the debt before the expiration of six months. For that he agreed to give time, and we think is bound by it.
It is immaterial that the benefit to the plaintiff', or the disadvantage to the debtor, might be slight. The $80 was then paid, and the plaintiff was entitled to hold it, in whole or in part, unless the debtor immediately paid the entire debt. For thus paying the $80, and for the chance of holding it, the plaintiff' chose to extend the time of payment, and we can not say, as matter of law, that he valued this chance too high. Ch. on Con. (9th Am. Ed.) 28, 32. So, although the extra interest paid might all be recovered back, upon the ground that it had been illegally extorted; Ch. on Con. 554, and cases cited; Willie v. Green, 2 N. H. 333; yet the payment of such illegal interest, and' even the promise to pay it, is decided to be a good consideration for an agreement to extend the time of payment. Bank v. Woodward, 5 N. H. 99; Wheat v. Kendall, 6 N. H. 504.
It is further urged, that the new promise of the defendant was upon a new consideration, and therefore he is, upon the doctrine of Bank v. Colcord, bound, although he had no notice of the agreement for indulgence; but we can not so regard it. On the contrary, the instrument is but an acknowledgement of a subsisting liability, upon the condition that Case was still liable, and should continue to be so ; and upon this acknowledgement a promise might be inferred. In other words, it is an acknowledgement that he is still held as surety.
There being evidence, then, upon which the jury might have found a valid agreement to extend the time of payment, the verdict directed for the plaintiff must be set aside. It is true that the verdict was ordered at the request of the defendant, but, in the absence of any further qualification, it must be deemed to stand upon the ordinary ground of a verdict directed by the court.
A farther question has been raised, which, as it is likely to arise upon another trial, we have considered, and that is, the effect of the payment of illegal interest by the principal, giving him a right, in Massachusetts, to a deduction of three times the amount. This is urged by the defendant’s counsel as a discharge of Case to the extent of $1200, which is said to be three times the amount of the
The memorandum of the defendant was, in effect, that he was held for the notes, unless Case should pay them, or unless he has been or shall be discharged by the plaintiff'. It appears that the plaintiff' did receive of the debtor, Case, in Massachusetts, illegal interest to the amount of $400, and that, by the laws of that State, in case of a suit there, he would be entitled to a deduction of three times that sum, amounting to $1200; but the provisions of that law, relating only to the remedy, can not be enforced here; Watriss v. Pierce, 32 N. H. 582; Gale v. Eastman, 7 Met. 14; although it would be otherwise where the lex loci made the usurious contract void.
The question then is, whether transactions voluntarily entered into by the creditor with the principal, by which the latter is enabled to defeat a suit against him in the jurisdiction where the contract was to be pei'formed, either as to a paid or all the claim, and this effect being known to the creditor, can be deemed to be a discharge of the principal in whole or in part, within the meaning of the defendant’s memorandum. It is quite clear that it would not, technically considered, be a discharge, but the effect would nevertheless be the same; and, from the nature of the arrangement, we think that the term was not used in its technical sense, but would embrace any agreement or act of the plaintiff, voluntarily entered into, with a knowledge of its effect, that should in any form extinguish the obligation of the principal, or enable him to avoid it, by proceedings either in law or equity. It would not, of course, embrace a case where the' creditor, by simply being passive, had enabled the principal to plead the statute of limitations; nor would it probably reach the case where some act of the creditor, not affecting the debtor’s liability in the jurisdiction where the contract was to be performed, might still constitute a defense in another jurisdiction. But however this may be, the act of the plaintiff which knowingly arms the principal with a defense to his claim in the jurisdiction where the performance was to be had, is wanting in good faith to the surety, and may well be deemed a discharge of the principal pro tanto, within the terms of the contract here set up.
By our law, when three times the amount of the unlawful interest exceeds the sum lawfully due, the defendant may avail himself of a plea in bar generally, upon the ground that the whole debt is forfeited; and even where the amount to be deducted is less than the sum due, the plea may be with a general verification, with a view to an issue as at common law. Gibson v. Stearns, 3 N. H. 195; Divoll v. Atwood, 41 N. H. 446, and cases cited. We are therefore brought to the conclusion that the taking of usury, as stated, and
A question has been made as to the sufficiency of the defendant’s promise to revive the debt, if the condition is complied with; but we think, as it contains a distinct acknowledgement of an existing debt that he is held to pay, there can be no doubt, upon our authorities, of its sufficiency as evidence of a conditional promise.
Another question has been raised as to the effect of the payment of the extra interest at the commencement of the loan, but regarding it as unlikely that it will be again presented in its present shape, we have not considered it.
"With these views there must be
A new trial granted.
