Russell v. Brown

• Citation: 21 Mo.App. 51
• Parties: J. W. RUSSELL, Appellant, v. J. B. BROWN ET AL., Respondents.
• Decision Date: 23 February 1886
• Court: Missouri Court of Appeals

21 Mo.App. 51

J. W. RUSSELL, Appellant,

v.J. B. BROWN ET AL., Respondents.

St. Louis Court of Appeals, Missouri.

Feb. 23, 1886.

APPEAL from the Hannibal Court of Common Pleas, THEO. BRACE, Judge.

Reversed and remanded with directions.

SMITH & HARRISON and G. D. BANTZ, for the appellant: The payment of interest in advance is not evidence of an agreement to extend the time of payment of a note, and, therefore, a surety will not be discharged thereby. St. Joseph Ins. Co. v. Hauck, 71 Mo. 465; Hosea v. Rowley, 57 Mo. 357; Coster v. Mesner, 58 Mo. 549; First Nat. Bank v. Leavitt, 65 Mo. 562.

ANDERSON & FOREMAN, for the respondents: Payment of interest in advance is a good consideration for the extension of the time of payment of a note. Stillwell v. Aaron, 69 Mo. 539. The agreement made between the holder of the note and the maker for an extension of the time of its payment, by which the surety is discharged, may be “written or verbal, express or implied.” 3 Cent. L. J. 630, elaborate note to Danforth v. Semple; Bangs v. Strong, 7 Hill, 250; Brooks v. Wright, 13 Allen, 72. The payment of interest in advance on a matured note is evidence of an agreement to extend time of payment. Oxford Bank v. Lewis, 8 Pick. 458; Woodburn v. Carter, 50 Ind. 376.

THOMPSON, J., delivered the opinion of the court.

This was an action on a promissory note. There was a default as to the defendant Coontz, and a verdict and judgment in favor of the defendant Brown, from which this writ of error is prosecuted by the plaintiff.

The defence of Brown was that he was merely a surety on the note, and that he had been discharged from liability as such by two extensions of time given by the plaintiff to Coontz, in consideration of the payment by Coontz of interest to a date in advance.

The evidence was to the effect that there had been several previous renewals of the indebtedness which had taken the form of the giving by Coontz of a new note with Brown as surety (he signing as a co-maker), Coontz paying the interest in advance. When the note sued on fell due, the plaintiff sent Coontz, by mail, a notice of the fact, as he had been accustomed to do in the case of former renewals, enclosing a new note to be executed in renewal of the old one. The defendant did not execute and return the renewal note, but, on the twenty-fifth of November, 1882, eight days after the maturity of the note sued on, wrote to the plaintiff: “Enclosed please find check for interest on note. Will send note this evening or Monday.” The check was for a sufficient sum to pay interest on the indebtedness until the twentieth of March, 1883, a period of four months and three days, the three days corresponding to the days of grace. The plaintiff thereafter indorsed upon the note, “Interest paid to March 20, 1883.” According to one statement in the plaintiff's testimony, this instrument was made on March 20, the day to which interest had been paid; and according to another, about the first of April; and according to still another, shortly after he received the letter and check on the twenty-fifth of November. There was no evidence to the contrary. Before this period expired, the plaintiff again notified Coontz by letter, but did not again enclose a note to be executed in renewal. On the twenty-third of March, three days after the expiration of this period, Coontz wrote to the plaintiff, enclosing a check, it seems, for the sum of $320.50, “to apply on the six hundred dollar note [a note not here in controversy], and pay interest sixty days on the balance, and fifteen dollars to pay on the Brown [the note in suit] note four months, which I hope will be satisfactory.” This check was not paid by the bank upon which it was drawn, but that bank, after holding for fifteen or twenty days, returned it to the plaintiff, who put it into the hands of his attorney for collection. The amount for which it was drawn was paid by Coontz to the plaintiff's attorney some time in June following. The plaintiff thereafter placed a second indorsement upon the note, as follows: “And int. pd. to July 23, 1883.” This indorsement, according to the plaintiff's testimony, not contradicted, was made about the twenty-eighth day of June. This, it is perceived, would be four months and three days from the time to which the interest had been previously paid, the three days being analogous to days of grace. On July 23, 1883, the day to which this second payment of interest reached, the plaintiff wrote to the defendant Brown, as follows: “We hold a note of five hundred dollars against you and Benton Coontz, due and unpaid.”

This was the substance of the evidence, uncontradicted on any material point, save for discrepancies in the plaintiff's own statements as above pointed out. From what above appears, there was no agreement between the plaintiff and Coontz for the renewal or extension of the note, nor were there any negotiations between them with reference to a renewal or an extension. Neither of these two indulgences, which were granted by the plaintiff to Coontz, was known to Brown, or authorized by him.

The court submitted the case to the jury on the following instruction, requested by the defendant, to the giving of which the plaintiff excepted: “If the jury find, from the evidence, that the defendant Brown was a surety on the note in suit, and that the plaintiff having notice of that fact, did, at any time after the maturity of said note, without the knowledge of defendant Brown, by agreement with defendant Coontz, accept from said Coontz any interest...