Braasch v. Bonde

• Decision Date: 07 December 1926
• Parties: BRAASCH v. BONDE ET AL.
• Court: Wisconsin Supreme Court

191 Wis. 414

211 N.W. 281

BRAASCH

v.BONDE ET AL.

Supreme Court of Wisconsin.

Dec. 7, 1926.

Appeal from Circuit Court, Manitowoc County; Chester A. Fowler, Judge.

Action by George Braasch against Nicholas Bonde and others. Judgment against the defendant named, but in favor of other defendants, and plaintiff appeals. Reversed, with directions.--[By Editorial Staff.]

November 24, 1919, defendant Nicholas Bonde, then unmarried, purchased a farm in Manitowoc county and gave the vendor in part payment a note due November 24, 1925, secured by mortgage. He borrowed from plaintiff $3,400 to make the down payment on such purchase, giving a promissory note due in one year at 5 per cent., payable semiannually, and obtained, at plaintiff's request, others of the defendants (his relatives) to sign the said note. It was conceded that such other signers received none of the consideration for such note or any for the signing.

Shortly afterward, defendant Nicholas gave to plaintiff as further security a second mortgage on the farm so purchased, and such was without the knowledge of the other defendant signers.

Nicholas Bonde continued to pay interest at 5 per cent., until November 24, 1921, when the note was then one year past due. There is a dispute as to what then took place, defendant Nicholas testifying, in substance, that at that time it was agreed that, if he would pay interest from then on at 6 per cent. (subsequently 5 1/2), instead of the original 5 per cent., the plaintiff would extend the time of the payment until the first mortgage fell due on November 24, 1925. The evidence on defendant's behalf was to the effect that there was no agreement to extend the time of payment, but an insistence on payment of the principal and, in default, a higher rate of interest.

August 6, 1925, this suit was commenced to foreclose the second mortgage given by Nicholas Bonde and for a deficiency judgment against him and the other defendants, who were signers of the $3,400 note.

Defendant Nicholas answered separately, asserting the above-alleged agreement of November, 1921--that the time of payment should be extended until November 24, 1925, upon condition of payment of an increased rate of 6 per cent. per annum, and that he has fully kept and performed all the terms of such agreement, and that there was not, at the time of the commencement of the action and at the time of answering (September 1, 1925), anything due or payable upon said note, and he demanded that the complaint be dismissed, with costs.

The other defendants, signers of said note, united in an answer, asserting their signing for accommodation only, and, as a separate defense, asserting the aforesaid alleged agreement of November 24, 1921, for an extension until November 24, 1925, and that Nicholas would pay 6 per cent., instead of 5 per cent.; that, under said agreement, defendant Nicholas has paid all interest as the same became due under the said agreement, and that said note did not become due and payable before November 24, 1925; that such extension agreement was without the knowledge or consent of said defendants; and they prayed for a dismissal of the complaint.

Interest was paid semiannually, at 6 per cent., for the year 1922 and in May, 1923; in November, 1923, twice in 1924, and in May, 1925, at 5 1/2 per cent. No interest was paid for the six months ending November 24, 1925.

The material parts of the findings of fact were:

“(3) After the said note became due, the plaintiff, in consideration of agreement by the defendant Nicholas to pay 6 per cent., instead of 5 per cent. interest, extended the time of payment of said note without the consent or knowledge of the other signers.

(4) After said agreement, the plaintiff and defendant Nicholas agreed to a reduction of the rate of interest from 6 per cent., as theretofore agreed, to 5 1/2 per cent.”

As conclusions of law, the court granted judgment against Nicholas and determined that the other signers of the note were released from obligation thereon by such extension of time and should have costs against the plaintiff. Judgment was so entered, and plaintiff appeals.

Hougen & Brady, of Manitowoc, for appellant.

L. W. Ledvina, of Manitowoc, for respondents.

ESCHWEILER, J.

[1] In the findings there is no express determination that the plaintiff and defendant Nicholas agreed to extend the time of payment until November 24, 1925, the definite and only date asserted in the several answers and testified to by Nicholas. From his written decision and the findings, however, the trial court seemingly considered that the payment of an increased interest rate, with an agreement to extend the time of the note to each successive interest-paying time, even if not to the definite date of November 24, 1925, being upon sufficient consideration; namely, the increased rate of interest, would any one of them operate so as to release the accommodation signers.

[2][3] Mere forbearance to sue upon an overdue indebtedness, even though there be a valuable consideration, as for instance here, an increased interest rate, is not sufficient of itself to operate as a discharge of sureties or accommodation makers. The same is true of prepayment of interest, or of paying an increased interest rate. In order to effect such result, the forbearance must be because of and upon a valid, distinct, and definite agreement to forbear. Union Nat. Bank of Chicago v. Cross, 100 Wis. 174, 177, 181, 185, 75 N. W. 992;Fanning v. Murphy, 126 Wis. 538, 554, 105 N. W. 1056, 4 L. R. A. (N. S.) 666, 110 Am. St. 946,5 Ann. Cas. 435;Welch v. Kukuk, 128 Wis. 419, 421, 107 N. W. 301;Grace v. Lynch, 80 Wis. 166, 49 N. W. 751.

The citations found in those cases show the same rule elsewhere, and it is now the same as it was then in Massachusetts. Barber v. Rathvon, 250 Mass. 479, 485, 145 N. E. 866;Mumford v. Coghlin, 249 Mass. 184, 190, 144 N. E. 283. And it is so held in Berry v. Pullen, 69 Me. 101, 103, 31 Am. Rep. 248.

The only alleged agreement relied upon by defendants and supported by any testimony is that in November, 1921, the time of payment was extended until November, 1925. Such alleged agreement involved a promise on the part of the plaintiff to forbear bringing action upon such note during a period of more than one year thereafter, conditional upon and supported by an undertaking by defendant Nicholas that he, on his part would perform; namely, by paying an increased rate of interest, at semiannual periods, until and including November, 1925. It involved therefore something to be performed by each after the year following the making of the promise. The final payment of interest due in November, 1925, was not made or tendered.

Appellant, the plaintiff, now and apparently for the first time asserts that, if there were such an agreement to extend the time of payment until November, 1925, being oral, it is void, under the statute of frauds; section 241.02(1) providing that every agreement which, by its terms, is not to be performed within one year from the making thereof, shall be void unless it be in writing, expressing the consideration, and subscribed by the party sought to be charged.

No objection was interposed on plaintiff's behalf, on the trial, as to the possible incompetency of the oral testimony offered and received concerning such agreement, and, at the opening of the trial, defendant's counsel stated that the extension agreement relied upon by them was not in writing.

[4] While, as a general rule, this court may and does refuse to consider and dispose of questions not properly or timely presented for consideration of the trial court, as has been stated in a number of cases, among others, Leickem v. Babe, 189 Wis. 602, 605, 208 N. W. 462, and Voluntary Ass. Mil. S. & W. Co., 186 Wis. 320, 329, 202 N. W. 693, and Harrington v. Downing, 166 Wis. 582, 385, 166 N. W. 318, yet, as stated in ...