Danforth v. Semple

• Decision Date: 30 September 1874
• Citation: 73 Ill. 170,1874 WL 13269
• Parties: ASA H. DANFORTH et al.v.JACOB SEMPLE et al.
• Court: Illinois Supreme Court

73 Ill. 170

1874 WL 13269 (Ill.)

ASA H. DANFORTH et al.

v.JACOB SEMPLE et al.

Supreme Court of Illinois.

September Term, 1874.

OPINION TEXT STARTS HERE1. SURETY-- discharged from liability by extension of time to principal.

A valid agreement, made by the payee of a note with the principal, to extend the time of payment, without the knowledge or consent of the surety, releases such surety from any further liability on the note.

2. A contract to extend the time of payment of a note in consideration of money actually paid, is a binding contract, and releases the surety on the note, if made without his knowledge or consent, whether the money so paid be regarded as usurious interest or not.

APPEAL from the Circuit Court of Woodford county; the Hon. JOHN BURNS, Judge, presiding.

Messrs. CHITTY & PAGE, for the appellants.

Mr. IRA J. BLOOMFIELD, for the appellees.

Mr. CHIEF JUSTICE WALKER delivered the opinion of the Court:

Appellee Semple, through one Merchant, effected a loan of $1,500 of appellants sometime in the month of September, 1869, and the other appellees became his sureties on the note then given. About the time of the maturity of the note, Semple, through Merchant, paid $75, as interest for six months, and $37.50 for an extension of time of payment for six months, which was given by appellants. The payees, on receiving this money, gave a receipt for the six months' interest, and in the receipt state that the time of payment is extended six months from the 3d of March, 1870. Breese, Zeigler and Fawcett, the sureties, had no knowledge of the arrangement for the extension, consequently gave no consent to it, nor did they subsequently agree to or ratify the arrangement.

The law is well settled, that where an extension of time is given to the principal debtor for the payment of money, by a valid and binding agreement, without the assent of the sureties, they are thereby released. Nor is this proposition controverted. But it is denied that this arrangement constituted a valid contract. It is claimed that it was simply the payment of usurious interest in advance, and such interest being prohibited by law, the sureties could at any time have paid the note and at once compelled their principal to reimburse them the money thus paid; that, usury being prohibited by the statute, such a contract is a nullity; and that the amount paid, over and above the interest due, operated as a payment of so much on the principal, which the law would have compelled to be so applied.

Such was not the intention of the parties to this agreement. From the evidence it is manifest that Semple intended to and paid appellants the $37.50 to procure the extension of time for payment, and they clearly received it as the consideration for extending the time, and did agree to extend it. This was the purpose of the parties, and they used such means as they supposed would have that effect. And we have no doubt they fully accomplished their design, and what was done created a valid, binding contract for the extension of the time for the payment of the note for six months as stated in the receipt.

It has been...