Day v. Gardner

• Citation: 7 A. 365,42 N.J.E. 199
• Parties: DAY v. GARDNER.
• Decision Date: 27 December 1886
• Court: New Jersey Court of Chancery

7 A. 365

42 N.J.E. 199

DAY

v. GARDNER.

Court of Chancery of New Jersey.

December 27, 1886.

(Syllabus by the Court.)

On final hearing on bill and answer, and proofs taken before a master. The facts appear in the opinion.

J. W. Bissell, for complainant.

H. Potts, for defendants.

VAN FLEET, V. C. The bill in this case is filed to foreclose a mortgage, made by the defendant to one Louisa D. Rollins, on the twenty-third of June, 1873, to secure the payment of $150. The complainant obtained title to the mortgage, by assignment, on the eleventh of December, 1883. The defense is that the debt which the mortgage secures has been extinguished or relinquished.

The following are the material facts: In January, 1880, Louisa D. Rollins held two mortgages against the defendant,—the one in suit, and a prior one, executed to her by the defendant, on the same premises, bearing date December 2, 1872, and given to secure the payment of $750. Both mortgages bore interest at the rate of 7 per cent. per annum. The mortgaged premises are situate in Jersey City, and were, in January, 1880, subject, in addition to the two mortgages, to five years' back taxes. The defendant swears that, at the date last mentioned, Miss Rollins made an agreement with her, by which it was stipulated that, if she paid the taxes in arrear, the mortgage debt should be reduced from $900 to $500, and the rate of interest from 7 to 6 per cent. per annum. The defendant performed her part of the contract. She paid the taxes in arrear, and, after January, 1880, Miss Rollins accepted semiannual payments of interest, at the rate of 6 per cent., on $500, up to October, 1881. Just subsequent to the date last mentioned, the defendant paid $100 of the principal of the debt; and after that, and up to the time the mortgages were assigned to the complainant, Miss Rollins accepted semi-annual payments of interest on $400. The complainant holds both mortgages. They were both assigned to him at the same time and by a single instrument.

The proofs make it entirely clear that the contract testified to by the defendant was made, and that both parties abided by it and acted on it for nearly four years. The question in dispute is whether the contract has the support of a sufficient consideration to give it legal efficacy.

The case, it will be observed, stands on an entirely different foundation from that on which the right to relief in Irwin v. Johnson, 36 N. J. Eq. 347, stood. There, as well as in the preceding cases, it was admitted that no contract existed,—at least, none having the support of a valuable consideration,—but the right to relief, or the ground of defense, in each, consisted simply in the fact that the creditor had made a declaration that he forgave, or intended to forgive, his debt; while here, a valid contract, founded on a good consideration has been shown. Nor is the case at all akin to those in which a debtor, having paid part of his debt under a promise from his creditor that he would forgive the balance, has nevertheless been held liable for the balance. It is agreed on all hands that such promises are void for want of consideration. The debtor, in paying, simply does what he ought to do, and the creditor, in receiving, gets nothing but what he is justly entitled to. The one suffers no detriment, and the other receives no benefit, and therefore there is nothing in the transaction which the law can recognize as a consideration for the creditor's promise.

Now, while it is true that the payment of a part of a debt in money will not operate as a satisfaction of the whole debt, even when the creditor has agreed that a payment of part shall have that effect, yet the rule seems to be entirely different where the debtor gives something else than money in payment, with the understanding that such thing shall be accepted in full satisfaction.

In Coke on Littleton it is said: "In the case of feoffment in mortgage, if the feoffer payeth to the feoffee a horse, or a cup of silver, or a ring of gold, or any such other thing, in full satisfaction of the money, and the other receiveth it, this is good enough, and as strong as if he had received the sum of money, though the horse or other thing were not of the twentieth part of the value of the sum of money, because the other hath accepted it in full satisfaction. "2 Co. Litt. tit. "Estates upon Condition," 2126. § 344. And so, too, "if the obligor pay a lesser sum, either before the day, or at another place, than is limited by the condition, and the obligee or feoffee receiveth it, this is a good satisfaction." Id. 2126. And the reason why the acceptance of a horse, or of a less sum of money than the whole debt, before the whole is due, is held to be a good discharge of the debt, in cases where the creditor has agreed that such should be its effect, is that it must be assumed that the creditor took the horse, rather than the money, because he thought the horse would be more beneficial to him than the money; and so, too, that he accepted part of his debt, before the whole was due, because he thought part then would be more beneficial to him than the whole when the...