Forster v. Furlong

• Decision Date: 22 April 1899
• Parties: FORSTER v. FURLONG et al.
• Court: North Dakota Supreme Court

8 N.D. 282

78 N.W. 986

FORSTER

v.FURLONG et al.

Supreme Court of North Dakota.

April 22, 1899.

Syllabus by the Court.

1. Section 3936, Rev. Codes, construed, and held, that the time of payment contained in a promissory note cannot be extended by any oral agreement, when the oral promise or agreement to extend is based entirely upon the debtor's oral promise to pay the consideration for the extension at some future time.

2. The holder of a junior lien, whose security is being reduced in value by the foreclosure of a prior lien, and the jeopardy of a possible foreclosure of another prior lien, as well as when it is being decreased in value by the nonpayment of interest due on such prior liens by the debtor, may, after such default, buy the prior liens, or pay the defaulted interest, and add the amount so paid to his liens, under section 4676, Rev. Codes.

Appeal from district court, Cass county; Charles A. Pollock, Judge.

Action by George W. Foster against William Furlong and Anna M. Furlong. Judgment for plaintiff. Defendants appeal. Affirmed.S. G. Roberts, for appellants. Morrill & Engerud, for respondent.

YOUNG, J.

This case comes to us for trial anew upon an appeal from a judgment and decree of foreclosure entered in the district court of Cass county in plaintiff's favor. The plaintiff is the owner of two mortgages executed by the defendants, covering 320 acres of land situated in Cass county. One of the mortgages secures two notes; the other secures one. Each note bears 10 per cent. interest, both before and after due. The notes show upon their face that they were due April 16, 1897, October 16, 1896, and December 9, 1897, respectively. There were two prior mortgages upon the same property. The first, for $1,400, secured a principal note for that sum, together with separate interest coupons, representing the yearly interest, at 7 per cent. per annum, all secured in the one mortgage. The second was in favor of the Fargo Loan Agency, and secured the amount of their commission in negotiating the first mortgage loan. This second mortgage was foreclosed, and sheriff's certificate issued to the Fargo Loan Agency, March 6, 1897. In January thereafter, the plaintiff, with a view to protect his subordinate liens, purchased this certificate. As a part of the transaction which resulted in the purchase, and as the only condition on which the holder would formally assign the certificate of sale to him the plaintiff paid to the loan agency, in addition to the amount due upon the certificates, the sum then due upon two first mortgage interest coupons, which were then past due, and in the hands of the loan agency for collection. Some time later the defendants redeemed from this foreclosure, but in so doing did not include the amount paid upon the two coupons. Plaintiff now seeks to foreclose his mortgages, and to add to the debt secured by them the amount paid by him to the loan agency as interest on the first mortgage. Defendants resist the foreclosure upon two distinct grounds: First, they rely upon an alleged oral agreement made in October, 1897, between plaintiff and them, whereby the time of payment was extended for a period of one year thereafter, as they contend; second, it is insisted that in any event the amount paid to the loan agency as interest upon the first mortgage cannot be added by plaintiff to the amount secured by his mortgages. Acting upon these views, the defendants, within the period of the alleged extension, but subsequent to the commencement of these foreclosure proceedings, made proper tender and deposit of the amount due upon their three notes, omitting to add thereto the accrued costs and disbursements on the foreclosure, and the additional amount paid by plaintiff to the loan agency, which course was entirely proper, if their position is correct.

We will first consider the matter of extension of time. The facts relative to this alleged agreement are in great doubt; but assuming defendants' contention is true, and that on October 20, 1897, the defendants did orally promise to pay 10 per cent. interest upon the then accrued interest, which they were not bound to pay by the notes themselves, in consideration of which plaintiff also orally promised to extend the date of all payments for the period of one year from that date, is such an agreement operative to extend the time of payment? We think not. The authorities are in almost complete harmony in holding that the time of payment fixed by a written contract may be suspended or enlarged by an independent executed oral agreement. We cite but a few of the very...