McNeill v. Simpson

• Citation: 39 S.W.2d 835
• Decision Date: 10 June 1931
• Docket Number: No. 1469-5707.,1469-5707.
• Parties: McNEILL v. SIMPSON et al.
• Court: Supreme Court of Texas

39 S.W.2d 835

McNEILL v. SIMPSON et al.

No. 1469-5707.

Commission of Appeals of Texas, Section A.

June 10, 1931.

Error to Court of Civil Appeals of Tenth Supreme Judicial District.

Suit by B. M. Simpson against H. K. T. Bonds and A. A. McNeill. Judgment for plaintiff against defendant last named was affirmed by the Court of Civil Appeals [24 S.W. (2d) 485], and defendant last named brings error.

Affirmed.

Nat Harris and Tom P. Scott, both of Waco, for plaintiff in error.

Taylor, Atkinson & Farmer and Aubrey Morris, all of Waco, for defendants in error.

HARVEY, P. J.

On January 1, 1923, H. K. T. Bonds, as maker, executed a promissory note to B. M. Simpson, payable one year after date. The note provided for interest at the rate of 10 per cent. per annum from date until paid, and was indorsed by A. A. McNeill. On January 1, 1927, the principal of the note, and two years' accrued interest, remained unpaid. At that time, Bonds and McNeill being unable to pay the note, Simpson orally agreed with them "to carry the note another year," if the past-due interest was paid. This agreement between the parties was oral. McNeill further agreed orally that, if Bonds did not pay the past-due interest, he (McNeill) would. Shortly afterwards the past-due interest was paid by Bonds. On April 16, 1928, which was more than four years after the maturity date named in the note, Simpson brought this suit against Bonds and McNeill to recover the indebtedness evidenced by the note. In his petition, Simpson describes the note, and sets up the oral agreement of January, 1927, as constituting a binding contract of extension of the time of payment, and predicates his alleged cause of action thereon as of a new contract to pay said indebtedness. Bonds duly pleaded his discharge in bankruptcy since the commencement of this suit. McNeill set up, and urges here that the oral agreement of January, 1927, was without consideration, and therefore was not a binding contract between the parties, and further that an action on the note is barred by limitation, in that, being oral, the said agreement, because of the provisions of article 5539 of the statutes, did not stop the running of limitation. The case, as between Simpson and McNeill, was tried to a jury. Judgment was rendered in favor of Bonds on his plea of discharge in bankruptcy, and against McNeill, in favor of Simpson, for the amount sued for. McNeill appealed, and the Court of Civil Appeals affirmed the judgment of the trial court. 24 S.W.(2d) 485. McNeill was granted the writ of error on account of alleged conflict of decisions.

Where the parties to a promissory note, which is past due but is unbarred by limitation, and which by its terms bears interest until paid, mutually agree to an extension of the time of payment of the note to a future date, a new contract, based upon a new consideration deemed valuable in law, arises between the parties. By such an agreement, each of the parties becomes obligated to the other in respects not comprehended by the contract arising...