Stillwell v. Aaron

• Decision Date: 30 April 1879
• Citation: 69 Mo. 539
• Parties: STILLWELL, Appellant, v. AARON.
• Court: Missouri Supreme Court

69 Mo. 539

STILLWELL, Appellant,

v.AARON.

Supreme Court of Missouri.

April Term, 1879.

Appeal from Hannibal Court of Common Pleas.--HON. JOHN T. REDD, Judge.

Waters & Winslow with W. P. Harrison for appellant.

In order to discharge the surety, an agreement to extend the time of payment must have been made by plaintiff with the principal debtor upon a sufficient consideration, one which would have estopped him from bringing his action against the debtor for a fixed and definite period of time beyond the day of payment named in the note. Under this rule defendant was not exonerated by the evidence in this case. (1) Blaine & Steers were the principal debtors, defendant was the surety and William Steers the indorser. While Steers was liable as a member of the firm of Blaine & Steers, as a maker, he was also liable as indorser. He got the money of the plaintiff on his indorsement. If as to plaintiff he is to be regarded an indorser, then he could make no agreement for time that would discharge the defendant. Hubbly v. Brown, 16 John. 70; Whiting v. Stage Co., 20 Iowa 554. If the holder of a note, who, at the time he discounted it knew it was for the accommodation of the indorser, give time to the indorser without the maker's consent, the latter is not discharged. Walker v. Bank, 12 Serg. & R. 382. After indorsement the maker of a promissory note stands as principal debtor, and the indorser stands as surety. As between themselves, the payee, before negotiation, may be the principal debtor and the maker the surety. This is always the case between an accommodation maker and payee, but in the hands of the indorser the paper is to him just what it purports to be on its face, and time given under an agreement with the indorser does not discharge the maker. Love v. Brown, 38 Pa. St. 308; Yates v. Donaldson, 5 Md. 389. (2) The consideration paid for the extension of time was interest in advance, and if so, although usurious, it will not support the agreement. The amount paid is exactly one month's interest at twelve per cent. Rucker v. Robinson, 38 Mo. 158; Hosea v. Rowley, 57 Mo. 357; Bank v. Harrison, 57 Mo. 503; Byles on Bills, 390; Parson's Mer. Law, 69, 93. (3) The period of the alleged extension is not precise or definite. Miller v. Stem, 2 Pa. St. 286; Rucker v. Robinson, 38 Mo. 158.

W. H. Hatch and James Carr for respondent, cited Semple v. Atkinson, 64 Mo. 504; Germ. Sav. Asso. v. Helmrick, 57 Mo. 100; Smarr v. Schnitter, 38 Mo. 478; Smarr v. McMaster, 35 Mo. 349; Clarkson v. Creely, 35 Mo. 95; Smith v. Rice, 27 Mo. 505; Dodd v. Winn, 27 Mo. 501; Globe Mut. Ins. Co. v. Carson, 31 Mo. 218; Bank of Albion v. Burns, 46 N. Y. 170; Deal v. Cochran, 66 N. C. 269; Ide v. Churchill, 14 Ohio St. 372; Pipkin v. Bond, 5 Iredell Eq. 91; Haynes v. Covington, 9 S. & M. 470; Wadlington v. Gary, 7 S. & M. 522; Miller v. McCan, 7 Paige 451; Sailly v. Elmore, 2 Paige 497; Huffman v. Hulbert, 13 Wend. 375; Haden v. Brown, 18 Ala. 641; King v. State Bank, 9 Ark. 185; Combe v. Woolf, 8 Bing. 156; s. c., 1 Moore & Scott 241; Caldwell v. McVickar, 9 Ark. 418; Heath v. Key, 1 Younge & Jer. 434; Ferguson v. State Bank, 8 Ark. 416; Branch Bank v. James, 9 Ala. 949; Thomas v. Stetson, 59 Me. 229; Calliham v. Tanner, 3 Rob. (La.) 299; Edwards v. Coleman, 6 T. B. Monroe 567; Varnum v. Milford, 2 McLean 74; Menifee v. Clark, 35 Ind. 304; Freeland v. Compton, 30 Miss. 424; Board of Police v. Covington, 26 Miss. 470; Gardner v. Watson, 13 Ill. 347; Thornton v. Dabney, 23 Miss. 559; Alcock v. Hill, 4 Leigh 622; McGee v. Metcalf, 12 S. & M. 535; Hayes v. Wells, 34 Md. 512; Parnell v. Price, 3 Rich. L. 121; Woolfolk v. Plant, 46 Ga. 422; Bucklen v. Huff, 53 Ind. 474; Scott v. Saffold, 37 Ga. 384; Montague v. Mitchell, 28 Ill. 481; Harbert v. Dumont, 3 Ind. 346; Kennedy v. Evans, 31 Ill. 258; Cross v. Wood, 30 Ind. 378; Grafton Bank v. Woodward, 5 N. H. 99; Austin v. Dorwin, 21 Vt. 38; Vilas v. Jones, 10 Paige 76; White v. Whitney, 51 Ind. 124; Wittmer v. Ellison, 72 Ill. 301; Myers v. First National Bank, 78 Ill. 257; Calvin v. Wiggam, 27 Ind. 489; Redman v. Deputy, 26 Ind. 338; Rose v. Williams, 5 Kan. 483; Christner v. Brown, 16 Iowa 130; Peoples' Bank v. Pearsons, 30 Vt. 711; Warner v. Campbell, 26 Ill. 282; Lime Rock Bank v. Mallett, 34 Me. 547; Flynn v. Mudd, 27 Ill. 323; Dubuisson v. Folkes, 30 Miss. 432; Wright v. Bartlett, 43 N. H. 548; Wiley v. Hight, 39 Mo. 130; Ransom v. Hays, 39 Mo. 445; Rutherford v. Williams, 42 Mo. 18; Marks v. Bank of Mo., 8 Mo. 316.

HENRY, J.

This was a suit on a note for $2,000, executed by Blaine & Steers, and the defendant, John Aaron, dated February 18th, 1873, payable 180 days after its date to William Steers, and by him indorsed to the plaintiff. The note was given for money borrowed by Blaine & Steers of Stillwell; the defendant, Aaron, was but the surety of the firm, and this was known to Stillwell when he received it. The evidence, on the part of the defendant, tended to show that when the note became due Blaine & Steers paid thereon $1,000, and that in consideration of $10 then paid to Stillwell, he agreed with William Steers, one of the firm of Blaine & Steers, and the payee and indorser of the note, to extend the time for payment of the balance one month, and that John Aaron was neither apprised of, nor consented to, the extension. For plaintiff, the court instructed the jury as follows: “Although the jury may believe from the evidence that Blaine & Steers were the principal debtors on the note, and that Aaron was only the security thereon, and that at maturity of said note Stillwell was the holder of said note, and as such he did, in consideration of $10 paid him by Steers, one of the firm of Blaine & Steers, agree with Steers to extend the time for payment of said note, for a definite time, without the consent of Aaron; yet if they find from the evidence that said $10, paid by Steers, was paid as interest in advance on said note, for said time, to procure said extension, and was so accepted and received by Stillwell, then the agreement so made by Stillwell did not discharge said Aaron, and the verdict should be for plaintiff.” In another instruction the court declared that if, at the time of payment of the $1,000, it was agreed by plaintiff, and Blaine & Steers, in consideration of $10, then paid by Steers to plaintiff, that the latter should extend the time of payment on the balance due for thirty or sixty days, such agreement did, by operation of law, release defendant from all liability on said note. There was a verdict and judgment for defendant, from which judgment plaintiff has prosecuted an appeal to this court. Many instructions were given and refused, but the foregoing fully present the questions which it is deemed necessary to consider.

It has uniformly been held in this State, that if a creditor, for a valuable consideration, make an agreement with the principal debtor which suspends his right of action on the demand for a definite period of time, without the consent of the surety, it operates to discharge the surety. 19 Mo. 263; 27 Mo. 501, 505; 31 Mo. 218; 38 Mo. 480; 57 Mo. 100, 385; 58 Mo. 550; 63 Mo. 46; 65 Mo. 562; State to use v. Roberts, 68 Mo. 234. The doctrine is stated by Savage, C. J., in Wood v. Jefferson County Bank, 9 Cowen 206, as follows: “If the creditor, by agreement with the principal debtor, without the consent of the surety, varies the terms (of the contract) by enlarging the time of performance, the surety is discharged.” In Kincaid v. Yates, 63 Mo. 47, it is thus stated: “If the creditor enters into any binding contract, the effect of which will be to give further time to the principal debtor without the consent of the surety, the surety will be discharged.” The contract or agreement which the authors of the above extracts had in their minds, was not an alteration of the original contract by erasure of terms from it, or the addition of stipulations to the original contract by interlineation. This would release the surety without any reference to the principle under consideration, whether such interlineation or erasure were made for a valuable consideration or not. It would then not be the contract the surety signed, and he could safely plead non est factum, or prove the fact under the general issue, if sued on a contract not under seal.

An agreement to extend the time will discharge the surety, whether the agreement is indorsed upon the obligation, or be evidenced by erasure or interlineation or by a collateral agreement. The adjudicated cases which support this proposition are innumerable, and nearly all, if not all, that will be subsequently cited in this opinion fully sustain it. Familiar principles of elementary law, we think, may also be safely invoked in its support. “In case of a simple contract in writing, oral evidence is admissible to show that by a subsequent agreement the time of performance was enlarged, or the place of performance changed.” 1 Greenleaf Ev., § 304. “Neither is the rule (that extrinsic evidence is not admissible to contradict or alter a written instrument) infringed by the admission of oral evidence to prove a new and distinct agreement upon a new consideration, whether it be as a substitute for the old or in addition to and beyond it.” Ib., § 303. The agreement, when made, becomes a part of the original, and just as effectually prevents the creditor from suing before the lapse of time agreed upon as if it were evidenced upon the original contract by erasure or interpolation. The doctrine is broadly stated in Theobold on Principal and Surety, that “the surety is discharged, if, without his consent, the principal parties make a new agreement inconsistent with the terms of the original agreement, or if they agree to make any alteration either in the terms of the original agreement or in the mode of performing them.” In Rucker v. Robinson, 38 Mo. 158, the court said: “It is well settled that a covenant not to sue upon a claim cannot be...