agreement not to sue at maturity, although he may have an independent action for damages for breach of such agreement. And this is true, in general, of an agreement on the holder's part not to sue until a given time after maturity. So, the holder cannot set up a verbal agreement that the bill might be paid in installments other than as provided by its terms.48 And parol evidence is inadmissible to show a contemporaneous agreement for future renewals.49

47

If the holder receives collateral security without an agreement for time, it will not amount to an extension.50 So, if he takes a new bill payable at a future day as collateral merely, although he afterwards transfers such bill to a bona fide holder; 51 especially where there is an express agreement that it shall be received as collateral only.52 And if the payee of a check procures it to be certified, it will not be such an extension of time to the drawee as will discharge the drawer.53

§ 1821. It is not an extension to write to the indorser that the maker is "unable to pay for a few days, and says he shall be ready in a week, which will be in time for me"; or to offer, after the bill is dishonored, to give time on a certain condition which is not

46 Atwood v. Lewis, 6 Mo. 392.

54

47 Byles, Bills, 241; Thimbleby v. Barron, 3 Mees. & W. 210; Ford v. Beech, 11 Q. B. 867; Lowe v. Blair, 6 Blackf. (Ind.) 282; Bridge v. Tierman, 36 Mo. 439. But, to the effect that a verbal agreement, after maturity, for further time, may be set up in bar to a suit on the note, see Fisher v. Stevens (Mo. Sup.) 44 S. W. 769.

48 Besant v. Cross, 10 C. B. 895.

49 Hoare v. Graham, 3 Camp. 57; Dawson v. Bank, 5 Ill. 56; Bond v. Worley, 26 Mo. 253. Especially where it is only proved by an unsigned indorsement on the envelope containing the note. Central Bank v. Willard, 17 Pick. (Mass.) 150. And where no application is made for the renewal. Gibbon v. Scott, 2 Starkie, 286.

50 Cherry v. Miller, 7 Lea (Tenn.) 305; Mills v. Gould, 14 Ind. 278; Allen v. O'Donald, 28 Fed. 17; Continental Life Ins. Co. v. Barber, 50 Conn. 569. Although maturing at a later day. Fisher v. Bank, 22 Colo. 373, 45 Pac. 440. So, where both bill and collateral were placed in the hands of an attorney to collect. Mendenhall v. Lenwell, 5 Blackf. (Ind.) 125.

51 Pring v. Clarkson, 1 Barn. & C. 14.

52 Shaw v. Crawford, 16 U. C. Q. B. 101.

53 Warrensburg Co-operative Bldg. Ass'n v. Zoll, 83 Mo. 94.

54 Margesson v. Goble, 2 Chit. 364.

55

56

nor the

performed, e. g. on condition of receiving a certain payment, which was only made in part; 5 or to agree to pay out of the funds that shall come to an executor's hands within a given time.57 So, mere delay upon receiving a part payment is not an extension; 58 receiving of a cognovit, payable in installments, with the proviso that the judgment should be entered on any default, if judgment was, in fact, entered on the first default and without any actual loss of time.59

The defendant must prove that the extension relied on was made by one who was the holder of the bill at the time.60 A pledgee has no authority to grant an extension, and cannot bind his pledgor by such act. So, an extension by an indorser will not bind subsequent parties without their consent, nor discharge prior parties as to them. So, an indorser will not be discharged by the holder's agreement with a stranger to give time if he would see the bill paid. And if the extension is granted, after suit begun against acceptor and indorser, by taking a warrant of attorney from the acceptor, it cannot be pleaded in bar by the indorser. If, however, an extension is given to the maker after a joint judgment recovered against him and the indorser, it has been held to discharge the latter and support an injunction on his behalf against further proceedings.65

63

55 Hewet v. Goodrick, 2 Car. & P. 46S. It must appear that the agreement was accepted by the maker. Hefford v. Morton, 11 La. 115.

56 Badnall v. Samuel, 3 Price, 521.

57 Muir v. Lawrie, 11 U. C. C. P. 252.

58 Hunt v. Bridgham, 2 Pick. (Mass.) 581.

59 Price v. Edmunds, 10 Barn. & C. 578.

60 Britton v. Fisher, 26 U. C. Q. B. 338. A valid extension cannot be made by the payee after indorsement. Zobel v. Bauersachs (Neb.) 75 N. W. 43. Nor by a collecting agent, under instructions "not to let the note outlaw."

v. Warden, 77 Cal. 94, 19 Pac. 235.

61 Key v. Fielding, 32 Ark. 56.

62 Claridge v. Dalton, 4 Maule & S. 226.

63 Frazer v. Jordan, 8 El. & Bl. 303.

64 Lee v. Levy, 4 Barn. & C. 390.

65 Van Koughnet v. Mills, 5 Grant (U. C.) 653.

(2556)

Low

Consideration for Extension.

68

§ 1822. A valid extension requires a sufficient consideration.** It is sufficient to permit a co-defendant to leave confinement under a ca. sa. for the purpose of becoming a witness in another case. 67 The prepayment of interest is a sufficient consideration; s or the agreement to pay interest, or to complete his title to the lands mortgaged for security,7° or merely to forego his right to make payment. So, too, a usurious payment, if actually made.72

And even

the giving of a usurious note has been held to be sufficient consideration for the extension of another note.73 But an agreement to pay usurious interest for an extension is not sufficient; 74 nor a mere part payment on account of the debt; nor an agreement to pay part at maturity and give a note for the balance; 76 nor a payment of interest already accrued," or another debt already due; 78 nor a promise

75

66 Rumberger v. Golden, 99 Pa. St. 34; Fridenberg v. Robinson, 14- Fla. 130; Howe v. Klein, 89 Me. 376, 36 Atl. 620; Tuskaloosa Cotton-Seed Oil Co. v. Perry, 85 Ala. 158, 4 South. 635. And see § 492, supra. But an executrix's promise to pay out of her private income is not sufficient. Philpot v. Briant, 4 Bing. 717.

67 Bank of U. S. v. Hatch, 6 Pet. 250.

68 Starret v. Burkhalter, 86 Ind. 439; St. Joseph Fire & Marine Ins. Co. v. Hauck, 71 Mo. 465. And see §§ 492, 965.

69 Nelson v. Flagg, 18 Wash. 39, 50 Pac. 571.

70 McKinnon v. Palen, 62 Minn. 188, 64 N. W. 387.

71 Simpson v. Evans, 44 Minn. 419, 46 N. W. 908.

72 Vary v. Norton, 6 Fed. 808; Wild v. Howe, 74 Mo. 551; Niblack v. Champeny (S. D.) 72 N. W. 402.

73 Fay v. Tower, 58 Wis. 286, 16 N. W. 558.

74 Ives v. Bosley, 35 Md. 262; Lewis v. Harbin, 5 B. Mon. (Ky.) 564; Green v. Lake, 2 Mackey, 162; Denick v. Hubbard, 27 Hun (N. Y.) 347.

75 Berry v. Bates, 2 Blackf. (Ind.) 118; Bailey v. Adams, 10 N. H. 162; Prather v. Gammon, 25 Kan. 379; Ingels v. Sutliff, 36 Kan. 444, 13 Pac. 828. So, the payment of $10 and interest due. Nightingale v. Meginnis, 34 N. J. Law, 461.

76 Miller v. Holbrook, 1 Wend. (N. Y.) 317.

77 Kellogg v. Olmsted, 28 Barb. (N. Y.) 96; Howard v. Fletcher, 59 N. H. 151; Russ v. Hobbs, 61 N. H. 93.

78 Wolz v. Parker, 134 Mo. 458, 35 S. W. 1149.

on the maker's part to pay the note, already matured, in installments." 79

81

Satisfaction-What is.

§ 1823. Some benefit to the holder of a bill is necessary to a valid satisfaction.80 It may be the mere relinquishment of a doubtful suit. But if the plaintiff proves a compromise in satisfaction, he can only recover the balance due on such compromise, although he has declared for the whole amount originally due on the bill.82

83

84

If the holder receives security from the principal in satisfaction of the bill, it will discharge the surety, even though the holder's rights against other parties are reserved. $3 But if the principal gives in satisfaction a deed, which is declared void as made in contemplation of bankruptcy, the surety will not be discharged. Satisfaction given by the drawer of a bill does not necessarily discharge the acceptor, since he is primarily liable.85 But if a bill was accepted for the drawer's accommodation, and is satisfied by him, the acceptor will be discharged.se And an indorsee will be bound by satisfaction on a nonnegotiable note made without notice of its assignment with the original payee.87

On the other hand, the drawer will not be discharged, although the acceptor had funds of his in hand both at the time of acceptance and at the maturity of the bill, and died leaving a partnership interest

79 McManus v. Bark, L. R. 5 Exch. 65; Jennings v. Chase, 10 Allen (Mass.) 526.

So Byles, Bills, 237; Cumber v. Wane, 1 Strange, 426. But satisfaction by notes of a third party sent to the indorsees, A. & B., before maturity, but after they had indorsed to B. & C. (their correspondents, with a common partner, B.), to cover advances, will bind both firms, although made without the knowledge of the latter. Jacaud v. French, 12 East, 317.

$1 Longridge v. Dorville, 5 Barn. & Ald. 117. So, where the doubt is reasonable but unfounded. Cook v. Wright, 30 L. J. Q. B. 321.

$2 Browning v. Crouse, 43 Mich. 489, 5 N. W. 664.

83 Boultbee v. Stubbs, 18 Ves. 20.

84 Harner v. Batdorf, 35 Ohio St. 113.

85 Jones v. Broadhurst, 9 C. B. 173. But see, contra, where the bill was discounted for the drawer, Williams v. Jones, 77 Ala. 294.

86 Bradford v. Hubbard, 8 Pick. (Mass.) 155. Although the accommodation was not known to the holder. Rolfe v. Wyatt, 5 Car. & P. 181.

87 Shade v. Creviston, 93 Ind. 591.

sufficient to pay the bill, which his executor authorized the administrator of the other partner (who was also one of the holders of the bill) to apply to the payment of the bill.88 A bill may even be satisfied by one who is not a party to it.89 Thus, if a note is secured by mortgage, and paid by a purchaser of the mortgaged premises who bought subject to the mortgage, it would be extinguished. 9° But the recovery of judgment against a sheriff for not returning an execution against the maker will not discharge an indorser or prevent his recovery against prior indorsers."1

Satisfaction by Payment.

§ 1824. A bill or note may be satisfied by the payment by a third person of an amount less than its face; 2 but not by such payment of a smaller amount made by the debtor himself.33 Even if one joint maker, who is a surety, makes a part payment, on an agreement that he shall be discharged and his co-maker alone still held for the balance, he will remain liable." But if the bill is given up and can

94

88 Barnes v. Ryder, 3 McLean, 374, Fed. Cas. No. 1,020.

89 Byles, Bills, 237; Belshaw v. Bush, 11 C. B. 207. Although formerly held insufficient. Grymes v. Blofield, Cro. Eliz. 541; James v. Isaacs, 12 C. B. 791. But it must be fully executed. James v. David, 5 Term R. 141. And the plea must show that it was given on the debtor's account, or ratified by him. Kemp v. Balls, 10 Exch. 607.

90 Appledorn v. Streeter, 20 Mich. 9. So, if collateral security is sold and the purchaser gives his own note in payment. Pauly v. Wilson, 57 Fed. 548.

91 Baker v. Martin, 3 Barb. (N. Y.) 634.

2 Byles, Bills, 237; Chit. Bills, 442; Welby v. Drake, 1 Car. & P. 557; Gordon v. Moore, 44 Ark. 349. But part payment by the acceptor will not discharge the drawer. Lynch v. Reynolds, 16 Johns. (N. Y.) 41.

93 Fitch v. Sutton, 5 East, 230; Down v. Hatcher, 2 Perry & D. 292; Perkins v. Lockwood,, 100 Mass. 249; Works v. Hershey, 35 Iowa, 340; Carrier v. Jones, 68 N. C. 127. Unless paid in settlement of an account with cross demands. Smith v. Page, 15 Mees. & W. 683. But see, contra, if paid under an agreement for satisfaction, Stewart v. Hidden, 13 Minn. 43 (Gil. 29); although it was not paid at the time agreed, Longworth v. Askren, 15 Ohio St. 370. And it was held in Schweider v. Lang, 29 Minn. 254, 13 N. W. 33, that the maker was liable to the payee for transferring the note in violation of his agreement to accept a smaller amount before maturity in satisfaction. 94 Harrison v. Close, 2 Johns. (N. Y.) 448; Clayton v. Clark, 74 Miss. 499,