Hance v. Holiman

Hughes, J.,

(after stating the facts). When this case on a former appeal was reversed and remanded for a new trial, an amendment to the complaint was made, as set out in the foregoing statement of facts, upon which amendment arises the question to be determined now. This question was not involved nor raised or considered on the former appeal. It is this: Did the execution of the mortgage for the security of the debt, as above set out, and the surrender thereupon of the notes evidencing the debt, have the effect to satisfy the debt or discharge the obligation to pay it ?

There was no agreement that the mortgage was to be a satisfaction of the debt, or that the surrender of the original notes was to discharge the original obligation to pay them. In fact, the mortgage was given to secure payment of the debt, and 'was not the substitution of the obligation of another person to pay it. According to the weight of the adjudicated eases on this question, the original obligation was not discharged, nor the debt paid, by the renewal of the obligation, and the surrender thereon of the original notes evidencing the debt. It was only an evidence of an extension of the time of payment. There was no payment. Upon failure to pay according to the renewed obligation, the original notes were revived and restored, and wére enforcible, unless there was an express agreement or understanding that the mortgage was to be in satisfaction of the notes, or unless the obligation or undertaking of a third party was taken for ot in lieu of the notes of debtor.' In the case of Olcott v. Rathlone, 5 Wend. 490, it is said: “Where the cashier of a bank, on a note holden by the bank falling due, accepted a check of a third person for a part of the amount and a new note for the balance, and delivered up the old note, on the check being dishonored, the action might be maintained on the original note against the maker to recover the amount of the cheek, and the bare fact of delivering up the old note was not evidence that the check and new note were received in payment.”

In 2 Daniel, Negotiable Instruments, § 1266a, it is said that “the delivery or surrender to the maker of the old note, upon its being renewed, does not in itself raise a presumption of its ex-tinguishment by the new, it being considered as a conditional surrender, and that its obligation is restored and revived if the new note be not duly paid;” citing Olcott v. Rathbone, 5 Wend. 490; Jager Iron Co. v. Walker, 76 N. Y. 522, and the other New York cases on this point; and First Nat. Bank. v. Case, 63 Wis. 506, and Jansen v. Grimshaw, 125 Ill. 468. In Jager. Iron Worlcs v. Waller, Judge Folger pertinently said: “Until the promise is in fact redeemed, there is no payment.” The proof on the trial of this cause was that the debt was not fully paid, and that payments had been made on the notes which prevented the bar of the statute of limitations, and that this action was not barred at the time of the institution of this action. There was no evidence that the land mortgaged was a homestead.

The judgment is reversed, and the cause is remanded, with directions to render judgment for the amount yet due on the debt in favor of the plaintiff and for foreclosure of the mortgage for its payment.