Pearl v. Wells

The following opinion was delivered :

By the Chancellor.

The defendant Wells, for a good and valuable consideration, agreed with the plaintiff Pearl to wait upon him for the payment of a note then due for the period of five months from the date of the agreement. A few days after, he brought a suit on the note, and this agreement was set up by way of defence; it was overruled by the court, and the amount of the note was recovered against Pearl. The latter then brought this suit for a breach of the agreement, and recovered in the court of common pleas of Washington county. On a writ of error to the supreme court the judgment was reversed, on the ground that the agreement did not form a substantive ground of action, and was available only as a defence to a suit on the note until the expiration of the time fixed by the agreement. The correctness of this latter decision is the only question which arises on this writ of error.

The counsel for the plaintiff in error has argued this cause upon the supposition that the agreement on which his suit was brought was a promise on the part of the defendant not to sue the plaintiff on the $30 note, for the term of five months. If he was correct in this construction of the contract, it probably could not have been pleaded in bar to the suit on the note, as a personal action once suspended by the voluntary act of the party is forever gone. It would in that case operate as a release of the debt, contrary to the intention of the parties. For this reason a covenant never to sue the sole party liable to an action operates as a release to avoid circuity of action, but a covenant not to sue within a limited period cannot be pleaded in bar of the action, but the defendant must seek his remedy by an action on his covenant. Cuyler v. Cuyler, 2 Johns. R. 186. Harrison v. Wilcox and Close, id. 443. Thus in the case of Dowse v. Jefferies, 1 And. Rep. 307, where to an action on an obligation the defendant pleaded that by an agreement under seal since the making of the obligation, the plaintiff covenanted not to sue or molest the defendant on the obligation before the feast of St. John the Baptist, in 1590, the court held this was no bar to the action, but that the defendant might recover damages on the covenant, if he was sued before that time. The same point was recently decided by the supreme court of Massachusetts, in the case of Perkins v. Gilman, 8 Pick. Rep. 229. But if the obligee covenants not to sue for a limited period, and that if a suit is brought within that time the obligation shall be void, such covenant may be pleaded as a bar to the suit, if brought before the expiration of the time limited, 3 D'Anver's Abr. 426. J. Bridg. Rep. 117.

The agreement as proved in this case, however, was an agreement to extend the time of payment of the note for the period of five months j being founded on a good consideration it was binding and operative, and suspended the right of action on the original contract until default should be made in the payment thereof at the expiration of the five months ; and even if it had been a bond with a penalty it would have operated as a defeasance thereof, and might have been pleaded in bar of an action brought within that time. 3 Johns. R. 528. 1 Johns. Cas. 22. Cro. Eliz. 623. J. Bridg. R. 117. As this was the legal effect of the promise, it was the duty of the maker of the note to set it up by way of defence to that action. If he established the fact of the extension of the time of payment, and the court improperly rejected that defence, his only remedy was by a writ of error in the original cause to reverse that decision. As the party was entitled to the full benefit of the agreement, by way of defence to the action on the note, he cannot make it a substantive ground of recovery in this suit. 9 Johns. R. 244. 12 id. 374. It is not necessary, therefore, to enquire whether the decision in the first suit was conclusive evidence that no such agreement, as was attempted to be established in this suit, was in fact made.

In my opinion the judgment of the supreme court was correct, and should be affirmed.

All the members of the court, except Senators Allen and Rexford, being of opinion that the judgment of the supreme court ought to be affirmed, it was accordingly, by a vote of 14 to 2, affirmed.