ment by the debtor to refrain from voluntary bankruptcy must be regarded as a sufficient consideration for the creditor's promise, but the mere fact that the creditor fears that the debtor will go into bankruptcy, and that the debtor contemplates bankruptcy proceedings, does not prove that the creditor requested the debtor to refrain from such proceedings. If the creditor gets the part payment, he is getting all he requests, and by this payment of part of the debt the creditor receives only a benefit in fact, and the debtor suffers only a detriment in fact in return for the agreement rather than detriment or benefit in law. In many cases of part payment of a liquidated debt as full satisfaction there is doubtless a detriment in fact to the debtor and a benefit in fact to the creditor, even though bankruptcy is not imminent. It seems difficult, where the debtor is insolvent, as much as where he is not, to evade the plain fact that the debtor is merely doing what he is under a legal obligation to do. The fact that if he obtains a discharge in bankruptcy he will escape from the obligation, does not make him any less bound until he gets such a discharge. Nor does it matter that a debtor refrains from going into bankruptcy, relying upon the compromise with his creditor, if the creditor did not request him to refrain.61 § 121. Payment or security differing in time, medium, place, from the debtor's legal obligation is valid consideration. If a debtor does something more or different in character from that which he was legally bound to do, this is sufficient consideration for a promise. Accordingly if a debtor pays his debt or part of it before it is due,62 or in a medium of pay 60 Hanson v. McCann, 20 Col. App. 43, 76 Pac. 983; Hinckley v. Arey, 27 Me. 362; Dawson v. Beall, 68 Ga. 328; Melroy v. Kemmerer, 218 Pa. 381, 67 Atl. 699; Rotan Grocery Co. v. Noble, 36 Tex. Civ. App. 226, 81 S. W. 586; Herman v. Schlesinger, 114 Wisc. 382, 90 N. W. 460, 91 Am. St. Rep. 922. 61 See infra, § 139. 62 Pinnel's Case, 5 Coke, 118; Phillips v. Preston, 5 How. (U. S.) 278, 12 L. Ed. 152; Rose v. Hall, 26 Conn. 392, 68 Am. Dec. 402; Spann v. Baltzell, 1 Fla. 301, 46 Am. Dec. 346; Hutton v. Stoddart, 83 Ind. 539; Boyd v. Moats, 75 Ia. 151, 39 N. W. 237; Bice v. Silver, 170 Ia. 255, 152 N. W. 498; Ricketts v. Hall, 2 Bush, 249; Chicora Fertilizer Co. v. Dunan, 91 Md. 144, 46 Atl. 347, 50 L. R. A. 401; Singer Sewing Machine Co. v. Lee, 105 Md. 663, 66 Atl. 628; Bowker v. Childs, 3 Allen, 434; Schwei ment different from that for which he was bound,63 or at a different place,64 or to someone other than the creditor,65 the consideration is sufficient to support a promise by the creditor. So if the debtor gives security, a promise in consideration thereof to release part of the debt is sufficiently supported.66 The application to the debt of property exempt from execution also is going beyond the legal obligation of the debtor, and therefore is valid consideration.67 So indeed is the giving of any security to which the creditor der v. Lang, 29 Minn. 254, 13 N. W. 33, 43 Am. Rep. 202; Reed v. McGregor, 62 Minn. 94, 64 N. W. 88; Dalrymple e. Craig, 149 Mo. 345, 50 S. W. 884; Jones v. Perkins, 29 Miss. 139, 64 Am. Dec. 136; Scofield v. Clark, 48 Neb. 711, 67 N. W. 754; Grant v. Hughes, 96 N. C. 177, 2 S. E. 339; Thurber v. Smith, 25 R. I. 60, 54 Atl. 790; Kirchoff v. Voss, 67 Tex. 320, 3 S. W. 548; Russell v. Stevenson, 34 Wash. 166, 75 Pac. 627. But payment upon a note after maturity, but before the last day of grace is not valid consideration. McKamy v. McNabb, 97 Tenn. 236, 36 S. W. 1091. See also Harms v. Fidelity & Casualty Co., 172 Mo. App. 241, 157 S. W. 1046; Bandman v. Finn, 185 N. Y. 508, 78 N. E. 175, 12 L. R. A. (N.S.) 1134. But an agreement where a contract called for daily payments, that payments should be made at the end of each week was held invalid in Wilt v. Hammond, 179 Mo. App. 406, 165 S. W. 362. 63 San Juan v. St. John's Gas Co., 195 U. S. 510, 49 L. Ed. 299, 25 S. Ct. Rep. 108; Leeson v. Anderson, 99 Mich. 247, 58 N. W. 72, 41 Am. St. Rep. 597. Logically perhaps this principle would sustain any promise for which the consideration was payment or part payment of a debt; for the debtor is never bound to pay the particular coins or bills with which he in fact makes payment, and in giving those coins or bills rather than others he suffers a legal detriment. Unless, however, the cred itor requested these coins or bills rather than others, this argument is too finespun for legal use. Indeed in Saunders v. Whitcomb, 177 Mass. 457, 59 N. E. 192, it was held that payment in United States money of a portion of a bill of exchange by its terms payable in pounds sterling would not support a promise to forego the remainder of the holder's claim; since payment was made in United States money as matter of convenience, and was not requested as the real exchange for the agreement. 64 Pinnel's Case, 5 Coke, 118; Pearson v. Thomason, 15 Ala. 700, 50 Am. Dec. 159; Cavaness v. Ross, 33 Ark. 572; Sonnenberg v. Riedel, 16 Minn. 83; Jones v. Perkins, 29 Miss. 139, 64 Am. Dec. 136; McKenzie v. Culbreth, 66 N. C. 534; Harper v. Graham, 20 Ohio, 105. It should be observed, however, that after maturity a money claim is transitory, and the debtor is bound to pay at any place where he may be found. Foster County State Bank v. Lammers (Minn.), 134 N. W. 501. 65 Roberts v. Carter, 31 Ill App. 142; Harper v. Graham, 20 Ohio * 105. 66 Kemmerer v. Kokendifer, 65 Ill. App. 31; Fred v. Fred (N. J. Eq.), 50 Atl. 776; Brown v. Kern, 21 Wash. 211, 57 Pac. 798. See also Lincoln Savings Bank v. Allen, 82 Fed. 148, 27 C. C. A. 87; McNealey v. Baldridge, 106 Mo. App. 11, 78 S. W. 1031. 67 Meeker v. Requa, 94 N. Y. App. 300, 87 N. Y. S. 959. was not otherwise entitled, whether the security is the property of a third person,68 or of the debtor himself.69 § 122. Mutual promises to extend an interest-bearing debt, are sufficient consideration for each other. When a debtor and creditor agree that an interest-bearing debt shall be extended for a fixed time, the promise of each is of something detrimental, as the creditor promises to forbear the collection of his claim, and the debtor gives up his right to stop the accrual of further interest by the payment of the principal at maturity. Accordingly such agreements are generally upheld.70 If, however, the debtor neither promises to refrain from paying the debt until a fixed day in the future, nor to pay interest until that time whether the debt is paid 68 Post v. Springfield Bank, 138 Ill. 559, 28 N. E. 978; Schmidt v. Ludwig, 26 Minn. 85, 1 N. W. 803. See also cases collected infra, § 124, where the personal security of a third person is given by the making or indorsing of negotiable paper. 69 Pulliam v. Taylor, 50 Miss. 251; Jaffray v. Davis, 124 N. Y. 164, 26 N. E. 351, 11 L. R. A. 710. It is indeed said in Keeler v. Salisbury, 33 N. Y. 648, and Walsh v. Curtis, 73 Minn. 254, 76 N. W. 52, that giving security of the debtor's non-exempt property is not valid consideration for an agreement by the creditor to abate a portion of his claim. This is clearly wrong, however, since the debtor is doing something which he was not bound to do, and the creditor is receiving a benefit to which he was not previously entitled. The possibility which the creditor previously had of seizing on execution his debtor's nonexempt property is a different thing from the hold given by a mortgage or pledge. 70 Rees v. Berrington, 2 Ves. 540; Stallings v. Johnson, 27 Ga. 564; Reynolds v. Barnard, 36 Ill. App. 218; Crossman v. Wohlleben, 90 Ill. 537; Royal v. Lindsay, 15 Kans. 591; Lor rimer v. Fairchild, 68 Kans. 328, 75 Pac. 124; Shepherd v. Thompson, 2 Bush, 176; Robinson v. Miller, 2 Bush, 179; Alley v. Hopkins, 98 Ky. 668, 34 S. W. 13, 56 Am. St. Rep. 382; Chute v. Pattee, 37 Me. 102; Simpson v. Evans, 44 Minn. 419, 46 N. W. 908; Moore v. Redding, 69 Miss. 841, 13 So. 849; Davis v. Lane, 10 N. H. 156; Fowler v. Brooks, 13 N. H. 240; McComb v. Kittridge, 14 Ohio * 348; Wood v. Newkirk, 15 Oh. St. 295; Fawcett v. Freshwater, 31 Ohio St. 637; Bickel v. Wessinger, 58 Ore. 98, 113 Pac. 34; Benson v. Phipps, 87 Tex. 578, 29 S. W. 1061, 47 Am. St. Rep. 128. The contrary decisions cannot be supported. Abel v. Alexander, 45 Ind. 523, 15 Am. Rep. 270; Hume v. Mazelin, 84 Ind. 574; Holmes v. Boyd, 90 Ind. 332; Davis v. Stout, 126 Ind. 12, 25 N. E. 862, 22 Am. St. Rep. 565; Wilson v. Powers, 130 Mass. 127; Hale v. Forbes, 3 Mont. 395; Grover v. Hoppock, 2 Dutch. 191; Kellogg v. Olmsted, 25 N. Y. 189; Parmelee v. Thompson, 45 N. Y. 58, 6 Am. Rep. 33; Olmsted v. Latimer, 158 N. Y. 313, 53 N. E. 5, 43 L. R. A. 685; Stickler v. Giles, 9 Wash. 147, 37 Pac. 293. See also Toplitz v. Bauer, 161 N. Y. 325, 55 N. E. 1059. or not, there is no consideration to support the creditor's promise to extend the time of payment."1 § 123. Promise of payment or payment of part of a debt by one joint debtor as consideration. It has been held in a number of cases that the note or promise of one joint debtor to pay the whole or part of a liquidated debt, is sufficient consideration to support an agreement by the creditor,72 though there are also contrary decisions.73 The reason given in most of the cases upholding the bargain is that the obligation of joint debtors is regarded as a single and indivisible thing, distinct from the individual obligation of any one of the joint debtors; and, therefore, the new obligation imposes a detriment on the promisor. In these decisions, however, the joint debtors were partners, and a possible reason exists for upholding an agreement with an individual partner to accept his promise to pay a portion of a partnership debt in full satisfaction. In cases of distribution in bankruptcy or insolvency individual debts are paid primarily out of individual assets; partnership debts out of partnership assets. Accordingly the performance of an individual promise accepted in lieu of a firm debt involves both a chance of detriment to the obligor and of benefit to the creditor.74 If the joint debtors were not partners the 71 McManus v. Bark, L. R. 5 Exch. 65; Austin Real Estate & Abstract Co. #. Bahn, 87 Tex. 582, 29 S. W. 646, 30 S. W. 430. Cf. Bickel v. Wessinger, 58 Ore. 98, 113 Pac. 34. 72 Thompson v. Percival, 5 B. & Ad. 925; Lyth v. Ault, 7 Ex. 669; Harris v. Lindsay, 4 Wash. C. C. 271; First Nat. Bank v. Cheney, 114 Ala. 536, 21 So. 1002; Hoopes v. McCann, 19 La. Ann. 201; Motley v. Wickoff, 113 Mich. 231, 71 N. W. 520; Morris Canal & Banking Co. v. Van Vorst's Admr'x, 1 Zab. 100, 119; Ludington v. Bell, 77 N. Y. 138, 33 Am. Rep. 601; Allison v. Abendroth, 108 N. Y. 470, 15 N. E. 606; Jaffray v. Davis, 124 N. Y. 164, 173, 26 N. E. 351, 11 L. R. A. 710; Collyer v. Moulton, 9 R. I. 90, 98 Am. Dec. 370; Lewis v. Davidson's Exec., 39 Tex. 660; Frye V. Phillips, 46 Wash. 190, 89 Pac. 559; Burdett v. Greer, 63 W. Va. 515, 60 S. E. 497, 15 L. R. A. (N. S.) 1019, 129 Am. St. 1014; Grubbe v. Lahay, 156 Wis. 29, 145 N. W. 207. 73 Early v. Burt, 68 Ia. 716, 28 N. W. 35; Walstrom v. Hopkins, 103 Pa. 118; Olive v. Morgan, 8 Tex. Civ. App. 654, 28 S. W. 572; Wadhams v. Page, 1 Wash. 420, 422, 25 Pac. 462. See also Wild v. Dean, 3 Allen, 579; Bowyer v. Knapp, 15 W. Va. 277. 74 This is pointed out in Lyth v. Ault, 7 Ex. 669, and in Ludington v. Bell, 77 N. Y. 138, 33 Am. Rep. 601. reasoning supporting the validity of an agreement to accept the promise of one in full satisfaction can only be supported on a theory of consideration in bilateral contracts previously criticised,75 since whether or not the new individual promise would involve a detrimental obligation, performance of the promise would involve neither any detriment to the debtor nor any benefit to the creditor to which he was not previously legally entitled. That actual payment by one joint debtor of part of the joint debt with no preceding promise will not support a promise by the creditor is generally held," and his promise to pay should have no greater value than his performance. If the original obligation was joint and several the promise of one of the debtors to pay a part will clearly support no agreement on the part of the creditor, since the debtor was by the original obligation already individually and separately bound.77 § 124. Payment of a portion of a debt with negotiable instrument. Negotiable paper is for many purposes regarded as a chattel, something to which the law will no more affix a definite value than to a horse or a book. Therefore, the transfer by the debtor of a negotiable note of a third person as full satisfaction of a liquidated and admitted claim greater than the face of the note is valid consideration.78 Similarly the debtor's note for less than the debt, if indorsed by a third person, is a sufficient consideration to support a promise to discharge 75 Supra, §§ 103 et seq. 76 Eldred v. Peterson, 80 Ia. 264, 45 N. W. 755; Deering v. Moore, 86 Me. 181, 29 Atl. 988, 41 Am. St. Rep. 534; Weber v. Couch, 134 Mass. 26, 45 Am. Rep. 274; Line v. Nelson, 38 N. J. L. 358; Harrison v. Wilcox, 2 Johns. 448; Martin v. Frantz, 127 Pa. 389, 18 Atl. 20, 14 Am. St. Rep. 859. The contrary decision of Bendix v. Ayers, 21 N. Y. App. D. 570, 48 N. Y. S. 211, cannot be supported. 77 Lyth v. Ault, 7 Ex. 669, 671. coln Safe Deposit Co. v. Allen, 82 Fed. 148, 27 C. C. A. 87; Brassell v. Williams, 51 Ala. 349; Colburn v. Gould, 1 N. H. 279; Conkling v. King, 10 N. Y. 440; Roberts v. Brandies, 44 Hun, 468. But see contra Mannakee v. McCloskey, 23 Ky. L. Rep. 515, 63 S. W. 482, with which, however, compare Woodfolk v. McDowell, 9 Dana, 268, where the surrender by a third person of a note of the creditor was held sufficient to support an agreement by the creditor to accept it in full satisfaction of a larger claim against his debtor. |