Sheats v. Scott

SHARPE, J. From the pleadings and evidence it appears that the consideration upon which the note and mortgage in question were given, was an agreement on defendant’s part to pay for complainant one-half of a total of $500 in case an offer of that sum was accepted in compromise of a judgment held by the government against them' and others as sureties on a postmaster’s bond. Defendant offered the. $500 by placing it in bank at the disposal of the government, but the offer [646] was declined and the money returned to Mm. Some months later he made a similar offer and deposit of $500 and of $62 additional to cover costs of the suit, but it was not accepted, and the sum deposited was refunded to him. After a year from the date of the note and mortgage and after they matured, he effected a compromise by paying $1,062 in settlement of the judgment. Whether* defendant was entitled to treat $250 of the sum he expended in the settlement as a sum secured by the mortgage has been the chiefly disputed question. It is not questioned that the preliminary agreement and defendant’s undertaking to supply money was a sufficient consideration to uphold the note and mortgage originally, but complainant insists that the substantial consideration failed when the offer of $500 was rejected and that sum was returned to defendant, and that there-. by the mortgage became extinguished. It is immaterial that evidence was not directed to showing complainant’s interest in the mortgaged property. Defendant by claiming it solely through complainant under the mortgage, is held to admit he has an interest. — Sullivan v. McLaughlin, 99 Ala. 69; Lang v. Wilkinson, 57 Ala. 259; Bernheim v. Horton, 103 Ala. 380; Pollard v. Cocke, 19 Ala. 188. The original contract having only provided for a compromise at $500 had not effect to either bind' or authorize defendant to commit the complainant to a borrowing of money to pay on a compromise at more than that sum. Though the increase of expenditure involved was borne immediately by defendant the change in amount was not immaterial to complainant; for in the absence of a release from the contribution which the law compels as between sureties, such change involved an increased liability on complainant for contribution. It was, however, within the competency of the parties to modify the agreement so as to change the application of the money provided for by the note and mortgage by having it paid on the settlement as finally made. To have done so would not have been an attempt to substitute a different debt for the one secured, or a [647] new consideration for one that had failed, for before the money was actually paid to the government the debt intended to be contracted and secured, could not under the contract have come into existence. As to whether there was such a modification the evidence is in conflict. By a majority of the court this question of fact is determined in favor of tlie defendant, and in consequence the decree will be affirmed.