Leis v. Sinclair

The opinion of the court was delivered by Johnston, G. J.: The first contention is that there was error in the holding that the plaintiffs were under legal obligation to secure an extension of the Bowman note and mortgage in behalf of John J. Kunkel. In [754] the covenant agreement incorporated in the deed made by- the Leises to Kunkel, they recited an assurance that they were the owners of the property conveyed, and were seized of a good and indefeasible title, free and clear from all encumbrances, except the Bowman mortgage. As to that, it was stipulated: “Which mortgage they hei'eby guarantee may and shall be extended, if desired by said party of the second part, at a rate of interest not to exceed six per cent, per annum, any excess of said rate to be paid by the first, party.” In the mortgage given at the same time by Kunkel to Leis for the unpaid portion of the consideration for the property, the guaranty was referred to as follows: “And it is also subject to the guaranty made by said Lillian R. Leis and George Leis, her husband, in their warranty deed of said property of even date herewith, made to said J. J. Kunkel.” It is argued, first, that the agreement to extend is so ambiguous and uncertain as to be unenforceable. It is definite as to the parties and the subject-matter. It positively fixes the rate of interest to be paid by Kunkel in case of the extension, and definitely provides that all excess of that rate must be paid by the Leises. The only uncertainty of the agreement is as to the time of extension. Some time was manifestly within the contemplation of the parties, an'd as the right of extension was at the option of Kunkel, it is not unreasonable to infer the intention to have been that the duration of the extension should be likewise at his option, within a reasonable time. In Atwood v. Cobb, 16 Pick. 227, 26 Am. Dec. 657, where no time was fixed for performance, Chief Justice Shaw remarked : “As to the uncertainty of the time at which the agreement is to be executed, the case is c ear, that wh9re on an executory contract a party stipulates to do some act, and no time is limited, it is to be done [755] within a reasonable time, and, therefore, the want of any stipulation to that effect does not render the instrument void.” Ambiguous terms and doubtful stipulations may be interpreted by courts in the light of extrinsic and surrounding circumstances, but, of course, no testimony can be received which will alter or contradict the terms of an agreement. Testimony was received explanatory of the purposes and objects of the parties in executing it, and some of it may have trenched on the rule admitting parol testimony to affect a written agreement. However, if it were assumed that the agreement was so uncertain as to be defective, it was not necessary to support it by parol testimony in order to make it effective. The defects, if any, were cured by the action of the parties in recognizing and ratifying it. They contended in the court below, and are contending here, that they complied with this part of the agreement. Aside from an ineffectual attempt to obtain an extension through H. C. Bowman, it was shown in the testimony, and found by the court, that after Kunkel had himself obtained an extension and had brought it to the attention of plaintiffs, the latter paid the excess of interest in accordance with the stipulation in the agreement challenged. In that way they ratified and confirmed the agreement and cured whatever of invalidity there was in it. The next contention is that there was error in the finding that the Leises had not complied with their contract to procure an extension of the Bowman debt. When Kunkel notified George Leis that he desired an extension or renewal of the note for five years, the latter opened negotiations with H. O. Bowman, the original mortgagee, for an extension, and did secure from him a verbal agreement to extend the note for a [756] short time at eight per cent, interest. This action, however, was not effectual and cannot be regarded as a compliance with the agreement. Aside from the fact that it was a verbal arrangement, it was made with one who no longer owned the note and who had no right to extend it. More than that, the arrangement, such as it was, was not brought to the attention of Kunkel, who for his own protection procured Sinclair to take care of the paper for a short time at ten' per cent, interest. Later it passed into the hands of W. C. Beardsley, of New York, and he was induced to renew the paper for five years, at six per cent, interest, upon the payment to the agent of a commission of $350. Nor can we say that the offer of Leis to purchase the note from Sinclair, and the refusal of Sinclair to assign it, operated as a compliance with the agreement to extend, or as a release of the Leises. Sinclair was willing to accept payment of the debt, but not to assign it. He was under no obligation to make an assignment or transfer of the note ; and, aside from these considerations, the Leises recognized the continuing force of the agreement by later paying the excess of interest on the extension which had been obtained. Under the reciprocal agreements between these parties, their conduct in confirming the agreements and in acknowledging their obligations, there is no room for the application of the doctrine of suretyship or to claim a release of plaintiffs’ liability because an extension was obtained without their-consent. Nor is there ground for reversal in the deduction of the amount paid by Kunkel as commission on the extension. Plaintiffs specifically bound themselves to obtain an extension, and as they failed in that respect Kunkel was justified in obtaining it, and the cost or charge [757] incurred in procuring an extension in excess of six per cent, per annum was properly chargeable against the plaintiffs. The terms of the extension may not have been the most advantageous that could have been obtained, but it was found that Kunkel acted in good faith and made what he believed to be the best contract he could make in the matter of extension. It appears that an extension could have been obtained through Bowman at a rate of eight per cent, per annum , but if the charge designated as commission is added as interest and distributed through the fiyeyear period, it will be found to be less than the eight per cent, which might have been obtained through Bowman. Under the circumstances, we think it was equitable to require the payment of this charge, which was no more than the extra cost of the use of the money which plaintiffs had agreed to pay. The statute of limitations referred to is not properly in the case and requires no attention. We find no errors in the rulings of the trial court, and therefore its judgment will be affirmed. All the Justices concurring.