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Wagner v. Wagner (Sup.) 109 N.
E. 47. Rehearing denied.
Waters v. Delagrange (App.) 105
N. E. 792, 1044. Rehearing de-
nied. Transferred to Supreme
Court, 109 N. E. 758.
Waters v. Indianapolis Traction
& Terminal Co. (Sup.) 113 N. E.
289. Rehearing denied.
Watson v. Armstrong (Sup.) 102
N. E. 273. Rehearing pending.
Watts v. Chicago & E. I. R. Co.
(App.) 104 N. E. 42. Rehearing
denied. Transfer to Supreme
Court denied.

Westphal v. Williams (App.) 107
N. E. 91. Rehearing denied.
Transferred to Supreme Court.
White v. Woods (App.) 106 N. E.
536. Rehearing denied. Trans-

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THE

NORTHEASTERN REPORTER

VOLUME 113

(185 Ind. 128)

MATCHETT v. WINONA ASSEMBLY AND
SUMMER SCHOOL ASS'N et al.

(No. 22882.)

(Supreme Court of Indiana.

6. PRINCIPAL AND SURETY 161 DISCHARGE OF SURETY-NEW PROMISE AFTER RELEASE-EVIDENCE.

Evidence of statements by a surety requesting further time for consultation with his prin

June 23, 1916.) cipal and cosureties, and expressing his desire to do all possible to arrange matters, held insufficient to show a new promise by surety after discharge by extension of time having been granted the principal debtor.

1. PRINCIPAL AND SURETY 104(1) RE-
LEASE OF SURETY BY EXTENSION OF TIME.
An agreement between the principal debtor
and creditor extending the time for payment of
a note, operates to release the sureties.

[Ed. Note.-For other cases, see Principal and
Surety, Cent. Dig. §§ 186, 190, 199; Dec. Dig.
104(1).]

[Ed. Note.-For other cases, see Principal and Surety, Cent. Dig. §§ 85, 439-441; Dec. Dig. 161.]

Appeal from from Circuit Court, Kosciusko County; Francis E. Bowser, Judge.

2. PRINCIPAL AND SURETY 105(4) RE-
Action by James R. Matchett against the
LEASE OF SURETY-PAYMENT OF INTEREST IN Winona Assembly and Summer School As-
ADVANCE.
Payment of interest in advance on a past-sociation and John F. Beyer and others as
due note operates to extend the time of payment sureties. From a judgment for plaintiff
of the principal to the date to which interest is against the defendant first named, and in
paid, and releases the sureties so that no agree favor of the sureties and against the plain-
ment for such release need be alleged or proved
because implied from the mere payment in ad- tiff, plaintiff appeals. Affirmed.

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3. PRINCIPAL AND SURETY 105(4) RE-
LEASE OF SURETY-PAYMENT OF INTEREST.

Where, on December 31, 1909, a creditor ac-
cepted payment of interest on an overdue note in
excess of the amount due, and indorsed on the
note interest paid to December 5, 1910, payment
of the original debt was thereby extended and
the sureties released.

[Ed. Note.-For other cases, see Principal and
Surety, Cent. Dig. §§ 186, 190, 199; Dec. Dig.
105(4).]

4. PRINCIPAL AND SURETY 59-DISCHARGE
OF SURETY-RULE OF STRICTISSIMA JURIS.
The rule of strictissima juris applied to con-
tracts of surety in favor of volunteer individual
sureties, but not in favor of corporate surety
companies, should be applied for the benefit of
stockholders of a corporation not conducted for
profit, although the rule might not apply in the
case of corporations conducted for profit.

[Ed. Note.-For other cases, see Principal and
Surety, Cent. Dig. §§ 103, 1032; Dec. Dig.
59.]

DIS

5. PRINCIPAL AND SURETY 130
CHARGE OF SURETY NEW PROMISE AFTER
RELEASE.

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If, after a surety is discharged by an exten-
sion of time for the payment of a note, he, with
knowledge of the facts, although without new
consideration, acknowledges liability, he is liable
therefor.

[Ed. Note.-For other cases, see Principal and
Surety, Cent. Dig. §§ 373-376; Dec. Dig.
130.]

H. W. Graham, of Warsaw, Anthony Deahl, of Goshen, and L. W. Royse, of Warsaw, for appellant. Widaman & Widaman, of Warsaw, and McNagny & McNagny, of Columbia City, for appellees.

LAIRY, J. The judgment from which this appeal is taken was based upon a promissory note executed by appellees and payable to appellant. The trial court rendered judgment in favor of appellant for the sum of $12,592 as against the Winona Assembly and Summer School Association and against appellant and in favor of appellees John F. Beyer, Christian C. Beyer, and J. Edward Beyer for costs. Upon proper request the court found the facts specially and pronounced its conclusions of law thereon. The questions here presented arise upon the exceptions to the conclusions of law.

As shown by the findings of fact the note in suit was executed on the 6th day of November, 1908, by the Winona Assembly and the Summer School Association as principal, and the other three appellees as sureties, and that appellant knew at the time the note was executed that the three last-named appellees were sureties for the principal maker of the note. The note was for the principal sum of $9,000, due 60 days after date, with interest after maturity at the rate of 8 per cent. per annum. The interest

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

to maturity was paid in advance and by the tion of appellant that, in order to constitute
terms of the note it fell due on the 5th day | such an agreement, both parties must have
of January, 1909. The note was not paid at
maturity, and interest was paid from time to
time by the principal maker. The first three
payments aggregating $360 paid the interest
to July 5, 1909, but by none of these pay-
ments was the interest paid in advance of
the time it was fully earned. After the pay-
ment which discharged the interest to July
5, 1909, no further payment was made un-
til January 1, 1910, on which date the prin-
cipal maker paid to appellant by check $360
as interest on the note in suit for six months
to January 5, 1910, and the following in-
dorsement was made on the back of the note:
"Interest 12/31 paid on this note to Jan.
5th, 1910, $360." The court's finding No. 6
is as follows:

"That at neither of the times when said payments were so made on said note was there any request made by the said principal on said note for any extension of the time of its payments, nor were either of said payments made under any agreement and understanding by and between the plaintiff and said principal, that in consideration thereof the time for the payment of said note should be extended, except such agreement as would be implied therefrom, and that each and all of said payments were made without anything said by said principal or said plaintiff about the extension of the time of the payment of said note."

The court further finds that all of such payments were made and indorsed on the note without the knowledge of the sureties. As a matter of law the court concluded that appellant was entitled to recover on the note as against the principal maker, but that he was not entitled to recover as against the sureties, and that they were entitled to recover their costs.

[1] It appears from the special finding that the payment of $360 as interest on the 1st day of January, 1910, paid the interest on the principal until January 5, 1910, which was four days at least in advance of such payment. There is no controversy as to the law governing the case, if, in connection with the other facts shown in the special finding, it is also found as a fact that there was an agreement between appellant and the principal debtor extending the time for the payment of the note. All parties concede that the law applicable to the facts shown by the special finding released the sureties if it is properly found as a fact that the time of payment was extended by agreement between the creditor and the principal debtor. Such is undoubtedly the law. Williams v. Scott, 83 Ind. 405; Post, Adm'r, v. Losey, 111 Ind. 74, 12 N. E. 121, 60 Am. Rep. 677. Appellant asserts that the finding does not show that there was any agreement between him and the principal debtor to extend the time for the payment of the note to January 5, 1910, at the time interest was paid to that date on the first day of that month, and that finding No. 6 shows that there was no express agreement to that effect. It is the posi

understood that, in consideration of the pay-
ment of interest in advance, the time for the
payment of the principal debt was extended
until the date to which interest was paid,
and that their minds must have met and
agreed upon that proposition. It is further
asserted that the fact of such agreement is
the ultimate fact to be found, and that the
failure to find such ultimate fact is fatal.
Appellant claims that the finding to the ef-
fect that interest was paid in advance from
the 1st of January, 1910, to the 5th of that
month is an evidentiary fact from which the
ultimate fact of an agreement to extend the
time for the payment of the principal debt
until the latter date might be inferred, but
that it does not amount to a finding of such
ultimate fact. Decisions in some other states
may be found to sustain appellant's position.
Haydenville Sav. Bank v. Parsons, 138 Mass.
53; Nat. Bank of Springfield v. Love, 62 Mo.
App. 378; Vilas v. Jones, 10 Paige (N. Y.)
76; Williams v. Smith, 48 Me. 135.

[2] The rule adopted in this state, how-
ever, does not sustain the position of appel-
lant, and does not accord with that an-
nounced in the decisions cited in its support.
On the contrary this court has held that the
payment of interest in advance has the legal
effect of extending the time for the payment
of the principal debt to the date to which the
interest is paid, and that such agreement
need not be alleged or proved for the reason
that it is implied as a matter of law from
the mere payment of the interest in advance.
Hamilton v. Winterrowd, 43 Ind. 393; Star-
ret v. Burkhalter, 86 Ind. 439.

In the case of Hamilton v. Winterrowd, supra, the court said:

"There is, to be sure, no allegation of an agreethe facts are stated from which the presumption ment to forbear for three months and a half, but of such an agreement arises. The doctrine of implied agreement rests on presumption. ""Implied contracts," says Blackstone (vol. 2, p. 443) which, therefore, the law presumes that every "are such as reason and justice dictate, and man undertakes to perform." 1 Pars. Con. (5th Ed.) p. 4. Presumptions of law, however, need not be stated in pleading. 2 G. & H. 111. It follows that under our Code it is sufficient to state facts from which the law implies an agreement, without in terms averring the agreement.'

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In each of the cases cited the question arose in the determination of the sufficiency of an averment of an answer, but the reason for the rule as stated by the court applies with equal force where the sufficiency of a special finding of fact is in question. In other cases this court approved the same proposition of law embodied in instructions. Woodburn v. Carter, 50 Ind. 376; Jarvis v. Hyatt, 43 Ind. 163.

[3] It may be that interest paid in advance by reason of a mutual mistake of the parties or on account of a miscalculation of the amount due as interest would not have the legal effect of extending the time for the pay

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