Wheeler v. Jones — 6 N.Y. St. Rep. 303

Majority

p. 303

Russell Wheeler et al., Resp’ts, v. David M. Jones, App’lt.

(Supreme Court, General Term, Third Department,

Filed January 24, 1887.)

Headnote

Payment—taking mortgage to secure wile not extend time of payment.

Certain accounts against third parties due in the future, were assigned to the plaintiffs as security upon the agreement of the plaintiffs that as these accounts become due, they should collect the same and apply the avails in payment of a certain indebtedness of defendant. Held, that plaintiffs did not fix a new day of payment of the old debt, nor agree to postpone collecting it until they should collect the assigned accounts.

Appeal from a judgment in favor of the plaintiffs entered upon the decision of the court at circuit upon the trial without a jury.

The action was for merchandise sold by the plaintiffs to the defendant. It was admitted that the plaintiffs were entitled to recover $778.30 unless they had, by accepting the following assignment as collateral security, extended the time of payment. It being admitted that the several assigned accounts were not due at the time of the commencement of the action.

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“ Whereas, I, David M. Jones, of Canton, am justly indebted unto the firm of Russell Wheeler, Son & Co,. of Utica, N. Y., the sum of $1,260.64; now, therefore, for the purpose of securing said debt to said firm, I do hereby sell, assign and set over to them the following accounts and demands, to wit: (Then follow the names of ten different persons with a statement of the amount of the account against each one, the aggregate being $1,688).

“ The said assignees are to collect said claims as they fall due and place the several amounts so received from them to my credit as payments upon my said indebtedness, and after the same shall be paid in'full to return such claims as are uncollected to me, if any there be; also to account to me for any amount received by them over and above the amount of their said claim and expense of collection.

Dated, Canton, November 27, 1884. .

D. M. JONES.”

Chamberlin - & Hale, for app’lt; Wm. H. Sawyer, for resp’ts.

Cary v. White ( 52 N. Y., 139 ), is to the effect that where there is no agreement to extend the time of the payment of the original debt, or no substituted 1 agreement made respecting the debt, the mere taking of a mortgage payable at a future time as collateral security for the original debt does not operate to extend the time for its payment.

Durkee v. National Bank of Fort Edward ( 36 Hun, 565 ), is to the effect that when the original debt is past due, and the debtor, at the request of his creditor, gives him a mortgage to secure its payment, which mortgage appoints a future day of payment and provides that if payment be then made the mortgage shall be void, then the creditor by accepting the mortgage accepts its terms.

In the former case, the collateral mortgage does not in terms refer to the original debt, nor fix a new day for its payment; in the latter case, the original debt is by express terms in the mortgage made payable at a future day.

In the case at bar, the assignment does not by its terms extend the time of payment of the original debt. Certain accounts against third parties, due in the future, were assigned to the plaintiffs as security upon the agreement of the plaintiffs that as these accounts became due they should collect the same and apply the avails in payment of the indebtedness. The plaintiffs now had the original unchanged promise of the defendant, and the assigned claims against third parties, but they did not fix a new day of payment of the old debt; they fixed the time when they would apply the proceeds of the assigned accounts, namely, when they

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.should collect them; but they did not agree to postpone collecting the original debt until they should collect the assigned accounts.

Judgment affirmed, with costs.

Learned, P. J., and Bockes, J., concur.