A consideration was necessary to make the agreement valid. Edw. Bills 534; Sto. Pr. Notes, s. 415; Philpot v. Briant, 4 Bing. 717; M'Lemore v. Powell, 12 Wheat. 554; Jennings v. Chase, 10 Allen 526; Oxford Bank v. Lewis, 8 Pick. 458; Blackstone Bank v. Hill, 10 Pick. 129; Greely v. Dow, 2 Met. 176; Gifford v. Allen, 3 Met. 255; Abbott v. Tucker, 4 Allen 72; Potter v. Green, 6 Allen 442; Reynolds v. Ward, 5 Wend. 501; Gahn v. Niemcewicz, 11 Wend. 312; Kellogg v. Olmsted, 25 N.Y. 189; Parmelee v. Thompson, 45 N.Y. 58; Ives v. Bosley, 35 Md. 262; Hoffman v. Coombs, 9 Gill 284; Gibson v. Renne, 19 Wend. 389; Grafton Bank v. Woodward, 5 N.H. 99; Wheat v. Kendall, 6 N.H. 504; Bailey v. Adams, 10 N.H. 162; McCann v. Dennett, 13 N.H. 531; Mathewson v. Bank, 45 N.H. 104. The debtor's payment of the interest that was due was not a good consideration for the creditor's promise to extend the time of payment of the remainder of the debt. Chit. Cont. 51; Edw. Bills 566, 570; Bailey v. Adams, 10 N.H. 162; McCann v. Dennett, 13 N.H. 531; Mathewson v. Bank, 45 N.H. 104; Watson v. Elliott, 57 N.H. 511; Reynolds v. Ward, 5 Wend. 502; Gibson v. Renne, 19 Wend. 389; Kellogg v. Olmsted, 25 N.Y. 189; Parmelee v. Thompson, 45 N.Y. 58; Jennings v. Chase, 10 Allen 526; Callagan v. Hallett, 1 Cai. 104; Pabodie v. King, 12 Johns. 426.,
Payment of the costs of the former suit did not constitute a consideration. The point was presented in Parmelee v. Thompson, 45 N.Y. 58 (6 Am. Rep. 33), and disposed of as follows: "The payment of the costs of the former action upon the note was but the discharge by the defendant of a legal obligation.
Ordinarily, and in the absence of other circumstances, acceptance by the mortgagee from the grantee of payments on account of principal or interest at the rate fixed in the original obligation, and at or after the due date thereof, will not discharge the mortgagor, for such action is consistent with the original obligation as well as the continued liability of both the mortgagor and his grantee as principal debtors. Under those circumstances the mortgagee receives no more than he is entitled to under the original obligation. Parmelee v. Thompson, 45 N.Y. 58, 6 Am. Rep. 33. Likewise, the mere waiver by the mortgagee of his optional rights under the acceleration clause of the mortgage, or his mere forbearance to further insist thereon after previously exercising his option to accelerate the due date of the principal because of the nonpayment of interest, standing alone, and with no other circumstances indicating prejudice to the mortgagor, will not operate to discharge the mortgagor where, as here, it does not appear that the mortgagor had relied upon such election nor changed his position by reason thereof and the mortgagee granted no extension beyond the original due date of the mortgage notes, but merely agreed "to discontinue the foreclosure action which it has started" on the mortgage in question.
In carrying out and applying the rule of law above announced, the parties to a contract may modify or waive their rights under it and engraft new terms upon it by letters, and in such case the promise of one party is the consideration for that of the other. In other words, a contract may be varied by the parties before performance for the reason that the power to enter into the contract equally authorizes them to abrogate or modify it, and this right to change or modify the contract equally extends to a change in the time of performing it. Parmelee v. Thompson, 45 N.Y. 58, 6 Am. Rep. 33. It will be noted from the letters quoted and referred to in our statement of facts that, after the expiration of the sixty days, Elkins treated the contract as continuing in force, and finally secured a change in its terms by proposing to accept the bonds at a lower price and pay the attorney's fees, which proposal was accepted by the town of Aliceville. Subsequently, on May 3, 1923, Elkins wrote to the town of Aliceville a letter in which he stated that the maturities of the bonds to be issued were satisfactory to him, and that he was ready to take up the bonds as soon as Wood Oakley gave their final opinion.
In the case of Royal v. Lindsay, 15 Kan. 591, it was held that a promise to pay interest monthly instead of annually was a sufficient consideration for the extension of a note, but Mr. Justice Brewer, in the course of the opinion, said: "That a promise to pay interest for a definite period of time is a sufficient consideration for an agreement to extend for a like period the day of payment is affirmed by these authorities: Wheat v. Kendall, 6 N.H. 504; Bailey v. Adams, 10 N.H. 162; Chute v. Pattee, 37 Me. 102; McComb v. Kittridge, 14 Ohio, 348. It is denied in Reynolds v. Ward, 5 Wend. [N.Y.] 502; Kellogg v. Olmsted, 25 N.Y. 189; Parmelee v. Thompson, 45 N.Y. 58 [6 Am. Rep. 33]; Gibson v. Irby, 17 Tex. 173; 2 Parsons on Notes and Bills, 528. It is perhaps not necessary that this question shall in this case be definitely decided, though we may say that the suggestions made in favor of the proposition by the court in the case from 14 Ohio seem to us of great force. We prefer to rest our decision upon what seems less doubtful grounds, viz., the promise to pay interest in a different manner from that prescribed in the note.
The answer of the defendant and her counsel's opening address disclose that an agreement was made between the plaintiff and the principal debtors for an extension of time, but there is neither allegation nor statement of any consideration for such agreement. That a valid consideration is an essential element of such an agreement cannot be doubted. ( Parmelee v. Thompson, 45 N.Y. 58.) Where an action or defense is based upon a contract, the pleading in which it is set forth should allege all the material facts. Consideration is a material and indispensable element of every contract.
(Citizens' Bankv. Jones, 121 Cal. 30, 32; Parmelee v. Thompson, 45 N.Y. 58, 59, 64.) Waiver of strict performance is nothing more than an extension of the time of payment. (Fleming v. Gilbert, 3 Johns. 298;Dearborn v. Crow, 7 Cow. 48-50.)
consent of the surety, thereby discharges the latter from liability, said that in order that an agreement shall accomplish that result, it must have a sufficient consideration, so as to prevent the prosecution of the debt by the owner, and to prevent the surety from compelling him to enforce it. It was claimed by the plaintiff that he was induced to enter into the agreement, and take notes extending the time of payment, by the fraudulent representations made by the principal debtor, and it was held that the court properly left it to the jury to determine whether the notes were imposed on the plaintiff by fraud, and if so that their receipt by the plaintiff under the agreement did not operate to extend the time of payment of so much of the amount of the bond as their face value represented. It was also held that the judge properly charged that in any event the extension of the time of payment did not discharge the surety as to the residue of the bond beyond the amount of the notes. In Parmelee v. Thompson ( 45 N.Y. 58) one of the makers of a promissory note after maturity paid to the payee a sum equal to the amount due thereon and took possession of the note. Subsequently he brought suit against another maker, who gave evidence tending to show that while the payee held the note an action was brought thereon in the Supreme Court, and that it was agreed between the defendants and the plaintiff therein that the suit should be discontinued, the defendant to pay the costs and have until the ensuing December to pay the note; that the costs were paid and the suit discontinued, after which the plaintiff became the owner of the note and brought the action before the expiration of the time agreed upon, and the trial judge held that there was no valid agreement to extend the time of payment.
The promise to forbear was without consideration, and nudum pactum. (Bishop on Con., § 421; Hughes v. Davis , 40 Cal. 120; Kellogg v. Olmsted , 25 N.Y. 189; Bates v. Starr , 2 Vt. 536; First Nat. Bank v. Church, 3 Thomp. & C. 10; Van Allen v. Jones, 10 Bosw. 369; Parmelee v. Thompson , 45 N.Y. 58; Hunt v. Bloomer, 5 Duer, 202; Pabodie v. King, 12 Johns. 426; Barron v. Vandvert , 13 Ala. 238.) Richards & Boyce, for Appellants.
Payment to the bank of the proceeds of the sale of the mortgaged premises, as to which the bank was already the mortgagee, evinces only partial payment of defendant-respondent's outstanding debt obligations. Such part payment is insufficient consideration to support the alleged oral modification (Parmelee v Thompson, 45 N.Y. 58; Federal Deposit Ins. Corp. v Hyer, supra, at 528-529). Further, since a mortgage is merely collateral security for the payment of a debt (Johnson v Augsbury Org., 167 A.D.2d 783, 784; Signal Fin. v Polomaine, 137 Misc.2d 78; 38 N.Y. Jur, Mortgages and Deeds of Trust, § 51) defendant-respondent cannot rely on the satisfaction of the mortgage to create issues concerning modification or satisfaction of the debt.