
    Adam Van Allen, Receiver, &c., Plaintiff and Respondent, v. George Jones, Defendant and Appellant.
    1. An agreement between the maker and the holder of a note, which, by its terms, is payable on demand, with interest, that the maker will pay interest semi-annually, and shall not be required to pay the principal until he wishes to do so, is without consideration and void; as the restriction of the right of the holder to demand interest, to stated periods, makes the contract less rather than more beneficial to him.
    2. A subsequent agreement between the same parties, that in consideration of the maker’s relinquishing such first agreement, the holder will allow him. to pay the principal in periodical installments, with interest semi-annually on the amount remaining unpaid, instead of on demand, is equally without consideration and void.
    3. The payment and acceptance of the first installment under such latter agreement does not render it binding as an accord.
    (Before Robertson and Monell, J. J.)
    Heard, March 6, 1863;
    decided, March 28, 1863.
    This was an appeal by the defendant, from a judgment entered in favor of the plaintiff, upon a verdict recovered on a trial, on the 24th day of October, 1862, before Chief Justice Bosworth and a Jury.
    The action was upon a promissory note made by the defendant, and dated the 2d of August, 1853, payable to the Bank of Albany, .on demand. The complaint was in the usual form, but admitted that the defendant had paid $500 to apply as principal on the note, and had also paid the interest thereon to the first day of January, 1861.
    The defendant, in his answer, set up, and on the trial offered to prove, that at the time the note was made, it was agreed between him and the bank, by the cashier, that he should not be called upon to pay the note at any time until he, the defendant, should desire to do so; the defendant at the same time agreeing to pay up, and keep paid semi-annually, the interest; that he regularly paid the interest, semi-annually, up to the first of January, 1861, pursuant to that agreement, and that in January or February, 1861, the defendant, at the request of the Bank of
    Albany, made a new verbal agreement with the Bank, to wit, that they agreed to rescind the old agreement, and to receive from the defendant at the rate of |500 every three months thereafter, until the principal sum was paid; and that, in consideration thereof, the defendant agreed to pay interest semi-annually on the whole amount, the defendant having the right to pay the whole amount at anytime. :That when the last agreement was made, and at the same time, defendant paid $500 to the Bank of Albany, -according to the terms of last mentioned agreement, which they then and there accepted, and also the interest for six months, up to January 1st, 1861, on the whole amount of the principal debt, which the Bank accepted from the defendant.
    The counsel also offered to prove by computation that by the payment of this interest semi-annually on the note in suit, of $4,000, from the time of its date until January 1, 1861, the defendant had been injured, and the plaintiff and the Bank of Albany benefited, to the amount of $514.50 for compound interest, or interest paid on the interest money aforesaid, or, in other words, that the interest on the sums paid for interest to this time is $514.50. And he claimed that the amount of interest overpaid should be deducted from the amount of the recovery for the plaintiff in this action, if any should be had.
    , The Court thereupon decided that there was no overpayment of interest, and that the offer made by the defendant constituted no defense to the cause of action set out in the complaint, and overruled the offers of proof. To which rulings the defendant excepted.
    The Jury, under the direction of the Court, then found a verdict for the plaintiff for the amount claimed, and after the entry of judgment, the defendant appealed. -
    
      Samuel G. Courtney,, for defendant, appellant.
    I. The agreement, offered- to be proved on the part of the appellant,, was a valid contract, and was acted upon as such by the B'ank of Albany and the defendant, from August, 1853, until January or February, 1861, and should have been admitted by the Court as evidence. This is apparent from the circumstances that the note is made payable on demand, is dated August 2,1853, and remained in the possession of the bank from August, 1853, unacted upon; neither was it put in suit, nor attempted to be enforced, except as stated in the answer of the defendant, until the new agreement was made with the bank—a period of over seven years.
    The making of payment before it was legally demand-able, was a sufficient consideration for the agreement. (Bainbridge v. Firmstone, 8 Ad. & El., 743; 1 Serg. & Rawle, 241; Clark v. Dales, 20 Barb., 64; Miller v. Drake, 1 Caines, 45; Briggs v. Tillotson, 8 Johns., 304; Draper ads. Ferris, 5 N. Y. Leg. Obs., 227; Houghtaling v. Randen, 25 Barb., 21; 21 Id., 454.)
    II. The second agreement was solicited and made at the request of the bank, and was not executory, but on the contrary, ratified and executed at the time it was made, by the bank receiving from the defendant the installment of $500. There was a good consideration for this agreement.
    III. There was a mutual promise between the parties, for the agreement, and this is, of itself, a sufficient consideration. (8 Johns., 304. Case above cited on this point.)
    The note was due, and past due, and the parties had the legal right, at any time after the making and executing of the note, even without any money, or beneficial or detrimental consideration, to make the second agreement, and it is, therefore, binding upon both parties. (Dearborn v. Cross, 7 Cow., 48-50.)
    • The acts of both parties in regard to said second agreement, in connection with what was said at the time of making it by them, make it valid and binding upon both, and canceled the old agreement, and, consequently, the old note.
    IV. The note, being an instrument in writing, and a simple contract, can be canceled by parol. (7 Cow., 48-50,) and may be varied, also, by a parol enlargement of the time of performance. (Clark v. Dales, 20 Barb., 64; Erwin v. Saunders, 1 Cow., 250; Mayor, &c., v. Butler, 1 Barb., 338; Dearborn v. Cross, 7 Cow., 48; Batterman v. Pierce, 3 Hill, 171; Fleming v. Gilbert, 3 Johns., 528; Keating v. Price, 1 Johns. Cas., 22.) In the case at bar, there was a clear waiver of performance produced by the parol agreements between the parties, carried out and executed by them. (3 Johns., 528.)
    V. The verdict under the direction of the justice is against evidence.
    VI. The remedy of the plaintiff is upon the agreement last mentioned. When any default on the part of the defendant, under the agreement, occurs, the plaintiff can proceed against the defendant, and obtain judgment on failure to pay these installments. He has no legal or equitable demand under the original note.
    
      John N. Whiting, for plaintiff, respondent; —
    Cited Hunt v. Bloomer, (5 Duer, 202;) Gibson v. Renne, (19 Wend., 389;) Acker v. Phenix, (4 Paige, 305;) Tinker v. Geraghty, (1 E. D. Smith, 687;) Miller v. Holbrook, (1 Wend., 317.)
   By the Court—Robertson, J.

The Bank of Albany had the right, by virtue of the original note in this case, at any time to demand the principal of it, and interest to the time of demand, and, of course, until the payment of such principal, to demand interest. They might forbear to demand either for a reasonable time, or to call for the interest except at stated periods; but an agreement by them not to demand such interest except at such periods, might make the contract less, but could not render it more beneficial to them. So, also, the defendant had a right to pay the principal at any time; a mere supplemental agreement, therefore, that he should be allowed to do so, would neither prejudice the bank nor benefit him, beyond what the terms of such note did. An agreement by the defendant to abstain from paying off the principal before a certain .time, and in the meantime to pay interest at stated periods, as a substitute for the obligation of the note, might be a good consideration for a corresponding substituted agreement by the bank, not to demand the principal before a fixed time, or the interest except at the end of such period, but no such agreement is pretended in this case.

The first agreement stated in the answer, and offered to be proved is, that the defendant agreed to pay the interest semi-annually, and the principal when he pleased; in consideration of which the bank surrendered the right to demand at their pleasure both principal and interest. This was entirely destitute of any consideration.

The second agreement set up in the answer is, that the first one was canceled and a new one substituted in its place, and in consideration thereof, and of a promise by the defendant to pay $500.00 on account of the principal of such note every three months, and interest on what remained due of it every six months, the Bank of Albany agreed to receive such sums, until the whole amount was paid, whereupon the first agreement was canceled. If this last agreement had been made in discharge of the note, it would, equally with the first one, have been without a consideration. As, however, it was merely an agreement to cancel another which was legally inoperative, both are wholly immaterial. *

The compound interest, on the payments of interest every six months was not a gain to the plaintiff’s assignors. It might have been if the plaintiff, by force and upon the face of the note, could only have recovered, and was only entitled to interest at the time of the trial; but as the bank was equally entitled to demand interest at the end of every six months, if the defendant chose to pay it, instead of paying up principal and interest, the plaintiff would reap the benefit of that legal consequence without any new agreement.

But as the supposed accord was entirely executory, the defendant must be left, in any event, to his remedy by action; any damages accruing to him by reason of nonperformance of the agreements in the answer, not being set up by way of set-off or recoupment. (Billings v. Vanderbeck, 23 Barb., 546; Tilton v. Alcott, 16 Barb., 598; Day v. Roth, 18 N. Y. R., 448; Mitchell v. Hawley, 4 Den., 414; 3 Bing. (N. C.,) 915.) The payment of the first installment was not a performance of the whole agreement, so as to ..make it.an executed one; such performance could take place when the whole principal was paid.

There was no over payment of interest in this case. The bank or the plaintiff having only received that to which they were entitled. x

The judgment must be affirmed with costs.  