279 P. 236 | Mont. | 1929
It is well established that the makers of a promissory note cannot make payment thereof in any manner other than by actually placing the currency in the hands of the owner or the person authorized by the owner to accept the payment (with a very few exceptions, viz.: Maine, Massachusetts, Vermont and Indiana), unless there is an agreement to the contrary. If the maker selects some medium or agency to perform that service for him he continues to be fully responsible to the owner of the note until the agency that he may have selected has accomplished a delivery of the currency. The cashier's check could not constitute payment in the absence of an express agreement that it was to be accepted *295
in satisfaction and discharge of the promissory notes. It was incumbent upon the defendants to prove the existence of an agreement to accept that check in satisfaction of the note in precisely the same manner that proof is required of an agreement to accept some other property for payment. (United States Nat.Bank of Red Lodge v. Shupak,
That the draft (cashier's check), under consideration here was received as payment is best evidenced by the act of plaintiff in stamping the notes paid and returning them to defendants and keeping the draft by which the notes were paid, which draft at all times since its receipt on the 29th of October, 1923, up to the present time, has been and still is in the possession of appellant. *296
A check where received as payment will operate to extinguish the note or other instrument in payment of which it is given. (8 C.J. 568, sec. 792.) A remittance by mail will not be presumed a payment in the absence of proof that the creditor requested such remittance or that it was warranted by the ordinary course of business. (30 Cyc. 1269.) In Equitable Nat. Bank v. Griffinetc. Co.,
Appellant says in his brief that the letter of September 18, 1923, was no more than a direction to the defendants as to the form of remittance which they might use. We submit that it was more than a permissive suggestion. It was a direction from the plaintiff to defendants as to the form of remittance which it desired, and when this form was agreed to by defendants, the agreement between the parties as to the form of remittance became complete. Appellant then had no further option in the matter. Nothing is said in the letter that the draft would be accepted as payment when finally paid. What was said is too plain for equivocation, that upon receipt of the draft the notes would be marked paid and returned. On motion for rehearing the opinion heretofore rendered in this action is withdrawn and the following opinion adhering to the same conclusion is substituted therefor.
This action was brought on three promissory notes and to foreclose a chattel mortgage given to secure their payment. The notes were made August 16, 1922. Two of them matured October 1, 1923, and the other October 1, 1924. *297
Defendants by answer admit the execution of the notes and mortgage, and allege that the two notes payable October 1, 1923, were paid, and that a tender was made by them of the amount due on the one maturing October 1, 1924, on condition that plaintiff release the chattel mortgage. By way of affirmative defense, defendants ask for damages in the sum of $100 under section 8271, Revised Codes of 1921, and $500 general damages for failure of plaintiff to satisfy and discharge the chattel mortgage within the time provided in that section.
The affirmative allegations of the answer were put in issue by the reply. Trial by jury was waived and the cause tried to the court. Judgment was rendered for defendants in the sum of $500, from which plaintiff appealed.
The court found that the two notes maturing on October 1, 1923, were paid and discharged, and that the note payable October 1, 1924, was discharged by the tender made by the defendants. The correctness of these findings is challenged by plaintiff for want of supporting evidence.
The evidence in support of the finding that the two notes payable October 1, 1923, had been paid was as follows: A letter was written by plaintiff at Billings and mailed to defendant Cecil L. Hess, at Denton, on September 18, 1923, as follows:
"Your notes in favor of our company which mature October 1, 1923, are being held at this office for collection. The principal with interest figured to due date amounts to $463.25. If you will kindly mail us draft for the above amount, we will stamp your note paid and return it to you by mail promptly. We ask you to give this matter your good attention.
"Yours truly, "ADVANCE-RUMELY THRESHER COMPANY, INC. "GLENN SMITHSON, Branch Manager."
In the latter part of October, 1923, defendants secured a cashier's check from the Denton State Bank, payable to the order of the Advance-Rumley Thresher Company, and mailed it to the company at Billings, stating in the letter of transmittal: *298 "Enclosed you will find draft as requested." The cashier's check was received by plaintiff at its office in Billings on October 29, 1923; it stamped the two notes "Paid," and mailed them to defendants at Denton. The cashier's check was deposited at the Midland National Bank at Billings for collection on the day of its receipt, but was not paid because the Denton State Bank closed on October 30, 1923.
In the absence of an agreement to the contrary, the acceptance[1] of a check in satisfaction of an obligation is conditional upon its payment. (Kalman v. Treasure County,
Defendants contend that the foregoing evidence discloses an express agreement unconditionally to accept the check in satisfaction and discharge of the notes.
Plaintiff contends, first, that the mailing of a cashier's[2] check instead of a draft was not a compliance with the request contained in the letter of September 18, 1923, assuming, for the sake of argument, that compliance therewith would have operated as actual payment of the notes.
We think, for the purposes of this case, the term "draft" and "cashier's check," may be regarded as meaning the same thing. (Montana-Wyoming Assn. of Credit Men v. Commercial Nat. Bankof Miles City,
Plaintiff's next contention is that, treating the cashier's check as a draft, the evidence falls short of showing an[3] agreement that it was accepted as unconditional payment of the notes. The fact that the notes were marked "Paid" and surrendered to the makers does not establish that the draft was accepted as unconditional payment of the notes. (22 Am. Eng. Ency. of Law, 2d ed., 564; Lloyd Mortgage Co. v. Davis,
A case very similar is that of National Life Insurance Co.
v. Globe,
Another case possessing similar features is that of Dille v.White,
This court held in Kalman v. Treasure County, supra, that the following letter: "We acknowledge receipt of your remittance under date of December 31, in the amount of $1,952.50 in payment of interest on Treasure county bonds," was not sufficient to show that the check was accepted as unconditional payment. The letter here relied upon as proving an offer to accept a draft as unconditional payment is not open to that construction. It is nothing more than a request for a draft and a promise to do that which is wholly consistent with its acceptance as conditional payment only, viz., stamp the notes "Paid" and return them to the makers. The letter was simply a direction as to the method of handling the transaction. *301 The agent of plaintiff who handled this transaction testified that he had no intention to accept the check as absolute and unconditional payment of the notes.
Contention is made that, since plaintiff has retained the[4] draft ever since receiving it, the implication follows that plaintiff accepted it as absolute payment. But plaintiff took no affirmative action to collect the draft, other than to have it presented for payment. It made no claim against the receiver of the bank, but, on the contrary, immediately upon learning of the suspension of the Denton bank, advised the defendants of that fact. Mere retention of the draft or failure to surrender it is not sufficient from which the deduction can be made that it was taken as unconditional payment of the notes. There is no evidence in this case that defendants ever asked the return of the draft. There is no evidence to support the finding that the notes maturing on October 1, 1923, were paid and discharged.
The finding that the note maturing on October 1, 1924, was[5-6] discharged and paid is based upon a tender made by defendants by depositing the amount due on the note in the First National Bank of Denton, to be paid to plaintiff on condition that plaintiff deliver the note and mortgage, together with a satisfaction in full of the mortgage. It is contended that the obligation was thus discharged by virtue of section 7446, Revised Codes of 1921.
The mortgage involved was given to secure the three notes, and, since the two maturing on October 1, 1923, had not been paid, the defendants, upon the tender made, were not entitled to a satisfaction of the mortgage. A tender is not valid when accompanied with conditions which the tenderer has no right to make. (38 Cyc. 152.) In order that a tender shall operate to extinguish the obligation under section 7446, it must be for the full amount of the debt. (24 Cal. Jur. 525.) Here the tender was only for the full amount due on the one note and upon condition that the mortgage given to secure payment of the three notes was satisfied. It was error to find that the *302 note maturing on October 1, 1924, was discharged by the tender made.
Since the judgment awarding to defendants $500 damages was predicated upon the mistaken premise that the notes were paid and the defendants entitled to a satisfaction of the mortgage, it cannot stand.
The judgment is reversed and the cause remanded for further proceedings not inconsistent with this opinion.
MR. CHIEF JUSTICE CALLAWAY and ASSOCIATE JUSTICES MATTHEWS, GALEN and FORD concur.
