12 W. Va. 772 | W. Va. | 1877
Lead Opinion
The plaintiff in error, Basnett, assigns that: “ It was error to proceed to a trial of the case and to render judgment therein against the defendant, without first disposing of the demurrer to the plaintiff’s declaration.’’
The second assignment of error.is: That the court should have sustained the demurrer.
No reasons have been given showing error in the declaration, and no error being apparent, I consider the declaration sufficient in law and that the demurrer should have been overruled.
As to the third assignment of error that the court erred in giving the second instruction to the jury, viz: “That the execution and delivery of the promissory note for $408.00, mentioned in the pleas and evidence^ was not a payment upon the said $1,000.00 note, and that unless the jury should believe from the evidence that the defendant had paid the said note of $408.005 prior to his receiving notice or knowledge that said $1,000.00 note had been assigned, they should find for the plaintiffs for so much or such part of the said $1,000.00 note as remained unpaid at the time when defendant received notice or knowledge of the assignment of the said $1,000.00 note,” The exception is well taken.
The 14th sec. of chap. 144 of Code of 1860, declares: “ The assignee of any bond, note or writing not negotiable, may maintain thereupon any action in his own name which the original obligee or payee might have brought, but shall allow all just discounts, not only against himself, but against the assignor, before the defendant had notice of the assignment. ” That section “ applies only to writings not negotiable, and the note in this case was not negotiable ; and its only effect is to authorize the assignee of such writings to sue at law in his own name. The legal title still remains in the assignor, in whose name the suit at law may be brought. ” (Opinion of Moncure, J., in Davis v. Miller, &c., 14 Gratt. 13). “The assignee acquires only an equitable right with a capacity, expressly given him by statute, to assert it at law in his own name. But the legal title still remaining in the obligee or payee, aright of action is incident thereto; and the
Bouvier, in his Law Dictionary defines payment thus : “ That which is given to execute what has been promised; or it is the fulfillment of a promise. Solvere dieimus cum quis fecit, quod facere promisit. But though this is the general acceptation of the word, yet by payment is understood every way by which the creditor is satisfied or ought to be, and the debtor liberated: for example, an accord and satisfaction will operate as a payment, ” &c.
In Huffman v. Walker, 26 Gratt. 316, the court held: “ Payment of a debt is not necessarily a payment of money, but that is payment which the parties contract shall be accepted as payment.”
In Poole & Co. v. Rice, 9 W. Va. 73, the court held : “A note will not be regarded as an absolute payment or extinguishment of a precedent debt, unless it be so expressly agreed — whether the note received was that of one previously bound, or of a stranger; and it will not be so regarded, even when so expressly received, if such agreement was procured by fraudulent concealments and representations.”
In Dunlap’s ex’ors &c. v. Shanklin’s ex’or, &c., 10 W. Va. the court held: “Taking a note from the debtor, or a note of a third party, is no discharge of the debt, unless it is expressly agreed between the creditor and debtor that it is jin absolute payment thereof2 Greenl. Ev. secs. 516,
Prom these authorities, and many others that might be cited, it seems to me the position assumed by the plaintiff in error, in the argument of this case, is tenable, “that the debtor, before notice of the assignment may, by contract with his creditors, thoroughly modify the legal relation subsisting between them, or may enter into a new and different contract, which shall by express words, constitute an extinguishment of the subsisting contract.” The assignee should be diligent in giving notice to the debtor, that he might know his rqal creditor; for without such notice, the debtor has every reason to consider the payee still his creditor, and any payment made to the payee, or new contract expressly entered into between them in extinguishment of the note, before notice of the assignment, is in contemplation of law a payment of the note, and the assignee cannot recover upon it as against the payee, if the defendant pleads payment, and files with his plea an account showing the nature of the payment relied upon, as was done in this instance. Hoffman v. Walker, 26 Gratt. 316-17.
The assignee in this case stood in the shoes of Hay-mond. Had Haymond sued on the $1,000.00 note, there can be no doubt that the defendant, the plaintiff in error, could have defeated his action by reason of the settlement evidenced by the receipt of March 29, 1861, if true, and that too by the plea of payment, certainly the assignee would be in. no better condition, unless the payee had notice of the assignment before said settlement. Hence we see there are instances where a new note may be a payment, and that our own Court has so held.
The instruction was calculated to mislead the jury, and should not have been given, because, whether the
Concurrence Opinion
I find myself unable to agree with the reasoning of my brother Moore, who prepared the opinion in this case on the subject, of ‘payment in something else than money. I did concur in the conclusion arrived at that the verdict in this case ought to be set aside and the case remanded for a new trial. I propose to review the authorities upon the subject of payment by other modes than by money, and-find I have undertaken a very difficult task, as the authorities are so numerous and in much confusion.
lsf. As to payment by check or negotiable note, either of the debtor or a third party:
In Thatcher v. Dinsmore, 5 Mass. 299, it was held that a negotiable .note given in consideration of a simple contract debt due is a discharge of the simple contract. Parsons, C. J., said, “ it has long been settled as law in this State, that a negotiable note given in consideration of a simple contract debt due is a discharge of the simple contract, * * *. The reason of the decision is that the defendant might not be held to pay the money twice, for if the administrator could recover, the defendant might afterwards be obliged to pay the note to an endorser ignorant of the consideration. It was therefore determined that the law will presume a negotiable note is agreed by the parties to be payment of the simple contract. This case does not indeed decide that the plaintiff may not encounter the presumption by proving an express agreement that the note should be received as a collateral security.” Butts v. Deane, 2 Metc. 76.
In Mancely v. McGee, 6 Mass. 143, Parsons, C. J., said : “ At common law a promissory note given by his debtor to pay to his creditor a subsisting debt, is no dis
In Melledge v. The Boston Iron Co., 5 Cush. 169, Shaw, C. J., said: “ It is true that it has long been held as the law of Massachusetts that when the party bound to the payment of a simple contract debt, gives his own promissory negotiable note for it, the law presumes such note to have been accepted in satisfaction and discharge of the pre-existing debt, because the party receiving it relinquishes no security, but has the same responsibility for payment which he had before, with more direct and unequivocal evidence of the debt and a more simple remedy for recovering it, and with power also by endorsement to transfer the whole interest in it to another. There seems therefore to be no motive for retaining and keeping alive the original debt.
But the presumption that a negotiable note is satisfaction of a pre-existent debt, and not as collateral security, is a presumption of fact only, and may be rebutted and controlled by evidence that such was not the intention of the parties; so that when the promissory note given is not the obligation of all of the parties who are liable for the simple contract debt, and a fortiori when the note is that of a third person, and if held to be in satisfaction, would wholly discharge the liability of the party previously liable, the presumption, if it exist at all, is of much less weight; and it is a question of fact on the evidence, whether the promissory note given on the one hand and accepted on the other, was in satisfaction and discharge of the original debt.” In that case, goods had been sold to a carpenter, and the declaration was in assumpsit, with the common .counts, and special counts on the notes executed for the defendant for the price of the goods sold. The plaintiff recovered. In Witherby v. Mann, 11, Johns. 516, it was held that
Spear & Patton v. Atkinson et al., 1 Ired. 262, was an action for goods sold and delivered. The plea was non assumpsit The plaintiff, on the 1st of April, 1836, sold goods to the firm of Joseph & John Atkinson, who were the defendants. The firm was dissolved in September, 1836. On the 15th of April, 1837, the two Atkinsons gave to the plaintiffs their promissory note for the price of the goods. Some payments were made on the note which reduced it to $500.00; and on the 18th of June, 1837, John Atkinson, in his own name, drew a bill of exchange on Mitchell & Co., of New. York, for $500.00 at sixty days, and took up the promissory note. When the bill fell due it was duly presented for payment, but payment was refused for want of funds of the drawer. No notice was given to the drawer of the dishonor of the bill. There was no proof that the bill was returned to the drawer, or that the plaintiffs offered to surrender it at the trial. The plaintiffs were non suited and appealed. Daniels, Judge, said: “If the plaintiffs had surrendered the bill, even on the trial, they might have recovered on the original consideration. For the taking of the note first, then the bill, did not merge the original consideration as a bond would have done. But as this negotiable bill is still outstanding, and may be in the hands of an innocent endorser or holder, we are of opinion from the cases, that the plaintiff cannot recover, and that the non-suit must stand.”
In Downey v. Hicks it was held, that “ where a certificate of deposit in a bank, payable at a future day, was handed over by a debtor to a creditor, it was no payment unless there was an express agreement on the part of the creditor to receive it as such, and the question, whether there was or was not such an agreement, was one of fact to be decided by the jury.”
Justice McLean, in delivering the opinion of the court
Palmer et al. v. Elliot & Hovey, 1 Cliff. 63. In Hudson v. Bradley et al., 2 Cliff. 130, the notes given by the defendants were negotiable notes, but Justice Clifford in his opinion says; “Wherea party in this State (Massachusetts) who is bound to a simple contract debt gives his own promissory note for the debt, the presumption in the absence of any proof to the contrary is, that such note was accepted by the creditor in satisfaction and discharge of the pre-existing debt, but such presumption is one of fact only, and may be rebutted and controlled by any evidence showing that such was not the intention of the parties. He must mean when the note taken was negotiable, as this accords with the authorities we have already cited from Massachusetts. “A note which two parties had endorsed for a third being over due, the holder wrote the endorsers requesting that a new note be sent in renewal. They sent one accordingly, made and endorsed by the same parties, payable at six months and requested the return of the old note. No notice was taken of this request, nor were any steps taken to fix the liability of the endorsers on the new note, but after it fell due, suit was brought on the old note, and the new one was tendered to the parties on the trial who refused to receive it. It was held that the plaintiff by retaining the new note under the circumstances had made it his own, and it operated as a payment of the old one. Sage v. Walker, 12 Mich. 425. In Marrett v. Brackett, 60 Me. 524, it was held that “the taking of check for an existing debt, is not ipso facto a payment of the debt; but the acceptance of the check
In Massachusetts it has also been held that payment by negotiable note, operates as a discharge and extinguishment of a prior debt, when so intended by the parties. Fowler v. Bush, 21 Pick. 230; Appleton v. Parker, 15 Gray 173; Spooner v. Roland, 4 Allen 485.
Balcom, Judge, said in Jobbett v. Goundry, 29 Barb. 509: “It is absurd to say that a creditor regards his demand as paid where he receives a check for it from his debtor on a bank. I think in ordinary transactions the creditor has not the least idea that his demand is paid though he may receipt it as paid upon receiving the check of a debtor or a third person, on a bank for the same. He cannot be supposed to regard the check as payment or a satisfaction of his demand, when the drawer has no funds in the bank to meet it and the bank refuses to honor it.
Where an antecedent debt is evidenced by negotiable paper, it is not enough that the new paper should have been received in payment and satisfaction of the old. To entitle the holder of the new paper to recover thereon, the old paper must be absolutely surrendered before maturity to the person from whom he received the new paper. Bright v. Judson, 47 Barb. 29.
The delivering of a check is not necessarily payment of the account, and the plaintiff was entitled to recover on the original indebtedness, and if the defendant relied upon the check to defeat the recovery, the onus was on him to show, that through laches of the plaintiff in respect thereof injury or loss has resulted.
The acceptance of a negotiable instrument for a debt, is no payment of it, without a separate agreement to that
In Johnson v. Bank of North America, 5 Rob. (N. Y.) 554, it was held that it was fully settled in that State, that the acceptance of one negotiable instrument in place of another and the surrender of the latter, is not a satisfaction of it unless specially so agreed, and. the burden .of proving such agreement rests on the party claiming its benefit. No case has ever implied that the surrender of a draft for a check, is anything more than a conditional acceptance of the latter as payment, and that such condition is that the check will bé good if presented in proper time for payment, provided there is no valid legal excuse for not presenting it.
In New Jersey it has been held, that a check or promissory note, either of the debtor or a third person, received for a debt is not payment, if not itself paid; except in cases where it is positively agreed to be received as payment. Accepting a check or draft, implies an undertaking of due diligence, in presenting it for payment, and if the drawer sustains loss by the want of such diligence, it will be held to as operate payment, Freeholders of Middlesex v. Thomas & Martin, 20 N. J. 39.
Though the delivering of a bill or note, either of the debtor or of a third party, is not payment of a precedent debt, but merely suspends the remedy, yet if the holder be guilty of laches, it operates complete as satisfaction. Shipman v. Cook, 16 N. J. Eq. 251.
In Illinois, it has been held, that a negotiable note executed by a debtor to a third party in the settlement of' his debt, at the instance of the creditor, or to the creditor himself, is prima facie, a payment of the original debt. Smally v. Eddy, 19 Ill. 207.
The bare reception of a check from the drawer for the amount of the bill will not ordinarily be considered as a payment, and such is the rule whether the bill is surrendered to the drawer at the time of receiving the check, or is retained by the holder, until, payment is. .cons.um-.
It is well settled that the mere giving of a negotiable note, or its endorsement to a third party, does not extinguish the original cause of action, if the payee can show, that the note has been lost, or can produce it upon the trial'to be cancelled. McOonneU v. Steltimus, 2 Gil. 707. In this case, Purple, J. said, what is there to exempt this case from this just law rule ? The basis of these decisions is, that when a party has once become indebted, he shall not be discharged until the debt has been actually paid, unless the debtor by some act or conduct of the creditor, has been placed in a worse condition.'’ But see While v. Jones, 38 Ill. 160.
In Alabama, it was held that the taking of a debtor’s negotiable note at or after the creation of a debt, is not a payment or extinguishment of the debt unless there was an agreement so to receive it. In the absence of any such agreement if the note is not paid at maturity, the creditor may sue on the original cause of action, and if he produces the note at the trial and offers to give it up to the defendant and the evidence shows, that it was taken “ for the purpose of closing the accounts on the books, it is not error to instruct the jury that the taking of the note does not raise the presumption of payment.” Mooring v. Mobile Marine Dock and Mutual Ins. Co., 27 Ala. 254.
It was held in Brown v. Crouise, 21 Cal. 386, “ where a creditor receives on account of his debt a bill of exchange drawn in his favor by the debtor upon a third person, it operates but as a conditional payment; if however the creditor fails to present it to the drawer for ác-
2d. Payment by checlc, draft, negotiable or other note, of one partner or joint debtor, of partnership or joint debt’.
In Heath v. Percival, 1 P. W. 682, decided in in 1720, the facts were that “Sir Stephen Evans, the goldsmith and his partner Pereival, were bound in a bond to the plaintiff for the payment of £1,000 and interest, and this so long since as 1693, in which year the money was employed in the partnership trade. In the same year Pereival being very ill in health, they broke off partnership, when Sir Stephen Evans, by ready money and his own bond secured to Pereival his share of the partnership stock, and took upon himself all the partnership debts giving his covenant to secure Pereival from all such debts. The same year Pereival died, leaving one Samuel Pereival,"his executor, and the defendant his residuary legatee. Public notice was given to all the creditors of the joint stock that they were either to receive their money of, or to look on Sir Stephen Evans only as their paymaster. In 1708, the plaintiff Heath, came to Sir Stephen and called in his money^ but then continued it upon Sir Stephen subscribing the bond at £6 per cent. Sir Stephen continued solvent until 1711, and the plaintiff till that time might when he pleased have had his money. The plaintiff outlawed Samuel Pereival, the executor, and brought his bill against Peter Pereival the residuary legatee, to recover the £1,000 and interest out of the assets of Pereival, the co-partner, Sir Stephen Evans having in 1711, become a bankrupt and insolvent.” It was claimed that the plaintiff's altering the interest on the bond from £5 to £6 per cent, was an alteration of the security and consequently the defendant was no longer liable.
The Lord Chancellor held, ‘‘the defendant’s testator being bound in the bond, he must be at stake until the
In Evans v. Drummond, 4 Esp. 89, it was held that “if two partners give a joint bill of exchange for partnership demand, and when the bill becomes due the holder takes the separate bill of one, the other is discharged.” Lord Kenyon, said: “ Is it to be endured that when partners have given their acceptance, and when perhaps one of two partners has made provision for the bill, the holder shall take the sole bill of the other partner and yet hold both liable ? I am of opinion that when the holder chooses to do so he discharges the other partner. Here the plaintiff has taken the bill of Combrune, after he admits that he was informed that Drummond had nothing to do with the concern. It is a reliance on the sole security of Combrune and discharges the defendant.” The action was assumpsit on the original contractor. The verdict was for defendant. Reed v. White et al., 5 Esp. 122 ; David v. Ellice et al., 5 Barn. & Cress. 201.
In Thompson v. Percival et al., 5 Barn. & Ad. 925, it appeai’ed, that A. and B. dissolved partnership and agreed that the business should be carried on by B. alone, and that he should receive and pay all debts. Sufficient partnership funds were left in his possession. C., a creditor of the firm, afterward applied for payment of his debt to B., who informed him that A. knew nothing of his debt and that he, C., must look to B. alone. C. then drew a bill on B., which he accepted, but which was afterwards dishonored. Held, in an action brought by C. against A. and B., (the latter having become bank
Denman, C. J., said: “ But it is contended that the acceptance of a bill of exchange by one of two debtors,.cannot be a good satisfaction, because the creditor gets , nothing which he had not before. The written security , however, which was negotiable and transferable, is of itself something different from that which he had before; and many cases may be conceived, in which the sole liability of one of two debtors may be more beneficial, , than the joint liability of two, either in respect of the parties, or the convenience of the remedy, as in cases of bankruptcy or survivorship, or in various other ways ; and whether it was actually more beneficial in each particular case, cannot be made the subject of inquiry. ” The ease of David v. Ellice, supra was disapproved in this case.
In Bottomley v. Nuttall, 94 Eng. C. L., decided in 1858, it was held, that where one of the members of a foreign firm resident in England, bought goods on-account of the firm for which he gave his own acceptance, and before the maturity of the bills, the acceptor became bankrupt and the drawer (or those to whom he had endorsed them) proceeded for the amount against the acceptor’s estate and received dividends, the vendor of the goods (to whom the bill had been returned) had done nothing to prejudice his rights to have recourse against the other members of the firm for the unpaid balance. And that the mere fact of the vendors dealing with the -
In Sheehy v. Mandeville, 6 Cranch 253, Marshall, C. J., in delivering the opinion of the court said: “That a note without a special contract would not of itself discharge the original cause of action is notdenied. But it is insisted that if by express agreement the note is received as pajmient, it satisfies the original contract- and the party receiving it must take his remedy on it. This principle appears to be well settled. The note of one of the parties or of a third party may by agreement be recieved in payment. The doctrine oí nudum pactum does not apply to such a case, for a man may if such be his will, discharge his debtor without any consideration. But if it did apply there may be inducements to take a note from one partner liquidating and evidencing a claim on a firm which might be a sufficient consideration for discharging the firm. Since then the plaintiff has not taken issue on the averment that the note was given and received in discharge of the account, but has demurred to the plea, that fact is admitted, and being admitted, it bars the action for the goods. * * * Whether the promise was made by Mandeville or not ceases to be material, if a note was received in discharge of the promise and the payment of the note need not be averred, since its non-payment cannot revive the extinguished assumpsit.” See, also, Harris et al. v. Lindsay, 4 Wash. C. C. 98.
In Arnold v. Camp, 12 Johns. 409, it was held, “ where a promissory note is given by a partnership and the' payee afterwards takes the individual note of one of the partners for the amount and gives up the partnership note, it is a payment of the partnership note. And if the payee afterwards gets back the partnership note, from the individual partner on redelivering him his note and brings an action upon the partnership note, the
In Waydell v. Luer, 5 Hill 448, decided in 1843, a contrary doctrine is held, that “ the giving of a promissory note by one of several partners or joint debtors, for a demand antecedently due from all, will not extinguish their liability, though the creditor expressly accept the note in satisfaction.”
But the judgment in this case was reversed by the court of errors, 3 Denio 410, in which the court held, “ that the giving of a promissory note for a co-partnership debt by one of several partners, individually, after the dissolution of the co-partnership, under an agreement by the creditor to accept it in payment of the debt, extinguishes the liability of the other co-partners.” Van Eps v. Dillage, 6 Barb. 244.
In Jones v. Johnson, 3 S. & R. 276, the action was assumpsit brought by Johnson & Smith, type founders, residing in Philadelphia, against Jones, Morehead & Taylor, for the price of certain materials furnished lor a newspaper establishment. The defense was that plaintiffs had accepted a single bill from Morehead and Taylor and two sureties for their claim, and had sued and received j udgment upon the single bill, and therefore the claim was extinguished. The court held, that a higher security given by different parties, or for a different sum, will in the absence of proof of the intention of the parties, be presumed to have been accepted only as collateral security, and not in satisfaction of the debt. A merger takes place only where the debt is one, and the parties to the securities are identical, which works a dissolution, not of the debt, but of the original security. Extinguishment, or satisfaction of the debt, depends upon the agreement and intention of the parties, which is rightly referred to the jury as a question of fact.
In Davis v. Desaque, 5 Wheat. 530, it was held, that “ Where the separate note of one partner is taken by a creditor, holding the note of the firm, it is a question of
In Bowen v. Stell, 49 Penn. 65, it was held, that if there be a joint liability, the act of the plaintiff in taking the individual note of one of the defendants, is not a satisfaction of the joint indebtedness, unless so expressly agreed, even though judgment be afterwards obtained upon it.
In Connecticut, Bonnell v. Chamberlain, 26 Conn. 481, it was held, that the taking of an individual note of one partner, for a partnership debt, where agreed to be taken in payment, extinguishes the partnership debt, and the question whether the note is taken in payment of the debt or only as collateral security, is a question of fact for the jury. A receipt in full unless given under circumstances of mistake, surprise or fraud, is a discharge of all indebtedness.
In Parker v. Cousins, 2 Gratt. 374, it appeared, that in 1833, Wyche & Parker were partners, merchandising in Petersburg, Wyche being the acting partner, and Parker being in Sussex. On the 31st of January, 1833, they were indebted to Cousins on account of a note of theirs which had been transferred to him, and for money advanced to Wryche to buy groceries, in the sum of $4,887.00, and on that day he advanced them the further sum of $1,049.00, making due him $5,936.00, and he took their negotiable note for $6,000.00 at sixty days. The note was given under an agreement between Cousins and Wyche, acting for the partnership, that the note was to be renewed every sixty days until May, 1837, upon the discount being paid by them. The notes were regu
The judgment was unanimusly affirmed.
3. Payment by note or cheek of third party:
In Rearslake v. Morgan, 5 Durnford & East 275, it was held that a plea in an action of assumpsit that the defendant, who was the payee of a promissory note, endorsed it to the plaintiff “for and on account of” the said debt is a good plea.
In Owen v. Morse, 7 Durnford & East 32, it was held, that if the seller of goods take the notes or bills of a third party for them, without agreement to run the risk of the notes being paid, and the notes turn out to be worth nothing,- the notes will not be considered as payment.
In Tapley v. Martin, 8 Durnford. & East 24, the facts were that A. wishing to send goods to B. at X. employed C. to carry them to B., and engagod to pay C. for the freight; C. on delivering the goods according to the order, took a bill of exchange from B. drawn on A. which bill was never paid ; it was held that A. was' liable to pay the amount of the freight to C. notwithstanding the bill of exchange. The action was debt on a charter party, between the master of the brig Hero and the defendant the freighter.
Lord Kenyon said : “The case states that the plaintiff applied to Acquabona “ to settle for the freight,” but it does not from thence follow that he applied for payment
Camedge v. Allenby, 6 B. & C. 373, was an action for the price of goods. It appeared that the goods were sold at York, on Saturday the 10th December, 1825, and on the same day at three o’clock in the afternoon the vendee delivered to the vendors, as and for the payment of the price, certain promissory notes of the bank of D. &' Co., at Huddersfield, payable on demand to bearer. D.'& Co. stopped' payment on the same day at eleven o’clock in the morning, and never afterwards resumed their payments, but neither of the parties knew of the stoppage or of the insolvency of D. & Co. The vendor never circulated the notes norpresented them to the bankers for payment, but on Saturday the 17th, he required the vendee to take back the notes and to pay him the amount, which he refused. Held under these circumstances that the vendor of the goods was guilty of laches and had thereby made the notes his own and consequently that they operated as a satisfaction of the debt.
Bailey, Judge, said, “it is clear that the plaintiff on
In Smith v. Ferrand, 7 Barn. & Cres. 19, it was held that where the seller of goods received from the purchaser an order upon his banker for the price, and the latter, with whom money had been deposited to meet that and certain other demands, offered to pay in cash, deducting discount for the period of credit, or by a bill upon a third person, which the seller elected to take, although the bill was afterwards dishonored, the seller could not sue the purchaser for the price of the goods.
In Robinson v. Read, 9 Barn & Cres. 449, a tradesman, who had supplied goods to a ship, sent in his account to the owner’s agent and ship’s husband, and took his acceptance at three months for the amount, deducting discount for that time, which was the usual credit,
In Whitbeck v. Van Ness, 11 Johns. 409, the action was assumpsit. Besides the common counts for goods sold, &c., and the money counts, the declaration contained, a count for horse sold to defendant, and a note of one Deane for $90.00 taken for the horse, which the defendant represented as good, and the maker responsible, when "the defendant knew that Deane wras not responsible, and that in consideration of the premises, the defendant promised to pay for the horse, the amount of the note, There was also a count for a horse sold and delivered for $90.00. The evidence showed that some conversation passed between the plaintiff and defendant, relative to the purchase of plaintiff’s horse. Afterwards the defendant desired a person, who was a witness in the case, to inform the plaintiff that defendant would give him $90.00 for the horse, if he would take the note of Daniel S. Deane, payable in six months with interest. The plaintiff told the person that defendant had said Deane was perfectly good, and that he would endorse the note. The witness replied that he had no instructions further, than to make the offer he had done for the defendant.
The Chief Justice charged the jury that the plaintiff was entitled to recover for the horse, unless he had expressly agreed to take the note at his own risk, of which in his opinion there was no evidence.. The jury found a verdict for the plaintiff for $118.00.
Spencer, Judge, in delivering the opinion of the court said: “ The intrinsic circumstances of this case plainly show that the plaintiff considered himself as taking Deane’s note at his own risk. It was"made payable to the plaintiff himself, and the defendant in not endorsing it or guaranteeing the payment clearly declines pleading his own responsibility. The offer was made by defendant’s agent of Deane’s note for the same; the plaintiff took time to consider whether it was advisable to take Deane’s note, and after deliberation, and we must presume too, after enquiry, agreed to sell the horse for the note. It appears to me we should be preventing the manifest agreement of the parties, if we were to pronounce that the plaintiff did not take the note at his own hazard. To my mind the nature and proof of this transaction furnished as decisive proof that the plaintiff was to take the note at his own peril, as if it had been stipulated in express terms.” A new trial was granted.
In Whiting v. Goin, 20 N. H. 354, it was held, “ if a creditor receives oí his debtor, when the debt was contracted, the note of a third person, and endorsed by said debtor, it will not be deemed to have been taken in satisfaction.”
In Griffin v. Grogan, 12 Cal. 317, the court held “The authorities proceed upon the obvious ground that nothing is to be considered payment in fact, but that which is in truth such, unless something else is expressly agreed to be received in its place. That the mere promise to pay, whether by the original debtor or a' third party, cannot of itself- be regarded as an effective payment is manifest.” See also Higgins v. Wortell, 18 Cal. 331.
In Welch v. Allington, 23 Cal. 322, it appeared that Allington, had given the plaintiff a promissory note for the same amount as the note sued on, executed by one Smith, not at the time due, and the note sued on was delivered up to Allington. Smith it appeared had a note against Allington for an amount sufficient to set off the note thus transferred by Allington to the plaintiff, and when the plaintiff demanded the money due on Smith’s note, the latter claimed the set-off and refused to pay. The plaintiff then brought this action upon the original note which had been surrendered at the time of the exchange.
The Appellant contended that the plaintiff had no right of action upon the original note, until he had instituted suit against Smith, or it was shown that Smith was insolvent or had absconded from the State. But the court held, “ that when a promissory note is received upon an antecedent debt, such debt is not extinguished thereby, unless the new note was, by express agreement, received in payment of the antecedent debt that it only operated to extend, until the maturity of the note, the period for the payment of the debt. There is no evi
In Maine and New Hampshire it has been held, that an accepted negotiable order or note of a third person, given by a debtor to his creditor for a precedent debt, is no defense to an action on such indebtedness, although the debtor has the original bill receipted as paid by such order; and payment of such precedent debt by such order can only be proved by a special agreement to that effect. Jose v. Baker, 37 Me. 465 ; Bartlett v. Mayo, 33 Me. 518 ; Coburn v. Odell, 10 Foster 540; Smith v. Smith & Barnett, 27 N. H. 244.
In Westfall, Stewart & Co. v. Braley, 10 Ohio St. 188, it was held, that where bank bills are transferred and received as money in payment of a debt, after the bank by which they were issued has stopped'payment, though its failure is not yet known at the place of payment, nor by either of the parties, the loss in such case must, in in the absence of any special agreement, be borne by the party paying the bill, provided the other party be guilty of no laches in retaining them for an unreasonable time.
In Dakin v. Anderson, 18 Ind. 52, a debt was paid in the paper of the “ Citizens’ Bank of Gosport,’’’which paper was illegal and void, and the creditor sued upon the debt as still unpaid, and the debtor pleaded that he was not receiving or paying out such paper, but the creditor requested him to procure said paper, and agreed that if he would procure and deliver the same to him to accept it in full satisfaction of the debt, and that he did, in consideration of such request and agreement, procure
In Tuttle v. Chapman, 30 Iowa 437, the maker of a promissory note gave to the payee an order on a third party, with an agreement that if collected, it should be applied on the note, and the payee delivered up the order to the drawee and took his note for the amount, payable to himself at a future time fixed ; it was held that the drawer was entitled to credit on his note, though the note executed by the drawee was not collected.
The receipt by the payee from the maker of a promissory note, of the note of a third person, willjbe deemed a conditional and not an absolute satisfaction of the original debt, or note of the maker, unless otherwise agreed between the parties. Kephart v. Butcher, 17 Iowa 240; Farwell v. Salpaugh, 32 Iowa 582.
In Wisconsin it has been held that the giving and receiving of a promissory note, is not an extinguishment of the original contract, nor does it change its nature, unless it be expressly so agreed. The payment is only suspended for the time being. Blount v. Walker, 11 Wis. 334; Eastman v. Porter, 14 Wis. 39; Lindsey v. McClelland, 18 Wis. 505.
In Hotchin v. Secor, 8 Mich. 494, a note of two members of an association was taken for the amount of a debt against the association, and this note was after-wards paid in part, by the makers, and their note on longer time was taken for the balance; and suit being brought on the original debt, the court was asked to charge the j ury, “ that it Avas not absolutely necessary to show an express agreement on the part of the plaintiffs to receive the note in payment of the claim against the association, but that if the jury find, from all the circumstances of the case, and the subsequent acts of the plaintiffs in regard to said note and in taking new notes of-the makers, and extending the time of payment, they
In New York it has been held, that the acceptance by a creditor from his debtor, of a bill or note made by a third person on account of debt, does not satisfy it unless the parties agreed that it should be received as payment. Noel v. Murray, 13 N. Y. 167.
If the note of a third party is received by the creditor at the time the debt was contracted, the presumption is that it was agreed to be taken in payment, but such presumption may be rebutted, by evidence of a contrary intention. Young v. Shanklin, 34 N. Y. 258.
Receiving from the president and agent of a corporation, on applying to . him as such agent for the payment of a sum then due from the corporation, part cash, and the balance in a note at thirty days, made by a firm of which such president was a member, and the giving of a receipt that the whole sum so due has been received, will not operate as a payment by the corporation of the sum for-which the note was so taken, unless it was expressly agreed at the time that it should be received as actual payment. Higby v. New York & Harlem R. R. Co., 3 Bosw. 497. To the same effect is Toby v. Barber, 5 Johns. 68.
The same doctrine is held to apply to the promissory note of a third person, given in full discharge of a debt for goods sold, where the maker of the note was insolvent and neither party knew the fact. Roberts v. Fish, 43 N. Y. (4 Hand) 159.
To establish the defense of payment of a precedent debt by a note of a third person, it is necessary for the defendant to prove that the note was given to tfie credi
In Missouri it has been held the acceptance by a creditor of the note of a third party for a debt is not prima facie an absolute payment. To have that effect it must be agreed that it should be taken in satisfaction. Appleton v. Renner, 19 Mo. 637; Citizens’ Bank of Steubenville v. Carson, 32 Mo. 171.
In North Carolina, where one contracted for .a lot of corn to be delivered on a certain day, and in payment therefor delivered without endorsement a note of a third person then in good credit, but in reality insolvent and who became notoriously insolvent before the day fixed for the delivery of the corn; it was held that the loss fell on the purchaser of the note in the absence of proof that the seller knew of the insolvency of the maker. Leroy v. Spruill, 7 Jones L. 96; Sellars v. Johnson, 65 N. C. 104; Gordon v. Price, 10 Ired. 585; Dewey, Cash. v. Bowes, 4 Ired. 538.
In Alabama it has been held that the parties may agree that the note of' a third person may be given in payment of a debt, and where this is gxpressly agreed the original liability is completely extinguished. Abercrombie v. Morely, 9 Ala. 145.
In Arkansas it has been held that where' a security against whom a decree was rendered, pays the amount in cash and a note with security, which are received by the creditor in full discharge of the decree, and satisfaction is entered of record, this is such a payment as will entitle the surety to maintain an action against the principal for the debt, so paid by him. Bone v. Terry, 16 Ark. 83.
A negotiable note given and accepted for the debt of a third person, is an extinguishment of such debt, and proof of this is sufficient to support an action against the debtor for money paid. Virer v. Bertrand, 14 Ark. 267.
Payment by note, or other paper of the debtor himself:'
In Puckford v. Maxwell, 6 Durnf. & East. 36, the defendant was arrested for debt, and gave the plaintiff a draft for, £45, part of the debt of £80, and agreed to meet the plaintiff a few days afterwards, to settle the remainder of the debt, on which the plaintiff agreed that the defendant should be discharged from custody. The draft was dishonored, the defendant having no funds in the hands of the drawee, whereupon the defendant was again arrested on the same affidavit. A rule was awarded calling on the plaintiff to show cause why the defendant should not be discharged out of custody. Ers-Jcine was called upon to support the rule; and he made two objections to the plaintiff’s mode of proceeding : 1st, that the plaintiff having agreed to accept this bill in part payment of the debt, could not merely because the bill was dishonored, treat the transaction as a nullity, and arrest the defendant a second time for the old debt, there being no fraud in the transaction. Lord Kenyon, C. J., said “in cases of this kind, if the bill which is given in payment does not turn out to be productive, it is not that which itpurports to be. and which the party receiving it expects it to be, and therefore he may consider it a nullity, and actas if no such bill had been given at all. Those questions had frequently arisen at nisi prius, where they have always been determined the same way. I remember one
In Hearn v. Cochran, 4 Man. G. & S. 272, the action was assumpsit. The first count was on a bill of exchange for £732 13s., drawn by the plaintiff on the 14th of December, 1839, payable two months after date, and accepted by the defendant. To this count the defendant pleaded that after the making and accepting the bill of exchange as stated in the count, and after the bill of exchange became due and payable, and before the commencement of the action, the defendant made his certain note in writing, bearing date, &c., and thereby promised to pay the plaintiff or his order on demand, £1050, and then delivered the same to the plaintiff, and who took the same for and on account of the last mentioned bill of exchange, and the causes of action in respect thereof, in the said first count mentioned; and ^hereupon afterwards, and after making and delivering by the defendant to the plaintiff of the promissory note in the plea mentioned, and before the commencement of the suit, on &e., it was agreed by and between the plaintiff and defendant, and Thomas, Earl of Dundonald, that the said Thomas should sign and seal, and as his act and deed deliver to the plaintiff, in full satisfaction and discharge of the said promissory note in the plea mentioned, and of all causes of action in respect thereof, and of the causes of action in the first count mentioned, a certain deed or instrument called a warrant of attorney to confess a judgment bearing date, &c., in the form and to the effect, and with the de-feasance thereunder written, herein next mentioned, respectively, and that the plaintiff should accept, and receive the same of and from the said Thomas, Earl of Dun-donald, in full satisfaction and discharge as last afore
It was objected, that the plea was double because it, set out, two defenses: the, giving of the promissory note, and the execution and receipt of the warrant of attorney.
Wild, C. J. said: “ It appears to me that this plea is free from the objection of duplicity. At first sight, the question seemed to present a difficulty, which vanishes upon better consideration. The plea commences with stating, that after the maturity of the bill mentioned in the first count the defendant delivered his promissory note payable on demand, to the plaintiff, who then took and received the same for and ón account of the bill and the cause of action in respect thereof. Now this instrument was of no greater effect than the original liability of the defendant, viz: to pay the debt on request, and in no respect alters the position of the parties, for it appears that the note still remains in the possession of the plaintiff; the plea, alleging that a warrant of attorney was afterwards given in satisfaction and discharge of the note, and of all causes of action in respect thereof, as well as of the causes of action in the first count mentioned, which it could not be unless the note remained in the plaintiff’s hands. The only mode therefore by which the plaintiff’s demand is said , to be satisfied, is by the delivery of the warrant of attorney.
If the warrant of attorney was given in satisfaction of the note, that in point of law would be a satisfaction of the original debt; and the, allegation in the plea, that
Cresswell, Judge, said : “It is contended that the plea' is double because the delivery of the promissory note therein alleged, operated either as a" satisfaction of the original debt, or as a suspension of the remedy, and a delivery of the warrant of attorney also operated as a separate and independent satisfaction. That which is stated with respect to the note however, falls short of satisfaction or suspension of remedy. A note payable on demand, could be no satisfaction of the debt or suspension of the remedy, so long as it remains in the hands oí the plaintiff. It would be no defence on gen-, oral demurrer. It is not a defense ill pleaded but simply no defense at all. The only defense the plea sets up, is the delivery of the warrant of attorney.”
There being a demurrer to the plea, it was sustained and judgment rendered for defendant.
Price v. Price, 16 Mess. & Welb. 231, was an action of debt for money lent, and on'account stated. The plea-was as to £100, parcel &c., that after that sum had become due, and before the commencement of the suit, the defendant made his promissory note for the payment .to. the plaintiff’s order of £100, six months after date, and. delivered the same note to the plaintiff, who then took and received the same for and on account of the said sum of £100 parcel, &c., and the causes of action in respect thereof. The plea was held bad on general demurrer for not averring that the note was still running, or that it had been endorsed overby plaintiff. Roader v. Barnes, 1 Burr. 9; Cumber v. Wane, 1 Stra. 426; Bishop v. Rowe, 3 M. & S. 362; Mendrick v. Lomax, 2 Crom.
In Rogers v. Town of Shelburn, 42 Verm. 550, where the plaintiff took a town order for $300.00 without prejudice to his full claim, which the town treasurer refused to pay ; and the order was not produced on the trial or accounted for, and there was nothing in the case to show thac the order was negotiable, it was held that the plaintiff was not required to treat the order as payment of any part of his original claim.
In Babcock et al. v. Hawkins, 23 Vt. 561, Redfield, Judge, in delivering the opinion of the court said, “we think it must be regarded as fully settled, that an agreement upon sufficient consideration, fully executed, so as to have operated in the minds of the parties as a full satisfaction and settlement of a pre-existing contract of account between the parties, is to be regarded as a valid settlement, whether the new contract be ever paid or not, and that the party is bound to sue upon the new contract, if such was the agreement of the parties. This is certainly the common understanding of the matter. It is reasonable, and we think it is in accordance with the strictest principles of technical law. There is no want of consideration in any such case, where one contract is substituted for another, and especially so where the amount due upon the former contract or account is matter of dispute, (as was the case here). The liquidating a disputed claim is always a sufficient consideration for a new promise. Holcomb v. Simpson, 8 Vt. 151. “The accord is sufficiently executed when all is done Which the party agrees to accept in satisfaction of the pre-existing obligation. This is ordinarily a matter of intention, and should be evidenced by some express agreement to that effect, or by some unequivocal act evidencing such a purpose. This may be done by surrender of the former securities, by release or receipt in full, or in any other mode. All that is requsite is, that the debtor
The facts of this case were, suit was brought on ^account and pending the suit, the parties met, and the defendant agreed to give a note for $30.00 to fhe plaintiffs, and pay all the plaintiffs’ costs in the suit, except the writ and service. The defendant executed the note which was credited by the plaintiffs and agreed to pay the costs, and the plaintiffs then executed and delivered to the defendant a receipt in these words: u Received of Peter Hawkins $30.00, by note given per
In Dixon v. Dixon et al., 31 Vt. 450, it is held that “ it is well settled that a note received in payment of a pre-existing debt is received and held upon-valuable and valid consideration. If a note be received in payment of a former one, it is not necessary to its validity that the old one should be delivered up at the time the new one is received.”
In Eastman v. Porter, 14 Wis. 39, it was held, “ it is a clear rule of the common law that a subsisting simple contract is not destroyed or extinguished by the acceptance of another contract of the same nature, given by the same party, and founded on the same consideration, unless it be expressly so agreed. The new contract is considered as nothing more than a new evidence of the same original contract or indebtedness, and if it is not performed the party may resort to his remedy on the latter.” See Lindsey v. McClelland, 18 Wis. 505.
In Iowa it was held that the acceptance of a promissory note for the amount of the account, will not operate as a satisfaction of the account unless so received. McLaren v. Hall et al., 26 Iowa, 297.
In Merrick v. Boury & Sons, 4 Ohio St., 60, Merrick, the debtor, who had bought goods of Boury & Sons on the 17th of July, 1851, wrote to Boury & Sons as follows : “On the 22d of December, 1850, I received your dispatch authorizing me to retain the goods on a year’s credit. * * * I will therefor pay you the balance due, $548.04, but no more, and if you choose to call on
Thereupon suit was brought, the declaration containing a count on the note and the common- counts. On the first of which judgment was given for Merrick, and on the latter, a judgment rendered in the common pleas, for the amount admitted to be due Boury & Sons by the letter of Merrick. An appeal was taken by him to the district'court when again judgment was rendered against him as above, and to review this judgment the writ of error was allowed.
Thurman, C. J., said: “The special count in the declaration was upon the note as altered, and as the court found for Merrjck upon this count, they must have held that the alteration was made without his authority and
“Thus if the verdict can be sustained only upon the ground that the note was not taken in payment of the antecedent debt, and that the alteration was made without any fraudulent purpose, it must be presumed upon a petition in error that these facts were found by the court and this finding will not be disturbed merely because we might doubt its correctness. The findings of a court when substituted for a jury are entitled to the same consideration as the verdict of the latter, and it is well settled that the verdict will not be set aside upon the ground of an erroneous finding, unless it is clear that such is the cáse. We are inclined to think however that there is no necessity in the present case for an application of this rule for we can hardly say that the testimony would warrant the finding that the note was taken as payment,'and as to the alteration, we see no reason at all to believe that it was made with a fraudulent intent.”
In Porter v. Talcott, 1 Cow. 380, it is said, “ the law is well settled, that a note given by a debtor for a precedent debt, is no payment of the original demand, unless it is expressly agreed to receive it in payment;” and this is the doctrine of very many cases. See Toby v. Barber, 5 Johns. 72, and the cases there cited. In Johnson v. Weed, 9 Johns. 310, it was held, that the agreement must be “clear and special,” otherwise the paper will be no payment. On the other hand it has been ruled, that “the object of giving a note may as well be ascertained from circumstances, as from- an express agreement. Riley & Van Amrige v. Anderson, 2 McLean 594. And the same doctrine is asserted in Story on Promissory
In Doebling v. Loos, 45 Mo. 150 it was held, that in a suit on an account, the mere acceptance by the plaintiff of notes given by defendant for the debt, and the giving of a receipt for the amount due, without further proof, does not constitute such evidence of payment, as to warrant the court in sending the case to the jury.
In Castleman v. Holmes, 4 J. J. Marshal] 1, Judge Underwood, in delivering the opinion of the court said, “Where a debt is continued by renewing notes each renewal is to be regarded as anew contract. The old contract is then settled, and the old note is then generally concelled, and thus there is no other contract in existence, but the new one. Its date of necessity then must be the time when the debt was contracted. These transactions of renewing debts by new notes, are equivalent, to paying the existing debt, and again borrowing the money. The old debt is paid off by the new. The interest accrued may be inserted in the new note and thus the consideration, and the amount of the debt, are both different from whatthey were originally; all which in addition to the time stated upon the face of the note, acknowledged by the obligor as the date of the contract, leads us to the conclusion that December 1819, ought to be regarded as the date when Holmes’s debt was contracted, It follows that all those who were shareholders, on the 8th
The doctrine laid down in this case is clearly repudiated in Kibbey v. Jones, 7 Bush. 244, where it is held “that a renewal of an obligation to pay is not a payment.” In this case one owed another $100.00, and sometime thereafter having become indebted in $80.00 more, executed his note for the $180.00; had it been regarded a new debt at the date of the $180.00 note, the $100.00 would have been exempt under the homestead exemption act, but it was held to be the [same old debt, unpaid, and was not exempt.'
In Slocumb’s adm’r v. Holmes’s adm’r, 1 Hurd, (Miss.) 139, it was held that when an account is closed by note for the amount a recovery cannot be had on the account; but resort must be had on the note given for the amount of the account.
In Gion v. Doherty, 43 Miss. 538, it appeared that G. gave his own promissory note for the amount of an account against his wife for goods sold on credit, and for which her separate estate was liable under the married woman’s law of 1857, it was held that an action could still be maintained on the account against the wife. The acceptance of security of equal dignity, is of itself no extinguishment of an antecedent debt. Aliter if there be an agreement of the creditor to accept it absolutely as payment and incur the risk of its being paid. See also, Lear v. Freedlander et al. 45 Miss. 559.
In Insurance Co. v. Smith, 6 Harris & J. 166, it was held that if a debtor give his promissory note, on ac
In Glenn v. Smith, 2 Gill. & Johns 493, Buchanan, C. J., in delivering the opinion of the court, said, “ the general rule is that the acceptance of a security or undertaking of equal degree is of itself no extinguishment of the former debt. Thus the acceptance by a creditor from his debtor, of his promissory note, for an antecedent simple contract debt, does not extinguish the original debt, (both being of equal degree in the eye of the law) if it remains in the hands of the creditor unpaid, and he can produce it to be cancelled or show it to be lost. But he wdll not be suffered to recover on the original cause of action, unless he can show the note to have been lost, or produce it upon the trial to be cancelled. ” Berry v. Griffin, 10 Md., 27; Matthews & Zollieffer v. Reese & Ross, 20 Md., 348.
In Elwood v. Diefendorf, 5 Bosw. 398, it was said, “It seems that the promissory note of the debtor or of one of- two or more joint debtors, given for a precedent debt, is not a satisfaction of such precedent debt, even although the creditor expressly accepts the note in satisfaction. ”
In Burdick v. Greene, 15 Johns. 247, it was held that “& plea to the common counts in assumpsit, that after making the promises in these counts mentioned the defendant made and delivered to the plaintiff his promissory note for the identical promises, which the plaintiff received in full satisfaction, and afterwards endorsed and deliyered the note to A. B. is- bad; for the receiving of a promissory note and endorsing it to the third person does not extinguish the original cause of action, provided the payee can show it to be lost, or can produce it on the trial to be cancelled.” See Porter v. Talcott, 1 Cow. 359.
In Central City Bank v. Dana & Sims, 32 Barb. 296, it was held, that “ the giving of a promissory note by a
In Cole v. Sackett, 1 Hill 516, it was held, that “the promissory note of a debtor, given for a precedent simple contract demand, will not operate as payment, so as to preclude the creditor from suing on the original consideration, though given under an express agreement that it was to be received in full satisfaction and discharge.”
Cowen, Judge, in delivering the opinion of the court, said : “ It may be considered however, at present, as entirely settled, that to operate as a satisfaction, the promise must be that of some third person, in other words, something over and above the original debt. A promise by note is a security of no higher degree than an implied promise; and the logic of these pleas is no more than saying, 'your precedent debt is discharged, because I promised to pay it in another form, and you accepted the latter promise as a satisfaction.’ "What consideration is there for such an acceptance ? The new promise to do a thing which the debtor was bound to do before, a thing which he now refuses to do because he had promised again and again to do it. In these pressing times there are, I apprehend, few debts which on such a theory are not in danger of being barred much short of the statute of limitations ; for creditors, however unwilling, are many times obliged to accept promises as the only satisfaction, they can obtain for the present. It is entirely settled that a promissory note of the debtor, in no way affects or impairs the original debt unless it be paid. The creditor may, notwithstanding, recover on the original consideration, surrendering or cancelling the note at the trial. The note is a mere liquidation of the demand, and it being the duty of the debtor thus to liquidate and secure the demand, nay, to do more, it fol
This case was cited with approbation in Lazier v. Nevin &c., 3 W. Va., 622, in which cáse the court held: “It is well settled that in a suit against a party when it appears that he had executed to the plaintiff a subsequent note for the same debt, while the subsequent note is no bar to the suit, the plaintiff cannot recover, without producing or accounting for the subsequent note” Cole v. Sackett, 1 Hill, 516; Toby v. Barb, 5 Johns. 68; Alcock v. Hopkins, 6 Cush. 484. But such cannot be the rule in a case like this where the debtor obtains money for which he executes his own note, and as further security places in the hands of the creditor a note of a third party.”
In McGuire v. Gadsby, 3 Call 204, it appeared that Gadsby had executed his note to McGuire for $550.00, after the said note became due, by an agreement between the parties, Gadsby executed to. McGuire eleven small notes of $50.00 each for the debt of $550.00, evidenced by the original note, which smaller notes extended the time of the payment, and fell due at different times; that three of the smaller notes had been paid by the defendant; that after the last of the smaller notes became due and default in payment made, McGuire brought suit. in debt on the original note of $550.00. The only plea was nil debet, that it was admitted that'the new notes were not given in consequence of any new contract
The court oh motion of the plaintiff instructed the jury that the giving of the smaller notes was no payment or discharge of the said note for $550.00 on which the plain tiff had brought suit. There was verdict and judgment for plaintiff, and the defendant appealed to the district court, which reversed the judgment, and McGuire appealed to the Court of Appeals.
Judge Roane in delivering, the unanimous opinion .of the court, said: “The question is whether the small notes were a payment or discharge of the-former which was held by the plaintiff and not given up on receipt of the other? In point of justice there seems no difficulty. The plaintiff is in pursuit of a just demand, which he has recovered, and the present attempt is to subject him to costs and delay, for that he ought to commence anew suit or suits upon the small notes, in which the same principles, without a single essential change in the situation of plaintiff or defendant are to govern the decision.This attempt therefore ought to be supported by strict law, before it should receive the sanction of this Court. And how is the law? First: view it as an accord between the parties. It was truly said by the counsel that an accord cannot be given in evidence but must be pleaded; and he might have added that it must be pleaded-with satisfaction too, that is that the thing substituted has been performed. In both points therefore the defendant has failed. He did not plead it, nor were the smaller notes paid. Next view it in the light of a merger.
“In Clark v. Mundal, 1 Salk. 124, the agreement to take a bill of exchange for the debt, which is to be an extinguishment of it, is made at the time of the original contract, the sale of the goods; but in that case a bill endorsed at or on a subsequent day was no satisfaction without payment. And to such Holt does not apply the exception of a special agreement. 'The 1 Esp. N. P. 49, takes notice of this, and says : ‘ A statute has altered the rule as to inland bills which declares them when accepted a satisfaction, if the person accepting does not take his due course to get them accepted and paid.; but if he does use due diligence he does not sustain the loss. A goldsmith’s note received for money and not paid is no satisfaction without an express agreement that*822 it shall be received as cash.' Ward v. Evans, 2 Salk, 442.
“All these cases respect bills, orders and notes, wherein third persons are concerned. They do not, therefore, shake the authority of Roades v. Barnes, 1 Burr. 9, and Cunber v. Wane, 1 Stra. 426, that a promissory note shall not be extinguished by a subsequent promissory note given by and to the same person, which is the case before the court.
“We think, therefore, that the direction of the hustings court, of Alexandria, was right and that the judgment of the district court ought to be reversed, and that of the hustings court affirmed."
In Herrington v. Harkins’s admr’s. 1 Rob. 591, suit was brought on a judgment, and the defendant pleaded, “that by an agreement in writing between the parties the judgment Avas discharged and satisfied, by a new contract, for the payment of a sum in cash, which Avas them paid, and for the payment of the balance by deferred, installments, whereby the said judgment was remitted and released, and accord and satisfaction thereof made. It Avasheld by the Court of Appeals, that a demurrer to-the plea Avas properly sustained by the court beloAv.
In McCluny & Co. v. Jackson, 6 Gratt. 96, it was held that Avhere “upon a settlement of an account, the creditor takes a negotiable note from the debtor, for the amount found due, and the note is discounted at the bank, for the creditor; and A\diilst the note is held by the bank and before it is due the debtor absconds, the creditor cannot sue out an attachment against the debtor for the debt due upon the account.'' In delivering the opinion of the court Allen, Judge, said upon the state of facts disclosed by the record : “Upon this state of facts it is not necessary to consider in this case, Avhether the making and acceptance of this negotiable security merged the simple contract, so that no action could be maintained for the original consideration-At the date of the attachment the note was a valid
In Moses v. Trice, 21 Gratt. 558, it was held, that “the note being a renewal of a former note, and all the notes having been given for the same loan of money, T. might have sued on the original note, or for money loaned.” This agrees in principle, with Parker v. Cousins, 2 Gratt.; Gadsby v. McGuire, 3 Call ; Herrington v. Harkins’s adm’r, 1 Rob.; and I have searched diligently in the early reports of that great and good Court of Appeals of the mother State, and I have been unable to find á departure from the principle as above laid down. What was my surprise to find the principle abandoned, in Blair & Hoge v. Wilson, 28 Gratt. 165, and what my mortification to find the principles in those old cases overturned without even a friendly notice ; to see them departed from, without even a regretful farewell? We presumed of course that the decisions of the court to which we have referred were not overlooked by the court in the case in 28 Gratt. According to our understanding of the last named case, it was not necessary to overrule decisions formerly made by the court to reach the conclusion arrived at in the case; as it is obvious that the decision itself is right, but a wrong reason given for it. As the record shows, the payee of-the check was guilty of gross laches in not presenting it for payment, and by his negligence the loss should have fallen on him, according to the authorities we have before cited in this opinion. But we think the court was clearly wrong in saying, that “while, however, the giving of a check by a debtor to his creditor, is generally presumed to be only a provisional or conditional pay
The principle here announced is directly opposed to the Virginia decisions we have quoted; and the review we have made of the authorities will show that the principle is by no means confined to the courts of New York and Virginia. And what consideration, I ask, is there for such an agreement ? A. owes B. a debt, A. gives B. his check for the amount of the debt; it is agreed between them, if youplease, that the check is given and received in absolute payment of .the debt; B. presently presents the check for payment, it is dishonored; is it not absurd to say that the check has paid the debt? The debt remains unpaid, and the agreement was without consideration, á mere nudum pactum. See Miller v. Miller, 8 W. Va. 542; Feamster v. Withrow, 9 W. Va. 296 : Same v. Same, second appeal, 12 W. Va. 611; Poole & Co. v. Rice, 9 W. Va. 73; Dunlap v. Shanklin, 10 W. Va. 662, in which payment by paper is to some extent discussed.
Remedy where the paper is not a payment.
In such case it is on the original consideration, but the paper must' be surrendered on the trial to be cancelled
Alcock v. Hopkins, 6 Cush., was an action of assump-sit for goods sold and delivered, and it was shown that the bill of a third party had been given and negotiated, but -which the plaintiff was compelled to pay ; it was held not to be payment under the circumstances of the case, and the court said, “ that the only material question is, not whether the bill has been negotiated for value, but whether it is still outstanding, so that the parties are liable upon it, notwithstanding a recovery on the original claim. If the bill is still outstanding, so that the parties are liable, then a recovery cannot be had on the original account, but if the bill has been taken up, and is produced to be cancelled as in this case, then the party may recover on the account.” Hedge v. McQuaid, 11 Cush. 352; Bridge v. Batchelder, 9 Allen, 394; McConnell, et al. v. Stetsmus, et al. 2 Gilman, 707; Rayburn v. Day, 27 Ill, 46.
Hamden v. Mendisabal, 2 Car. & Payne, 20, was an action of assumpsit for goods sold. A witness proved an admission of a balance due to the plaintiff for goods; but from his cross-examination it appeared that bills of exchange had been given for those goods, which bills had been paid away by the plaintiff, but had been subsequently got back by him, and were at the time of the trial, lying protested in the hands of his agent at Cadiz. It -was objected by counsel for defendant that as the plaintiff had passed away the bills, he had made thejn his own, and could not recover for the goods sold, without delivering them up. Best, C. J., said, “If the bills had gone from the plaintiff’s control the objection would be unanswerable. The plaintiff might have them here now, but you could not make him deliver them up till the payment of the money. If the bills are not forthcoming you may have equitable relief in another place. A man having a bill may
In Dangerfield v. Wilby, 4 Esp., 158, the declaration stated that the defendant was indebted to the plaintiff £10 on a promissory note, for that sum made by the defendant, payable to the plaintiff, with the other counts for money had and received, and a count on an account stated. The plaintiff did not produce any promissory note, which he stated to have been lost, nor offer any evidence of its being destroyed or not in existence, but gave in evidence that the defendant had, on the money being demanded, apologized for not paying the £10 on account of the note, and then rested his case.
On objection being made, the plaintiff’s counsel contended that the note was only evidence of the debt for money lent, or otherwise claimed, and that he should, therefore, be at liberty to abandon the note, and go for the consideration of it, which was in the present case for money lent.
Lord Ellenborough said he was of opinion that the plaintiff was not so entitled, “ for as the note for anything that appeared in evidence, was in existence, it still might be in circulation, and the defendant be liable to be called on to pay it, so that he might be subjected twice to the payment of the same demand. It was therefore incumbent on him to show it to be lost so that the defendant should not again be subjected to the payment of it. As to any demand therefor on account of the note he thought the plaintiff not entitled to recover.” The plaintiff was non-suited. Smith v. Rogers, 17 Johns. 340.
Burdick v. Greene, 15 Johns, was an action of assump-sit. The declaration contained several counts. 1. On a promissory note, dated the 21st of June, 1810, made by defendant, and payable to the plaintiff' or order, on the 1st of August next thereafter for .$ 1,525.00. 2. The second count after setting forth the note, stated that the plaintiff endorsed it to Joel Ketchum or order, who on
The defendant pleaded. 1. Non assumpsit. 2. Actio non aoeremt infra sex annos. * * * To the third, fourth and fifth counts, the defendant pleaded, that after making the several promises in these counts mentioned, to-wit on the 21st of June, 1810, the defendant made his promissory note for the same identical promises and delivered it to the plaintiff, by which note for value received, he promised to pay the plaintiff or order $1,525.00, on the 1st day of August then next, which note the plaintiff received in full .satisfaction of the said promises, and that the plaintiff afterwards endorsed and delivered it to Joel Ketchum for value received. To this last plea the plaintiff’ replied : “ That after the 21st of June, 1810, and before the commencement of this suit, to-wit: on the 31st of July, 1816, Ketchum, by his instrument in writing under his hand and seal, assigned the said note with all his right, title and interest to the plaintiff, averring that the note had not been paid; whereby the endorsement to Ketchum became cancelled, and the plaintiff restored to all his rights in the premises, as though the endorsement had not been made. ” The defendant demurred to this replication, and the plaintiff joined in the demurrer. 4
The court held, Spencer, J.: “ The plea is defective as a bar to an action on the original consideration, for we have seen that the mere giving a negotiable note, or its endorsement to a third person does not extinguish the original cause of action, provided the payee in the note can show it to be lost, or can produce it to be cancelled ; and non constat that it cannot be done in this ease.” Judgment was for the plaintiff. Holmes & Drake v. DeCamp,
In Moses v. Trice, 21 Gratt. 556, it appeared that M. borrowed money, (Confederate) early in 1864, of T. and executed his negotiable note endorsed by D. for the amount, payable in ninety days at the Bank of Virginia. The note was renewed from time to time, M. proposed to pay off the note to T. but at the request of T. renewed the note again, upon the promise of T. that he would deposit the note in bank for collection, and before the note fell due M. deposited more than the amount of the note in the bank, where it remained until the bank failed. A few days before the note was due the bank was burned out, the note not having been deposited in the bank. It was held that M’s. offer to pay, he consenting to renew the note, aud his depositing the money in bank, was neither a tender, nor accord and satisfaction, and he is still liable to pay the amount due upon the note. The note being a renewal of a former note, and all the notes having been given for the same loan of money, T. might have sued on the original note, or for the money loaned, and therefore he is entitled to recover, though at the time the note sued on fell due, Confederatecurrency was worthless.
From the numerous authorities cited, conflicting and irreconcilable as many of them are, what is the proper rule to be laid down in a case where one note of the same character is given for a former by a debtor to his creditor?
The doctrine of merger certainly cannot apply; because there can be no merger where the contracts are equal. It cannot be a payment of the debt, because from the very nature of the transaction the old debt, for which the new jiote is given remains. It seems absurd to say that a promise to pay a debt, is discharged by another promise of the same character made by the same party to his creditor. I can easily understand how a debt from B. to
But is it not a solecism to say, that if A. owes B. $100.00, which is evidenced by A’s note for that amount, due sixty days after date, that the debt, at the end of the sixty days is paid, by A. giving to B. another note of precisely the same character to be due at the end of the next sixty days ? The debt is unpaid; if no fraud has. been committed, the remedy upon the note has been suspended for sixty days, but that is the only effect thereof, the debt itself is no nearer paid, than when it was first due. Even if there was an express agreement between the parties that the second note should be taken in absolute payment of the debt, it would amount to nothing, because it is contradicted by the new note itself, which is but another evidence of the same old subsisting debt, which will not down, until it is either actually paid or released. And besides there is no consideration for such an agreement, it is a mere nudum pactum.
Bro. Moore to sustain his opinion, cites Poole & Co. v. Rice, and Dunlap v. Shanklin supra, but there is nothing adjudicated in either of those cases, contrary to the views herein expressed ; the point was not involved in either of the cases, and was not decided. It is there
If, then, in the case we have been considering, the giving of the note is not a payment, can it be an accord and satisfaction ? “ Accord and satisfaction is a good plea, but is must be performed at the time of the plea. A bare accord without satisfaction is no plea. 'Where accord and satisfaction is pleaded, it must appear to the court to be a reasonable and good satisfaction, and be accepted by the plaintiff as such, such as a better security and so on. A bond may be pleaded in bar of a simple contract debt.” Esp. N. P. 147 ; see 2 Chitty Pl. 288; McGuire v. Gadsby, 3 Call 204.
In numerous cases, as wo have seen, pleas of accord and satisfaction, setting up the giving of a second note of like character, for the first, have been held bad, on the ground that there was no satisfaction of the cause of action. True there are cases to be found the other way, but we do not think they are sustained on principle.
If there Avas no fraud in the transaction, and the first note Avas actually given up to the debtor, under an agreement that the second note should be 'the only evidence of the indebtedness, and there Avas nothing in the note or its execution to vitiate it, no suit could be brought on the original indebtedness; but where both notes are retained by the plaintiff, and the second note is due, although there aves an express agreement betAveen the parties at the time the second note Avas executed, that the original note should be given up to the debtor, suit may be maintained on the original note. McGuire v. Gadsby, 3 Call 204.
In such a case however, in order that there might be
The creditor should not be permitted in any case to recover on the original note, whether it be negotiable or not, unless he also files, with his declaration the subsequent note, or accounts for its loss. For otherwise he might be permitted to recover on the original note, and the defendant be liable to be made to pay the second if negotiable to an innocent holder for value, or if not negotiable be liable to be sued thereon, and put to in^ convenience and expense in defending the suit thereon.
But if both notes, whether negotiable or not, are in the hands of the plaintiff, and he files them with his declaration, he recovers his debt upon the one or the other, it is immaterial which; the whole matter is settled and no one is injured. I have no hesitation in saying, that the execution of the $408.00 note in the case before us, and giving the receipt would not constitute a payment of the residue of the $1,000.00 note, sued on if it had been executed, and the $600.00 paid after the $1,000.00 note was due. Of course the money paid to the assignor even after the assignment, without notice to the debtor of the assignment, would be a good payment and could have been properly proved under the plea of payment.
The taking of the $408.00 note, under such circumstances, and giving the receipt would not be an accord and satisfaction according to the principles above enunciated. The $408.00 would be still due and unpaid by the debtor and could be recovered, on the original note by the assignors, provided they had in their possession the $408.00 note, or could account for its loss, and had either counted on it in the original or an amended declaration.
In such a case the plaintiff ought uot to be permitted to
But in the case before us it appears that the $600.00 was paid before the $1,000.00 note was due, and the note for $408.00, due four months after date, which was far beyond the time the $1,000.00 note would become due, executed, and an express agreement made between the maker and payee of the $l,000i00 note, that it should be extinguished by the new agreement, and surrendered to the maker. Is this agreement founded on a valuable consideration; and is it binding on the parties? We think it is ; as the payment of the $600.00 before it was due, was a benefit to the creditor, and an inconvenience to the debtor, and was therefore a valuable consideration for the new agreement, and the execution of the new note in extinguishment of the old. Pinsol’s case, 3 Co. R. 238; Uhler v. Applegate, 2 Casey 140; Austin v. Darwin, 21 W. 38; Goodnow v. Smith, 18 Pick 414.
The instruction of the court was, therefore, erroneous and the judgment must be reversed, and a new trial granted.
The question presented to our consideration by the record in. this case, is what is the effect of the taking, by
In this opinion 1 shall confine myself to the consideration of the question which arises when the creditor accepts from the maker of the original note, a note with an express agreement that it shall be in full satisfaction and discharge of the original note. In this case all the authorities agree that the right of the creditor to sue on the original note is forever and immediately gone, provided this express agreement is supported by a valuable consideration. The whole diversity in the decision of thé courts in such cases is, whether in a particular case there is a valuable consideration to support the agreement or, whether it is a nudum pactum. All the authorities agree that if there be an express agreement to accept of the maker the note of a third person in full satisfaction of the original note, the delivery of such note to the payee
In McGuire v. Gadsby, the court say : “On this subject we take the law to be settled, that in order to make one instrument an extinguishment of another, the latter must be of a higher dignity than the former, or must put the plaintiff in a better condition,” we might show that this is an imperfect statement of the law, but we may admit it as correct, understanding the phrase, “ must put the plaintiff in a better condition” to mean, must be such as may put the plaintiff in a better condition. And the court must have so understood it, for otherwise the proposition of law laid down by them, would have been in plain violation of the fundamental principles of the law which defines what is a sufficient consideration to sustain an agreement. So understanding the court, its application of the law to the case before them was faulty. They say: “Nor do the new notes place the plaintiff in a better condition than the former note. They benefit the defendant by giving him a further day of payment.” Are these just legal conclusions? May not the plaintiff have been benefited by the defendant agreeing and binding himself not to pay the debt for sixty days and to pay interest on it for that time? Might it not bo that the plaintiff had no present or immediate use for the money, and the payment of it with the accumulating interest on it at a future day, when the plaintiff wanted its use, might not only have been an accommodation but a profit to him. It is very probable that this was not the case, and that the postponement of the time of payment was a more accommodation to the defendant. But it is sufficient that it may have been a benefit to the plaintiff, and the court, as a legal proposition, could not say that these new notes placed the plaintiff necessarily in no better condition than the former note.
“I do not find this proposition controvered any where except in New York, where it seems to be held that such an agreement is invalid, because without consideration. The authorities in all the other States seem to uphold such an agreement when made. In some cases it is said the agreement must be ‘express’ in others that it must be ‘special,’ while in many others it is said it may be ‘express or implied.’ The authorities touching such agreement are collected and classified in 2 Parsons on Bills and Notes 159, 160, 161, 162, note 2, and as there given relate mostly to bills of exchange and promissory notes. I see no good reason however why the note should not apply as well to a check as to a bill or note, and why the agreement may not as well be implied as expressed.
*847 “To make the agreement however valid, whether it be express or implied it must of course be bona fide, and hence the check must have been drawn against sufficient funds, and if the check was so given and received, and there were sufficient funds to meet it, which would have been applied to its payment if presented on the day it was given, was not the debt sued upon extinguished by the check, and were the plaintiffs entitled to any recovery in the action? The declaration contained only common counts. There was no count on the check. And if the goods were paid for absolutely by the check, then the demand upon the account stated was thereby extinguished.”
This decision is properly regarded by Bro. Johnson as in effect overruling the decision of McGuire v. Gadsby, and as I have before stated, I too have found no decisions which sustain that case, except those in New York and perhaps those in Kentucky. The authorities in all the other States are opposed to it so far as my investigations show. In the case of Blair & Hoge v. Wilson, the case of McGuire v. Gadsby, was not referred to, but in this the court acted as others have done. In none of the numerous eases in other States on this subject which I have examined is any reference made to McGuire v. Gadsby nor does the review of the authorities on this subject in Smith’s Leading Cases, under the leading case of Cumber v. Wane, nor the American edition in its review of the authorities on this subject, under Toby v. Barlow and Ohio v. Spencer, notice this case. The conclusions reached by the editor of each of these leading oases, are substantially those I have reached. The other Virginia cases really throw no light on the subject under discussion. The ease of Herrington v. Hawkins’s adm’rs, 1 Rob. 391, was an action of debt on a judgment; the plea was that “the judgment was by a written agreement between the parties, discharged and satisfied by a new contract for the payment of $400.00 in cash, which was then paid and the balance to be paid by deferred installments, whereby the said judgment was released, and accord and
Had they been disposed to have sustained the decision in Gadsby v. McGuire they would not have left this question open, as the principles laid down in that case rendered it clear that the original cause of action was not and could not be so extinguished. I regard this case as an intimation by the court thatthey were notthen prepared to approve the case of Gadsby v. McGuire, which they subsequently in effect overruled.
In the case of Parker v. Cousins, 2 Gratt. 388, which we have already commented upon, the court might properly have approved that case had they been so disposed, but they again omitted to do so.
In the case of Moses v. Trice, 21 Gratt. 568, it was decided that if money be loaned and a note taken, which, from time to time is renewed by other notes given by the debtor payable on time, the creditor may bring suit for the money loaned on the original note. This case gave not the least countenance to the principles laid down in Gadsby v. McGuire, for there was no pretense that the notes were given and accepted under an express agreement in discharge and satisfaction of the original debt. Of course they could not so operate, and the court treated the right of the creditor in such a case to sue on the original debt as a matter of course, without-discussing the subject or citing any authority.
In our State there is no express decision of the question under discussion, yet our Court has in some cases apparently assumed that a new note, whether of the debtor, or one of joint debtors, or of a third person if expressly agreed to be received in discharge and satisfaction of an old debt and actually accepted by the debtor as such, would so operate. Thus in Dunlap’s ex’ors v. Shanklin ex’or, 10 W. Va. 662, it was held that “ the taking oi a note from the debtor or a note of a third party is no discharge of the debt unless it is expressly agreed between the creditor and debtor that it is an absolute payment
I have thus far considered the question under discussion as though the giving of the new note had been subsequent to the time when the precedent debt -was payable. In point of fact the receipt of a portion of the precedent debt, and the agreement to consider it as discharged, and the giving of the new note for the balance, occurred two days before the original note was due. There is respectable authority for holding that a mere parol agreement without any consideration, will discharge a debt before it is payable. But I. am strongly inclined to think, that such a debt cannot be discharged by a parol agreement not based on a valuable consideration, though made before the debt is payable, and that a consideration is equally necessary to discharge a precedent debt, by an express agreement to re
In the case of Fitch v. Sutton, 5 East 230, it was decided that the acceptance of a less sum after a debt is due, can not be a satisfaction of the debt, but in pronouncing the opinion of the court, Lord Ellenborough, expressly says, “if the obligor or lessor pay a lesser sum either before the day or at another place than is limited by the condition and the feofee receiveth it, this is a good satisfaction.” And it has accordingly been often decided that the part payment of a debt on the day it becomes due though accepted in full satisfaction of the debt, cannot so operate; but a part payment however small, made before a debt becomes due, though but the day before and acceptance thereof by the creditor as a full satisfaction of the debt will be a full discharge of such debt; see Pinnel’s case, 5 Co. R. 117 ; Brooke et al. v. White, 2 Metc. (Mass.) 283; Smith v. Brown, 3 Hawk. (N. C.) 380, and the same principles wore really held in Row v. Hall, 26 Conn. 392, and these principles were approved in Sibree v. Tripp, 15 M. & W. 31; Lee v. Openheiner, 32 Me. 254; Goodnow v. Smith, 18 Pick. 414 and Reid v. Bartlett, 19 Pick. 273, as appears from the opinions delivered, and so far as I know they have never been controverted unless we were to consider Cumber v. Wane, 1 Stra. 426, as controverting the position, which is doubtful as it is badly reported and, if it does, it has as we have seen been expressly disapproved and overruled. It it is true in the case before us the $550.00 was paid only two days before the original note was due, but this payment will operate just as effectually as a com sideration, as it would have done if the payment had been made ten years in advance of the time when the original note might have fallen due, this appears from the above cases; and in Uhler v. Applegate, 2 Casey, (26 Pa. St.) 140, the part payment of the debt in that ease was made but a single day before it was due, yet the court held that while if it had been made the next day it would
There remains to be disposed of, the question whether the acceptance by the creditor as a full discharge and satisfaction of the debt, could be properly given in evidence under the pleadings in the ease ? In Cadsby v. McGuire, 3 Call 237, it was held, that such a defense could not be given in evidence under the general issue; but to enable such a defense to be relied on, accord and satisfaction must be pleaded. The court refers to no authority but I presume they acted upon the authority of Esp., N. P.; he, in his treatise, page 147, having laid it down thus, and it being referred to in the argument of counsel. But Espinasse does not seem to be sustained by the authorities. In Paramour v. Johnson, 12 Mod. Rep. 377, it is said,“ it is indulgence to give accord and satisfaction in evidence upon non assumpsit pleaded; but that has crept in and is now settled.” And in Strong v. King, 17 Mod. Rep. 538, the court ’say: “In a debt on a simple contract, it is a good plea that the defend-anthas given his bond for the debt, and the plaintiff did accept it in satisfaction ; and upon the general issue, that matter may be given in evidence.” In Martin v. Thornton, 4 Esp. 180, which was an action for malicious prosecution, and the plea was, not guilty, Lord Alvanly says; “What amounts to accord and satisfaction may be given in evidence under the general issue.” Lord Holt (referring to the above case) says it was an innovation ; but it has been well settled that whatever goes to show that the plain
On these authorities I think we may safely say, that the decision in McGuire v. Gadsby on this point was erroneous, as we have shown it to be on the other point decided in that case. But in the case before us, the general issue was not pleaded. There was no plea filed except the plea of payment, with which was filed a proper bill of particulars, specifying in detail the proposed items of payment, as attempted to be proven. Can the proposed defense be made under this plea? I can see no good reason why it may not. A payment may be otherwise than in money — anything which the parties agree to accept as payment, is payment; it is so laid down in the text books; thus Chitty lays it down that by agreement between the parties, payment may be made in goods as well as in money, referring to numerous authorities. See Chitty on Contracts, 9 Eng., 11th Am. ed., vol. 2, p. 1110. Such a defense as that proposed in this case, it was expressly decided in Ligon v. Dunn, 6 Ired. (N. C.) L.137, could be made under the plea of payment; the court says “ Why is not this payment ? A payment it is said by Mr. Stephens, (vol. 2 p. 716), may be made in money or its equivalent, and Mr. Chitty, in his treatise on contracts, 750, states that payment may be made in money or in goods, when the latter are received at an agreed price. Thus, if A. hold a bond of B. for $100.00, and the latter deliver to the former a horse valued by the parties at that sum, and the horse is received in discharge of the obligation, it is a payment, although the horse may die the day after its delivery. Payment may be made also in a bill of exchange or a promissory note, although the receipt of neither is itself payment, for neither is money. But when at the time of the transfer, it is agreed between the parties that the draft shall be received in payment, it will discharge the debt as a payment. See Mayer v. Nias, 1 Bing. 311.
Judge Christian in delivering the opinion of the court says : “ Payment oí a debt is not necessarily 'payment of money; but that is payment which the parties contract shall be accepted as payment. Whether under a simple plea of payment, (without notice to the plaintiff how the payment was made) payment may be shown in any other thing than money, is a question which does not arise in this case; because here with the plea of payment was filed an account showing the nature of the payment relied upon by the defendants, by special agreement with the plaintiff, and that was if the defendant would pay the bond which the plaintiff owed to Leffle, the amount thus paid should be a payment pro tanto of the defendant’s bond held by the plaintiff. The instruction simply announced the proposition that if there loas such an agreement to accept Laffle’s bond as paymentpro tanto the defendants were entitled to a credit for the amount due on that bond as a payment. If such an agreement was established it was certainly a good defense to the extent of the amount due on the Laffle bond. ” I am, therefore, of the opinion that the defense proposed in this case would properly be made under the plea of payment, accompanied as it was, with a bill of particulars showing the exact character of the payment proposed to be proven.
In the case before us, on its merits, as disclosed by the certificate of the evidence certified to by the court, a new trial ought to have been granted the defendant. The evidence shows conclusively that the $1,000.00 note sued upon was not negotiable paper; that it became due April 1, 1861; that the maker of the note, the defendant, had no notice of its assignment till after it became due; that two days before it be
I agree with Bro. Moore, in his opinion, that the question, whether this cash note, &c. was received in full discharge and satisfaction of the original note, is a question of fact for the jury. See Powell v. Charless, 34 Mo. 485 ; Rayburn v. Day, 27 Ill. 46; Harris v. Lindsey, 4 Wall. C. Ct. R. 271, 274; Bedford v. Delaine, 2 B. & A. 210. But it is the dirty of the court to instruct the jury as to the meaning and legal effect of the receipt proved in evidence before them ; and what weight it is entitled to as evidence before them. The judgment of the circuit-court must be therefore reversed, the verdict of the jury set aside and a new .trial awarded; and the appellant must recover of the appellees, his costs expended in this Court.
Judgment Reversed.