Drew v. Towle

Woods, C. J.

Interest is not allowable on the indorsement of January 10, 1849. The sum of $175 was paid and received in part of the principal of the note. The interest had been adjusted prior to that date, to wit, May 27, 1848, to the first of April, 1849, on each of the f200 notes. There was, then, nothing to which the payment of the $ 175 upon the note for $>200, which fell due in one year, to wit, November 30, 1848, could be applied, but the principal of the note. The indorsement is in these words and figures : “ January 10, 1849, received in part of the within note one hundred and seventy-five dollars.” Although the note, by the terms of it, fell due November 80, 1848, yet the interest being paid to April ], 1849, and indorsed thereon, furnishes evidence of an agreement of the parties for an extension of the time of payment of the principal until that period. Crosby v. Wyatt, 10 N. H. Rep. 318. The principal was not due, then, until that time. What induced the defendant to make the payment before it became due, or the plaintiff to receive it, does not appear. But whatever might have been the motive, we are not to presume that it was the understanding of the parties, to be inferred from the face of the transaction, that the plaintiff agreed or understood that she was to pay or allow interest on the sum of the indorsement, to the time to which the payment of the principal whs agreed to be delayed. The mere fact of the payment and receipt of the money, can furnish no proper grounds for such an inference ; and the law will not raise a promise by implication on the part of the payee, to pay or allow interest upon a payment of money made in discharge of a subsisting debt. We think this case does not differ from the case of a payment made by the maker of a note not bearing interest, and not due at the time of the payment. It could not be inferred that it was agreed by the parties, that interest was to be allowed by the payee upon the sum paid, from the date of it to the time when the residue should become due and payable. No such contract could be implied from the transaction. It could be understood only as the payment and receipt of the money in part discharge of the principal, and to the extent of the payment, and no more.

Simple interest only upon the sum of $170,13, the price paid for the land, is allowable to the defendant. The price paid, and interest, is the rule of damages in this State, in an action upon the covenant of warranty where there has been a complete failure of title, and the possession has been surrendered by the purchaser to the holder of the paramount title, without suit or the expenses of litigation. Willson v. Willson, 5 Foster’s Rep. 229, and eases there cited. We are not aware that rests in the computation of the interest have ever been allowed or are allowable, in cases of that character, within the rule stated. And we can see no ground upon which the mode of computing the interest can be properly varied from the ordinary rule where redress is sought by way of set-off, instead of the action of covenant. The rule of damages cannot be varied in such a case by the mere election of remedies ; and such would be the effect of allowing the rests claimed by the defendant.

The sum of $130,34, being the amount of the judgment rendered against the defendant, as the trustee of the plaintiff, having been paid by him by force of the statute, must be treated as a payment, to that extent, of the claims in suit against the defendant, and is to be allowed in the same manner, and must have the same effect as if the same had been a voluntary payment to the plaintiff herself. Such judgment and payment will go in discharge of the claim attached by the process, to the extent of the amount of it, and is in legal effect and operation a payment pro tanto. Rev. Stat. ch. 208, § 38. Inasmuch as the payment would exceed the interest due at that period, the same is to be deducted from the sum of the principal and interest due to the plaintiff upon the claim in suit in his favor, and simple interest is to be computed upon the balance.

The claim of the defendant to a deduction from the consideration paid for the land, provided the title to the land conveyed has failed, cannot be sustained. Rev. Stat. eh. 190, §§ 5, 6. Whatever might be the rights of these parties in reference to betterments, provided an action had been, commenced against the defendant, and he had been defeated, and betterments had actually been recovered by him, we are of the opinion that under existing circumstances the defendant was in no way liable to the plaintiff by reason of the mere possibility that in the event of such a suit he might have recovered something for the increased value of the estate. The defendant had an undoubted right, upon being satisfied of the invalidity of his title, to abandon the possession of the premises, and thereby to avoid the necessity of litigation and its attendant perplexities, and expenses. He owed the plaintiff no duty to remain in possession and sustain the burthen of the defence when the title was invalid, in order by possibility to become the recipient of the value of betterments, more or less, and in that way to compensate himself to some extent for the injury sustained by the failure of the plaintiff to keep her covenants, or in that way to create a fund, out of which remuneration might be made for the loss which he has sustained by her fault. Now, the right of the defendant was at any period to give up the possession to the rightful owner, upon claim made. He was under no obligation, either of duty or contract, to withhold it. He was not bound to seek redress through a litigation that might turn out to be fruitless, with the party having the title.

He had a right to look to the covenants in his deed for indemnity for the injury and loss sustained by the failure of the plaintiff to keep them. If the title were known to the defendant to be invalid, would he be justified in litigating the question at the expense of the plaintiff ? A party, it is true, is entitled to recover of the covenantor all reasonable costs attending a litigation of the question of title. But would the costs be reasonable, within that rule, that should be incurred in a litigation known to the party to be utterly fruitless ? It is doubtful, to say the least of it. And it certainly has not yet been determined that where the party should go into a litigation upon his own mere motion, for the purpose of testing the question of betterments, that the covenantor would be answerable for the costs, or to indemnify the party from loss by reason of the litigation. And it is only upon a failure of title that betterments ..are recoverable. It is the reasonable costs attending the litigation to test the title, that has been determined thus far to be a proper item to be recovered in an action of covenant, in addition to the consideration paid. Kingsbury v. Smith, 13 N. H. Rep. 109.

It is fully settled in this State, that the possession of land by a party holden by virtue of a contract of purchase, is not adverse until full payment for it has been made, according to the terms of the agreement. Wendell v. Moulton, 6 Foster’s Rep. 41. Here was plainly no title acquired to the premises by adverse possession. Here, then, was a total failure of title, and of the consideration upon which the agreed price of the land wras paid, and in that event it seems to be conceded that the set-off for the amount of the payment, as claimed, may be rightfully allowed. No question upon this point is suggested.

The question as to the actual amount of the note of November 30, 1847, specified in the notice of set-off as a. note for $42,25, whether it be a note for $42,25, or for $42,75, and the further question whether if it be a note for $42,75, more than the amount of a note for $42,25, can be recovered by or allowed to the defendant, upon his set-off, in which it is specified as a note for $42,25, are raised in this case.

As to the first question, it is one properly for the consideration of the court, and not for the jury. The construction of all written contracts is matter for the court. Whether this is a note for $42,25, or $42,75, is to be determined by the court, upon inspection. The execution of the note is not disputed, and so it is a written contract, and its construction, or, in other words, what it contains, and means, is to be settled by the court. We think, moreover, that if the note upon inspection appears to us, and is found to be a note for $42,75, that the full amount of it must be allowed: that it is now too late, after verdict, to except to the variance between the specification filed and the note given in evidence. Justice demands that the exception which is one of variance, should not be allowed if the note turns out to be a note for $42,75, in fact. If the note is found to be a note for $42,25, it is understood that there is no claim insisted upon for the allowance of a larger sum, merely because the note was erroneously read as being for a larger sum.

Upon inspection of the note, wé are all of the opinion that it is for the sum of $

If, upon computing the interest in the manner stated, and ascertaining the amount of the claims of the respective parties, in accordance with the principles before indicated as applicable to this case, it be found that a greater balance was due to the plaintiff than $90, at the time of the payment of that sum into court, then the plaintiff, will be entitled to a judgment for the excess, and interest thereon, and the costs of the suit from that time. But if it be ascertained that a smaller sum, or precisely $90, were due to the plaintiff, then the defendant will be entitled to his costs incurred since the time of said payment. Rules of Court 78.

Let judgment be entered according to the principles of the foregoing opinion.

Case Details

Case Name: Drew v. Towle

Court Name: Superior Court of New Hampshire

Date Published: Jul 15, 1855

Citation: 30 N.H. 531