33 Iowa 406 | Iowa | 1871
I. The defendant claims that the findings of the court are not supported by the proof, and, upon an assignment of errors to this effect, asks us to review the evidence. The main point of contest upon the findings of the court relates to the conclusion that the certificates were not received in payment of defendant’s indebtedness, growing out of the purchase of the land.
It is a doctrine recognized by this court, that the transfer of a note or bill of a third party, on account of an existing debt, in the absence of an agreement that it shall be taken in absolute payment, operates only as a conditional payment, and does not defeat recovery upon the original indebtedness in case of the non-payment of the
III. Counsel announcing the-rule, which it is not necessary to examine here, that a transfer of the note of a third party for a debt contracted at the time of the transaction, does, in the absence of evidence of a contrary intent, operate as a satisfaction, claim that the indebtedness in this case was contemporaneous with the transfer of the certificate, and is, therefore, satisfied. "We have just pointed out on’ reasons for sustaining the finding of the court to the effect that the debt of defendant' to plaintiff existed before the transfer of the certificate. This position of counsel demands no further attention.
Upon principle, we are unable to hold that the transfer of a bill or note, without the indorsement of the debtor, will operate to discharge the debt. The distinction between such a case, and one where the instrument is indorsed by the debtor, which is held not to operate as payment, are not such as in our opinion justify attributing different effects to the two acts of the debtor. The only difference in fact in the cases is, that in the last the debtor becomes bound as an indorser upon the instrument transferred. Upon this contract, he is liable to the creditor. In the first case there is no such liability. The reasons, so far as we have observed, that are given for holding the original debt to stand unpaid, in cases involving the point now under consideration, is that the indorsement operates to keep alive the debtor’s obligation to the creditor. Uis obligation upon the original debt, it is said, is suspended by the new contract of indorsement, but, upon the dishonor of the last instrument, his obligation to pay the first debt revives. If the doctrine depended upon the existence of a binding obligation between the debtor and creditor to pay the amount of the original debt, this reasoning would support the view contended for. But, as the statement of this argument itself shows, it. finds no support in this thought. It is conceded, by the terms above used in stating the positions assumed, that the original debt, by the dishonor of the second instrument, is revived. It was then evidently never discharged. If the debt was paid the con
If the doctrine be founded upon these reasons it is equally applicable to the case of a note given in payment without the indorsement of the debtor. The obligation rests upon the debtor to pay the debt. If this obligation is not discharged by another contract, whereby he becomes bound as an indorser, surely it will not be, in the absence of such a contract. - In the first case, as we have seen, the indorsement does not keep alive the indebtedness; why should it be extinguished because there is no
It will, of course, be understood that the agreement of the parties, to the effect that paper of any description taken upon a prior debt shall be regarded as payment, will be enforced by the law. It will also be readily seen that these views do not apply to bank notes. They pass from hand to hand as money, and, for that reason, payment therewith discharges the original debt.
V. The certificates of deposit in question were payable in currency. They are not, therefore, to be considered negotiable paper. Huse v. Hamblin, 29 Iowa, 501. This fact has been made the foundation of an argument by defendant’s counsel in support of their position that the transaction amounted to absolute payment of plaintiff’s debt. In our opinion the questions above discussed are unaffected by the non-negotiable character of the paper.
Collections of this kind are uniformly made through the hanks, and by them are sent to their correspondents in cities, which are the money centers of the particular locality of the party or maker of the paper from whom payment is sought. The certificates in question were received by plaintiff in Cass county. He was not a banker. The course of business would not require him to send the instruments directly to Buffalo, where the makers live, for collection. It would be sufficient if he should send the instruments to bankers where he was in the habit of doing business, in Council Bluffs or Des Moines, by them to be forwarded to New Tork, where all such paper is usually sent, that from that city it might be sent for collection to Buffalo. If it should not be sent off by mail on the day it was received, but the succeeding day, it would not be out of the usual course of business. Now, the plaintiff pursued such a course with the certificates as to bring them within these rules. Upon failure of the drawers of the certificates to pay the same, notice was given to defendant in a manner and at a time that comply with the requirements of the commercial law. This cer
IX. It is insisted that, as plaintiff held the paper until the commencement of this suit, January 17, 1871, without proceeding against the makers, this discharges defendant. But, as we have above observed, plaintiff was not required to bring an action against them. Defendant was notified of the non-payment of the certificates March 28, -1870, and it was his duty thereupon to see that the paper was enforced against the makers. It did not rest upon plaintiff to do so. The fact that plaintiff retained the instruments in his
Finally, in our opinion, the findings of fact by the court below are sufficiently supported by the evidence, and the conclusions of law thereon sustain the judgment rendered against defendant.
X. The judgment allows interest at the rate of ten per cent. Counsel of defendant claim that it should be six per cent, as the action is not upon the note 'or any contract; in writing fixing the interest at the rate allowed. But counsel misapprehend the facts upon which they base their position. The action is brought to recover the indebtedness of defendant, on account of the purchase of the land. The contract upon which the indebtedness accrued was embodied in the note and bond of plaintiff, and both expressly provide for interest at ten per centum per annum. In these writings defendant agreed to pay the interest allowed. "We have held that the debt remains unpaid, that the con-. tract has not been performed, and that recovery may be . had in this action thereon. Plaintiff must he allowed the interest agreed upon. It is true that the action is not brought upon the note, but it is brought to recover the present indebtedness as determined by the contract, which is the sum remaining unpaid, and interest thereon, at the rate of ten per cent per annum.
Affirmed.