| Miss. | Oct 15, 1871
Friedlander & Gersen and T. H. & J. M. Allen & Co., exhibited their bill in chancery to foreclose a mortgage in fee executed to them by Elizabeth D. Shaw. By amended bill John Lear was made a party defendant, on a suggestion that he had some sort of claim, alien on the mortgaged premises.
Lear, by answer and cross-bill, sets up that Thomas Jones (from whom Elizabeth B>. Shaw derived the lands as devisee) was indebted to him in the sum of $1,331 by promissory note, dated 17th February, 1858, and due twelve months after date. That at his decease-Jones was possessed of a large personal estate, which he bequeathed to Elizabeth E). Shaw, and made her his executrix. That, in order that she might make a final settlement in 1861, he accepted from her her individual note for the debt due him by her testator, and that she did, in her final settlement made in the probate court, obtain credit for the note due from her testator. But her note was not taken, by him in satisfaction of his debt against the testator’s estate. That subsequently, on June 24, 1866, said Elizabeth, as additional security for his debt, executed to him a mortgage on the same lands embraced in the mortgage to the complainants.
On this state of facts he claims a priority over the complainants, treating his debt as still subsisting against J ones’ estate, and the lands in controversy as part of it. The genT eral rule is, that the giving of a promissory note does not discharge the precedent debt of equal grade, unless accepted as such. In Woods v. Gridley, 26 Miss., the doctrine is ex
But there are cases where the court will intend that the note was given in satisfaction of the original debt. Peter v. Beverly, 10 Pet. 552. If at the time the substituted note was made the promisor was solvent, and so continued to be for some time thereafter, long enough for the creditors to have realized his debt by suit; and if, in the mean time, rights have sprung up in favor of other parties, which would be injuriously affected or wholly lost (if the original indebtedness were treated as subsisting and unsatisfied), so that a loss must ensue to somebody, it should be made to fall upon the negligent and indulgent. In Arnold v. Camp, 12 Johns. 409" court="N.Y. Sup. Ct." date_filed="1815-10-15" href="https://app.midpage.ai/document/arnold-v-camp-5473594?utm_source=webapp" opinion_id="5473594">12 Johns. 409, the plaintiff held the promissory note of Camp and.Downing partners. The plaintiff, the creditor, gave up the note of the partners, and took in lieu of it, the note of Downing, one of them. Camp had given Downing property to take up the partnership note. Downing’s note was held to be in satisfaction, otherwise injury and loss might ensue to Camp. James v. Hackly, 16 Johns. 278, illustrates the same principle. Hackly, one of the administrators, produced to his co-administrators evidence that the creditor of their intestate had received his note in full of all demands on the estate. Knowing that Hackly was solvent and able to pay his note, the creditor, by the indulgence of Hackly, for a long time, “must (say the court) either submit to a loss attributable entirely to his negligence, or throw the loss on the estate,” for the co-administrators and were justified in re-imbursing Hackly.
We think,.in view of all the circumstances, that it ought to be intended that the note of Elizabeth Shaw was in satisfaction of the debt of her intestate ; or it may be stated thus: Lear ought not to be permitted, at this late day, as against the complainants who have acquired a lien on the lands devised, to set up his debt against Jones, the intestate, and thereby defeat their debt. In his answer and cross-bill, Lear states that Jones left a large personal estate, in addition to the lands, and that there was but little indebtedness ; and that he received the note of Elizabeth (who took the whole estate, real and personal), under the will, as a matter of convenience, to enable her to settle finally, without delay and costs. At that time (1861), the debt against her was just as good and solvent as it was against Jones, the intestate, for she succeeded to the whole estate. But, by co-operating with her, and consenting that she might treat the original debt, in her final settlement, as paid, and enabling her to hold the property by her title as legatee and devisee, he assisted in giving her personal credit, on the faith of the property thus acquired.
By his negligence in not insisting upon his debt, from 1861 to 1866, third parties, having access to the probate records, and there finding his debt against the intestate paid, had a right, both from his delay and the record, to suppose that his original demand was satisfied, and might safely extend credit to the devisee, and take liens upon the land. In these circumstances, business men who conduct their affairs with prudence and caution would not hesitate to extend credit to her, and would consider-any lien she might make as safe. If, in the mean time, Elizabeth Shaw has become insolvent, so that a loss must fall either upon the complainants or upon Lear, equity would not pause long to determine who should bear it. Lear has actively contributed to the condition of things which presented Elizabeth Shaw to the public as the owner of this property;
The policy of the law is, that there shall be as speedy a payment of the debts of a decedent as can be reasonably made ; this is the primary duty of the administrator, and ought to be performed before final settlement and discharge; indeed, the trust is not fully executed until this has been done. 43 Miss. 104. But there is another circumstance, in connection with- those we have been considering, which makes it conclusive that Lear had surrendered all claim on the estate. On the 24th of June, 1866, he took, from Elizabeth Shaw, a mortgage to secure her note.
If the only contestants to this record were Lear, the creditor, and Elizabeth Shaw, the debtor, and Ms debt could oMy be realized by a resort to the estate of .Jones, and no third parties had conflicting claims and interests, there might be relief afforded him. Or, without disturbing intervening rights, he might, as stated in Woods v. Gridley, supra, have Ms election of a personal suit or a bill against the estate.
Upon the whole, we are satisfied that the decree of the chancellor is correct.
Decree affirmed.