75 Va. 726 | Va. | 1881
The learned judge of the chancery court was of the opinion that the judgment recovered by Merrick & Sons against Charles Y. Morriss was fully satisfied and discharged by the settlement of June 5th, 1869; but that the debt for which the judgment was rendered was not extinguished, but still remained, and having been contracted prior to the conveyance of the “Montevideo” estate to Mrs. Morriss and her children, might be enforced against that estate.
With great respect to the opinions of the chancellor, I ■cannot concur in this view. It seems to me that if the judgment is to be regarded as satisfied, the debt must be •considered as also satisfied. As will be hereafter seen, the general rule applying in all this class of cases, is that the debtor’s own note does not operate as a payment of an antecedent debt, unless intended by the parties. In the absence' of such intention, expressed or implied, the note is treated as a conditional payment merely, that is, when actually
When once we reach the conclusion that the notes of •Charles Y. Morriss, endorsed by Harveys & Williams, were received as a conditional payment, they necessarily so operated with respect to the judgment, and whatever might be the effect at law, the lien would still remain to be enforced in a court of equity. On the other hand, if the nature of that transaction be such as to satisfy the mind that the notes were accepted in absolute payment of the judgment, or as a substitute therefor, it is to be presumed that the debt represented by the judgment was included in the arrangement and was intended to be also discharged and satisfied.
The learned judge of the chancery court has declared that neither the judgment nor the substitution of other securities will prevent a court of equity, where a deed is sought to be impeached as voluntary, from looking to the original cause of action in order to ascertain whether it was a subsisting debt contracted at the time the deed was made. The correctness of that proposition will not be. contro
Sometimes the transaction amounts to a novation of the-debt by a mere exchange of securities. In such case, the new contract is accepted in satisfaction of the old—becomes-an accord executed, and discharges the original cause of action, whether the new contract is ever performed or not. Here, again, it is a question of intention, to be derived from all the circumstances, although nothing positive be-expressed. 2 Smith’s Lead. Cases, 268.
The real difficulty in all this class of cases is in ascertaining what is the real intention of the parties. Sometimes, where they have used words of plain import, the courts differ as to the true meaning and effect of the words-so used. The circumstance often relied upon, as affording strong presumptive proof of the intention, is the surrender of the original securities to the debtor. The doctrine on
In a case decided by the supreme court of Pennsylvania, cited in 5th Eob. Prac. 863, Eogers, J., in discussing a similar question, said: “Whether taking the separate note of one of the parties amounts to an extinguishment or satisfaction of a joint debt depends upon the intention of the parties, and, in the absence of all proof of a special agreement, the giving up or the retention of the original security will, in general, be a decisive circumstance, for it is difficult to account for the fact except on the supposition that in the one case it was intended in case of need, to enforce the joint liability, or, in the other, to depend altogether upon the responsibility of one of the joint debtors. Where a joint debtor insists that the separate note is substituted and is in satisfaction of the joint debt, the onus is upon him, and to discharge himself from liability, it will be necessary to show a special contract to that effect, or that, in addition to a separate note being taken for the amount of the debt, the original bills were given up to the debtor.” The same reasoning will apply where there is but a single debtor, for if the creditor means, in any contingency, to resort to the original indebtedness, he will scarcely be willing to surrender all evidence of that indebtedness to his debtor without fortifying him.self with some acknowledgment of the real nature of the transaction.
I am free to admit that generally the courts are reluctant to treat the new note as a satisfaction where the effect will be to deprive the creditor of a subsisting lien. But where, as in this case, there is a judgment, and the parties, by unmistakable acts and declarations, show that they con
Bearing these principles in mind, let us look to the settlement of June 5th, 1869, which has already been referred to. The writing evidencing this settlement is in the following words:
“ In satisfaction of a judgment of the circuit court of the United States for the district of Virginia, rendered in favor of Merrick & Sons, of Philadelphia, against Charles Y. Morriss, of Kichmond, on two negotiable notes executed by C. Y. Morriss to Merrick & Son, each for $6,122^-, payable June 1st, 1861—the other June 8th, 1861—I, James Alfred Jones, attorney for Merrick & Sons, have this day received and accepted one thousand and twenty-nine dollars, and ninety-five cents, in cash, and six negotiable notes of Charles Y. Morriss, endorsed by Harveys & Williams, for the aggregate amount of eighteen thousand two hundred and ninety-seven dollars; the said several notes being — and payable at the dates described in the above memorandum. The said original notes of f6,122Tf)T¡fiIJ, payable respectively on June 1st, 1861, and June 8th, 1861, are to be delivered to Mr. Charles Y. Morris as soon as they can be gotten from Philadelphia.
“James Alfred Jones,
“Jume 5th, 1869.” “Att’y for Merrick & Sons.”
Before considering the terms and meaning of this instrument, it is important to inquire what were the surroundings and circumstances of the parties at the time it was executed. At that time Charles Y. Morriss was free from
It is still more difficult to understand why Merrick & Sons were not brought forward as witnesses. What was their understanding of the matter ? Did they believe that the notes of Charles Y. Morriss were accepted merely as conditional payment; that upon the dishonor of these notes the lien of their judgment might be enforced, or their debt be made available out of the “Montevideo” estate? If such was their understanding, it is remarkable that they consented to accept six thousand dollars in payment of a debt of eighteen thousand dollars well secured upon real estate.
Mr. Williams, in his deposition, states that Merrick & Sons professed themselves willing to receive from Morriss’ estate the same per cent, that other creditors got, upon receiving from Harveys & Williams an additional ten per cent, for their endorsement. They were, therefore, relying upon the endorsement of Harveys & Williams, and not upon the lien of the judgment or the continued existence of the antecedent indebtedness.
If any presumptions are to be derived from the conduct of men, we may justly infer from the conduct of Merrick & Sons what was their understanding of the operation and effect of the settlement of Juné 5th, 1869. Much reliance is placed upon the fact that the other creditors, the general creditors as they are termed, would not consent that Merrick & Sons should share in the general assets of Morriss’ estate, because the debt bound the “Montevideo” property. The answer to this is obvious. It does not appear that these creditors knew, or ever had heard of, the settlement of the 5th of June, 1869. Indeed, it is very certain they were entirely ignorant of its existence, and they could therefore know nothing of the extinction of the original indebtedness by the substitution of the new securities.
The next matter to be considered is, what was the understanding of Harveys & Williams. This inquiry is not at all essential to a just conclusion, for they as purchasers and' assignees of the debt, can occupy no higher ground than Merrick & Sons, and if the latter are bound by the settlement of June, 1869, Harveys & Williams are estopped to controvert it. Still it will tend to elucidate the merits of the case, to ascertain their view of the transaction at the time.
In the original bill filed by Harveys & Williams for the purpose of subjecting “Montevideo” to the payment of this debt, no reference is made to the judgment now claimed as a lien on that estate. The claim there asserted is founded upon the negotiable notes of March 1st, 1870, executed by Charles Y. Morriss, which are averred to be an extension of an old debt Morriss owed Merrick & Sons many years previous. No one reading the bill would even conjecture there had been a judgment against Morriss in favor of Merrick & Sons, or that the latter had once held negotiable notes of the former, upon which a judgment was rendered. In the agreement of the 11th of June, 1870, signed by Morriss and wife, which was prepared by Mr. Williams, the same silence is preserved with respect to the judgment and the settlement. Nor is the slightest allusion made to them in the depositions of Harvey or Williams. This studious avoidance of all mention of that judgment and settlement is calculated to excite some suspicion that the parties were apprehensive of the effect of the settlement, if known, upon their present pretension. When the paper of the 11th of June, 1870, was prepared, it is difficult to believe the judgment and settlement had been entirely forgotten, and yet the only reference there made is to a certain debt con
It is, however, not at all material to inquire in this connection how the fact really was. The execution of the deed of trust of the 10th of June, 1870, was a measure designed more for the relief of Harveys & Williams than for Charles Y. Morriss, who was hopelessly insolvent. Their plan then, or shortly before conceived, was to use the assets of Charles Y. Morriss in compromising with his creditors, to make sales of property to such of them as "would not consent to an adjustment of their claims, to take a transfer
Much reliance is placed on the fact, that Harveys & Williams required Charles Y. Morriss to pay all the debts for which they were bound as endorsers, except the Merrick debt, and this exception, it is argued, must have grown out of the fact, that they regarded the Merrick debt as amply secured by reason of its lien upon the “Montevideo” estate.
I think, then, it has been conclusively shown that neither Merrick & Sons, at any time, nor Harveys & Williams, on any occasion prior to the anticipated insolvency of C. Y. Morriss, “ treated the transaction as the continuation of the old debt in a new form.” The agreement of the 11th of June, 1870, was an after-thought, growing out of the complications in which Harveys & Williams were involved with the creditors of C. Y. Morriss. So far as Charles Y. Morriss was concerned, he, no doubt, would have signed any paper they (Harveys & Williams) might have asked him to sign. His admissions or statements, as set forth in the paper of the 11th of June, 1870, are, of course, evidence against himself, but as against his wife and children, the beneficiaries under the deed of the 15th March, 1869, they are of no value whatever. They cannot be considered by this or by any other court.
With respect to Mrs. Morriss, no one can for a moment believe she would ever have- signed that paper, had she been apprised of the settlement of the 5th of June, 1869, its legal effect and operation. But whether she did or did . not understand it, she could not, in that form, bind herself or her estate; nor could she bind her children in any form,
The whole writing is an absolute nullity as to her and her children, and the cause must be decided precisely as though it had never been executed.
Without further protracting the discussion, I think, for the reasons stated, that the decree of the chancery court is erroneous in the particulars already alluded to, and must, therefore, to that extent be reversed and annuled.
It remains now to inquire whether Charles Y. Morriss is personally liable to Harveys & Williams for the Merrick debt. When this branch of the case was under argument in this court, it was asserted that the judge of the chancery court had not decided the question of such liability, but left it open for future consideration.
The correctness of this assertion was not controverted by the counsel on the other side, and some of the judges certainly, if not all of them, took it for granted that the fact was as stated.
Upon a careful examination of the record, I think the chancellor has passed upon the question, and has affirmed that such liability exists, and although the decrees entered by him may not be enforceable by execution, as they now stand they affirm a right of recovery on the part of Harveys & Williams to the extent of the amount paid by them to Merrick & Sons.
The question is, therefore, before us, and must be decided by this court.
The counsel for Charles Y. Morriss bases his alleged exemption from all liability for any part of that debt upon the provisions of the deed of 10th of June, 1870. I do not think this claim is well founded. The meaning of the deed, as I understand it, is that Charles Y. Morriss was to be released from all liability to his creditors included in
These creditors were to look to Harveys & Williams for payment, and not to Charles Y. Morriss. But, if from any unforeseen cause, the assets conveyed by the deed proved insufficient to repay Harveys & Williams the amounts paid by them upon the three and six months’ notes, then they were to be indemnified by Charles Y. Morriss. It is very clear that the Merrick debt which belonged to schedule B was not intended to be included in any part of this arrangement. That debt had been, prior to the deed of 10th of June, compromised with Merrick A Sons and transferred by them to Harveys A Williams. They were then the creditors really, and not Merrick A Sons. Although Harveys & Williams may have used the money of Charles Y. Morriss in making the purchase of the Merrick debt, they had charged themselves with all the funds of Charles Y. Morris in their hands and accounted for the same.
It is scarcely to be supposed that Harveys & Williams would agree to place the Merrick debt in the second class, release Charles Y. Morriss from all liability therefor, and at the same time fail to require of him the indemnity exacted from the other creditors who were in the preferred class. It is, however, unnecessary to discuss the provisions of the deed of 10th of June, 1870. We are saved all trouble on that point by the agreement of the 11th of June, 1870, known as paper K. This agreement recites that Harveys A Williams are endorsers of certain notes executed by Morriss to Merrick A Sous in extension and renewal of a debt contracted prior to the war; that Harveys A Williams had purchased these notes for the sum of §6,346.85, and that Charles Y. Morriss, by his deed of 10th June, 1870, had provided for the repayment of this sum to Harveys A Williams, but as the property therein conveyed might not be sufficient for that purpose, it was therefore agreed that
Christian, Anderson, and Burks, J’s, concurred in the opinion of Staples, J.
Decrees reversed and cause remanded.