Muldon v. Whitlock

| N.Y. Sup. Ct. | Aug 15, 1823

Woodworth, J.

The goods were ordered by Frederick Jenkins & Son, the ship’s husbands, and delivered on the 20th November, 1818, at a credit of 4 months. They were charged, at the time, in the plaintiffs’ books, to the ship Cadmus, for account of Frederick Jenkins & Son, and Whitlock & Jenkins. Two bills, of the goods in question, were afterwards rendered by the plaintiffs, to Frederick Jenkins & Son, headed as follows: “ Novr. 20, 1818. Ship Cadmus, acc. of Messrs. Frederick Jenkins & Son, to Muldon & Montgomery, Dr”

The original credit was expressly given to all the defendants, as appears by the original entry in the plaintiffs’ books: they are consequently liable until legally exhonerated. The bills rendered after the charge thus made, and delivery of the goods, cannot release Whitlock & Jenkins ; for it does not purport to be an extract from the books, but a statement of the articles sold. I do not understand that, thereby, Frederick Jenkins Son are designated, as sole debtors. It is the ship Cadmus’ account; or, in other words, a statement of stores for the ship Cadmus, as delivered to Frederick Jenkins & Son. The bills were memoranda of the goods, and had no reference to the question—to whom was the credit given ? This act does not furnish any evidence of an election to discharge a part of the owners; but, in my view, is perfectly consistent with their liability.

The case of Schermerhorn v. Loines & others, (7 John. 311) decides, that where a person, on the order of the ship’s husband, supplied stores to a ship, of which there were several owners, and took the note of one owner in payment, and gave a receipt in full, it was no discharge of the others; that taking the note, and giving a receipt, was no extinguishment of the original debt, unless the note was paid. It is true, the Court allude to the circumstance, that the plaintiff did not know that the other defendants were part owners; but I do not consider the decision as turning on that point.Ignorance of the other owners would, indeed, place the justice of the plaintiffs’ claim in a stronger point of view but, without that fact, it is well supported by authority. The principle which governs is this, that taking a note for a pre-existing debt is no payment, unless it be expressly- agreed to ta^e ^ as such, and to run the risk of its being paid. It only postpones the time of payment of the old debt, until a-default be made in the payment of the note ; that the inference arising from a receipt is not enough to establish an agreement to take the note as absolute payment. This doc- . trine is fully supported in Toby v. Barber, (5 John. 68) and the authorities there cited. It is also recognized in Arnold v. Camp, (12 John. 409.) This last case was cited by the' defendants’ counsel, on the argument, but, in my view, does-not support the doctrine contended for. The facts were these: Camp and Downing, being partners, gave the plaintiff their note, which Downing took up, by giving his own note, having received property from Camp, his partner, fertile purpose of discharging the joint note. Afterwards Doroning took back his own note, and returned the partnership note. The Court say, “ the circumstances fully warrant the conclusion, that the individual note was intended to be-given to, and was actually received by the plaintiff, in satisfaction of the partnership note; that it must necessarily be inferred that it was- delivered up ■ for the purpose of being destroyed.” This, then, was considered a sufficient proof of an agreement to discharge the partnership demand. Without such agreement, it is an authority to show"'that the original demand remained in force. It does not appear, by-the case under consideration, that the defendants have been prejudiced. The mere extension of the time of credit operated in favour of all the defendants. It was the- exercise of a discretion vested, by law, in the plaintiff. He, thereby^ incurred no risk. Frederick Jenkins & Son rendered to Whitlock & Jenkins, a few days after the stores -were furnished, an account of the disbursements of the ship; which account was never settled between them, nor any payment made by Whitlock & Jenkins, on account of the stores. There is, then, no evidence of actual loss, sustained in consequence of taking the note of Frederick Jenkins &. Son. If there had been, it would present a different case; In Reed v. White, (5 Esp. 122) the defendants insisted, that the plaintiff had discharged the other owners ; who, in ignorance of thb dealing between the plaintiff and White, had suffered him to receive large sums of the East India Company, for freight, which they would otherwise have detained. It seems to me this was a material circumstance, on which that case chiefly turned. This Court, in Schermerh'orn v,.Loine.s, so considered it; for they observe, “ the case of Reed v. White proceeds on the ground that the plaintiff had taken the ship’s husband, exclusively, for his debtor, knowing there were other owners, and after a settlement of accounts between them and the ship’s husband.'11 The principle is also recognized in Wyatt v. The Marquis of Hertford, (3 East, 147.) The plaintiff had taken the draft of the defendant’s agent, without the knowledge of the principal, and gave the agent a receipt. Lord Ellenboroufh said, “ it did not appear that the defendant was in any way prejudiced, by his steward having given his own security to the plaintiff, and taking the lattér’s receipt; that, if it had appeared that the defendant had, in the interval, inspected the steward’s accounts, and had, in any manner, dealt differently with him, on the supposition that this demand had been satisfied, as the receipt imported, no doubt the defendant would have been discharged.”

I do not perceive any ground for submitting this case to a jury. The facts were not controverted. The question is, whether, in judgment of law, the defendants are liable ? My construction is, that they are. Besides; the defendants did not, at the trial, request the Court to submit the cause to the jury; but, correctly, put their right on the ground that the law was in their favour. The letter of Muldon does not contain an admission that the plaintiffs agreed to discharge the other owners. It states—“ for the accommodation of your house, took your note, for eight months interest.” I should incline to the opinion, that the accommodation here spoken of, referred rather to the extended time of payment, than to the question of general liability. They speak of its being considered confidential,-and that the loss would be insupportable. I admit that this language goes far to prove that Muldon was under an impression that, by taking the note and giving the receipt, his remedy was against Frederick Jenkinp ,& Son, solely. Entertaining such an opinion, the letter might well be written in this manner. No doubt he supposed the inference of law would be, that Whitlock dr Jenkins were exonerated, although he had made no express agree?ment to that effect. This misapprehension of the law cannot avail the defendant. If the letter does not contain evidence of an agreement to look to Jenkins & Son, solely, independent of the note and receipt, it is immaterial. That it does not, I am satisfied. The motion for a new trial must be denied.

Sutherland, J.

The original liability of the defendants, as part owners of the vessel, is clearly proved. The articles were charged, in the plaintiffs’ books, to Frederick Jenkins dr Son and Whitlock dr Jenkins, the defendants. The only question, then, is, whether the plaintiffs, by their subsequent conduct, have discharged the defendants from their original responsibility. Let it be kept in mind, that the proof establishes, incontrovertibly, that the original credit was given to Frederick Jenkins d? Son, and to the defendants, jointly. The subsequently taking a separate note, from Frederick Jenkins dr Son, is not evidence that the original credit was given to them ; but is adduced, as amounting to a discharge from an acknowledged antecedent' debt. It is evidence, as the defendants contend, .of a subsequent'agreement, on the part of the plaintiffs, to look to Frederick Jenkins dr Son, alone, for payment. Now no principle of law is better settled, than that taking a note either from one of several joint debtors, or from a third person, for a pre-existing, debt, is no payment, unless it be expressly agreed’ to be taken as payment, and at the risk of the creditor« Nor does the taking a note, and giving a receipt for so much cash, in full of the original debt, amount to evidence of such express agreement to take the note in payment. The agreement must be clearly and explicitly proved by the original debtor, or he will still be held liable. (2 Ld. Raymond, 928. 1 Salk. 124. Owenson v. Morse, 7 T. R. 64. Tobey v. Barber, 5 John. Rep. 68. Johnson v. Weed & another, 9 John. 310. Sheehy v. Mandeville, 6 Cranch, 258. Opinion of Marshall, Ch. J. 264.) Giving a prolonged credit upon the note, beyond the usual time, cannot change the liability of the parties, unless the defendants can show that they have sustained an injury in consequence of it.

But rendering the account to Frederick Jenkins & Son, and taking their note for the stores furnished the vessel, was not out of the ordinary course of business, even upon the supposition that the plaintiffs still intended to hold the defendants eventually responsible. Frederick Jenkins & Son were the ship’s husbands. These are defined to be “ a class of agents, whose chief employment it is, (among other things) to purchase the ship’s stores, for her voyage, and to make disbursements for the ship’s use, and to make out an account of these transactions, for their employers, the owners of the ship, to whom they are, as it were, stewards at land, as. the officer bearing that name is, on board the ship, when at sea.” (Livermore on Agency, 72. Beawe’s Lex. Merc. 47.)

The fact, that they were also part owners, does not alter-the case. They were the persons to whom it was natural and proper for the plaintiffs to present their account, and, in the first instance, to look for payment. They were the agents for all the owners, and in that character the plaintiffs dealt with them. They gave their note as the agents of the defendant. It was their note, in judgment of law ; and, not having been paid, the plaintiffs have a right to resort to their original cause of action. (Everett v. Collins, 2 Campb. 515.)

This case is, in no respect, distinguishable from that of Schermerhorn v. Loines, (7 John. Rep. 311) except that, in that case, although the plaintiff knew there were other owners besides Townsend, there was no positive evidence that he knew who they were. The evidence there certainly-warranted the presumption that he did know who they were. But that fact is only mentioned incidentally, in the opinion of the Court, and is, by no means, the point on which the decision turned. The Court, evidently, put their opinion upon the broad ground, “ that the defendants were liable as owners, and that taking the note of Townsend, the ship^s husband and part owner, was no extinguishment of the original debt, until the note was paid.” They distinguish the case from that of Reed v., White, by remarking that, “ in that case, the plaintiff had taken the ship?s husband, exclusively8for his debtor, knowing there were other owners, and after a settlement of accounts between them, and the ship's husband.” Now it does not appear, in Reed v. White, "that the plaintiff; knew who the other owners were, but they were held not to he liable on the ground that, having been kept in ignorance of the transaction between the plaintiff and the ship’s husband, they had suffered him to receive large sums of money, which 'they otherwise would, not have done. (Reed v. White, 5 Esp. N. P. Rep. 122.) The true principle, applicable to this1 class of case's, seems to be this : If a man deal with the agent of. another, in such a manner as to enable him, to settle with his principal, and receive from him a sum of money, or other advantage, which otherwise he would not have been able to obtain, and the principal does, in truth, so settle with his agent, he shall 'not, afterwards, be responsible upon the contract of his agent, if he fail to pay'. (Wyatt v. The Marquis of Hertford, 3 East's Rep. 147. Cheever v. Smith & others, 15 John. Rep. 276.) In this case, "the defendants have not been misled, or injured, in consequence of the manner in which the plaintiffs dealt with Frederick Jenkins & Son. They have hot settled with them upon a different principle, or paid them any money, which they would not otherwise have done. Upon every principle," therefore, tpey must be held responsible, upon this contract.

Much "stress was laid, in the argument, upon the letter from the plaintiffs to Frederick Jenkins & Son, of 'the 25th June, 1819, urging the payment of the nóte-, in very pressing terms, although Frederick Jenkins f Son had then failed. The inference drawn from it was, that' the plaintiffs must then have thought their only remedy was upon the notei This is, by no means, a necessary consequence. Having dealt with Frederick Jenkins f Son, alone, throughout the transaction, they may have thought it" their moral, if hot their legal duty, to make every exertion in their power to obtain payment from 'them. They were' also ignorant of thp state óf the accounts' between jFrederick Jenkins fy Sun anil the defendants. They did not know but the defendants had paid them the amount of this account, upon the strength of their receipt to Frederick Jenkins Sy Son. Thus, they had many inducements for wishing to obtain payment from them, independent of the belief that the other defendants were absolutely discharged ; and their unavailing efforts, for that purpose, can afford no protection to the defendants, against this demand. I am, accordingly, of ppinion/that the plaintiffs are entitled to judgment.

Savage, Ch. J. concurred.

Rule for judgment absolute1.