The opinion of the court was delivered by
Plaintiffs purchased of defendant a quantity of goods, and in consideration of such purchase made and delivered to him their promissory note, negotiable in form, for the sum of $350, due ninety days after date, and at the time received from the defendant a receipt in substance as follows: “Received from Walsh Bros. $350, one note for above, in payment for goods to be delivered or note to be invalid.” There was a failure to deliver all the goods purchased, and this action was prosecuted to recover the value of the goods which were not delivered. It appeared from the undisputed proofs that the plaintiffs had never done any thing towards the payment for any of the goods, excepting to execute and deliver the note above referred to. It also appeared that the defendant had never negotiated the note, and that it was in his possession at the time the action was
As to whether or not the execution and delivery of a negotiable promissory note has the effect of discharging the obligation for which it is given, always depends upon the intention of the parties at the time. If it is agreed that the note shall be taken in payment, then it will have the effect of satisfying the debt, and the rights of the parties will thereafter be determined upon the note, without any reference to the prior indebtedness, excepting for the purpose of showing the consideration for which the note was given. The respondents, appreciating this principle, endeavored to show that it was the intention of the parties at the time this note was executed that it should be in full payment. They testify that it was so given, and this testimony would have force were it not for the fact that the receipt given by the defendant, and accepted by them, negatives the testimony so far as it tended to show that the giving of the note had the same effect as would the payment of the money. That the note was in a contingency to be treated as payment is in no way negatived by the receipt given, but that it was to become the property of the defendant to negotiate at will and thus in substance take the place of cash was directly negatived by such receipt. Therefrom it clearly appears that it was the intention of the parties that the note should have no validity until the goods were delivered. And while it is true that the form in which the note was given made it possible for the defendant to put it in the hands of one who could enforce it in accordance with its terms, such fact could have no influence in determining the question as to the intention of the parties in the giving and receiving of the note. It will not be presumed that the defendant, after having signed a receipt in the above form, would act in opposition to the intention of the parties as therein made manifest.
Judgment will be reversed and the cause remanded for a new trial.
Dunbar, C. J., and Stiles and Scott, JJ., concur.