Opinion
March Term, 1860
Smith Lapham, for the appellant.
Henry O. Chesebro, for the respondent.
After considering the circumstances under which the plaintiff made the payments to Boyce, and arriving at the conclusion that as matter of law — in the face of the referee's direct finding that as matter of fact they were made in good faith, and without notice — they could not be held sufficient to have put the plaintiff upon inquiry, the learned judge proceeded: We think, however, the referee erred in admitting the receipt of Boyce of May 31, 1851, as evidence of the payment to him, on that day, of the sum of $234, on the bond and mortgage. A written receipt for money is but the admission of the party giving it, and is always capable of explanation. It is the declaration of the party attested by his signature. It has no greater significance from the circumstance that it is reduced to writing and signed by him. If made by parol, it would be of equal value. It has been supposed, since the decision of Paige v. Cagwin (7 Hill, 361), in the Court of Errors, that the rule was settled in this State, that the declarations or admissions of the assignor of a chose in action could not be given in evidence against an assignee for value. This case was reviewed by PARKER, J., in Smith v. Webb (1 Barb. S.C. Rep., 230), where he says it was held in that case, that the declarations of a prior holder of a note, transferred after maturity, or of a vendor of a chattel, are not admissible in evidence against a subsequent purchaser who acquired title for a valuable consideration; and that such declarations are only admissible when made by a party really in interest, or by one through whom the plaintiff claimed by representation. The rule is only applicable where there is an identity of interest between the assignor and assignee. This identity of interest is said in Fitch v. Chapman ( 10 Conn. Rep., 8), to exist "when the nominal party was suing in fact for the benefit of a third person." This court in Booth v. Swezey (4 Seld., 276), approves of the cases of Paige v. Cagwin and Smith v. Webb. In that case it was held that in an action, brought by the assignee of a mortgage to foreclose the same, the declarations of the mortgagee made by him prior to the assignment, were inadmissible to impeach the mortgage, and to show that it was given upon a usurious consideration. It is true, that Judge MORSE, in his opinion, says that a receipt given by the mortgagee stands upon a different footing, as an act of the parties. The ground of this distinction is not perceived. The making of a usurious agreement which, if proved, would invalidate the whole mortgage, is as much the act of the parties as the payment of a part of the moneys secured thereby, and the giving of an acknowledgment by the party receiving it, that it had been paid. Suppose in Booth v. Swezey, the mortgagor had offered the written history of the inception of the mortgage signed by the mortgagee, and which would have shown its usurious character, would the offer have been in any the less objectionable form? We do not see that it would, and the same reasons which would require its exclusion in one form, are equally applicable to its exclusion in the other. The great objection to this class of testimony is, that it seeks to establish by hearsay or secondary evidence what can be shown by better and more satisfactory proof. The case of Jermain v. Denniston, in 2 Selden, 276, is relied upon as holding a contrary doctrine. That case was decided the year before Booth v. Swezey, and some of the judges who sat in that case, and who concurred in the decision of it, took part in the decision of the former case. In Jermain v. Denniston, it was said that admitting the doctrine of Paige v. Cagwin to the fullest extent, it could not apply when the previous holder of a note, while he owned it, put into the hands of the maker, in the usual course of business, written evidence of its payment and discharge. That is not the present case, and does not therefore control it.
The judgment in this cause must be reversed, and a new trial ordered, with costs to abide the event of the action.
CLERKE, J., delivered an opinion to the same effect; SELDEN, WRIGHT, and WELLES, Js., concurred.
The payment made before the assignment, was prima facie proved by the receipt of the mortgagee. (1.) The holder of the receipt is entitled to the benefit of the presumption usually allowed in respect to written instruments, that it was given at the time it bears date. (2.) That fact being presumed, the receipts ought not to fall within the rule that the mere declaration of a former holder of a chose in action is not admissible in evidence in a controversy between the debtor and an assignee. A receipt in full has a legal operation (at least prima facie) as a discharge of the debt; and a receipt of a partial payment should operate as a partial discharge. Such an instrument presumptively shows an actual transaction in which both the parties were actors, and it stands on higher ground than a mere declaration which may be made to any one when the party in whose favor it is made is not even present. It is scarcely expedient to extend the rule which excludes declarations of that nature. It seems to me a rule of great convenience that written acknowledgments of this kind given by a creditor to his debtor should be taken as true in the debtor's favor, until they are disproved or some suspicion is thrown upon them. The doctrine, if not fully sustained, is certainly very strongly countenanced in some of the adjudged cases in this State. (See Sherman v. Crosby, 11 Johns, 70; Rawson v. Adams, 17 Johns, 130; Booth v. Swezey, 4 Seld., 276; Jermain v. Denniston, 2 Id., 276.)
I think the referee was also right in allowing the two payments made to the mortgagee after the assignment. In order to perfect an assignment of a chose in action and protect the assignee against future payments to the assignor, notice should be given to the debtor. If the assignee neglects to give such notice himself, he must, in order to avoid the effect of payment to the assignor, show that the debtor, before making it, in some other way acquired a knowledge of the fact. ( Reed v. Marble, 10 Paige, 413; 1 R.S., 763, § 41; Adams Equity, 53-54.) Notice may be inferred, of course, from the circumstances attending the transaction; but the true question is always one of good faith. The referee in this case has found that the payments were made without notice of the assignment and in good faith. The particular facts stated in the finding certainly do not overthrow that conclusion; in other words, those facts do not compel us as a legal inference to impute notice and bad faith. It is true the securities were not present when the payments were made, nor was the supposed creditor personally there. The payments were made to an agent. The plaintiff inquired of him for the papers. They were searched for and not found. The plaintiff suggested that they might be at the clerk's office for record, and the agent stated that such was probably the fact. The fact suggested was by no means improbable as to the mortgage at least, because it had been only recently given, and might well be at the clerk's office for record. It is difficult to believe that these payments were made in bad faith, and we certainly cannot say so in opposition to the conclusion of fact found at the trial. The case of Brown v. Blydenburgh (3 Seld., 141), is cited for the appellant, but the circumstances of that case distinguish it from the present. The conveyance there was made to the creditor in full satisfaction of the mortgage debt, and of course the securities ought to have been delivered up at the same time. The transaction was with the mortgagee personally, and no inquiry was made of him for the securities, nor did he make any representation or suggestion intended or calculated to mislead. Such being the facts, this court affirmed the decision of the court below, where the question had been determined against the mortgagor. The question was one of fact, as it is in the present case. The decision is clearly not an authority requiring us to hold as matter of law that the plaintiff was chargeable with notice when he made the payments in question.
The judgment should be affirmed.
DENIO and BACON, Js., concurred in this opinion.
Judgment reversed and a new trial ordered.