Opinion
10-11-1877
LEWIS & al. v. DAVISSON'S ex'or.
Sheffey & Bumbgardner, for the appellants. William B. Compton, for the appellee.
L, C & B, partners under the name of L, C & Co., in April, 1862, gave their note to Mrs. D for $862.50, payable the 1st of April, 1864, the last payment of a tract of land. Before it fell due she authorized P as her agent to collect the note and to receive Confederate currency for it. P saw L and so informed him, and a few days after L sent the Confederate currency to P. In the meantime P heard that there was to be a new issue of Confederate notes, and therefore when L's agent brought the notes, P refused to receive them, except upon the express agreement that Mrs. D would consent to receive them. Upon that understanding P received the notes, endorsed a receipt upon the note and delivered it to the agent, who handed it to L, and L tore off the name of the makers. Mrs. D declined to receive the notes and returned them to P, but authorized him to receive payment in the new issue. P took the notes at once to the place of business of L, C & Co., and saw B, who informed him L had the note; but he received the notes and gave P a paper acknowledging the receipt of $862.50 they had paid Mrs. D, and which she had refused to receive, and concludes: We now owe Mrs. D the above amount, which we will pay in the new issue of Confederate money after the 1st of April next: signing the firm name. P took this receipt and gave it to Mrs. D. Twice in the year B offered to pay P the debt in the new issue; but P informed him he had given the receipt to Mrs. D, and was no longer her agent. In an action based upon the original note-- HELD:
1. The delivery by B and reception by Mrs. D of the paper given to P by B, is not a discharge of the note, unless it was so intended and agreed by Mrs. D; and this must be clearly shown by the defendants.
2. The delivery of the note by P to the agent of L, and its cancellation and possession by L, will not prevent an action upon it by Mrs. D.
This was an action of debt in the circuit court of Rockingham county, brought by Anne Davisson, and on her death revived in the name of her executor, against John F. Lewis, James M. Crawford and Manasses Blackburn, late partners doing business under the name of Lewis, Crawford & Co., to recover the sum of $862.50, which the plaintiff alleged to be due to her upon a note bearing date the 19th of April, 1862, and payable on the 1st of April, 1864.
There was a judgment against Blackburn, without defence. Lewis and Crawford filed the pleas of " nil debet " and " payment." And there was a verdict and judgment for the plaintiff for $862.50, with interest at the rate of six per centum per annum from the 27th of January, 1876, till paid.
On the trial of the cause, the defendant took three bills of exceptions, the first as to instructions given by the court on the motion of the plaintiff, and the refusal to give one asked for by the defendants; the second to the refusal of the court to give an instruction asked for by the defendant, and giving it with an addition; and the third to the refusal of the court to grant a new trial. In this exception the facts are stated by the court, which are substantially as follows:
On the 19th of April, 1862, Lewis, Crawford & Co. executed their note, by which they promised to pay to Anne Davisson the sum of eight hundred and sixty-two dollars and fifty cents on the 1st of April, 1864, the third and last instalment on a tract or parcel of land. Some time before April, 1864, Anne Davisson instructed her agent, James A. Patterson, who had this note in his possession, to apply to John F. Lewis and collect from him the amount specified in said note, and authorized Patterson to receive in payment thereof Confederate money. Some six months before this Lewis had offered to pay said note in Confederate money; but Mrs. Davisson had refused to receive it. Soon after receiving his instructions, Patterson met Lewis and informed him what his instructions were, and that Mrs. Davisson was then ready to receive Confederate money in payment of the note, as she could then get Confederate bonds for the money. Lewis said he did not have the money with him, but would send it to Patterson in a day or two. Accordingly in a day or two thereafter Lewis did send by H. P. Mason the nominal amount of Confederate money sufficient to pay the note. But between the time of Patterson's conversation with Lewis and his sending the money by Mason, Patterson had learned that Confederate money was to be scaled or reduced one-third by a new issue of Confederate notes; and before he would receive the money, he, on his own motion and without instructions from Mrs. Davisson, made Mason promise and agree that if Mrs. Davisson should refuse to receive such treasury notes they should be returned by Patterson to Lewis, and the note of Lewis, Crawford & Co. should be returned by Lewis to Patterson. Upon this express agreement Patterson endorsed a receipt of payment on the note and delivered it to Mason, who delivered it to Lewis; and Lewis thereupon tore off from it the name of the makers of the note.
A few days after receiving the notes, Patterson sent them by his son to Mrs. Davisson, and caused her to be informed of the rumor he had heard about the new issue, and that she could return the treasury notes sent to her, if she objected to them, or saw proper; and Mrs. Davisson did object to the treasury notes sent to her, and returned them to her agent, Patterson, to take the money back, and if they would pay " the new issue" she would take it. The day after Patterson received back the said treasury notes, with instructions as aforesaid, he went to the place of business of the then firm of Lewis, Crawford & Co., (which was a new firm doing business under the same name), to see Lewis, but not finding him, he had an interview with the defendant, Blackburn, and informed him that his principal declined to receive the " old issue" notes, but would take the new issue. Blackburn said that Lewis had just left, but would be back in the evening or next morning, and that he had the note with him. Patterson then asked Blackburn whether he would take the money and give him a receipt for it; which Blackburn agreed to do, and thereupon said money was delivered to said Blackburn, who gave him a receipt in which he says:
" Received of Mr. J. A. Patterson $862.50, the money we paid him for our bond to Mrs. Davisson, and she refused to receive at this time. We now owe Mrs. Davisson the above amount, which we will pay in the new issue of Confederate money after the 1st of April next.
LEWIS, CRAWFORD & CO.,
Per M. Blackburn."
This receipt was delivered to Patterson, Blackburn agreeing to get the note from Lewis and return it to Patterson. This receipt Patterson delivered to Mrs. Davisson, who received it without objection, and kept it in her possession until June, 1868, when an action of assumpsit was brought upon it; which was afterwards dismissed.
In the month of May, 1864, and also in August, 1864, Blackburn offered to pay Patterson the amount stipulated in Blackburn's receipt in treasury notes of the new issue; but Patterson informed him he had returned the paper to Mrs. Davisson, and that he was no longer her agent; and he therefore declined to receive the treasury notes.
No demand was made upon Lewis by Patterson for the note, and it remained in his custody until it was produced in court after this action was brought; and no notice was given to Lewis by Patterson of the return of the treasury notes to Blackburn, or of any conditions connected with its payment.
After the evidence had been introduced, the plaintiff moved the court to give to the jury nine instructions; but it is only necessary to state the sixth and eighth. These are:
" 6th. The jury are instructed that unless they believe from the evidence adduced, that the defendants, Lewis, Crawford & Co., paid to Anne Davisson, or to her authorized agent, the new issue of Confederate States treasury notes in accordance with the stipulation in the receipt marked B in this cause, (Blackburn's receipt), then said receipt is no satisfaction, discharge or extinguishment of the original demand of the plaintiff on which this action is brought, and is no bar to the plaintiff's proceedings to recover on her original debt.
8th. If the jury believe from the evidence, that before the note for $862.50 mentioned in the declaration, became due and payable, the defendants, Lewis, Crawford & Co., through their agent, H. P. Mason, delivered to James A. Patterson, who was in possession of the said note, $862.50 in Confederate States treasury notes of the old issue, to be delivered to said Anne Davisson, the owner of said note, provided she would receive it in discharge of said note, and that said James A. Patterson delivered to said Lewis, Crawford & Co., or their agent, H. P. Mason, the note aforesaid, with the understanding and agreement that said note was to be delivered up to said Anne Davisson, or to said James A. Patterson for her, in case she refused to receive said Confederate notes, and that said Anne Davisson did refuse to receive said Confederate notes in payment of said note, and returned the same to said Patterson, or to said Lewis, Crawford & Co., or their agent, then the note described in the declaration is not paid, and the jury must find for the plaintiff."
And the defendants asked the court to give an instruction, which it is not necessary to state.
The court refused to give the instruction asked for by the defendants, and gave the nine asked for by the plaintiff. And the defendant excepted.
The defendants then moved the court to instruct the jury as follows:
" If the jury believe from the evidence that the paper was the note of defendants to plaintiff's testatrix, and is the same sued on in this action, and was held by the agent of the plaintiff's testatrix duly authorized to receive the amount of the same in Confederate States treasury notes of the old issue, and he delivered up to the agent of the defendants the said note upon the receipt of the amount thereof in Confederate States treasury notes of the old issue, with the understanding and agreement that if the plaintiff's testatrix, when the said Confederate States treasury notes were offered to her should refuse to receive the same, they should be returned to the defendants, who should redeem the same by the exchange therefor of Confederate States treasury notes of what was known as the new issue of treasury notes, that the plaintiff's testatrix did refuse the said notes of the old issue and returned them to her agent, directing him to procure the said notes of the new issue in lieu of them, and the said agent of the plaintiff's testatrix, the said notes of the new issue not being ready for delivery, returned to the defendants the said treasury notes of the old issue, and took from the defendants the receipt and obligation in the words and figures following
‘ Received of Mr. J. A. Patterson $862.50, the money that we paid him for our bond to Mrs. Davisson, and she refused to receive at this time. We now owe Mrs. Davisson the above amount, which we will pay in the new issue of Confederate money after the 1st of April next.
LEWIS, CRAWFORD & Co.,
Per M. Blackburn.'
--and the plaintiff's testatrix accepted and received the said receipt and obligation as a compliance with her instructions, on the part of her said agent, and ratified his action in that matter, and claimed under said receipt and promise, then the plaintiff cannot recover in this action."
But the court refused to give said instructions as asked for; but gave the same with the addition thereto of the following words: " unless they further believe, from all the evidence in this case, that the plaintiff's testatrix did not receive said receipt and obligation in satisfaction of the note upon which this suit is brought." To which action of the court in refusing to give said instruction as asked for, and in giving it as modified by the court, the defendants excepted.
Upon the petition of the defendants, Lewis and Crawford, this court awarded a supersedeas to the judgment.
Sheffey & Bumbgardner, for the appellants.
William B. Compton, for the appellee.
STAPLES, J.
This is an action of debt upon a promissory note executed by Lewis, Crawford & Co. to Mrs. Anne Davisson on the 19th of April, 1862, for the sum of eight hundred and sixty-two dollars and fifty cents, payable on or before the 1st day of April, 1864, " being the third and last instalment on a tract of land." At the time this action was brought in the year 1868, the note was in the possession of John F. Lewis, one of the defendants, and a member of the firm of Lewis, Crawford & Co., and had been so in his possession ever since the year 1864, with the names of the makers torn from the paper. The first question arising here is, whether the action can be maintained under such circumstances. If the note has not been paid, and is improperly withheld from the plaintiff, the mere possession of the defendant cannot affect the plaintiff's right of recovery. It is equally clear, that the unauthorized alteration or even destruction of the instrument by the party executing it, will not preclude the payee or other person entitled from maintaining his action thereon. The authorities upon this point are numerous and decisive. 3 Rob. Prac. 27, 28; 5 Rob. Prac. 758 to 764; Smith Lead. Cases, vol. 1, pt. 2, 279. In the present case, whether the note in controversy had been paid or satisfied by the dealings between the parties, whether the defendants were authorized to cancel the instrument by tearing off the names, was a question or questions of fact for the jury under the instructions of the court. The only point, therefore, we have to consider is, first, whether the instructions were properly given; and secondly, whether the verdict is sustained by the evidence. The court, on the motion of the plaintiff, gave the jury nine instructions. The 1st, 2d, 3d, 4th, 5th 7th and 9th, have no special bearing upon the controversy here, and require no particular notice. The defendant's objections relate mainly to the 6th and 8th instructions. It is insisted that they leave out of view the effect of any ratification by Mrs. Davisson; that they ignore entirely the new or substituted contract of the parties, and confine the jury to the consideration of certain isolated facts as conclusive of the case.
The sixth instruction affirms that the paper known as Receipt B, is no satisfaction or extinguishment of the note upon which the action is founded, unless the jury is satisfied that the defendants paid to Mrs. Davisson the new issue of Confederate currency, as stipulated in that receipt.
The eighth instruction states the facts hypothetically; that is to say, if the jury believe that Mrs. Divisson's agent, James A. Patterson, received the Confederate currency from the defendants' agent, and delivered to said agent the note in controversy, with the understanding that the note was to be returned if Mrs. Davisson declined to receive the currency, and that Mrs. Davisson did refuse to receive the currency, and the same was thereupon restored to the defendants, then the note is not paid, and the jury must find for the plaintiff.
It is not material now to inquire whether these instructions are justly liable to the criticism of defendants' counsel. The instruction given at the instance of the defendants removes the difficulty, if any, growing out of the restricted terms of the plaintiff's instruction. The defendants' instruction fairly presented the question of the operation and effect of Receipt B, as a new and substituted agreement, if the jury believed it was so accepted in lieu of the note now in controversy. The qualification or addition made to that instruction by the court was very proper under the circumstances. The mere fact that Mrs. Davisson had accepted the receipt and claimed under it, and ratified thereby what her agent had done, was not of itself sufficient to discharge the note, unless the receipt was received in satisfaction of the original demand; and so the court very properly said to the jury.
The plaintiff's and defendants' instructions taken together, with the qualification suggested by the court, fairly state the law applying to the case, and leave no just complaint to either party.
It only remains to inquire whether the verdict is so manifestly in conflict with the evidence as to authorize this court to set it aside. The learned judge of the circuit court has given a certificate of the facts proved on the trial. I do not consider it important to enter into a discussion of these facts. It is only necessary to allude to a few of the most prominent.
It is very manifest throughout that the only question arising in the case is, whether the action can be maintained on the original demand, or whether the plaintiff ought to have proceeded on the receipt or substituted agreement, as it is called. It is not pretended that the note has been paid. The sole ground of defence is that the receipt was accepted in satisfaction of the note, and the action ought to have been brought on the substituted agreement, and not on the note. In support of this proposition, the counsel for the defendants relies upon the doctrine as laid down in certain cases, that although the new agreement may not be good as an accord and satisfaction, it may be good as a substituted agreement, and as such constitutes a discharge of the original demand, although not performed at the time of the suit.
The great weight of modern authority certainly supports this doctrine. Ordinarily, where the debtor's own security, not negotiable and of no higher nature than the simple contract, is taken, it is not considered as a payment or satisfaction, unless there be an agreement so to consider it. In the absence of proof, the natural inference is that a promise to perform is not a satisfaction unless it be fulfilled. It must be shown that the parties intended the debt to be extinguished, whether the promise was or was not performed. Even where a negotiable note of the debtor is given, it operates only as a conditional payment, unless the parties agree to treat it as an absolute payment. Upon the dishonor of the instrument, if the creditor be in no default, his right of recovery revives upon the original cause of action. The party relying upon the new note as a satisfaction or extinguishment of the original demand, must in all cases make the fact clearly and satisfactorily appear that such was the agreement or understanding. In the absence of such proof, it will not be presumed that a creditor having a perfectly valid claim has surrendered it without consideration, merely to substitute another cause of action in its place. 2 Am. Lead. Cas. 263 to 274; Smith Lead. Cas. vol. 1, pt. 1, 451, 611-616; 7 Rob. Prac. 531; 5 Rob. Prac. 735-6.
Let us apply these principles to the case in hand. In the first place it is not pretended, there is not even a suggestion, that the note in controversy was payable in Confederate currency, or was even entered into with reference to such notes as a standard of value. No such question is raised anywhere in the record. The verdict of the jury is for the nominal amount of the note, and no exception was taken to the finding upon the ground that the scale of depreciation ought to have been applied to the debt. It must, therefore, be assumed that the contract was to pay in a sound currency.
Now, when it is claimed that a creditor has surrendered a perfectly valid claim of this sort without consideration for a mere promise to pay in a highly depreciated currency, the evidence in support of such a pretension ought to be very clear and satisfactory. If the note had been surrendered and cancelled at the time the receipt was given, there might be some foundation for the claim of a new agreement. But such was not the fact. At that very time it was expressly agreed that the note should be returned to Mrs. Davisson. It would have been then surrendered to her agent, but it was in the possession of Mr. Lewis, who was absent. It is obvious that none of the parties regarded the note as satisfied or discharged, and that all of them considered the receipt as a mere voucher for the debt until the note could be returned to the rightful owner. The promise to accept payment in the new issue of the Confederate currency was without any consideration whatever. It was a mere privilege accorded the debtors; and in view of the rapid depreciation of the money, it was incumbent upon them to be prompt and diligent in making the payment. But they never made any such payment to Mrs. Davisson. They never even offered her the money. It is very true that on two occasions they proposed to pay Mr. Patterson, but he informed them that the paper was not in his possession, and that he was no longer Mrs. Davisson's agent. Why did they then not apply to her? They do not tell us. They have not even attempted an excuse for their failure. The only solution of their conduct is that they were enabled to use the money more profitably in the business in which they were engaged.
The whole case resolves itself into an attempt to discharge a perfectly valid debt payable in a sound currency, by a mere promise without consideration on either side, to pay in Confederate currency; a promise never performed, or even attempted to be performed.
The plaintiff is to be turned around to another suit on the receipt, which, if not barred by limitation, can only result in a recovery of, perhaps, one-tenth of a perfectly valid claim. The verdict is not only fully sustained by the evidence, but it is a just and proper finding.
My opinion is, therefore, to approve the judgment of the circuit court.
The other judges concurred in the opinion of Staples, J.
JUDGMENT AFFIRMED.