Opinion
(June Term, 1840.)
If a note be lost, the acceptance of a negotiable instrument expressly in payment of it amounts in law to a satisfaction, and may be so pleaded, and the debt being thus extinct at law there can be no relief in equity upon the last note.
If a bond be lost, whether the acceptance of a negotiable instrument under seal from the principal obligor expressly in payment of it be a satisfaction at law or not, the obligee cannot recover in equity on the lost bond against the principal obligor or his surety, contrary to his agreement.
THE bill stated that in 1834 the defendants, Lewis Kidd and Moses Kidd, gave to Samuel Smitherman, the intestate of the plaintiff, a bond or note — but which the plaintiff did not know — for the sum of $325, payable on 25 October, 1834. But from the answers, exhibits and proofs the case appeared to be that Lewis Kidd gave a bond or note to Smitherman for the sum of $200, payable as mentioned, and that Moses Kidd also executed it as the surety of Lewis, and that a few days afterwards Lewis alone gave a second bond or note to Smitherman for $125, payable at the same time. These papers Smitherman delivered without endorsement to one Long, as his agent, to present and receive payment thereon; but Long absconded without presenting them or receiving payment, and either destroyed or carried off the instruments. On 4 May, 1835, Smitherman represented to the Kidds the loss of the papers, and requested them to execute others in their stead. Moses, the surety, refused to become further bound, but Lewis, the principal, readily assented, as Smitherman agreed to accept his bond in satisfaction (87) of the others and to give a discharge from and indemnity against them. Accordingly Lewis Kidd then gave his bond to Smitherman for $325, with interest from 25 October, 1834, and Smitherman gave to him two papers, one of which purported to be a receipt, not under seal, of the bond for $325, "in full of the two notes" before described; and the other purported to be an agreement, not under seal, to indemnify the parties from loss by reason of the former notes, if they would resists the payment should it be demanded by Long or any other person. The bill offered an indemnity and prayed a decree against the two Kidds upon the instrument as stated in the bill.
Winston for the plaintiffs.
Mendenhall for the defendants.
Not to advert to the inaccurate description in the bill of the instruments on which the defendants were in fact chargeable, and to the several objections that arise thereon, there are other substantial difficulties which prevent a decree for the plaintiff. As the bill leaves it uncertain whether the first securities were bonds or notes, we are obliged to take it most strongly against the plaintiff, upon whom it laid, to remove the doubt. Now, it is clear at law that the acceptance of a negotiable instrument, expressly in payment of a simple contract debt, does amount to satisfaction, and may be so pleaded. If then, the securities were notes, the plaintiff has no debt in law, and consequently has nothing for which he can ask a decree in equity.
But, supposing the securities to have been bonds, still the plaintiff is not entitled to any relief on them here. It is true that at common law one bond is not a satisfaction of another, both being instruments of the same dignity. If it be admitted that the law remains the same, although bonds are now negotiable, yet in this case the plaintiff can derive no benefit from that rule of law. The rule is strictissimi juris, and founded upon reason purely technical, which have no relation to the principles of equity. In this Court the agreements of (88) parties are respected, without regard to their being under seal or not; and there cannot be a decree upon a former instrument directly in opposition to a subsequent agreement made upon a just consideration. If this plaintiff can maintain actions at law upon those instruments as lost bounds let him do so. For the present at least we have nothing to say against it. But when he seeks to change the forum and to get a decree in this Court for his debt, upon the ground that he cannot recover it at law, he cannot have the relief if it be in the teeth of an agreement so reasonable and plain as is established in this case. What more could a creditor ask when he has lost his security than that the debtor should give another, and thus save him from the difficulty and expense of providing the loss and contents of the instrument at law, or the delay and expense of resorting to a court of equity? If the debtor comply with such a request of the creditor it is obviously an adequate consideration for an agreement on the part of the creditor not to enforce the first security and to relay solely on the second.
By discharging the principal debtor, Moses Kidd, the security is also discharged in the view of this Court. The plaintiff cannot have a decree against either of the defendants, but his bill must be dismissed with costs.
PER CURIAM. Bill dismissed.
(89)