11 Ind. 18 (Ind. 1858), , Tyner v. Stoops

Citation:11 Ind. 18
Opinion Judge:Worden, J.
Party Name:Tyner and Another v. Stoops
Attorney:J. Morrison, J. D. Howland and G. Holland, for appellants. Counsel for the appellants, in their brief, made, in substance, the following argument: J. Ryman and P. L. Spooner, for appellee.
Judge Panel:Worden, J. Hanna, J., dissented. Hanna, J., dissented.
Case Date:June 19, 1858
Court:Supreme Court of Indiana

Page 18

11 Ind. 18 (Ind. 1858)

Tyner and Another

v.

Stoops

Supreme Court of Indiana

June 19, 1858

The Petition for a Rehearing in this case, was filed on the 10th of July, and Overruled on the 13th of October.

From the Franklin Court of Common Pleas.

The judgment is affirmed with costs.

J. Morrison, J. D. Howland and G. Holland, for appellants.

Counsel for the appellants, in their brief, made, in substance, the following argument:

Will a note, given and accepted in satisfaction and discharge of a parol debt, merge and destroy the original cause of action? In England it is well settled that it will. Sard v. Rhodes, 1 M. & W. 153. Sibree v. Tripp, 15 id. 23.

In New York, the law upon the point seems to be unsettled, but the current of authorities in the other states, is in favor of the proposition that it will. Darlington v. Gray, 5 Whart. 487.--Johnson v. Johnson, 11 Mass. 359.--Butts v. Dean, 2 Met. 76.--Thacher v. Dinsmore, 5 Mass. 299.--Maneely v. McGee, 6 Mass. 143.--1 Greeenl. Ev. 425, 426, and cases cited. Story, in his work on Promissory Notes 521, says: "But if it is agreed between the parties, as it well may be, that the substituted note, shall be an absolute payment of the original debt or note, then it will operate as an absolute satisfaction and extinguishment thereof." And see the authorities there cited, particularly the very sensible opinion of Chief Justice Marshall, in Sheehy v. Mandeville, 6 Cranch. 253, 267. If it be the note of a third person, the law is well settled. James v. Hackley, 16 Johns. 273.--Brown v. Jackson, 2 Wash. C. C. 24.--N. Y. State Bank v. Fletcher, 5 Wend. 85.--Frisbie v. Larned, 21 id. 451.

The case of the acceptance of the note of one partner for the liability of the firm, is the same as the acceptance of the note of a third person. Story on Partnership, 252, § 155, and note 2, with authorities cited, and § 392, authorities in note 1.--Collyer on Partnership, book 3, ch. 3. §§ 383, 398, 2d edition.--Sheehy v. Mandeville, 6 Cranch. 253.--Arnold v. Camp, 12 Johns. 409.--Harris v. Lindsay, 4 Wash. C. C. 271.--Parker v. Cousins, 2 Grattan 373.--Muldon v. Whitlock, 1 Cow. 290.--Wildes v. Fessenden, 4 Met. 12 -- Estate of Davis v. Desauque, 5 Whart. 531.--Mason v. Wickersham, 4 Watts & Serg. 100.--Thompson v. Percival, 5 Barn. & Adol. 925.

It is a well settled principle that the acceptance of a higher security or obligation from the debtor, for the payment of the same debt, is an extinguishment of a lower security for that debt. U. S. v. Lyman, 1 Mason 482.--Jones v. Johnson, 3 Watts & Serg. 276.--Brozee v. Poyntz, 3 B. Mon. 178.--Green v. Sarmiento, 1 Pet. C. C. 74.--Tom v. Goodrich, 2 Johns. 213.--Banorgee v. Hovey, 5 Mass. 11.

Under our statute all written contracts not under seal are elevated to the condition of sealed instruments at common law; and if at common law the taking of a sealed obligation for a parol debt, would merge the original claim, and the taking of a written note or contract not under seal, will have the same effect--and this is the common sense of the thing. Our statute of 1852, provides: "There shall be no difference, in evidence, between sealed and unsealed writings: and every writing not sealed shall have the same force and effect that it would have if sealed." 2 R. S. p. 90.

The Court below erred, in refusing to give the first instruction. It is well settled that a creditor accepting a note, either as collateral security or conditional payment, is bound to use due diligence in attempting to collect the money when due; and if he fails to do this, the original debt is discharged and regarded as paid. Story on Promissory Notes, p. 521, § 405, cases and notes. This question has been directly decided in this Court in Slevin v. Morrow, 4 Ind. 427, in which the Court say: "The transfer of the note in question was not an absolute payment of the original indebtedness, but when the holder fails to realize the money through his own laches, his debtor has a right to have it considered as a satisfaction of his debt."

It is a fraud upon the other partners to permit Stoops to take the note of Tyner, and charge the firm debt as paid, and have the pork firm settled upon the hypothesis of such payment, and then after Tyner's insolvency, to resort to the original consideration, and recover from the pork firm. See Harris v. Lindsay, 4 Wash. C. C. 98, where the subject is very ably discussed by Judge Washington. The hinge of the decision there was, that the funds of the partnership had been given to one partner, and the creditor had entered into such arrangements...

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