Tyner v. Stoops

Citation11 Ind. 18
PartiesTyner and Another v. Stoops
Decision Date19 June 1858
CourtSupreme Court of Indiana

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 with that partner, and so amalgamated that debt with others, that the retiring partner "could never plead payment of the balance due by the partnership, even though a larger sum than that due by them should have been paid by the partner, whose separate security had been accepted, out of the very funds retained by him for that purpose." See Arnold v. Camp, 12 Johns. 409.--James v. Hackley, 16 id. 273.--Parker v. Cousins, 2 Grattan 373.--Wildes v. Fessenden, 4 Met. 12.

In their petition for a rehearing, the counsel cited 1 Smith's Leading Cases, p. 389 et seq., where the authorities are fully reviewed, and, also, Nicklaus v. Roach, 3 Ind. 78.

J. Ryman and P. L. Spooner, for appellee.

Worden, J. Hanna, J., dissented.

OPINION

Worden, J.

This was an action by the appellee against the appellants, to recover the value of 11,250 pounds of pork, sold and delivered by him to them.

The defendants answered--1. In denial; 2. Payment; 3. That the defendants delivered to the plaintiff, the note of Richard Tyner for 400 dollars, which the plaintiff received in full satisfaction of the claim; 4. That the pork, at the price agreed upon, amounted to 392 dollars 4 cents; that, at the time of the sale and delivery thereof, viz., on the 30th of December, 1853, and before and afterwards, the plaintiff and Richard Tyner, one of the defendants, had other private dealings and accounts between them; that afterwards, on the 21st of February, 1854, the plaintiff and Richard Tyner settled their private dealings and accounts, and also for the pork, and upon the settlement, there was found due the plaintiff the sum of 400 dollars, including the price of the pork, and thereupon R. Tyner executed and delivered to the plaintiff his individual note for said 400 dollars, which the plaintiff received in full satisfaction of the claim, and thereupon the price of the pork was credited to Tyner and charged to defendants, and afterwards, on the 23d of June, 1854, the partnership affairs between the defendants were settled and closed accordingly; that the plaintiff still holds the note of Tyner, partly paid and partly unpaid; that on the 10th of November, 1854, said Tyner failed, and since then has been and is insolvent.

The plaintiff replied to the second paragraph denying the payment, and demurred to the third and fourth paragraphs, and the demurrer was sustained as to the third, and overruled as to the fourth.

The plaintiff thereupon replied to the fourth, that the pork was sold and delivered on the 30th of December, 1853, on a credit of six months, whereupon the defendants executed to the plaintiff a memorandum in writing by which they acknowledged the receipt of the pork to be paid for at the rate of four dollars per 100 pounds, which memorandum the plaintiff held until the 21st of February, 1854, when he presented the same to the agent of the defendants, Richard H. Tyner, (by whom the memorandum was executed on behalf of defendants), who then, on behalf of the defendants, received the same; and on the plaintiff's suggesting to him that he the plaintiff ought to have a note for the price of the pork, the said Richard H. still being such agent, executed and delivered to the plaintiff a promissory note for the price of the pork, as follows, viz.:

"$ 400. Brookville, Ind. February 21st, 1854. For value received, on the first day of July next I promise to pay to Robert Stoops, or order, four hundred dollars. R. Tyner, per R. H. Tyner."

Which note the plaintiff received and accepted as a note or memorandum of the amount due him from the defendants for the pork and not in payment or satisfaction thereof. That at the time of the sale of the pork, and at the time of the making of the note, said Richard Tyner was insolvent, and ever since has been, which insolvency he concealed, and which was wholly unknown to the plaintiff; and the plaintiff produces the note and offers to surrender it to be canceled.

The cause was tried by a jury, who found for the plaintiff the sum of 400 dollars, on which there was judgment, over a motion for a new trial.

The first error assigned is, the sustaining of the demurrer to the third paragraph of the answer.

This we cannot notice, as no exception was taken to the ruling below.

The bill of exceptions filed, sets out the evidence, and discloses the points relied upon for the reversal of the judgment.

The material facts, as they appear from the evidence, are, that about the last of December, 1853, the plaintiff sold and delivered to the defendants, pork to the amount in value of about 400 dollars, at prices agreed upon, upon a credit of six months, for which a receipt or memorandum was then given by defendants to plaintiff. Afterwards, Stoops came to the counting-room of defendants, and said he wanted to settle and produced the receipt given him as above. Defendants' agent looked over the pork books and saw the amount of the pork, also over the store book, and the cash book of R. Tyner, and found, including all the dealings, that there was due to Stoops over 409 dollars, all over which sum was then paid him, and the note above set out was then executed and delivered to him, made payable six months from the...

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