Burrows v. Bangs

• Decision Date: 20 June 1876
• Citation: 34 Mich. 304
• Court: Michigan Supreme Court
• Parties: Delabar Burrows v. Benjamin Bangs

34 Mich. 304

Delabar Burrows v. Benjamin Bangs

Supreme Court of Michigan

June 20, 1876

Heard June 8, 1876 [Syllabus Material]

Appeal in Chancery from Oakland Circuit.

Decree of the court reversed, and decree entered in this court declaring the mortgage satisfied. Complainant recovered the costs of both courts.

T. G Smith and M. E. Crofoot, for complainant, as to when paper transferred is to be held to have been received as payment cited: Ellis v. Wield, 6 Mass. 321; McIntyre v. Kennedy, 29 Pa. 448; McLaughlin v. Borard, 4 Watts 308; Tobey v. Barber, 5 Johns. 68; Johnson v. Weed, 9 Johns. 310; Reget v. Merrit, 2 Caines 117; Berry v. Griffin, 10 Md. 27; Perit v. Pittsfield, 5 Rawle 166; Van Eps v. Dillage, 6 Barb. 244; Archibald v. Argall, 53 Ill. 309; Lear v. Freelands, 45 Miss. 559; Kearslake v. Morgan, 5 T. R., 513; Laide v. Rhodes, 1 M. & W., 154; Glenn v. Smith, 2 G. & J., 493; Huse v. McDaniel, 33 Iowa 406; Jewett v. Bleak, 43 Ind. 568; Matteson v. Ellsworth, 33 Wis. 488; Lindsey v. McClelland, 18 Wis. 481; Mooring v. Ins. Co., 27 Ala. 254; Welch v. Allington, 23 Cal. 322; Davidson v. Bridgeport, 8 Conn. 472; Hodgen v. Latham, 33 Ill. 344; May v. Gamble, 14 Fla. 467; Middlesex v. Thomas, 20 N. J. (5 C. E. Gr.), 39; Jose v. Baker, 37 Me. 465; Ward v. Bourne, 56 Me. 161; Govern v. Littlefield, 13 Allen 127; Bridge v. Batchelder, 9 Allen 394; Hall v. Richardson, 16 Md. 396; Derickson v. Whitney, 6 Gray 248; Devlin v. Chamblin, 6 Minn. 468; Barnet v. Smith, 30 N.H. (10 Foster), 256; Wright v. Lawton, 37 Conn. 167; Gorgan v. Prime, 10 Ired. 385; Whitbeck v. Van Ness, 11 J. R., 408; Noel v. Murray, 13 N. Y., 167; Young v. Stahelin, 34 N. Y., 258; Gardner v. Gorham, 1 Doug. 507; Allen v. King, 4 McLean 128; Hudson v. Bradley, 2 Cliff. 130; Baker v Draper, 1 Cliff. 420; Downey v. Hicks, 14 How. 240; Maze v. Miller, 1 Wash. C. C., 328; Harris v. Donaldson, 4 Wash. C. C. 271; Peter v. Beverly, 10 Pet. 558, 567; Lyman v. U.S. Bk., 12 How. 225; Hooper v. Strasburger, 37 Ind. 390; Hotchin v Secor, 8 Mich. 494; Phoenix Ins. Co. v. Allen, 11 Mich. 501.

A. C. Baldwin, for defendant, argued that the legal presumption is, that a negotiable bill was intended to be, and in fact is, an extinguishment of the original demand: Varner v. Nobleborough, 2 Me. 121; Descadillas v. Harris, 8 Me. 298; that a promissory note, if given and accepted as payment of a debt, will be regarded as payment: Abercrombie v. Moseley, 9 Port. 145; Slocumb v. Holmes, 2 Miss. 139; Comstock v. Smith, 14 Me. 202; Newell v. Hussey, 18 Me. 249; Pope v. Tunstall, 2 Ark. 209; Watson v. Owens, 1 Rich. 111; Carr v. Hall, 5 Mo. 59; Bange v. Warren, 34 Me. 324; Paine v. Dwinell, 53 Me. 52; Ferdon v. Jones, 2 E. D. Smith, 106; Heidenheimer v. Lyon, 3 E. D. Smith, 54; that the taking of the note raises the presumption that a settlement is made of all outstanding matters: Maynard v. Johnson, 4 Ala. 116; Butts v. Dean, 2 Met. 76; Ilsby v. Jewett, 2 Met. 168; Fowler v. Lerding, 34 Me. 455; Woodville v. Reed, 26 Md. 179; Morse v. Elleber, 4 Rich. S C., 600; Rowe v. Collier, 25 Texas (Supp.), 252; Collamer v. Langdon, 29 Vt. 32; Hutchins v. Olcutt, 4 Vt. 555; Wait v. Brewster, 31 Vt. 516; Arnold v. Sprague, 34 Vt. 402; Plankinhorn v. Cave, 2 Yeates 370; that "if a person buy goods of another who agrees to receive a certain bill in payment, the buyer's name not being on it, and that bill being afterwards dishonored, the person who took it cannot recover the price of his goods from the buyer:" 15 East, 7; Ellis v. Wild, 1 Mass. 321: Noel v. Murray, 13 N. Y., 167;) American Leading Cases, 297, 298, 299 and 300; that upon the question of presumption of payment there is a uniformity of authorities in all the states, and this presumption must be rebutted by affirmative proof; a mere statement that "he did not receive it in payment will not suffice;" and it is prima facie evidence of a settlement of accounts: Thornton v. Williams, 14 Ind. 518; Gaskin v. Wells, 15 Ind. 253; Smith v. Bissell, 2 Greene (Iowa), 379; Grimmell v. Warren, 21 Iowa 11; Burlington v. Greene, 22 Iowa 508; Lake v. Tyson, 6 N. Y., 461; Youngs v. Stahelin, 34 N. Y., 258.

OPINION

Cooley, Ch. J.

The important facts in this case are the following:

At the beginning of July, 1871, complainant was owner of real estate subject to certain incumbrances, among which was a mortgage of one thousand dollars, held by one Mrs. McGinnis. This mortgage was past due, but payment was not demanded. The mortgage year ended October 20th, in each year. Being desirous to pay off these incumbrances, he entered into a negotiation with the defendant for a loan of two thousand dollars. It appears that one Latourette, a banker at Fenton, was indebted to defendant in the sum of several thousand dollars, and the money, if loaned, was expected to be obtained from him. Defendant called on Latourette, who informed him that he could not well pay two thousand dollars at that time, and inquired whether a part of that amount would not answer. Defendant on inquiry ascertained that Mrs. McGinnis did not care for her money before the mortgage year expired, and he informed Latourette of this fact It was finally arranged that Latourette should pay one thousand dollars at that time and give a certificate of deposit for another thousand, upon which the money should not be called for until October 20th following, when it would be needed to pay the McGinnis mortgage. What followed between these parties is shown by their testimony, which is here given.

Complainant testified: "Before the papers were made I went with Bangs to Latourette's Bank and Bangs informed Latourette that we were going to make the arrangement, and we then went to Smith's office to make the papers. I was to have the thousand dollars then. I objected to giving the mortgage for two thousand dollars, not receiving but one thousand dollars. I proposed to give the mortgage for one thousand dollars then, and when I got the other one thousand, I would give a mortgage for that and put it all into one, for the reason that I did not want three thousand dollars against my place. Mr. Bangs said he would rather have it all in one mortgage, assuring me that the money would be paid at the time agreed upon, and Mr. Latourette was paying ten per cent. interest and it would balance the ten per cent. I was to pay him. Then, with that assurance, the mortgage was drawn for two thousand dollars. I then stated to Mr. Bangs that I wished him to leave the note and mortgage with Mr. Smith until the other one thousand dollars was paid. He was not inclined to do it. I then asked him to hold it from record until that one thousand dollars was paid, so that I might have the McGinnis mortgage and the other mortgage discharged; then the place would be clear and he would have the first mortgage. He did not make any reply to this. We then went together to the bank. Mr. Bangs said to Mr. Latourette: 'Mr. Burrows wants one thousand dollars now, as we talked, and the other as we had agreed upon.' Mr. Latourette gave to me or Bangs a certificate for one thousand dollars, being the amount to be paid down. Then Mr. Bangs said to Mr. Latourette: 'You are a man of large experience; how can this other thousand be fixed so that when it is paid it shall discharge the McGinnis Mortgage?' and that he wanted the first mortgage on the place. Then Mr. Latourette said it could be a condition in the certificate of deposit that it was to pay the McGinnis mortgage, and nothing else. This one thousand dollars was to be paid the 20th of October, 1871. Mr. Latourette went on and made out the certificate of deposit, and Mr. Bangs took it and passed it over to me. As I took the certificate and stepped a little back from the counter, I saw Mr. T. G. Smith passing, and called him in, and he says, 'this only draws seven per cent.; I thought it was to draw ten per cent.' Smith said I had better have it put in; then it would be sure. I then called Mr. Latourette's attention to it and passed the certificate to him, and he wrote across the face of it, 'interest at ten per cent.,' and handed it back to me. I remarked that it was a strange way of doing business. It was said, and distinctly understood, that this one thousand dollars was not to be paid or called for until the 20th of October, 1871, and then was to be paid on the McGinnis mortgage, and was so expressly understood as between me and Mr. Bangs, or any one else. I did not accept this certificate as payment, and never agreed to receive it as payment. It was Mr. Bangs' suggestion that the last payment of one thousand dollars was put off to the 20th day of October. The reason the payment was put off to the 20th of October was because it was not convenient for Mr. Latourette to pay it before."

The following is a copy of the certificate:

"D. L. Latourette, successor of the First National Bank of Fenton, Michigan.

"Fenton, July 6, 1871.

"B. Bangs has deposited in this bank one thousand dollars, payable to the order of D. Burrows when Mrs. L. D. McGinnis shall discharge a certain mortgage on said Burrows' farm, on the return of this certificate. Interest ten per cent.

"$ 1,000. (signed) D. L. Latourette."

The testimony of Mr. Bangs was as follows:

"I made an arrangement to loan the complainant some money in July, 1871. I first had conversation in the early part of July that year. Complainant applied to me for the loan of two thousand dollars to be secured by a mortgage on his farm. I inquired in reference to any other incumbrance that might be on the place, and stated my unwillingness to loan the amount on his farm unless it was free from all incumbrances. I received this assurance, that although there was then a mortgage of six hundred dollars and another of one thousand...