Carter v. Burr

• Decision Date: 16 March 1885
• Citation: 113 U.S. 737,28 L.Ed. 1147,5 S.Ct. 713
• Parties: CARTER v. BURR, Adm'x, etc
• Court: U.S. Supreme Court

113 U.S. 737

5 S.Ct. 713

28 L.Ed. 1147

CARTER v. BURR, Adm'x, etc.

March 16, 1885.

H. O. Claughton, for appellant. R. Ross Perry and W. D. Davidge, for appellee.

WAITE, C. J.

The following facts are either conceded by both parties or fully established by the evidence:

On the twenty-ninth of May, 1873, Joseph Daniels bought of John E. Carter certain parts of lots 1 and 24, in square 514, of the city of Washington, for which he paid $4,000 cash in hand, and gave his three promissory notes for $4,000 each, payable respectively in one, two, and three years from date, with interest at the rate of 8 per cent. per annum. The notes were secured on the property by a deed of trust to Dorsey E. W. Carter, trustee. When the first note fell due, in 1874, Daniels was unable to meet it, and John E. Carter, who then held it, pressed him for payment. On the seventh of July, 1874, he entered into a contract with Seth A. Terry, by which he assigned to Terry his interest in what were known as the 'Eight-hour Law Cases' and the 'Twenty per Cent. Cases,' for the consideration of $10,000, of which $5,000 was paid in hand, and the remaining $5,000 was to be paid by taking up, on or before the first day of September then next, certain notes of Daniels secured by a deed of trust of his homestead. The notes, when taken up, were to be held by erry for three years from the date of the contract, if the 'Eight-hour Law' and 'Twenty per Cent.' cases were not paid before that time. If the cases were paid within the three years, the notes were to be given up to Daniels, but if not so paid, Terry was authorized to enforce their collection by a sale of the property covered by the deed of trust. Among the notes to be taken up by Terry under this contract was that given to John E. Carter, payable one year after date, and secured with the other two notes by the deed of trust to Dorsey E. W. Carter. In order to comply with the contract, Terry was under the necessity of borrowing $3,000 from C. C. Burr, to secure which he agreed to pledge the Carter note as collateral when he took it up.

On the sixth of May, 1874, John E. Carter left the Daniels note with the Farmers' & Mechanics' National Bank of Georgetown, for collection when it fell due. The note remained in that bank until August 29, 1874, when it was returned to Carter unpaid. Burr did not have the money on the first of September which he had agreed to loan Perry, but he expected to receive it soon. Perry, therefore, arranged with the Second National Bank of Washington to advance the $3,000 for a few days, and about the first of September he went to the store of Dorsey E. W. Carter, where John E. Carter then was, and, with money of his own, paid to John E. Carter all that was due on the note except $3,000. He told Carter if he would call at the Second National Bank in the course of the day, the bank would pay him that sum. Carter then gave Terry the note uncanceled and indorsed in blank. The note shows only one indorsement of payment, and that is as follows: 'Interest on the within paid to September 29, 1874.' Terry, after he got the note from Carter, took it to the Second National Bank and left it there, the bank agreeing to pay Carter the $3,000 when he called. Carter did call in the course of the day and got his money. A few days afterwards Burr went to the bank, paid the sum which had been advanced to Carter, and took the note away. No entries of the transaction were made on the books of the bank; but Terry paid the interest on the advance made by the bank from the time the money was given to Carter until it was repaid by Burr. Terry had not paid his debt to Burr when the decree below was rendered.

After the first note had got in this way into the possession of Burr, Dorsey E. W. Carter obtained from John E. Carter the second Daniels note under circumstances which, in the opinion of the court below, postponed his lien under the trust deed to that of Nathaniel Carusi, who had previously bought the third note from John E. Carter. The court, at special term, found that the note held by Mrs. Burr had been paid and canceled; and, after finding the amount due Dorsey E. W. Carter...