Clayton v. Clark

• Citation: 21 So. 565,74 Miss. 499
• Court: United States State Supreme Court of Mississippi
• Decision Date: 15 February 1897
• Parties: W. L. CLAYTON, ADMINISTRATOR, v. JOHN CLARK, EXECUTOR, ET AL

21 So. 565

74 Miss. 499

W. L. CLAYTON, ADMINISTRATOR, v. JOHN CLARK, EXECUTOR, ET AL

Supreme Court of Mississippi

February 15, 1897

October 1896

FROM the circuit court of Lee county HON. NEWNAN CAYCE, Judge.

Appellant's intestate instituted this suit seeking recovery on a promissory note for $ 2, 789, less a credit of $ 1, 000 against the appellees, the surviving makers of the note, and the executor of one of them who had died. The declaration itself showed that, upon payment of the $ 1, 000 for which credit was given, by R. C. Clark, one of the makers, the note was surrendered to him by the payee. The defendants filed three pleas. By the first one it was averred that about the time of the maturity of the note the payee of the note transferred and assigned the same to R. C. Clark, one of the makers; by the second, a like transfer and assignment was pleaded, and it was averred to have been so transferred for a valuable consideration; and by the third plea a like transfer and assignment was stated, and it was averred to have been made in consideration of the $ 1, 000 paid by R. C. Clark to the payee.

The original plaintiff having died, the suit was revived in the name of the appellant, his administrator, who demurred to each of the pleas, assigning as causes of demurrer, in various forms, that the pleas only amounted, in effect, to claims of payment of $ 1, 000 on a note for a much larger sum, and that credit was given for the $ 1, 000 by the declaration. The demurrer was overruled, and from the judgment rendered for the defendants the plaintiff appealed.

Affirmed.

W. L Clayton, for appellant.

The payment of about two thousand dollars less than the amount due on the note, does not discharge the note, no other or different consideration being alleged. This is the rule in all the courts, both in England and America. I refer to some of the authorities. Fitch v. Sutton, 5 East, 230; Boyd v. Hitchcock, 10 John., 76; Pulliam v. Taylor, 50 Miss. 251; Jones v. Perkins, 29 Miss. 139. These cases lay down the rule plainly that the payment of a less stun than that due by a debtor, without any other or different consideration, does not discharge the debt, but only operates as payment pro tanto. It seems to me there can be no doubt that the legal effect of all the pleas is that of payment of a less sum in discharge of the whole debt. If this be true, certainly they are insufficient.

Blair & Anderson, for appellees.

This court ought to hold that where the payee in a note surrenders it to the maker in consideration of the payment by the latter of a less amount due, even after maturity, the payee cannot recover the balance remaining unpaid on the note. in other words, where the transaction is completed and executed in every respect, the court ought not to disturb the status quo of the parties. Such a case is not covered by the principles announced in the cases of Pulliam v. Taylor and Jones v. Perkins, relied on by opposing counsel. The statements of facts in those cases do not show that the payment of the less amount than the contract called for had been made, and the contract, or evidence of indebtedness, transferred and surrendered, as in this case.

It is true there would be no consideration for the surrender of the contract under such circumstances, but it is in the nature of a gift of the balance due on the note or contract, and, where such an agreement is fully completed in every respect, there is no reason why they should not be upheld by the courts. There is no doubt whatever about the proposition that the payee in the note may make a valid and binding gift of his note to the maker. Our court recognizes this doctrine in the case of Young v. Power, 41 Miss. 197.

It is true an unexecuted contract to give is not binding, and cannot be enforced. Neither is a contract to make a deed of gift to land. But where the contract is executed, where the gift has been made, the court will leave the parties where they have placed themselves. We ask, what is the difference, in principle, between this class of cases and a case in which the payee has surrendered his evidence of indebtedness to the maker of the debt on the payment of only a part of what is owing to him? We can see none. The payee in the note says to the maker, "if you will pay me one-half of what you owe me, I will give you the balance of the debt." That is what it amounts to. The agreement, as long as it is unexecuted, is not binding. But, when fully executed, why should it not be, as in case of a gift?

OPINION

WOODS, C. J.

The single assignment of error is as to the action of the trial court in overruling the demurrer interposed by plaintiff below to the pleas of the defendant. If the pleas had distinctly set up a payment of the note sued on by the tender of $ 1, 000--a lesser sum than that named in the note--by the debtor, and the acceptance of this lesser sum by the creditor as full payment of the note, in pursuance of an agreement of both parties to that effect, before the day of the maturity of the note, then by all the authorities the pleas would have been good. For the reason, to quote Coke's quaint language in Pinnel's case, 3 Coke's Reports, 117, that "peradventure parcel of it before the day would be more beneficial to him than the whole at the day, " as multitudes of creditors who have been in sore straits can bear witness to from happy experience. But the pleas do not aver with sufficient distinctness any payment before the day of the note's maturity; they only aver that about the thirtieth of July payment was made, when the copy of the note sued on shows on its face that the note was due August 1. It is to be observed, however, that the declaration on the note does not profess to give an exact copy of the note, but only a substantial copy, because, as is alleged, the note itself was not in the possession of the plaintiff, but was then held by the defendants. Now, to this declaration the pleas only answered that about two days before the date of the note's maturity as shown by the copy sued on, and not made from the original then in the defendant's possession, payment was made by tender and acceptance of the lesser sum for the greater. But the plea is to be taken most strongly against the pleader, and about a certain time may mean a day or a week or a month after the time, as well as a day or a week or a month before the time.

We are unable to adopt as sound the argument of counsel for appellees that these pleas are pleas not of satisfaction and payment, but only pleas denying title in appellant to the note, because of the pleas averring that the note had been transferred and assigned by the payee to the payor. Whenever there is shown a legal assignment and transfer of an obligation to pay money by the obligee to the obligor, necessarily there is an extinguishment of the debt, and in such case the debt may be properly said to be satisfied, to be paid. And, as perfectly appears, not only from the transcript before us, but as is substantially agreed by the counsel of the respective parties, the pleas interposed all set up one and the same matters of defense, so it, also, perfectly appears that this defense was a new contract entered into by the parties, whereby it was agreed that the payor of the note should pay to its holder and owner, and the latter should accept from the former a lesser, stipulated sum for the greater sum named in the note, in full satisfaction of the debt, and as a full discharge of the payor from further liability, and that this new contract, with the concurrence of both parties thereto, has been completely executed by payment and acceptance of the agreed lesser sum, and the evidence of the indebtedness surrendered and delivered up to its maker by its holder.

With the case viewed in the light of the foregoing elucidation of the purpose and effect of the pleadings, this question--not a new one in our jurisprudence -- squarely confronts us, viz Will the acceptance of a lesser sum, in money, by the payee of a note, than the greater sum actually due from the debtor, on the distinct agreement that such payment and acceptance of the lesser sum shall extinguish the whole debt evidenced by the note, operate to satisfy the note and discharge the debtor, unless the lesser sum of money is paid before the maturity of the note for the greater sum, or unless the lesser sum of money is paid at another place than that named in the note itself as the place of payment? This question has, in two cases, been remarked upon by this court, and, though not necessary to the determination of the question presented in either case, was, in both instances, affirmatively answered, though in both the affirmative answer was given with evident reluctance and with doubt as to its soundness. We refer to the cases of Jones et al. v. Perkins et al. , 29 Miss. 139, and Pulliam v. Taylor , 50 Miss. 251. In the former case, the defense was that the parties had contracted to pay and to accept $ 1, 500 in New York in discharge of a debt for $ 2, 000, payable by its terms in Mississippi; and the court held, as is universally held elsewhere, that this was a good defense. But that defense is not the one now before us. In the other case of Pulliam v. Taylor , the defense was that the debtor had compounded with his creditor, and the creditor had contracted and agreed to accept less than the whole amount of the debt, and had actually accepted the notes of the debtor for the smaller sum, to be paid in installments in equal annual payments thereafter, the notes being secured by mortgage, and that one of the notes had actually been paid to the creditor; and this was held to be a good defense to a suit brought by the creditor on the original debt, in disregard of the new...