Haines v. Pearce

• Decision Date: 09 December 1874
• Citation: 41 Md. 221
• Parties: EPHRAIM HAINES and JAMES M. EPPLEY, Trading as E. HAINES & CO. v. LUKE J. PEARCE.
• Court: Maryland Court of Appeals

41 Md. 221

EPHRAIM HAINES and JAMES M. EPPLEY, Trading as E. HAINES & CO. v. LUKE J. PEARCE.

Court of Appeals of Maryland

December 9, 1874

APPEAL from the Circuit Court for Baltimore County.

The case is stated in the opinion of the Court.

Exception.--The plaintiffs offered the following prayers, the seventh of which was granted, and the others were refused:

1. If the jury find that the goods were sold and delivered by the plaintiffs to the defendant, as stated in the bill of particulars, and shall further find that the plaintiffs have not received the money for the same, then the plaintiffs are entitled to recover, though the jury shall believe the statement made by the defendant on his cross-examination that when the orders were offered by the defendant to the plaintiffs, the plaintiff Eppley, said that he would take the orders on the Dairy Association, if Councilman, the President, would accept them, and that when the defendant returned and handed the orders and acceptance offered in evidence to Eppley; Eppley said: "It is all right, I will take the orders on the Association for all the feed you want," and nothing further was said on the subject provided, the jury shall further find that the plaintiffs at the trial-table, tendered and offered to return the orders and acceptances to the defendant.

2. Even if the jury shall find the statement of the defendant, made on the cross-examination to be true, that he called on the plaintiff Eppley and offered to give the orders offered in evidence, and that Eppley agreed to take the orders, provided Councilman, the President of the Association, would accept them, and that he took the orders to Councilman, who accepted them, and that he then took them back to Eppley, and that Eppley received them, and said to him that it was all right and that the plaintiffs would take orders on the Dairy Association for all the feed he wanted, and this was all that was said on the matter; this does not constitute a sufficient agreement to take the orders as payment of the account of the plaintiffs already contracted.

3. That the burden of proof rests on the defendant, to show that the orders were received as payment by the plaintiffs, of his account previously due, and that the defendant has offered no competent evidence on that point.

4. That there is no competent evidence in the cause, of any suit brought by the plaintiffs against the Baltimore County Dairy Association.

5. That as the holders of the orders declared upon, the plaintiffs had failed to collect them by suit in their own names if they held them as collaterals only, and that no inference that they were received as payment, can be drawn from the fact that suit was brought against the Dairy Association by the plaintiffs in their own names on said orders.

6. That it was not necessary, in order to enable the defendant to recover hereafter on the accepted orders from the Dairy Association, that the orders offered in evidence should be protested, as that notice of non-payment should be given to the defendant.

7. That the burden rests on the defendant to prove the orders were received as payment.

The defendant offered four prayers; the first and second of which were rejected, and the others as follows, were granted:

3. That if the jury find that the three orders and acceptances dated July 7th, 1870, and offered in evidence, were given by the defendant and received by the plaintiffs, with the understanding that said orders should be in satisfaction and extinguishment of the account for goods sold to the defendant, to the extent of the amount of said orders, for the price of which this action was instituted, the defendant is entitled to be credited in this suit with the amount of said orders.

4. That if the plaintiffs received the three orders or acceptances, and undertook to collect them, and to apply the proceeds to the indebtedness of the defendant; and if they believe that by proper diligence the plaintiffs could have collected said orders, and that through the negligence or laches of the plaintiffs they were not collected, and no notice of their non-payment at maturity was given by the plaintiffs to the defendant, then the defendant is entitled to be credited with them in this case as if they had been paid.

To the rejection of their prayers and to the granting of those of the defendant, the plaintiffs excepted.

The jury rendered a verdict in favor of the plaintiffs for $25.50, and judgment was entered accordingly. The plaintiffs appealed.

The cause was argued before BARTOL, C.J., STEWART, BRENT, MILLER and ALVEY, J.

R. R. Boarman and William A. Fisher, for the appellants.

That the plaintiffs' first three prayers state the correct rule of law is settled by the following cases: Berry vs. Griffin, 10 Md., 27; Glenn vs. Smith, 2 G. & J., 493; Crawford vs. Berry, 6 G. & J., 72; Yates vs. Donaldson, 5 Md., 396.

For the like reason, the third prayer of the defendant should have been rejected for lack of evidence to support it.

The fifth prayer of the plaintiffs should also have been granted. The orders in question were part of the cause of action in an attachment sued out by the plaintiffs against the Dairy Association, and by reason of the rejection of this prayer, the defendant was enabled to argue successfully to an inexperienced jury, that the institution of suit by the plaintiffs in their own names on the orders, was conclusive proof that they had been accepted in payment.

If the orders were accepted as collateral, or in any manner other than as payment, the plaintiffs had the right to sue upon and endeavor to collect them. As they had a special property in them, it was right and usual that they should sue in their own names, and no inference that they were accepted as payment could be legitimately drawn from this circumstance. Indeed the case of Berry vs. Griffin, 10 Md., 28, is conclusive as to this point, since it was not considered that there was there any evidence that the note had been accepted as payment, although the plaintiff actually sued and obtained judgment in his own name.

The sixth prayer of the plaintiffs should have been granted. The suit was not upon the orders, but upon the open account, and the right of the plaintiffs to recover could not be affected by the failure to protest the orders, and give notice to the defendant in any event. Besides the orders were not instruments which it was necessary under the law merchant, to protest.

The fourth prayer of the defendant, granted by the Court, erroneously assumes that it was necessary to protest the orders. The latter prayer was also faulty in that it enabled the jury to find that the orders were not collected by reason of the laches or negligence of the plaintiffs, and there was not a shadow of proof to support such a proposition.

Arthur W. Machen, for the appellee.

The facts present a clear case of Novation--the substitution of the Dairy Association for the defendant, as debtor, to the amount of the orders, in his place. Such an arrangement requires the concurrence of all three parties; and here all concurred. This is not the mere case of the transfer of a negotiable instrument by the debtor to his creditor. But, by special agreement, the appellee, as the orders matured was charged with the amount by the Association, extinguishing his claim against it, and the appellants credited therewith, in their own account with the Association. The acceptance is explicit on this point, showing what was the understanding of the Association, and the appellants necessarily adopted it when they received the paper. That all parties acted upon it is shown by the account between the Association and the appellants, filed by the latter in the Superior Court, and by the total omission to notify the appellee of any default on the part of the Association, or to set up any claim against him for over two years. Addison on Contracts, 817, 821; 1 Parsons on Contracts, title Novation, 187; Dickinson vs. Marrow, 14 M. & W., 713; Wilson vs. Coupland, 5 B. & Ald., 228; Crowfoot vs. Gurney, 9 Bing., 372.

While the doctrine is unquestionable that the taking of a bill drawn on a third party by way of payment of a precedent debt, will not per se operate as satisfaction of the debt, being presumptively intended only as a conditional payment, it is equally certain that it may by agreement operate as satisfaction, and that such agreement need not be declared in terms, but may be implied from circumstances justifying the inference. Story on Prom. Notes, sec. 104; Yates vs. Donaldson, 5 Md., 396; Phelan vs. Crosby, 2 Gill, 462; Brown vs. Jackson, 2 Wash. C. C., 24, 27; Harris vs. Lindsay, 4 Wash., 271; Hoopes vs. Strasburger, 37 Md., 401; Hurley vs. Hollyday, 35 Md., 473; Sard vs. Rhodes, 1 M. & Wels., 155.

In this case there is no proof that the orders and acceptance were taken for a precedent debt. The plaintiffs' bill of particulars claimed some subsequent deliveries of goods, and there is no evidence of any antecedent sales.

The plaintiffs' fifth prayer was objectionable as assuming a previously contracted debt, without evidence.

The defendant was at any rate discharged by the laches of the plaintiffs. Orear & Berkley vs. McDonald, 9 Gill, 360; Glenn vs. Smith, 2 G. &. J., 493; Smith vs. Mercer, 3 Law Reports, Exch., 51; Hopkins vs. Ware, 4 Law Rep. Ex., 268; Peacock vs. Pursell, 14 C. B. N. S., 728; Parsons on Notes and Bills, 154; Addison on Contracts, 953.

BARTOL C.J., delivered the opinion of the Court.

This is an action of assumpsit for goods sold and delivered by the appellants to the appellee.

The only exception taken by the appellants, was to the ruling of the Circuit Court upon the prayers. In order to understand the questions...