Perot v. Cooper

• Decision Date: 16 November 1891
• Citation: 28 P. 391,17 Colo. 80
• Parties: PEROT v. COOPER.
• Court: Colorado Supreme Court

28 P. 391

17 Colo. 80

PEROT v. COOPER.

Supreme Court of Colorado

November 16, 1891

Error to district court, Arapahoe county; WESTBROOK S. DECKER Judge. Reversed.

Action by T. Morris Perot against Sarah F. Cooper, administratrix etc. Judgment for defendant. Plaintiff brings error.

The other facts fully appear in the following statement by ELLIOTT, J.:

This was an action by T. Morris Perot, plaintiff below, against Sarah F. Cooper, as administratrix of Isaac Cooper, deceased. The complaint contained two causes of action. The first was founded upon three certain promissory notes, executed on September 30, 1882, by Isaac Cooper, for the aggregate sum of $20,000, and payable to the order of plaintiff 6, 9, and 12 months, respectively, after date, with interest at 6 per centum per annum after maturity. The second cause of action founded upon a certain written contract between said Cooper and Perot, executed at the same time as the notes, was, upon defendant's motion, dismissed by the court at the close of plaintiff's evidence. The due execution and delivery of the notes were admitted in the answer. Every other allegation of the complaint was denied. The defense principally relied on was that before the commencement of the action, and on or about March, 1887, said Isaac Cooper paid satisfied, and discharged the notes. The defense of payment and other affirmative defenses were traversed by the replication. Verdict and judgment were rendered for defendant. Plaintiff brings the case to this court by writ of error.

Syllabus by the Court

1. The execution and delivery of a promissory note being admitted, the presumption, in the absence of proof, is that it is founded upon a sufficient consideration.

2. In an action upon a promissory note the possession and production of the note by the plaintiff at the trial, uncanceled, and unextinguished by indorsements of payment or otherwise, are prima facie evidence that the plaintiff is the owner of the note, and that it is unpaid.

3. A plea of payment, being an affirmative defense, must be supported by a preponderance of the evidence in order to be effective in favor of the party pleading it.

4. A conveyance absolute in form may be found and adjudged to be a mortgage in fact when it is shown by evidence clear, certain, unequivocal, and trustworthy that such instrument was executed, delivered, accepted, and intended by the parties merely as collateral to secure the payment of a debt. But where there is a substantial conflict in the evidence a mere preponderance is not sufficient to warrant a change in the character of a deed or other solemn instrument of writing.

5. A person indebted on separate and distinct accounts is entitled to have his payments applied on such account or accounts as he shall direct; but, if he makes a payment without directions, the creditor may apply the same to any debt due him at the time from such debtor.

6. It is not necessary that the debtor should give an express direction as to the application of the payment. If, from the circumstances of the case, his intention as to its application may be clearly implied, the creditor is bound to regard it. It will be presumed, in the absence of evidence to the contrary, that a payment is made upon a demand admitted, rather than upon one in dispute, at the time of making such payment. So, also, an undesignated payment will be applied to an interest-bearing demand, rather than to one not bearing interest.

7. An instruction, even though correct as a proposition of law, if misleading as to the issues, inapplicable to the evidence, and calculated to prejudice the substantial rights of the losing party, cannot be held to be a harmless error.

R. H. Gilmore and I. E. Barnum, for plaintiff in error.

H. P. Bennet and W. C. Kingsley, for defendant in error.

ELLIOTT, J., ( after stating the facts.)

The principal matters in controversy in this cause having occurred before the death of Isaac Cooper, both parties were placed at a disadvantage in the production of evidence,--the defendant by the death of her intestate, the plaintiff by force of the statute. See Act 1870, p. 63; Mills, Ann. St. § 4816. It was admitted upon the trial that the consideration for the notes sued on was a loan of $20,000, made by Perot to Isaac Cooper on the day the notes bear date; and that said loan was also the consideration for the contract or 'agreement' made between said parties on the same day, to-wit, September 30, 1882. By the terms of said contract, Isaac Cooper, in consideration of one dollar and other good and valuable considerations acknowledged to have been received by him, covenanted and agreed to transfer and convey to said Perot certain interests in certain stocks bonds, lands, letters patent, etc. It is undisputed that on February 25, 1887, the plaintiff, Perot, and Isaac Cooper met in the city of Philadelphia, and negotiated a settlement of certain matters pertaining to the contract of September, 1882, whereby said Perot was to receive a deed or deeds for 100 lots in the town of Glenwood Springs, Colo., and also to receive from said Cooper the sum of $34,878.42 in money, a portion of which sum is conceded to have been for interest accrued to that date on the $20,000 notes. The money and the lots were duly received by Perot. In behalf of defendant it is contended that the settlement thus negotiated was, when carried into effect, payment in full of the principal of the $20,000 notes as well as the interest thereon. The claim is that the moneys thus paid and the lots thus conveyed were in settlement of the contract of September, 1882; that said contract having been entered into at the time of the giving of the notes, and for no other or different consideration, was collateral to the notes merely, and was only intended to secure their payment; and therefore, that when a sum of money equal to the principal and interest on the notes was realized by the payee out of such security, the notes were in fact paid. In support of this theory counsel for defendant cite White & Tudor's Leading Cases in Equity, (Hare & W. notes to Thornbrough v. Baker, 1941, and Howard v. Harris, 1949.) In behalf of plaintiff it is contended that the agreement made in September, 1882, was, in fact as well as in form, a contract to transfer and convey absolutely to the plaintiff the property therein described, and was so intended by the parties; and that the settlement negotiated in February, 1887, did not include, and was not intended to include, the principal of the $20,000 notes. In support of this claim plaintiff relies upon certain letters written by Isaac Cooper in his life-time, and other documentary evidence; also upon the testimony of the attorney who prepared the agreement of February, 1887, to convey the 100 lots; and also upon the circumstance that the notes were at that time left in possession of the plaintiff, Perot, without any provision, either orally or in writing, for their surrender, and other circumstances. The execution and delivery of the notes being admitted, the presumption would be, in the absence of proof, that they were founded upon a sufficient consideration to sustain the plaintiffs cause of action. In addition to this, a full consideration for the notes was expressly admitted on the trial. The possession and production of the notes by the plaintiff at the trial, uncanceled and unextinguished by indorsements of payment or otherwise, were prima facie...