Powell v. Blow

• Decision Date: 31 March 1864
• Citation: 34 Mo. 485
• Parties: ALBERT POWELL, Respondent, v. TAYLOR BLOW AND WM. T. BLOW, ADMINISTRATORS OF JOSEPH CHARLESS, Appellants.
• Court: Missouri Supreme Court

34 Mo. 485

ALBERT POWELL, Respondent,

v.TAYLOR BLOW AND WM. T. BLOW, ADMINISTRATORS OF JOSEPH CHARLESS, Appellants.

Supreme Court of Missouri.

March Term, 1864.

Appeal from St. Louis Circuit Court.

Hill & Jewett, for appellants.

The first and third instructions given for the plaintiff, give the force of law to the notions set forth in the petition, to-wit, that surviving partners, after the death of a co-partner, can renew the notes of the old firm and make such renewed note binding on the estate of the deceased partner.

This idea, so absurd in law, is elaborated in the petition and sustained by the court in its instructions to the jury. The third instruction given for the plaintiff distinctly tells the jury that the notes of 1859 and 1860, given after the death of Charless, may operate as a renewal or continuance of the original loan to the old firm, and thereby bind the estate of Charless. Certainly an instruction more plainly and palpably in the teeth of the law could not well be given. The transaction is as plain as daylight, and nothing but the most perverse ruling would have led even a stupid jury so far astray.

Some of the cases speak of notes being renewed after dissolution in liquidation; but this is always when the partners are living, and even that goes upon the ground of assent by all the partners. In this case there could be no implied assent to any renewal.

It is a familiar principle, that at law creditors have no right of action against a deceased partner's estate; it is only in equity that they can come upon the estate, aside from statutory provisions upon the subject. The law, upon the effect of a dissolution of partnership by death, is so familiar, that it is not deemed worth while to cite cases or text books to this court upon that point. But it is further insisted, that the two said instructions given for plaintiff were wrong in this respect, that they convey to the jury distinctly the idea that the renewal of a note cannot operate as a “payment and extinguishment” of the old note, when, in fact, the law and the custom of merchants is, that such renewal does extinguish the old note. Parsons on Notes and Bills, vol. 2, p. 203, says: “Whatever may be the law with regard to payment and satisfaction of a pre-existing debt by bill or note, the general custom and understanding of the mercantile world would seem to demand that a new note, given in renewal of an old one which is taken up, as it is termed, should pay and cancel the old note for which it is given.

"The banks consider this to be the effect of renewal, even though the old notes are left with the banks, as is frequently the case. The old note would be cancelled, if it were paid in money, though the same money would be immediately loaned to the debtor who had paid it in. There seems to be no need of going through the ceremony of paying down coin which is to be taken away again. Yet renewal amounts to this in the understanding of the parties, and we should think the courts ought to regard this universal understanding in arriving at the intention of the parties. Banks renew notes again and again. New sureties are furnished on new notes, and the debtor's own note often taken for one with sureties. The parties, without question, suppose themselves discharged. Some of the courts seem to admit that renewing a note cancels the old debt which is merged in the new note, but it cannot be regarded as by any means settled.”

If there is a difference in the cases in the different States, and the law is not “settled” generally, neither is it settled in this State; and it is insisted, that when it is “settled” in this State, it should be in accordance with the “universal understanding” of the mercantile community and the decisions of many of the States, that when a note is renewed and the old one given up, that it should be at least prima facie proof of payment of the old note. But we insist that the law in this State is so far settled in this matter as to require that the fourth instruction asked by defendants should have been given, to the effect that the facts in this case made a prima facie case of payment, and called upon the plaintiff for rebutting proof. (Yarnell et al. v. Anderson, 14 Mo. 619; Patterson v. Camden, 25 Mo. 13.)

To the point that the defendants made a prima facie case of payment that required rebutting proof, the following cases are also cited: Arnold v. Camp, 12 John. 409; Estate of Davis v. Desauque, 5 Whart. 530; Stone v. Chamberlin, 20 Georgia, 259; Waydell v. Luer, 3 Denio, 410; Frisbee v. Larned, 21 Wend. 450.

The cases just cited are all from States where the law is held as here, that the simply giving a note is not absolute payment. In the States of Massachusetts, Maine, New Hampshire, and Vermont, the simply giving a note is absolute payment. Indeed, this is the only sensible law on the subject, and is in accordance with the custom and the general understanding of the community.

The instructions given for the plaintiff are further wrong, on the ground that there is no evidence in the case that will authorize the jury to infer that it was not the intention of the parties to discharge the old note.

Hamilton and Wickham, for respondents.

As to the plaintiff's instructions:

The defence was, that the notes given were those of the new firm, and that this was apparent from their face. In other words: That the defendants gave their own separate security; that the first of those operated as payment and satisfaction of the old note, and that it was understood and intended by the parties that the new notes should be in full satisfaction and payment of the old note, and in discharge of the estate therefrom.

The instructions for the plaintiff, taken in connection with those given for the defendants, placed the issue before the jury in the most favorable aspect for the defendants; that is, as a question of intention. Some of the cases go so far as to call for an express agreement.

The following authorities show that satisfaction, as distinguished from payment or performance, is in such a case not the result of any mere inference or presumption of law, but of some specific understanding or agreement, the existence of which must be proved by the party who alleges it: 1 Lindley on Part. 356, 367; 2 Am. L. C. (4th ed.) 242-245; S. Bt. Charlotte v. Hammond, 9 Mo. 63, 4; Appleton v. Kennon, 19 Mo. 641; Muldrow v. Whitlock, 1 Cow. 304-6; Johnson v. Weed, 9 John. 310; Downing v. Hicks, 14 How. 240; 2 Robinson's Prac. 429; Olcott v. Rathbone, 5 Wend. 490; Vernon v. Manhattan Co. 22 Wend. 133; Cole v. Sackett, 1 Hill, 511; Waydell v. Luer, 5 Hill, 448 [S. C. in error]; 3 Denio, 410.

In Edward v. Deifendorf, 5 Barb. S. C. 408, it is said: “A promissory note of the debtor, or of one, two, or more joint debtors, for a precedent debt, is not a satisfaction of such debt, even although the creditor expressly accepts the note in satisfaction. This principle, distinctly advanced in Cole v. Sackett, (1 Hill, 516,) and in Waydell v Luer, (5 Hill, 448,) cannot be considered as overruled by the decision of the latter case by the Court of Errors, (3 Denio, 410.)

In Van Eps v. Dillaye, 6 Barb. 252, the Court says: “The question in such cases is always whether the creditor agreed to and did accept the notes either of the debtor or of the third person, as payment of the original debt.” (Dayton v. Trull, 23 Wend. 347; Henbach v. Mollman, 2 Duer, 259; Yarnell v. Anderson, 14 Mo. 624; Patterson v. Camden, 25 Mo. 13; Hays v. Stone, 7 Hill, 128; Hill v. Beebe, 3 Kernan, 562-3; Brown's Com. on Com. Law, 398; Perrin v. Keens, 19 Maine, 358; Chase v. Vaughn, 30 Maine, 413; Wilds v. Fessenden, 4 Met. 12; Jones v. Johnson, 3 W. & S. 276; Wallace v. Firman, 4 Watts, 378; Weakley v. Bell, 9 Watts, 273; Mason v. Wickersham, 4 W. & S. 100; Oliphant v. Church, 7 Harris, Pa. 320; Collier v. Leach, 5 Casey, Pa. 404; Foster v. Ludwig, 34 Maine, 461; Parker v. Cousins, 2 Grattan, 372.) “Partners make a note and then the partnership is dissolved. The partner who is authorized to settle up the business of the partnership cannot renew the note in the partnership name so as to bind the other partner.” In such a case, though the last note does not bind the partner, who did not execute it, the first note is still a valid security as against him, though it was surrendered when the last note was taken.

The taking of a new security from one of two joint debtors will release the other, if in any case, only where there is an agreement by the creditor, express or implied, that he shall be released.

In equity:

Harris v. Farwell, 15 Beav. 33. To discharge the estate of the deceased partner it is not sufficient to take a new security, but you must agree to discharge the old firm. (Winter v. Innes, 4 My. & Cr. 108; Hammersly v. Lambert, 2 J. C. R. 508.) The rule, that the note prima facie extinguishes the debt, is assignable to New England, whose courts, however, admit that it is opposed to the common law, being founded on special usage, (6 Mass. 145,) and even there it is held that “if the paper accepted is not binding upon all the parties previously liable, or if the paper of a third person be received not expressly in payment, the presumption may be considered as repelled.” (Fowler v. Ludwig, 34 Maine, 461; Perrin v. Keane, 19 Me. 358; 5 Cush. 170.)

If this were the note of the survivors alone, the circumstance that it included the unpaid balance of the separate loan, so far from having any technical operation by way of discharge, would, of itself, raise the presumption in the first instance, that it was designed merely as collateral security. (9 Watts, 273; 3 W. & S. 276; 4 Watts, 378; 7 Harris, Pa. 320; 5 Casey, Pa. 404; 3 Kernan, 562-3.)

Next it is insisted that where a note is renewed and the old one given up, it should be, at least, prima facie evidence of payment of the old note. The answer is that “renewal” is not a word of art; it may mean simply an extension of credit or...