Brewster v. Bours

Terry, C. J., delivered the opinion of the Court—Burnett, J., and Field, J., concurring. On the trial, the plaintiffs moved that the jury be instructed to find a special verdict, setting out all the facts in the ease as disclosed by the testimony. The Court held, that in cases where a special verdict was desired, the proper practice was to frame issues, stating separately each point in controversy, and directed such issues to be framed and submitted to the jury. Plaintiffs’ counsel objected to this mode oí proceeding, and declared that they would prefer a general verdict, and no objection being made by the defendants, a general verdict was returned. The appellants now insist that the ruling of the Court on this point was erroneous, that the special verdict provided for in the Practice Act is as distinct from special issues as from a general verdict. That “it resembles somewhat the taking of depositions in chancery under an order to an examiner, or master, [505] but differing from these, and commending itself, therefore, to favor in this, that the certified result is not encumbered with the tedious details of every interrogatory, arid the exact words of the witness spoken in reply; that the, Practice Act meant to obviate the objectionable incidents of the old system, secure the privilege of a jury trial in every case as far as consistent with the rules and practice of Courts of Equity, and whilst it avoided the framing of numerous special issues in certain cases, presented all the information derivable from that 'proceeding in a form 'much more connected and intelligible.” This point is not well taken. The mode of proceeding contended for by the appellants is, we think, impracticable; that in complicated cases, it would bo next to impossible to find a jury capable of passing, understanding^, upon the various questions of fact involved, without the aid of special issues, and that the statute contemplates, that in all such cases, special issues should be framed under the directions of the Court, according to the long-established rules of chancery practice. The case at bar was a proper one for a special verdict; but as the failure to present the issues was the result of plaintiffs’ own motion, he cannot be allowed to take advantage of it. It remains only to inquire whether the allegations of fraud in plaintiffs’ complaint are sustained by the evidence. The record shows that Gillingham & Co., traders in Stockton and San Francisco, were, on the first day of October, 1856, insolvent, but that this fact was known only to themselves; that,\ at this time, they were indebted to Bours & Co. in the sum of five thousand three hundred and eighty dollars, for money before that time advanced; that Gillingham, concealing the fact of his insolvency, obtained from Bours an extension of the time of payment, and pursuant to this arrangement, executed two notes,- one payable on the thirteenth of October, and the other thirty days after date. On the evening of the sixth of October, Bours, knowing that Gillingham & Co. had failed, and apprehending that their property would be attached, and wholly consumed by other creditors, before the maturity of his notes, called on Gillingham, and requested that he would confess judgment for the amount of his debt. To this, Gillingham consented ; but at the suggestion of Bours’ counsel, in lieu of the confession of judgment, he gave a note payable on demand for the amount which was duo Bours on the first day of October; that this note was dated on the first of October, and that on the day it was executed suit was commenced upon it, and attachment was levied on Gillingham’s property; that Bours knew ah this time that Gillingham & Co. were insolvent, and that his object in taking anote on demand was to enable him, by attachment, to obtain priority over other creditors; that plaintiffs are creditors, having attachments subsequent to Bours’, [506] and that the amount of property attached is not more than sufficient to satisfy Bours’ demand. We are not able to perceive any fraud in this transaction. The evidence shows an entire absence of any fraudulent intent on the part of the defendants, and we are clearly of opinion that the facts disclosed by the record do not constitute legal or constructive fraud. The argument that the effect of the proceedings was to hinder and delay other creditors, would apply with equal force to every proceeding by attachment against a debtor, whose assets were not sufficient to discharge all his liabilities. Bours & Oo. sought to recover only the sum which was justly due to them; relying on the representations of Gillingham, and ignorant of his circumstances, they had agreed to give time for the payment of their debt; discoving the true state facts, they took such measures as were thought necessary to restore thorn to the position which they before occupied; to this end they took a note, on demand, for the precise amount of their antecedent debt, which was a sufficient consideration for the note. The acceptance of a note payable at a future time for a preexisting debt, does not extinguish the debt' its only effect is to suspend the creditor’s right to recover until the maturity of the note, when he may surrender or cancel the note and proceed on the original consideration. 2 Am. Lead. Cases, 182. See, also, Toby v. Barbie, 5 Johns., 73, where the Court hold, that “it is a rule well settled and repeatedly recognized in this Court, that taking a note, either of the debtor or a third person, for a preexisting debt, is no payment, unless it be expressly agreed to take the note as payment, and run the risk of its being paid, or unless the creditor parts with the note, or is guilty of some laches in not presenting it in due time. He is not obliged to sue on it, ho may return it when dishonored, and report to his original demand. It only postpones the time of payment of the old debt until default is made in the payment of the note.” The rights of the plaintiffs were not, as we conceive, injuriously affected by the execution of the note on demand. Bours’ debt was wholly due on the first of October, was not extinguished by the execution of the notes at that time, and his consent to extend the time of payment had been procured by a concealment on the part of Gillingham & Co. of the fact of their insolvency. Under these circumstances, Bours could have surrendered the notes, and proceeded directly upon the original indebtedness. This view of the case renders it unnecessary to notice in detail the errors assigned by the appellants upon the instructions refused by the Court. Judgment affirmed.