Gibson v. Toby

By the Court, Marvin, P. J. The facts being ascertained, I do not understand that there is any dispute touching the law applicable to cases of the sale of property and the receiving of the note of a third person by the vendor, from the vendee. If the agreement expressly is that the note of a third person shall be taken for the property sold, and the property and note are delivered, the transaction is an exchange of property. It was said by the court, in Johnson v. Weed, (9 John. 310,) “ that the books all agree that there must be a clear and special agreement that the vendor shall take the paper absolutely as payment, or it will be no payment, if it afterwards turns out to be of no value.” In Whitbeck v. Van Ness, (11 John. 409, 410,) the court say that the opinion went further than the judges meant to go. Spencer, J. examines a large number of cases, and among them Ward v. Evans, (2 Ld. Raym. 928,) which he approves. In that case there was a precedent debt, and a note of a third person had been taken. Lord Holt said, ei that taking a note for goods sold is a payment, because" it was a part of the original contract; but paper is no payment when there- is a precedent debt. For when such a note is given in payment, it is always intended to be taken under the condition, to be payment if the money be paid thereon in convenient time.” As I understand, there must be an agreement between the parties that the note of the third person shall be taken by the vendor in payment for the property sold. When the sale and delivery of the property and the transfer of the note are at the same time, a presumption arises that the parties agreed to an exchange of property; that is, that the vendor should sell and deliver his property for the note to be transferred by the other party, called the vendee, and the agreement being executed, the note is taken at the risk of the party taking it for his property. The fact of a simultaneous exchange is the evidence from which the agreement is presumed. This presumption is not conclusive. The party taking [196] ■ the note may show that it was not the agreement that he should take the note at his owm risk, in exchange for his property. In Whitbeck v. Van Ness, (supra,) the lease and the note were delivered at the same time, and in addition it was pi’oved that the defendant offered to buy the lease if the plaintiffwould take the note, and the plaintiff accepted the offer, and the exchange was made. In case the debt existed at the time the note is transferred, an agreement is required that it shall be paj-ment. The onus of showing this is, of course, upon the debtor. He owed the debt, and must show it satisfied.' By proving an express agreement that his creditor should take the note of a third person in payment of the debt, he proves an accord, and by adding the proof of the delivery to, and acceptance by, his creditor, he proves the satisfaction. (See Noel v. Murray, 3 Kern. 168.) The question in the present' case is, was the relation of debtor and creditor established between the parties prior to the negotiations touching the draft, and did such relation exist at the time the draft was taken ? If this question was answered in the affirmative, then the question will be, was there an express agreement that the draft should be taken in payment of the debt. The referee must have found the first question in the negative, or the second question in the affirmative. He does not find the fact directly, but “ decided as matter of law that the delivery to and acceptance by the plaintiff of said draft was* a payment.” As the referee nonsuited the plaintiff he must have been of the opinion that the evidence did not tend to prove a prior indebtedness, or that it proved an express agreement to take the draft in payment. I think the learned referee erred. It seems to me that the evidence clearly showed the relation of debtor and creditor prior to any negotiation touching the draft. By the agreement of sale, payment was to be made in cash. The hogs were weighed between 9 and 10 o’clock. The, agent of the de [197] fondants expressed a desire to ship the hogs right away, saying he had not time to pay then, but Ilogle would see that the plaintiff was paid, and the plaintiff assented, and the agent drove the hogs to the Erie railroad cattle yard and shipped them on board the cars. This was a delivery. The defendants became debtors, and the- plaintiff could have maintained an action against them for the price of the hogs. The plaintiff had a right to insist upon payment in cash. It may be that he also had the right to repossess himself of the hogs if the cash was not paid, as no credit was to be given; but he was not bound to adopt that remedy. The delivery had been made, and the defendants were his debtors. The debt must-be paid in cash, unless there should be a further agreement between the parties. A further agreement was made, and the question now is, was it an express agreement that the draft in question should be taken by the plaintiff in satisfaction of the debt ? It seems to me that the evidence did not show that such was the character of the agreement. The onus was upon the defendants. Let us again examine this evidence. Starting with the position that the plaintiff was the creditor of the defendants, the defendants, by their agent, approach him, and learn that he is going directly home, and intends taking the money with him. ■ He was then told that currency was rather hard- to obtain; that an eastern draft could' be got that would be as good to the plaintiff as the money; that the banks preferred giving drafts to giving currency. The plaintiff assented to the taking of a draft. There was a subsequent conversation with Pienlcowskie, in’which P. proposed to got currency or a-draft, as the plaintiff should choose; saying, if the plaintiff wanted to carry it home he could get the plaintiff, an eastern draft which would- be just the same to the plaintiff as money. The plaintiff remarked that he would full as soon carry a draft as the money, and for safety, rather. When the [198] dráft was handed to the plaintiff by Pienkowskie, the latter said “ here is the draft for $3200.” The plaintiff’ took it, saying he supposed it was all right; and Hogle said, “Yes, it is better than the money;, it cost me one eighth to get it.” The plaintiff took the draft without reading it. Nothing had been said as to whose draft was to be obtained.- It seems to me that this evidence does not prove that the plaintiff entered into an agreement with the defendants to take the draft in question at his own risk, in payment of the debt then due .him, On the contrary, if it proved any agreement, other than that which the law would imply, viz. in the language of Holt, Ch. J„' that “ it is always intended to be taken under the condition, to be payment if the money be paid thereon in convenient time,” it proved an agreement that an eastern draft should be given to the plaintiff, as good to him as the money, or better than money. No other kind of draft Was talked of. The plaintiff exercised no judgment touching the goodness of the paper, and legally he was not bound to do so. The defendants owed him and were bound, to pay him, and they handed him a draft declaring that it was better than money. (See Torry v. Hadley, 27 Barb. 192.) I think the referee erred in deciding that the delivery to, and acceptance by the plaintiff of the draft was a payment, If the debt was not paid by the draft, were the defendants discharged by the laches of the plaintiff in giving notice to the defendants of the dishonor of the draft ? No point is made that there was any negligence in sending the draft forward and ¡presenting it to the drawees for payment. It was understood that the plaintiff was to take the draft with him, to his home in Ohio. Due diligence was used in sending the draft to .the drawees. (Stevens v. McNeill, 26 Barb. 651.) What duty did the plaintiff owe to his debtors ? Their names were not upon the paper. •The paper was presented for payment, which was refused, and notice was given to the indorsers, and I infer to the [199] drawer, though this does not very clearly appear in the case. The drawer, however, can raise no objection, as he had directed the drawees not to pay any more of his drafts, prior to the presentation of this draft. The sole point is that the plaintiff was guilty of laches in not notifying the defendants of the dishonor of the bill. Upon this point, the counsel for the defendants cites Dayton v. Trull, (23 Wend. 345,) and Woodcock v. Bennet, (1 Cowen, 711.) • These cases are not in point. The holders of the bills neglected to present them for payment, and the persons from whom they were received were the drawers. There were some other circumstances. In one of the cases, Bronson, J. says the drafts should at least have been produced and canceled on the trial, or it should have been shown what had become of them. [Erie General Term, February 8, 1869. In the present case the plaintiff did, some five days after he received notice of the dishonor of the drafts, go to Buffalo and then tender to Pienkowskie the draft, and ask him to pay its amount. This was November 15. On the 5th of December the money was demanded of the defendants and the drafts offered to him With the notarial certificate of protest. The action was thereupon commenced. This is not a case where the party has made the paper his own by negligence. The learned referee erred, and the judgment should be reversed, and there should be a new trial; costs to abide the event. Marvin, Irnnont and Barker Justices.]