Whitbeck v. Van Ness

Spencer, J. delivered the opinion of the court. The single point for our determination in this case is, whether the note of a third person, agreed to be taken in payment for goods sold at. the same time, is taken at the risk of the vendor of the goods, or of the vendee. I put out of consideration the allegation of fraud, for it was not proved; and I also lay aside the plaintiff’s allegations, that the defendant had promised to • endorse the note, a,s there was no proof of that fact. [412] The plaintiff relies on the decision of this court, in Johnson v. Weed and another. (9 Johns. Rep. 310.) I am compelled to say, that although I assented to that decision, and yet believe & to be correct, the reasoning of the judge,(a) who gave the opinion, went farther than I intended; and, as I understand those of my brethren who assented to the decision, farther than they meant to go. In that case, there was a contrariety in the evidence. The defendants’ proof went to show, that it was part of the bargain, that Townsend's note should be taken in payment for the goods; whilst the evidence of the plaintiff showed, that they were to be paid for in cash; and that when Townsend's note, made payable to the plaiptiff, was produced, the plaintiff observed, it ought to have been made payable to, and endorsed by, the defendants ; to which one of the defendants replied, “ it was late in the evening, and his vessel was ready to go to Albany, and that it would make no difference A new trial was properly refused in that case, because it was evident that the plaintiff did not intend to take Townsend's note at his own risk; nor could such have been the intention of the defendants, unless, indeed, they had a fraudulent design, which we were not authorized to suppose. Here, the facts are entirely different; and nothing can be more manifest, than that both parties perfectly understood, that the plaintiff should take Deane's note at his own hazard. The case of Johnson v. Weed renders it necessary to review the various cases in the English courts, and in our own, that we may be perfectly understood. In Clark v. Mundell, (1 Salk. 124. and 12 Mod. 203.) Lord Holt held, that if A. sells goods to B., and B. is to give a bill in satisfaction, B. is discharged, though the bill is never paid, for the bill is payment; but otherwise, a bill should never discharge a precedent debt or contract. In Bank of England v. Newman, (1 Ld. Raym. 442. and 12 Mod. 241.) Lord Holt ruled, that 6C if a man has a bill payable to him, or bearer, and he delivers it over for money received, without endorsement, this is a plain sale of the bill; and he who sells it does not become a new securityotherwise, if he had endorsed it. This de [413] tAioB of Lord Holt is cited by Chief Justice Lee, In Hartop v. Honre, (3 Atk. 50.) with approbation. In Ward v. Evans, (2 Ld, Raym. 928.) Lord Holt reiterates the doctrine, that taking a bill for goods sold is a payment, because it was part of the original contract; but that paper is no payment, where there Is a precedent debt. In 12 Mod. 408 and 517, he again, asserts the same doctrine. In Fydell v. Clark, (1 Esp. Cases, 448.) Lord Kenyon held, that if a man, in the discount of notes, takes bills without endorsement, he must be considered as having taken the risk of payment on Mmseif, that by not endorsing them, the defendant refused to pledge their credit, and the person receiving the bills took them on their own credit only. The statute of Anne 5. 7. has interposed to regulate and fix the result of taking bills for a preexisting debt It provides, that the acceptance of bills for a former debt shall be a complete payment, unless due diligence is used to obtain payment, and the bill be protested. In the very recent case of Emly v. Lye, (15 East, 12.) Bayley, J. observes, “If a person buy goods of another, who agrees to receive a certain bill in payment, the buyer’s name not being upon it, and that bill be afterwards dishonoured, the person who took it cannot recover the price of his goods from the buyer, for the Mil Is considered as a satisfaction.” It has been supposed, that the cases In 2 Ld. Raym. 929, 930. I Salk. 124. 7 Term Rep. 66. 3 Johns. Cases, 73. and 6 Crunch, 364. contain contrary principles. The cases from Ld, Raym. and Salk. have already been commented on. The case from 7 Term. Rep. (Owenson v. Morse,) on examination, will be found to turn on the right to stop goods in transitu* Owenson purchased from Morse some plate, and paid for it in the notes of a third person. Morse retained the plate, to have CrvcnsoFs aims engraved, at Morse's expense. In the interim, the maker of the notes failed ; and on refusal to deliver the plate, Owen* son brought trover, and failed ; the court holding, that the bargain was not so perfected but that the seller might slot: tlm goods in transitéo in Roget v. Merrit & Clapp, (2 Caines, 128.) we adopted the same principle, that in an executory contract, the consideration having failed, the vendor had a right to witiihoM a delivery of the goods. The case In 3 Johns* Oases, 73™ smml entirely upon the efiect of accepting- a [414] for a precedent debt, and was decided in strict conformity t@ Lord Holt’s distinction. The case of Shuby v. Mandeville, (6 Cranch, 264.) proceeds wholly on the effect of a creditor’s? taking a note from one of two joint debtors, and prosecuting it to judgment; and on his right, afterwards, to maintain a suit against both, notwithstanding his judgment against one. That case contains no principle applicable to the one before us. In Tobey v. Barber, (5 Johns. Rep. 68.) the principle, that taking a third person’s note for a preexisting debt is not payment, unless so expressly agreed, is again recognised and enforced. In Wilson v. Foree, (6 Johns. Rep. 110.) a horse and chair was sold for a third person’s note, and it was received in full satisfaction; but it appearing that the defendant knew that the third person was insolvent, but had represented him to the plaintiff as a man of property, we held, that as the basis of every contract was good faith, taking the note under a fraudulent misrepresentation was no payment. In the case of Markle and Hatfield, (2 Johns. Rep. 459.) a counterfeit bank bill was taken in payment; and we held, that the payee did not assume upon himself the risk of forgery ; the forged note being received upon the faith of its being genuine ; but it is not to be doubted, that had the bill been good, and had the bank failed, and the parties been equally ignorant of the fact, that the decision would have been different. These are all the cases referred to, which are supposed to countenance the opinion, that the defendant is liable for the price of the horse sold to him; and it appears to me, that they are perfectly reconcilable with the various decisions of Lord Holt. The intrinsic circumstances of this case plainly show, that the plaintiff considered himself as taking Deane’s note at his own risk. It was made payable to the plaintiff himself, and the defendant, by not endorsing it, or guaranteeing the payment, clearly declined pledging his own responsibility. The offer was made by the defendant’s agent of Deane’s note for the horse; the plaintiff took time to consider whether, it was advisable to take Deane’s note, and, after deliberation, and, we must presume, too, after inquiry, agreed to sell the horse for the note. It appears to me, we should be perverting the manifest agreement of the parties, if we were to pronounce that [415] the plaintiff did not take the note at his own hazard0 To my mind, the nature and proof of this transaction furnish as deci~ ~ive proof that the plaintiff' was to take the note at his own peril, as if it had been stipulated in express terms0 There must be a new trial, with costs, to abide the event of the suit. New trial granted. Footnotes [(a)] It may be proper to observe, that throughout these reports, (except in a few instances,) where the opinion of the court is stated per curiam, it is always taken from the notes of the judge who delivers the opinion of the court, and with which the reporter is obligingly famished.