Real Estate Bank v. Rawdon

the opinion of the court was delivered by Dickinson, J. The only question in this case is as to the plaintiffs’ right to recover of the defendant upon the facts stated. As a question of practice may possibly be raised in this case, we will first examine and decide that point before passing to the consideration of the main en-quiry raised by the record. The facts were admitted upon the trial on an agreed case. The court was required to decide the law arising upon these facts. The case stands in the same situation as if there had been a special finding by a jury — the law of the case being referred to the court. The practice in such a case has been settled, as it has been expressly ruled in this court in the case of Hanly and another, and Porter and another. In that case there was a special' finding by the jury. The court decided the law wrong upon the facts, and we reversed its decision because the judgment was erroneous. The object of the finding of the jury is to ascertain the truth of the facts, and when this is done, if the law is erroneously applied, it is the duty of the supervising tribunal to correct the error. We can see no possible distinction between facts established to be true by the special finding of a jury, or facts admitted to be true upon an agreed case of the parties themselves. If any conceivable distinction can exist, the truth of the facts must be more clear and conclusive in a case where they are admitted to be true by the parties themselves to the record, than in a case where they are only ascertained to be true by a special finding. In both, however, there can be no contrariety of opinion as to the truth of the facts. They are not a matter of dispute before the court or between the parties. The only question in litigation is as to the law of the case, and if the court decide this wrong, shall not the party, who excepts to that decision, have the benefit of it, if there be error in the judgment? To deny him this privilege involves the absurdity of sustaining the judgment of the court when the law of the whole case has been erroneously decided, and that too where an exception is regularly put in to the opinion. To require him in such case to ask for a new trial is to do a useless and unmeaning thing. It could not be to correct the facts of the case, for they are undeniably true and verified by the contract. It certainly could not be to correct thedaw in the case, because that had been just decided and the exception not abandoned. By moving for a new trial the party waives his exception. How then could he afterwards have the benefit of it. All he complains of is, that the law of the case has been incorrectly a<i-judged against him, and this is the point upon error he desires to correct. Our statute, by giving to the parties the privilege of waiving thet rial by jury, puts both the law and the facts submitted to the court. And this court in inspecting the transcript, as there can be no doubt about the facts when they are put upon the record, will unquestionably reverse the judgment below, if the law of the case has been decided, wrong. This brings ussto the second enquiry, which is, was the Bank upon the agreed case made liable for the amount of Williamson’s notes? The doctrine in case of this kind is slated with great perspicuity and force by Justice Story in his admirable treatise upon agency. In these cases, says that learned judge, any mode of payment by the agent, accepted and received by the other contracting party as an absolute payment, will discharge the principal, whether he be known or unknown, or whether it be in the usual course of business or not. The question in most cases of this sort, is not generally so much a question of law as of' fact: That is to say, whether the note is received as a conditional payment or as an absolute payment. Whether it is received with the knowledge that there is another principal or not, and whether there is an exclusive credit given to the agent or not. Story, Com. on Agency, 440, 441. Paley on Agency, by Lloyd, 357. Smith vs. Ferrand, B. & C. 10. Johnson vs. Weed, 9 J. R. 310. If a creditor of the principal settles with the agent and takes .a note or bond, or obligation from the latter for the amount due by the principal, although as between the parties it is intended only as a conditional payment, yet if the creditor gives a receipt, as if the money were received, or the security an absolute payment, so that the agent is thereby enabled to settle and does settle with his principal, as if the debt has been actually discharged, and the principal would be otherwise prejudiced, the debt will be deemed as to the latter absolutely discharged. Reed vs. White, 1 Esp. 122. Wyatt vs. Marquis of Hertford, 3 Esp. 147. Schemerhorn vs. Loomis, 7 J. R. 311. It is perfectly clear that if the principal settles with the agent on the faith of a receipt in full as for money, he is entirely discharged. Does the form of the receipt vary the principle ? The receipt here is as if the security were an absolute payment for Hawdon, Wright & Hatch, receipted for the notes precisely as they receipted for the money. They released the principal and elected to take the agent’s responsibility, and he, upon the faith of the receipt, settled with his principal, the Bank. No doubt, taking a note for a pre-existing debt is not conclusive evidence of payment, unless it is expressly agreed to be taken as payment, and at the risk of the creditor. Toby vs. Barber, 1 J. R. 68. Arnold vs. Camp, 12 J. R. 407. Did the receipt here warrant the Bank in settling with Williamson? It unquestionably did. No receipt is conclusive evidence of absolute payment. A receipt in full by cash may be explained or contradicted as well as a receipt in full by note. The legal presumption arising from the fact of drawing a negotiable order or making a negotiable note, which is received by the creditor, is that it was intended to be and in fact is an extinguishment of the original demand or cause of action. This presumption may be contradicted or explained by the agreement of the parties or proof of usage, as circumstances inconsistent with such inference. Varner vs. Nobleborough, 2 Greenleaf 121. Now, the circumstances that defeat the presumption of such payment, are such as would induce a court of equity to set aside the contract. As, for instance, mistake, fraud or surprise. The proof of any of these things will defeat the effect of the receipt. If given with a knowledge of the circumstances, and there is no mistake or surprise upon the one part, or fraud or misrepresentation upon the other, it would effectually defeat all further claim. Fuller vs. Crittenden, 9 Conn. 401. Giving a negotiable note for a prior debt of another is such a payment as will support an action of assumpsit for money paid. Cornwall vs. Gould, 4 Pick. 446. Barday et al. vs. Gooch, 2 Esp. 571. Witherbee vs. Mann, 11 J. R. 518. Douglass vs. Moody, 9 Mass. 553. The first notice that was ever given to the Bank that the plaintiff looked to her for payment of Williamson’s note, was about eighteen months after they fell due, and two years after their execution, and a considerable length of time after the Bank had settled with Williamson upon the faith of the receipt and paid him over the balance due. This delay upon the part of the plaintiffs goes far to explain the true nature and character of the receipt, and fortifies the legal presumption arising upon it, that it was prima facie evidence of an absolute payment: or, in any event, it was such a payment as the principal, after he had settled with the agent, had a right to consider as conclusive evidence of the creditor’s demand. The receipt in this case is prima facie evidence of payment, and as the plaintiffs have failed to show any circumstances or facts overthrowing this presumption, it must stand as full proof of the fact, and therefore of the case. This position all the authorites support. 8 Greenl. 298. 6 Mass. 143. 7 Mass. 36. 11 Mass. 359. 10 Mass. 47. 4 Mass. 93. 4 Pick. 228. 8 Pick. 522. 10 Pick. 525. 12 Pick. 269. The judgment is therefore reversed with costs.