Wolcott v. Reed

Church, J. This action is founded upon a receipt, given by the defendant to the plaintiff, for two hundred and fifty dollars, and dated June 15th, 1837. The defendant was the holder of a note of seven hundred and two dollars and twenty-four cents, dated January 23d, 1832, made by Leman Bradley, and payable to Abiathar Wolcott, or order, and by him indorsed to Riley A. Holden, and by Holden to the defendant. This note was secured by mortgage upon the estate of Abiathar Wolcott, the first indorser, and had been protested for non-payment. From the tenor of this receipt, it appears, that William A. Wolcott, the plaintiff, had in view a purchase of this note and mortgage of the defendant, and paid him two hundred and fifty dollars thereon, which was to be indorsed and applied on the note as interest, if the plaintiff should not take an assignment of it, as purchaser; but if he should do this, then the money paid, was to be considered as a part of the purchase money of the note and mortgage. The plaintiff was under no obligation to pay the balance due on the note, and take an assignment of it, nor was any time fixed within which he should make his election, whether he would do this or not. He never moved in the matter again. And the defendant, after retaining the note and mortgage in his hands, for nearly a year and four months, assigned them to Barnabas Payne, on the 8th day of October, 1838, [245] after deducting the amount paid by the plaintiff. Payne afterwards prosecuted proceedings of foreclosure against the mortgagor, and for some reason, made the plaintiff a party defendant to them; but he did not appear, nor make any answer thereto. A decree of foreclosure was passed, by which it was found, that the whole sum of the original note and interest was due, making no allowance or deduction of the amount paid by the plaintiff. And this suit is brought to recover back from the defendant the sum so paid to him. We know of no principle which can sustain this demand. The defendant had a right to receive of the plaintiff this money in payment: it was due to him, and he may retain it, unless he has done some act, or omitted to perform some duty, by reason of which he has forfeited this right. The money was paid without fraud or mistake, upon a lawful arrangement between the parties. The plaintiff directed its application, and the defendant has done no act to defeat it. The money was to apply in payment of the interest on the note, unless the plaintiff chose to purchase it. He has not purchased it, nor offered to do it; nor expressed, an intention to purchase it, at any future time. If, therefore, the defendant has retained the money as so much interest due to him upon the note, he has done only what the plaintiff agreed he should do. Of course, he does not hold this money for the plaintiff’s use. When the defendant assigned the note and mortgage to Payne, he deducted this payment in his estimate of the amount due, and received only the balance. He has acted in entire good faith, not only with the plaintiff, but with Payne, and has not received from either of them a dollar to which he was not entitled. It is said, that by assigning the note and mortgage to Payne, the defendant put it out of his power to assign them to the plaintiff, and thus defeated the plaintiff’s purpose. The defendant retained them more than a year after the arrangement was made; much beyond a reasonable time for the plaintiff to have made the purchase. He was under no obligation of law or honour to wait longer. It is claimed also, as the whole amount of the note, without deduction of the payment made by the plaintiff, was found due by the court, on the decree of foreclosure, that this gives to the plaintiff a right to recall the money he has paid. [246] But the defendant was no party to that proceeding, and his rights cannot be affected by it. He had no longer an interest in the note, and was not bound to look after it in the hands of Payne, The plaintiff was a party; he could have seen to the application of the payment in making up the decree of the court; and if he neglected to do it, he must not shift the consequences of this neglect from himself to the defendant. Besides, we do not see how the plaintiff’s rights have been at all changed, by that decree. It does not appear, that he had any interest in the land mortgaged, or in the debt secured. Whether more or less was found due, therefore, must be immaterial to him. We do not advise a new trial. In this opinion, the other Judges concurred. New trial not to be granted.