Ricker v. Adams

The opinion of the court was delivered by Powers, J. The auditor’s report shows that the plaintiff accepted Durant’s note in full payment of his account against the firm of Durant & Adams. In this State a promissory note, either of the debtor or a third person, given in settlement of an account or previous debt, is presumtively a payment of such previous indebtedness. Hutchins v. Olcutt, 4 Vt. 549. If the parties agree that such note shall be a payment, it is manifest that the original indebtedness forming the consideration is extinguished, and no right of action thereon remains. [156] But if such agreement is induced by fraud or misrepresentation, it stands like other contracts, and may be rescinded by the holder of the note in a reasonable time on placing the other contracting party in the condition he was in when the agreement was made. Assuming, but not deciding, that the case shows such deceit by the defendant in the note ti ansaction as amounts to legal fraud, we think the plaintiff has lost his right to rescind the agreement under which he accepted Durant’s note in full payment of the account now sued for. After the plaintiff discovered the defendant’s fraud in making the agreement he took no steps to repudiate the agreement under which he took the note, but brought the suit upon it and attached Durant’s property, and (Durant having meantime died) presented the note for allowance before the commissioners upon his estate, and the same was allowed, and such allowance was confirmed by the Probate Court. The plaintiff then had obtained a valid judgment against Durant’s estate, on which he is entitled to receive such dividend as the estate may pay. Pie cannot put the defendant in statu quo. If ho returns the note he still retains this judgment. Before bringing suit upon the note the plaintiff knew the condition of the mortgage deed which indemnified the defendant against liability to the plaintiff, among others, for the firm indebtedness, and without notice to the defendant of any purpose to repudiate the note, he deals with it as his own, and seeks by all legal remedies to enforce it. The facts reported cleai’ly show no purpose to rescind, but an active and unmistakable purpose to affirm, the agreement under which the note was executed. Downer v. Smith, 32 Vt. 1, and cases passim. This holding renders it unnecessary to notice the other points made in argument. • • • • Judgment affirmed.