Pattison v. His Creditors

Smdell, C. J. (Vooehies, J., absent; Ogben, J., declined sitting.) This case is a contest between two mortgage creditors, Gray, Maemurdo & Co, and Cuddy. The judgment of the former was first recorded, and the dispute is about an amount of $500, which Cuddy contends has been extinguished by novation. The court below decided against him, and he has appealed. The circumstances were as follows: Gray, Maemurdo & Co. held a recorded judgment against Pattison and his firm, Lowe, Pattison & Co., desiring indulgence, they made an agreement embodied in the following receipt: [230] Received, New Orleans, July 17th, 1852, from Messrs. Lowe, Pattison & Go. the following described paper, to wit: Wm. S. Pattison’s mortgage note, at five month’s date from 13th inst. pa-raphed “ Be Verretur" by John Glaiborne, N. P. for - - $3500 00 William H. Pattison’s note to order of, and endorsed by Lowe, Pattison & Go., at three month’s date from 15th inst-., for - 1000 00 Lowe, Pattison & Go’s draft, one day sight, on P. Pattison & Go., Philadelphia, for.1,279 92 which when paid, and not otherwise, will be credited on the judgment obtained by us against said Lowe & Pattison and Alex. Pattison, in the Supreme Court of Louisiana. Gray, Maemurdo & Go. in liquidation. It is understood that execution shall not be issued, if these obligations above mentioned are punctually paid at maturity. a, m. & Co. When the note for $1000 matured, Pattison was unable to pay in full, and Copland, his agent paid $500 on account of the note, and got Gray, Maemur-do & Go. to extend the payment of the balance some ten days. The note of $1000 was delivered to Gray, Maemurdo & Go., and a memorandum was made on it, “this note settled through B. Copland." A new note at ten days, signed by Pattison and endorsed in the name of his firm, for $503, was at the same time given to Gray, Maemurdo & Go., which was protested at maturity and remains unpaid. Copland, whose testimony was taken, states these facts, and adds, that there was no intention of the parties when the $500 note was given in renewal, that Gray, Maemurdo & Go. should give up their mortgage; that Mr. Bell, acting for Gray. Maemurdo & Go. said nothing at all about giving up the mortgage, and that he did not believe Bell had such an intention. Upon this evidence, we think the district Judge was clearly right in deciding against Guddy. In questions of this sort, the doctrine is well settled, that novation is not presumed; the intention to make it must be clearly deducible from the terms of the agreement, or acts of the parties. In ascertaining the intention, all the attending circumstances must be considered. Here the judgment was the main preexisting obligation, secured by a judicial mortgage of the debtor’s property. The notes and bills were mere collaterals, which, “ when paid and not otherwise,” were to be credited on the judgment. It would be a strained and unbusinesslike view of the agreement, and of the conduct of the parties to say, that Pattison paid the $1000 note, when he paid only $500 upon it, and got the ten day’s extension by giving the new note for $503. Undoubtedly, the note for $1000 was paid in this sense, that as an obligation to pay money it was extinct. But it was not paid in the sense contemplated in the written agreement of July 17th. The payment there meant was an actual payment, not a mere renewal in whole or in part by a now note, made in a spirit of further indulgence to the debtor. Much stress is laid by the appellant’s counsel on the fact, that the note for $1000 was given up when the partial cash payment was made, and the new note taken ; and it is said, where a surrender of the original obligation is made and a new one taken, a novation may be implied. But here the judgment was the original obligation, and it was never surrendered. Concede the principle in its fullest extent; and it amounts to no more than this, that the note of $1000 was novated. The question is, was the judgment novated? It is im [231] possible to deduce any such intention from the language or the acts of the parties. See Civil Code, 2181, 2183, 2186. Short v. City of New Orleans, 4 An. 281. Pothier Oblig., No. 559. Judgment affirmed; appellant to pay costs of appeal.