Haines v. Pearce

Bartol, O. J., delivered the opinion of the Court. This is an action of assumpsit for goods sold and delivered by the appellants to the appellee. The only exception taken by the appellants, was to the ruling of the Circuit Court upon the prayers. In order to understand the questions presented, a brief statement of the facts of the case is necessary. The appellee, a farmer, had been supplying milk to the “Baltimore County Dairy Association,” a corporation in which the appellants were interested as- stockholders, and of which Eppley subsequently became president. The appellants kept a feed store, and the appellee purchased feed from them at different times, amounting in the whole to $346.13, the account for which forms their bill of particulars in this case. This has been omitted from the record; but it appears by the agreement of counsel, that some of the charges were prior in date to the 7th of July, 1870,'and some afterwards. On that day, the appellee gave to the appellants the following orders on the Dairy Association, with the written acceptance of Councilman, the then president, annexed thereto: Baltimore, July 7th, 1870. Baltimore County Dairy Association, pay to E. Haines & Co., one hundred and sixty dollars, and charge to account of Luke J. Pearce. $160.00. To Dr. J. T. Councilman, Presd’t. Baltimore, July 7, 1870., Baltimore County Dairy Association, pay to E. Haines & Co., or order, eighty dollars from amount that may be due me for milk, on the 10th August, 1870. Luke J. Pearce. ' $80.00. To Dr. J. T. Councilman, Presd’t. — 229 — Baltimore, July ,7th, 1870. Baltimore County Dairy Association, pay to E. Baines & Co., eighty dollars and sixty three cents from amount of money that may be due me on 10th September, for milk furnished. Luke J. Pearce. $80.63. To Dr. J. T. Councilman, Presd’i. Attached to these orders was the following: Baltimore, July 7th, 1870. E. Haines & Co. Gents : — 1 accept the orders of Luke J. Pearce, and will charge them to his acct., giving you credit as they become due. J. T. Councilman, Pres. B. C. D. A. At the trial, the testimony of the appellee was that the orders were given for the amount of his bill then due. Eppley said he would take orders on the Association, if Councilman would accept them as president; that he (witness) went to see Councilman and got the acceptance, offered in evidence, to satisfy Eppley, and Eppley took the orders. Witness considered that this settled the matter, and he never' thought or heard of the orders afterwards, until just before this suit, (which was commenced in January, 1873.) He further stated that he signed and gave the orders to the plaintiffs for the bill, that he had no notice of the non-payment, and no demand on him was made by plaintiffs, until some months after the Association broke up. That in July, 1870, the Dairy Association owed him three times the amount of the orders, and that he never collected it. On the other hand, the plaintiff, Eppley, testified that at the time the orders were given, he told Pearce that the Association owed Haines & Co.; and that he would take the orders, and collect them if he could, and pass them to — 230 — his, Pearce’s credit, if he got the money ; that he never collected a cent of it; and notified the defendant soon after of the non-payment — it may have been a week or a month after ; and stated that there was a distinct understanding with Pearce, that he was not to be credited unless the orders were paid. There was evidence in the cause showing that on the 12th September, 1870, the apjiellants instituted an action of attachment in the Superior Court, against the Dairy Association, upon an account, which was filed as the voucher of their claim ; one item of which account was for “ Accepted orders of Luke J. Pearce, $320.63.” It appears by the proceedings, which by agreement have been made a part of this record; that certain chattels were seized by the sheriff, which were sold under an order of the Court passed at the instance of the plaintiffs, and realized in excess of the expenses and sheriff’s costs $9.59.14. What disposition was made of this money does not appear; but on the 18th day of September, 1813, the attachment was dismissed by order of plaintiffs’ attorneys. And by order of the Court the plaintiffs were allowed to withdraw from the files of the Court the vouchers of their claim. It was further proved that after the orders of July Lth •were given, the appellants received several sums of money from the Dairy Association, viz: $290, July 23rd, 1810; $15.31, September 1st, 1810, and $82.50, September 3rd, 1810. These sums were credited on the account filed in the attachment suit; by which it appeared that the balance due the appellants from the Association was $959.09 — including the amount of Pearce’s orders of July Tth. At the trial the appellants tendered to the appellee the orders and acceptance. Upon this state of the proof, the legal questions presented were: 1st. Whether there was evidence from which the jury could find, that the debt of the appellee for goods pur — 231 — chased had been paid and extinguished pro tanto, by the orders and acceptance of July 7th, and 2ndly. Whether there was evidence of ladies on the part of the appellants, which, if found by the jury, would operate in law to release the appellee from liability, even if he was not discharged originally by giving the orders and acceptance. On both these questions the Circuit Court instructed the jury in the affirmative, by granting the appellee’s third and fourth prayers. The genera] proposition is well settled, that the taking of a bill or order on a third person in payment of an antecedent debt, will Hotter se operate to extinguish the debt, unless such he the agreement between the parties. Glenn vs. Smith, 2 G. & J., 493; Yates vs. Donaldson, 5 Md., 396 ; Berry vs. Griffin, 10 Md., 27. The burden of proving sucli agreement rests upon the defendant, the presumption of law in such case being that the bill or order is taken as conditional payment only. The Court said in Glenn vs. Smith, “there must be an express agreement by the creditor to receive the note or hill absolutely as payment, and to run the risk of its being paid.” G. & J. 509. This language was quoted in Berry vs. Griffin, 10 Md., 30, and in Hurley vs. Hollyday, 35 Md., 473. The dispute in this case seems to have arisen, in a great measure from the use of the words express agreement, in stating the rule. By this we understand that such must he proved to have been the contract or agreement between the parties; but it is not required that it he expressed in terms; it maybe established by the facts and circumstances attending the transaction, which taken in connection with the language of the parties justify the inference that such was the agreement and intention of the parties. Whether such a contract existed between the parties, is a question for the jury, as was decided in Yates vs. Donaldson, 5 Md., 396. — 232 — In this case it appears by the agreement of counsel filed in the cause, that on the 7th July, 1870, only a part of the debt of the appellee had been contracted, how much does not appear. The appellee at that time desiring to continue his dealings and purchase other goods from the appellants, is told by Eppley that they would take orders on the Association, if Councilman (the President) would accept them ; whereupon the appellee went to see Councilman and obtained from him the written acceptance of the orders — Eppley said “ it was all right, he would take the orders, and would take orders for all the feed he wanted.” By the terms of Councilman’s acceptance he agreed to “charge the orders to the appellee’s account with the Association, and give the appellants credit for them as they became due.” In accordance with this arrangement, the appellants charged the whole amount oí the orders in their account current with the Dairy Association, and went on afterwards to supply the appellee with goods as he required them. One of the orders was payable at once, one of them on the 10th of Aug., and one on the 10th of September, 1870. It appears by the appellants’ own testimony, that after the 7th of July, they received in cash from the Dairy Association more than the amount of the orders, the cash so paid them was- credited to the Association on their general account current. The appellants held on to the orders, merely charged them in their account against the Association, took no steps to collect them, until September 12th, 1870, when they sued out their attachment, and according to the appellee’s testimony, gave him no notice that the orders remained unpaid, until 1873, shortly before this suit was brought. These facts, if believed by the jury, wei’e in our opinion sufficient in law, to justify them in finding that the appellants had agreed to take the acceptances of the Association, in satisfaction of'the appellee’s account, and to look — 233 — to the Association for payment; and consequently there was no error in granting the appellee’s third prayer. We are also of opinion that the appellee’s fourth prayer was properly granted. Even if the acceptances of the Association, had ¡been taken only as collateral, it was clearly the duty of the appellants to exercise diligence in collecting them, and upon the failure of the Association to pay them when due, the appellee was entitled to reasonable notice. In this case there was evidence of laches on the part of the appellants, and the Circuit Court committed no error iu granting the appellee’s fourth prayer, and in refusing the sixth prayer of the appellants. Glenn vs. Smith, 2 G. & J., 493 ; Orear vs. McDonald, 9 Gill, 360 ; Addison on Contracts, 955. The appellants’ first prayer was properly refused. Even if it were conceded that the testimony of the appellee as to what took place between him and Eppley at the time the orders and acceptance were given, would not be legally sufficient, if standing alone, to prove an agreement on the part of the appellants, to take them absolutely as payment ; it would have been error to instruct the jury as proposed by tbis prayer ; that tlie plaintiffs were entitled to recover, although the jury should believe the testimony of the defendant in that particular. By such an instruction the jury would have been misled, by withdrawing from their consideration, the other facts and circumstances attending the transaction, to which we have adverted, which tended to explain the meaning of the language used, and which as we have said, when taken in connection with what transpired between the parties, as testified by the appellee, were sufficient in law to authorize the jury to find there was a contract and understanding between them, that the acceptance should be received in payment and satisfaction for goods which had before been sold to the appellee, and for such as he might thereafter purchase, and that the appellants would look exclusively to the Association as their debtor. — 234 — The objections to a prayer of this kind have been clearly stated in Riggin vs. Patapsco Ins. Co., 7 H. & J., 291; Bosley vs. Ches. Ins. Co., 3 G. & J., 462; McTavish vs. Carroll, 7 Md., 366; Adams, vs. Capron, 21 Md., 205; Winner vs. Penniman, 35 Md., 168 ; B & O. R. R. Co. vs. Shipley, 31 Md., 368, and other cases might be cited to the same effect. For a like' reason the second prayer of the appellants was properly refused. Though differing somewhat in phraseology from their first prayer, it is liable to a similar objection; as it was an effort to withdraw from the consideration of the jury facts and circumstances attending the transaction, and to confine them to the words which were spoken by Epjdey at the time the orders and acceptance were given to him. In this case the actual agreement or understanding between the parties, is not to be deduced simply from the words spoken in that interview, and referred to in the prayers; but must be determined by the jury from -the acts of the parties, and all the attending facts and circumstances disclosed in the evidence. These were sufficient to justify the jury in finding that the agreement was that the Dairy Association should be substituted for the appellee, as debtor to the appellants, to the amount of the orders. By a concurrence of the Association in' this agreement, of which there was evidence; their debt to the appellee to that extent was paid, and the debt of the appellee to the appellants was to the same extent extinguished. The transaction constituted what is sometimes called novation; or substitution of one debtor in place of another. Addison on Contracts, ch. 22, sec. 3 ; 1 Parsons on Contracts, ch. 13 ; White vs. Solomonsky, 30 Md., 589. There was no error in refusing the fifth prayer of the appellants. * Unquestionably as holders of the acceptances, they would have been entitled to collect them by suit in their own names, as asserted in the prayer, although they had been taken merely as collaterals. Still it would have — 235 — been error to grant this prayer. The evidence in the cause showed, not that the appellants had sued the Dairy Association on their acceptances as such ; their suit was brought upon their general account current, in which the accepted orders were charged as one of the items. The form in which the account was made out, taken together with the terms of the acceptance, was evidence proper for the jury to consider, as tending to prove that the orders had not been taken merely as collaterals, but absolutely as payment. (Decided 9th December, 1874.) The fourth prayer of the appellants has been abandoned. By granting their seventh prayer the jury were instructed, that the burden rested on the defendant, to prove the orders were received as payment. There being evidence competent for the jury to consider, tending to prove that such was the agreement or understanding between the parties, the appellants’ third prayer was properly refused. Binding no error in the ruling of the Circuit Court upon the prayers, the judgment will be affirmed. Judgment affirmed.