E. C. Yarnell & Co. v. Anderson

Birch, J., delivered the opinion of the court. In this case the plaintiffs originally declared in assumpsit against Cosse and Anderson, late co-partners, but the former having pleaded his discharge under the bankrupt law, the suit was dismissed as to him and prosecuted against Anderson alone. The pleas relied upon were the general issue, payment and set off. It was proven by the only witness who was introduced that the defendant and Cosse were in partnership until the month óf May, 1841. He also proved, that as the authorized agent of the plaintiffs he had divers interviews with both the late partners, commencing about the month of October, 1841, in reference to a note executed by them (as partners) to the plaintiffs, on the 24th of August, 1840, for the sum of $1885 12, payable at 6 months. Anderson stated that they had dissolved partnership, and that the terms of the dissolution were that Cosse was to take all the assets and pay all the debts, and had given him (Anderson) security to hold him harmless, from all the debts and liabilities. He also said there was stock enough to pay all the debts, and that besides, there was $4,000 or $5,000 due the concern which had been turned over to Cosse. Anderson was then doing a grocery business on the levee One of the plaintiffs having come to St. Louis in November afterwards, agreed with Cosse, without intending thereby to discharge the liability of Anderson as a promisor of the original note, (.having, indeed, sought proper legal advice how to shape his conduct so as to avoid it,) to receive, conditionally, three notes signed by Cosse, and endorsed by one Burnett, and by Conn, Sprigg and Green, at 9, 12 and 15 months, which were given accordingly. Upon the delivery of these notes, the plaintiffs gave to Cosse a receipt thereof stating that said notes, “when paid,” would be in full Tor the original notes of Cosse and Anderson, and also for the amount of a certain book account, against the same parties, therein mentioned. These notes and receipts bear date November 27th, 1841, and on the same day the plaintiffs gave up to Cosse the original note alluded to. In March, 1842, the witness again called upon Anderson, who was in business upon the levee, in behalf of the plaintiffs. Anderson declined doing any thing until the first of the three notes should fall.due, but did not deny h¡3 liability to the plaintiffs. In still another conversation with Anderson, he desired the witness to' call on Burnett, one of the endorsers, and try and make the money out him; saying he thought Burnett had collaterals from Cosse to secure his endorsement. The witness, did so, but met with no success, Conn, Sprigg and Green failed before the maturity of the notes, and Burnett soon afterwards. Suit was [623] brought against Burnett, but not against the other endorsers, for they had nothing; and nothing was realized from either of them. At the time oí their endorsement. Conn, Sprigg and Green were auction and commission merchants, and Burnett a wholesale dry goods merchant. On cross examination, the witness testified that there was neither any express admission or denial on the part of Anderson concerning his liability; nothing being said about it, and that he did not inform Anderson of tlie arrangements between Cosse and the plaintiffs, but that in all his interviews he acted under the belief that Anderson was still liable. The defendant produced the receipt alluded to, and an account between the plaintiffs and Cosse and Anderson, dated November 27th, 1841, showing a balance then due plaintiffs of $2150 57, and a minute of the three notes already mentioned appended and so carried out as seemingly to leave a balance of 65 cents due to the plaintiffs. This being the substance of all the testimony, the plaintiffs asked, and the court refused, the following, instructions: 1. If the plaintiffs received theseS notes from Cosse as collateral security for the original claim sued, and not in payment, and if the notes were never paid, the receiving of them was neither payment nor ex-tinguishment of the claim sued. 2. That however the defendants or either of them understood the delivery of these notes, yet their delivery and acceptance was not in law payment, unless the plaintiffs also understood it so, and agreed to take them in absolute satisfaction of the original demand. 3. That if Anderson assented to the arrangement for extension, and the receiving of said three notes by the plaintiffs, and if at that time it was intended by the parties to the arrangement thereby to release Anderson, and Anderson, knowing this, assented to the arrangement, then the receiving the new and surrendering the old notes does not operate in law to discharge Anderson’s liability, if he was previously liable, unless the new notes had been paid. 4. That if the plaintiffs received the three notes, and surrendered the old one thereupon; but received the three notes not in payment, but only as collateral security; and if Anderson knew this, and assented t® it, then Anderson was not, by this arrangement releaséd from a liability which previously on the original demand, if any, unless the new noteli were paid. The defendant thereupon asked, and the court gave the following instructions: “If the jury find fronj the evidence that the plaintiffs, knowing of thé dissolution of the firm of Cosse & Anderson, gave time to the defendant Cosse, on the indebtedness of Cosse & Anderson to them, upon said [624] Cosse paying interest on said indebtedness for the period of such forbearance, with the current rate of exchange on Philadelphia, and also took the notes of James M. Cosse, endorsed by Isaac Burnett and Conn, Sprigg and Green, for such indebtedness, interest and exchange, at 9, 12 and 15 months, they will find for the defendant Anderson.” Regarding the matter of interest and notes as nothing beyond that to which the plaintiffs were reasonably entitled, it seems to us that the court below' did not instruct the jury with sufficient plainness "and perspicuity, and that this judgment, consequently, ought not to stand. Under the plea of payment, (upon which this case turned,) “the burden of proof is on the defendant, who must prove the payment of money, or something accepted in its stead. The word is not a technical one, but has been imported into law proceedings from the exchange. When used in pleading in respect to cash, it means immediate satisfaction; but when applied to the delivery of a bill or note, or other collateral thing it does not necessarily mean payment in immediate satisfaction and discharge of the debt, but may be taken in its popular sense, as delivery only, to be a discharge when converted into money.” 2 Greenleaf, 516. Applying, then, the tes'imony before us to the pleading as above explained, it is seen that so far from intending that the transaction with Cosse should be held to “necessarily” imply an “immediate satisfaction and discharge” of the pre-existing debt, the receipt which was executed by the plaintiffs, and which the defendant had possession of and used upon the trial, expressly avoids such implication, by explicitly conforming to and setting forth the “popular sense” in which such collaterals are usually received, by stating expressly that “when paid,” these notes would be in full of the original one of Cosse & Anderson. It would appear from the testimony that Anderson understood, and at last tacitly acquiesced in this arrangement, and that, the probable reason why he said in one of his interviews with the agent of the plaintiffs that he could do nothing until the first of the tliiee notes fell due, was, that until the arrangement which Cosse had thus made was forfeited by his neglect, whereby he (the defendant) would become liable for the payment of a debt against which he had been indemnified, he would have no legal right to resort to his indemnity This, however, was but a circumstance, along with others, which might have entered into the deliberations of the jury, under such instructions from the court as would have left the defendant liable for his original debt, unless he proved that it had been fairly paid, according to the purpose and understanding of all the parties, “either in money or something accepted in its stead.” [625] The instruction given by theacourt was therefore at least objectionable, in substituting, in the connexion they occupy, the ambiguous words “for such indebtedness,” in lieu of the plainer, less equivocal and only ■efficient ones, ‘-in discharge of such indebtedness;” and although more was seemingly asked for by the plaintiffs than may have been deemed necessary for the case presented by the testimony, still, as we are unable to perceive any respect in which they could have misled the jury, we recognize no sufficient reason why they were not given as prayed for. For these reasons the judgment of the court of common pleas must be reversed, and the cause remanded. Napton, J. The instruction given by the court declares that the taking of the new note of Cosse, with the security of Conn, Spring and others, per se discharged the retired partner, Anderson. The opinion of Lord Kenyon, in the cases of Evans vs. Drummond (4 Esp. 89) and Reed vs. White (6 Esp. 122,) go for to sanction the instruction; but the current of later authorities, and especially in this country, are decidedly against viewing such a transaction as any thing more than a prima facie case against the creditor, liable to be rebutted by other proof. It would seem to be clearly established, that so far as the plaintifls and Cosse were concerned, it was well understood that these new notes were not taken in satisfaction of the original demand, but merely as collateral security. As Anderson entrusted Cosse with the management of the business of the partnership, after his retirement, any loss sustained by him, by reason of Cosse’s failure to communicate the particulars of the arrangement with plaintiffs, may with more propriety fall upon him than upon the plaintiffs; Cosse was his agent and not theirs. The cases of Bardick vs. Green, 15 John R. 248, and Sneed vs. Wesler, 2 A. K. Marsh, are in point.