Hudson v. Bradley

CLIFFORD, Circuit Justice. Evidently the question of payment is the only one of any importance in the case. Where a party in this state, who is bound to the payment of a simple contract debt, gives his own promissory note for the debt, the presumption, in the absence of any proof to the contrary, is, that such note was accepted by the creditor in satisfaction and discharge of the pre-existing debt, but such a presumption is one of fact only, and may be rebutted and controlled by any evidence showing that such was not the intention of the parties. Taking the rule as stated, it is supported by many decisions in this state, but it is now generally admitted, wherever this rule prevails, that when it appears that the note was not the obligation of all the parties who were liable for the original debt, and a fortiori, when it appears that the note was that of a third party, and if held to be in satisfaction, would wholly discharge the party previously liable, the presumption, if it-exist at all. may be repelled by slight circumstances evidencing a contrary intention. Melledge v. Boston Iron Co., 5 Cush. 169. . Courts of justice here and in Maine adhere to the rule, as herein stated, in cases where the party accepting the new evidence of the debtor’s promise relinquishes no security for the payment of the debt; but wherever the contrary appears, the manifest tendency of the modern decisions is, to regard that circumstance as affording strong evidence to repel the prima facie presumption. Many of the ordinary circumstances, which, as it is held, may have the effect to repel such a presumption are enumerated by Shepley, C. J., in Fowler v. Ludwig, 34 Me. 461, which was referred to by the libellant. He says, if the negotiable paper was accepted in ignorance of the facts; or under a misapprehension of the rights of the parties, it has been held, that the presumption might be considered as rebutted. French v. Price, 24 Pick. 13. So if the paper accepted is not binding upon all the parties previously liable, or if the paper of a third person be received not expressly in payment, the presumption may be considered as repelled. Applying the qualifications to the general rule adopted in those cases, to the facts of this case, it is clear, that the defence cannot prevail for several reasons. Evidence to show that the notes were received expressly in payment is entirely wanting. On the contrary, the clear presumption from .the language of the receipts, especially when considered in connection with the circumstances of the transaction, is that they were not so received. The contract was made by the maker of the notes as agent, and that fact was known to the libellant, as is evident from the manner in which the charges were made for the articles sold and services rendered. No settlement was made when the notes were accepted, and the account was not receipted. Funds were wanted by the libellant, but the agent had none belonging to his principals, and proposed to give his own notes, in a form that would enable the libellant to raise money at the banks. Time notes "were accordingly made, without interest, and delivered by the agent to the libellant, but he did not then charge the same to his principals; and the whole transaction on its face shows that the notes were given as a temporary accommodation to the libellant, and not as an absolute payment of the debt. Circumstances are wholly wanting to show that either party intended to discharge the respondents, and it is their own fault if they have paid the amount to their agent instead of discharging their own obligation. Cases involving the same conditions as those presented in this case, have so frequently received examination in this court, that it' is not deemed-necessary to give the subject any further investigation. The decree of the district court is, therefore, affirmed, with costs.