Davis v. Parsons , 157 Mass. 584 ( 1893 )

Barker, J.

It is conceded that the petitioner was entitled to have his lien established, unless barred by a note given to and negotiated by him, but which he had taken up before the completion of his contract, because of the inability of the maker to meet it at maturity, and which he produced and surrendered in court. The court below found that the note was not payment, and the respondents contend that the finding was not a proper inference from the facts stated, and also that, if the note was not payment when given, a finding that he was its owner at the time of filing his statement of lien could not be properly drawn from the facts stated.

1. The finding that the note was not payment was abundantly supported by the circumstances stated in the agreed facts. Although the petitioner had received two payments upon account, his contract was for an entire sum, which, as the work was unfinished, was not yet due. In asking for the note he did not claim that its amount in addition to the payments had then been earned, and he asked to be helped out because he had himself a note to pay at bank on that day. If the transaction might not have been found to be a mere accommodation, the circumstance that he was secured by a lien which would pro tanto be extinguished if the note were payment, warrants the finding that it was not so intended. Maneely v. M'Gee, 6 Mass. 143. Butts v. Dean, 2 Met. 76. Curtis v. Hubbard, 9 Met. 322, 328. Appleton v. Parker, 15 Gray, 173. Green v. Fox, 7 Allen, 85, 87. Tucker v. Drake, 11 Allen, 145, 147. Taft v. Boyd, 13 Allen, 84. Parham Sewing Machine Co. v. Brock, 113 Mass. 194. Lovell v. Williams, 125 Mass. 439, 441. Quimby v. Durgin, 148 Mass. 104, 108. Page v. Hubbard, 1 Sprague, 335, 338. Kidder v. Knox, 48 Maine, 551, 555. Mehan v. Thompson, 71 Maine, 492. Sweet v. James, 2 R. 1. 270. The day of the maturity of the note was prior to the time of the expiration of his lien.

2. If the note was not payment when given, its negotiation by the petitioner, he having taken it up before filing his claim, and having surrendered it in court, does not bar his right to have his lien established. The respondents contend that there was not, and could not properly be, a finding that the petitioner had reacquired the note. But it is a proper inference from the agreed facts that he reacquired it on the day of its maturity, he .having previously given to his indorsee his own note to take up the one in question, in consequence of a notification from the maker that he could not pay it. His right to have his lien established is not prejudiced by the fact that he had for a time parted with the note, in accordance with an understanding of the parties. When, either under the Massachusetts rule or under the general mercantile law, a note payable at a future day is taken on account of a debt, but not as payment, the effect upon the right to enforce payment of the debt is the same. The creditor cannot commence such proceedings until the note becomes due, and default is made in payment; Stedman v. Gooch, 1 Esp. 3; Belshaw v. Bush, 11 C. B. 191; Putnam v. Lewis, 8 Johns. 389; Bottomley v. Nuttall, 5 C. B. (N. S.) 122, 142, 144; Currie v. Misa, L. R. 10 Ex. 153, 163; Sweet v. James, 2 R. I. 270, 294; and there can be no recovery while the note is outstanding in the hands of a third person who has a right of action upon it; Morton v. Austin, 12 Cush. 389; Price v. Price, 16 M. & W. 232; Kendrick v. Lomax, 2 C. & J. 405; but it is sufficient if the plaintiff has the note in his possession at the commencement of his suit, and surrenders it in court at the hearing; Price v. Price, ubi supra; Burdick v. Green, 15 Johns. 247; Sweet v. James, 2 R. I. 270, 295; Hughes v. Wheeler, 8 Cowen, 77, 81; Dayton v. Trull, 23 Wend. 345; and the mere negotiation of the note does not put an end to the right of the creditor to assert that it was not payment. If, under some circumstances, the transfer of the note may be in bad faith, in the present case the facts shown make it apparent that the petitioner and the maker of the note understood that the former was to use it to raise money to meet his own note due on the day it was given, and this necessarily implied that it was to be negotiated. The reason upon which the Massachusetts rule is founded, which rule is only that without further evidence of intent than the giving and receiving a negotiable note for a simple contract debt we construe it to be payment, while the general commercial law does not, is for the protection of the debtor, who might otherwise be compelled to pay both the note and the debt. But full protection is given to him if, in the proceedings to enforce the original debt, it is shown that he has not paid the note, and that it is then owned by the creditor, and if it is surrendered in court for the benefit of the maker.

Exceptions overruled.