Cushing v. Wyman , 44 Me. 121 ( 1857 )

Appleton, J.

On the 29th of September, 1851, Messrs. Brown & Son and William H. McCrillis gave Francis Wyman, Jr., one of the defendants, a note of the following tenor:

$530,75. For value received, we promise F. Wyman, Jr., to pay him five hundred and thirty dollars and seventy-five cents, provided the drafts given by T. Cushing, for the logs cut on No. 2, range 9, are paid.

Wm. H. McCrillis.

Sept. 29, 1851. Walter Brown & Son.

On the 2d of December following, the above note was transferred, by the indorsement of the defendants, to the plaintiff, and in consideration therefor they received of him one span of black horses, valued at $250, and his note for the difference between their value and the note then transferred, which at its maturity was duly paid.

The notes of the plaintiff, Cushing, referred to in the note of McCrillis and Brown & Son, were paid by him at their maturity, on the 20th of January, 1852, at or before which time he presented their note, received from Wyman to Brown & Son, for payment, or to be allowed towards his drafts then maturing, which, for reasons disclosed in the testimony of Walter Brown, they declined doing.

Walter Brown, one of the firm of W. Brown & Son, testified that the note of September 29, 1851, had been given for the balance due F. Wyman, Jr., one of the defendants, on a lumbering operation of the previous winter; that soon after the note was given, Wyman again applied to him to supply him for another operation for the ensuing winter; that he at first declined, but finally consented upon an agreement between him (Wyman) and Brown & Son, that he should turn out the Brown and McOrillis note (tho whole of it) to go towards supplies; that their firm should not, however, give credit for it until it was payable, according to its condition; that in pursuance of such agreement, Brown & Son did supply the defendants with two or throe thousand dollars; that tho amount of supplies furnished and remaining due and unpaid December 2, 1851, was $583,77; that tho amount due and unpaid March 18, 1852, was $1406,50; that tho amount due and unpaid October 5, 1853, was about $1700; that the amount duo and unpaid at the time of the trial, April, 1857, was $302,67; that no sum had as yet been credited for or on account of this note, for the reason that it had never been of fered or surrendered to them; that no sum had ever been paid by the defendants toward this account, except what had been received from the lumber sold, being the proceeds of said operation; that as security for these supplies, they had taken an assignment of the permit under which they were cutting, and of all logs and lumber cut under it, and that they had, by virtue thereof, the logs to market; that after the agreement with Francis Wyman, Jr., he took as partner his brother, Andrew W. Wyman, the other defendant, and the two were in the place of Francis, who originally made tho bargain, that the goods were charged to the Wymans; that though often urged, they had never offered to settle with Brown & Son, and that the makers of the note, Brown & Son and McOrillis, were, and still are, solvent.

The plaintiff insists that these facts disclose a good defence to tho note of Brown and McOrillis; that the note having been paid, was valueless at the date of its transfer; that this being the case, he had a right to rescind the contract; that having this right, he seasonably gave notice to the defendants of his intention so to do, and tendered to them the note in question, and demanded his property; and the samo not having been surrendered on demand, that he can maintain the present action, which is assumpsit, for the price of the horses, and for the money by him paid.

Assuming the offer to rescind seasonably made, which is a matter of grave doubt, the inquiry arises whether this form of action can be maintained for the value of the horses, the title to which, if the rescisión was valid, reverted to the plaintiff. In such case there is neither an express sale, nor any facts shown from which a promise can be implied. The defendants have made no new bargain, and the original one has been rescinded. If the contract was legally rescinded, the defendants, by refusing to restore the property, became' wrong doers, not purchasers. The rescisión must be entire, not partial.

But waiving all merely technical objections, the important question recurs, whether the facts disclosed in the testimony of Brown show any defence to the note of McCrillis and Brown & Son, and thus justify the plaintiff in his attempted rescisión. If the note of September 29, 1851, transferred to the plaintiff, has not been paid, or there was or is no valid, subsisting defence to it, he can have no grounds upon which to rescind. The rights of the parties depend upon the testimony of Brown, and whether that shows a defence to the note.

The agreement between the parties, as stated in his testimony, was purely executory. Nothing is better established, by the entire concurrence of authorities, than that an executory agreement would constitute no bar to a suit upon a note. In Cary v. Bancroft, 14 Pick. R., 315, a negotiable note was made to the plaintiff by the defendant, who held a note made by the plaintiff, but not having it with him at the time, it was agreed that the two notes should be set off one against the other, so far as the smaller would pay the larger. It was there held that this agreement was executory, and therefore was not an extinguishment of the smaller note. In reference to this agreement to offset, so far as the smaller note would pay the larger, Shaw, C. J., said, that “ if available at all, it was an executory contract, requiring some further act to be done before the one would operate as payment or extinguishment pro tanto of the other.” In Richardson v. Cooper, 25 Maine R., 450, Tenney, J., says, “ in the case at bar, it was agreed by the parties and the witness, that an exchange of their several claims should bo made, which, if made, would have been a discharge of the contract declared on; but this contract not being present at the time of the agreement, the exchange did not take place. Something further was to be done, to make this oral agreement effectual; it was executory; until executed, all former liabilities remained.” “ It appears,” says Tindal, C. J., in Bagley v. Homan, 32 E. C. L., 379, “by a long train of authorities, commencing with that of Dyer, 35G, that a plea of accord, to be a good plea, must show an accord which is not executory at a future day, but which ought to be executed, and has been executed, before the action brought.” In that case the court came to the conclusion that a plea of an accord executory, made upon mutual promises, was bad. In the case before us, no credit was to be given for the note until it should, after its maturity, have been turned out to the firm of Brown & Son, and by them passed to the credit of the Wymans, which was never done. 1 Ev. Pothier, 339; Goodrich v. Stanley, 24 Conn. R., 623.

The note in question was assigned to the plaintiff before its maturity, and on the 2d of December, 1851. At this time the defendants were indebted to the firm of Brown &, Son, in the sum of $583,77, which exceeded the amount due on the note. Had the makers of the note, at that time, any right of set off, which would have been available by way of defence to a suit on the note; or had the same been transferred to or paid by the makers, or either of them; or was there any valid or subsisting agreement which would constitute a defence to the same?

The note was running to P. Wyman, Jr. The supplies were furnished by Walter Browii & Son, and were charged to F. & A. W. Wyman. A suit upon the note must hava been in tbe name of E. Wyman, Jr. In sncb suit it is apparent that the goods furnished could not have been successfully filed in set off, because the parties furnishing them were not the makers, and the parties to whom they were furnished were not the payees of the note.

The note having never been transferred by assignment or delivery to the makers or either of them, they could claim no title to it in either of those ways.

The note was not paid on the 2d of December, 1851, although goods to a larger amount had been furnished at that date. To enable a party to set up that defence, there must be the concurring intention of the party making and the party receiving the payment, to one and the same thing— that is, that there be a payment. “ The effect of a payment,” says Pothier, part 3, ch. 1, art. 14, s. 6, “ is to extinguish the obligation and everything accessory to it, and to liberate all the debtors of it.” But the note of McCrillis and Brown & Son was neither paid nor extinguished, nor intended to be. Brown testifies that their firm was to furnish supplies, but that they were not to give credit for the note until it was payable, according to its condition. If the drafts of Cushing, mentioned therein, should not be paid, the note was not to be transferred. The goods were charged and delivered to E. & A. W. Wyman, and they, as purchasers, were liable therefor. The note was not thereby paid, nor intended -to be, nor were the goods delivered or received in payment thereof. No credit had then been given for the note, nor had it been transferred. The note then being in full force, was neither paid nor extinguished, but remained in full force, and under the. legal control of Wyman. Whether Wyman would thereafter transfer it to Brown & Son was a matter resting simply in agreement, but which in no way affected the question of payment.

At the maturity of the note, there was due to Brown & Son, from E. & A. W. Wyman, an amount exceeding the note. But before that time it had been transferred to the plaintiff, for a full and adequate consideration, without no* ticc. Was there then or is there now any defence to a suit upon the note, in the name of the payee, and for the benefit of the plaintiff?

It has been seen that no payment was made before the maturity of the note, nor any valid agreement entered into by which the makers were discharged from liability. The goods previously delivered to E. & A. W. Wyman were not for the purpose of paying the note, and they were not received under the expectation that it was thereby paid. The risk and the ownership and the legal right of disposition of the note of Brown & Son and McCrillis, remained with Wyman, who would alone suffer in case of the insolvency of the makers.

After the maturity of the note, there is still less ground for the allegation of payment. The note had been transferred before maturity; and Brown & Son knowing of its assignment, could not defeat the rights of the assignee, if they had wished.

No specific goods were delivered or received at any time as in payment. The note, therefore, was not paid.

If any were delivered with that design, and received for that purpose, of all which there is no proof, the goods thus specifically delivered were those first in time. But the cas® finds that the whole amount of the largo indebtedness of the Wymans has been discharged by the sales made by Brown &, Son, of thoir lumber, excepting the sum of $302,67.

The law of appropriation of payments is well settled. The money received from the sales of the lumber of the Wymans must be appropriated to the discharge of the account of Brown & Son, in the order of its indebtedness. The goods first delivered would be first paid for, so that there would, be no outstanding indebtedness, which upon any grounds, can be applied to the payment of the note. It was hold m Trescolt v. King, 2 Selden, 147, that in case of a running account, where there is no specific appropriation of payments* they must be applied in general upon the first items of indebtedness, though the creditor may hold security for the payment of those items, and none for the final balance of the account.

The note of the 29th of September, 1851, had two signers. The agreement set forth in the testimony of Brown was one by which one of the signers was to be the sole debtor, and to pay the debt, if it was anything. In Lodge v. Dicas et al., 5 E. C. L., 397, there was an agreement that one of the partners should take upon himself to discharge a debt to A., and A., upon being informed thereof, agreed expressly to exonerate the other partner from all responsibility, yet it was held that this agreement was n°o defence to the latter, in a suit by him against both partners. “ It is for the defendant, Dicas,” says Baglby, J., “ to show he was discharged. A release is one mode ; another is satisfaction. It is clear that the former has not been given, and an agreement by the plaintiff to abandon a claim, unless there be a consideration shown, is a mere nudum pactum. Now what consideration is there in the present case.” It was, however, held in Thompson v. Percival, 27 E. C. L., 241, that the acceptance of a bill of exchange by one of two debtors, given and received in satisfaction of the debt, would be a good discharge.

.So the civil law has its novation by which a new is substituted for an old debt, which latter is extinguished by the new one contracted in its stead. “ The effect of a novation is, that .the former debt is extinguished in the same manner as it would be by a real payment. Where one of several debtors in solido alone contracts a new engagement with the creditor, as a novation of the former debt, the first debt being extinguished by the novation, in the same manner as it would have been by a real payment, all his co-debtors are equally liberated with himself. And as the extinction of a principal obligation induces that of all accessory obligations, the novation of the principal debt extinguishes all accessory obligations, such as those of sureties.” 1 Ev. Poth., part 3, eh. 2, art. 5.

But no agreement is proved, which, upon the principles of the cases to which reference has been made, or which, according to the doctrines upon which novation rests, would be a bar to the note. It is not in proof that McCrillis was to be discharged, or that Brown & Son were to be the sole debtors to Wyman, and to pay this note unconditionally.

Neither could a defence to the note be established on the ground" of accord and satisfaction. Accord, without satisfaction, would be no answer. Caxen v. Chadley, 10 E. C. L., 270. If a substituted agreement be shown, it must appear that its performance was accepted in satisfaction. Flockton v. Hall, 71 E. C. L., 1039. The payments must be received, as well as made, in satisfaction of the debt, to show accord and satisfaction. Webb v. Weatherby, 27 E. C. L., 474.

Now in the case before us there are no specific payments which at any time appear to have been made or received in satisfaction of the note due Wyman, or which would sustain the plea of accord and satisfaction.

As the testimony of Brown discloses no defence to the note of McCrillis and Brown & Son, and as, for aught that appears, it may be enforced by Cushing in the name of Wyman, but for his benefit, there exists no valid and sufficient reason for rescinding the contract sought in this action to be rescinded.

The plaintiff failing to show any cause of action, must submit to a nonsuit.

Plamtiff nonsuit.