Moore v. Norman , 18 L.R.A. 359 ( 1892 )

Dickinson, J.

The defendant, to secure two promissory notes executed by him to the plaintiff, mortgaged certain personal property to her. She prosecutes this action to recover possession of a part of the mortgaged property by virtue of her rights as such mortgagee. A former appeal in this action is reported in 43 Minn. 428, (45 N. W. Rep. 857.) The only issue to which reference is now necessary is as to whether certain payments and a tender of payment made by the defendant were sufficient and effectual to discharge the mortgages. The whole transaction on the part of the plaintiff was conducted by one George B. Moore, who was her general agent.

Long after the maturity of the notes the defendant made a tender of payment to the plaintiff, which on his part is claimed to have been sufficient in amount, with payments which had been previously made, to complete the payment of the debt, and hence to discharge the mortgages. Moore v. Norman, 43 Minn. 428, (45 N. W. Rep. 857.) The plaintiff, however, then claimed that the amount tendered was not sufficient to pay the debt; and whether it was so or not was one of the issues in this ease, in respect to which the plaintiff’s contention, that the amount was insufficient, was supported by evidence which would have sustained a verdict in her favor. The evidence tended to show that the tender was accompanied by a demand that the notes be surrendered; that such surrender was refused, a larger sum being claimed to be due; but that the plaintiff (by her agent, who held the notes) offered to receive the money tendered, and indorse it on the notes, which offer the defendant refused to accept. The court, at the request of the defendant, charged the jury to the effect that if the amount tendered was sufficient the defendant had a right to demand the surrender of his notes. This constitutes one of the errors assigned. We think, as applied to the circumstances of this case, this instruction was erroneous.

It may be stated as a general proposition, applicable at least where it appears that a larger sum than that tendered is in good faith claimed to be due, that the tender is not effectual as such if it be coupled with such conditions that the acceptance of it, as tendered, will involve an admission by the party accepting it that no more is due. Leake, Cont. 865, 866; Add. Cont. (9th Ed.) 153; 2 Chit. Cont. 1194; Bowen v. Owen, 11 Q. B. 130; Finch v. Miller, 5 C. B. 428; Evans v. Judkins, 4 Camp. 156; Foord v. Noll, 2 Dowl. (N. S.) 617; Thayer v. Brackett, 12 Mass. 450; Wood v. Hitchcock, 20 Wend. 47; Noyes v. Wyckoff, 114 N. Y. 204, (21 N. E. Rep. 158;) Holton v. Brown, 18 Vt. 224. See, further, in support of the general rule that a tender, to be effectual, must be absolute and unconditional, Moore v. Norman, 43 Minn. 428, 434, (45 N. W. Rep. 857;) Bank of Benson, v. Hove, 45 Minn. 40, 42, (47 N. W. Rep. 449;) Balme v. Wambaugh, 16 Minn. 116, (Gil. 106.) The most common and familiar illustrations of the proposition above stated are cases where the tender is made as being all that is due, or as payment in full. It is everywhere held that such a tender is not good. The debtor has no right to the benefit of a tender, as having the effect of a payment, when it is burdened with such a condition that the creditor cannot accept the money without compromising his legal right to recover the further sum which he claims to be due. This case falls within the same principle. By offering to pay the money only upon the condition that the plaintiff deliver up the notes, (if such was the fact,) the defendant insisted upon a condition the acceptance of which would at least seriously compromise the right of the plaintiff to recover any more, even though it should be true that the amount unpaid exceeded the sum tendered. The acceptance of the money and the surrender of the notes would be at least strong evidence against her, in the nature of an admission, that the notes were thereby fully paid. The defendant should not be heard to assert that a mere offer to pay a specified sum, less than was supposed by the other party to be due, has the effect of a payment, so as to discharge the mortgage, when the offer was burdened with such a condition. It was enough for his protection that the plaintiff would have received the money offered and have indorsed its payment on the notes, which were already overdue and still in the hands of the plaintiff. If the defendant rejected this offer, and insisted upon the surrender of the notes, the natural and only reasonable construction to be put upon his conduct was that he insisted that the tender, if accepted, should be accepted as payment of the notes in full. If that was the effect of the tender, it was bad, under all the authorities. A mere tender should not be effectual to discharge the lien of a mortgage unless it be certainly' sufficient in amount, and unburdened with any conditions which the debtor has not a clear right to impose. See Moore v. Norman and Bank of Benson v. Hove, supra. A new trial must be granted for the reason above stated.

We will refer to another matter, by way of caution.

While George R. Moore was the general agent of the plaintiff, there was evidence tending to show (although this is a matter of controversy) that on a certain occasion, when some property of the defendant was sold, he acted as an agent of the defendant, and as such agent received the proceeds of the sale. If such was the fact a mere direction by the defendant to him to apply on the plaintiff’s notes the money which he (Moore) had received and held as the agent of the defendant would not, in itself, constitute, or be legally equivalent to, such an application of the money. If the defendant’s agent disobeyed such instructions, and applied the money to his own use, the plaintiff would not be affected thereby, unless the circumstances were such that it could be considered that in behalf of the plaintiff, as her agent, he consented to apply the money a3 a payment on her notes. Such consent need not be express. If the defendant engaged Moore to be present at the sale, to receive the proceeds of sales made, and to apply the same on the plaintiff’s notes, it might be inferred, in the absence of any dissent by Moore, that he acquiesced in this, and hence that, when he received the money, he received it as the agent of the plaintiff, even though, for some other purposes connected with the sale, he might have acted as the agent of the defendant. Of course, if the money was received by him as her agent, it was as though it had been received by her personally.

Order reversed.

(Opinion published 53 N. W. ítep. S09.)