Hall v. Clement , 41 N.H. 166 ( 1860 )

Bell, C. J.

It is contended that by tbe settled law of Massachusetts, where tbe note in suit is dated and payable, a note is an absolute payment of a preexisting debt, and not, as here, a security, unless otherwise agreed by tbe parties; and tbe authorities cited, Thatcher v. Dinsmoor, 5 Mass. 299, 301; Whitcomb v. Williams, 4 Pick. 228; and other cases, sustain that view. No inference is drawn from that position, but the only inference available to the plaintiffs must be, that the debt, being paid and discharged by the note, the note cannot be contested for the want of consideration, any more than the money, if actually paid in discharge of such a debt, could be recovered back. But however logical an inference this might be from the doctrine in question, we do not understand that any such principle is adopted in Massachusetts; but that the illegality of the consideration of a promissory note is there, as it is here, a good defence. Wheeler v. Russell, 17 Mass. 258; Bank v. Merrick, 14 Mass. 322.

If this were otherwise, the fact that the note was made in this State would give it the effect of a security, and not of a payment. Thompson v. Briggs, 28 N. H. 40, and Smith v. Godfrey, 28 N. H. 377, cited by plaintiffs. It is further contended, that the plaintiffs’ specification under the general count, being part of the record, sets up the partial payments, as made .upon the account generally, as an open account. The plaintiffs’ evidence, tending to show different settlements of the account as far as then contracted, or any application of the payments to particular parts of it, is inadmissible, as contradicting an admission in pleading, which always concludes and estops the party making it. But an admission made in one count, or plea, has never been held here to conclude the party upon any other plea. Kimball v. Bellows, 13 N. H. 68; Bump v. Smith, 11 N. H. 48. Besides, it is by no means clear that proof that an account has been settled and a balance has been struck by the parties, the effect of which may be to make an application of certain payments to certain items of the account, is in contradiction of the account as stated here. Such evidence appears to us merely collateral to the account, and in no way inconsistent with it. It is among the most ordinary modes of proving an account, to show that the defendant examined the account, and agreed to, or assented to, the balance as struck.

It is also contended that partial payments, made generally upon an account composed of items in part legal and in part illegal, cannot be applied by the creditor to the illegal items; but the law will apply them to the valid items, irrespective of their order in the account; and Rohan v. Hanson, 11 Cush. 44, and Blackman v. Wright, 1 Wms. Vt. 187, are cited. And this we understand to be the general rule as to debts existing at the time of the payment. It is so laid down in Wright v. Laing, 3 B. & C. 165; Ex parte Rundleson, 2 Deac. & Ch. 534; Bancroft v. Dumas, 21 Vt. 465 ; Cruikshank v. Rose, 5 C. & P. 19 ; Philpott v. Jones, 2 Ad. & E. 41. But this must be understood with the qualification, that the payment must be taken to have been made on account of a subsisting debt, and will not be held an advance against future indebtedness. Hamesley v. Knowles, 2 Esp. 666 ; Bancroft v. Dumas, 21 Vt. 465; Harrison v. Johnston, 27 Ala. 445; Caldwell v. Wentworth, 14 N. H. 436.

When, therefore, parties are dealing together in the sale and purchase of goods, some of which are prohibited by law, and the buyer pays money generally on account beyond the amount due for goods legally sold, the balance will be applied in payment for the goods illegally sold. It will not be presumed that it is designed as a payment in advance, for a legal debt to be afterwards contracted.

It is found here by the auditor, that the amount of the payments which had been made to January 1,1857, exceeded the amount then due for goods legally sold, by the sum of $138.16, and the payment made on the 18th of February, 1857, exceeded the amount then due to the plaintiffs for goods legally sold, by $17.80. These sums, then, being legally applicable to no' other subsisting legal claim, must be applied for so much in discharge of the account for goods illegally sold.

The plaintiffs are, therefore, entitled to recover $94.82, balance found by the auditor of the legal sales, after deducting all the payments made, and $188.16 and $17.80, which must be applied to pay for the illegal sales, and which consequently leave so much of the legal sales unpaid. These sums, with interest to the date of the writ, are found by the auditor to amount to $270, for which judgment is to be rendered, with interest from the date of the writ.