D. B. Martin Co. v. Strickler ( 1914 )

Opinion by

Head, J.,

This was a feigned issue framed to try a single question of fact. The defendant does not deny he had become indebted to the plaintiff for merchandise sold and delivered to him in the sum of $1,288. He concedes he executed and delivered to the plaintiff company his judgment note with warrant of attorney in the sum named to secure its payment. After the plaintiff had held the note for a considerable period of time it caused judgment to be entered thereon. This was followed in a few days by the petition of the defendant praying for a rule to show cause why the judgment should not be opened and he permitted to defend on the single ground that he had made payment of the note in the manner hereinafter stated. The rule was made absolute and this issue framed for the purpose of determining that question.

The question at issue is further simplified because the defendant does not allege he paid the note in money or in any of the ordinary equivalents thereof. His whole case rests on the proposition that he gave to the plaintiff company three notes of a corporation known as Bankers’ Trust Company, which notes the plaintiff agreed to receive and did receive in actual payment and discharge of his personal obligation. The testimony shows these notes were of practically no commercial value. It further shows the defendant had bought one of them, of the face value of $500, just a few days before the transaction in question for the sum of $15.00. The defendant concedes that a few months before this transaction he had, in correspondence with the proper officers of the plaintiff, sought to induce the latter to accept some of these notes in payment of merchandise he then desired to buy, and that, after investigation as to the value of the obligations he proposed to exchange, the plaintiff declined to ship its goods and accept these notes in payment. On October 5, 1911, the defendant wrote to Mr. English, the assistant secretary of the plaintiff, with whom he had formerly corresponded, stating he had a good proposition to submit concerning his affairs; that he would be in Philadelphia on the following Friday, and asking at what time he could meet the officer named and the treasurer on Saturday. On the following day one Dumont, the sales manager of the plaintiff, replied he would meet the defendant át a certain hour on the day named. At that meeting the defendant testifies he offered to give to Mr. Dumont three bankers trust notes of the face value of $500 each, in payment of his own note of $1,288 and accrued interest, then held by the plaintiff. Also that the sales manager replied he could not make any such agreement without seeing Mr. English, but, if the company would accept the trust notes, he would come up in a few days and get them. Within a day or two the sales manager appeared at the place of business of the defendant at Miffiinburg, Pa., and there received from the defendant the three bankers trust notes referred to, for which he gave the following receipt:

“Rec’d of Samuel K. Strickler, three bankers trust notes of $500.00 each for payment of note of $1,288.00.

“ (Signed) D. B. Martin Co.

“per H. T. Dumont,”

Dumont did not have with him the note of the defendant. His statement to the latter indicates that he personally had no access to or control over such paper. It further shows he had not at that time yet seen Mr. English because, according to the defendant’s testimony, he stated that Mr. English was out of the city and he could not get into the safe, but would send the note back on the following Tuesday. It never was returned.

It is conceded by everybody, that, under the circumstances stated, the presumption of law would be these obligations of a third party were accepted by the plaintiff creditor only as a collateral or further security for the debt due to it. This presumption, however, is not a conclusive one and may be rebutted by evidence that the intention of both parties was they should be received and accepted in discharge of the debt already due and owing, and as an extinguishment of the obligation already held by the creditor to secure its payment. In such a case the burden is strongly on the debtor, and his allegation ought' to be established by the clear weight of the credible evidence. The learned judge below recognized the principle just stated throughout the trial, but, as we view it, fell into error in the weight and significance which he attached to the receipt already quoted. He appears to have regarded it, and so stated to the jury in the charge and answers to points, as exhibiting an agreement "to accept the trust company’s notes in absolute payment of the note in suit” and affirmed a point of the defendant stating the legal value of the receipt in the language just quoted.

We are by no means able to agree that the receipt, standing alone, can be properly so construed. It certainly contains no usual or apt language to express the idea that the plaintiff was accepting the new obligations in discharge of the debt due to it and in extinguishment of the note referred to. It would have required no professional or technical skill. to have clearly expressed that idea. On the contrary, the receipt simply says these obligations were received "for payment of. note of $1,288.” What is the meaning of the expression “for payment of note”? Certainly the law attaches no such significance to that expression as to warrant the learned trial judge in saying that the receipt expressed an .absolute agreement on the part of the plaintiff to discharge the defendant and surrender his obligation. In commercial transactions the word “for” is frequently used as the equivalent of “on account of.” If it be thus regarded, it is quite clear the receipt would manifest a very different agreement from that indicated by the learned trial judge. Or if the expression be so construed as to be the equivalent of the words “to be applied to,” again the case would be clear. These constructions — or oth.er like ones that would readily occur— could be attached to the expression used in the receipt without doing any violence to the ordinary meaning of words; and such construction would be in harmony with the legal presumption instead of opposed to it. We are of opinion the plaintiff suffered harm by the construction thus placed on the receipt by the learned trial judge, and we must accordingly sustain the third, fourth and fifth assignments of error.

The burden was also on the defendant to show that the individual with whom this transaction was effected had authority to bind his employer by an agreement to give up a portion of the corporate assets and accept the obligations of some third party with whom it had no dealings in their stead. This burden was certainly not lessened by the conceded fact that the officers of the company had but a few months previously, after investigation made, declined to receive the same or similar obligations for merchandise the defendant desired to buy. There is nothing in the title “sales manager” to hold out to the public that such an agent could handle, manage, control or exchange the financial assets of his principal. There was nothing shown by the evidence to indicate that he had ever before attempted such a transaction with the knowledge or subsequent approval of his principal. In a word, there was no evidence upon which to predicate that such an act was within the apparent scope of the agent’s authority, whilst all of the evidence precludes any claim that he had any actual authority to bind his company by such an agreement. The defendant admits he was previously told by this very agent he had no such authority and would first have to see Mr. English. He was further told, according to his own statement, at the very moment of the transaction, that the agent did not have his note and could not deliver it because he had no access to the safe in the absence of Mr. English, and therefore could not deliver the note until the return of the latter to his office. If the transaction were as the defendant contended, there was no occasion for any receipt at all. The delivery of the trust company notes on the one hand, the cancellation and surrender of his own note on the other, would have completed the transaction. But if, as the plaintiff contends, the defendant was seeking indulgence in the collection of the debt he owed, and was placing in the hands of his creditor some additional security for his debt, then of course a receipt for the latter, indicating the object for which these additional securities were given, would be but the usual and ordinary conduct of business men. As the evidence stands in the record before us, we are unable to say the defendant has discharged the burden cast upon him by the law and presented evidence to the jury to fairly support a finding that Dumont had any authority to bind his principal by a transaction of the character set up by the defendant.

As the assignments of error, however, disclose no point for a binding direction to the jury and no motion for judgment non obstante veredicto, there remains nothing for us to do but send the case back for another trial in accordance with the principles laid down in this opinion.

Judgment reversed and a venire facias de novo awarded.