Tracy v. Pearl

The opinion of the court was delivered by

Davis, J.

The observations of Redfield, J., in delivering the opinion in the case of Torrey v. Baxter, 13 Vt. 452, that it was evident, that the plaintiff, in moral equity and good conscience, was entitled to recover for the debt originally due him, that it will rarely be found that technical principles of law stand in the way of such a result, are fully applicable to this case. In that case, which was assumpsit on a note and upon the common counts, the defence was, that the plaintiff’s demand was paid by the sale and transfer to him of a note executed by one Peake to Baxter & Throop, — the plaintiff’s claim having been originally against them as partners, — ■ upon which the written guaranty of the payees was indorsed. Before Peake had paid any thing on the note, Throop applied to the plaintiff for a return of it, on account of some previous understand*166ing, that it should be offset against'a note which Peake had obtained of one Parker against the firm. It was given up and the note in suit was given ; but this, being after the dissolution, was held invalid; and the plaintiff was driven to rely on his original claim for goods sold, which had been settled by the Peake note. It is probable, though the case does not expressly so state, that Peake had been notified of the transfer of his note to the plaintiff. It was held, that the plaintiff, not having collected the note, nor put it in circulation, nor made it his own by unreasonable delay, nor agreed absolutely and unconditionally to receive it in payment of his debt, might well recover upon his original cause of action.

The present case bears a strong analogy to that. In neither was there any real payment. Here, instead of passing a note against a third person, guaranteed by the defendants, the avails of which, with their consent, came back into their own hands, and thus the guaranty became inoperative, a bill, or order, drawn upon them in favor of a third person, is accepted, but not paid, and ultimately, after suit brought, is, without the consent of the defendant, surrendered to the drawer, with the acceptance cancelled. Neither was a ■value parted with, nor did a subsisting responsibility to another, in lieu of the original liability, remain.

So far as the payee, Roberts, is concerned, it is manifest, that the receipt of the bill, or order, supposing it to have the ordinary qualities of such an instrument, — which I shall remark upon by and by,— with the verbal and written acceptance superadded, did not constitute a payment of his debt against the drawer, Tracy, because it was not only not agreed to be received as payment, but the contrary was expressly stipulated. To give it that effect, he must have received the pay upon it, negotiated it, or made it hi's own by some laches, which may be presumed to have operated to the prejudice of the drawer. It is not claimed, that he did either, except that it is insisted, that, by procuring a written acceptance in March, 1845, a considerable time after a verbal acceptance had been given, he brought the case under the last contingency. No new rights were acquired and no new responsibilities were incurred by that ceremony. A verbal acceptance, the order being in existence and in the hands of the payee, was, for every purpose save the convenience of proof, of *167equal validity with the written acceptance that followed. Chit, on Bills 176-8. 3 Kent 83.

Whatever rights, as. against the defendant, Roberts may have acquired by the acceptance, they were such as could be released; and the surrender of the bill to the drawer, with the cancelling of the written acceptance, were tantamount to a formal release. If true, then, that this acceptance imposed a new obligation to a third person, with the consent of the original creditor, which, while it continued, should have the effect of suspending the original indebtedness, relief from such collateral responsibility would restore such indebtedness. Torrey v. Baxter, above cited. Hays v. McClurg, 4 Watts. 452. Burdick v. Green, 15 Johns. 247. Stebbins v. Kellogg, 5 Conn. 265. Kean v. Dufresne, 3 S. & R. 233. 1 Nott & McCord 187. A note of a third person, taken as payment, will nevertheless not extinguish the original debt, if there be any fraudulent representations as to the solvency of the maker. Pierce v. Drake, 15 Johns. 435. Wilson v. Force, 6 Johns. 110. So if the note prove not available from some vice in it, as if given on a gambling consideration. Baird v. Brandon, 2 Nott & McCord 102. Owenson v. Morse, 7 T. R. 64. In England, the authorities are to the same effect. The case of Tarleton v. Allhusen, 2 Ad. & E. 32, goes far beyond the present; as a bill was not only drawn and accepted,, but was actually negotiated, and a judgment recovered thereon in favor of the indorsee, though not satisfied; subsequently the plaintiff took up the bill himself, — as the plaintiff did here, — the judgment became in effect vacated, and the defendant was adjudged liable on his original indebtedness. Robinson v. Read, 9 B. & C. 449. Tapley v. Martens, 8 T. R. 451. Burden v. Halton, 4 Bing. 454. If the accepted bill be lost, or" destroyed, so that the acceptor is no longer in danger of being called on, the original indebtedness revives. Woodford v. Whiteley, M. & M. 517. Rolf v. Watson, 4 Bing. 273. These and many similar cases proceed upon a natural principle of justice, which denies to a mere technical, temporary, constructive, or conditional payment the effect of a substantial payment, — at the same time taking care to protect the defendant against any collateral or substituted responsibilities by a surrender, or cancellation, or destruction, of the evidence of such responsibilities.

*168There is, however, another aspect, in which this case may be viewed, which will lead to the same result, and perhaps upon grounds even more satisfactory. The order drawn in favor of Roberts and accepted has no claim to be regarded as a mercantile bill of exchange; nor can it be governed by the principles applicable to that species of paper. Its terms are not such as are usual and essential to constitute a bill. There is no sum of money specified in it; but it is merely a request to pay over the balance in the hands of Pearl, Killam & LaClare to Roberts. Nothing on the face of the instrument indicates what that balance is, and no mode of ascertaining it by computation, or otherwise, is pointed out. It has always been held essential to paper of this kind, that it should be for money, and payable absolutely, not contingently, and not out of a particular fund. These qualities are indispensable, to obviate inconveniences which would arise, if it were necessary to make inquiries into these matters before the paper could be taken. Equally necessary is it, that the amount should not be a matter of uncertainty. How could the holder here ascertain what sum he was to be accountable for, until the balance was paid 1 Is that to be left wholly to the acceptor ? On suit against him by the holder, what sum is he to recover ? The bill does not show; and must the whole matter of perhaps a complicated account between the drawer and drawee be gone into and adjusted, in order to ascertain those damages ? Negotiability is not essential to the validity of a bill, and this is not in terms made negotiable. If it had been drawn to Roberts and order, or bearer, could it possibly be made to answer the purposes of negotiable mercantile paper ? Assuredly not.

Farther, the facts in the case show satisfactorily to my mind, that it was neither drawn, nor taken, with the view of creating any new and independent liability. The auditor distinctly finds, that it was merely passed as a matter of convenience, and only to be available, when the money, claimed by Tracy to be due him, should be paid to Roberts. The debt due from Tracy to Roberts would therefore not be extinguished, until the amount should be received from the defendant. Roberts was, then, merely the agent of the former, to call upon his debtor and receive what might be due him; payment, to the agent would be payment to the principal, and any new promises, verbal, or written, made to the former, were simply a recogni*169tion of a subsisting liability, with renewed assurances of payment, and not the creation of a new and independent obligation to a third person. The circumstance, that the agent was a creditor of the . principal, and that the money, when received, would, by consent, be applied in satisfaction of the debt, does not at all affect the character of the transaction. If, on account of unreasonable delay in calling for payment, or giving new time, the debt should be lost by the failure of the debtor, this might perhaps justly throw the loss upon the agent; but the legal responsibility of the original debtor would not be impaired thereby.

There was, then, no error in the judgment of the county court, and the same is affirmed.