Case Name: Bantz & Co. v. Basnett
Court: Supreme Court of Appeals of West Virginia
Jurisdiction: West Virginia
Decision Date: 1877-11-08
Citations: 12 W. Va. 772
Docket Number: 
Parties: Bantz & Co. v. Basnett.
Judges: (Absent, Haymond, Judge.)
Reporter: West Virginia Supreme Court
Volume: 12
Pages: 772–857

Head Matter:
Wheeling.
Bantz & Co. v. Basnett.
(Absent, Haymond, Judge.)
Decided November 8, 1877.
T. S. B. & Co., as assignees of Ii., bring an action of debt on a non-negotiable promissory note against B., for $1,000.00, and B. pleads payment to Ii. before notice of assignment, and with his plea files a statement of the payment, viz: Cash paid to II., March 29, 1801, $550.00 ; an account on Hiram Haymond. $50.00, anda note of said B., dated March 29,1861, for $408.00, aggregating $1,008.00; and to sustain his plea, B. gives in evidence the following receipt: “ Received of P. S. Basnett, $550.00 in cash, and '¿'50.00, which Iiiram Haymond owes said Basnett, which 1 settle for him, and the note of said Basnett for $408.00, of even date, due at four months. The whole of .the above is in extinguishment of anote of $1,000.00 given to me by said Basnett, which said note will be due on the -1st April; and I further agree to return said Basnett his said note at an early day.”
“J. H. Haymond.
“ Fairmont, March 29, 1861.”
B. proved by himself and another, the making of said receipt by II. and the agreement of H. to surrender the $1,000.00 note to B. as soon as he could get it from Baltimore, where he had left it with other papers, but he never surrendered it and B. was not notified that it had been assigned to T. S. B. & Co, Upon the trial, the court instructed the jury, “That the execution and delivery of the promissory note for $408.00, mentioned in the pleas and evidence, was not a payment upon the said $1,000.00 note; and that .unless the jury should believe from the evidence that the defendant had paid the said note of $408.00 prior to his receiving notice or knowledge that said $1,000.00 note had been assigned, they should. find for the plaintiffs for so much or such part of the said $1,000.00 Aote as remained unpaid at the time when defendant received notice or knowledge of the assignment of the said $1,000.00 .note.” Held:
1. When the record does not show what was the ruling of the court below upon a demurrer, the Appellate Court will consider that the demurrer was overruled.
2. The instruction as given by the court was calculated to mislead the jury and therefore erroneous.
3. Where before a note is due, a part of the debt is paid, and a new note executed for the residue, by the debtor, and an express agreement made between the partie * that the old note shall be surrendered, such agreement is founded upon valuable consideration, and extinguishes the old note, and ho suit can be maintained thereon.'
4. Qus&re — Would the case be changed, were the payment, new note and agreement made, after the old note became due?
Supersedeas to a judgment of the circuit court of Marion county, rendered on the 30th day of April, 1874, in an action in debt, in which Theodore S. Bantz & Co., suing as assignees of Jonathan H. Haymond, were plaintiffs, and Philip S. Basnett was defendant, allowed upon the petition of said defendant.
Hon. C. S. Lewis, late Judge of the second judicial circuit, rendered the judgment complained of.
Moore, Judge, furnishes the following statement of the case:
The plaintiffs as assignees of Jonathan H. Haymond brought an action of debt in the circuit court of Marion county against the defendant, Basnett, to recover the amount of a certain promissory note, made by said Basnett, payable six months after date, to the order of J. H. Hay-mond, for the sum of $1,000.00, dated October 1st, 1860 ; the said plaintiffs claiming to be the assignees of said noté by assignment from said Haymond. The defendant demurred to the declaration, and-pleaded payment to the said Haymond of the said note, before its maturity and "before notice to him of its assignment to said plaintiffs; and issue being joined a trial was had before the said circuit court by jury. The verdict of the jury was against defendant in favor of plaintiffs, §408.00, and interest $310.80, aggregating the sum of $718.80, of which sum the plaintiffs remitted $8.00, and the court after overruling the defendant’s motion to set aside the verdict of the jury, gave judgment for the plaintiffs against the defendant for the residue, viz: for the sum of. $710.80, with interest thereon from April 20th, 1874, until paid, and costs.
Upon the trial the deposition of Theodore S. Bantz, one of the plaintiffs, and senior partner of T. S. Bantz & Co., was introduced, to the reading of which as evidence the defendant objected, because it did not appear that notice of the taking thereof was served on the defendant. And he further excepted to the reading of said deposition, or so much thereof as relates to any communications made through Jonathan H. Hay-mond to said Theodore Bantz & Co., tending to charge said defendant with notice of the assignment of the note mentioned and sued on. The court directed the jury to disregard so much of said deposition as consists of,'or relates to communications made through Jonathan H. Haymond to said Theodore S. Bantz & Co., tending to charge said defendant with notice of the assignment of the $1,000.00 note mentioned in the declaration, and on which this suit was brought.
The other part of the deposition was substantially as follows: Witness first saw the note of $1,000.00 in their store, in Baltimore, to the best of his recollection, “in the fall or winter of 1860, or probably the first part of 1861; J. H. Haymond was in the store of Theodore S. Bantz & Co., at the time, and exhibited the note” to witness. Haymond was largely indebted to them at the time for 'money loaned him by the firm, and he proposed to assign the note of P. S. Basnett for $1,000.00 to the firm as part, payment of his indebtness to the firm; T. S. Bantz & Co., agreed to take the note, and gave Haymond credit for the amount on his account. Since that time the note had never been in Haymond’s possession. The note was sent to the Fairmont bank, for collection February 13, 1861 ; and was there March 29, 1861, as the propei’ty of Theodore S. Bantz & Co. The firm had not received the amount of said note from Basnett, nor from any other person, except the following sums, to-wit:
1861.
May 20. — Received..»..$150.00
Discount off 10 per cent, depreciated currency. .$15.00
$135.00
1862.
March 5. — Received-..».....$70.00
$205.00
A note or postscript to a letter addressed to the cashier of the Fairmont bank by the said firm, of April 1, 1874, states, “The proposition is to pay cash $600.00 to you note at four months, drawn by P. S. Basnett, endorsed, by J. H. Haymond, which was sent us dated March 29, 1861, for $108.00 being interest included.”
The note was not paid to the bank. The plaintiff gave in evidence the said $1,000.00 note, endorsed by said Haymond.
The defendant on his part introduced the deposition of William P. Thompson, who substantially testified that lie was acquainted with both Haymond and Basnett, and was their counsel in almost all their legal business; that the receipt of J. H. Haymond to said Basnett, filed with the defendant’s plea, was in his (said witness’s), handwriting, and was signed by Haymond in his presence at witness’s office in Fairmont, and was as it states, in settlement of a note previously given by Basnett to Hay-mond ; witness prepared all the papers in reference to the settlement; before these papers were completed, Basnett wanted the original note; and witness’s im pression is, Haymond left the office for the purpose of getting the original note; after some time he returned without it, stating that he had left it along with other papers, in Baltimore, and would get and bring it out and leave it with witness for Basnett; he did not leave the original note with witness after that.
Basnett had that settlement with Haymond in the lisual course of business. As to how much of the original note was settled in money, what was the amount of the new note mentioned in the receipt, and when due, witness could only speak as the receipt shows; his recollection is, that he counted the money, prepared the note, and then wrote said receipt to correspond with the facts, but cannot at this late day recall the amount of cash paid, the amount of the new note, or when it was due, nor has he any knowledge whether the new note was paid or not. Why witness inserted in the receipt that the said note was in Baltimore, meaning the original note, and then erased the same, witness’s impression was that, Haymond was in doubt whether the original note was in Fairmont among his papers, or in Baltimore, but could give no other explanation why those words were inserted and then erased, &c. The defendant testified in his own behalf, that he settled said promissory note of $1,000.00 with Jonathan H. Haymond, the original holder thereof at Fairmont, the place of residence of said Haymond, before he had notice or knowledge that the said promissory note had been assigned; that said settlement was made in the law office of William P. Thompson, on the day of the date of the receipt filed with the pleas in this case and referred to in the deposition of William P. Thompson; that at said time said Haymond proposed to surrender said promissory note of $1,000.00 to defendant, and defendant demanded that it be sui'rendered to him, and said Haymond made search for the said note among his papers in his office at that time for the purpose of surrendering it to defendant, but failed to find it, and agreed with defendant thereupon that said prom issory note should be surrendered to defendant as soon as be, the said Haymond, could find it, or at any early' day, said Haymond finally saying that he had probably left said note in Baltimore with some other papers which he had left there.
And the defendant further testified that he had never seen the said promissory note of $408.00, mentioned in said receipt, since the execution of said last-mentioned note, and does not know' who holds the same; that said Hay-mond left this country in a very short time after said note of $408.00 was given, and has never since returned; that defendant has never paid anything on said $408.00 note since its execution, nor had any transaction with said Haymond, but that he considered said $408.00 paid by reason of claims which he had against said Haymond at the time said note was executed, but which claims had not been settled because of the absence of said Hay-mond, and the amount of said claims the defendant did not state.
And the defendant also gave in evidence the receipt above referred to, dated on said 29th day of March, Í861, signed by J. H. Haymond, whose signature was admitted to be genuine, which receipt is in these words:
“ Received of P. S. Basnett, $500.50 in cash, and $50.00 which Hiram Haymond owes said Basnett, which I settle for him, and the note of said Basnett for $408.00, of even date, due at four months. The whole of the above is in extinguishment of a note of $1,000.00 given to me by said Basnett, which said note will be due on 1st April; and I further agree to return said Basnett his said note at an early day.
“J. H. Haymond.
“ Fairmont, March 29, 1861.”
And this was all the evidence for the defendant.
And thereupon the court instructed the jury :
1st. That if they believed from the evidence that the defendant had paid the promissory note of $1,000.00, upon which said suit was brought, to JonathanjH. Hay- mond, before notice of the assignment thereof, that they ’ ° J find for the defendant: and also instructed the , iury: J , . - _ , . »
, 2d. lhat the execution and delivery of the promissory note for $408.00, mentioned in the pleas and evidence, was not a payment upon the said $1,000.00 note ; and that unless the jury should believe from the evidence that the defendant had paid the said note of $408.00 prior to his receiving notice or knowledge that said $1,000.00 note had been assigned, they should find for the plaintiffs for so much or such part of the said $1,000.00 note as remained unpaid at the time when defendant received notice or knowledge of the assignment of the said $1,000.00 note.”
And to the said second instruction of the court the defendant, by his attorney, then and there excepted.
James Morrow, Jr., for plaintiff in error,
relied upon the following authorities:
2 Tuck. Com. 268; 14 Gratt. 12, 13, 14; Id. 44-5; 15 Gratt. 99 ; 3 Russ. 1; 16 Vt. 358 ; 26 Ind. 201; 2 Wash. 233; 9 Gratt. 402; 6 Mete. 7; White and Tudor Lead. Cas. in Eq. (4 Am. ed.) vol. 2, pt. 2, p. 1533.
A. B. Fleming, for defendant in error,
cited the following authorities:
1 Rob. 265-6 ; 2 Tuck. Com. (3d. ed.) 25, 26; 3 Ch. PI. (8 Am. ed.) 926, note 3; Code 1860, ch. 144, §14, p. 630; Code 1868, ch. 100, §14, p. 538; 1 Rob. 591.

Opinion:
Moore, Judge :
The plaintiff in error, Basnett, assigns that: " It was error to proceed to a trial of the case and to render judgment therein against the defendant, without first disposing of the demurrer to the plaintiff's declaration.''
It is a well established rule that when the record does not show what was the ruling of the court below upon demurrer, the Appellate Court will consider that the demurrer was overruled.
The second assignment of error.is: That the court should have sustained the demurrer.
No reasons have been given showing error in the declaration, and no error being apparent, I consider the declaration sufficient in law and that the demurrer should have been overruled.
As to the third assignment of error that the court erred in giving the second instruction to the jury, viz: "That the execution and delivery of the promissory note for $408.00, mentioned in the pleas and evidence^ was not a payment upon the said $1,000.00 note, and that unless the jury should believe from the evidence that the defendant had paid the said note of $408.005 prior to his receiving notice or knowledge that said $1,000.00 note had been assigned, they should find for the plaintiffs for so much or such part of the said $1,000.00 note as remained unpaid at the time when defendant received notice or knowledge of the assignment of the said $1,000.00 note," The exception is well taken.
The 14th sec. of chap. 144 of Code of 1860, declares: " The assignee of any bond, note or writing not negotiable, may maintain thereupon any action in his own name which the original obligee or payee might have brought, but shall allow all just discounts, not only against himself, but against the assignor, before the defendant had notice of the assignment. " That section " applies only to writings not negotiable, and the note in this case was not negotiable ; and its only effect is to authorize the assignee of such writings to sue at law in his own name. The legal title still remains in the assignor, in whose name the suit at law may be brought. " (Opinion of Moncure, J., in Davis v. Miller, &c., 14 Gratt. 13). "The assignee acquires only an equitable right with a capacity, expressly given him by statute, to assert it at law in his own name. But the legal title still remaining in the obligee or payee, aright of action is incident thereto; and the assignee may, at his election, sue at law in his own name' or in of the obligee or payee for his benefit. (Moncure, J., in Clarksons v. Doddridge et al. 14 Gratt. 44). The assignee of dioses in action not negotiable, takes an equitable interest only, and until notice, he has no equity against the debtor which can be recognized and protected by a court of law or equity. Notice of the assignment must be given to the debtor by the assignee to prevent him from making payment to the assignor, and until he receives notice of the assignment, the debtor may safely make payments to the original creditor. Davis v. Miller, 14 Gratt. 12, 13.
Bouvier, in his Law Dictionary defines payment thus : " That which is given to execute what has been promised; or it is the fulfillment of a promise. Solvere dieimus cum quis fecit, quod facere promisit. But though this is the general acceptation of the word, yet by payment is understood every way by which the creditor is satisfied or ought to be, and the debtor liberated: for example, an accord and satisfaction will operate as a payment, " &c.
In Huffman v. Walker, 26 Gratt. 316, the court held: " Payment of a debt is not necessarily a payment of money, but that is payment which the parties contract shall be accepted as payment."
In Poole & Co. v. Rice, 9 W. Va. 73, the court held : "A note will not be regarded as an absolute payment or extinguishment of a precedent debt, unless it be so expressly agreed — whether the note received was that of one previously bound, or of a stranger; and it will not be so regarded, even when so expressly received, if such agreement was procured by fraudulent concealments and representations."
In Dunlap's ex'ors &c. v. Shanklin's ex'or, &c., 10 W. Va. the court held: "Taking a note from the debtor, or a note of a third party, is no discharge of the debt, unless it is expressly agreed between the creditor and debtor that it is jin absolute payment thereof2 Greenl. Ev. secs. 516, 519, 520, 521, and authorities cited, and 2 Parsons on Contracts, pp. 624, 684, &c.
Prom these authorities, and many others that might be cited, it seems to me the position assumed by the plaintiff in error, in the argument of this case, is tenable, "that the debtor, before notice of the assignment may, by contract with his creditors, thoroughly modify the legal relation subsisting between them, or may enter into a new and different contract, which shall by express words, constitute an extinguishment of the subsisting contract." The assignee should be diligent in giving notice to the debtor, that he might know his rqal creditor; for without such notice, the debtor has every reason to consider the payee still his creditor, and any payment made to the payee, or new contract expressly entered into between them in extinguishment of the note, before notice of the assignment, is in contemplation of law a payment of the note, and the assignee cannot recover upon it as against the payee, if the defendant pleads payment, and files with his plea an account showing the nature of the payment relied upon, as was done in this instance. Hoffman v. Walker, 26 Gratt. 316-17.
The assignee in this case stood in the shoes of Hay-mond. Had Haymond sued on the $1,000.00 note, there can be no doubt that the defendant, the plaintiff in error, could have defeated his action by reason of the settlement evidenced by the receipt of March 29, 1861, if true, and that too by the plea of payment, certainly the assignee would be in. no better condition, unless the payee had notice of the assignment before said settlement. Hence we see there are instances where a new note may be a payment, and that our own Court has so held.
The instruction was calculated to mislead the jury, and should not have been given, because, whether the new note was intended as payment or not, is a question of fact for the jury. 2 Greenl. Ev. §521, and note 4. And the court should not have usurped the province of the jury by instructing it that the new note was not a payment. I am therefore of opinion that the verdict "shouldhave been set aside and a new trial awarded. The judgment should be reversed with costs, and the case remanded to the circuit court for a new trial to be had therein.