Case Name: Hurd and another against Blackman and another
Court: Connecticut Supreme Court
Jurisdiction: Connecticut
Decision Date: 1848-07
Citations: 19 Conn. 177
Docket Number: 
Parties: Hurd and another against Blackman and another :
Judges: In this opinion Waite, and Storks, Js. concurred ; Church, Ch. J. and Ellsworth, J. being absent.
Reporter: Connecticut Reports
Volume: 19
Pages: 177–182

Head Matter:
Hurd and another against Blackman and another :
IN ERROR,
In tins state, a receipt in fait wilt operate, like a discharge, to defeat any farther claim by the party giving- it, unless it is given under such circumstances of mistake, accident or surprise, or is procured by such fraud, as will authorize a court of equity to set it aside.
Therefore, where A and i?, between whom there had been mutual dealings, came together, for the purpose of settling all their accounts, which were examined, and a balance ascertained, in favour of 2?, for which A gave B a draft, which was duly paid, and B, at the same time gave A a writing, whereby he acknowledged the receipt of payment in full, of A’s account; Á having previously given B a note for 100 dollars, which had not then come to maturity, it was adverted to, by both parties, and the amount deducted from B's claim against A ; in this transaction, neither of the parties acted under any mistake, or with a fraudulent intent; in an action, afterwards brought by B against A, for the balance of the original account, it was held, that the receipt so given by B, was an effectual defence.
This was an action of book debt, brought originaliy by Blackman & Betts, against Hurd & Hoyt, On a motion for that purpose, Eliphalet Swift, Esq., was appointed sole auditor, to audit and adjust the accounts between the parties, and to make his award thereon. He found and reported the following facts.
Most of the several items charged in the plaintiff’s account were admitted by the defendants; but they claimed, to have made payment in full. The defendants had been partners in business, and their partnership was dissolved, on the 22 nd of April 1844, At that time, the partnership was indebted to the plaintiffs, on book, about 150 dollars. Hoyt was also indebted to the plaintiffs on book, on his individual account, in the sum of 88 dollars, 46 cents. Hurd was also indebted on book to the plaintiffs, on his individual account, about 200 dollars. Hurd took the company property; and it was agreed between Hurd and Hoyt, that Hurd should pay the debts of the company, and should also pay Hoyt’s individual debt to the plaintiffs. The dissolution was soon made known to the plaintiffs, and Hurd agreed with them, to pay them 100 dollars, every three months, until the whole of said debts were paid, and to give Isis notes, from time to time, to that effect, to be applied, when paid ; but there was no agreement, as to which particular account should be first paid. On the 28th of June, 1844, Hurd paid the plaintiffs 100 dollars, giving no directions as to which of said accounts the money should be applied upon; but the plaintiffs applied it to the partnership account. On the 28th of September 1844, Hurd gave the plaintiffs his note for 100 dollars, payable in three months, in pursuance of said agreement. On the 7th of October 1844, Hoyt called upon the plaintiffs to settle all his liabilities ; which consisted of his individual book account, and that of Hurd & Hoyt. The accounts were then examined, by the parlies ; and the sum which they then found due, and which was then in fact due from Hoyt alone, and from Hurd & Hoyt, was 144 dollars, 98 cents. Belts, one of the plaintiffs, and also Hoyt, mentioned the note which Hurd had given to the plaintiffs for 100 dollars, then not paid nor matured ; and Hoyt claimed, that it should be deducted from the account. To this Betts assented, and deducted it; and thereupon, Hoyt gave the plaintiffs a draft upon Hurd & Hoyt, at thirty days sight, for the sum of 44 dollars, 98 cents — the balance of the account, after deducting said note. Hoyt then drew a receipt, of the following tenor: “ Received, Norwalk, Oct. 7th 1844, by draft on Hurd & Hoyt, at SO days sight, for 44 dollars, 98 cents, payment in full of E. G. Hoyt and Jikrd & Hoyt's account.” Betts objected to the signing of it, on the ground that it would, or might, prevent the plaintiffs from collecting said note. Hoyt said, it would make no difference: there would be no trouble about it. Betts then signed the company name of the plaintiffs, to the receipt, received said draft and delivered said receipt to Hoyt. A part of the booK account of the plaintiffs against Hurd & Hoyt, was included in said note, and the whole of their private account against Hoyt. The draft was paid at maturity, and applied, by the plaintiffs, to their account against Hurd & Hoyt. No part of the note given by Hurd to the plaintiffs has been paid, but it remains overdue in the hands of the plaintiffs. At the time the receipt was given, the defendants were both in good credit. At the time Hurd’s note fell due, he had failed in business, and was unable to pay it; and afterwards, Hoyt also became insolvent. In this transaction, none of the parties acted under any mistake, or with a fraudulent intent, in giving or obtaining said receipt.
The defendants insisted, that, on these facts, the plaintiffs' account against them had been paid, and they could not recover in this action; and if the court should be of that opinion, then, the auditor found, that the defendants owed the plaintiffs nothing. The plaintiffs, on the other hand, insisted, that upon these facts, their account had not been paid, and that they were entitled to recover; and if such should be the opinion of the court, then the auditor found a balance of 13 dollars, 26 cents, due to the plaintiffs.
The court accepted the auditor’s report, rendered judgment in favour of the plaintiffs, to recover of the defendants, said sum of 13 dollars, 26 cents, debt, and their costs. To revise this judgment, the defendants brought the record before this court, by motion in error.
E. Taylor and White, for the plaintiffs in error,
contended, 1.That from the facts found in this case, it is evident, that Blackman & Bells agreed to receive Hurd’s notes in payment ; and if they were so received, they operate as payment, and Hoyt is not liable. Anderson v. Henshaw, 2 Day, 272. Bartsch v. Atwater & al. 1 Conn. R. 409. Bill v. Porter, 9 Conn. R. 23. 30. 5 Day, 511.
2. That in consequence of the giving Hurd time of payment, without the knowledge or consent of Hoyt, the loss, by means of Hurd’s insolvency, falls on Blackman & Betts, as the giving indulgence, without notice, operates as an agreement on their part to look to Hurd for payment, and discharges Hoyt. Chitt. Cont. 751, 2.
3. That as Bells assented to deduct Hurd’s note, his doing so, and accepting the draft for the balance, is an implied agreement to receive said note as payment.
4. That the receipt, under the circumstances of this case, is conclusive. Fuller v. Crittenden, 9 Conn. R. 401.
Butler and Carter, for the defendants in error,
contended, 1.That the plaintiffs below did not take Hurd’s note in payment, and at their own risk, there being no express agreement to that effect. Davidson v. Bridgeport, 8 Conn. R. 477. Bill v. Porter, 9 Conn. R. 80. 31.
2. That there is no evidence of any agreement or understanding, with or without consideration, that the plaintiffs should take Hurd for their debtor, and discharge Hoyt. The fact that Hoyt went to the plaintiffs to settle the balance, shows, that neither he nor they so considered it.
3. That the receipt is to be used to effectuate, not to defeat, the previous understanding of the parties. Tucker v. Baldwin, 13 Conn. R. 137.
4. That the law never presumes that a creditor intends . to take the medium of payment at his own risk, whether— that medium be coin, bank bills or promissory notes. It is not according to the common course of things, for the creditor to discover the worthlessness of the medium of payment, until after a receipt has been given ; and it would be unreasonable to make the receipt evidence against him, that he took it at his own risk. Davidson v. Bridgeport, Bill v. Porter, Fuller v, Crittenden, Bartsch v. Atwater <fe ah, before cited. Tobey v. Barber, 5 Johns, R. 68. Putnam v. Lewis, 8 Johns. R. 389. Willim,antic School Society v. First School Society in Windham, 14 Conn. R. 457. 468, 9. 1 Greenl. Ev. 246. 354.

Opinion:
IIinman, J.
The question in this case, is, whether any reason exists for setting aside the receipt of the 7th of October 1844. The account of the defendants in error accrued before that receipt was given, and was extinguished by it, unless there is a sufficient reason for setting it aside. The law with us is well settled, that a receipt in full will operate, like a discharge, to defeat any further claim by the party giving it, unless it is executed under such circumstances of mistake, accident or surprise, or is procured by such fraud, as will authorize a court of equity to set it aside. Fuller v. Crittenden, 9 Conn. R. 401. Tucker v. Baldwin, 13 Conn. R. 136.
The burden of showing that the receipt, in this case, ought to be set aside, was upon the plaintiffs in the original action. They gave it; they are claiming to recover a debt, which existed previous to its execution. Unless, then, they can show, that their debt was not intended to be included in the settlement made at the time it was given, it is extinguished by it. From the facts found by the auditor, it appears, that Hurd, one of the defendants in the original action, on the 7th of October 1844, called on the plaintiffs, for the purpose of settling all his liabilities to them. These liabilities consisted of a book account due from him alone, and the account in suit. The accounts were examined, and the amount found due on each of them. Hurd claimed, that a note for 100 dollars, previously given by his partner, should be deducted from the amount. It was so deducted, with the consent of the Plaintiffs- aud a draft given for the balance ; and then ⅛⅛ receipt was given. Betts at first objected to signing the receipt, on the ground that it might prevent the plaintiffs from co]jecpmg p)e note ; but on being informed, that it would not make any difference in that respect, and that there would be no trouble about it, he signed and delivered the receipt. Surely, there was no mistake or fraud in all this. The whole transaction seems to have been fair ; and the effect of the receipt understood by the parties.
We think, therefore, that the receipt must operate to discharge this claim; and the decision of the superior court must, consequently, be reversed.
In this opinion Waite, and Storks, Js. concurred ; Church, Ch. J. and Ellsworth, J. being absent.
Judgment reversed.