Case Name: Calvin W. Smith v. Joseph Applegate
Court: New York Court of Common Pleas
Jurisdiction: New York
Decision Date: 1860-02
Citations: 1 Daly (N.Y.) 91
Docket Number: 
Parties: Calvin W. Smith v. Joseph Applegate.
Judges: 
Reporter: Daly's Common Pleas Reports
Volume: 1
Pages: 91–99

Head Matter:
Calvin W. Smith v. Joseph Applegate.
A creditor is entitled to apply money received hy him to either or any of the separate-debts due to him from the person making the payment.
The accey v.rcs of a note or bill made by a third person, on a precedent debt, affords u - presumption in favor of the debtor, but leaves the onus of proving that it v¿s taken in absolute payment, upon him.
But the :p:ance of such a security suspends the creditor’s right to sue upon his origin-.'.: claim, until the maturity of such security.
. This action was brought in the District Court, for the' Fourth, Tudicir.1 District, upon a promisory note for one hundred lollars. The defendant answered, alleging that the note was an accommodation note, made for the benefit of James L. Oheesem-iE, and that it had been paid. Upon the trial, it appeared il.f.r. Charles B. Tappan, had procured from the plaintiff, for James L. Cheeseman, upon this note and Cheeseman’s postdated check, two hundred and ten dollars ; that the check had been pr.hh and the note protested. That Tappan had also borrowed ibom plaintiff for Cheeseinan, five hundred dollars, upon two cheeks of Chceseman’s, which, were not paid. That Tappan, still acting as Oheescman’s agent, had thereupon given anote of the FTow York Ice Company for five hundred and twenty-eight dollars and seventy-one cents, and eighty dollars in cash, and took . d the two dishonored checks, and that the note of the Ice Compá iy liad still some time to run. The evidence was conflicting as to Oiether this note and the eighty dollars in cash was in payment, or as collateral for all the protested paper, including the note 1i suit, or only of the debt secured by the two last mentioned Jieques. .
Judgment vas given for the defendant, and the plaintiff appealed to this C urt.
William J. Huff for the appellant.
I. There being no evidence that the note was an accommodation note, the law raised the presumption that the same was a bona fde note, and the defendant was bound to rebut this presumption.
II. There being no evidence of a payment having been made by the defendants, either in part or in whole, of the note, and the plaintiff being the owner of the note, the plaintiff was entitled to recover the face of the note and interest. .
The eighty dollars was paid by Tappan, as agent of James L. Oheeseman, on a loan of five hundred dollars, and plaintiff, in absence of any direction, had á right so to apply the same, and there was no evidence that the eighty dollars was the defendant’s money. Walther v. Whitmore, 1 E. D. Smith, 19.
III. If plaintiff held the sanie as collateral, and his advances had not been paid, he was entitled to recover the face of the 'notes, he being for the purposes of the action, the owner and holder of the notes. Nantucket Pacific Bank v. Stebbins, 6 Duer, 348.

Opinion:
By the Court.
Brady, J.
The plaintiff loaned to . J. L. Cheeseman, the payee of the note in suit, or his agent, five hundred dollars, and such loan was made upon two post-dated checks, which on presentment were dishonored. He also, prior to that transaction, purchased or discounted the note mentioned- and a. check ibr one hundred and seventeen dollars and Jiffy cents, and the note was also protested. "When, the note and checks were under protest in the hands of the plaintiff, Tappan, who obtained the money from him, paid to the plaintiff eighty dollars in cash, and delivered to him a note of the ¡New York Ice Company, in payment, or as collateral, amounting to five hundred and twenty-eight, dollars and seventy-one cents, and which note, at the time of the trial, was not yet due. The plaintiff did not return that note, nor did he offer to return it at the trial, although it was proved, and was not disputed, that the eighty dollars paid, and the note given to the plaintiff, were paid and delivered on account of the protested paper held by him. There can be no doubt of the plaintiff's right to apply the eighty dollars toward the payment of the last loan, and of his right to recover on the note sued upon, assuming such application to have been made by him, unless the acceptance of the note for five hundred and twenty-eight dollars and seventy-one cents, operated as a suspension of his right to prosecute the orginal indebtedness. Such in my judgment was the effect of the receipt of that paper. The acceptance of a note or bill made by a third person on a precedent debt, affords no presumption in favor of the debtor, but leaves upon him the onus of establishing that it was agreed to be taken in absolute payment (Noel v. Murray, 3 Kernan, 167), but until such security is due, the party receiving it is bound to perform all the duties of holder or indorser, as may be, and his right to sue upon his original claim is suspended. Chitty on Contracts, § 979, and cases cited ; Putnam v. Lewis, 8 John. Rep. 304; Copper v. Powen, Anthon, N. P.,49.
The plaintiff had advanced seven hundred and ten dollars, and had been - aid one hundred and seventeen dollars and fifty cent5; and f dollars, making one hundred and ninety-seven dollars a j cents, which, deducted from the amount loaned, or from the oeven hundred and seventeen dollars and fifty cents, left a balance which was covered by the note of the Ice Company. It is true that the note in controversy, was, with the check of one hundred and seventeen dollars and. fifty cents, purchased by the plaintiff, as he alleges, and that this would make his claim seven hundred and seventeen dollars and fifty cents as above, and it is also true, that from his statement of the trans action, it would seem that he received the note of the Ice Company as collateral for the loan of five hundred dollars only ; hut Tappan, who negotiated the loan,' and made the sale, stated that the note of the Ice Company was handed over with the eighty dollars upon the protested paper, and which protested paper included the note in action. This is not denied by the plaintiff, and having accepted from Tappan a security sufficient to cover the whole indebtedness to him, arising upon the note of the defendant and the loan of five hundred dollars, his right to sue upon the original indebtedness was suspended until that security matured. I am conscious that the testimony .does not show clearly that Tappan was acting for Cheeseman in obtaining the loan of five hundred dollars, although the appellant concedes the fact in his points, but it was made upon checks drawn by the latter, to whose order the note of one hundred dollars was also made payable, and Tappan was the acting man, and Cheeseman the debtor in both transactions. If the fact he material, the judgment of the justice decides it in favor of the defendant, hut I do not so regard it. If the note of the Ice Company was deposited only to secure the payment of the balance of the loan of five hundred dollars, the plaintiff should have so stated, and his omission to do so justifies the conclusion that the converse was the fact. For these reasons I am opposed to the reversal of the judgment, and think it should he affirmed.
Daly, F. J., concurred.
Ejxtox. L, dissented.
Judgment affirmed.
affirmance of the judgment, the execution which was issued in that action, and for the stay of 'which the bond' in suit was given, was returned unsatisfied before the expiration of sixty days. On this evidence, he dismissed the complaint, and judgmenfc was rendered for the defendants. The plaintiff appealed to this court from such judgment.
S. B. Noble, for appellant.
Philip Levy, for respondent.
By the Court.
Daly, F. J.
The undertaking upon which the action was brought, was in the form prescribed by the 356th section of the Code, the effect of which is to stay executian. It was not necessary that the same instrument should also embrace the undertaking required by' section 354 to per-feet an appeal. That undertaking- may be a distinct and different instrument, with different sureties ; and from all that appears in the case, the requisite undertaking under the 354th section may' í ve been given, and the justice would have had no right to jnnelude that it had not been given. It was sufficient that the undertaking sued upon was in pursnanee of a statute requirement, that it was in the firm proscribed thereby, and that it was given in a case contemplated by the statute. Slack v. Heath, 4 E. D. Smith, 95. All this was shown upon the trial. The undertaking recited "that the appellant intended to appeal to this court from the judgment rendered against him in the District Court of the Second Judicial District, It was shown by the production of the judgment record that the appellant did appeal to this court; that the undertaldng given by' the defendant was filed in die court; that tile judgment of the Court below was affirmed .upon appeal; that execution was issued against the appellant and returned unsatisfied, and the execution of the undertaking by the defendant was admitted by the answer. This was all that was necessary' to establish the defendant's liability. Slcicls v. Heath, sapra. It was no defence that the execution issued upon the judgment in the District Court was returned before the expiration of the sixty days. Wood v. Demikson, 1 Hilton, 410. The agreement entered into while the appe.il was pending was not an agreement to return or discharge the appellant Levy, but for the payment of the amount of the judgment by installments, the first installment of which, $14, was paid by Levy to the plaintiff, and was credited upon the execution issned after the affirmance of the judgment. It did not, therefore, ope-z-ate to the prejudice of the defendant Trigler, but was for his benefit. I can see no ground to warrant the justice in dismissing the complaint and rendering judgment for the defendant, nor has any been suggested by the respondent. It did not appear at whose recpiest the execution was returned before the sixty days. A levy was made under it of property enough to satisfy it, but the property was claimed by one Collamer, whose claim was tried by the sheriff, and upon a finding in his favor, the sheriff returned the execution unsatisfied. After such a result, the sheriff might well return the execution, without waiting until the expiration of the sixty days. The witness who testified that he did not know at whose request the sheriff returned the execution before the sixty days, also testified that he knew that a notice had been given by the plaintiff's attorney to the sheriff, between the appeal and the affirmance^ to return the execution before the sixty days had expired; but this could not refer to the execution upon the judgment of affirmance in this court, as it had not then been issned. The justice would not have been warranted in finding that it did, when the witness had previously sworn that he did not know at whose request the execution issned upon the judgment of affirmance had been returned before the expiration of the sixty days. The judgment should be reversed.