Case Name: A. Merrick v. J. Boury & Sons
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1854-12
Citations: 4 Ohio St. 60
Docket Number: 
Parties: A. Merrick v. J. Boury & Sons.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 4
Pages: 60–72

Head Matter:
A. Merrick v. J. Boury & Sons.
The findings of a court, when substituted for a jury, are entitled to the same consideration as the verdict of the latter; and it is well settled that a verdict will not be set aside, upon the ground of erroneous finding, unless it is clear that such is the case.
It is only by force of an agreement of the parties, that the giving of an un-. sealed note by tbe debtor will be payment of a precedent debt. The burden of proof is upon the debtor, who must establish the agreement clearly; and the question whether ther.e was such an agreement, is one of fact to be determined by the jury.
A Vendee of goods, subsequently to the purchase, gave his note for the price, but it was not received as payment. Afterward, the vendors, to whom it was payable, without any fraudulent purpose, and under an honest mistake of right, materially altered it. Held, that such alteration did not preclude a recovery upon the original cause of action, the precedent indebtness.
In Error to the district court of Muskingum county.
The record presents the following facts:
In 1851, Merrick was indebted to Boury & Sons for goods sold :and delivered. Some difficulty or difference having arisen between 'the parties in relation to the price, character, and quantity of the goods sent to Merrick by Boury & Sons, Merrick, on the 17th of July, 1851, wrote to Boury & Sons, among other things, as follows: “ On the 22d of December, 1850,1 received your dispatch, authorizing me to retain the goods on a year’s credit. On the 22d of December, 1851,1 will therefore pay you the balance due, $548.04, but no more; and if you choose to call on Messrs. Slingluff & Ensey, 13 N. Howard street, they will hand *you my note for that amount, in full of account to date — not that I consider that amount ■due you in equity, but because T said I would pay you that much.”
On the 7th of August, 1851, Boury & Sons answered the above letter, and wrote to Merrick on that day, acknowledging the receipt of his of July 17, 1851, in which, among other things, they say to Merrick: “ We have signed the receipt transmitted through Messrs. Slingluff & Ensey, and the note received of them for $548.04, has been duly passed to your credit; and as you are aware that our invariable custom is to make all drafts, notes, etc., due us, payable, with difference of exchange, on Baltimore, we have taken the liberty to add this small item to said note, not doubting it will fully meet your approval.”
This letter was received by Merrick, no reply made to it, and nothing more heard Of the matter until about the time the note became due, when it was sent to the bank in Zanesville, where Merrick resided, for collection. When the note was due, Merrick called at the bank and offered to pay the amount, but not the difference of exchange. This the cashier refused to receive, and the note was returned to the After this Merrick refused to anything. Thereupon suit was brought; the declaration containing a count on the note, and the common counts, on the first of' which judgment was given for Merrick, and on the latter, a judgment rendered in the common pleas for the amount admitted to bodue Boury & Sons, by the letter of Merrick. An appeal was taken by him to the district court, where again judgment was rendered against him as above; and to reverse this judgment, this petition in error is brought.
L. P. Marsh, for plaintiff in error:
I. A promissory note, may not operate as’ payment of an open; account, unless it is given and received in payment. In the absence of express proof, the object of giving such note may bo determined from the attending circumstances. If given in payment *of a pre-existing debt, it operates as an extinguishment of such, original debt, upon which no action can thereafter be maintained, the holder being left to pursue his remedy upon the note alone.. Story on Prom. Notes, sec. 104; Riley & Van Amringe v. Anderson, 2 McLean, 594.
II. In the absence of any express agreement, or agreement implied from the attending circumstances, that a note is given in payment of a pre-existing debt, it not unfrequently, as in this case, maybe held to effect an accord and satisfaction of such pre-existing debt.. Harper v. Graham, 20 Ohio, 117, citing Brooks v. White, 2 Met. 285 ; Sibree v. Tripp, 15 Mee. & Welsb. 37; Boyd v. Hitchcock, 20 Johns. 76.
III. If the note was given in payment, or if there was effected; an accord and satisfaction of the original open account, the plaintiffs can only recover upon the note. The note was altered in a material part by-the plaintiffs, after they received it, and such alteration was-without the knowledge or consent of the defendant: this avoids the note, and does not revive the original account. Being void for one purpose, the note is void for all purposes, and is incompetent evidence. Martindale v. Follet, 1 N. H. 99, and cases there cited.
IV. The fraudulent alteration of a note in a material part by the holder, not only avoids the note, but prevents a recovery upon its. original consideration. Master v. Miller, 4 D. & E. 329.
V. No recovery can be had upon the note for two reasons: 1. Because the note as altered is not the contract executed by the defendant; 2. Because of the fraudulent alteration.
YI. The fraudulent intent is presumed; the legal effect is a fraud mpon the defendant, unless the alteration is made with his knowledge and consent.
Counsel cited: Anderson v. Langdale, 23 Eng. C. L. —; 2 Barn. & Adol. 660; 10 Missouri, 348; Newell v. Mayberry, 3 Leigh, 250 ; Mills v. Starr, 2 Bailey, 359; 2 Barb. Ch. 120, and notes and cases there cited.
*Geo. James, for defendants in error.
I. That the note of even the original debtor may be given to the •'Original creditor in payment of a pre-existing debt, and is so received in payment by the creditor, will be payment, there is no doubt. But it must be clearly shown that such was the intention; as between the original parties, the giving of the note of the debtor is never presumed to be in payment. 1 Cow. 359; Porter v. Talent, lb. 290.
II. But this question was one oí fact, submitted to the court as though to a jury, and they have found against the supposed intention; and the question can not be reinvestigated on a writ *of error.
III. Every alteration of such an instrument as that here in ques•tion does not render it absolutely void, for all purposes, and as to ■,all parties. The instrument is not affected unless the alteration be ■material, and not then, if the alteration was made before it was ■ issued, or to correct a mistake,' or by the consent of the parties (Smith Merc. L. 266), or to make instruments conform to the ‘Original intention of the parties (3 Shepl. 357; 1 Denio, 239; 10 Wend. 93); or if made with an honest intention. 15 Pick. 239; 20 Vt. 205; Beatman v. Russel, 18 lb. 466; Miller v. Greenleaf, Penn. 4 (citing 1 Greenl. 73, 334; 8 Conn. 75; 1 Shepl. 386; 2 Mason, 478; 6 Ala. 513; 8 Dana, 98; 2 N. H. 543, and other cases) ; Provost v. Gratz, 6 Wheat. 502; Nevins v. DeGrand, 15 Mass. 436; Thornton v. Appleton, 29 Maine, 298 ; Rollins v. Bartlett, 9 Shepl. 317; 3 Barr. 379; Adams v. Frye, 3 Met. 109. That a material ■alteration may vitiate the note or bond as to some of the parties, but not as to others, see in State v. Van Pelt, 1 Smith, 118; Prevost v. Brown, 2 Dougl. 9; Davis v. Coleman, 7 Iredel, 424.
Counsel also cited Waring v. Smith, 2 Barb. Ch. 119; 3 Barb. S. C. 484; 1 Greenl. 7; 8 Cow. 71; 22 Wend. 388; Agriculturist etc. v. Fitzgerald, 4 Eng. Law and Eq. 349.
IY. The alteration, though it may vitiate the instrument of *writing, yet does not prevent the party from recovering on> the original consideration/ where such consideration existed prior-to, and is independent of, the instrument of writing — is not merged-in, or discharged by, such instrument; or when the debt, duty, or-obligation, is not created by the instrument — but it is given merely' as evidence of such consideration. Atkinson v. Hawden, 6 Adol. and El. 728; Sloman v. Cox, 1 Comp. Mee. and Rosc. 471; Suttan v. Toomer, 7 Barn. and Cresw. 416; Smith’s Merc. Law, 266, Note R.; Clude v. Smale, 17 Wend. 238; Chitty on Bills, 6 Am. ed. 100.
Y. It is doing no violence to the evidence or facts stated in the' bill of exceptions, to say that the court properly inferred the assent of Merrick to the alteration. In the very letter in which Boury &. Sons acknowledge the receipt of the note, they inform him of the-alteration, and he never objects to it, until after the note is due.. Six months aftei it was made, and when the note became due, with a lull knowledge of the alteration, he went to the bank and acknowledged his liability, by offering to pay it, without the difference of exchange. This is very similar to the ease of Humphreys v. Guillon, 13 N. H. 385.
YI. Assent may be before or after alteration, and proved by parol. 9 Cranch, 28; 4 Johns. 54. It may be implied from the nature of the alteration, and from the custom or mode of business-between the parties, 2 N. H. 545. The letter of Boury shows that the alteration was made to conform the note to what was usual between the parties, and with what they presumed to be the assent, of Merrick.

Opinion:
Thurman, C. J.
The errors assigned amount in substance to-this, that the evidence did not support the action, and hence, Merrick's motion for a new trial was improperly overruled, and the-judgment against him improperly given.
The special count in the declaration was upon the note as-altered, and as the court found for Merrick, upon this count, they *must have held that the alteration was made without his authority, and was never ratified by him. But whether the verdict for Boury & Sons, upon the common counts, was upon the note as-it existed previous to the alteration, or upon its consideration, the original indebtedness, does not appear by the record. Let it have been upon either, or even upon the note in its altered shape, the-common counts were entirely sufficient, and the judgment can not. be disturbed, unless tbe verdict was clearly against the evidence. Thus, if the verdict can be sustained only upon the grounds that the note was not taken in payment of the antecedent debt, and that the alteration was made without any fraudulent purpose, it must be presumed, upon a petition in error, that these facts were found by the court, and this finding will not be disturbed merely because we might doubt its correctness. The findings of a court, when substituted for a jury, are entitled to the same consideration as the verdict of the latter; and it is well settled that a verdict will not be set aside upon the ground of an erroneous finding, unless it is clear that such is the case. We are inclined to think, however, that there is no necessity, in the present case, for an application of this rule; for we can hardly say that the testimony would warrant a finding that the note was taken as payment, and as to the alteration, we see no reason at all to believe that it was made with a fraudulent intent.
In Porter v. Talcott, 1 Cow. 380, it is said: " The law is well settled, that a note given by the debtor for a precedent debt, is no payment of the original demand, unless it is expressly agreed to receive it in payment;" and this is the doctrine of very many cases. See Tobey v. Barber, 5 Johns. 72, and the cases there cited. In Johnson v. Weed, 9 Johns. 310, it was held, that the agreement must be " clear and special," otherwise the paper will be no payment. y,
On the other hand, it has been ruled, that " the object of giving a note may as well be ascertained from circumstances as from an express agreement." Riley & Van Amringe v. Anderson, 2 McLean, 594, *and the same doctrine is asserted in Story on Promissory Notes, sec. 104.
But whatever may be the law of evidence, nearly all the cases concur in holding that it is only by force of an agreement of the parties, that the giving of an unsealed note by the debtor will be a payment; that the burden of proof is upon the debtor, who must establish the agreement clearly; and that the question whether there was such an agreement is one of fact, to be determined by the jury.
How then stands the present case ? It is not pretended that there was any proof of an express agreement that the note should be payment, and we think it must be held that it is not clearly inferable from the circumstances. From what can it be inferred ? The answer of counsel is: " That the plaintiffs proposed to extend the credit to December 22, 1851; to. this the defendant acceded, and sent them his negotiable note, payable at that time for a less sum than the plaintiffs claimed to be due, stating in his letter that he would pay that sum in full of account, if the plaintiffs, chose to' call for his note, and no more. The plaintiffs received the note,- and say, in a letter subsequently written, "we have passed it to your credit."
That there was an extension of credit, as here supposed, is not clearly established by the testimony, for it does not appear when the original indebtedness was payable, nor that it was payable before the time fixed for the maturity of the note. But let that be granted, and it by no means (.follows, as a necessary consequence, that the note was taken in payment. Speaking upon this point the Supreme Court of New York, in Tobey v. Barber, supra, said: " He [the "creditor] is not obliged to sue upon it [the note]. He may return it when dishonored, and resort to his original demand. It only postpones the time of payment of the old debt, until a default be made in the payment of the note." And in Clark u. Young, Crancb, 181, it was held that " it was not necessary for the plaintiff to offer to return the note, to entitle him to bring suit for the goods sold."
*That the note was negotiable is a circumstance entitled to no weight in this inquiry. In almost eyery case of this nature, to be found in the books, the note or bill was negotiable. ' '
That it was for a smaller sum than the creditors claimed, is undoubtedly true, but that it was for less than the amount actually due, does not appear. It was for precisely the amounDwhich the plaintiff in error said was " the balance due," though he thought it too large " in justice or equity by $150." What significance, then, has the fact that it was for less than the amount claimed ? Plainly no more than this, that the creditors agreed to accept the sum admitted to be due. It has no bearing upon the question whether they agreed to take the note in payment of that sum.
But were it admitted that the note was for less than the actual indebtedness, it was for the court, to whom the cause was submitted, to decide whether there was an accord and satisfaction that extinguished the original debt, or whether the creditors merely relinquished a part of their claim, and took the note as a collateral security for the residue; and if were of the latter we mot say, upon the testimony, that they were clearly in the wrong.
That the note was " passed to the credit" of the maker — by which we understand that it was put to his credit on the creditors' books— is, in our judgment, a very slight circumstance; and just what usually takes place when a note is given to a merchant, A receipt in full of the original account is a much more pregnant instrument, and yet that is not conclusive that payment was made (5 J. E. 72), It may be sufficient to shift the burden of proof to the creditor, and possibly would have done so in this case had the receipt that was given been produced. But it was not produced, and therefore Boury .& Sons were under no necessity of explaining it; indeed, its non-production by Merrick raises a presumption that its terms were -unfavorable to his defense.
Upon the whole, as before said, there was no proof of an *express agreement that the note should be payment, nor can such an ¡agreement — or, what is substantially the same thing, an aecox-d and ¡satisfaction that extinguished the precedent debt — be clearly inferred from the circumstances of the case. It follows, that a judgment might well be rendered upon the original indebtedness, unless the .alteration of the note not only destroyed it, but also the original cause of action. That it had that effect, is ably contended by counsel, and, in support of his point, he cites the following authorities; Master v. Miller, 4 D. & E. 329; Alderson v. Langdale, 3 Barn. & Adol. 660 ; Martindale v. Follett, 1 N. H. 95 ; Whitmer v. Frye, 10 Missouri, 348; Newell v. Mayberry, 3 Leigh, 250; Mills v. Starr, 2 Bailey, 359; and Waring v. Smith, 2 Barb. Ch. 119.
The case of Master v. Miller is not in point. It was an action by .an indorsee against the acceptor of a bill of exchange, which had been materially altered while in the hands of the payees, and before the indorsement.
The main question was, whether the rule that an alteration, in a material part, of a deed, avoids it, applied to instruments not under" ¡seal. And the court held that it did. Kenyon also held that the plaintiff could not recover upon the ground of money paid by the payees to the acceptor, or had and received by the latter for the use of the former, because such a right of action was not assignable-He intimated, however, that possibly an action might be framed to .give the plaintiff some remedy. Grose, J., thought there could be no recovery upon the general counts, "because it is not stated as a fact in the verdict that the defendant received the money, the value-of the bill." Ashhurst, J., expressed no opinion on this point, while Buller, J., maintained, that the plaintiff was entitled to recover, either on the bill in its original shape, or on the money counts.
The case of Alderson v. Langdale was this: "The vendee of goods paid for them by a bill of exchange drawn by him on a third ^person, and after it had been accepted the vendor altered the time of payment mentioned in the bill, and thereby vitiated it. Held, that by so doing he made the bill his own, and caused it to operate as a satisfaction of the original debt, and that consequently he could not recover for the goods sold." The court likened the case to that in which the holder of a bill " makes it his own by laches, as by not presenting it for payment when due," and upon that principle held that the plaintiff could not recover. It is very evident, therefore, that the ground of the decision was the injury done to the drawer by the release of the acceptor, and that ground is no doubt quite sufficient. But here no third person has been released, and no-injury is done to Merrick by compelling him to pay what he justly owes.
In Whitner v. Frye, the alteration was of a bond. Of course there was no original cause of action to fall back upon. If a precedent debt formed the consideration of the bond, it was merged in it, because it was under seal. If there was no precedent liability, then the bond created the only liability that ever existed, and that being avoided by the alteration, there could be no recovery.
The same remarks apply to the case of Waring v. Smyth, in which the alteration was of a bond and mortgage; and to Miller v. Starr, in which a note under seal was altered.
The cases of Newell v. Mayberry, and Martendale v. Follett, in effect decide nothing more than that where a written contract has been fraudulently altered, the party guilty of the alteration can not recover upon the contract as it existed before it was altered. Neither-of them was a case where there was a precedent liability; in each, case the only contract between the parties was the written one that, was altered, and that being vitiated by the alteration, it was very properly held, that there could be no recovery. It is nof to be-denied, however, that the language of the judge who delivered the opinion in Martendale v. Follett, goes somewhat further, and, unless-restricted to the facts of that case, *might seem to support the-present defense. But before we yield our assent to a decision that is not binding upon us as authority, we must be satisfied of its correctness, and if this is true in respect to decisions, a fortiori is it. true in regard to dicta.
It is thus apparent that neither of the cases cited by the plaintiff in error is directly in point, and to the reasons already given why they are not so, may be added another, namely, that in neither of them was the presumption of & fraudulent alteration rebutted by the: proofs.
But the case of Atkinson v. Hawdon, 2 Add. & Ell. 628, 29 Eng. Com. Law, 169, is directly in point, and fully sustains the judgment, under consideration. It was an action of assumpsit by vendor-against vendee, and the declaration contained two counts, one upon a bill of exchange that had been given by the vendee for the price of the goods, and the other for goods sold and delivered. The bill, had been materially altered by the payee, the vendor, without the privity or assent of the drawer, the vendee. Held that the bill was. thereby vitiated, but that the plaintiff was entitled to recover upon, the common count.
This ease was approved and followed by the Supreme Court of New York, in Clute & Bailey v. Small, 17 Wend. 238, the court, adding, however, that "for aught that appeared, the alteration was. made under an honest mistake of right." And this qualification the court appears to have thought was necessary, holding, it would seem, that when the alteration is in fact fraudulent there ought to-be no recovery, but that when made without any fraudulent purpose there may be a recovery upon the original cause of action.
We have no hesitation in going to this extent, and upon principle, do not see how it can be avoided. It is difficult to perceive-how the destruction without fraud, of a mere security given by the-debtor himself, and the destruction of which can in no event prejudice him, can operate to discharge the precedent debt. Inasmuch, then as we are well satisfied that the alteration ini ^question was made under an honest mistake of right, we are of the opinion that the plaintiffs below were entitled to recover, upon the original cause of action, the amount admitted to be due and for which the-note was given. Whether they could have recovered upon the note-as it existed before the alteration, is a question upon which wo express no opinion. Many authorities are cited by the defendant in. error to show that, as the alteration was not fraudulent, there could: be such are covery, but it is unnecssary to consider them. It may/ .be as well to remark, however, that tampering with a security, however honestly, is a dangerous thing, and ought not to be en- . couraged.
Judgment affirmed.