Case Name: SILA A. ADAMS, Administrator, v. R. H. and HANNAH RUTHERFORD
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1885-12-03
Citations: 13 Or. 78
Docket Number: 
Parties: SILA A. ADAMS, Administrator, v. R. H. and HANNAH RUTHERFORD.
Judges: 
Reporter: Oregon Reports
Volume: 13
Pages: 78–97

Head Matter:
[Filed December 3, 1885.]
SILA A. ADAMS, Administrator, v. R. H. and HANNAH RUTHERFORD.
Tender — Promissory Note — Place of Payment. — When a promissory note is payable at a particular place, to make a good tender the payor must be at tbe place of payment at the time it matures, ready and willing to pay, and should either deposit the amount due in some bank or other place to be paid, or keep it intact; and in either case, if suit be commenced, carry it into court, and deposit it there when he files his answer.
Negotiable Instrument. — Where such a note provides for the payment of interest at stated times before maturity of the principal, and that “if not so paid the whole sum, both principal and interest, to become immediately due and collectible at the option of the holder, ” the latter clause is not to be interpreted by the law merchant, but by the ordinary law of contracts; and the party who claims a breach must show performance on his part. Per Thayer, J., arguendo.
Idem — Forfeiture of Time of Credit. — Where the failure of the payor of. such an instrument to pay or tender an installment1 of interest on the day specified is caused by some conduct of the payee calculated to mislead the payor, or designed to prevent payment of the interest on the day specified, or when the complainant is not free from fault, a court of equity will refuse to enforce forfeiture of the time of credit. Waldo, C. J., dissenting.
Marion County. Plaintiff appeals.
Affirmed.
G. J. McDougall, for Appellant.
As against a maker of a promissory note or acceptor of a bill of exchange payable at a specific place, it is not necessary for the holder thereof to make demand of payment at such place, as a condition precedent to bringing an action thereon; nor to aver such demand in the complaint, or prove it on the trial. (Moak’s Van Sant. PI.,. 3d ed., 321; Adams v. Hackensack Imp. .Com., 43 Am. Rep... 407. The liability of the maker of a note payable at a. particular place, or of the acceptor of a bill so payable, is-not a conditional liability depending upon presentment, and demand of payment at the place where the note or bill was made payable, but is an absolute liability to pay generally. (Wallace v. McConnell, 13 Pet. 145; Bank v. Smith, 11 Wheat. 171; Cox v. Nat. Bank, 100 U. S. 714; Schoharie Co. Bank v. Bevard, 51 Iowa, 258; Armistead v Armistead, 10 Leigh, 525; Watkins v. Crouch, 5 Id. 522; Buggies v. Patten, 8 Mass. 480; Caldwell v. Cassidy, 8 Cow. 271; McQairy v. Bell, 1 Yerg. 502; S. C., 24 Am. Dec. 454; Renshaw v. Richards, 30 La. Ann. 398; Hills v. Place, 48 N. Y. 520; Howard v. Boorman, 17 Wis. 459; McCullough v. Cook, 34 Ind. 290; Montgomery v. Tutt, 11 Cal. 307;. Reeve v. Pack, 6 Mich. 240; Yeaton v. Berney, 62 HI. 62;-Hall v. Allen, 37 Ind. 541.)
William M. Ramsey, for Respondents.
According to English authority, the holder of a note-payable at any particular place could not maintain an action upon it, until he had demanded payment at the-place specified; and it was necessary to allege such a. demand in the complaint. (Sands v. Clark, 65 Eng.. Com. L. 751; Story on Notes, secs. 227, 229.) “And plainly, one cannot maintain a suit against another for not doing what he put it out of the other’s power to do.”' (Bishop on Contracts, sec. 695; Stewart v. Keteltas, 36 N. Y. 388; 2 Chitty on Contracts, 11th Am. ed., 1087; Pollock on Contracts, 372, 373.)

Opinion:
Thayer, J.
This appeal is from a decree of the Circuit Court for the county of Marion, rendered in a suit. brought by the appellant against the respondents to foreclose a mortgage. It appears that on the twenty-third day of August, 1883, the respondent R. H. Rutherford executed to one Jesse Adams a promissory note, of which the following is a copy:
"On or before five years after date, without grace, I promise to pay to the order of Jesse H. Adams, at Salem, Oregon, twenty-three ($2,300) hundred dollars in gold coin of the United States of America, of the present standard value, with interest thereon in like gold coin at the rate of eight per cent per annum from date until paid, for value received. Interest to be paid annually, and if not so paid, the whole sum, both principal and interest, to become immediately due and collectible at the option of the holder of this note; and in case suit or action is instituted to collect this note, or any portion thereof, I promise and agree to pay, in addition to the costs and disbursements provided by statute, such additional sum in like gold coin as the court may adjudge reasonable for attorney's fees, to be allowed in said suit or action.
[Signed] "R. H. Rutherford."
That, in order to secure the payment of the said note, said respondents at the same time executed to the said Jesse H. Adams a mortgage upon certain real property situated in the said county of Marion; that after the execution of said note and mortgage the said Jesse H. Adams died, and the said respondent, Sila A. Adams, was duly appointed his administratrix with the will annexed. It is alleged in the complaint that the respondents failed to pay the installment of interest which fell due on the twenty-third day of August, 1884, and that consequently the whole sum of principal and interest became due by the terms of the note, and the suit was instituted to enforce payment of the entire demand.
The respondents in their answer alleged that when the note was made both payee and maker resided in the county of Marion, but that the appellant then, and for more than four months past had, resided in Multnomah County, and that said note had, during such time, been in said last-mentioned county, and had not at any time during said period been in Salem, or to be found there; that the respondent had not presented said note to the maker for payment at any time, at Salem or elsewhere, or demanded payment of said interest; that on said twenty-third day of August, 1884, the said maker was, and ever since had been, able, ready, and willing to pay to the holder the said interest, and that he had in Salem, when said interest became due, sufficient funds to pay it, and was then willing, and tendered the amount and brought it into court, and deposited it for the appellant. These several allegations, excepting place of residence of the .appellant, were denied in a reply filed on behalf of the appellant, and which constituted the main issues tried. Evidence was taken in the case, from which the Circuit Court found that said installment of interest had been tendered; and the amount having been paid into court, decreed that it be applied to the payment thereof, and that the appellant pay the costs of the suit. I have examined the evidence, and am satisfied that the respondent R. H. Rutherford intended to pay such interest at its maturity. The appellant had been, before it accrued, negotiating with him to pay the whole claim. About the day it fell due, the said respondent transmitted to her a check drawn by the Oregon and California Railroad Company on Ladd & Tilton, which he had obtained, amounting to $94.50, and two or three days thereafter sent her a draft on Allen & Lewis for $125; that several days before the said twenty-third day of August he wrote her, inquiring as to whom he should pay said interest; that he made arrangements with a banking-house at Salem by which he might draw on it for funds. Subse quently to sending the check to appellant of $94.50, ho received a letter from Messrs. McDougal & Bower, appellant's attorneys, bearing date August 26, 1884, in which the same was inclosed, and which stated, in effect, that the appellant would not receive it, as it was not the whole, amount. The said draft was also subsequently returned. Thereupon, he sent the balance due on said interest by express in the care of Messrs. McDougal & Bower; that, afterwards the summons in the suit was served upon him, and. he then sent his brother down to pay it, but appellant would not receive the amount. '
It is unnecessary to review the evidence further. There can be no question in my mind but that said respondent used all reasonable efforts to pay said interest; still I do not think they strictly or technically amounted to a tender. I understand the rule in such cases to be that the payor of a note must be at the place of payment at the time it matures, ready and willing to pay the same, and that he should either deposit the amount of money due in some bank or other place to be paid, or keep it intact; and in either case, if suit be commenced, carry it into court and deposit it there when he files his answer. These very nice requirements of the law upon the subject of tender were not observed by the respondent in this case, neither was the appellant at Salem on said twenty-third day of August, 1884, to receive said interest, nor had she designated any person to whom it could have been paid. The result is, that, as a matter of strict law, she was entitled to' a decree for the payment of the amount of said interest, and to have the mortgaged property sold, and the proceeds applied for that purpose* The appellant's counsel further claim that, as a sequence, the entire debt became due, and that the appellant is entitled to a decree for the full amount, in accordance with the clause in said note which provides that the interest shall be paid annually, "and if not so paid, the whole sum, both principal and interest, to become immediately due and collectible, at the option of the holder of the note." But I do not think they can maintain that position. I am of the opinion that such a clause in a note must be construed independently of the rules established by the law merchant. It must stand upon its own basis. It is a stipulation grafting upon the note another genus. Under the lex mercatoria, as expounded by the American courts, we may be compelled to conclude that the appellant need not aver or prove that she performed, upon her part, the acts by which payment of said interest could have been made, in order to maintain her suit ; but it does not follow that she is relieved from averring and proving such performance in order to obtain the benefit of a provision foreign to that Code. The stipulation ought not to be rendered effectual, except in accordance with the principles of the general law of contracts. In that view of the matter, the appellant should not be, heard to complain of the said respondents not being present at Salem on the day the interest fell due, ready to pay it, unless she was there ready to receive it, or had designated some party to whom he might pay it. He had, about a week before the time, written the appellant to know how or where he should pay the interest, and fair dealing required that she should have answered that letter. His going to Salem upon the day the payment was to be made, and remaining there ready and willing to pay the interest, might have answered the technical requirements of the law; but practically, it would have been an idle affair. It would have been of no benefit to the appellant. He could not have paid the money to any one; and if he had deposited it there, it would have been of no advantage to the appellant whatever.
She apparently did not want him to pay the interest, was anxious that the time in which he was to pay it by the terms of the note should run past; and it appears to me that she is endeavoring, by means of a mere technical rule, to perpetrate what might be a great hardship and wrong upon the respondents. The money was sent to her before she began her suit, and what more could she have honestly desired? Time was not the essence of the contract. The stipulation could only have been intended for the purpose of saving the holder of the security the necessity of commencing a number of suits to obtain satisfaction of the debt, and was not expected to become operative unless the payor utterly failed to make the payment. It could not have been designed as "a trap for the unwary," and the attempt to take advantage of it in the manner in which the appellant is endeavoring to, under the circumstances disclosed by the evidence, is. unconscionable; and if a court of equity were to aid in carrying out a scheme that would enable one party to gain an undue advantage over another, it would abuse the important mission intrusted to it. It may seem very absurd to determine that for one purpose a note has not been paid, and for another that the holder cannot claim a default upon the part of the maker by reason of a nonperformance on his part, but the parties to the note have occasioned the seeming inconsistency by inserting in it stipulations of a dissimilar nature. A promissory note is a written promise to pay a sum of money, at a certain definite time. The stipulation is to the effect that, in a certain event, a sum of money shall become payable; otherwise not. The instrument combines two heterogeneous features, one of which must be interpreted by the law merchant, and the other by the ordinary law of contracts. In the latter case, the party who claims a breach must show performance upon his part. The clause referred to is no doubt lawful, and the view here taken may appear subtile; but it is fair and proper to counteract a technical claim that would work injustice, by the employment of technicality. I concede that the construing of the different parts of the same instrument by different systems of law is the getting down very much to a nicety, but when parties jumble up their transactions by blending elements of a different character, refined discriminations have to be resorted to, especially when the matter comes before a court of equity — a tribunal that can never, consistently with the object and purpose for which it was established, assist in the perpetration of a wrong. I am of the opinion that, upon general equitable principles, the appellant should not be allowed the relief she claims. Equity never enforces a penalty or forfeiture, nor the specific performance of a contract, except to subserve the ends of justice. The appellant has not done equity in the affair, and is endeavoring to secure an unjust advantage. I think the appellant should have a decree for said amount of interest, with costs and disbursements up to the time the money was brought into court, and that the same be applied upon said interest, and the said costs and disbursements allowed as above, and that the respondents pay any deficiency that may remain; and that, in default of such payment, the appellant have leave to enforce it by execution and sale of said mortgaged premises, and that each party pay one half of the disbursements upon appeal to this court; and the decree appealed from be modified in accordance with the principles of this decision.