Court Opinion

ID: 4929240
Source: CourtListenerOpinion
Date Created: 2021-09-24 01:05:03.518969+00
Date Added: 2024-06-11T08:14:24.307907
License: Public Domain

Rice, J.
The bond was given as collateral security for a debt which was due from the defendant Reed, to the plaintiffs, and also as security for other debts which the defendants contemplated contracting with the plaintiffs.
So far as the preexisting indebtedness of Reed is concerned, there is no reason suggested why it should not be secured by the bond. The case finds that the plaintiffs’ claim had been forwarded to an attorney for collection, and by him the bond in suit was taken, and in its terms covers that indebtedness.
As to the claims which originated subsequent to the execution of the bond, the defendants contend, that they are not liable in this action, because the bond was given only as security for “ goods and cash,” to be delivered in the future, and because they affirm, for all the goods delivered subsequent to the date of the bond, payment was made by the negotiable promissory notes of Reed.
The rule of law in this State and in Massachusetts, is that the giving of a negotiable note is prima facie evidence of the payment and satisfaction of a simple contract debt. But this legal presumption is by no means conclusive, but may be rebutted by proof that such was not the intent of the parties.
The simple question for the consideration of the Court, is whether the facts in the case overcame this presumption. To determine this question, the situation and acts of the parties must be considered. Reed was indebted to the plaintiffs, they were seeking to enforce payment or obtain security, he desired extension of time for payment, and additional credits for goods and cash. For this purpose the. bond was given. Now is it credible that those plaintiffs having thus obtained security not only for past indebtedness, but for future advances, should immediately thereafter voluntarily and intention*563ally disregard that security, and rely solely upon the note of the man whose ability to pay they manifestly distrusted ? Such a proposition carries improbability on its face. And that improbability is increased by the letters of the parties in the case.
So too as to the drafts; we ar¿ of opinion that the situation of the parties and the evidence in the case authorizes the inference, that they were paid by the plaintiffs out of their own funds, and not from the funds of the defendants or either of them.
Whether the conditions of the bond are such as to restrict the credits to be covered by it to “ goods and cash” only, is not certain. But as on the other branch of the ease we think the plaintiffs entitled to recover, it becomes unnecessary to express an opinion upon that point.
According to agreement a default is to be entered for the several sums due, as specified in the report, with interest thereon from the time they severally became payable, or by their terms were to draw interest.
Shepley, C. J., and Howard and Appleton, J. J., concurred.