Court Opinion

ID: 5459899
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:32:09.872235+00
Date Added: 2024-06-11T08:32:49.979869
License: Public Domain

By the Court,

E. Darwin Smith, J.
The referee, I think, disposed of this case correctly. The giving of the §2750 note did not discharge absolutely, or satisfy, the two notes of §1000 and §1750. It was a mere renewal of those notes ; the making simply of a new promise to pay the defendants’ own debt. The giving of a promissory note of a debtor, without any additional security, has never been held to pay or satisfy the original debt. It is a payment, it is true, sub modo, but the creditor may always sue and recover upon the original consideration by producing and cancelling the note at the trial. The effect of taking the new note was nothing more, upon the actual right's of the parties, than an extension of the time of payment of the debt; and this extension, not affecting the rights of sureties, is of no consequence. The plaintiff was entitled to count upon the original notes of §1000 and §1750, as he did, as valid notes, and make such proof on the trial as should be necessary to avoid any defense that might be interposed. On its appearing on the trial that these notes were canceled and in the hands of the defendants, the presumption of payment arising from these facts, the plaintiff was necessarily called upon to repel. The notes themselves, in the hands of the defendants and canceled, established prima facie payment, as alleged in the defendants’ fourth and fifth answers. But as no reply was allowable to those answers, the plaintiff was at liberty, under section 168 of the code, to give any proof in avoidance thereof, which would have been a good legal reply thereto. The proof given consisted in showing how those notes came to be canceled and surrendered, and showed that they were not in fact ever paid but simply given up for a new note of the defendants for §2750, and that this new note was not paid. On this proof and on the production and surrender of the §2750 note, *299I do not see why the plaintiff was not entitled to recover, independently of the questions relating to the validity of this note. It was a protested note, not paid, in the hands of the creditors, given confessedly in renewal of the previous notes of $1000 and $1750 on which the defendants were indorsers, duly fixed. But if this were not so, and the plaintiffs were hound primarily to resort to their remedy upon the $2750 note, the election of the defendants to disaffirm the contract contained in and" made hy this new note, for usury, remitted the plaintiffs to their original rights. (Shepherd v. Hamilton, 29 Barb. 156. Le Farge v. Herter, 5 Seld. 241.) The record and proceedings in the suit upon this $2750 note were properly admitted to show such election on the part of the defendants. They were not received to establish that such note was in fact usurious, as a basis of an affirmative claim on the part of the plaintiff, but simply as evidence that the defendants had disaffirmed such note and had insisted on its invalidity. It is true they had gone to trial and established the usury. That was superfluous. In the case of Le Farge v. Herter, the defense of usury was about to be interposed, and in the case of Shepherd v. Hamilton it was set up in a sworn answer. All that was necessary on the part of the plaintiff was to show that the note which the defendant in this suit set up as a payment of the previous notes they had previously, by some distinct act, asserted and declared to be void for usury, and had definitively elected to annul and disaffirm for that reason. It ceased, thereafter, to be available to the defendants for any purpose, and they were estopped from setting it up as a valid payment of the $1000 and $1700 notes, in this action. These notes were given for a valid debt, and cannot be discharged short of actual payment ; and the law is not yet subject to the reproach that a just debt can be paid and satisfied by a new promise of the debtor, unfulfilled, and which he can avoid at his pleasure. It is a mistake to claim that the plaintiff was allowed in making this proof to give evidence of the commission of a *300criminal offense, for the purpose of enabling them to recover. The plaintiff’s right of action was not based upon the usury which infected the $2750 note, but upon their original debt, and the proof given of the recovery of judgment merely disproved the pretense of payment by such note, and showed that such new note was invalidated and adjudged void at the special instance and distinct election of the defendants. Hence it could not operate as payment of the two notes for which it was given, but instead of discharging them they became, as the learned referee held, by force of such adjudication, valid and operative instruments, and the plaintiff was entitled to recover thereon. As we are satisfied that the case was rightly decided by the referee, I think we may affirm the judgment; but if we had come to an opposite conclusion, I should have had some hesitation about reversing it, for the reason that the reference, being to one of the justices of this court, I am inclined to think it was a mere arbitration.
[Monroe General Term,
September 3, 1860.
Smith, Johnson and Knox, Justices.]
Judgment affirmed.