Court Opinion

ID: 9300241
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:06:43.149287+00
Date Added: 2024-06-11T17:13:39.312518
License: Public Domain

G-KiiDK, Circuit Justice.
Taking the note of hand of the debtor is not per se legal satisfaction, unless there is evidence that the parties intended it should operate as such. Where the debtor has two securities, as in the present ease, it will not be easily presumed, that he has voluntarily relinquished one of them, and that the best of the two. The giving the receipt for the notes, as in full of the account, it is true, is prima facie evidence that such was the case. But a receipt is no estoppel; and wnen we consider how little attention is usually paid to the peculiar form or expressions of such documents, signed by mechanics, and drawn up by the clerks of the employer, such formal words may be easily rebutted, by showing the true nature of the transaction. The note taken is no higher a security than the account, and, unless the transaction shows an intention to surrender without consideration the better security, these formal words in a receipt, given when the account is settled, ought not to he considered as at all conclusive ot' an intention to receive the lesser security as satisfaction. The case of Jones v. Shawhan, 4 Watts & S. 263, is directly in point, and states the law as applicable to th's case. The law as laid down in that case is this — a new note without a-fresh consideration is not satisfaction of an open account, or of a preceding note unless it has been accepted as such: and though the presumption is, that a larger security is not exchanged for a smaller one, yet a receipt of the lesser security as “in full” is but evidence to go to the jury to rebut such presumption. But it is not conclusive, and when opposed by the presumption., it may be explained by showing that there was no contract to take the lesser security and release the better, and that the intention to accept it as satisfaction and relinquishment of another security, was not in the contemplation of the parties. In this case, the duty of finding these facts cannot be devolved upon a jury; and on a careful examination of the evidence, I am convinced that the libellant when he signed this receipt, had not the idea before his mind of releasing any security held by him. Nor did the officer with whom this settlement was made, contract for any such release, or that the note should be received in actual satisfaction.
In the 1st place, it does not appear that notes were demanded for the purpose of having a • marketable security on which to raise money, or that they were used for that purpose. They are brought into court and surrendered. 2nd. The libellant called for a settlement of his account, not for the purpose of getting immediate payment by note, but to have the account settled and adjusted before the officers who had dealt with him, should send in their threatened resignation. The notes were given as evidence of the amount of the balance, due on settlement, says the witness, “on account of the directors being about to resign.” When the account was stated and adjusted with the president of the company, he ordered the clerk to draw these notes and take a receipt for them. No direction was given to the clerk in what form to draw the receipt either by the president or by Sutton. The clerk drew it in his usual form. Sutton signed it without criticising its form, or perhaps reading it. His object was to get his account settled, so that he might not have difficulty with the new officers of the corporation. No suggestion was made by either party, that these notes were either wanted to raise money on, or given as a favour, or received in satisfaction of any other security held by the mechanic. There was no consideration given, or intended to be given for the relinquishment of one of the mechanic’s securities, nor did such an act enter into the contemplation of the parties at the time of their settlement. The clerk drew the receipt in the usual form in his receipt-book without any instruction from either party to put it in any particular form, and thus made it have an apparent, effect which was not within the scope of the contract, or contemplation of the parties.
*468Upon a more careful examination of the ease than 1 was able to give originally, 1 feel satisfied that a jury would haye been justified in finding that it was not the intention of the parties to this settlement to. give or receive their notes in satisfaction of the debt so as to relinquish the security on the vessel given by law to the libellants. Decree affirmed.