Court Opinion

ID: 8184088
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:06:19.819662+00
Date Added: 2024-06-11T16:40:21.102051
License: Public Domain

Pinney, J.
The machinery sold by the plaintiffs, whether sold to the defendants on their credit, or to the Cypress Lumber Company, was sold for “ cash at the end of thirty days trial, or note, with interest, due in ninety days;” and, according to the evidence, when the note of the Cypress Lumber Company was mailed by it to the plaintiffs, and when it was received by them, the period of trial of the machinery, etc., had not elapsed, but, having tried it twenty days, the company expressed its satisfaction with it. This was in answer to a letter from the plaintiffs, of a month previous, to the company, sending their account to it, and asking its settlement. They had previously sent an invoice of the machinery, etc., to the Cypress Lumber Company. The plaintiffs, on receipt of the note by mail, acknowledged the receipt of the note “at ninety days, in settlement of account, for which please accept thanks. . . . Awaiting your further valued favors, we -are,” etc. The plaintiffs had charged the machinery to the defendants on their books, and they at once credited them with the note.
"We think that, upon a fair construction of the transaction in question, the agreement of sale would not be complete until there had been thirty days trial of the machinery, etc., according to the terms of the order, and that at the *408time of the delivery of the first note by the Cypress Lumber Company to the plaintiffs there was no. antecedent or pre-existing- indebted ness of the defendants to the plaintiffs, upon any fair theory of the case. There is no evidence tending- to show, as alleged in the complaint, that this note, or any of those given in renewal of it, was taken expressly as security. The note was sent by the Cypress Lumber Company in payment for the machinery, etc., and its receipt was acknowledged in settlement of the account which had been sent for the same property. The terms of the letter acknowledging the receipt, together with the fact that they credited’the account of the defendants with the note which balanced it, all are pretty cogent evidence in support of the claim that the note was received in payment for the property sold. Until there had been a satisfactory trial, we think it is not possible to say there was any indebtedness on the part of the defendants, even upon the plaintiffs’ theory, for the machinery. Until then the title did not pass and no action could have been maintained on the contract for the price. Benj. Sales, 365. In Ford v. Mitchell, 15 Wis. 308, the law was settled in this state to' be that “ where the note of a third person is received upon the sale of goods, or for an indebtedness contracted at the time, the note will be deemed to have been taken by the vendor in satisfaction, unless the contrary be expressly proved, or unless the note be void, and there be fraud or misrepresentation respecting it.” There has been no decision of the court withdrawing or qualifying the law as thus laid down, and as applicable to the particular case of the note of a third party received upon the sale of goods or for an indebtedness contracted at the time, although Mr. Justice Tayloe expressed a doubt in respect to it in Hoeflinger v. Wells, 41 Wis. 628, 631; but that case was distinguished, and a decision of the point was not necessary to the determination of it. The case of Allis v. Meadow *409Springs Distilling Co. 67 Wis. 22, was a case of an antecedent debt, and the point does not seem to have been material to the decision.
This is in harmony with the law as laid down in the state of Yew York from the earliest period. Some of the cases in that state have been cited in Ford v. Mitchell, 15 Wis. 308. The subject has recently been considered by the court of appeals in Mew York in the case of Hall v. Stevens, 116 N. Y. 201-206, and it is there held that where a note of a third party is received for a present, and not a precedent, debt, the presumption is that it was agreed to be taken in payment, and the burden of proving the contrary rests upon the plaintiff; while if it was for the latter, or an antecedent debt, the presumption is that it was not taken as payment, and the onus of establishing that it was so taken rests upon the defendant. See, also, Benj. Sales, sec. 1081, and note, in which it is said that if the seller desires to hold the buyer, the appropriate method is by requiring his indorsement. If the seller accepts the note without indorsement, that fact indicates an intent to take the note in exchange for the goods, and not to hold the buyer. 2 Daniel, Neg. Inst. sec. 1264; Bayard v. Shunk, 1 Watts & S. 95. The whole subject was fully considered and discussed in Gibson v. Tobey, 46 N. Y. 637.
The circuit judge, therefore, erred in charging the jury that the note of a third party would not relieve the defendant, even if received in payment by the creditor, unless such creditor expressly agrees with his debtor, or the person turning over such note, that the note shall be in full payment of the debt, whether the note is paid or not, or that the creditor will run the risk of the collection and payment of such note so turned over to him; and also in instructing the jury that, although the creditor gives a receipt to his debtor for the note of a third party, as in payment of such a debt, it is necessary for. the debtor to prove *410that the creditor expressly agreed to take the same in payment and extinguishment or satisfaction of such debt by the debtor, and also in charging the jury, as' in substance he did, that, if they found that the machinery, etc., was sold to the defendants, the burden of proof was on the defendants, in a case such as this, to show that the note of the Cypress Lumber Company was taken in payment for the machinery, etc. If the note had been the note of the defendants, or of a third party, given for a pro-existing debt, the charge would have been correct; but in this case, for the reason above stated, the burden of proof was on the plaintiffs to show that the note was not taken in payment for the machinery. The entire charge proceeds throughout upon the erroneous assumption that, if the jury found that the machinery, etc., was sold on the credit of the defendants, the debt was necessarily a pre-existing one, and not one presently contracted. For these errors in the instructions to the jury, the judgment of the circuit court must be reversed, and the cause remanded for a new trial.
By the Gov/rt.— The judgment of the circuit court is reversed, and the cause remanded for a new trial.