Court Opinion

ID: 6963645
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:49:55.632462+00
Date Added: 2024-06-11T16:08:31.418216
License: Public Domain

Mr. Justice Craig, dissenting: As I do not agree with a majority of the court in the judgment rendered, I desire to state the rules of law which, in my judgment, should control the decision of the court. The following instrument was filed in the county court, as evidence qf the demand of the Belleville Savings Bank against the estate of Conrad Bornman, deceased: “$10,000. Office of Belleville Nail Mill Co., Belleville, III., July 17, 1874. “Four months after date, pay to the order of Belleville Savings Bank, ten thousand dollars, value received, and charge same to account of Belleville Nail Mill Company. Conbad Bobnman, Pres’t. James C. Waugh, Sec’y. To F. H. Piepeb, Treas., Belleville, 111.” • Written across the face of this instrument appear the words: “Accepted.—F. H. Pieper, Treas.” On the back are the signatures of Conrad Bornman and James Waugh. In the circuit court the cause was tried without a jury, and it was proven that after the draft was executed by the Belle-ville Nail Mill Company, Bornman wrote his name on the hack ■of it, and gave it to F. H. Pieper, and directed him to tell the •cashier of the hank that the draft was not to be taken by the bank unless Mr. Abend placed his name on the back of it; "that when the draft was given to the cashier he was so notified. Abend never placed his name on the back of the draft. He ■executed a separate paper, guaranteeing the payment of the draft if it was not paid by the Belleville Nail Mill Company ■or Conrad Bornman. Had this been all there was of the case, it is plain that Bornman was not liable. His contract was a ■conditional one. He guaranteed the draft on the condition that Abend should also become a guarantor, like himself, by writing his name on the back of the draft, and the bank, before accepting the draft, had notice of that fact. As the condition upon which Bornman agreed to become bound as a guarantor of the paper was never performed, of which the bank had notice before accepting the draft, he incurred no obligation. The bank had no right to take the draft until Abend had written his name on the back of it. It was, as between the bank and Bornman, an incomplete instrument until that condition was complied with, and, so far as the conditional contract of Born-man is concerned, no recovery can be had upon it. But there is another feature of the case, which places the liability of the parties in a different aspect. This draft was .given in renewal of a like one in all respects, except date, made ,on March 14, 1874, on the back of which appear the signatures of Conrad Bornman, James Waugh and Edward Abend, .■as co-guarantors. This last draft, when the other one was taken by the bank, was marked paid, and surrendered, and -was put in evidence on the trial, by defendant. That.the draft ■ of March'14 was in all respects valid, and a binding obligation, ■ and that Bornman was liable thereon as guarantor, is not -■questioned or denied. That it never was in fact paid is also .-a conceded fact. And if Bornman shall not be held liable as ¡guarantor on the renewal draft of July 17, then it is contended that his liability as guarantor of the old draft of March 14-remains undischarged, and may be enforced against his estate. The authorities are not uniform on the subject of the giving; of a bill of exchange or a negotiable promissory note for a, pre-existing debt being regarded as payment, or not, of the indebtedness. But the prevailing rule I regard to b.e as stated in 1 Edwards on Bills and Notes, sec. 290, viz.: “In general, the American courts have'followed the doctrine of the common law, holding that the negotiable note of a debtor, when delivered to his creditor on his own debt, without express agreement, is not a payment thereof, but that the giving of the note maybe shown in evidence on the trial in an action brought on the-original demand, and will defeat a recovery on it unless the-note is produced and cancelled.” In further support of such, rule, see secs. 277, 278, 286, 290, same author, and 1 Daniel on Neg. Inst. see. 205 ; 2 id. secs. 1259,1260,1266,1267, and. authorities cited in the notes. And see McConnell v. Stettinius, 2 Gilm. 713; Miller v. Lumsden, 16 Ill. 161; Morrison v. Smith, 81 id. 221. Generally, where a new bill or note is given in renewal of another bill or note, the new bill or note operates only as a. suspension of the debt evidenced by the original, and is not-a satisfaction of it until paid. Although in some cases it has-been held that an agreement to take a bill or note in absolute-payment of a debt must be express, in order to render it such, the better opinion is said to be that such agreement may be-implied as well as expressed, and that all the circumstances may be looked to, to ascertain what was the actual agreement of the parties. 2 Daniel on Neg. Inst. sec. 1268. There was in the present ease nothing of any agreement that the renewal draft should be taken in payment of the old one, and all the circumstances indicative of any intention of the parties in that respect, are the surrender of the old draft,— the bank stamping it “paid” on its face,—and indorsement on the renewal draft of payments subsequently made. But it is-held that delivery of the old note, without arrangement that it shall be extinguished, does not, of itself, operate as a presumption of extinguishment; neither does the receipting of the renewal note as payment so operate,—such receipt being interpreted as meaning conditional payment, to be in full when the renewal note is paid. (See authorities above cited.) The circumstance of indorsing some payments that were made, on the last note, although dwelt upon by counsel, I regard ^s of no significance. It is said by Parsons, (2 Parsons on Notes and Bills, 203,) that the general custom and understanding of the mercantile world would seem to demand that a new note given in renewal of an old one, which is “taken up,” as it is termed, should pay and cancel the old note for which it is given. But this appears to be but the author’s individual opinion, and not having support in the adjudicated cases. (See 2 Daniel on Neg. Inst. sec. 1266.) But it is laid down by Parsons: “When a new note is exchanged for one void or. worthless from any cause, as, usury, the former contract is not thereby avoided. The debtor has not given that to the creditor which the creditor supposed, and therefore the creditor is not bound thereby. Nor would an exchange or renewal of notes be held a payment and discharge, if such discharge would injure the creditor.” (2 Parsons on Notes and Bills, 205, 219.) Daniel lays it down: “Even where a note is considered as paid and discharged by one given for it, as a general rule the case is excepted where the debt would, by such construction, be lost, because then the intention to receive the second as a discharge would be prima facie rebutted. This view was taken where the first note was secured by mortgage, citing authorities.” 2 Daniel on Neg. Inst. sec. 1266. A renewal note has the benefit of any security for the payment of the original, whether by way of mortgage, deed of trust, or otherwise, and the holder may enforce it. (1 Daniel on Neg. Inst. sec. 148.) This is abundantly established by the authorities, where the first note is secured by a mortgage. It is also held, where the renewal note is void for usury in it, that the original note is not discharged, and may be enforced. Rice v. Welling, 5 Wend. 595; Leary v. Miller, 61 N. Y. 490. In the case at bar there was a clear liability on the part of Bornman and Abend, as co-guarantors, for the payment of the draft of March Í4, 1874. That draft has never been paid, and Bornman’s liability to pay it has not been discharged. As respects Bornman, all that he has done in the way of discharging this undoubted liability of his, is, that he has made an abortive attempt toward the continuation and extension of his liability for four months. In place of his guaranty of the draft of March 14,:he was willing to become guarantor with Abend on a draft in renewal, payable at the end of four months, and went so far in that purpose as to place his name on a renewal draft dated July 17, payable at four months, upon the condition that before it was delivered Abend should likewise place his name on the draft as co-guarantor. This Abend did not do; consequently Bornman’s placing his name on the renewal draft went for naught, and it was as if he had never-done so. So Bornman’s liability on the draft of March 14,1874, remains with nothing whatever done on his part in discharge of it. To hold Bornman to be quit and clear of all liability by reason of the bank taking the renewal draft, would be a manifest injustice, and not in accordance with the intention of either party. The bank surely did not intend to release the liability of Bornman, as guarantor. Bornman had no intention or expectation of having his liability as guarantor extinguished. He was willing and expected to continue his existing liability as guarantor, by having Abend join with Mm in the guaranty of the renewal draft. But if Abend would not become a co-guarantor with him of the renewal draft, then, of course, Born-man intended and expected that his liability, together with that of Abend, as guarantor on the old draft, should be and remain as it then was. There is no reason why his mere unsuccessful attempt to renew the guaranty should discharge it. His putting his name on the renewal draft, without a delivery thereof, was of no detriment to him or benefit to the bank, and the taking by the latter of the renewal draft, with Bornman’s name upon it, should, under the circumstances, count as nothing toward the discharge of his liability as guarantor upon the original draft of March 14, 1874. Nor did the separate guaranty given by Abend affect the rights of any of the parties. He remained bound as co-guarantor on the old draft with Born-man. For like reason that the taking of the renewal draft would not have been held to affect the security of any mortgage, had there been one, for the payment of the original draft, I think it should not be held to discharge this security of a guaranty for the payment of the first draft. Yates v. Valentine, 71 Ill. 643, which is referred to by counsel for defendant in error, is obviously a quite different case from the present, and should not control it. That was not a case of a mere renewal of a note, but in the place of a former note the maker of it had given a new note, made payable to another person than the payee of the former note, and thus had been placed in a worse condition, where to have enforced the old note against him would have made him subject to a double liability for the same debt. In McConnell v. Stettinius, supra, the rule as I have stated, which- generally prevails, was laid down, and has never intentionally been departed from by this court. But it is said the plaintiff must recover on the claim .presented, (the draft of July 17,) or not at all,—that the draft of March 14 was not presented as a claim against the estate, and an allowance can not be predicated upon it. I do not concur in this view. The doctrine contended for is entirely too technical. No pleadings are required in the county court in a proceeding of this character, and I think a party ought to recover where the evidence shows that he is entitled to a judgment, although a mistake may have occurred in filing the claim. Harrison v. Lindley, 104 Ill. 247, is a case where a recovery was sustained on proof variant from the claim filed. Section 24 of the Practice act provides, “that at any time before final judgment, in a civil suit, amendments may be allowed * * * changing the parties, either plaintiffs or defendants, changing the form of the action, and in any matter, either of form or substance, in any process, pleading or proceeding, which may enable the plaintiff to sustain the action for the claim for which it was intended to be brought, or the defendant to make a legal defence.” This act has always received a liberal construction, and since its passage amendments almost unlimited in character have been sustained when made, even in courts where written pleadings are required. Less strictness would, of course, be required in courts where ne written pleadings are required. Indeed, the whole theory and policy of our practice now is, to allow a recovery in all cases, regardless of technical rules, where the evidence shows a right of recovery. Such being the case, it would be no less than taking a step backward to lay down a rule of practice, in a court where no pleadings are required, which would defeat a recovery on the evidence, merely because the evidence was variant from the claim in writing, filed as the foundation of the action. This I am not prepared to do. It is also insisted that the question involved is one of fact, upon which the decision of the Appellate Court, affirming the judgment of the circuit court, is conclusive. I do not take that view of the question. Had the question been merely whether or not the draft had been paid, that might be regarded as a question of fact. But that was not the point. The question was, whether the giving of the draft of July 17 operated as a payment of the draft of March 14,—and that was a question of law. Whether the draft last dated was given in renewal of the one of date March 14, may be regarded as a question of fact; but when the fact was established by the evidence, whether the renewal operated as a payment of the first draft was a question of law, upon which the court was required to pass in rendering a judgment in the cause. There was here no dispute in regard to the facts. Conceding the facts, therefore, to he as claimed by the defendant, did they constitute a defence, under the rule indicated in Fitch v. Johnson, 104 Ill. 119 ? That was a question of law, which may be reviewed on appeal.