Eaves v. Henderson — 17 Wend. 190

Majority

p. 109

Eaves vs. Henderson.

Headnote

Where a promissory note is given for a specific sum, evidence that at the time of the giving of the note, it was agreed between the parties that an account which the maker held against the payee should he deducted from the note, is not admissible.

An agreement, however, made after the giving of the note, that a debt contemplated to be contracted by the payee with a third person, should he allowed in payment of the note, is a valid agreement, and the debt, when contracted, may be shown in payment of the note under the general issue.

But such debt can not be allowed as a set-off;^[1] and where a court of common pleas instructed a jury that they might allow it, either in payment or as a set-off, the judgment entered upon a verdict in pursuance of such charge was reversed.

Whether an agreement to set off precedent debts operates as a payment, satisfaction or extinguishment, qucre.

Error from the Yates common pleas. Eaves and Henderson in a justice’s court, and declared on a joint and several promissory note, given by Henderson and one George B. Nichols to the plaintiff, for $28‘84, dated 30th March, 1833, payable six months after date. The defendant pleaded the general issue and gave notice of set-off. The cause was tried before the justice, who rendered judgment in favor of the plaintiff. The defendant appealed to the Yates common pleas, where the cause was again tried. After the making of the note was shown, the defendant proved, that at the time of its delivery by Nichols to the plaintiff; the latter agreed that a book account which Nichols held against him for goods sold out of his store, amounting to the sum of $8-33, should apply on the note. A witness for the defendant proved the delivery of the articles contained in the account, the two first items of which, amounting to $3-25, were delivered previous to the date of the note. The same witness further testified, that it was also agreed by the plaintiff, at the same time, to take the balance of the note in goods out of the store, and that it was customary at Nichols's store to charge interest on goods sold, after six months. The whole of this evidence was objected to as inadmissible, on the ground that it contradicted the note and varied [191] the contract b'etween the parties as therein expressed. The objection was overruled. The defendant then proved an account of goods sold to the plaintiff at the store of Nichols (and one Stoll, who was a partner of Nichols), between 16th May, 1833, and 25th January, 1834, amounting to $24, Stoll having assigned his interest in the account to Nichols. The plaintiff objected to this evidence also as inadmissible, on the ground that the notice of set-off referred to goods sold by the defendant, and the proof was of goods sold by third persons. The objection was overruled. The court instructed the jury that they might allow both the accounts either as a set-off or payment. The jury found for the defendant. The plaintiff, having excepted to the charge and to the several decisions of the court, sued out a writ of error.

p. 110

W. Cornwell, for plaintiff in error.

J. Taylor and D. T. Moseley, for defendant in error.

By the Court,

It is highly probable that the jury may, upon the evidence, have found that the goods, except the two first items, which bore date before the note, were delivered in payment. That, however, we do not know. They may have thought there was no agreement to let the accounts apply; and then they must have gone on the right of set-off. The court gave them the alternative, which should not have been done. It involves the absurdity of an account due to A being let in as a set-off in favor of B. That is objectionable enough of itself, independent of the question of variance, which I also incline to think would be fatal. Beside, you can not contradict the note. I am satisfied it is that view alone which casts any doubt on the propriety of submitting the two items to the jury. An agreement to apply a subsequent account, to be run up by the plaintiff with Nichols, or with him and his partner, the account being afterwards made, and that too, as here, with the assent of the partner, would enure as a payment, beyond all [192] doubt, and come in as such under the general issue (Kinnerly v. Hossack, 2 Taunt. 170; Roper v. Bunford, 3 id. 76; Babington on Set-off, 4, 5, 6). And an agreement to apply a distinct independent precedent debt, the agreement having been made after the note given, has recently been held, I see, also to operate as a payment (Gardiner v. Callender, 12 Pick. 374 ). The case was this: Bobbins and Coffin were executors of Smith, deceased, to whom Payne, deceased, owed $6000. Bobbins agreed with Payne’s executor that $3235, due from Bobbins to Payne, should be applied to and extinguish so much of the $6000. Held, a payment protanto. That an agreement to set off precedent debts operated as a payment, satisfaction or extinguishment, was formerly doubted ( Vin. Abr. Accord, A. pl. 8; Saunderson's case, Goldsb. 80, pl. 17; Davis v. Ockham, Sty. 245; and see Lutw. 57; Rol. Abr. 123; Bac. Abr. Accord, Sec. A). The doubt does not seem fully to be cleared up in Massachusetts (Cary v. Bancroft, 14 Pick. 315 ). And there yet seems, by the latest cases I have seen, considerable difficulty upon it in England (Cuxton v. Chadley, 5 Dowl. & Kyl. 417; 3 Barn. & Cress, 591; per M. R. in Jeffs v. Wood, 2 P. Wms. 129; see also Peabody v. Peters, 5 Pick. 1 , and Sargeant v. Southgate, id. 312).

But the difficulty here in respect to the two small items of articles delivered before the giving of the note, lies in the evidence being a contradiction of the amount expressed in the note. Looking at the evidence as it comes before us, I do not see that the jury would have been wrong in allowing nearly the whole as a payment. But as they were allowed to take it up in the light of a set-off, there must be a new trial, under the general issue alone, and the jury must be directed to consider the accounts, except the two first items, as a payment, and not a set-off, provided they shall think the evidence shows a payment. As our interference is, I imagine, little more than formal, the costs must abide the event.

Judgment reversed.