American Malting Co. v. Souther Brewing Co.

80 N.E. 526, 194 Mass. 89, 1907 Mass. LEXIS 920

• Court: Massachusetts Supreme Judicial Court
• Decided: February 26, 1907
• Status: Published

Opinion

Braley, J.

The ease having been tried before the judge, without a jury, the findings of fact are not open to review, but must be treated as conclusive if there is any evidence to support them. White Sewing Machine Co. v. Phenix Nerve Beverage Co. 188 Mass. 407, 409, and cases cited.

Unless certain promissory notes made by the partnership to the order of the plaintiff are to be credited as a partial payment the entire amount for which suit has been brought is due. It has been settled law in this jurisdiction for more than a century, that where a debtor delivers to his creditor either his own or the negotiable promissory note of a third party for the whole, or a part of the indebtedness, a presumption arises that it was given and received in satisfaction of the debt, although this presumption may be controlled by evidence that by acceptance the creditor did not intend to extinguish the original claim. Thacher v. Dinsmore, 5 Mass. 299, 302. Wiseman v. Lyman, 7 Mass. 286. Curtis v. Hubbard, 9 Met. 322. Brigham v. Lally, 130 Mass. 485. Dodge v. Emerson, 131 Mass. 467. Green v. Russell, 132 Mass. 536. Ely v. James, 123 Mass. 36, 44. Davis v. Parsons, 157 Mass. 584, 587. Brewer Lumber Co. v. Boston & Albany Railroad, 179 Mass. 228, 234. Jeffrey v. Rosenfeld, 179 Mass. 506, 509. Paddock & Fowler Co. v. Simmons, 186 Mass. 152, 153.

But as this rule of evidence was not the law of the plaintiff’s place of business where the notes were accepted, it is not applicable unless the contract was to be performed here. Carnegie v. Morrison, 2 Met. 381, 397. Tarbox v. Childs, 165 Mass. 408, 411, and cases cited. Andrews v. Pond, 13 Pet. 65. The auditor, upon whose findings the ruling as to the place of performance rests, not only reports that the malt was to be delivered at Boston

* where the title passed and consequently the defendant’s promise to pay arose, but the notes were made, and were payable here, though sent by mail to the plaintiff. When considered separately the place of the making and performance of the contract of sale were the same, while the notes became completed contracts only upon their acceptance in another State. But this fact is not decisive. The debt due for the malt was payable in this Commonwealth where the performance of this contract began, and the notes given which it is contended were to be applied in payment also were made payable here, and not elsewhere. Liverpool & Great Western Steam Co. v. Phenix Ins. Co. 129 U. S. 397. When accepted, the acceptance having been according to their tenor, it was ruled correctly that the contract was to be performed at the place selected by the parties. Carnegie v. Morrison, ubi supra. Penobscot & Kennebec Railroad v. Bartlett, 12 Gray, 244, 248. Shoe & Leather National Bank v. Wood, 142 Mass. 563, 567. Tarbox v. Childs, ubi supra. Andrews v. Pond, ubi supra. De Wolf v. Johnson, 10 Wheat. 367, 383. Chatenay v. Brazilian Submarine Telegraph Co. [1891] 1 Q. B. 79, 82. Hamlyn v. Talisker Distillery, [1894] A. C. 202. See Nashua Savings Bank v. Sayles, 184 Mass. 520, 522.

But while under the rulings this presumption must be included as forming a portion of the evidence upon which the finding of payment rests, the plaintiff contends that the entire testimony is insufficient to sustain the finding that there was a written agreement to receive the notes in payment, or that by their acceptance it intended to extinguish a part of the original debt. The inception of this agreement is contained in two letters, which are to be construed with later letters to ascertain whether any or all of the notes were given and accepted in partial liquidation, or as security. Before the organization of the corporation the plaintiff had dealt with the partnership to whose business the defendant had succeeded, and from the auditor’s report of their commercial relations, and the letters which passed between them, it is evident that the plaintiff was desirous of retaining the corporation as a customer, and when the arrangement was proposed regarded the financial condition of either as unexceptionable. In less than a year after the contract for malt was entered into the indebtedness on account amounted to a large sum which had become overdue. The plaintiff insisted upon payment, and on June 27,1899, while acknowledging and regretting the delay, the defendant offered by letter the notes of the partnership “ to settle everything due to the present moment, if acceptable.” To this letter on June 28, 1899, the plaintiff replied “ that we would be pleased to receive notes from you, with interest, for the overdue amounts . . . and if you wish would be pleased to accept your notes for everything shipped you so far, having same run on stipulated time of contract.” The subsequent correspondence discloses a similar course of dealing as to accruing indebtedness, and when interpreted with reference to the precedent conditions, and of the further finding that at least in one instance the plaintiff returned an invoice receipted as paid, and" promised that other invoices should be similarly receipted, these letters with those which followed properly were held to contain an unequivocal proposition to give, and agreement to accept, the notes of the firm in settlement of the open account then payable, and of any account that might become due for future deliveries. Smith v. Faulkner, 12 Gray, 251, 255. Proctor v. Hartigan, 139 Mass. 554. Hebb v. Welsh, 185 Mass. 335. Bassett v. Rogers, 162 Mass. 47. Lynn Safe Deposit & Trust Co. v. Andrews, 180 Mass. 527. Callender, McAuslan & Troup Co. v. Flint, 187 Mass. 104. Buffington v. McNally, 192 Mass. 198.

If, however, the plaintiff was induced to accept the notes in partial payment by misrepresentations of the defendant acting through its treasurer, upon discovery of the fraud it had the right to rescind, and on rescission its original debt would have been fully restored. While there were material misstatements in the defendant’s letter relating to the cost of the brewery, and payment for its construction, to avoid the contract of payment the plaintiff must prove not only an intent to defraud, but that it actually had been misled by the deceit. Collins v. Denison, 12 Met. 549. Brady v. Finn, 162 Mass. 260. Hillyer v. Dickinson, 154 Mass. 502. Lee v. Tarplin, 183 Mass. 52, 56. Both questions were issues of fact, and the adverse findings that there was no purpose to mislead, as the defendant’s*treasurer, who also was a member of the firm, believed at the time that the firm was solvent, and that the misrepresentations did not influence the plaintiff’s conduct, are supported by the evidence. Holbrook v. Burt, 22 Pick. 546. Curtis v. Aspinwall, 114 Mass. 187. Gilfillan v. Mawhinney, 149 Mass. 264, 266.

The remaining requests for rulings must be considered in connection with these special findings, which although adverse to the plaintiff are not shown to have been erroneous, and when thus considered those refused were irrelevant, and the rulings given were correct in law.

Judgment for the plaintiff on the finding.

The contract signed by the parties required the delivery of the malt at the Boylston Street railroad station in Boston, freight to be paid by the plaintiff.