Eby v. Hoopes

1 Pennyp. 175

• Court: Supreme Court of Pennsylvania
• Decided: May 5, 1881
• Docket: No. 115
• Status: Published

Opinion

The opinion of the Court was delivered by

Green, J.

The learned judge of the Court below in his general charge correctly stated the law relative to the assignment of securities by a debtor to a creditor. Whether such assignment is "in payment or as collateral security is certainly a question of intention depending upon the testimony in the particular case. In the absence of evidence tending to show an intention to pay and receive the securities assigned as satisfaction of the debt, in whole or in part, the law presumes that they were assigned only as collateral. The duty of establishing the contrary is affirmative, and it rests upon the debtor. If he fails to perform this duty the law makes a positive inference that the assignment is only as collateral security, and that inference is substantial evidence upon which the creditor may rely.

The circumstance that the assignment of the security is absolute in form is of no consequence on the question of intention, because the assignment simply operates to transfer the title. Nor is the legal effect of the assignment dependent upon other relations which may subsist between the parties. Whether they be husband and wife, or parent and child, or strangers in blood, can make .no difference when the one relation of debtor and creditor is under consideration, and there are no special circumstances affecting the case. In Leau v. James, 10 S. & R,., 315, this Court said, Tilghman, C. J.: “ When the defendants set up the assignment of the bonds as a payment, it is incumbent on them to prove that it was so intended. The writing itself shows no such thing, and in ease where a chose in action is assigned by the debtor to the creditor, I think the presumption is that it was not intended as an absolute payment unless it is so expressed. The reason of this presumption is that such assignment is not in its nature a payment. It puts no money in the hands of the creditor, but only gives him the means of collecting money from another.”

We said, in the case of Perit v. Pittfield, 5 Rawle, 171: “ The general principle is that property placed by the debtor in the hands of the creditor is not to be construed as received in full discharge of the debt, unless that plainly appears to have been the intention of the parties.”

In Jones v. Johnson, 3 W. & S., 278, Gibson, G. J., said: “ There are presumptions which operate even in cases of intention as prima fade evidence on the one side or the other; for instance, that a bond given by a stranger, after the debt iucurred, was accepted as collateral security.” The learned judge of the Court below, in his answer to the defendant’s third point, said: “When an absolute assignment is made by a husband to a wife of a judgment or mortgage, there is no presumption of law that it or they are assigned as collateral security independent of proof that they were so accepted.” As an abstract proposition, independent of any relation of debtor and creditor existing between the husbáfid and wife, this is true; but it is said in an action at law where that relation does exist, and the husband, who is the debtor, is seeking to have an inference of payment affixed to a mere transfer of a security by himself to his wife because it was absolute in form. When said in such a connection and between parties so circumstanced, it tended to mislead the jury, and was therefore erroneous.

This is still more apparent when we consider the answer to the defendant’s fourth point, which was, “ That there is no evidence that either the Lewis mortgage or the Mark-wood judgment was assigned as collateral;” to which the Court answered, “ that they have no knowledge of such evidence ; but that the evidence in the ease is for the jury, and whether there is such evidence is for the jury to determine.” This answer entirely ignores the force of the legal presumption, which is in itself evidence the securities in question were assigned as collateral. This evidence there was in the case, and the Court should have so said to the jury instead of leaving it to them to say whether there was any such evidence.

Upon these two answers the jury were at liberty to infer that, unless there was affirmative evidence on the part of the plaintiff showing that the mortgage and bond were taken as collateral only, they were really taken as payment. This would shift the burden of proof from the debtor to the creditor, who requires no proof, having already a legal presumption which, in itself, was evidence that the assignment was as collateral and not as payment. For these reasons the judgment must be reversed.

Judgment reversed, and venire de novo awarded.