Hodges v. Tennessee Implement Co.

123 Ala. 572

• Court: Supreme Court of Alabama
• Decided: November 15, 1898
• Status: Published

Opinion

McCLELLAN, C. J.

It was held in the case of Pearson & Fant v. Thomason, 15 Ala. 700, that “if a creditor agrees with his debtor to accept in discharge of the debt a less sum in money than the debtor owes, on an overdue note, and the latter pays the sum of money so agreed, but the note is not delivered up, it is a nude pact, and cannot bar a recovery of the balance due on the note.” And it could have made no difference had the creditor evidenced this agreement and its execution by giving the debtor a receipt for the less sum and specifying therein ‘that it was received in full satisfaction of the note. As the law then stood the agreement would have been wholly inoperative for the Avant of consideration, and the receipt Avould not have aided the transaction though' both parties may have intended full satisfaction of the debt, and the receipt may have been executed by the creditor and taken by the debtor as evidence of such intended consummation. If the law as thus expounded in Pearson & Fant v. Thomason, supra, Barron v. Vandervert, 13 Ala. 232, and other of our early cases Avere the laAV at this time, it is altogether clear that the receipt by the Tennessee Implement Company of Hodges’ check for a part of the sum due on his note to the company but purporting to be in full payment of said note, and the collection of said check by the company and retention to this day and appropriation by it of the proceeds of the'check, would not constitute payment and satisfaction of the debt in full, e/ven had both parties so.intended it, and a receipt had been passed eAddencing such intention. It Avould be a nudum pactum and constitute no bar to a subsequent action for the balance of the debt, the note not having been surrendered. That is the law today, with this exception, that by virtue of the statute now of force, “all receipts, releases, and discharges in writing, whether of a debt of record, or a contract under seal, or otherwise, must have effect according to the intention of thq parties thereto.” — Code, § 1805. Whatever operation is to be accorded to this statute, nothing can be plainer than that it can have no effect in respect of even an expressed, receipt not intended to' operate as such by the parties thereto, and, a fortiori} no effect by way of converting the indorsement by the creditor of such a check into a receipt in full by implication and giving it effect as such when the indorsement was made only for the purpose of collecting the check as a partial payment on the note and without any intention whatever that the indorsement should operate as a receipt in full. That is the case we have here. The statute in question does not'apply to it. In respect of it the law is now as it, was declared in Pearson & Fant v. Thomason, supra; and the fact that the plaintiff indorsed, and collected the check and kept and applied its proceeds to the note pro tanto constitutes no defense to this action for-the balance evidenced in the note. It is shown without conflict in the evidence and by competent evidence and beyond a contrary inference that the plaintiff expressly refused to receive the amount set down in the check in full payment before the check was sent to it, and that on the receipt of the check the company, acting upon its right to the amount for which it was drawn from the defendant as a part payment on the note, _.t once informed the defendant again that it would not accept that sum in satisfaction, but would collect the check and enter its proceeds as a credit on'the note. And on this, the case being proved in all other respects, the trial court properly gave the affirmative charge for the plaintiff.

Affirmed.