Nickerson v. Babcock

23 Ill. 561

• Court: Illinois Supreme Court
• Decided: January 15, 1860
• Status: Published

Opinion

Caton, C. J.

The substantial question in this case is, whether this was an exchange of paper between the parties; whether Nickerson purchased the notes and mortgage given by Head, and the debt evidenced thereby, and gave in payment therefor the note on which this action is brought, and the other notes given at the same time, or whether these notes were given for a debt which Nickerson had agreed to pay to Babcock, upon a forbearance of that debt till the times specified in these notes.

The evidence shows clearly, to our minds, that the notes were given for a debt which Nickerson had agreed to pay to Babcock, and were taken by him in payment of that debt. Nickerson had agreed with Head to purchase of him the mortgaged premises, and to take up these notes and mortgage as a part payment. Upon this point there is no contrariety of testimony and no dispute, nor is there any question that Babcock fully understood this to be the state of facts. The whole negotiation, between Nickerson and Babcock, was for an extension of time for the payment of the mortgage debt, then due, and of the rate of interest,' or -measure of computation, which Nickerson should pay Babcock for the extension of time, one asking twenty per cent, and the other offering twelve per cent, per annum, and they finally agreed upon fifteen per cent, per annum; upon which basis the settlement was made and these notes given. It is true, that after the basis of the arrangement was agreed upon, Babcock told Nickerson that he wanted it understood that it was an exchange of paper, and not a money transaction, to which Nickerson made no reply ; even had Nickerson expressly agreed to this, it could not. have changed the real character of the transaction; and the proposition itself shows that Babcock fully appreciated that it was an usurious transaction, and felt the necessity of giving it some color, which would avoid the consequences attaching to its true character. Nor did the assignment of the notes and mortgage to Nickerson, instead of canceling and destroying them, change the legal effect of the transaction. The debt was as effectually paid, and the notes and mortgage as much destroyed, by the giving of the new notes, as if they had been actually canceled at the time. ' Were this an action upon those notes, by Nickerson against Head, no one will pretend that the plaintiff could recover upon the facts here established; and yet that is the real question in this case. If Nickerson had agreed to take up and satisfy these notes and mortgage, or took the land subject to the mortgage, which is the same thing, then the giving of the new notes and the surrender of the old ones and the mortgage, was a complete ex-tinguishment of the latter, in pursuance of such agreement, and this was done with the full knowledge and approbation of Babcock. He made the arrangement with Nickerson with a full knowledge of the character of the arrangement between Nickerson and Head, and with the view of consummating it. There can be no pretense that Nickerson understood it one way and Babcock another, or that Babcock supposed that Nickerson was purchasing the notes and mortgage to hold them as a subsisting debt against Head. Both knew and understood that Nickerson had assumed to pay off and discharge them, and that after the new notes were given, the old debt due from Head was satisfied.

We think the verdict was wrong, and that a new trial should have been granted. The judgment is reversed, and the cause remanded.

Judgment reversed.