text:
    Noel and another v. Murray.
    (Before Oakley, Ch. J., Paine and Bosworth, J.J.)
    Nov. 19, 20;
    Dec. 22, 1852.
    Where the sale and delivery of goods, and the acceptance by the holder of the promissory note of a third person as a payment in full, are simultaneous acts,. the presumption of law is, that the payment was ipeant to be absolute and final.
    The general rule, that the acceptance by a creditor of the bill or note of a third person does not operate, unless by an express agreement of the parties, as a satisfaction of a precedent debt, has no application to such a case.
    When the sale and the delivery of the goods are simultaneous, the legal inference is that the acceptance of the note, as a final payment, was a part of the agreement, and a condition of the purchase.
    If a receipt then given by the seller for the note, expressing it to have been received as a payment in full, may be contradicted at all, it can only be so, by proof of an express agreement that it should be held- 0u}y as a collateral security.
    Judgment for the defendant upon a case reserved.
    The complaint demanded judgment for the sum of $988 67, as a balance due to the plaintiffs, upon a sale by them to the defendant of a quantity of looking-glass plates.
    The answer admitted the sale, but set up as a defence, that the whole debt thereby contracted, amounting to $1,029, was satisfied at the time by a cash payment of $38 33, and a delivery ‘ " to the plaintiffs of a promissory note of J. Howland & Son payable in six months from the 23d of September, 1850, and that the plaintiffs, by a receipt in writing then given, acknowledged that the said money and note were received by them as a payment in full.
    The cause was tried before Hr. Justice Paine and a jury on the. 14th of April, 1852.
    The plaintiffs proved by a clerk that the glass plates were ordered by the defendant, and the order accepted by the plaintiffs on the 8th of October; that all so ordered were subsequently delivered; and that the sum of $988 69, the balance claimed, was still unpaid. The same witness proved that none of the plates were delivered until the 12th of October.
    The defendant’s counsel then read in evidence the bill rendered by the plaintiffs, specifying the number, size, and price, of the plates sold. It was dated on the 10th of October, 1850, and was footed at the sum of $1,029 : at the bottom was written the following receipt, signed by the plaintiffs, which was also read in evidence.
    “ New Yoke, October 12th, 1850.
    “ Eeceived from John B. Hurray, Hessrs. J. Howard & Sons’ note, at six months from 17th September, for nine hundred and eighty-eight t<lo and thirty-eight fW dollars, in full for the above bill.”
    The books of the plaintiffs were also produced upon notice, and it appeared from the entries therein that they had credited the defendant with the note in question. The plaintiffs then produced the note, which it was admitted had not been paid, and offered to surrender it to the defendant.
    No other facts were given in evidence that are deemed material.
    Hnder the direction of the' judge a verdict was rendered for .the plaintiffs for $l,092f¡f¡r, being the balance claimed, with interest, subject to the opinion of the court upon a case, with liberty to either party to turn the same into a bill of exceptions.

      G. C. Goddard, for the plaintiffs,
    insisted that they were entitled to judgment upon the verdict, and argued as follows:
    It is clear that the goods were not sold for the note, or on an agreement to take the note ; but that the goods were selected, the bill of them made out and rendered, and a written order for them, given by the purchaser, presented some days before the giving of a note in settlement of the bill was suggested.
    The case then is clearly distinguishable from those in which it is a part of the bargain on a sale of goods, that a note of a third party shall be taken—as was the case of Whitbeck v. Van Ness (11 Johns. Rep. 407; also 9 Johns, Rep. 309; Johnson v. Weed.)

    Even where a note of a third party is taken at the time of the contract on a sale of goods, it is said by Whittlesey, Justice, in Munroe v. Hoff (5 Denio, 362), and by Sutherland, Justice, in Porter v. Talcott (1 Cowen, 383), not to be payment unless agreed to be received as such.
    The note being given after the sale had been made, and there being no agreement to receive it in satisfaction of the debt, at plaintiffs’ risk, it is not payment, and the plaintiffs are entitled to judgment on the verdict. (Tobey v. Barber, 5 John. Rep. 68; Porter v. Talcott, 1 Cowen, 383; Munroe v. Hoff, 5 Denio, 362.)
    The receipt given for the note and cash being in full of the bill, does not import that the note was taken in satisfaction. This-was decided in Tobey v. Barber, and many other cases.

      H. Day, for the defendant,
    argued that judgment ought to be rendered in his favor upon the following grounds :
    I. The sale was not made or consummated until the 12th of October, when the delivery and payment were made; and the law regards the sale fraudulent and void until delivery or part payment is made, (Statute of Frauds, R. S. vol. ii., p. 195.) And therefore,.
    II. The note of" Howard & Son, the note of a third party, was not given for a precedent debt, and the receipt of the note was prima facie evidence that it was taken in payment of the debt. 1. Because it was taken without endorsement by the defendant, and his endorsement was not asked. (Bank of England v. Newman, 1 Ld. Raymond, 442; Whitbeck v. Van Ness, 11 John. 409; Breed v. Cook, 15 John. 241; Fydele v. Clark, 1 Espinasse, 448; Frisbie v. Larned, 21 Wend. 452.) 2. The credit of the note to the defendant in the books of the plaintiffs, and the balancing of the books, are primd faeie evidence that the note was taken in payment (Frisbie v. Larned, 21 Wend. 452), which case is approved and cited in the Court of Errors, 3 Denio, 410, and in this court. (St. John v. Purdy, 1 Sand. 9). 3. The receipt, reciting that the note with cash is received in full for the debt, is .primd faeie evidence that the note was accepted as payment.
    HI. It is unnecessary to prove that an agreement was made in so many words, that the note would be received in payment. Circumstances may show it. (1 Cowen 80; Whitbeck v. Van Ness, 11 John. 409; Waydell v. Luer, 3 Denio, 410; Arnold v. Campbell, 12 John. 411; St. John v. Purdy, 1 Sand. 9.)
    TV". All the circumstances of the transaction show that the note was tendered and accepted in payment, and that the plaintiffs took their choice of the note in' preference to giving credit to defendant. 1. The plaintiffs knew nothing of Murray or his credit. 2. There could be no object in the defendant’s paying part cash and a negotiable note as security for the remainder of the debt, when he had a credit for six months, as appears in the pleadings, for he would thus lose the interest on his money, and put it out of his power to negotiate the note, so that it would not be at his risk. 3. The plaintiffs did not ask defendant to endorse the note, and he did not endorse it, which is the most common and natural way of seeming the liability of the debtor. 4. The receipt is in full for the glass.
   By the Court. Oakley, Ch. J.

It is not necessary to deny that in this state the law is settled, that the acceptance by a creditor of the bill or note of a third person, even when not endorsed by the debtor, never operates as. a satisfaction of a precedent debt, unless it is expressly shown that such, at the time, was the understanding and agreement of the parties; and it may also be admitted that this rule prevails, even when a receipt is given by the creditor, acknowledging the bill or note to have been received by him as a payment in full. But these admissions are not at all inconsistent with the position that when the seller of goods, at the time of the sale, accepts the note of a third person not endorsed by the debtor, and gives a receipt for it, as a payment, in part or in full, of the price, it is a presumption of reason and, therefore, of law, that the payment so. made was meant to be absolute and the purchaser to be wholly discharged. That this is the reasonable and legal presumption we cannot doubt.

The error in the argument of the plaintiff’s counsel in this case, consists in assuming the existence of a debt from the defendant, when the parties met on the 12th of October; a debt arising from a sale prior to that day; but, in reality, there was no sale before that day, and, consequently, no precedent debt. The order given by the defendant, and its acceptance by the plaintiffs on the 8th of October, were evidence of a verbal agreement; but as none of the goods were then delivered, and no part of the consideration then paid, the agreement was void under the statute of frauds, so that when the parties met on the 12-th, there was no contract upon which either of them was, or could be rendered, liable to the other. The actual sale was made and completed on that day; and as the date and delivery of the goods, and the delivery and acceptance of the note, were simultaneous acts, they musty in our judgment, be considered as parts of one transaction, and the execution of an entire agreement. The sale, by the election of the plaintiffs, was not for cash, or upon credit, but partly for cash, and partly for the note; and the acceptance of the note and the discharge of the defendant thus became conditions of the purchase. All the facts in the case, the entries in the books, and, emphatically, the terms of the receipt, correspond entirely with this view of the intention nf the parties, and, as it seems to us, do not admit of any other interpretation. Whether a receipt thus given, and expressed to be for a payment in full, ought not to be held as concluding the plaintiffs, is unnecessary now to determine; but we are clearly of opinion that it cast upon them the burden of proof, and that the conclusion, which its terms necessarily suggest, could only be repelled by evidence of an express agreement that the note should be held only as collateral security, and its amount be credited to the defendant only when collected. Ho such evidence was given or offered upon the trial.

We are therefore of opinion, that the defence set up in the answer has been established, and that the defendant is, upon the facts, as they appear in the case, e'ntitled to judgment.

We remark, in conclusion, that we have not been referred, tó any adjudged case which is in conflict with the views we have expressed. The observations in Munroe v. Hoff, and in Porter v. Talcott, are merely dicta, while, on the other hand, our present decision is fully sustained by the judgment of this court, in St. John v. Purdy (1 Sand. S. C. Rep. 9).

Verdict for plaintiff set aside, and verdict and judgment thereon, with costs, entered for defendant.


source: Caselaw Access Project

author: By the Court. Emmett, J. Bosworth, J.

license: Public Domain

text:
    Brandreth v. Sandford.
    On the 26th July, 1849, the plaintiff and defendant entered into and signed the following agreement:— . ,
    ‘C. W. Sandford, having caused a bond and mortgage for $4,000, from Teunis E. Dikeman to Cathalina Corbett, to be assigned to Dr. Benjamin Brandreth, has received from him on account thereof the sum of $4,000, bearing interest from the date hereof; and said mortgage is to be foreclosed immediately, and out of the proceeds the said sum of $4,000 is to be refunded to the said Brandreth, with the interest for the same, at the rate of seven per cent, per annum, until paid, and the residue due on said mortgage is to be paid to the said C. W. Sandford.” *

      Held, that this agreement did not necessarily import a personal liability on the part of the defendant for the sum received, and that prior transactions between the parties which led to the agreement, might be properly resorted to for the purpose of showing that he was acting only as the agent of the mortgagee.

      Held, also,.that the agreement did not by its terms imply that the mortgage was assigned as a security for the repayment of the $4,000 as a debt, but that by its fair interpretation it was evidence of a purchase by the plaintiff of an interest in the mortgage to the extent of the sum that he advanced.

      Held, also, that if the defendant could be rendered liable at all, he could only be so as a. surety, it being the manifest intent of the parties that the mortgage se- " curities should be the primary fund for the reimbursement of the plaintiff.

      (Before Oakley, Ch. J., Paine, Bosworth and Emmett, J.J.)
    Nov. 15, 1852;
    Jan. 29, 1853.

      Held, therefore, that qudcumque via datd, the plaintiff was not entitled to recover, as he had failed to aver or prove that he had exhausted his remedies upon the bond and mortgage.
    Judgment for the defendant, Bosworth, Justice, .dissenting.
    This was an action for the recovery of $4,000 as moneys lent and advanced by the plaintiff to the defendant, and was tried before the Chief Justice and a jury, in March term, 1852.
    The following are the material facts, as established by the pleadings and the evidence :—
    The complaint alleges that between the 9th July, 1846, and the 26th July, 1847, the plaintiff lent and advanced to the defendant, at his request, $4,000, partly in cash, and partly in a promissory note, which, when due, was paid by the plaintiff; and that the defendant promised to pay the said sum of $4,000 when required, with interest from the 26th July, 1847; and that he is indebted on account thereof, $1,965 76 principal, with interest from the 27th November, 1850.
    The answer denies the allegations in the complaint, and alleges that at or about the times therein stated, the defendant, as the agent and attorney of Cathalina Corbett, received from the plaintiff $4,000, or thereabouts, as the consideration money of an assignment, or assignments, of a certain indenture of mortgage made by Tennis E. Dikeman' to Mrs. Corbett, dated 15th November, 1841, for $4,000 and interest. That the money mentioned in the complaint was received by the defendant, as the attorney and agent of Mrs. Corbett, as the consideration money payable by .the plaintiff to her on the assignment of such mortgage, and that such assignment was received by the plaintiff in full payment and satisfaction of said money.
    The reply denies these allegations in the answer.
    _ The evidence on the trial, which was entirely documentary, and produced on the part of the plaintiff only, shows the following facts in the order of their occurrence.
    On the 15th May, 1843, Mrs. Corbett, being the owner of the mortgage from Dikeman mentioned in the answer, gave her bond to John Strang to secure the payment of $2,000, with interest; and as security for such bond gave him an assignment of the Dikeman mortgage, with the bond therein mentioned, with a proviso that if she should pay her bond to Strang, the assignment should be void.
    On the 9th July, 1846, the defendant obtained from the plaintiff his note at ninety days, for $1,750, payable to defendant’s order; and at the same time gave him a receipt for such note, which receipt stated that the note was to be provided -for and paid by him, the defendant, out of the first proceeds of a bond and mortgage from Dikeman to Mrs. Corbett, left in his hands for collection; and this receipt was signed by the defendant, as solicitor for Mrs. Corbett.
    On the 10th October, 1846, the day on which the plaintiff’s note for $1,750 became due, defendant gave him a written acknowledgment, stating that there was due to him $1,750, bearing interest from that date, for which he, defendant, was to give him his note, endorsed by John Strang, payable at three ' months, or an assignment of the mortgage above mentioned, from Dikeman to Mrs. Corbett, then in his hand for collection, out of the proceeds of which mortgage, the said $1,750 and interest was to be paid.
    On the 20th Movember, 1846, Mrs. Corbett executed an assignment to plaintiff of the bond and mortgage from Dike-man to her, subject to the assignment theretofore made by way of mortgage to Strang. The consideration mentioned in this assignment to plaintiff, was $4,000—the face of the mortgage. The actual consideration was the $1,750,* then due to the plaintiff.
    On the 21st May, 1847, Strang executed to the plaintiff an’ assignment of the same mortgage, by which plaintiff became legally vested with the entire interest in that mortgage, divested of Strang’s lien. The consideration mentioned in this assignment from Strang to plaintiff, was $2,000, which was the amount of principal due Strang from Mrs. Corbett.
    On the 26th July, 1847, about a month after the date of Strang’s assignment to plaintiff, a paper was signed by both plaintiff and defendant, stating that he, the defendant, having caused the bond and mortgage for $4,000 to be assigned to the plaintiff, had received from him on account thereof, the sum of $4,000, bearing interest from that date. That the mortgage was to be foreclosed immediately, and out of the proceeds the said sum. of $4,000 was to be refunded to thé plaintiff, with interest at seven per cent., until paid; and that the residue due on the mortgage was to-be paid to the defendant.
    The plaintiff, as the owner of the mortgage, foreclosed it about three years afterwards, claiming that there was due and unpaid upon it the principal sum of $4,000, with interest from the 20th November, 1846, the day upon which it was assigned to him by Mrs. Corbett. Neither Mrs. Corbett nor the defendant was made a party to the foreclosure. The mortgaged premises were sold under the decree of foreclosure, for $3,700, and purchased by the plaintiff. The principal and interest due on the mortgage, with costs, arrears of taxes, and expenses of sale, &c., amounted to $5,665 76, being on the 27th November, 1850, $1,965 75 more than the price which the premises brought at the sale; and the plaintiff, in his complaint, claims that sum with interest from that date, as the amount due him by the defendant.
    At the trial, the defendant moved, on the plaintiff’s evidence, to dismiss the complaint, which motion was denied.
    The jury, under the direction of the court, found a verdict for the plaintiff for $1,965 26, with interest from November 27th, 1850, subject to the opinion of the court at general term, on a case to be made, with liberty to either party to turn it into a bill of exceptions.
    ' J. J. Hoffman, for the plaintiff,
    insisted that he was entitled to judgment upon the verdict upon the following grounds :
    I. The receipt of $4,000 from the plaintiff by the defendant is not denied.
    H. The defence, as gathered from the answer, is as follows : 1. That the several sums of money were received by defendant as the agent of Cathalina Corbett. 2. That they were so received as the consideration money, payable by said plaintiff to said Corbett upon the assignment of a certain mortgage; and the assignment of said mortgage was received by said plaintiff, in full payment and satisfaction of said sum of money.

      HI. The money was not received by defendant as the agent of Cathalina Corbett; or if it was, defendant made no declaration, at the time, of his agency to plaintiff. 1. The receipt, dated July 6, 1846 (see fol. 19 of case), contains a promise that the note there mentioned shall be provided for and paid by himself (“ hy me”), and although signed by him as solicitor, yet it is his personal promise", and not his promise as agent, nor the promise of C. Corbett. The fact of the note of plaintiff being payable to and endorsed by the defendant also shows the personal nature of the transaction. 2. As solicitor, he had no power to borrow notes and pledge his credit for the payment, and the signing as solicitor is not an avowal of agency. Should the plaintiff seek to charge C. Corbett upon the instrument, he would be compelled to prove more than that C. W. Sandford was her solicitor. The burden of proving direct agency or authority would be upon him, and that burden now rests upon the defendant. 3. The acknowledgment of October 10,1846, is a distinct personal obligation to secure, in one of two ways, $1,750,' in which he acknowledges himself to be indebted to plaintiff. 4. So also the writing of July 26,1847, the obligation is personal. 5. It is also the last in order of time, and for that ■ reason controls any doubt arising out of the manner of the execution of the former document.
    IT. Even if he had disclosed his agency (of which there is no proof), yet having signed in his own name contracts and memoranda in writing which do not upon their face show that he was acting as the agent of another, he is personally liable. (Story on Agency, § 269 ; and cases cited in note.)
    Y. The four thousand dollars were not received as the consideration money payable by plaintiff to said Corbett, upon the assignment of said mortgage, nor was the assignment received by said plaintiff in full payment and satisfaction of said sums'of money. 1. At the time of the assignment, the mortgage was encumbered for half its amount, viz., $2,000; subject to which encumbrance the assignment was taken. 2. “ Consideration money,” payable upon the assignment of a mortgage, necessarily implies an absolute purchase; but here an agreement is made with Sandford, supplemental to the assignment, regulating the disposal of the proceeds. If the assignment was by way of sale, for a consideration, nothing but the assignment itself was required. 3. B. Brandreth, as between himself and Sandford, never had the absolute control and right to dispose of the mortgage at his pleasure. 4. There being no purchase, no money was paid as consideration money. The allegation that it was so received, and that the assignment was received in satisfaction thereof, as contained in the answer, 'must be considered as an entire allegation, and the one part necessarily falls with the other.
    VI. The advance of $4,000, by plaintiff to defendant, was by way of loan. 1. Upon the credit of O. W. Sandford he acknowledges the receipt, and promises to secure the sum of $1,750. The agreement of 26th July, 1847, explains the manner of the execution of the receipt of July 9th, 1846. 2. Personal credit was given to defendant, that he would pay the note out of a • fund particularly applied to that purpose. 3. The note not having been provided for, he executed the acknowledgment bearing date October 10,1846. The words, “ for which,” here mean “ to secure which,” for the $1,750 is to be paid out of the proceeds. The assignment was not to be absolute. 4. Afterwards, O. W. Sandford, “ having caused” (not Cathalina Corbett having assigned) the bond and mortgage to be assigned, executed the writing dated July 26, 1847. The fact contained here, that money is to be refunded, necessarily conveys the idea of a loan. Loans are refunded. Consideration money is absolute upon a purchase.
    VU. The point raised on the trial, that the advance of $4,000 ■ was a loan by plaintiff to defendant, upon particular securities, to which alone he agreed to look for payment, is not made a ground of defence in the answer, and is in no way raised by the pleadings. It should not be considered by the court, a. The fact that the security was to be immediately foreclosed and the advance refunded, precludes the idea of a loan for the sake of an investment.
    V JUUL. As between the parties to this suit, the Dikeman mortgage should be considered as having been under the control of G. W. Sandford, and by him caused to be assigned, by way of mortgage or collateral security, to the plaintiff, to secure an indebtedness of $1,750, previously incurred by defendant; together with a subsequent advance. 1. In each of the written instruments in evidence, signed by Sandford, there is a distinct acknowledgment of indebtedness, and no one of them contains a waiver of personal liability. The securities are additional to the defendant’s obligation or liability. 2. The promise to pay out of the proceeds of the mortgage, is the application of a particular fund to the payment of the debt. It implies no release of any other security.
    IX. The taking of a mortgage to secure a debt does not extinguish the original debt, so long as it remains unsatisfied. The one is the principal, the other the incident; and the latter cannot merge in the former. (Sterling v. Rogers, 26 Wend. R. 658: see also 15 Wend. R. 218.) 1. The taking of collateral security for his indemnity would not prevent the plaintiff from resorting to an implied promise, unless it was agreed that he should only look to such security. (4 Pickering’s Rep. 444.) 2. In this case the advance of the money constituted the debt, part of which is yet unpaid. The mortgage was taken for security and indemnity. It was not intended to change the nature of the debt, and there was no agreement to look alone to the security.
    X. The securities have been exhausted, and the sheriff reports a deficiency, Hov. 27, 1850, of $1,965 76.
    XI. In this amount, therefore, defendant is personally liable, and judgment should be entered upon the verdict, with costs.
    The defendant in person made and argued the following points:
    I. The loan to Strang of $1,750 was a separate transaction, and was closed by Strang’s assignment to the plaintiff in May, 1847; and the money due to Strang was a prior lien on the mortgages payable out of the first proceeds.
    II. The plaintiff dealt with the defendant as the agent of Strang & Oorbett, and recognised him as such agent.
    HI. The plaintiff paid the balance of the $4,000 as a purchase of the bond and mortgage, and took Mrs. Corbett’s assignment therefor, without any covenant or guarantee; and the whole transaction between Corbett and Brandreth was a purchase and sale of the mortgage, involving no personal liability of any kind on the part of the defendant.
    IV. There was no promise, express or implied, on the part • of the defendant, to pay any deficiency upon the foreclosure of the mortgage.
   By the Court. Emmett, J.

If the plaintiff has any claim in this action, it must arise on the paper of the 26th July, 1847, the last in point of date, and which was signed by both parties.

He could have no specific demand for the $1,750 mentioned in the paper of the 10th October, 1846, because the defendant’s engagement in regard to that sum was that he should give for it either his note endorsed by Strang or an assignment of the Dikeman mortgage. The assignment of that mortgage was given to the plaintiff, which was a performance of defendant’s agreement, and acquitted him of any personal obligation in respect to the $1,750.

In addition to the $1,750 and the interest due on it, the plaintiff subsequently advanced as much more as. made up $4,000; and for this subsequent advance he received an assignment of Strang’s lien, which made him the sole legal owner of the Dikeman bond and mortgage. The $4,000 was the consideration for the entire sale of that bond and mortgage to him, and unless he stipulated for some additional security, or reserved some ulterior right against Mrs. Corbett or the defendant, he was to look to that bond and mortgage alone for reimbursement ; and the defendant’s answer in that respect is strictly true.

But it is contended that by the paper of the 26th July, 1847, the defendant acknowledged that he had received $4,000 from the plaintiff, and that as this paper does not on its face disclose any agency for Mrs. Corbett, such acknowledgment raised an implied personal promise on defendant’s part to pay the $4,000.

The answer to that is, that the paper of the 26th July, 1847, was a part of the same transaction that gave rise to the receipt of the 9th July, 1846, and the paper of the 10th October, 1846, in both of ‘which the defendant explicitly stated his agency. It is not pretended that the $4,000 was not made up in part of the $1,750 mentioned in those two antecedent papers, or that the mortgage mentioned in the paper of the 26th July, 1847, was a different mortgage from that described or referred to in those previous papers, in both of which it was expressly stated that the bond and mortgage were in defendant’s hands for collection, and the earliest of which was signed by the defendant as solicitor for Mrs. Corbett, thus disclosing the party for whom he was acting. Both those papers were made evidence by the plaintiff himself, and rendered it unnecessary for the defendant to offer any other or further proof of his agency. They sufficiently established the allegation to that effect in his answer; and the assignment of. the mortgage executed by Mrs. Corbett, which was also put in evidence by the plaintiff, proved her ■ownership of the mortgage, her knowledge of the transaction, and her assent to it. We have no right, therefore, to regard the paper of the 26th July, 1847, otherwise than in connexion with those previous documents, in considering this question of defendant’s personal liability under it. They are all parts of a continued negotiation in relation to the same subject matter, in the very inception of which the defendant gave the most ample notice of his agency, disclosed the name of his principal, and subsequently procured her ratification of his acts in her behalf.

But even if the agency of the defendant were not sufficiently established, hów would the parties stand under the paper of the 26th July, 1847 ?

On fhe one hand, the plaintiff acknowledged by it that the defendant had caused the Dikeman bond and mortgage for $4,000 to be assigned to him. On the other, the defendant acknowledged that he had received from the plaintiff on account thereof $4,000, bearing interest from that date; and they agreed,—first, that the mortgage should be foreclosed immediately ; second, that out of the proceeds the $4,000 should be refunded to the plaintiff, with interest at seven per cent, until paid; third, that the residue due on the m'ortgage should be paid to the defendant.

It appears then by that paper, that on the day it bears date, the plaintiff’s whole advances amounted to $4,000, and no more. But there was then due on the Dikeman bond and mortgage not only $4,000 principal, but interest from the 20th of November, 1846. The foreclosure proceedings show this.

The amount due on the bond and mortgage, therefore, exceeded the sum of plaintiff’s advances by the amount of this cash interest. The paper itself shows that no deficiency on the contemplated foreclosure was anticipated by either party, but on the . contrary, that it was assumed that the foreclosure would yield the full amount of principal and interest due on the mortgage, in which evept, after refunding to the plaintiff his $4,000 with interest, there would be a residue or surplus; and it is manifest that the object of this paper was to provide a check upon the plaintiff’s having a greater interest in the bond and mortgage under the assignment which he held, than would be an equivalent for the sum paid by him with interest. Without that paper the assignment would have operated as an absolute sale to the plaintiff of all that was due on the bond and mortgage, for interest as well as principal; and it was not intended that he should have as profit or usury on the transaction, the excess of what was due on the bond and mortgage beyond what he had paid with interest. That paper was drawn therefore, not for the benefit of the plaintiff, but of some interest represented by " the defendant; whether Mrs. Corbett’s or his own, is immaterial so far as the plaintiff is concerned. It was an equitable defeasance of the assignment, as to all benefit from it beyond the sum advanced by plaintiff with interest. It provided in distinct terms that the residue due on the mortgage, after refunding the plaintiff’s $4,000 with interest, should be paid to the defendant, which merely meant that it should not be paid or go to the plaintiff; and it contained no undertaking or guarantee on the part" of the defendant either personal or fiduciary, to pay anything to the plaintiff in any event. The plaintiff was to look to the proceeds of the mortgage, not merely as the primary source but as the only source from which he was to receive his $4,000 with interest, and that he was to do by an immediate foreclosure—not for the sake of his own interest merely, but for the more certain realization of the residue which did not belong •to him. That paper in fact made him a trustee as the holder of the mortgage, for the defendant, in respect to such residue ; and if by his delay in not foreclosing immediately but deferring it for three years, while the interest was accumulating on his own $4,000, and on the mortgage debt, it could be shown that the property had so depreciated in value as to have caused the mortgage on foreclosure to yield less than sufficient to pay the full amount of principal and interest due on it, so far from having any demand for a deficiency of his own proper claim under it, he would be more likely to have made himself liable to the defendant for having thus occasioned the loss of the surplus or residue, which by the terms of that paper was to be paid to him.

Even if the defendant had been the acknowledged debtor to the plaintiff, and it was admitted that the assignment of the bond and mortgage had been merely as collateral security for such debt, the immediate foreclosure of the mortgage was made an essential part of the consideration for giving such security; and the plaintiff’s unexplained neglect to comply with that condition was a failure of consideration on his part, which the defendant might have set up against any attempt to make him liable for the deficiency. That the engagement to foreclose rested on the plaintiff, admits of no question. It could have rested on no other party. He was the holder and owner in law of the bond and mortgage, and as such, did actually foreclose in 1850 ; and it does not appear, nor is it pretended, that the defendant was to have, or that he had in fact, any control over, or agency in the foreclosure proceedings. The delay, therefore, in taking those proceedings, lies at the plaintiff’s door. Hor would he have stood on sure ground, even if he had foreclosed immediately; because he took the bond and mortgage under an agreement- to look, directly and in the first instance, to the proceeds for his money, thus, by his own act and consent, placing the defendant in the position of a mere surety to be called upon only in the event of a failure of the primary source or fund. The bond and mortgage together constituted that source. They were inseparable, and had both been assigned to him as one asset or item of property; and he was bound therefore to have exhausted his remedy on the bond as well as the mortgage before he could have recourse to the defendant. It does not appear that he has done so ; and the presumption is, that he still holds the bond, which may be perfectly good against the estate of the obligor. He has not even tendered back the bond to the defendant as a preliminary to his demand against him; and he surely could not recover in this suit and retain the bond also.

If we view this case, therefore, in the most favorable light for the plaintiff, his claim is beset with difficulties. In its true aspect, as .already shown, it is clear that he has none that can be enforced; and the defendant is, therefore, entitled to judgment.

Bosworth, J.

(dissented.)

The complaint alleges, that between the 9th of July, 1846, and the 26th of July, 1847, the plaintiff loaned to the defendant $4,000 in cash, and a promissory note of the plaintiff, which note the plaintiff had paid, and alleges a balance of $l,965Tg0, with interest from ¡November 27,1850, to be due.

The defendant, in his answer, denies that any loan was made to himself. He avers that he received the $4,000, as the agent and attorney of Oathalina Corbett, as the consideration money of an assignment or assignments of a mortgage for $4,000, executed by Tennis E. Dikeman to Oathalina Corbett, bearing date the 15th of ¡November, 1841.

That he received this money as the agent and attorney of Oathalina Corbett, “as the consideration money payable by said plaintiff to the said Corbett, upon the assignment of said mortgage,” and the assignment of said mortgage was received by said plaintiff in full payment and satisfaction of said sum of money.

The allegations of new matter contained in the answer are put in issue by the reply.

The pleadings are sworn to. '

The evidence is entirely documentary. The paper of July 26,1847, shows incontestibly that the bond and mortgage were not sold to or purchased by Brandreth. Out of the proceeds ■ of it when foreclosed, $4,000, with interest from the date of that paper until paid, was to be “refunded” to Brandreth, and “the residue due on said mortgage was to be paid to the defendant.”

This paper is signed by the plaintiff and the defendant. It is clear, then, that this money was not paid as the price or consideration of the assignment. The whole ownership of the bond and mortgage did not belong to Brandreth. The whole of the moneys owing upon and secured by them, if collected, would not belong to him.

Hence a material allegation of the answer is disproved. That the defendant received the whole $4000, is admitted. That this sum, “ with interest at the rate of seven per cent, per annum, until paid, is to be refunded to said Brandreth,” this agreement expressly states.

Hence it is evident that this sum was “ advanced,” and not paid as the price of the bond and mortgage. That it was to be “ refunded” with interest until paid.

. To whom was it advanced, and by whom was it to be refunded ? The defendant admits in his answer that he received it, but denies that it was to be refunded at all events. He answers, that the assignment was taken in payment and satisfaction of it.

That the assignment was taken in payment and satisfaction of the' $4,000, is disproved by the defendant’s agreement, and that it was to be refunded is expressly stated in the same instrument.

The' defendant received the money. If he received it as principal, he is the person bound to refund it. He avers that he received it as agent. On this, the reply takes issue. The paper of July 26,1847, does not profess on its face to have been signed by him as agent, nor does it intimaté that he received the money as agent. It recites, that he had caused the bond and mortgage to be assigned, and had received “ on account thereof,” $4,000.

This language implies that the assignment was an act, in respect to which he was the principal, and in good sense and legal effect is equivalent to saying that he had assigned them. The agreement does not recite that Hrs. Corbett had assigned them, or that she was the owner of, or had any interest in them, or in the money received from the plaintiff, or that she was to be paid the excess owing on the bond and mortgage over and above the amount advanced by Brandreth.

Although the fact of his agency was distinctly put in issue by the pleadings, the defendant gave no evidence to show that he was in truth such agent, or even professed to be, when he "obtained the additional advance of $2,250.

If the right of the plaintiff to recover is to be determined . solely by the terms and legal import of the paper of the 26th of July, 1847, I think it undeniable that the defendant would be regarded as the person to whom the advance was made, and who was to refund it.

This is the last agreement executed in point of time. If this imposes a personal obligation on the defendant, then I think . that he cannot claim exemption from such liability, even if the papers of July 9th, and October 10th, 1846, are consistent with the idea that at those dates he was acting as agent, unless he proves affirmatively that he in fact acted throughout -as agent, and that he so stated to Brandreth.

To hold, that as all the papers evidently relate to distinct parts of the same transaction, and that enough is disclosed on the first to prevent the defendant from being estopped- from proving that he acted throughout as agent, is altogether a different proposition from holding that the first shows that he in fact acted only as agent, at the time it was executed, and also at the time when the last was executed, which imports on its face that he acted as principal and on his own account.

The first paper in order of time is in these words, viz,:—

“Received N. Y. July 9,1846, from Dr. Brandreth, his note at 90 days for $1,750, to be provided for and paid by me, out of the first proceeds of a bond and mortgage left in my hands for collection, drawn by Tennis E. Dikeman in favor of Cathalina Corbett.
(Signed) Charles W. Sandford,
Sol. for said C. Corbett.”

In this instrument the defendant personally undertook to pay this note out of the first proceeds of a bond and mortgage. I think he also undertook to collect, or endeavor to collect, the bond and mortgage, to raise the means of paying it. This note was evidently loaned. To whom was it loaned ? Was it loaned to Cathalina Corbett ? He adds to his signature, that he was her solicitor. That does not prove that it was loaned to her. Can it be implied that he had received this bond and mortgage from her, to foreclose on her account? This paper does not • state that lie had. On other facts proved by record evidence, it is not apparent how that fact could be so.

On the 15th of May, 1843, over three years previously, she had executed her bond to John Strang for $2,000, and had assigned to him the bond and mortgage in question as collateral security for its payment, which assignment was recorded on the 14th of June, 1843.

Strang held this assignment until May, 1847, nearly a year after this paper of July 9,1846, was executed.

Without actual proof of the fact, it cannot be presumed, in contradiction of this evidence, that the bond and mortgage were in the hands of the defendant on the 9th of July, 1846, as the agent of Mrs. Corbett, or that he held it to be foreclosed by him as her solicitor. *

The legal title to them was in John Strang, and when foreclosed, he was entitled, as a matter of legal right, to be first paid out of the proceeds, the amount due on Mrs. Corbett’s $2,000 bond which she had executed to him.

If he was the agent of any one, the presumption most favorable to fair professional conduct is, that the defendant, in agreeing that the first proceeds of this bond and mortgage, to the extent of $1,750, should be applied to pay the note borrowed of the plaintiff, made such agreement in behalf of the party to whom such proceeds of right belonged. It is conclusively shown that they belonged to Strang and not to Mrs. Corbett. What was done with this $1,750, is not shown.

The fact that Strang, by assignment, held the bond and mortgage in question, as security for $2,000 due him, in connexion with the terms of the paper of July 9,1845, and the one of October 10, 1846, the next in the order of time, furnishes some grounds for inferring, that the $1,750 note was obtained to be delivered to Strang. Whether the defendant was interested as principal, or acted as agent for Mrs. Corbett, or Strang, or on his own account, in obtaining the money, is the fact to be ascertained from the paper writings put in evidence.

The paper of October 10, 1846, the second in the order of date, is in these words.

“Due Dr. Benjamin Brandreth seventeen hundred and fifty dollars, bearing interest from this date, and for which I am to give him my note, endorsed by John Strang, payable at three months, or an assignment of a mortgage now in my hands for collection, made by Tennis E. Dikeman to Cathalina Corbett, on house, No. 250 Elizabeth street, out of the proceeds of which mortgage said $1750 and interest is to be paid.
“ ChAeles W. Samdeoed.
“New York, October 10,1846.”

It will be borne in mind, that the note for $1,750 fell due on this day. The defendant had not provided for and paid it? according to his agreement of July 9th, It does not appear that he had taken a step towards foreclosing the mortgage. It became necessary for the plaintiff, of whom it had been borrowed, to pay it, or suffer it to be protested.

The defendant then entered into a new agreement, by the express terms of which he acknowledged himself indebted to the plaintiff in the sum of $1,750, bearing interest from its date at the rate of 7 per cent., the payment of which he agreed to secure in one of two specified ways.

It is well settled that where one person, by instrument in writing, acknowledges á certain sum to be “ due” to another, an action will lie to recover it. The acknowledgment of indebtedness itself creates a legal liability sufficient to sustain the action. The language is equivalent to a formal promise to pay it.

Elder v. Roux, 15 Wend. 218, and cases there cited. The consideration of the indebtedness thus acknowledged, is Brandreth’s note of $1,750, mentioned in the paper of July 9, 1846, and which the defendant personally promised to provide for and pay.

This agreement is not signed as solicitor or agent for any person, and the $1,750 mentioned in it have not been repaid.

Whose contract is it.? In terms it is his. And even though he had added to his name the word agent, or solicitor, yet when personally sued on it, he could only avoid a recovery against himself, by showing that he was in fact the agent of another person, and authorized to contract on such terms (Rossiter v. Rossiter, 8 Wend. 494; Mills v. Hunt, 20 Wend. 431-434).

The onus of showing actual agency and authority lies on the agent; describing himself as agent does not prove him to be an agent, nor is it any evidence of that fact (White v. Skinner, 13 J. R. 307-311).

The only effect of adding the designation of agent, is, to make it competent for him to prove, when sought to be charged personally, that he was in reality acting as a known agent.

Suppose, after executing the paper of October 10, 1846, the defendant had failed, or refused to give his note at three months, endorsed by Strang, or an assignment of the bond and mortgage, could Cathalina Corbett have been sued on that agreement, as being her agreement, to recover back the $1,750 ?

It does not purport to have been made on her behalf, nor does her name appear on it as principal. By well settled cases, it is, in judgment of law, the personal contract of the defendant (Pentz v. Stanton, 10 Wend. 271; Stackpole v. Arnold, 11 Mass. 27).

It is not sufficient that a person, in order to discharge himself from a promise in writing, shoxdd show that he was in fact the agent of another, but it should be made to appear that he treated as agent, and actually bound his principal by the contract.” Here there are no words, in either of the contracts of October 10,1846, or. of the 26th of July, 1847, which furnish any indication of an intent to charge any person other than himself And no action would lie against the alleged principal, on either contract merely, without extrinsic proof (Arfredson v. Ladd, 12 Mass. 178).

It may be, that as the first paper signed by the defendant has, as an addition to his signature, the words: “ Sol. for said C. Corbett,” it is competent for him to show that in fact he acted as agent, and at the time so avowed to the plaintiff, and that he had no personal interest in the matter (Evans v. Wells, 22d, 324-341).

But without intimating any opinion on this point, it is sufficient to say, that although the fact of his being an agent was put in issue by the pleadings, and although he held the affirmative of that issue, he offered no evidence to establish it. The contracts of October, 1846, and of July, 1847, the two last in order of time, do not on their face purport to he the contracts of Mrs. Corbett, or to have been made in her behalf.

I think it cannot be denied that if the contract of the 10th of October, 1846, had not been performed, or if it had turned out that the bond and mortgage recited in that of July, 1847, to have been assigned, had previously been paid, or had been forged, an action would have lain on either against the defendant personally, and not against C. Corbett, without extrinsic proof; but whether such proof would have been admissible is a question that does not now arise.

If this be so, then the only point left, bearing on the question of the defendant’s personal liability, is this. Did the plaintiff advance his $4,000 upon an agreement to look solely and exclusively to the proceeds of the assigned bond and mortgage ?

The agreement of July 27,1847, does not so state in express terms. Its terms perhaps imply that the parties contemplated the proceeds would prove sufficient to reimburse the $4,000 with interest, and leave a surplus to be paid to the defendant.

But that and the paper next prior in date, seem to indicate very clearly, that the money advanced by the plaintiff was a loan, and was to be refunded at all events.

In the paper of October, 1846, the defendant, in addition to acknowledging himself personally indebted for the amount of $1,750, agreed to give security for its payment.

The security for the repayment of the $1,750 was to be either his own note at three months, with John Strang as an endorser, or an assignment of the whole of his bond and mortgage, the agreement being that if the bond and mortgage were assigned, the $1,750 and interest should be paid out of its proceeds. This $1,750 was lent, and has not been repaid. •

This paper shows, that on failure to provide for and pay the note borrowed on the 9th of July, the defendant, on the day of its maturity, acknowledged himself indebted, as principal, to-the plaintiff, for the amount of it, with interest until paid; and in addition agreed to furnish to the plaintiff one of two kinds of security for its payment. All that the plaintiff had advanced up to this time was $1,750. This was incontestibly lent. The defendant had obtained the loan, and signed a contract acknowledging himself the debtor.

The next paper executed by the defendant was that of the 26th of July, 1847. At the latter date the defendant had been personally the debtor of the plaintiff for $1,750 lent, from the 10th of the previous October.

On the 26th of Tilly, 1847, he and the plaintiff signed a contract in these.words:—

“ C. W. Sandford, having caused a bond and mortgage for $4,000, from Teunis E. Dikeman to Cathalina Corbett, to be assigned to Dr. Benjamin Brandreth, has received from him on account thereof, the sum of four thousand dollars, bearing interest from the date hereof; and said mortgage is to be foreclosed immediately, and out of the proceeds the said sum of $4,000 is to be refunded to the said Brandreth, with the interest for the same at the rate of seven per cent, per annum, until paid, and the residue due on said mortgage is to be paid to the said C. W. Sandford.
(Signed)
B. Bbakdbeth,
C. W. Sakdeobd.”

Between the date of this agreement; and the 10th of the previous October, Mrs. Corbett assigned to the plaintiff on the 20th of Uoyember, 1846, the bond and mortgage, subject to the assignments which she had theretofore made of the same by way of mortgage on the same; and Strang, on the 21st of May, 1847, also assigned to the plaintiff the same bond and mortgage, subject only to the proviso contained in the assignment thereof, which Mrs. Corbett had made to him, which proviso was, that on Mrs. Corbett paying -her bond of $2,000, executed to him, with the interest on the same, the said assignment to Strang should be void.

■ These papers indicate to me, in the absence of all other evidence, that the defendant owned the bond and mortgage, subject to the assignment of them held by Strang, or had some other personal interest in the moneys that might be collected on them over and above what might be required to pay Strang.

Hence his personal undertaking to repay the $1,750 first borrowed. Hence the last agreement states, not that Mrs. Corbett had assigned the bond and mortgage, but that he had caused them to be assigned. An assignment from both her and Strang was essential'to a full assignment. If the agreement of July 26,1847, imports that the defendant obtained the money and contracted as principal, then it follows—inasmuch as by a reference to the previous contracts, whatever may be the effect of that of July 9th, standing alone, it appears, that on the 10th of October, 1846, the defendant acknowledged himself personally indebted for §1,750, of this §4,000, and that he .continued thus indebted, until he recovered the balance of the §4,000— that the contract of July 26 creates, primó, facie, no other liability as to the whole sum lent, than he had expressly incurred in respect to so much of it as had been lent prior to that date. n

The paper of July, 1847, states, ‘that defendant has received §4,000, “bearing interest from the date hereof.” If the plaintiff simply purchased at his own risk, four thousand dollars in amount of the moneys owing on and secured by the bond and mortgage, this expression, “ bearing interest from the date "hereof,” is an inapt one to indicate the transaction. It is very clear that he did not take an assignment of four thousand dollars in amount, as a satisfaction of his advance. Because, no matter how large the amount due on them, he had a right to the whole proceeds, unless they exceeded his advance and interest.. It is equally clear that he did not take the assignment out and out as a satisfaction of the .sum advanced. For, if the proceeds amounted to more than the sum advanced, he was to pay the surplus to the defendant.

Hence it is evident that all" the issues made by the pleadings are proved against the defendant.

1. It is incontestible that he personally received the §4,000 from the plaintiff, and that it has not been refunded.

2. He says, “ the said mortgage was received by said plaintiff in full payment and satisfaction of said sum.” This is disproved. The answer does not aver that it was advanced on an agreement of the plaintiff to take the risk of the proceeds of the mortgage being sufficient to reimburse the advance with interest, or to look exclusively to such proceeds for re-payment.

3. He says in the answer, that he received those moneys “ as the agent or attorney of Cathalina Corbett.” This is denied by the reply. He gives no proof of the fact. The contracts of October, 1846, and July, 1847, which acknowledge the receipt of the moneys, are, in judgment of law, his contracts. They disclose no principal, nor do they intimate that the defendant had one.

In judgment of law, therefore, he received the moneys as principal, and on his own account. He is liable to repay them. He did not receive them as a gift, but as moneys bearing interest from the date of his receipt of them, and to be refunded with interest until paid. The bond and mortgage were assigned as security for their re-payment, and not upon any agreement of the plaintiff to advance the money and take the risk of realizing sufficient from the mortgage to reimburse himself. I cannot therefore resist the conclusion, that the ruling at the trial, on the evidence given, was correct.

What the position of the defendant would have been, if he had proved that throughout these transactions he had in fact acted as the agent of Mrs. Corbett, which fact was put distinctly in issue by the pleadings, and whether he could prove that fact in contradiction of the clear legal import of the agreements of October 10, 1846, and of July 26, 1847, it is unnecessary to undertake to decide. It is sufficient to say, that no evidence of such agency was given or offered, except such as appears on the face of the papers; and on and by the last two he appears and contracts as principal.

The answer does not allege that the plaintiff was’ guilty of any neglect in foreclosing the mortgage, that the market value of the premises was higher at any time between the 26th of July, 1847, and the day of sale, than on the latter day, or that they did not in fact sell for all they were worth, or that any trick or artifice was resorted to by the plaintiff to become a purchaser at less than their actual value.

I find nothing in the agreements to justify the conclusion that the plaintiff advanced his money on an agreement to look only to the assigned bond and mortgage for repayment. As to the $1,-750first advanced, that was undeniably a loan; and an agreement of the borrower or of a person to whom money is advanced, to repay it out of, or to appropriate a particular fund to pay it, does not absolve him from his personal liability to refund. (Cornwall v. Gould, 4 Pick. 444-7; Sterling v. Rogers, 25 Wend. 658.)

The assignment of a mortgage as collateral security for the payment of a simple contract debt works no merger of the latter. (Day & Penfield v. Leal & Leal, 14 J. R. 404.)

As to the idea, that the assigned bond and mortgage were the primary fund for the repayment of the loan, that the defendant was merely a surety for its repayment, and that the plaintiff did not immediately foreclose the bond and mortgage, it is sufficient to say, that if such was the position of the defendant in this case, the neglect to sooner foreclose is no defence. There is no allegation that any injury was produced by the delay. If a surety, and not injured by the delay, he must pay the deficiency. (Vide Schroeppell v. Shaw, 3 Coms. 446.)

The mortgage was to be foreclosed immediately. It has been foreclosed. It is not averred that it is or was in the power of the plaintiff to do anything in the foreclosure proceedings, which he has not done, that would have produced more than has been realized.

The bill of foreclosure states that Dilceman, the mortgagor, died in October, 1844, and that the whole principal was due, with interest from the 20th of November, 1846.

There is no allegation that Dikeman left any property at the time of his death.' (See 1 R. S. 749, § 4.)

On the contracts signed by the defendant, and the other evidence given, I think it is manifest that the §4,000 advanced by the plaintiff was lent by him; that it was advanced at the request of the defendant, that he acted as principal and on his own behalf in procuring the money, and that he is personally liable to pay the amount in arrear. It certainly does not appear that any part of the money was ever paid to Mrs. Corbett, or to any one by her order, or for her use.

But as a verdict was ordered subject to the opinion of the court at general term, and as it is obvious that all the facts of the case have not been disclosed, and as injustice might possibly be done by ordering a judgment on the verdict, I think it proper, under all the circumstances of the case, that a new trial should be granted on the payment by the defendant of the costs of the trial and of subsequent proceedings.

h£y brethren are of a different opinion, and think the verdict should be set aside and the complaint dismissed.

It seems to me, that unless the agreement of October, 1847, can be construed as an agreement to look solely and exclusively to the proceeds of the mortgage for reimbursement, the most that can properly be done is to grant a new trial. If that is not so clearly its legal import, that no parol evidence of the transaction can be given which would affect the rights tif the parties, it would seem that inasmuch, as the court below held the evidence sufficient to entitle the plaintiff to. recover, he ought not to be now turned out of court absolutely because he did not then give more. If the complaint is to be dismissed, it seems to me it must be upon the ground that no extrinsic proof is inadmissible to vary or explain the legal import of the written contracts; that by their necessary legal import they are not the contracts of the defendant, but of Cathalina Corbett, or if they are his contracts, that by them the plaintiff advanced his money and agreed to look solely and exclusively to the proceeds of the mortgage to obtain the repayment.

[Verdict set aside, and judgment for defendant dismissing complaint with costs.]