Helme v. Middleton, Harper & Co.

Cole, J.

The defendants being indebted to J. H. Palmer & Co., gave to them as collateral security two notes of J. B. Harper <& Son., and upon the 6th of June, 1853, the defendants agreed to allow Palmer & Co., to be paid the amount of the notes out of a judgment, in case it should be rendered in their favor, in a suit instituted by them against the Memphis Insurance Company.

Afterwards the following transaction took place between the parties, as is evidenced by their receipt:

“ Received, Bayou Sara, April 23d, 1855, from Messrs. J. B. Harper & Son, their draft on Messrs. B. F. Shields & Co., New Orleans, La., for $972 32 in full of all demands, in case said draft is accepted and and acceptable to the representative of /. H. Palmer & Co.; also order on Messrs. Bonford <& Finney, for control of the suit of Middleton, Harper <& Co. v. Memphis Insurance Co., and when suit is brought to a successful termination and the money made, we agree to return to said J. B. Harper & Son, the aforesaid draft, notes, &c., and the balance due from insurance, less costs for collection, costs etc.,

J. H. Palmer & Oo.,

A. N. Baxter.”

At same time of execution of this receipt, the following order was given :

To Messrs. Bonford & Finney.

Please give in charge the suit Middleton, Harper & Co. v. Memphis Insurance Co., to Wm. M. Abernethy, Esq., executor of J. H. Palmer, and his receipt will be good to you. J. B. Harper & Son.

Bayou Sara, April 23d, 1855.

The draft on Shields & Co., was not paid at maturity, and was returned to /. B. Harper & Son, whereupon plaintiff, who is the receiver of Palmer <& Co., instituted this suit, in which he averred that more than enough had been collected from the judgment against the Memphis Insiurance Co., to pay the two notes of J. B. Harper <& Son, and he prayed for judgment against Middleton, Harper & Co., and their attorneys in the suit against the Insurance Co. No service of citation was made upon the attorneys, as they agreeed to pay, if judgment should be rendered against Middleton, Harper & Co., and they were willing to • have paid without suit, but were prevented by their client.

There was judgment for plaintiff upon the amount of the two notes, and defendant has appealed.

It is contended by defendant that the draft on Shields <& Co., was given in payment, and that the original debt was novated by the receipt of April 23d, 1855.

*485 There may be some obscurity about this receipt, but it is clear that novation was not created thereby of the two notes.

If it had been the intention of the parties that the draft on Skidds <& Co. should be taken in absolute payment of the two notes, and that the draft was substituted in their place, then there would have been no reason for giving Palmer & Co. the control over the suit against the Insurance Company, and for stipulating that when the money was made out of this suit, then, that the draft, notes, etc., should be returned to Harper <& Son. The draft could not have been given in absolute payment, because in a certain event, it was to be returned.

Novation must be clearly established.

The conduct of the parties corroborates our interpretation of this receipt.

The return of the notes was not required. The draft on Shields & Co., was on the 11th February, 1856, returned to Messrs. Harper & Son, in a letter, in which it was stated that plaintiff held the draft only as collateral.

The statement is not contradicted until the 28th of December, 1857, when the answer is filed.

We would here remark, that J. B. Harper was formerly a member of the firm Middleton, Harper <& Co.

It is also contended that defendants are released, because the draft was not protested, but it is established that Shields & Co., had, at the maturity of the ' draft, no place of business in New Orleans, and that they could not be found, and that the house had ceased to exist before the maturity of the draft.

Even if Shields & Co. were indebted to Harper & Co., at the time of the maturity of the draft, it is evident from the record, that the money could not have been made out of them.

The long silence of Harper & Son, after the return to them of the draft, shows that they did not attach any importance to the failure of the protest.

There is, however, an error in the judgment.

The court has omitted to notice credits of March 18th, 1854, upon the note of $579 61, amounting to $300 84.

The two notes were evidently to be accepted as full satisfaction for the original debt with the additional guaranty of the obligation of the defendants to be personally responsible for the same, and they must be deemed to have been so taken and assumed, subject to a deduction for the endorsed credits.

One of the credits asked for by appellant cannot be allowed, for it is on the original note, represented by the two notes now sued upon.

It is, therefore, ordered, adjudged and decreed, that the judgment be amended by making the sum of $579 61, mentioned therein, subject to a credit of $300 84 paid on the 18th March, 1854; that the judgment so amended be affirmed, and that appellee pay the costs of appeal.