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Crawford v. Swearingen.

Dec. Ter

1816.

Ix Bank. But, in neither of these cases was it pretended that an in

i strument, including only the terms employed in the writing executed by Swearingen, would have operated to discharge the future cause of action. And, as we have already seen, it was held, in Cuyler v. Cuyler, 2 Johns. Rep. 186, that such release does not discharge the. liability arising upon the subsequent payment of the money upon a preëxisting note. .

The doctrine held by the Court on the circuit, is also directly established by Chitty on Bills, 342. “And it seems, that if a

creditor for goods sold is also indorsee of a bill of exchange, which he has indorsed to a third person for valuable con

sideration, who, at the time of the execution of a composition • deed by the creditor, is the holder of the bill, and the creditor • sign the deed containing a release, but without specifying the « amount of his debt, the composition would extend only "to the amount of the goods sold and bills actually in his hand "at the time he executed;" Chitty on Bills, 342. The present case is within the terms of this authority.

Swearingen was creditor for goods sold, viz., flour to the amount of one or two hundred dollars, as stated by Forse. The bill had been indorsed for valuable consideration to Wolcott, and was outstanding in his hands unmatured, " at the time of the execution of the composition deed.” The release was executed by Swearingen without specifying his debt; but, as Forse says, was not intended to embrace the bill. The release, therefore, could "extend only to the amount of goods sold.”

Two cases are cited by Chitty, Harrhy v. Wall, 2 Starkie Rep. 195; and Margetson v. Aitkin, 3 Carrington and Payne, 338. In Harrhy v. Wall, the bills being in the hands of the indorsees, Buckle & Co., merely as agents for the plaintiffs, they were considered as being in the plaintiff's hands, and therefore discharged by the release. But on a motion to set aside the nonsuit, the Court held, that if Buckle & Co. were indorsees for value, then they would have been the creditors of the defendant for the amount, so that the release would not have operated; 2 Stark. Rep. 195. So, if Wolcott had held

Crawford v. Swearingen.

1816.

the bill as the mere agent of Swearingen, at the exccution of In Bank.

Dec. Term, the composition deed, there would have been ground to consider the bill discharged by the release. But Wolcott being holder in his own right, according to the authority just cited, he, and not Swearingen, was Forse's creditor upon the bill, which, therefore, could not be affected by Swearingen's release.

Margetson v. Aitkin, 3 Carrington and Payne, is thus reported : “Assumpsit, by the plaintiff, as indorsee, against the • defendant as indorser of three bills of exchange, amounting fogether to £41 13s. 6d.”

The defence was, that after these bills had been given, but before two of them became due, the defendant had compounded with his creditors, and that the plaintiff had executed the deed of composition, the plaintiff's debt being there stated at £27. However, it also appeared, that the two bills that had not become due at the time of the executing of the deed of composition, had been indorsed over by the plaintiff, and were not then in her hands; but that the other bill, which was for $10, was then in her hands as a dishonored bill.

Lord Tenterden, C. J. “ The utmost effect that can be given to Mr. Gurney's argument, and to the deed, is, that the plaintiff releases whatever debt is due to her. But I am of opinion that that deed cannot be taken as a release by the plaintiff, as to the bills then outstanding, undishonored, in other hands. It does not, I think, apply to two of the bills. * As to the remaining bill, I think that the plaintiff cannot recover on it, as that was dishonored at the time of executing the deed.” Verdict for plaintiff.

It would thus appear, from all the cases, that in order to make the release operate upon the bill, the person releasing should have been actually, or constructively, its holder, at the execution of the release. Story on Bills, treating of releases, and their operation, sec. 263, 269, 270, 430, 431, 432, 433, and 440, has reference, in every instance, to releases by the holder. So also in Story on Promissory Notes, sec. 422, et sequente. And unless the release, by express terms, has relation

Crawford v. Swearingen.

Dec. Term

1846.

In Bank. to a future or contingent, as well as present liability, as in Coe Fm, v. Hutton, and Scott v. Lifford, it will not operate to discharge such liability. .

The release in question, being upon composition by Forse with his creditors, a relation existing between him and Swearingen for gouds sold, and having no reference to the bill of which Swearingen was not holder; and the release, moreover, by its terms and intention, applying only to present and not to future or contingent liability, it cannot be set up to defeat this action. And the ruling in this case, by the Court below, seems to be fully established, not only by the authorities cited in behalf of Swearingen, but also by those cited for the plaintiff in error.

Marsh, in reply.

The counsel for the defendant in error, insists and bases his whole argument upon the principle that the term “ holder," as used by Story and other elementary writers, is applied to the person holding the bill at the time of his executing the release. This is an entire misconception. It is used as synonymous with plaintiff; that is, the holder at the time of trial; and every case cited will require this to make it intelligible. I cannot find the quotation from Chitty in the copy I have here, but I have the authorities cited to sustain the position, and I thank the counsel for them.

In Harrhy v. Wall, the release did not contain any prospective words in the instrument. It was shaped to specify the amount of the claims released by each, but the plaintiff declined to specify the amount of his. When afterwards called upon to specify the amount, he claimed that the note was to be paid. He did not specify the amount of his claim. He had a claim besides the note. It does not appear whether or not he had taken up the note when he claimed that it should be paid. It is very clear he was not the holder when he executed the release. He had indorsed it; a bank had discounted it and credited him with the amount. They owed or had paid him the money. The note was theirs. The plaintiff put it on

Crawford v. Swearingen. that ground and insisted, as in this case, that he then had no In Bank.

e Dec. Term, claim to be barred. The Judge says not a word of Buckle &

1846. Co. being his agents, but distinctly sustains the principle of his own decision in Scott v. Lifford, and says Harrhy was entitled, under his release, to the composition on the note. He had taken it up when due and dishonored, after the release. On the motion to set aside the nonsuit, it is said, the Court concurred with Lord Ellenborough. So far, is perfectly intelligible. A blundering reporter has given a reason which is not only at variance with the grounds of the decision, but he puts it on a matter of fact which that Court would never have decided without the intervention of a jury, viz: whether or not Buckle & Co. were the agents of the plaintiff? This, then, is a full authority for the plaintiff in error. In Margetson v. Aitken, 3 Car. & Payne, 338, the release was of a debt amounting to £27. The plaintiff sued on three bills, amounting to £41 13s. 6d. The case is very loosely reported. At the time of the release, the plaintiff held one of them and had indorsed the other two. The syllabus is, that the bill he held exceeded the amount stated in the release. The text states it at £10. Under this special release, the Court held, at nisi prius, that the bill then in his hands was released, and that the others were not. The case was not moved in Bank. Any general language reported as used by the Court, is, of course, to be taken as applied to the terms of that release. The general expressions beyond that, are not authority, and are at variance with all the decided cases.

The effect of a release cannot be controlled by the intentions of the parties, not expressed in the instrument. The statement of Forse, therefore, that the release was not intended to cover this bill, cannot affect the matter, even if true; but he admits that nothing was said, so that any such intention was a mere mental reservation, which none but Omnipotence could know, so far as Swearingen was concerned. See Story on Bills, sec. 431.

The case of Cuyler v. Cuyler, is nearly confessed to be a direct authority against the plaintiff below, so far as the counts

Crawford v. Swearingen.

IN Bank. on the bill, and recourse is had to the dictum of the Court to Dec. Termn, sustain this judgment on the common count. That was a suit 1846.

against the maker of the note, the principal debtor; this is a suit against a security on the bill. If, according to that dictum, a new cause of action accrued to Swearingen against Forse, after the release on an implied contract for money paid to Wolcott, (which I deny,) what had Crawford to do with that contract ? He was no party to it as security or otherwise. If Forse was not liable to Swearingen on the bill, in consequence of the release, his appropriated demand of payment, protest, and notice to Crawford, were all false assumptions, which he had no right to make, and, therefore, cannot claim them when done by others. Without the bill, as a valid claim against Crawford, Swearingen has no cause of action against him.

BIRCHARD, J. The instructions given, may well be considered in connection with those refused. There can be no doubt in this case, as to the intention of the parties. If the release has the effect to bar the claim of Swearingen, it effects what he never intended. The object of Forse and those of his creditors who signed his release and compounded with him, was merely to discharge him “ from all claims, demands, action or actions, cause or causes of action whatsoever," which they then had against him. Swearingen had such a claim or demand as these words would embrace, at the time. It was an existing liability for flour sold, which created between him and Forse the relation of debtor and creditor. Upon that claim, the release was designed to operate, and, as to that, it was a discharge.

Whether it could operate upon the liability that grew out of the nonpayment, protest, &c., of the bill of exchange, depends entirely upon the intention of the parties, to be gathered from the language of the release and state of facts then existing. It must be borne in mind, that Swearingen, at the date of the release, was not the holder of the bill, he had no right to it, it was not matured, but was in the hands of an indorsee for value.

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