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Reports of cases adjudged in the Supreme court of Pennsylvania, in the Eastern district [Dec. term, 1835 - Mar. term, 1841] (Volume 5) online

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an extension of credit, and is a common transaction in Philadelphia.
On such occasions the money always remains with the party who
provides it on the occasion. I have never known myself any such
transactions, except my own, to be a witness to them."

Mr. Peaslee described the manner of these renewals as follows :

' The notes were renewed by taking to Hacker, Brown & Co. a



101 SUPREME COURT [Dec. Term,

[Hacker v. Perkins.]

new note for the amount which we wished renewed, adding interest
for the time it had to run, and receiving from Hacker, Brown & Co.
a check for a similar amount, independent of the interest which
*10^T was * ac ^ed t the note; we then took up the note by pay-
* J -' ing the difference ourselves. This was the way. On these
occasions, we, in the first place drew out of the bank the amount
of their check and applied that money towards the taking up of
the old note ; and this, to the best of my knowledge, was repeated
on each renewal. The old notes were paid at the bank by us
and received by us. The sixteen notes produced by the plaintiffs'
counsel purporting to be drawn by Peaslee, Sims and Co. in favor
of Hacker, Brown & Co., are all of them genuine notes, with the
signatures of Peaslee, Sims & Co., and are all of them, I believe,
notes received by the plaintiffs from Peaslee, Sims & Co. in renewal
of former notes, in precisely the manner I have stated. As to
each of the sixteen notes which I have identified above, I believe
that the check of Hacker, Brown & Co. was received, and the
amount of it drawn out of bank in money and applied to the taking
up of a previous note, as I have explained above. During my
interviews with the plaintiffs, nothing was said about borrowing
money ; they never gave me authority to use the money in any
other way than to take up the notes."

The notes in which the notes in question had originated (except
one, of which the loss was proved), and all intermediate notes
given in renewal of them, were produced from among the papers
of Peaslee, Sims & Co., in the hands of the defendant as assignee;
and the witness, Mr. Burkhart, traced each of them successively,
from the original notes to the present note.

The whole of the several notes referred to, and produced by Mr.
Burkhart, were given in evidence ; they were all endorsed by the
plaintiff, and the word paid was written upon the back of them,
with the exception of two or three of them, which were cancelled
by tearing off the signature ; some of them had subsequent en-
dorsements on them.

In the series of renewals there was occasionally a note or two
which did not appear to have been in bank, and on the renewal of
which no check or money had been given by the plaintiffs to enable
Peaslee, Sims & Co. to take it up, as in the cases where the note
was in bank. But, except as to notes Nos. 9, 11 and 14 there was
no dispute that the original note for the price of the goods and the
last note of the series of renewed notes (in each of the two extremes
of the series prior to the present notes) had been in bank, and had
been at maturity taken out of bank by Peaslee, Sims & Co. with
money received by them for the purpose from the plaintiffs, as ex-
plained above. As to note No. 9, for five hundred dollars, a check
of the plaintiffs, was given in evidence and verified for the amount



1839.] OF PENNSYLVANIA. 102

[Hacker . Perkins.]

of this note, less the discount. It had originated in a note for fif-
teen hundred and ninety-six dollars and thirty-two cents, which
Mr. Burkhart supposed had not been in bank, but which was after-
wards ""proved to have been discounted for the plaintiffs in r*-j no
Stephen Girard's bank.

Notes Nos. 11 and 14 were the only two for the amounts of which,
less interest, the plaintiffs did not produce their checks as above.
Each of them was the renewal of an original note for the price of
goods. Mr. Burkhart deposed that the original of note No. 14
never was in bank. He could not remember whether the original
of No. 11 had been in bank or not. He did not produce it, but
proved its loss. All of the other original notes had been in the
bank where those of larger amount had been discounted, and the
rest had remained for collection in bank till due.

In the course of the trial the following points of evidence were
ruled.

1. Charles S. Peaslee's deposition in writing had been taken on
behalf of the defendant at a former period, in which he had deposed
in chief, as follows :

" Immediately after our assignment we made out a list of the
debts we owed, and of our creditors, in classes according to this
schedule, which is the paper itself, marked B. It was laid open for
the inspection of all our creditors who chose to come and look at it.
It was laid upon our desk at our counting-house, with our assign-
ment and release, where it remained till the time of signing the
release expired. Our creditors were in the habit of coming in and
examining this schedule with our release and assignment. Hacker,
Brown & Co., that is Isaiah Hacker and Mr. Brown were there in
our counting-house and examined this schedule with the release and
assignment. They did so more than once ; our release was signed
by them at the same place ; we had no communications between the
date of our assignment and the time of executing our release with
either of that firm, as to the amount in different classes."

And in cross-examination Being asked whether a conversation
did not take place shortly after the assignment was made between
himself and Mr. Isaiah Hacker, as to the effect of the assignment ;
he answered, "I do not recollect. It is possible such a conversation
may have occurred, and I cannot say it did not, but I do not remem-
ber of any; my mind was very much harassed at the time."

On a former trial of this cause William T. Burkhart had been
examined as a witness for the defendant, and had also testified
that soon after the making of the assignment, and before the
execution of the release, the assignors prepared the above-men-
tioned statement of their affairs, to be exhibited to their credi-
tors, and it lay for some time on the desk, in their counting-
house, along with the assignment and release, open to the exami-



103 SUPREME COURT [Dec. Term,

[Hacker . Perkins.]
nation of such of their creditors as might wish to inspect them ;



*1041 the above-named members of the *plaintiff's firm,

-* were in and out occasionally during this period. He
recollected their looking at this exhibit and believed that they,
or one of them, examined it. One of them saw it several times ;
but the witness could not remember any conversation that passed
concerning it.

The statement referred to by these witnesses consisted of four
schedules, one of them headed thus :

" In order according to our assignment No. 1, borrowed money "
in which there were certain names and amounts, and among them
"Hacker. Brown & Co. $1597.85."

Another headed " in order according to our assignment No. 2
endorsements," contained among others this item, " to Hacker,
Brown & Co. for balance of their bond for money loaned us to
pay drafts and acceptances for account of Jones & Truesdell's,

$10376 65
for which they hold Jones and Truesdell's notes as

above 6165 54



4211 11"

Another headed " in order according to our assignment No. 3
for merchandise, contained, among other items, " to Hacker,
Brown & Co. nine thousand and forty-nine dollars and fifteen
cents." The remaining schedule was entitled "summary under
head No. 4," and after bringing in the aggregate from each of the
three other schedules, proceeded to give a statement of assets in
hand and expected ; adding " in the above summary we have
endeavored to come as near the actual state of things as in our
judgment was correct." It was dated at foot, December 13th
1832, and was without signature.

The defendant offered to give in evidence, testimony of Mr.
Peaslee and Mr. Burkhart, such as they had respectively given
before, (as above), concerning this statement ; and in connection
with this testimony offered to give in evidence the statement
itself.

The court rejected the offer. The defendant excepted.

2. After Mr. Peaslee, the witness of the defendant, had been
examined as to the facta relating to the payment of money by the
plaintiffs, at the time of their receiving the notes in question, he
was asked by the defendant's counsel, " Did you ever receive, or
did they (the plaintiffs give the money or checks (referred to in
the evidence respecting the renewals) as a loan ? or did you
receive it as agent to take up the notes ?" The question was



1839.] OF PENNSYLVANIA. 104

[Hacker v. Perkins.]

objected to, on the ground, that it involved a mere point of law,
viz. : whether a man could receive money for his own use, other-
wise than as a borrower-. The court refused to permit the ques-
tion to be answered.

* The defendant excepted. r*10~

3. The court also rejected evidence offered on the part *
of the defendant, to show that according to mercantile usage, the
renewal of a note was not considered as a loan of money. The
defendant excepted.

The evidence on both sides being closed; under the recom-
mendation of the court, a verdict was by consent given for the
defendant without prejudice to the rights of either party, the
court to have power on the judge's report of the evidence to de-
cide any question of fact, or to order a new trial ; if the court
should be of opinion that the verdict .ought to have been for the
plaintiffs, a verdict and judgment to be entered for the plaintiffs
in such sura as the court might think them entitled to, on the
evidence so reported.

Mr. Cadwalader, and Mr. F. W. ffubbell, for the plaintiffs,
argued

1st. That upon the true construction of the words of the assign-
ment the plaintiffs were to be considered as creditors for borrowed
money ; and upon this point they cited Ellmaker v. Ellmaker,
4 Watts 90 ; Paul v. Lewis, Id. 403 ; Finch 321 ; 5 Wentworth
147, 165 ; 2 Richardson's Practice 1295 ; 2 Chitty's PI. 181 ;
Rastell 152 ; Marriat v. Sister, 2 Wilson 142 ; Herries v. Jame-
son, 5 Term Rep. 554 ; Jones on Bailments 54 ; Robson v. Bennet,
2 Taunt. 395 ; Hays v. McClung, 4 Watts 454 ; Slaymaker v.
Gundacher, 10 S. & R. 82 ; Ex parte Barclay, 7 Ves. 597 ; Hart
v. Boiler, 15 S. & R. 163 ; Dillon v. Rimmer, 1 Bing. 100; s. c.
8 E. C. L. R. 263.

2d. That the evidence offered on the trial was properly reject-
ed : in reference to which they cited Lyon v. Marclay, 1 Watts
274 ; Gratz v. Gratz, 4 Rawle 431 ; Weidler v. Farmers' Bank
of Lancaster, 11 S. & R. 139 ; Seaville v. Robinson, 4 Term Rep.
724 ; 1 Star. Evi. 40 ; 2 Id. 380 ; Alexander v. Kerr, 2 Rawle
89 ; Crest v. Jack, 3 Watts 239 ; Flemming v. Slocum, 18 Johns.
403 ; Kuhn v. Nixon, 15 S. & R. 121 ; Robinson v. Justice, 2
P. & W. 19 ; Lewis v. Jones, 4 Barn. & Ores. 506, s. c. 10 E. C.
L. R. 393.

Mr. Perkins, for the defendants.

1st. The first object must be to discover the intentions and un-
derstanding of the parties to this assignment and release : and then



105 SUPREME COURT [Dec. Term,

[Hacker v. Perkins.]

whether they have expressed that intention by appropriate terms
and descriptions of classes.

The intention of the parties is clear in the first class of prefer-
ences under the assignment ; there is but one condition annexed
to the loan ; it must be without evidence of debt, neither bond nor
promissory note. In the second class there must be a borrowing
*-iAp-i of money *and evidence of the debt given ; there must be
J such a borrowing as creates the debt, not an evidence of a
prior debt for merchandize ; not a delivering to the assignors of
money to take to the bank for the plaintiffs' own use, to go directly
to their credit ; or rather to remain with them. The agreement of
the parties as to these sixteen notes, was not that the plaintiffs
should lend money ; but that they should grant an extension credit
should renew their notes. But it is argued that the first notes
given for the goods were paid ; and that the consideration of
the new notes, was the money received from the plaintiffs
with which to take up the old notes. This was in pursuance
of the agreement. The renewal was to be in this way, in order to
save the credit of the makers ; and in law the taking up the old
notes, by paying part and giving new notes, for the bal-
ance was not payment ; unless the new note was paid at maturity,
or was agreed to be taken in payment : Putnam v. Lewis,
8 Johns. 304 ; House v. Law, 2 Id. 378 ; Tobey v. Barber, 5 Id.
67, 72 ; Johnson v. Weed, 9 Id. 309 ; Owenson v. Morse, 7 T. R.
60; Drake v. Mitchell et al., 3 East 251; Sheeley v. Marideville
et al., 6 Cranch 253 ; Shermerhorn v- Loines, 7 Johns. 310 ; Wil-
son v. Force, 6 Id. 110 ; Tapley v. Martens, 8 T. R. 451; Herring
v. Singer, 3 Johns. Gas. 71 ; Tyson v. Pollock, 1 P. & W. 381 ;
Puckford v. Maxwell, 6 T. R. 52; Bishop v. Row, 3 M. & S.
362 ; Olcott v. Rathbone, 5 Wend. 490; Porter v. Talcott, 1 Cowen
379; Hughes v. Wheeler, 8 Id. 77; Hart v. Boiler, 15 S. & R. 163 ;
Keen v. Dufresne, 3 Id. 233 ; Ex parte Barkley, 7 Ves. Jr. 597 ;
Robinson v. Read, 9 B. & C. 449 ; s. c. '17 E. C. L. R.
418 ; Wyatt v. Hertford, 3 East 147 ; Marsh v. Pedder, 4 Camp.
257 ; Everett v. Collins, 2 Id. 515.

The schedules should have been permitted to go to the jury as
to what took place at the time of executing the release. Up to the
time of these plaintiffs signing the release, the assignment was merely
a proposal, an offer to contract between the parties, not complete
till the plaintiffs executed the release ; and what then took place
is evidence : Scott v. Sherkley, 3 Watts 50 ; Krider v. Lafferty,
1 Whart. 303; Ingham v. Crary, 1 P. & W. 389; Hultz v. Wright,
16 S. & R. 345 ; Bertsch v. Lehigh C. & N. Co., 4 Rawle 130 ;
Keller v. Leib, 1 P. & W. 220 ; Bellinger v. Eckert, 16 S. & R.
4-24 ; Miller v. Henderson, 10 Id. 292 ; Christ v. Deffenbach, 1
Id. 464 ; 1 Yeates 139 ; Cozens v. Stevenson, 5 S. & R. 421 ;



1839.] OF PENNSYLVANIA. 106

[Hacker . Perkins.]

Campbell v. McClenachan, 6 Id. 171 ; Field v. Biddle, 2 Dall. 171 ;
McMinn v. Owen, Id. 173; Zantzinger v. Ketch, 4 Id. 132;
Dinkle v. Marshall, 3 Binn. 587. Evidence should have been ad-
mitted to show that according to the mercantile usage, the renewal
of a note was not considered as a loan of money when renewed as
the sixteen notes in question were proved to have been. r^-iA-r
*Evidence of usage or custom was admitted to fix the mean- I
ing of words in the following cases : Whipple v. Lovitt. 2 Mass.
89 ; Gorden et al. v. Little, 8 S. & R. 533 ; Stultz v. Dickey, 5
Binn. 285 ; 3 Starkie on Evid. ; Snowden v. Warder, 3 Rawle 101;
Roscoe on Evid. 10, and cases there cited ; Jones v. Fales, 4 Mass.
245 ; Lincoln u. Kennebec Bank, 9 Id. 155 ; Blanchard v. Hil-
liard, 11 Id. 85 ; Pierce v. Butler, 14 Id. 303 ; Whitnell v. John-
son, 17 Id. 449 ; 13 Peters's S. C. Rep. 89 ; Clayton v. Gregson,
30 E. C. L. R. 400 ; s. c. 4 N. & M. 602 ; s. c. 31 E. C. L. R.
342 ; s. c. 5 A. & E. 302 ; Loring v. Gordon, 5 Pick. 15 ; Birch
v. Depeyster, 2 E. C. L. R. 359 ; Cutter v. Powell, 6 T. R. 320 ;

2 Bing. N. C. 668 ; 29 E. C. L. R. 452 ; 15 Wend. 561 ; 2 M. &
R. 85 ; 2 Shepley 185 ; 20 Pick. 150.

Mr. J. H. Ingersoll, on the same side, cited Page v. Bank of
Alexandria, 7 Wheat. 35 ; Mandeville v. Welsh, 5 Id. 277 ; Mus-
grave v. Gibbs, 1 Dall. 237 ; Gallagher v. Roberts, 2 Wash. C. C
Rep. 191 ; Brown v. Jenkins, Id. 24 ; Commercial Bank v. Clapier,

3 Rawle 338 ; Molierre u. Penn. Ins. Co., 5 Id. 347 ; McCulloh v.
Girard, 4 Wash. C. C. Rep. 289 ; Cortelyou v. Lunsing, 2 Caines
202 ; Armine v. Spencer, 4 Wend. 407 ; Jackson v. Parkhurst, Id.
369 ; Brewster v. Countryman, 12 Id. 446 ; Parker v. Hook, 16
S. & R. 327 ; Halsey v. Whitney* 4 Mason 206 ; Gordon v. Cooley,
1 Sumn. 527.

Mr. F. W. ffubbell, replied.

The opinion of the court was delivered by

HUSTON, J. On the 24th of September 1832, Charles S. Peas-
lee, John C. Sims and William F. Burkhart made an assignment
for the benefit of their creditors, to Mr. Perkins, the defendant, in
trust to pay

Class 1. All borrowed money loaned to the said firm of Peaslee,
Sims & Co., and for which neither the bond or note of the said firm
is now held.

Class 2. All and every the sum and sums of money borrowed by
the said firm from individuals or firms, from which either the bond
or promissory note of the said parties of the first part have been
given, and fully to indemnify and save harmless all and every indi-
vidual and firm of and from all loss for or by reason of any promis-



107 SUPREME COURT [Dec. Term,

[Hacker . Perkins.]

sory note, draft, or bill of exchange, drawn, endorsed, or accepted,
or signed by him or them for the accommodation of the parties of
the first part (the parties of the first part were Peaslee, Sims & Co.).
Class 3. The remaining debts and claims against Peaslee,
Sims & Co.



*10S1 1832, Peaslee, Sims & Co. had sold goods to

J Jones & Truesdell, of Wheeling, to about twelve thousand
dollars, advanced about five thousand dollars, and were liable on
acceptances to about twenty-four thousand dollars. The house at
Wheeling having stopped, Peaslee, Sims & Co. felt themselves
under great difficulties, and proposed to assign. The father of
William Burkhart, and Hacker, Brown & Co., proposed each to
advance them twelve thousand dollars ; and as they were largely
indebted to Hacker, Brown & Co., for goods sold them, the latter
proposed to give them an extension of credit. The amount of
goods sold was from fifty to sixty thousand dollars, for all of which
they held the notes of Peaslee, Sims & Co., payable at different
times. William Burkhart and Charles S. Peaslee were both ex-
amined, and stated what was agreed on and what was done under
the agreement. The difference between their accounts of the mat-
ter is only verbal, in substance they agree. This testimony was
as follows :

" The plaintiffs were perfectly aware of our situation. They
and we thought it advisable for them to renew these notes, that our
difficulties might not be known, as we had a prospect of getting
through and maintaining our credit ; and they agreed to renew these
notes in this way that it might not be known. In the mode adopted
there is nothing peculiar. It was an extension of credit. The
notes were renewed by taking to Hacker, Brown & Co., a new note
for the amount we wished renewed ; we paid on a note falling due
as much as we could ; the new note and interest was for the balance
and was given to them, and they gave us a check for the amount of
such note. The check was taken to the bank where Hacker, Brown
& Co. kept their money, and we drew the amount and with that
and what we could pay, lifted the old note. The money was taken
to the bank where the plaintiffs kept their account, and not where
we kept our account ; we invariably took the money itself to the
bank where the notes were. The new notes are for the balance of
the old notes ; the present notes are the lowest amount of notes ;
the day after this took place, the plaintiffs stood better than they
stood before, in this, that we owed them so much less as the differ-
ence between the respective amounts of the old and new notes.
The money was passed to the credit of the plaintiffs ; the new note
had nothing to do with the bank transaction. I do not know that
the bank knew of the notes being renewed. The course is that
the money is passed to the credit of the note in bank. They were



1839.] OF PENNSYLVANIA. 108

[Hacker v. Perkins.]

not out of pocket longer than to go from one bank to the other.
The arrangement between us was that the notes should be renewed.
There was no arrangement that they should lend us money."
Again, the witness says : " There were some of these notes that I
believe were settled at the plaintiffs' counting-house ;" and as to
these, it seems conceded, the plaintiffs have no claim to come in as
for money lent. The allegation is, that in the mode which was
adopted *expressly that it might not be known what was r*-iAq
going on, Hacker, Brown & Co. gave to Peaslee, Sims & Co. ^
money or a check to receive money and carry it to bank and pay
it in for the use of Hacker, Brown & Co., and this they wish to
call, and wish the court to say, is money lent by them, and bor-
rowed by Peaslee, Sims & Co. Where a man borrows money, it is
his own, and he may use it for a purpose before arranged in his
own mind, or for some other purpose. When money or a check to
receive money is to be carried to a particular bank, and paid in to
the credit of the man who handed the money, or gave the check,
there is no lending money or borrowing money in the case it is
merely placing confidence in the man that he will do with the
money or check what was intended by him who intrusted him ; if
he does any thing else with it he is guilty of a fraud, or, under
some circumstances of preconceived intention to violate trust, and
use the money, may be guilty of larceny.

Generally it is, as between creditor and debtor, immaterial
whether a note was given for money lent, or for goods sold. But
in case of assignment, it has become usual to direct payment of the
fund, so as to prefer debts contracted in one mode from those con-
tracted in another mode : and in the case before us three different
grades are marked.

We had some learning and notice of the terms in old declara-
tions and pleas ; and not a few cases, in some of which the new
note was an extinguishment of the old note ; and in some it was
held not to extinguish the present debt or note. The result of all
the cases in our own court, and perhaps in all, is, that it depends
on the intention of the parties ; and if that intention can be ascer-
tained, it decides whether it is or is not the extinction of the old,
or creating a new debt. Such is the decision in Slaymaker v. Gun-
daker's Ex'rs, 10 S. & R. 82 ; and in 15 S. & R. 183, the very
point came up, and though it is stated by the late chief justice, that
" a new note, without any new consideration, given by the same
parties, will generally be considered as the same debt, yet it is error
to decide it as a point of law ; that whether it is a continuance of
the old, or creating a new, must be left to the jury." 1 In this case,
the partners, Peaslee and Burkhart, were examined, one by the
plaintiffs, and one by the defendant ; and there is no discrepance.

1 See post, *537.



109 SUPREME COURT [Dec. Term,

[Hacker v. Perkins.]

We have thus positive proof that the offer of Hacker, Brown <fc Co.
was to extend the time of payment on the notes for goods sold, that
there was never at any time any mention of a loan on the one side,
or borrowing on the other, so far as respected these notes, or the
renewal of them. That the understanding was, that the money or
checks were given to Peaslee, Sims & Co., as a mode of extending
the credit ; and it was part of the understanding, that this was not
to be known.

Hacker, Brown & Co. understood perfectly the difference between
a debt for goods sold, and one for money lent. About the time of
*1101 * tQ i s arrangement they drew up a judgment bond, and pre-
^ sented it for signature to Peaslee, Sims & Co., who executed
it, and Hacker, Brown & Co. gave a receipt, stating the receipt of
the said bond as security for the repayment of twelve thousand
three hundred and thirty-seven dollars and twenty- nine cents,
" which we have agreed to loan them ; and for the payment of two
notes we have lent them ; one for three thousand four hundred and
ninety-two dollars and twenty-eight cents, due the 23d of this
month, and one for eight thousand two hundred and ninety-eight
dollars and fifteen cents, due on the 17th of 7th month next ; if
Peaslee, Sims & Co. pay the above sums, with interest, the above
bond and judgment are to be given up :" thus showing a clear dis-
tinction, understood by themselves, between a debt for money, or
notes loaned, and a debt for goods sold. Their debt for goods sold
amounted, then, to fifty or sixty thousand dollars ; and in conse-
quence of this arrangement was in six months reduced to about
nine thousand dollars. The assignees, Peaslee, Sims & Co., also
well understood and correctly expressed themselves. " 1st class,
all borrowed money loaned to us, for which no bond or note was
given, or is held ; 2d, all sums borrowed by us for which a note or



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