UNITED STATES SUPREME COURT DECISIONS ON-LINE

In equity, where a creditor agrees to receive specific articles in satisfaction of a debt, even although it be a debt upon bond secured by mortgage, he will be held to the performance of his agreement.

But in order to bring a case within this principle there must be

1. An agreement not inequitable in its terms and effect.

2. A valuable consideration for such agreement.

3. A readiness to perform and the absence of laches on the part of the debtor.

Where the agreement to receive payment in goods was made by a person who acted under a power of attorney from the creditor, authorizing him to trade, sell, and dispose of notes, bills, bonds, or mortgages, and under this power a partial payment was received in goods which was afterwards recognized as a payment by the creditor, the power was sufficient to authorize an agreement to receive the remaining amount, also in goods, at any time when called for within twelve months, especially as the bond had yet four years to run.

This agreement was not inequitable; there was a valuable consideration for it and the debtor was always ready to comply with it on his part.

The creditor cannot now allege fraud in his debtor. It is not charged in the bill, and although he may not have known of the agreement when the bill was framed, yet when the answer came in he might have amended his bill and charged fraud.

In 1841, one Darwin Lindsley owned a lot of land in the Town of Little Rock and State of Arkansas which was known as lot No. 7, in block or square No. 35 in that part of the city west of the Quapaw Line, and known as the Old Town.

On 3 March, 1841, he sold this lot to Jonas Levy, who gave two bonds, each for $4,000, one payable five years after date and the other six years after date. Both were to carry interest, at 7 percent, payable quarter-yearly. The bond, payable in five years, was not involved in the present suit, and no further notice need be taken of it. Both bonds were secured by a mortgage of the property.

On 25 March, 1841, Lindsley assigned the six years' bond to Martin Very, a citizen of the State of Indiana.

This bond had the following credits endorsed upon it:

1841, March 15 . . . . . . . . $550.00

1842, January 29 . . . . . . . 181.12

1843, March 3 in goods . . . . 1898.25

The last credit was signed Martin Very, by J. S. Davis, and arose in this way:

On 25 November, 1842, Davis addressed the following letter to Levy.

"NEW ALBANY, Indiana, Nov. 25, 1842"

"DEAR SIR -- My object in writing to you, is to inquire what

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you will give in cash and jewelry for the last note that you gave to Darwin Lindsley, and which was assigned by him to Martin Very. I have bought a part of the note, and am authorized to make disposition of it, and I thought, as a matter of justice, you should have the refusal of the note at a considerable discount if you desired it. Please let me hear from you at your earliest convenience. I write for myself and Mr. Very."

"I am, respectfully yours, &c."

"Mr. JONAS LEVY JOHN S. DAVIS"

"[Endorsed] -- Mr. JONAS LEVY, Little Rock, Arkansas"

"[Postmarked] -- New Albany, Ind., Nov. 26"

On 28 January, 1843, Very executed the following power of attorney to Davis:

"Know all men by these presents that I, Martin Very, of the County of Floyd and State of Indiana, have made, constituted, and appointed and do by these presents make, ordain, constitute, and appoint John S. Davis, of the City of New Albany, Indiana, my true and lawful attorney for me, and in my name, and for my use to ask, demand, sue for, recover, and receive all such sum of sums of money, notes, bills, bonds, mortgages, or debts which are or shall be due, owing, or belonging to me in any manner or by any means whatsoever, and I hereby give my said attorney full power and authority to trade, sell, and dispose of any notes, bills, bonds, or mortgages held or owned by me on any resident or residents of the State of Arkansas, and I hereby give my said attorney full power and authority in and about the premises to have, use, and take all lawful ways and means in my name for the purposes aforesaid, and upon the receipt of such debts, dues or sums of money to make, seal, and deliver acquittances and other sufficient discharges for me and in my name, or, upon the sale of any bill, bond, note, or mortgage, to execute a good and sufficient assignment of the same to the purchaser thereof for me and in my name, and generally to do and perform in my name all other acts and things necessary to be done and performed in and about the premises as fully and amply to all intents and purposes as I myself could or might do if personally present, and attorneys, one or more, under him for the purpose aforesaid to make and constitute and again at pleasure revoke. And I hereby ratify and confirm all and whatsoever my said attorney shall lawfully do in my name in and about the premises by virtue of these presents, and I hereby make this power of attorney irrevocable to all intents and purposes. In testimony whereof I have hereunto

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set my hand and seal this the 28th day of January in the year of our Lord 1843."

"MARTIN VERY [SEAL]"

"Signed, sealed, and delivered in presence of"

"Jos. P. H. THORNTON"

Under this power, Davis went to Little Rock, and on 3 March, 1843, put the receipt above mentioned upon the back of the bond for $1,898.25, paid in goods, and on the same day executed the following paper, viz.:

"LITTLE ROCK, March 3, '43"

I hereby agree to take in goods, such as jewelry &c., the balance due me on a note assigned by D. Lindsley to me, as also a mortgage assigned by the said Lindsley, said goods to be delivered to m, or any agent at Little Rock, Arkansas, at reasonable prices, at said Little Rock, said goods to be called for within twelve months from this time. MARTIN VERY

"By J. S. DAVIS"

"Attorney in fact"

Davis stated in his deposition that in January, 1844, he wrote to Levy directing him to pay the balance in jewelry, watches &c., to Mr. Waring in Little Rock; that he received an answer from Levy declining to do so, but that he had lost or mislaid this answer from Levy.

On 3 February, 1844, Davis wrote to Levy the following letter:

"NEW ALBANY, Feb. 3, 1844"

"DEAR SIR -- If you can pay the balance of your note in good silver or gold watches and good jewelry at fair prices, say about half of each or two-thirds watches, you will please notify me of the fact by return of mail and I will send on for them at once. The things you let me have before were too high -- at least Mr. Very says so. Let me hear from you. I am your friend,"

"JOHN H. DAVIS."

"MR. J. LEVY."

"[Postmark] New Albany, Ind., Feb. 5"

"[Endorsed] MR. JONAS LEVY, Jeweler, Little Rock, Ark."

In April, 1848, Very filed his bill in the Circuit Court of the United States for the District of Arkansas against Levy for the purpose of foreclosing the mortgage. The answer of Levy admitted all the allegations of the bill, but set up as a defense the execution of the power of attorney by Very to Davis, and the subsequent agreement between Davis and himself, by which clubjuris

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the goods were to be called for within twelve months. It was then alleged that not only during the next twelve months but always afterwards, Levy had kept on hand goods enough of the proper character to pay the balance due, been always ready and still was ready to deliver them, and had often urged the complainant to receive and accept them, and would deposit them in the custody of anyone directed by the court.

Levy brought into court a large quantity of goods and jewelry, which was placed in the hands of a receiver.

The case being heard on bill, amendment, answers replications, exhibits, and testimony, the court held Very bound by the agreement, and found that Levy had always had sufficient goods on hand ready to be delivered, and directed the master to ascertain the balance due on the bond and the value of the goods delivered to the receiver.

The master reported the balance due on 3 March, 1844, to be $2,002.59, and the value of the goods, $5,776.99. No exception was taken to the report, and it was confirmed.

The court then ordered the complainant to select out of the goods to the amount of $2,002.59, and on his failure, after notice to his solicitor, that the master should do so. The complainant failed to select; the master set apart the requisite amount, the residue were redelivered to Levy, and the court decreed that Very should receive the goods so set apart by the master and that the bond and mortgage were satisfied, denied the relief prayed, and dismissed the bill, all costs to be paid by the complainant.

Very appealed to this Court. clubjuris

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