Binford, Administrator, v. Adams, Administrator, et al.

person. Ritenour v. Mathews, 42 Ind. 7; Sheldon Sub., section 186; 2 Edwards Bills and Notes (3d ed.), 536.

Whether a transaction between the holder of a promissory note and the person who pays the money is of such a character as to constitute a payment that will operate to extinguish the debt, is generally a question of fact. Dougherty v. Deeney, 45 Iowa, 443; Moran v. Abbey, 63 Cal. 56; Jones v. Bobbitt, 90 N. C. 391; Balohradsky v. Carlisle, 14 Bradwell, 289. It is true that there are cases in which the court may presume, as matter of law, that the debt was not extinguished, but those are cases depending upon the equitable principle of which we have spoken, and this case is not of that class. The general rule prevails here, and the question must be regarded as one of fact.

There is an important difference between the payment of a note and the purchase of it from the owner. Payment is the discharge of a debt. The purchase of a note is a contract of sale. The sale of a note, in order to be valid, must be made by a buyer to a seller; there must be mutual assent, and there must also be a consideration. Daniel says: "Payment is not a contract. It is the discharge of a contract in which the party of the first part has a right to demand payment, and the party of the second part has a right to make payment. A sale is altogether different. It is a contract which does not extinguish a bill or note, but continues it in circulation as a valid security against all parties. And it is necessary to constitute a transaction a sale that both parties should then expressly or impliedly agree, the one to sell, and the other to purchase the paper." 2 Daniel Negotiable Inst., section

1221.

Another author says: "To constitute a sale there must be a clear intention on the one part to buy, and on the other to sell; neither of these standing alone will operate to effect a sale." Edwards Bills and Notes (3d ed.), section 728.

The Supreme Court of California, in a case similar in its general features to the present, said: "The legal effect of the

Binford, Administrator, v. Adams, Administrator, et al.

transaction was to extinguish the obligation of the note." In the course of the opinion in that case it was also said: "But payment of a promissory note is not a contract; it is performance of the obligation arising out of the promise to pay. Any one of the several parties to a joint contract, or any one in his behalf and at his request, or with his consent, may perform the obligation; and when performance has been offered or made, and the money accepted, the obligation becomes extinguished. The parties to the contract are no longer bound to each other by the vinculum legis of right and duty." Moran v. Abbey, supra.

The question presented in Lancey v. Clark, 64 N. Y. 209 (21 Am. R. 604), was similar to that presented here, and it was there said: "To make a sale or transfer takes two parties, one to sell and the other to buy." The same general doctrine is also maintained in Eastman v. Plumer, 32 N. H. 238.

The case of Burr v. Smith, 21 Barb. 263, is directly in point, for the facts are so nearly the same, that with a change of names, dates and amounts, one statement of facts would substantially fit both cases. In that case the court said, in speaking of the request that the note should be cancelled, that "It is true he declined having it cancelled; but that circumstance was not enough, in my judgment, to overcome the presumption arising from the facts proved, that it was paid and extinguished. It does not prove a purchase, and unless it was purchased by Riley, it was satisfied by the payment." One of the authors referred to notes the case of the payment of a bill of exchange to save it from dishonor, states that such a case forms an exception to the general rule, and says: "With this exception to the general rule, there is no reason why an officious payment and satisfaction of a bill or note should not be held to cancel the security." 2 Edwards Bills and Notes (3d ed.), section 729.

It is impossible to conceive any valid reason why the sale of a promissory note is not a contract, and once it is granted

Binford, Administrator, v. Adams, Administrator, et al.

that it is a contract, it must surely follow that there can be no sale unless the holder of the note expressly or impliedly agrees to sell. To assert the contrary is to assert that there may be a contract without a meeting of the minds of the parties, and he who asserts this runs counter to one of the most familiar of the elementary principles of the law. In this instance the owner of the note declares that nothing was said to him about the purchase of the note, and that it never was purchased of him. It can not be possible, therefore, that there was a contract of sale, and if there was not, the note was extinguished.

Stress is laid upon the agreement between the maker of the note and Binford; this agreement, however, is not of controlling force, for the real question is, not what was the agreement between those parties, but what was the agreement between the person claiming as purchaser and the owner of the note, in whom alone was vested the power to sell? The authority to sell was undoubtedly in the holder of the note, and unless he sold the note no one could become a purchaser. Eastman v. Plumer, supra. A seller of a note incurs some liability although he transfers the note simply by delivery, for, even in such a case, he warrants the genuineness of the note. Lancey v. Clark, supra; Delaware Bank v. Jarvis, 20 N. Y. 226; Bell v. Cafferty, 21 Ind. 411; Brown v. Summers, 91 Ind. 151. There are authorities extending the implied warranty much further. French v. Turner, 15 Ind. 59; 1 Daniel Negotiable Inst., section 729. But we need not pursue this inquiry, for, if there is any warranty at all in the case of a transfer by delivery, it can not be possible that such a warranty can be asserted against a party who has made no contract, and this satisfactorily proves that there can be no purchase of a promissory note unless there is an agreement to sell.

Granting that the case of Dodge v. Freedman's, etc., Co., 93 U.S. 379, correctly lays down the law, it is not in point here, for the reason that here the money was paid directly to the

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Storms v. Stevens.

holder of the note; while there it was paid to a bank acting as a collecting agent. In that case, the fact that the notes were paid to a collecting agent without authority to bind the holder by a transfer of title, was given prominence, and it may be that this fact sustains the decision. Here, however, the court can not decide that there was a purchase, without deciding, also, that there was an implied warranty binding the person making the transfer; this we can not do, for we can perceive no ground upon which a person can be held to have made a warranty, and yet not have entered into a contract. Smith v. Sawyer, 55 Maine, 139, Willis v. Hobson, 37 Maine, 403, and Greening v. Patten, 51 Wis. 146, support our conclusions.

In Swope v. Leffingwell, 72 Mo. 348, as in Harbeck v. Vanderbilt, 20 N. Y. 395, there was an assignment of the note to the stranger, by whom the money was paid. Here there was none, and it needs no more than a bare mention of this fact to exhibit the difference between those cases and the present. Judgment affirmed.

Filed Nov. 24, 1885.

No. 12,201.

STORMS v. STEVENS.

STATUTORY RIGHT.-Mode of Enforcing.-Where a statute creates a new right, and prescribes a mode of enforcing it, that mode must be pursued to the exclusion of all others.

DRAINAGE.-Collection of Ditch Assessment.-Tax Duplicate.-Interest after Demand.-When the county surveyor accepts work on a ditch, whether of shares allotted to residents or non-residents of the county, and issues his certificates of acceptance, he must file copies thereof with the county auditor, and the auditor must charge the amount mentioned in the certificates on the tax duplicate, to be collected as taxes are collected; and the holders of such certificates will be entitled to six per cent. interest thereon from demand until paid, or, if no demand has been made and

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the amounts thereof have been placed on the tax duplicate, from delinquency. SAME-Action at Law.--In such case, the amount of a certificate can not be collected, nor can the lien created by the certificate be enforced, by an action at law.

RULE OF CONSTRUCTION.-Statutes.-In construing statutes, the prime object is to ascertain and carry out the purpose and intent of the Legislature, and, in so doing, the words of a statute will be given their literal and ordinary signification; but if such a construction renders the meaning of a whole statute doubtful, or leads to contradictions or absurd results, the whole statute must be looked to, and the intent, as collected therefrom, will prevail over the literal import of terms and detached clauses and phrases.

From the Huntington Circuit Court.

J. C. Branyan, M. L. Spencer, R. A. Kaufman and W. A. Branyan, for appellant.

J. B. Kenner, J. I. Dille, W. G. Sayre and J. T. Hutchens, for appellee.

ZOLLARS, J.-A ditch was constructed by order of the board of county commissioners, under R. S. 1881, section 4285, et seq. The auditor sold the shares or allotments of work as provided by section 4303. Appellant bought the share allotted to appellee, and received from the county surveyor the certificate as provided by section 4305. He brought this action in the court below to enforce against appellee's land the lien created by sections 4317 and 4305. He contends that this kind of an action may be maintained. Appellee contends that it can not; that the statutory mode of collection is, by placing the amount upon the tax duplicate, to be collected as other taxes are collected, and that this mode is exclusive of all others. If the statute does provide a mode of collection, that is exclusive, and must be pursued. The statute clearly creates a new right. Where a statute creates a new right and prescribes a mode of enforcing it, that mode must be pursued to the exclusion of all other remedies. Such has been the settled law in this State for more than sixty years, and such is the law elsewhere. Lang v. Scott, 1