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§ 1514.

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A note is, of course, no satisfaction of the debt, if it is expressly agreed that it shall not be." Thus, where notes are given for the accommodation of a builder before completion of his work, with an express agreement that they are not to be credited on account, they will be considered as a loan, and not as a payment, leaving his lien intact for the entire balance due." So, if a bill is taken with an express reservation of the holder's rights against the drawer of the original bill, or if a note is received as payment "when paid." 2 And, if a collateral note is given to collect and apply on the original note, it will be a payment only so far as collected.63 So, a debt, released on condition that notes given for it are paid when due, will not be discharged if the holder is obliged to take up the notes."

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If the note or renewal is paid at or before maturity, it will be a payment of the debt."5 But, if it is given for part of the amount only, the balance may still be recovered, after the note is paid. If a note held as collateral is paid, it will discharge the debt secured pro tanto. And the debt may be discharged, although the payment never reaches the creditor's hands; e. g. where the debt is paid by a crossed check to the creditor's agent, and the check is paid to the bank, to which it is crossed, and the amount is held by the bank for a debt due to it from the agent.68 On the other hand, if a bill is given to an agent, who is only authorized to receive cash in payment, it will not be a satisfaction, although the bill is afterwards paid to the lawful holder of it.69

ance for which the note was given, Tabor v. Insurance Co., 44 Mich. 324, 6 N. W. 830.

59 Gilmore v. Bussey, 12 Me. 418.

60 Jones v. Keen, 115 Mass. 170.

61 Bedford v. Deakin, 2 Starke, 178, 2 Barn. & Ald. 210.

62 Herring v. Sanger, 3 Johns. Cas. (N. Y.) 71.

63 Haven v. Hathaway, 20 Me. 345.

64 Lord v. Bigelow, 124 Mass. 185.

65 Benj. Chalm. Dig. art. 251; 2 Pars. Notes & B. 163.

66 Lumley v. Musgrave, 4 Bing. N. C. 9, 5 Scott, 230; Crawford v. Roberts, 50 Cal. 235.

67 Marine Bank v. Vail, 6 Bosw. (N. Y.) 421.

68 Bridges v. Garrett, L. R. 5 C. P. 451.

69 Sykes v. Giles, 5 Mees. & W. 645; Williams v. Evans, L. R. 1 Q. B. 352; Catterall v. Hindle, L. R. 1 C. P. 186.

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Pleading Payment by Bill.

§ 1515. Payment by the bill or note of a third person has been held sufficient to support a general plea of payment of the original bill. But, where the debtor gives his own negotiable note in payment, it has been held to be admissible as evidence under the general issue, but not to be pleadable in bar as a payment.72 In pleading payment by bill or note, it is sufficient to aver that it was taken in payment, and that the paper is still current, and not due." But it must be averred that the paper was received in satisfaction." And it has been held not to be sufficient at common law to set out that the bill was "given on account of and in payment and discharge" of the debt. And it should appear by the pleading that the bill was payable to order or to bearer, and therefore negotiable."

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Satisfaction a Question of Intention.

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§ 1516. Whether a bill or note has been taken in satisfaction of a debt is a question of intention for the jury to determine.78 And,

Selman v.

10 Byles, Bills, 388; Thorne v. Smith, 10 C. B. 659. So, an indorser may plead payment and show a renewal taken without his indorsement. Brown, 78 Ga. 332.

71 Hughes v. Wheeler, 8 Cow. (N. Y.) 77.

12 Roades v. Barnes, 1 Burrows, 9; Hughes v. Wheeler, supra. land v. Dryfus (Ga.) 29 S. E. 612, a special plea was required. 73 Maillard v. Argyle, 6 Man. & G. 40.

But in Kirk

74 Byles, Bills, 387; 2 Pars. Notes & B. 150; Kearslake v. Morgan, 5 Term R. 513; Griffiths v. Owen, 13 Mees. & W. 58.

15 Davis v. Gyde, 2 Adol. & E. 623. In Texas a plea of payment by notes must allege that they were accepted in payment, or that the money had been or could be realized on them. Gray v. McFarland, 29 Tex. 163.

McDowall v. Boyd, 17 Law J. Q. B. 295; Kemp v. Watt, 15 Mees. & W. 672. * James v. Williams, 13 Mees. & W. 828.

T 2 Daniel. Neg. Inst. 296; 2 Pars. Notes & B. 160; Lyman v. Bank, 12 How. 244; Root v. Burt, 118 Mass. 521; Corner v. Pratt, 138 Mass. 446; Darnall v. Morehouse, 45 N. Y. 64: Howland v. Coffin, 9 Pick. (Mass.) 52; Brown v. Scott, 51 Pa. St. 357; Dodge v. Emerson, 131 Mass. 467; Weakly v. Bell, 9 Watts (Pa.) 273; Hunter v. Moul, 98 Pa. St. 13; Sykes v. Gerber, Id. 179; Seltzer v. Coleman, 32 Pa. St. 493; Crabtree v. Rowand, 33 Ill. 422; Thom v. Wilson's Ex'r, 27 Ind. 370; Weston v. Wiley, 78 Ind. 54; First Nat. Bank of New Castle v. Nugen, 99 Ind. 160; Bullen v. McGillicuddy, 2 Dana (Ky.) 90; Gardner v. Gorham,

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if found to have been so given as a fact, it will extinguish all cause of action on the original debt. So, it is a question of intention whether a renewal bill or note was received in payment or as a renewal merely, so even where two notes are given for one.1

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So, it is a question for the jury whether the note of an indorser, given to take up the original note of the maker, was intended as a payment.82 If a note is given as collateral only, and is so received by the creditor, it may be an extension, but not a payment.83 And if the debtor's own note, payable at the banking house of A., is returned to the debtor before its maturity on A.'s refusal to meet it for want of funds, it will be considered as withdrawn or canceled, and will not be a payment.84

Presumption of Payment-Massachusetts Rule.

§ 1517. Where the debtor's own note is given for a precedent debt, it will be presumed not to be a payment, although it is proved by other evidence; but the burden of proof is on the party alleging it to be such.85 So, if a nonnegotiable note is received in absolute

1 Dougl. (Mich.) 507; Dogan v. Ashbey, 1 Rich. Law (S. C.) 36; Merrick v. Boury, 4 Ohio St. 60; Johnson v. Clarke, 15 S. C. 72; Myatts v. Bell, 41 Ala. 222; Brugman v. McGuire, 32 Ark. 733; Salomon v. Pioneer Co-Op. Co., 21 Fla. 374; McGuire v. Bidwell, 64 Tex. 43; Hall's Self-Feeding Cotton-Gin Co. v. Black, 71 Ga. 450; Lyons v. Bank, 86 Ga. 485, 12 S. E. 882; Stewart Paper Mfg. Co. v. Rau, 92 Ga. 514, 17 S. E. 748.

79 Govern v. Littlefield, 13 Allen (Mass.) 127; Trotter v. Crockett, 2 Port. (Ala.) 401.

80 2 Daniel, Neg. Inst. 290; 1 Edw. Bills & N. § 286; Flanagin v. Hambleton, 54 Md. 222; Hart v. Boller, 15 Serg. & R. (Pa.) 162; Bank of Cadiz v. Slemmons, 34 Ohio St. 142. So, where the renewal was held by the bank until it matured, and action was then brought on the original note. Cake v. Bank, 86 Pa. St. 303.

81 Goldshede v. Cottrell, 2 Mees. & W. 20.

82 Connecticut Trust & Safe-Deposit Co. v. Melendy, 119 Mass. 449. But there must be an agreement of the parties to effect a payment. It must be taken in liquidation and discharge, and it is not sufficient to aver that it was taken on account of, and appropriated to, and retained for, payment. Baillie v. Moore, 8 Q. B. 489.

83 Byles, Bills, 387.

84 Stedman v. Gooch, 1 Esp. 4.

85 Wilbur v. Jernegan, 11 R. I. 113;

State v. Rosborough, 2 Rich. Law (S. C.)

241; Merrick v. Boury, 4 Ohio St. 60; Geib v. Reynolds, 35 Minn. 331, 28 N. W.

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payment, the fact must be proved affirmatively. Satisfaction of a debt by a bill or note is a question of intention, dependent on the agreement of the parties; and the note will not be a payment without such agreement, although credited as such on the book account of the creditor.87 And, in general, the debtor's own note will not be considered to be a payment of the debt without strong evidence of an intention to that effect.88

In Massachusetts the rule has been laid down (and followed in some other states) that the debtor's own negotiable note is prima facie payment of an existing debt. And, as such, it will extinguish the debt, and take it out of the reach of a subsequent attachment against the debtor." If the debtor gives his note for an open book account, it has been held to be presumptive evidence of the payment of the account." And the giving of a note is said to be presumptive evidence of a settlement of accounts between the parties up to its date, although the sufficiency of the note alone as such evidence has been denied.93 If the debtor gives his note to take up an earlier note, it is presumptively a payment of the origi

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923; Foster v. Hill, 36 N. H. 526; Aultman v. Jett, 42 Wis. 488; Aultman v. Hetherington, Id. 622; Preston v. Jones, 3 Ill. App. 632; Estey v. Birnbaum, 9 S. D. 174, 68 N. W. 290. So, where the payor gave a bond and mortgage, and said they were good, and if not he should feel bound to make them so. Gardner v. Gorham, 1 Dougl. (Mich.) 507.

86 Olvey v. Jackson, 106 Ind. 286, 4 N. E. 149.

87 Follett v. Steele, 16 Vt. 30.

ss Shepard v. Allen, 16 Kan. 182.

89 Benj. Chalm. Dig. art. 251; 2 Daniel, Neg. Inst. 285; 2 Edw. Bills & N. § 753; 2 Pars. Notes & B. 150; Thacher v. Dinsmore, 5 Mass. 299; Maneely v. McGee, 6 Mass. 143; Inhabitants of Bangor v. Inhabitants of Warren, 34 Me. 324; Ward v. Bourne, 56 Me. 161; Bunker v. Barron, 79 Me. 62, 8 Atl. 253; Stephens v. Thompson, 28 Vt. 77; Wemet v. Lime Co., 46 Vt. 458; Arnold v. Sprague, 34 Vt. 402; Thornton v. Williams, 14 Ind. 518; Weston v. Wiley, 78 Ind. 54; Smith v. Bettger, 68 Ind. 254. And proof of express agreement is unnecessary. White v. Jones, 38 Ill. 159.

90 Wood v. Bodwell, 12 Pick. (Mass.) 268.

91 Taft v. Boyd, 13 Allen (Mass.) 84; Hoodless v. Reid, 112 Ill. 105; Gooding v. Morgan, 37 Me. 419; Tisdale v. Maxwell, 58 Ala. 40.

92 Maynard v. Johnson, 4 Ala. 116; Gaskin v. Wells, 15 Ind. 253; Rowe v. Collier, 25 Tex. Supp. 252. So, a negotiable note given for building material on a general account for several buildings. Hill v. Sloan, 59 Ind. 181.

93 Rosencrantz v. Mason, 85 Ill. 262.

nal note in Massachusetts, unless such presumption would lead to loss on the payee's part of advantages inherent in the old note,— e. g. under the insolvent laws,-which the creditor had no intention or thought of abandoning. Even if the renewal is for less than the original note, it has been held to be presumptive evidence of satisfaction.96 But the rule of presumption of payment has not been extended to nonnegotiable notes."7

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The presumption of payment has been extended to a note given for a debt contracted at the time; e. g. for an insurance premium.98 So, if a note is given for goods sold, and the goods are left as collateral, and the note partly paid out of the proceeds, the note will be regarded as payment, if it has been so received." But an agreement to receive a note as absolute payment for goods purchased at the time will not be presumed, where the maker has become insolvent before its maturity.100

Presumption of Payment-Rebutted.

§ 1518. A bill or note is, however, even by the Massachusetts rule, only a presumptive payment, in the absence of all proof as to the agreement.101 The presumption may be rebutted by evidence to the contrary.102

Thus, the note may be shown to have been given as

94 Goodnow v. Hill, 125 Mass. 587; Taft v. Boyd, 13 Allen, 84. But see Tisdale v. Maxwell, 58 Ala. 40.

95 Tucker v. Drake, 11 Allen (Mass.) 145.

96 Piper v. Wade, 57 Ga. 223.

97 Smith v. Bettger, 68 Ind. 254; Bartlett v. Mayo, 33 Me. 518; Weston v. Wiley, 78 Ind. 54; Travellers' Ins. Co. v. Chappelow, 83 Ind. 429.

98 Union Ins. Co. v. Grant, 68 Me. 229; Franklin Life Ins. Co. v. Wallace, 93 Ind. 7.

99 Jones v. Kennedy, 11 Pick. (Mass.) 125.

100 Bill v. Porter, 9 Conn. 23.

101 Amos v. Bennett, 125 Mass. 123; Rindge v. Breck, 10 Cush. (Mass.) 43; Krutsinger v. Brown, 72 Ind. 466; especially where a collateral bond is taken, Appleton v. Parker, 15 Gray (Mass.) 173. So, too, even where a receipt is given for the payment. Milliken v. Whitehouse, 49 Me. 527.

102 Appleton v. Parker, supra; Dodge v. Emerson, 131 Mass. 467; Green v. Russell, 132 Mass. 536; Melledge v. Iron Co., 5 Cush. (Mass.) 158; Butts v. Dean, 2 Metc. (Mass.) 76; Curtis v. Hubbard, 9 Metc. (Mass.) 322; Maneely v. McGee, 6 Mass. 143; Paine v. Dwinel, 53 Me. 52; Miller v. Hilton, 88 Me. 429, 34 Atl. 266; Morrison v. Smith, 81 Ill. 221; Maynard v. Johnson, 4 Ala. 116.

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