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given in payment, which is insufficiently stamped, the original debt may still be proved by the creditor.189

But, although the holder may recover on the original consideration in such case, it has been held that the note is not admissible as evidence of the debt for want of the stamp.190 Where, however, a renewal is drawn on the back of the original bill, but not stamped, and the original acceptance is thereupon canceled, the renewal is admissible without a stamp to show that the acceptance was canceled with the drawer's consent.191 And, where a note is given by an agent and is not properly stamped, it may still be admitted to support his action against the principal, on the ground of payment by him, whether it is a collectible note or not.192 Where an insufficiently stamped draft is given by the payee to A. as a donatio causa mortis, and the payee's administrator brings suit on the original debt (treating the draft as void), the maker may bring the draft into court, and stamp it, and so give it validity as the property of A. to defeat the recovery by the payee's administrator. 193

Payment, by Usurious Note or Bill.

§ 1528. The giving of a security which is void for usury is not a valid payment.194 And an action will still lie on the original debt after taking such a bill or note, 195 or after the usurious renewal of And suit will lie on the original

a bill or note originally valid.196

note in such case, although it has been destroyed. 197 And if the

189 Brown v. Watts, 1 Taunt. 353. And suit brought on it. Waterbury v. McMillan, 46 Miss. 635; Wilson v. Carey, 40 Vt. 179.

190 Wilson v. Kennedy, 1 Esp. 245; Humphreys v. Wilson, 43 Miss. 328. 191 Sweeting v. Halse, 9 Barn. & C. 365.

192 Hardin v. Branner, 25 Iowa, 364.

193 As to the necessity for a stamp, see chapter 7, supra; Gibson v. Hibbard, 13 Mich. 214.

194 Phillips v. Cockayne, 3 Camp. 119; Cook v. Barnes, 36 N. Y. 520; Ramsdell v. Soule, 12 Pick. (Mass.) 126; Gerwig v. Sitterly, 56 N. Y. 214; Meshke v. Van Doren, 16 Wis. 319; Lee v. Peckham, 17 Wis. 383.

195 Central City Bank v. Dana, 32 Barb. (N. Y.) 296; Fleischmann v. Stern, 24 Hun (N. Y.) 265; Chastain v. Johnson, 2 Bailey (S. C.) 574.

196 Farmers' & Mechanics' Bank v. Joslyn, 37 N. Y. 353; Leary v. Miller, 61 N. Y. 488.

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

original note has been canceled, but not destroyed, it will be admissible as evidence to support a recovery against the maker on the common counts.198 So, a usurious note, which is void, is no payment, although the original note was surrendered.199 And, if usury has been actually paid upon the new note, the payment will be credited on the principal debt.200 It has been held, however, that, while such usurious note is still outstanding and not abandoned, an action will not lie upon the original claim. 201

"203

202

In the same manner, if the debtor gives the note of a third person, which is void for usury, in payment of the original note, which is surrendered at the time, an action will still lie on the original,2 although the usurious note is indorsed by the debtor "without recourse." So, where the accommodation note of a third person, who was insolvent, is given for other valid notes and bills, and had been issued at a usurious rate of discount, and transferred without indorsement by the debtor, it will not bar a recovery upon the original notes and bills. 204 But where the note of a third person, which was originally usurious, is set up by the debtor as a valid satisfaction of the original debt, the creditor receiving it cannot set up the usury to render it void, such defense being 'personal to the original maker,20

Payment by Altered Bill.

206

§ 1529. Where the bill given in payment has been rendered void by a material alteration, it will not be a satisfaction of the debt; especially where the holder has been induced to take it by fraud.207 But if the altered note is afterwards renewed, and the indorser of the

198 Edgell v. Sanford, 6 Vt. 551.

199 Winsted Bank v. Webb, 39 N. Y. 325.

200 Gerwig v. Sitterly, 56 N. Y. 214.

201 Hammond v. Hopping, 13 Wend. (N. Y.) 505.

202 Sheppard v. Hamilton, 29 Barb. (N. Y.) 156.

203 Ramsdell v. Soule, 12 Pick. (Mass.) 126.

204 Loeschigh v. Blun, 1 Daly (N. Y.) 49.

205 Austin v. Chittenden, 33 Vt. 553.

206 Sloman v. Cox, 1 Cromp., M. & R. 471, 5 Tyrw. 174; Merrick v. Boury,

4 Ohio St. 60. But the note should be produced to be canceled.

Welty, 18 Md. 169.

207 Martin v. Smith, 13 Phila. (Pa.) 103.

Morrison v.

renewal is liable, it will be a payment of the original note.208 So, if the alteration of the debtor's note is by the payee receiving it, it will discharge the original debt.209

Payment by Forged Bill.

§ 1530. In like manner, payment by a forged note or bill is no payment.210 And an action will still lie on the original note, although it has been canceled; 211 or in replevin for the original note surrendered.212

So, if a note is renewed by the maker with a forged indorsement, and the original note is destroyed, an action will still lie on the original.213 And, by accepting a renewal with a forged indorsement, the creditor will not discharge the original indorser or surety.214

And if the purchaser of goods pays for them with the note of another, known to be forged, it will not be a valid payment.215

208 Bank of Ohio Valley v. Lockwood, 13 W. Va. 426.

So.

209 Kennedy v. Crandell, 3 Lans. (N. Y.) 1; Plyler v. Elliott, 19 S. C. 257; Sykes v. Gerber, 98 Pa. St. 179. Especially if it is altered by the holder fraudulently. Smith v. Mace, 44 N. H. 553; Ballard v. Insurance Co., 81 Ind. 239. But a payment made for A. by the collector, on account of A.'s taxes, may be recovered on the common counts, although repaid by A.'s note to the collector, which the payee had altered by adding the word "Collector" to the payee's name. York v. Janes, 43 N. J. Law, 332. And an action lies for the original consideration, even after judgment on the note in favor of the maker because of an alteration by the payee. Eckert v. Pickel, 59 Iowa, 545, 13 N. W. 708.

210 Markle v. Hatfield, 2 Johns. (N. Y.) 455; Aldrich v. Jackson, 5 R. I. 218; Albright v. Griffin, 78 Ind. 182; Emerine v. O'Brien, 36 Ohio St. 491; Second Nat. Bank v. Wentzel, 151 Pa. St. 142, 24 Atl. 1087.

211 Goodrich v. Tracy, 43 Vt. 314; Eagle Bank v. Smith, 5 Conn. 71; Stratton v. McMakin, 84 Ky. 641, 1 S. W. 590; or surrendered, First Nat. Bank of Athens v. Buchanan, 87 Tenn. 32, 9 S. W. 202; or stamped "Paid," Lyndonville Nat. Bank v. Fletcher, 68 Vt. 81, 34 Atl. 38. And the holder may recover against the original surety, although the original note was surrendered by mistake. Lovinger v. Bank, 81 Ind. 354.

212 West Philadelphia Nat. Bank v. Field, 143 Pa. St. 473, 22 Atl. 829. 213 Ritter v. Singmaster, 73 Pa. St. 400.

214 Allen v. Sharpe, 37 Ind. 67; Sandy River Nat. Bank v. Miller, 82 Me. 137, 19 Atl. 109; Bowman v. Humphrey (Ky.) 37 S. W. 150; or an accommodation maker, Irwin v. Freeman, 13 Grant, Ch. 465. So, if the surety's signature is forged, it will not be a valid extension. Kincaird v. Yates, 63 Mo. 45.

215 Bell v. Cafferty, 21 Ind. 411, and the vendor may affirm or rescind the sale.

if an execution is marked "Satisfied" upon receipt of a forged note given to be applied in payment, the satisfaction will be set aside as of no effect.216 So, an acceptor will still remain liable, although the acceptance has been retired by a forged acceptance discounted for the drawer, and has been returned by the collecting agent canceled.217 And, even if the note of a third person is expressly received in payment, it will not be such if the surety's signature on the note was forged without the knowledge of either party.218 And, even where an administrator receives a forged note as that of his intestate, it will not be binding as a payment.219

If, however, a note is paid by money loaned to the maker by a third person (the proceeds of another note which had been discounted for such third person), it will amount to a payment, although the second note was a forgery, and the maker of the first note will be discharged.220 And, if the note of a third person is taken in payment with a forged indorsement under a special agreement, no recovery can be had on the original debt until the agreement is rescinded or an offer made to return the note.221 And if a check is paid by the drawee by its own bank notes, which prove to be spurious, the holder will lose his remedy against the drawee by failure for an unreasonable time to return the notes."

222

Effect of Fraud.

§ 1531. While it is a question of intention whether the debtor's note was taken in absolute payment or not, the intention itself will be defeated by fraud or deceit on the payor's part;

223

e. g. if the

216 Offutt v. Bank, 1 Bush (Ky.) 166. 217 Notwithstanding a subsequent deposit by the debtor of larger sums which were drawn out again by him. Bell v. Buckley, 11 Exch. 631.

218 Pope v. Nance, 1 Stew. (Ala.) 354; although with the knowledge of the payee's agent, Egan v. Fuller, 35 Minn. 515, 29 N. W. 313.

219 Wilson v. Alexander, 4 Ill. 392.

220 Grafton Bank v. Hunt, 4 N. II. 488.

221 Coolidge v. Brigham, 1 Metc. (Mass.) 547.

222 Gloucester Bank v. Salem Bank, 17 Mass. 33.

223 Grimes v. Kimball, 3 Allen (Mass.) 518. So, where he had obtained an indorser's signature by fraud. Alpena Nat. Bank v. Greenbaum, 80 Mich. 1, 44 N. W. 1123. So, where a ship's husband falsely represents himself as

debtor knew that the bill was of no value.22 So, if he gave the note of a third person, fraudulently representing it to be good, when he knew it was not.225 And in such case an action will lie on the original debt, as though there had been no note given,226 and without first returning the note.227 And, if such a note is taken in payment for goods sold, trover will lie for the return of the goods.228 But, if the holder has proved the note in bankruptcy as a debt against the maker's estate, he cannot afterwards treat the sale as void, and replevy the goods.229 If the note is in fraud of creditors, an action will still lie on the original agreement, notwithstanding the fraud in the settlement by note.230

Bill or Note without Value.

231

§ 1532. If a bill is drawn by the debtor without funds to meet it, it will not be a satisfaction of his debt.2 So, where the drawer was himself indebted to the drawee, and had agreed with him to pay the amount for which the note was drawn.232 And if a debtor gives in payment the note of a third party, who is insolvent at the time, it will not be a payment, although the insolvency was not known by either party.233 This is true, also, if the note was given for an exist

owner, and his note is taken on the strength of such representation. Baker v. Draper, 1 Cliff. 420, Fed. Cas. No. 766.

224 Byles, Bills, 390; 2 Daniel, Neg. Inst. 293; 2 Pars. Notes & B. 207; Hawse v. Crowe, 1 Ryan & M. 414; Puckford v. Maxwell, 6 Term R. 52; Owenson v. Morse, 7 Term R. 64.

225 Willson v. Foree, 6 Johns. (N. Y.) 110; Bridge v. Batchelder, 9 Allen (Mass.) 394; Vallier v. Ditson, 74 Me. 553. Although receipted as taken “at his own risk and collect or lose the same without calling on defendant for the money." Snyder v. Findley, 1 N. J. Law, 48.

226 Vallier v. Ditson, 74 Me. 553.

227 Bridge v. Batchelder, 9 Allen (Mass.) 394; or any part payment received on the note, Miller v. Woods, 21 Ohio St. 485.

228 Ford v. Atwater, 1 Root (Conn.) 58; Alexander v. Dennis, 9 Port. (Ala.) 174.

229 Seavey v. Potter, 121 Mass. 297.

230 Walker v. Mayo, 143 Mass. 42, 8 N. E. 873.

231 Byles, Bills, 386; Stedman v. Gooch, 1 Esp. 3; Kearslake v. Morgan, 5 Term R. 513.

232 Tapley v. Martens, 8 Term R. 451.

233 Roberts v. Fisher, 43 N. Y. 159.

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