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And, if the

surety; 55 but this presumption may be rebutted. vendor takes a mortgage on part of the land for part of the purchase money, it will be a discharge of his general lien.57 So, there will be no lien where he takes a note for the price, and the land is afterwards conveyed by the purchaser in trust for his creditors; 65 or if the vendor takes the purchaser's note and trust deed payable to another.659

Vendor's Lien Affected by Transfer of Note.

662

§ 1576. Where the vendor takes a note, and retains the security of the vendor's lien, it will generally pass with a transfer of the note.co And, if he procures the note to be discounted by his banker, it will not discharge the lien.661 So, the lien will revive in him or his executor upon his taking up or repurchasing the note.$82 But, if a note is given for goods sold, a statutory exemption from execution, which will not apply to the goods sold as against the seller, will apply as against an indorsee of the note. If a lien is discharged by the giving of a note, it will not revive on the transfer of the note to a bona fide holder.664 And if a note given for land purchased is paid out of the proceeds of a discount of a draft, given in renewal by the maker, and not paid, the indorsee who took up

663

655 Boon v. Murphy, 6 Blackf. (Ind.) 272. And in such case the indorsee of the note gets no lien. Walker v. Carroll, 65 Ala. 61.

656 Willis v. Gay, 48 Tex. 463.

657 Capper v. Spottiswoode, Tam. 21.

658 Womble v. Battle, 38 N. C. 182.

659 It being in such case a question for the jury whether the vendor's lien was waived or merged in the trust deed.

Irvin v. Garner, 50 Tex. 48. 660 Stevens v. Chadwick, 10 Kan. 406; Kenny v. Collins, 4 Litt. (Ky.) 289; Edwards v. Bohannon, 2 Dana (Ky.) 98; although the vendor may not be liable on the note, Wolffe v. Nall, 62 Ala. 24; and although the note was merged in a judgment before its transfer, and the land was in the possession of a bona fide purchaser, Johnston v. Gwathmey, 4 Litt. (Ky.) 317.

661 Gunn v. Bolckow, 10 Ch. App. 491, overruling Bunney v. Poyntz, 4 Barn. & Adol. 568, 1 Nev. & M. 229. So, Sweet v. James, 2 R. I. 270.

662 Cotten v. McGehee, 54 Miss. 510. And this is also true of a note for rent secured by a landlord's lien. Farwell v. Grier, 38 Iowa, 83.

663 Shepard v. Cross, 33 Mich. 96.

664 Donegan's Adm'r v. Hentz, 70 Ala. 437.

667

the note will not be protected by the vendor's lien.665 And in many states the lien of the vendor is discharged if he makes a transfer of the purchaser's note; 666 especially where the deed recites the payment of consideration money. And if land is sold by a married woman without express reservation of a lien, and a note is taken for it payable to her, and her husband transfers the note with a guaranty for a debt of his, no lien will pass to the indorsee, although such lien was guarantied in the transfer.668 So, where the purchaser's note is transferred by the vendor with the maker's guaranty, any lien that might exist will be waived by the additional security taken by the indorsee."69

Effect on Mechanic's Lien.

§ 1577. Taking a negotiable bill or note for a debt secured by a mechanic's lien will not discharge the lien, unless it is clearly so intended, even though the debt is receipted in full.671 It is a

670

65 Shall v. Biscoe, 18 Ark. 142.

66 Iglehart v. Armiger, 1 Bland (Md.) 519; Jackman v. Hallock, 1 Ohio, 318. So, if transferred without recourse. Schnebly v. Ragan, 7 Gill & J. (Md.)

120; Hightower v. Rigsby, 56 Ala, 126.

* Rogers v. James, 33 Ark. 77.

ees Pillow v. Helm, 7 Baxt. (Tenn.) 545.

669 Woods v. Bailey, 3 Fla. 41.

€70 2 Daniel, Neg. Inst. 305; 2 Pars. Notes & B. 176; Blake v. Pitcher, 46 Md. 453; Code Md. art. 61, § 11; Brady v. Anderson, 24 III. 110; Calef v. Brinley, 58 N. H. 90; Lane v. Jones, 79 Ala. 156; Livesey v. Hamilton, 47 Neb. 644, 66 N. W. 644; Donovan v. Frazier, 15 App. Div. 521, 44 N. Y. Supp. 533; McMurray v. Taylor, 30 Mo. 263; Mix v. Ely, 2 G. Greene (Iowa) 513; Greene v. Ely, Id. 508; Logan v. Attix, 7 Iowa, 77; Kinsley v. Buchanan, 5 Watts (Pa.) 118; Hinchman v. Lybrand, 14 Serg. & R. (Pa.) 32. If it matures before the lien expires, Wisconsin Trust Co. v. Robinson, 15 C. C. A. 668, 68 Fed. 778; Hersh v. Carman, 51 Neb. 784, 71 N. W. 713; or a workman's preference for wages against an insolvent corporation, Delaware, L. & W. R. Co. v. Oxford Iron Co., 33 N. J. Eq. 192. But see, contra, when the note is payable in future, Silver v. Williams, 17 Serg. & R. 292; Ohio Falls Car Mfg. Co. v. Central Trust Co., 18 C. C. A. 386, 71 Fed. 916; People v. Remington, 45 Hun, 335; Spencer v. Hodgman, 57 Hun, 490, 11 N. Y. Supp. 241. So, drafts on a third party accepted and paid by him do not carry the laborers' liens which were paid with them. Beecher v. Dacey, 45 Mich. 92, 7 N. W. 689.

471 Wheeler v. Schroeder, 4 R. I. 383; The Charlotte v. Hammond, 9 Mo. 58;

question for the jury in such case whether a discharge is intended."" So, where the payment is credited upon the books of the creditor, as well as receipted in full, and a subsequent purchaser becomes interested in the property, the discharge of the lien is a question for the jury.673 An agreement, express or implied, is necessary to effect such discharge; and such agreement will not be presumed by reason of the note being made payable one day after date, or the lien being filed on the day the note bears date.674 And the subsequent transfer of the note will not make it a payment.675

676

But if the note is made payable after the expiration of the time for filing the lien, and is transferred by the payee, it will be sufficient without other evidence of intention to discharge the lien," although the parties had agreed that the note should not be a satis faction of the debt.677 So, if a mechanic takes a certificate for wages preferred by statute, and assigns the certificate to another, who surrenders it for a negotiable note, it will be deemed a waiver of his statutory preference.678

§ 1578. On the other hand, a mechanic's lien will not be discharged by a draft on the owner or by his acceptance of such draft; 679 or by notes made direct to the creditor, or at his request to a third person, and afterwards transferred to him.680 But a partnership note, taken in satisfaction of the building debt of one partner, amounts to a new security, and will be a discharge of the builder's lien." 681 So, where the lien creditor takes by indorsement from

Howard v. Jones, 33 Mo. 583; Goble v. Gale, 7 Blackf. (Ind.) 218. And the lien may be filed after the note matures.

672 Jones v. Shawhan, 4 Watts & S. (Pa.) 261; Casey v. Weaver, 141 Mass. 280, 6 N. E. 372.

673 Seltzer v. Coleman, 32 Pa. St. 493.

674 Teal v. Spangler, 72 Ind. 380.

675 German Bank v. Schloth, 59 Iowa, 316, 13 N. W. 314.

676 Green v. Fox, 7 Allen (Mass.) 85.

677 Morton v. Austin, 12 Cush. (Mass.) 389. But see, contra, if so taken under the terms of the building contract and lien expressly reserved by it, Butler-Ryan Co. v. Silvey (Minn.) 73 N. W. 406.

678 Montgomery's Appeal (Pa. Sup.) 7 Atl. 231, 9 Eastern Rep. 402.

679 Jones v. Hurst, 67 Mo. 568.

680 Bashor v. Nordyke, 25 Kan. 222.

681 Benneson v. Thayer, 23 Ill. 374.

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his debtor a note which was made for value by another party,682 or where he takes the debtor's note and mortgage.683 So, where the lien claim is against a firm, and the creditor takes the note of one partner, with a mortgage on the property which is subject to the lien. This subject has been regulated by statute in Maine. where it was held, prior to the act of 1851, that the debtor's note discharged the mechanic's lien claim.685 But the note of a third person, indorsed by the debtor, with the express agreement that it should not be a payment unless paid, will not discharge a lien, notwithstanding an unperformed agreement between the creditor and the maker of the note to take a less sum than its face in satisfaction. 686

Effect on Maritime Liens.

§ 1579. The same rule applies, in general, to a maritime lien for which a note is taken. The lien will not be discharged by the note, unless it was so intended." 8 687 So, a draft is only conditional payment of a ship's debt contracted in a foreign port, and will not discharge the creditor's lien.88 Liens which are dependent upon possession of the property, such as an owner's lien for freight, are held to be discharged, where a bill or note is taken in payment.689 So, a seaman's lien for wages will be discharged, in England, if he takes a bill on the owner.690 So, a lien for pilot's wages will be discharged by the owner's note at a higher rate of interest, if it is not prosecuted for several months, and other claims intervene without notice. In the United States, however, it has been held that

691

682 Ferdon v. Jones, 2 E. D. Smith (N. Y.) 106.

es? Trullinger v. Kofoed, 7 Or. 228, although he filed his lien on the same day. 84 Dutton v. Insurance Co., 29 N. H. 153.

695 Coburn v. Kerswell, 35 Me. 126. The act of 1851 required an express agreement on taking the note to discharge the lien.

686 Prentiss v. Garland, 67 Me. 345.

687 Moore v. Newbury, 1 Newb. Adm. 49, Fed. Cas. No. 9,772; The Queen' of St. Johns, 31 Fed. 24.

88 The Emily Souder, 17 Wall. 666; Mehan v. Thompson, 71 Me. 492. *ss 2 Pars. Notes & B. 167; although a personal note is given, Id. 170. 90 William v. Money, 2 Hagg. Adm. 136.

1 Risher v. The Frolic, 1 Woods, 92, Fed. Cas. No. 11,856.

seamen's wages are not discharged by an order on the owner, by a note.693

696

-692

or

§ 1580. In like manner, a lien for ship's supplies is not discharged by a note of the ship's agent, or of the owner.695 But if a bill is taken, and the creditor delays to collect the bill or enforce the lien while the owners are in good credit, his lien will be discharged. A lien for repairs of a vessel has been held not to be a maritime contract, but to be governed by local law, and, as such, not to be discharged by a note taken from the master.697 On the other hand, a bill drawn by the master, expressly in consideration of advances for repairs, has been held to discharge the lien."98 note given for the charter money of a vessel will not, in general, discharge the lien on the cargo. 699 But where a contract is made for the payment of dockage râtes in quarter-yearly payments, and the creditor accepts an order on the ship's agent for the payment, it will discharge the lien.700 And where the contract is for payment of freight by delivery of "good and approved bills," the receiving of bills will be construed to be an approval, and will discharge the lien.701

Effect on Original Action.

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§ 1581. Where the note of a debtor is taken, and is not paid at maturity, the creditor's right to bring suit upon the original consideration revives.702 So, a fortiori, on nonperformance of an agree

692 The Eastern Star, 1 Ware, 184, Fed. Cas. No. 4.254.

693 Butts v. Cuthbertson, 6 Ga. 166; although the state law made the note a payment, The Betsy and Rhoda, 2 Ware, 113, Fed. Cas. No. 1,366.

694 The Active, Olc. 286, Fed. Cas. No. 34.

695 Page v. Hubbard, Spr. 335, Fed. Cas. No. 10,663.

696 Leland v. The Medora, 2 Woodb. & M. 92, Fed. Cas. No. 8.237. So, if the vessel against which the lien would go is itself sold on execution to satisfy the note. The Mary Morgan, 28 Fed. 196.

697 The Chusan, 2 Story, 455, Fed. Cas. No. 2,717.

698 Murray v. Lazarus, 1 Paine, 572, Fed. Cas. No. 9,962.

699 The Kimball, 3 Wall. 37.

700 Ex parte Lewis, 2 Gall. 483, Fed. Cas. No. 8,310.

701 Byles, Bills, 391; Horncastle v. Farran, 3 Barn. & Ald. 497, 2 Starkle, 590; Alsager v. Dock Co., 14 Mees. & W. 794.

702 Porter v. Talcott, 1 Cow. (N. Y.) 359; Fry v. Patterson, 49 N. J. Law,

612, 10 Atl. 390; Stewart v. Manufacturing Co., 95 Tenn. 497, 32 S. W. 464;

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