knew at the time that it was of no value; (a) [or unless the signature of any party to it be forged. (a)]

debt, is no discharge of the debt. But in this State it has long been settled, that when a debtor gives to his creditor his negotiable note for a debt due on simple contract, the legal presumption is that the note was received in payment. This presumption arises from the consideration that if the creditor could compel payment of the original debt, the debtor might afterwards be obliged to pay the note to an endorsee, and thus be twice charged." Maneely v. M'Gee, 6 Mass. R. 143. But does the reason given establish the propriety of the peculiar rule adopted in Massachusetts? According to the rule of the common law a debtor is in no danger of being twice charged, since in an action on the original contract, it is held to be necessary for the plaintiff to produce and give up the note, before he can prevail.

It has been held in Massachusetts that where the underwriter in a policy of insurance, acknowledges the premium paid, and the assured has afterwards a right to the return of the premium, he may recover the same in an action for money had and received; although he gave his promissory note therefor, which remains unpaid in the hands of the underwriter. Hemmenway v. Bradford, 14 Mass. R. 121. See also Russell v. Degrand, 15 Mass. R. 35.

In the case of Varner v. Nobleborough, in Maine, Mellen C. J. says, "The legal presumption arising from the fact of drawing a negotiable order, or making a negotiable note, which are received by the creditor, is, that they were intended to be, and in fact are, an extinguishment of the original cause of action. But this presumption may be controlled or explained by the agreement of the parties, or by proof of circumstances or usages inconsistent with such presumption." 2 Greenleaf, 121.

In Connecticut in an action of book debt, the defendant gave in evidence a receipt by the plaintiff acknowledging the recept of a bill of exchange, which when paid was to be in full of the plaintiff's account: and it appearing that this bill had been protested, the defendant produced a receipt by the plaintiff acknowledging the receipt of the amount of the bill by a bill on another person; the court refused to admit evidence on behalf of the plaintiff that the latter bill was not paid. Anderson v. Henshaw, 2 Day, 272.

But even in Massachusetts a promissory note not negotiable, does not operate as payment of a pre-existing demand in consideration of which it is given. Greenwood v. Curtis, 4 Mass. R. 93.

And a negotiable note is no discharge of a debt for which it is given, where it is the agreement or understanding of the parties that it is not to be considered payment. Maneely v. M'Gee, 6 Mass. R. 143.

Maxwell, in payment for boards purchased by him of Tucker, gave an order in favor of the latter on a third person, payable on the return of the brig Cataract owned by Maxwell from a voyage. The order was accepted, and Tucker gave Maxwell a receipt in full. After the usual time for the voyage had long elapsed, the vessel not returning, Tucker sued Maxwell on the original contract; and it was held that the action was maintainable, unless the defendant could prove that the plaintiff was to take the risk of the voyage. Tucker v. Maxwell, 11 Mass. R. 143.]

(60) Vide ante, chap. vii. p. 124.

[Defendant bought goods of the plaintiff, in payment for which he

A bill or note will satisfy a preceding debt, if the holder makes it his own by laches. (64) (a)

gave a bill of exchange drawn and accepted by two other persons, and endorsed by defendant in blank. The plaintiff having lost the bill brought an action for the goods sold. The Court said, "that the plaintiff having taken a bill, by losing which, he had deprived the defendant of all means of recovering over, he should not turn round and sue the defendant for goods which had already cost him their full value." Champion v. Terry, 3 Brod. & Bing. 295.-7 Moore, 130.

Where a party to whom a bill had been endorsed neglected to have it protested for non-acceptance, it was held that he could maintain no action on the original contract on account of which the bill was endorsed to him. Duncan v. Course, 1 S. Car. R. 100. See also Brower V. Jones, ante, p. 149; and Henry v. Donaghy, Addison, 39.]

(61) In Owenson v. Morse, 7 Term Rep. 66. ante, p. 248. n. (58), Lord Kenyon said, "If the defendant had agreed to take the notes as payment, and to run the risk of their being paid, that would have been considered as payment whether the notes had or had not been afterwards paid." See also Clark v. Mundal, 1 Salk. 124.

(62) Fydell v. Clarke and another, 1 Esp. N. P. C. 447. The plaintiff had been in partnership with his brother R. Fydell; and the latter,, on his own account, but in the partnership name, drew certain notes to the amount of £8000, which he discounted with Hurlock and Co., bankers. The plaintiff, after his brother's death, voluntarily paid the £8000 to the bankers, supposing that his brother had received the amount of these notes in money: he afterwards discovered that they had only given other bills and notes, which they had not endorsed, in lieu of his brother's notes, some of which bills and notes to the amount of £4300 proved unproductive; and to recover that sum the present action was brought against the defendants, who were trustees of the insolvent estate of the bankers, and who had reserved funds to answer the event of the action. Lord Kenyon said, that the bankers by not endorsing the bills and notes, had refused to pledge their credit to their validity, and that R. Fydell must be taken to have received them on their own credit only; and that therefore the action could not be supported. Nonsuit.

Ex parte Shuttleworth, 3 Ves. 368. Newton gave the bankrupt before his bankruptcy, cash for a bill, but refused to allow the bankrupt to endorse it, thinking the bill better without his name. He now proved the amount under the commission, and on petition to have the debt expunged, the chancellor granted the petition, observing that this was a sale of the bill. [See also Wilkings v. M'Kinzie, Cam. and Nor. 448.] (63) In Fenn v. Harrison, 3 Term Rep. 759. Lord Kenyon said, "It is extremely clear that if the holder of a bill send it to market without eudorsing his name upon it, neither morality or the laws of this country will compel him to refund the money for which he sold it, if he did not know at the time that it was not a good bill. If he knew the bill to be bad, it would be like sending out a counter into circulation to impose upon the world, instead of the current coin. In this case, if the defendants had known the bill to be bad, there is no doubt but that they would have been obliged to refund the money.

[(a) The principles stated above are fully recognized in many Ameri

can cases.

In an action against two partners for goods sold, it is a good plea in bar, that the note of one partner was given and received by the plain

As by not presenting it for payment when due ; (65) (a) Though it were taken from a third person; (65)

tiff for and in discharge of the account for the goods sold. Marshall C. J., in delivering the opinion of the Court, says, "The note of one of the parties or of a third person may, by agreement, be received in payment." Sheehy v. Mandeville, 6 Čranch, 253. See also Van Ness v. Forrest, 8 Cranch, 30; Willie v. Green, 2 N. Hamp. R. 333; and Campbell v. Mosby, 4 Munf. 287.

In an action against Camp and Downing, as makers of a note, it appeared that the plaintiff had given the note up to Downing and received his separate note for it, but Downing afterwards took back his own note, and returned the partnership note to the plaintiff, on the plaintiff's telling him, that if he did not do so, he should work for him no longer. Thompson C. J. delivered the opinion of the Court. "The facts in the case necessarily lead to the conclusion that when the individual note of Downing was taken, and the partnership note delivered up, it was intended and agreed to be considered as payment of the note in question, and it operates as a satisfaction of the partnership note." Judgment for the defendant. Arnold v. Camp, 2 Johns. R. 409.

Where the selectmen of a town had given a creditor of the town an , order on their town treasurer, payable to the creditor or order, for the amount due him, it was held that an action could not be maintained against the town without proving a presentment of the order to the town treasurer. Varner v. Nobleborough, 2 Greenleaf, 121.

But where A. received from B. a check on a bank merely to hold as evidence of the amount due from B. to A. and not to be presented at the bank, and A. passed it to C. in payment of a debt; and C. after ascertaining the purpose for which the check was drawn, and that B. had stopped payment of it, brought an action against A. without having presented the check for payment, Thompson C. J. said that A. had committed a fraud both on B. and C. and directed a verdict for the plaintiff for the amount of the check and interest. Devoe v. Moffatt, Auth. N. P. 161.

In an action by Watts against Willing on a bond in which Willing was surety for Bird, it appeared that Bird had delivered certain bills of exchange to Watts, which it appeared by an endorsement on the bond when paid were to be credited in part payment. The bills were not paid, and Watts had furnished accounts in which he had charged 20 per cent. damages on the bills. He did not offer to return the bills at the trial. The Court said, that the two circumstances of retaining the bills in his own hands, and of charging 20 per cent. damages, showed an election to receive them as payment; and that their amount must be credited in this action. Watts v. Willing, 2 Dall. 100. See also the opinion of Sedgwick J. in Wiseman v. Lyman, 7 Mass. R. 286.

Where a debtor remitted to his creditor a bill of exchange drawn by a third person, which when paid was to discharge the debt, and the bill being dishonored, the creditor, contrary to the request of the debtor, delivered up the bill to the drawer, and took his note for the principal, interest, and damages, payable at a future day; it was held that the original debt on account of which the bill had been remitted was discharged. Keppele v. Carr, 4 Dallas, 155.

Johnson, on account of goods sold by him to Harris, received from him a note of other persons endorsed by Harris, which when paid was to be in full. Johnson endorsed this note to Dunlop, who sued Harris

And in such case plaintiff must prove the bill was duly presented; (65)

upon it, but failed to recover, because the law of Virginia gave him recourse only to the maker or his immediate endorser. Johnston sued Harris on the original contract for goods sold, and obtained judgment in the Circuit Court of the District of Columbia. On Error, Marshall C. J. delivered the opinion of the court. "The judgment is to be reversed, for error in directing the jury that the action was maintainable on the original contract, after the note received as conditional payment had been endorsed." The court thought that Harris was entitled to have the note returned that he might have his remedy against the previous parties to it; and also because they thought that Dunlop, the holder, might maintain a suit against him in equity, though not at law. Harris v. Johnston, 3 Cranch, 311.

Where a note was given on account of money paid, which was void on account of its also including a sum in consideration of forbearance, it was held that an action might be maintained on the original contract for the payment of money. Johnson v. Johnson, 11 Mass. R. 359.

Roberts bought goods on account of the Providence Hat Manufacturing Company of the plaintiffs, and gave a note for the amount signed, "for the Provid. Hat Man. Co. Frink Roberts." Roberts had no authority to sign such a note, though he had authority to buy goods. It was held that taking the note did not extinguish the implied promise to pay for the goods; and that the company were liable in an action for goods sold and delivered. Emerson v. Prov. Hat Man. Co. 12 Mass. R. 237. Willson sold Foree a horse and chaise, and agreed to take in part payment the note of Whaley at Willson's own risk. In an action by Willson on the original contract of sale, it was held, that he might be allowed to prove, that the defendant at the time of the sale, knowing Whaley to be insolvent, represented to the plaintiff that he was a man of property; and that the plaintiff offered to return the note before bringing the action. The court said, "The taking of the note under a fraudulent misrepresentation was no payment, and any term of payment which the note may have implied became void.” Willson v. Foree, 6 Johns. R. 110.

Snyder v. Findly, 1 Coxe, 48, is a similar case, and decided on the same ground.

In an action for cattle sold, where the defendant had paid the plaintiff for them in bank notes, one of which turned out to be forged, but it did not appear that either party knew it to be so at the time of the sale, it was held that the plaintiff might recover the amount of the counterfeit note with interest. Kent C. J. delivered the opinion of the court. "The negotiable note of a third person, and a bank note, are equally promissory notes, for the payment of money; and if the receiver may be presumed in the one case, and not in the other, to have taken upon himself the risk of the solvency of the maker, there is no presumption in either case, that he assumes upon himself the risk of forgery." Markle v. Hatfield, 2 Johns. R. 455. See also the cases ante, p. 94. note (60).

Where one of two copartners obtained money on a note payable at a future day, and on which he had forged the name of an endorser, the other partner being ignorant of the forgery, it was held that the lender might bring an action for money had and received before the maturity

But he need not prove notice to such third person of the bill's dishonor. (65)

of the note, against both partners, the money having gone to their use. Manufacturers and Mechanics Bank v. Gore, 15 Mass. R. 75.

In another case of the same kind, against partners, as makers of a note, and also on the money counts, where the name of an endorser had been forged on the note by one partner, of which the other was ignorant; it was held that both partners were liable on the money counts, though there was no evidence that the money obtained went to the use of the partnership. It was objected in this case that no civil action could arise out of a felony. Parker C. J. giving the opinion of the court, said, "As far forth as the objection goes against the recovery by the plaintiff as endorsee of the note it is well founded. For to maintain the action in that shape, he must prove the handwriting of the supposed endorser. But we see no objection his recovering upon the money counts. He does not claim the money through or under a forgery; but merely on the ground that money was advanced by him on the faith of a security, which turns out to be wholly worthless.""General copartners are bound by the acts of each other, when the name of the firm or house is pledged to any extent; unless the person who takes a security of that sort, has knowledge of some limitation of the authority of the partner who undertakes to bind the firm. The note was still the note of the partnership notwithstanding the forgery of the endorser's name. And the money being obtained upon a note payable by the company, both partners must be considered answerable." Boardman v. Gore, 15 Mass. Rep. 331.

Taking a note from a debtor, and afterwards giving it up to him in consequence of his fraudulent representations, does not extinguish the original debt.

Crane gave Arnold his notes for money lent him by Arnold. Crane afterwards executed a deed of land to Arnold for this debt; and Arnold gave Crane the deed to get it recorded, which Crane offered to have done; and Arnold gave up the notes to Crane. But Crane did not get the deed recorded, and sold the land to another person, who had his deed recorded. Crane refused to pay the money or return the deed or the notes. It was held that Crane having obtained possession of the notes by a fraud, there was no payment or extinguishment of the original debt; and that Arnold might recover against him on the common money counts. Arnold v. Crane, 8 Johns. R. 62.

Hollingworth as agent of Manly sold goods to Lewis, for which he took Lewis's note. Lewis fraudulently representing himself insolvent, Hollingworth returned his note to him, on the delivery of goods charged at exorbitant prices. The court had no doubt that the note was no extinguishment of the original cause of action. Lewis v. Manly, 2 Yeates, 200.]

(64) Bridges v. Berry, 3 Taunt. 130. Defendant accepted a bill for 1197. due 20th October, but did not pay it: plaintiff was the holder: defendant afterwards lodged in plaintiff's hands as a security, a bill drawn by defendant upon one Ivory, for 1177. 11s. 2d. and paid plaintiff the difference: this bill was dishonored, but no notice thereof was given to defendant action by plaintiff on both bills. It was admitted at the trial that defendant was discharged from the second bill, but it was urged that he continued liable on the first: but Mansfield C. J. and the court held he did not, and nonsuit; and rule to set it aside refused. See Swinyard v. Bowes, p. 186. note (114).