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creditor directs certain specific precautions, it is no defence to a creditor sending money without these precautions, that he could not take them; as he then should not have sent it. (ee)

4. OF PAYMENT IN BANK-BILLS.

In this country, where paper-money is in universal use, questions often arise as to payments made in that way. It seems to be settled that a payment in good bank-bills, not objected to at

the time, is a good payment; and so is a tender of such * 622 *bills; (ƒ) but the creditor may object and demand specie. (g) If the bills are forged, both in England and in this country, the payee may treat them as a nullity, for such bills are not what they purport to be. (h) But if the bills are

was drawn. Upon this evidence, Lord Kenyon nonsuited the plaintiff, and said: "Had no directions been given about the mode of remittance, still this being done in the usual way of transacting business of this nature, I should have held the defendant clearly discharged from the money he had received as agent. It was so determined in the Court of Chancery forty years since; and as the plaintiff in this case directed the defendant to remit the whole money in this way, it was remitted at the peril of the plaintiff." And see Kington v. Kington, 11 M. & W. 233. In Wakefield v. Lithgow, 3 Mass. 249, a sheriff had allowed an execution in his hands to lie by until the return day had passed, and the creditor's attorney wrote to the sheriff, presuming he had collected the money, and requested him to send it to him by mail. At that time the sheriff had not received the money, but collecting it several months afterwards, sent it by mail to the plaintiff's attorney, to whom, however, it was never delivered. It was held, that the sheriff was liable to the creditor, and that the money was sent at his own risk. Otherwise, if the money had been sent immediately upon receipt of the attorney's letter. See also Jung v. Second Ward Bank, 55 Wis. 364; First Nat. Bank v. McManigle, 69 Penn. St. 156. When payment is to be made by letter, care should be taken that the letter is properly directed, or it will not discharge the debtor. Thus, in Walter v. Haynes, Ryan & M. 149, a letter was put into the office directed to "Mr. Haynes, Bristol," and this was held to be insufficient. See also Gordon v. Strange, 1 Exch. 477. So in the case of Hawkins v. Rutt, Peake, 186, Lord Kenyon, ruled that a person remit

ting money by the post should deliver the letter at the general post-office, or at a receiving house appointed by that office, and that a delivery to a bellman in the street was not sufficient. See Crane v. Pratt, 12 Gray, 348.

(ee) Williams v. Carpenter, 36 Ala. 9.

(f) Snow v. Perry, 9 Pick. 542; Warren v. Mains, 7 Johns. 476; Wheeler v. Knaggs, 8 Ohio, 169; Hoyt v. Byrnes, 2 Fairf. 475; Tiley v. Courtier, 2 Cromp. & J. 16, n.; Wright v. Reed, 3 T. R. 554; Ball v. Stanley, 5 Yerg. 199; Polglass v. Oliver, 2 Cromp. & J. 15; Brown v. Saul, 4 Esp. 267; Noe v. Hodges, 3 Humph. 162; Seawell v. Henry, 6 Ala. 226; Fosdick v. Van Husan, 21 Mich. 567; Harding v. Commercial Loan Co., 84 Ill. 251.

(g) Coxe v. State Bank, 3 Halst. 172; Moody v. Mahurin, 4 N. H. 296; Donaldson v. Benton, 4 Dev. & Bat. 435. And a legal tender cannot be made in copper cents under the Constitution of the United States. M'Clarin v. Nesbit, 2 Nott & M'C. 519.

(h) United States Bank v. Bank of Georgia, 10 Wheat. 333; Markle v. Hatfield, 2 Johns. 455; Thomas v. Todd, 6 Hill, 340; Hargrave v. Dusenberry, 2 Hawks, 326; Anderson v. Hawkins, 3 Hawks, 568; Pindall v. The Northwestern Bank, 7 Leigh, 617; Mudd v. Reeves, 2 Harris & J. 368; Wilson v. Alexander, 3 Scam. 392; Eagle Bank v. Smith, 5 Conn. 71; Young v. Adams, 6 Mass. 182; Sims v. Clarke, 11 Ill. 137; Ramsdale v. Horton, 3 Barr, 330; Keene v. Thompson, 4 Gill & J. 463. See also ante, vol. i. p. * 264. But such forged notes (and the sample applies to forged coin) must be returned by the receiver in a reasonable time, or he must bear the loss. Pindall

true and genuine, the responsibility of the solvency of the bank would seem from some cases to rest upon the payee. (i) But if the debtor knew of the insolvency, and did not disclose it, or if he might have known it, and his ignorance was the result of his negligence, he certainly is not discharged by such payment. (j) And the majority of our cases appear to take the ground, that where bills of a bank that has failed are paid and received in ignorance of such failure, the loss falls on the party paying; putting such bills on the same footing as forged bills, and as equally a nullity. (k) But if such a rule were adopted,

it would undoubtedly be so far qualified, that where *623 both parties were entirely and equally ignorant, and the creditors by receiving and retaining the bills without notice, deprived the debtor of any remedy or indemnity he might have, the debtor was then discharged. (1)

v. The Northwestern Bank, 7 Leigh, 617; Sims v. Clarke, 11 Ill. 137. But payment made to a bank, bona fide, in its own notes, which are received as genuine, but afterwards ascertained to be forged, is good, and the bank must bear the loss. See ante, vol. i. p. * 264. This seems to be on the ground that the bank, or its officers, having superior means of determining the genuineness of their own bills, are guilty of negligence in receiving them without examination. But payment to a bank by its own notes, which have been stolen from such bank, is no payment. State Bank v. Welles, 3 Pick. 394.

(i) Lowrey v. Murrell, 2 Port. 280; Bayard v. Shunk, 1 Watts & S. 92; Scruggs v. Gass, 8 Yerg. 175. Perhaps these cases rest upon the ground that the identical bills given and received were received as payment, per se, whether they were good or bad. Possibly, also, there may be a difference between bills received in payment of an antecedent debt and bills passed in payment at the time of a purchase. In the latter case, perhaps, the doctrine of caveat emptor applies to the receiver of the bills, as well as to the purchaser of the goods. Sed quære.

(j) See Commonwealth v. Stone, 4 Met. 43.

(k) Wainwright v. Webster, 11 Vt. 576; Gilman v. Peck, id. 516; Fogg v. Sawyer, 9 N. H. 365; Frontier Bank v. Morse, 22 Me. 88; Lightbody v. Ontario Bank, 11 Wend. 1, 13 Wend. 101; Houghton v. Adams, 18 Barb. 545. See also ante,

vol. i. p. 264, * 242, n. 1. In Timmins v. Gibbins, 18 Q. B. 722, 14 Eng. L. & Eq. 64, M. W. deposited certain country banknotes, payable in London, representing £80 in value, with a banking company, and received the following memorandum, signed by the manager: "Received of M. W. £80, for which we are accountable, £80, at three per cent. interest, with fourteen days' notice." The notes were sent on the same evening by post to the London agents of the banking company, and were presented on the next day, and refused payment. They were transmitted by that night's post to the banking company, who on the following day gave notice of dishonor to M. W., and tendered to him the notes, which he refused. It turned out that the bank which had issued the notes had stopped payment upon the day when M. W. made the deposit with the banking company, but that neither M. W. nor the company were then aware of this. It was held, that under the above circumstances M. W. could not maintain an action, either for money lent, or for money had and received, against the banking company.

(2) Thus, where a banking company paid notes, on which the name of the president had been forged, and neglected for fifteen days to return them, it was held, that they had lost their remedy against the person from whom the notes had been received. Gloucester Bank v. Salem Bank, 17 Mass. 33. See also Camidge v. Allenby, 6 B. &. C. 373.

5. OF PAYMENT BY CHECK.

Payment is also often made by the debtor's check upon a bank. A check is a draft, and the law of bills and notes is generally applicable to it. If given in the ordinary course of business, and unattended by especial circumstances, it is not presumed to be received as absolute payment, even if the drawer have funds in the bank. The holder is not bound by receiving it, but may treat it as a nullity if he derives no benefit from it, provided he has been guilty of no negligence which has caused an injury to the drawer. (m)1 (x) Nor is it necessary, to preserve the payee's rights that it should be presented on the day on which it is

received. (n) And if drawn on a bank in which the drawer * 624 * has no funds, it need not be presented at all in order to sustain an action upon it. (o) The drawing of such a check knowingly is a fraud, which deprives the drawer of all right of presentation or demand.

6. OF PAYMENT BY NOTE.

Payment is also often made by the debtor's giving his own negotiable promissory note for the amount.

(m) Cromwell v. Lovett, 1 Hall, 56. The holder of the check in such a case becomes the agent of the drawer to collect the money. And certainly if the check is conditional, as if it is stated to be for the "balance due" the creditor, this would be no payment, and the creditor need not return it before commencing suit on the original cause of action. Hough v. May, 4 A. & E. 954. And if a creditor is offered either cash, in payment of his debt, or a check of the debtor's agent, and he prefers the latter, this does not discharge the debt if the check is not paid; although such agent afterwards fails with a large balance of the debtor's funds in his hands; for the check of the agent is

In Massachusetts, such

considered, in such a case, as the check of the principal debtor. Everett v. Collins, 2 Camp. 515. See also Tapley v. Martens, 8 T. R. 451; Bolton v. Richard, 6 T. R. 139; Brown v. Kewley, 2 B. & P. 518.

(n) The Merchants Bank v. Spicer, 6 Wend. 443; Robson v. Bennett, 2 Taunt. 396; Rickford v. Ridge, 2 Camp. 537; Gough v. Staats, 13 Wend. 549. Checks are considered as inland bills of exchange, and the holder must use the same diligence in presenting them for payment as the holder of such bill. Marcy, J., in Bank v. Spicer, 6 Wend. 443.

(0) Franklin v. Vanderpool, 1 Hall, 78. See chapter on Bills and Notes.

1 A check is said to be a particular form of cash payment, and if dishonored the seller may resort to his original claim, on the ground of failure of the condition on which it was taken. Hodgson v. Barrett, 33 Ohio St. 63; Phillips v. Bullard, 58 Ga. 256; Marrett v. Brackett, 60 Me. 524; Blair v. Wilson, 28 Gratt. 165. Where a check is lost by or fraudulently obtained from the creditor and is paid to the finder or fraudu lent holder on a forged indorsement of the payee, the debtor may be again called upon unless the check was taken in absolute payment. Thomson v. Brit. No. Am. Bank, 82 N. Y. 1. See Syracuse, &c. R. Co. v. Collins, 3 Lansing, 29; First Bank v. Leach, 52 N. Y. 350. — K.

(x) While, as between merchants, a check is usually treated as conditional payment, it is otherwise with a public

officer, like a collector of taxes, whose duty is to collect the money. Houghton v. Boston, 159 Mass. 138, 34 N. E. 93.

note is said in some cases to be an absolute payment and a discharge of the debt. (p) It is said that this rule has prevailed in that State from colonial times, and it rests upon the danger which the promisor would be under of being obliged to pay the note to an innocent indorsee, after he had paid the sum due on a suit brought by his creditor on the original contract. But most of the cases in Massachusetts treat it only as a presumption of payment, in the absence of circumstances going to show an opposite intention, and this may now be considered the settled rule in that State. (q) (x) And the same rule is recognized in Maine, [Indiana,] and Vermont. (r) But even in this the law in those States differs from the rule as held in the courts of the United States, and in the State courts generally. There it is held that a negotiable promissory note is not payment, unless circumstances show that such was the intention of the parties. (s)

1

(p) Thacher v. Dinsmore, 5 Mass. 299; Whitcombe v. Williams, 4 Pick. 228.

(9) Watkins v. Hill, 8 Pick. 522; Reed v. Upton, 10 id. 525; Maneely v. McGee, 6 Mass. 143; Wood v. Bodwell, 12 Pick. 268; Ilsley v. Jewett, 2 Met. 168; Dodge v. Emerson, 131 Mass. 467. This presumption is but primâ facie, and may be rebutted by proof of a different intent. Butts v. Dean, 2 Met. 76. And the fact that taking such note as payment would deprive the party taking it of a substantial benefit, or, where he has other security for the payment, has a strong tendency to show that the note was not intended as payment. Curtis v. Hubbard, 9 Met. 328; Parham, &c. Co. v. Brock, 113 Mass. 194. See Ely v. James, 123 Mass. 36; Lovell v. Williams, 125 Mass. 439; Re Clap, 2 Lowell, 226, 230. And see Thurston v. Blanchard, 22 Pick. 18; Melledge v. Boston Iron Company, 5 Cush. 158; Appleton v. Parker, 15 Gray, 173; Palmer v. Elliot, 1 Clifford, 63.

(r) Varner v. Nobleborough, 2 Greenl.

121, and note a; Descadillas v. Harris, 8 Greenl. 298; Newall v. Hussay, 18 Me. 249; Bangor v. Warren, 34 Me. 324; Fowler v. Ludwig, id. 455; Shumway v. Reed, id. 560; Gilmore v. Bussey, 3 Fairf 418; Comstock v. Smith, 23 Me. 302; Gooding v. Morgan, 37 Me. 419; Mehan v. Thompson, 71 Me. 492; Teal v. Spangler, 72 Ind. 380. But this rule never applies to notes not negotiable. Trustees, &c. v. Kendrick, 3 Fairf. 381; Edmond v. Caldwell, 15 Me. 340; Wait v. Brewster, 31 Vt. 516. It is likewise held, in Dixon v. Dixon et al. 31 Vt. 450, as well settled, that a note received in payment of a preexisting debt is received and held upon valid and valuable consideration.

(s) Peter v. Beverly, 10 Pet. 567 Sheehy v. Mandeville, 6 Cranch, 253; Wallace v. Agry, 4 Mason, 336; Smith v. Smith, 7 Foster, 244; Van Ostrand v. Reed, 1 Wend. 424; Burdick v. Green, 15 Johns. 247; Hughes v. Wheeler, 8 Cowen, 77; Booth v. Smith, 3 Wend. 66; Bill v. Porter, 9 Conn. 23; Davidson v. Bridge

1 But in Massachusetts and Maine at least a check or unaccepted bill presumptively operates only as conditional payment. Weddigen v. Boston Co., 100 Mass. 422; Marrett v. Brackett, 60 Me. 524; Strang v. Hirst, 61 Me. 9.-W.

(x) The Massachusetts rule that a negotiable note is primâ facie payment of the debt for which it is given, is contrary to the law of England and of most of the States, and is not an unqualified one in that State. If the maker avoids the note for illegality or fraud, the promissor may recover the original consideration in an action for money lent or money had and received. National Granite Bank v. Tyndale,

179 Mass. 390, 60 N. E. 927. And the presumption of payment is rebutted when the effect will be to deprive a party of security taken for payment of the original debt. Davis v. Parsons, 157 Mass. 584, 32 N. E. 1117; Brewer Lumber Co. v. Boston & A. R. Co., 179 Mass. 228, 60 N. E. 548; Jeffrey v. Rosenfeld, 179 Mass. 506, 61 N. E. 49.

It would seem to be clear, both on principle and on authority, that if one receives negotiable paper of any kind in payment of or as security for a debt, and by his laches destroys or diminishes the value of the paper, he makes the paper his own, and the loss must fall upon him. (ss)

*625

*7. OF PAYMENT BY DELEGATION.

Payment may be made by an arrangement, whereby a credit is given or funds supplied by a third party to the creditor, at the instance of the debtor. But such an arrangement must be carried into actual effect to have all the force of payment; and, in general, it may be compared with the delegation of the civil law. Thus, where a debtor directed his bankers to place to the credit of the creditor, who was also a customer of the bankers, such a sum as would be equal to a bill at one month, and the bankers agreed so to do, and so said to the creditor who assented to the arrangement, and the bankers became bankrupt before the day on which the credit was to be given, this was held to be no payment, and the creditor was permitted to maintain an action against the original debtor on the original liability. (t) It would doubtless have been otherwise had there been a remittance or actual transfer on account of the debt; for it seems to be settled, that the actual transfer of the amount of the debt in a banker's books, from the debtor to the creditor, with the knowledge and assent of both, is * 626 equivalent to payment. (u) (y) Where *bankers receive

port, 8 Conn. 472; Elliott v. Sleeper, 2 N. H. 525; Frisbie v. Larned, 21 Wend. 450; St. John v. Purdy, 1 Sandf. 9; Haw. ley v. Foote, 19 Wend. 516; Cole v. Sackett, 1 Hill, 516; Waydell v. Luer, 5 Hill, 448; Van Eps v. Dillaye, 6 Barb. 244; Pratt v. Foote, 5 Seld. 463; Commercial Bank v. Bobo, 9 Rich. 31; Mooring v. Mobile M. D. & M. I. Co., 27 Ala. 254. For the English law upon this point (x) see Crowe v. Clay, 9 Exch. 604, 25 Eng. L. & Eq. 454; Maxwell v. Deare, 8 Moore, P. C. 363, 26 Eng. L. & Eq. 56; Seymour v. Darrow, 31 Vt. 122. See also Currie v. Misa, L. R. 10 Ex. 153, 163; Keay v. Fenwick, 1 C. P. D. 745; May v. Gamble, 14 Fla. 467; Rawlings v. Robson, 70 Ga. 595; Belleville Bank v. Bornman, 124 Ill. 200; Edwards v. Trulock, 37 Iowa, 244; Shepard v. Allen, 16 Kan. 182; Breitung v. Lindauer, 37 Mich. 217; Brown v.

(x) See also Fleming v. Bank of New Zealand, [1900] A. C. 577.

Dunckel, 46 Mich. 29; Wadlington r.
Covert, 51 Miss. 631; Leabo v. Goode,
67 Mo. 126; Chamberlin v. Perkins, 55
N. H. 237; Jagger Iron Co. v. Walker,
76 N. Y. 521; McIntyre v. Kennedy, 29
Penn. St. 448; Wilbur v. Jernegan, 11
R. I. 113; Aultman v. Hetherington, 42
Wis. 622. See post, p. 683.

(ss) Peacock v. Pursell, 14 C. B. x. s. 728; Curtis Mfg. Co. v. Douglas, 79 Tex. 167; Carroll v. Sweet, 128 N. Y. 19.

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