449

Acceptance of Other Party.

§ 1553. Where the debtor gives in payment the acceptance of a third party, its effect is still a question of intention for the jury,*** although it is presumed under the Massachusetts rule to be a payment.**7 In other states this presumption is denied, and the question is to be determined purely by the intention. And this is so whether the acceptance is in payment of a previous debt or of one incurred at the time.* 448 So, if a bill drawn by one person is received after the maturity of another's acceptance in absolute satisfaction. So, if the debt of a partner is paid by an acceptance of his firm, under an agreement for a novation of the debt, the original debt will be paid, and a new joint debt incurred in its stead.450 So, if the acceptance of one partner is received for a debt of the partnership, and judgment is rendered on such acceptance.*51 But, in general, whether such acceptance has been received in payment, especially after dissolution of the partnership, is a question for the jury to determine.452 Where A.'s acceptance is given in pay. ment of a debt of B., to whom A. was indebted, it is not necessarily an absolute payment.453 So, a consignee's acceptance, taken for a freight bill, without other notice to the consignor than a request for his indorsement (which was refused), will not be a payment, although the contract was for payment of the freight "by approved bills." 454 So, where the drawee of a check gives a bill on another, which is accepted, but not paid, and both drawer and drawee of the bill, as well as the original debtor, become bankrupt, the creditor may prove his claim, not only against the drawer and drawee of the bill, but also against the original debtor on the check drawn by him, crediting in the latter proof all dividends received under the

446 Alcock v. Hopkins, 6 Cush. (Mass.) 484.

447 Strang v. Hirst, 61 Me. 9.

448 Devlin v. Chamblin, 6 Minn. 468 (Gil. 325).

449 Sard v. Rhodes, 1 Mees. & W. 153.

450 Ex parte Whitmore, 3 Mont. & A. 627.

451 Nichols v. Burton, 5 Bush (Ky.) 320.

452 Thompson v. Percival, 5 Barn. & Adol. 925.

453 Swinyard v. Bowes, 5 Maule & S. 62. 454 Taylor v. Briggs, Moody & M. 28. RAND.C.P.-140

(2225)

former.455 The debt of a partnership is, in like manner, not discharged by an acceptance of one partner. 456 So, it is not a payment, where the maker of a note gives his draft on a third person, which is accepted by the drawee, but not paid on account of his subsequent failure, although he had received security for his acceptance from the drawer.457 So, if a city coupon is paid by the treasurer's draft on another town, and such draft is accepted, but not paid, the original debt will revive.458

Payment by Check.

1554. A check is not equivalent to money as a medium of payment, although sometimes spoken of as such. A check, like a note, is only a conditional payment, and discharges the debt if it is paid, and not otherwise.460 Thus, if a bill of exchange is presented for payment, and the drawee gives his check for the amount, it will not discharge the bill. So, if the maker of a note gives his

455 Ex parte Blackburne, 10 Ves. 204.

456 Although the agreement of the parties was for payment by the acceptance of either partner at the creditor's option, and no notice of the dishonor of the acceptance was given to the other partner, In re British & American Steam Nav. Co., L. R. 8 Eq. 506; or although given in the absence of the other partner, who was sick, and made payable to and indorsed by the original surety, Dobson v. Chambers, 79 N. C. 142.

457 Moye v. Cogdell, 69 N. C. 93.

458 Short v. City of New Orleans, 4 La. Ann. 281; Goldschmidt v. Mayor, etc., 5 La. Ann. 436.

459 Chit. Bills, 450; Moore v. Bartrup, 2 Dowl. & R. 25, 1 Barn. & C. 5. 460 Everett v. Collins, 2 Camp. 515; Olcott v. Rathbone, 5 Wend. (Mass.) 490; People v. Baker, 20 Wend. (N. Y.) 602; Davison v. Bank, 57 N. Y. 81: Syracuse, B. & N. Y. R. Co. v. Collins, 57 N. Y. 641, affirming 3 Lans. (N. Y.) 29; Dennie v. Hart, 2 Pick. (Mass.) 204; Morris v. Bank, 106 Ala. 383, 18 South. 11; Equitable Nat. Bank v. Griffin & Skelley Co., 113 Cal. 692, 45 Pac. 985; Goodwin v. Trust Co., 152 Mass. 189, 25 N. E. 100; Greenwich Ins. Co. v. Oregon Imp. Co., 76 Hun, 194, 27 N. Y. Supp. 794; Hodgson v. Barrett, 33 Ohio St. 63; Kilpatrick v. Association, 119 Pa. St. 30, 12 Atl. 754; Brown v. Leckie, 43 Ill. 497; National Life Ins. Co. v. Goble, 51 Neb. 5, 70 N. W. 503; Phillips v. Bullard, 58 Ga. 256. And, to the same effect, see Code Ga. § 2867. And goods so paid for may be reclaimed by the seller. Canadian Bank of Commerce v. McCrea, 106 III. 281.

461 Turner, v. Bank, *42 N. Y. 425; Kirkham v. Bank, 26 App. Div. 110, 49

check for it; 462 or if a joint note is surrendered for the worthless check of one joint maker; 463 or if a bill for freight is receipted, and a check taken for it on a bank where the drawer has no funds.464 So, a check drawn against insufficient funds, and taken on a previous representation by the drawer that it was good, is not a payment.465 But where a note was taken up at its maturity by a check of the holder (the sole proprietor of the bank to which the check was payable), and the holder's account was overdrawn at that time, and continued to be so notwithstanding large deposits afterwards made by him, the note will be regarded as paid, if the check was charged up against the holder, and the note entered on the books of the bank as paid after such deposits were made, the holder having afterwards become insolvent.466

It

In general, however, an unpaid check is no payment, although the bank drawn upon was indebted at the time to the drawer.467 may have been given as mere evidence of a loan, with no intention to have it presented for payment; and an action will lie in such case on the common counts for the money lent.468 If goods are bought and paid for by the check of a third person, and it was bad when received, but believed by the buyer to be good, and afterwards duly presented and dishonored, it will not be a payment, although the bill for goods was receipted.469 And a check is not an absolute payment, although it is deposited and credited to the depositor as cash.470

N. Y. Supp. 767. But see First Nat. Bank of Skowhegan v. Maxfield, 83 Me. 576, 22 Atl. 479.

462 Woodburn v. Woodburn, 115 Ill. 427, 5 N. E. 82; especially if the original note and a mortgage securing it are not surrendered or canceled. But the taker of the check must show that he failed to realize on it. Watkins v. Parsons, 13 Kan. 426.

462 Henry v. Conley, 48 Ark. 271, 3 S. W. 181. So, a check taken from one joint contractor, and judgment rendered against him, is no bar to a suit on an original debt against the other. Wegg-Prosser v. Evans [1895] 1 Q. B. 108,

affirming [1894] 2 Q. B. 101.

464 Jobbitt v. Goundry, 29 Barb. (N. Y.) 509.

465 Jones v. Heiliger, 36 Wis. 149.

466 Pratt v. Foote, 9 N. Y. 463, reversing 12 Barb. (N. Y.) 212.

467 Finney v. Edwards, 75 Va. 44.

468 Currier v. Davis, 111 Mass. 480.

469 Weddigen v. Fabric Co., 100 Mass. 422.

470 Brown v. Kewley, 2 Bos. & P. 518.

Payment by Check-A Question of Intention.

471

§ 1555. A check is not an absolute payment, unless an intention is shown to receive it as such, e. g. by putting it into circulation.* But, if received as such, it is a good payment.472 And if it is received as cash, and the drawee had funds of the drawer in his hands, it is presumed to be a payment.473 So, if the maker of a note takes it up by a check which is antedated, and includes the amount of a bill of goods, and the note is surrendered, and the bill receipted, it will bar an action on the original debt.** 474 Whether the check is taken as a payment or not is a question for the jury.75 And evidence is admissible which tends to satisfy the jury that it was received as cash. +76 But a receipt is only prima facie evidence of such intention.477 So, if a note is surrendered on receiving a check for it, and the check is not paid, an action will lie upon the note.478

A check which is invalid for want of a stamp will not avail as a payment.479 So, if a check is drawn against a special account in depreciated bills, and is payable in such bills, and the holder refuses to receive them, this will amount to a dishonor, and the drawer will be liable on due notice.480 And if the indorser of a note gives his check at the time it matures, to be held by the creditor, and used, if

471 Strong v. King, 35 Ill. 9.

472 Lyon v. Northrup, 17 Iowa, 314; Sutton v. Baldwin, 146 Ind. 361, 45 N. E. 518; Turner v. Bank (Ky.) 39 S. W. 425. And the debtor cannot recover it from the holder, although the consideration which proceeded from a third party afterwards fails. Stedman v. Carstairs, 97 Pa. St. 234.

473 Woodville v. Reed, 26 Md. 179.

474 White v. Howard, 1 Sandf. (N. Y.) 81. So, where the original instrument is marked paid and surrendered. Equitable Nat. Bank v. Griffin & Skelley Co., 113 Cal. 692, 45 Pac. 985.

475 Smith v. Collins, 115 Mass. 388; Weed v. Snow, 3 McLean, 265, Fed. Cas. No. 17,347; Blair v. Wilson, 28 Grat. (Va.) 165.

476 Titus v. Bank, 35 N. J. Law, 588.

477 Weed v. Snow, 3 McLean, 265, Fed. Cas. No, 17,347. But see Bailey v. Pardridge, 134 Ill. 188, 27 N. E. 89.

478 Olcott v. Rathbone, 5 Wend. (N. Y.) 491.

479 Bond v. Warden, 1 Colly. 583.

480 Howes v. Austin, 35 Ill. 396.

necessary, after diligent efforts to collect the note from the maker, it will not be considered as a payment.481

Checks as Absolute Payment.

§ 1556. If a check is duly honored, it will be an absolute payment of the debt for which it is received; 482 and it is to be considered as a payment until dishonored. 483 So, if it is delivered and payable to a third person at the creditor's request, it will be a payment, as against a subsequent attachment of the original debt.48*

485

A check tendered in payment as money need not be received as such. But, if no objection is made except as to the amount, it will be a sufficient tender.* 486 Where the creditor has agreed to accept a smaller amount in satisfaction of a larger debt, if paid within a certain time, the tender of an uncertified check within the time limited may be refused.487 And where an agent is liable to his principal for money collected and deposited in bank without direction from him, and the principal receives his draft, and promptly forwards it for payment, it will not discharge the debt, if dishonored. 488

If the creditor, however, is itself the bank drawn upon, and holds sufficient deposits of the drawer, his check cannot be refused by it, but will be a payment from the time of presentment.489 So, a check given to the president of the bank is presumptively a payment in such case, although the bank had removed its deposits to another part of the country before presentment of the check. And if a bank discounts a note, and the note is paid at maturity by the maker's check, drawn by him against the proceeds of a subsequent discount deposited and credited to him, the check will be a valid

490

481 American Nat. Bank v. Harrison Wire Co., 11 Mo. App. 446.

482 Pearce v. Davis, 1 Moody & R. 365.

483 Getchell v. Chase, 124 Mass. 366.

484 Barnard v. Graves, 16 Pick. (Mass.) 41.

485 Sweet v. Titus, 4 Hun (N. Y.) 639, 67 Barb. (N. Y.) 327.

48€ Jones v. Arthur, 8 Dowl. 442; Shipp v Stacker, 8 Mo. 145; Jennings v. Mendenhall, 7 Ohio St. 258.

487 Harding v. Loan Co., 84 III. 257. 488 Cartmell v. Allard, 7 Bush (Ky.) 482.

489 Laubach v. Leibert, 87 Pa. St. 55.

490 Springfield v. Green, 7 Baxt. (Tenn.) 301.