ment to give and receive such note.703 And if an agent, on making a sale of goods, takes a note without authority, and transfers it to his principal, the principal may still sue the purchaser for the price of the goods.04 A creditor cannot, however, take several notes for one book account, and on their maturity, at different times, recover part of his debt on one note, and afterwards sue upon the original consideration (instead of the other notes) for the balance of the debt.705

But merely taking a renewal will not bar a recovery on the original consideration.706 And it has been held that a creditor may take a renewal note for the principal of a debt, leaving the interest remaining open, and retaining the original note, and may still have his action for the interest due him.707 But where a renewal is secured by a bond and warrant to confess judgment, and the amount is subsequently paid, except the costs of the judgment, the creditor cannot sue upon the original bill for such unpaid costs.708

If a bill is taken for a note, and no demand of payment is made on the day of its maturity, and the debtor subsequently tenders the amount, which is refused by the creditor, his right of action on the note will not revive without a fresh demand of payment.709 But if goods are obtained on a note by fraud, and sold to a party with notice, the vendor may bring an action of trover against such party for the goods, without first returning the note to the maker.710 So, if a note is taken for an agreement to convey land upon its payment, and the maker is let into possession in the meantime, the payee may rescind the agreement on nonpayment of the note, and bring ejectment for the land."1 711

McCormick v. Peters, 24 Neb. 70, 37 N. W. 927. But see, contra, Slocumb v. Holmes, 1 How. (Miss.) 139.

763 Clifton v. Litchfield, 106 Mass. 34; Scearce v. Gall, 82 Ind. 255.

704 Edmond v. Caldwell, 15 Me. 340.

705 Buck v. Wilson, 113 Pa. St. 423, 6 Atl. 97.

766 Norris v. Aylett, 2 Camp. 329, although it has been transferred.

707 Eames v. Cushman, 135 Mass. 573.

708 Dillon v. Rimmer, 1 Bing. 100, 7 Moore, 427.

709 Soward v. Palmer, 8 Taunt. 277, 2 Moore, 274.

710 Stevens v. Austin, 1 Metc. (Mass.) 557.

711 Arbuckle v. Hawks, 20 Vt. 538.

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Production and Surrender of Note.

§ 1582. A bill is not payment of a debt where it is surrendered by the creditor before action brought.12 He may surrender the bill after its dishonor, and bring suit on the original debt.713

And, if the vendor of land takes a certificate of deposit by indorsement from the purchaser, he must surrender it before bringing suit for the purchase money.714 So, if a vendor brings an action to rescind the sale for fraud, he must produce the note taken by him, although this need not be done before commencing his action.715 Where the bill or note taken by the creditor is negotiable, it must be produced by him to be canceled." This is true, at least, where it is received as a conditional payment, although it is said not to be so where it is received merely as collateral.17 And where a creditor declares both on the note and the common money counts, if the note is not negotiable, he may recover on the common counts, on proof of the consideration, without producing the note."1

716

712 Burden v. Halton, 4 Bing. 454.

713 Derickson v. Whitney, 6 Gray (Mass.) 248.

714 Leake V. Brown, 43 Ill. 377.

718

715 Thurston v. Blanchard, 22 Pick. (Mass.) 18: Nichols v. Michael, 23 N. Y. 264; Hoopes v. Strasburger, 37 Md. 390. So, if a note is given for goods sold conditionally, they may be replevied on condition broken without first returning or offering to return the note. Kirby v. Tompkins, 48 Ark. 273, 3 S. W. 363. So, if the debtor accepts a draft drawn on him by his creditor. King v. Kelley, 51 Pa. St. 36.

716 Morrison v. Weltey, 18 Md. 169; Myers v. Smith, 27 Md. 43; Glenn v. Smith, 2 Gill & J. (Md.) 493; Ramsay v. Allegre, 12 Wheat. 611; Hall v. Engine Co., 91 Ala. 363, 8 South. 348; Jackson v. Brown (Ga.) 29 S. E. 149; Woodin v. Frazee, 38 N. Y. Super. Ct. 190; Rayburn v. Day, 27 Ill. 46; Walsh v. Lennon, 98 Ill. 27; Hays v. McClurg, 4 Watts (Pa.) 452; Salomon v. Co-operative Co., 21 Fla. 374; Davidson v. Borough of Bridgeport, 8 Conn. 472. So, as to action to foreclose a collateral mortgage, Fitch v. McDowell, 145 N. Y. 498, 40 N. E. 205; or to set aside a conveyance for fraud as against the original debt, Wilcox v. Packing Co., 113 Ala. 519, 21 South. 376. But the exception must be

taken at the time. Bill v. Porter, 9 Conn. 23. In England, however, if judgment has been rendered without production of the bill, the fi. fa. will be stayed until it is produced, Hadwen v. Mendisabel, 2 Car. & P. 20, 10 Moore, 477. And see Raisin v. Thomas, 88 N. C. 148.

717 Plants Mfg. Co. v. Falvey, 20 Wis. 211.

718 Fitch v. Bogue, 19 Conn. 285.

In like manner, if the creditor takes in payment the negotiable bill of a third person, he may sue for the original debt upon surrender of the dishonored bill.719 But if he has transferred the instrument, so that he cannot produce and surrender it, he cannot recover in the original action.720 In like manner, he cannot recover upon a renewal without surrendering the original note.721

So, if he has taken a draft in part payment, the draft should be surrendered or the judgment reduced by that amount.722 The creditor cannot recover without producing a negotiable bill or note taken by him, unless he can excuse its production, as he may do by proof of its loss or accidental destruction.723 And where, in an action against a collecting agent for negligence, the defendant sets up a payment made to him by the draft of his local correspondent, which was protested and not paid, he must produce the draft or account for its absence before he can prove that it was protested for nonpayment, and returned to the drawer.724

Effect on Original Defenses.

§ 1583. Where a bill or note is renewed, its force and validity will, in general, be that of the original note.25 If a conveyance is made in fraud of the original note, it will be void as to the renewal

719 Tempest v. Ord, 1 Madd. 89; Alcock v. Hopkins, 6 Cush. (Mass.) 484; Spear v. Atkinson, 23 N. C. 262.

720 Harris v. Johnston, 3 Cranch, 311; unless it is retransferred and can be produced at the trial, Burden v. Halton, 4 Bing. 454.

721 Miller v. Ritz, 3 E. D. Smith (N. Y.) 253.

722 Hodgen v. Latham, 30 Ill. 188.

723 Holmes v. D'Camp, 1 Johns. (N. Y.) 34; Angel v. Felton, 8 Johns. (N. Y.) 149; Burdick v. Green, 15 Johns. (N. Y.) 247; Raymond v. Merchant, 3 Cow. (N. Y.) 147; Matthews v. McClure, 20 Md. 248; Mauney v. Coit, 86 N. C. 463; Pipes v. Norton, 47 Miss. 61; The Charlotte v. Lumm, 9 Mo. 64; Upton v. Paxton (Iowa) 29 N. W. 809. So, a note given to a third person may be surrendered, or its loss proved. McConnell v. Stettinius, 7 Ill. 707.

724 Defendant must produce the draft or account for its absence, and he must show that the nonpayment was not by his fault. Simpson v. Waldby, 63 Mich. 447, 30 N. W. 199.

725 E. g. the renewal of a premium note to a mutual insurance company. Howard v. Iron Co., 64 Me. 93. As to the renewal of illegal instruments, see & 536, supra.

RAND.C.P.-142

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also.26 But where the payee's charter only authorizes it to take premium notes payable "within 12 months," and an original note is held on that account to be void, because payable "12 months after date," the renewal of such note may cure the defect." On the other hand, if a note is held in trust, the renewal will be subject to the same trust, if it can be identified in the hands of the payee.728 The renewal of a note will, in like manner, bear the character of the original, as regards a homestead exemption law.72

727

In other cases, a renewal has been held to destroy the former contract, or to waive the defenses belonging to it; 730 e. g. to bring it within the meaning of an intervening law as to insolvent debtors, which was not applicable to the original note.731 But the drawer of a lost draft will not be liable on a "duplicate" for it, if he has been already discharged without his knowledge by the holder's laches as to the original draft.732 So, if the maker renews a note, which has been altered, without notice of the alteration.733 On the other hand, where a note is made payable when a railroad is completed, and another note is afterwards substituted, payable at a certain time, it will be a waiver of the condition of the first note.734 But if a machine is sold with a warranty, and a note is given for it, the renewal of the note will not be conclusive evidence of the waiver of a claim growing out of the prior breach of warranty.735

Original Consideration-Illegality.

§ 1584. A bill of exchange given in renewal is, in general, subject to any defense based upon the consideration of the original

726 Thomson v. Hester, 55 Miss. 656. And see § 1534, supra.

727 Osgood v. Toole, 1 Hun (N. Y.) 167.

728 Andrews v. Bank, 3 Allen (Mass.) 313.

729 Wood v. Lord, 51 N. H. 448. So, obiter, Strachn v. Foss, 42 N. H. 43; Kibbey v. Jones, 7 Bush (Ky.) 243.

730 Wickenkamp v. Wickenkamp, 77 Ill. 92.

731 Wyman v. Fabens, 111 Mass. 77.

732 Benton v. Martin, 40 N. Y. 345. See § 1191, supra.

733 Fraker v. Cullum, 21 Kan. 555.

734 Four Mile Val. R. Co. v. Bailey, 18 Ohio St. 208; O'Donald v. Railroad Co., 14 Ind. 259.

735 Aultman v. Wheeler, 49 Iowa, 647.

bill. If the original is without consideration, and is therefore void, the renewal will be so.737 But it has been held that an extension of time to the maker, coupled with a release of the original indorser, will even in such case be a good consideration for the renewal.738 If the original consideration was illegal, the defense may be set up, in like manner, to the renewal,7 739 unless the renewal is made to a bona fide holder of the original note.740 So, fraud in the original note is admissible against the original payee as a defense to the renewal.741

But if a note made by A. to B., and indorsed by C. and D., and afterwards by B., is taken up by a bill drawn by C. on D., and accepted by D., thereby releasing A., the defendant in a suit upon the bill cannot go into the consideration of the original note."* 742 So, if a second note is sent by the indorser of the first note to his indorsee for the purpose of renewal, and the renewal is refused by the indorsee, but the new note afterwards purchased by him from the maker with full notice, he cannot deny, in an action upon the first note, that he took the second note for the intended purpose of a renewal. If, however, an original note is made to a national bank for a loan by the payee exceeding the legal restrictions, and the

736 Hynds v. Hays, 25 Ind. 31. If the original consideration is good, it supports the renewal. King v. Doane, 139 U. S. 166, 11 Sup. Ct. 465. If it fails, the renewal fails. Wheelock v. Berkeley, 138 Ill. 153, 27 N. E. 942; Tyler v. Anderson, 106 Ind. 185, 6 N. E. 600; Hooker v. Hubbard, 97 Mass. 175, s. c. 102 Mass. 239. So, the original note is not a waiver of partial failure of the original agreement, where damages were claimed and reserved at the time. Davis Provision Co. v. Fowler, 20 App. Div. 626, 47 N. Y. Supp. 205.

137 Hill v. Buckminster, 5 Pick. (Mass.) 391; Royer v. Bank, 83 Pa. St. 248; Turle v. Sargent, 63 Minn. 211, 65 N. W. 349.

738 Gatzmer v. Pierce, 13 Phila. (Pa.) 88.

739 Holden v. Cosgrove, 12 Gray (Mass.) 216; Alabama Nat. Bank v. Halsey, 109 Ala. 393, 19 South. 522. So, if void for coverture. Union Stock-Yards Nat. Bank v. Coffman, 101 Iowa, 594, 70 N. W. 693; Comings v. Leedy, 114 Mo. 454, 21 S. W. 804; Continental Nat. Bank v. Clarke (Ala.) 22 South. 988. But renewal by the widow is a waiver. Harrisburg Nat. Bank v. Bradshaw,

178 Pa. St. 180, 35 Atl. 629.

740 Calvert v. Williams, 64 N. C. 168.

741 Case v. Grim, 77 Ind. 565; though the original note had been transferred, and retransferred to the payee, Sawyer v. Wiswell, 9 Allen (Mass.) 39.

742 Estep v. Burke, 19 Ind. 87.

743 Hooker v. Hubbard, 97 Mass. 175, affirmed in 102 Mass. 239.