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tion, but disprove the payment of the bill given for it. Where the surrender of a note has been procured by the maker's fraud, the holder may sue upon the tort, or waive the tort and sue for money had and received. If several actions are brought by one holder of different notes, which have all matured before suit brought, they will not be consolidated under the old practice at common law, and in the absence of any rule of court to that effect. But under the present English practice the plaintiff is entitled in such case to the costs in one suit only."

In general, the procedure upon bills and notes is of a summary character in most foreign countries. In Great Britain summary proceedings were provided for in 1855, if brought within six months after maturity of the paper; and the holder may "at once sign final judgment," not exceeding the amount indorsed on the writ, with interest and costs, on proof of personal service, the defendant being let in to defend, within 12 days after service of the writ, on payment into court of the sum named, or affidavit of satisfactory defense, and on such terms as the court may judge fit. This act has been held to apply to checks and to demand notes (the term of six months running from the date of the note), but not to a promise to pay in installments, maturing on default of any payment, with a provision that indulgence to one party shall not prejudice proceedings against another."

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Action of "Debt."

§ 1674. At common law, an action of “debt" may be brought by the payee of a note against the maker, 10 or by the drawer against

2 Byles, Bills, 420; 2 Pars. Notes & B. 436; Hebden v. Hartsink, 4 Esp. 46; Bishop v. Rowe, 3 Maule & S. 362.

3 Penobscot R. Co. v. Mayo, 67 Me. 470.

4 Bank of Alexandria v. Young, 1 Cranch, C. C. 458, Fed. Cas. No. 857.

5 Jackson v. Freeman, 20 Wkly. Rep. 683.

6 18 & 19 Vict. c. 67, § 1.

7 Rochford v. Daniel, 1 Fost. & F. 602; Eyre v. Waller, 5 Hurl. & N. 460.

8 Maltby v. Murrells, 5 Hurl. & N. 813. 9 Kirkwood v. Smith [1896] 1 Q. B. 382. 10 Byles, Bills, 88; Chit. Bills, 773; pressed to be for “value received."

Bishop v. Young, 2 Bos. & P. 78, if ex-
So, without such expression. Hatch v.

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the acceptor of a bill purporting to be for value received, or against the drawer of such a bill by the payee,1 or by a remote indorsee, striking out intermediate indorsements.13 But debt cannot be brought on a note payable in installments until the whole has become due,14 nor on a collateral undertaking to pay the debt of another person,15 nor against the acceptor of a bill in favor of the payee,16 or of an indorsee.17

The most usual remedy, however, at common law, and, indeed, the only remedy formerly available against remote parties, was by action of "assumpsit." 18 This action may be brought by an indorsee against his immediate indorser.19 So, it may be brought against a corporation on a note executed for it by its agent.20 And in Massachusetts assumpsit lies on a note signed with a scroll, although where it was made the scroll was a lawful seal.21

Trayes, 11 Adol. & E. 702. And such action lies against the maker's executor. Childress v. Emory, 8 Wheat. 642.

11 Chit. Bills, 774; Priddy v. Henbrey, 1 Barn. & C. 674, 3 Dowl. & R. 165. Or by the payee or indorsee of such bill. Raborg v. Peyton, 2 Wheat. 385. So, in Virginia, by the indorsee of an inland bill against the acceptor. Vowell v. Alexander, 1 Cranch, C. C. 33, Fed. Cas. No. 17,017. In Virginia and West Virginia the statute provides for an action of debt on any note or writing,VIRGINIA (Code, § 285); whether sealed or not, WEST VIRGINIA (Code, c. 99, § 10).

12 Chit. Bills, 774; Hodges v. Steward, Skin. 346. So, where the drawer was payee and first indorser, and the action was brought by his immediate indorsee. Stratton v. Hill, 3 Price, 253, 2 Chit. 126. And the averment of a promise by the drawer after dishonor is surplusage, in a suit by the payee of a check against the drawer. Simpkins v. Pothecary, 5 Exch. 253.

13 Home v. Semple, 3 McLean, 150, Fed. Cas. No. 6,658.

14 Rudder v. Price, 1 H. Bl. 548.

15 Purslow v. Bailey, 2 Ld. Raym. 1040; Hodsden v. Harridge, 2 Saund. 61. 16 Chit. Bills, 774; Simmonds v. Parminter, 1 Wils. 185; Browne v. London, 1 Mod. 285, 1 Freem. 14.

17 Cloves v. Williams, 3 Bing. N. C. 868, 5 Scott, 68.

18 Chit. Bills, 534. But "debt" lies by an indorsee against the maker. Willmarth v. Crawford, 10 Wend. (N. Y.) 343. Or against his immediate indorser. Stratton v. Hill, 3 Price, 253. Or a remote indorser. Onondaga Co. Bank v. Bates, 3 Hill (N. Y.) 53.

19 Campbell v. Jordan, Hempst. 534, Fed. Cas. No. 2,362.

20 Proctor v. Webber, 1 D. Chip. (Vt.) 371.

21 McClees v. Burt, 5 Metc. 198.

Collateral-Parties Entitled.

§ 1675. The indorsement of a note generally carries with it a collateral mortgage or other security without formal assignment of the collateral.22 If property is conveyed to a trustee to secure three notes, and two of them are transferred, the indorsee may foreclose the trust deed, or compel its foreclosure.23 And, if a mortgage secures several notes, the decree may include those that have matured after suit begun, but before decree. Where an accommodation acceptance is secured by the drawer's trust deed and by certain notes representing another debt also, the holder of the bill may resort to the trust deed, if the notes have not been transferred by him to a bona fide holder.25 But where collateral is given to an indorser for his personal indemnity, it will not inure to the benefit of an accommodation acceptor,26 and such collateral will not be enforced in equi

22 Scott v. Turner, 15 La. Ann. 346; Mapps v. Sharpe, 32 III. 13; Adler v. Sargent, 109 Cal. 42, 41 Pac. 799; Kernohan v. Manss. 53 Ohio St. 118, 41 N. E. 258. And see §§ 731-733, supra. Mere delivery of the mortgage is sufficient. Green v. Hart, 1 Johns. (N. Y.) 580. See, too, § 1571, supra, as to renewal of note secured.

23 Sargent v. Howe, 21 Ill. 148. But property held in trust for several notes cannot be transferred to one cestui que trust to the prejudice of the others. Webster v. Mitchell, 22 Fed. 869. In general, such collateral belongs to all the notes secured pro rata, irrespective of possession of the collateral. Lewis v. Farrell, 51 Conn. 216. Or of priority in maturity. Jennings v. Moore, 83 Mich. 233, 47 N. W. 127; Shields v. Dyer, 86 Tenn. 41, 5 S. W. 439. Or in judgment recovered. Aaron v. Warner, 62 Miss. 370. And see § 1506, supra. But he takes subject to the agreement as to priorities made before transfer to him. Nashville Trust Co. v. Smythe, 94 Tenn. 513, 29 S. W. 903.

24 Williams v. Creswell, 51 Miss. 817.

25 Toulmin v. Hamilton, 7 Ala. 362. But the indorsee is not entitled to collateral given the acceptor, as against a bona fide purchaser of the land after release by the drawer. St. Louis Bldg. & Sav. Ass'n v. Clark, 36 Mo. 601. In like manner, collateral given to a surety by the principal debtor may be reached by the holder, by a bill in equity. Merchants' & Manufacturers' Nat. Bank of Middletown v. Cummings, 79 Hun, 397, 29 N. Y. Supp. 782.

26 Cooper v. Platt, 39 Pa. St. 528. But if the indorser of a note, who is a surety for the maker, pays the note, and afterwards surrenders collateral received by him from the principal maker for his indemnity, he will discharge pro tanto a co-maker who was also surety for the same principal. Kirkpatrick v. Howk, 80 Ill. 122.

ty in favor of the holder of a bill until ordinary remedies are exhausted. Where a bill of lading is attached to a bill of exchange, the drawee is entitled to it on acceptance, and the holder cannot refuse to deliver it until payment, and protest the bill for nonacceptance on the drawee's refusal to accept without it.28

In like manner, a collateral vendor's lien goes with the transfer of a note, and may be enforced by the assignee.29 And in Mississippi, if a note is made for the purchase of land, an assignee of the note may sue for performance of the contract of sale.30 But where a note is given for a sewing machine, the right of property being reserved in the payee until the note is paid, transfer of the note will not enable an indorsee to bring replevin for the machine on nonpayment of the note, although it may prevent the payee from bringing trover against a third party for the machine.32

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27 Ohio Life Insurance & Trust Co. v. Reeder, 18 Ohio, 35. But where the maker becomes bankrupt, a collateral mortgage given by him to his surety will inure in equity to the payee. Barton v. Croydon, 63 N. H. 417. But if the maker gives a mortgage to an indorser for his indemnity, it will be discharged if the indorser is discharged by the holder's laches, and a subsequent purchaser will have no claim upon it. Peets v. Wilson, 19 La. 478. On the other hand, where an accommodation indorsement has been fraudulently diverted, and used as collateral by the maker, the indorser is entitled to have all payments on the principal debt credited on the collateral note. State Sav. Bank v. Baker, 93 Va. 510, 25 S. E. 550.

28 Lanfear v. Blossman, 1 La. Ann. 148. And see § 1508, supra. If, however, the drawee refuses to accept the bill of exchange, the holder will be eutitled, as against him, to the goods consigned by the negotiable bill of lading attached. Davenport Nat. Bank v. Homeyer, 45 Mo. 145. And a bill of lading will inure to the holder of a bill of exchange, where it has been appropriated by the drawer and acceptor to that purpose, and both drawer and acceptor have become bankrupt, although the holder was ignorant of such appropriation. Ex parte Dever, 53 Law T. (N. S.) 131. And see § 1507, supra.

29 Sloan v. Campbell, 71 Mo. 387. Especially, if expressly reserved in the note. Hobson v. Edwards, 57 Miss. 128. And see § 732, supra. But the contrary rule has been laid down in Tennessee. Green v. Demoss, 10 Humph. 371, And in Alabama such lien does

overruling Eskridge v. McClure, 2 Yerg. 84. not pass if the note is transferred by the vendor without personal liability; and in that case a court of equity will not enforce it in favor of the assignee. Bankhead v. Owen, 60 Ala. 457; Barnett v. Riser's Ex'rs, 63 Ala. 347.

30 Boyce v. Francis, 56 Miss. 573.

31 Domestic Sewing Mach. Co. v. Arthurhultz, 63 Ind. 322.

82 Esty v. Graham, 46 N. H. 169.

Sale of Collateral.

§ 1676. The power of sale by the pledgee is under well-estab lished legal restrictions.33 And where collateral is delivered to the payee of a note, with authority to pledge it for certain purposes, and he consents to a sale by the pledgee without notice to the maker, he will be charged with its full value as a credit on the note.34

In general, the holder of collateral must collect and apply the proceeds, and cannot transfer the collateral without an express power of sale.35 Any sale except by express power of sale or statutory proceeding is a conversion, and acts as a payment up to its full value.36

But where a debtor receives notice that the creditor is about to sell the collateral, and apply the proceeds to the note, and makes no reply or objection, he will be deemed to have waived further notice of sale. If the payee of a note surrenders a collateral certificate of deposit without the maker's consent, and takes a note and mortgage from the bank for it, it will be a conversion of the collateral, and render the payee liable to the maker for its face, although the bank had already suspended when the certificate was given.38 But the burden of proof is on the party who alleges that the collateral has been improperly disposed of.39

Collateral for a note may be applied to the judgment afterwards rendered upon it,40 but not (as against the pledgor's assignee in

33 And see § 801 et seq., supra. In California, express provision for collateral, and its sale, may be contained in a negotiable instrument. Civ. Code, § 3092.

34 Washburn v. Pond, 2 Allen (Mass.) 474.

35 Richardson v. Ashby, 132 Mo. 238, 33 S. W. 806.

36 Richardson v. Ashby, supra; Pauly v. Wilson, 57 Fed. 548; Gilliam v. Davis, 7 Wash. 332, 35 Pac. 69. So, if he surrenders the collateral. Haas v. Bank, 41 Neb. 755, 60 N. W. 85.

37 Downer v. Whittier, 144 Mass. 448, 11 N. E. 585. So, as to unreasonable place of sale. Guinzburg v. H. W. Downs Co., 165 Mass. 467, 43 N. E. 195. So, a full and express power of sale may preclude objection as to unfavorable state of the market. Franklin Nat. Bank v. Newcombe, 1 App. Div. 294, 37 N. Y. Supp. 271.

38 Greenwald v. Metcalf, 28 Iowa, 363.

39 Vose v. Yulee, 4 Hun (N. Y.) 628.

40 Jenkins v. Bank, 111 Ill. 462.

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