372 CHAPTER Suspends the remedy on a simple contract. CHAPTER XXIII. HOW FAR A BILL OR NOTE IS CONSIDERED AS THOUGH it be a general rule of law, that one simple contract cannot be satisfied by another similar executory contract (a), for that is merely substituting one cause of action for another, yet the delivery of a valid bill or note suspends the creditor's remedy for a debt, and if he either receive the money on the instrument, or be guilty of laches, it operates as a complete satisfaction (b). "The law," says Lord Kenyon, "is clear, that if, in payment of a debt, the creditor is content to take a bill or note payable at a future day, he cannot legally commence an action on his original debt, until such bill or note becomes payable, and default is made in the payment; but, if a bill or note is of no value, as if, for example, drawn on a person who has no effects of the drawer in his hands, and who, therefore, refuses it, in such case he may consider it as waste paper, and resort to the original demand, and sue the debtor on it" (c). The taking a bill or note from the original debtor, (a) But see Com. Dig. Accord, B.; Good v. Cheesman, 2 B. & Ad. 328; 4 C. & P. 513; Cartwright v. Cook, 3 B. & Ad. 701; Garrard v. Woolner, 8 Bing. 258; 1 M. & Sc. 327; Carter v. Wormald, 1 Exch. 81. (b) 3 & 4 Anne, c. 9, s. 7; Sibree v. Tripp, 15 L. J., Exch. 318; 15 M. & W. 23. (c) Stedman v. Gooch, 1 Esp. 3; Kearslake v. Morgan, 5 T. R. 513. or from a third person (d), amounts to an agreement to give the debtor credit for the time it has to run; but when that time has expired, and the bill or note is in the hands of the creditor unpaid, the liability of the debtor on the original debt revives (e). CHAPTER XXIII. But a creditor may agree to take for a debt already due Collateral a bill as a collateral security, without affecting his present security. right to sue for that debt. A creditor who takes from his debtor as collateral security only a bill indorsed by his debtor, as he is trustee of the rights, so he is bound by the duties of a holder, and if he neglects to present or give notice of dishonour to his debtor, the debtor is discharged, for no one but the actual holder can perform these duties (f). It is not essential to plead the taking of a negotiable Form of instrument, either as payment or as satisfaction. In pleading. answer to an action for a debt, it is sufficient to allege that a bill or note, payable to order or bearer, was delivered for and on account of the sum due (g), and that the bill or note has been or is running, or that it is in the hands of a third person (h). But a plea was not double, which alleged both that the bill was taken for and on account, and also in payment (i). But the liberty of pleading that a bill or note was given or taken on account was confined to the case of such instruments. It must have appeared on the face of the plea that the bill or note was payable to order or to bearer, otherwise the plea would be bad, even after verdict (k). The payment of a substituted note, though given by a An unsatisfied judgment on the bill alone will not destroy the original debt. Tarleton v. Allhusen, 2 Ad. & Ell. 32. (d) Bellshaw v. Bush, 11 C. B. 131; Bottomley v. Nuttall, 28 L. J., C. P. 110; 5 C. B., N. S. 122. (e) The law on this subject in the United States is not uniform, and subject to many distinctions. Byles on Bills, 6th American ed. p. 568. (f) Peacock v. Pursell, 32 L. J. 256. (g) Kearslake v. Morgan, 5 T. R. 513; see Griffiths v. Owen, 13 M. & W. 58. (h) Price v. Price, 16 M. & W. (i) Maillard v. Duke of Argyle, (k) James v. Williams, 13 M. & CHAPTER stranger, has been held, in an action on the first note, XXIII. admissible under a plea of payment (1). Not on a contract under scal. Does not sus The taking a bill or note from a party bound by a contract under seal does not extinguish or suspend the remedy on the specialty, unless the bill or note be actually paid. Thus, where one of three joint covenantors gave a bill of exchange for part of a debt secured by the covenant, it was held that the bill only operated as a collateral security, not affecting the remedy on the covenant, and even though judgment had been obtained on the bill; Le Blanc, J., observing, "The giving of another security, which, in itself, would operate as an extinguishment of the original one, cannot operate as such by being pursued to judgment, unless it produce the fruit of a judgment" (m). Where a tenant gave a note of hand for arrears of rent, pend distress. it was held that the landlord might nevertheless distrain, for the note was no alteration of the debt till after payment (n). Note in payment of an attorney's bill. The Attorneys and Solicitors Act, 6 & 7 Vict. c. 73, s. 21, enacts, that an application to tax an attorney's or solicitor's bill must be made within twelve months after payment. Where a promissory note is given for an attorney's bill payable at a future day, the twelve months run from the time the note was paid, and not from time it was given, unless it were treated as payment at that time (0). Consequence If the debtor, instead of paying the creditor, directs him of a creditor to take a bill of a third person, which the creditor does, taking bills of and the bill is dishonoured, the liability of the original debtor revives (p); and it is not necessary to give the a third person. (1) Thorne v. Smith, 20 L. J., C. P. 71; 7 C. P. 659. (m) Drake v. Mitchell, East, 251; and see Curtis v. Rush, 2 Ves. & B. 416. (n) Harris v. Shipway, 1744; Ewer v. Lady Clifton, C. B., Trin. T. 1735; Bull. N. P. 182; Palfrey v. Baker, 3 Price, 572; Davis v. Gyde, 2 Ad. & Ell. 623; 4 N. & M. 462. Even a bond given for rent does not extinguish it. Rent, though due on a parol lease, is of as high a nature as an obligation. 11 Vin. Ab. 289. (0) Sayer v. Wagstaff, 5 Beav. 415; In re Harries, 13 M. & W. 3; In re Wilton, Q. B. 847. (p) Marsh v. Pedder, 4 Camp. 257; Holt, N. P. C. 72; Ex parte Dickson, cited 6 T. R. 142; Taylor v. Briggs, M. & M. 28; and see Robinson v. Read, 9 B. & C. 449; 4 Man. & Ry. 349. original debtor notice of the dishonour (7). The bill or note CHAPTER must be presented within a reasonable time (r). So if the creditor, not having the option of taking cash, takes of his own accord a bill of his debtor's agent, the debtor is not discharged (s). But if the debtor refer his creditor to a third person for payment generally, and the creditor, having the option of taking cash, elects to take a bill which is dishonoured, the original debtor is discharged (t). XXIII. debtor's bill. The consequence of giving a bill to an agent, an auc- Of the credi tioneer, for example, who has no authority to receive tor's agent anything but cash, is, that the party giving the bill is not taking the discharged from the demand of the principal, although the bill fall due at the period when the debt ought to have been discharged, and be regularly paid to the holder (u). The taking of his separate bill from one of several partners for a joint debt, will, as we have seen, discharge the others. Such a transaction imports an agreement between the creditor and the firm, that the creditor shall rest on the liability of the one partner alone, and shall discharge the others; that is, an accord -and the separate bill is a satisfaction. For the separate liability of one partner may, in many cases, be more advantageous than his joint liability with others. It is not extinguished, at law, by his predecease; in the event of a separate adjudication of bankruptcy against him, it would be satisfied before joint debts (x), and it avoids difficulties which might arise in suing him with another defendant (y). (q) Swinyard v. Bowes, 5 M. & S. 62. (r) Chamberlyn v. Delarive, 2 Wilson, 354. (s) Robinson v. Read, 9 B. & C. 444; Marsh v. Pedder, Holt, N. P. C. 72; 4 Camp. 257. (t) Strong v. Hart, 6 B. & C. 160; 9 D. & R. 189; 2 C. & P. 55; Smith v. Ferrand, 7 B. & C. 19; 9 D. & R. 803; and see Baillie v. Moore, 15 L. J., Q. B. 169; 8 Q. B. 489. (u) Sykes v. Giles, 5 M. & W. 645; Williams v. Evans, 1 Law Rep., Q. B. 352; Catterall v. Hindle, 1 Law Rep., C. P. 186. A cheque duly honoured is equivalent to cash; thus, when the steward of a manor received payment from a copyholder by a crossed cheque, which was duly (x) 6 Geo. 4, c. 16, s. 62; 12 & (y) Evans v. Drummond, 4 Esp. 82; Reed v. White, 5 Esp. 122; Thompson v. Percival, 5 B. & Ad. 925; 3 N. & M. 667. CHAPTER What a cre a dishonoured bill must prove. Where the creditor's rights against an original debtor are reserved, whether by express agreement (z), or by the nature of the transaction, or by the original debtor's name being on the new bill, the taking of the bill of one of several, or of a stranger, does not discharge the original debtor. Where a debtor indorses a bill to his creditor, the creditor ditor who has cannot sue for his debt without proving presentment of the been paid by bill and notice of dishonour (a). But where he does not indorse it, it seems sufficient for the creditor, when suing for the original debt, to show that the bill still remains in his hands, without proving presentment (b), or notice of dishonour (c); for that is presumptive evidence of dishonour, sufficient to throw it on the defendant to show that the bill has been paid. Where the transferor strument to be of no value. If the party who gave the bill in payment as a good bill knew at the time that it was of no value, or fraudulently knew the in- misrepresented the solvency of parties to it (d), the holder, on discovering the fraud, may immediately sue such party on his original liability; or, if the bill were given for goods, delivered at the time, he may disaffirm the contract, and sue in trover for the goods. Thus, where a vendee, under terms to pay for goods on delivery, obtained possession of them by giving a cheque which was afterwards dishonoured, Lord Tenterden said, "If the vendee had reasonable ground to expect that the cheque would be paid, the transaction was not fraudulent, and the property would pass to him if he had not reasonable ground for so expecting, the transaction was fraudulent, and the vendors are entitled to recover their property in an action of trover" (e). A lost or de A negotiable bill or note given in discharge of a debt, and stroyed bill, then lost or destroyed, is at common law payment (ƒ); but when pay ment. (2) Bedford v. Deakin, 2 Stark. 178; 2 B. & Ald. 210. (a) Kearslake v. Morgan, 5 T. R. 513; Bridges v. Berry, 3 Taunt. 130. (b) Goodwin v. Coates, 1 M. & Rob. 221. (c) Bishop v. Rowe, 3 M. & Sel. 362. (d) Byles on Bills, 6th American ed. p. 575. (c) Hawse v. Crowe, 1 R. & M. 414; Puckford v. Maxwell, 6 T. R. 52; Owenson v. Morse, 7 T. R. 64; Bishop v. Shillito, 2 B. & Ald. 329, n.; Taylor v. Plumer, 3 M. & Sel. 562; Brown v. Kewley, 2 B. & P. 518; Gladstone v. Hadwen, 1 M. & Sel. 517; Noble v. Adams, 7 Taunt. 59; Earl o Bristol v. Wilsmore, 1 B. & C. 514; 2 D. & R. 755; Kilby v. Wilson, 1 R. & M. 178. See the American authorities to the same effect, Byles on Bills, 6th American ed. pp. 37, 450, 574. (f) Woodford v. Whiteley, M. & M. 517; Crowe v. Clay, 9 |