Payment is also often made by the debtor's giving his own negotiable promissory note for the amount.1 In Massachusetts, such 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)2 And the same rule is recognized in Maine and Vermont. (r) 3

(p) Thacher v. Dinsmore, 6 Mass. 209. Whitcombe v. Williams, 4 Pick. 228.

(q) 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. This presumption is but prima 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. And see Thurston v. Blanchard, 22 Pick. 18; Melledge v. Boston Iron Company, 6 Cush. 158; Appleton v. Parker, 16 Gray, 178; Palmer v. Eliot, 1 Clifford, 68.

(r) Varner v. Nobleborough, 2 Greenl. 121, and note a; Descadillas v. Harris,

1 The effect of giving a note or a check is to suspend the remedy for the debt until its maturity. Currie v. Misa, L. R. 10 Ex. 153, 163; Jagger Iron Co. v. Walker, 76 N. Y. 521; Wilbur v. Jernegan, 11 B. I. 113; Huse v. McDaniel, 33 la. 406; Stevens v. Park, 73 Ill. 387; Kermeyer v. Newby, 14 Kan. 164. It may be agreed, however, that the note shall be absolute satisfaction. Wilbur v. Jernegan, 11 R. I. 113. And this may be implied. Haines v. Pearce, 41 Md. 221. See Swire v. Redman, 1 Q. B. D. 586, 540; Millerd v. Thorn, 56 N. Y. 402 ; Nightingale v. Chafee, 11 R. I. 609. Where the buyer was to give up a note of the seller's and pay the balance of the price of goods in cash, it was held that on the buyer's refusal to give up the note, the seller might recover the full contract price. Gray v. White, 108 Mass. 228. And, equally, if the maker of a note is, without the knowledge of both parties, insolvent, the party taking it can recover the full amount of the original debt. Roberts v. Fisher, 43 N. Y. 159. See Wright v. Lawton, 37 Conn. 167. Unaccepted bills are not presumed to be payment. Strang v. Hirst, 61 Me. 9.

2 This presumption is controlled where such effect would deprive the creditor of a security. Parham, etc. 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.

8 Strang v. Hirst, 61 Me. 9; Mehan v. Thompson, 71 Me. 492. Also in Illinois and Indiana and Oregon. Morrison v. Smith, 81 Ill. 221; Frazer v. Boss, 66 Ind. 1 ; Maxwell v. Day, 45 Ind. 509; Matasce v. Hughes, 7 Oreg. 39. The receipt of the worthless note of a third person fraudulently represented by a vendee to be solvent will not prevent the vendor from recovering from the vendee the amount for which the note was accredited in payment of goods sold. Vallier v. Ditson, 74 Me. 553. In California, to make a note prima facie payment, there must be an express agreement. Brown v. Olmsted, 50 Cal. 162. In Pennsylvania a draft of a third person, for a preexisting debt is presumed to be a conditional payment. League v. Waring, 85 Penn. St 244. In West Virginia a note is not absolute payment unless it is so expressly agreed. Poole v. Rice, 9 W. Va. 73.

But even in this the law in those States differs from the rule as held in the courts of the United States, and of 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

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)

*7. Of Payment by Delegation. *626

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 equivalent to payment. (u) Where * bankers receive funds from a debtor, to be by them transmitted through their foreign correspondents to a foreign creditor, it seems that the bankers are not liable if they pass it to the credit of their foreign correspondents, and give notice to them to pay it over to the creditor, and afterwards accept bills drawn on them by the foreign correspondents, although the foreign correspondents become bankrupts before the notice reaches them, and do not transmit the money to the creditors. (v) The rule seems to rest on the fact that the bankers had done all that was to be expected of them, and all that they had undertaken to do.

8 Greenl. 296; Newall v. Hussay, 18 Me. 249; Bangor v. Warren. 34 Me. 324; Fowler v. Ludwig, id. 455; Shumway v. Reed, id. 660; Gilmore v. Bussey, 3 Fairf. 418; Comstock v. Smith, 23 Me. 302; Gooding v. Morgan, 37 Me. 419. But this rule never applies to notes not negotiable. Trustees, etc. v. Kendrick, 3 Fairf. 381; Edmond v. Caldwell, 16 Me. 340; Wait v. Brewster, 81 Vt. 616. It is likewise held, in Dixon v. Dixon, et al. 31 Vt. 460, as well settled, that a note received in payment of a pre-existing debt is received and held upon valid and valuable consideration.

(s) Peter v. Beverly, 10 Pet. 667; Sheehy v. Manderille, 6 Crunch, 268; Wallace v, Agry, 4 Mason, 336; Smith v. Smith, 7 Foster, 244; Van Ostrand v. Reed, 1 Wend. 424; Burdick v. Green, 16

Johns. 247; Hughes v. Wheeler, 8 Cowen, 77; Booth v. Smith, 3 Wend. 66; Bill v. Porter, 9 Conn. 23; Davidson v. Bridgeport, 8 Conn. 472; Elliott v. Sleeper, 2 N. H. 525; Frisbie v. Lamed, 21 Wend. 460; St John v. Purdy, 1 Sandf. 9; Hawley v, Foote, 19 Wend. 516; Cole v. Sackett, 1 Hill, 616; Waydell v. Luer, 6 Hill, 448; Van Eps v. Dillaye, 6 Barb. 244; Pratt v, Foote, 6 Seld. 468; Commercial Bank v. Bobo, 9 Rich. 31; Mooring v. Mobile M. D. & M. I. Co. 27 Ala. 264. For the English law upon this point see Crowe v. Clay, 9 Exch. 604, 26 Eng. L. & Eq. 454; Maxwell v. Deare, 8 Moore, P. C. 863, 26 Eng. L. & Eq. 66; Seymour v. Darrow, 31 Vt. 122. See post, p. 683.

(ss) Peacock v. Pursell, 14 C. B. (n. s.) 728.

1 Wilbur v. Jernegan, 11 R I 113; Nightingale v. Chafee, id. 609; Paine v. Voorhees, 26 Wis. 522; Aultman v. Jett, 42 id. 488; Aultmnn, etc. Co. v. Hetherington, id. 622. See Burkhalter v. Second Bank, 42 N. Y. 538; May v. Gamble, 14 Fla. 467. 8ee also Chamberlin v. Perkins, 55 N. H. 237, as to payment in purchaser's acceptances. In Brown v. Dunckel, 46 Mich. 29, where a debtor had sold to the plaintiff a horse which had previously been mortgaged to the defendant to secure a note, and subsequently a new note and mortgage were taken in place of the old, it was held in an action of replevin that the jury must determine whether under the circumstances the giving of the new note and mortgage amounted to a payment of the old.