3 ns. 213, Tom v. Goodrich. 5 Mass. 11, Banorgee v. J. B. Moore 157, (4 E. C. L. Rep. 410) Godson v. e contract, the latter is not extinguished. 3 Barn. & wopenny v. Young. Facts not under seal, whether written or merely verbal, are of gree; and therefore the acceptance of a promissory note, which - a simple contract, does not extinguish the preexisting debt. Wil- A creditor, however, who accepts a bill or note in payment of a pre- [69 a] lateral securities, and the creditor may pursue his remedy on either, or both, at his election. The giving of a new security which, in itself, would not operate as an extinguishment of the original one, cannot operate as such by being pursued to judgment. A judgment recovered in any form of action is still but a security for the original cause of action, until it be made productive in satisfaction to the party; and therefore, till then, it cannot operate to change or extinguish any other collateral concurrent remedy. 3 East. 251, Drake v. Mitchell. So the contract of a stranger as surety or guarantor, though by an instrument of a higher nature, does not extinguish the debt of the principal. 6 T. R. 177, White v. Cuyler. See also Hooper's case, 2 Leon. 110, and Pudsey's case, cited 5 Mass. 25. So a bond and warrant of attorney given as a collateral security for a debt, does not, though of a higher nature, and although judgment may have been rendered on such collateral security, extinguish the original contract, if the judgment remains unsatisfied. And if a higher security be between different parties, or for other debts besides the original one, and not for the exact amount of that debt, it will be presumed that it was intended only as collateral security. 14 Johns. 404, Day v. Leal. 5 Mass. 25, Banorgee v. Hovey. So a simple contract is not extinguished by a sealed instrument which merely recognizes the debt and fixes the mode of ascertaining the amount. 7 Cranch 299, Bank of Columbia v. Patterson. And a covenant under seal, to come to a settlement in a limited time, and to pay the balance which may be found due, is merely collateral, and cannot be pleaded as an extinguishment of a simple contract; the period within which the settlement was to be made having elapsed before the action brought, and the plea not averring that any such settlement had been made. 9 Wheat. 556, Baits v. Peters. And the official bond of the receiver of public monics does not extinguish the simple contract debt arising from a balance of account due from him to the U. States, and an action of assumpsit for the balance of the account, and an action of debt upon the bond against the principal and sureties, may be maintained at the same time. 9 Wheat. 651, Walton v. U. States. A debt due for rent issuing out of the realty is of equal degree with a debt due on a bond; and therefore if an action be brought for rent due from a testator, the executor cannot plead a bond made by him for the same rent, not yet satisfied, nor e contra; for being of equal degree, one cannot be a bar to the other; and in such case there is no difference between rent due upon a lease by parol and a lease by indenture; for in both cases the rent is of the same quality. Com. Rep. 67, Gage v. Acton. 4 Mod. 44, Newport v. Godfrey, affirmed on error, 12 Mod. Com. Rep. 145, Stonehouse v. Ilford. And a bond given for rent in arrear on a parol lease, is no bar to an action of assumpsit for use and occupation. 20 Johns. 407, Cornell v. Lamb. And even a judgment on a covenant for the payment of rent is not, without satisfaction, an extinguishment of the rent; and the lessor may, notwithstanding such judgment, distrain for the rent in arrear. 13 Johns. 240, Chipman v. Martin. 7. On the other hand it is also a general rule that the acceptance of a higher security, (as if a simple contract creditor take a bond for the debt, or if a bond creditor obtain judgment on the bond, or have a judgment acknowledged to him on the bond,) is an extinguishment of the former debt, and he cannot afterwards bring an action upon the former contract. Bac. Abr. tit. Extinguishment D. 2 Johns. 308, Curson v. Montairo. 6 Co 44, Higgins' case. 20 Johns. 409, Cornell v. Lamb. 3 East 258, Drake v. Mitchell; but whether a foreign judgment would be an extinguishment, quære et vide, 1 East 432. So a specialty entered into by one partner in the name of the copartnership, though binding on him alone, is an extinguishment of the simple contract debt due from the partnership to the obligee. 3 Johns. Ca. 180, Clement v. son. Brush. 2 Johns. 213, Tom v. Goodrich. 5 Mass. 11, Banorgee v. Hovey. And if such specialty was also executed by a third person as surety, and he pays the debt, his only remedy is against the individual partner who executed it as principal. Tom v. Goodrich ub. sup. So a judgment obtained against one of several joint contractors extinguishes the original contract as to all the others. 13 Mass. 148, Ward v. John18 Johns. 459, Robertson v. Smith; but see 6 Cranch 253, Sheehy v. Mandeville cont. ; but if the contract was a joint and several promissory note, a judgment against one would not extinguish the contract as to the others. 5 Bos. & Pull. 475, Ayrey v. Davenport. And if, in an action of assumpsit against an administratrix, she plead in abatement that others were jointly liable with the testator, and fail to prove it, in consequence of which the plaintiff recovers a verdict and merly nominal damages, such verdict does not extinguish the original contract, so as to bar the plaintiff from recovering against the other contractors in a subsequent action. 2 J. B. Moore 157, (4 E. C. L. Rep. 410) Godson v. Smith. And where a specialty is given as a collateral or further security for a simple contract, the latter is not extinguished. 3 Barn. & Cres. 208, Twopenny v. Young. All contracts not under seal, whether written or merely verbal, are of equal degree; and therefore the acceptance of a promissory note, which is but a simple contract, does not extinguish the preexisting debt. Willes 406, Scott v. Surnam. 2 Str. 1218, Taylor v. Wasteneys. But if a person takes a bill or note in payment of a former debt, or of a debt created at the time, he cannot legally commence an action on his original debt, until such bill or note becomes payable, or default is made in the payment or acceptance; for the receiving of such bill or note amounts to an agreement to give credit for the length of time it has to run. The right of action is thus suspended, though not extinguished. 3 Bos. & Pul. 582, Dutton v. Solomon. 1 Esp. 3, Stedman v. Gocch. If in a case of this kind, the bill or note which is given in payment turns out not to be productive, and proves to be of no value, it is not that which it purports to be, and which the party receiving it expected, and therefore he may consider it a nullity, resort to his original demand, and act as if no such bill or note had been given. 1 T. R. 52, Puckford v. Maxwell. 7 T. R. 60, Owenson v. Morse. So bills, in lieu of which other bills have been given, if permitted to remain with the holder, may be sued upon, if the substituted bills are not paid. 3 Mau. & Sel. 362, Bishop v. Rowe. A creditor, however, who accepts a bill or note in payment of a precedent debt, cannot proceed in an action for such debt without showing that he has used due diligence to obtain payment of such bill or note, and, if the defendant was a party thereto, that he was duly notified of its dishonor. 2 Wils. 353, Chamberlyn v. Delarive. 3 Taunt. 130, Bridges v. Berry; but if the defendant was not a party to the bill or note, it will be sufficient for the plaintiff to show a due presentment for acceptance or payment, without showing that he gave the defendant notice of its dishonor, unless the defendant can show that he has sustained some actual loss for want of such notice. 3 Mau. & Sel. 362, Bishop v. Rowe. 7 Taunt. 312, Hickling v. Hardy. And in general, when the holder has been guilty of neglect, either by not presenting the bill, or by not giving notice, or by giving time to the acceptor, this conduct will render the original delivery of the bill or note equivalent to the payment of the debt, and discharge the debtor from all liability. 6 Mod. 147, Popley v. Ashley. 2 Wils. 353, Chamberlyn v. Delarive. And where there is no antecedent debt, as if A. carries a bill to B. to be discounted, and B. discounts it without taking A's name upon it, if it is dishonoured, A. has no demand against B.; for there was no relation between the parties except that transaction, and the circumstance of not [69 b] [69 c] taking the name upon the bill, is evidence of the purchase of it. 10 Ves. Jr. 206, Ex parte Blackburn. Such are the doctrines which prevail, on this point, in England. In Massachusetts, when a creditor accepts from his debtor a negotiable note for a debt due on simple contract, the legal presumption is that the note was received as payment absolutely, and no action can afterwards be maintained on the original contract. This presumption however may be controlled by the agreement of the parties; 6 Mass. 143, Maneely v. M'Gee. 5 Mass. 299, Thacher v. Dinsmore; and the presumption is the other way when the creditor receives a note not negotiable. 4 Mass. 93, Greenwood v. Curtis. Maneely v. M'Gee, ub. sup. A negotiable promissory note given by one part owner of a vessel, for supplies furnished the vessel, discharges the other owners from their liability for such supplies. 10 Mass. 47, Chapman v. Durant. And if a creditor accepts from his debtor the note of a third person in payment, this operates as a complete discharge of the original debtor, and the note so taken is at the risk of the creditor, unless the contrary be agreed. 7 Mass. 286, Wiseman v. Lyman. So if upon a sale of merchandize, the vendor receives certain notes of a third person in payment, and the notes are afterwards discovered to be forged, of which fact the vendee was ignorant, the vendor cannot afterwards resort to the vendee for payment for the merchandize; but it would be otherwise if the sale had been for cash and the notes were received by the vendor as an accommodation to the vendee; 6 Mass. 321, Ellis v. Wild. 17 Mass. 27, Salem Bank v. Gloucester Bank; and it would also be otherwise if the payment had been ignorantly made in forged bank notes. 6 Mass. 182, Young v. Adams. 17 Mass. 33, Gloucester Bank v. Salem Bank. In New York a bill or note either of the debtor or of a third person is not an absolute payment of a precedent debt, unless it is so specially agreed by the parties; and if upon receiving such bill or note the creditor gives a receipt absolute in its terms, such receipt is not conclusive evidence that it was so agreed. 2 Johns. Ca. 438, Murray v. Gouverneur. 3 Johns. Ca. 71, Herring v. Sanger. 5 Johns. 68, Tobey v. Barker. 9 Johns. 310, Johnson v. Weed. 8 Johns. 389, Putnam v. Lewis. A note, accordingly, given by one part owner of a vessel for supplies furnished the vessel, and a receipt in full thereupon, will not discharge the other part owners. 7 Johns. 311, Schermerhorn v. Loines; but where a note was given by a partnership, and the payee afterwards took the individual note of one of the partners for the amount, and gave up the partnership note, it was held that this extinguished the partnership debt. 12 Johns. 409, Arnold v. Camp. So if, upon a sale of merchandize, the vendor receives payment in notes of a third person, or in bank notes, which prove to be forged, or of no value, of which fact the vendee was ignorant, the vendor may treat such payment as a nullity and resort to the vendee on the original contract for goods sold and delivered. 2 Johns. 455, Markle v. Hatfield. But it would have been different if it had been a part of the original agreement to take them as absolute payment, and run the risk of their genuineness and of their being paid. 2 Caines 120, Roget v. Merritt; and where, on the sale of goods, the vendee delivers to the vendor the promissory note of a third person which he refuses to endorse, it will be considered absolute payment; and the vendor cannot afterwards resort to the vendee, unless the note was forged, or there was fraud or misrepresentation on the part of the vendee as to the solvency of the maker. 15 Johns. 241, Breed v. Cook. 11 Johns. 409, Whitbeck v. Van Ness. From this brief review of the decisions in Massachusetts and New York, it appears that a number of cases, precisely analogous, have occurred in the two States respectively, in which their adjudications have been directly contrary to each other. A moment's reflection, however, tions. will evince that they differ, not in their principles, but in their presumpIn Massachusetts, when a creditor accepts a note from his debtor, the presumption is that it was received as an absolute payment of the preexisting debt. In New York, the presumption is that it was only conditional payment. In Massachusetts, therefore, in an action on the original contract, the defendant has to prove only that the plaintiff has accepted a negotiable note, and the onus probandi is then thrown upon the plaintiff, to show that, by the special agreement of the parties, it was received only as a conditional payment; whereas, in New York, this is the legal presumption from the facts, and the onus still lies on the defendant to prove that the payment was absolute. But in both States the agreement of the parties, however ascertained, will be carried into effect. The decisions in New York are more in conformity with the English authorities. In the Supreme Court of the U. States, it has been held that a note of a third person, endorsed by the purchaser of goods to the vendor as a conditional payment for the goods, will discharge the purchaser, unless the vendor use due diligence to obtain the money due on such note; 1 Cranch 192, Clark v. Young; that where the vendor has passed away the note so received, he cannot maintain an action on the original contract; 3 Cranch 311, Harris v. Johnson; and that a promissory note given and received in discharge of an open account is a bar to an action on the open account, though the note be not paid. 6 Cranch 311, Sheehy v. Mandeville. It may be useful, in this place, to consider the rules as to the application of a payment made by a debtor to his creditor, where such payinent is capable of several applications. 1. The first general rule is that the party who pays the money has the right to apply it as he chooses; and therefore, where there are more accounts than one between a debtor and his creditor, e. g. one debt on bond and another on simple contract, if the debtor, when he pays the money, declares that he pays it specifically on either of the accounts, the creditor cannot place it to the other. Cro. El. 68, Anon. 2 Caines 99, Mann v. Marsh. Coleman and Caines' Cases, 365. S. C. The intention of the party paying the money is sometimes inferred from the circumstances of the particular case, without any express direction as to its application. Thus where a trader owed £200, and after he had ceased to trade, incurred a further debt, and then paid money without expressly directing its application, the law will presume it was paid on account of the first debt, so as to prevent the creditor from taking out a commission of bankruptcy, if sufficient has been paid to reduce the debt contracted while the party was a trader, under £100. Peake's Ca. 64, Dawe v. Holdsworth. 5 Taunt. 596, Peters v. Anderson. 1 Ld. Raymond 286, Meggot v. Mills. So where one account is with the debtor in his own right, and the other in alieno jure, as executor, &c., the law will presume the payment to have been made by the debtor on account of himself individually, and will not permit the creditor to apply it to the account against the testator. 2 Str. 1194, Goddard v. Cox. So where security was given by a surety for goods to be supplied to his principal, and not in respect of a preexisting debt, and goods were subsequently supplied, and payments, from time to time, were made by the principal, in respect to some of which discount was allowed for prompt payment, it was inferred, in favor of the surety, that all the payments were intended in liquidation of the latter account. 2 Starkie's Ca. 101, Marryatts v. White. So where the payment exceeds one of the demands, and is exactly equal to what remains due on the other, it will be considered as having been paid on account of that other. 3 Caines 14, Robert v. Garnie. So a positive refusal to pay one debt and an [69 d] |