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by the acceptor or maker, yet it may be paid, even by them any number of times before it is due, and may
be circulated anew between each payment. For example, the acceptor or maker of a bill or note, made or become payable to bearer, and not yet due, may pay the present holder, and straightway for a consideration give the instrument to another. Or if a bill payable to bearer be paid by the acceptor before it is due, and, instead of being destroyed, get lost, and the person finding it give it to a bona fide holder for value, such last-mentioned holder may recover on it at maturity.
11. A bill or note payable on demand can never be prematurely paid, and therefore, a payment on demand of such a bill will be a defence even against an indorsee for value without notice of the payment, for such bills are prevented by statute from circulating again. Extreme caution should on this account be used in taking such bills, which may be utterly valueless.
12. Payment may be made in money or by means of any other consideration. Payment of a smaller sum can never be satisfaction of a larger sum. (But see chap. . xii, sect. 1.) If it be made by a cheque, as is often the case, and the bill be given up to the acceptor, and the cheque be dishonored, the drawer and indorsers will be discharged; for they, when they pay, have a right to have the bill given up to them, and, if the acceptor has the bill, this is impossible.
It has been held, nevertheless, that an agent, unless ordered to the contrary, is justified in giving up the bill on receipt of a cheque.
The same result would probably be considered to arise if the payment were made in bank notes, and the banker were to fail.
13. When payment is made by the acceptor, it is usual to give a receipt on the back of the bill, for which no further stamp is required. Such a receipt, being seldom given upon payment by other parties, is prima facie evidence that the bill was paid by the acceptor.
When a man is sued upon a bill or note, and he produces a cheque for the amount of the bill or note drawn by him, and which has passed through his banker's hands, and bears the plaintiff's name at the back, this raises a presumption of payment, unless there have been so many dealings between the parties that it is impossible to say to which the chéque in question relates.
If the receipt be given on a separate piece of paper, it will not be admissible in evidence without a stamp; but though it cannot be seen by the jury in a civil proceeding, yet it may be shown to the witness to refresh his memory, and if he persists in denying the receipt the document will be admissible against him in a criminal proceeding, as, for instance, an indictment for perjury.
After a lapse of twenty years, a promissory note payable on demand is presumed to have been paid.
14. As to the discharge of a whole bill or note or of individual parties, I quote the following from the 68th section of the B. of Excb. Act, 1882:
Where a bill is intentionally cancelled by the holder or his agent, and the cancellation is apparent thereon, the bill is dis. charged.
In like manner any party liable on a bill may be discharged by the intentional cancellation of bis signature by the holder or his agent. In such case any indorser who would have had a right of recourse against the party whose signature is cancelled, is also discharged.
A cancellation made unintentionally, or under a mistake, or without the authority of the holder is inoperative; but where a bill or any signature thereon appears to have been cancelled the burden of proof lies on the party who alleges that the cancellation was made unintentionallly, or under a mistake, or without authority.
APPROPRIATION OF PAYMENTS:
A few rules are necessary on this subject with re. ference to cases where there may be current accounts, or several debts owing by one party to another.
1. The payment of money is appropriated (i.e. applied to a particular debt), at the choice of the party paying.
2. If no such choice were made, then the creditor may choose to which debt the money shall be applied.
3. Where there is an account current and the party paying is silent, it is presumed that he intends the payment to apply to the earlier items.
Where the debts are distinct, the creditor may, in the absence of any appropriation by the debtor, appropriate the payment to any debt he pleases, but he will be bound by any communication be may have made to the debtor of the way the payment is appropriated.
The same rules apply to a payment by a third party. But where a third party pays money to the creditor for the debtor, the creditor cannot appropriate the payment to a particular debt without the consent of the person paying.
From these rules, it will be understood that if A be liable to B upon three bills of £100 each, and pay
him £100 without saying for which bill the payment is meant, B may wait to appropriate the payment till such time as he sues upon the other bills. It might be a matter of great advantage to him to be able to exercise this power, because he has all the intervening time to see which of the bills will be satisfied by other parties.
SATISFACTION, EXTINGUISHMENT, AND SUSPENSION. 1. Accord and satisfaction of a debt due on a Bill or
Note. 2. Acceptor becoming holder after maturity. 3. Release before and after maturity by writing and
by deed. 4. Considerations which may by consent (i.e."accord"),
amount to satisfaction of a Bill or Note. 5. Difference between taking a Bill or Note in satis
faction and discharge of a debt, and taking it in
payment of a debt. 6. Bili indorsed to one of several joint acceptors. 7. Discharge of acceptor is discharge of other parties. 8. Miscellaneous matters connected with the subject.
1. There are other circumstances under which a bill or note
may be as much satisfied, and the remedies on it extinguished, as by means of payment strictly so called.
Although, as we have seen (chap. x, sec. 12) part payment by the party owing a larger sum can never
satisfy the whole debt, yet such part payment, if accompanied by an act done at the request of the creditor, will amount to such a consideration as is capable of effecting this object. If, for example, it be agreed between the acceptor and the holder of a dishonored bill for £100, that the acceptor shall pay 6d. . in satisfaction of the debt, this consideration will be insufficient; whereas, if to the payment of 6d. it be agreed to add the delivery of a loaf of bread, the bill will be thereby discharged; and this may be done though an action has been brought. This is called “accord and satisfaction."
2. “Where the acceptor of a bill is or becomes the holder of it at or after its maturity, the bill will be discharged."-B. of Ecch. Act, s. 61. The like of the maker of a note.
3. Before, at, or after the maturity of a bill, the holder may renounce his rights against any party, but the renunciation, to be immediately effective, must be absolute and unconditional, and, if the bill be not given up, must be in writing. But, though the renunciation be in writing, if the bill be not given up and come to the hands of
a holder in due course, who takes it without notice of the renunciation, he will not be prejudiced, and the renunciation will only be good as between the parties to it. The best sort of writing would be by a memorandum on the bill signed by the holder, relin. quishing all claim, and this, being on the bill, would prevent it, if still current, from getting into the hands of a holder in due course, because it would be notice to any one to whom the bill might be offered.
4. A bill taken from one of two partners in his own name, may be a satisfaction for a joint debt.
Foregoing a defence to a suit may be a satisfaction of a debt.
Taking a bill or note for a smaller sum may be a satisfaction for a larger sum, for the negotiable quality of the instrument confers an advantage, as does also the more effectual remedy afforded by law upon such instruments.
5. If a creditor takes the bill or note of a third person in satisfaction and discharge of a debt owing by another, the debt will then be extinguished, and it will not revive on the dishonor of the security ; but it is always a question for a jury, whether the instru. ment be so taken, or merely by way of further security, or on account.
If a bill or note be given by way of payment of a debt, no action can be brought for the debt till the maturity of the bill or note; also, if another bill or note be given by way of renewal of a former bill or note, no action can be brought by the person con. senting to the renewal till the maturity of the second bill or note. But the old bill should be given up, or a memorandum indorsed on it, to prevent it being transferred for value to some one who may sue.
6. A bill indorsed in blank to one of several acceptors, and in his bands when due, can neither be sued on by the holder, nor transferred by him so as to confer a right against any of the acceptors.
7. Whenever the acceptor, or maker of a bill or note, is discharged, all the other parties are discharged, for the surety is always discharged by the discharge of the principal.
A judgment recovered against one acceptor of a bill or joint maker of a note, is an answer to an action against the others; otherwise of a judgment against a joint and several maker of a note. (Acceptances, wben by more than one, are always joint.)
8. Issuing execution against either the body or goods of one party does not discharge the others; but discharging a party whose body has been taken in execution, will operate as a discharge to all those parties to the instrument who stand as his sureties, a relationship which will presently be explained. (See chap. xiii.)
Waiving the right of taking his goods in execution will not bave the same effect.
A bill or note is discharged by taking a co-extensive security by deed, but only as regards the party executing such deed; unless the deed were taken from the acceptor or maker; for in that case, of course, all the parties are discharged.
But the security must be strictly co-extensive; for in. stance, a note will not be discharged by taking the bond of one of two joint and several makers for the money. This is a difficult subject, on which advice should always be sought.