II. PAYMENT-WHEN MADE AND HOW PROVED.

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§ 1470. Payment of commercial paper should be made at the time it falls due.267 But it may be made before that time or afterwards, and still be valid between the parties to the payment.268 Paper payable on demand may be paid at any time,269 and an indorser of such paper will be liable until demand is made.270 fore maturity the holder is not obliged to receive payment, and it can only be made by his consent.2 But, if there is a condition in a note that the maker shall be entitled to interest on all payments made before maturity, it will imply leave to pay before the day named.272 In general, however, payment before maturity is at the risk of the party making it, and constitutes no defense against a subsequent bona fide holder for value before maturity.273 Some

271

267 Benj. Chalm. Dig. art. 235; Story, Bills, § 417.

208 Benj. Chalm. Dig. art. 235; Leighton v. Cummings, 89 Ill. 520.

269 Bartrum v. Caddy, 9 Adol. & E. 275, 1 Perry & D. 207; and the maker may pay at any time without demand first made, Stover v. Hamilton, 21 Grat. (Va.) 273.

270 Pardee v. Fish, 60 N. Y. 265.

2712 Daniel, Neg. Inst. 262; 2 Edw. Bills & N. § 745; Story, Bills, § 417: Ebersole v. Redding, 22 Ind. 232.

272 And a tender before maturity will be a good defense. Crocker v. Green, 54 Ga. 494.

273 Byles, Bills, 227; Chit. Bills, 448; 2 Daniel, Neg. Inst. 261; 2 Edw. Bills & N. § 744; 2 Pars. Notes & B. 214; Story, Bills, § 417; Burbridge v. Manners, 3 Camp. 193; Morley v. Culverwell, 7 Mees. & W. 174; Trustees v. Lewis, 34

foreign statutes provide expressly that the holder need not receive payment of a bill before it is due,274 and that, if payment is made before maturity to an unauthorized holder, it will not discharge the bill.2

275

If a bill is paid before maturity by the acceptor, and afterwards comes into his possession again, and is held by him at maturity, it will be extinguished.276 But if he purchases it by way of discount, and negotiates it, the indorser will be liable, even to a holder with notice.277

Fla. 424, 16 South. 325; although secured by a collateral mortgage which has not been transferred with the note, Brayley v. Ellis, 71 Iowa, 155, 32 N. W. 254. As between assignees of notes secured by different mortgages, each claiming priority, see Watson v. Wyman, 161 Mass. 96, 36 N. E. 692. And a bank which pays a postdated check before its date will be liable to the drawer's assignee claiming under an assignment made after the payment and before the date of the check. Godin v. Bank, 6 Duer (N. Y.) 76. And this is also true of a formal release before maturity without surrender of the instrument or cancellation. Dod v. Edwards, 2 Car. & P. 602. And see $$ 680, 1462, supra.

274 ARGENTINE REPUBLIC (Code Com. art. 863); BELGIUM (Code Nap.); BOLIVIA (Code Com. art. 402); CHILI (Code Com. art. 713); COLOMBIA (Code Com. art. 455); COSTA RICA (Code Com. art. 448); ECUADOR (Code Com., as in "Spain"); FRANCE (Code Com. art. 146); GREECE (Code Nap.); HAYTI (Code Nap.); HOLLAND (Exch. Law, art. 159); ITALY (Code Com. art. 231); MEXICO (Code Com. art. 393); NICARAGUA (Code Com. art. 278); PERU (Code Com. art. 455); PORTUGAL (Code Com. art. 380); RUSSIA (Exch. Law, art. 610); SALVADOR (Code Com. art. 454); SAN DOMINGO (Code Nap.); SPAIN (Code Com. art. 501); SWITZERLAND (Oblig. R. 760); TURKEY (Code Nap.); URUGUAY (Code Com. art. 881); VENEZUELA (Code Com. art. 60).

275 ARGENTINE REPUBLIC (Code Com. art. 862); BELGIUM (Code Nap.); BOLIVIA (Code Com. art. 400); CHILI (Code Com. art. 714); COLOMBIA (Code Com. art. 449); COSTA RICA (Code Com. art. 442); DENMARK (Exch. Law, § 51); ECUADOR (Code Com., as in "Spain"); FRANCE (Code Com. art. 144); GREECE (Code Nap.); HAYTI (Code Nap.); HOLLAND (Exch. Law, art. 158); ITALY (Code Com. art. 229); MEXICO (Code Com. art. 387); NICARAGUA (Code Com. art. 379); PERU (Code Com. art. 449); RUSSIA (Exch. Law, art. 611); SALVADOR (Code Com. art. 448); SAN DOMINGO (Code Nap.); SPAIN (Code Com. art. 495); TURKEY (Code Nap.); URUGUAY (Code Com. art. 879); VENEZUELA (Code Com. art. 61).

276 Byles, Bills, 227.

277 Byles, Bills, 227; Benj. Chalm. Dig. art. 235; Attenborough v. Mackenzie, 25 Law J. Exch. 244.

Business Hours.

§ 1471. A foreign bill of exchange should be paid on the day of maturity, in business hours.278 But an inland bill (as distinguished formerly from a foreign bill) might be paid at any hour of the day,279 and a sufficient tender might be made about sunset on the day of maturity.280 But, if payment of a bill or note is refused on presentment for payment at any hour on the day of maturity, the holder may at once treat it as dishonored.281 In Hungary bills payable at a fair, which lasts one day, must be paid before 4 p. m., and all other bills before noon.2 282

Payment after Maturity.

§ 1472. If a bill is paid after presentment and refusal, on the day it matures, it will still be sufficient to discharge the parties.283 But a tender made after maturity, although before suit, will constitute no defense.284 It was formerly considered, however, that the drawer and indorser were entitled to a reasonable time to pay after dishonor by the acceptor, and might therefore make a suffi

278 Byles, Bills, 226; Chit. Bills, 448; Colkett v. Freeman, 2 Term R. 61; Parker v. Gordon, 7 East, 385.

279 Chit. Bills, 449; 2 Daniel, Neg. Inst. 262; 2 Pars. Notes & B. 214; notice of protest being generally made on the next day, Leftley v. Mills, 4 Term R. 170; Haynes v. Birks, 3 Bos. & P. 599.

280 Avery v. Stewart, 2 Conn. 69.

281 Chit. Bills, 448; 2 Daniel, Neg. Inst. 261; 2 Edw. Bills & N. § 745. And such demand will be sufficient against the drawer, although made at 11 a. m. Ex parte Moline, 1 Rose, 303, 19 Ves. 216. So, of a promissory note. Burbridge v. Manners, 3 Camp. 193.

282 HUNGARY (Exch. Law, § 109).

283 And such payment will render the notice of dishonor of no effect, Hartley v. Case, 1 Car. & P. 555, 4 Barn. & C. 339, 6 Dowl. & R. 505; and the payor will not be liable, in such case, for the fees of noting, Leftley v. Mills, 4 Term R. 173.

2** Byles, Bills, 227; Chit. Bills, 383, 449; whether made by the acceptor of a bill, Hume v. Peploe. 8 East, 168; Walker v. Barnes, 5 Taunt. 240, 1 Marsh. 36; Dobie v. Laikan, 10 Exch. 776; Poole v. Tunbridge, 2 Mees. & W. 223; or the maker of a note, City Bank v. Cutter, 3 Pick. (Mass.) 414; McCreary v. Newberry, 25 Ill. 496.

285

cient tender on the day after.2 A tender of the face of the bill after it has become due need not be accepted by the holder.286 But a good tender stops the accruing of further interest.287

In order to have that effect, however, the person making the tender must have been ready, not merely willing, to pay.288 And a plea of tender is of no avail, if the party making it is not still, and has not been always, ready to pay.289 And it is available only in bar of damages and costs, and must be pleaded with a profert of the money.29

Burden of Proving Payment.

§ 1473. The party alleging payment must bear the burden of proving it.291 And if he pleads, by way of payment of a certificate of deposit, that he had paid a previous order given for the same debt by the payee of the certificate to another person, he must prove

285 Chit. Bills, 382; Walker v. Barnes, 1 Marsh. 36, 5 Taunt. 240; Soward v. Palmer, 2 Moore, 274, 8 Taunt. 277.

286 Huston v. Noble, 4 J. J. Marsh. (Ky.) 130; but if accepted it is a good payment, Kilby v. Wilson, 1 Ryan & M. 178.

287 Strafford v. Welch, 59 N. H. 46; notwithstanding an indefinite extension until after one year's notice and a tender without such notice, Woodruff v. Trapnall, 12 Ark. 640.

288 Otis v. Barton, 10 N. H. 433.

289 Chit. Bills, 382; Siggers v. Lewis, 1 Cromp. M. & R. 370, 2 Dowl. 681; Matthews v. Lindsay, 20 Fla. 962; Balme v. Wambaugh, 16 Minn. 116 (Gil. 106); Walker v. Brown, 12 La. Ann. 266.

290 Caldwell v. Cassidy, 8 Cow. (N. Y.) 271; Adams v. Commission, 44 N. J. Law, 638.

291 Hilton v. Smith, 5 Gray (Mass.) 400; Ellison v. Rix, 85 N. C. 77; Smith's Appeal, 52 Mich. 415, 18 N. W. 195; Van Buskirk v. Chandler, 18 Neb. 584. 26 N. W. 356. Especially if the note was at the place of payment at its maturity. Fullerton v. Bank, 1 Pet. 604. And whether payment has been made or not is a question for the jury. Smith's Appeal, supra. Where the indorser of a note holds it as collecting agent for his indorsee, and also holds a second and smaller note, belonging to the maker of the first note, with authority to collect and apply it to the payment of the first note, the burden of proving that he has done so is still on him, although a payment larger than the second note was made by him on the first the day before he collected the second, and the balance on the first note was afterwards paid by the maker, who was presumed to have paid it all. Shephard v. Calhoun, 72 Ill. 337.

such payment.292 Payment on a note is an admission of the debt as then due; but, if the time is material, the party making payment must prove when it was made.29 And, in an action against

an indorser, if he pleads payment by the acceptor, and the acceptor paid the bill by mistake for another bill, and the payment was promptly revoked and the acceptance restored, and the other bill surrendered, the holder must establish the fact of the mistake.294

In foreclosure of a collateral mortgage, parol evidence is admissible to show payments on the notes referred to in the mortgage, without producing or accounting for them.295 And, in general, any facts tending to show payment of a note are relevant and admissible. But the presumption that an outstanding note is not paid is not changed by evidence that a brother of the maker said he had furnished him with money to pay it,2 or that the payee afterwards received checks sufficient in amount to pay it.20

297

Presumption of Payment.

§ 1474. A bill or note is presumed to be still unpaid while it is in the possession of the payee 299 or his personal representative.300 And if it is alleged that a note was paid, and left by inadvertence in the holder's hands, it will not be sufficient to show that the habits of the payee were generally careless in such matters.801 But if a

292 Since it will otherwise be presumed to have been settled and disposed of by the certificate, Alabama & M. R. R. Co. v. Sanford, 36 Ala. 703. 293 McGehee v. Greer, 7 Port. (Ala.) 537.

294 Bogart v. Nevins, 6 Serg. & R. (Pa.) 361.

295 Catterlin v. Armstrong, 79 Ind. 514.

296 Moran v. Abbey, 58 Cal. 163. But a promise to pay, made by the principal maker, is not sufficient, as against a surety, to rebut the proof of payment by him. Kirkpatrick v. Howk, 80 Ill. 122.

297 Walker v. Douglas, 70 Ill. 445.

298 Smith's Appeal, 52 Mich. 415, 18 N. W. 195.

299 Brembridge v. Osborne, 1 Starkie, 374; Davis v. Gaines, 28 Ark. 440; Turner v. Turner, 79 Cal. 565, 21 Pac. 959; Stiger v. Bent, 111 Ill. 328; although overdue, Hamblet v. Bliss, 55 Vt. 535. In this case the payee held a collateral mortgage also. So, Stiger v. Bent, 20 Cent. Law J. 37.

300 Ritter v. Schenk, 101 Ill. 387; notwithstanding proof that checks were given, but not indorsed, Somervail v. Gillies, 31 Wis. 152.

301 Perry v. Gray, 106 Mass. 206.

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