note, after being transferred and dishonored, returns to the possession of the bank, and the bank also holds a check from the maker for the same amount drawn on it and payable to it, it will be presumptive evidence that the note is paid.302 On the other hand, a note will not be presumed to be paid because it is in the maker's possession as administrator of the payee.303 And, if a note is in the possession of one who is the personal representative both of the payee and the maker, it will be presumed that he holds it on account of the payee's estate, of which he is sole executor, rather than as one of several administrators of the maker. 304

Payment Presumed from Possession.

§ 1475. Payment of a bill or note will be presumed from possession after maturity by the party liable on it,305 especially if it is indorsed by the party who claims adversely as holder, or is indorsed and canceled.307 So, payment of a note will be presumed, if the maker holds it with a receipt of a later date for the amount

302 Burns v. Kelley, 41 Miss. 339.

303 Love v. Dilley, 64 Md. 238, 1 Atl. 59.

304 Haywood v. Lewis, 65 Ga. 221.

305 McGee v. Prouty, 9 Metc. (Mass.) 547. In such case payment will be presumed to have been made to the person entitled to receive it. Lipscomb v. De Lemos, 68 Ala. 592. But see, as to possession acquired, after receiving payment, by gift from the then holder, Jones v. Benbow (N. C.) 29 S. E. 774. 306 Byles, Bills, 232; Egg v. Barnett, 3 Esp. 196; Tedens v. Schumers, 112 Ill. 263; Grimes v. Hillary, 150 Ill. 141, 36 N. E. 977; Smith v. Gardner, 36 Neb. 741, 55 N. W. 245; Halfin v. Winkleman, 83 Tex. 165, 18 S. W. 433; First Nat. Bank v. Harris, 7 Wash. 139, 34 Pac. 466. And a purchaser from the maker can only recover against the indorser on proof that the note was made for his accommodation, and the want of such proof will not be cured by the verdict. Callahan v. Bank, 78 Ky. 604; but not so the possession of a note by the maker as agent for the holder, Bowman v. St. Louis Times, 87 Mo. 191; nor possession of a note by the maker before maturity, although it is indorsed by the payee, Eckert v. Cameron, 43 Pa. St. 120; Morris v. Morton, 14 Neb. 358, 15 N. W. 725; nor where it is shown to have been surrendered to the maker by the unauthorized act of the holder's agent, Emerson v. Mills, 83 Tex. 386, 18 S. W. 805.

207 Egg v. Barnett, 3 Esp. 196; or stamped "Paid," Perez v. Bank, 36 Fla. 467, 18 South. 590; especially where it is corroborated by the debtor's testimony that it was paid, Peavey v. Hovey, 16 Neb. 416, 20 N. W. 272.

secured by it, stipulating for a credit on the note.308 Possession of a note by the maker is presumptive evidence of payment, although it is shown that he obtained it from the attorney of the holder, and that the holder had not actually received the money for it.309 So, if a note is found among the maker's papers after his death, it will be presumed to have been paid.310 But payment will not be inferred, from the possession of the note by the maker, until it is shown to have been issued and delivered to the payee.311

Where one of several makers brings suit against the others for contribution, his possession of the note will be evidence, for the purpose of such suit, that he has paid it.312 The presumption of payment arising from surrender to the maker or possession by him is not conclusive, but may be rebutted, like other presumptions.313 So, where sale of a note is made by the pledgee, the maker's possession will not amount to evidence of payment (except as to the amount secured to the pledgee), as against a purchaser of the premises mortgaged for its security, who has assumed to pay the note.314

Possession by Drawee-Indorser.

§ 1476. If a bill is in the possession of the drawee after its maturity, it is prima facie evidence that it has been paid.315 So, a draft, payable to the drawer's own order and not indorsed, will be

308 Penn v. Edwards, 50 Ala. 63.

309 Hollenberg v. Lane, 47 Ark. 394, 1 S. W. 687, and 23 Cent. Law J. 550. 310 Richardson v. City of Cambridge, 2 Allen (Mass.) 118; Liddell v. Wright, 72 Ga. 899.

311 Mygatt v. Pruden, 29 Ga. 43.

312 Dillenbeck v. Dygert, 97 N. Y. 303; McGee v. Prouty, 9 Metc. (Mass.) 547; Chandler v. Davis, 47 N. H. 462; especially where the note had a receipt indorsed (as from the plaintiff) by the bank where it was payable, Ingram v. Croft, 7 La. 82. But see, contra, Bates v. Caine's Estate (Vt.) 40 Atl. 36.

813 Fellows v. Kress, 5 Blackf. (Ind.) 536; e. g. where the maker got possession of the note by fraud, Arnold v. Crane, 8 Johns. (N. Y.) 79; or where the note was indorsed and delivered with a release of the collateral mortgage for the purpose of collection, Allen v. Sawyer, 88 Ill. 414; or was surrendered for a renewal note then taken, Potts v. Coleman, 67 Ala. 221.

814 Zimpleman v. Veeder, 98 Ill. 613.

$15 Gibbon v. Featherstonhaugh, 1 Starkie, 225. So, of a check, Wilson v.

But the

presumed to be paid, if found in the drawee's hands. 316 possession of a bill by the acceptor before maturity raises no such presumption.317 After it has been circulated, however, its posses sion by the acceptor will be presumptive evidence that it is paid,31 but that is only upon proof that it has been in circulation.319 When an indorser brings suit against the acceptor of a bill, he must prove that he has paid it. But it has been held that possession by him without reindorsement, after subsequent special indorsements, will be sufficient.320 On the other hand, where a note is made for the accommodation of the payee, and was in his hands and indorsed by him after maturity, it will be presumed to have been paid, in a suit by his indorsee against the maker.321

Payment Proved by Receipt.

§ 1477. A receipt of payment on the bill itself is presumptive evidence of payment by the acceptor or maker.322 But this is only so where it is in the handwriting of a holder, who was entitled to receive payment.323 But, where credits are indorsed on a note without signature or proof of handwriting, it has been held that they may be presumed to have been indorsed by the payee, leaving to the holder the burden of explaining them away.324 If a note is transferred and delivered by the payee with indorsements of interest on it, not signed, they will be presumed to have been written by him Goodin, Wright (Ohio) 219; or a canceled check, Conway v. Case, 22 Ill. 127; or a draft, Bell v. Norwood, 7 La. 95; but it may be rebutted, Hill v. Gayle. 1 Ala. 275.

316 Connelly v. McKean, 64 Pa. St. 113.

317 Witte v. Williams, 8 S. C. 290.

818 Baring v. Clark, 19 Pick. (Mass.) 220.

319 Byles, Bills, 232; 2 Daniel, Neg. Inst. 256; 2 Pars. Notes & B. 221; Pfiel v. Van Batenburg, 2 Camp. 439; Curry v. Kurtz, 33 Miss. 29. But see, contra. Bell v. Norwood, 7 La. 95.

320 Norris v. Badger, 6 Cow. (N. Y.) 449. But see, contra, Gorgerat v. McCarty, 2 Dall. 144.

321 Blenn v. Lyford, 70 Me. 149.

322 Byles, Bills, 233; 2 Edw. Bills & N. § 785; 2 Pars. Notes & B. 221; Scholey v. Walsby, Peake, 34.

323 Chit. Bills, 478; Pfiel v. Van Batenburg, 2 Camp. 439; Curry v. Kurtz. 33 Miss. 29.

324 Brown v. Gooden, 16 Ind. 444; Bell v. Campbell, 123 Mo. 1. 25 S. W. 359.

at the time they bear date.325 A part payment, indorsed in the handwriting of the payee, is admissible as evidence of payment against him or his indorsee.326 And the date of an indorsement of payment, made at the time of the payment, is evidence of the time. when it was made.327

But a receipt in full, written across the face of a note without any date, will be presumed to have been writ ten at the time of the last payment indorsed on the note.328

"329

Payment may also be proved by a separate receipt in full given by an agent, although the note stipulated on its face, "No credit allowed unless indorsed on the note at the time of payment." A receipt of payment indorsed on a bill may be explained by parol.330 And even recitals in a deed are only prima facie evidence of payment of the consideration for which a note is given.331 But a receipt on account of a bond, for the exact amount due, cannot be lightly questioned by circumstantial evidence after the lapse of more than 20 years. 332 § 1478. When a memorandum of payment of interest is indorsed on a note, it will be evidence of a payment on account of the note, and, if made within six years, will be presumptive evidence that the principal was then unpaid.333 But in New Jersey the indorsement of payment on a bill or note, by or for the party receiv ing it, is not sufficient proof of payment to take the note out of the statute of limitations.334 But such indorsement by a deceased hold

325 Smith v. Battens, 1 Moody & R. 341.

326 Addams v. Seitzinger, 1 Watts & S. (Pa.) 243.

327 Clapp v. Hale, 112 Mass. 368; Pears v. Wilson, 23 Kan. 343. But see, contra, Shaffer v. Shaffer, 41 Pa. St. 51.

228 Chapman v. Smoot, 66 Md. 8, 5 Atl. 462.

829 Howe Mach. Co. v. Simler, 59 Ind. 307.

330 Chit. Bills, 478; 2 Daniel, Neg. Inst. 258; 2 Edw. Bills & N. § 786; Scholey v. Walsby, Peake, 24; Swain v. Frazier, 35 N. J. Eq. 326; or it may be identified by the plaintiff with a payment already credited by him, Robertson v. Garshwiler, 81 Ind. 463.

331 Lazell v. Lazell, 12 Vt. 443. So, a receipt indorsed on the margin of the record of a collateral mortgage may be rebutted. Patch v. King, 29 Me. 448.

332 Robert v. Garnie, 3 Caines (N. Y.) 14.

223 Purdon v. Purdon, 10 Mees. & W. 562. But such indorsement is not evidence of the payment unless indorsed before the statute ran out. Young v. Alford, 118 N. C. 215, 23 S. E. 973.

334 Parker v. Butterworth, 46 N. J. Law, 244; Revision, p. 596, § 11.

But

er is available as an admission against interest, without proof of actual payment made, it being a question for the jury whether the payment was actually made.335 And, in Minnesota, it is provided by statute that such indorsement shall be prima facie evidence of the facts stated, when made against the interest of the holder.336

337

On the other hand, where part payment has been made and not indorsed on a note, the want of such receipt will not be regarded as fatal, upon an application to vacate the sale of collateral mortgaged premises made under a power of sale to satisfy the note.3 And, where a bill is taken up by an indorser, it is not necessary to indorse a receipt on the bill; and the bill may be proved in bankruptcy against the drawer without such indorsement.338

Payment Indorsed by Mistake.

§ 1479. Where a note is marked "Paid" by mistake, and the indorser is notified of it before the close of banking hours, it will not discharge the note.339 So, if a check is marked "Received payment," according to the custom of a bank which marked in this way all checks that were to be presented to other banks, such mark may be explained by parol evidence to that effect.340 But if a check is credited to the holder, and stamped "Paid," it cannot afterwards be charged back to him.* And if the payee transfers a note in trust,

such indorsement, if corroborated, may be considered sufficient to go to the jury. So, in Arkansas, an indorsement, "See entry Jan. 30, cr. by $95." in the handwriting of the former receiver of the bank payee, the actual receiver knowing nothing about the payment or on what account it was made. Alston v. Bank, 9 Ark. 455. In South Carolina, such indorsement is prima facie evidence of payment, but it is a question for the jury whether it was made in order to take the note out of the statute. Gibson v. Peebles, 2 McCord, 418. 335 Risley v. Wightman, 13 Hun (N. Y.) 163.

836 MINNESOTA (Gen. St. § 5752).

337 Lake v. Brown, 116 III. 83, 4 N. E. 773.

338 Palmer v. Blight, 2 Wash. C. C. 96, Fed. Cas. No. 10,684.

339 Manufacturers' Nat. Bank v. Thompson, 129 Mass. 438; the clearing house rule not being available. So, Carley v. Bank (Tenn. Ch. App.) 46 S. W. 328.

840 Scott v. Betts, Hill & D. (N. Y.) 363.

* American Exch. Nat. Bank v. Gregg, 138 III. 596, 28 N. E. 839; although it had not been charged up to the drawer.