note was business paper, "and not subject to defense for want of consideration, usury, or otherwise." 30 31 34 32 But, if the representation was itself obtained by fraud, it will create no estoppel. So, if it was based on a mistake; or where the purchaser had notice of the defect, and was not misled by the representation; 33 or where the representation was ambiguous, or in answer to an ambiguous question. The liability for negligence in guarding against alteration and forgery has been already discussed. The maker may be estopped by a recital in the note,35 or in a collateral mortgage,3 36 or contemporaneous agreement construed with the note.37 So, too, an indorser by recital in his indorsement.38 If a note recites that all the makers are principals, it has been held that one maker cannot set up, even against the payee, that he was surety for the other.3 39 30 Lewis v. Barton, 106 N. Y. 70, 12 N. E. 437. 31 Hill v. Thixton, 94 Ky. 96, 23 S. W. 947; Jaqua v. Montgomery, 33 Ind. 36. 32 Lyndonville Nat. Bank v. Fletcher, 68 Vt. 81, 34 Atl. 38 (saying a note was paid which had been stamped "Paid" on receipt of a forged renewal). 33 Spray v. Burk, 123 Ind. 565, 24 N. E. 588. So, as to admission of a forged renewal as genuine. Second Nat. Bank of Reading v. Wentzel, 151 Pa. St. 142, 24 Atl. 1087. 34 E. g. to a telephone question whether a check was "all right," the indorsement being forged, German Sav. Bank of Davenport v. Citizens' Nat. Bank. 101 Iowa, 530, 70 N. W. 769; or to a question at the bank certifying a check, whether it was good, the body of the check having been altered, Clews v. Association, 89 N. Y. 418. And see § 1780 et seq., supra. 35 Nott v. Thomson, 35 S. C. 461, 14 S. E. 940; White v. Goldsberg, 49 S. C. 530, 27 S. E. 517 (recitals of benefit to wife's separate estate). And see § 282, supra. And, as to recitals in municipal bonds, see § 345, supra. But a waiver of defense in the note will not exclude a counterclaim for damages for breach of warranty in the thing purchased. Osborne v. McQueen, 67 Wis. 392, 29 N. W. 636. 36 Brandenburgh v. Bank (Ky.) 45 S. W. 108 (excluding condition for other signatures). But see, as to wife's suretyship for husband, Cole v. Temple, 142 Ind. 498, 41 N. E. 942. 37 Chapman v. Skellie, 65 Ga. 124 (agreement not to plead failure of consideration); or in the deed for which the note was given, Reed v. Litsey (Ky.) 33 S. W. 827. 38 Kempner v. Huddleston, 90 Tex. 182, 37 S. W. 1066 (recital of value paid). 39 Menaugh v. Chandler, 89 Ind. 94. Subsequent Representations-By Other Party. § 1869. If the maker or indorser says, after the transfer of a note, that it is all right, such representation will not constitute an estoppel. But if the holder informs the indorser, after the note matures, that it has been paid, it will discharge the indorser." 40 And a surety will be discharged by such information if he is induced by it to surrender to the principal securities held by him.42 So, if the holder informs the maker that the note was paid or to be paid by the party for whom it was really made, and that the maker need have no further trouble, and the maker (in effect a surety) thereupon gives up to such other party the goods for the purchase of which the note was given.* 43 So, the indorser of a note will be estopped from denying his signature as against a plaintiff who has relied on his previous admissions, and delayed suit until the maker became insolvent.4* And in some states the defendant's failure to deny his signature by plea is an admission, and dispenses, prima facie, with further proof of it.45 40 Crossan v. May, 68 Ind. 242; Windle v. Canaday, 21 Ind. 248; Stutsman v. Thomas, 39 Ind. 384. So, where the maker or drawer named in a forged note or bill says that it "will be paid." Traders' Nat. Bank v. Rogers, 167 Mass. 315, 45 N. E. 923. 41 Such holder being also the executor of the maker. State Bank v. Wilson, 12 N. C. 484. So, where the holder informed the indorser, after judgment against him and the maker, that he should not be held, and induced him to neglect to secure himself when he could have done so. Roberts v. Miles, 12 Mich. 297. But such representation to an indorser before maturity will not discharge him where he has not been prejudiced. De Nayer v. Bank, S Neb. 105. 42 Grant v. Cropsey, 8 Neb. 205. But the holder may discontinue an attachment against the principal, although he had informed the surety of it, and the surety had thereupon neglected to secure himself. Barney v. Clark, 46 N. H. 514. 43 Manufacturers' Bank of Troy v. Scofield, 39 Vt. 590. 44 Bates v. Leclair, 49 Vt. 229. 45 The denial must be by plea in FLORIDA (Rev. St. § 1073); MASSACHUSETTS (Pub. St. c. 167, § 21); by plea or affidavit in INDIANA (Horner's Rev. St. 364); by answer verified by oath in KENTUCKY (Ky. St. § 473); by affidavit and plea in MISSOURI (Rev. St. § 2186); NEVADA (Gen. St. § 3557); TEXAS (Rev. St. arts. 313, 2318); VIRGINIA (Code, § 3279); WEST VIR 47 If one places a note in the hands of a broker for sale, and it is represented by him to be good business paper, it will estop the maker from denying that fact.40 But the admission of one maker as to the validity of a nonnegotiable note will not prevent the other from setting up a want of consideration. And a representation by the drawer of a bill, for whose accommodation it was accepted, to the purchaser, at the time of purchase, will not create an estoppel against the acceptor.48 So, in general, the admission of a party, although made while he is the owner and in possession, will not bind other parties; 49 especially where such parties were in no way identified in interest, and the admission was not part of GINIA (Code, c. 125, § 40); WISCONSIN (Sandb. & B. Ann. St. § 4192). So, in NEW HAMPSHIRE, under the present rules, Great Falls Bank v. Farmington, 41 N. H. 32. And see Vance v. Funk, 3 Ill. 263. And in ARKANSAS, if the plaintiff makes oath that he believes there is no defense (Sand. & H. Dig. § 5763). If not denied, the instrument must still be produced. Sebree v. Dorr, 9 Wheat. 558. But, in VIRGINIA no evidence can be afterwards given to disprove its execution. Phaup v. Stratton, 9 Grat. 615. And, if denied, the execution must be proved. Woollen v. Wire, 110 Ind. 251, 11 N. E. 236. 46 Ahern v. Goodspeed, 9 Hun (N. Y.) 263. See, as to representations by the agent of a corporation, § 370, supra; and, as to estoppel by acts of an agent, § 392, supra. Fifth Ward Sav. Bank v. First Nat. Bank, 48 N. J. Law, 528, 7 Atl. 318. : 47 Although the plaintiff relied on the admission in purchasing the note. Lewis v. Woodworth, 2 N. Y. 512. In general, however, if the partnership is established, such admission will bind the other partners. Chit. Bills, 703; Gray v. Palmers, 1 Esp. 135; Wood v. Braddick, 1 Taunt. 104. But not without first proving the partnership. Tuttle v. Cooper, 5 Pick. (Mass.) 414. And the partnership cannot be proved by the declaration of one partner made in the absence of the other. King v. Barbour, 70 Ind. 35. 48 Jackson v. Fassitt, 33 Barb. (N. Y.) 645. 49 Byles, Bills, 439; Hemings v. Robinson, Barnes, 436; Pocock v. Billing, 2 Bing. 269; Dodge v. Freedman's Savings & Trust Co., 93 U. S. 379; Whitaker v. Brown, 8 Wend. (N. Y.) 490; Paige v. Cagwin, 7 Hill (N. Y.) 361; Camp v. Walker, 5 Watts (Pa.) 482; De Bruhl v. Patterson, 12 Rich. Law (S. C.) 363. But see, contra, as to the admission of an assignor as affecting subsequent assignees. Thorp v. Goewey, 85 Ill. 611; Snelgrove v. Martin, 2 McCord (S. C.) 242; Sharp v. Smith, 7 Rich. Law (S. C.) 3; Stoner v. Ellis, 6 Ind. 152; Blount v. Riley, 3 Ind. 471. So, as to the assignee of a nonnegotiable note, Shade v. Creviston, 93 Ind. 591; Abbott v. Muir, 5 Ind. 444. the res gestæ.50 So, the indorser's admissions, after he has parted with his interest, will not bind the maker. 51 But a pledgor may bind himself by admissions as to any interest remaining in him after the pledge is satisfied.52 So, a principal will be bound by the admissions of a fully-authorized agent, or a trustee by the admissions of his cestui que trust.54 So, a purchaser after maturity is subject to admissions made by a prior holder, while owning the instrument.55 Estoppel by Bill or Note. § 1870. Where a bill or note is given in settlement of an account, it will in general bar further inquiry into the account.56 So, if the maker, after learning that the consideration between him and the payee has failed, gives a new note to the indorsee of the original note, it will be a waiver of the defense.57 So, if he gives a new note to the bona fide holder of a note originally obtained from him by fraud.58 So, if A. gives his note to B. to reimburse him for giving (and afterwards paying) his own note for A.'s debt, which was supposed by him to be valid, but was in reality for gambling losses.59 50 Chit. Bills, 743; Beauchamp v. Parry, 1 Barn. & Adol. 89; Phillips v. Cole, 2 Per. & D. 288. But it is otherwise where the parties are identified in interest, Byles, Bills, 434; Pocock v. Billing, 2 Bing. 269, Ryan & M. 127; or the admissions formed part of the original res gestæ, Kent v. Lowen, 1 Camp. 177. 51 Andrews v. Campbell, 36 Ohio St. 361. 52 Bond v. Fitzpatrick, 8 Gray (Mass.) 536. 53 Reed v. Vancleve, 27 N. J. Law, 352; Bank of Newbury v. Sinclair, 60 N. H. 100. 54 Chit. Bills, 743; Welstead v. Levy, 1 Moody & R. 138. 55 Curtiss v. Martin, 20 Ill. 557; Eaton v. Corson, 59 Me. 510. contra, Shober v. Jack, 3 Mont. 351. But see, 56 Chit. Bills, 201; Knox v. Whalley, 1 Esp. 159; Trueman v. Hurst, 1 Term R. 40; Chandler v. Dorsett, Finch, 431; or the manner in which the account was charged, Audleur v. Kuffel, 71 Ind. 543; or the time when the consideration (goods purchased) was delivered, Reid v. Field, 83 Va. 26, 1 S. E. 395. So, where a former indorsed note is surrendered, Coco v. Lacour, 4 La. 507. As to the effect of a new bill upon the original defense, see § 1583 et seq., supra. 57 Griffith v. Trabue, 11 Heisk. (Tenn.) 645. 58 Ross v. Webster, 63 Conn. 64, 26 Atl. 476. 59 Bangs v. Hornick, 30 Fed. 97. 60 So, he cannot set up usury in the original debt, after giving his negotiable note in satisfaction of a judgment rendered on it, and for an extension of time. And, where the maker sets up that the note was given for land under a false representation as to its location, the defense will be barred, if it appears that the note was given after learning the correct location. So, if he gives a note after the accruing of a cause of action, which was known to him, he cannot avail himself of it as a set-off.62 But an existing set-off will not be barred by the renewal of the original note by the maker's executor.63 61 The holder of a note, on the other hand, after receiving it in renewal of a prior note, cannot set up that it was given for another purpose. 34 Estoppel by New Promise. 66 65 67 § 1871. Where a party has been discharged by an extension or otherwise, such defense may be waived by a new promise afterwards made with knowledge of the discharge. This is true, also, of at discharge in bankruptcy. But a promise, made without knowl edge of the fact of discharge, will not create an estoppel. And a new promise, to amount to such, must be unambiguous and explicit.es An account stated has been held sufficient to estop a party 60 Gipson v. Shanklin, 83 Ind. 147. So, where he gives his note to a trustee, who pays the maker's debt. Jenkins v. Levis, 25 Kan. 479. 61 Isham v. Davidson, 1 Hun (N. Y.) 114. 65 So held as to a promise of the drawer after extension to the acceptor, Stevens v. Lynch, 12 East, 38; or of the accommodation acceptor after extension to the drawer, Kerrison v. Cooke, 3 Camp. 362; or of a surety, receiving indemnity, after extension to the principal, Fowler v. Brooks, 13 N. H. 240; or after being released by the release of a co-surety, Mayhew v. Crickett, 2 Swanst. 190. So, even a promise for new consideration to assume a forged indorsement as a valid debt. Toof v. Rosenplanter (Tenn. Sup.) 41 S. W. 336. 66 Henly v. Lanier, 75 N. C. 172; Fraley v. Kelly, 79 N. C. 348; Apperson v. Stewart, 27 Ark. 619; Jones v. Sennott, 57 Vt. 355. 67 Mackay v. Holland, 4 Metc. (Mass.) 69; Long v. Dismer, 71 Mo. 452. So, by statute in GEORGIA (Civ. Code, § 2976). So, a promise to pay a renewal, not knowing it to be forged. Barry v. Kirkland (Ariz.) 52 Pac. 771. 68 Huffman v. Johns (Pa. Sup.) 6 Atl. 205, 10 East. Rep. 729. And not a |