7 N.H. 202 | Superior Court of New Hampshire | 1834
It has been decided, in the case of Bryant vs. Ritterbush, 2 N. H. Reports, 212, that, as a general rule, when a note has been once paid it ceases to be negotiable. This doctrine was based upon the decisions in Blake vs. Sewall, 3 Mass. 556, and Boylston vs. Green, 8 Mass. 465 ; but it is undoubtedly subject to the limitation as now holden in Guild vs. Eager, 17 Mass. 615, in which the rule is restrained to cases where the party to a bill or note is prejudiced by a subsequent transfer. There is nothing in the case of Bryant vs. Ritterbush which conflicts with the limitation here affixed, or with the doctrine generally sustained, that the negotiability of a note is not impaired bjf its being paid and taken up by an endorser, in cases where those only who are bound to pay at all events can be sued in consequence of such paper being again put in circulation. To this extent, the negotiability of a note which has been taken up by an endorser has been holden to remain unimpaired. Callon vs. Lawrence, 3 Maule & Selwyn 95 ;
In this case, the proceeds of the note were jointly received -by the maker and endorser ; but we are not aware that this would limit its negotiability, unless the maker should be prejudiced by the new transfer. But the transfer does not,increase or vary his liability. This suit is open to any defence that could be set up in an action broughtjby the endorser, and there seems no objection to sustaining the plaintiff’s rights as endorsee as long as the maker remains uninjured. -
But there are other grounds of defence, which are an answer, to, this action. On the day the note was paid by Pinkham the endorser, the defendant drew an order on one William Bishop, for the sum of $200, payable in eight months, which was accepted by Bishop, and the endorser agreed to collect and retain, from the proceeds of this order, an amount equal, to the defendant’s portion of the note, and account to the defendant for the -residue ; and the defence set up is payment by this acceptance.
There' is no doubt, from the contract, that Pinkham received the acceptance to be appropriated upon the note, in payment of his claim : and the legal effect of the contract would seem to be to give the defendant a credit on the original debt during the time specified in the acceptance. Chitty on Bills, 123 : Stedman vs. Gooch., 1 Esp. 3. However this may be is immaterial in this case, as Pinkham agreed to collect the acceptance at maturity and apply it in payment of this debt ; and a neglect in this undertaking makes the acceptance his own, and equivalent to a payment.
■ It has long been holden, that where a bill of exchange or promissory note is taken in satisfaction of a precedent debt, or to be applied when due as payment, that the creditor cannot proceed, in an action for such debt, without shewing that he has used due diligence to obtain accept-
In Smith vs. Wilson, And. 187, payment of a precedent debt on account was made in part by an endorsed note, and at the foot of the account the plaintiff wrote the following memorandum: “ Received the contents of said note, tú. be allowed when paid." In this case, the court held that where a note is taken for a precedent debt, it must be intended to be taken by way of payment, on condition that the note is paid in a reasonable time ; but if the person accepting it does not endeavor to procure such payment, and the money is lost by his default, he must bear the loss. See also Chamberlin vs. DeLarive, 2 Wilson, 353 ; Brower vs. Jones, 3 Johns. 230 ; Ex’rs of Smedes vs. Elmendorf, do. 185; Jones & al. vs. Savage, 6 Wendell 658; Seymour vs. Van Slyck, 8 Wendell 403; Whittlesey & Stone vs. Dean, 2 Aikens 263; Kearslake & al. vs. Morgan, 5 D. & E. 514; Bridges vs. Berry, 3 Taun. 130; Bishop vs. Rowe. 3 Maule & Selwyn 362 ; Champion & al. vs. Terry, 3 Brod. & Bing. 295 ; Tapley vs. Martens, 8 D. & E. 450 ; Buller’s N. P. 182 ; Chitty on Bills, 126; Clark vs. Young, 1 Cranch 191; Lord vs. Chadbourne & al. 8 Green. 198 ; Henry vs. Donagley, Addison 39; Bailey on Bills, 251 and 255.
It is admitted in this case, that the contents of the acceptance. against Bishop, with common and ordinary diligence, might have been collected by the payee of the note ; and where no excuse.is rendered for the neglect of the payee to collect the same, he must be considered as receiving the acceptance in satisfaction of .the debt, or that he has elected to appropriate if in this manner ; and as this plaintiff holds the note, subject to any defence that .may he set up against the payee. ' .
The plaintiff must become nonsiiii.
