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Form of plea.
Reply to a
plea of set-off.

Reply of the saving clauses.



The defendant must now plead that the claim is barred by the Statute of Limitations (2).

To a plea of set-off, the Statute of Limitations must be replied specially (a).

The plaintiff may reply to a plea of the statute, that he is within the saving clause, or rather such parts as are unrepealed. An acknowledgment or payment obviating the statute must be specially pleaded (b).

Lastly, independently of the statute, if a note be twenty years old (c), it will be presumed to have been paid, in the absence of circumstances tending to repel the presumption (d).

The lapse of thirteen years has been held sufficient to raise a presumption of the repayment of a loan not secured by a note (e).

Wakelee v. Daris, 25 W. R. 60.
In the County Court a defendant
must give notice of it as a special
defence, County Court Act, 1888,
s. 82; County Court Rules, 1889,
Ord. X. rr. 10 & 14 (a).

(z) And should apparently state
the Act on which he relies, which
for actions on a bill or note is the
21 Jac. 1, c. 16, s. 3. See R. S.
C. 1883, Forms in Appendix.

(a) Chapple v. Durston, 1 C. & J. 1; 35 R. R. 669. See post, Chapter on REMEDIES; Pleading.

(b) Skeet v. Lindsay, [1877] 2 Ex. D. 314.

(c) Such, for two hundred years, has been the common law as to a bond. The defence was. introduced into Ireland by statute8 Geo. 1, c. 4, and into England by the 3 & 4 Will. 4, c. 42, s. 3.

(d) Duffield v. Creed, 5 Esp. 52;. Brown v. Rutherford, 14 Ch. D.. 687.

(e) Cooper v. Turner, 2 Stark. 497; 20 R. R. 730.

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THOUGH it be a general rule of law, that one simple contract cannot be satisfied by another similar executory contract (a), for that is merely substituting one cause of action for another, yet the delivery of a valid bill or note suspends the creditor's remedy for a debt, and if he either receive the money on the instrument, or be guilty of laches, it operates as a complete satisfaction (b). "The law," says Lord Kenyon, "is clear, that if, in payment of a debt, the creditor is content to take a bill or note payable at a future day, he cannot legally commence an action on his original debt, until such bill or note becomes payable, and default is made in the payment; but, if a bill or note is of no value, as if, for example, drawn on a person who has no effects of the drawer in his hands, and who, therefore, refuses it, in such case he may consider it as waste paper, and resort to the original demand, and sue the debtor on

(a) But see Com. Dig. Accord, B.; Good v. Cheesman, 2 B. & Ad. 328; 4 C. & P. 513; 36 R. R. 574: Cartwright v. Cook, 3 B. & .Ad. 701 ; 37 R. R. 534; Garrard

v. Woolner, 8 Bing. 258; 1 M. &

Sc. 327; Carter v. Wormald, 1
Exch. 81.

(b) 3 & 4 Anne, c. 9, s. 7;
Sibree v. Tripp, 15 L. J., Exch.
318; 15 M. & W. 23.


Suspends the
remedy on a
simple con-



Collateral security.

Form of pleading.

it" (c). The taking a bill or note from the original debtor, or from a third person (d), amounts to an agreement to give the debtor credit for the time it has to run; but when that time has expired, and the bill or note is in the hands of the creditor unpaid, the liability of the debtor on the original debt revives (e).

But a creditor may agree to take for a debt already due a bill as a collateral security, without affecting his present right to sue for that debt. A creditor who takes from his debtor as a collateral security only a bill indorsed by his debtor, as he is trustee of the rights, so he is bound by the duties of a holder, and if he neglects to present or give notice of dishonour to his debtor, the debtor is discharged, for no one but the actual holder can perform these duties(ƒ).

It is not essential to plead the taking of a negotiable instrument, either as payment or as satisfaction. In answer to an action for a debt, it is sufficient to allege that a bill or note, payable to order or bearer, was delivered for and on account of the sum due (g), and that the bill or note has been or is running, or that it is in the hands of a third person (h). But a plea was not double, which alleged both that the bill was taken for and on account, and also in payment (i). But the liberty of pleading that a bill or note was given or taken on account was confined to the case of such instruments. It must have appeared on the face of the plea that the bill or note was payable to order or to bearer, otherwise the plea would be bad, even after verdict (k).

The payment of a substituted note, though given by a stranger, has been held, in an action on the first note, admissible under a plea of payment (7).

(c) Stedman v. Gooch, 1 Esp. 3 ; Kearslake v. Morgan, 5 T. R. 513. An unsatisfied judgment on the bill alone will not destroy the original debt. Tarleton v. Allhusen, 2 Ad. & Ell. 32.

(d) Bellshaw v. Bush, 11 C. B. 191; Bottomley v. Nuttall, 28 L. J., C. P. 110; 5 C. B., N. S. 122.

(e) See "unpaid seller," Sale of Goods Act [1893], s. 38 (1) b. (f) Peacock v. Pursell,32 L. J., C. P. 256.

(g) Kearslake v. Morgan, 5 T. R. 513; see Griffiths v. Owen, 13 M. & W. 58.

(h) Price v. Price, 16 M. & W.

232; but see Mercer v. Cheese, 12 L. J., C. P. 56; 4 M. & G. 804; Crisp v. Griffiths, 2 C., M. & R. 159.

(i) Maillard v. Duke of Argyle, 6 M. & G. 40. And an allegation that a bill was given " on account of and in payment and discharge," is not equivalent to an allegation that it was given in satisfaction. M Dowall v. Boyd, 17 L. J., Q. B. 295; Kemp v. Watt, 15 M. & W.


(k) James v. Williams, 13 M. & W. 828.

(1) Thorne v. Smith, 20 L. J., C. P. 71; 10 C. B. 659.


The taking a bill or note from a party bound by a con- CHAPTER tract under seal does not extinguish or suspend the remedy on the speciality, unless the bill or note be actually paid. Not on a conThus, where one of three joint covenantors gave a bill of tract under exchange for part of a debt secured by the covenant, it was seal. held that the bill only operated as a collateral security, not affecting the remedy on the covenant, and even though judgment had been obtained on the bill; Le Blanc, J., observing, "The giving of another security, which, in itself, would operate as an extinguishment of the original one, cannot operate as such by being pursued to judgment, unless it produce the fruit of a judgment" (m).

Where a tenant gave a note of hand for arrears of rent, it was held that the landlord might nevertheless distrain, for the note was no alteration of the debt till after payment (n).

The Attorneys and Solicitors Act, 6 & 7 Vict. c. 73, s. 41, enacts, that an application to tax an attorney's or solicitor's bill must be made within twelve months after payment. Where a promissory note is given for an attorney's bill payable at a future day, the twelve months run from the time the note was paid, and not from time it was given, unless it were agreed to treat it as payment at that time (0).

If the debtor, instead of paying the creditor, directs him to take a bill of a third person, which the creditor does, and the bill is dishonoured, the liability of the original debtor revives (p); and it is not necessary to give the original debtor notice of the dishonour (q). The bill or note must be presented within a reasonable time (r).

So if the creditor, not having the option of taking cash, takes of his own accord a bill of his debtor's agent, the

(m) Drake v. Mitchell, 3 East, 251; 7 R. R. 449; followed in Wegg Prosser v. Erans, [1895] 1 Q. B. 108. And see Curtis v. Rush, 2 Ves. & B. 416.

(n) Harris v. Shipway, 1744 ; Ewer v. Lady Clifton, C. B., Trin. T. 1735; Bull. N. P. 182; Palfrey v. Baker, 3 Price, 572; Davis v. Gyde, 2 Ad. & Ell. 623; 4 N. & M. 462. Even a bond given for rent does not extinguish it. Rent, though due on a parol lease, is of as high a nature as an obligation. 11 Vin. Ab. 289. Palmer v.

Bramley, [1895] 2 Q. B. 405.

(0) Sayer v. Wagstaff, 5 Beav. 415; In re Harries, 13 M. & W. 3; In re Romer v. Haslam, [1893] 2 Q. B. 286.

(p) Marsh v. Pedder, 4 Camp. 257; Holt, N. P. C. 72; Er parte Dickson, cited 6 T. R. 142; Taylor v. Briggs, M. & M. 28; and see Robinson v. Read, 9 B. & C. 449; 4 Man. & Ry. 349.

(g) Swinyard v. Bowes, 5 M. & S. 62; 17 R. R. 274.

(r) Chamberlyn v. Delarice, 2 Wilson, 354.

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Of the creditor's agent taking the

debtor's bill.

debtor is not discharged (s). But if the debtor refer his creditor to a third person for payment generally, and the creditor, having the option of taking cash, elects to take a bill which is dishonoured, the original debtor is discharged (/).

The consequence of giving a bill to an agent, an auctioneer, for example, who has no authority to receive anything but cash, is, that the party giving the bill is not discharged from the demand of the principal, although the bill fall due at the period when the debt ought to have been discharged, and be regularly paid to the holder (u).

The taking of his separate bill from one of several partners for a joint debt, will, as we have seen, discharge the others. Such a transaction imports an agreement between the creditor and the firm, that the creditor shall rest on the liability of the one partner alone, and shall discharge the others; that is, an accord—and the separate bill is a satisfaction. For the separate liability of one partner may, in many cases, be more advantageous than his joint liability with others. It is not extinguished, at law, by his predecease; in the event of a separate adjudication of bankruptcy against him, it would be satisfied before joint debts (r), and it avoids difficulties which might arise in suing him with another defendant (y).

Where the creditor's rights against an original debtor

(s) Robinson v. Read, 9 B. & C. 449; Marsh v. Pedder, Holt, N. P. C. 72; 4 Camp. 257.

(t) Strong v. Hart, 6 B. & C. 160; 9 D. & R. 189; 2 C. & P. 55; 30 R. R. 272; Smith v. Ferrand, 7 B. & C. 19: 9 D. & R. 803; and see Baillie v. Moore, 15 L. J., Q. B. 169; 8 Q. B. 489.

(u) Sykes v. Giles, 5 M. & W. 645; Williams v. Erans, 1 Law Rep., Q. B. 352; Catterall v. Hindle, 1 Law Rep., C. P. 186. A cheque duly honoured is equivalent to cash; thus, when the steward of a manor received payment from a copyholder by a crossed cheque, which was duly honoured, the payment was held good as against the lord, although the bankers, through whose hands the cheque necessarily passed being crossed, detained the proceeds on account of a debt due

to them from the steward. Bridges v. Garrett, L. R., 5 C. P. 580 39 L. J. 251. This case was distinguished in Pape v. Westacott. [1894] 1 Q. B. 272, where the cheque was dishonoured. See too Blumberg v. Life Assurance Co., [1897] 1 Cha. 171: and Johnstone v. Rogers, 80 L. T., N. S. 488.

(r) Bankruptcy Act, 1883, s. 40 (3). A discharge on a separate bankruptcy frees from joint debts. Er parte Hammond, L. R., 16 Eq. 614.

(y) Erans v. Drummond, 4 Esp. 88 Reed v. White, 5 Esp. 122; Thompson v. Percival, 5 B. & Ad. 925; 3 N. & M. 667. An unsatisfied judgment on such a separate instrument is no bar to suing the others, Wegg Prosser v. Erans, [1895] 1 Q. B. 108; ante, p. 314.

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