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and takes it up at the expiration of the trust without canceling his indorsement, he may bring suit as a purchaser against the maker, although the note was canceled by mistake and marked "Paid." 341 And if the maker's name is canceled, and the note marked "Paid by mistake," but the mistake is corrected as "Canceled in error," before the note is returned to the indorsing bank, the collecting agent will not be liable as having received payment.342 And where a bill is accepted payable at a given place, with direction to apply to another house in case of need, and the party so referred to cancels the acceptance by mistake, supposing it to be payable at his house, and afterwards writes on the bill "Canceled by mistake," and pays it for the honor of the indorsers, they may recover against a prior indorser on proof that the cancellation was by mistake.343 So, where advances were made by A. to the drawer of several bills of exchange drawn against a bill of lading, and the drawer furnished further collateral to A. on the dishonor of the first of the bills, and A. settled with the drawee on the dishonor of the last of them (by means of a judicial sale of the goods consigned, which resulted in the bills of exchange being canceled and delivered up to the drawee, leaving a balance still due to A. for his advances), he was entitled to hold the collateral as security for such advances, notwithstanding the formal cancellation of the bills and the possible injury to the drawer thereby.344 And if an acceptance is canceled, and marked "Canceled by mistake," it will not discharge an indorser's liability to his indorsee.345

Presumption from Lapse of Time.

§ 1480. A demand note will be presumed to have been paid after the lapse of 20 years.346 And the length of time elapsed since an

341 McLemore v. Hawkins, 46 Miss. 715.

342 Prince v. Bank, 3 App. Cas. 325. 343 Raper v. Birkbeck, 15 East, 17. 344 Yglesias v. Bank, 3 C. P. Div. 60.

345 Although, in a suit brought by the indorser in France against his indorsers (and also against the indorsee, by way of injunction), the drawer and indorsers were declared to be discharged by English law, because the remedy was suspended, Novelli v. Rossi, 2 Barn. & Adol. 757.

346 Duffield v. Creed, 5 Esp. 52; 3 & 4 Wm. IV. c. 42; Pattie v. Wilson, 25 Kan. 326; although the statute of limitations had not run, because of the non

alleged payment may be considered with other evidence by a jury. in determining whether it was made.347 If a payment is proved to have been made in a certain year, it will be presumed to have been. made on the last day of the year, in the absence of other proof as to the date. 348 And where, after suit brought, there are subsequent settlements of account between the holder, indorser, and maker, they are admissible as evidence of payment for the consideration. of the jury.349

But the inference of payment arising from mere lapse of time is not sufficient to overcome positive evidence that a note has not been paid.350 And there is no such presumption from lapse of time against an alien enemy,351 So, the presumption may, in general, be rebutted by proof of a subsequent parol acknowledgment of the debt.35

Circumstantial Evidence of Payment.

§ 1481. Payment of a bill or note may be proved without actual production of the paper; 353 and it may be shown by circumstantial evidence. So, the holder may be estopped from denying pay

354

residence of the maker, Bean v. Tonnele, 94 N. Y. 381; Courtney v. Staudenmayer, 56 Kan. 392, 43 Pac. 758; or although the payee had died after holding the paper 8 years, and no administrator was appointed for 21 years, Sheldon v. Heaton, 22 App. Div. 308, 47 N. Y. Supp. 1124. So, if a note has been lost for 18 years, Peabody v. Denton, 2 Gall. 351, Fed. Cas. No. 10,867; but a note will not be presumed to have been paid after a lapse of five years, Nash v. Gibson, 16 Iowa, 305; or from the neglect to present it until time enough had passed to outlaw it. Smith's Appeal, 52 Mich. 415, 18 N. W. 195.

347 Manning v. Meredith, 69 Iowa, 430, 29 N. W. 336.

348 E. g. a payment proved to have been made 16 years before, Byers v. Fowler, 14 Ark. 86.

349 Williams v. Barrett, 52 Iowa, 637, 3 N. W. 690.

350 Delaney v. Brunette, 62 Wis. 615, 23 N. W. 22; and delay to sue until the statute had nearly run out raises no presumption of payment, Newcombe v. Fox, 1 App. Div. 389, 37 N. Y. Supp. 294.

351 Du Belloix v. Lord Waterpark, 1 Dowl. & R. 16.

352 Fisher v. Phillips, 4 Baxt. (Tenn.) 243.

353 Shearm v. Burnard, 10 Adol. & E. 593.

354 E. g. a sale of other property for the purpose and a contemporaneous statement of payor as to his purpose, Planters' Bank v. Massey, 2 Heisk. (Tenn.) 360; or satisfaction of a collateral trust deed on the record, Minter v. Cupp, 98 Mo. 26, 10 S. W. 862. As to the admissibility of an agreement that

ment, if he informs a surety that the principal has paid, and the surety neglects on that account to take proceedings for several years, and is damaged by the delay.355 And this has been held to be so, if the holder of a note secured by trust deed represents to the purchaser of the land that his note has been paid, although he was induced to make the representation by fraud.356

In like manner, proof of payment is often unnecessary. Thus, where a partnership is dissolved and its assets transferred to one partner, and the other afterwards receives and converts a draft of the partnership to his own use, he will be liable for conversion without proof that the draft has been paid.357 And payment is sufficiently proved as to all the makers by judgment to that effect in favor of one in a joint action of trover brought by them against the payee for retaining the note after it was paid.35

§ 1482. Payment to a collecting agent cannot be proved, without producing the bill itself, by showing that he received it for: collection, and delivered it to his bankers, and received credit for a bill for the same amount.3 359 So, an entry to the credit of a depositor's personal account is not sufficient proof of payment by him as executor.360 And it has been held that the fact that an action is barred on the note by the statute of limitations is not such evidence of payment as will entitle the maker to a transfer of land, which was conditioned on the payment of the note.361 Whether the circumstances show or establish a payment is a question of fact; and the presumption is against the alleged payment, where the bill was not produced at the time, and bears no mark of payment, and the books of the parties show no memorandum of the fact.362 If a note is taken up by the holder at the surety's request, and is de

a balance due from the holder to the maker should operate as payment, see Roche v. Kempt, 33 U. C. Q. B. 387.

355 Although such information was given in good faith, Whitaker v. Kirby, 54 Ga. 277.

356 Staats v. Bigelow, 2 MacArthur (D. C.) 367.

357 Bullard v. Hascall, 25 Mich. 132.

358 Spencer v. Dearth, 43 Vt. 98.

359 Atkins v. Owen, 4 Nev. & Man. 123, 2 Adol. & E. 35.

260 Scholey v. Walton, 12 Mees. & W. 510.

361 Cook v. Reynolds, 58 Miss. 243. But see, contra, Jordan v. Fountain, 51 Ga. 332.

362 Hankin v. Squires, 5 Biss. 186, Fed. Cas. No. 6,025.

livered to the surety to enable him to make proof of claim in bankruptcy against the maker, but is never actually paid to the holder, the surety will not be discharged by such apparent payment.363 In an action by a pledgee against his pledgor, payment to the latter is admissible to disprove an alleged payment to the pledgee by the agent who collected the note. 364

If it appears, from payment of interest, that the note was not paid, the presumption may be rebutted by showing that the interest was paid by mistake.365 So, an alleged payment by the acceptor of a bill may be avoided, on the ground that the money belonged to his assignee and could not be so appropriated.366 On the other hand, the pecuniary circumstances of the maker and holder are not admissible as evidence from which a payment may be inferred.3 367 So, an allegation that individual checks were given in payment on behalf of the drawer's firm cannot be supported by evidence of other similar payments for the firm in other business. 36s Neither can it be shown by parol evidence that a stock certificate, described in a note as collateral, was to be regarded as payment, if the note was not paid at maturity.369

363 North Bridgewater Sav. Bank v. Soule, 129 Mass. 528.

364 Lockhart v. Fessenich, 58 Wis. 588, 17 N. W. 302.

365 Ritter v. Schenk, 101 III. 387.

866 Pritchard v. Hitchcock, 6 Man. & G. 151.

367 Daby v. Ericsson, 45 N. Y. 786; Alexander v. Dutcher, 7 Hun, 439.

368 Howe v. Whitehead, 130 Mass. 268.

369 Perry v. Bigelow, 128 Mass. 129.

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Payment by Mistake.

§ 1483. A payment once made cannot, of course, be recovered by force. But, in general, one who pays a bill by mistake may recover the amount at law from the party receiving it; 371 a demand from the defendant being a prerequisite to such recovery.372 So, if a bill is accepted by mistake and afterwards paid by the acceptor, it is recoverable as a payment made by mistake.373 And, if payment is made by a note for a larger amount than is actually due, an action lies, after the note is given, to recover the excess.374

375

Where a bank pays an overdraft by mistake, the presumption is that the drawer had funds sufficient to meet the draft, and the burden of proof is on the bank to show an error in its account." But where such payment is made by a bank through the negligence of its own officer, without investigating the depositor's account, it has been held that it cannot recover the payment from an innocent holder to whom it was made.376 So, where a note payable

370 Chambers v. Miller, 32 L. J. C. P. 30; Pollard v. Bank, L. R. 6 Q. B. 623. 371 Byles, Bills, 258; Benj. Chalm. Dig. art. 237; 2 Daniel, Neg. Inst. 253; 2 Edw. Bills & N. § 741; 1 Pars. Notes & B. 246; Mills v. Guardians of Poor, 3 Exch. 590; U. S. v. National Park Bank, 6 Fed. 852; Munroe v. Bonanno, 16 App. Div. 421, 45 N. Y. Supp. 61. But payment made by an accommodation indorser cannot be recovered back as damages, because of a verbal contemporaneous agreement made by the holder with the maker to surrender the note if the maker would give a new note and mortgage. Gardner v. Mathews, 81 Mo. 627.

372 Southwick v. Bank, 84 N. Y. 420.

373 Kendal v. Wood, L. R. 6 Exch. 243.

274 And giving the note is sufficient payment to sustain a recovery of the excess, Whitcomb v. Williams, 4 Pick. (Mass.) 231; although the payment is less than the amount of a collateral note held as security, Hunt v. Nevers, 15 Pick. (Mass.) 500.

375 Bank of U. S. v. Washington, 3 Cranch, C. C. 295, Fed. Cas. No. 940. 376 Boylston Nat. Bank v. Richardson, 101 Mass. 287; nor from the payee,

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