Sec 955

When goods are, by the agreement of sale, to be paid for by the buyer's note or acceptances, or like forms of credit, the inference is that the payment is only conditional, and that, upon dishonor of the paper, the seller may sue for the price of the goods.3 On the other hand, Question one of inference from facte.

1 Peter V. Beverly, 10 Pet. 532; Kem-mil V. Wilson, 4 Wash. C. C. 308; Wallace V. Agry, 4 Mason, 336; Bangor V. Warren, 34 Me. 324; Ripley V. Green-leaf, 2 Vt. 129; Reed V. Upton, 10 Pick. 525; Ilsley V. Jewett, 2 Met. (Mass.) 168; Hughes V. Wheeler, 8 Cow. 77; Frisbie V. Larned, 21 Wend. 450; Waydell V. Luer, 5 Hill, 448; Bank of Penna. V. Potius, 10 Watts, 148; Lord V. Ocean Bank, 20 Penn. St. 384; Swope V. Leffingwell, 72 Mo. 348; Graves V. Shulman, 59 Ala. 406. And see as generally sustaining the text, Peter V. Beverly, 10 Pet. 532; Wallace V. Agry, 4 Mason, 336; Bell V. Porter,.

9 Conn. 23; Burdick V. Green, 15 Johns. 247; Vansteenburg V. Hoffman, 15 Barb. 28; Keen V. Dufresne, 3 S. & R. 233; Geiser V. Kershner, 4 Gill & J. 305; Prescott V. Hubbell, 1 McC. 94; Barelli V. Brown, 1 McC. 449; Minis V. McDowell, 4 Ga. 182.

2 Hill V. Sleeper, 58 Ind. 221; Bristol Milling Co. V. Probasee, 64 Ind. 406; Linderman V. Rosenfield, 67 Ind. 246; Jeffries V. Lamb, 73 Ind. 202.

3 Leake, 2d ed. 894; Paul V. Dod, 2 C. B. 800; Helps V. Winterbottom, 2 B. & Ad. 431; Gunn V. Bolckow, L. R.

10 Ch. 500; Mayer V. Nyas, 1 Bing. 311; Harris V. Johnston, 3 Cranch, 311; Brigham V. Lally, 130 Mass. 485. See Herring V. Sanger, 3 John. Cas. 71; Tyson V. Pollock, 1 Pen. & W. 375;.

Little V. Sewing Machine Co., 67 Ind. 67; Hoeflinger V. Wells, 47 Wis. 628.

In Swain V. Frazier, N. J. Ct. of Errors, 1882 (14 Rep. 277), Magie, J., on delivering the opinion of the court, said: "The vice-chancellor further held that the acceptance of the promissory note of a debtor for his pre-existing debt will not operate as a discharge or satisfaction of the debt, unless the creditor agrees that such shall be its effect. The question involved in this proposition, though much discussed elsewhere, is now for the first time, so far as I can ascertain, presented for the consideration of this court. The question is not a new one in the courts of this state. In 1853 Chancellor Williamson held that, whether a note given for a legacy, charged upon land of the maker, was to operate in payment of the legacy or not, was a question of the intention of the parties to the transaction. Schanck V. Arrowsmith, 1 Stock. 314. In Shipman V. Cook, 1 C. E. Green, 251, Chancellor Green seems to admit the same rule as unquestionable. In Freeholders V. Thomas, 5 C. E. Green, 39, Chancellor Zabriskie said that it was well settled that a note, either of the debtor or a third person, received for a debt, is not payment, if not itself paid, except in cases where it is positively agreed to be received in payment. The same principle was apif the creditor have offered to him the choice between cash and negotiable paper, and takes the negotiable paper, this will be regarded as satisfaction.1 The question to be determined on all the circumstances of the case is, whether the paper was taken in payment, or merely as security.2 If the creditor gives a receipt in full, the inference of satisfaction will be strong,3 though this may be explained by extrinsic proof.4 The question as to the intention of the parties is for the jury.5 - If the note of a third party is accepted in payment of goods, the inference is that the note was received in full satisfaction for the goods,6 supposing the note be genuine and there be no fraudulent concealment.7 But unless the note was taken in satisfaction, it does not discharge a pre-existing debt.8 plied by Vice-Chancellor Van Fleet in Hutchinson V. Swartsweller, 4 Stew. Eq. 205. Under such circumstances it would be questionable whether, if there were doubts respecting the rule, it would be wise at this day to attempt to modify or reverse it. But the rule is sustained by the great weight of authority in England and in this country. Mr. Addison so states the rule to be established in his work on Contracts, and the English cases may be found collected in the notes to sec 333 of Morgan's edition. The American cases are collected in the note to 2 Parsons on Contr. *624, *681, and in the notes to Tobey V. Barber, 2 Am. L. C. 5th ed. 245, and to Cumber V. Wane, 1 Smith L. C. 7th Am. ed. 595. Later cases will be found in Bigelow on Bills and Notes, 499. According to the nearly unanimous doctrine of these cases, a creditor may agree to accept a new promise of the debtor in satisfaction of a pre-existing debt. The rule applied by the vice-chancellor seems to be entirely satisfactory."

1 Marsh V. Pedder, 4 Camp. 257; Smith V. Ferrand, 7 B. & C. 19; Anderson V. Hillies, 12 C. B. 499. See Babcock V. Hawkins, 23 Vt. 561; McClure V. Andrews, 68 Ind. 97; infra, sec 957.

2 Robinson V. Read, 9 B. & C. 449; Sard V. Rhodes, 1 M. & W. 153; Wiseman V. Lyman, 7 Mass. 286; Perit V. Pitfield, 5 Rawle, 166; Glenn V. Smith, 2 Gill & J. 494. See supra, sec 954 et seq.

3 Ibid.; Wheeler V. Schroeder, 4 R. I. 383.

4 Feamster V. Withrow, 12 W. Va. 611.

5 Benj. on Sales, 3d Am. ed. sec 729; Goldshede V. Cottrell, 2 M. & W. 20; Lyman V. Bank, 12 How. U. S. 225; Johnson V. Cleaves, 15 N. H. 332; Coburn V. Odell, 30 N. H. 540; Vail V. Foster, 4 Comst. 312; Cake V. Bank, 86 Penn. St. 303; Gordon V. Price, 10 Ired. 385; Moore V. Briggs, 15 Ala. 24; Fulfud V. Johnson, 15 Ala. 386; Steamboat Charlotte V. Hammond, 9 Mo. 59.

6 Whitbeck V. Van Ness, 11 Johns. 409. As to merger, see supra, sec 684, 860; infra, sec 1001, 1040.

7 Markle V. Hatfield, 2 Johns. 455; Willson V. Foree, 6 Johns. 110. The earlier American cases will be found discussed in detail in Smith's L. C. 7th Am. ed. 614 et seq.

8 Ibid.; Wildrick V. Swain, 34 N. J.

Whether one note accepted in exchange for another is a payment of the original note or merely a collateral, depends, also, upon the intention of the parties as evidenced by the facts of the particular case.1