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when Considered Absolute or Condi Tional Payment by Bill

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PAYMENT BY BILL, WHEN CONSIDERED ABSOLUTE OR CONDI TIONAL. When payment of a bill or note is made by giving another note or bill, other than notes treated as legal tender, as a general rule, such payment will not be considered absolute until the paper given in payment has been itself paid, except where the parties expressly or impliedly agree that the claim shall be discharged by such payment. (Tiedeman, Com. Pap., Sec. 379.) A distinction is made by some authorities when the payor gives his own note in payment and when he gives the note or bill of another. In the first instance it is uniformly treated as a conditional payment. (Bank of U. S. v. Daniel, 12 Pet., 32; McLaren v. Hall, 26 Ia., 298.) When a stranger's note is given in payment for a precedent debt it is also generally treated as a conditional payment, but if given in satisfaction of a contemporaneous debt it is held to be an absolute payment if so transferred as to end the transferor's liability thereon, that is, without indorsement. (Crane v. McDonald, 45 Barb., Boyd v. Hitch cock, zo Johns., 76.) A new bill or note given in renewal of an old one retained by the payee, is also held to constitute but a suspension of the old one until the new one is paid. If the new note fails for any reason, the old one is revived and suit may be brought on it. (Ritter v. Singmaster, 73 Pa. St., 400.) To rebut this legal presumption that such payments are con ditional, there must be an express agreement to the contrary, or such circumstances as will by implica tion show that the parties considered the payment absolute. Thus while a receipt in full signed by the recipient of the paper is not considered sufficient to rebut the presumption of conditional payment, if other corroborating circumstances appear, as where the words were, "received and accepted in full satisfaction," and security by the indorsement of a third person was given, it was held to be an abso lute payment. (Morris v. Harvey, 75 Va., 726.) Some cases hold where the holder had the option of a cash payment or the bill it will be treated as an absolute payment, but the surrender of a security is not sufficient to alter the presumption. (Tiedeman, Corn. Pap., Sec. 380.) The conditional payment operates to suspend the right of action on the original paper until the paper taken in payment falls due, then the holder can sue, at his election, on either of the obligations. But if he sues on the original debt or note, he must pre sent and surrender the bill or note taken in pay ment, or account for it to the satisfaction of the party giving it. It is the duty of a holder of a bill taken in conditional payment to present it for acceptance or payment and do all things necessary to charge the parties liable on it, and a failure so to do, is held by some authorities to discharge the debtor both on his indorsement and on the original debt. (Mauney v. Coit, 8o N. C., 300.) While others hold such failure will only discharge the debtor in case he has been damaged by the negli gence of the creditor. (Kephart v. Butcher, 17 la., 240; Tiedeman, Com. Pap., Sec. 382.)

note, conditional, held, debt and paper