Case Name: North Penn Iron Company v. New Jersey Bridge Company, Appellant
Court: Superior Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1907-12-12
Citations: 35 Pa. Super. Ct. 84
Docket Number: Appeal, No. 41
Parties: North Penn Iron Company v. New Jersey Bridge Company, Appellant.
Judges: Before Rice, P. J., Porter, Henderson, Morrison, Orlady, Head and Beaver, JJ.
Reporter: Pennsylvania Superior Court Reports
Volume: 35
Pages: 84–86

Head Matter:
North Penn Iron Company v. New Jersey Bridge Company, Appellant.
Promissory notes — Debtor and creditor — Payment.
A promissory note, though negotiable, given by a debtor to his creditor, does not operate as a payment of a pre-existing indebtedness, in the absence of an agreement between the parties that it shall so operate, and action may still be maintained on the original indebtedness.
Argued Nov. 19, 1907.
Appeal, No. 41, Oct. T., 1907, by-defendant, from judgment of C. P. Bucks Co., April T., 1905, No. 16, on verdict for plaintiff in case of North Penn Iron Company v. New Jersey Bridge Company.
Before Rice, P. J., Porter, Henderson, Morrison, Orlady, Head and Beaver, JJ.
Affirmed.
Assumpsit for goods sold and delivered. Before Stout, P. J.
At the trial the following offer was made by defendant:
Mr. DuBois: It is proposed to prove that a note for $350.49, was given by the defendant company to the plaintiff company, and that this particular note matured before the bringing of the suit at bar, and also that this particular note is outstanding and is in the possession of the plaintiff company, and that the defendant company is now liable for its payment. Payment upon this particular note was refused by the defendant company.
Plaintiff objects to the offer on the ground that the mere giving of a note which matured before the suit was brought, and which has never been paid, payment upon which was stopped by the defendant, is not admissible in evidence as a payment on account.
The Court: The objection is sustained. To which ruling of the court defendant excepts, and a bill is sealed. [1]
Verdict for plaintiff for $1,069.2,5.
On a motion for a new trial Stout, P. J., filed the following opinion:
The second reason assigned complains that the court refused to admit the defendant’s offer as an offset to plaintiff’s claim a certain promissory note for $350.49 given by the defendant to the plaintiff on account of his claim. The plaintiff presented the note for payment at maturity and payment was refused. The note was then protested, and it still remains in the hands of the plaintiff company unpaid. There was no offer to show that the plaintiff accepted the note as a payment, or that there was any agreement whatever that it was so regarded by the parties.
The first reason assigned complains that the court directed upon plaintiff’s motion the testimony in relation to a certain certified check for $352.25, given by the defendant company for the use and benefit of the plaintiff company, should be stricken out. The purpose of the testimony was to use the said check as an offset to plaintiff’s claim.
This motion was made at the close of the defendant’s case. All the testimony on this branch of the case showed that the said check was given to take up the said note of $350.49; that the defendant had placed the check into the hands of Mr. John J. Albertson, the engineer in charge, to deliver it to the plaintiff company upon certain terms; that a dispute arose between the plaintiff and the defendant as to whether the terms upon which the check was to be delivered had been complied with by the plaintiff; the defendant contended that they had not, and directed the said Albertson not to deliver the said check. In pursuance of this instruction by the defendant the said Albertson refused to deliver the check. The check has never been paid and still remains in the possession of Albertson. The plaintiff never had possession or control of said check nor derived any benefit therefrom. The plaintiff now sues on the original claim, and the defendant was permitted to go fully into its various claims of set-off, including that upon which it had passed its order not to deliver the said check to the plaintiff.'
According to the. general doctrine a promissory note, though negotiable, given by a debtor to his creditor, does not operate as a payment of a pre-existing indebtedness, in the absence of an agreement between the parties that it shall so operate, and action may still be maintained on the original indebtedness: 22 Am. & Eng. Ency. of Law (2d ed.), p. 555.
December 12, 1907:
It is settled, by a long and unquestioned line of authorities, that when a creditor receives from his debtor the note or check of the latter, or of a third party, on account of a pre-existing debt, such note or check is only collateral to the original indebtedness; that it is taken not as absolute, but as conditional payment; and that the debt will be extinguished only if the collateral obligation be paid: Mechanics’ Nat. Bank v. Kielkopf, 22 Pa. Superior Ct. 128; McCartney v. Kipp, 171 Pa. 644.
Motion overruled and new trial refused.
Error assigned was, inter alia (1), rulings on evidence, quoting the bill of exceptions.
John L. DuBois, for appellant.
Clifton Maloney, with him Yerkes, Ross & Ross, for appellee.

Opinion:
Per Curiam,
The assignments of error are overruled and the judgment is affirmed for the reasons given by the learned judge below in the opinion overruling the motion for new trial.