Court Opinion

ID: 7043301
Source: CourtListenerOpinion
Date Created: 2022-07-24 06:52:27.44084+00
Date Added: 2024-06-11T16:11:26.014394
License: Public Domain

On petition for a rehearing.
Biddle, J.
The counsel for appellant have filed a long and ardent brief to convince us of two propositions:
,1. That negotiable paper taken in payment of a debt does not discharge the debt unless the paper is made by the debtor; and,
2. That, unless the debt is upon simple contract, taking negotiable paper will not discharge the debt at all.
The learned counsel have not furnished either text or case in support of the first proposition. They have cited several cases wherein it was held that a negotiable note made by the debtor and' received by the creditor was a payment of the debt; but they have furnished us with no case wherein it was held that the debtor and the maker of the negotiable paper must be the same person, or the debt will not be discharged. A single bill of exchange, after it has been endorsed by the payee, and thus made negotiable by delivery, will pay debt after debt, to any number, before it falls due, either by additional endorsemen ts or by passing it from hand to hand, long after the parties have lost all knowledge of the maker and his debt, except his name to the bill. Bills of exchange are often made where no debt exists between the maker and the payee; often made, indeed, expressly to pay the debt of *263the payee to a third person, and not the debt of the maker to the payee. Such bills, when once made negotiable by delivery, and put in circulation, will pay just as many debts as there are debtors who pass them, and creditors who receive them, before they are due. These are the qualities of bills of exchange, which give them their peculiar character aud their great usefulness in the commerce of the world. The rule contended for by the counsel would effectually put a stop to the use of commercial paper, except as between original debtors and original creditors who made and received the paper; indeed, it would rob it of every quality which constitutes it commercial paper.
As to the second proposition, that the debt paid by a bill of exchange must be a simple contract, or it will not be discharged: The plainest, and therefore the best, definition of simple contracts that we know of is given by Mr. Addison, as follows:
“ Parol or simple contracts are contracts which are either made by word of mouth, or are inferred from the silent language of men’s conduct and actions, or are put into writing and signed by the parties to them, but are not sealed and delivered, and can not be enforced unless they are founded upon some good or valuable consideration.” 1 Addison Con., sec. 2.
Any of the text-books will give substantially the same definition of simple contracts.
Promissory notes and bills of exchange are simple contracts, and differ in nothing from oral contracts, except that the words are fixed by writing, and can by that means be passed all over the world, and be easily proved. A promissory note secured by a mortgage on real estate does not cease to be a simple contract; the note is the debt, not the mortgage; and the payment of the note effectually discharges the mortgage. Any kind of a debt *264may be paid by a bill of exchange made by any person, whenever the debtor delivers it, if negotiable, or, if not, endorses it to the creditor, before it is dae, and the debt will thereby be discharged. The statute expressly enacts that “An agreement in writing, without a seal, for the compromise or settlement of a debt, is as obligatory as if a seal were affixed.” Sec. 273 of the Code.
The petition is overruled.