By the Court,
Beardsley, J.
It' is well settled as a rule of evidence that paroi proof of notice of non-payment may be given, although the notice was in writing and the defendant has not been called on to produce it at the trial. (1 Phil. Ev. by Cow. & H., 445, 446, note 850. 2d vol., 28, note 100.) There is no difference, in this respect, between a notice given by a public notary and one by a private person. This objection was properly overruled.
The check was drawn by the defendant upon the Chemical Bank, but it was presented for payment by an agent of the Phoenix Bank. It was the custom of the latter, before sending out checks on other banks for payment, to stamp them on their face as paid, as was done with this check, but as payment was refused, this stamp, as in other cases, was erased. It was urged on the part of the defendant that this mark of payment on the face of the check canceled and destroyed it, but the circuit judge held that it did not. It was not pretended that the check had been paid before or after this stamp was placed on it, and we are not called upon to determine how far such a stamp, unexplained, may be evidence of payment. It was clearly subject to explanation, and a satisfactory one was given. The circuit judge was correct in disregarding this objection.
There was no variance between the, check given in evidence and the copy annexed to the declaration. The check was payable to bearer and the plaintiff sought to recover in that character. The stamp of pajunent on the face of the check, which had been erased, and certain names on its back, were no part of the check, and the statute does not [367]*367require that they should appear on the copy served with the declaration. (2 R S., 352, §7.)
The objection made at the trial, that the plaintiff could not recover without proving the check to have been protested by a notary, and that the notice given in the name of the notary by his clerk was bad, is not taken in the points submitted on the part of the defendant, and is regarded as abandoned. But it is manifestly unfounded.
The circumstances under which this check was made and passed to the plaintiff, as detailed by the witnesses, were as follows : One Watrous, living in the city of New York, was in the habit of drawing drafts for his own accommodation on the plaintiff who resided at Troy, and which the plaintiff was in the habit of accepting. These drafts were negotiated in New York by J. E. Betts (the father of the defendant) for the benefit of Watrous. On the 3d of October, 1842, Watrous drew on the plaintiff, at one day after sight, for $325, and his draft was accepted by the plaintiff on the 4th of said October. This draft had been negotiated by J. E. Betts for the benefit of Watrous, before the check in suit was made. J. E. Betts was at this period a broker in New York, but he was in bankruptcy and could not keep a bank account, for which reason his son (the defendant) allowed him to keep a bank account in his name, and signed such checks in blank for the use of said J, E. Betts, as were required in the course of his business. There was no particular arrangement between them as to the use of such checks, but they were to be used with prudence, and the course of business was for J. E. Betts to make his deposits of money in the defendant’s name, and draw the same' out of bank by checks which the defendant signed in blank and left with J. E. Betts to fill up and use as he wanted them. Defendant sometimes signed twenty or thirty checks at a time and left them with J. E. Betts. This check was one thus signed and left with him, and he filled it up and issued it on the 7th October, 1842, although it is dated on the 10th. On the 7th one Keeler, an agent for said Watrous, applied to J. E. Betts for the loan of a check of $325 to Watrous, to be sent to the plaintiff to meet the draft of Watrous for that [368]*368sum which the plaintiff had accepted on the 4th, and this check was thereupon lent by J. E. Betts to Watrous for that purpose, it being agreed that Watrous should provide funds to take up said check at maturity. J. E. Betts was reluctant to let Watrous have the check, and told Keeler he considered it a stretch of authority to do so. The check was sent by Watrous to the plaintiff at Troy, on the 7th of October, to meet said draft which was to be paid on the 8th, and at which time it was paid by the plaintiff. Watrous never-provided funds to pay the check, having failed on the 9th of October, and it has remained unpaid. Some other circumstances were detailed by the witnesses, but they are not deemed material to the points raised and decided by the judge.
The judge charged the jury that if they believed the plaintiff' received this check before it fell due, bona fide and -without notice of its misapplication or malapplication, and to be applied on said draft or in reimbursement of his payment thereof, the draft having been paid by him when it fell due, he, being an accommodation acceptor of said draft, was-entitled to recover on said check. This was excepted to by the counsel for the defendant.
The counsel for the defendant then requested the judg-e to charge the jury that if they believed J. E Betts had no authority to use the defendant’s check, except to draw out funds deposited by him in bank to the credit of the defendant, the plaintiff could not recover without showing a consideration paid on the credit of said check, and that payment of his previous acceptance for the accommodation of Watrous, after the receipt of said check, would not be a consideration within the meaning of this rule. The judge refused so to charge and the counsel for the defendant excepted.
Both exceptions raise, in substance, the same question, for the latter is but a modification of the former; it presents no - new principle.- Each assumes that the check was lent by J. E. Betts to Watrous without authority, and that it was unavailable in the hands of the latter. This view was correct so far as respects Watrous; he received the check with notice that it was issued without authority, and, besides, [369]*369he promised to pay it when presented. He, therefore, could not have maintained an action upon it against the defendant. Each exception also assumes that the plaintiff neither made an advance of money, nor incurred any new obligation, nor relinquished any right, in consequence of this check being transfered to him. If he paid his own acceptance after the check came to his hands, he did so, not in consideration of the transfer of the check to him, but because he was bound by his previous acceptance to do so If the acceptance had been paid when the check was received by the plaintiff, he held it to reimburse an advance already made. It does not appear to have been received in satisfaction of Watrous’s liability to the plaintiff; that was in full force notwithstanding the transfer of the check. Payment of the check to the plaintiff would certainly have extinguished the liability of Watrous, but that consequence did not follow from its mere transfer to the plaintiff as security for what was his due.
Under the charge the jury must have found that the plaintiff received the check without notice that it had been issued without authority, or that Watrous had engaged to pay it when presented, and that the plaintiff was a bona fide holder.
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By the Court,
Beardsley, J.
It' is well settled as a rule of evidence that paroi proof of notice of non-payment may be given, although the notice was in writing and the defendant has not been called on to produce it at the trial. (1 Phil. Ev. by Cow. & H., 445, 446, note 850. 2d vol., 28, note 100.) There is no difference, in this respect, between a notice given by a public notary and one by a private person. This objection was properly overruled.
The check was drawn by the defendant upon the Chemical Bank, but it was presented for payment by an agent of the Phoenix Bank. It was the custom of the latter, before sending out checks on other banks for payment, to stamp them on their face as paid, as was done with this check, but as payment was refused, this stamp, as in other cases, was erased. It was urged on the part of the defendant that this mark of payment on the face of the check canceled and destroyed it, but the circuit judge held that it did not. It was not pretended that the check had been paid before or after this stamp was placed on it, and we are not called upon to determine how far such a stamp, unexplained, may be evidence of payment. It was clearly subject to explanation, and a satisfactory one was given. The circuit judge was correct in disregarding this objection.
There was no variance between the, check given in evidence and the copy annexed to the declaration. The check was payable to bearer and the plaintiff sought to recover in that character. The stamp of pajunent on the face of the check, which had been erased, and certain names on its back, were no part of the check, and the statute does not [367]*367require that they should appear on the copy served with the declaration. (2 R S., 352, §7.)
The objection made at the trial, that the plaintiff could not recover without proving the check to have been protested by a notary, and that the notice given in the name of the notary by his clerk was bad, is not taken in the points submitted on the part of the defendant, and is regarded as abandoned. But it is manifestly unfounded.
The circumstances under which this check was made and passed to the plaintiff, as detailed by the witnesses, were as follows : One Watrous, living in the city of New York, was in the habit of drawing drafts for his own accommodation on the plaintiff who resided at Troy, and which the plaintiff was in the habit of accepting. These drafts were negotiated in New York by J. E. Betts (the father of the defendant) for the benefit of Watrous. On the 3d of October, 1842, Watrous drew on the plaintiff, at one day after sight, for $325, and his draft was accepted by the plaintiff on the 4th of said October. This draft had been negotiated by J. E. Betts for the benefit of Watrous, before the check in suit was made. J. E. Betts was at this period a broker in New York, but he was in bankruptcy and could not keep a bank account, for which reason his son (the defendant) allowed him to keep a bank account in his name, and signed such checks in blank for the use of said J, E. Betts, as were required in the course of his business. There was no particular arrangement between them as to the use of such checks, but they were to be used with prudence, and the course of business was for J. E. Betts to make his deposits of money in the defendant’s name, and draw the same' out of bank by checks which the defendant signed in blank and left with J. E. Betts to fill up and use as he wanted them. Defendant sometimes signed twenty or thirty checks at a time and left them with J. E. Betts. This check was one thus signed and left with him, and he filled it up and issued it on the 7th October, 1842, although it is dated on the 10th. On the 7th one Keeler, an agent for said Watrous, applied to J. E. Betts for the loan of a check of $325 to Watrous, to be sent to the plaintiff to meet the draft of Watrous for that [368]*368sum which the plaintiff had accepted on the 4th, and this check was thereupon lent by J. E. Betts to Watrous for that purpose, it being agreed that Watrous should provide funds to take up said check at maturity. J. E. Betts was reluctant to let Watrous have the check, and told Keeler he considered it a stretch of authority to do so. The check was sent by Watrous to the plaintiff at Troy, on the 7th of October, to meet said draft which was to be paid on the 8th, and at which time it was paid by the plaintiff. Watrous never-provided funds to pay the check, having failed on the 9th of October, and it has remained unpaid. Some other circumstances were detailed by the witnesses, but they are not deemed material to the points raised and decided by the judge.
The judge charged the jury that if they believed the plaintiff' received this check before it fell due, bona fide and -without notice of its misapplication or malapplication, and to be applied on said draft or in reimbursement of his payment thereof, the draft having been paid by him when it fell due, he, being an accommodation acceptor of said draft, was-entitled to recover on said check. This was excepted to by the counsel for the defendant.
The counsel for the defendant then requested the judg-e to charge the jury that if they believed J. E Betts had no authority to use the defendant’s check, except to draw out funds deposited by him in bank to the credit of the defendant, the plaintiff could not recover without showing a consideration paid on the credit of said check, and that payment of his previous acceptance for the accommodation of Watrous, after the receipt of said check, would not be a consideration within the meaning of this rule. The judge refused so to charge and the counsel for the defendant excepted.
Both exceptions raise, in substance, the same question, for the latter is but a modification of the former; it presents no - new principle.- Each assumes that the check was lent by J. E. Betts to Watrous without authority, and that it was unavailable in the hands of the latter. This view was correct so far as respects Watrous; he received the check with notice that it was issued without authority, and, besides, [369]*369he promised to pay it when presented. He, therefore, could not have maintained an action upon it against the defendant. Each exception also assumes that the plaintiff neither made an advance of money, nor incurred any new obligation, nor relinquished any right, in consequence of this check being transfered to him. If he paid his own acceptance after the check came to his hands, he did so, not in consideration of the transfer of the check to him, but because he was bound by his previous acceptance to do so If the acceptance had been paid when the check was received by the plaintiff, he held it to reimburse an advance already made. It does not appear to have been received in satisfaction of Watrous’s liability to the plaintiff; that was in full force notwithstanding the transfer of the check. Payment of the check to the plaintiff would certainly have extinguished the liability of Watrous, but that consequence did not follow from its mere transfer to the plaintiff as security for what was his due.
Under the charge the jury must have found that the plaintiff received the check without notice that it had been issued without authority, or that Watrous had engaged to pay it when presented, and that the plaintiff was a bona fide holder. They must also have found that the plaintiff paid his own acceptance at maturity, and that he received the check before or after that payment had been made, to be applied, when paid, in satisfaction of the acceptance, or in repayment of what the plaintiff had already advanced to satisfy his acceptance. That the plaintiff was an accommodation .acceptor, seems to have been conceded. He took the check without notice and with the rights of a bona fide holder; and the only material question is, did he receive it for what the law deems a valuable consideration ? if he did, he is entitled to judgment.
The plaintiff was a creditor of Watrous, by accepting for his accommodation, and, perhaps, by having already paid that acceptance. The legal proposition is the same in either event; he had all the rights of a creditor of Watrous. Under these circumstances Watrous transfers to the plaintiff the check, a negotiable security, not then due, and for the pur[370]*370pose of having the proceeds applied, when received, in satisfaction of such indebtedness. In the hands of Watrous, the check was unavailable, but it would be otherwise when transfered to a bona fide holder for value.
The jury have found that the plaintiff was a bona fide holder; that point is therefore disposed of.
But did he receive the check for a valuable consideration ?
He was not a purchaser in the ordinary sense of the term; that is, he paid nothing on the check; made no advance of money or property on receiving it. Had he done so he would have been a purchaser for value and his right incontestable. Upon this point all the authorities agree.
But in my estimation this is not the only mode in which a party may acquire the rights of a purchaser for a valuable consideration. If the paper is received in payment and satisfaction of a pre-existing debt; or if, in consideration of its transfer, some new responsibility is incurred, or a valuable benefit relinquished, by the person who receives it, he ought, in my judgment, on every principle to be deemed a purchaser for value. A debt which ought to be paid is canceled by the creditor; a new burthen is assumed, or some valuable advantage is given up. Where, in reason and justice, can be the difference between a purchase in one of these modes, or by a present payment of money 1 I confess I see none, and although the adjudged cases in this state are not all harmonious, I regard the principle stated as a well settled point in commercial law. (Swift v. Tyson, 16 Pet., 1; Bank of Sandusky v. Scoville, 24 Wend., 115; Bank of Salina v. Babcock, 21 id., 499; Coddington v. Bay, 20 Johns., 637, Woodworth, J. Same case, opinion and decree of the Chancellor, 5 Johns. Oh., 54. Payson v Coolige, 2 Gal. R., 233; Krush v. Scribner, 11 Conn. R., 388.) In the last case the authorities on this subject are collected and ably reviewed by Chief Justice Williams.
/ It is, however, true that it has been adjudged in this state, that one who receives negotiable paper in payment of a preexisting debt is not a holder for value. (Rosa v. Brotherson, 10 Wend., 85. See also 12 id., 600, and 14 id., 570.) But this principle is virtually overruled by the later cases in this [371]*371court, and is opposed to the general current of authority on the subject.
There is a plain distinction between a transfer of negotiable paper in payment of a precedent debt, and one made merely as security for its ultimate payment. In the latter-case no right is relinquished; the debt continues, as before, in full force, neither postponed or extinguished; but in the former, it is gone forever.
In the present case the check was not received as payment, but as security. Scott could have sued Watrous when the check was received, and, for aught that appears in the testimony, that right is still unimpaired. Scott paid nothing for the check, incurred no new obligation and relinquished no right in consequence of receiving it. The judge therefore erred in his charge, and a new trial should be granted.
New trial granted.