
    Musgrave and Another v. Glasgow.
    In an action against principal and surety upon a promissory note, evidence was adduced by the defendant, tending to show that, at the time appointed for the payment of the note, the principal offered to pay the same, and that the payee, without receiving the money or surrendering the note, made an oral agreement with the principal for a new loan of the money, upon the sole responsibility of the latter; but the Court instructed the jury that the evidence constituted no defense to the action.
    
      Tuesday, November 25.
    
    
      .Held, that the instruction of the Court was erroneous.
    APPEAL from the Dearborn Circuit Court.
   Smith, J.

Debt upon two joint and several notes for the payment of 100 dollars each, made by Musgrave and Bond in favor of Glasgow. Judgment for the plaintiff for the amount of the notes.

Musgrave let judgment go against him by default. Bond appeared and pleaded the general issue, and several special pleas. Demurrers were sustained to all the special pleas, but as it is agreed by both parties that the evidence applicable under the special pleas might have been, and was, given under the general issue, it is unnecessary to notice them.

The facts relied upon as a defense by Bond, were as follows:

Bond was the security of Musgrave on the notes sued upon. The notes were drawn payable one day after date, but it was understood that Musgrave was to have the money for a trip down the river, and there was a verbal agreement that the latter was to pay 10 per cent, interest for the use of it. Musgrave came back from his trip down the river, in May, 1848; he then went to Glasgow with money to pay the two notes now sued upon, and another note for 100 dollars which Glasgoio held and upon which Bond was not a party. He told Glasgow he was ready to pay, and offered to pay, all the notes, but Glasgow told him he then wanted only 100 dollars, and that he wished him to keep the rest, as he desired it to be drawing interest. Musgrave told Glasgow he would have no use for the money unless he could keep it until the next spring, and if he, Glasgow, would need the money before the next spring, he had better take it then. Glasgow then agreed that Musgrave should keep it until the next spring, the latter agreeing to pay 10 per cent, interest for it. At the time of this agreement, Glasgow asked Musgrave if Bond would be willing to stand as security for the money again, and Musgrave answered that Bond had told him, Musgrave, he did not want to do so. Glasgow then said to Musgrave, “ it will make no difference, I think you are good for it.” Musgrave then paid Glasgow 100 dollars, and took up the note signed by him for that amount, and brought away the money he had carried to Glasgow to pay the notes upon which Bond was security, leaving those nptes in Glasgow’s possession.

P. L. Spooner and E. Dumont, for the appellants.

J. Byman, for the appellee.

Two witnesses testified that, after this transaction, Glasgoio had inquired of them as to the standing of Musgrave, telling them that he had loaned Musgrave money, with Bond as his security, and had afterwards let Musgrave have the money again'for another trip down the river, taking Musgrave alone for it.

The Court instructed the jury, substantially, that this evidence did not constitute any “ defense to the suit, and was not admissible under the general issue.”

We think this evidence tended to prove that there was, really, a payment of the original notes and a new loan made to Musgrave on his sole responsibility. If Musgrave had -actually placed the money in the hands of Glasgoio for the payment of the notes, and afterwards received it back from him as a new loan, under the circumstances' detailed, it cannot be doubted that this would have been a payment, and Bond would have been discharged. And' if the parties intended to waive the formality of passing the money from one to the other and back again, but really to consider the transaction as a payment and new loan, we do not see any good reason why it might not be so regarded by the jury. Viewed in this light, the evidence was admissible and the instructions given were erroneous.

Per Curiam.

The judgment is reversed with costs. Cause remanded, &c.  