
    Stam & Grumme v. Alexander Kerr.
    A creditor who receives the bill of exchange of his debtor as a conditional payment of his debt, is bound to give notice to the debtor of the dishonor of the bill, if it be not paid at maturity; and if he fail to do so, and do not return the bill, the payment will become absolute. See Story on Bills, \ 109.
    In error from the Circuit Court of Yazoo county. Hon. E. G. Henry, judge.
    The defendant in error sued the plaintiffs in error, in assumpsit, for the recovery of a promissory note, executed by the defendant, for $132. The plaintiffs in error pleaded payment, .and on the trial, tbe answer of Kerr to tbe bill of discovery, filed by Stam, was read to tbe jury. Tbe bill charged that tbe defendant, Stam, bad given to tbe plaintiff bis bill of exchange on one J. H. Bell, for tbe amount, and in payment of tbe note sued on, and that be bad no notice of its non-payment, and bad bad a settlement with Bell, in which be left tbe amount of tbe bill in bis bands.
    Tbe answer of Kerr admitted tbe giving and receiving of tbe bill of exchange, but denied that it was in absolute payment of tbe note sued on; but that it was expressly agreed between tbe parties, it should only be considered as a payment in tbe event that tbe bill was paid on presentation. That it had been presented, and accepted by Bell, but was not paid ; and that be now bad tbe bill in his possession for defendant’s benefit.
    This was all tbe evidence in tbe case.
    Tbe court instructed tbe jury, that “If they believed, from tbe evidence, that tbe agreement between Stam and tbe plaintiff, when be took tbe draft on Bell, was, that if paid on presentation, it was to be payment of tbe note sued on; and that it was not paid but accepted, and tbe draft held by plaintiff, and not returned nor offered to be returned to Stam; and that Stam was not notified of non-payment, tbe law is for defendant.”
    Tbe plaintiffs below bad verdict and judgment. Tbe defendant moved for a new trial, which was overruled, and to tbe action of tbe court they took their bill of exceptions. •
    
      
      Gribbs and Bowman, for plaintiffs in error,
    Insisted, that although the bill was given as a conditional payment of the debt, yet, the plaintiff, by his laches in failing to give notice of its non-payment, had made the bill his own, and the payment had become absolute. See Story on Bills, § 109, and authorities there cited, and Dayton v. Trull, 28 Wendell, Bep. 345.
    Creo. B. Wilkinson, for defendant in error,
    Contended, that the payment was conditional, and not absolute, and that the verdict did substantial justice between the parties; and that the court would not, in cases of this sort, grant a new trial. See Barniigu v. Nesbit, 1 S. & M. 22; Leflore v. Justice, lb. 381.
   Fisher, J.,

delivered the opinion of the court.

The plaintiff below brought this action in the Circuit Court of Yazoo county, to recover the- amount of a note made by the defendants. The defence set up was, that the note had been paid by a domestic bill of exchange, drawn by one of the defendants, in favor of the plaintiff, on one James H. Bell, and which was by him accepted. The testimony to sustain this defence consisted of a bill of discovery, by the defendants, and answer thereto by the plaintiff. It was alleged in the bill, that the bill of exchange on Bell had been given by one of the defendants, as above stated; that Bell had accepted the same; that the defendant, since the said acceptance, had a settlement with Bell, and had left the amount in his hands. The answer denies that the bill was received as an absolute payment of the note, but that it was only to be a payment in the event of its being paid on presentment to Bell.

Upon this state of case the jury found a verdict for the plaintiff below, for the amount of the note and interest; and the court refused, upon motion, to set aside the verdict, and to grant a new trial.

The bill, Mnder any view of the case, was received as a conditional payment of the note ; and the plaintiff, while he continued to be the holder, was'bound to use due diligence to collect it from the acceptor, and to give notice of its dishonor to the drawer. Story on Bills, § 109. Nor conld he return the bill and prosecute his action under the circumstances, on the note; and the court indeed, so instructed the jury; but that instruction they appear to have disregarded. The defendant was entitled to notice of the dishonor of the bill, that he might not be induced to do what was done in this instance, to wit; to leave funds in the hands of the acceptor, with which to pay the bill.

Judgment reversed, new trial granted, and cause remanded.  