COMPOSITIONS WITH CREDITORS.

it. In almost every State, as well as in England, the question has frequently arisen since, and with the exception above noted, the old rule has always been sustained. 5

makes it, unless it is supported by a sufficient consideration, is the fundamental principle which underlies all compositions, and the application of it may be more nicely seen in this class of cases than in any other. To make such a stipulation, as is above set forth, binding upon the creditor, he must receive something from his debtor which it would be in vain for him to demand. Or, the latter must part with something which he may legally retain without accountability to the former. In the case of a creditor receiving fifty per centum of his claim in full discharge of the same, the courts have asked, what has the creditor gained or the debtor lost by this proceeding? What property has the former acquired to which he had no title, and which the latter might withhold from him? The debtor was bound to pay the debt the moment the creditor set the legal machinery at work for its collection. By this proceeding, then, the creditor incurs all the loss, and the debtor makes all the gain; which is just the reverse of the order of things which the law of contracts declares must exist.

Upon this reasoning, the soundness of which can not be questioned, it was long ago resolved, most strongly, in Pinnel's Case,1 that a promise by a creditor to receive a part of his debt in full satisfaction of the whole, is without consideration and void, though a receipt in full, written in the strongest terms be given, and it is the intention of both parties that the promise should never be violated. While the rule has been criticised on a few occasions,2 no State in this country has repudiated it judicially, except Pennsylvania ;3 and Maine is the only State whose legislature has deemed it proper to enact a law against

The harshness of the rule was perceived as soon as it was declared, and the necessities of commerce compelled the courts to frame many exceptions to it; the result of all which is that, at the present day, the rule exists on

4 Statute of June 3, 1851.

5 In Alabama.-Leverich v. Bates, 6 Ala. 480; Agee v. Steele, 8 Id. 948; Wilson v. Bank, 9 Id. 847; Barrow v. Vandervort, 13 Id. 232; Pearson v. Thomason, 15 Id. 700. In Arkansas.-Pope v. Tunstall, 2 Ark. 209. In California.-Gavin v. Arnan, Cal. 494; Delano v. Heilt, 27 Cal. 611. In Connecticut.-Warren v. Skinner, 20 Conn. 559; Rose v. Hall, 26 Id. 395. In Georgia.-Molyneaux v. Collier, 13 Ga. 406. But compare Brown v. Ayer, 24 Ga. 478. In Indiana.Markel v. Spielter, 28 Ind. 488; Stone v. Lewman, Id. 97. In Iowa.-4 G. Greene, 544; Norris v. Slaughter, 3 Id. 116; State ex rel. v. Clark, 12 Iowa, 335. In Kansas.-Royal v. Lindsay, 15 Kan. 591. In Kentucky. -Cutter v. Reynolds, 8 B. Mon. 598; Williams v. Langford, 15 Id. 569; Fenwick v. Phillips,3 Met. (Ky.)8. In the later cases, Ricketts v. Hall, 2 Bush, 249, and Arnold v. Park, 8 Bush, 6, the position of the court is doubtful, the leaning of the court being apparently against the rule. In Maryland.-Geiser v. Kirchner, 4 G. & J. 305; Jones v. Ricketts, 7 Md. 103; Campbell v. Booth, 8 Md. 107; s. c., 15 Id. 569; Gurley v. Hites bue, 5 Gill, 218. In Minnesota.-Sage v. Valentine, 23 Minn. 102. In Mississippi.-Jones v. Perkins, 7 Cush. 139. In Missouri.-Price v. Cannon, 3 Mo. 453; Kiley v. Kershaw, 52 Id. 224; In Massachusetts. Harriman v. Harriman, 12 Gray, 341; Brooks v. White. 2 Met. 285; Smith v. Bartholemew, 1 Id. 276; Twitchell v. Shaw, 10 Cush. 46; Potter v. Green, 6 Allen, 442; Jennings v. Chase, 10 Allen, 526; Curran v. Rummell, 118 Mass. 482; Lathrop v. Page, 129 Mass. 21. In New Hampshire.--Blanchard v. Noyes, 3 N. H. 518; Fisher v. Willard, 20 Id. 121; Matthewson v. Strafford Bank, 45 Id. 107. In New Jersey.Daniels v. Hatch, 1 Zabriskie, 391. See 2 Harris, 275. In New York.- Harrison v. Close, 2 Johns. 448; Seymour v. Mention, 17 Id. 169; Dederick v. Leman, 9 Id. 333; Mechanic's Bank v. Hazard, 13 Id. 353; Jobnson v. Brannan, 5 Id. 268, 271; Moss v. Shannon, 1 Bilt. 177; Blum v. Hartmann, 3 Daly, 47; Keeler v. Salisbury, 33 N. Y. 648; 18 Abb. Pr. 101; 1 Hilton, 515. In Maine.-White v. Jordan, 27 Me. 370. In North Carolina.-McKenzie v. Culbreth, 66 N. C. 534; Bryan v. Foy, 69 N. C. 45, Hayes v. Davidson, 70 Id. 573. In South Carolina.-Eve v. Moseley, 52 Strobh. 203. In Ohio.-Harper v. Graham, 20 Ohio, 105. In Wisconsin.- Stone v. Scammon, 6 Wis. 497. In England. -Pinnell's Case has been followed in Cumber v. Wayne, 1 Strange, 426; Fitch v. Sutton, 5 East, 230; Adams v. Topling, 4 Mod. 88; Heathcote v. Crookshanks, 1 T. R. 24; Lynn v. Bruce, 2 H. Bl. 317; Thomas v. Heathom, 2 B. & C. 477; s. C., 3 D. & R. 647; Mitchell v. Cragg, 10 M. & W. 367; Graves v. Key, 3 B. & Adol, 313; Skaife v. Jackson, 3 B. & C. 421; Stratton v. Rastall, 2 T. R. 366; Bowes v. Foster, 2 H. & N. 779; Down v. Hatcher, 10 A. & E. 121. It makes no difference to how much trouble the debtor is put to obtain the sum paid. Harriman v. Harriman, 12 Gray, 344

devised in which the operation of the rule may be escaped and the transactions upheld. They are as follows, viz. :

1. When the transaction takes place before the maturity of the debt.6-In this case, the creditor plainly derives an advantage. In the words of the court in Pinnel's Case," "the payment and acceptance of parcel before the day, in satisfaction of the whole, would be a good satisfaction in regard to circumstance of time; for peradventure, parcel of it before the day would be more beneficial to him than the whole at the day, and the value of the satisfaction is not material." The law only demands that there shall be some consideration, and cares nothing for its inadequacy. That there is some consideration for the creditor's promise, is too plain to be argued.

2. When the payment of the part is made at a place different from that designated by the contract or by law for the payment of the whole. To use the words of the court in Pinnel's Case again: "If I am bound in £20 to pay you £10 at Westminster, and you request me to pay you £5 at the day at York, and you will accept it in full satisfaction of the whole £10, it is a good satisfaction of the whole, for the expenses to pay it at York is sufficient consideration."

3. When the creditor's agreement is in writing and under seal.-The seal does not prove that the instrument is supported by a sufficient consideration, but the creditor is estopped to allege that such is not the fact. 9

4. When the payment is made by a third person. 10-In this case, the advantage which the creditor derives is evident. He receives

6 Pope v. Tunstall, 2 Pike (Ark.), 209; Rose v. Hall, 26 Conn. 395; Fenwick v. Phillips, 3 Met. (Ky.) 88; Arnold v. Park, 8 Bush, 6; Sonnenburg v. Riedel, 16 Minn. 88; Riley v. Kershaw, 52 Mo. 224; Goodnow v. Smith, 18 Pick. 414; Brooks v. White, 2 Met. 283; Bowker v. Childs, 3 Allen, 534; Colburn v. Gould, 1 N. H. 279; Smith v. Brown, 3 Hawks, 580; Harper v. Graham, 20 Ohio, 105; Spann v. Baltzell, 1 Fla. 302; Dictum in Milliken v. Brown, 1 Rawle, 391; Austin v. Dorwin, 21 Vt. 39; Bank v. James, 9 Ala. 949. 7 Supra.

8 Blanchard v. Noyes, 3 N. H. 518; Matthewson v. Strafford Bank, 45 N. H. 107; McKenzie v. Culbreth, 66 N. C. 534; Jones v. Perkins, 29 Miss. 140; Stone v. Scammon, 6 Wis. 175.

1 Chitty on Contracts, 7, (11 Am. ed).

10 Whelan v. Edwards, 29 Ga. 315; Riley v. Kershaw, 52 Mo. 224; Blanchard v. Noyes, 3 N. II. 518; Colburn v. Gould, 1 N. H. 279; Welby v. Drake, 1 C. & P. 557.

a part of a debt from one who is under no responsibility to him, a sufficient consideration for his promise to discharge the whole of a debt, due, in all probability, from an insolvent debtor.

5. When a third person guarantees the payment of the stipulated percentage, or gives his own note therefor.11-The responsibility of another is considered, in law, a sufficient substitute for that part of the debt which the creditor agrees to remit. 12

6. When the debt is due from a co-partnership, and one of the partners gives his own note for the stipulated percentage. 13-By the law of pleading, a plaintiff must join in his action all his joint debtors, and furthermore, must make service upon all. 14 The opportunity to avoid this trouble, causing, as it necessarily does, so much difficulty in the collection of a partnership debt, is a sufficient consideration for the creditor's promise to discharge the whole debt upon the receipt of the note of one of the partners for a part. He thereby gains a simpler mode of collection than he possessed before. 15

7. When the debtor pays the stipulated percentage with his own negotiable instrument,16 be the same a promissory note,17 check, 18 or bill of exchange.19-The addition of the element of negotiability to the debtor's obligation, which will enable the creditor to transfer it to whomsoever he will, is an advantage which the law holds to be a sufficient consideration for the creditor's release of the whole debt.

8. When, in addition to the percentage, the debtor pays something which he is not bound

11 Ricketts v. Hall, 2 Bush, 249; Brooks v. White, 2 Met. 283; Boyd v. Hitchcock, 20 Johns. 77; Keeler v Saliskwy, 33 N. Y. 648; Phillips v. Berger, 2 Barb. 608; Steinham v. Magrues,.11 East, 394; Le Page v. McCrea, 1 Wend. 164; New York State Bank v.. Fletcher, 5 Id. 85; Frisbie v. Larned, 21 Id. 451; Bullen v. McGillicuddy, 2 Dana, 90; Kellogg v. Richards, 14 Wend. 116; Sanders v. Decatur Bank, 13 Ala. 353; Smith v. Ballou. 1 R. I. 497; Pulliman v. Taylor, 50 Marshall, 251. A check is sufficient. Guild v. Butler, 127 Mass. 386.

12 Curlewis v. Clark, 3 Exch. 375.
13 Waydell v. Luer, 3 Denio, 410.
14 Gould on Pleading, ch. 4, sec. 67.
15 Waydell v. Luer, supra.

16 Pope v. Tunstall, 2 Ark. 209; Riley v. Kershaw, 52 Mo. 224.

17 Harper v. Graham, 20 Ohio, 106; Goddard v. O'Brien, 30 Week. Rep. 549; 50 Wis. 349.

18 Guild v. Butler, 127 Mass. 386. 19 Curlewis v. Clark, 3 Exch. 375.

to pay, e. g., attorney's fees or interest. 20-The reason for this exception is too obvious to dwell upon it further.

9. When the debt includes principal and interest, and the debtor pays a sum which exceeds the principal, but which is not equal to the amount of both. 21-Interest being but an incident to the principal, it can not exist when the principal is gone. The principal is extinguished by the payment and the agreement of the parties, and the interest falls with it.22 Interest, of itself, can be the foundation of no action. 23

10. When the part payment is made in anything but money. 24-This exception is founded upon the right acknowledged by the courts to exist, of a man to place whatever value he may choose upon property. The doctrine of peculiar values is recognized to a great extent, and the courts will not interfere with a creditor who does nothing more than to barter his own property for that of his debtor. The transaction can not be examined; the judgment of the parties is final. 25

The

11. When the subject-matter of the composition is a note,26 bond,27 or any obligation other than a book-account.28-The desire to tear away from the general rule, seems to be the most plausible reason for this exception. courts, in all the cases cited, proceed upon the assumption that, in such cases, the instrument is surrendered by its holder to its maker for cancellation, and the cancellation destroys the cause of action, without which the holder has no standing in a court of law; wherefore, the exception. This is rather questionable reasoning from which to deduce the exception under consideration; and the facilities now allowed by statutes to holders of destroyed

20 Harper v. Graham, 20 Ohio, 106; Mitchell v. Wheaton, 46 Coun. 316.

21 Johnston v. Brannon, 5 Johns. 361.

22 Stone v. Burnett, 8 Mo. 41; Tileston v. Preston, 3 Johns. 229.

23 Abbott v. Wilmot, 22 Vt. 437.

24 Jones v. Bullet, 2 Litt. (Ky.) 50; Eaton v. Lincoln, 13 Mass. 424. Real estate: State Bank v. Chetwood, 3 Halsted (N. J.), 1; Williams v. Phelps, 16 Wis. 80; Watkinson v. Inglesby, 5 Johns. 386.

25 Blinn v. Chester, 5 Day, 359; Reed v. Bartlett, 19 Pick. 273; Strang v. Holmes, 7 Cow. 224; Buell v. Bull, 43 Conn. 455.

26 Ellsworth v. Fogg, 35 Vt. 355; Draper v. Hilt, 43 Ib. 439; Kent v. Reynolds, 8 Hun (N. Y.), 559; Vanderbeck v. Vanderbeek, 30 N. J. Eq. 365.

27 Beach v. Endress, 51 Barb. 570.

18 Silvers v. Brittin, 2 Harris (N. J.), 275; Reid v. Hubbard, 6 Wis. 175. Both cases of judgments.

notes, makes it doubtful whether there is any consideration for a surrender of a promissory note for a portion of its face value. 29

12. When the amount or existence of the debt is, in good faith, disputed.30-Litigation being the only method of determining such a dispute and it being for the interest of the people, as well as of the parties directly concerned, that litigation should cease; the uncertainty of the result, the saving of the expenses incurred in obtaining it, favorable or unfavorable, as well as the benefit to the community derived from the peaceable adjustment of differences between business men, are held to be a sufficient consideration for the acceptance of a stipulation and the discharge of the whole claim.31

13. When the debt discharged is unliquidated.32 To liquidate a debt is something which always costs time and often causes trouble. The surrender by the debtor of his right to have a proper liquidated account of his liabilities rendered to him is such an advantage to his creditor as is considered, in law, a sufficient consideration for the creditor's promise to accept a smaller sum in the discharge of the whole debt.33

14. When two or more creditors of a common debtor agree to accept the precentage in full for their respective claims. 34 The ar

29 But see Foster v. Dawber, 6 Exch. 883, where it is said by Parke, B, that a note may be surrendered even without receiving anything.

30 Cooper v. Parker, 15 C. B. 822; Parker v. Riley, 21 Ga. 427; Morris v. Munroe, 30 Id. 630; Weiger v. Gould, 86 Ill. 180; Rosemmeller v. Lampe, 89 Id. 213; Tayler v. Galland, 3 G. Greene (Ia) 17; Clay v. Hoysradt, 8 Kansas 74; Stark v. Wilson, 3 Bibb. 477; Van Dyke v. Davis, 2 Mich. 144; Edwards v. Baugh, 11 M. & W. 641; Barlow v. Ocean Ins. Co., 4 Met. 270; Kerr v. Lucas, 1 Allen 279; Leach v. Yobes, 11 Gray 506; Riggs v. Hawley, 116 Mass. 596; Tuttle v. Tuttle, 12 Met. 551; Burnham v. Durm, 35 N. H. 556; Palmerston v. Huxford, 4 Denio. 166; Pierce v. Pierce, 25 Barb. 243; Vosburg v. Teator, 32 N. Y. 361; Hayes v. Davidson, 70 S. C. 574; Powell v. Jones, 44 Barb. 521; McDaniel v. Lapham, 21 Vt. 521; McGlynn v. Billings, 16 Id. 329; Cole v. Champlain Transportation Co., 26 Id. 87; Towslee v. Healy, 39 Id. 522; Bromley v. School District, 47 Id. 203; Reid v. Hubbard, 6 Wis. 175.

31 Clifton v. Litchfield, 106 Mass. 31; Donahue v. Woodbury, 6 Cush. 150; Coon v. Knapp, 4 Selden 402. 32 Cool v. Stone, 4 Iowa 219; Mathis v. Bryson, 4 Jones (N. C.) 508; Longridge v. Dorville, 5 B. & Ad. 117; Haigh v. Brooks, 10 A. & E. 309; Walters v. Smith, 2 B. & Ad. 889; Wilkinson v. Byers, 1 A. & E. 106; Atlee v. Backhouse, 3 M. & W. 651; Sibrel v. Tripp, 15 M. & W. 23; McDaniels v. Lapham, 21 Vt. 223; Lamb v. Goodwin, 10 Iredell 320.

33 Donahue v. Woodbury, 6 Cush. 150.

31 Pierson v. McCahill, 21 Cal. 611; Reay v. White,

rangement must not be conducted with each creditor separately and independently,35 but the composition agreement must be entered into between all the creditors compromising. 36 Each creditor must contract with all the others as well as with the debtor.37 The want of mutuality will make the creditor's promise ineffectual 38 There is no rule which requires all the creditors of the debtor to join in the composition; two are sufficient to make it binding, except when the composition agreement itself stipulates otherwise.39 A partner is authorized to sign such a paper in the firm name; and his act can not be called into question, except on the ground of fraud.41 After a creditor has once affixed his signature to the paper, his power over it has gone, and nothing short of the debtor's consent to its withdrawal can rob it of its binding force. 42 If a creditor represents to the debtor that he has assigned his claim to another, and the debtor procures the signature of the latter and pays to him the composition money, the creditor is forever estopped to allege the falsity of his own statement in a suit for the recovery of the debt. 43

40

Fraud.-The nature of the transaction requires the observance of the strictest good faith by all concerned. The debtor must not

3 Tyrwh. 596; s. c., 1 Cr. & Mees. 748; Goods V. Cheeseman, 2 B. & Ad. 327; Bradley v. Gregory, 2 Camp. 383; Steinman v. Magrues, 2 Id. 124; s. C., 1 East 390; Boothcy v. Sowdon, 3 Camp. 175; Paddleford v. Thacher, 48 Vt. 574; Diermayer v. Hackman, 52 Mo. 282; Renard v. Fuller, 4 Bosw. 107; Way v. Sangley, 15 Ohio St. 392; McKenzie v. Culbreth, 66 N. C. 534; Sage v. Valentine, 23 Minn. 102; Culter v. Reynolds, 8 B. Mon. 599; Ponkins v. Durflinger, 59 Ind. 27; Devon v. Horn, 17 Id. 472.

35 Perkins v. Lockwood, 100 Mass. 249; Bliss v. Shwarts, 65 N. N. 444; Wheeler v. Wheeler, 16 Vt. 60.

36 Citizens Nat. Bank v. Richmond, 121 Mass. 110; Mathewson v. Strafford Bank, 45 N. H. 104; Wilson v. Powers, 130 Mass. 127.

37 Parodie v. King, 12 Johus. 426; Harriman v. Harriman, 12 Gray 311; Ryan v. Ward, 48 N. Y. 204; Hendrickson v. Beers, 6 Bosw. 639.

38 Pierson v. Thoueason, 15 Ala. 700; Burge v. Koop, 48 N. Y. 225; See contra, 87 Me. 362.

39 Lehigh Co. v. Hibbs, 2 Week. Notes of Cas. (Penn.) 96.

40 Beach v. Ollendorf, 1 Hilton (N. Y.) 41: Smith v. Stone, 4 G. & J. 310.

41 Hawkshaw v. Parkins, 2 Swanst. 539; Teede v. Johnson, 11 Exchef. 840; Halsey v. Whitney, 4 Mason 206.

42 Anstey v. Marden, 1 Bos. & Pul. H. R. 124; See Reay v. Richardson, C. M. & R. 422; Gardner v. Lewis, 7 Gill 377; Fellows v. Stevens, 24 Wendell 291. 43 Blair v. Wait, 69 N. Y. 113; s. C., 14 N. Y. Supr. Ct. 477.

48

misrepresent the amount of his indebtedness or the value of his property.44 He must not permit any creditor to act under a false impression regarding his affairs when it lies in his power to correct it. 45 He must not wait for questions, but must volunteer information where it is evident that a creditor does not possess it.46 A misrepresentation of the amount of his assets; 47 or of the amount due to one or more creditors; a fraudulent conveyance of a part of his property, upon a secret trust for himself, the intent of which is to create the belief among the creditors that he possesses no more than he exposes to their view; 49 the failure on his part to divulge the existence of a dormant partner; a false statement to one that all the others have promised to sign if he will; 51 or that the others have accepted his terms, 52 are but a few of the deceptions which will avoid compositions. A misrepresentation by an agent53 or partner 54 is as fatal as those made by the principal or co-partner himself, even though the person making the misrepresentation is innocent.

50

Another species of fraud consists in giving secret preference to some creditors in consideration for their signatures or influence. 55 A creditor may openly insist upon any terms which he may desire; 56 but the law will give no recognition to those transactions which are

44 Kahn v. Roberts, 9 Ind. 430.

45 Droon v. Smith, 17 Ind. 172; Stafford v. Bacon, 1 Hill. 532; s. C., 25 Wend. 384: Dolson v. Arnold, 10 How. Pr. 528; Huntington v. Clark, 39 Conn. 540; Seving v. Cole, 28 Ind. 486; Carter v. Connell, 1 Wharton 392.

46 Hefter v. Cahn, 73 Ill. 296; O'Shea v. Collier White Lead & Oil Co., 42 Mo. 397; Richards v. Hunt, 6 Vt. 251.

47 Jackson v. Hodges, 24 Md. 468; Irving v. Humphrey, Hopk. 284; Elfert v. Snow, 2 Sawyer 94; Armstrong v. Mechanic's Nat. Bank, 6 Biss. 520. 48 Irving v. Humphrey, Hopk. 284.

49 Richards v. Hunt, 6 Vt. 251: Reynolds v. French, 8 Ib. 85.

50 Carter v. Connell, 1 Whart. 392. 51 Cooling v. Noyes, 6 T. R. 263.

52 Whiteside v. Hyman, 17 N. Y. Supt. Ct. 218; Compare Argall v. Cook. 43 Conn. 160; Bartlett v. Blaine, 83 Ill. 25.

53 Elfert v. Snow, 2 Sawyer 94; Hefter v. Cahn, 73 Ill. 296.

54 Pierce v. Wood, 23 N. H. 519.

55 Cobleigh v. Pierce, 32 Vt. 788; Chuck v. Mezritz, 2 Woods 204; Bean v. Amsirak, 10 Blatchford, 361; Bean v. Brookmire, 2 Dillon 108; Partridge v. Messer, 14 Gray 180.

56 Jacksman v. Mitchell, 13 Ves. 581; Smith v. Salzman, 9 Excheq. 535; Kellogg v. Richards, 14 Wend. 116; Smith v. Stone, 4 G. & J. 310.

His

It makes no difference in what form this secret preference is rendered, be it compensation for services in procuring the signatures of other creditors, 59 or for becoming surety for the payment of the composition money to them.60 Each creditor must remain on an equal footing with the others.61 advice must be prompted by no secret motives of gain.6 62 He must view his loss in the same manner as his fellow creditors, and anything, given to him, or promised to him, the tendency of which is to prejudice his mind in favor of the debtor is a secret preference. 63

64

If after receiving his composition money, a creditor discovers that he has fallen a victim to either of these species of fraud, he may bring suit for his original cause of action,6 without tendering back the money received,65 except where it was paid to him by a surety for the debtor, in which case the money must be restored to him who paid it before the commencement of the suit. 66

If the debtor has given a secretly preferred creditor money, he may recover it back in an action for money had and received. 67 If he

57 McGarland v. Garbee, 10 Ind. 151 (to last creditor); Bartleman v. Douglass, 1 Cranch C. C. 450; O'Shea v. Oil Co., 42 Mo. 397; Fay v. Fay, 121 Mass. 56 (note); Case v. Gerrish, 15 Pick. 30 (note); Ramsdell v. Edgarton, 8 Met. 227, promise to pay the whole debt; Lothrop v. King, 8 Cush. 382; Way v. Langley, 15 Ohio St. 392; Patterson v. Boehm, 4 Penn. St. 507; Macon v. Darlington, 14 Id. 310; Gibbon v. Bellas, 2 Phila. 390; Callahan v. Ackley, 9 Ib. 99; Primeo v. Higgins, 12 Abb. Pr. 334; Lawrence v. Clark, 36 N. Y. 121; Carroll v. Shields, 4 E. D. Smith 466; Beach v. Ollendorf, 1 Hilton 41; Higgins v. Mayor. 10 How. Pr. 363.

58 Clark v. White, 12 Pet. 178.

59 Frost v. Gage, 5 Gray 560; Eldridge v. Strong, 34 N. Y. Sup. Ct. 491.

60 Wood v. Barker, L. R. 1 Eq. 139.

61 Knight v. Hunt, 5 Bingham 432. 62 Bryant v. Christie, 1 Starkie 329.

63 Coleman v. Weller, 3 Y. & J. 212.

64 Kahn v. Gumbert, 6 Ind. 430; Danglish v. Tennant, L. R., 2 Q. B. 49: Partridge v, Messer, 14 Gray 180: Stuart v. Blum, 28 Penn. St. 225; Pierce v. Wood, 23 N. H. 519. In Michigan, he can sue only in tort for the fraud, Jewett v. Petit, 4 Mich. 508.

65 Babcock v. Dill, 43 Barb. 517; Crandall v. Cochran, 3 T. & C. 203.

66 Elfert v. Snow, 2 Sawyer 94.

67 Atkinson v. Densby, 6 H. & N. 778; s. c., 7 Id. 934; Bean v. Arnsick, 10 Blatch. 861; Turner v. Hoole,

has given him notes, or a mortgage, 68 a court of equity will order them to be delivered up for cancellation.69 If the note includes the the composition money and the preference, the note is entirely void and no action can be maintained upon it.70 So, if two notes be given, one for the composition money, and the other as a preference, they are both void, 71 for the fraud vitiates the entire transaction.72 If the creditor secretly obtains an indorser upon the note received by him, the indorsement is void.73 But, if a note be indorsed to an innocent third person for value before maturity, the debtor must pay it,75 and resort to his remedy against the creditor for money paid. 76

--

Conditions. A creditor may insist upon any condition before aflixing his signature and such conditions must be literally fulfilled before the release takes effect.77 And if the debtor fails to fullfill the condition as to one creditor, all the creditors are released from their obligations, though they have accepted their precentage.78 If the creditors sign upon the condition that their agreement shall be void unless all the creditors take the same percentage, the debtor must procure the signatures of all creditors, secured and unsecured, 79 however large or small their claims may be. 80 Time is of the essence of the contract in all

D. & R. N. P. 21; Alsoger v. Spaulding, 4 Bing. N. C. 407; s. C., 6 Scott 204; Bran v. Brookmire, 2 Dillon 108.

68 Middleton v. Onslow, 1 P. Wms. 768; Estabrook v. Scott, 3 Ves. 456; Jackson v. Mitchell, 13 Ves. 581; Spowrett v. Spiller, 1 Atk. 105.

69 Cockshot v. Bennett, 2 T. R. 163; Jackson v. Lomas, 4 Id. 166; Lothrop v. King, 8 Cush. 382; Carroll v. Shields, 4 E. D. Smith 466.

70 Howden v. Haigh, 11 A. & E. 1033.

71 Eldridge v. Strong, 34 N. Y. Sup. Ct. 491; Steinburg v. Bowman, 103 Mass. 328.

72 Doughty v. Savage, 28 Conn. 146.

73 Leicester v. Rose, 4 East. 872; Ex parte Saddle, 15 Ves. Pr. 52.

74 Smith v. Cuff, 6 M. & S. 160; Bradshaw v. Bradshaw, 9 M. & W. 29.

75 Horton v. Rily, 11 M. & W. 492.

76 Gilmore v. Thompson, 49 Powers Pr. 198.

77 Magee v. Mast, 49 Cal. 141.

78 Shipton v. Casson, 5 B. & C. 378; Garrat v. Woolner, 8 Bing. 258; Wenhun v. Fowle, 3 Dowl. 43; Rosling v. Muggeridge, 16 M. & W. 181; Evans v. Powis, 1 Excheg. 601; Culter v. Reynold, 8 B. Monroe 599; Makepeace v. Harvard College, 10 Pick. 298; Penniman v. Elliott, 27 Barb. 315; Dauchy v. Goodrich, 20 Vt. 127. But strict performance may be waived. Hyde v. Boerum, 16 Cranch C. C. 9.

79 Kinsing v. Bartholemew, 1 Dillon 155.

80 Paulin v. Kaigh, 27 N. J. 503; Durgin v. Ireland, 14 N. Y. 322; Acker v. Phoenix, 4 Paige 305; Spooner v. Whiston, 8 Moore 580.