[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 523 The merits of this appeal, hang upon the question, whether the indebtedness of the Hudson River Iron Company, for iron sold to it, was merged in, and satisfied by the first note given by it for $634.33.
We are of the opinion that it was not; and that the note, and those given in succession after it, were but continued evidences of the first indebtedness, and extensions from date to date, of the time of payment thereof.
Such is the result of the adjudications in cases like this in hand; though the question has not, in all of them, been sharply presented and made the ground of judgment. (See Garrison v.Howe, 17 N.Y., 458, 465; Deming v. Puleston, 55 N.Y., 655; aff'g, S.C. in 3 Jones Sp., 309; Boughton v. Otis,21 N.Y., 261, 265; Jones v. Barlow, 62 id., 202.) Such too is the result of adjudications in analogous cases. A note, given to renew and take up a note tainted with usury, is itself tainted: (Tuthill v. Davis, 20 J.R., 285; Reed v. Smith, 9 Cow., 648; Jackson v. Packard, 6 Wend., 415.) Where a chattel mortgage is given to secure a debt, the taking of a new note and a new mortgage, does not extinguish the original debt, nor the first mortgage: (Hill v. Beebe, 13 N.Y., 556; Gregory v.Thomas, 20 Wend., 17..)
These cases all go upon the principle, that the taking of a debtor's note, does not merge or extinguish the demand for which it is taken. The original consideration remains. Indeed, but for the original consideration, the note would have no force. It is but a promise to pay, put in writing. If there is no debt existing to be paid, the promise to pay it is, so to speak, null. The promise to pay is not payment, when first made, nor when at any time it is renewed; (see 20 Wend. [supra]; Waydell v.Luer, 5 Hill, 448; Cole v. Sackett, 1 id., 516.) The operation of such a note, is, to extend the time of payment until the note becomes due. If it be not paid then, the creditor may sue upon the original demand, and bring the note into court, to be given up on the trial; (Muldon v. Whitlock, 1 Cow., 290.) *Page 525
Indeed, we should have thought that this case was in substance that of Parrott v. Colby, 71 N.Y., 597; aff'g, S.C., 6 Hun, 55; but for the attempt to show that they are not alike. Save for the fact, that, in that case, the year in which to sue, prescribed by the statute, had run before the note was given, the cases are alike. There, the giving of the note was held not to be the making of a debt, but only a promise to pay the old one, and an extension of time for payment. Some facts in that case, made it stronger for the plaintiff there, than is the case here for the plaintiff in it. Doubtless, the holder of a note, who surrenders it, gives a good consideration for the note of a third party, which he takes in its place; (Brown v. Burrall,31 N Y, 114.) But there, comes in the liability of the third party, and the contracting parties are changed, and a new consideration is raised, into which the old one is merged, or, by the taking of which, the old one is extinguished. The giving up of one promise to pay, on taking another from the same party, is but a continuation of the promise, and the giving of further time to perform it. As the first did not pay the debt, the other does not redeem the promise of the first, nor itself pay the debt.
It is claimed, that the raising of money on the second or later note, and using it to take up the first or former one, is a payment of it. If there had been the discharge of the plaintiff from further liability by reason of its indorsement of the first note; or if by the transaction it had obtained a claim against another party; there would be more plausibility in the position. In fact, the plaintiff never gets by the operations with the successive notes, any satisfaction of its original claim. It has got discounted the note of its debtor, but is liable to pay it when due if the debtor does not pay. It does pay it when due, by the avails of another like discounting. It has the use of money, by using its credit and incurring liability. It has never yet received compensation for the property it sold. The cases cited to the contrary, are, where notes with other parties have been *Page 526 discounted, and the avails applied to the payment of notes with different names upon them: (Bank of Salina v. Babcock, 21 Wend., 501.) The bank, indeed, which discounted the first or any other note, could have held it as a new liability, and enforced it, irrespective of the original indebtedness. It is enough to say that it did not. It looked to the plaintiff for the money to take up the discounted note. The plaintiff paid it, and received back again the unredeemed promise of the primary debtor. Indeed, the fallacy that runs through the whole argument, is, that a promise to pay is payment, because it is put in writing in the form of a promissory note instead of being oral, and the note used as a means of borrowing money. Until the promise is in fact redeemed, there is no payment. Until payment, there is no satisfaction of the indebtedness for the goods sold.
The appellant relies upon Fisher v. Marvin, 47 Barb., 159. We are not able to distinguish this case from that, nor to reconcile it with that; nor can we decide this case in accord with that.
The judgment should be affirmed.
All concur, except MILLER, J., not voting.
Judgment affirmed.