If the referees were right in finding that the money which the plaintiffs seek to recover was "lent by them",to Thomas W. Jenkins, it follows that the plaintiffs -have paid no .money on their "notes, and the whole groundwork of the action fails. I am not prepared to say that the report is so clearly against the weight of -evidence upon that -point that we should'be warranted in setting it aside. "But if we assume that the referees were wrong'on this question of fact, they were Clearly-right on the question of law. If .the plaintiffs paid the money -in question through Jenkins, they -did hot pay it -to the use of the defendants, -but in-discharge of their own obligation. The-original transaction was -an exchange of -notes, the -undertaking-.of each party beingthe-consideration for the undertaking oftheuther. This -was a sufficient consideration; -and the notes of each party had their inception as -valid securities the moment the exchange was made. Each firm was -bound to pay -its own notes.; =and the plaintiffs cannot recover against the defendants for having discharged their own undertaking. A-contract-to indemnify-is not implied, where there.is an express engagement of-another kind ; and -here each -party is -under an express-engagement to the other. If the plaintiffs had loaned their notes to the -defendants, a promise of indemnity might have been implied ; and money paid by the -plaintiffs in taking -up the notes *189would have been paid to the use of the defendants. But each firm made its notes for value received in other notes. It was the same thing, in legal effect, as though the value had been received in goods or money. The securities on both sides were valid, the moment they, were exchanged. The plaintiffs had-a clear right of action when they took up the notes of the defendants at maturity; and their remedy now should have been upon those notes. (Rice v. Mather, 3 Wend. 62; Cameron v. Chappell, 24 id. 94; Rolfe v. Caslon, 2H. Black. 570; Buckler v. Buttivant, 3 East, 72; 1 Camp. 179, note ; Hornblower v. Proud, 2 B. & Ald. 327; Cowley v. Dunlop, 7 T. R. 565; per Lawrence, J.; Spencer v. Parry, 3 Ad. & El.. 331.) (a) This is not a mere question of variance. The statute of limitations had run upon the notes of the defendants before the suit was commenced. The plaintiffs, by confining their claim to the money paid on their own notes, which had been paid within six years, precluded the defendants from setting up the statute.
It is urged that as between, the original parties, cross notes or acceptances should be regarded as accommodation, in contradistinction to business securities. But the rule is,settled the other way. Each party may prove the debt against the other under a commission of bankruptcy. And although one party sells the note or bill at. a greater discount than seven per centum; the purchaser will acquire a good title. It is true that so long as the securities are in the hands of the original parties, they will balance each other. But- it will be by way of set-off; and not on the ground that they are invalid.
If a party lend his note or acceptance, and take a counter-security of the same kind, by way of indemnity merely, the lent note or bill will not have inception as a- valid security- until it passes into the hands of a bona fide holder. But I- do not con-sider this a transaction of- that kind. Neither firm took the. notes of the other by way of indemnity merely. But the notes on both sides were made, to be negotiated and- used as valid securities.
Motion denied.
See also Dowe v. Shutt, (2 Denio, 621.)