(dissenting).- .-It is well to have clearly in mind the ultimate and controlling facts in solving the legal principles involved. Plaintiff had the option of taking the amount of his loan in “ check or draft,” or in “ money, check, or draft,” and he agreed to take it in two drafts. Pursuant to the agreement, he received the two cashier’s checks mentioned in the opinion. These he accepted without protest, and at no time has he ever complained that defendant did not give him the paper to which he was entitled. When he came to negotiate with the agent of the seller of the property this agent advised the return of the checks, and that they be exchanged for drafts. Of this defendant had no notice whatever, nor was he asked to substitute drafts for the checks. At the suggestion of the notary, plaintiff went to the bank, returned the checks, which were thereupon marked “ paid ” and received the drafts upon the Stockyards Bank of St. Joseph, Mo. Defendant at all times had more than enough on deposit to take up the checks, and he had no knowledge whatever of the insolvency of the bank. While the bank was perhaps insolvent when 'it issued the checks and the drafts, it was still a going concern, had not closed its doors, and neither plaintiff nor defendant had knowledge of its insolvency. Plaintiff had not returned, nor did he offer in his pleading to return, either the checks or the drafts, and it is not shown what are the assets of the insolvent bank. To my mind, it is a case where plaintiff should be held to have received exactly what he agreed to take, and where he himself, without the knowledge, consent or acquiescence of defendant, voluntarily and of purpose converted the obligation of the defendant into a promise of the *349bank, wbicb, so far as this case is concerned, be yet retains. Witb tbe drafts issued upon tbe St. Joseph Bank, defendant bad no connection. He was not a party to, and was in no manner responsible thereon. If, as tbe majority bold, tbe checks were not taken in payment, defendant’s .obligation to plaintiff was tbe primary one; tbe bank being secondarily liable or liable not at all if plaintiff did not seek to enforce liability. When plaintiff took tbe draft, without tbe knowledge or acquiescence of defendant, tbe bank became liable thereon, and tbis liability remained until acceptance by tbe St. Joseph Bank, and after that, secondarily liable if liable at all. Defendant could not have been held liable upon that instrument at any time. While it was shown that tbe Citizens’ Bank of Mt. Ayr was insolvent tbe next day after tbe drafts were drawn, there is no testimony that it bad no assets witb wbicb to pay tbe check, and no testimony that it will not pay dividends to its creditors; indeed, tbe contrary appears. And, as we have said, plaintiff has not returned either tbe checks or tbe drafts. Defendant has nothing upon wbicb to predicate a claim to any part of tbe assets of tbe bank represented by these checks and drafts.
With the vexed question as to whether the taking of a check for a contemporaneous debt or promise is presumptively a payment or not, I shall not deal; for, whatever the rule here, it is very firmly established, and, as I believe, without any serious conflict in the authorities, that, if the party who receives it cashes, negotiates, or in any manner changes the obligation of the parties to the original instrument, be by that act treats the instrument as payment, and, if loss thereafter follows by reason of failure to collect .the substitute, no recovery can be bad upon the original obligation. In other words, whenever the bolder of a check makes it bis own by substituting some other liability, be cannot be heard to say that the check is not good. In support of tbis, I cite the following authorities: Oddie v. Bank, 45 N. Y. 735 (6 Am. Rep. 160); Warrensburg v. *350Zoll, 83 Mo. 97; Smith Co. v. Mitchell, 117 Ga. 772 (45 S. E. 47, 97 Am. St. Rep. 217); Strong v. King, 35 Ill. 9 (85 Am. Dec. 336); Woodville v. Reed, 26 Md. 179; Barnard v. Graves, 16 Pick. (Mass.) 41; Sellars v. Johnson, 65 N. C. 104; Strong v. Hart, 6 B. & C. 160; Ex parte Whittemore, 3 Mont. & A. 627. By putting the cheeks in circulation, and accepting a substitute therefor, plaintiff elected to treat them as payment, and cannot complain of these substitutes because they were worthless. Byles on Bills, 389; Titus v. Bank, 35 N. J. Law, 588; Cragie v. Hadley, 99 N. Y. 131 (1 N. E. 537, 52 Am. Rep. 9); Oddie v. Bank, 45 N. Y. 735 (6 Am. Rep. 160); Smith v. Mitchell, supra; Board v. Robinson, 81 Minn. 305 (84 N. W. 105, 83 Am. St. Rep. 374); Wasson v. Lamb, 120 Ind. 514 (22 N. E. 729, 6 L. R. A. 191, 16 Am. St. Rep. 342); Bank v. Burkhart, 100 U. S. 686 (25 L. Ed. 766); Smith v. Ferrard, 7 B. & C. 19; Loth v. Mothner, 53 Ark. 116 (13 S. W. 594); Southwick v. Sax, 9 Wend. (N. Y.) 122; First Bank v. Leach, 52 N. Y. 350 (11 Am. Rep. 708); Tuttle v. Chapman, 10 Iowa, 437; Downey v. Hicks, 14 How. (U. S.) 240 (14 L. Ed. 404); Strong v. Ten Cent Tutor Bldg. & Loan Ass’n, 189 Pa. 406 (42 Atl. 46); Watkins v. Parsons, 13 Kan. 426; Lineweaver v. Slagle, 64 Md. 465 (2 Atl. 693, 54 Am. Rep. 775; Randolph on Com. Paper, section 1551. I shall briefly refer to some of these cases to show how clearly in point they are.
In Tuttle v. Chapman, 10 Iowa, 437, the maker of a note gave the payee an order on a third person with an agreement that if collected it should be applied upon the note. The payee delivered up the order to the drawee, and took his note for the amount payable to himself at a future date. It was held that the drawer was entitled to credit on his note, although the note executed by the drawee was not collected. It was said in the opinion that there was such a change in the rights and obligations of the parties to the order that they *351-were severally discharged. That case is to my mind closely in point.
In Loth v. Mothner, 53 Ark. 116 (13 S. W. 594) defendants gave plaintiff a written order upon their banker to pay an account. The payee of the order, instead of demanding cash, took payment in St. Louis exchange. The draft proved worthless. In a. §uit- upon the original account, there was judgment for defendants. The Supreme Court of Arkansas said: “ Having elected the mode of payment [of the order] they [plaintiff] cannot now repudiate it because the exchange proved worthless, but appellee’s debt is satisfied — citing, among other cases, Smith v. Ferrand, 7 Bearn. & C. 19.
In Challoner v. Boyington, 83 Wis. 399 (53 N. W. 694) it is held that “ if the note of a third person is received upon a sale of goods or for an indebtedness contracted at the time, the note will be deemed to have been taken by the vender in satisfaction unless the contrary be expressly proved, or unless the note be void and there be fraud or misrepresentation respecting it.” See, also, Ford v. Mitchell, 15 Wis. 308; Hall v. Stevens, 116 N. Y. 201 (22 N. E. 374, 5 L. R. A. 802); Daniel, Neg. Inst., section 1264; Gibson v. Tobey, 46 N. Y. 637 (7 Am. Rep. 397); Bayard v. Shunk, 1 Watts & S. (Pa.) 95 (37 Am. Dec. 441). If this be the rule when the note is accepted at the time, it is clear that when the seller or borrower converts that note or check into another form of obligation, as in this case, into a draft without the consent of the buyer or lender, he should be held to assume the risk and the original debtor should he discharged.
In Hall v. Stevens, 116 N. Y. 201 (22 N. E. 374, 5 L. R. A. 802), plaintiff received for the sale of cattle, a draft from the purchaser, which was not signed or indorsed by him, the purchaser. The seller took the draft home and used it. The bank was insolvent when the draft was drawn, but neither party had knowledge of that fact. It was held *352that the seller could not recover the purchase price of the cattle. It was also held that the insolvency of the bank cut no figure in the case, and for this Lightbody v. Bank, 11 Wend. (N. Y.) 9, and Bank v. Lightbody, 13 Wend. (N. Y.) 101 (27 Am. Dec. 179), are cited. See, also Gibson v. Tobey, 46 N. Y. 639 (7 Am. Rep. 397; Whitbeck v. Van Ness, 11 Johns. (N. Y.) 409 (6 Am. Dec. 383).
In Gibson v. Tobey, 46 N. Y. 639 (7 Am. Rep. 397) following St. John v. Purdy, 1 Sandf. (N. Y.) 9, and Whitbeck v. Van Ness, 11 Johns. (N. Y.) 409 (6 Am. Dec. 383) it was held, under facts very similar to those here presented, that a seller of hogs could not recover the purchase price. See, also, Cheltenham Co. v. Gates Co., 124 Ill. 623 (16 N. E. 923); Smith v. Bettger, 68 Ind. 254; s. c., 34 Am. Rep. 256. I should not be disposed to go so far as. these cases, for I believe the better rule is to treat the intention of the parties as the test. But, when the seller or borrower elects to convert the note or check received by him as cash and negotiates, and thus converts or substitutes the note or check into something which he regards as of value to him, he thus conclusively indicates his intention to treat the note or check as payment, and thereafter the risk is his. See, also, Noel v. Murray, 13 N. Y. 169.
In First Bank v. Leach, 52 N. Y. 350 (11 Am. Rep. 708) the holder of a check presented it to the drawee, and procured it to be certified by the bank upon which it was drawn. This was held to be a payment as between the drawer and the holder, and a discharge of the drawer. That case is closely in point here. In the instant case the holder for his own purposes converted the cashier’s checks into drafts drawn by the bank, and the bank thus became the principal debtor. The bank became substituted for the defendant, and the loss must be borne by plaintiff. See, as directly in point upon this proposition, Oddie v. Bank, 6 Am Rep. 160; Meads v. Bank, 25 N. Y. 148 (82 Am. Dec. 331).
*353In Smith v. Miller, 43 N. Y. 173 (3 Am. Rep. 690) defendants, who were indebted to plaintiff, sent them a draft on a New York firm. This firm gave plaintiff its check for the draft upon presentation. Plaintiffs deposited the check in their own bank. After the making of the check, and before payment, the bank failed. The court held that plaintiff could not recover on its original debt. So, also, Smith v. Mitchell, 117 Ga. 772 (45 S. E. 47, 97 Am. St. Rep. 217), which holds to the same proposition, and Board v. Robinson, 81 Minn. 305 (84 N. W. 105, 83 Am. St. Rep. 374); Pratt v. Foote, 9 N. Y. 463.
In Downey v. Hicks, 14 How. (U. S.) 240 (14 L. Ed. 404) it is said a bill or note given for a debt is not deemed payment unless so expressly agreed, or it has been negotiated and is outstanding against defendant.
In First Bank v. Burkhart, 100 U. S. 686 (25 L. Ed. 766) it is held that the deposit of a check with credit to the depositor or any other species of conduct practically amounting to demanding and receiving a credit, is the equivalent of a cash payment. See, as sustaining the same proposition, Wasson v. Lamb, 120 Ind. 514 (22 N. E. 729, 6 L. R. A. 191, 16 Am. St. Rep. 342). Whenever the creditor appropriates a check received by him to his own use by negotiating it, it then becomes a payment of the indebtedness for which it was given. Strong v. King, 35 Ill. 9 (85 Am. Dec. 336). See, also, as directly, in point, Smith v. Ferrand, supra; White v. Howard, 1 Sandf. (N. Y.) 81.
In Bunney v. Poyntz, 4 B. & Ad. 568, it was held that a vender, who had negotiated a bill taken at the time of sale without making himself liable by that act, converted the conditional into an absolute payment. Aside from this, plaintiff is not entitled to relief without surrendering the check received by him. This is directly held in Davidson v. Bridgeport, 8 Conn. 472; Carlin v. Heller, 34 Iowa, 256; Schuster v. Marden, 34 Iowa, 181; Alcock v. Hopkins, 6 Cush. (Mass.) 484, and cases cited in volume 22, Am. Eng. *354Ency. Law, 567; Burdick v. Green, 15 Johns. (N. Y.) 247.
In this case plaintiff has not surrendered either the checks or the draft. Nor does he offer to do so in the petition- filed by him, and there is no testimony that either checks or drafts are entirely worthless.
II. The equitable doctrine presented by the majority in the second divisions of the opinion has no application to the facts, as I understand them. There was no mistake here as between plaintiff and defendant. Plaintiff received the very thing he agreed to take, and having cashed it, or what is the same thing,'having converted it into a draft, the check was paid. But, whether this be true or not, defendant was in no sense a party to the drafts, and there could have been no mistake as between plaintiff and defendant regarding that matter. Moreover, there is no showing in this record that either checks or draft were absolutely worthless. Perhaps, if they were, no return was necessary; but there is no presumption that they were, and, in the absence of proof that nothing whatever can be realized thereon, there is no room for the equitable doctrine relied upon, and plaintiff , cannot recover here without showing a return, or at least an offer to return, the checks and drafts. In all cases of rescission plaintiff must show the return of everything received by him no matter how inconsiderable in value. -In other words, the parties must be put in statu quo. Of course, if the property is absolutely worthless for any purpose, no return is necessary; for the law does not- require the doing of useless acts. See Allen v. Pegram, 16 Iowa, 163.
My investigation of the case leads me to 'believe that the judgment should be reversed.