Citizens Bank v. Lay

Citations

• 80 Va. 436
• 1885 Va. LEXIS 81

Syllabus

<p>1. Negotiable Instruments — Discharge.—Payment of note at bank is either a sale or a discharge thereof. A sale, it cannot be without the bank’s consent. And where the note is paid by a stranger bound for its payment at maturity, the note is thereby actually discharged, and cannot be re-issued by him so as to bind the parties thereto, or to keep alive a trust-deed executed to secure it, except with the knowledge and consent of those parties.</p> <p>2. Quasre. — When may suit be brought on a dishonored note ? As soon as it is dishonored, or after business hours on the day of its dishonor, or on the next day after its dishonor ?</p> <p>3. Negotiable Instruments — Discharge—Estoppel—Case at bar. — C. purchased a lot and owed thereon $2440, evidenced by his note secured by trust-deed on the lot. P. bought the lot of C., and, as part of the price, agreed to pay the note when due. When due, P. paid the note and took it up. It was not marked “paid,” as P. told the note clerk he wanted to deposit it elsewhere as collateral. He did so deposit it with the Citizens Bank. Afterwards P. sold and conveyed the lot to L. The trust-deed had not been released, but P. told L. the note had been paid. Later, the bank had the lot advertised for sale to pay the note, and L. obtained an injunction. '</p> <p>Held:</p> <p>1. The transaction between P. and the bank at which the note was payable, discharged the note of C.</p> <p>2. L. was entitled to rely on the statement of P. that the note had been paid, and was not estopped from denying its existence as a valid security, though P. might have been so estopped.</p> <p>3. L. was a purchaser for value without notice, and it was proper to perpetuate the injunction in his favor.</p>