This action is prosecuted by the plaintiff for the purpose, first, of recovering a judgment against J. E. Dickerson & Co., including the defendant Robertson; second, against the J. E. Dickerson Company, and third, for the purpose of subjecting the assets of the J. E. Dickerson Company in the hands of the receiver to the payment of such judgment. There is no controversy in regard to the liability of Hollingsworth, the maker of the note, or of J. E. Dickerson and the Asheville bank as endorsers. His Honor having instructed the jury to answer the third issue “No,” upon this appeal the question as to the liability of Robertson is eliminated. The personal representatives of Cottrell and Watkins not being parties, no question is presented in respect *568to the liability of the deceased partners. We take it to be elementary that the death of Cottrell worked, by operation of law, a dissolution of the firm of J. E. Dickerson & Co. George on Partnership, 257; Bates on Partnership, section 610.
It is equally well settled that where the dissolution is brought about by operation of law, by the death of one of the partners, it is not necessary to give notice to prevent liability attaching to the estate of the deceased partner, or to either of the surviving partners, for any future contracts made in the name of the firm.
In Martlett v. Jackman, 3 Allen (85 Mass.), 287, Bigelow, C. J., says: “Two text writers, however, of great learning and authority have laid down the rule that when a copartnership is dissolved by the death of one of the copart-ners, no notice of the dissolution is necessary, and the surviving partners are not bound by any new contract entered into by one of the firm in the partnership name after dissolution, although it is made with a person who had previously dealt with the firm, and had no notice or knowledge that it was terminated by the death of one of the members” — citing Kent’s Commentaries, Story on Partnership, and Colyer on Partnership. The learned Chief Justice further says: “Starting, then, rvith the admitted proposition that death works a dissolution of a firm, and that thereby the estate of the deceased partner and his personal representatives, as well as his share of the assets of the firm, are absolutely relieved and absolved from any new contracts or subsequent transactions of the surviving partners, which are not necessary to the settlement of the joint business, the inquiry at once arises as to the effect of such a dissolution, caused by the act of God, on the relative rights and duties of the surviving copartner. One of the essential elements of the contract of copartnership consists in the right which each member has to the continuance of all his associates as mem*569bers of the firm. * * * When therefore by the death of a member of the firm his personal liability ceases, and his estate is by operation of law absolved from all future contracts and transactions’ entered into in the name of the firm, it would seem to follow, as a necessary consequence, that the power of the surviving copartners to bind each other by new contracts and engagements must at once cease. The copartnership would then be terminated, not only as to the deceased partner and his estate but also as to the other members of the firm. The delectus personarwn would not longer exist.”
It seems to be equally well settled that a surviving partner has no power, after dissolution, to renew or endorse a note in the name of the firm. “The dissolution operates as a revocation of all authority for making new contracts. It does not revoke the authority to arrange, liquidate, settle and pay those before created. The implied power of the ex-partner does not extend to giving a note or to drawing a bill in the firm’s name; nor could he bind the firm by a check in its name. Renewals of outstanding bills or notes of the firm stand on the same footing; and as the ex-partner could not draw a bill or note for a firm debt, neither could he renew a bill or note of the firm given for their debt.” Daniel Neg. Inst., section 370. “Where a note is issued by a partner after dissolution it will not bind the other partners, even though given for a debt due by the firm.” Ibid., 371. “Where the dissolution is by the death of one of the partners, the surviving partner may endorse a note payable to the firm in his own name." Bristol v. Sprague, 8 Wend., 423; Whitman v. Leonard, 3 Pick. (20 Mass.), 177; Charles v. Remick, 156 Ill., 327; Woodson v. Wood, 84 Va., 478; Lush v. Smith, 8 Barb., 570; Myatt v. Bell, 41 Ala., 222.
In Abell v. Sutton, 3 East, 110, Lord Kenyon said, in regard to the liability of a partner for an endorsement made *570after the dissolution of the firm: “To contend that this liability to be bound by the acts of his partner extends to times subsequent to the dissolution, is to my mind a most monstrous proposition. A man, in that case, could never know when he is to be at peace and retired from all the concerns of a partnership.” 22 Am. & Eng. Ency., 214. “A note given by one partner, after dissolution of the partnership, does not bind the other partner, although given in the partnership name and in consideration or settlement of a subsisting partnership liability.” Haddock v. Crocheron, 32 Tex., 277, 5 Am. Rep., 244; White v. Tudor, 24 Tex., 639, 76 Am. Dec., 126; Fellows v. Wyman, 33 N. H., 351.
It is claimed, however, that the note in suit was given in renewal of notes executed by the same persons. The contention in regard to this phase of the case is: The defendant Hollingsworth executed a note payable to J. E. Dickerson & Co. for $4,900 in August, 1893, which was endorsed to and discounted by the Bank of Asheville, and endorsed to and re-discounted by the plaintiff bank. This note, at maturity, was -returned to the Asheville bank, endorsed for collection, and charged to said bank by the plaintiff bank. Upon its receipt by the Asheville bank, it was credited to the plaintiff bank. The Asheville bank then procured a renewal note from, the same parties, which was sent to the plaintiff bank for re-discount. It was in evidence that the plaintiff bank was under no obligation to re-discount the note thus taken in renewal. It would seem that each re-discount by the plaintiff bank was a separate and distinct transaction. It was in evidence that each note, as it was sent to the Asheville bank and a new one taken, was marked “paid” and surrendered to the makers. Whether these transactions, resulting in the execution of the note in suit, operated as a payment of the original note, it is not necessary to decide. What constitutes a payment, otherwise than by money, is usually a *571mixed question of law and fact, dependent frequently rrpon the intention of the parties. It is undoubtedly true that the renewal of the note, secured by mortgage or collateral, will not operate to discharge the security. It is equally well settled that the giving of a note or draft for an existing indebtedness does not operate, unless so agreed by the parties, to extinguish the original indebtedness, and upon the dishonor of the note or draft the creditor may sue upon the original consideration. “A note given by all the parties to pay for the goods delivered would not extinguish the original undertaking like a bond or judgment taken for it. The plaintiffs might still maintain their action for goods sold and delivered, provided they produced and delivered up the note on trial, or proved it was destroyed.” Wilson v. Jennings, 15 N. C., 90, cited in Mauney v. Coit, 86 N. C., 471. “The general doctrine is that the mere giving of a note for a debt is not a discharge or payment of the debt, and the note may be surrendered and a recovery had on the debt. But, if there are any facts tending to show that the note, even when given by one of several joint debtors, was received in payment of the debt, then it becomes a question for the jury to determine whether it was so received, and if they find that it was, then no action can be maintained on the debt.” Lee v. Fountain, 10 Ala., 755, 44 Am. Dec., 505.
In Spear v. Atkinson, 23 N. C., 262, the plaintiffs sold a bill of goods to the defendants for which they gave their promissory note. Afterwards one of the defendants drew a bill of exchange in favor of the plaintiffs and took up the promissory note. The bill was presented for payment and dishonored. There was no proof that the bill had been returned to the drawer, or that the plaintiffs ever offered to surrender it at the trial. In an action in assumpsit on the original hill of goods, the plaintiffs were nonsuited and the judgment affirmed, Daniel, J., saying: “If the plaintiffs *572therefore had surrendered the bill, even on the trial, they might have recovered upon the original consideration; for the taking of the note first, and then the bill, did not merge the original consideration, as a bond would have done.”
The right of the creditor in such case is to sue upon the original consideration or contract. If, by any act of his, either of the original debtors is released, as by extending the time of payment upon valuable consideration or otherwise, such defense must be set up by such debtor. This action being upon the note executed July 15, 1897, more than two years after the death of Cottrell and the dissolution of the partnership, and also after the purchase by Dickerson of the interest of the surviving partners in the assets of the old firm of J. E. Dickerson & Co., the action cannot be maintained as upon a bond endorsed by the firm of J. E. Dickerson & Co. I. E. Dickerson is of course individually liable, and the fact that he endorsed the note as J. E. Dickerson & Co. in no manner affects his individual liability. It would be a singular result, and work a great hardship upon partners, if they could be bound upon endorsements made by their late partners under the circumstances existing in this case.
The plaintiff, however, says that it is entitled to judgment against the corporation, the J. E. Dickerson Company, and his Honor was of that opinion. This contention is based upon the theory that it permitted its business to be conducted in the name of J. E. Dickerson & Co.; that the business sign was never changed, the same stationery was used, goods were bought and sold in the name of J. E. Dickerson & Co., the correspondence was carried on in that name and the account at the bank was kept in that name. There can be no question as to the validity of the articles of incorporation. Whatever may have been the motive of Dickerson in forming the corporation, it became a de jure as well *573as a cle facto corporation, and could only be bound upon contract made in its corporate name and for corporate purposes, or for debts for wbicb it- bad received tbe consideration. Tbis note was never payable to tbe corporation, was not executed in consideration of any debt due tbe corporation, was never endorsed by any officer of tbe corporation in bis official capacity, and it is. difficult to perceive bow it could bave become liable upon the cause of action set forth in tbe complaint, that is, tbe promissory note of Hollings-worth. . Tbe cashier of tbe bank, its teller, and one of its directors, knew of the existence of tbe corporation, and knew that it bad purchased the assets and stock of J. E. Dickerson & Oo., and that J.. E. Dickerson & Oo. bad ceased to exist in respect to tbe hardware business. It is not necessary for us to decide to what extent tbe knowledge of these persons is to be imputed to tbe bank, as fixing it with notice of tbe status of tbe parties. Certainly, if bis Honor was correct in telling tbe jury that, upon tbe evidence, tbe firm of J. E. Dickerson & Oo. was liable upon tbe endorsement, this would exclude the idea that the J. E. Dickerson Company was liable upon tbe same endorsement. It must be kept in mind that tbis action is upon the endorsement upon the notej and not upon an open account or other form of indebtedness by tbe corporation to tbe Asheville bank. In order to maintain its action against tbe J. E. Dickerson Company, tbe plaintiff must connect tbe corporation with and make it a party to the note of Hollingsworth, because it was only in this way that it acquired any right of action. We therefore conclude that, upon the issue as submitted to tbe jury, and upon tbe evidence introduced by tbe plaintiff, bis Honor was in error in charging tbe jury to answer tbe second issue in the affirmative.
The plaintiff says that however tbis may be, J. E. Dickerson was, in any point of view, personally liable upon tbe *574endorsement, and that lie formed the corporation for the purpose of defrauding his creditors; that pursuant thereto, and in execution of such fraudulent purpose, he transferred his property to the corporation; that the transfer of the stock, followed by the absolute sale thereof to the defendant Robertson, was a fraud upon his creditors. Eor the purpose of examining this phase of the case, the intent with which Dickerson formed ihe corporation of J. B. Dickerson Company is material only as a circumstance or fact to be considered by the jury in connection with other facts. He had a legal right to do so. In the transfer of the assets of J. E. Dickerson & Co. to said corporation, and taking in payment therefor the stock of said corporation, he committed no fraud upon his creditors unless done with a fraudulent intent. The shares of stock represented the property which he put into the corporation, and was liable for his debts as the property would have been. The deposit of this stock as collateral security for the debt due Cottrell, Watkins & Co. was based upon a valuable consideration, and was a valid transaction as against his other creditors in the absence of any fraudulent intent. The subsequent sale of the stock, in consideration of the release of the indebtedness to Cot-trell, Watkins & Co., was, in the absence of fraud, valid against all persons except the creditors of the J. E. Dickerson Company. The payment of these creditors was assumed by Robertson, and it is in evidence that all of the creditors of the corporation, proving their claims pursuant to the orders in the suit in equity, have been paid.
The plaintiff, however, says that the corporation took the property subject to the debts of J. E. Dickerson or J. E. Dickerson & Co., or, in the language of the brief: “When a corporation takes the assets of an individual or partnership concern and issues in payment therefor its stock, as was done in this case, the assets thus passing to the corpo*575ration remain liable for all the debts of the concern.” Upon this principle the plaintiff contends that the J. E. Dickerson Company is liable for the note in controversy.
It seems well settled “that a corporation buying all the property of another corporation, paying therefor in stock of the former corporation issued to the stockholders of the latter corporation, must either pay the obligations of the latter corporation or have the property sold to pay such obligations.” Cook on Corp., section 613. This doctrine is based upon the principle that corporate property is held in trust, first, for the benefit of the creditors of the .corporation, and then for the stockholders, and that such trust attaches to it in the hands of the new corporation.
In Ins. Co. v. Transportation Co., 13 Fed. Rep., 516, McCrary, C. J. says: “A distinction with respect to transactions of this character exists between a corporation and a natural person. A natural person may sell all of his property for a fair consideration if the transaction is bona fide, and the buyer will not be required to take care that the seller provides for and pays all of his debts. A corporation, unlike a natural person, by disposing of all its property, may not only deprive itself of the means of paying its debts, but be deprived of corporate existence and place itself beyond the reach of processes at law. At all events, equity cannot permit the owners of one corporation to organize .another and transfer from the former to the latter all of the corporate property without paying all of the corporate debts.” Taylor on Corp., 655. It is also said that “where a corporation formed by and consisting of the members of a copart-nership takes a conveyance or assignment of all of the assets of the partnership for the purpose of continuing the business, it is to be presumed that it has assumed the partnership debts and it is prima facie liable therefor.” Clark & Marshall on Corp., 346. The same writer says: “But a corpora*576tion that Has taken, over the property of a partnership is not liable for the debts of the latter, until it is shown that the sale was fraudulent as to the creditors of the latter, or that there was an express contract to assume such liability, or that the transaction was a mere continuation of the partnership.”
All of the cases to which our attention has been called have arisen in an effort of the creditors of the first corporation, or of the partnership, to follow the property impressed with the trust into the new corporation. In Andres v. Morgan, 62 Ohio St., 236, 78 Am. St. Rep., 712, the facts were that certain- persons were conducting business as a partnership known as the Eranklin Mill Co.; the partnership being indebted, a corporation was chartered and organized, the property being transferred to the corporation, each partner taking stock representing his interest in the partnership property; the corporation becoming insolvent executed a deed of trust; the creditors of the partnership sought to prove their claims against the assets of the corporation: Marshall, J., says: “On this state of the case it is very clear that the corporation was liable for this debt, whether it had expressly assumed the indebtedness of the partnership or not. It is not to be regarded as an ordinary sale of property by one to another. A partnership is a quasi legal entity. It owns property and has liabilities as such. Its creditors have a right to the payment of their claims from the partnership assets in preference to individual creditors, and have, in equity, a lien on the assets of the firm that may be worked out through the partners. So that, when the partners transferred all of the property of the firm to the company, the partnership was dissolved and the rights of its creditors followed the partners and the property into the corporation, and it was bound to discharge the debts of the partnership, having received the property of the partner*577ship on' which it had obtained credit. It could not retain the property and repudiate the liability.”
A careful examination of the authorities fails to disclose any case in which the principle (upon which a new corporation becomes liable by reason of taking the assets of the old corporation or a partnership) is applied to the transfer of property by an individual in payment of his subscription to the capital stock of a corporation — in the absence of any finding that such transfer was made with intent to defraud his creditors.
In Austin v. Bank, 35 L. R. A., 444, 59 Am. St. Rep., 543, the facts were: Russell & Holmes were engaged in business as bankers. The plaintiff deposited with them the sum of $300 and received a certificate therefor. The firm went into liquidation, closed its business and organized a corporation having the name of “The Bank of Russell & Holmes” and engaged in the business of banking as the successor of said bankers Russell & Holmes. Thereafter, the Bank of Russell & Holmes went into liquidation and closed its business, -when the defendant bank was duly organized and created by virtue of the National Banking Act. The plaintiff sued the defendant bank on his certificate of deposit, alleging that the defendant Avas organized, created and came into possession of the property, assets, etc., of the Bank of Russell & Holmes and of the late firm of Russell & Holmes, and that thereby the defendant bank became liable to the plaintiff for the deposit so received. The plaintiff alleged that the business of the defendant bank Avas carried on in the same building previously occupied by the Bank of Russell & Holmes, and that all the owners and officers of said bank became stockholders of the corporation bank and as such managed and controlled its business, whereby the defendant assumed this indebtedness and became liable therefor. The plaintiff further alleged that the Bank of Russell *578 & Holmes was wholly insolvent. The defendant denied the material allegations of the complaint. The Circuit Court gave to the jury a peremptory charge to find for the defendant. Upon appeal, Post, C. J., said: “The judgment of the District Court appears to rest upon the conclusion that the plaintiff has failed to state a cause of action against this defendant, and our investigation of the subject has led to the same result. It will be observed, from a careful reading of the petition, that it is not charged that the Bank of Russell & Holmes became a national bank; that said corporation was reorganized .under the National Banking Act or otherwise; that its liabilities, or any part thereof, were in fact assumed by the defendant herein; or that the latter did not, in good faith, in the usual course of business, purchase and pay for the rights and property therein described.” After discussing the question involved, the Chief Justice concludes: “There are to be found in the reports and textbooks expressions apparently sustaining the proposition that a corporation which upon its organization succeeds to the business and property of another corporation or firm, is from that fact alone chargeable with the indebtedness of the latter. It is, for instance, said by Mr. Beach in his excellent work on the Law of Private Corporations, section 360, that, ‘Where an old established corporation sells out to a newly organized one and turns over all its property, the new company becomes liable upon the debts and contracts of the old.’ The strict accuracy of that statement may, we think, be doubted, in view of the omission therefrom of any reference to the purpose or character of the transaction contemplated, or the consideration therefor.” He then proceeds to classify the cases in which such liability attaches: “1. Cases in which the liability of the new corporation results, not from the operation of law, but from its contract relation with the old. 2. Cases in which the transfer of the *579property and francbise amounts to a fraud upon the creditors of the old corporation. 3. Oases where the circumstances attending the creation of the new corporation and its succession to the business, franchise and property of the old are such as to raise the presumption or warrant the finding that it is a mere continuation of the former — that it is, in short, the same corporate body under a different name. And the facts upon which such finding or presumption depends will not be presumed, but should affirmatively appear from the pleadings and proofs.” It will be observed that there is no suggestion that these principles would apply to the cases in which an individual transferred his property in payment of his stock. We can see no difference between the transaction set forth in this record and the one in which Dickerson had sold his property and taken a note therefor. This certainly would be no fraud upon creditors unless made with a fraudulent intent. If, in the latter case, he had transferred the note to a bona fide purchaser for value and without notice, the purchaser would acquire a good title as against his creditors. The case of Friedenwald v. Tobacco Works, 117 N. C., 544, comes within the first and third classes. The firm of J. E. Dickerson & Co. was not liable upon this note. J. E. Dickerson, trading under the name of J. E. Dickerson & Co., was personally liable thereon.
Eor the purpose of passing upon the defendant’s exception to his Honor’s charge upon the fourth issue, we must assume that he accepted the defendant’s testimony as true. Erom that point of view, the condition of the property at the time of the organization of the corporation was as follows: The firm of J. E. Dickerson & Co. having been dissolved, its entire assets had become the property of J. E. Dickerson by purchase from the surviving partner and personal representives of the deceased partners. This condi*580tion continued from the date of the purchase, December 12, 1895, until August 1, 1896. At that date there were no liens upon the property, and Dickerson had a right to sell it or transfer it to either of his creditors in payment of their debts, provided it was done in good faith. Upon the formation of the corporation an inventory of the goods was taken and the corporation purchased them, issuing to Dickerson stock in payment therefor, Dickerson agreeing to pay the debts of J. E. Dickerson & Co. There was no concealment of the transaction from the First National Bank of Asheville, the cashier being one of the incorporators and knowing all of the facts connected with it. We see no evidence, from the defendants’ testimony, at least, tending to show any fraud upon his creditors, except that Dickerson says that his purpose in organizing the corporation was to avoid certain liability on account of a suit in the Federal Court, upon which it seems no judgment has ever been obtained. The shares of stock'which were issued to Dickerson were subject to his debts to the same extent as the properly assigned to the corporation. There being no liens upon his stock, he had a right to sell it or assign it to either of his creditors. lie swears that this was done in good faith without intent to defraud any one. Mr. Robertson says, that at the time he took the assignment he knew nothing of Dickerson’s indebtedness. When the final transaction occurred, in which Dickerson parted with the title to the stock and all his interest in the goods and other assets of'the J. E. Dickerson Company, there was a surrender of the indebtedness to Robertson and the personal representatives of the deceased partners. This certainly constituted Robertson a purchaser for value, and there is no evidence that he had any notice of Dickerson’s indebtedness to the bank. We are unable to see why this did not vest in Robertson a perfect title to the stock and to such interest as Dickerson had in *581tbe property, being that which remained after the payment of the debts of the corporation. Robertson having assumed the payment of these debts and they having been paid, no question arises in respect to any indebtedness of the corporation.
The action of Dickerson in respect to the formation of the corporation was, not as a matter of law, a fraud upon his creditors. So far as we can see from his testimony, he regarded the Asheville bank as absolutely solvent. The note upon which he was endorser was made for the accommodation of the bank. It seems from the testimony that he became indebted to the bank in some large amount, but at what time such indebtedness accrued, or exactly how it came about, is not very clear from the testimony. In fact, there seems to be much controversy as to the origin and extent of his indebtedness. Dickerson's testimony tends to show a course of dealing with and on part of the bank which was well calculated to and did result in fraud upon the plaintiff. If his purpose in the formation of the corporation, transfer of his property, and his subsequent dealings in respect thereto with the defendant Robertson, were with a fraudulent intent, and this was known to Robertson, or he was put upon notice, the assignment of stock to him could be set aside by Dickerson’s creditors. These, however, were questions of fact which should have been submitted to the jury under proper instructions from the Court. The corporation did not assume the indebtedness of J. E. Dickerson, and is not liable as a corporation therefor unless such liability attaches by operation of law. If there was any fraudulent purpose on the part of Dickerson in transferring the properly to the corporation, his creditors had their remedy to follow and subject it to the payment of their debts, unless other and superior rights had attached. Such purpose is *582expressly denied by Dickerson. It therefore became an issue of fact to be determined by the jury. Many facts and circumstances are called to our attention as constituting fraud which are competent as evidence, but do not of themselves, considered either singly or taken together, constitute fraud per se. “An insolvent owner of property has the same right as one who is solvent to dispose of it by a sale or conveyance to secure a present indebtedness in the absence of an operating bankrupt act, when done bona fide and not with the covinous purpose of hindering or defrauding creditors, and the presence of such purpose alike vitiates and avoids the conveyance made by either. When the' vitiating intent appears in the instrument itself, the Court ascertains and adjudges the fact and no jury finding is necessary. Rut when the fraud is to be inferred from surrounding circumstances, and is not an element in the transaction, it must be found by a jury and upon a proper issue framed to raise the inquiry.” Beasley v. Bray, 98 N. C., 266. The cause should be remanded and a new trial had upon the issue of fraud raised by the pleadings, and the claim of the defendant Robertson that, in any event, he is a purchaser for value and without notice. The burden of proof upon the first issue will be upon the plaintiff, and as to the second upon the defendant. Cox v. Wall, 132 N. C., 730. Let this be certified.
New Trial.
PLAINTIPES'’ APPEAL.
Ilis Honor instructed the jury to answer the third issue: “Is the defendant W. S. Robertson personally indebted to the plaintiff; if so, in what amount?” in the negative. The plaintiff excepted and appealed. For the reasons given in the opinion in the defendants’ appeal we are of the opinion that his Honor correctly instructed the *583jury. There is no aspect of the testimony in which the defendant W. S. Robertson could be personally liable to the plaintiff. The judgment in that respect must be affirmed.
Affirmed.