■^
 
 ■ MANUfACrUREO BY 
 E. C. MCCULLOUGH & Co 
 . MANILA. 
 
 THE LIBRARY 
 OF 
 
 THE UNIVERSITY 
 
 OF CALIFORNIA 
 
 LOS ANGELES 
 
 SCHOOL OF LAW
 
 LEADING AND SELECT AMERICAN CASES 
 
 IN THE LAW OF 
 
 BILLS OF EXCHANGE, 
 PROMISSORY NOTES, AND CHECKS 
 
 ARRANGED ACCORDING TO SUBJECTS. " 
 
 WITH NOTES AND REFERENCES. 
 
 BY 
 
 ISAAC F. REDFIELD 
 
 AND 
 
 MELVILLE M. BIGELOW. 
 
 BOSTON: 
 
 LITTLE, BROWN, AND COMPANY. 
 
 1871.
 
 Entered according to Act of Congress in the year 1871, by 
 
 ISAAC F. KEDFIELD AND MELVILLE M. BIGELOW, 
 
 In the office of the Librarian of Congress at Washington. 
 
 IS7I 
 
 /si 
 
 I 
 
 CAMBRIDGE : 
 PRESS OF JOHN ^VTLSON AND SON.
 
 c? 
 
 PREFACE. 
 
 In preparing this volume, the editors have first endeav- 
 ored to present the history of commercial paper throughout 
 its usual stages; and then to illustrate such collateral 
 branches of the general subject as are of practical impor- 
 tance. The cases as far as the subject, " Discharging 
 Indorser or Drawer," p. 544, are arranged by topics in the 
 order of progression which bills and notes usually follow in 
 the course of business. At this point the cases upon 
 collateral subjects begin, and continue through the book. 
 
 The editors have aimed to present the largest possible 
 number of valuable cases, and to illustrate as wide a range 
 of topics as space would permit. Upon subjects involved 
 in conflict, decisions presenting the diiferent rulings have 
 been selected as principal cases ; and to these have been 
 added notes, citing the authorities which have followed or 
 rejected the doctrine of the respective cases, and stating the 
 general current of adjudication upon the subject. 
 
 The preparation of the notes has been mainly the 
 work of Mr. Bigelow ; and the editors have sought to 
 present their annotations within the narrowest compass 
 compatible with a full illustration of the subject of the 
 work. They, like the principal cases, are selected matter ; 
 embracing mainly the decisions which were deemed to be 
 
 V35840
 
 IV PEEPACE. 
 
 of practical importance to the profcs.sion. It is hoped that 
 the selection may prove satisfactory ; though it would be 
 too much to exjject that no errors of judgment have been 
 made. 
 
 The opinions in many important cases have been pre- 
 sented in full in the notes, in the belief that they would 
 prove more acceptable than any annotations that could have 
 been made in their place. 
 
 In the citation of text-books in the notes, the original 
 paging is uniformly referred to, unless otherwise indicated. 
 
 The following additional references and citations should 
 be made at the places designated : In the middle of p. 
 63, at the end of the paragraph in which Wilkinson v. 
 Johnson is first cited, add, " But see Goddard v. Mer- 
 chants' Bank, 4 Comst. 147." At the end of the same 
 page, add reference to " Forgery," p. 643. At the end of 
 p. 476, add reference to Commercial Bank of Albany v. 
 Clark, p. 536, and note. 
 
 Boston, March 25, 1871.
 
 ANALYTICAL INDEX. 
 
 FORM AND REQUISITES. 
 I. Thompson v. Sloan. 
 
 (23 Wendell, 71. Supreme Court of New York, January, 1840.) 
 
 PAGE 
 
 Payable in Canada vioney. — A written promise, executed in New York, to pay in 
 that State a certain sum in Canada money is not a negotiable note ; but if 
 negotiable, parol evidence is admissible to show the meaning of the term 
 " Canada money " 1 
 
 Note discussing the general question, when a note or bill may be said to be pay- 
 able in money, and when not ; and citing many cases 6 
 
 II. WoRDEN V. Dodge. 
 
 (•1 Denio, 159. Supreme Court of New York, January, 1847.) * 
 
 Payable out of a particular fund. — An instrument by which a party promises to 
 pay a certain sura at a stated time out of the net proceeds of ore to be raised 
 and sold from a certain ore-bed, is not a promissory note, it being payable 
 upon a contingency 7 
 
 Note referring to many analogous cases 8 
 
 III. Cook v. Satterlee. 
 
 (6 Cowen, 108. Supreme Court of New York, August. 1826.) 
 
 Additional directionx. — An order directed to the defendants to paj' to the plaintiff, 
 or bearer, ninety days after date, §400 ; "and take up their note given to 
 William and Henry B. Cook for that amount," is not a bill of exciiange, 
 though accepted by the defendants 8 
 
 Note upon the same subject, referring to numerous cases 9
 
 VI ANALYTICAL INDEX. 
 
 IV. Kelley V. Hemmingway. 
 
 (18 Illinois, 60-i. Supreme Court, June, 1852.) 
 
 PAGE 
 
 Certainty as to time of payment. — A writing promising to pay a certain sum when 
 K. shall arrive at age, is not a promissory note, being payable upon a contin- 
 gency which may never happen ; and it does not alter the case that K. actually 
 lived to attain his majority 11 
 
 Note and digest of the cases 12 
 
 MAKER'S LIABILITY. 
 I. Wallace v. McConnell. 
 
 (13 Peters, 136. Supreme Court of the United States, January, 1839.) 
 
 Note payable at pai-ticuJar place. No demand necessary upon maker. — In an action 
 against the maker of a note payable at a designated place, no demand need 
 be averred and proved ; if the maker was ready and offered, at the time and 
 place, to pay, it is a matter of defence to be pleaded and proved by him . . 15 
 
 Note of reference 25 
 
 DRAWER'S LIABILITY. 25 
 
 ACCEPTANCE. 
 
 I. Allen v. Suydam. 
 
 (20 Wendell, 321. Court of Errors of New York, December, 1838.) 
 
 Agent's duty to present for acceptance. — An agent who receives a bill of exchange, 
 payable after date, for collection, which has not been accepted, is bound to 
 present the same for acceptance without \mreasonable delay, or he will be 
 liable to his principal for the damages which the latter may sustain by the 
 agent's negligence. In case the debt is lost by the agent's negligence, the 
 measure of damages is prima facie the amount of the bill ; but evidence of 
 facts may be produced tending to reduce the recovery to a nominal sum 
 
 In what cases presentment for acceptance is necessary 26 
 
 Note discussing the question and the cases 39
 
 ANALYTICAL INDEX. Vll 
 
 II. Spear v. Pratt. 
 
 (2 Hill, 582. Supreme Court ot New York, May, 1842.) 
 
 PAGE 
 
 What constitutes acceptance. — If the drawee of a bill of exchange write his name 
 across the face of tlie bill, this binds him as an acceptor ; and this too, 
 though the statute requires aacei)tance to be in writing:, and signed by the 
 acceptor or his agent 41 
 
 Note upon the same question and citing numerous cases 42 
 
 III. COOLIDGE V. PaYSON. 
 
 (2 Wheaton, 66. Supreme Court of the United States, February, 1817.) 
 
 Promise to accept. — A letter written within a reasonable time, before or after 
 the date of a bill of exchange, describing it in terms not to be mistaken, and 
 promising to accept it, is, if shown to the person who afterwards takes the 
 bill on the credit of the letter, a virtual acceptance, binding the person who 
 makes the promise ; and this too though it was drawn in favor of a person 
 who took it for a pre-existing- debt 43 
 
 Note examining the cases upon this sulyect 49 
 
 TV. BoYCE V. Edwards. 
 
 (4 Peters, 111. Supreme Court of the United States, January, 1830.) 
 
 Promise to accept. Bill must be pointed out. — In order to bind as an acceptor one 
 who has promised to accept a non-existing bill, the particular bill must be 
 pointed out and described in terms not to be mistaken. 
 
 Distinction between an action upon a bill as an accepted bill, and one founded 
 
 on a breach of promise to accept 52 
 
 Note referring to many other cases 56 
 
 V. HORTSMAN V. HeNSHAW, 
 (11 Howard, 177. Supreme Court of the United States, December, 1850.) 
 
 What acceptance admits. — Tiio drawee of a bill of exchange cannot recover the 
 amount thereof paid to a houa Jide holder, if the drawer put the bill into cir- 
 culation bearing a forged indorsement of the payee's name. Acceptance 
 admits the drawer's signature to be genuine, an<l tlie drawer, in such case, 
 warrants the signature of tlie payee 57 
 
 Meacher v. Fort presented in full in note referring to many other cases ... 59
 
 Vlll ANALYTICAL INDEX. 
 
 VI. SCHIMMELPENNICH V. BaYARD. 
 (1 Peters, 264. Supreme Court of the United States, January, 1828.) 
 
 PAGE 
 
 Acceptance supra protest. — If the drawees of a bill of exchange, refusing to lienor 
 the bill, were bound to accept the same, tliey will not be permitted to change 
 the relation in which they stand to the parties on the bill l)y a wrongful act. 
 They can acquire no rights as the holders of bills paid supra protest, if they 
 were bound to honor them in their character of drawees. 
 
 When bound to accept. — A drawee, who has been in the habit of receiving con- 
 signments from the drawer with whom he has an open account therefor, is 
 not bound to accept bills drawn on him against a particular shipment, which 
 bills the drawer in his letter of advice says may be charged in account, if 
 the account actually show that the drawer had no funds in the hands of the 
 drawee 64 
 
 YII. KoNiG V. Bayard. 
 
 (1 Peters, 250. Supreme Court of the United States, January, 1828.) 
 
 Acceptance supra protest by stranger. — It is no objection that a stranger has inter- 
 vened as acceptor for the honor of an indorser ; or that his acceptance has 
 been made at the request and under the guaranty of the drawee. But in 
 such case the indorser may avail himself of all defences which lie could have 
 made had the drawee accepted for his honor and then sued upon such 
 acceptance 85 
 
 Note referring to other cases 87 
 
 VIII. The United States v. The Bank of the Metropolis. 
 
 (15 Peters, 377. Supreme Court of the United States, January, 1841.) 
 
 Acceptance by the United States. — The liability of the United States, on an 
 acceptance by an authorized officer given to a bona fide holder is the same as 
 that of a private individual. 
 
 Conditional acceptance. — A bill drawn by a government contractor was " ac- 
 cepted on condition that the drawer's contracts be complied with," and dis- 
 counted by the defendants in due course of trade. Held, that forfeitures 
 previously incurred, and advances previously made, were not covered by 
 the condition 88 
 
 IX. Newhall V. Clark. 
 
 (3 Cushing, 376. Supreme Court of Massachusetts, March, 1849.) 
 
 Conditional acceptance. — An acceptance of the following order is conditional : 
 " Please pay, &c., out of the amount to be advanced to me, when the 
 houses I am now erecting on your land . . . are so far completed as to
 
 ANALYTICAL INDEX. IX 
 
 liave the plastering done, according to our contract," &c. And if tlie work 
 was never done by the contractor (tlie drawer), under the contract referred 
 to, the event never occurred upon which the defendant by his acceptance 
 bouufl liimself to pay. And it is iraniaturial tiiat this contract was subse- 
 quently cancelled by the drawer and acceptor, if there was no fraudulent 
 interference by the acceptor to prevent the completion of the work con- 
 tracted for 104 
 
 Note referring to many cases 108 
 
 INDORSEMENT. 
 I. Brown v. The Butchers' and Drovers' Bank. 
 
 (6 Hill, 443. Supreme Court of New York, May, 1844.) 
 
 Fonn of indorsement. — The following figures in pencil, on a bill of exchange, viz., 
 " 1, 2, 8," in connection with evidence tending to show that the person who 
 placed them there meant thereby to bind himself as an indorser, constitute 
 a valid indorsement ; though it also appeared that he could write .... 110 
 
 Extended note discussing the cases 110 
 
 II. Camden v. McKoy. 
 
 (3 Scammon, 437. Supreme Court of Illinois, December, 1842.) 
 
 Indorsement hy one not a party. — If one not a party to a promissory note place 
 his name on the back thereof, the payee not having indorsed it, he is to be 
 regarded as a guarantor, and not as maker or surety ; and the holder has no 
 authority to write over the name any thing which wouM render such person 
 liable as an original promisor, in the absence of proof of intention .... 112 
 
 Note referring to other cases 124 
 
 III. Union Bank of Weymouth and Braintree v. Willis. 
 
 (8 Metcalf, 504. Supreme Court of Massachusetts, October, 1844.) 
 
 Indorsement by one not a jxirty. — If a person not a party to a note place Ins name 
 upon the back of it at the time it was made, he is liable as maker ; and when 
 the note is in the hands of a bona fide holder, the presumption in the absence 
 of proof is that the name was placed upon it at the time it was executed . 124 
 
 Note referring to other cases 131
 
 ANALYTICAL INDEX. 
 
 ly. Hall v. Newcomb. 
 
 (7 Hill, 41C). Court of Errors of New York, December, 1844.) 
 
 PAGE 
 
 Indorsement by one not a party. — . If one wlio is not a party to a promissory note 
 place his name upon the back thereof, the payee not having indorsed it, lie is 
 to be regarded as an indorser, and not as maker or guarantor 131 
 
 Note citing other cases 139 
 
 V. Sylvester v. Downer. 
 
 (20 Vermont, 355. Supreme Court, March, 1848.) 
 
 Indorsement by one not a party. — One who is not a .party to a promissory note, 
 by placing his name upon the same, the payee not having indorsed it, ren- 
 ders himself prima facie liable as maker ; but evidence may be received to 
 show the real intention of the signer 139 
 
 Note referring to other cases 143 
 
 VI. Greenough V. Smead. 
 
 (3 Ohio State, 415. December, 1854.) 
 
 Indorsement by one not a party. — If one not a party to a note put his name on the 
 back thereof, the note being subsequently indorsed by the payee below his 
 signature, but not being intended for the payee, such party is to be regarded 
 as an indorser ; but if the note were intended for the payee, the liability of 
 such third person is that of ma^er or guarantor 143 
 
 Note and reference to other cases 150 
 
 VII. Rey V. Simpson. 
 
 (22 Howard, 841. Supreme Court of the United States, December, 1859.) 
 
 Indorsement by one not a party. — The defendants, W. M. and J. M., not parties 
 to the note in suit, placed their firm name on the back of the note, at its 
 inception, and before it had been passed or offered to the plaintiff, at the 
 request of ^he other defendant, the maker, knowing that the note had not 
 been indorsed by the payee, and with a view to give credit to the same, for 
 the benefit of the maker : held, that W. M. and J. M. were original promisors 
 with the maker ; evidence being admissible to show their intention . . . 150 
 
 Note presenting a summary of the conflicting cases 155,156
 
 ANALYTICAL INDEX. XI 
 
 VTTT. Leavitt v. Putnam. 
 
 (3 Comstock, 494. Court of Appeals of New York, July, I80O.) 
 
 I'AQB 
 
 Indorsement after muturily. — Negotiable paper does not lose its negotiable char- 
 acter by being dislionored ; hot even tiiough indorsed to a particular person 
 without other words 156 
 
 Note 158 
 
 IX. Estabrook V. Smith. 
 
 (6 Gray, 570. Supreme Court of Massachusetts, September, I80G.) 
 
 Indorsement of Jinn note by partner in his oivn name. — An indorsement by one 
 partner, in his individual name, to his copartner, the paper being payable to 
 the firm or order, will not enable the indorsee to sue thereon in his own 
 name 158 
 
 Note and reference to other cases 160 
 
 X. Stevens v. Beals. 
 
 (10 Cushing, 291. Supreme Court of Massachusetts, October, 1852.) 
 
 Indorsement by ivife irith consent of Iter husband. — A wife, with the consent of her 
 husband, may indorse in her own name a promissory note made payable to 
 her during coverture, and pass a good title to the indorsee 161 
 
 Note and reference to other cases 164 
 
 HOLDER FOR VALUE. 
 
 L Bay v. Coddington. 
 
 (5 Johnson's Ch. 54. Court of Chancery of New York, 1821.) 
 
 Note delivered as security for contimjent liability. — A, the agent of B, received 
 negotiable notes to be delivered to B, but delivered them to C, as security 
 for responsibilities incurred by C in indorsing accommodation paper for him- 
 self, A. C had not then become chargeable on his said indorsements. Held, 
 that C was not a bona Jide holder for value, though lie did not know that 
 the delivery of the notes to himself by A was fraudulent, but believed A to 
 be tiie real owner of them 166
 
 Xll ANALYTICAL INDEX. 
 
 11. Stalker v. McDonald. 
 
 (6 Hill, 93. Court, of Errors of New York, December, 1843.) 
 
 PAGE 
 
 Paper takm as security for antecedent debt. — One who takes a note merely as col- 
 lateral security for an antecedent debt, without aQvancing any thing upon 
 it, or rehnquishing any security, is not a holder in the due course of trade . 169 
 
 III. Swift v. Tyson. 
 
 (16 Peters, 1. Supreme Court of the United States, January-, 1842.) 
 
 Paper taken in payment of pre-existing debt. — The bona fide holder of a bill of 
 exchange, who has taken it before .maturity, in payment of a pre-existing 
 debt, without notice of any equities between the drawer and acceptor thereof, 
 will not be affected by such equities. 
 
 Authority of the decisions of State courts. — The 34tli section of the Judiciary Act 
 (1 St. at Large, 92), is limited to the laws of a State strictly local ; that is, 
 to the positive statutes of the State and their interpretation by the local 
 tribunals, and the rights and titles to things having a permanent locality, 
 such as real estate. It does not apply to questions of general commercial 
 law, such as bills of exchange and promissory notes 186 
 
 Opinion of Court in Atkinson v. Brooks, 26 Vt. 574, given in note .... 195 
 
 Note from American Law Register 202 
 
 Extended discussion of the more recent cases upon this and other analogous 
 
 questions 208 
 
 TV. Pettee v. Prout. 
 
 (3 Gray, 502. Supreme Court of Massachusetts, September, 1855.) 
 
 Presumption of title. — In an action upon a note payable to A, or bearer, the 
 production of the note by the plaintiff, B, is sufficient evidence of his title, 
 though he is the general agent of A, who, the answer alleges, is the owner 
 of the note. 
 
 Equities. — One to whom a note payable to A, or bearer, is transferred before 
 maturity,* takes it subject to no equities or rights of set-off which the maker 
 might have against A 217 
 
 Reference to other cases 219 
 
 V. Way v. Richardson. 
 
 (3 Gray, 412. Supreme Court of Massachusetts, March, 1855.) 
 
 Presumption of title. — It is not competent for the defendant to deny that the 
 plaintiff is the owner and holder of a note upon which he brings suit as such.
 
 ANALYTICAL INDEX. XIU 
 
 PAGB 
 
 without traversing the signature, or the indorsement, or the delivery of tiie 
 note ; and in sucli case evidence is inadmissible to prove that the plaintiflF 
 never owned the note, and never employed counsel to prosecute the action, 
 and that he had no interest in the suit 220 
 
 VI. 'Davis v. McCready. 
 
 (17 N. Y. [3 Smith], 230. Court of Appeals of New York, March, 1858.) 
 
 Defence of breach of executory agreement. — It is no ground of defence to an 
 action against the acceptor of a bill that the holder was informed that it was 
 accepted in consideration of an executory contract, if he had no notice 
 of its breach 222 
 
 Note 225 
 
 VII. Brewster v. McCardel. 
 
 (8 Wendell, 478. Supreme Court of New York, January, 1832.) 
 
 Postdated paper. — An indorsee for value of a postdated note may recover there- 
 on, though he took it before the date at which it purported to be executed . 226 
 
 VIII. Bayley v. Taber. 
 (5 Massachusetts, 286. Supreme Court, May, 1809.) 
 
 Note void by statute. — Commercial paper declared ^oid by statute is void even 
 in the hands of a bona fde holder for value ; and, therefore, where prom- 
 issory notes were antedated to avoid a statutory prohibition, held, that in 
 an action against tlie maker he could prove the actual date at which they 
 were made and issued, even against an innocent indorsee 226 
 
 IX. Paton V. COIT. 
 (5 Michigan [1 Cooley], 605. Supreme Court, October, 1858.) 
 
 Illegal consideration. Burden of proof. — Whenever the consideration of negotiable 
 paper between the original parties has been illegal, especially if it is as to 
 them in violation of a positive prohibition of statute, proof of such illegality 
 throws upon the indorsee the burden of proving that he took it bona 
 fxle, and gave value for it 230 
 
 Note 234
 
 XIV ANALYTICAL INDEX. 
 
 X. Fowler v. Brantly. 
 
 (14 Peters, 318. Supreme Court of the United States, January, 1840.) 
 
 PAGE 
 
 What sufficient to put the holder upon inquiri/. — A note made payable to the cashier 
 of a bank, and drawn within a peculiar form to be within the usages of the 
 bank, was sent to an agent to procure a discount at the bank. The note 
 was rejected, and marked in pencil, with a mark employed by the bank, 
 to indicate that it had been offered and refused. The agent then sold 
 the note and applied the proceeds to his own use. Held, that the note on its 
 face was sufficient to put the holder upon inquiry, and that he could not 
 recover though he had no knowledge of the fraud 235 
 
 Note 239 
 
 XI. Goodman v. Simonds. 
 
 (20 Howard, 343. Supreme Court of the United States, December, 1857.) 
 
 Bona ^fide holder's claim only to he repelled by bad faith. — In an action by the 
 holder of a bill of exchange placed by the drawer in the hands of the holder 
 as collateral security for his debt, the following instruction was given to the 
 jury : " That if such facts and circumstances were known to the plaintiff as 
 caused him to suspect, or that would have caused one of ordinary prudence 
 to suspect, that the drawer had no interest in the bill, and no authority to 
 use the same for his own benefit, and by ordinary diligence he could have 
 ascertained these facts," the plaintiff" could not recover. Held, that the 
 instruction was erroneous, and that nothing short of bad faith in the holder 
 would overcome his title ; and the burden of proof is upon him who assails 
 the title to show such bad faith 239 
 
 Note collecting the early and recent cases upon this point 257 
 
 XII. Fisher v. Leland. 
 
 (4 Gushing, 456. Supreme Court of Massachusetts, October, 1849.) 
 
 Indorsee affected with notice. — One who has taken commercial paper by indorse- 
 ment before it is due, with notice of fraud in its inception, is subject to the 
 same defences, in an action against the maker, that could be raised against 
 the payee to whom the fraud had attached. And the maker, against such 
 indorsee, can give in evidence the fraudulent acts of the payee, and the 
 admissions and confessions of the latter, while he was the holder of the 
 note 258 
 
 XIII. Hascall v. Whitmore. 
 
 (19 Maine, 102. Supreme Court, April, 1841.) 
 
 Indorsee with notice claiming under holder tvithoiit. — One who purchases commer- 
 cial paper for value, with notice of defect m its inception, from a bona fide
 
 ANALYTICAL INDEX. XV 
 
 PAGE 
 
 holder without notice, stands upon the rights of the latter, and may recover 
 
 the amount of the paper 201 
 
 Note 202 
 
 XIV. Grant v. Ellicott. 
 
 (7 Wenddl, 227. Supreme Court of New York, May, 1831.) 
 
 Accommodation paper. ITohhr with notice. — In an action by an indorsee of a bill 
 of exchange against the acceptor, it is no defence that the bill was accepted 
 for the accommodation of the drawer, and that the indorsee had knowledge 
 of the fact when he took the bill 263 
 
 Note 264 
 
 XV. Small v. Smith. 
 
 (1 Denio, 583. Supreme Court of New York, October, 1845.) 
 
 Fraudulent diversion. — One who purchases accommodation paper with knowl- 
 edge that the terms and conditions on which the accommodation was given 
 have been violated is not a bona Jide holder as agaiqst the party who lent 
 his name for accommodation 264 
 
 XVI. Mohawk Bank v. Corey. 
 
 (1 Hill, 513. Supreme Court of New York, July, 1841.) 
 
 Accommodation paper. Diversion. — Where it does not appear that the accom- 
 modation party had any interest in the manner in which his paper was to 
 be applied, it is immaterial that it was not used according to agreement . . 267 
 
 Note 268 
 
 XVII. Stoddard v. Kimball. 
 
 (6 Gushing, 4G9. Supreme Court of Massachusetts, October, 1850.) 
 
 Misapplication. — In an action bj' the indorsee against the indorser who had in- 
 dorsed the paper for the maker's accommodation, the indorser cannot raise 
 the defence that the note was misajiplied by the maker, without showing 
 that the plaintiff had knowledge of the misapplication. 
 
 Amount of recovery. — If accommodation paper has been taken to secure a pre- 
 existing debt of a less amount than that expressed on the face of the paper, 
 the holder can recover against tlie accommodation indorser only the amount 
 of the debt, if he (the holder) is not liable to any third person for any sur- 
 plus 269 
 
 Note citing many other cases 270
 
 XVI ANALYTICAL INDEX. 
 
 XVIII. Baxter v. Little. 
 The Same v. Harris. 
 
 (6 Metcalf, 7. Supreme Court of Massachusetts, March, 1843.) 
 
 PAGE 
 
 Papei- overdue. Set-off. — When tlie first indorsee of a promissory note negotiates 
 it after it is dishonored, and the second indorsee brings an action thereon 
 against the maker or first indorser, the defendant cannot set off any claim 
 wliicli lie lias against the first indorsee, except such as existed at tlie time 
 of the transfer of the note to the plaintiff, although he had no notice of such 
 transfer when he acquired his claim against the first indorsee 271 
 
 Note embracing opinion of Court in Britton v. Bishop, 11 Vt. 70, and reference 
 
 to other cases 275 
 
 XIX. Knights v. Putnam. 
 
 (3 Pickering, 184. Supreme Court of Massachusetts, September, 1825.) 
 
 Usury. When maker can set up this defence. — Commercial paper which is vahd 
 in its inception cannot be tainted with usury afterwards, except as between 
 the immediate parties ; and therefore the maker of a note, vahd when exe- 
 cuted, cannot raise the defence against an indorsee that the latter purchased 
 the note of the payee at a usurious rate of interest 277 
 
 XX. Holmes v. Williams. 
 
 (10 Paige, 326. Court of Chancery of New York, 1843.) 
 
 Usury. — Where the holder and apparent owner of negotiable securities sells 
 them at a discount, to a bona Jide purchaser, who has no knowledge of the 
 purpose for which such securities were made, the holder representing such 
 securities to belong to himself, and to be business paper, the transaction is not 
 usurious, as between the vendor and purchaser, though the representations 
 of the vendor were false, the paper having been made to be sold at usurious 
 discount in the market 280 
 
 XXI. Cameron v. Chappell. 
 
 (24 Wendell, 94. Supreme Court of New York, May, 1840.) 
 
 Usury. — Acceptance of a bill in consideration that a shipment of wheat shall 
 be made to the drawee by the drawer does not make the bill accommo- 
 dation paper between the parties ; and such bill is not tainted with usury 
 by the fact that the drawer afterwards procured it to be discounted at a 
 rate of interest beyond that allowed by law 287
 
 » 
 
 ANALYTICAL INDEX. XVii 
 
 PRESENTMENT AND DEMAND FOR PAY^SIEXT. 
 
 I. MussoN V. Lake. 
 
 (4 Howard, 262. Supreme Court of the United States, December, 1845.) 
 
 PAGE 
 
 Necessity of presentment. — The notary should present tlie paper when he de- 
 mands pa3ment ; and tliis rule has not been changed by statute in Louisiana. 
 Even if it had been there changed, as the defendant's contract was to Ije 
 performed in Mississippi where the law merchant prevails in this particular, 
 presentment could not be dispensed with. 
 
 Protest, how far evidence. — A protest which only states that payment was de- 
 manded, is not evidence to prove presentment 290 
 
 Note referring to other cases ^ . . . . 296 
 
 II. Renner V. Bank of Columbia. 
 
 (9 Wheaton, 581. Supreme Court of the United States, February, 1824.) 
 
 On what day jwesentment should be made. Usar/e of banks. — A custom of all the 
 banks of the District of Columbia to demand payment and give notice to 
 indorsers of commercial paper on the fourth day after the day of payment 
 named, which has been uniformly followed for upwards of twenty years, and 
 which was known to and understood by the defendant when he indorsed the 
 paper, is to be considered as entering into the contract, so that demand and 
 notice on the fourth day are sufficient to charge the indorser 297 
 
 Extensive note and references to otlier cases 306 
 
 III. Dana v. Sawyer. 
 
 (22 Maine, 244. Supreme Court, April, 1843.) 
 
 At what time of day presentment should be made. — When a bill or note is not pay- 
 able at a place where there are established business hours, presentment for 
 payment may be made at any reasonable hour of the day ; but presentment 
 to the maker at near midnight, after he had retired to rest, is not a rea- 
 sonable hour, and will not charge an indorser on notice, unless there was a 
 waiver of any objection as to the time, or unless it appear that payment 
 would not have been made upon a demand at a reasonable hour .... 310 
 
 Note and references to other cases 311 
 
 IV. Taylor v. Snyder. 
 
 (3 Denio, 145. Supreme Court of New York, May, 1846.) 
 
 Where to be made. — The place of date of a promissory note payable generally, is 
 only prima facie the place of payment ; and though a note be made and dated 
 
 b
 
 XVlll ANALYTICAL INDEX. 
 
 in New York, if the maker then resided in Florida, and tlie holder knew 
 this at the time the note was executed, and the maker has not chantiod his 
 residence since tliat time, demand must be made of the maker in Florida in 
 order to charge an indorser 313 
 
 V. Chicopee Bank v. Philadelphia Bank. 
 
 (8 Wallace, CiL Supreme Court of the United States, December, LS69.) 
 
 Paj/ahk at bank. Negligence of collecting hank. — Though commercial paper be 
 physically in the bank at which it is payable, yet if the bank is ignorant of ' 
 this by reason of the feet that the letter in whicli it was sent slipped through 
 a crack in the cashier's desk and disappeared before it had been seen by 
 him, then there is no presentment, even though the acceptor had no funds 
 there, and di!l not mean to pay the bill. And such a disappearance carries* 
 a presumption with it of negligence in the collecting bank, and throws the 
 burden of proof upon the bank to repel this presumption. In the absence 
 of such proof, the bank is responsible to the holder for the amount of the 
 bill or note • . 322 
 
 Note and extensive discussion of the cases 326 
 
 PAYMENT. 
 
 I. Wheeler v. Guild. 
 
 (20 Pickering, 545. Supreme Court of Massachusetts, October, 1838.) 
 
 Payment to one not authorized to receive it, and before maturity. — The plaintiff, holder 
 of a note indorsed in blank, delivered it to B. and G., attorneys in partner- 
 ship, to be held by them as collateral security for the payment of certain 
 debts due from the planitiff to B. and G., and otlier persons ; and the note 
 was placed among the private papers of G., by whom the business was trans- 
 acted. Some time after payment Of the debts so secured, but before the 
 maturity of the note, the maker paid to B. the amount due on the note, exclu- 
 sive of interest, and took therefor a receipt signed by B. alone, setting forth 
 that it was in full payment of the note, and that the note was to be deliv- 
 ered up to the maker. Held, that as the note was not in fact delivered up 
 to the maker, and as tlic right of B. and G. to transfer or collect the note 
 had ceased upon payment of the debts for which it was pledged, and as the 
 note was paid before maturity, the payment to B. did not operate as a discharge 
 of the note ; and that the plaintiff might, notwithstanding such payment, 
 recover the amount from the maker 331 
 
 Note discussing the cases and giving extracts from other opinions 388
 
 ANALYTICAL INDEX. xix 
 
 II. SwoPE V. Ross. 
 
 (40 Pennsylvania State, 186. Supreme Court, 1861.) 
 
 PAGE 
 
 Paper not accepted discounted hy drawee before maturiti/. — Tlie drawee of a bill 
 not accepted by him may discoimt the same before maturity and thus be- 
 come holder of the paper. Such proceeding is not a payment, and the 
 drawee can recover against the drawer at the maturity of the paper, upon 
 taking the usual proceedings to charge him 340 
 
 Note • 343 
 
 III. Eastman v. Plumer. 
 
 (32 New Hampshire, 238. Supreme Court, December, 1855.) 
 
 Wrongful payment by principal debtor. Effect as to surety. — The defendant signed 
 a negotiable note as surety for the principal maker. The note was indorsed 
 in blank, and the indorsee called upon the principal debtor for payment. 
 The latter brought the money, paid the amount, and received the note. In 
 point of fact, this money paid by the principal had been furnished b}' a tliird 
 jierson, who sent it to purchase the paper through the principal as liis agent, 
 though this fact was unknown to the holder. This third person, the owner 
 of the money, brought an action on the note against the defendant, the suret}^ 
 Held, that tlie payment by the principal discharged the paper as to the 
 surety, and that tlie action could not be maintained 343 
 
 Extended note embracing the opinion of the Court in Jones v. Broadhurst, 9 
 
 Com. B 173, and reference to other cases 345 
 
 PROCEEDINGS ON NON-PAYMENT. 
 
 I. Burke v. McKay. 
 
 (2 Howard, 06. Supreme Court of the United States, January, 1844.) 
 
 Protest of promissory note. — It is not necessary in Mississippi, or by the general 
 law merchant, that a promissory note should be protested by a notary, or 
 that he should give notice of dishonor 355 
 
 Note 357
 
 XX ANALYTICAL INDEX. 
 
 II. Mills v. Bank of the United States. 
 
 (11 Wheaton, 431. Supreme Court of the United States, February, 1826.) 
 
 PAGE 
 
 Form of notice. — Notice to an indorser is not defective by reason of not stating 
 the name of the holder, or by reason of a misdescription of the date of the note 
 in question, provided there was no other note payable at the same place and 
 made and indorsed by the same parties. Nor is it fatal to the notice that it 
 did not contain a formal allegation that payment was demanded at the bank 
 when the note became due. It is sufficient that it states the fact of the non- 
 payment of the note, and that the holder looks to the indorser for indem- 
 nity. "Whether the demand was duly and regularly made is matter of evi- 
 dence to be established on the trial 358 
 
 Note giving extracts from opinions and reference to other cases 362 
 
 III. Gilbert v. Dennis. 
 
 (3 Metcalf, 495. Supreme Court of Massachusetts, March, 1842.) 
 
 Form of notice. — Merf notice of non-payment, which does not express or im- 
 ply demand and dishonor, is not such notice as will render the indorser 
 Uable 863 
 
 Note giving opinion of the Court in Furze v. Sharwood, 2 Q. B. 888, and 
 
 digesting other cases 871 
 
 lY. Munn v. Baldwin. 
 
 (6 Massachusetts, 316. Supreme Court, March, 1810.) 
 
 Manner of sending notice. Post-office. — Putting a letter into the post-office di- 
 rected to the indorser of a bill of exchange, and containing notice of protest 
 for non-payment, is sufficient, though it does not appear that the letter was 
 ever received 376 
 
 Note 377 
 
 Y. Bowling v. Harrison. 
 
 (6 Howard, 248. Supreme Court of the United States, December, 1847.) 
 
 Notice to be given personally, when. — If the parties reside in the same citj^ or town 
 the indorser is entitled to personal notice of the dishonor of the bill or note, 
 either verbally or in writing, or a written notice must be left at his dwelling- 
 house or place of business. Notice by tlie mail in such case is not sufficient. 
 And a memorandum on a note, in these words : " Third indorser, J. P. 
 Harrison, lives at Vicksburg," is not an agreement to receive notice 
 through the post-office 378 
 
 Note discussing other cases and giving extracts from the opinions 381
 
 ANALYTICAL INDEX. XXI 
 
 VI. Chanoine V. Fowler. 
 
 (3 Wendell, 173. Supreme Court of New York, August, 1829.) 
 
 PAGE 
 
 Bi/ whom notice should be r/h-iti. — Notice of dishonor cannot be given by a stran- 
 ger ; it should be given by the holder, or by one who is a party to it, and 
 who would, on the same being returned to him, have a right of action on 
 it . 383 
 
 Extensive note giving references to otlier cases, and extracts from the opin- 
 ions 384 
 
 VII. Simpson v. Tdrney. 
 
 (5 Humphreys, 419. Supreme Court of Tennessee, December, 1844.) 
 
 Intermediate parties. — Notice given by the holder of a promissory note to the 
 second indorser too late to fix his responsibility, will not avail an intermedi- 
 ate indorser, though it would have been in due time if given by him , . 386 
 
 Note 388 
 
 VIII. Bank op Alexandria v. Swann. 
 
 (9 Peters, 33. Supreme Court of the United States, January, 1835.) 
 
 When the notice shoidd be sent. — It is sufficient to charge an indorser that notice 
 of the default of the maker of a note be put into the post-office early enough 
 to be sent by the mail of the succeeding day. The holder is not required 
 to give notice the day upon which the demand was made 388 
 
 Note containing opinion of the Court in Lawson v. Farmers' Bank, 1 Ohio 
 
 State, 206 390 
 
 IX. Walker v. Stetson. 
 
 (14 Ohio State, 89. Supreme Court, December, 1862.) 
 
 Domicile. Where notice should be sent. — The fact that a drawer or indorser goes 
 from the place of liis actual residence to another place to dispose of prop- 
 erty, which occupies him for several weeks of time, does not make such 
 town his place of business within the meaning of the rule upon the subject 
 of notice, in the absence of all explanation as to the mode of doing the 
 business, or of his relations to the post-office there 397 
 
 Note 404 
 
 X. Bank of Columbia v. Lawrence. 
 
 (1 Peters, 578. Supreme Court of the United States, January, 1828.) 
 
 Where notice shoidd be sent. — Actual notice to an indorser is not required ; due 
 diligence only is necessary. Therefore, in the case of an indorser who
 
 XXn ANALYTICAL INDEX. 
 
 PAGE 
 
 lived in the country, two or tliree miles flistant from the place (G.) at which 
 the note in question was payable, where he usually received his mail ; held, 
 that notice left in the post-office at G., directed to him at that place, was 
 
 sufficient to charge him 404 
 
 Note and reference to other cases 409 
 
 XI. Bank of Utica v. Bender. 
 
 (21 Wendell, 643. Supreme Court of New York, October, 18;)9.) 
 
 Diligence. Law and fact. — When the facts are all found, what is reasonable 
 diligence is a question of law. 
 
 Reasonable diligence, not excessive, required. — The holder of a bill inquired of the 
 drawer, upon discounting the same, where the defendant, an accommoda- 
 tion indorser of the drawer, resided. Notice was sent according to the 
 answer given. Held, that this was reasonable diligence, nothing having 
 occurred to lead the holder to distrust the information received, though the 
 indorser actually lived in a different place from that named, and received 
 his mail in a third 410 
 
 Note 413 
 
 EXCUSES OF PRESENTMENT AND NOTICE. 
 I. Windham Bank v. Norton. 
 
 (22 Connecticut, 213. Supreme Court, July, 1852.) 
 
 Unavoidable accident. — Presentment of commercial paper must be made on the 
 day on which it becomes due, unless it is out of the power of the holder, l^y 
 the use of reasonable diligence, to present it. Failure of such presentment 
 is excused by any inevitable or unavoidable accident, not attributable to the 
 fault of the holder, provided he make presentment as soon thereafter as he 
 is able 414 
 
 Note distinguishing Schofield v. Bayard, 3 Wend. 488 422 
 
 II. Juniata Bank v. Hale. 
 
 (16 Sergeant & Rawle, 157. Supreme Court of Pennsylvania, June, 1827.) 
 
 Death of maker. Indorser appointed administrator. — The death of the maker of a 
 note before it becomes due, and the taking out letters of administration upon 
 his estate by the indorsers and others, before the note arrived at maturity, 
 do not dispense with the necessity of notice to the indorsers of non-paj'ment 
 by the maker 423 
 
 Note examining Caunt v. Thompson, 7 Com. B. 400, and referring to other 
 
 cases 428
 
 ANALYTICAL INDEX. XXllI 
 
 III. HoPKiRK V. Page. 
 
 (2 Broekonbroiigh, 20. Circuit Court of the United States for Virginia, 
 
 ISIay, 1822.) 
 
 PAG E 
 
 Drawimj willwut finids. — If tlie drawer have no funds in the hands of the drawee 
 at the time of drawin<,^ and no right to draw, and has the strongest reasons 
 to heiieve that his draft will not he i)aid, lie is not entitled to notice of dis- 
 honor. 
 
 Effect of war. — The effect of war is to suspend all commercial intercourse be- 
 tween the countries engaged in it ; and therefore presentment and notice 
 will he excused during the continuance of hostilities. But these steps 
 should be taken within a reasonable time after the cessation of the war . . 430 
 
 Extended note and discussion of the cases, and containing opinion in House v. 
 
 Adams, 48 Penn. State, 2G1 441-443 
 
 IV, McGruder V. Bank of Washington. 
 
 (9 Wheaton, 598. Supreme Court of the United States, February, 1824.) 
 
 Removal into another jurisdiction. — The removal of the maker of a note, before 
 its maturity, into another jurisdiction from that in which the note was 
 executed, will excuse the holder from making a personal presentment and 
 demand 447 
 
 Note discussing analogous question 449 
 
 V. Lehman v. Jones. 
 
 (1 Watts & Sergeant, 126. Supreme Court of Pennsylvania, May, 1841.) 
 
 AhscondiiKj of the paijor. — If tlie maker of a promissory note absconds before 
 the maturity of the note, this will excuse the holder from making present- 
 ment at his last place of residence 450 
 
 Note and reference to otlier cases, and containing extract from oinnion in 
 
 Pierce v. Cate, 12 Cush. I'JO 451 
 
 VI. Williams v. Bank op the United States. 
 
 (2 Peters, 96. Supreme Court of the United States, January, 1829.) 
 
 Absence of payor. — In an action against an indorser, it appeared tliat the notary 
 called at his dwelling-house to serve notice of dishonor, and found the house 
 shut up, the doors locked, and the family out of town (as he learned on in- 
 quiry of the next neiglibor), upon a visit of unknown duration, lldd, that 
 he had used due diligence, and that the indorser was liabld 452 
 
 Note and reference to cases 458
 
 XXIV ANALYTICAL INDEX. 
 
 VII. Barton v. Baker. 
 
 (1 Sergeant & Rawle, 334. Supreme Court of Pennsylvania, April, 1815.) 
 
 PAGK 
 
 Insolvency. Assignment to indorser. — Tlioiigh the maker of a note was insolvent 
 when the note was made and indorsed, and also when it fell due, and this 
 
 I fact was known to the indorser, this will not excuse due notice of non-pay- 
 ment. But if the indorser has received from the maker a general assign- 
 ment of his estate and effects, notice is not necessary 4-58 
 
 Note and reference to other cases 461 
 
 Opinion in Watkins v. Crouch, 5 Leigh, 522 , , 463 
 
 VIII. Berkshire Bank v. Jones. 
 
 (6 Massachusetts, 524. Supreme Court, September, 1810.)" 
 
 Waiver of notice. Payable at bank. — Waiving notice by an indorser does not 
 excuse the indorsee from making demand of payment ; but if the paper was 
 payable at a designated place, and the indorsee was ready to receive pay- 
 ment at the time and place, no further demand is necessary 468 
 
 Note and reference to other cases, and containing opinion in Union Bank v. 
 
 Hyde, 6 Wheaton, 572 469 
 
 Also opinion in Coddington v. Davis, 1 Comst. 186 471 
 
 IX. SiGERsoN V. Mathews. 
 
 (20 Howard, 496. Supreme Court of the United States, December, 18.57.) 
 
 Promise to pay, ivhen a zvaiver. — If, before the maturity of a note, the indorser 
 dispensed with a presentation of the note and demand of payment, and prom- 
 ised to pay it or to provide for its payment at maturity, he cannot set up as 
 a defence to a suit upon the note, that it was not presented for payment, and 
 demand made therefor, when it was due, and that no notice of its dishonor 
 was given. Or if, after the maturity of the note, the indorser promised the 
 holder or his agent to pay the same, having at the time of making said 
 promise knowledge of the fact that the note had not been presented for pay- 
 ment, and that no demand had been made therefor, or notice of non-payment 
 given, the indorser cannot now set up as a defence to the note, a want of 
 such demand and notice 473 
 
 Note referring to numerous other cases 475
 
 ANALYTICAL INDEX. XXV 
 
 ACTIONS. 
 
 I. Pearce v. Austin. 
 
 (4 Wharton, 489. Supreme Court of Pennsylvania, March, 1839.) 
 
 PAGE 
 
 Who mmj sue. — One to whom negotiable paper is indorsed as agent for another, 
 may bring an action upon the same in his own name ; unless such agent's 
 possession is shown to be mala ^cle 477 
 
 Note and digest of tiie cases 478 
 
 II. Staples v. The Franklin Bank. 
 
 (1 Metcalf, 43. Supreme Court of Massachusetts, March, 1840.) 
 
 When action may be brought. — The maker of a promissory note is bound to pay 
 it upon demand made at any seasonable hour of the last day of grace, and 
 may be sued on that day, if he fail to pay on such demand. 
 
 Post-notes, issued by a bank, are payable on demand made at any time on the 
 last day of grace, after the known and usual hour of opening the bank for 
 business, and may be put in suit on that day, if payment is refused . . . 480 
 
 Note and reference to other cases 490 
 
 III. Smith v. The Bank of Washington. 
 
 (5 Sergeant & Rawle, 318. Supreme Court of Pennsylvania, 1819.) 
 
 When action may be browjht. — Notice to an indorser of non-payment of a prom- 
 issory note was put into the post-office on the 13th, and by the course of the 
 mail could not reach him before the 19th. Suit was brought on the IGth, 
 Held, that it was premature 490 
 
 Note referring to other cases 492 
 
 IV. OSBORN V. MONCURE. 
 (3 Wendell, 170. Supreme Court of New York, August, 1829.) 
 
 When action may be brought. — An action brought against the maker of a prom- 
 issory note on the third day of grace is premature 493 
 
 Note referring to the contlict, and containing opinion in Smith v. Aylesworth, 
 
 40 Barb. 104 494
 
 XXVI ANALYTICAL INDEX. 
 
 EVIDENCE. 
 
 I. Wells v. Whitehead. 
 
 (15 Wendell, 527. Supreme Court of New York, July, 1836.) 
 
 PAGE 
 
 Production. Bill drawn in sets. — In a suit against the indorser of a bill of ex- 
 change drawn in sets, the defendant may require the production of the iden- 
 tical one of the set dishonored 498 
 
 Opinion in Downes v. Church, 13 Peters, 205, and other cases referred to . . 501 
 
 II. Bank of the United States v. Dunn. 
 
 (6 Peters, 51. Supreme Court of the United States, January, 1832.) 
 
 Evidence to vary Uahility of indorser. — Tlie indorser of commercial paper will 
 not be permitted to show that his indorsement was intended to be merely 
 formal ; and that he was informed by the payor that he would incur no 
 responsibility by indorsing the paper, as its payment had been secured by a 
 pledge of stock 503 
 
 III. Townsend V. Bush. 
 
 (1 Connecticut, 200. Supreme Court, November, 181-1.) 
 
 Competency of party to commercial paper to prove it invalid. — A party to a nego- 
 tiable instrument, who is divested of interest, is competent to prove usury 
 in the inception of the paper . 507 
 
 lY. Thayer v. Grossman. 
 
 (1 Metcalf, 416. Supreme Court of Massachusetts, September, 1840.) 
 
 When indorser competent to prove payment. — In an action by the indorsee against 
 the maker of a note indorsed overdue, the indorser is competent to show 
 payment before the note was indorsed 522 
 
 Note in regard to the conflict, and citing other cases 527 
 
 V. The Commercial Bank of Albany v. Strong. 
 
 (28 Vermont, 316. Supreme Court, February, 1856.) 
 
 Sufficiency of prorf. — A decision of the county Court, as to the sufficiency of 
 certain proof, held, to refer to its cliaracter, or quality and competency, and 
 not merely to its quantity or force, in convincing the mind.
 
 ANALYTICAL INDEX. XXVll 
 
 When notice should be sciU. — A notice of the dislionor of a bill of excliiinf,'e, or 
 promissory note, should be addressed to an indorser at the place of his resi- 
 dence, unless he is shown to have a place of private business elsewhere. 
 The office of a corporation, of which he is an officer (in this case the presi- 
 dent), in a town diflerent from that in which he resides, will not, in the 
 absence of i)roof, be re^'ardcd as his i)rivate business place ; and a notice 
 ad<lresscd to him there will not be sufficient. 
 
 Number ofwilness(.<i. — That a notice to an indorser was seasonably deposited 
 in the post-office need not be proved by a sini^le witness. If more persons 
 than one participated in the act, the testimony of all of them should be 
 adduced. 
 
 Consideration of tlie probability as to the manner in wiiicli the notice in the 
 present case was directed and sent to the defendant; and of the testimony, 
 in reference to its legal sufficiency, to prove that the notice addressed to the 
 defendant as indorser, was put into the post-office, seasonably to chart^e him. 528 
 
 VI. The Commercial Bank of Albany v. Clark. 
 
 (28 Vermont, 325. Supreme Court, February, 18oG.) 
 
 Admissions. Notice. — A written admission by tlie indorser of a bill or note, 
 that he received due notice of its dishonor, thouyh strong evidence, is not 
 conclusive of the fact against him. He may show that the paper was signed 
 under a misapprehension or mistake as to the bill or note referred to, and 
 that no notice of the dishonor was, in point of fact, given. 
 
 Contract. Estoppel. — Such a writing, in the present- case, held not to operate 
 either as an admission for tlie purpose of a trial, as a contract, or as an 
 estoppel in pais 536 
 
 Note discussing the cases 540 
 
 DISCHARGING INDORSER OR DRAWER. 
 
 I. Sterling v. The Marietta and Susquehanna Trading 
 
 Company. 
 
 (11 Sergeant & Rawle, 179. Supreme Court of Pennsylvania, May, 1824.) 
 
 Additional securiti/. — Taking a bond from a third person for the money due upon 
 a note is no discharge of an indorser, unless it be so agreed; nor will pro- 
 ceeding to judgment on the bond alter the case. 
 
 Delaying suit. — Neither giving time to the maker, by forbearing to proceed to 
 recovery on the pai)er by legal process ; nor delay to sue the indorser for 
 several years, within the period of limitation, will operate as a discharge 
 to the indorser ; provided no time was given before the indorser's liability 
 was fixed 544 
 
 Note referi'ing to conflict, and citing other cases 546
 
 XXVin ANALYTICAL INDEX. 
 
 11. Okie v. Spencer. 
 
 (2 Wharton, 253. Supreme Court of Pennsylvania, December, 1836.) 
 
 PAGE 
 
 Additional security. Extension of time. — If the holder of a promissory note take a 
 check upon a bank from the maker, dated six days after the maturity of 
 the note, the check to be in full satisfaction of the note if paid, this oper- 
 ates as an extension of time to the maker, and discharges an indorser . . 547 
 
 III. McLemore V. Powell. 
 
 (12 Wheaton, ,554. Supreme Court of the United States, January, 1827.) 
 
 Agreement for delay. — Mere agreement by the holder with the drawer of a 
 bill of exchange for delay, made without consideration, and not commu- 
 nicated to the indorser, does not discharge the indorser 551 
 
 Note containing opinion in Payne v. Commercial Bank, 6 Sm. & M. 24 . . . 554 
 Also opinion in Bank of Utica v. Ives, 17 Wend. 501 556 
 
 lY. Tiernan V. Woodruff. 
 
 (5 McLean, 350. Circuit Court of the United States for Michigan, June, 1852.) 
 
 Agreement for delay. Bankruptcy. — A bankrupt maker of a promissorj'^ note 
 procured from his creditor two months' time, within which the right to sue 
 on the note was suspended. The agreement was upon a valuable consid- 
 eration. Held, no discharge to an indorser 558 
 
 Note containing opinion in Frazer v. Jordan, 8 El. & B. 303 560 
 
 V. Couch v. Waring. 
 
 (9 Connecticut, 261. Supreme Court, June, 1832.) 
 
 Judgment and execution against maker. Indorser sued for balance. — The holder of a 
 promissory note sued the maker thereof, and obtained judgment, which was 
 satisfied on execution. He then brought an action against an indorser to 
 recover a balance of interest due on the note, not included in the judg- 
 ment and execution. Held, that the effect of the former proceedings was 
 to discharge the maker from further liability, and to preclude the holder 
 from resorting to the indorser 563 
 
 VI. Newcomb V. Raynor. 
 
 (21 Wendell, 108. Supreme Court of New York, May, 1839.) 
 
 Release of first indorser. — If the holder of a promissory note release the first 
 
 indorser this discharges the subsequent indorsers 568
 
 ANALYTICAL INDEX. XXIX 
 
 VII. Pannell V. M'Mechen. 
 
 (4 Harris & Johnson, 474. Court of Appeals of Maryland, June, 1819.) 
 
 PAGE 
 
 Composition deed. Remedy against indorser reserved. — A made a negotiable note 
 payable to B, wlio indorsed it to C, by whom it was indorsed to D. A and 
 B made a composition deed with their creditors, and conveyed all their 
 estate to trustees, among whom was C, and were discharged, with the 
 proviso " that the said release shall not operate in favor of or be construed 
 to release any persons or person who may be bound, &c., for A and B, or 
 either of them, or who may have indorsed any note or notes drawn or in- 
 dorsed by the said A and B, or either of them." Held, that C, who had 
 received due notice of dishonor, was liable to D 569 
 
 Note containing opinion in Sohier v. Loring, 6 Cush. 537 574 
 
 VIII. Mayhew v. Boyd. 
 
 (5 Maryland, 102. Court of Appeals, December, 1853.) 
 
 Mortgage security sold without indorser's assent. — An indorsement of three notes 
 was made, in consideration of the execution of a mortgage at the same 
 time by tlie maker to the holder, by the terms of which the mortgagee was 
 to sell the property only on default of the maker to pay the notes at their 
 maturity. When the first note was due it was dishonored, but by the 
 assent of all parties a new one was substituted in its place. Tlie mortgagee, 
 after the original, but before the new note or any of the otlk^rs matured, 
 sold the property with the assent of the mortgagor, but not of the indorser, 
 applied the proceeds to pay the first two notes, and sued the indorser upon 
 the third. Held, that the right to sell, which accrued upon the dishonor of 
 the first note, was taken from the mortgagee by the substitution of the new 
 one in its place, and the sale before the maturity of the latter was a viola- 
 tion of the contract between the parties and discharged the indorser. 
 General nde. — Any dealings with the principal debtor by the creditor which 
 amount to a departure from the contract by which an indorser is to be 
 bound, and which, by possibility, might materially vary or enlarge the lat- 
 ter's liability without his assent, discharge the indorser. ....... 577 
 
 IX. Farmers' and Mechanics' Bank v. Rathbone. 
 
 (26 Vermont, 19. Supreme Court, , 1852.) 
 
 Distinction between hill for value and accommodation bill. — If a bill of exchange be 
 drawn and accepted at a time when the drawer has an open account with 
 the acceptor, for goods which he is in the course of sending to the acceptor 
 for sale, and it appear to have been the understanding of the parties, at the 
 time, that the bill was to be paid by the acceptor, and its amount be entered 
 in the general account, it will be treated as a bill drawn for value, imposing 
 upon the acceptor the primary obligation to pay it, and cannot be held an 
 accommodation bill; and its legal character, in this respect, will not be
 
 XXX ANALYTICAL INDEX. 
 
 affected by any alteration of the balance of the account, nor by the fact, 
 afterwards ascertained, that the drawer was indebted to the acceptor at the 
 time of the acceptance. 
 
 The. release of the drawer, in such case, by the holder, will not discharge the 
 acceptor, but will be treated as a relinquishment, merely, by the holder, of 
 so mucli security which he had for the payment of the debt. 
 
 Accommodation paper. Release of drawer. — An indorsee, for value, of a bill of 
 exchange, who became such before its maturity, and in ignorance that it was 
 given for accommodation, has a right to treat all parties thereon as liable to 
 him according to their relative positions on the bill, and to regard the 
 acceptor as the principal debtor, and the liability of the drawer as collateral ; 
 and this right is unaffected by any subsequently acquired knowledge, that 
 the bill was given for accommodation. In such case a release of the drawer, 
 by the liolder, has no effect on the ultimate liability of the acceptor. And 
 in this respect the rule is the same in equity as at law 581 
 
 Note referring to other cases 596 
 
 SURETYSHIP. 
 
 I. Keith v. Goodwin. 
 
 (.31 Vermont, 2G8. Supreme Court, November, 1858.) 
 
 When surety hoklen as principal, as to guarantors. — When a person signs a note as 
 surety for the makers and intrusts it to them, for the purpose of obtaining 
 the money upon it, and they subsequently obtain further guarantors, upon 
 tlie credit of all the signers, under the belief that they are joint principals, 
 and in order to procure the money upon the note, such surety will be 
 holden as a principal to indemnify the guarantors, if they are compelled to 
 pay the note. 
 
 Contribution. Stipulation for full indemnity. — One who signs a note as guar- 
 antor or surety, others having before signed the same as sureties, may 
 stipulate for full indemnity of each and all the former signers, or make 
 that the condition of his own undertaking ; and in that case he will not 
 be liable to contribute with the other sureties to the payment of the note. 
 And the facts and circumstances attending the signing or the guarantj^ of 
 payment of a note, may be sufficient to indicate as clearly as an express 
 stipulation or condition, the terms of the undertaking 597 
 
 Note discussing the cases at length 603 
 
 Opinion in Deardorff t'. Foresman, 5 Am. Law Reg. N. s. 539 604
 
 ANALYTICAL INDEX. XXXI 
 
 BANK-BILLS AND 0TIIP:R PAPP]R TAKEN IN PAYMENT 
 
 OF DEBT. 
 
 I. Bayard v. Shunk. 
 
 (1 Watts & Sergeant, !)2. Supremo Court of Pennsylvania, May, 184 .) 
 
 PAGE 
 
 Payment in bank-bills. — If a creditor receive current bank-notes in payment,- 
 tliis discharges the debt; tliough, by reason of the failure of the bank, of 
 wiiich botli parties were ignorant at the time, the notes were worthless 
 when received 617 
 
 XL Ontario Bank v. Lightbody. 
 
 (13 Wendfll, 101. Court of Errors of New York, December, 1834.) 
 
 Payment in bank-bills. — If the holder of commercial paper receive bank-notes in 
 payment of the same, the risk of the solvency of the bank \yhich issued 
 the notes is upon him who gave them, in the abserfce of agreement; and 
 therefore if the bank had actually failed or stopped paj-ment at the time 
 the notes were received, and this was unknown at the time to* the holder, 
 this will not constitute payment of his paper, though such bank-notes were 
 current at the place where they were received, at that time 625 
 
 Note containing opinion in Fogg i'. Sawyer, N. H. 365, and citing other cases 684 
 
 III. The Phcenix Insurance Company v. Allen. 
 
 (11 Michigan, 501. Supreme Court, July, 1863.) 
 
 Payment by paper of third })arty. Duty of creditor. — Where a party receives a 
 draft as conditional payment of a debt due him, his right of action upon the 
 debt is suspended until the draft is properly presented tor payment and pay- 
 ment refused. By receiving such draft, the creditor accepts the duty of 
 doing every thing with respect thereto which is necessary to fi.\ the liability 
 of the parties ; and the <iniis is upon him to show tliat he has performed that 
 duty when he seeks to recover upon the original cause of action .... 637 
 
 Note referring to other cases 642
 
 XXXll ANALYTICAL INDEX. 
 
 FORGERY. 
 I. Canal Bank v. Bank of Albany. 
 
 (1 Hill, 287. Supreme Court of New York, May, 1841.) 
 
 PAGE 
 
 Recovery of money paid upon forged indorsement. Notice. — Money paid by the ac- 
 ceptor of a bill to an innocent holder under a forged indorsement of the 
 payee may be recovered, if seasonable notice of the forgery be given. . . 643 
 
 Note referring to other cases, and containing opinion in Merchants' National 
 
 Bank v. National Eagle Bank, 101 Mass. 281 648 
 
 II. The Bank of the United States v. The Bank of the 
 State of Georgia. 
 
 (10 Wheaton, 333. Supreme Court of the United States, February, 1825.) 
 
 Bank's own forged bills received as genuine. — If a bank receives from a debtor 
 forged notes purporting to be its gwn, as genuine, and passes them to the 
 credit of the debtor, who acts in good faith, the receiving bank is bound 
 by such credit ; and it cannot recover -from the depositor and debtor the 
 amount of the forged bills 650 
 
 Extended note and digest of the cases 661 
 
 Opinions in Mather v. Lord Maidstone, 18 Com. B. 273 661 
 
 In McKleroy v. Southern Bank of Kentucky, 14 La. An. 458 662 
 
 And in Belknap v. National Bank of North America, 100 Mass. 376 . . . 665 
 
 LOST BILLS AND NOTES. 
 I. Pintard v. Tackington. 
 
 (10 Johnson, 104. Supreme Court of New York, January, 1813.) 
 
 IVhen owner may recover. — The plaintiff declared on a promissory note, pay- 
 able on demand, and stated that the note had been lost or destroyed ; and 
 the existence and contents of the note being proved, and it not appearing 
 that the note was negotiable, or if negotiable, that it had been negotiated ; 
 AeW, that the plaintiff was entitled to recover 671 
 
 Opinion in Blade v. Noland, 12 Wend. 173, and reference to other cases . . . 673
 
 ANALYTICAL INDEX. XXXlll 
 
 II. T(jWER V. Ai'i'LET(JN Bank. 
 
 (3 Allen, 387. Suineme Court of Massachusetts, January, \H(j-2.) 
 
 PAGE 
 
 Bank-bills. Cirr.umstanti(d fviihnce of destruction. — The owner of bank-bills 
 wliicli cannot be iilentitied or distinguislied from otlier similar bills, cannot 
 maintain an action aj^ainst the bank which issued them, upon circumstan- 
 tial evidence that they have been destroyed, and a tender of indemnity . . G74 
 
 Note referring to other cases GT'J 
 
 III. Rowley v. Ball. 
 
 (3 Cowen, 303. Supreme Court of New York, October, 1824.) 
 
 No action at law on lost neijotiahle note. — An action at law cannot be sustained 
 on a negotiable promissory note pa3able to bearer, by tiie owner, on proof . 
 that the note was lost, though he show that it was lost after it became due. 
 
 When the owner may sue at law 680 
 
 IV. FaLes V. Russell. 
 
 (16 Pickering, 315. Supreme Court of ^Massachusetts, March, 1835.) 
 
 Action at law 'maintainable on lost nccjotiahle paper. — AVhere a nejiotiable promis- 
 sory note, indorsed in blank, was stolen from the holder before it was due, 
 held, that he might recover the amount from the maker, in an action at law, 
 on filing a bond sufficient for the maker's indemnification 683 
 
 Note referring to the conflict, and containing opinion in Thayer v. King, 15 
 
 Ohio, 242 686 
 
 V. Chewning V. Singleton. 
 
 {2 Hill, Chancery, 371. Court of Appeals of South Carolina, December, 183.').) 
 
 licmcdy in eiptili/. — A party who has lost a note pa^-able to bearer, although 
 past due, may come into equity for relief The ground of jurisdiction is not 
 only that he may give indemnity to the defendant, but that he must swear 
 to the loss G88 
 
 Hopkins v. Adams, 20 Vt. 407, in note G'Jl 
 
 YI. TUTTLE V. StANDISH. 
 (4 Allen, 481. Supreme Court of Massachusetts, Septemlier, 1862.) 
 
 Action at law. Indemnity. — The owner of a lost note cannot maintain an 
 action at law against an indorser, in a case where a bond to indemnify
 
 XXXIV ANALYTICAL INDEX. i 
 
 PAGE 
 
 tlie (letbiidant against Leinu: called on a second time to pay the note would 
 
 not afford to liim an adequate iirotection T 694 
 
 Note containing case of Smith r. Rockwell, 2 Hill, 482 697 
 
 VII. The Bank of the United States v. Sill. 
 
 (5 Connecticut, 106. Supreme Court, July, 1823.) 
 
 Commercial, paper cut in fialvcs. — If the holder of a bank-bill voluntarilj- cut it in 
 halves, for the sole purpose of transmitting it by mail with greater safety, 
 this will not affect his rights upon such bill. To entitle him to recover on 
 the production of but one of the parts, he must show that he is owner of 
 the whole, and account for the absence of the other part. 
 
 The parts of a divided bank-bill are not separately negotiable. 
 
 Notice bjj the payor of cut bills. — The board of directors of the Bank of the United 
 States gave notice that the bank would not hold itself responsible upon any 
 of its notes which should be voluntarily cut into parts, except on the pro- 
 duction of all the parts ; which notice was published in all the newspapers 
 of the city of Philadelphia, at which place said bank was located ; held, 
 that the rights of a person in Connecticut, who subsequently became the 
 owner of a note so cut' into parts, and who was in possession of one of 
 the parts, and who had never received the notice, were not affected by 
 the same 699 
 
 Martin v. Bank of the United States, 4 Wash. C. C. 253, in note 703 
 
 Hinsdale v. Bank of Orange, 6 Wend. 378, in note 706 
 
 LAAV OF PLACE. 
 
 I. Aymar v. Sheldon. 
 
 (12 Wendell, 439. Supreme Court of New York, October, 1834.) 
 
 Bill drawn in one countrij and indorsed in another. — In an action by an indorsee 
 against an indorser of a bill of e.xchange drawn in a foreign country, and 
 indorsed and negotiated to the plaintiff in New York, the law of New 
 York must determine whether the jiroper steps have been taken to charge 
 the indorser 709 
 
 Note referring to numerous other cases and giving extended extracts from 
 
 opinions of the Court 712
 
 ANALYTICAL INDEX. XXXV 
 
 CHECKS. 
 
 I. Morrison v. Bailey. 
 
 (o Ohio State, 13. Supreme Court, December, 1855.) 
 
 PAGE 
 
 Form. — The following draft is not a check : W. Q. & B. : Pay to B. on the 
 13th of July, '53, or order, three hundred dollars ; it being payable on a 
 future day designated. It is one of the essentials of a check that it shall be 
 payable on demand. 
 
 Dai/s of (/race are not allowed on checks. 
 
 Distinction between checks and bills of exchange 716 
 
 Extended note embracing opinions in Keene v. Beard, 8 Com. B. fx. s.) 372, 
 
 and giving references to other cases #718 
 
 II. Mus.sEY V. Eagle Bank. 
 
 (9 Metcalf, 306. Supreme Court of INIassachusetts, March, 1845.) 
 
 Certification of checlcs. Inherent power of teller. — Evidence that tli.e teller of a 
 bank, during all the time of his holding office, whenever the convenience 
 of the bank or of its customers required it, certified that checks were 
 " good," which were drawn on the bank by its customers, when funds to 
 the amount of such checks were to the credit of the drawers, and that 
 his so doing was, in some instances, known to the bank, and was not for- 
 bidden, and that it was the usage of the tellers of other banks to do the 
 same thing, does not warrant a jury to infer that the power of so doing was 
 an original, inherent, implied power of the teller, as such. 
 
 Usage. The u.sage of issuing certificates of deposit, by a teller of a bank, is 
 not evidence to prove a usage of certifying checks. 
 
 A teller of a bank, as sucli, has no authority to certify that a check is " good," 
 so as to bind the bank to pay the amount thereof to any person who may 
 afterwards present it ; and a usage for him so to certify a check, to enable 
 the holder to use it at his pleasure, is bad 721 
 
 III. The Farmers' and Mecfianics' Bank of Kent County, 
 Maryland, v. The Butchers' and Drovers' Bank. 
 
 (16 New York [2 Smith], 125. Court of Appeals, September, 1857.) 
 
 Certification of checks. — A bona fi'h- holder, for value, of a negotiable check 
 certified to be good by the paying teller of the bank on which it is drawn,
 
 XXX VI ANALYTICAL INDEX. 
 
 PAGE 
 
 whose authority to certify is limited to cases wliere tlie bank has funds of 
 the drawer to meet tlie check, can recover of tlie bank the amount of the 
 check, though tlie drawer had no funds in the bank, and though the certi- 
 fication by the toller was in violation of his duty, and for the drawer's 
 accommodation 727 
 
 ^Merchants' National Bank v. State National Bank, in note 739
 
 TABLE OF CASES REPORTED. 
 
 [THIS TABLE INCLUDES THE CASES PRESENTED AT LENGTH TS THE NOTES.] 
 
 PAGE 
 
 Adams, Hopkins v 691 
 
 Adams, House v •443 
 
 Allen, Plifcnix Ins. Co. v G37 
 
 Allen V. Suydani and Boyd 26 
 
 Appleton Bank, Tower v 674 
 
 Atkinson v. Brooks 19/> 
 
 Austin, Pearce ?' 477 
 
 Aylesworth, Smith v. 494 
 
 Aymar v. Sheldon 709 
 
 Baker, Barton v 4.")8 
 
 Baldwin, Munn v 376 
 
 Ball, Rowley v 680 
 
 Bank of Albany, Canal Bank r 643 
 
 Bank of Alexandria v. Sw.ann 388 
 
 Bank of Columbia i\ Lawrence 404 
 
 Bank of Columl)ia, Renner v 297 
 
 Bank of Georgia, Bank of United States v 6.0O 
 
 Bank of Metropolis, United States i' 88 
 
 Bank of Ignited States v. Bank of Georgia 650 
 
 Bank of United States v. Dunn 503 
 
 Bank of United States, Martin r 703 
 
 Bank of United States, Mills v 358 
 
 Bank of United States r. Sill C.'.i;) 
 
 Bank of United States, "Williams v 45i 
 
 Bank of Utica r. Bender 410 
 
 Bank of Utica i". Ives H.JG 
 
 Bank of Waslun<;ton, M'Gruder v 447
 
 XXXVlll TABLE OP CASES REPORTED. 
 
 PAGE 
 
 Bank of Washington, Smith v 4'JO 
 
 Barton v. Baker 458 
 
 Baxter v. Little 271 
 
 Bay V. Codflington 105 
 
 Bayard, Konig v 85 
 
 Bayard, Schimmelpennich v G4 
 
 Bayard v. Shiink Gl7 
 
 Bavley r. Taber 22G 
 
 Beals, Stevens v IGl 
 
 Belknap v. National Bank of North America 665 
 
 Bender, Bank of Utica v 410 
 
 Berkshire Bank v. Jones 468 
 
 Bishop, Britton v 275 
 
 Blade v. Noland 673 
 
 Bowling V. Harrison 378 
 
 Boyce and Henry i\ Edwards 52 
 
 Boyd, Mayhew v 577 
 
 Brantly, Fowler v 235 
 
 Brewster v. McCardel 225 
 
 Britton v. Bishop 275 
 
 Broailhurst, Jones v 346 
 
 Brooks, Atkinson v 105 
 
 Brown v. The Butchers' and Drovers' Bank 110 
 
 Burgess, Morrison v 716 
 
 Burke V. M'Kay 355 
 
 Bush, Townsend v 507 
 
 Butchers' Bank, Farmers' Bank v 727 
 
 Butchers' and Drovers' Bank. Brown v 110 
 
 Camden v. IMcKoy 112 
 
 Cimeron v. Chappell 287 
 
 Canal Bank v. Bank of Albany 643 
 
 Chanoine v. Fowler 383 
 
 Chappell, Cameron v 287 
 
 Chewning v. Singleton 688 
 
 Chicopee Bank v. Philadelphia Bank 322 
 
 Church, Downe v 501 
 
 Clark, Commercial Bank of Albany 536 
 
 Clark, Newhall v 104 
 
 Coddington, Bay v 165 
 
 Coddington v. Davis 471
 
 TABLE OF CASES RKPORTFD. XXxix 
 
 v.\t,i: 
 Coit, I'aton v 2o() 
 
 Commercial Bank of Alhaiiy v. Clark o.'jG 
 
 Commercial Bank of Alhany r. Strong ,028 
 
 Commercial Bank of Xatcliez, Payne v ,0,')4 
 
 Cook V. Satterlee 8 
 
 Coolidge r. Paysou 4;j 
 
 Corey, Mohawk Bank r 2(i7 
 
 Couch V. Waring o03 
 
 Crossman, Thayer r 522 
 
 Crouch, Watkiiis r .KJ.-j 
 
 Dana r. Sawyer 310 
 
 Davis, Coddinirton r 471 
 
 Davis V. ]M'Creatly 222 
 
 Deardorft'w. Foresman 004 
 
 Dennis, Gilbert v ;3(33 
 
 Dodge, Wordeu r 7 
 
 Downer, Sylvester r 139 
 
 Downes i: Church 501 
 
 Diuin, Bank of United States r 503 
 
 Eagle Bank, Mussey v. 721 
 
 Eastman v. Plumei' 343 
 
 Edwards, Boyce v 52 
 
 Ellicott, Grant v 2(53 
 
 Estabrook v. Smith 158 
 
 Fales r. Kus.sell G83 
 
 Farmers' and ^lechanics' Bank r. Butchers' and Drovers' Ixuik . . 727 
 
 Farmers' Bank, Lawson v. otIO 
 
 Farmers' and Mechanics' Bank i\ Bathbone 581 
 
 Fisher v. Leland 258 
 
 Fogg V. Sawyer 634 
 
 Foresman, Deardorff v G04 
 
 Fort, Meacher r . 59 
 
 Fowler v. Brantly 235 
 
 FowU'r. C'lianoino r 3S'6^ 
 
 Franklin PKUik, Staples r 480 
 
 Frazer r. .Jordan 5 GO 
 
 Furze v. Sharwood 371
 
 xl 
 
 TABLE OF CASKS REPORTED. 
 
 PAGE 
 
 Gilbert r. Dennis 3().'} 
 
 Goodman, Keith c 597 
 
 Goodman v. Simonds 2.")9 
 
 Grant v. Ellieott -^63 
 
 Greenou<i;li i\ Smead 1-13 
 
 Guild, Wheelei- v .' . . 331 
 
 Hale, Juniata Bank v. . 
 Hall v. Newcomb . . 
 Harrison, Bowling v. . 
 Hascall v, Whitmore 
 Hemmingway, Kelley v 
 Hensliaw, Horti^man v. 
 Holmes v. Williams . 
 Hopkins v. Adams , 
 Hopkirk V. Page 
 Hortsman v. Henshaw 
 House V. Adams 
 Hyde, Union Bank v. 
 
 423 
 
 131 
 
 378 
 
 2G1 
 
 11 
 
 57 
 
 280 
 
 691 
 
 430 
 
 57 
 
 443 
 
 469 
 
 Ives, Bank of Utica v 556 
 
 Jones, Berkshire Bank v 468 
 
 Jones V. Broadhurst 346 
 
 Jones, Lehman v 450 
 
 Jordan, Frazer v o60 
 
 Juniata Bank v. Hale 423 
 
 Keith V. Goodwin . 
 Kelley v. Hemmingway 
 Kimball, Stoddard v. . 
 King, Thayer v. ^ . . 
 Kniglits V. Putnam . . 
 Kouig V. Bayard 
 
 597 
 11 
 269 
 686 
 277 
 85 
 
 Lake, j\Iusson v 
 
 Lawrence, Bank of Columbia v. 
 
 290 
 404
 
 TABLIO OF CASES REPOUTED. 
 
 xli 
 
 Lawson V. Farmers' IJaiik 
 Leavitt r. Putnam . 
 Lehman v. Jones 
 Leland, Fisher i\ . . . 
 Lightbody, Ontai'io liank r, 
 Little, Baxter i\ ... 
 Loring, Sohier v. . . . 
 
 PAGE 
 
 1.50 
 4.0O 
 258 
 (',25 
 271 
 574 
 
 Maidstone. Mather r 001 
 
 Marietta, jfcc., Trading Co., Sterling v 544 
 
 Martin v. Hank of United States 703 
 
 Mather v. Lord INIaidstone 001 
 
 Mathews, Sigersou v 473 
 
 Mayhevv v. Boyd 577 
 
 McCardel, Brewster i' 225 
 
 M'Koy, Camden r 112 
 
 M'Connell, Wallace v 15 
 
 M'Cready, Davis v ' 222 
 
 M'Donahl, Stalker V lO'J 
 
 M'Gruder v. The Bank of Washington 447 
 
 M' Kay, Burke w 355 
 
 M'Kleroy v. Southern Bank of Kentucky 002 
 
 M'Lemore v. Powell 551 
 
 M'Mechen, Pannell v 509 
 
 Meacher v. Fort 59 
 
 Merchants' National Bank v. National Eagle Bank 048 
 
 Merchants' National • Bank of Boston v. State National Bank of 
 
 Boston 739 
 
 Mills V. Ba)ik of the United States 358 
 
 Mix, Shaylor r 382 
 
 Mohawk Bank v. Corey 2()7 
 
 Moucure, Osborn v 4'.»3 
 
 Morrison v. Burgess 710 
 
 Munn V. Baldwin 370 
 
 Mussey v. Eagle Bank 721 
 
 Musson V. Lake ' . . . . 290 
 
 Natipnal Bank of North America, Belknap v 005 
 
 National Eagle Bank, Merchants' National Bank r 048 
 
 Newcomb, Hall v 131 
 
 Newcomb v. Kaynor 508 
 
 y
 
 Slii TABLE OF CASES REPORTED. . 
 
 PAGE 
 
 Kewl.nll V. Clark 104 
 
 Noland, Blade v 673 
 
 Norton, Windham Bank v 414 
 
 Okie V. Spencer '. . . 547 
 
 Ontario Bank v. Lightbody 625 
 
 Osborn v. Moncure 493 
 
 Page, Hoi)kirk v. 430 
 
 Pannell v. M'Mechen 569 
 
 Paton V. Coit ; ... 230 
 
 Payne v. Commercial Bank of Natchez 554 
 
 Payson, Coolidge v 43 
 
 Pearce v. Anstin 477 
 
 Pettee v. Prout 217 
 
 Philadelphia Bank, Chicopee Bank V 322 
 
 Pha?nix Insurance Co. v. 'Allen 637 
 
 Piutard v. Tackington 671 
 
 Pluraer, Eastman v 343 
 
 Powell, M'Lemore v 551 
 
 Pratt, Spear v 41 
 
 Prout, Pettee v 217 
 
 Putnam, Knights v 277 
 
 Putnam, Leavitt v 156 
 
 Rathbone, Farmers' and Mechanics' Bank v 581 
 
 Ray nor, Newcorab v 568 
 
 Renner v. The Bank of Columbia 297 
 
 Rev I'. Simpson 150 
 
 Richardson, Way v 220 
 
 Rockwell, Smith v. ." 697 
 
 Ross, Swope V 340 
 
 Rowley v. Ball 680 
 
 Russell, Fales v.* 683 
 
 Satterlee, Cook v 8 
 
 Sawyer, Dana v 310 
 
 Sawyer, Fogg v 634 
 
 Schimmelpennich v. Bayard 64
 
 TABLE OF CASES REPORTED, xHii 
 
 rA(iE 
 
 Sliaiwood, Furze v 371 
 
 Slmyloi- V. ]Mix .'5)S2 
 
 Sheldon, Aymar v • 7'>'J 
 
 Slmiik; Hayard r G17 
 
 Sigerson v. Matliews 473 
 
 Sill, United States IJank r GUI) 
 
 Sinionds, Goodman v 239 
 
 Simpson, Key r 150 
 
 Sim|).son v. Tiiniey 386 
 
 Singleton. Clicwiiing r 688 
 
 Sloan, Thompson r 1 
 
 Small /'. Smith 261 
 
 Smead, Greenongh r 143 
 
 Smith V. Aylesworth 494 
 
 Smith, Estabrook v 158 
 
 Smith V. Rockwell 697 
 
 Smith, Small v 264 
 
 Smith V. The Bank of Washington 490 
 
 Snyder, Taylor v 313 
 
 Si)hier v. Loring 574 
 
 Southern Iiatdv of Kentucky, M'Kleroy v 662 
 
 Spear and Patten v. Pratt 41 
 
 Spencer, Okie v 547 
 
 Stalker z', M'Donuld 169 
 
 Standish, Tuttle v 694 
 
 Staples V. Franklin Bank 480 
 
 State National Bank of Boston, Merchants' National Bank of Bos- 
 ton V 739 
 
 Sterling v. The Marietta, ifcc. Trading Company 544 
 
 Stetson, Walker v 397 
 
 Stevens r. Beals Ifil 
 
 Stoddard v. Kiml)all 269 
 
 Strong, Commercial liaidc of Albany v 528 
 
 Suydam, Allen i\ 26 
 
 Swami, Bank of Alexandria I' 388 
 
 Swift t'. Tyson 186 
 
 Swope V. Boss 340 
 
 Sylvester v. Downer i;i9 
 
 Taber, Bayley v 226 
 
 Tackington, Pintard r 671 
 
 Taylor v. Snyder 313
 
 xliv TABLE OF CASES REPORTED. 
 
 PAOE 
 
 Thayer v. Crossmanli 5^2 
 
 Thayer v. King G86 
 
 Thompson v. vSloan et al 1 
 
 Tiernan v. Woodruff • •'"^58 
 
 Tower V. Appleton Bank G74 
 
 Tovvnseiul v. Bush 507 
 
 Turney, Simpson v 386 
 
 Tuttle V. Standish G94 
 
 Tyson, Swift v 186 
 
 Union Bank v. Hyde 469 
 
 Union Bank of Weymouth and Braintree f. Willis 124 
 
 United States v. Bank of the Metropolis 88 
 
 United States Bank v. Sill 699 
 
 Walker v. Stetson 397 
 
 Wallace v. M'Connell 15 
 
 Waring, Couch v 563 
 
 Watkins v. Crouch 463 
 
 Way V. Richardson 220 
 
 Wells V. Whitehead 498 
 
 Wheeler v. Guild 331 
 
 Whitehead, Wells V 419 
 
 Whitraore, Hascall v 261 
 
 Williams v. Bank of the United States 452 
 
 Williams, Holmes v 280 
 
 Willis, Union Bank of Weymouth and Braintree I' 124 
 
 Windham Bank v. Norton 414 
 
 Woodruff, Tiei-nan v 558 
 
 Worden v. Dodge . . 7
 
 TABLE OF CASES CITED. 
 
 
 PAGE 
 
 
 
 
 PAGE 
 
 Al)el V. Sutton 
 
 1(51 
 
 Andrews v. Pond 
 
 
 
 250 
 
 Aborn v. Bosworth 
 
 (iSO 
 
 Androscoggin Bank v. Kimball 
 
 245 
 
 Al)soloii r. Murks 
 
 160 
 
 Angel V. Felton 
 
 
 
 672 
 
 Adams v. Darin- 
 
 441, 44:3 
 
 Anonymous v. Stanton 
 
 
 441 
 
 , 442 
 
 V. JoIU'S 
 
 49, r>7 
 
 Appersou v. Union Ban 
 
 k 
 
 
 446 
 
 r. Lulaiul 
 
 320, 449 
 
 Appleton Bank v. McGilvray 
 
 
 648 
 
 r. Otti-rback 
 
 307, 309 
 
 Arbouin v. Anderson 
 
 
 252 
 
 259 
 
 V. Soulu 
 
 211 
 
 Arlington v. Hinds 
 
 
 
 478 
 
 Addy V. Grix 
 
 110 
 
 Armot V. Union Bank 
 
 
 
 703 
 
 Adle V. Metoyer 
 
 59G 
 
 Armstrong v. C'bristiani 
 
 
 
 375 
 
 Agra, In re, &c.. Bank 
 
 42, 51 
 
 V. Thruston 
 
 
 
 375 
 
 Alden v. Barbour 
 
 109 
 
 Arnold v. Dresser 
 
 
 296 
 
 476 
 
 Aldricb v. Jackson 
 
 636 
 
 V. Kinloch 
 
 
 
 375 
 
 V. Warren 
 
 234 
 
 V. Rook River, &c., R 
 
 . Co 
 
 9 
 
 Alexander v. Bunbfield 
 
 746 
 
 V. Sprague 
 
 
 
 642 
 
 c. Byers 
 
 636 
 
 Arnot 0. Woodburn 
 
 
 
 276 
 
 V. Dennis 
 
 636 
 
 Arundel Bank v. Goble 
 
 
 
 654 
 
 17. McKenzie 
 
 736, 737 
 
 Asbpitel V. Bryan 
 
 
 
 215 
 
 V. Oakes 
 
 7 
 
 Astor V. Benn 
 
 
 
 715 
 
 Allaire v. Hartsborn 200, 
 
 207, 256, 
 
 Atkinson v. Brooks 
 
 195; 
 
 203, 
 
 208, 
 
 
 270 
 
 
 
 211 
 
 256 
 
 Allen f. Ilolkiiis 
 
 509 
 
 V. Manks 
 
 
 7 
 
 109 
 
 c. Keuilile 
 
 713, 714 
 
 Attenborougb v. McKenzie 
 
 
 ;!41 
 
 V. King 201, 202 
 
 203, 443 
 
 Attwood V. Rattcnbury 
 
 
 
 160 
 
 V. Merobants' Bank of New 
 
 Attwood V. Mnnnings 
 
 
 736, 
 
 737 
 
 York 
 
 715 
 
 Aurora v. West 
 
 
 
 234 
 
 Allen V. Newbury 
 
 478 
 
 Austin V. Boyd 
 
 
 
 129 
 
 V. State B:ink 
 
 708 
 
 V. Burns 
 
 
 
 9 
 
 Allin V. Sliadbnrni! 
 
 478 
 
 V. Curtis 
 
 203, 
 
 211, 
 
 213 
 
 Allwood V. Iliseldon 
 
 462 
 
 Awde V. Dixon 
 
 
 604, 
 
 610 
 
 r. Ilazelton 
 
 158 
 
 Aver V. Hutcbins 
 
 
 
 250 
 
 Almy V. Reed 
 
 676, 695 
 
 Ayrey v. Fearnsides 
 
 
 
 14 
 
 American Bank v. Baker 
 
 576 
 
 Aymar v. Sbeldon 
 
 709, 
 
 714, 
 
 715 
 
 Amniidown v. Woodman 
 
 490 
 
 
 
 
 
 Amoskeag Bank v. Mt)ore 
 
 476 
 
 
 
 
 
 Anderson v. Drake ;>14, olO, 
 
 317, 321, 
 
 Babcoek, In re 
 
 
 
 592 
 
 
 327 
 
 Baekiiouse v. Harrison 
 
 
 
 .252 
 
 Andrews v. Baggs 
 
 108 
 
 Backus i'. Sbipberd 
 
 
 
 469 
 
 V. Boyd 
 
 462 
 
 Bacon v. Searles 
 
 349, 
 
 350, 
 
 351 
 
 i\ Franklin 
 
 13 
 
 Badeock i'. Steadmaq 
 
 
 
 607 
 
 V. Hart 
 
 214 
 
 Badger v. Tbe Bank of 
 
 Cun 
 
 ber- 
 
 
 V. Herriot 
 
 715 
 
 land 
 
 
 
 747
 
 xlvi 
 
 TABLE OF CASES CITED. 
 
 
 PAGE 
 
 Badnall v. Samuel . 
 
 554 
 
 Bagnall v. Andrews 
 
 687 
 
 Bailey v. Bidwell 
 
 233 
 
 V. I'orter 
 
 443 
 
 Baily v. Smith 
 
 214 
 
 Bain r. Wilson 
 
 402 
 
 Baii'd V. Coi'liran 
 
 527 
 
 Baizley, J'Jx parte 
 
 425 
 
 Baker v. Birch 
 
 425 
 
 V. Bonesteel 
 
 636 
 
 V. Briggs 
 
 117, 128, 129 
 
 V. Dening 
 
 110 
 
 V. Flower 
 
 563 
 
 V. Walker 
 
 207. 255 
 
 Bancroft v. Hall 
 
 410 
 
 Bangs V. Moslier 
 
 550 
 
 Bank v. Flanders • 
 
 111 
 
 Bank, Tie The, &c. 
 
 213 
 
 Bank of Alexandria v. Swann 362, 
 
 363, 388, 392 
 
 Bank ot America ik Petit 462 
 
 V. Woodworth 316 
 
 Bank ofAujiUsta v. Earie 748 
 
 Bank of Burlington v. Beach 598 
 
 Bank of Chenango v. Hyde 598 
 
 Bank of Columbia v. Fitzhugh 307 
 
 V. Lawrence, 377, 
 
 382, 389, 399, 404, 
 
 532 
 
 V. Magruder 307, 
 
 410 
 
 Bank of Commerce v. Union Bank 62, 
 
 648, 662, 665 
 
 Bank of the Commonwealth c. 
 
 Curry 612 
 
 Bank of Cooperstown v. Woods 363 
 Bank of England v. Xewnian 134, 669 
 Bank of Geneva v. Howlett 410 
 
 Bank of Georgetown v. Magruder 475 
 Bank of Ireland v. Beresford 216, 
 
 594 
 Bank of Kentucky v. The Schuyl- 
 kill Bank _ 747 
 Bank of Louisiana v. Tournillon 410 
 Bank of Louisville v. Summers 674 
 Bank of the Metropolis v. The 
 
 New England Bank 204, 207 
 
 Bank of Michigan v. Ely 51, 56 
 
 Bank of Missouri v. Hull 528 
 
 Bank of Natchez v. King 393 
 
 Bank of New York v. Vander- 
 
 horst 211 
 
 Bank of Niagarh v. iNPCracken 677 
 Bank of Pittsburgh i'. Neal 257 
 
 Bank of the Republic v. Carring- 
 
 ton 208. 
 
 Bank of Rochester r. Gould 363, 370 
 Bank of Puitland v. Buck 183, 598 
 
 Bank of Rutland v. Woodruff 42, 51 
 
 Bank of Salina v. Babcock 172, 189, 
 
 • 255, 268 
 
 Bank of Sanduskv v. Scoviile 172, 
 
 1S9, 268 
 Bank of Scotland v. Hamilton 28, 30, 
 
 34 
 Bank of South Carolina v. Flagg 328 
 r. flyers 462 
 Bank of St. Albans v. Farmers' 
 
 and Mechanics' Bank 648, 664 
 
 Bank of St. Albans v. Gilliland 201 
 Bank of Syracuse t'. Hollistcr 495 
 
 Bank of the United States r. The 
 
 Bank of Georgia 628, 
 
 636, 642, 644, 646, 64«, 
 
 650 
 
 V. Carneal 325, 328, 364, 
 
 370.376,399,409,410, 
 
 443 
 
 V. Davis 396, 745 
 
 V. Hatch 559, 563 
 
 V. Sill 680, 692, 699 
 
 V. Smith 16, 17, 23, 328, 
 
 443 
 
 V. United States 479 
 
 Bank of Utica v. Bender 399 
 
 V. Davidson- 411 
 
 V. Smith 303, 312 
 
 Bank of Vergennes v. Cameron 535 
 
 V. Warren 747 
 
 Bank of Washington v. Triplett 39, 
 
 237, 308 
 Banorgee v. Hovev . 57 
 
 Barber v. Gingell' 646, 658, 661, 670 
 Barclay, Ex x>arte 884 
 
 Barker v. Parker 462 
 
 V. Prentiss 524 
 
 V. Valentine 276 
 
 Barlow v. Scott 276 
 
 •Barnes v. Ontario Bank 748 
 
 Barnet v. Smith 747 
 
 Barough v. White 259 
 
 Barr v. Greenawalt 616 
 
 Barry v. Ransom 600 
 
 Barstow v. Hiriart 376 
 
 Barbour r. BaA'on 307 
 
 Barclay c. Bai"ley 311, 312 
 
 V. Weaver 476 
 
 Baring v. Lyman 57 
 
 Barlow v. Bishop 162, 163 
 
 V. Broadhurst 10 
 
 Barnes v. Gorman 7 
 
 Barnet v. Smith 43 
 
 Barney r. Earle 200. 207 
 
 Barnsback i'. Reiner 616 
 
 Barrett v. Wills 316 
 
 Barry County v. McGlolhli.n 478
 
 TABLE OF CASES CITED. 
 
 xlvU 
 
 PAGE 
 
 427 
 •183 
 
 2ir>, 216, 2G2 
 
 2l;3 
 
 Bartholomew v. Hill 
 Barton v. Baker 
 Bartruin v. ('aildy 
 Bass V. Clivu 
 Bassett v. Avery 
 
 .0. Dodgiii 
 
 Batenian t\ Joseph 4y8 
 
 Bates V. Kem[) 27G 
 
 BaiimganliiiT r. Reeves 458 
 
 Bawden r. Howell 1(51 
 
 Baxter v. Diireii 669 
 
 i\ Stewart 9 
 Bay r. Cod.iinfrtoii 171, 172, 189 
 
 Ba^anl c. Lathy 50 
 
 V. Shiink 6:5-1 
 
 Baverque v. San Francisco 8 
 
 Bayley v. Tabcr 226, 23o 
 
 Beal V. McKii-niau 614 
 Braie V. Parrish . 388, 413 
 
 Bcals ('. Peck 363 
 
 Bean v. Arnold 469 
 
 Beardslee f. Ilorton 10 
 
 Bear.bley v. Baldwin 12 
 
 Beaucha:n[i v. Cash 363 
 
 V. Parry 259 
 
 Beck V. Robley 350, 351 
 
 Beckford v. Jackson 701 
 Beckwith v. Angell 122, 124, 126, 130 
 
 V. Corrall 708 
 
 Bceching v. Gower 410 
 
 Beekinan v. Wilson 479 
 licenian c. Du.k 62, 661, 670 
 Beers v. The Phcenix Glass Co. 747 
 
 Helden v. Lamb 399 
 Belmont Branch Bank v. Hoge 258 
 Belknap r. National Bank of North 
 
 America 648, (5G5 
 
 Belshaw V. Bush 2U7 
 
 Beltzlioover v. Blackstock 708 
 
 Bene.lict 0. CafFe 4^2 
 
 Benior j;. Paqnin 216 
 
 Bennett, £.r y)a;7e 614 
 
 B(!noist r. Creditors 442 
 
 Bent V. Baker 513, 523 
 
 lienthall V. Jndkins 131 
 
 Bentley v. Columbia Ins. Co. 614 
 
 Benton r. Martin 543 
 
 Berkshire Bank d. Jones 468, 542 
 
 Bernard r. Barry 715 
 
 Berridge v. Fitzgerald 404 
 
 Berry c. Robinson 158 
 
 Bevan V. Eldridge 492 
 
 Bray v. Iladwen 394 
 
 IK Manson 563 
 
 Breckinridge r. Moore 201 
 
 Brenzer r. Wiglitnian 393 
 
 Beveridge v. Burgis 458 
 
 Bibb V. Reid 605 
 
 Bickford v. First Nation 
 Bigehjw r. Colton 
 Bignold, Ex parte 
 Bikerdike v. BoUman 
 
 Bird V. Le Blanc 
 Birdseye v. Ray 
 I Bishop V. Dexter 
 I Bissidl V. Jellersonville 
 j Blackburne, L'x parte 
 j Pdaikenship v. Rogers 
 I Blackhan c. Doren 
 1 Blai.-kiiaw v. Doren 
 j Blaekie r. Pidding 
 I Blade v. Noland 
 i BJake v. Wheadon 
 
 Blanchard v. Stevens 
 I Bleaden r. Charles 
 Bliss r. Nichols 
 Bloodgood V. Hawthorn 
 Bloxhani, Ex parte 
 Boelim r. Sterling 
 Bogy V. Keil 
 Bolton V. Richard 
 Bond V. Farnhara 
 
 V. Fitzpatrick 
 Boody V. Bartlett 
 Bookman v. Metcalf 
 Boot r. Franklin 
 Borrailale v. Lowe 
 Bosanquety. Corser 
 V. Dudnian 
 
 V. Forster 
 Boss V. Hewitt 
 Boston Bank v. Hodges 
 Bostwick V. Dodge 
 Boultljee V. Stubbs 4G2 
 Boulton V. Welsh 366, 
 Bowcn V. XewcU 
 Bowie V. Dnvall 
 Bowling V. Harrison 
 Bowyer v. Bamplon 
 Boyce v. Edwards 
 Boyd V. Emmerson 
 
 V. McCanu 
 
 V. Mr Ivor. 
 
 V. Plumb 
 Brabston v. Gibson 
 Bradley v. Davis 
 Bramah r. Roberts 
 Branian c. Hess 
 Brannin r. Henderson 
 Brett c. Levett 
 Bridgeford v. .Simonds 
 Bridgepoit City Bank /• 
 Bristol V. Warner 
 Bromley v. Holland 
 
 al V>£ 
 
 l'\r,n 
 
 747 
 
 156 
 
 462 
 
 4;J0, 431. 432, 
 
 433, 44(J, 442 
 
 472 
 
 171 
 
 158 
 
 744 
 
 636, 669 
 
 442 
 
 432, 441 
 
 588 
 
 679 
 
 673, G94 
 
 161 
 
 200, 2t)7, 256 
 
 335 
 
 404 
 
 442 
 
 177, 179. 193 
 
 746 
 
 4G2 
 
 G54 
 
 427, 459, 461 
 
 271 
 
 210 
 
 211, 212 
 
 328 
 
 426, 476 
 
 198, 206 
 
 193, 198, 
 
 204. 208 
 
 198, 206 
 
 214 
 
 484 
 
 200, 207 
 
 464, 575, 576 
 
 373, 374, 375 
 
 718 
 
 23, 109, 479 
 
 377, 532 
 
 512 
 
 49, :)2 
 
 746 
 
 2(52 
 
 257 
 
 734, 735, 736 
 
 109 
 
 363 
 
 177, 180, 193 
 
 279 
 
 43 
 
 466 
 
 543 
 
 211 
 
 6 
 
 6'JO, 691, 692 
 
 17; 
 
 4<55, 
 
 ^\\
 
 xlviii 
 
 TABLE OF CASES CITED. 
 
 
 PACK 
 
 Brooks V. Page 
 
 
 7 
 
 B rough V. Parkings 
 
 
 292 
 
 Brown, ]Matter of 442, 
 
 588, 717, 
 
 720 
 
 V. Barry 
 
 
 41 
 
 V. Bunn 
 
 
 715 
 
 V. Butchers' and 
 
 Drovers'* 
 
 Bank 
 
 110 
 
 156 
 
 V. Davies 
 
 250, 2G0, 
 
 275 
 
 V. Fferguson 
 
 
 393 
 
 V. Ilarraden 
 
 
 308 
 
 V. Leavitt 
 
 
 211 
 
 V. Lfckie 
 
 
 747 
 
 V. London 
 
 
 748 
 
 V. Maffey 
 
 432, 
 
 465 
 
 V. JNPDi-rniot 
 
 
 426 
 
 «r. JNIott 
 
 
 593 
 
 j,\ Ne-vvell 
 
 
 308 
 
 V. Pi-nfield 
 
 
 214 
 
 V. Taber 
 
 
 250 
 
 V. Turner 
 
 
 393 
 
 Browne v. Coit 
 
 
 108 
 
 Browning v. Kinnear 
 
 
 458 
 
 Bruce v. Bruee 
 
 647, 657, 
 
 665 
 
 V. Lytle 
 
 330, 
 
 451 
 
 Bruen w. Marquand 
 
 
 576 
 
 Brush -y. Reeves 
 
 
 134 
 
 V. Seribner 194 
 
 200, 207 
 
 252 
 
 Bryant v. Damariscotta 
 
 
 677 
 
 V. Edson 
 
 
 308 
 
 Bryden v. Bryden 
 
 
 410 
 
 Buchanan v. Marshall 
 
 
 469 
 
 Buck v. Cotton 
 
 
 462 
 
 Buckler i\ Buttivant 
 
 288 
 
 289 
 
 Buckley v. Bentley 
 
 
 472 
 
 Buckner v. Finley 
 
 
 500 
 
 Buller V. Harrison 
 
 
 176 
 
 Bullet V. Bank of Penns 
 
 ylvania 
 
 678, 
 
 
 703 
 
 705 
 
 Burbridge v. Mannei-s 
 
 
 485 
 
 Burchell v. Slocock 
 
 
 6 
 
 Burchfield.w. Moore 
 
 
 62 
 
 Burgess v. Vreeland 
 
 
 376 
 
 Burgh V. Legge 
 
 
 368 
 
 Burnham v. ^Vebster 
 
 469 
 
 747 
 
 Burns r. Rowland 
 
 50, 57 
 
 Burr V. Smith 
 
 
 354 
 
 Burridge v. Manners 
 
 338 
 
 341 
 
 Burrough v. Moss 
 
 274 
 
 275 
 
 Burrows v. Hannegan 
 
 
 715 
 
 Bush V. Peckard 
 
 200 
 
 207 
 
 V. Livingston 
 
 
 279 
 
 Bussard v. Levering 
 
 
 488 
 
 Butler V. Campbell 
 
 • 
 
 116 
 
 V. Damon 
 
 
 525 
 
 v. Kimball 
 
 
 490 
 
 V. Paine 
 
 
 ,7 
 
 Cabot Bank v. Morton 669 
 
 CaldwelU. Cassady 22, 109 
 
 Callow ?'. Lawrence 351, 353 
 
 Cameron v. Chappell 223 
 
 Camidge v. Allenby 618, 620, 669 
 
 Camp V. Bates 417 
 
 Campbell v. Butler 115, 118 
 
 V. Pettengill lOS, 443 
 
 Canal Bank v. Bank of Albany 61, 62, 
 'C43, 669 
 Carlisle v. Wishart 
 Carnegie v. Morrison 
 Carpenter v. Oaks 
 Carr v. Moore 
 
 V. Rowland 
 Carroll v. Upton 
 V. Weld 
 Carstairs, Ex parte 
 
 V. Rolleston 
 Carter v. P>urley 
 V. Flower 
 Carver v. Warren 
 Castrique v. Bernabo 
 Cathell V. Goodwin 
 Catskill Bank v. Stall 
 Caunt f. Thompson 
 
 200, 207 
 50, 57 
 131, 143 
 611 
 143 
 399 
 124 
 575 
 354 
 393 
 443 
 127, 129 
 485, 492 
 441 
 411, 734 
 375, 376, 428 
 Cayuga Bank v. Warden 363, 375 
 
 Cavuga Conntv Bank v. Hunt 312 
 
 Chaffee v. Jones ' 128 
 
 Chalmers v. Mc^Iurdo 147 
 
 Champion v. Griffith 145 
 
 Chandler v. Mason 528 
 
 Chanoine v. Fowler 383, 390, 426, 428 
 
 Chapman v. Keane 
 Chard u.-Fox 
 Charles v. Marsden 
 Charnley v. Grundy 
 Chaudron v. Hunt 
 Cheetham v. Ward 
 Chesmer v. Noyes 
 Chester v. Doit 
 Chick V. PiUsbury 
 Chicopee Bank v. Chapin 
 
 384 
 
 375 
 
 216, 263 
 
 297 
 
 674 
 
 576 
 
 292 
 
 217 
 
 392, 394 
 
 200, 203, 
 
 256, 271 
 
 V. Philadelphia 
 
 Bank 25, 109, 322 
 
 Childs V. Wyman 131 
 
 Chouteau v. Webster 401, 410 
 
 Church V. Barlow 396, 592 
 
 V. Clark 484 
 
 Churchill v. Suter 279, 514, 520, 522, 
 
 523, 524, 525, 526 
 
 Citizens' Bank v. Payne 211 
 
 City Bank v. Cutter 309, 357, 484 
 
 Clagett V. Salmon 576 
 
 Claremont Bank v. Wood 592 
 
 Clark National Bank v. Bank of 
 
 Albion 748
 
 TAIJLK OP CASES CITED, 
 
 xlix 
 
 Clapp v. Ilan-son 
 
 PAOE 
 
 527 
 
 V. Rice 
 
 1:51 
 
 Clarid^'C r. Dalton 
 
 •111, 442, 0H6 
 
 ( 'lark's ( 'ase 
 
 511 
 
 Clark V. Devlin 
 
 505 
 
 V. Eldridge 
 
 363, 375 
 
 V. Alinton 
 
 462 
 
 r. Percival 
 
 14 
 
 V. Merriaiu 
 
 124, 143 
 
 V. Cock 
 
 48, 49 
 
 V. Quince 
 
 679 
 
 V. Kiisscl 
 
 41 
 
 Clason r. JJailcy 
 
 14 
 
 ("laxton V. Swift 
 
 564 
 
 Clayton's Case 
 
 352 
 
 Clavton V. Gosling 
 
 14 
 
 Cloi)i)cr V. Union Bank 441, 592, 596 
 Clotiston V. Harbiere 139 
 
 Cobl) V. Doyle 211 
 
 Cockerill v. Kirkpatrlck T^ 6 
 
 Cocks V. Mastcnnan 615, 646 
 
 Coddington v. Bay 169, 170, 172, 173, 
 177, 184, 256 
 V. Davis 462, 471, 472 
 Coggill V. American Exchange 
 
 Bank 61, 62 
 
 Coggs V. Bernard 326, 744 
 
 Cole *;. Wcndel 4 
 
 Colelian v. Cooke 12 
 
 Coleman v. Ewing 490 
 
 V. Riches 738 
 
 V. Sayer 307 
 
 V. Wise 513 
 
 Colkett V. Freeman 486 
 
 C'ollinge v. Ileywood 616 
 
 Collins V. Butler 458 
 
 r. Emmett 61 
 
 V. Lincoln 6, 7 
 
 V. Martin 167, 176, 333, 334 
 
 CoUis ('. Eiiiett 245 
 
 CoUott V. Ilaij^h 590 
 
 Colpoys L\ Colpoys 5 
 
 Commercial Bank v. Benedict 708 
 
 V. Cunningham 592 
 
 Commercial Bank of Albanv v. 
 
 Clark 537 
 V. Iluiiiies 441 
 Connnercial Bank of Lake Erie o. 
 
 Norton 747 
 
 Commonwealth v. Alleghany Co. 744 
 V. Pittst)urg 744 
 
 V. Stone 63(i 
 
 Comparree v. Brockway 139 
 
 Conalian /•. Smith 715 
 
 Cone r. Baldwin 250, 257 
 
 Conkling c. Vail 212 
 
 Conner v. Routli 1)5 
 
 Cony V. Wheelock ' 161 
 
 PAGE 
 
 Cook V. Litchfield 363 
 
 V. Martin 441 
 
 V. Satterlee 2 
 
 V. Southwick 143 
 
 Cooke V. French 3(J8 
 
 Cookendorfer v. Preston 306 
 
 Cooley V. Lawrence 155 
 
 Cooliijge c. Brigham 669 
 
 V. Payson 42, 49, 54, 55, 57, 
 
 75, 192 
 
 V. Ruggles 12 
 
 Cooper V. Le Blanc 661 
 
 V. Meyer 63 
 
 V. Smith 613 
 
 V. VValdgrave 715 
 
 Copeland v. IMercantile Ins. Co. 613 
 
 Corbit V. Bank of Smyrna 036 
 
 Cordery v. Colvin * 542 
 
 Corney v. Da Costa 459, 460, 465, 
 
 466 
 
 Corp V. M'Comb 488 
 
 Corson, //( re 353 
 
 Cota i\ Buck 8, 13 
 
 Cotes v. Davis 163 
 
 Cottrell V. Conklin 111* 
 
 Couch V. AVaring 546 
 
 Coursin v. Ledlie G 
 
 Cowles V. Harte 376 
 
 Cowley V. Dunlop 288, 289 
 
 Cowper V. Smith 576 
 
 Craig V. Sibbett 225 
 
 Cram v. Hendricks 285, 288 
 
 Cramlington v. Evans 478 
 
 Crawford v. Branch Bank 375, 715 
 
 Crawshay v. Collins 160 
 
 Craythorne v. Swinburne 600, 601, 
 
 602 
 Creamer t'. Peny 462, 475,' 476 
 
 Creery r. Holly 4 
 
 Crenshaw i\ McKiernan 490 
 
 Cronise v. Kellogg 596 
 
 Crook V. Jadis 253 
 
 Crosse v. Smith 456 
 
 Crowell V. Van Bibber 42, 50, 51 
 
 Crygter v. Long 494 
 
 Cunlilfe v. Whitehead 502 
 
 Cunningham v. Wardwell 43 
 
 Curtis V. ]Mohr 212 
 
 Cushman v. Ilaynes 14 
 
 V. Dement 124 
 
 Cuthbert v. ILiley 283 
 
 Cutter V. Powell 301 
 
 Dabney v. Campbell 
 Dailey o. De Frees 
 Dakin v. Anderson 
 Darbishire v. Parker 
 
 309 
 
 216 
 
 636 
 
 40, 391, 410
 
 TABLE OF CASES CITED. 
 
 PAGE 
 
 Darby v. Ouseley • 641 
 
 Davies v. Dodd 691, 692 
 
 Daviess v. Barton 539 
 
 Davis V. Beckham 409 
 
 V. Briggs 478 
 
 V. Williams 09 
 
 Dawkes v. De Lorane 8 
 
 Dawson r. Chauinev 326 
 
 Day V. Riddle " 326 
 
 Deacon v. Stodbart 364 
 
 Dean v. Ilall 118 
 
 V. Hewit 477 
 
 V. Speakman . 674 
 
 De Berdt v. Atkinson 459, 460 
 
 Deberry v. Darnell 2, 3 
 
 Decring r. The Earl of Winchel- 
 
 sea 600 
 
 De Forest v. Frary 14 
 
 Dehers v. Harriot 297, 307 
 
 De la Chanmette v. The Bank of 
 
 England 193, 197, 202, 203, 205, 
 
 715 
 Delaney v. Stoddart 37 
 
 De la Torre v. Barclay 676 
 
 •Denison v. Tyson 7 
 
 Dennett v. Goodwin 7 
 
 Dennie v. Walker 316, 317, 488 
 
 Dennistoun v. Stewart 303 
 
 Dennv v. Palmer 462, 463 
 
 Des Arts v. Leggett 674, 679, 694 
 Descadillas v. Harris 642 
 
 'Desha v. Stewart 160, 478 
 
 De Silva v. Fuller 335, 338 
 
 De Tastet, Ex parte 353 
 
 Devallar, Executors of, v. Herring 
 
 174 
 Dewey v. Washburn 7 
 
 DeWolf 17. Murray 375 
 
 Deyraud v. Banks 328 
 
 Dezell V. Odell 745 
 
 Dickens v. Beal 399, 441 
 
 Dod V. Edwards 338 
 
 Dodge V. Bank of Kentucky 393 
 
 Dole V. Gold 375 
 
 DoUfus V. Frosch 441% 479 
 
 Don V. Lippman 716 
 
 Dougal r. Cowles 43 
 
 Douglas V. Waddle 149 
 
 Dowe V. Schutt 223 
 
 Downer v. Remer 409 
 
 Downs V. The Planters' Bank 392, 394 
 Drake v. Henly 627 
 
 Draper v. Weld 131 
 
 Drinkwater v. Tebbetts 4G9 
 
 Du'^an V. United States 343, 479 
 
 Duncan v. McCullough 317, 319, 329, 
 
 451 
 Dunn V. OTveefe 259 
 
 Dupeau v. Waddington 
 Duvall V. Farmers' Bank 
 
 PAGE 
 
 255 
 
 462, 471 
 
 Eagle Bank v. Chapin 393 
 
 V: Hathaway 381, 396 
 Easter v. Minard 214 
 
 East India Company v. Boddam 690 
 Eastman v. Plumer 696 
 
 East River Bank y. Butterworth 217 
 Eccles V. Ballard 134 
 
 Eckhert v. Cameron 214, 338, 343 
 Edie V. The East India Co. 158 
 
 Edmunds v. Digges 636 
 
 Edson V. Fuller 43 
 
 Edwards v. Jones 171, 270 
 
 Eicheberger «. Finley 443 
 
 Elford V. Teed 311 
 
 EUicott V. Martin 219, 258 
 
 Elliot V. Abbott 747 
 
 Elhs V. Brown 111, 139, 145, 148 
 
 V. Commercial Bank of Natch- 
 ez 715 
 V. Mason 13 
 V. Ohio Life Insurance Co. 665 
 V. Wild 669 
 Ellsworth V. Brewer 616 
 Elting V. Vanderlyn 255 
 Ely V. Adams 4 
 Emly V. Lye 669 
 Emmett v. Tottenham 221 
 English V. Darley 563, 665 
 V. Derby 586 
 V. Wall 443 
 Esdaile v. Sowerbv 291, 425, 459, 461, 
 
 462, 465 
 Essex Company r.Edmands 156 
 
 Etheridge v. Ladd 297 
 
 Etting V. Schuylkill Bank 375, 388 
 Evans v. Underwood • 13 
 
 Everard v. Heme 573 
 
 V. Watson 375 
 
 Exchange Bank of St. Louis v. 
 Rice 50 
 
 Fairbanks v. Metcalf 607 
 
 Fairchild v. Ogdensburgh, &c., R. 
 Co. 109 
 
 Fales V. Russell 675, 676, 678, 683, 
 
 695, 696 
 
 Farebrother v. Simmons 613 
 
 Farmers' Bank v. Gilson 616 
 
 V. Van Meter 441 
 
 Farmers' Bank of Maryland v. Du- 
 vall 393, 489 
 
 Farmers' Bank of Virginia v. Rey- 
 nolds 708
 
 TABLE OF CASES CITED. 
 
 Farmers' and Mecbanics' Bank v. 
 
 R;xtlibone 354, 581 
 
 FariiiLTs' and Mechanics' Bank of 
 Kent Co. v. Butchers' and Drov- 
 ers' Bank 7-27, 745, 747, 748 
 Farmers' Ins. Co. v. Miller 7 
 Fanners' Loan and Trust Co. v. 
 
 Curtis 744 
 
 Farnsworth v. Allen 312 
 
 Fariium v. Fowle 452, 483 
 
 Farrington v. Brown 476 
 
 r. The Park Bank 214 
 
 Farwell v. Kennett G 
 
 V. Tyler ■ - 478 
 
 Fav r. Grimsteed 403 
 
 Fear v. Dunlap 139 
 
 Fegenbush r. Lang 124 
 
 Fenn r. Harrison G69 
 
 Fentum v. Pocock 591, 594, 596 
 
 Ferf^uson v. King 100, 478 
 
 Ferrall c. Shaen 278 
 
 Field V. Can- .S52 
 
 Findlav r. Ilinde 693 
 
 Firth V. Thrush 394 
 
 Fish V. Hubbard's Adm'rs 5 
 
 Fisher v. Beck with 42 
 
 V. Bradford 479 
 
 V. Fisher 211 
 
 V. Marvin 343 
 
 V. Mershon 673 
 
 Fitch V. Jones 233, 234 
 
 Fleckner i;. Bank of United States 747 
 
 Fleming v. Potter 
 Fletcher v. Austin 
 V. Chase 
 V. Dana 
 V. Gushee- 
 Flint V. Day 
 V. Flint 
 V. Rogers 
 Florance r. Adams 
 Foard v. Womack 
 Foden v. Sharp 
 Foley V. Cowgill 
 Folger V. Chase 
 Foltz V. Pourie 
 Ford V. Angelrodt 
 
 V. Beech 
 Foster v. Julion 
 
 V. Pearson 
 Fowler r. Brantly 
 Fox r. Whitney 
 Foy r. Blackstone 
 Fralick r. Norton 
 Francia v. Joseph 
 Frankfort Bank 
 
 Franklin v. Twogood 
 V. Verbois 
 
 109 
 
 604 
 
 211 
 
 160, 478 
 
 258 
 
 140, 593, 600, 601 
 
 276 
 
 485 
 
 614 
 
 441, 443 
 
 21 
 
 606, 607 
 
 112, 325 
 
 161 
 
 108 
 
 ^07, 561, 5(;2 
 
 326, 330, 449, 452 
 
 198, 253, 259 
 
 235, 239, 250 
 
 524, 526 
 
 212 
 
 10 
 
 172 
 
 Johnson 745 
 
 PAGE 
 
 Frazer v. Jordan 560 
 
 Frazier v. Warfield 715 
 
 Freakley v. Fox 479 
 
 Fredd v. Eves 164 
 
 Freeman v. Boynton 296, (i!»0 
 
 I'. Bri'ttin .")28 
 
 Freemans' Bank v. Perkins 393 
 
 French v. The Bank of Columbia 434, 
 
 442 
 Frontier Bank v. Morse 636 
 
 Fry V. Hill 40, 41 
 
 Fuller V. Smith 669 
 
 FuUerton v. Bank of United States 325, 
 
 393, 443 
 
 V. Sturges 610 
 
 Fulton V. Williams 161 
 
 Furze v. Sliarwood 371, 376 
 
 Fydell v. Clark 669 
 
 Gale V. Walsh 
 Gallery t\ Prindle 
 Galpin V. Hard 
 Gansvoort v. Williams 
 Gardner v. Walsh 
 Garnett v. Woodcock 
 Gaskin v. Wells 
 Gay r. Haseltine 
 Gazzam t'. Armstrong 
 Geary v. Physic 
 Geill V. Jeremy 
 Geljocke v. Dubuque 
 Genesee Bank v. The 
 
 Bank 
 George v. Surry 
 Geralopulo v. Wieler 
 Gerard v. Le Coste 
 Gibbs V. Fremont 
 V. Gannon 
 Gibson v. Connor 
 Gilford, Ex parte 
 Gilbert v. Dennis 
 Gill V. Cubitt 208, 216, 
 
 Gillespie v. Cammack 
 V. PLannahan 
 Gilman r. Peck 
 Girard Bank v. Bank 
 
 Township 
 Gist r. Lybrand 
 Gladwell v. Turner 
 Glendinning, Ex parte 
 
 431 
 8, 108 
 320 
 734, 735, 736 
 599* 
 311 
 642 
 543 
 
 87 
 110, 
 
 Patchin 
 110, 
 
 200, 
 
 575, 
 
 296, 
 
 253, 254, 
 
 258, 
 
 317, 
 of Penn 
 
 330, 
 575, 576, 
 
 210 
 468 
 
 Gloucester Bank v. The Salem 
 Bank 644, 646, 648, 656, 
 
 Glynn v. Bank of England 691, 
 (xoblet V. Beechey 
 Goddard v. Lyman 
 
 112 
 394. 
 744 
 
 729 
 111 
 88 
 6 
 713 
 426 
 207 
 576 
 375 
 257, 
 259 
 443 
 451 
 636 
 
 747 
 449 
 542 
 594, 
 596 
 
 657 
 
 692 
 
 6 
 
 160
 
 lii 
 
 TABLE OF Cases cited. 
 
 PACK 
 
 Goddard v. Merchants' Bank GG5 
 
 Goddin V. Shipley 308 
 
 Gohlsmith r. Bland 454, 456 
 
 Goodall i\ DoUey 27, 431 
 
 Goodloe V. Taylor 13 
 
 Goodman v. Harvey 208, 216, 251, 
 
 252, 253, 257, 258, 259 
 
 V. Simonds 208, 216, 219, 
 
 223, 235, 239, 260, 261, 478 
 
 Goodrich v. De Forest 50 
 
 Gorliam v. Carroll 528 
 
 Goshen & j\I. Turnpike v. Hurtin 13 
 
 Goss v. Nelson 12 
 
 Gould V. llobson 550,, 564, 565 
 
 Goiipy V. Harden 40 
 
 Gove v. Vining 476 
 
 Gower V. Moore 428,' 429 
 
 Grafton Bank v. Cox 329, 451 
 
 V. Hunt 635 
 
 Graham v. Adams 6 
 
 V. Gillespie 665 
 
 V. Sangston 375 
 
 Grandin v. Leroy 216 
 
 Granite Bank y.Ayres 452, 458, 462 
 
 "Grant v. Norway 738 
 
 V. Vaughan 167, 175, 254, 257, 
 
 333 
 
 Graves v. American Exchange 
 
 Bank 339 
 
 Gray v. Brown 576 
 
 r. Donahoe 6 
 
 Greele v. Parker 60, 56 
 
 Greeley v. Thurston 485 
 
 Green v. London Omnibus Co. 744 
 Greenway, Ex parte 682, 689, 690 
 Grenaux v. Wheeler 258 
 
 Griffin v. Goff 476 
 
 Griswold V. Davis 203, 338 
 
 V. Slocum 155 
 
 Grugeon r. Smith 368, 373 
 
 Grutacap v. WouUouise, 10 
 
 Guidon V. Robson 161 
 
 Gurney v. Womersley 669 
 
 Gwvnn V. Lee 252 
 
 Hawden v. Mendizabel 
 
 
 
 479 
 
 Haines v. Dennett 
 
 
 
 528 
 
 Hale V. Andrews 
 
 
 
 616 
 
 V. Burr 
 
 330 
 
 429 
 
 451 
 
 Hall V. Fuller 
 
 661 
 
 662 
 
 665 
 
 V. Hale 
 
 
 
 257 
 
 V. Newcomb 111, 
 
 131, 
 
 145, 
 
 148, 
 
 
 
 472, 
 
 528 
 
 Halsey v. Brown 
 
 
 
 302 
 
 Haly r. Lane 
 
 
 
 174 
 
 ILinimond v. Dufrene 
 
 
 
 443 
 
 Hancock Bank v. Joy 
 
 
 
 164 
 
 Hansard v. Robinson 291, 293, 675, 
 
 679, 690, 692, 698 
 
 Hansbrough v. Gray 596 
 
 Harker v. Anderson 41, 720 
 
 Harley v. Thornton 636 
 
 Harper v. West 43, 51 
 
 Harphain v. Haynes 214 
 
 HarreU v. Marston 14 
 
 Harris v. Clark 149 
 
 V. Robinson 385 
 
 Harrison v. Bailey 476 
 
 V. Courtauld 591, 595 
 
 V. HaiTison. 110 
 
 Harrison v. Ruscoe 385, 386 
 
 Hartford Bank v. Steadman 390, 393 
 
 Hartley v. Case 
 
 363, 366, 372, 486, 
 487 
 
 Harvey v. Towers 199, 233 
 
 Hasbrook v. Palmer 6 
 
 Hasey v. White Pigeon Sugar Co. 43 
 Haskell v. Boardman 463 
 
 Haslett V. Kunhardt 429 
 
 Hatch v. Searles 215 
 
 Hatcher v. McMorine 715 
 
 Hawkes v. Phillips 131, 154 
 
 V. Salter 394, 535 
 
 Hawkins v. Watkins 6 
 
 Haxtun v. Bishop 274, 677 
 
 Haynes v. Birks 394 
 
 Hazelhurst v. Kean 715 
 
 Hazelton v. Colburn 542 
 
 Heane v. Rogers 539 
 
 Heath v. Sansom 213 
 
 Hedger v. Steavenson 367, 373, 374 
 Hemmenway v. Stone 128 
 
 Hemming v. Brook 352 
 
 Henderson r. Bondurant 215 
 
 Henry v. Jones 482 
 
 V. Lee 311 
 
 Hepburn v. Toledano 321 
 
 Herdnian i\ Bratten 606 
 
 Hern v. Nichols 732, 738, 745 
 
 Herrick v. Carman 114, 115, 134, 135, 
 136, 137, 147 
 V. Woolverton 214 
 
 Hetherington v. Kemp 536 
 
 Heywood v. Watson 
 
 Hiatt V. Simpson 
 Hickman v. Ryan 
 Hicks V, Brown 
 Higgins V. Watson 
 Hill V. Lewis 
 V. Norris 
 Hilton V. Smith 
 Hine V. Allely 
 Hinsdale v. Bank of Orange 
 V. Lamed 
 
 177, 179, 193, 
 
 198, 206 
 
 607 
 
 393 
 
 710 
 
 156 
 
 134 
 
 441, 442, 443 
 
 271 
 
 458 
 
 677, 706 
 
 677
 
 TABLE OP CASES CITED. 
 
 liii 
 
 Hinsdale v. Miles 297 
 
 Iliiitoii V. Bank of Columbus 03 
 
 Ilirsdifield V. Smith 713, 714 
 
 Ilitc i'. Tlie State 6 
 
 Iloailley v. Bliss 476 
 
 Hoare v. Cazenove 88 
 
 V. Graham 505 
 
 Ilobart V. Dodge 14 
 
 Ilodi^es V. Shuler 10 
 
 Holfman v. Miller . 210 
 
 V. Smith [441, 443 
 
 Ilofje V. Lansing 215 
 
 llnlcman v. Ilobson 271 
 
 llollowell r. Curry 443 
 
 Ilolnian r. fFoImson 234 
 
 Holme V. Karsper 234 
 
 Holmes D. D'Camp G72 
 
 Home Ins. Co. v. Green 363 
 
 HoTues i;. Smyth 183, 184, 200, 207 
 
 Hooker v. Gallagher 160 
 
 Hopkins v. Liswell 475 
 
 Ilopkirk V. Page 426, 430, 444, 543 
 
 Hornl)lower v. Proud 255 
 Hortsman v. Henshaw 57, 88, 338, 339, 
 648, 661, 662 
 
 Hough V. Barton 674 
 
 Houghton V. Adams 636 
 
 Houlditch V. Cauty 368, 373, 375 
 
 House V. Adams 443, 543 
 
 Housum V. Rogers 212 
 
 Howard v. Ives 392 
 
 Howe i\ Bowes 458 
 
 V. Merrill 131 
 
 Howell V. Crane 262 
 
 Hoyt V. Lynch 6, 10 
 
 Hubbard v. Chapin 235 
 
 V. Jackson 351 
 
 Hume r. Peploe 488 
 
 Humphries c. Blight 260 
 
 V. Chastain 161 
 
 Hunt V. Adams 117, 127, 128 
 
 V. Bovd 642 
 
 V. Wadleigh 462 
 
 Hunter v. Ingraham 108 
 
 V. Kibbe 219 
 
 Hutchins v. Nichols 576 
 
 Hyslop V. Jones 409 
 
 Illinois, State of, v. Delafield 735 
 
 Ilsley V. Jewett 642 
 
 Imeson, Ex parte 1,2 
 
 Ingalls V. Lord 38 
 
 Ireland v. Archer 51 
 V. Kip 409, 456 
 
 Irick V. Black 615 
 
 Irish V. Cutter 131 
 
 Irvine v. Lowry 6 
 
 Irving Bank v. Wetherald 
 Ives V. Farmers' Bank 
 
 Jackson v. Richards 
 
 G65, 748 
 211 
 
 393, 459, 462. 
 488 
 V. Ritter 
 James t\ Badger 
 Jameson v. Swinton 
 Janson v. Thomas 
 Jarvis v. St. Croix Manuf. Co. 
 JelFcrson County Bank v. Chap- 
 man 
 Jenney r.-Herle 
 Jennings v. Thomas 
 Jennison v. Parker 
 
 V. Stafford 
 
 Jenys v. Fawler 
 
 Jerome v. Whitney 
 
 Johnson v. Baker 
 
 V. Catlin 
 
 V. Collins 
 
 V. Kennion 
 
 V. Weed 
 
 Johnston, Ex parte 
 
 Jones V. Bank of Iowa 
 
 V. Broadhurst 
 
 V. Brooke 
 
 V. Fales 1, 302, 685, 695, 696 
 
 V. Hibbert 271 
 
 r. Lewis 399 
 
 V. O'Brien o39 
 
 V. Quinnipiack Bank 615 
 
 V. Ryde 647, 651, 657, 669 
 
 V. Simpson 14 
 
 V. Thorn 160 
 
 V. AVardell 377 
 
 Jordaine v. Lashbrooke 509, 510, 511, 
 
 513, 522, 523 
 
 460 
 565 
 384 
 307 
 410 
 
 677 
 
 139, 143 
 
 639 
 
 255 
 
 658 
 
 7 
 
 604, 605 
 
 478 
 
 48 
 
 350, 351 
 
 632 
 
 462 
 
 50 
 
 346 
 
 279 
 
 Josselyn v. Ames 
 
 115, 
 
 122, 
 
 126 
 
 V. Lacier 
 
 
 
 8 
 
 Joyce V. Williams 
 
 
 
 734 
 
 Judah V. Harris 
 
 
 
 2 
 
 Juniata Bank v. Hale 
 
 
 384, 
 
 423 
 
 Kearney v. King 
 
 
 
 715 
 
 Kearslake r. Morgan 
 
 207 
 
 642 
 
 672 
 
 Kearsley v. Cole 
 
 
 
 575 
 
 Keene v. Beard 
 
 
 718, 
 
 745 
 
 Keith V. Jones 
 
 
 
 2,3 
 
 Kelley r. Brooklyn 
 
 
 
 7.8 
 
 V. Brown 
 
 
 
 476 
 
 V. Hemingway 
 
 
 
 8 
 
 Kelly V. Solari 
 
 
 
 648 
 
 Kellogg I'. Dunn 
 
 
 
 166 
 
 V. LawrencQ 
 
 
 
 109 
 
 Kemble v. Lull 
 
 
 
 109
 
 liv 
 
 TABLE OF CASES CITED. 
 
 PAGE 
 
 Kondrick v. Lomax 550 
 
 Kcniuird v. Knott 563 
 
 Kennebeck Bank v. Page 302 
 
 Kennedy v. Carpenter 616 
 
 V. Geddes 51 
 
 Kensington v. Inglis 701 
 
 Kent V. Somervell 479 
 
 V. Warner 476 
 Kenworthy v. Hopkins 600, 564 
 
 Kerrison v. ("coke 591 
 
 Ketcbell r. Bums 111 
 Kiddell v. Ford . 462 
 
 Kilgore v. Bulkley 308 
 
 Killby V. Rochussen 542 
 
 Kilsby V. Williams 746 
 
 Kimball, The 213 
 
 V. Huntington 6 
 
 King V. Baldwin 559 
 
 V. Holmes 327 
 
 Kingman v. Pierce 334 
 
 King-sbury v. Butler 12 
 
 Kingsley v. Robinson 441 
 
 Kinsley v. Robinson 443 
 
 Klein V. Currier 124 
 
 Knapp V. Parker 140 
 
 Knight V. Piigh 258 
 
 Knox Co. V. Aspinwall 744 
 Kramer v. Sandford 462, 463 
 
 Kupfer V. Bank of Galena 441 
 
 LaCoste v. Harper 
 LaJdlaw v. Organ 
 Lake v. Stetson 
 Lambert, Ex jyarte 
 
 V. Ghiselin 
 
 V. Oakes 
 
 V. Sanford 
 Lancaster Nat. Bank v 
 Landry v. Stansbury 
 Lane v. Ridley 
 
 V. Steward 
 Lange v. Kohne 
 Langton v. Lazarus 
 Lansing v. Gaine 
 Lanusse v. Massicot 
 Laverty v. Burr 
 Lawrence v. Bowne 
 
 V. Dougherty 
 V. Langley 
 Lawson v. Sherwood 
 
 V. Weston 
 Laxton v. Peat 
 Lazarus v. Cowie 
 Lazell V. Lazell 
 Leach V. Buchanan 
 Leaf r. Gibbs 
 Le Breton v. Peirce 
 
 Taylor 
 
 442 
 624 
 156 
 87 
 413 
 450 
 596 
 213 
 429 
 353 
 469 
 2 
 
 62, 662 
 734 
 458 
 734 
 494 
 
 7 
 
 462 
 
 535 
 
 254, 708 
 
 590, 591, 594 
 
 345, 596 
 
 C92 
 
 63, 661 
 604, 609 
 
 202 
 
 
 PAGE 
 
 Lee V. Buford 
 
 542 
 
 V. Levi 
 
 563 
 
 Lee Bank v. Spencer 
 
 452 
 
 Leeds v. Vail 
 
 164 
 
 Leffingwell v. White 
 
 476 
 
 Leftley v. Mills 300, 311, 377, 485 
 
 Legge V. Thorpe 432 
 
 Leggett V. Jones 9 
 
 V. Raymond 111, 112 
 
 Legro V. Staples 14 
 
 Le Guen v. Gouverneur 39 
 
 Lehman v. Jones 316, 330, 449, 450 
 
 Leiber v. Goodrich 1, 2 
 
 Leland v. Farnliam 213 
 
 Lenox v. Leverett 88 
 
 V. Prout 563 
 
 V. Roberts 389, 392 
 
 Leonard v. Gary 476 
 
 V. Mason 10 
 
 V. Sweetzer 143 
 
 V. Vredenburgh 138 
 
 Levy V. The Bank of the United 
 
 States 620, 646, 654, 658, 660, 661 
 
 Lewis V. Gompertz 
 V. Hanchman 
 V. Harvey 
 V. Kramer 
 V. Reilly 
 
 Lickbarrow v. Mason 
 
 367, 373, 375 
 592 
 131 
 462 
 161 
 214, 262 
 
 Life and Fire Ins. Co. v. Mechan- 
 ics' Fire Ins. Co. 744 
 Lightbody v. The Ontario Bank 619, 
 
 625 
 Lindas v. Bradwell 
 Little V. Phoenix Bank 
 Livingston v. Clinton 
 
 V. Hastie 
 
 V. Littell 
 
 V. Livingston 
 
 V. Rogers 
 
 Cohen 
 
 104 
 6, 720 
 477 
 734 
 214 
 693 
 
 673, 701 
 715 
 
 604, 609 
 279 
 
 Lizardi v. 
 Lloyd V. Howard 
 
 V. Keach 
 
 V. The West Branch Bank 747 
 Lockwood V. Crawford 375, 393 
 Loker v. Haynes 523 
 Lorain Bank of Elyria v. Town- 
 send 399 
 Loring v. Gurney 14 
 Lovell V. Martin 334 
 Low V. Chifney 258 
 V. Copestake 161 
 V. Howard 469, 476 
 Lowe V. Waller 229, 512 
 Lowery v. Scott 320 
 Lowndes v. Anderson 177 
 LoAvrey v. Murrell 636 
 Luke V. Lyde 191
 
 TABLE OP CASES CITED. 
 
 Iv 
 
 Lumley v. Palmer 
 
 43 
 
 Luiit V. Adams 
 
 312 
 
 Lyon V. Ewings 
 
 212 
 
 r. Holt 
 
 5G2 
 
 Lysaght o. 15rvant 
 
 385 
 
 IMacartiicy r. Graham 
 
 GOO 
 
 IMaidonald r. Hoviiijrton 
 
 oG4 
 
 ]\IacH' V. Wc-lis 
 
 5G0 
 
 ]MaclK'll r. Kinnear 
 
 160 
 
 ;Matli.sh ('. Kkins 
 
 175 
 
 Madison, The, &c., Plank Road 
 
 Co. V. Stevens 606 
 
 Magee v. Badger 258 
 
 Magriider v. Union Bank of 
 
 (ieorgetown 428 
 
 Maiden Bank r. Baldwin 328 
 
 Mallet V. Thompson 575, 590 
 
 Manchester Bank v. Fellows 381, 541 
 
 Manning v. !MtClure 211 
 
 V. Wheatland 277, 278 
 
 IManrow r. Durham 111 
 
 Mareal v. Melliet 215 
 
 March r. Ward 128 
 
 Marine Bank r. Clements 234 
 
 Marion, &e., R. Co. v. Ilodge 43 
 
 INIarkle i: Hatfield 626, 632, G35, 651 
 
 Marr v. Johnson 38.S 
 
 Marsh v. Barr 409 
 
 V. Xewell 479 
 
 Marshall v. Mitchell 462, 476 
 
 Martcl c. Tureauds 4G2 
 
 Martin v. Bacon 42 
 
 V. Bank of United States 678, 
 
 703 
 
 V. Boyd 131 
 
 V. Channtry 7 
 
 r. TiigersoU 476 
 
 Mason v. Franklin 328, 329 
 
 v. Hunt 47, 108 
 
 Master v. IMiller 702 
 
 Mather v. Lord Maidstone 661, 670 
 
 Matossv ('. Frosh 502 
 
 IMatthews v. Povthress 258, 708 
 
 [Matthey v. (ially 469 
 
 Mauran ik Lamb 478 
 
 May V. Chapman 251, 252 
 
 V. Quimby 212 
 
 Mayor r. Johnson 702, 703 
 
 v. Lord 744 
 
 McCalop I'. Fhiker 109 
 
 IM'Clarin v. Xesliit 2 
 
 ISrCormick v. Trotter 3 
 
 ]\Ic('ranier D. Thompson 615 
 
 McDonald v. Bailey 469 
 
 r. :\ratrruder 593 
 
 McDowell v. Keller 6 
 
 PAGE 
 
 McEvers r. Mason 49 
 
 McFarland v. Pico 492 
 
 Mcdarr y. Lloyd 674 
 
 McGee r. Proiity 343 
 
 MHi ruder v. Bank of Washington 317, 
 
 319, 330 
 McGuIre v. Bosworth 131 
 
 McKenzie v. Durant 490 
 
 M'Kinney v. Crawford 424 
 
 MeKlcroy v. Southern Bank of 
 
 Kentucky 648, G62, 664 
 
 McLemore v. Powell 546, 559 
 
 M'Nairy v. Bell 24 
 
 McNeil V. Wyatt 388 
 
 Meacher ?). Fort 661 
 
 Mead v. Engs 339 
 
 V. ^lerchants' Bank of 
 Albany 748 
 
 V. Young 338 
 
 Meads v. INIerchants' Bank 747 
 
 Mechanics' Bank v. Griswold 462, 476 
 V. Hazard 346 
 
 r'. The New York and New 
 Haven Railroad Company 738, 
 739 
 Meckles v. Colvin 211 
 
 Mellish V. Rawdon 40, 41 
 
 Mercer Co. «. Hacket 744 
 
 V. Lancaster 410 
 
 Merchants' Bank v. Birch 429 
 
 V. Spicer 14, 111 
 Merchants' National Bank v. Na- 
 tional Eagle Bank 648 
 Merciiants' National Bank v. State 
 
 National Bank 739 
 
 Merriam c. (Jranite Bank 257 
 
 V. Wolcott 669 
 
 Messenger c. Southey 367, 373 
 
 Metcalfe v. Richardson 375, 376 
 
 Midland v. Lagarde 452 
 
 Michigan Ins. Co. v. Leavenworth 12 
 State Bank r. Leaven- 
 worth 203, 211, 213, 546, 
 557 
 Middlesex, &e. v. Davis 6 
 
 ^liddleton Bank r. Morris 40 
 
 Miers v. Brown 376, 428 
 
 Miles V. O'Hara 424 
 
 Miller i\ Delamater 163 
 
 r. Hacklev 501, 536 
 
 V. Race 16G, 175, 254, 257, 333, 
 617, 618, 619, 620, 628, G54, 
 702 
 Millett V. Parker 612 
 
 Mills V. The Bank of the United 
 
 States 237, 308, 352, 368, 390 
 
 V. Barber 199, 234, 258 
 
 Miln V. Prest 51
 
 Ivi 
 
 TABLE OF CASES CITED. 
 
 Milne V. Graham 71o 
 
 Minet t'. Gibson 61 
 
 Misei" V. Trovinger 441 
 
 Mitchell V. Culver 245 
 
 V. Deo-rand 392 
 
 V. Rice 479 
 
 Mitford V. Wallicot 2T5 
 
 Mobley v. Clark 443 
 
 Moffat V. Edwards 13 
 
 Mohawk Bank v. Broderick 41 
 
 Moics V. Bird 116, 118, 128 
 
 Moline, Ex parte 485, 41)0 
 
 Montague v. Perkins 245 
 
 Montgomery Bank v. Walker 592, 596 
 
 Moore v. Denslow 160 
 
 V. Fall 679 
 
 V. Hardcastle 409 
 
 V. Isley 601 
 
 Moran v. Miami Co. 744 
 
 Mores v. Conham 744 
 
 Morgan t\ Davison 312 
 
 V. Peet , 476 
 
 Morley v. Culverwell 338 
 
 Morris v. Bethell 661, 669 
 
 V. Sumnierl 37 
 
 Morrison v. Buchanan 648 
 
 V. StockwcU 478 
 
 Morton v. Burn 255 
 
 V. Navlor 8 
 
 V. Westcott 409 
 
 Moses v. Ela 463 
 
 Moss V. Hall 561, 562 
 
 V. Riddle 606 
 
 Mossop V. Eadon 689, 690, 691, 692 
 
 Muilman v. D'Eguino 40 
 
 Mulherrin v. Hannum 24, 109 
 
 Mullick i\ Radakissen 40 
 
 Munn r. Baldwin 376, 532, 533 
 
 V. Commission Co. 279 
 
 V. Ruggles 285 
 
 Murdock v. Mills 50 
 
 Murray v. Judah 696 
 
 V. Lardner 257 
 
 Mussey v. Eagle Bank 729 
 
 Mutford V. Walcot 158 
 
 Nadin v. Battle 564 
 
 Naglee r. Parrott 211 
 
 Napier v. Elam 256 
 
 National Bank of North America 
 
 V. Bangs 664 
 
 National Park Bank v. Ninth Na- 
 tional Bank 665 
 National Savings Bank v. Tranah 213 
 Natwyn v. St. Quintin 553 
 New York and New Haven Rail- 
 road Co. V. Schuyler 745 
 
 N. B. Savings Inst. 
 
 Bank 
 Neal V. Wood 
 Nelson v. Dubois 
 
 V. Fairhaven 
 
 615 
 
 541 
 
 114, 115, 116. 118, 
 
 134, 135 
 
 556 
 
 483 
 
 8, 25 
 
 Newell and Pierce v. Hamer 
 N. E. Bank v. Lewis 
 Newhall v. Clark i 
 
 New York M. Iron Works v. 
 
 Smith 
 N. Y^ & Va. State Stock Bank v. 
 
 Gibson 
 Niagara District 
 
 Fairman, &c., 
 
 Co. 
 Nichols V. Holgate 
 
 V. Norris 
 Nicholls V. Bowes 
 Nicholson v. Gouthit 
 
 256 
 234 
 
 Bank v. The 
 Manufacturing 
 
 329 
 
 528 
 
 575, 576, 591 
 
 19, 20 
 
 425, 459, 460, 
 
 461, 462, 465 
 
 V. Patton 257 
 
 V. Revill 576 
 
 Noble V. Kennoway 302 
 
 North Bank v. Abbot 328 
 
 Northern Bank v. Farmers' Bank 708 
 
 North River Bank v. Aymar 735, 736, 
 
 748 
 Northam v. Latouche 233 
 
 Norton v. Coons 600 
 
 V. Lewis 417 
 
 V. Waite 183, 200, 207 
 
 Nott V. Beard 292 
 
 Nutter V. Stover 211 
 
 Ogden V. Cowley 
 
 V. Slade 
 Ogilby V. Wallace 
 O'Keefe v. Dunn 
 Okie V. Spencer 
 
 455 
 6 
 477 
 259 
 204, 213, 546 
 
 Oliver v. Bank of Tennessee 441 
 
 Ontario Bank v. Lightbodv 619, 620, 
 . 625, 634, 661 
 V. Worthington 42, 51, 
 172, 189 
 Ord V. Portal 160 
 
 Orear v. McDonald 441, 443 
 
 Oridge v. Sherborne 307, 308 
 
 Oriental Bank v. Blake 429 
 
 Orono Bank v. Wood 542 
 
 Orr V. Maginnis 292, 443, 688 
 
 Ory r. AVinter 715 
 
 Osborn v. Moncure 487, 493 
 
 Osgood V. Thompson Bank 211 
 
 Otsego County Bank v. Warren 463 
 Oulds V. Harrison 276 
 
 Outhwite V. Porter 211 
 
 Overman v. Hoboken City Bank 650
 
 TABLE OP CASES CITED. 
 
 Ivii 
 
 
 
 PAOE 1 
 
 
 
 I-AGE 
 
 Overton v. Tyler 
 
 
 
 9 
 
 Percival v. Franipton 
 
 177, 
 
 182, 194, 
 
 Owen V. Ifjlanor 
 
 
 
 108 
 
 
 
 198, 206 
 
 I'. Liivine 
 
 
 
 108 
 
 Perkins v. Barstow 
 
 
 150 
 
 Owenson v. !Morse 
 
 
 
 632 
 
 V. C'atlin 
 
 
 124, 143 
 
 Oxlurd Bank v. Ilaynes 
 
 
 
 129 
 
 V. Franklin Bant 
 
 
 480 
 
 V. Lewis 
 
 
 
 657 
 
 Perry v. Green 
 
 V. Harrington 
 Peto V. Reynolds 
 
 
 402 
 
 8, 108 
 
 14 
 
 Pacific Bank v. Mitchell 
 
 
 
 354 
 
 Petrie r. Clark 
 
 184, 
 
 200, 207 
 
 Packard v. Richardson 
 
 
 
 522 
 
 Pettee v. Prout 
 
 
 213, 478 
 
 Pagan i\ Wjlie 
 
 
 
 66.-) 
 
 Philadelphia Bank v. Newkirk 14 
 
 Palen i'. ShurtlefF 
 
 
 
 388 
 
 Philadelphia and Baltimore R 
 
 Co. 
 
 Palmer v. Hughes 
 
 
 
 109 
 
 V. Quigley 
 
 
 744 
 
 V. Pratt 
 
 
 
 12 
 
 Phillips V. Cole 
 
 
 259 
 
 V. Richard 
 
 198, 
 
 2on, 
 
 2r,2 
 
 r. Frost 
 
 
 43 
 
 V. Richards 
 
 
 604 
 
 6()9 
 
 V. Thum 
 
 61, 62, 63, 88 
 
 V. Stej)hens 
 
 
 14, 
 
 111 
 
 Phipps r. Chase 
 
 
 443 
 
 r. Whitney 
 
 
 
 543 
 
 Pliipson V. Kneller 
 
 465, 
 
 466, 476 
 
 Park r. Page 
 
 
 
 482 
 
 PhcL-nix Bank v. Hussey 
 
 
 88 
 
 Park Bank v. Watson 
 
 
 
 212 
 
 Phoenix Ins. Co. v. Allen 
 
 
 542, 637 
 
 Parker v. Gordon 
 
 
 
 311 
 
 V. Gray 
 
 
 542 
 
 r. Greele 
 
 
 
 56 
 
 Pickering v. Busk 
 
 
 614 
 
 V. Hanson 
 
 
 
 525 
 
 Picquet v. Curtis 
 
 
 219 
 
 V. Maconiber 
 
 
 
 101 
 
 Pidcock V. Bishop 
 
 
 004 
 
 Parks V. Ingiam 
 
 
 
 596 
 
 Pierce v. Cate 330, 429, 
 
 449 
 
 451,490 
 
 Parr v. Eliason 
 
 
 279, 
 
 280 
 
 V. Kennedy 
 
 
 112, 139 
 
 Partridge v. Davis 
 
 111, 
 
 112, 
 
 156 
 
 V. Pendar 
 
 
 377, 382 
 
 Pascoe V. Vyvyan 
 
 
 
 M5;! 
 
 Pierce v. Wiiitney 
 
 
 327 
 
 Pasmore v. North 
 
 
 
 220 
 
 Pierson v. Dunlop 46, 47 
 
 ', 48, 351 
 
 Passunipsic Bank v. Goss 
 
 6in, 
 
 615 
 
 V. Hooker 
 
 
 475 
 
 Paterson v. Hardacre 
 
 
 21;?, 
 
 3:53 
 
 V. Hutchinson 
 
 
 672, 682 
 
 Patience r. Towidey 
 
 418, 
 
 419, 
 
 444 
 
 Pillans V. Van Mierop 46, 47, 48, 49, 
 
 Patton f. Bank of South Carolina 
 
 703 
 
 
 
 174, 192 
 
 V. State Bank 
 
 
 
 703 
 
 Pine V. Smith 
 
 
 214 
 
 Pawling V. The United States 604, 
 
 606, 
 
 Pinkhara v. Macy 
 
 
 375 
 
 
 607, 
 
 608, 
 
 009 
 
 Pinnes v. Ely 
 
 
 112 
 
 Payne v. Cutler 
 
 
 172 
 
 1.S9 
 
 Pintard v. Tackington 
 
 671 
 
 680, (582 
 
 Payson v. Coolidge 
 
 
 
 50 
 
 Pitcher r. Barrows 
 
 
 161,478 
 
 Peabody v. Rees 
 
 
 
 215 
 
 Plato V. Reynolds 
 
 
 543 
 
 Peach I'. Kay 
 
 
 
 43 
 
 Plets V. Johnson 
 
 
 61 
 
 Peacock v. Purcell 
 
 
 208 
 
 210 
 
 Plumnier v. Lyman 
 
 
 50, 51 
 
 V. Rliodes 167 
 
 , 176 
 
 , 2o4 
 
 , 333 
 
 Poirier v. Morris 199, 
 
 204 
 
 206, 256 
 
 Pearson v. Bank of Metropolis 
 
 320 
 
 ,327 
 
 Polk V. Spinks 
 
 
 446 
 
 r. Crallan 
 
 
 
 408 
 
 Pollard V. Herries 
 
 
 10 
 
 r. (iarret 
 
 
 
 12 
 
 Pons V. Kelly 
 
 
 443 
 
 r. Stoddard 
 
 
 
 156 
 
 Poole r. Tumbridge 
 
 
 490 
 
 Pease, Ex jmrte 
 
 
 204 
 
 205 
 
 Pope V. Nance 
 
 
 648 
 
 V. Hirst 
 
 
 
 354 
 
 Porter v. Kemball 
 
 
 472 
 
 Peck V. Bli-h 
 
 
 
 276 
 
 Potter r. Brown 
 
 
 711 
 
 r. Hibbard 
 
 
 
 715 
 
 V. Lansing 
 
 
 38 
 
 Peckani v. Gilnian 
 
 
 
 150 
 
 Powell I'. Jones 
 
 
 43 
 
 Pcisch V. Dickson 
 
 
 
 4 
 
 V. Waters 
 
 
 216, 283 
 
 Pendlebury i\ Walker 
 
 
 
 601 
 
 Pownal V. Ferrand 
 
 
 353 
 
 Pendleton v. Bank of Kontut 
 
 ky 
 
 748 
 
 Pratt V. Coman 
 
 
 211 
 
 People, The, r. Bostwic 
 
 k 
 
 
 611 
 
 Prentiss v. Danielson 
 
 
 462 
 
 r. Wiley 
 
 
 
 677 
 
 Prentice v. Zane 
 
 
 201, 2<i2 
 
 Pepper V. The State 
 
 605, 
 
 007, 
 
 608, 
 
 Prescott Bank r. Caverl 
 
 v 
 
 528 
 
 » 
 
 609 
 
 611 
 
 ,615 
 
 Preslar v. Stalworth 
 
 
 616
 
 Iviii 
 
 TABLE OP CASES CITED. 
 
 
 
 ] 
 
 'AGE 
 
 
 
 PAGE 
 
 Prestwick v. Marshall 
 
 
 
 163 
 
 Richter v. Selin 
 
 
 476 
 
 Price V. P](hn()nds 
 
 
 
 591 
 
 Rideout v. Bristow 
 
 
 255 
 
 V. Edmunds 
 
 
 563, 
 
 591 
 
 Ridgway v. Day 
 
 
 476 
 
 V. Neale 646, 655, 
 
 656, 
 
 657, 
 
 658 
 
 Ricraan v. Fisher 
 
 
 669 
 
 V. Price 
 
 
 
 206 
 
 Riggs V. Waldo 
 
 
 112, 139 
 
 V. Teal 
 
 
 
 10 
 
 Riley ik Gerrish 
 
 
 528 
 
 V. Young 
 
 
 
 429 
 
 Ringgold V. Tyson 
 
 
 528 
 
 Pridcaux v. ('riddle 
 
 
 
 396 
 
 Ripka V. Pope 
 
 
 109 
 
 Prince v. Brunatte 
 
 
 
 163 
 
 Ripley v. Greenleaf 
 
 308, 
 
 546, 557 
 
 Pring V. Clarkson 
 
 
 546, 
 
 549 
 
 Robarts v. Tucker 
 
 
 665 
 
 Pringle v. Phillips 
 
 
 
 258 
 
 Robb V. Bailey 
 
 160, 
 
 161, 478 
 
 Prossor v. Luqueer 
 
 
 
 132 
 
 Robins v. Maidstone 
 
 
 271 
 
 Puckford V. Maxwell 
 
 
 632, 
 
 642 
 
 Robinson v. Abell 
 
 
 145 
 
 Purssord v. Peek 
 
 350 
 
 351, 
 
 352 
 
 V. Ames 
 
 
 441 
 
 Putnam v. Sullivan 316, 
 
 317, 
 
 451, 
 
 610, 
 668 
 
 V. Bland 
 V. Reynolds 
 ?). Smith 
 
 
 715 
 
 214, 262 
 211 
 
 Quin V. Sterne 
 
 
 
 150 
 
 V. Yarrow 
 Robson V. Bennet 
 V. Curlewis 
 
 
 63 
 
 746 
 
 375 
 
 Rabey v. Gilbert 
 
 
 
 542 
 
 Rogers v. Coit 
 
 
 111 
 
 Raborg v. Bank of Columbia 
 
 
 
 V. Stevens 
 
 292, 
 
 431, 476 
 
 Radolph V. Cook 
 
 
 
 490 
 
 Rohde, Ex parte 
 
 
 452 
 
 Ranger v. Cary 
 
 
 
 274 
 
 Rolfe V. Caslon 
 
 
 288 
 
 V. The Great Western R. 
 
 
 V. Wyatt 
 
 
 591 
 
 Co. 
 
 
 
 745 
 
 Rordasnz v. Leach 
 
 
 160 
 
 Ransom v. Mack 363, 
 
 375, 
 
 377, 
 
 382, 
 410 
 
 Rosa V. Brotherson 
 Roscow V. Hardy 
 
 
 172, 189 
 386 
 
 Ranson v. Sherwood 
 
 
 
 124 
 
 Rose V. Park 
 
 
 715 
 
 Raphael v. The Bank of England 
 
 252, 
 
 V. Sims 
 
 
 288 
 
 
 
 
 253 
 
 v: Van Mierop 
 
 46-49 
 
 174, 192 
 
 Ratcliff V. Planters' Ban 
 
 k 
 
 
 330 
 
 Rosher v. Kieran 
 
 
 386 
 
 Rayner v. Linthorne 
 
 
 
 613 
 
 Ross V. Bedell 
 
 
 258 
 
 Read v. Adams 
 
 
 41 
 
 444 
 
 RothsL'hild V. Cnrrie 
 
 
 712, 713 
 
 V. Brookraan 
 
 
 
 690 
 
 Routh V. Robertson 
 
 
 363 
 
 V. Gamble 
 
 
 
 502 
 
 Rowan r. (\lenheimer 
 
 
 363 
 
 IK Marsh 
 
 
 
 50 
 
 Rowe v. Tipper 
 
 
 385 
 
 Reakert v. Sanford 
 
 
 
 164 
 
 IK Young 17, 
 
 18, 21 
 
 108, 329 
 
 Reddick v. Jones 
 
 
 200 
 
 , 207 
 
 Rowley v. Ball 673, 676 
 
 680, 698 
 
 Reedy v. Seixas 
 
 
 
 363 
 
 V. Home 
 
 
 708 
 
 Rees V. Warwick 
 
 
 
 42 
 
 Royal British Bank v. 
 
 Tarquand 744 
 
 Reg. V. Bateman 
 
 
 
 215 
 
 Rucker et nJ. v. Hiller 
 
 
 433 
 
 V. Wilson 
 
 
 
 215 
 
 Ruggles V. Patten 
 
 
 23, 109 
 
 Reid V. Eurnival 
 
 
 
 353 
 
 Rundle v. Moore 
 
 
 37 
 
 V. Morrison 317, 
 
 329, 
 
 330, 
 
 449, 
 
 Rushton V. Aspinwall 
 
 
 305, 491 
 
 
 
 
 451 
 
 Russel V. Langstaflfe 
 
 215 
 
 245, 610 
 
 Renner v. The Bank of Columbia 
 
 
 Russell V. Swan 
 
 
 160 
 
 237, 297, 362 
 
 , 447 
 
 , 505 
 
 , 696 
 
 V. Turner 
 
 
 38 
 
 Reynolds v. Blackburn 
 
 
 351 
 
 353 
 
 V. Wiggin 
 
 
 50, 51, 57 
 
 V. Doyle 
 
 
 
 616 
 
 Rutland & B. R. Co. 
 
 V. Cole 
 
 478 
 
 Rex V. Hart 
 
 
 
 215 
 
 Ryan v. Chew 
 
 
 211 
 
 V. Johnson 
 
 
 
 701 
 
 
 
 
 Rhett V. Poe 
 
 
 441 
 
 ,443 
 
 
 
 
 Rice V. Mather 
 
 
 
 288 
 
 Safford V. Wyckoff 
 
 
 729 
 
 V. Riatt 
 
 
 
 211 
 
 Salinas v. Wris/ht 
 
 
 14 
 
 Richardson v. Lincoln 
 
 
 129 
 
 , 221 
 
 Salisbury v. AVilliams 
 
 
 701 
 
 V. Rikeman 
 
 
 
 672 
 
 Samson v. Thornton 
 
 
 129 
 
 Richie v. McCoy 
 
 
 
 443 
 
 1 Sanderson v. Bo\\^s 
 
 
 20, 23
 
 TABLE OP CASES CITED. 
 
 lix 
 
 PAfiK 
 
 Sandford v. Dillaway 452, 402 
 
 Sanford v. Lainlieit 592 
 
 V. IMicklcs 161 
 
 V. Norton 112, 111, 142, 213, 
 
 257 
 
 Sard V. Rhodes 352 
 
 Sargent v. Appleton 354, 443, 576 
 
 V. Soutiigate 273, 274, 275, 
 
 520 
 
 Saul V. Jones 543 
 
 Saiindcrson v. Judge 377 
 
 Savage v. King 103, 104 
 
 Saver r. WagstalT 213 
 
 Sehimnielpennifli r. Hayard 49, 54, 04 
 
 Schneider v. Schiffman 131, 143 
 
 Scholield i\ Bayard 88, 422 
 
 Schollenberger v. Nehf 124, 143 
 
 Scott V. Greer 472 
 
 V. Ocean Bank 210, 212 
 
 r. Lifford 377 
 
 Scruggs V. (iass 619, 020 
 
 Seabury v. Hungerford 132, 138 
 
 Seacord v. Miller 403 
 
 Schree v. Dorr 502 
 
 Seely v. The Peo[)le 003 
 
 Seixas v. Woods 624 
 
 Seneca ( 'o. Jiank v. Xeass 325, 410 
 
 Serle v. Norton 740 
 
 Seventh Ward Bank v. Ilanrick 392 
 
 Bewail V. Russell 393 
 
 Seymour v. Leyman 150 
 
 Shaniburiih v. Connnagere 328 
 
 Sharp V. United States 008 
 
 Shaver v. Elile 082 
 
 Shaw V. Coates 383 
 
 r. Croft 383, 380 
 
 V. Reed 290, 328, 330, 451, 462 
 
 Shaylor v. Mix 382, 409 
 
 Shearni r. Burnard 502 
 
 Shed V. Brett :i77, 409, 458, 484, 496 
 
 Sheldon v. Benhani 382, 390 
 
 V. ( 'hapnian 543 
 
 r. llorloii 470 
 
 ' Shelton i\ Urothwaile 308 
 
 Shepj)anl ifc Co. v. Stewart 342 
 
 Sherwood i\ Barton 161 
 
 r. Roys 479 
 
 Shirley v. Fellows 441 
 
 Shute (;. Robins 40 
 
 Shuttleworth, Ex parte 669 
 
 Sigerson v. ^Mathews 542 
 
 Simpson v. Moulden 6, 7 
 
 V. Turney 896 
 
 Sinclair r. Lynch 375 
 
 Slacum r. Pomerv 715 
 
 Smedes v. The lltica Bank 380, 535 
 
 Smith ('. Bank of Washington 490 
 
 V. Boulton 375 
 
 
 
 I'AGE 
 
 Smith V. Iha'me 
 
 198, 
 
 233, 258 
 
 V. ( 'hester 
 
 
 63, 058 
 
 r. De Witts 
 
 
 193 
 
 V. P^arl of Jersey 
 
 
 4 
 
 V. Iliscock 
 
 
 202 
 
 V. Kendall 
 
 
 6, 9 
 
 V. Knox 
 
 
 203 
 
 V. Lusher 
 
 
 161, 478 
 
 V. Mechanics' Bank 
 
 257 
 
 V. Mercer 046 
 
 656, 
 
 657, 058 
 
 V. IVIoberly 
 
 
 612 
 
 V. IMullett 
 
 
 382, 395 
 
 V. Nightingale 
 
 
 10, 14 
 
 V. RockAvell 
 
 
 695, 697 
 
 V. Thatcher 
 
 
 442 
 
 V. Whiting 
 
 363, 
 
 364, 370 
 
 V. Winter 
 
 
 576 
 
 V. A\"right 
 
 
 303 
 
 Snow V. Peacock 
 
 
 708 
 
 V. Perkins 
 
 
 363 
 
 V. Perry 
 
 
 636 
 
 Society for Savings v. New I 
 
 iOn- 
 
 don 
 
 
 744 
 
 Solarte, Ex parte 
 
 
 462 
 
 V. Palmer 300, 
 
 307, 
 
 372, 373, 
 374, 375 
 
 Solly V. Forbes 
 
 
 576 
 
 Solomons v. The Bank of England 201 
 Spangler v. ]Mcl)aniel 443 
 
 Spaulding v. Andrews 42 
 
 Spear v. Atkinson 441 
 
 Spencer v. Harvey 462, 476 
 
 Spies V. Gilmore 111, 139, 145, 156, 
 
 451 
 
 V. Newbury . 375 
 
 Spooner v. Rowland 642 
 
 Spring I'. Lovett 527 
 
 Spiincfield Ins. Co. v. Tincher 543 
 
 StalFord v. Rice 522, 528 
 
 Stagg v. Elliott 215 
 
 Staley V. Mathers 276 
 
 Stalker v. IMcDonald 201, 250, 265 
 
 Stanton v. Blossom 386, 388 
 
 Staples V. Okines 402, 465, 466 
 
 Starr i'. Sanford 542 
 
 State V. Bodly 610 
 
 V. Chrisman 600, 012 
 
 Bank i\ Evans Oil 
 
 V. Ilurd 827, 370 
 
 V'. Napier 109, 325, 328 
 
 Steadman v. Gooch 206 
 
 Stedman v. Gooch 642 
 
 Steinhart v. Boker 216 
 
 Steman v. Harrison 50 
 
 Stephenson r. Dickson 396 
 
 V. Primrose 462 
 
 Sterling r. ^larietta, &c.. Trading 
 
 Co. 644, 550
 
 Ix 
 
 TABLE OP CASES CITED. 
 
 Stevens v. Blunt 13 
 V. CainplioU 211 
 V. Hoyland 211 
 Stewart v. Eden 315, 575 
 V. Smith ^214 
 Stivers v. Prentice 328 
 Stockman v. Parr 303 
 Stoddard v. Kimball 211, 256 
 Stones V. Butt 479 
 Stoney v. The American Life In- 
 surance CompanJ' 728, 744 
 Storer v. Logan 50, 57 
 Storm V. Sterling 14 
 Stothart V. Parker 462 
 Stotts V. Byers 212 
 Stout w. Benoist 661 
 Straker v. Graham 40 
 Strang v. Wilson 527 
 Strange v. Price 368, 373 
 V. Wigney 708 
 Strong's Case 540 
 Strong V. Foster 562 
 V. Ptiker 141, 143 
 Stump V. Napier 528 
 Sumner v. Gay 117, 129 
 V. Parsons 127 
 Supervisors v. Schenck 744 
 Sussex Bank v. Baldwin 3'27, 328 
 Sutcliffe V. McDowell 442 
 Sutton V. Shelley 505 
 Swan V. The North British Austra- 
 lian Company 604, 610, 745 
 Swansey v. Breck 108 
 Swetland v. Creigh 7 
 Swift V. Tyson 168, 169, 177, 183, 
 199, 2U0, 207, 210, 211, 212, 219, 
 222, 235, 249, 252, 256, 261, 264, 
 
 265 
 
 Sylvester v. Crapo 259 
 
 V. Downer 112 
 
 Talbot V. Bank of Rochester 62 
 
 V. Clark 393 
 
 Talman v. Gibson 477 
 
 Tarleton v. AUhusen 642 
 
 V. Benbow 689, 691 
 
 Tarver v. Nance 441 
 
 Taunton Bank v. Richardson 476 
 
 Tayler v. Mather 260, 275 
 
 Taylor v. Beck 528 
 
 V. Snyder 25, 109, 326, 449, 
 
 450, 451 
 
 Taylor v. Craig 612 
 
 Tebbetts v. Dowd 541 
 
 Temple v. Seaver 161 
 
 Tenney v. Prince 117, 129 
 
 Teresy v. Gorey 691, 692 
 
 Thackray v. Blackett 
 
 
 442 
 
 Thayer v. Boston 
 
 
 745 
 
 V. BufFum 
 
 161, 
 
 478 
 
 V. Grossman 
 
 522, 
 
 527 
 
 V. King 
 
 680, 
 
 686 
 
 Thomas v. Fenton 
 
 
 352 
 
 r. Newton 
 
 
 261 
 
 V. Todd 
 
 
 636 
 
 Thompson v. Ketcham 
 
 
 327 
 
 V. Patrick 
 
 
 744 
 
 V. Shepherd 
 
 
 264 
 
 Thornton v. Wynn 
 
 475 
 
 476 
 
 Tillman v. Wheeler 
 
 
 134 
 
 Tillotson V. Rose 
 
 
 616 
 
 Timmis v. Gibbins 
 
 
 636 
 
 Tindal v. Brown 363, 365-371, 372, 374, 
 384, 385, 391, 425, 428, 488 
 Tinker v. McCauley 156 
 
 Tobey v. Berly 476 
 
 Tobias v. Rogers 600 
 
 Todd V. Stafford _ 528 
 
 Tomlinson Co. v. Kinsella 214 
 
 Toosey v. Williams 535 
 
 TooteW, Ex jxnie 14 
 
 Tower v. Appleton Bank 674, 694 
 
 Townsend v. Bush 523, 527 
 
 V. Crowdy 648 
 
 V. Lorain Bank 375, 376 
 Townsends v. Bank of Racine 636 
 
 Townsley v. Springer 393 
 
 V. Sumrall 27, 49, 51, 192, 
 500 
 Treon v. Brown 527 
 
 Triggs V. Newnham 311, 312 
 
 Trimby v. Vignier 715 
 
 Troy City Hank v. Lauman 329 
 
 Trustees v. Hill 212 
 
 Tunstall v. AValker 401 
 
 Tyrner v. Leech 386, 387 
 
 Twopenny v. Young 557 
 
 Ubsdell V. Cunningham 13 
 
 Uhler V. Semple 615* 
 
 Ulen V. Kittredge 116 
 
 Ulster County Bank v. McFarlan 56 
 Union Bank v. Hyde 357, 469, 472 
 
 V. Magruder 476 
 
 V. Stoker 409 
 
 Union Bank of Weymouth v. Wil- 
 lis 144, 148, 156 
 United States v. Barker 91 
 V. Dunn 91 
 V. Hodge 203 
 V. Le filer 606, 607 
 V. Parker 392 
 United States Bank v. Goddard 386 
 Upham V. Prince 113
 
 TABLE OF CASES CITED. 
 
 Ixi 
 
 Uther V. Rich 
 Utica Ins. Co. 
 
 V. Toledo 
 
 I'Adi: 
 G13 
 
 200, 
 
 Valette v. IVIason 
 Valk V. Siniinons 
 Vallance v. Siddel 
 Vallett V. Tarker 
 Vaiiaukt-n v. llornbeck 
 Van Duzer 17. Howe (rj, 
 
 Van Kaiigh i\ Van Arsdale 
 Van Vc'chten r. Pruyn 
 Van Wart v. WooUey 3U, 31 
 
 Veazie Bank r. Wynn 
 Vere v. Lewis 
 Vidal V. Thonipson 
 Vincent v. lloiloik 
 Vinton V. King 
 Violctt V. Patton 
 Vore V. Hurst 
 
 207, 
 441, 
 173, 
 233, 
 
 215, 
 
 39G, 
 
 ,32, 
 
 38, 
 
 131, 
 
 271 
 443 
 174 
 235 
 673 
 G02 
 711 
 410 
 34, 
 213 
 490 
 Gl 
 308 
 111 
 214 
 245 
 139 
 
 Waekerbatli, Ex jiarte 87 
 
 Wade V. Buekner, Stanton, & Co. 55G 
 
 V. New Orleans Canal 674 
 
 V. Wade 680 
 
 V. Withington 668 
 
 Wain V. Bailey 297 
 
 Wainwright v. Webster 636 
 
 Wait V. Brewster 642 
 
 Wakfield v. Crossman 539 
 
 Walker v. Bank of The State of 
 
 New York 39, 329 
 
 V. Geisse 200, 207 
 
 V. Laverty 475 
 
 V. Rogers 441, 442, 476 
 
 r. Stetson 377, 413, 542 
 
 Wall V. Bry 472 
 
 Wallace v. Agry • 715 
 
 V. M"( onnell 109 
 
 r. Tellfiiir 37 
 
 Walmsley r. Child 689, 691, 692 
 
 Walter v. Kirk •192 
 
 Walton V. Mascall 255 
 
 V. Shelley 505, 509, 511, 513, 
 
 517, 520, 622, 523, 
 
 527 
 
 Walwyn v. St. Quintin 351, 432, 564 
 
 Ward r. Allen 
 V. Evans 
 V. Lewis 
 ?■. Berrin 
 Warden r. Howell 
 AVare v. Street 
 Warner v. Lee 
 Warren r. Gihnan 
 V. Lynch 
 
 62, 662 
 6:!2 
 607 
 404 
 268 
 636 
 210 
 219, 376, 381, 541 
 171, 188 
 
 i: 
 
 Warren v. Merry 
 Warrington r. Furbor 
 Wasiiington Bank v. Krum 
 Wasiiington Co. Mut. Ins. Co 
 
 Miller 
 Waterbiiry v. Sinclair 
 WatervHet Bank v. AVhite 
 Watkins v. Crouch 
 
 I'AOE 
 
 522, 523, 524 
 291 
 212 
 
 13 
 111, 139 
 479 
 22. 109, 
 328, 462, 463 
 200 
 262 
 124, 143 
 276 
 478 
 719 
 509 
 485, 486 
 124 
 37 
 616 
 24, 109 
 479 
 Hathaway 
 
 Watson V. Cabot Bank 
 V. Flanagan • 
 V. Hurt 
 Way V. Lamb 
 
 V. Richardson 
 Wavman v. Bend 
 Webb r. Danforth 
 
 V. Fairmaner 
 Webster v. Cobb 
 
 r. De Tastet 
 r. Kirk 
 Weed V. Van Houten 
 Welch r. Lindo 
 
 Welland Canal Co. r. Hathaway 745 
 
 Wells V. Jackson 139 
 
 Wentworth v. Wentworth 635 
 
 West V. Brown 328 
 
 Westfall V. Braley 636 
 
 Wetlierwax v. Paine 131 
 
 Whak-y v. Houston 442 
 
 Wheaton v. AVihnarth 363 
 
 Wheeler v. Field 330, 399, 449, 452 
 
 V. Guild 218, 252, 331 
 
 V. Johnson 479 
 
 V. Slocuui 255 
 
 Whistler v. Foster 210,«213, 339 
 
 Whitaker v. Brown 261 
 
 V. Sumner 744 
 
 White V. Hopkins 592 
 
 v. Howland 118, 128 
 
 V. Kibling 260, 338 
 
 V. Richmond 7 
 
 V. Springfield Bank 256 
 
 Whitefield r. Fausset 692 
 
 Whitehead c. Walker 276 
 
 Whitfield V. Savage 425 
 
 Whitlock ?;. McKechnie 161 
 
 Whittaker v. Ednmnds 258 
 
 Whittier v. Graiiam 316, 317 
 
 Wiiitwell V. Johnson 296, 39^ 
 
 WilKn V. Roberts 271 
 
 Wiggin r. Bush 250 
 
 Wiggle V. Thomason 492 
 
 Wild V. The Bank of Fassama- 
 
 quoddy 747 
 
 «. Rennards 20 
 
 Wildes V. Savage 50, 57 
 
 Wilkes r. Jacks 443 
 
 Wilkins r. Jadis 311,312
 
 Ixii 
 
 TABLE OF CASES CITED. 
 
 Wilkinson v. Adam 
 
 V. Johnson 
 V. Lutwidge 
 Willcts V. Plifjenix Bank 
 Williams v. Brashear 
 V. Cheney 
 V. Germaine 
 ■V. Little 
 V. Smith 
 
 374 
 63, 645, 605 
 G58 
 747 
 441, 442 
 235 
 
 200, 203, 207 
 200, 271 
 United States Bank 378 
 
 Wade 
 Walbridge 
 Winans 
 I'. Johnson 
 
 Williamson 
 Wilson, Ex parte 
 
 V. Clements 
 
 V. Holmes 
 
 ». Lazier 
 
 V. Senier 
 
 V. Swabey 
 
 V. Williams 
 
 V. Williman 
 Windham v. Wither 
 Wintermute v. Post 
 Winton v. Saidler 
 Wiseman v. Lyman 
 Wolcottu. Van Santvoord 
 
 Wolfe V. Jewett 
 WoUenweber v. Ketterlinus 
 Wood V. Brown 
 
 V. Corl 
 Woodcock V. Houldsworth 
 Woodford v. Whiteley 
 Woodman v. Churchill 
 
 715 
 
 622, 734 
 42, 51 
 111 
 664 
 50 
 260 
 715 
 463 
 384 
 734 
 489 
 567 
 108 
 622 
 642 
 21, 22, 
 109 
 451 
 
 441, 442 
 476 
 308 
 399 
 679 
 
 213, 215 
 
 PAGE 
 
 Woodruff V. Merchants' Bank 308, 
 
 718, 720 
 
 Woods V. Dean 476, 542 
 
 V. Neeld 409 
 
 V. Price 441, 476 
 
 r. Pugh 87, 88 
 
 V. Tyson 479 
 
 Woodworth v. Huntoon 262 
 
 Worcester Bank v. Dorchester 
 
 and U. Bank 257 
 V. Welh 
 Wormley v. Lowry 
 Worrall v. Gheen 
 V. Munn 
 Wright V. Austin 
 V. Dannah 
 V. Maidstone 
 V. ]\Iorse 
 V. Shawcross 
 V. The Shelby, &c 
 Wyat V. Campbell 
 Wynn v. Alden 
 
 715 
 201 
 648, 665 
 607 
 616 
 613 
 679 
 156 
 394 
 606 
 233 
 375 
 
 Co. 
 
 Yallop V. Ebers 691 
 
 Yeaton v. The Bank of Alexan- 
 dria 303 
 York County Mut. Fire Ins. Co. 
 
 V. Brooks 
 Young V. Adams 
 
 V. Bryan 
 V. Grote 
 Youngs V. Lee 
 Youngue v. Ruflf 
 
 604 
 
 618, 619, 630, 635, 
 
 651 
 
 356 
 
 62, 648, 665, 668 
 
 255, 363 
 
 441
 
 LEADING AND SELECT CASES.
 
 LEADING AND SELECT CASES 
 
 UPON BILLS OF EXCHANGE AND PROMISSORY NOTES. 
 
 FORM AND KEQUISITES. 
 
 Thompson v. Sloan et al. 
 
 (23 Wendell, 71. Supreme Court of New York, January, 1840.) 
 
 Payable in Canada money. — A written promise, executed in New York, to pay in that 
 
 State a certain sum in Canada money is not a negotiable note ; but if negotiable, 
 parol evidence is admissible to show the meaning of the term " Canada money." 
 
 The note in this case was dated at Buffalo, New York, signed 
 by James Sloan and John Wilkinson, payable to the order of John- 
 son, Hodge, & Co., in Canada money, at the Commercial Bank in 
 Buffalo, and indorsed by the payees. The makers and indorsers 
 were sued jointly. 
 
 The questions in controversy were, first, whether the paper were 
 a negotiable note ; and secondly, whether parol evidence could be 
 received to explain the meaning of the term " Canada money," as 
 understood in Buffalo. 
 
 CowEN, J. A promissory note must, in order to come within the 
 statute, like a bill of exchange, be payable in money only, in current 
 specie ; Bayl. on Bills [1], 10 Am. ed. of 183G ; Ex parte Imeson, 
 2 Rose, 225 ; or at least in what we can judicially notice as equiva- 
 lent to money. Accordingly, a note payable in bills of country 
 banks, Jones v. Fales, 4 Mass. 245, in Pennsylvania or New 
 York paper currency, current in Pennsylvania or New York, Lei- 
 ber V. Goodrich, 5 Cowen, 186, in notes of the chartered banks of 
 Pennsylvania, though the note was made and payable in the State 
 
 1
 
 2 FORM AND REQUISITES. 
 
 of Pennsylvania, M'Cormick v. Trotter, 10 Serg. & Kawle, 94 ; see 
 Cook V. Satterlec, G Cowen, 108 [ joos^, 8] ; in paper medium, Lange 
 t;-|:ohne, 1 M'Cord, 115 ; see M'Clarin v. Nesbit, 2 Nott & M'Cord, 
 519, or in cash or Bank of England notes, Ex parte Imeson, before 
 cited, 2 Buck, 1 S. P., has been held without the statute. 
 
 The farthest we have gone is, to say that a note drawn and pay- 
 able here, in New York bills or specie, Keith v. Jones, 9 Johns. 
 120, or in bank-notes current in the city of New York, Judah v. 
 Harris, 19 Johns. 144, is negotiable. In both cases the Court 
 went on the ground of a right to take judicial notice that New 
 York bills, and especially bank-notes current in the city of New 
 York, were customarily considered and treated as equivalent to 
 specie. And, in the last case, they said, though the defendant 
 might have a right to pay with foreign bills current in the city, the 
 note was still to be regarded as payable in current money. 
 
 Admitting that the note in question imports an obligation to pay 
 in gold and silver, current in Canada, I do not see on what prin- 
 ciple we can pronounce it to be payable in money, within the mean- 
 ing of the rule. It is not pretended that coins current in Canada 
 are, therefore, so in this State. As gold and silver they might 
 readily be received : and so might the coin of any foreign country, 
 Germany or Russia, for instance ; but the creditor might, and in 
 many cases doubtless would, refuse to receive them, because igno- 
 rant of their value. In law, they are all collateral commodities, 
 like ingots or diamonds, which, though they might be received, and 
 be in fact equivalent to money, are yet but goods and chattels. A 
 note payable in either would, therefore, be no more negotiable than 
 if it were payable in cattle or other specific articles. The fact of 
 Canada coins being current here is not, at any rate, so notorious 
 that we can judicially notice them as a universally customary 
 medium of payment in this State ; and if not, they are no more a 
 part of our currency than Pennsylvania bank-bills. Leiber v. 
 Goodrich, before cited. Nor do I perceive in the case any proof, 
 or offer to prove, that such coins were universal currency. 
 
 This view of the case is not incompatible with a bill or note pay- 
 able in money of a foreign denomination, or any other denomination, 
 being negotiable, for it can be paid in our own coin of equiva- 
 lent value, to which it is always reduced by a recovery. Chit, on 
 Bills, 615, 616, Am. ed. of 1839 ; Deberry v. Darnell, 5 Yerg. 451. 
 A note payable in pounds, shillings, and pence, made in any coun-
 
 THOMPSON V. SLOAN. 3 
 
 try, is but another mode of expressing the amount in dollars and 
 cents, and is so understood judicially. The course, therefore, in 
 an action on such an instrument is to aver and prove the valuo»of 
 the sum expressed, in our own tenderable coin. It is payable in 
 no other, vide Bayl. on Bills, 23, Am. ed. of 18-30, and the cases 
 there cited, whereas on the note in question, Canada money, a 
 specific article, would be a lawful tender ; Canada coppers, for aught 
 I see, and, under our own decisions, bank-bills commonly current 
 in Canada, would also be tenderable. 
 
 Nor is it necessary to deny, that had this note been made, in 
 dorsed, and payable in Canada, it would have been negotiable. It 
 would then on its face have been payable in the current coin of the 
 country where it is made. The objection is, that the note was 
 made, indorsed, and payable here, in a foreign commodity, which 
 the payee was entitled to demand specifically ; and to reject gold 
 and silver current in the United States. It is of course the same 
 thing under the extrinsic evidence offered by the plaintiff, and re- 
 ceived by the judge. The Canadian statute merely proved what 
 coins were current as Canada money ; which could not be recog- 
 nized as the money of this country. In the light of that proof, the 
 note must be read as necessarily payable in Canada money, current 
 by law in that province. It did not improve the case, without fol- 
 lowing it with some statute making that money, as such, current 
 here ; or, at least, showing that it was, in fact, so notoriously cur- 
 rent among us that we should be entitled to take judicial notice of 
 the fact. The latter is the utmost, that, by our cases, the plaintiff 
 could claim ; though we have gone farther than the cases decided 
 in any other State or country, so far as they were cited on the 
 argument, or have come under my observation, except a case in Ten- 
 nessee, Deberry v. Darnell, 5 Yerg. 451. The instrument was pay- 
 able in North Carolina notes, yet held negotiable. In M'Cormick 
 V. Trotter, I fear we were somewhat justly criticised for the high 
 ground on which we had placed all our State bills in Keith v. Jones. 
 At any rate, Mr. Justice Diuicdti very truly reminded us that New 
 York State bills had depreciated in common with those of Pennsyl- 
 vania. A remark, which he made as to the note in that case, 
 which was payable in Pennsylvania bills, would, I apprehend, be 
 nearly applicable to our own at some stages of our currency ; viz., 
 that " it was payable in more than forty kinds of paper of different 
 value."
 
 4 FORM AND REQUISITES. 
 
 The evidence offered, that the makers were desirous to draw the 
 note payahle in Canada hills, which the plaintiff refused, tended to 
 pri)ve no more than that the note was intended to be payable in 
 Canadian current coin. It was, therefore, as we have seen, irrele- 
 vant, besides being, as I think, inadmissible, because it was direct 
 independent evidence of intention, as explained by the parties at 
 the very time of drawing the note. Every thing of this kind which 
 the parties declared was merged by the written agreement. The 
 legal effect of a written agreement cannot be controlled by this kind 
 of evidence. Creery v. Holly, 14 Wend. 26. Nor, in general, 
 can a patent ambiguity be obviated by it. See Cowen & Hill's 
 Notes to 1 Phil. Ev. 1384, 1388, et seq. and cases there cited. I 
 speak of the confessions or declarations of the parties, which go to 
 show what they meant by the words used in the writing. I do not 
 deny that in such a case, a resort may be had to collateral circum- 
 stances. Per Bayley, J. in Smith v. Doe, ex dem. Earl of Jersey, 
 2 Brod. & Bing. 558 ; 1 Phil. Ev. Cowen & Hill's ed. 546, note 957; 
 p. 1399, et seq.; Peisch v. Dickson, 1 Mason, 9, 11. The cases of 
 Cole V. Wendel, 8 Johns. 116, and Ely v. Adams, 19 id. 313, 
 were mentioned to us on the argument. I much doubt whether the 
 latter case can be understood as conflicting at all with the distinc- 
 tion I have mentioned. In the former, it was doubtful which of 
 two subjects mentioned in the writing, the parties intended to refer 
 to, and the judge at the circuit, received evidence of the form in 
 which the plaintiff desired the contract should be written, and to 
 which the defendant assented. It was written in a different form, 
 which made it ambiguous on its face. Yet the verdict was sustained 
 on motion for a new trial, and an opinion expressed that the evi- 
 dence was proper. The ambiguity, though patent, lay between two 
 objects only, and the decision may be sustained by a class of authori- 
 ties which make such cases an exception. Vide Cowen & Hill's 
 Notes to 1 Phil. 1388, 1392. The ambiguity was not, in its own 
 nature, unexplainable ; and the only difficulty is on the kind of 
 proof. There was, however, as the Court remarked, enough ap- 
 pearing on the face of the paper itself to remove the doubt. The 
 case is sustainable on that ground, even if the contemporaneous 
 declarations were improperly received. 
 
 But in the case at bar, extrinsic evidence of the kind offered by 
 the defendants was, I think, admissible to prove that Canada money 
 meant, in general mercantile understanding at Buffalo and in its
 
 THOMPSON V. SLOAN. 6 
 
 vicinity, Canadian bank-bills, and not specie, whether we regard 
 tlie words used in the note as jn-ima facie importing current Cana- 
 dian coin, or as ambiguous on their Face ; in otlicr words, leaving it 
 doubtful whether they meant current Canadian coin or bank-notes. 
 Such evidence was not necessary, if what I have said as to the legal 
 ellect of the words be correct, and was therefore irrelevant, and, in 
 that view, inadmissiljle. But suppose I am mistaken in saying that 
 this note was not negotiable as being payaljle in the legal money of 
 the province, then it was competent to prove the customary mean- 
 ing of the words. The cases are quite numerous, that though tiie 
 meaning of the word be perfectly well settled in general language, 
 yet if a secondary meaning has been affixed to it in commercial 
 usage, in a certain region of country, or among certain classes 
 of men, this may be shown ; and when the proof is clear, the use 
 of the word in that region, or among those men, carries into the 
 contract the signification thus established. The general rule is 
 clear, and hardly calls for a quotation of books, vide Cowen & Hill's 
 Notes to 1 Phil. Ev. 1409, 1412, and the cases there cited ; and if 
 a word of known general signification may be thus qualified, it is 
 difficult to perceive how, without a violation of the very principle 
 on which this is allowed, we can refuse the same sort of testimony 
 to clear up a doubtful word. The latter would seem to be a less 
 violent exception to the rule, which requires that language shall 
 have an effect according to its general import. 
 
 It is supposed that a ])atent ambiguity is more stubborn than a 
 direct and clear expression. This conclusion is sought to be de- 
 rived from the famous rule of Lord Bacon, which declares patent 
 ambiguities unexplainable. I had occasion in a late case, Fish v. 
 Hubbard's Adin'rs, 21 Wend. 651, to show that the rule in its 
 general sense had seldom, if ever, been acted upon, and never 
 should be so applied as to preclude collateral circumstances in ex- 
 planation of doubtful words or phrases, which, when explained, are 
 found to be significant and operative of themselves. This was also 
 sufficiently shown in Colpoys v. Colpoys, Jacob, 451. Usage is 
 one of the most common circumstances receivable for the purpose 
 of such explanation. It is from this that we derive our general 
 knowledge of language, which knowledge cannot be made the only 
 test, without assuming judges and jurors to be familiar with words 
 and phrases applicable to every employment of life in different 
 sections of the country, and indeed in foreign countries.
 
 6 FORM AND REQUISITES. 
 
 It is obviously as necessary to ascertain the provincial meaning 
 of words, through witnesses who are acquainted with their signifi- 
 cation, as to translate a foreign language through a sworn interpre- 
 ter. Abbreviations of words are often used, generally of known 
 import ; but sometimes entirely ambiguous, not to say absohitely 
 obscure. Such was the word mod in the will of NoUekens, the 
 sculptor. But its meaning was collected through the medium of 
 witnesses skilled in the trade of the testator, and from proof of the 
 surrounding circumstances. In that case, too, direct evidence of 
 intention, viz., the declarations of the testator of what he intended 
 to bequeath, and to whom, made by him to his female attendant in 
 his sickness, was overruled. Goblet v. Beechey, 3 Sim. 24, more 
 fully reported in Wigr. on Bxtr. Ev. 139, et seq. ; and see Hite v. 
 The State, 9 Yerg. 357, 381. 
 
 The motion to set aside the nonsuit, and for a new trial, is 
 denied. 
 
 The New York statute as to negotiable notes is as follows : ' ' All jiotes 
 in writing, made and signed by any person whereby he shall promise to pay to 
 any other person, or his order, or to the order of any other person, or unto 
 the bearer, any sum of money therein mentioned, shall be due and payable as 
 therein expressed ; and shall have the same effect, and be negotiable in like man- 
 ner as inland bills of exchange, according to the custom of merchants." 1 Rev. 
 L. of 1813, 151 ; 1 Rev. St. 768, § 1. This is substantially the statute of Anne, 
 \ which has been generally adopted in this country. ' Under this statute it is 
 held that negotiability, as between the original parties, is not necessary to a 
 promissory note, Burchell v. Slocock, 2 Ld. Raym. 1645 ; Smith v. Kendall, 6 
 Term, 123 ; Kimball v. Huntington, 10 Wend. 675 ; Middlesex, &c. v. Davis, 3 
 Met. 133. But see Bristol v. Warner, 1-9 Conn. 7, for the rule in Connecticut. 
 And negotiability is not essential to bills of exchange. Coursin v. Ledlie, 31 
 Penn. State, 506. See also Gerard v. Le Coste, 1 Dallas, 194; 1 American 
 Leading Cases, 302, and note ; Hoyt v. Lynch, 2 Sandf. 328. 
 
 A check drawn in New York, payable in Mississippi, in current bank-notes, 
 is not negotiable. Little v. Phoenix Bank, 7 Hill, .359, affirming 2 Hill, 425, 
 
 It has generally been held, that instruments payable in current bank-notes 
 are not negotiable, though possessing all other requisites to negotiability. Simp- 
 son V. Moulden, 3 Cold. 429; McDowell v. Keller, 4 Cold. 258; Gray v. Dona- 
 hoe, 4 Watts, 400 ; Hasbrook v. Palmer, 2 McLean, 10 ; Ogden v. Slade, 1 Texas, 
 13 ; Irvine v. Lowry, 14 Peters, 293 ; Collins v. Lincoln, 11 Vt. 268 ; Farwell v. 
 Kennett, 7 Mo. 595 ; Graham v. Adams, 5 Ark. (Pike) 261. In the last-named 
 case it was held that a note or bond payable " in good current money of the 
 State," was payable in gold and silver. And Cockerill v. Kirkpatrick, 9 Mo. 
 688, was to the same effect. In Hawkins v. Watkins, 5 Ark. (Pike) 481, it was 
 held that a draft payable " in Arkansas money of the Fayetteville Branch,' was 
 not a bill of exchange.
 
 WORDEN V. DODGE. ♦ 
 
 But a different doctrine has been held in the followinf? cases : Swetland v. 
 Creigh, 15 Ohio, 118, in which a note payable " in current Ohio bank-notes," 
 was held negotiable. Read, J., dissenting. The same Judge dissented again in 
 White V. Richmond, 16 Ohio, 5, in which a note payable " in current funds of 
 the State of Ohio," was held negotiable ; Butler v. Paine, 8 Minn. 324, where it 
 was held that an order payable in " currency " was payable in money. 
 
 Tlie mere mention of a particular fund in a bill of exchange will not vitiate 
 it, if it was inserted only as a direction to the drawee how to reimburse himself. 
 Kelley ». Brooklyn, 4 Hill, 263. 
 
 In Vermont, a contract in the form of a promissory note, payable in specific 
 articles, is treated as a proniissory note for some purposes. Denison v. Tyson, 
 17 Vt. 549 ; Dewey v. Washburn, 12 Vt. 580; Brooks v. Page, 1 D. Chip. 840. 
 
 As in regard to pleading and importing consideration, but not as to nego- 
 tiability; as a note payable in "current bills" is not negotiable. Collins v. 
 Lincoln, . 11 Vt. 268. See also Farmers' Ins. Co. v. Miller, 26 Vt. 77, as to 
 premium notes being promissory notes for the full amount expressed therein. 
 
 See further upon the subject of instruments payable in specific articles, Jerome 
 ». Whitney, 7 Johns. 321 ; Lawrence v. Dougherty, 5 Yerg. 435 ; Simpson v. 
 Moulden, 3 Cold. 429 ; Alexander v. Oakes, 2 Dev. & B. 513 ; Martin v. Chaun- 
 try, 2 Stra. 1271; Dennett u. Goodwin, 32 Maine, 44; Atkinson v. Manks, 1 
 Cowen, 691 ; Barnes v. Gorman, 9 Rich. Law, 297, and other cases cited in 
 this and the following notes. 
 
 WoRDEN V. Dodge et al. 
 
 (4 Denio, 159. Supreme Court of New York, January, 1847.) 
 
 Payable out of a particular fund. — An instrument by which a party promises to pay a 
 certain sum at a stated time out of the net proceeds of ore to be raised and sold 
 from a certain ore bed, is not a promissory note, it being payable upon a con- 
 tingency. 
 
 Assumpsit upon a written instrument in the form of a promis- 
 sory note, except that it was payable " out of the net proceeds 
 after paying the costs and expenses of ore to be raised and sold 
 from the bed in the lot this day conveyed by Edward Maiden to 
 Edwin Dodge, which bed is to be opened, and the ore disposed of 
 as soon as conveniently may be." 
 
 Beardsley, J. The nonsuit was proper. A promissory note 
 must be payable absolutely, and not upon any contingency as to 
 time or event. 3 Kent, 5th ed. p. 74 ; Smith on Merc. Law, 113, 
 116 ; Story on Prom. Notes, §§ 1, 22-26 ; id. on Bills of Exch. §§ 
 46, 47 ; Chit, on Bills, 10th Amer. ed. pp. 132-139.
 
 8 FORM AND REQUISITES. 
 
 This was not such an engagement, for although the promise was 
 to make payments at certain specified times, the payments were to 
 be made " out of the net proceeds " " of ore to be raised and 
 sold " from a certain ore bed. Here was a contingency ; the fund 
 might turn out to be inadequate, in which case there would be no 
 obligation to pay at any time. It was not a promise to pay " abso- 
 lutely and at all events," as a promissory note always is. 
 
 New trial denied. 
 
 That an order or promise to pay out of a particular fund is not a bill 
 of exchange or promissory note see Morton v. Naylor, 1 Hill, 583 ; Josselyn 
 V. Lacier, 10 Mod. 294 ; Gallery v. Prindle, 14 Barb. 186 ; Jenney v. Herle, 
 2 Ld. Raym. 1361; Dawkes v. De Lorane, 3 Wilson, 207; Bayerque v. San 
 Francisco, 1 McAU. 175. If, however, the mention of a particular fund was 
 inserted merely as a direction to the drawee how to reimburse himself, the in- 
 strument will not be vitiated as a bill of exchange. Kelley v. Brooklyn, 4 
 Hill, 263. 
 
 Acceptance of an order to pay a certain sum out of the fii'st money of the 
 drawer, received by the drawee from a particular source, will bind the acceptor 
 to pay as the funds come to the hand of the drawee. Perry v. Harrington, 2 
 Met. 368 ; and note to Newhall v. Clark, post. 
 
 See, also, Cota v. Buck, 7 Met. 588, cited at length in note to Kelley v. H&m- 
 mgv!&y, post, 11. 
 
 Cook v. Satterlee and Satterlee. 
 
 (6 Cowen, 108. Supreme Court of New York, August, 1826.) 
 
 Additional directions. — An order directed to the defendants to pay to the plaintiff, or 
 bearer, ninety days after date, §400 ; " and take up their note given to William 
 and Henry B. Cook for that amount," is not a bill of exchange, though accepted 
 by the defendants. 
 
 Assumpsit against the defendants, as acceptors of a bill of ex- 
 change, requesting them to pay the plaintiff 8400 ninety days 
 after date ; " and to take up their note given to William and 
 Henry B. Cook for that amount, dated April 19, 1825." 
 
 The question in the case was whether the instrument were a bill 
 of exchange. 
 
 Savage, C. J. The essential qualities of a bill or note, are : 
 1. That it be payable at all events ; not dependent on any con- 
 tingency, nor payable -out of a particular fund ; and 2. That
 
 COOK V. SATTERLEE. 9 
 
 it be for the payment of money only, and not for the per- 
 formance of some other act, or in the alternative. (Chit, on 
 Bills, 55). 
 
 Is not the instrument declared on payable upon a contingency ? 
 From the face of the instrument itself, it appears that the drawers 
 had, on the IDtli of Aj)ril preceding its date, given their note for 
 i460, to William and H. B. Cook ; and the object of drawing the 
 instrument in question was to take up that note. The engage- 
 ment of the acceptors must be construed according to what is 
 required of them by the drawers. The note was supposed to be 
 in possession of the payee or holder of the bill, and the payment 
 of the money and taking up the note of the drawers, must be si- 
 multaneous acts. The acceptors could not take up the note till it 
 was presented ; nor were they bound to pay the money till the 
 plaintiff was ready, and offered to enable them to take up the note. 
 It seems to me, therefore, that substantially this instrument is 
 payable upon a contingency, and is the same as if it had said, 
 " Pay W. C. 8400, on his giving up our note," (fee. Had such been 
 the form, it would clearly not be technically a bill of exchange. 
 The holder, in declaring upon it, should aver his readiness to de- 
 liver up the note. Upon a contrary doctrine, the defendants may 
 be compelled to pay the bill, and the drawers to pay the note, 
 provided it lias been transferred before due. 
 
 The defendants are entitled to judgment, with leave to amend 
 on the usual terms. 
 
 Rule accordingly. 
 
 To the same effect on very similar facts, is Austin v. Burns, 10 Barb. 643. 
 
 So an instrument in the usual form of a promissory note, to which i.s added an 
 authority to any attorney to enter judgment in favor of the holder for the amount 
 of the note with costs, coupled with a release of errors and a waiver of stay of 
 execution and of the right of an inquisition and an appraisement, is not a prom- 
 issory note, so as to be entitled to days of grace. Overton v. Tyler, 3 Penn. 
 State, 34G. 
 
 A promissory note, however, does not lose its character as such, by a recital in 
 the instrument that bonds have been deposited as collateral security for the note, 
 and that they may be sold in case of non-pajaneut. Arnold v. Rock River, &c., 
 K. Co., 5 Duer, 207. 
 
 So a Avritten promise to pay and to do some other act required by law, as a 
 promise to pay the hire of slaves and clothe them, is a negotiable instrument. 
 Baxter v. Stewart, 4 Snecd, 213. 
 
 An instrument by which the maker promises to pay with cui~rent exchange, haa 
 been held a promissory note. Smith v. Kendall, 9 Mich. 241 ; Leggett v. Jones,
 
 10 FORM AND REQUISITES. 
 
 10 Wis. 34. In the former case Campbell, J., dissenting, said : " In tbe case of 
 Pollard V. Herrics, 3 Bos. & Pul. 335, the action being between theimmediate par- 
 ties to the note, no question arose concerning its negotiable character ; and there is 
 no English case that I am aware of, which has given any countenance to innova- 
 tion on tliis subject. So fir as any practice has existed in this State, in relation 
 to notes payable with exchange, I believe it has not been in favor of their nego- 
 tiability. The question has been raised several times in the Federal Court with- 
 in my own experience, and every case I have known has held them not to possess 
 that character." The cases refen-ed to by Judge Campbell do not seem to have 
 been reported. Grutacap v. WouUouise, 2 McLean, 581, the only Michigan 
 case bearing on the subject in the Federal Court, was an action on a note paya- 
 ble with exchange. But the question was not raised whether this vitiated it as a 
 promissory note ; the question was whether exchange could be recovered, and 
 it was held that it could be. See also Price v. Teal, 4 McLean, 201. 
 
 If the instrument recite that the payee is to receive a certain sum less than the 
 principal sum named, in case the paper is paid on an earlier day than that named, 
 it is not a promissory note. Fralick v. Norton, 2 Mich. 130. 
 
 A written promise to pay S., or order, $1000, or, upon surrender of "this 
 note," to issue stock for the same, is held a promissory note. Hodges v. Shuler, 
 24 Barb. 68. It was held in this case, that, as it was optional with the holder to take 
 the stock, there was no condition and no uncertainty in the promise to pay money. 
 Another reason is stated, that, as the instrument purported on its face to be ne- 
 gotiable, being payable " to order," and using the expression "this note," the 
 payee and indorser, who was the defendant, was estopped to deny the negotia- 
 bility of the paper. 
 
 In Leonard v. Mason, 1 Wend. 522, the plaintiff held a promissory note against 
 one Leonard, underneath which was written an order in these words : ' ' Levi 
 Mason, Esq., please pay the above note, and hold it against me in our settle- 
 ment. N. Leonard." A parol acceptance was proved, and the Court held the 
 order a bill of exchange. 
 
 So an order drawn underneath an account directing the drawee to pay the 
 amount of the same, is a bill of exchange, though not negotiable. Hoyt v. 
 Lynch, 2 Sandf. 328. 
 
 Nor will it vitiate the instrument as a promissory note, that the consideration 
 for which it was given is stated in it. Beardslee v. Horton, 3 Mich. 560. 
 
 But an instrument by which a party promises to pay a certain sum " and also 
 all other suras which may be due," is too indefinite to constitute a promissory 
 note. Smith v. Nightingale, 2 Stark. 375 ; by Lord Ellenborough, in 1818. 
 
 So an instrument promising to pay to the representatives of S., three months 
 after his death, " first deducting thereout any interest or money which S. might 
 owe the maker on any account," is not a note for the payment of a certain sum 
 at all events. Barlow v. Broadhurst, 4 Moore, 471 (1820).
 
 KELLEY V. HEMMINGWAY. 11 
 
 David Kelley, Appellant, v. Moses Hemmingway, Appellee. 
 
 (l;5 Illinois, G04. Supreme Court, June, 18^2.) 
 
 Ca-tatnti/ as to time of jtai/ineiit. — A writing promising to pay a certain sum when K. 
 shall arrive at age, is not a promissory note, being payable upon a contingency 
 which may never happen ; and it does not alter the case that K. actually lived to 
 attain his majority. 
 
 The case is stated in the opinion of the Court. 
 
 Treat, C. J. This was an action brought by Hemmingway 
 against Kelley before a justice of the peace, and taken by appeal to 
 the Circuit Court. On the trial in the latter Court, the plaintiff 
 offered in evidence an instrument in these words : — 
 
 "Castleton, April 27th, 184-1. 
 
 " Due Henry D. Kelley, fifty- three dollars when he is twenty-one 
 years old, with interest. David Kelley." 
 
 On tlie back of which was this indorsement : — 
 
 " RocKTOX, May the 21st, 18-49. 
 
 " Signed the within, payable to Moses Hemmingway. 
 
 Henry Kelley." 
 
 The plaintiff proved that the payee became of age in August, 
 1849. The defendant objected to the introduction of the instru- 
 ment, because it was not negotiable, but the Court admitted it in 
 evidence, and rendered judgment for the plaintiff. 
 
 Our statute makes promissory notes assignable by indorsement 
 in writing, so as absolutely to vest the legal interest in the assignee. 
 "Was the instrument in question a promissory note ? To constitute 
 a promissory note, the money must be certainly payable, not de- 
 pendent on any contingency, eitlier as to event, or the fund out of 
 which payment is to be made, or the parties by or to whom pay- 
 ment is to be made. If the terms of an instrument leave it un- 
 certain whether the money will ever become payable, it cannot bo 
 considered as a promissory note. Chitty on Bills, 134. Thus, a 
 promise in writing to pay a sum of money when a particular per- 
 son shall be married, is not a promissory note, because it is not
 
 12 FORM AND REQUISITES. 
 
 certain that he will ever be married. Pearson v. Garret, 4 Mod. 
 242 ; Bcardsley v. Baldwin, 2 Strange, 1151. So of a promise to 
 pay when a particular ship shall return from sea, for it is not cer- 
 tain that she will ever return. Palmer v. Pratt, 2 Bing. 185 ; 
 Coolidge V. Ruggles, 15 Mass. 387. In all such cases, the promise 
 is to pay on a contingency that may never happen. But if the 
 event on which the money is to become payable must inevitably 
 take place, it is a matter of no importance how long the payment 
 may be suspended. A promise to pay a sum of money on the death 
 of a particular individual, is a good promissory note, for the event 
 on which the payment is made to depend will certainly transpire. 
 Colelian v. Cooke, Willes, 393 ; s. c, 2 Strange, 1217. 
 
 In this case, the payment was to be made when the payee should 
 attain his majority, — an event that might or might not take place. 
 The contingency might never happen, and therefore the money was 
 not certainly and at all events payable. The instrument lacked one 
 of the essential ingredients of a promissory note, and consequently 
 was not negotiable under the statute. 'The fact that the payee 
 lived till he was twenty-one years of age makes no difference. It 
 was not a promissory note when made, and it could not become 
 such by matter ex post facto. The plaintiff has not the legal title 
 to the instrument. If it presents a cause of action against the 
 maker, the suit must be brought in the name of the payee. Tlie 
 case of Goss v. Nelson (1 Burr. 226), is clearly distinguishable 
 from the present. There, the note was made payable to an infant 
 when he should arrive at age, and the day when that was to be was 
 specified. The Court held the instrument to be a good promissory 
 note, but expressly on the ground that the money was at all events 
 payable on the day named, whether the payee should live till that 
 time, or die in the interim ; and it was distinctly intimated that 
 the case would be very different had the day not been stated in the 
 note. It was regarded as an absolute promise to pay on the day 
 specified, and no effect was given to the words that the payee would 
 then become of age. 
 
 The judgment must be reversed. Judgment reversed. 
 
 When no time of payment is fixed, the presumption is that the bill or 
 note is payable on demand. Michigan Ins. Co. v. Leavenworth, 30 Vt. 20. 
 In- the case of a note payable " when demanded," the statute of limitations be- 
 gins to run from the date of the note ; and there is no distinction between such 
 a note and one on demand. Kingsbury v. Butler, 4 Vt. 458.
 
 KELLEY V. IIEMMINGWAY. 13 
 
 " Against the 26th of December, 1819, or when the house John Mayficld has 
 undertaken to build for me is completed, I promise to pay," &c. Held, that by 
 tlic first clause the particB iiad fixed upon a certain time of payment, constituting 
 the iustrinncnt a promissory note. Goodloe v. Taylor, 3 Hawks, 458. Sec also 
 Stevens v. Blunt, 7 Mass. 240. 
 
 " For value received I promise to pay J. P., or bearer, $570, it being for 
 property I purchased of hiui in value at this date, as being payable as soon as 
 can be realized of the above amount for the said property I have this day pur- 
 chased of said P., which is to be paid in the course of the season now coming." 
 JleM, that tlie note was payal)le at all events, and within a certain time. Cota v. 
 I'uck, 7 Mot. 588. " We tiiink the meaning to be this : that the signer, for 
 value received in the purchase of jjroperty, promised to pay P. or bearer the 
 sum named as soon as the termination of the coming season, and sooner, if the 
 amount could be sooner realized out of the fund. Such reference to the sale of 
 the property, was not to fix the fund from which it was to be paid, but the time 
 of payment. The undertaking was absolute, and did not depend on the fund." 
 Ibid. Per Shaw, C. J. 
 
 A note payal)le " twenty-four after date " was held, in Conner v. Routh, 7 
 How. (Miss.) 176, not void for uncertainty, nor a note on demand, but payable 
 at some time after date. The note, with other evidence, was held admissible 
 to show that the time of payi^ent was intended to be twenty-four months from 
 date. 
 
 In Ubsdell v. Cunningham, 22 Mo. (1 Jones) 124, it was held that the follow- 
 ing were promissory^ notes : " Due U. & P. $100, to be paid over to them as 
 soon as collected at P., now in the hands of P., of that place ; " and " Due U. & 
 P. §34.63, for goods pm-chased of them while at P., to be paid as soon as col- 
 lected from my accounts at P." There are, however, no authorities cited in sup- 
 port of the decision, and it is very doubtful if any can be found, though it has 
 been held in England that it is suHiciently certain that the paper is made paya- 
 ble on the payment of money due for wages on shipboard from the Government. 
 Andiewsr. Franklin, 1 Stra. 24 ; livans i'. Underwood, 1 Wil. 262. The ground 
 taken ceeina to have been that the Government was certain to pay at some time. 
 
 In Ellis V. Mason, 7 Dowl. P. C. 598, the following was held a promissory 
 note: " John Mason, 14th February, 1836, borrowed of Marv Ann Mason, his 
 sister, the sum of £14, in cash, as per loan, in promise of payment of which I 
 am truly thaiil<^ful for; it shall never be forgoUen by me, John Mason, your af- 
 fectionate brother. £14." 
 
 No question wa- raised in this case as to the time of payment, and it may- 
 have been tacitly considered a promise to pay on demand. It would be diflicult 
 to sustain the case on any other hypothesis. 
 
 So a writing promising to pay " in such manner and proportion, and at such 
 time aiul place," as the payee shall require, is a promissory note ; being payable 
 in instalments, in effect on demand, at the election of the payee, (ioshen and 
 M. Turnpike v. Ilurtin, 9 Johns. 217 ; Washington Co. Mut. Ins. Co. r. Miller, 
 26 Vt. 77. 
 
 But if the writing is payable " by instalments for rent," without further quali- 
 fication, it has been held not to possess the requisites of a promissory note, in 
 not specifying a certain time ol payment. MoU'at v. Edwards, Car. & M. 16.
 
 14 FORM AND REQUISITES. 
 
 If, in this case, the time when the instalments were payable had been stipulated, 
 the instrument would probably have been held a promissory note, as the time of 
 payment would thus have been made certain. 
 
 See, also, respecting time of payment, Loring v. Gurney, 5 Pick. 15 ; Ho- 
 bart V. Dodge, 1 Fairf. 156 ; De Forest v. Frary, 6 Cowen, 151 ; Harrell v. 
 Marston, 7 Rob. La. 34 ; Salinas v. Wright, 11 Texas, 572 ; Clayton v. Goshng, 
 6 Barn. & C. 360; Ex parte Tootell, 4 Ves. 372. 
 
 In addition to the requisites to a valid promissory note or bill of exchange, 
 stated in the preceding cases and notes, the following are important : — 
 
 The amount must" be definite and certain. See Cushman v. Haynes, 20 Pick. 
 132 ; Philadelphia Bank v. Newkirk, 2 Miles, 442 ; Legro v. Staples, 16 Maine, 
 252 ; Jones v. Simpson, 2 Barn. & C. 318 ; Clark v. Percival, 2 Barn. & Ad. 660 ; 
 Smith V. Nightingale, 2 Stark. 375 ; Ayrey v. Fearnsides, 4 Mees. & W. 168. 
 
 There must be certainty as to the parties, as the maker of a note. Ferris v. 
 Bond, 4 Barn. & Aid. 679 ; Clason v. Bailey, 14 Johns. 484. The payee of a note 
 or bill when not payable to bearer. Storm v. Sterling, 3 El. & B. 832. The draw- 
 er and drawee of a bill, Peto v. Reynolds, 9 Exch. 410. 
 
 But the initials of the maker were held sufficient in Palmer v. Stephens, 1 
 Denio, 471. So of an indorser : Merchants' Bank v. Spicer, 6 Wend. 443. 
 
 The result of the cases upon the form and requisites of bills of exchange and 
 promissory notes, may be concisely stated thus : A bill of exchange is a written 
 and signed order or request, and a promissory note a written and signed promise, 
 for the payment to a person named, or to his order, or to bearer, of a di.finite 
 sum in money, that is, legal tender, without condition or contingency, and at a 
 definite time. And each should be dated, though this is not absolutely necessary. 
 Chitty, Bills, 148.
 
 WALLACE V. M'CONNELL. 15 
 
 MAKER'S LIABILITY. 
 
 William Wallace, Plaintiff in Error, v. Corry M'Connell, 
 Defendant in Error. 
 
 (13 Peters, 136. Supremo Court of the United States, January, 1839.) 
 
 Note payable at particular place. No demand necessary upon maker. — In an action 
 against the maker of a note payable at a designated place, no demand need be 
 averred and proved ; if the maker was ready and offered, at the time and place, 
 to pay, it is a matter of defence to be pleaded and proved by him. 
 
 The case is stated in the opinion of the Court. 
 
 Thompson, J. This case comes up on a writ of error from the 
 District Court of the United States for the Southern District of 
 Alabama. 
 
 The action in the Court below was founded upon a note, which, 
 althoiigh under seal, is considered in Tennessee a promissory 
 note, and is in the words following : — 
 
 " Three years and two months after date, I promise to pay Corry 
 M'Connell or order, at the office of discount and deposit of the 
 Bank of the United States, at Nashville, four thousand eight hun- 
 dred and eighty dollars, ninety-nine cents, value received." The 
 declaration sets out this note according to its terms, and alleges 
 the promise- to pay at the office of discount and deposit of the 
 Bank of the United States, at Nashville, without averring that the 
 note was presented at the bank or demand of payment made there. 
 The defendant pleaded payment and satisfaction of the note ; and 
 issue being joined thereupon, the cause was continued until the next 
 term thereafter, at which time the defendant interposed a plea 
 puis darrein continuance, alleging that the plaintiff, as to the sum 
 $4204, part and parcel of the sum demanded in the declaration, 
 ought not further to have and maintain his action therefor against 
 him, because that sum had been attached by Blocker and Co., by 
 proceedings commenced by them against the plaiutifiF in this cause,
 
 16 maker's liability. 
 
 under the attachment law of Alabama, in which he was summoned 
 as garnishee ; and setting out the proceedings against him 
 according to the requirements of that law, and under which he 
 was examined on oath ; and did declare, that he executed the 
 note to the said M'Connell, the plaintiff in this cause, as set out 
 in the declaration ; that he had paid on the note $372.34, and that 
 the remainder of the said note was due by him to said M'Connell. 
 And the plea further sets out, that, under the proceedings on the 
 attachment, the Court had given judgment against him for 84204, 
 and costs ; but with a stay of all further proceedings until the 
 further disposition of tlie case, and which remains yet undeter- 
 mined. 
 
 To this plea the plaintiff demurred. And the Court sustained 
 the demurrer, and gave judgment for the plaintiff for $675.39, the 
 residue of the plaintiff's debt in his declaration mentioned, by 
 default ; and thereupon gave a final judgment for the plaintiff for 
 the full amount of the note, $4880, the debt aforesaid, and $394, 
 the interest assessed by the clerk together witli his cost. And the 
 plaintiff remits upon the record the sum of $351.28 ; and the 
 questions arising upon this record have been made and argued 
 under the following objections : — 
 
 1. That the declaration is bad for want of an averment that the 
 note was presented, and payment demanded at the office of dis- 
 count and deposit of the Bank of the United States, at Nashville. 
 
 2. That the matters pleaded of the proceedings under the at- 
 tachment laws of Alabama, were sufficient to bar the action, as to 
 the amount of the sum so attached ; and that the demurrer ought 
 therefore to have been overruled. 
 
 3. That the judgment by nil dicit, for the $676.39, was erro- 
 neous. 
 
 The question raised as to the sufficiency of the declaration in a 
 case where the suit is by the payee against the maker of a promis- 
 sory note, never has received the direct decision of tliis Court. In 
 the case of the Bank of the United States v. Smith, 11 "Wheat. 
 171, the note upon which the action was founded was made pay- 
 able at the office of discount and deposit of the Bank of the 
 United States, in the city of Washington ; and the suit was against 
 the indorser, and the question turned upon the sufficiency of the 
 averment in the declaration of a demand of payment of the 
 maker. And the Court said, when in the body of a note, the place
 
 WALLACE V. M'CONNRLL. 17 
 
 of payment is designated, the indorser has a right to presume that 
 the maker has provided funds at such place to pay the note ; and 
 has a right to require the holder to apply at such place for pay- 
 ment. In the opinion delivered in that case, the question now 
 presented in the case hefore us is stated ; and it said, whether 
 where the suit is against the maker of a promissory note, or the 
 acceptor of a bill of exchange, payable at a particular place, it is 
 necessary to aver a demand of payment at such place, and upon 
 the trial to prove such demand; is a question upon which con- 
 flicting opinions have been entertained in the courts in Westmin- 
 ster Hall. But that the question in such case may, perhaps, be 
 considered at rest in England, by the decision of the late case of 
 Rowe V. Young, 2 Brod. &, Bing. IGo, in the House of Lords ; 
 where it was held, that if a bill of exchange be accepted, payable 
 at a particular place, the declaration on such bill, against the 
 acceptor, must aver presentment at that place, and the averment 
 must be proved. But it is there said a contrary opinion has been 
 entertained by courts in this country ; that a demand on the 
 maker of a note, or the acceptor of a bill payable at a specified 
 place, need not be averred in the declaration or proved on the trial ; 
 that it is not a condition precedent to the plaintiff's right of re- 
 covery. As matter of practice, application will generally be made 
 at the place appointed, if it is believed that funds have been there 
 placed to meet the note or bill. But if the maker or acceptor has 
 sustained any loss by the omission of the holder to make such 
 application for payment, at the place appointed, it is matter of 
 defence to set up by plea and proof. But it is added, as this ques- 
 tion does not necessarily anse in this case, we do not mean to be 
 understood as expressing any decided opinion upon it, although 
 we are strongly inclined to think, that as against the maker of a 
 note or the acceptor of a bill, no averment or proof of a demand 
 of payment at the place designated would be necessary. The 
 question now before the Court cannot, certainly, be considered as 
 decided l)y the case of the Bank of the United States v. Smith, 11 
 Wheat. 171. But it cannot be viewed as the mere obiter opinion 
 of the judge who delivered the judgmenl of the court. The atten- 
 tion of the Court was drawn to the question now before the Court, 
 and the remarks made upon it, and the authorities referred to, 
 show that this Court was fully apprised of the conflicting opinions 
 of the English courts on the question ; and that opinions, contrary
 
 18 maker's liability. 
 
 to that of the House of Lords, in the case of Rowe v. Young, 2 
 Brod. ct Bing. 1G5, had been entertained by some of the courts 
 in this country ; and under this view of the question, the Court 
 say they are strongly inclined to adopt the American decisions. 
 As the precise question is now presented by this record, it becomes 
 necessary to dispose of it. 
 
 It is not deemed necessary to go into a critical examination of 
 the English authorities upon this point ; a reference to the case in 
 the House of Lords, which was decided in the year 1820, shows the 
 great diversity of opinion entertained by the English judges upon 
 this question. It was, however, decided that if a bill of exchange 
 is accepted, payable at a particular place, the declaration in an 
 action on such bill against the acceptor, must aver presentment 
 at that place, and the averment must be proved. The Lord Chan- 
 cellor, in stating the question, said this was a very fit question to 
 be brought before the House of Lords, because the state of the law, 
 as actually administered in the courts, is such, that it would be 
 infinitely better to settle it in any way than to permit so contro- 
 versial a state to exist any longer. That the Court of King's Bench 
 has been of late years in the habit of holding that such an accept- 
 ance as this is a general acceptance ; and that it is not necessary 
 to notice it as such in the declaration, or to prove presentment, 
 but that it must be considered as matter of defence ; and that the 
 defendant must state himself ready to pay at the place, and bring 
 the money into court, and so bar the action by proving the truth 
 of that defence. On the contrary, the Court of Common Pleas 
 was in the habit of holding, that an acceptance like this was a 
 qualified acceptance, and that the contract of the acceptor was to 
 pay at the place ; and that as matter of pleading a presentment at 
 the place stipulated must be averred, and that evidence must be 
 given to sustain that averment ; and that the holder of the bill has 
 no cause of action unless such demand has been made. In that 
 case the opinion of the twelve judges was taken and laid before 
 the House of Lords, and will be found reported in an appendix to 
 the report of the case of Rowe v. Young, 2 Brod. & Bing. 180. 
 In which opinions all the cases are referred to in which the ques- 
 tion had been drawn into discussion ; and the result appears to 
 have been, that eight judges out of the twelve sustained the doc- 
 trine of the King's Bench on this question, notwithstanding which 
 the judgment was reversed.
 
 WALLACE V. M'CONNELL. , 19 
 
 It is fairly to be inferred from an act of parliament passed 
 immediately thereafter, 1 A: 2 Geo. IV. c. 7H, that this decision 
 was not satisfactory. By that act, it is declared that " after the 
 1st of Augnst, 1821, if any person shall accept a bill of exchange 
 payable at the house of a banker or other place, without further 
 expression in his acceptance, such acceptance shall be deemed and 
 taken to be, to all intents and purposes, a general acceptance of such 
 bill. But if the acceptor shall, in his acceptance, express that he 
 accepts the bill payable at a banker's bous6 or other place only, 
 and not otherwise or elsewhere ; such acceptance shall be a qual- 
 ified acceptance of such bill ; and tiie acceptor shall not be liable 
 to i)ay the bill except in default of j)ayment, when such payment 
 shall have been first duly demanded at such banker's house or 
 other place." Bayley on Bills, 200, note. 
 
 In most of the cases which have arisen in the English courts, 
 the suit has ))een against the acceptor of the bill, and in some 
 cases a distinction would seem to be made between such a case 
 and that of a note when the action is against the maker, and the 
 designated place is in the body of the note. But there can be no 
 solid grounds upon which such a distinction can rest. The 
 acceptor of a bill stands in the same relation to the drawee as the 
 maker of a note does to the payee ; and the acceptor is the princi- 
 pal debtor in the case of a bill, precisely like the maker of a note. 
 The liability of the acceptor grows out of, and is to be governed by, 
 the terms of his acceptance, and the liability of the maker of a note 
 grows out of, and is to be governed by, the terms of his note ; and 
 the place of payment can be of no more importance in the one 
 case than in the other. And in some of the cases where the 
 point was made, the action was against the maker of a promissory 
 note, and the place of payment designated in the body of the note. 
 The case of NichoUs v. Bowes, 2 Camp. 498, was one of that de- 
 scription, decided in the year 1810 ; and it was contended on the 
 trial, that the ])laintiff was bound to show that the note was pre- 
 sented at the banking house where it was made payable. But 
 Lord Elh'nhorovijh^ before whom the cause was tried, not only 
 decided that no such proof was necessary, but would not suffer 
 such evidence to be given ; although the counsel for the plaintiff 
 said he had a witness in court to prove the note was presented at 
 the banker's the day it became due ; his lordship alleging that he 
 was afraid to admit such evidence lest doubts should arise as to
 
 20 „ maker's liability. 
 
 its necessity. Aryi in the case of Wild v. Kennards, 1 Camp. 425, 
 note, Mr. Justice Bayle.y, in the year 1809, ruled that if a promis- 
 sory note is made payable at a particular place, in an action against 
 the maker, there is no necessity for proving that it was presented 
 there for payment. 
 
 The case of Sanderson v. Bowes, 14 East, 500, decided in the 
 King's Bench in the year 1811, is sometimes referred to as contain- 
 ing a different rule of construction of the same words when used 
 in the body of a promissory note, from that which is given to them 
 when used in the acceptance of a bill of exchange. But it may 
 be well questioned whether this use warrants any such conclusion. 
 That was an action on a promissory note by the bearer against the 
 maker. The note, as set out in the declaration, was a promise to 
 pay on demand at a specified place, and there was no averment 
 that a demand of payment had been made at the place designated. 
 To which declaration the defendant demurred ; and the counsel in 
 support of the demurrer referred to cases where the rule had been 
 applied to acceptances on bills of exchange ; but contended that 
 the rule did not apply to a promissory note, when the place is desig- 
 nated in the body of the note. Lord Ellenhorough ^ in the course 
 of the argument, in answer to some cases referred to by counsel, 
 observed : " Those are cases where money is to be paid, or some- 
 thing to be done at a particular time as well as place, therefore 
 the party (defendant) may readily make an averment, that he was 
 ready at the time and place to pay, and that the other party was 
 not ready to receive it ; but here the time of payment depends en- 
 tirely on the pleasure of the holder of the note." It is true Lord 
 Ellenhoro'ugh did not seem to place his opinion, in the ultimate 
 decision of the cause, upon this ground. But the other judges did 
 not allude to the distinction taken at the bar between that case 
 and the acceptance of a bill in like terms ; but placed their opin- 
 ions upon the terms of the note itself, being a promise to pay on 
 demand at a particular place. And there is certainly a manifest 
 distinction between a promise to pay on demand, at a given place, 
 and a promise to pay at a fixed time at such place. And it is 
 hardly to be presumed that Lord EUenhorong-h intended to rest 
 his judgment upon a distinction between a promissory note and a 
 bill of exchange, as both he and Mr. Justice Bayley had a very 
 short time before, in the cases of Nicholls v. Bowes, 2 Camp. 498, 
 and Wild v. Reunards, 1 Camp. 425, note, above referred to,
 
 WALLACE V. m'CONNELL. 21 
 
 applied the same rule of construction to jjroraissory notes where 
 the promise was contained in the body of the note. Where the 
 promise is to pay on demand at a particular place, there is no 
 cause of action until the demand is made, and the maker of the 
 note cannot discharge himself by an olTer of payment, tl* note 
 not being due until demanded. 
 
 Thus we see that until the late decision in the House of Lords in 
 the case of Rowe i\ Young, and the act of parliament passed 
 soon thereafter, this ([ucstion was in a very unsettled state in the 
 English courts ; and without undertaking to decide between those 
 conflicting opinions, it may be well to look at the light in which 
 this question has been viewed in the courts in this country. 
 
 This question came before the Supreme Court of the State of 
 New York, in the year 1809, in the case of Foden and Slater v. 
 Sharp, 4 Johns. 1S3, and the Court said the holder of a bill of 
 exchange need not show a demand of payment of the acceptor 
 any more than of the maker of a note. It is the business of the 
 acceptor to show that he was ready at the day and place appointed, 
 but that no one came to receive the money, and that he was always 
 ready afterwards to pay. This case shows that the acceptor of a 
 bill and the maker of a note were considered as standing on the 
 same footing with respect to a demand of payment at the place 
 designated. And in the case of Wolcott v. Van Santvoord, 17 
 Johns. 248, which came before the same court in the year 1819, 
 the same question arose. The action was against the acceptor of 
 a bill, payable five months after date at the Bank of Utica, and the 
 declaration contained no averment of a demand at the Bank of 
 Utica, and upon a demurrer to the declaration the Court gave 
 judgment for the plaintill". Chief Justice Spencer, in delivering 
 the opinion of the Court, observed, that the question had been 
 already decided in the case of Foden v. Sharp ; but considering 
 the great diversity of opinion among tlie judges in the English 
 courts on tiie question, he took occasion critically to review the 
 cases which had come before those courts, and shows very satis- 
 factorily that the weight of authority is in conformity to that 
 decision, and the demurrer was accordingly overruled ; and the 
 law in that State for the last thirty years has been considered as 
 settled upon this point. And although the action was against the 
 acceptor of a bill of exchange, it is very evident that this circum- 
 stance had no influence upon the decision ; for the Court say that
 
 22 maker's liability. 
 
 in this respect the acceptor stands in the same relation to the 
 payee as the maker of a note does to the indorsee. He is the 
 principal, and not a collateral debtor. 
 
 And in the case of Caldwell v. Cassady, 8 Cowen, 271, decided 
 in theieame court in the year 1828, the suit was upon a promissory 
 note payable sixty days after date at the Franklin Bank in New 
 York, and the note had not been presented or payment demanded 
 at the bank ; the Court said, this case has been already decided by 
 this court in the case of Wolcott v. Van Santvoort. And after 
 noticing some of the cases in the English courts, and alluding to 
 the confusion that seemed to exist there upon the question, they 
 add : " That whatever be the rule in other courts, the rule in this 
 court must be considered settled, that where a promissory note is 
 made payable at a particular place on a day certain, the holder of 
 the note is not bound to make a demand at the time and place by 
 way of a condition precedent to the bringing of an action against 
 the maker. But if the maker was ready to pay at the time and 
 place, he may plead it as he would plead a tender in bar of dam- 
 ages and costs by bringing the money into court." 
 
 It is not deemed necessary to notice very much at length the 
 various cases that have arisen in the American courts upon this 
 question ; but barely to refer to such as have fallen under the obser- 
 vation of the Court ; and we briefly state the point and the decision 
 thereupon ; and the result will show a uniform course of adjudi- 
 cation, that in actions on promissory notes against the maker, or 
 on bills of exchange, wiiere the suit is against the maker in the 
 one case, and acceptor in the other, and the note or bill made 
 payable at a specified time and place, it is not necessary to aver 
 in the declaration, or prove on the trial, that a demand of pay- 
 ment was made in order to maintain the action. But that if the 
 maker or acceptor was at the place at the time designated, and was 
 ready and offered to pay the money, it was matter of defence to be 
 pleaded and proved on his part. 
 
 The case of Watkins v. Crouch & Co., in the Court of Appeals 
 of Virginia, 5 Leigh, 522, was a suit against the maker and in- 
 dorser, jointly, as is the course in that State upon a promissory 
 note like the one in suit. The note was made payable at a speci- 
 fied time, at the Farmers' Bank, at Richmond, and the Court of 
 Appeals, in the year 1834, decided that it was not necessary to 
 aver and prove a presentation at the bank and demand of pay-
 
 WALLACE V. M'CONNELL. 23 
 
 meiit, in order to entitle the plaiutifTto recover against the maker ; 
 but tiiat it was necessary, in order to entitle him, to recover 
 against the indorser ; and th6 president of the Court went into a 
 very elaborate consideration of the decisions of the English courts 
 upon the question ; and to show that, upon common-law principles, 
 applicable to bonds, notes, and other contracts for the payment of 
 money, no previous demand was necessary in order to sustain the 
 action, but that a tender and readiness to pay must come by way 
 of defence from the defendant ; and that, looking upon the note 
 as commercial paper, the principles of the common law were 
 clearly against the necessity of such demand and proof, where the 
 time and place were specihed, though it would be otlierwise where 
 the place, but not the time, was specified ; a demand in such case 
 ought to be made ; and he examined the case of Sanderson v. 
 Bowes, to show that it turned upon that distinction', the note being 
 payable on demand at a specified place. The same doctrine was 
 held by the Court of Appeals of Maryland, in the case of Bowie v. 
 Duvall, 1 Gill & Johnson, 175 ; and the New York cases, as well 
 as that of the Bank of the United States v. Smith, 11 Wheat. 171, 
 are cited with approbation, and fully adopted : and tiie Court put 
 the case upon the broad ground that, when the suit is against the 
 maker of a promissory note, payable at a specified time and place, 
 no demand is necessary to be averred, upon the principle that the 
 money to be paid is a debt from the defendant, that it is due gen- 
 erally and universally, and will continue due, though there be a 
 neglect on the part of the creditor to attend at the time and place 
 to receive or demand it. That it is matter of defence, on the 
 part of the defendant, to show that he was in attendance to pay, 
 but that the plaintiff was not there to receive it ; which defence 
 generally will be in bar of damages only, and not in bar of the 
 debt. The case of Ruggles v. Patten, 8 Mass. 480, sanctions the 
 same rule of construction. The action was on a promissory note 
 for the payment of money, at a day and place specified ; and the 
 defendant pleaded that he was present at the time and place, and 
 ready and willing to pay, according to the tenor of his promises, in 
 the second count of the declaration mentioned, and avers that tlie 
 plaintifTwas not then ready or present at the bank to receive pay- 
 ment, and did not demand the same of the defendant, as the jilaiii- 
 tiff in his declaration had alleged ; the Court said this was an 
 immaterial issue, and no bar to an action or promise to pay money.
 
 24 maker's liability. 
 
 So, also, in the State of New Jersey, the same rule is adopted. In 
 the case of Weed v. Van Houten, 4 Halst. (N.J.) 189, the Chief Jus- 
 tice says : " Tlie question is, whether, in an action by the payee of a 
 promissory note, payable at a particular place, and not on demand, 
 but at time, it is necessary to aver a presentment of the note and 
 demand of payment by the holder at that place, at the maturity of 
 the note." And, upon this question, he says : " I have no hesita- 
 tion in expressing my entire concurrence in the American decisions, 
 so far as is necessary for the present occasion ; that a special 
 averment of presentment at the place is not necessary to the validity 
 of the declaration, nor is proof of it necessary upon the trial. This 
 rule, I am satisfied, is most conformable to sound reason, most 
 conducive to public convenience, best supported by the general 
 principles and doctrines of the law, and most assimilated to the deci- 
 sions, which bear analogy more or less directly to the subject." 
 
 The same rule has been fully established by the Supreme Court 
 of Tennessee, in the cases of M'Nairy v. Bell, and Mulherrin v. 
 Hannum, 1 Yerg. 502, and 2 Yerg. 81, and the rule sustained 
 and enforced upon the same principles and course of reasoning 
 upon which the other cases referred to have been placed. And no 
 case, in an American court, has fallen under our notice, where a 
 contrary doctrine has been asserted and maintained. And it is to 
 be observed, that most of the cases which have arisen in this country, 
 where this question has been drawn into discussion, were upon 
 promissory notes, where the place of payment was, of course, in the 
 body of the note. After such a uniform course of decisions for at 
 least thirty years, it would be inexpedient to change the rule, even 
 if the grounds upon which it was originally establislied, might be 
 questionable ; which, however, we do not mean to intimate. It is 
 of the utmost importance that all rules relating to commercial law 
 should be stable and uniform. They are adopted for practical pur- 
 poses, to regulate the course of business in commercial transactions ; 
 and the rule here established is well calculated for the convenience 
 and safety of all parties. 
 
 The place of payment in a promissory note, or in an acceptance 
 of a bill of exchange, is always matter of arrangement between the 
 parties for their mutual accommodation, and may be stipulated in 
 any manner that may best suit their convenience. And, when a 
 note or bill is made payable at a bank, as is generally the case, it is 
 well known that, according to the usual course of business, the note
 
 WALLACE V. M'CONNELL. 25 
 
 or bill is lodged at the bank for collection ; and, if the maker or 
 acceptor calls to take it up when it falls due, it will be delivered 
 to him, and the business is closed, IJut, should he not find his 
 note or l)ill at the bank, he can deposit his money to meet the note 
 when presented ; and should he be afterwards prosecuted, he would 
 be exonerated from all costs and damages, upon proving such ten- 
 der and deposit. Or, should the note or bill l)e made payable at 
 some place other than a bank, and no deposit could be made, or he 
 should choose to retain his money in his own possession, an offer 
 to pay at the time and place, would protect him against interest 
 and costs, on bringing the money into court ; so that no practical 
 inconvenience or hazard can result from the establishment of this 
 rule, to the maker or acceptor. But, on the other hand, if a pre- 
 sentment of the note and demand of payment at the time and place, 
 are indispensable to the right of action, the holder might hazard the 
 entire loss of his whole debt. 
 
 See note to Xewhall v. Clark, j^ost ; Taylor v. Snyder, and Chicopee Bank v. 
 Philadelphia Bank, and note, post, as to the rule respecting indorsers of paper 
 payable at a place designated. 
 
 DRAWER'S LIABILITY. 
 
 The liability of the drawer of a bill of exchange being in 
 general that of an indorser, the subject will not be separately 
 introduced here. Tlie cases and notes will be found under Pre- 
 seulniciit fur Acceptance, and ruocEEUiNGS upon Non-Payment, 
 post.
 
 26 ACCEPTANCE. 
 
 ACCEPTANCE. 
 
 S. & M. Allen v. Suydam and Boyd. 
 
 (20 Wendell, 321. Court of Errors of New York, December, 1838.) 
 
 Agent's duty to present for acceptance. — An agent who receives a bill of exchange, pay- 
 able after date, for collection, which has not been accepted, is bound to present the 
 same for acceptance without unreasonable delay, or he will be liable to his prin- 
 cipal for the damages which the latter may sustain by the agent's negligence- In 
 case the debt is lost by the agent's negligence, the measure of damages is prima 
 facie the amount of the bill ; but evidence of facts may be produced tending to 
 reduce the recovery to a nominal sum. 
 
 Action on the case against S. <fe M. Allen for negligence in omit- 
 ting for seventeen days to present for acceptance a bill of ex- 
 change sent them by Suydam and Boyd for collection, and 
 payable two months after date. 
 
 By the Chancellor. Two questions of importance to the com- 
 mercial community are presented for oar consideration and decision 
 in this cause : 1. Whether an agent, or broker, who receives for 
 collection a draft or bill of exchange payable at a particular day, 
 or a certain number of days after its date, is under any obliga- 
 tion to present the same to the drawee for acceptance immediately, 
 and before the time when the draft is due and payable ? And, 
 2. If he is, whether the person who has given him such draft 
 or bill for collection, can, in case of his neglect to present the 
 same before tlie day of payment, recover the whole amount due 
 thereon, with interest ; although the owner has not, in fact, sus- 
 tained damage to that extent, by the neglect of his broker or 
 agent to present the bill for acceptance without any unnecessary 
 delay ? 
 
 A bill payable at sight, or a certain number of days after sight, 
 must be presented for acceptance and payment, or for acceptance 
 only, without unreasonable delay, or the drawer and indorsers will 
 be discharged, for they have an interest in having the bill accepted 
 immediately, in order to shorten the time of payment, and thus to
 
 ALLEN V. SUYDAM. 27 
 
 put a limit to the period of their liahility ; and also, to enahle 
 them to protect themselves by other means, before it is too late, if 
 the bill is not accejjted and paid within the time originally contem- 
 plated by them. But in relation to a bill payable at a day certain^ 
 as at a fixed time after its date, it is perfectly well settled, not 
 only in this country and in England, but also in Scotland and in 
 France, that the drawer or indorser of the bill is not discharged 
 by the neglect of the holder to present the same for acceptance 
 immediately, or until the time when it becomes due and payaljle. 
 If, however, such a bill is actually presented for acceptance, and is 
 dishonored before it becomes due, notice of such dishonor must Ije 
 given to the drawer or indorser without delay, or he will be dis- 
 charged. 3 Kent, Comra. 2d ed. 82 ; Townsley v. Sumrall, 2 
 Peters, U. S. 170; Goodall v. Dollcy, 1 Term, 712; Bayley on 
 Bills, 21!2 ; Glen, 109 ; Byles, 102 ; Evans, 80 ; Muir, 22 ; 2 Par- 
 dessus, No. 358, p. 417, 2d Paris ed. All the writers agree, 
 however, that the owner of the bill has an interest in having it 
 presented for acceptance without delay, although such present- 
 ment is not necessary in the case of a bill payable on a day certain, 
 to enable him to retain his claim against the drawer or indorser of 
 such bill ; and that if the ai>-rnt who has been intrusted with the 
 bill for the purpose of getting it accepted and paid, or accepted 
 only, neglects to comply with the direction of the owner, to get 
 the bill accepted without any unnecessary delay, he will be liable 
 to the owner for the damage which the latter has sustained by 
 such negligence. Pardessus says that the right to require an 
 acceptance in such a case, is one which the holder of the bill may 
 use or not, as he thinks proper, but that it is certainly an advan- 
 tage to him to demand such acceptance ; for if the drawer is in 
 credit, the drawee will probably accept, and the holder will thus 
 obtain an additional security for his debt ; whereas, if he delays 
 to present the bill for accoj)tance until it becomes due, and the 
 drawer fails in the mean time, the drawee may then refuse to 
 accept ; and he mii^ht have added, for such is the rule of the 
 French law on the subject, that if the bill was protested for non- 
 acceptance before it became due, the holder would then have been 
 entitled to demand, both of the drawer and of the indorsers, 
 security for the payment of the bill when it should become due, 
 or for reimbursement, with the expenses of protest and re-exchange. 
 Pardessus also says that the bearer of the bill may hold it as a
 
 28 ACCEPTANCE. 
 
 mere agent, to do what is necessary for the interest of his prin- 
 cipal ; in which case, he ought to act according to the express or 
 implied duties which are derived from his relation to such princi- 
 pal ; and among the duties whicli his situation imposes upon the 
 agent, is that of presenting the bill for acceptance whenever the 
 law or prudence imposes such an obligation on him. 2 Pard. 
 No. 358, pp. 417, 420 ; No. 583, p. GG9. It was upon this ground 
 that the case of The Bank of Scotland v. Hamilton, referred to in 
 a note to Bell's Commentaries, and also in Cliitty on Bills, was 
 decided. And Glen, who also has a brief note of that case, states, 
 as exceptions to the rule, that it is not necessary to present a bill, 
 payable at a time certain, for acceptance, before it becomes due; 
 the case of a direction to the payee or holder of the bill to present 
 it immediately ; and the case of a bill sent to an agent for negotia- 
 tion. Glen on Bills, 109. 
 
 The counsel for the plaintiffs in error, however, attempted to 
 take the case out of this last exception to the general rule, on the 
 ground that these agents only received the bill for collection, and 
 that they received no instructions to present it for acceptance 
 before it came due. I infer, however, from the note of the case of 
 The Bank of Scotland v. Hamilton, as given by Glen, that the 
 present case cannot be distinguished from that in this respect. 
 For it there appears that the bill then in question was finally pre- 
 sented for acceptance on the evening of the fourth day from its 
 date, after the drawer had failed, and then only in consequence of 
 a letter from Dunlop, who had sent the bill to the agents in Glas- 
 gow three days before. From that statement of the case, I think 
 we may fairly presume there were no special directions to the 
 agents to present the bill for acceptance when it was originally 
 sent to them for collection, especially as it had but four days to 
 run when it was originally discounted by Dunlop. On this subject, 
 Pothier says, in regard to the indorsement of a bill by the owner 
 thereof to another, as a mere agent to receive the amount due 
 thereon for the indorser and as his proxy : " The contract which 
 such an indorsement implies, and which it makes between the 
 indorser and the person to whom he makes his order, is a contract 
 of agency, and creates the ordinary obligations of an agent ; and 
 consequently, he to whom the order is given is liable in the char- 
 acter of an agent, as regards his indorser, the owner of the bill, to 
 obtain acceptance if it has not already been accepted, and to go
 
 ALLEN V. SUYDAM. 29 
 
 when the bill becomes due to receive payment thereof, and remit 
 him the amount ; and also in default of acceptance or of payment, 
 to make the protests, i^c, which are necessary in such cases, and 
 the indorser on his part is bound to make good the whole of the 
 expenses which have been incurred therefor by the indorsee." 
 Poth. Traite Du Cont. DcChange, c. 4, No. H2. Again : " The 
 bearer of the bill, where he is merely the agent of the owner, 
 ought to present it as soon as possible to the drawee to have it 
 accepted. It is very important to have it accepted, as it is only by 
 accepting it that the drawee becomes bound to pay it. Without 
 such acceptance, the owner of the bill has for his debtor only the 
 drawer of the 1)111, to whom he has paid its value. Therefore, if 
 the drawer should happen to fail, the bearer of the bill who had 
 neglected to present it for acceptance would be liable to damages, 
 if it was his fault, in favor of the owner of the bill for whom he 
 was agent." Id. No. 128. The principles thus laid down by 
 Pothier are recognized by Beawes and Paley as sound and correct, 
 in relation to the duties and liabilities of agents who are employed 
 in negotiating or collecting f5ifls of exchange ; and I can see no 
 good reason why they should not be applied to the case now under 
 consideration. If the receiving a bill by an agent, to collect, 
 implies an obligation on his part to take the necessary steps to 
 charge the drawer and indorsers, by protest and notices, in case it 
 is not accepted and paid by the drawee, I do not see why due dili- 
 gence on the part of the agent, in procuring the acceptance of the 
 draw^ee without delay, when it may be necessary or beneficial to 
 the interests of the principal, should not also be implied, as it is 
 the duty of a faithful agent to do for his principal whatever the 
 principal himself Avould probably have done if he was a discreet 
 and prudent man. Even where the principal is habitually negli- 
 gent in attending to his own interests, it forms no excuse for 
 similar negligence on the part of his agent. The fact, therefore, 
 that the bill in this case was not put into the hands of the agents 
 for collection until some time after it bore date, was no legal 
 excuse for their negligence in not sending it on for acceptance and 
 payment without unnecessary delay. For these reasons, I agree 
 with the Court below, that the Aliens were legally liable to the 
 owners of this bill for the damages, if any, which the latter 
 sustained by the non-presentment of the bill to the drawee for 
 acceptance previous to the time it became due.
 
 30 ACCEPTANCE. 
 
 In relation to the amount of damages, however, I think the 
 charge of the judge, who tried the cause, was clearly wrong ; and 
 that it has unquestionably produced great injustice in this case. 
 As we have before seen, the relation between the drawer or 
 indorser of the bill and the person to whom it is transferred for 
 the mere purpose of negotiation or collection, is not the relation 
 of indorser and indorsee, so as to throw the loss of the whole 
 amount of the bill upon the latter, if he neglects to present the 
 same for acceptance and payment in time, or to give notice of its 
 dishonor to the indorser, as required by law. Nor will the pay- 
 ment of the damages, by the agent, have the effect to subrogate 
 him to all the rights and remedies of the person from whom he 
 received the bill, as against other parties who may be liable for the 
 payment thereof; but it is a mere contract of agency, which leaves 
 the indorser to all his rights and remedies for the recovery of his 
 debt as against other parties, and only renders the indorsee liable 
 as agent for the actual or probable damages which his principal 
 has sustained in consequence of the negligence of such agent. 
 This principle was distinctly recd^ized by the Court of King's 
 Bench in England, in the case of Van Wart v. Woolley, 5 Dowl. 
 & Ryl. 374, where the plaintiff had not lost his remedy against 
 the drawers of the bill, or the persons from whom he received it, 
 by reason of the neglect of the agents to present it for acceptance 
 in due time ; the drawers of the bill in that case having drawn 
 without authority when they had no funds in the hands of the 
 drawees, and Irving & Co., who had sent the bill to the plaintiffs 
 in payment, not standing in the situation of indorsers of the bill, 
 as their names did not appear upon it. In that case, however, if 
 there had been any evidence to warrant the belief that the bill 
 would have been accepted if an immediate acceptance or rejection 
 of tbe bill by the drawees had been insisted on, according to the 
 decision in the case of The Bank of Scotland v. Hamilton, the loss 
 which had arisen from the neglect of the defendant in not pressing 
 for an acceptance, or in not giving due notice of the dishonor of 
 the bill immediately, if it could then probably have been collected 
 from the drawees, should have fallen upon Woolley & Co. instead 
 of Irving & Co., who had remitted the same to Van Wart ; and 
 tlie plaintiff would then have l^een permitted to recover whatever 
 damages had been sustained by such negligence, for the benefit of 
 Irving & Co. In that respect Irving & Co. stood in the same rela-
 
 ALLEN V. SUYDAM. 31 
 
 tive situation to Van Wart, as Dunlop did to tlie Bank of Scotland, 
 ill the case before referred to ; and Woolley Sc Co. occupied the 
 situation of Ilainiltoii ct Co., who were hpld lialjle in that case, in 
 exoneration of J)uiil<)|t\s liability. The only difference in principle 
 which I can see Itetween the two cases is, that in the Scotch case 
 it was evident that the bill would probably have been accepted and 
 saved, if it had been presented for acceptance on Saturday, when 
 it was received by the agent in Glasgow, instead of being kept 
 back until Tuesday evening, when news of the drawers' failure 
 had reached that place ; and therefore, to exonerate Dunlop, who 
 remitted the bill, the agents in Glasgow were very properly ciiarged 
 Avith the amount of the bill, the whole of which had been lost 
 through their negligence, except the small amount of dividend 
 wliich the bank would be entitled to out of the drawers' estate 
 under the commission of bankruptcy against him ; whereas, in the 
 case of Van Wart /•. Woolley, there was no reason to believe that 
 the Ijill would have been accepted if the agent had insisted upon 
 an answer immediately, and there was as little j)rol»ability that 
 any thing would have been obtained from the drawers if Van AVart 
 or Irving & Co. had received notice of the di>honor of the bill 
 immediately after it was received by the agent in London. In the 
 latter case, therefore, the damage which either Van Wart or those 
 who had transmitted him the bill in payment had sustained, was 
 merely nominal. Besides, the Supreme Court of this State having 
 decided, that neither the drawers nor Irving & Co. were discharged 
 from their liability to the idaintitf by this neglect of his agent, 
 neither of them, in fact, having been injured by such neglect, the 
 plaintiff upon the second trial was of course only held to be 
 entitled to such damages as he had sustained, and which were 
 noiniiial only. If the rule laid down by the judge who tried the 
 j)reseiit case was correct, that the princij>al was entitled to recover 
 the whole amount of the bill and interest, because there was no 
 other evidence to enable the jury to discover what the damage was, 
 then the plaintitV in the case of Van Wart /'. Woolley should have 
 been permitted to retain his verdict upon the lirst trial ; as it did 
 not then appear whether he could actually succeed in collecting 
 the money, either from the drawers of the bill, or from Irving & 
 Co. ; neither did it then appear whether by the laws of this S'tate, 
 where they resided, they were not actually discharged from liability, 
 so that no judgment could be recovered against them, in conse-
 
 32 ACCEPTANCE. 
 
 quence of the negligence of the agent. The granting of the new 
 trial in that case, therefore, proceeded upon the principle that the 
 agent was not liable for the whole amount of the bill, unless 
 damages to that extent had been sustained by his neglect, and 
 that to recover damages to that extent it was 'incumbent upon the 
 party claiming, to give sufficient evidence to satisfy the Court and 
 jury that it was at least probable that he had sustained damages to 
 that amount. Neither the Scotch or the English case, therefore, 
 is an authority to sustain the charge of the judge in relation to the 
 amount of damages in the present case ; on the contrary, the case 
 of Van Wart v. Woolley is a direct authority to show that the 
 agent ought not to be charged with the whole amount of the bill, 
 unless tliere is sufficient evidence to render it at least probable 
 that tlie whole amount of the debt would have been saved if the 
 agent had discharged the duty which his situation imposed upon 
 him. 
 
 Where there is a reasonable probability th.at the bill would have 
 been accepted and paid if the agent had done his duty ; or where, 
 by the negligence of the agent, the liability of a drawer or indorser 
 who was apparently able to pay the bill has been discharged, so 
 that the owner of the bill cannot legally recover against such 
 drawer or indorser, I admit the agent by whose negligence the 
 loss has occurred is prima facie liable for the whole amount 
 thereof, with interest, as damages ; unless he is able to satisfy the 
 Court and jury that tha whole amount of the bill has not been 
 actually lost to the owner in consequence of such negligence. 
 The case under consideration, however, is one of a very diiferent 
 description. Here it is perfectly evident, from the testimony of 
 one of the drawees, that the draft would not have been accepted at 
 any time after it was received by the Aliens for collection, as the 
 drawees had received express directions from the drawer not to 
 accept ; nor would they have accepted it, even without such a 
 prohibition, unless they had previously been advised so to do by 
 the drawer. The fact, also, that tiie drawer's credit was not good 
 at the time this draft was received for collection, lie having suf- 
 fered his note to Boyd and Suydam to lie under protest for some 
 time, and the express directions given by him to the drawees not 
 to accept this draft, rendered it highly improbable that he would 
 liave paid the draft himself to save liis credit, if it had been sent 
 back protested at an earlier day. From the facts of the case,
 
 ALLEN V. SDYDAM. 33 
 
 tlicrcforc, I think thoro was no ground for supposing tliat the 
 owners had sustained any actual damage from the mistake of 
 the Aliens, in not sending on the bill for acceptance immediately 
 after they received it for collection in New York ; or that their 
 chance of obtaining* payment from the drawer was materially 
 impaired by the delay of the protest for a few days. Under the 
 circumstances of this case, therefore, I think the jury should have 
 been instructed that, upon the evidence, the plaintiffs were only 
 entitled to nominal damages ; or at least they should have been 
 told to (iiiil only such damages as they should, fi-om the evidence, 
 believe it jjrobable the plaintiflfs might have sustained by the delay 
 in presenting the draft for accci)taiice immediately ; for I do not 
 see how it is possible for any one to believe, or even to suppose it 
 probable from this evidence, that the whole amount of this draft 
 was in fact lost to the plaintiffs below, by the delay of the Aliens 
 in presenting it to the drawees, and giving notice of the dishonor 
 thereof immediately to the drawer, who never intended that it 
 should be accepted and paid. 
 
 For these reasons I am of opinion that the judgment of the 
 Court below should be reversed, and that a venire cle novo should 
 be awarded ; to the end that no more damages may be recovered 
 than such as a jury may believe it probable, from the evidence 
 adduced, that the plaintiffs may have sustained from the negligence 
 of their agcnte. 
 
 By Senator Verplanck.^ In this case the defendants in the 
 Court below were agents for collecting, for a commission, a draft 
 on another State, payable after date. What are the duties and 
 responsil)ilities of agents in regard to presenting such paper for 
 acceptance ? Legal authority, as well as commercial usage, has 
 long settled as a genei-al rule, that the holder of a bill of exchange, 
 payable at a specific time, is not obliged to present such bill for 
 acceptance in order to iiold the drawer or prior indorser. It is, 
 indeed, usual as well as prudent, to do so, both for the sake of the 
 added security a*nd better credit of the paper, and because in case 
 of refusal, recourse may be had immediately to the drawer. It is, 
 therefore, the duty of an agent for collection, to exert the cus- 
 tomary prudence, and present such paper for acceptance without 
 
 1 Tliis opinion is given as exceedingly interesting and able ; though that part of it 
 relating to the damages was not adopted. 
 
 3
 
 34 ACCEPTANCE. 
 
 delay, since, by neglect, his principal may either lose the drawee's 
 security, and the credit it gives, or else be prevented from malting 
 such inquiries and demands, or using such legal or precautionary 
 measures towards the drawer or other parties, as might tend to 
 secure his debt. Tiiis distinction was long ago stated by Pothier, 
 who points out the different obligations of him who holds a bill as 
 ail agent (" mandataire "), " who ought to present it for acceptance 
 as soon as possible ; " and those of him who holds as owner 
 (" lorsque le porteur est en meme temps le proprietaire "), who 
 may present it when he thinks fit. Contract du Ciiange, partie 
 1, c. 5, art. 128. This distinction was recognized in the English 
 elementary books (see earlier editions of Chitty on Bills, and 
 other writers there cited) as part of the general commercial law 
 of Europe, before any express judicial decision to that point. The 
 modern case of Van Wart v. Woolley, 5 Dowl. & Ryl. 374 ; 3 
 Barn. & Ores. 439, has sanctioned the principle judicially, by 
 deciding that the delay of an agent to give notice of non-acceptance 
 of bills, subjected him to damages, even when the drawer was not 
 discharged. The case of tiie Bank of Scotland v. Hamilton, cited 
 in 1 Bell's Commentary on the Laws of Scotland, 409, decided by 
 the Scotch Court of Sessions, is remarkable for its similarity to the 
 present case, and is entitled to the same authority with us, as it 
 receives in England (see Chitty on Bills, 300, who refers to that 
 case as an authority to this point), as well on adcount of the 
 general uniformity of the law of negotiable paper in the civilized 
 world, as because it is evident from the books that on this head 
 the Scotch law conforms to the English, and is much governed by 
 its usages and decisions. In that case, a bill payable at Glasgow, 
 three days after date, was sent to an agent at that city for collec- 
 tion. It is stated " that it is not customary for porteurs (bearers) 
 of bills at short dates to present them for acceptance." Before the 
 day of payment the drawer failed, and the Glasgow Bank refused 
 to accept. It was not clear whether the bank would have accepted 
 the draft if it had been immediately presented, for the bank had no 
 funds of the drawer, and the practice had been to make provisions 
 for such drafts at the day of payment. The action was against the 
 agents. " The Court held, that, as ag-ents, they were bound imme- 
 diately to present the bill for acceptance." 
 
 Thus, it seems to be the general commercial law of the civilized 
 ■world, that when a bill is payable at a day certain, the drawer and 
 indorser are not discharged if the bill is not presented until the
 
 ALLEN V. SUYDAM. 85 
 
 day of payment. Yet it is still the duty of the a^•entJor collection 
 to present the bill for acceptance without delay, and to give imme- 
 diate notice of refusal to accej)t. The reason of this, I take to be, 
 that the drawer, by fixing a day certain for payment, assumes the 
 responsibility of providing funds at that time, whatever may have 
 been his previous credit with the drawee. Again: an indorser 
 makes, as the phrase is, " a new bill on the same terms ; and 
 besides, he waives liis right of immediate acceptance, by not 
 enforcing it, but putting his bill into circulation without accept- 
 ance." Not so he who places a bill in his agent's hands for 
 collection. He makes no waiver or postponement of any of his 
 rights, l)ut looks directly to the means necessary or expedient for 
 his own security. In the present instance, the draft, which the 
 payees might have retained until the day of payment, had they 
 thought fit, was placed, directly upon receiving it, in the hands of 
 agents, who were to receive " a commission or compensation for 
 collecting the same." It was retained for seventeen days by the 
 agents, who could have forwarded it for acceptance the next day. 
 Nor after it had been refused acceptance did they again present it 
 for payment. In the delay of presentation for acceptance, there 
 was want of due diligence. The principle is familiar, that an 
 agent for pay is bound to use such means, care, skill, and pre- 
 caution, as are adequate to the due execution of his trust. He 
 must use the ordinary diligence of a skilful and prudent man in 
 such affairs. ' Now an early presentment for acceptance is an 
 obvious precaution which a prudent man of business would take, 
 to insure collection of a questionable draft. By this neglect or 
 delay, the payees were prevented from making those demands and 
 taking such immediate measures as to the drawer, on receipt of 
 notice of non-acceptance, as might possibly have secured the payees 
 in some way or other. At the late period at which they did receiye 
 such notice, they preferred looking to the responsibility of their 
 agents. These must be held responsible for the consequences of 
 their negligence to the amount of the damage so caused. Nor is 
 it a sufficient defence of the agents, that the bill would not have 
 been accepted if immediately presented, because the drawer had 
 directed that it should not be, nor that it was uncertain whether 
 the funds in the hands of the drawees were sufficient or not, to 
 meet the draft at the day fixed for payment. At and after the 
 time when the draft sliould have been presented, the drawer was 
 in business at New York, struggling for and obtaining credit, and
 
 36 ACCEPTANCE. 
 
 having the command of funds which he applied to pay other drafts 
 presented subsequently to the date, when, with due diligence, 
 notice of the non-acceptance of this bill would have been received. 
 Whatever might have been his first intention, it was not for a 
 court and jury to assume the broad presumption that an imme- 
 diate demand, upon return of the draft, with such other legal 
 measures as the state of business between the parties or other 
 circumstances might render advisable, would not have led to the 
 ultimate payment. As a mere conjectural inference from the 
 character and course of business of Eastabrook, as incidentally 
 presented in the evidence, I should think the probability rather 
 the other way, and that immediate and urgent measures might 
 perhaps have prevented loss. His death, and the consequent 
 insolvency of his estate, have left all this mere matter of con- 
 jecture ; but it is quite immaterial as to the question of the 
 agent's duty, and the right of action against him, though were it 
 distinctly in evidence either way, it might affect the measure of 
 damages. 
 
 Thus far, then, I think the law quite clear as to the rights of 
 holders of bills, and the duties of collecting agents ; but I have 
 had more hesitation as to the rule of damages. Is the plaintiff, in 
 similar cases, to be obliged to make out in evidence the precise 
 actual amount of the damage he sustained, and thus to give to the 
 party in fault all the numerous and great advantages of doubt, 
 uncertainty, and difficulty in the proof? Or are we to apply to 
 these cases the doctrine of laches in commercial paper, as between 
 the holder and other parties, and consider the agent as liaving 
 made the paper his own by his neglect ? Contradictory as these 
 rules are, they have yet each their share of authority, and are just 
 and wise when applied to other questions ; but I am not satisfied 
 with the equity in the commercial policy of either, when applied to 
 a collecting agency, and I have sought in the decisions for some 
 safer and more equitable doctrine on that head. 
 
 Considering the subject in regard to commercial policy, there is, 
 on one side, the vast amount of paper daily collected through our 
 banks, the great public necessity for giving every facility and 
 inducement to such collections, the serious drawback on those 
 facilities and inducements that would be occasioned, and the 
 opportunity of fraud afforded if worthless paper deposited for 
 collection can, whenever parties are discharged by the blunder
 
 ALLEN V. SUYDAM. 37 
 
 of a clerk, be saddled irrevocably on responsible a<j:ents and 
 "made their own " absolutely, and without allowing any defence 
 or nuli<i;atiun of danuigos. On the other band, the policy of hold- 
 ing sucii agents to strict accountability is e([ually clear. Our 
 whole system of negotiable paper, and its responsibilities, formed, 
 as it is, by long experience, and admirably adjusted to the varied 
 uses of commerce, rests upon the single princii)le of strict punc- 
 tuality in demands, j)resentments, and notices, as well as in pay- 
 ments. Now^ the policy and necessity of that punctuality, apply 
 with the same force to the agent of such paper that they do to the 
 principal. I can, therefore, find no sounder rule of damages, nor 
 one better protecting and reconciling all these claims of policy and 
 justice, than that pointed out by the decisions in a large class of 
 cases of agency, and by the analogy of the measure of damages in 
 trover. In those cases, the presumption is, in the first instance, 
 to the full nominal amount of the loss, as if appears on the face of 
 the transaction against the agent wanting in diligence, or the party 
 guilty of the tortious conversion. Thus, where an agent or factor 
 neglects to insure for his principal, according to order, he is held 
 responsible for the default, prima facie, to the total amount which 
 he ought to have covered by insurance. But at the same time he 
 is allowed to put himself in the place of the underwriter, and to 
 prove fraud, deviation, or any other defence which would have 
 been good, bad the insurance been made, or which would go to 
 show that nothing at all, or how much, was actually lost by the 
 neglect. Delaney v. Stoddart, 1 T. R. 22 ; Wallace v. Teimiir, 2 
 id. 18S ; Wel)ster /•. De Tastet, 7 id. 157. In the courts of this 
 State, lUmdle v. Moore, o Johns. Cas. 30. And in the courts of 
 the United States, Morris v. Summerl, 2 Wash. 203. See also 
 1 Phil, on Ins. r)21, and the cases there cited. So, too, in 
 actions against sheriffs, where those official public agents become 
 chargeable with the debt of another, by their own negligence or 
 misconduct. When the default is established, the amount due 
 the plaintiff in the original suit is the j/rima facie evidence of the 
 measure of damages. This presumjttion may be controlled or 
 rebutted, and the sheriff may give in evidence any fact, showing 
 cither that the party has not been aciually injured, or to a much 
 less amount. He may show, for instance, the insolvency of the 
 original debtor. But the burden of proof is upon him ; if lie 
 leaves the presumption uncontradicted, that establishes the meas-
 
 38 ACCEPTANCE. 
 
 ure of damages. This has been frequently ruled at our Circuits, 
 nor can I find that it has ever been questioned in our Supreme 
 Court, and is substantially recognized in Potter v. Lansing, 1 
 Johns. R. 215 ; Russell v. Turner, 7 id. 189. The Massachusetts 
 decisions are particularly full and express on this very point. 
 See 10 Mass. 470; 11 id. 89; ib. 188; 13 id. 187. Similar 
 decisions may be found in tlie reports of other States. So again 
 in trover. In Ingalls v. Lord (1 Cowen, 240), in trover for a 
 note, it was held, that the prima facie measure of damages was 
 the face of the note ; but that evidence might be given to reduce 
 the amount, by proving payment in part, or the insolvency of the 
 maker, or any other fact invalidating the note or lessening its value. 
 
 It is true, that Lord Tenterden^ in Van "Wart v. Woolley, above 
 cited, held that damages must be shown, and that the face of the 
 bill is not the conclusive measure ; but this I think is not in con- 
 tradiction to the view tliat I have taken. I therefore take the 
 cases before mentioned to point out the sound doctrine here. The 
 face of the bill is tlie prima facie measure of damages. These 
 may be reduced by any positive evidence proving the real damage 
 to be less ; but the burden of that proof must be upon the negli- 
 gent agent, and not on the party who suffers by his negligence. 
 Circumstances like those of the present case, may often render it 
 difficult or impossible for either party to prove or even to form a 
 probable estimate of tlie precise damages incurred by the agent's 
 neglect. In such cases, is it not just that those chances of loss 
 which must fall upon one or the other, should be thrown upon the 
 party in default, and not upon the innocent sufferer ? It was, 
 then, for the defendants here to show that the debt would not 
 have been paid had due diligence been used, or that there were 
 any other circumstances to diminish the actual damages below the 
 nominal amount. I do not see that this was done, and therefore 
 think that Chief Justice Jones was right in his charge : " That the 
 Court and jury having no knowledge what the amount of damages 
 was except from the proof of the amount of the draft, the jury 
 should fiitd for the plaintiffs for tlie amount of the draft, and 
 interest from the day it became due." 
 
 Perhaps the case was a hard one. So are many others that 
 arise under our law of negotiable paper, in consequence of laches 
 of parties. In all such instances, the hardship of the particular 
 case must yield to the necessity of adhering to some general rule
 
 ALLEN V. SUYDAM. 39 
 
 founded on broad considerations of public policy. I can find no 
 such rule safer or more conducive to commercial convenience, or 
 sanctioned by stronger authority, than tiie one 1 have stated. 
 
 If, however, we abandon this rule, the only alternative, in my 
 judgment, so far as authority governs, is to adopt the stricter doc- 
 trine of our Supreme Court, in Le Guen v. Gouverneur and Kem- 
 ble, 1 Johns. Cas. 4<;7, and affirmed in 1800, in this Court: '^ Tliat 
 where the property consists of credits, the agent whose breach of 
 orders causes damages, is bound to answer to the amount of the 
 credits, and the principal may al)andon to him." The only defence 
 distinctly recognized as valid in those doctrines, is that of fraud, 
 ♦ or some similar one going to invalidate the whole contract. 
 
 Upon this principle, the agents here would be held to have made 
 the paper their own by their default, if the plaintiffs below thought 
 fit to abandon it to them ; and this, perhaps, is the ground on 
 which the Superior Court rested their decision in this case ; the 
 reasons of which I regret that we have not before us. 
 
 Under tiie circumstances of the case, either this rule or that 
 which I have stated before, would affirm the judgments of the 
 courts below ; but I place my own vote for affirmance upon the 
 ground first stated, as being the most equitable, the most condu- 
 cive to public policy, and as supported by the analogy and autiiority 
 of many modem decisions. 
 
 Judgment reversed. 
 
 In the rule for judgment of reversal, the following entry was 
 made: "It is further ordered and adjudged, that an ag'ent who 
 receives a bill of exchange for roUvrtion which has not been 
 accepted, is bound to present the same for acceptance without 
 unreasonable delay, as well as to present the same for payment 
 when it becomes due, or he will be liable to his prineijjdl for the 
 damages which the latter sustains by such negligence." 
 
 The doctrine of this case is again held in the Court of Appeals in Walker v. 
 Bank of The State of New York, 9 N. Y. (5 Seld.) 582, decided in 185-1 ; and 
 upon the rulin<j respectinfj dama<xes seems just and reasoiiahle. But it is held 
 in Bank of Washington v. Triplett, I Peters, 25, (1828) in the case of a 
 bank to which a bill had been sent for collection, that a settled usage of the 
 bank, not to note the bill as dishonored, after calling on the drawer for accept- 
 ai^e, is a good defence against the charge of negligence. And it must be ad- 
 mitted that the language ol" Chief Justice Marshall is against the rule letjuiring 
 the agent to present such bills as the one in question for acceptance ; but no 
 authorities were before him, and the case was actually decided upon the ques- 
 tion of usage.
 
 40 ACCEPTANCE. . 
 
 With respect tp the time when bills payable at or after sight should be 
 presented for acceptance, the only rule, whether the bill be foreign or inland, 
 and whether payable at sight or so many days after sight, or in any other man- 
 ner, is, that they must be presented within a reasonable time ; and as the' drawer 
 may sustain a loss by the holder's keeping it any great length of time, it is ad- 
 visable in all cases to present it as soon as possible ; but he is not obliged to send 
 it by the first opportunity. (Shitty, Bills, 274 ; Story, Bills of Exchange, 
 § 231 ; Muilman v. D'Eguino, 2 H. Bl. 565. 
 
 In the case of a foreign bill, payable after sight, it is no laches to put it into 
 circulation before acceptance, and to keep it in circulation without acceptance, 
 as long as the convenience of the successive holders may require ; and it has 
 been even laid down that, if such a bill drawn at three days' sight were kept out 
 in that way for a year, this would not be laches. Chitty, Bills, 275 ; Story, 
 Bills of Exchange, § 231. So .in the case of a bill payable in India sixty days» 
 after sight, it would not necessarily be negligence to omit presenting it for accept- 
 ance for twenty-six days after its arrival ; but if, instead of putting it into cir- 
 culation, the holder were to lock it up for any length of time, this would be 
 laches. Muilman v. D'Eguino, 2 H. Bl. 5(35. 
 
 In this case, Eijre, C. J., said : " It is not necessary to lay down any new rule 
 as to bills of exchange payable at sight, or within a given time afterwards. ... 
 It would be a very serious and difficult thing to say that a person buying a for- 
 eign bill in the way these were bought, should be obliged to transmit it by the 
 first opportunity to the place of its destination. There would also be a great 
 difficulty in saying at what place such a bill should be presented. The courts 
 have been very cautious in fixing any time for presenting for acceptance an in- 
 land bill, payable at a certain period after sight, and it seems to me more neces- 
 sary to be cautious with respect to a foreign bill payable in that manner. I 
 think, indeed, the holder is bound to present the bill ii> a reasonable time." 
 
 Per Buller, J. " Due diligence is the only thing to be looked at, whether 
 the bill be foreign or inland. . . . But I think a rule may be thus laid down as 
 to laches, with regard to bills payable at sight, or a certain time after sight, 
 viz., tJtat they ouglit to he put into circulation ; and if a bill drawn at three 
 days' sight were kept out in that way for a year, I cannot say that there would 
 be laches ; but if, instead of putting it into circulation, the holder were to lock 
 it up for any length of time, I should say that he would be guilty of laches ; but 
 further than this no rule can be laid down." 
 
 A similar question as to laches arose in Goupy v. Harden, 7 Taunt. 159, in an 
 action upon a foreign bill payable thirty days after sight. Gibbs, C. J., said : 
 " The distinction is between bills payable at a certain number of days after date, 
 and bills payable at a certain number of days after sight. In the former the 
 holder is bound to use all due diligence, and to present such bill at its maturity ; 
 but in the latter case he has a right to put the bill into circulation before he pre- 
 sents it, and then, of course, it is uncertain when it will be presented to the 
 drawee. It is to the prejudice of the holder if he delays to do it, and he loses 
 his money and his interest." See also Straker v. (Jraham, 4 Mees. & W. 7il ; 
 Middleton Bank v. Morris, 28 Barb. 616 ; Mullick v. Radakisscn, 28 Eng. Law 
 & E4. 86; Mellish v. Rawdon, 9 Bing. 416; Fry v. Hill, 7 Taunt. 3'J7 ; Shute 
 V. Robins, Mood & M. 133; s. c, 3 Car. «& P. 80; Darbishire v. Parker, 6 East, 
 12; Chitty, Bills, 274-279. If there is a clear and determinate usage of trade
 
 SPEAR V. PRATT. 41 
 
 wlil'h ascertains and fixes a definite time within wliieh the presentment must be 
 mad"', the usage will .nrovern. Stury, Bills of Exehan^^e, § 231 ; Mellish v. 
 Rawdon, i» Hiiig 410. 
 
 The kuld'T uf an inland bill payable after j-ight, is not bound instantly to 
 transmit the bill for aceeptance ; he may put it into cireulation, and if he ilo not 
 circulate it, he may take a reasonable time to present it for acceptance ; and the 
 keepin<( it an entire day after he received it, and a delay to present tintil the 
 <burlh day a bill on Loudon, yiven within twenty miles of that city, is not unrea- 
 sonable. C^liitly, Hills, 27;»; Fry v. Hill, 7 Taunt. 'Ml; Ilarker i;. Anderson, 
 21 Wend. ;)72, and casts cited by the Court. 
 
 I Respecting the question, What is reasonable time, see Ilarker v. Ander.son, 
 21 Wend. 372, and Mohawk Bank v. Broderick, 13 Wend. 133. 
 
 Though there has been some conflict in England as to whether this is a ques- 
 tion of law or fact (see cases above cited), the rule has become pretty well set- 
 tled in this country, that the determination of the (juestion must depend on t'ue 
 particular circumstance of the case; that if the facts are found, it becomes ex- 
 clusively a question for the Court; if not, it is a mixed question of law and f.ut, 
 to be determined l)y the jury, under proper instructions from the Court. 
 
 The result of the cases upon this subject may be stated thus : — 
 
 1. Presentment fur acceptance, though always proper and advisable, is abso- 
 lutely necessary only in the case of bills payable on demand or (d or after si<jht ;. 
 and it should be made within a rcastjnable time. It is always the wisest course, 
 when practicable, to present the bill for acceptance before it is put into circula- 
 tion, though the law does not require this. 
 
 2. If a bill payable at a certain time aj'ler date is presented for acceptance. — 
 the advisable but not a necessary proceeding, — and the drawee refuses to ac- 
 cept, iuimcdiate notice should be given to the prior parties to charge them. But 
 in Pennsylvania, protest and notice of non-acce[)tauce in the case of foreign bills 
 is not necessary. Read v. Adams, 6 Serg. & R. 356 ; Brown v. Barry, 3 Da!l. 
 365 ; Clarke v. llussel, 3 Dall. 415. See Story, Bills of Exchange, § 273, note. 
 
 Spear and Patien v. Pratt. 
 
 (2 Hill, f>S2. Supreme Court of New York, May, 1842.) 
 
 What const it iilos arcf planer. — If the drawee of a bill of exchange write his name across 
 the face of tlie hill, tliis binds him as an acceptor ; and this too, tii()U_u:h tlie statute 
 requires accciUauce to lie in writintr, and signed by tlie aecci)tor or his agent. 
 
 The defendant, drawee of a bill of exchange, wrote his name 
 across the face of the bill. He was a resident of New York. The 
 question was wlictlicr he was bound as an accej)tor. 
 
 CowEN, J. Any words written by the drawee on a bill, not put- 
 ting a direct negative upon its request, as " accepted," " presented,"
 
 42 ACCEPTANCE. 
 
 " seen," the day of the months or a direction to a third person to 
 pay it, is prima facie a complete acceptance, by the law merchant. 
 Bayley on Bills, 163, Am. ed. of 1880, and the cases there cited. 
 Writing his name across the bill, as in this case, is a still clearer 
 indication of intent, and a very common mode of acceptance. This 
 is treated by the law merchant as a written acceptance, — a signing 
 by the drawee. " It may be," says Chitty, " merely l)y writing his 
 name at the bottom or across tlie bill ; " and he mentions this as 
 among the more usual modes of acceptance. Chitty on Bills, 320, 
 Am. ed. of 1839. 
 
 It is supposed that the rule has been altered by 1 Rev. St. 757, 
 2d ed. § 6. This requires the acceptance to be in ivriting, and 
 sig-ncd by the acceptor or his agent. The acceptance in question 
 was, as we have seen, declared by the law merchant to be both a 
 'writing- and signing. The statute contains no declaration that it 
 should be considered less. An indorsement must be in writing 
 and signed ; yet the name alone is constantly holden to satisfy the 
 requisition. No particular form of expression is necessary in any 
 contract. The customary import of a word, l)y reason of its appear- 
 ing in a particular place, and standing in a certain relation, is con- 
 sidered a written expression of intent quite as full and effectual as 
 if pains had been taken to throw it into the most labored periphrase. 
 It is said the revisers, in their note, refer to the French law as the 
 basis of the legislation which they recommended ; and that the 
 French law requires more than the drawee's name, — the word 
 accepted, at least. That may be so ; but it is enough for us to see 
 that both the terms and the spirit of the act may be satisfied short 
 of that word, and more in accordance with the settled forms of 
 commercial instruments in analogous cases. The whole purpose 
 was probably to obviate the inconveniences of the old law, which 
 gave effect to a parol acceptance. 
 
 New trial denied. 
 
 Verbal acceptance is valid in the absence of statute, if communicated to bim 
 who takes the bill, and he takes it on the credit of such acceptance. Fisher v. 
 Beckwith, 19 Vt. 31 ; Bank of Rutland v. Woodruff, 34 Vt. 89 ; Martin v. Ba- 
 con, 4 Const. 132 ; Spaulding v. Andrews, 48 Penn. State, 411 ; Ward v. Allen, 
 2 Met. 53; Williams v. Winans, 2 Green (N. J.), 339; Ontario Bank v. Worth- 
 ington, 12 Wend. 593; Rees v. Warwick, 2 Barn. & Aid. 11;]; C'rowell v. Van 
 Bibber, 18 La. An. 637 ; In re Agra, &c., Bank, Law Rep. 2 Ch. 391 ; Coolidge 
 V. Payson, infra, and note. 
 
 Where a corporation draws upon itself, or a partner draws on his firm for
 
 COOLIDGE V. PAYSON. 43 
 
 partnership purposes, or an individual on liimsclf, formal acceptance is unnec- 
 essary ; tlie act of drawing is deemed acceptance. Ilasey v. White Pigeon Su- 
 gar Co., 1 Doug. (Mich.) 19.3; Dougal v. Cowles, 5 Day, oil ; Cunningham v. 
 Wardwell, 3 Fairf. 4GG ; Marion, &c., II. Co. ». Hedge, 9 Ind. 163. 
 
 If the drawee's agent write an order on the bill to another to pay it, this is 
 an acce|)|(ince. Harper >;. West, 1 ('ranch, ('. ('. l'J2. 
 
 See further upon tin's .sid)jcct, Phillips v. Frost, 2'J Maine, 77 ; Brannin v. Hen- 
 derson, 12 B. Mon. 61, in wiiich the drawee had written upon the back of the 
 bill, " I will see the within paid eventually ; " Edson v. Fuller, 2 Foster, 183, in 
 which a parol promise " to settle," was proved ; Barnet v. Smith, 10 Foster, 256, 
 in which a check was pronounced ''good " by the cashier of the bank upon which 
 it was drawn. In all these cases the words in (juotation marks were held to con- 
 stitute acceptance. Scd qucere. See Powell i'. Jones, 1 Esp. 17. 
 
 It has even been held that tlie words " I will not accept this bill," written 
 on the draft, constitute a valid acceptance. Lumley v. Palmer, Cas. Temp. 
 Hardw., London ed. 74. But so paradoxical a ruling may well be questioned. 
 See Bailey on Bills, 1G4, note (2 Am. ed.), where it is said: "But by Lord, 
 Mansfield, in Peach v. Kay, . . . ' it was held by all the judges that an express 
 refusal to accept, written on the bill where the drawee apprised the party who 
 took it away what he had written, was no acceptance ; but if the drawee had in- 
 tended it as a surprise ujjon the party, and to make him consider it as an accept- 
 ance, they seemed to think it iiiight have been otherwise.'" See 1 Parsons, 
 Notes and Bills, 283. 
 
 CooLiDGE et al. V. Payson et al. 
 
 (2 Wheaton, GG. Supreme Court of the United States, February, 1817.) 
 
 Promise to accept. — A letter written within a reasonable time, before or after the date 
 of a bill of exchange, describing it in terms not to be mistaken, and i)romising to 
 accept it, is, if sliown to the person wlio afterwards takes the bill on the credit of 
 the letter, a virtual acceptance, binding the person who makes the promise ; and 
 this too though it was drawn in favor of a person who took it for a preexisting 
 debt. 
 
 The case is stifTiciently stated in the opinion of tlio Court. 
 
 Maiish.\ll, C. J. This suit was instituted by Payson Sc Co., as 
 indorsers of a bill of exchange, drawn by Cornthwaite and Cary, 
 payable to the order of John Randall, against Coolidge <fc Co. as 
 the acceptors. 
 
 At the trial the holders of the bill on which the name of John
 
 44 ACCEPTANCE. 
 
 Randall was ladorscd, olTered, for tlie purpose of proving the in- 
 dorsement, an affidavit made by one of the defendants in the cause, 
 in order to obtain a continuance, in which he referred to the bill in 
 terms which, tliey supposed, implied a knowledge on his part that 
 the plaintiffs were the rightful owners. The defendants jDbjected 
 to the bill's going to the jury without further proof of the indorse- 
 ment ; but the Court determined that it should go with the affida- 
 vit to the jury, who might be at liberty to infer from tlience that 
 the indorsement was made by Randall. To this opinion the coun- 
 sel for the defendants in the Circuit Court excepted, and this 
 Court is divided on the question wlicther the exception ought to be 
 sustained. 
 
 On the trial it appeared that Coolidge & Co. held the proceeds 
 of part of the cargo of the " fliram," claimed by Cornthwaite and 
 Gary, which had been captured and held as lawful prize. The 
 cargo had been acquitted in the District and Circuit Courts, but, 
 from the sentence of acquittal, tlie captors had appealed to this 
 Court. Pending the appeal Cornthv/aite & Co. transmitted to 
 Coolidge & Co. a bond of indemnity, executed at Baltimore with 
 scrolls in the place of seals, and drew on them for two thousand 
 seven hundred dollars. This i)ill w^as also payable to the order of 
 Randall, and indorsed by him to Payson & Co. It was presented 
 to Coolidge & Co. and protested for non-acceptance. After its pro- 
 test, Coolidge & Co. wrote to Cornthwaite and Cary a letter, in 
 which, after acknowledging the receipt of a letter from them, with 
 the bond of indemnity, they say, '• this bond, conformably to our 
 laws, is not executed as it ought to be ; but it may be otherwise in 
 your State. It will therefore be necessary to satisfy us tliat the 
 scroll is usual and legal with you instead of a seal. We notice no 
 seal to any of the signatures," " We shall write our friend Wil- 
 liams by this mail, and will state to him our ideas respecting the 
 bond, which he will probably determine. If Mr. W. feels satisfied 
 on this point, he will inform you, and in that case your draft for 
 two thousand dollars will be honored." 
 
 On the same day Coolidge & Co. addressed a letter to Mr. Wil- 
 liams, in which, after referring to him the question respecting 
 the legal oliligation of the scroll, they say, " you know the object 
 of the bond, and, of course, see the propriety of our having one, not 
 only legal, but signed by sureties of unquestionable responsibility, 
 respecting which we shall wholly rely on your judgment. You
 
 roOLIDGE y. PAYRON. 45 
 
 mention the last surely as l)eing rcspbnsihle ; wliat think you of 
 the others ? " 
 
 In his answer to this K'lter, Williams says, "I am assured, that 
 tlic l)ond transmitted in my last is sufficient for the purpose for which 
 it was ^iven, provided the parties possess the means ; and of the 
 last signer, I have no hc^sitation in expressinu; my firm heliSf of 
 his being able to meet the whole amount hims(df. Of Ihc j)rinci- 
 pals I cannot s[)eak with so much confidence, not being well ac- 
 quainted with their resources. Under all circumstances, I should 
 not feel inclined to withhold from them any portion of the funds 
 for which the bond was given." 
 
 On the day on which tiiis letter was written, Cornthwaite and 
 Gary called on Williams, to inquire wiielher he had satisfied 
 Coolidge & Co. respecting the bond. Williams stated the substance 
 of the letter he had written, and read to him a part of it. One of 
 the firm of Payson & Co. also called on him to make the same in- 
 quiry, to whom he gave the same information, and also read fiom 
 his letter book the letter he had written. 
 
 Two days after this, the bill in the declaration mentioned, was 
 drawn by Cornthwaite and Gary, and ])aid to Payson & Go. in part 
 of the protested bill of two thousand seven hundred dollars, by 
 whom it was presented to Coolidge & Co., who refused to accept 
 it, on which it was protested, and this action brought by the 
 holders. 
 
 On this testimony, the counsel for the defendants insisted that 
 the plaintiffs were not entitled to a verdict ; but the Court instructed 
 the jury, that if they were satisfied that Williams, on the applica- 
 tion of the plaintiffs, made after seeing the letter from Coolidge k 
 Go. to Cornthwaite and Gary, did declare that he was satisfied with 
 the \nnn\ referred to in that letter, as well with respect to its e.xecu- 
 tion, as to the sufficiency of tlie obligors to pay the same ; and that 
 the plaintiffs, u[)on the faith and credit of the said declaration, and 
 also of the letter to Cornthwaite and Gary, and without having 
 seen or known the contents of the letter from Coolidge k Co. to 
 AVilliamSjdid receive and take the bill in the declaration mentioned, 
 they were entitled to recover in the present action ; and that it was 
 no legal objection to such recovery that the promise to accept the 
 present bill was made to the drawers thereof, previous to the exist- 
 ence of such bill, or that the bill had been taken in part-payment 
 of a pre-existing debt, or that the said Williams, in making the
 
 46 ACCEPTANCE. 
 
 declarations aforesaid, did ^ceed the private instructions given to 
 him by Coolidge & Co. in their letter to him. 
 
 To this cliarge the defendants excepted ; a verdict was given for 
 the plaintifTs,- and judgment rendered thereon, which judgment is 
 now before this Court on a writ of error. 
 
 Tfie letter from Coolidge & Co. to Cornthwaite and Cary contains 
 no reference to their letter to Williams which might suggest the 
 necessity of seeing that letter, or of obtaining information respect- 
 ing its contents. Tliey refer Cornthwaite and Cary to Williams, 
 not for the instructions they had given him, but for his judgment 
 and decision on the bond of indemnity. Under such circumstances, 
 neither the drawers nor the holders of the bill could be required 
 to know, or could be affected by, the private instructions given to 
 Williams. It was enough for them, after seeing the letter from 
 Coolidge & Co. to Cornthwaite and Cary, to know that Williams 
 was satisfied with the execution of the bond and the sufficiency 
 of the obligors, and had informed Coolidge & Co. that he was so 
 satisfied. 
 
 This difficulty being removed, the question of law which arises 
 from the charge given by tlie Court to the jury is this : does a 
 promise to accept a bill amount to an acceptance to a person who 
 has taken it on the credit of that promise, although the promise 
 was made before the existence of the bill, and although it is drawn 
 in favor of a person who takes it for a pre-existing debt ? 
 
 In the case of Pillans and Rose v. Van Mierop and Hopkins, 3 
 Burr. 1663, the credit on which the bill was drawn was given be- 
 fore the promise to accept was made, and the promise was made 
 previous to the existence of the bill. Yet in that case after two 
 arguments, and much consideration, the Court of King's Bench 
 (all the judges being present and concurring in opinion) considered 
 the promise to accept as an acceptance. 
 
 Between this case and that under consideration of the Court, no 
 essential distinction is perceived. But it is contended, that the 
 authority of the case of Pillans and Rose v. Van Mierop and Hop- 
 kins is impaired by subsequent decisions. 
 
 In tiie case of Pierson v. Dunlop ct al., [2] Cowp. 571, the bill was- 
 drawn and presented before the conditional promise was made on 
 which the suit was instituted. Although, in that case, the holder 
 of the bill recovered as on an acceptance, it is supposed that the 
 principles laid down by Lord 3IansJield, in delivering his opinion,
 
 COOLIDGE V. PAYSON. 47 
 
 contradict those laid down in Pillan and Rose v. Van Mierop and 
 PIoj)kins. IIisl()rd.sliij)ol)Scrvcs, '• it lias Ijoen truly said, as a gen- 
 eral rule, that the mere answer of a merchant to the drawer of a 
 hill, saying, ' he will duly honor it,' is no acceptance, •unless accom- 
 panied with circumstanees which may induce a third person to take 
 the bill by indorsement; hut if there arc any such circumstances, 
 it may amount to an acceptance, though the answer be contained 
 in a letter to the drawer." 
 
 If the case of Pillans and Rose v. Van Mierop and Hopkins, had 
 been understood to lay down the broad })rinciple that a naked prom- 
 ise to accept, amounts to an acceptance, the case of Piersou v. 
 Dunlop certainly narrows that principle so far as to require addi- 
 tional circumstances proving that the person on whom the bill was 
 drawn, was bound by his promise, either because he had funds of 
 the drawer in his hands, or because his letter had given credit to 
 the bill, and induced a third person to take it. 
 
 It has been argued, that those circumstances to which Lord 
 3IansJir/d alludes, must be apparent on the face of the letter. But 
 the Court can perceive no reason for this opinion. It is neither 
 warranted by the words of Lord Mansfield, nor by the circum- 
 stances of the case in which he used them. " The mere answer of 
 a merchant to the drawer of a bill, saying "he will duly honor it, is 
 no acceptance unless accompanied with circumstances," &c. The 
 answer must be " accompanied with circumstances ; " but it is not 
 said that the answer must contain those circumstances. In the 
 case of Picrson v. Dunlop, the answer did not contain those cir- 
 cumstances. They were not found in the letter, but were entirely 
 extrinsic. Nor can the Court perceive any reason for distinguish- 
 ing l)etween circumstances which ajjjjcar in the letter containing 
 the promise, and those which are derived from otlier sources. The 
 great motive for construing a j)romise to accept, as an acce{)tance, 
 is, that it gives credit to the bill, and may induce a third person to 
 take it. If the letter be not shown, its contents, whatever they 
 may be, can give no credit to the bill ; and if it be shown, an abso- 
 lute promise to accept will give all the credit to the bill which a 
 full confidence that it will be accepted can give it. A conditional 
 promise becomes absolute when the condition is performed. 
 
 In the case of Mason v. Hunt, Dong. '2\){j, Lord Matis/ic/d said, 
 " there is no doubt but an agreement to accept may amount to an 
 acceptance ; and it may be couched, in such words as to put a third
 
 48 ACCEPTANCE. 
 
 person in a better condition than the drawee. If one man, to give 
 credit to another, makes ffn absolute promise to accept his bill, the 
 drawee, or any other person, may show such promise upon the ex- 
 change to get credit ; and a third person, who should advance his 
 money upon it, would have nothing to do with the equitable circum- 
 stances wliich migiit subsist between the drawer and acceptor." 
 
 What is it that " the drawer, or any other person, may show 
 upon tlic exchange?" It is the promise to accept, — the naked 
 promise. Tlie motive of this promise need not, and cannot be ex- 
 amined. The promise itself, when shown, gives the credit ; and 
 the merchant who makes it is bound by it. 
 
 The cases cited from Cowper and Douglas are, it is admitted, 
 cases in which the bill is not taken for a pre-existing debt, but is 
 purchased on the credit of the promise to accept. But in the case 
 of Pillans v. Van Mierop, the credit was given before the promise 
 was received or the bill drawn ; and in all cases the person who 
 receives such a bill in payment of a debt, will be prevented thereby 
 from taking other means to obtain the money due to him. Any in- 
 gredient of fraud would, unquestionably, affect the whole transac- 
 tion ; but the mere circumstance, tliat the bill was taken for a 
 pre-existing debt has not been thought sufficient to do away the 
 effect of a promise to accept. 
 
 In the case of Johnson and another v. Collins, 1 East, 98, Lord 
 Kenyan shows much dissatisfaction with the previous decisions ou 
 this subject ; but it is not believed that the judgment given in 
 that case would, even in England, change the law previously es- 
 tablished. In the case of Johnson v. Collins, the promise to accept 
 was in a letter to the drawer, and is not stated to have been shown 
 to the indorser. Consequently, the bill does not appear to have 
 been taken on the credit of that promise. It was a mere naked 
 promise, unaccompanied with circumstances which might give 
 credit to the bill. The counsel contended, that this naked promise 
 amounted to an acceptance ; but the Court determined otherwise. 
 In giving his opinion, Le Blanc, J., lays down the rule in the words 
 used by Lord 31ansficld, in the case of Pierson v. Dunlop ; and 
 Lord Kenyon said, that " this was carrying the doctrine of implied 
 acceptances to the utmost verge of the law ; and he doubted whether 
 it did not even go beyond it." In Clarke and others v. Cock, 4 
 East, 67, the judges again express their dissatisfaction with the 
 law as established, and their regret that any other act than a writ-
 
 COOLIDGE V. PAYSON. 49 
 
 ten acceptance on the bill had ever been deemed an acceptance. 
 Yet they do not undertake to overrul(v the decisions which they 
 disapprove. On the contrary, in that case, they unanimously de- 
 clared a letter to the drawer promising to accept a bill, which was 
 siiown to the person wiio held it, and took it on the credit of that 
 letter, to be a virtual acceptance. It is true, in the case of Clark 
 V. Cock, the bill was made before the promise was given, and the 
 judges, in their opinions, use some expressions which indicate a 
 distinction between bills drawn before and after the date of the 
 promise ; but no case has been decided on this distinction ; and in 
 Pillans and Rose v. Van Mierop and Hopkins, the letter was writ- 
 ten before the bill was drawn. 
 
 The Court can perceive no substantial reason for this distinction. 
 The prevailing inducement for considering a promise to accept, as 
 an acceptance, is that credit is tliereby given to the bill. Now, 
 this credit is given as entirely by a letter written before the date of 
 the bill as by one written afterwards. 
 
 It is of much importance to merchants that this question should 
 be at rest. Upon a review of the cases which are reported, this 
 Court is of opinion, that a letter written within a reasonable time 
 before or after the date of a bill of exchange, describing it in terms 
 not to be mistaken, and promising to accept it, is, if shown to the 
 person who afterwards takes the bill on the credit of the letter, a 
 virtual acceptance binding the person who makes the promise. 
 This is such a case. There is, therefore, no error in the judgment 
 of the Circuit Court, and it is affirmed with costs. 
 
 Judgment affirmed. 
 
 Tlie doctrine of tlic above case is re-affirmed in Schimmelpennich v. Bayard, 
 post, 64; Townsley r. Suiiiiall, 2 Peters, 170; Boyce v. Edwards, post, 52, and 
 Adams r. Jones, 12 Peters, 207, on the point respecting a promise to accept. 
 
 In Town^ley v. Sumrall, supra, the Court, Story, J., held that if the drawee 
 Lave no funds in his hands, and the fact is known to the party taking the bill, 
 and yet tlie inducement to take the bill is the promise of the drawee to accept 
 it, it constiiutes a valid contract between the parties, if there is a purchase of 
 the bill on the credit of such promise. 
 
 In McEvers i\ Ma^*on, 10 .Johns. 207, decided in 1813, three years prior to 
 the decijion in Coolidge v. Payson, the Court, Kent, C. J., drew the same dis- 
 tinction between the rights of one who has taken a bill on the faith of a promise 
 tp accept, and one who has not so taken it; and it was held that, as the indorsee 
 had taken the bill in entire ignorance of any such promise, he could not recover 
 from the defendants as implied acceptors. 
 
 • 4
 
 50 ACCEPTANCE. 
 
 Although doubts were expressed in this case whether an agreement to accept 
 a bill thereafter to be drawn would amount to an acceptance, or could be en- 
 forced by the indorsee, yet the law is now considered well settled in America, 
 that an agreement to accept is binding if the bill is drawn within a reasonable 
 time, and such agreement was made known to the indorsee, and the bill was in- 
 dorsed or negotiated on the credit of the acceptor. Per Bean/.sley, Senator, in 
 Greele v. Parker, 5 Wend. 414, citing Goodrich v. De Forest, 15 Johns. 6. In 
 Greele v. Parker, decided in 1830, Walworth, Chancellor, says: " It is a well 
 settled rule of the commercial law of this country, and of most of the nations of 
 Europe, except England, where it has recently been abolished by statute, that 
 an unconditional promise in writing to accept a bill of exchange, if made within 
 a reasonable time before or after the date of the bill, and describing the same in 
 terms not to be mistaken, is a virtual acceptance thereof, in favor of any person 
 to whom such promise has been shown, and who has received the bill for a valua- 
 ble consideration, on the faith of such promise." That a promise to accept a 
 non-existing bill constitutes an acceptance, see Steman v. Harrison, 42 Penn. 
 State, 49 ; Burns v. Rowland, 40 Barb. 368 ; Crowell v. Van Bibber, 18 La. An. 
 6:57 ; Bayard v. Lathy, 2 McLean, 462 ; Wilson v. Clements, 3 Mass. 1 ; Storer 
 V. Logan, 9 Mass. o5 ; Carnegie v. Morrison, 2 Met. 381; Murdock v. Mills, 11 
 ]\Iet. 5; Russell «. Wiggin, 2 Story, 213; Plummer r. Lyman, 49 Maine, 229, 
 and other authorities cited in this note. But it must be observed that in such a 
 case the promise must have been communicated to the indorsee, and that he 
 took the bill on the credit thereof. Chitty, Bills, 285. It has been held that 
 a promise to accept an existing bill may be sued upon as an acceptance, whether 
 the holder took it on the credit of the promise or not. Jones v. Bank of Iowa, 
 34 111. 313 ; Read v. Marsh, 5 B. Monr. 8. But this may be doubted ; and Ex- 
 change Bank of St. Louis v. Rice, 98 Mass. 288, is an ably considered case to 
 the contrary. 
 
 In Read v. Marsh, the Court say that " it seems to be now well settled that 
 a letter promising to accept or protect a bill, whether written before or after it 
 is drawn, may operate as an accej^tance, . . . although the holder has not been 
 induced by such letter or promise to take the bill,'' citing Chitty, 177. But the 
 text does not support this position ; and this is certainly not the law respecting 
 non-existing bills. In this case, the letter promising to accept, was written after 
 the bill had been drawn. 
 
 Frequent expressions of regret occur that the doctrine of virtual acceptances 
 of non-existing bills was ever advanced ; and in Wildes v. Savage, 2 Story, 22, 
 ^tory, J., it is held that the doctrine must be strictly confined to the case of bills 
 to be drawn payable on demand or after date, and never extends to those paya- 
 ble at or after sight. It is a little remarkable that he should say (p. 29), that 
 he has been unable to find a single case of that kind, when he himself de- 
 livered the opinion in Payson v. Coolidge, 2 Gall. 233, — the principal case in 
 the Court below; from the report of which, as given in 2 Gallison, it appears 
 th.it the bill in suit, and of which the defendants were there held as acceptors, 
 was payable at sight. No notice of the distinction drawn in Wildes v. Savage, 
 was taken either in the Court below, or on the appeal. 
 
 The question whether a parol promise to accept a non-existing bill is valid in 
 favor of an indorsee for value, who took the bill on the faith of such promise.
 
 COOLIDGE V. PAYSON. . 51 
 
 has several times come luffjro the courts of Englaiul and of this country. In 
 Miln V. Prost, 1 Holt, IHl (181G), it is held that a parol promise in such a casse 
 is as valid as if it were in writing; but tlie contrary doctrine is held in Bank of 
 Ireland v. Archer, 11 Mees. & Wels. 383 (1843). And rarke, li., in this case, 
 says that the report of ^liln v. Prest, in Holt, is inaccurate, and refers to 4 
 Camp. 393, for a correct version of it. The language of Parke, B., seems to 
 cover the case of a uviUcn, as well as of a parol promise to accept a non-existing 
 bill. This is sustained hy the opinion of eminent I-2nglish counsel in Russell v. 
 Wiggin, 2 Story, 21:5; and see C'hitty, Bills, 284-286. Mr. Chitty here re- 
 views the English cases, and considers it "at least questionable whether a third 
 person, who has taken a bill on the faith of such [written] promise, can treat 
 the promise as equivalent to an acceptance." But see /rare Agra, &c., Bank, Law 
 Rep. 2 Ch. Ap. ot)l (18G7), in which it is held that such third person may in 
 equity compel the party to a< cept who had promised to do so. 
 
 In Bank of ^Michigan v. Ely, 17 Wend. oOS, the Court, Xehou, C. J., say 
 that, previously to the statuie refjuiring acceptances to be in writing, it was set- 
 tled in that State that a parol promise to accept a future bill was not binding, 
 unless the bill was taken by the holcfer upon the faith and credit of such promise ; 
 citing Ontario Bank v. Worthington, 12 Wend. 503. The converse would seem 
 to follow from this, that if the holder did so take the bill, tlie parol promise 
 would be binding. To this elFect are Crowell v. Van Bibber, 18 La. An. G37 ; 
 Williams v. Winans, 2 Green (N. J.), 339. Contra, Kennedy v. Geddes, 8 Port. 
 (Ala.) 2(J3 ; Plummer v. Lyman, 49 Maine, 232. But the promise in the last 
 case came within the statute of frauds. 
 
 The doctrine being settled in this country, differently perhaps from that of 
 the courts of England, that a promise to accept a non-existing bill under the re- 
 strictions above mentioned, may be sued upon as an acceptance, there seems to 
 be no solid ground for the distinction between a written and a parol promise, 
 when not within the statute of frauds, except where the statute requires accept- 
 ance to be in writing, as in England and New York. The credit given to the 
 indorsee is that which gives the promise its binding force ; and the inducement to 
 take the bill may be as strong when the promise is in parol, as when it is writ- 
 ten. That the ordinary promise to accept is not within the statute of frauds, is 
 well settled. See Townsley v. Sumrall, 2 Peters, 170, and other eases, si(j>ra. 
 There were special circumstances in Plummer v. Lyman, supra, which brought 
 the promise within the statute. 
 
 If the drawee of a bill, drawn and indorsed for his acconmiodation, procure 
 the same to be discounted and promise to pay the bill at maturity, this consti- 
 tutes him an acceptor. Bank of Rutland v. Woodruff, 34 Vt. 89. 
 
 So if the drawee's agent write an order on the bill to another to pay it, this is 
 an acceptance of the original bill. Harper v. West, 1 Crauch, C C. 192.
 
 52 * « ACCEPTANCE. 
 
 BoYCE and Henry, Plaintiffs in Error, v. Timothy Edwards, 
 Defendant in Error. 
 
 (4 Peters, 111. Supreme Court of the United States, January, 1830.)' 
 
 Promise to cwcept. Bill must be pointed out. — In order to bind as acceptor one who has 
 promised to accept a non-existing bill, the particular bill must be pointed out and 
 described in terms not to be mistaken. 
 
 Distinction between an action upon a bill as an accepted bill, and one founded on a 
 breach of promise to accept. 
 
 The case is stated in the opinion of the Court. 
 
 Thompson, J. This was an action of assumpsit, brought in the 
 Circuit Court of the United States for the District of South Caro- 
 lina, upon two bills of exchange drawn by Adam Hutchinson, in 
 favor of Timothy Edwards, the plaintiff in the Court below, upon 
 Boyce and Henry, the defendants, both bearing date on the 8th of 
 February, 1827, the one for $2100 and the other for $2331, payable 
 sixty days after sight. 
 
 The cause was tried before the district judge ; and in the course 
 of the trial, several exceptions were taken on the part of the de- 
 fendants below to the admission of evidence, and the ruling of the 
 Court upon questions of law, all which are embraced in the charge 
 to the jury, to which a general bill of exceptions was taken ; and 
 the cause comes here upon a writ of error. 
 
 The bills of exchange were duly presented for acceptance, and 
 on refusal were protested for non-acceptance and non-payment ; but 
 the plaintiff sought to charge the defendants as acceptors, by virtue 
 of an alleged promise to accept before the bills were drawn. And 
 whether such liability was established by the evidence, is the main 
 question in the cause. The evidence principally relied upon for 
 this purpose consisted of two letters, the first as follows : " Charles- 
 ton, March 9, 1825. Mr. Edwards : Dear Sir, — Mr. Adam Hutch- 
 inson, of Augusta, is authorized to draw on us for the amount of 
 any lots of cotton which he may buy and ship to us, as soon after 
 as opportunity will offer ; such drafts shall be didy honored by 
 yours, respectfully, Boyce, Johnson, and Henry." 
 
 Johnson soon after died ; and on the 28th of the same month of 
 March, the defendants published a notice in the Charleston news- 
 papers, announcing a dissolution of the partnership by the death of
 
 BOYCE V. EDWARDS. 53 
 
 Johnson, and that the business would be conducted in future under 
 the firm of IJoyce and Henry. The other letter is from the defend- 
 ants, of the date of the 4th of January, 1827, addressed to Adam 
 Hutchinson, in which they say, " you are at liberty to draw on us 
 when you send the bill of lading. We do not put you on the foot- 
 ing of otiier customers, for we do not allow them to draw for more 
 than three-fourtiis in any instance. You may draw for the 
 amount," &c. 
 
 The defendants' counsel had objected to the admission of the 
 first letter from Boyce, Johnson, and Henry, and contended that 
 this did not bind Boyce and Henry to accept bills drawn on them 
 after the dissolution of the partnership was known, and desired 
 the Court so to instruct the jury. But the Court stated to the 
 jury, that the said letter in connection with the other evidence in 
 the cause was sufficient to charge the defendants as acce{)tors. 
 The other evidence referred to by the Court, as would appear from 
 other parts of the charge, was the letter of the 4th of January, 
 1827, the notice of the dissolution of the partnership, the accounts 
 rendered by the defendants, and the numerous bills, drawn and 
 accepted by them, all wliich had been given in evidence in tlie course 
 of the trial. 
 
 According to the view which we take of the instruction given by 
 the Court below at the trial, tliat the defendants, upon the evidence, 
 were liable as acceptors, it becomes very unimportant to decide 
 whether the letter of Boyce, Johnson, and Henry should have been 
 admitted or not. For we think, in point of law, there was a mis- 
 direction in this respect, even if the letter was properly admitted. 
 We should incline, however, to the opinion that this letter, at the 
 time when it was olTered and objected to, and standing alone, would 
 not be admissible evidence against the defendants. It was dated 
 nearly two years before the bills in question were drawn, and was 
 from a different firm. It was evidence between other and different 
 parties. A. contract alleged to have been made by Boyce and Henry, 
 could not be supported by evidence that the contract was made by 
 Boyce, Johnson, and Henry. It might be adniissil)le, connected 
 with otlier evidence showing that the authority had been renewed 
 and continued l)y the new firm, and in support of an action on a 
 promise to acc3pt bills drawn on the new firm. But that was not 
 the purpose for which it was received in evidence, or the effect 
 given to it by the Court in the part of the charge now under con-
 
 54 ACCEPTANCE. 
 
 sideration. It was declared to be sufficient, in connection with the 
 other evidence, to charge the defendants as acceptors. And in this 
 we think the Court erred. Had the letter been written by the de- 
 fendants themselves, it would not have been sufficient to charge 
 them as acceptors. 
 
 The rule on this subject is laid down with great precision by this 
 Court, in the case of Coolidge v. Payson, 2 W. 66 [ante, p. 43], 
 after much consideration and a careful review of the authorities : 
 " That a letter written within a reasonable time, before or after the 
 date of a bill of exchange, describing it in terms not to be mis- 
 taken, and promising to accept it, is, if shown to the person who 
 afterwards takes the billon the credit of the letter, a virtual accept- 
 ance, binding the person who makes the promise." This case 
 was decided in the year 1S17. Tlie same question again came 
 under consideration in the year 1828, in the case of Schimmel- 
 pennich et al. v. Bayard el al., 1 Peters, 264 [pos^, p. 64], and re- 
 ceived the particular attention of the Court, and the same rule 
 laid down and sanctioned ; and this rule we believe to be in per- 
 fect accordance with the doctrine that prevails both in the English 
 and American courts on this subject. At all events, we consider 
 it no longer an open question in this Court, and whenever the 
 holder of a bill seeks to charge the drawee as acceptor upon some 
 collateral or implied undertaking, he must bring himself within 
 the spirit of the rule laid down in Coolidge v. Payson, and we think 
 the present case is not brought within that rule. 
 
 With respect to the letter of the 9th of March, 1825, in addition 
 to the objection already mentioned, that it is not an authority to draw 
 emanating from the drawees of these bills, it bears date nearly two 
 years before the bills were drawn, and, what is conclusive against 
 its being considered an acceptance, is, that it has no reference what- 
 ever to these particular bills, but is a general authority to draw at 
 any time, and to any amount, upon lots of cotton shipped to them. 
 This does not describe any particular bills in terms not to be mis- 
 taken. 
 
 The rule laid down in Coolidge v. Payson, requires the authority 
 to be pointed at the specific bill or bills to which it is intended to 
 be applied, in order that the party who takes the bill upon the 
 credit of such authority may not be mistaken in its application. 
 
 And this leading objection lies also against the letter of the 4th 
 of January, 1827. It is a general authority to Hutchinson to
 
 BOYCE V. EDWARDS. 55 
 
 draw, upon sending to the defendants tlie l)ills of lading for the 
 cotton. This is a limitation iipon the authority contained in the 
 former letter, even supposing it to have been adopted by the new 
 firm, and must be considered, pro tanto, a revocation of it. Hutch- 
 inson is only authorized to draw upon sending the bills of lading 
 to tlie defendants. And although it may fairly Ijc collected from the 
 evidence, that that was done in the present case, it does not remove 
 the great objection that it is a general authority, and does not j)oint 
 to any particular bills and descrilje tliem in terms not to l)0 mis- 
 taken, as required by the rule in Coolidge v. Payson. The other 
 circumstances relied on by the Court to charge the defendants 
 as acceptors, are still more vague and indefinite, and can have 
 no such effect. 
 
 The Court, therefore, erred in directing the jury that the evi- 
 dence was sufficient to charge the defendants as acceptors, and the 
 judgment must be reversed. 
 
 The distinction between an action on a bill, as an accepted bill, 
 and one founded on a breach of promise to accept, seems not to 
 have been adverted to. But the evidence necessary to sui)port the 
 one or the other is materially different. To maintain the former, 
 as has been already shown, the promise must he applied to the 
 particular bill alleged in the declaration to have been accepted. In 
 the latter, the evidence maybe of a more general character, and the 
 authority to draw may be collected from circumstances and ex- 
 tended to all bills coming fairly within the scope of the promise. 
 
 Courts have latterly leaned very much against extending the 
 doctrine of implied acceptances, so as to sustain an action upon 
 the bill. For all practical purposes in commercial transactions in 
 bills of exchange, such collateral acceptances are extremely incon- 
 venient and injurious to the credit of the bills ; and tiiis has led 
 judges frequently to express their dissatisfaction that the rule had 
 been carried as far as it has, and their regret that any other act 
 than a written acceptance on the bill, had ever been deemed an 
 acceptance. 
 
 As it respects the rights and the remedy of the innnediate parties 
 to the promise to accept, and all others who may take bills upon 
 the credit of such promise, they are equally secure, and eqiuilly at- 
 tainable by an action for the breach of the promise to accept, as 
 they could be by an action on the bill itself. 
 
 In the case now before the Court, the evidence is very strong, if
 
 56 ACCEPTANCE. 
 
 not conclusive, to sustain an action upon a count properly framed 
 upon the breach of the promise to accept. The bills in question 
 appear to have been drawn for the exact amount of the cost of the 
 cotton shipped at the very time they were drawn. And i£, the bills 
 of lading accompanied the advice of the drafts, the transaction came 
 within the authority of the letter of the 4th of January, 1827 ; and 
 if satisfactorily shown that the bills were taken upon the credit of 
 such promise, and corroborated by the other circumstances given 
 -in evidence, it will be difficult for the defendants to resist a recov- 
 ery for the amount of tlie bills. 
 
 With respect to the question of interest, we think that, if the 
 plaintiff shall recover at all, he will only be entitled to South Caro- 
 lina intx^rest. The contract of the defendants, if any was made, 
 upon which they are responsible, was made in South Carolina. 
 Tiie bills were to be paid there ; and although they were drawn in 
 Georgia, they were drawn, so far as respects the defendants, with 
 a view to the State of South Carolina, for the execution of the 
 contract. 
 
 The judgment of the Circuit Court must be reversed, and the 
 cause sent back with directions to issue a venire de novo. 
 
 ' The following letter, in Ulster County Bank v. McFarlan, 5 Hill, 432, was 
 held to be a sufficient promise to accept : "I hereby authorize you to draw on 
 me at ninety days, from time to time, for such amounts as you may require, pro- 
 vided that the whole amount running and unpaid shall not exceed S3000." And 
 the Court, Bronson, J., after citing Bank of Michigan v. Ely, 17 Wend. 508, 
 and Parker w., Greele, 2 Wend. 545; s. c, 5 Wend. 414, say: "These cases 
 show also that the written promise to accept need not contain a particular de- 
 scription or identification of the bill to be drawn." 
 
 The case was decided in favor of the defendant, on the ground that the 
 authority was not strictly pursued. It was afterwards affirmed in the '• 'ourt of 
 Appeals on that defence. 3 Denio, 553. But Hand, Senator, takes occasion to 
 deny the soundness of the doctrine advanced in the Supreme Court above men- 
 tioned, and thinks that a wrong view was taken of the cases of Greele v. Parker, 
 and Bank of Michigan v. Ely. He says: "The first case was on a promise to 
 accept for $250 at three and four months, and was clearly intended to be but 
 one transaction. The names of the j^arties and amount were given, and the 
 time the bill was to run, which was a far more definite description than that 
 given in this case. The last case turned on another point." 
 
 Again on p. 558 : " But the ground upon which I put this part of the case is, - 
 that by the law of this country, irrespective of the statute, the promise must 
 point to the particular bills, and describe them in tenns not to be mistaken, and 
 that the statute has in no way enlarged that rule." 
 
 The statute referred to is worthy of note. It reads as follows : " An uncondi-
 
 nORTSMAN V. HP:N.SnAW, 57 
 
 tional promise in writing to accept a bill before it is drawn, shall be deemed an 
 actual acceptance in favor of every person who, upon the faith thereof, ^hall 
 have received the bill for a valuable considera'tion," 1 R. S. 768, § 8, published 
 in 1829. It will be seen that it says nothing concerning the necessity of the 
 promise dejpignating and describing the bill ; and it is not difficult to see that 
 there might be diirorent views on this subject in construing the statute. But in 
 the absence of statute, the rule in the principal case will be found a safe and 
 just precedent. 
 
 The following cases further illustrate the subject : lianorgee v. Ilovey, 5 Mass. 
 11; Storer v. Logan, 9 id. 55 f Carnegie v. Morrison, 2 Met. 381; Wildes v. 
 Savage, 1 Story, 22; Baring v. Lyman, ib. 39G ; Russell v. Wiggin, 2 id.. 
 213 ; Adams v. Jones, 21 Peters, 207 ; and cases cited in note to Coolidge 
 V. Payson, supra. See also Burns v. Rowland, 40 Barb. 3G8, in which the 
 defendants authorized IL to draw on them for the amount he might owe tiie 
 plaintilfs. The Court held that it was no objection that the drafi was drawn 
 for a specific sum not mentioned in the letter, and that the defendants were 
 liable as acceptors. 
 
 John Hortsman, Plaintiff in Error, v. John Henshaw et al.. 
 Defendants in Error. 
 
 (11 Howard, 177. Supreme Court of the United States, December, 1850.) 
 
 What acceptance admits. — The drawee of a bill of exchange cannot recover tlie amount 
 thereof paid to a honnjide liolder, if tlie drawer put tlie bill into circulation bearing 
 a fort^ed indorsement of the payee's name. Acceptance admits tlie drawer's sig- 
 nature to be genuine, and tlie drawer, in sucii case, warrants the signature of tlie 
 payee. 
 
 The case is stated in the opinion of the Court. 
 
 Taney, C. J. The material facts in this case may he stated in 
 a few words. 
 
 Fiske and Bradford, a mercantile firm in Boston, drew their bill 
 of exchange upon Hortsman of London, payable at sixty days' sight 
 to the order of Fiske and Bridge, for six hundred and forty-two 
 pounds sterling. The drawers, or one of them, placed the bill in 
 the hands of a broker, with the names of the payees indorsed upon 
 it, to be negotiated ; and it was sold to the defendants in error 
 bona fide and for full value. They transmitted it to their Corre- 
 spondent in London, and, upon presentation, it was accepted by the
 
 58 ACCEPTANCE. 
 
 drawee, and duly paid at maturity. The payees and indorsees all 
 resided in Boston, where the bill was drawn and negotiated. 
 
 It turned out that tjie indorsement of the payees was forged, — 
 by whom does not appear ; and a few months after the bill was 
 paid, the drawers failed and became insolvent. The drawee, hav- 
 ing discovered the forgery, brought this action against the defend- 
 ants in error to recover back the money he had paid them. 
 
 The precise question which this case presents does not appear to 
 have arisen in the English courts ; nor in any of the courts of this 
 country with the exception of a single case, to which we shall here- 
 after more particularly refer. But the established principles of 
 commercial law in relation to bills of exchange leave no difficulty 
 in deciding the question. 
 
 The general rule undoubtedly is, that the drawee by accepting 
 the bill admits the handwriting of the drawer; but not of the in- 
 dorsers. And the holder is bound to know that the previous in- 
 dorsements, including that of the payee, are in the handwriting of 
 the parties whose names appear upon the bill, or were duly author- 
 ized by them. And if it should appear that one of them is forged, 
 he cannot recover against the acceptor, although the forged name 
 was on the bill at the time of the acceptance. And if he has 
 received the money from the acceptor, and the forgery is after- 
 wards discovered, he will be compelled to repay it. 
 
 The reason of the rule is obvious. A forged indorsement can- 
 not transfer any interest in the bill, and tlie holder therefore has 
 no right to demand the money. If the bill is dishonored by the 
 drawee, the drawer is not responsible. 'And if the drawee pays it 
 to a person not authorized to receive the money, he cannot claim 
 credit for it in his account with the drawer. 
 
 But in this case the bill was put in circulation by the drawers, 
 with the names of the payees indorsed upon it. And by doing so 
 they must be understood .as affirming that the indorsement is in 
 the handwriting of the payees, or written by their authority. And 
 if the drawee had dishonored the bill, the indorser would undoubt- 
 edly have been entitled to recover from the drawer. The drawers 
 must be equally liable to the acceptor who paid the bill. For hav- 
 ing admitted the handwriting of the payees, and precluded them- 
 selves from disputing it, the bill was paid by the acceptor to the 
 persons authorized to receive the money, according to the drawer's 
 own order.
 
 HORTSMAN V. IIENSIIAW. 59 
 
 J^ow the acceptor of a bill is presinhed to accept upon funds of 
 the drawer in his hands, and he is prcclnded by his acceptance 
 from averring the contrary in a suit brought against him Ijy the 
 holder. The rights of the parties are therefore to be determined 
 as if this bill was paid by Hortsman out of the money of Fiske 
 and Brad-ford in his hands. And as Fiske and Bradford were lia- 
 ble to the defendants in error, they are entitled to retain the money 
 they have thus received. 
 
 We take the rule to be this. Whenever the drawer is liable to 
 the holder, the acceptor is entitled to a credit if he pays the money ; 
 and he is bound to pay upon his acceptance, when the payment will 
 entitle him to a credit in his account with the drawer. xVnd if he 
 accepts without funds, upon the credit of the drawer, he must look 
 to him for indemnity, and cannot upon that ground defend himself 
 against a bona fide indorsee. The insolvency of the drawer can 
 make no difference in the rights and legal liabilities of the parties. 
 
 The English cases most analogous to this are those in which the 
 names of the drawers or payees were fictitious, and the indorse- 
 ment written by the maker of the bill. xVnd in such cases it has 
 been held that the acceptor is liable, although, as the payees were 
 fictitious persons, their handwriting of course could not be proved 
 by the holder. 10 Barn. & Ores. 478. The American case to 
 which we referred is that of Meacher v. Fort, 3 Hill (S. C), 227. 
 The same question now before the Court arose in that case, and 
 was decided in conformity with this opinion. 
 
 Another question was raised in the argument upon the sufficiency 
 of the notice ; and it was insisted by the counsel for the defend- 
 ants, that, if they could have been made liable to this action by the 
 plaintiff, they have been discharged by his laches in ascertaining 
 the forgery and giving them notice of it. 
 
 But it is not necessary to examine this question, as the point 
 already decided decides the case. 
 
 Tlic judgment of the Circuit Court is affirmed, with costs. 
 
 The case of IVIeacher v. Fort, cited by Taney , J., is so clearly stated, and so 
 important, that the opinion is f;iven in full. 
 
 Before Evans, J., at Charleston, January term, 1837. 
 
 His Honor, the presiding jud^^o, reported the case as follojvs : — 
 
 This was an action on a promissory note. Tiie note was payable to Jph 
 Fort and Joseph Maybank, and indorsed to the plaintill", Meacher The defend- 
 ant was the maker. There was no doubt as to the signature of the defendant, •
 
 60 ACCEPTANCE. 
 
 as maker, or of.Maybank, one oMlie indorsers. The defence relied on was, 
 that the signature of John Fort, one of the indorsers, was a forgery ; and as 
 the note was niadu payable to John Fort and Maybank, the plaintiff could not 
 recover unless both indorsed it. There is no doubt of the correctness of this 
 position, as a general rale. It was clearly proved that the signature was not 
 John Fort's. But the plaintiff contended that the defendant himself had either 
 forged the signature of John Fort, or had procured it to be done, and had put 
 the note in circulation, and was thereby precluded from objecting to the forgery 
 of the signature of the indorser. Fort, who was the defendant's father. The plain- 
 tiff, Meacher, was a bona fide holder, — having received the note from one 
 Bruerton, on account of a debt due to him by Bruerton. 
 
 When the note became due, Meacher sent an agent (Stillraan), to demand 
 payment of the drawer, at his residence on Black River, fifteen miles above 
 Georgetown. Stillinan told him if it was not paid it would be protested, and 
 the indorsers called upon for payment. The defendant replied it was impos- 
 sible for him to pay it before January (the note was due 1st December), and 
 spoke of selling some property to pay the debt. The demand of payment was 
 made for Meacher. 
 
 A bond, signed by John E. Fort and John Fort, was offered in evidence, to 
 enable the jury to decide whose writing the signature of John Fort was. 
 
 On the part of the defendant, John Fort was examined. He denied that the 
 signature was his, or that he had ever authorized any person to sign his name 
 on the note. In fact he had never heard of the existence of any such paper, 
 until it was presented to him by Meacher, 1st February, 1833 (which was some 
 months alter its date: it was due 1st December, 1883). As soon as he knew of 
 the note, he advertised it as a forgery. Defendant is his son, and lived, at the 
 date of the note, at the thirty-two-mile house. A Mrs. Durant had rented the 
 house of Bruerton, and kept a tavern. Defendant married her daughter, and 
 heard him say he would buy the place if he could. He tried to do so, but could not 
 make the payment. Bruerton had very little property, and the defendant never 
 had any propc.-rty from him of the value of this note (nine hundred dollars). 
 
 In my charge to the jury, I told them that from the evidence I thought Meach- 
 er should be regarded as the bona fide holder of this note, — he having received 
 it from Bruerton in the course of a regular business transaction ; but to enable 
 him to recover against the maker, it was necessary to prove that the payees of 
 the note had parted from their interest by indorsement. This was the general 
 rule, but there were exceptions. 
 
 Among the exceptions which were applicable in this case, were these : — 
 
 1. If the maker of a note make it payable to a fictitious person, which ficti- 
 tious name he writes on the note, and then puts it in circulation. 
 
 2. Or if he make it payable to a real person, and forge his indorsement, or 
 if he procure it to be done, and then put it in circulation. 
 
 In these cases the drawer could not insist on proof of the indorsements, be- 
 cause he was estopped to say that was not genuine which he had represented to 
 be so, by putting it jn circulation. 
 
 It was submitted to the jury .to decide, whether the eviden .'c in this ca^e brought 
 it within these exceptions to the general rule. They found for the plaintiff. The 
 •notice of appeal is annexed.
 
 HORTSMAN V. HENSHAW. 61 
 
 On the trial the plaintifT contended he could recover on the promise made by 
 defendant to pay at Janiiiny, when .Stiiinian demanded panncnt. I did not 
 think so; but I find it alle;.'((i in the iioliee, as a ground that I did not instruct 
 the jury that the plaintlll' could not recover on this proniite, unless it Lad been 
 declared on. I certainly so decided in the hearing of" the jury ; and I charged 
 them to find for defendant, unless they believed the case came within the excep- 
 tions hereinbefore stated. 
 
 The defendant moves for a nonsuit, or a new trial, on the grounds following: 
 
 1. Because the phiintill's case was without evidence, in this that tlie declara- 
 tion was upon a note, and no proof of the indorsement alleged in the declaration, 
 which was necessary to convey a right to the plaintiff. 
 
 2. Because the Court did not instruct the jury that the plaintiff must recover 
 on the note only, and could not recover upon the promise made to the jjlain- 
 tiff, as the same was not declared on; and, if it had been, was founded on no « 
 consideration. 
 
 3. Be( ause the verdict was against the positive evidence, as to the indorse- 
 ment, and the judge erred in charging the jury that, although the indorsement 
 ■was not genuine, they were at liberty to presume it was made by the assent of 
 the real payee of the note, and that if so made, the interest in the note was 
 thereby passed to the plaintiff. 
 
 4. Because tiie judge eireil in charging the jury that, if the name of the pavee 
 of the note was written by the maker, the plaint ilt" was entitled to recover undeir 
 a declaration setting forth a real indorsement by the payee himself; whereas, it 
 is submitted, that if such was the state of facts, the action should have been 
 founded on the deceit. 
 
 CuiUA, Evans, J. This Court is of opinion there was no error in the charge 
 of tlie presiding judge. The facts of the case were for the decision of the jury, 
 and there docs not appear to be any sufficient ground to disturb the verdict. 
 
 The motion is dismissed. 
 
 Oanlt, Richardson, 0''Xeall, and Butler, JJ., concurred. 
 
 A similar question arose in 1847, in Coggill v. American E.xchange Bank, 1 
 Comstock, 113. In that case one of the drawers of the bill forged the payee's 
 name, and then procured it to be discounted ; and at maturity the plaintiff, the 
 drawee, paid it. On discovering the forgery he sued the delendant, a hona Jide 
 holder to whom he had paid the b!ll, to recover the sum paid. The Court held 
 that the action could not be maintained; but based their decision on the fact 
 stated, that the payee had no interest in the bill, comparing it to a bill drawn to 
 a fictitious person, such a bill being in effect payable to bearer. Vere v. 
 Lewis, 3 T. R. 182; Rlinct v. Gibson, ib. 481; s. c, 1 H. Bl. 5G9; Collins 
 V. Emmett, 1 II. Bl. 313: rhilllps v. Thurn, Law Rep. 1 C. P. 4C3 ; Plets v. 
 Johnson, 3 Hill, 112. The j)oint made in the j)rincipal case was not noticed, 
 that, in such ease, the drawer is estopped to deny the genuineness of the in- 
 dorsement ; that he is thus liable to the bona Jide holder, and that, therefore, the 
 drawee is entitled, on payment, to a credit against the drawer. Whence it would 
 follow that it is immaterial that the payee had no interest in the bill, when the 
 drawer himself puts it into circulation, bearing the payee's indorsement. But, ac- 
 cording to Coggill V. American Exchange Bank, explaining, on this point. Canal 
 Bank v. Bank of Albany, 1 Hill. 287, if the payee owned the forged bill, the ac*
 
 62 ACCEPTANCE. 
 
 ceptor would be entitled to recover the sum paid to the holder. It must be con- 
 fessed there is ailhculty in harmonizing the two cases, unless the language of the 
 principal decision is used with reference to the case of a payee without interest ; 
 and yet, if that be true, how can it be said that in -such case the drawee has paid 
 to one not entitled to receive the money ? The case seems to cover the whole 
 ground of a payee who owned the bill, as well as of one who had no interest in 
 it. And a further explanation than the very satisfactory one given by Judge 
 Taney, may perhaps be given to the case ; that it rests upon the familiar principle 
 that of two innocent parties, he should suffer who occasioned the difficulty. The 
 drawee, by accepting, induced the holder to part with his money. See opinion 
 of Keating, J., in Phillips v. Thum, Law Rep. 1 C. P. 472. The case of Canal 
 Bank v. Bank of Albany, supra, may at first seem to present a different view ; 
 but it nuist be observed that it is nowhere stated in that case that the forged bill was 
 put into circulation by the drawer, — the distinguishing fact in all the other above 
 cases. See also Burchfield v. Moore, 3 E. & B. 683 ; Talbot v. Bank of Roch- 
 ester, 1 Hill, 295 ; Young v. Grote, 4 Bing. 253. These eases show that the 
 drawer is not estopped to deny the genuineness of the indorsement, if the forg- 
 ery occurred after the bill passed out of the drawer's hands ; and this is the line 
 of distinction drawn in the principal case. This may have escaped the notice of 
 the learned judge (Bronson), in Coggill v. American Exchange Bank. And we 
 repeat that it must be understood that the principal case and the above discus- 
 sion are predicated of forgery committed before the drawer put the bill into 
 circulation. 
 
 Though it is true in general that the acceptor does not warrant the genuine- 
 ness of the signature of any indorser, still, if he accept and negotiate the bill 
 with knowledge that there is a forged indorsement upon it, he is estopped to 
 deny the genuineness of such indorsement. Beeman v. Duck, 11 Mees. & W. 
 251. 
 
 It has been held that, though acceptance admits the genuineness of the draAv- 
 er's signature, the rule does not apply where the forgery is in the body of the 
 bill, as in the sum to be paid ; that the reason and justice of the rule extend no 
 farther than to the signature. With the drawer's handwriting, as indicated in his 
 signature, the drawee is bound to be familiar, but with nothing else. Bank of 
 Commerce v. Union Bank, 3 Comst. 230 (1850). In this case the amount of the 
 bill was altered from .$105 to $1005; and the acceptor having paid the latter 
 sum, was held entitled to recover it from him to whom he had paid it. But the 
 law upon this point do6s not seem to be so settled. See Byles, Bills, 323 ; 
 Ward V. Allen, 2 Met. 53, decided in 1840, and Langton v. Lazarus, 5 Mees. 
 & W. 629, decided in 1839, in which cases it is held that the fraudulent altera- 
 tion of the day of payment, made before acceptance, is no defence to the accept- 
 or in an action by a bona fide holder. And in Van Duzer v. Howe, 21 N. Y. 
 531 (1860), post, it is held that where the defendant wrote his blank acceptance 
 on an agreement with the drawer that he should not draw for more than $1000, 
 and he inserted in the bill a larger sum, and passed it for value to the plaintiff', 
 the defendant was nevertheless liable. 
 
 So in Young v. Grote, 4 Bing. 253 (1827), it is held that, if the drawer facili- 
 tated or gave occasion to the forgery, he must bear the loss himself. In that case 
 •the bill had been so drawn by leaving a space after the mark " £," that the amount
 
 * HORTSMAN V. HENSHAW. 63 
 
 was rhanged from £iy2.'2, to £352.2, and the drawer was required to bear the 
 lo.'^s, after payment by the drawee. See IJylcs, liills, 3215. 
 
 The acceptance of a bill drawn by procuration admits the hand\vriting of the 
 drawer, and also the procuration ; but it does not admit the agent's power to in- 
 dorse, though the handwriting is the same as that of the drawer, and though the 
 indorsement preceded the acceptance. Robinson v. Yarrow, 7 Taunt, -loo (1817) ; 
 Smith V. Chester, 1 T. K. (t.')4. 
 
 If, however, the drawer is a fictitious person, and the bill is drawn payable to 
 the drawer's order, the arceptor's undertaking is that he will pay to the signature 
 of the same person that signed for the drawer ; and in such case the indorsee 
 may show, as against the acceptor, that the signatures of the fictitious drawer 
 and of the first indorser, are in the same handwriting. Cooper v. Meyer, 10 
 Barn. & C. 468. 
 
 A party who admits that an acceptance is in his own handwriting, and thereby 
 induces another to take the bill, is precluded thereafter from denying the gen- 
 uineness of the acceptance. Leach v. Buchanan, 4 Esp. 22G. 
 
 So if the acceptor puts the bill into -circulation, he cannot be allowed to allege 
 that he paid it before maturity. Ilinton r. Bank of Columbus, 9 Port. Ala. 4C3. 
 
 Acceptance for the honor of an indorser does not admit the genuineness of the 
 indorser's signature. Wilkinson v. Johnson, 3 Barn. & C. 428. And the rea- 
 soning of Abbutt, C. J., in this case is perhaps broad enough to warrant the rule 
 as laid down in 1 Parsons, Notes and Bills, 323, that acceptance for honor 
 does not admit the genuineness of the signature of any party for whose honor the 
 acceptance is given, not even of the drawer's signature. 
 
 The acceptor for honor then occupies a more favorable situation than an 
 acceptor in at least two respects : first, that he is entitled to notice, like an in- 
 dorser, on presentment to and non-payment by the drawee ; secondly, that he 
 can recover money paid to a holder who claims under a forgery of the drawer's 
 name, according to the rule in Parsons and the reasoning in Wilkinson t'. John- 
 son, supra. 
 
 But one who accepts for the honor of tlie drawer is, like the drawer himself, 
 estopped from denying that the bill is a valid bill ; and consequently it is not 
 competent to him to set up as a defence to an action against him by an indorsee, 
 that the payee is a fictitious person, and that he was ignorant of that fact at the 
 time he accepted the bill. Phillips v. Thurn, 18 Com. B. (x. s.) G94 (1865) ; 
 s. c, again in Law Rep. 1 C. P. 463. See next case and note. 
 
 In this case, the bill was payable to a fictitious payee, and therefore held 
 equivalent to a bill payable to bearer, Erie, C. J, said: " I take it to be cleai" 
 that if the defendant had not intervened, and the action had been brought by 
 the holder of the bill against the drawer, the drawer would have been by law 
 compelled to admit that the bill was a valid bill, payable to bearer. ... It seems 
 to me there is good reason lor saying that that which the drawer would be 
 estopped from denying, the acceptor for honor should also be estopped from 
 denying. I think that he is ecpially bound to admit that the bill is a valid bill." 
 18 Com. B. 701.
 
 64 ACCEPTANCE. 
 
 Gerrit Schimmelpennich and Jan Adrian Toe Lear, 
 Aliens, v. William Bayard, William Bayard, Jr., Rob- 
 ert Bayard, and Jacob Le Roy. 
 
 (1 Peters, 264. Supreme Court of the United States, January, 1828.) 
 
 Acceptance supra protest. — If tlie drawees of a bill of exchange, refusing to honor the 
 bill, were bound to accept the same, they will not be permitted to change the rela- 
 tion in which they stand to the parties on the bill by a wrongful act. They can 
 acquire no rights as the holders of bills paid supra protest, if they were bound to 
 honor them in their character of drawees. 
 
 When bound to accept. — A drawee, who has been in the habit of receiving consign- 
 ments from the drawer with whom he has an open account therefor, is not bound 
 to accept bills drawn on him against a particular shipment, which bills the drawer 
 in his letter of advice says may be charged in account, if the account actually show 
 that the drawer had no funds in the hands of the drawee. 
 
 The case is stated in the opinion of the Court. 
 
 Marshall, C. J. This action was brought on nine hills of 
 exchange, drawn by John C. Delprat, on the plaintiffs, and indorsed 
 by the defendants, a list of which follows : — 
 
 Baltimore, May 23, 1822, 
 
 £500 
 
 favor of J. P. Kraft. 
 
 200 
 
 favor 
 
 of defendants. 
 
 300 
 
 
 )) 
 
 500 
 
 
 » 
 
 1000 
 
 
 5) 
 
 300 
 
 
 )j 
 
 1000 
 
 
 » 
 
 r. 10,000 
 
 
 » 
 
 5000 
 
 
 5> 
 
 ,, June 12 „ 
 
 5) 55 -'-" 55 
 
 . „ July 31 „ 
 
 55 55 55 55 
 
 55 55 55 55 
 
 These bills were regularly protested for non-acceptance and non- 
 payment ; but were accepted and paid svpra protest., by the draw- 
 ees, for the honor of the defendants the indorsers. The jury found 
 a verdict for the plaintiffs, subject to the opinion of the Court, on a 
 case stated. The judges were divided in opinion on the following 
 points, which have been certified to this Court. 
 
 1. Whether the authority to John C. Delprat to draw on the 
 plaintiffs, did or did not amount to an acceptance of the bills. 
 
 2. Whether the bills paid by the plaintiffs, supra protest, for the
 
 SCIIIMMKLI'ENNICII V. BAYARD. 65 
 
 lioiior of tlie dcfendiiiits, were drawn and negotiated in confornnty 
 to the authority and instructions of the phiintiffs to J. C. Delprat. 
 
 3. Whether the plaintiffs were bound to accept and pay the hills 
 in question, and whether the same having l)ecn jjaid hy the plain- 
 tiffs, supra protest, for the honor of the defendants, the plaintiffs 
 are entitled to recover the amount of the defendants. 
 
 4. Whether J! C. Delprat was a competent witness. 
 
 5. Whether the letter oifered by the plaintiffs in evidence, and 
 rejected, ought to have been admitted. 
 
 6. Whether the plaintiffs are entitled to a judgment on the ver- 
 dict of the jury. 
 
 These questions require an examination of the relations which 
 existed between the drawer of these bills and the drawees. 
 
 On the lltli of January, 1H18, the plaintiffs entered into a con- 
 tract with John C. Delprat, of wliich the following is a copy. 
 
 The undersigned, N. and J. and R. Van Staphorst, merchants in 
 this city, and John C. Delprat, of Philadelphia, present the last 
 choosing for the present act his domicilium citandi et exequendi, at 
 the office of the youngest notary here, have entered with one 
 another into the following arrangement and stipulations : — 
 
 Art. I. The second undersigned (namely, J. C. Delprat) shall 
 to the benefit of the first undersigned (N. and J. and R. V. S.) 
 manage in the United States of America, the mercantile interest of 
 said first undersigned, consisting chiefly in the forming of new 
 solid connections, and procuring of consignments ; and shall further 
 perform every thing the first undersigned will appoint him to do as 
 their agent. 
 
 Art. II. The second undersigned binds himself to procurfi to no 
 person or i)ersons in this kingdom any consignments or commis- 
 sions from himself or any other, except to the first undersigned ; 
 but, on the contrary, to use his utmost exertions towards the ben- 
 efit of the mercantile house of the first undersigned, they being 
 willing on their side to facilitate all such commercial operations as 
 might, benefit tiic second undersigned without their prejudice. 
 
 Art. III. The first undersigned allows to the second undersigned 
 the faculty to value on them direct, or payable in London, at no 
 shorter date than sixty days' sight, for such moneys as the second 
 undersigned shall emjjloy to make advances, on whole or jiart of 
 cargoes of current articles, namely, to the aniount of two-thirds of 
 
 5
 
 66 ACCEPTANCE. 
 
 the invoice price of articles laden in chartered vessels, and of three- 
 fourths in vessels owning to the shii)pers, and likewise consigned 
 to the first undersigned ; it beiug left to the knowledge and prudence 
 of the second undersigned to judge of the invoice price of the afore- 
 mentioned goods ; and it being understood that the second under- 
 signed, at the same time that he gives advice of his drafts furnished 
 in the above maimer, shall enclose and forward, or cause to be 
 enclosed and forwarded, to the first undersigned, the bill of lading 
 and invoice of the goods on which the above-mentioned advances 
 might have been made ; and shall cause the above goods to be duly 
 insured in America to that effect, that the policy of said insurance 
 be delivered up, duly indorsed, to the second undersigned, and rests 
 with him until the end of the expedition. It being further a fixed 
 rule that tlie first undersigned must never come in the predicament 
 of having made any advances on cargoes or part of cargoes which 
 are not duly insured in America. 
 
 The first undersigned further oblige themselves to open a credit 
 of $40,000, say forty thousand dollars, with Messrs. Le Roy, Bayard, 
 & Co., New York, to be made, use of by the second undersigned, 
 in case any advances are required on consignments to be made to 
 the said first undersigned, that credit to be renewed every time by 
 the said first undersigned, after the arrivement of the consigned 
 goods shall have been duly advised by them. 
 
 If, however, against all probability, it happened that the multi- 
 plicity of consignments rendered it desirable to the first undersigned 
 to stop for a wliile further consignments, then the said first under- 
 signed retain the faculty to prescribe to the second undersigned 
 such limits and orders as they shall find proper, according to cir- 
 cumstances, which orders and limits the second undersigned shall 
 be obliged to follow. 
 
 Art. IV. As sometimes an opportunity might offer to procure a 
 good consignment to the first undersigned, on condition of their 
 taking an interest in that expedition, they authorize the second 
 undersigned to make use likewise of the above-mentioned credit of 
 $40,000 to interest the first undersigned ; in such expeditions for a 
 proportion not larger than one-fourth, with this restriction, that 
 said proportion must never exceed the amount of $10,000, say ten 
 thousand dollars. The choice of the articles to be shipped to the 
 first undersigned on their own account, being left to the commercial 
 knowledge of the second undersigned. This authorization will be 
 considered as renewed after the termination of each expedition ;
 
 SCHIMMELPENNICH V. BAYARD. 67 
 
 namely, after that termination sliall have l)een duly advised to the 
 second undersigned hy the first undersigned. 
 
 Art. V. That the first undersigned, in consideration of the ser- 
 vices to he rendered hy the second undersigned, shall grant to the 
 second undersigned one-third of the amount of the two per cent 
 commission, to he earned by the first undersigned on the consign- 
 ments to he procured, and further, one per cent from the purchase 
 of such goods which might Ijc shipped for the account of the first 
 undersigned, as is m')re amply specified in article 4 ; it is to be 
 understood that then no benefit arises from the third of the two per 
 cent commission of those good ; and finally, that the second under- 
 signed is promised an allowance for travelling and other expenses 
 the sura of 82000, say two thousand dollars, per annum, to com- 
 mence with the first of February, 1818. 
 
 Art. Yl. These arrangements shall last for the term of two con- 
 secutive years, and thus end with the last day of January, 1820. It 
 being understood that (in case of no denunciation to the contrary, 
 made by any of the parties aforesaid) this contract will be continued 
 from year to year, but that, in case one of the parties should desire 
 the annullation of the present contract, said party shall be obliged 
 to signify his intention to the other party four months before the 
 expiration thereof. 
 
 Art. Vn. Ultimately, it has been stipulated that in the Unhoped- 
 for and wholly unexpected case of any differences taking place 
 between the undersigned, respecting tlie fulfilment of any of the 
 articles al)ove mentioned, those disputes or differences shall be 
 entirely adjusted and decided by the decision of two arbiters, to be 
 chosen in the city of Amsterdam, one by each party ; who, in case 
 of difference of opinion between them, shall have the faculty of 
 appointing a third or super arbiter, which arbiters then must decide 
 and finally terminate all such differences ; both parties renunciating 
 to all law measure and impediments, and especially to the faculty 
 of laying any arrests or hindrance on moneys, goods, or possessions, 
 belonging to any one of the parties undersigned ; all such aforesaid 
 measures to be considered now and then as null, void, and of no 
 effect whatsoever ; the consequences thereof to be suffered by the 
 party which might have made use of the aforesaid measures. 
 
 Of the present act have been made two copies, itc. 
 
 (Signed) N. and J. and R. Van Staphorst. 
 
 John C. Delprat. 
 
 AMSTEiauM, 11th January, 1818.
 
 68 ACCEPTANCE. 
 
 A copy of tins contract was transmitted by the plaintiffs to the 
 defendants, in a letter dated the 21st of the same month, a copy of 
 which follows. 
 
 Amsterdam, 21st January, 1818. 
 M,essrs. Le Roy, Bayakd, & Co., New York (confidential). 
 
 Gentlemen, — Thinking it useful for the extension of our commer- 
 cial relations in the line of consignments (one of the branches of 
 our establishment), to appoint an agent to that purpose in the 
 United States of America, we have been decided by the confidence 
 we place in the character and commercial notions of Mr. John C. 
 Delprat, to appoint that gentleman to the aforementioned trusts ; 
 in which choice we have chiefly been directed by the reliance we 
 have on the principles of loyalty and prudence, which must actuate 
 a person employed during such along period by your worthy house. 
 We judged it necessary, for the obtaining of said purpose, to leave 
 at the disposal of Mr. Delprat sufficient means to facilitate his 
 exertions ; namely, by opening with you, in his favor, a credit to be 
 made use of by him in the manner pointed out in the enclosed 
 abstract of our contract with said gentleman. We therefore request 
 and authorize you to furnish Mr. Delprat to the extent of $40,000, 
 say forty thousand dollars (to be made advances with by him on 
 such cargoes, or part thereof, as he might procure the consignment 
 of to our house, and to be made use of to interest our house in 
 part of cargoes to the forementioned purpose). The credit to run 
 for the space of two years, unless countermanded by us in such a 
 manner that, when Mr. Delprat has availed himself of the whole or 
 part of said credit of $40,000, that credit, or part of the same, must 
 be considered renewed when you receive our approbation of the 
 said disposition of Mr. Delprat. 
 
 You will observe, the sole object of the mission of Mr. Delprat is 
 to obtain solid consignments from good houses, throughout the 
 United States, and the disposal of the credit opened in his behalf 
 with your house is exclusively intended to facilitate said business. 
 In this important matter, it will be a point of great security, and, 
 as such, eminently satisfactory to us, that our said agent may be 
 able to have recourse, in every circumstance, to wise and friendly 
 counsel ; and we therefore request you to assist Mr. Delprat, as far 
 as opportunity may offer, with the lessons of your long experience, 
 particularly with respect to those transactions for which, by virtue
 
 SCHI.MMELPENNICU V. BAYARD. 69 
 
 of tlic credit aforementioned, we may have recourse to your cash, 
 it heiuf^, as you will observe, a material point that we are secured ; 
 that the moneys he may dispose of will have no other than the des- 
 tination just mentioned. To this ellect, we authorize you, gentle- 
 men, in case of moral certainty that the moneys Mr. Delprat should 
 demand from you by virtue of the above-mentioned credit, would not 
 be employed in the aforementioned manner, and earnestly request 
 you not to pay, and to refuse him, any moneys whatsoever, on 
 account of the above credit. 
 
 In general, as a trust of this nature, which is to have* its effect at 
 such a distance, is always a delicate matter, we must claim and 
 dare expect from your known sentiments towards us, that you will 
 give the strictest attention to tlie line of conduct followed by Mr. 
 Delprat; and if, unexpectedly, that conduct could appear in the 
 least exceptionable, we mean either imprudent or equivocal, then, 
 gentlemen, do give us, with all the frankness of long-experienced 
 friendship, your ideas respecting that suljjcct, and be j)erfectly secure 
 that every information, of what nature soever, will not only be 
 thankfully acknowledged by us, but received with the most religious 
 secrecy. We have now, gentlemen, only to request your kind oliices 
 in favor of Mr. Delprat, and to solicit your friendly co-operation 
 towards tlie attaining the object of his mission, which, we are fully 
 persuaded, can be much facilitated by your kind recommendation 
 to the numerous friends you have in different parts of your country. 
 Be assured, gentlemen, of the high sense we have of the obligation 
 we will liave to you for your friendly services through the whole of 
 the business we just now took tlic liberty to explain to you, and of 
 the earnest desire we have to be often in the opportunity of render- 
 ing you the like, or any services in our power. Referring for com- 
 mercial information to our general letter of this date, we are, with 
 sincere regard, 
 
 Gentlemen, your most obedient servants, 
 
 N. and J. and R. Van Staphorst. 
 
 (Indorsed), Confidential, Amsterdam, 21st of January, 1818. 
 N. and J. and R. Van Staphorst. Received March 29th. Answered 
 24th do. 
 
 This letter was answered l)y Le Roy, Bayard, & Co. in the fol- 
 lowing terms : —
 
 70 ACCEPTANCE. 
 
 PRIVATE. 
 
 New York, 24th March, 1818. 
 Messrs. N. and J. and R. Van Staphorst, Amsterdam. 
 
 Gentlemen, — We have the honor of replying to your esteemed 
 favor of 21st of January, acquainting us with the arrangement you 
 have made with our mutual friend, Mr. Delprat, who has undertaken 
 the agency of procuring you consignments from this country. In 
 the furtherance of the object, we shall be very happy to render our 
 services useful, and beg to offer our best wishes for the success of 
 Mr. Delprat's operations in your behalf. Due note is taken of the 
 credit you are pleased to open to that gentleman with us, to the 
 amount of 140,000, subject to renewal, as fully expressed in your 
 letter. We doubt not, from the knowledge we possess of Mr. Del- 
 prat's character, that he will fully justify the confidence you repose 
 in him ; and though he may, under existing circumstances, find it 
 difficult to enlarge to the extent that could be mutually wished, we 
 are persuaded that no exertion will be wanted on Mr. Delprat's part, 
 to reap the utmost benefit from the mission intrusted to him. 
 
 Believe us, with honor and esteem, gentlemen, 
 
 Your obedient servants, 
 
 Le Roy, Bayard, & Co. 
 
 It is proper to observe that several merchants of Holland, whose 
 agents the plaintiffs were, had become large holders of government 
 stock, and of shares ih the Bank of the United States. Le Roy, 
 Bayard, & Co. had been employed to draw the interest and divi- 
 dends, and to remit them to Europe. The credit of $40,000, there- 
 fore, which was raised for Delprat, with Le Roy, Bayard, & Co., 
 was merely the application of so much of their funds, in the United 
 States, to the business of his agency, in aid of the bills he was 
 authorized to draw on them. The continuance or discontinuance 
 of this credit might depend on the eligibility of continuing this mode 
 of remittance, as well as on the withdrawal of their- confidence in 
 their agent. Several letters passed between the plaintiffs and 
 defendants, respecting their transactions in consequence of this 
 credit, which manifest, unequivocally, the desire of the plaintiffs 
 that its amount should not be exceeded, but which betray no want 
 of confidence in Delprat. In a letter of the 24th of June, 1819, they 
 renew the credit of $40,000, and add, " at the same time, we con-
 
 SCHIMMELPENNICH V. BAYAIID. 71 
 
 firm our former orders not to exceed said amount for our account. 
 In case you have funds in hand, for any of our institutions, and 
 you think proper to' remit us for the sarae3Ir. Delprat's bills oir us, 
 the nature of which you are well ac(iuainted with : you allow him. 
 then, the same credit which you do to all persons from whom you 
 take bills, in the persuasion of their solidity and of the reality of 
 the transaction on which the bills are issued." 
 
 In answer to this letter, the defendants say, on the 24th of Sep- 
 tember, 181*J : '' You also accord us the permission to remit this 
 gentleman's (Delprat's) drafts for any moneys we may have on 
 hand bclonginj^ to your various institutions. The confidence 
 which we mutually have in this gentleman's cliaracter, must, .with 
 us, act in lieu of vouchers, to exhibit the reality of transactions 
 which may give origin to such drafts, the whole of this gentle- 
 man's operations having Ijcon hitherto beyond our immediate 
 knowledge." 
 
 This correspondence continued until the 12th of May, 1820, 
 when X. and J. and R. Van Staphorst addressed a letter to Messrs. 
 Le Roy, Bayard, & Co., of which the following is an extract: — 
 
 '" There being frequent opportunities of drawing here now, on 
 New York, we will probably have, for some timo to come, occasion 
 to dispose of tlie dividends which ' you will receive for our ac- 
 count, in October next,' and so on ; and we have therefore directed 
 Mr. Delprat not to make use of his credit of 840,000, lately opened 
 in his favor. We thus also request you, by the present, to con- 
 sider the same as annulled until we may again renew the same." 
 
 The agency of Delprat continued after this revocation of his 
 credit with Le Roy, Bayard, <fe Co. He continued to solicit con- 
 signments for their house in Amsterdam, and to draw bills on them 
 for advances, without any other alteration in his powers than is 
 contained in a letter of the (Uh of February, 1821, which contains the 
 following clause : " The advances, therefore, to be made by you on 
 our behalf, on shipments to our consignments, either from funds 
 belonging to jus in your hands, or by drawing and indorsing tlie 
 shipper's draft, must not exceed, henceforth, one-half of tiie ' true 
 invoice.' " As a compensation for this reduction of the advance 
 to be made in the United States, J. and X. apd R. Van Staphorst 
 engaged, on the arrival of the shipments, to remit to the consign- 
 ors the estimated value of the cargoes in bills on their house in the 
 United States.
 
 72 ACCEPTANCE. 
 
 Delprat acknowledged the receipt of this letter on the 17th of 
 April, 1821, and promised to conform to its directions. 
 
 Tlie correspondence between the plaintiffs and defendants, re- 
 specting Mr. Delprat's agency, appears to have ceased on the 12th 
 of May, 1820, when his credit with the house of the latter was 
 annulled. At least, no subsequent letter appears in the record 
 until the 9th of July, 1822, when the plaintiflfs announced to the 
 defendants the sudden termination of their connection with Mr. 
 Delprat ; whose conduct, they said, had been so imprudent as to 
 oblige them, at the same time, to protest several of his drafts. 
 Tlieir knowledge, they say, of the former intercourse between Le 
 Roy, Bayard, & Co. and Mr. Delprat, and of the great regard 
 felt for hiin by those gentlemen, induce them to state the chief 
 reasons which compelled them to this measure. These are, his 
 irregularities in keeping his accounts, and omission to furnish an 
 account since the 31st of December, 1820, although the balance 
 then due from him was fully 17837.54, being " for the proceeds 
 of gin consigned l)y us to him ; for proceeds of drafts, issued by 
 him on us, for our account, in order to employ the proceeds to 
 make prudent advances with," &c. 
 
 They then proceed to state that Mr. Delprat owed, at tliat date, 
 upwards of 82,000 florins, against which he might be entitled to a 
 credit of $6000. The account, they say, has accrued to this height, 
 in a great measure, " inconsequence of shipments made to him for 
 his account, in full confidence of his making us, for the amount, 
 remittances ; which we till now have not received, though the goods 
 were witli him for many months." The letter complains of the 
 large advances made by Mr. Delprat, on consignments, notwith- 
 standing their repeated remonstrances ; and dwells on the high 
 opinion they had entertained of him ; " his integrity," they say, 
 tiiey "even now will not question." Thus, the letter proceeds, 
 " were matters situated, when last Friday, contrary to any thing 
 we could expect or anticipate, we found ourselves drawn upon by 
 Mr. Delprat, for £200, <£300, and <£500, issued, as he informs us, 
 for the amount of purchases which he is making of articles not yet 
 shipped;" and, on the other hand, 2d, .£500, florins 1250 and 
 1750, issued on us,- as advances made to Mr. Krafft, already so 
 much our debtor, on shipments which he made some long time ago, 
 and which Mr. Delprat could clearly perceive that, taken at an 
 average, did nothing diminish the balance due by him."
 
 SCIIIMMELPENXICH V. BAYARD. 73 
 
 The letter proceeds to state, in substance, that they could choose 
 only between the alternatives of allowing the debt due from Mr. 
 Dclprat to be swelled to a still larger amount, and protesting his 
 bills. They had chosen the latter, however it might pain their 
 feelings. They express tlieir regret to find that, among the drafts 
 to be protested for non-acceptance, and perhaps afterwards for non- 
 payment, are several indorsed l)y the defendants^ for whose honor, 
 however, they had intervened. 
 
 This letter was received by the defendants on the first day of Sep- 
 tember, 1822. They immediately obtained from Mr. Delprat an 
 order on tiie plaintiffs to hold at their disposal all the proceeds of 
 the goods shipped in his name, by the " Virgin" and other vessels, 
 and all balances due to him. This order was enclosed to the plain- 
 tififs, in a letter of the 7th of September, 1822, in which they say : 
 " We can of course only consider this order as applying to the bal- 
 ance that may possilily accrue to him upon the settlement of your 
 account ; and if any should accrue, we will thank you to take such 
 legal steps which you may deem necessary, as will place it with us, 
 without fear of contention. His drafts, which you may have paid 
 for our account, will probably furnish sufficient authority to enable 
 you to do so." 
 
 At the trial, John C. Delprat was examined as a witness. He 
 deposes that the several bills of exchange on which this suit jvas 
 instituted, were drawn in his capacity as agent, on account of and 
 for the purpose of making advances on shipments consigned to the 
 plaintiffs ; and, except that in favor of J. P. Krafft, for ,£500, were 
 accompanied by letters of advice. That during the whole period 
 of his agency, he was in the habit of making shipments on his own 
 account, and of drawing for advances on the said shij)ments pre- 
 cisely in the same manner as when they were made by others ; that 
 this was done with the full knowledge and approbation of the said 
 N. and J. and R. Van Staphorst, who never found fault with him 
 for doing so ; but to encourage him to make such shipments, gave 
 him credit for one-half the commission upon the sales of the shijiments 
 so made upon his own account. On his cross-examination, the 
 witness stated that the bill for £500 in favor of Krafft was drawn 
 for shipments, by the " Edward," "Jason," and " May Flower." He 
 cannot say when the " Edward " sailed. The " Jason " had arrived, 
 and the " May Flower " had sailed before the bill was drawn. Kraffl 
 was at that time indebted to the plaintiffs. The bill was issued to
 
 74 ACCEPTANCE. 
 
 Krafft, but was returned to witness, who sent it to the defendants. 
 The bills of lading and the invoices were not sent with it. The 
 three bills of the 27th of May, for XIOOO, were drawn on account 
 of shipments, in his own name, by the " Virgin." She sailed about 
 the oOth of July. They were not accompanied by invoices or bills of 
 lading. The two bills of the 12th and 18th of June, for £1000 and 
 for <£300, were drawn on tobacco shipped by the " Henry," belong- 
 ing to the witness and to Mr. Krafft. The bill of lading and invoice 
 did not accompany them. The three bills of the 31st of July were 
 drawn on the shipments by the " Virgin " generally. They were not 
 accompanied by bills of lading or invoices. The defendants re- 
 ceived a commission for indorsing his bills on the plaintiffs. 
 
 In making the advances on shipments on his own account, he 
 drew on the plaintiffs, sent his bills to the defendants, to whom they 
 were charged, and then drew on the defendants, as the mo'ney was 
 required, either on his own shipments or the shipments of others ; 
 ■which bills were credited to the defendants. He understands that 
 all his transactions with the defendants were carried by them into 
 their general account with him. These transactions were not con- 
 fined to his agency for the plaintiffs. He remains considerably 
 indebted to them. 
 
 He was concerned in shipments with Mr. Krafft, and did a great 
 deal of business with him ; but did not consider himself as a gen- 
 eral partner. 
 
 The connection between the plaintiffs and J. C. Delprat, was 
 formed by the agreement of the 11th of January, 1818. He was con- 
 stituted their agent for purposes therein described, and received 
 such powers as were deemed suflficieint to enable him to perform the 
 duties which devolved on him. That duty was to manage their 
 mercantile interest in the United States, " consisting chiefly in the 
 forming of new solid connections, and procuring of consignments." 
 To enable him to perform this duty, he was allowed the faculty to 
 value on them direct or payable in London, at no shorter date than 
 sixty days' sight, for such moneys as he should " employ to make 
 advances on the whole or part of cargoes of current articles ; " 
 namely, to the amount of two-thirds of the invoice price, &c. It 
 being understood that his letters of advice should be accompanied 
 by the bills of ladings and invoices of the goods on which the ad- 
 vances piay have been made. 
 
 John C. Delprat, then, had no general authority to personate the
 
 SCIIIMMELPENNICH V. BAYARD. 75 
 
 plaintiffs in all respects whatever ; but was an agent appointed for 
 particular purposes, with limited powers, calculated to subserve 
 those purposes. To procure consignments, it was indispensable 
 that he should advance money to the consignors, and this money 
 was to be raised by bills on the plaintiffs. But he was authorized 
 to draw only for a sjiecial j)urpose, and to a limited extent. Out of 
 the limits assigned to him, he had no power. The plaintiffs not 
 being, as a matter of course, the acceptors of every bill he might 
 draw, must have performed some act in relation to the particular 
 bills, which imposes on them in law the character of acceptors. 
 
 This point was considered by this Court, in the case of Coolidge 
 and otliers v. Payson and others, 2 W. 66 \^ante, p. 43]. 
 
 Coolidge & Co. held the proceeds of a cargo, claimed by 
 Cornthwaite and Gary, whose claim depended on the decision of 
 this Court, of a case depending therein. Cornthwaite and Cary 
 were desirous of drawing these funds out of the hands of Coolidge 
 <fe Co., and offered a bond, with sureties, as an indemnity, in the 
 event of an unfavorable decision. Coolidge & Co., in a letter to 
 Cornthwaite and Cary, state some formal objections to the bond, 
 and add, " we shall write to our friend Williams, by this mail, and 
 will state to him our ideas respecting the bond, which he will 
 probably determine. If Mr. Williams feels satisfied on this point, 
 he will inform you ; and in that case your draft for 82000 will be 
 honored." 
 
 In answer to the letter addressed by Coolidge & Co. to Wil- 
 liams, on this subject, he declared his satisfaction with the bond, 
 as to form ; declared his confidence that the last signer was able 
 to meet the whole amount himself ; but that he could not speak 
 certainly of tiie })rincipals, not being well acquainted with their 
 resources. He added, " under all circumstances, I should not 
 feel inclined to withhold from them any portion of the funds for 
 which the bond was given." 
 
 On the same day, Cornthwaite and Cary called on Williams, 
 who stated the substance of the letter he had written, and read a 
 part of it. One of the firm of Payson <fe Co. also called on him, 
 and received the same information. Two days afterwards Corn- 
 thwaite and Cary drew on Coolidge & Co. for 82000, and paid the 
 bill to Payson & Co., who presented it to Coolidge & Co., by 
 whom it was protested. Payson & Co. sued them as acceptors. 
 
 The Court instructed the jury that if they were satisfied that
 
 76 ACCEPTANCE. 
 
 Williams, on the application of the plaintiffs, made after seeing the ^ 
 letter from Coolidt^e & Co. to Cornthwaite and Gary, did declare 
 that he was satisfied with the bond referred to in that letter ; and 
 that the plaintiffs on the faith and credit of tlie said declaration, 
 and also, of the letter to Corntiiwaite and Gary, did receive and 
 take the bill in the declaration, they were entitled to recover in 
 the action. 
 
 The jury found a verdict for the plaintiffs ; the judgment on 
 which was alTirmed in tliis Court. 
 
 In this case, the drawee had written a letter to the drawer, 
 promising to honor his bill for $2000, if Mr. Williams should be 
 satisfied with a bond of indemnity, which had been placed in their 
 possession. Mr. Williams declared his satisfaction with it, both 
 to the drawer and holder of the bill, within two days after this 
 declaration. In this case the promise to accept was express, and 
 applied to a particular bill, the precise amount of which was speci- 
 fied in the promise. 
 
 The Court in its opinion reviews several decisions in England on 
 this point ; in all of which the promise to accept was express ; and 
 in some of which the Court declared the opinion that the promise 
 ought to be accompanied by circumstances which may induce a 
 tliird person to take the bill. After reviewing these cases, this 
 Court laid down the rule, " that a letter written within a reason- 
 able time before or after the date of the bill of exchange, describ- 
 ing it in terms not to be mistaken, and promising to accept it, is, 
 if shown to the person who afterwards takes the bill on the credit 
 of the letter, a virtual acceptance, binding the person who makes 
 the promise." 
 
 It cannot be alleged that these bills are brought within this 
 rule. The plaintiffs, therefore, cannot be considered as acceptors 
 of them. 
 
 But, although the plaintiffs cannot be viewed as the acceptors of 
 these bills, it does not follow, necessarily, that they can maintain 
 the present action. To entitle them to maintain it, the Court must 
 be satisfied that the payment is, in fact, what it professes to be, — 
 a payment really for the honor of the indorsees. If the' drawees, 
 thus refusing to honor the bill, and thus denying the authority of 
 the drawer to draw ui)on them, were bound in good faith, to accept 
 or pay as drawees, they will not be permitted to change the rela- 
 tion in which they stand to the parties on the bills by a wrongful
 
 SCHIMMELPENNICH V. B A YARD. 77 
 
 ^act. They can acquire no rights, as the holders of bills paid supra 
 protesl, if they were hound to honor them in their ciiaracter of 
 drawees. The sinj^le and unmixed inquiry, therefore, on the 
 second and third (luestions is, whether the drawees were l)ouMd to 
 accept or to pay tiicse hills. And, first, were they so bound be- 
 cause the bills were drawn in pursuance of the authority they had 
 given to the drawer ? Tliis demands a more critical examination 
 of the evidence than was required when considering the first 
 question. 
 
 It is apparent, from the contract of the 11th of January, 1818, 
 that Mr. Delprat came to the United States as the agent of N. 
 and J. and R. Van Staphorst, to manage their mercantile interest ; 
 " consisting chiefly in forming new solid connections and procur- 
 ing of consignments ; " and also with commercial views of his 
 own. The jirincipal object of the contract is to define his author- 
 ity, and to regulate his conduct as agent. He is allowed to draw 
 on the jdaintiffs for such moneys as he should employ, in making 
 advances on current articles consigned to his principnls, to the 
 amount of two-thirds of the invoice price of articles laden in 
 chartered vessels. He was still further restricted in his advances, 
 by orders received long before the bills in question were drawn, to 
 one-half of the true invoice. Mr. Delprat's authority, then, to 
 make advances was limited, at the date of this transaction, to one- 
 half the invoice price. One, and perhaps the most usual mode of 
 conducting business of this description is, to draw in favor of the 
 consignor, or to indorse his l)ill. The agent might, however, if 
 not otherwise instructed, draw immediately on his principal, and 
 advance tiie money to tlie consignor which was raised by the bill. 
 In either case, however, drafts beyond one-half the invoice price 
 of the consignments actually made would exceed the authority 
 given. Circumstances may exist, which w^ould impose on the 
 principal the obligation to pay such drafts ; but the question we 
 are Jiow considering relates only to the authority under which the 
 bills were drawn. That authority restricted the agent in the 
 amount of his drafts to one-half the invoice price of the articles 
 actually consigned ; and also required him to accompany his let- 
 ters of advice with bills of lading and invoices. 
 
 Were the bills in question drawn in conformity with powers and 
 instructions thus limited ? 
 
 The first bill on the list is for =£500, drawn in favor of J. P.
 
 78 ACCEPTANCE. 
 
 Krafft, on the 23d of May, 1822, and indorsed by liim to the de-^ 
 fendants. Tlic letter of advice states this bill to be drawn on ac- 
 count of shipments by the "-Ecrward," "Jason," and "May 
 Flower," as by letter of 21st, which is to be charged to account of 
 P. Krafft. Tiio letter of the 21st is not in the record. 
 
 The shipment by the " Jason " had arrived, and the " May 
 Flower " had sailed before the bill was drawn. Mr. Krafft was at 
 the time iiulcl>ted to N. and J. and R. Van Stapliorst. The bill 
 was returned by Krafft to Delprat, and then indorsed by the de- 
 fendants. 
 
 It does not appear certainly who remitted this bill ; although the 
 probability is that, as it was indorsed by the defendants, not as 
 purchasers, but for a commission, it was remitted by Delprat, to 
 whom it was returned by Krafft, as is stated in Delprat's testi- 
 mony, or by some person to whom Delprat sold it. It is true that 
 he further states that, after the bill was so returned, he sent it to 
 the defendants ; but this was, no doubt, done for the purpose of 
 having it indorsed by the defendants, in order to give it credit. 
 Neither does it appear, from the evidence in the cause, that Krafft 
 accompanied the sliipments on account of which this bill was 
 drawn, by any letter of advice, or otherwise directing the proceeds 
 thereof to be applied to the discharge of this bill ; but, on the 
 contrary, the letter of advice addressed to the plaintiffs by Delprat 
 directed the bill to be charged to the account of Krafft, generally. 
 Under these circumstances, taken in connection with the addi- 
 tional one that Delprat was concerned, generally, with Krafft, in 
 the shipments made to the plaintiffs, the Court is of opinion that 
 there is no material difference between this bill and those drawn 
 on account of shipments made by and in the name of Delprat, 
 which are now to be considered. 
 
 It has already been stated that Mr. Delprat was a merchant, 
 trading on his own account, at the same time that he was the agent 
 of N. and J. and R. Van Staphorst. His transactions, in his two 
 characters, were as distinct from each other as if they had been 
 the transactions of distinct persons. As an agent, he was bound 
 to act " in conformity to the authority and instructions " of his 
 principals ; as a merchant, he was himself the principal, and 
 acted in conformity with his own judgment. It would seem, then, 
 that the cpntract must contain some very peculiar and unusual 
 provisions, to. place Mr. Delprat under the authority of the house
 
 SCHIMMKLPENNICH V. BAYARD. 79 
 
 in Amsterdam, wliilst carryinp; on trade iii tlic riiited States on 
 his own account. Uj)on reference to the contract, we find a stip- 
 ulation between the parties in the following words : " The second 
 undersigned (Delprat) binds himsell to procure to no person or 
 persons in this kingdom any consignments or commissions, from 
 himself or any other, except to the first undersigned ; but, on the 
 contrary, to use liis utmost exertions toward the benefit of the mer- 
 cantile house of the first undersigned ; they being willing, on 
 their side, to facilitate all such commercial operations as might 
 benefit the second undersigned, without their prejudice." 
 
 This article contains the only limitation on the entire independ- 
 ence of Mr. Delprat as a merchant. It is, perhaps, a necessary 
 limitation, which was, in part, the price of his agency, and for 
 which he finds a comj)ensation in the profits of the business con- 
 fided to him. This restriction does not change the character of 
 his transactions as a merchant. His waiving the right to consign 
 to any other liouse, does not impress on his consignments to the 
 Van Staphorsts, or on his bills drawn on those consignments, a 
 character dilferent from that which would have belonged to them 
 had his shipments been made from choice. He does not bind him- 
 self to make consignments to them ; but not to make consignments 
 to any other house in the Netherlands. 
 
 If any doubt could arise from this article, it would be produced 
 by the peculiar manner in which it is expressed. Mr. Delprat 
 binds himself to {)rocure to no person in the kingdom of the 
 Netherlands any consignments or commissions, from himself or 
 any other, except to the Van Staphorsts. The singular applica- 
 tion of the word " procure," to consignments made by Mr. Delprat 
 himself, may be connected with the succeeding article, which au- 
 thorizeshim to draw bills, and may have some influence on its 
 construction. In that article, the Van Staphorsts allow Mr. Del- 
 prat " the faculty to value on them direct, or payable in London," 
 for such moneys as he shall employ to make advances on the 
 whole or part of cargoes of current articles consigned to them, to 
 the amount of two-thirds of the invoice price. 
 
 It may be said that, as in the preceding article, consignments 
 made by Delprat on his own account were considered as procured 
 by him, and were placed on the same footing with consignments 
 made by others ; so in this the express authority to draw bills 
 might embrace transactions of both descriptions. But we do not
 
 80 ACCEPTANCE. 
 
 think that the inaccurate use of words in one article will justify 
 a departure from the correct construction of a succeeding article ; 
 unless the same words are used, or the bearing of the one on the 
 other is such as to require tliat departure. 
 
 The same motives existed for restraining the agent from making 
 as from procuring consignments to any other house in the Nether- 
 lands. His utmost exertions were required for the benefit of his 
 principals. The restriction, therefore, might be expressed in the 
 same sentence ; and a sliglit inaccuracy of language was the less 
 to be regarded, because it could produce no possible misunder- 
 standing with respect to the extent of the prohibition. 
 
 The third article might not be intended to prescribe the same 
 rules for the conduct of Mr. Delprat, as a merchant and as the 
 agent of the Van Staphorsts. As a merchant, he had a right to 
 draw on effects placed in their hands, independent of contract. 
 Tiie usage of trade allows such drafts to be made on a shipment ; 
 and the consignee must pay the bills, if the shipment places funds 
 in his hands to pay them. But, as agent, his line of conduct was 
 to be prescribed by contract. We must therefore, consult the 
 language of the agreemeat, in order to determine whether it pro- 
 vides for the future connection between the parties, further than as 
 regards their characters as principal and agent. 
 
 The faculty given to Mr. Delprat by the third article, to value 
 on the Van Staphorsts, is " for such moneys as he should employ 
 to make advances " on articles consigned to them. Money laid 
 out in the purchase of articles on his own account cannot, with 
 any propriety of language, be denominated money employed in 
 making advances on articles consigned to him. The distinction 
 between money advanced on articles consigned and money em- 
 ployed in purchases, although the articles may be purchased for 
 the purpose of being consigned is obvious. Money advanced is 
 always to another, never to the individual making the advance. 
 This language shows, we think, incontestably, that the article was 
 drawn with a sole view to bills drawn by Mr. Delprat as agent, not 
 on his own account as a merchant. 
 
 A subsequent part of the article gives additional support to this 
 construction. Mr. Delprat is to draw for two-thirds of the in- 
 voice price of the article, and is himself the judge of the price 
 which may be inserted in the invoice. This power might be safely 
 confided to him in making advances to others, but might not be
 
 SCniMMELPENNICH V. BAYARD. 81 
 
 trusted to him in his own case. The case shows the Van Stap- 
 horsts to have been men of extreme caution. Their letter to Le 
 Roy, Bayard, & Co., enclosing their contract witii Delprat, shows 
 an unwillingness to commit themselves to him further than was 
 necessary. It is not i»rol)able that they would have given him an 
 elipress authority to draw on his own account on invoices to be 
 priced by himself. 
 
 But the language of the article applies, wc think, entirely to his 
 bills drawn as agent, not to those drawn as a merchant transact- 
 ing business for himself. 
 
 When examined as a witness, Mr. Delprat says that, during the 
 whole period of his agency, he was in the habit of making ship- 
 ments on his own account, to the said house in Amsterdam, and of 
 drawing for advances on account of the said shipments so made, 
 precisely in the same manner as when the shipments were made by ' 
 others ; and this was done with the full knowledge of X. and J. 
 and R. Van Staphorst, who never found fault with him for doing 
 so ; but, in order to encourage him to make such shipments, gave 
 him credit for one-half the commission upon the sales of the ship- 
 ments, so made on his own account. 
 
 The Van Staphorsts were commission merchants, desirous of 
 extending their business. No doubt can be entertained of their 
 willingness to receive consignments from Mr. Delprat, as well as 
 from others. But this does not prove that the power given him as 
 their agent, to make advances to others, was intended to regulate 
 the intercourse between them as merchants. That intercourse 
 was regulated by the general principles of mercantile law ; and the 
 contract between the parties does not show that cither was dissat- 
 isfied with those principles, or wished to vary them. 
 
 This question refers, we presume, to the authority given by the 
 contract of the 11th January, 1818. The first article describes 
 the objects which were committed to Mr. Delprat, by the Van 
 Staphorsts. These were : the management "■ of their mercantile 
 interest in the United States, consisting chiefly in the forming new 
 solid connections, and procuring of consignments." 
 
 The second article restrains the right Mr. Delprat might other- 
 wise have exercised, of consigning to other houses in the Nether- 
 lands. 
 
 The third authorizes him to draw bills on his principals, for the 
 
 6
 
 82 ACCEPTANCE. 
 
 purposes of his agency, under such limitations as they deemed it 
 prudent to prescribe. 
 
 Tills contract, we think, does not contemplate bills drawn by Mr. 
 Delprat on his own account, as a merchant. The bills mentioned 
 in the declaration, which were drawn in favor of the defendants, 
 and indorsed by them, do not come within the authority given b^ 
 the contract. No instructions from the plaintiffs, extending this 
 authority, appear in the record. 
 
 Tlie third question comprehends the whole matter in contro- 
 versy, and has been partly answered in answering the preceding 
 questions. It asks whether the plaintiffs were bound to accept 
 and pay the bills in question ; and whether the same having been 
 paid by the plaintiffs, svpra protest, for the honor of the defend- 
 ants, the plaintiffs are entitled to recover the amount of the de- 
 
 •fendants ? 
 
 Tlie opinion has been already expressed that the bill, drawn 
 
 on the 23d May, 1822, for X500 sterling, in favor of J. P. Krafft, 
 is not distinguislial)le from those which were drawn by Mr. Del- 
 prat, to enable him to purchase articles on his own account, which 
 were shipped to the plaintiffs. In making these shipments, and in 
 drawing these bills, Mr. Delprat acted for himself, as an inde- 
 pendent merchant. The relation between him and the plaintiffs 
 was that of consignor and consignee. The obligation of the plain- 
 tiffs to accept and pay his bills, depended essentially on the state 
 of their accounts. So far as the information furnished by the 
 case goes, Delprat appears to have been indebted to the plaintiffs. 
 In tlieir letters of 19th July and 10th September, 1822, which were 
 given in evidence by the defendants, they state him to be then 
 their debtor ; and it is not shown that this debt has been dis- 
 charged. The plaintiffs, therefore, were not bound to accept and 
 pay these drafts, unless they have acted in such a manner as to 
 give the holders of the bills a right to count on their being paid. 
 
 It is believed to be a general rule, that an agent with limited 
 powers cannot bind his principal when he transcends his power. 
 It would seem to follow that a person transacting business with 
 him on the credit of his principal, is bound to know the extent of 
 his authority. Yet, if the principal has, by his declaration or con- 
 duct, authorized the opinion that he had given more extensive 
 powers to his agent than were in fact given, he could not be per- 
 mitted to avail himself of the imposition, and to protest bills, the
 
 SCHIMMELPENNICII V. BAYARD. 83 
 
 drawing of which his conduct had sanctioned. But the defend- 
 ants, in this cause, cannot allege that they have been deceived. 
 They were the intimate correspondents of the plaintiffs, from whom 
 they received a co})y of the contract. The letter which transmitted 
 i^ requests their friendly supervision of the conduct of Mr. Del- 
 prat, and desires them not to pay the money for which the plain- 
 tiffs had given him a credit with them, in case of "a moral 
 certainty " that it would not be employed for the purposes of hi& 
 agency. In the course of the correspondence between the plain- ^ 
 tiffs and defendants, we find several letters, written during the 
 continuance of Mr. Delprat's credit with the latter, which show 
 the determination of the former not to approve of advances be- 
 yond that credit. In their letter of the 24th June, 1819, the 
 plaintiffs expressly caution the defendants, should they think ^ 
 proper to remit in Mr. Delprat's bills, the nature of which they 
 are well acquainted with, that they (the defendants) allow hira 
 the same credit that they do other persons, from whom they take 
 bills, in the persuasion of their solidity, and of the reality of the 
 transaction on which the bills are issued. They add : " Tiiis is 
 not the effect of any want of confidence in our agent, but merely 
 profluing from our invariable rule to limit and circumscribe the 
 credits we allow." The letters from the defendants show a perfect 
 understanding on their part, of the terms on which Mr. Delprat's 
 bills were to be taken. On the 11th May, 1819, announcing that 
 he had filled his credit, they say : " In addition to it, he has ex- 
 pressed an anxiety that we should negotiate his drafts on you, 
 payable in London, for about £3000 sterling, or that we should 
 take his drafts on Amsterdam, for a similar value. The personal 
 regard which we bear for Mr. Delprat, would have induced us 
 promptly to accede to his request, had not the restriction laid upon 
 us, of not permitting him to exceed, but for a few hundred dollars, 
 the credit you give him, and the total absence of any indication 
 from you of a wish for us to interfere in his pecuniary arranti-e- 
 ments, in any other than the mode marked by the credit, led us to 
 believe that our negotiations or purchase of his drafts, was neither 
 wished nor contemplated by you." And, in their letter of the 
 7th September, 1822, enclosing the order of Mr. Delprat on the 
 plaintiffs, for any balances belonging to him in their hands, so far 
 from complaining of the protest of the bills, they say : " We can, 
 of course, only consider this order as applying to the balance
 
 84 ACCEPTANCE. 
 
 that may possibly accrue to him, upon the settlement of your 
 account." 
 
 Messrs. Le Roy, Bayard, & Co., then, were not deceived by the 
 plaintiffs. Unfortunately for themselves, they placed too much 
 confidence in Mr. Delprat. They took his bills, as they were cau- 
 tioned to do, in the letter of the 24th June, 1819, " in the persua- 
 sion of their solidity, and of the reality of the transaction on 
 which they were issued." If in this they were mistaken, the re- 
 
 ** sponsibility and the loss arc their own. The fourth and fifth ques- 
 tions have been waived by the parties, and do not properly arise in 
 the case. They are on exceptions taken in the trial of the cause, 
 which could not be brought before the Court after verdict, but on a 
 motion for a new trial, which was not made. 
 
 ^ The sixth question, whether a judgment can be rendered on the 
 verdict of the jury, has been answered, so far as this Court can 
 answer it. We do not understand it as referring to the amount of 
 the verdict, for, on that the Circuit Court alone can decide. If it 
 is intended to repeat, in another form, the question whether the 
 plaintiffs can maintain their action, as the holders of bills, accepted 
 and paid, supra 2Jrotest, for the honor of the drawers, it is already 
 answered. 
 
 The decision of a majority of this Court, on the points on which 
 the judges of the Circuit Court were divided, will be certified in 
 conformity with the foregoing opinion. 
 
 This cause came on to be heard, on a certificate of division of 
 opinion of tiie judges of the Circuit Court of the United States, 
 for the Southern District of New York, and on the points on which 
 the said judges were divided in opinion, and was argued by coun- 
 sel, on consideration wiiereof, this Court is of opinion, — 
 
 1. That the authority to John C. Delprat to draw on the plain- 
 tiffs did not amount to an acceptance of the bills. 
 
 2 and 3. Tliat the bills mentioned in the declaration, were 
 drawn by the said Delprat, not under the authority of the plaintiffs, 
 but on his own account ; and the plaintiffs were not bound to 
 accept and pay them, unless funds of the drawer came to their 
 hands. 
 
 4 and 5. These questions are understood to be waived, and do 
 not appear to arise in the case. 
 
 6. The sixth question is decided by the answer to the second and
 
 KONIG V. BAYARD. 86 
 
 third, 80 far as respects the right of the plaintiffs to maintain their 
 action. On the (juantum of damages, this Court can give no opinion. 
 All which is ordered to be certified to the Court of the United 
 States for the Second Circuit and District of New York. 
 
 See next case. 
 
 William Konig, an Alien, Plaintiff below, v. William Bay- 
 ard, William Bayard, Jr., Robert Bayard, and Jacob 
 Le Roy. 
 
 « 
 
 (1 Peters, 250. Supreme Court of the United States, January, 1828.) 
 
 Acceptance supra protest hi/ stranger. — It is no objection tliat a stranger lias intervened 
 as acceptor for the honor of an indorser ; or that his acceptance has been made at 
 the request and under tlie jjuaranty of the drawee. But in such case the indorser 
 may avail himself of all defences which he could have made had the drawee 
 accepted for his honor and then sued upon such acceptance. 
 
 The case is stated in the opinion of the Court. 
 
 Marshall, C. J. This suit was brought in the Court of the 
 United States for the Second Circuit and District of New York, 
 on a l)ill of exchange, drawn by John C. Delprat, of Baltimore, 
 on Messrs. N. and J. and R. Van Staphorst, of Amsterdam, in 
 favor of Le Roy, Bayard, <fe Co., of New York, and indorsed by 
 them. The bill was regularly presented, and protested, after 
 which it was accepted and paid by the plaintiff, for the honor of 
 the defendants. The jury found a verdict for the plaintitT, sub- 
 ject to the opinion of the Court, on a case stated by the parties. 
 The judges of the Circuit Court were divided in opinion on the 
 following points : — 
 
 1. Whether the letters offered in evidence by the defendants, 
 and objected to, ouglit to have been admitted. 
 
 •J. Whether the plaintiff had a right, under the circumstances, 
 to accept and pay the bill in question, under protest, for the honor 
 of the defendants, and is entitled to recover the amount with 
 charges and interest. 
 
 The first question is understood to be waived. It is a questiou
 
 86 ACCEPTANCE. 
 
 which was decided by the Court at the trial, and could not arise 
 after verdict, unless a motion had been made for a new trial. 
 
 The second requires an examination of the case stated by coun- 
 sel. The bill was transmitted by Le Roy, Bayard, & Co., to 
 Messrs. Rougemont and Behrends, of London, to have it presented 
 for acceptance, who enclosed it to the plaintiff in a letter, from 
 which the following is an extract : " We beg you to have the en- 
 closed accepted: 1st of fl. 21,500, 60 days, on N. and J. and R. 
 Van Staphorst, and hold the same to the disposal of 2d, 3d, and 
 4th. You will oblige me by mentioning the day of acceptance, 
 and in case of refusal, you will have the bill protested." 
 * The plaintiff gave immediate notice of the dishonor of the bill, 
 and of their intervention for the honor of the defendants. 
 
 Messrs. N. and J. and R. Van Staphorst addressed a letter to 
 the defendants, dated the 26th November, 1822, giving notice that 
 the bill was dishonored, the drawer having no right to draw, 
 and that they were advised by counsel not to interpose in their 
 own names for the honor of the defendants. Tlie letter adds : 
 " In this predicament, we applied to our friends, William Konig & 
 Co., who had the said bill in hand, informed them of the whole 
 case, and requested these gentlemen, under our guarantee, to in- 
 tervene on behalf of your signature, with acceptance and payment 
 of the above bill ; which favor these gentlemen have not refused to 
 us ; so that, without our prejudice, and completely without yours, 
 we have duly protected your interest." 
 
 The defendants also gave in evidence a letter from the plaintiff, 
 stating that he had intervened, at the request of N. and J. and R. 
 Van Staphorst, and under their gua^-antee ; but that they required 
 him to proceed against the defendants, as preliminary to the per- 
 formance of that guarantee. 
 
 It was admitted that the bill was drawn by J. C. Delprat, on his 
 own account, and not on any shipment for a debt due from him to the 
 defendants, for advances previously made to him ; and that he had 
 given to the defendants an order on N. and J. and R. Van Stap- 
 horst, for all balances due from them to him. 
 
 It is not alleged that the drawees had any funds of the drawer 
 in their hands. 
 
 The plaintiff in this case must be considered as the agent of N. 
 and J. and R. Van Stapliorst, and as having paid the bill at their 
 instance. All parties concur in stating this fact. The Van Stap-
 
 KONIG V. BAYARD. 87 
 
 horsts adopted this circuitous course, instead of interposing 
 directly in their own names, under the advice of counsel. They, 
 however, immediately stated the transaction in its genuine colors, 
 to the defendants. It is impossible to doubt that a person may 
 thus intervene, throui^h an agent, if it be his will to do so. The 
 suspicion which might be excited by proceeding, unnecessarily, in 
 this circuitous manner, cannot affect a transaction, which was 
 immediately communicated, with all its circumstances, to the per- 
 sons in wKose behalf the intervention had been made ; unless 
 those persons were exposed to some inconvenience, to which they 
 would not have been exposed had the interposition been direct. 
 This is not the case in the present instance, since it cannot be 
 doubted that the defendants might have availed themselves of 
 every defence in this action -of which they could have availed, 
 themselves had N. and J. and R. Van Staphorst been plaintiffs. 
 The case shows plainly that the bill was not drawn on funds, and 
 that the drawees were not bound to accept or pay it. No reason, 
 therefore, can be assigned why the person who has made himself 
 the holder of the bill, by accepting and paying it under protest, 
 should not recover its amount from the drawer and indorsers. 
 
 This cause came on to be heard on a certificate of division of 
 opinion of the judges of the Circuit Court of the United States 
 for the Southern District of New York, and on the points on whicli 
 the said judges were divided in opinion, and was argued by coun- 
 sel ; on consideration w^hereof this Court is of opinion that the 
 plaintiff had a right, under the circumstances, to accept and pay 
 the bill in question, under protest, for the honor of the defendants, 
 and is entitled to recover the amount with charges and interest ; 
 which is ordered to be certified to the said Circuit Court. 
 
 In regard to the defences wliieh a drawer or indorser may raise against a 
 stranger who accepts for his honor, it seems to be immaterial whether such 
 acceptor acted at the instance of the drawer or as the agent of the drawee, as 
 in the above case ; at least no distinction is drawn in the cases upon this point. 
 See Gazzam v. Armstrong, 3 Dana, 554 ; Wood v. Piigh, 7 Ohio, 15G (Curwen's 
 ed. 501). 
 
 An accepted bill whicli has been dishonored may be accepted again for honor 
 upon the insolvency of the drawee. See Ex parte Wackerbath, 5 Ves. 574; Ex 
 parte Lambert, 13 Ves. 179. In the latter ca'se Lord Erskine disapproves the 
 position taken in the former, that in such case the acceptance is given to an 
 accepted bill, and holds that the acceptor for honor stands precisely in the place
 
 88 ACCEPTANCE. 
 
 of the drawer in an action against the drawee, and can acquire no stronger title 
 against the latter than the drawer had. 
 
 The acceptor supra protest is considered in the light of an indorscr ; and there- 
 fore at maturity the bill must be again presented to the drawee, and if still dis- 
 honored bv him, it should be protested, and notice given to the acceptor for 
 honor, or he will i)e discharged, lloare v. Cazenove, 16 East, 3D1 ; Williams v. 
 Germaine, 7 B. & C. 468; Schoficld v. Bayard, 3 Wend. 488; Lenox v. Lever- 
 ett, 10 Mass. 1. 
 
 A stranger to the bill may, by paying it for the honor of the jmrties, acquire 
 a right of action against all of them, and will be considered as standing in the 
 place of a bona fide holder. But to entitle him to this attitude, he must pay the 
 bill, not for the honor o{ any one, but of all the parties, and not before but after 
 protest ; and the payment should be accompanied by a declaration, evidenced by 
 a notarial act, showing why, and for whom, the payment was made ; and of all 
 this the parties to be charged should have notice. Per Marshall, J., in Gaz- 
 zam V. Armstrong, 3 Dana, 554. See Geralopulo v. Wieler, 10 C. B. 690, 709 ; 
 Phoenix Bank v. Hussey, 12 P'ick. 483. And if the party who has paid a bill 
 supra prote4 do not give reasonable notice to the party for whose credit he has 
 made the payment, the latter will not be required to refund. Wood v. Pugh, 
 7 Ohio, 156 (Curwen's ed. 501). 
 
 In a suit by a holder who discounted a bill on the faith of an acceptance for 
 honor, the bill being forged, the acceptor supra protest cannot deny its genuine- 
 ness. Phillips V. Thurn, Law R. 1 C. P. 463. See note to Hortsman v. Hen- 
 shaw, ante, 63, suhfin. 
 
 The United States, PlaintifFs in Error, v. The Bank of 
 THE Metropolis, Defendant in Error. 
 
 (15 Peters, 377. Supreme Court of the United States, January, 1841.) 
 
 Acceptance hy the United States. — Tlie liability of the United States, on an acceptance 
 by an authorized officer given to a bona Jide holder is the same as that of a private 
 individual. 
 
 Conditional acceptance. — A bill drawn by a government contractor was "accepted on 
 condition that tlie drawer's contracts be complied with," and discounted by the 
 defendants in due course of trade. Held, that forfeitures previously incurred, and 
 advarfces previously made, were not covered by the condition. 
 
 The case is stated in the opinion of the Court. 
 
 Wayne, J. This is an action of assumpsit brought by the United 
 States to recover the sura of ^27,881.57. The defendants pleaded 
 the general issue. On the trial of the cause, the defendants claimed 
 credits, amounting to $23,000, exclusive of interests and costs.
 
 UNITED STATES V. BANK OF THE METROPOLIS. 89 
 
 The items liad been ])i'escnted to the proper accounting ofTicer, and 
 were not allowed. They were acceptances of the post-office depart- 
 ment, of the drafts of mail contractors, and an item of 8tjll.o2, 
 called in the record " E. F. Brown's overdraft." 
 
 Tlie jury foinid for tlie defendants, and certified there was due to 
 them by the United States -'353371.94, with interest from the (jth 
 March, 1838. 
 
 The errors assigned arc, that the Court refused to give to the 
 jury the following instructions, which were asked after the evidence 
 had been closed on both sides. 
 
 1. That upon tlie evidence aforesaid, the defendants are not 
 entitled in this action to set off" against the plaintiffs' demand, the 
 amount of die acceptances given in evidence by the defendants, nor 
 the amount of the overdraft of E. F. Brown. 
 
 2. If the jury believe, from the evidence, that when the accept- 
 ance of the draft of E. Porter was given by the then treasurer of the 
 department, there was nothing due to Porter standing on the books 
 of the ])Ost-office department, and that on the books of the depart- 
 ment, when the acceptance fell due, there was nothing due to him ; 
 then the defendants cannot set off" the amount of said acceptance 
 against the plaintiffs' claim in this action. 
 
 3. That if the accounts of E. Porter and Reeside, as contractors 
 with the post-office department, were not finally settled on the books 
 of the post-office department when the present postmaster-general 
 came into office, it was his duty to have said accounts settled ; and 
 if in such settlement there were credits claimed by them as allowed 
 by order of Mr. Barry, when postmaster-general, and entered on 
 the journal, but not carried into these accounts in the ledger, and 
 finally entered as credits in these accounts, which credits were for 
 extra allowances which the said postmaster-general was not legally 
 authorized to allow them, then it was in the power, and was the 
 duty of the present postmaster-general, to disallow such items of 
 credit. 
 
 We will consider the instructions asked in connection, and upon 
 the merits of the case ; but, before we conclude, will express an 
 opinion upon the form of the first. 
 
 It appears that the five drafts claimed as credits were drawn on 
 the post-office department by contractors for carrying the mails. 
 That they were accepted, and were discounted at the Metropolis 
 Bank in the way of business.
 
 90 ACCEPTANCE. 
 
 Porter's draft was at ninety days after date for |10,000, payable 
 at the Metropolis Bank to his own order, to be charged to account, 
 and was unconditionally accepted by R. C. ^ason, signing himself 
 treasurer of the post-office department. It is admitted that he 
 was so. 
 
 Reeside drew four drafts. One on the 17th October, 1835, for 
 $4500 ; another on the 20th October, 1835, for $1000 ; a third on 
 the 23d October, 1835, for $4500 ; and the fourth on the 28th 
 October, 1835, for $3000. They were payable to his own order 
 ninety days after date, for value received ; to be charged to his 
 account for transporting the mail, and addressed to the postmaster- 
 general. Tlie following was the form of all of them, and of the 
 acceptances of the postmaster-general. 
 
 $4500. Washington City, October 17, 1835. 
 
 Sir, — Ninety days after date, please pay to my own order, four 
 thousand five hundred dollars, for value received, and charge to my 
 account, for transporting the mail. 
 
 Respectfully yours, James Reeside. 
 
 Hon. Amos Kendall, Postmaster-General. 
 
 " Accepted, on condition that his contracts be complied with." 
 
 Amos Kendall. 
 
 Porter's draft was unconditionally accepted. It was discounted 
 by the defendants, upon his indorsement. Tlie bank became the 
 holder of it, for valuable consideration, and its right to charge the 
 United States with the amount cannot be defeated by any equities 
 between tlie drawer and the post-office department, of which the 
 bank had not notice. 
 
 When the United States, by its authorized officer, become a 
 party to negotiable paper, they have all the rights, and incur all tUe 
 responsibility, of individuals who are parties to such instruments. 
 We know of no difference, except that the United States cannot 
 be sued. But if the United States sue, and a defendant holds its 
 negotiable paper, the amount of it may be claimed as a credit, if, 
 after being presented, it has been disallowed by the accounting 
 officers of the treasury ; and if the liability of the United States 
 upon it be not discharged by some of those causes which discharge 
 a party to commercial paper, it should be allowed by a jury as a 
 credit against the debt claimed by the United States. This is the
 
 UNITED STATES V. BANK OP THE METROPOLIS. 91 
 
 privilege of a defendant, for all equitable credits given by tbe Act 
 of March 3, 1797 ; ^ 1 Story, 4t!4. This, and the liability of the 
 United States, in the yianncr it has l)een stated, has been repeat- 
 edly declared, in effect, by this Court. It said, in llie case of the 
 United States r. Dunn, Pet. 51, "the liability of parties to a 
 bill of exchange, or promissory note, has been fixed on certain 
 principles, which are essential to the credit and circulation of such 
 paper. These princij)lcs originated in the convenience of com- 
 mercial transactions, and cannot now be departed from." From 
 the daily and unavoidable use of commercial paper by the United 
 States, they are as much interested as the community at large can 
 be, in rriaintaining these principles. 
 
 It was held in the case of the United States v. Barker, 4 Wash. 
 C. C. 464, that the omission of the secretary of the treasury, for 
 one day, to give notice of the dishonor of bills, which were pur- 
 chased by the United States, discharged the drawer. And this 
 Court said, when that case was brought before it, there was no 
 right to recover, on account of the neglect in giving notice after 
 the return of the bills. 12 AVheat. 501. That, and other cases 
 like it, show how rigidly those principles have been applied in 
 suits on bills and promissory notes, in which the United States 
 was a party. The acceptance of Porter's draft was unconditional, 
 and there is nothing in the evidence to discharge the acceptor. 
 There is neither waiver, express or implied, of his liability. There 
 was no understanding nor communication concerning it between 
 the bank and any officer of the post-office department, before it 
 was discounted. The bank advanced the money, which it was 
 the object of the bill to obtain. It cannot be doubted, the accept- 
 ance was given for that purpose. The want of consideration, then, 
 between the drawer and the acceptor, can be no defence against 
 the riglit of the indorsee, who gave a valuable consideration for 
 the bill. 
 
 It does not matter how the drawer's account stood. Whether 
 he was a debtor or a creditor of the department ; whether the 
 bank knew one or the other. An unconditional acceptance was 
 tendered to it for discount. It was not its duty to inquire how 
 the account stood, or for what purpose the acceptance was made. 
 All it had to look to was the genuineness of the acceptance, and 
 the authority of the officer to give it. The rule is, that a want of 
 
 1 1 Stats, at Large, 512.
 
 92 ACCEPTANCE. 
 
 consideration between the drawer and acceptor is no defence 
 against the right of a third party, wlio has given a consideration 
 for the bill, and this even though the acceptor has been defrauded 
 by the drawer ; if that be not known by such third party, before 
 he gives value for it. 
 
 The evidence then, concerning Porter's account, was immaterial 
 and irrelevant to the issue. It cannot affect the rights of the 
 bank, and did not lessen the obligation of the department to pay 
 the acceptance when it became due. 
 
 But the evidence does not show that any thing was due by 
 Porter when the draft was accepted, or wlien it came to maturity. 
 Mason, the witness, says, " that in the interim a sufficient sum 
 had been raised and carried to the credit of Porter, to pay the 
 draft ; but that he had also, within the dates, been charged with 
 the amount of a draft, drawn upon him by the postmaster at Mo- 
 bile, accepted by him, which draft was payable in 1833, and that 
 he was charged with failures and forfeitures incurred as con- 
 tractor, in 1833 ; which charges were made by order of Mr. Barry, 
 then postmaster-general. It was certainly right to debit Porter 
 with these charges, if they were due by him ; but that did not 
 change the relative rights and obligations of the bank and the 
 dei)artment upon his bill. If either are to lose by Porter, shall it 
 be that party, who was bound to know the state of the account, 
 before it gave an unconditional acceptance, for the purpose of 
 accommodating its own agent ; or the other, who placed faith in 
 the acceptance, advanced the money upon it, which it was intended 
 to raise ; and who could not have learned what was the state of 
 Porter's account, as it is proved that the charges which it is now 
 said should have priority of payment over the bill, were not made 
 against Porter until after his bill had been accepted ? Certainly, 
 the loss should fall upon the first. It cannot be otherwise, unless 
 it be affirmed that an acceptor may claim to be discharged on 
 account of his own negligence, and that, having induced a third 
 party to advance money upon his acceptance, he shall be permitted 
 to intervene between himself and the indorsee of the paper, a 
 debt due to him by the drawer. The evidence offered to invalidate 
 this credit was done from ignorance of the legal consequences in- 
 curred by such an acceptance. In such a case, the bank right- 
 fully looked to the United States for payment of this bill ; and if 
 Porter owes any thing for forfeitures incurred as contractor, or on 
 account of tHe Mobile draft, the United States must look to him.
 
 UNITED STATES V. BANK OP THE METROPOLIS. 93 
 
 There is no proof on the record, however, of any things being due 
 by I'ortcr on those accounts ; and we do not intend to express any 
 opinion upon his lial»ilty, or the rights of the United States, in 
 respect to them one way or the other. 
 
 What are the merits of the case upon Reeside's drafts? 
 
 They were drawn on the postmaster-general, at ninety days, pay- 
 able to the order of the drawer, and were to l)e charged to his 
 account for transporting the mail. They were " accepted on con- 
 dition that liis contracts l)e complied with." Tiiis is of course as 
 binding as an absolute acceptance, if the condition, has been per- 
 formed. 
 
 What is the proof of performance, and how shall this condi- 
 tional acceptance be construed? Mason, the witness, says: 
 " Reeside, in fact, performed the services for which he was con- 
 tractor, in the year ISof) ; and the money which he earned upon his 
 contracts was a|>^jlied, to an extent exceeding the amount due upon 
 his drafts, to the extinguishment of balances created against him 
 i)y recharging him with sums of money which had been allowed 
 to him by Mr. Barry, the former postmaster-general, as contractor 
 for carrying the mail, by giving him credit therefor in a general 
 account current on the journal, but not entered in the ledger, 
 where his account remained unsettled when the present post- 
 master-general came into office." It is said, this does not cover 
 the condition of the acceptance, because Reeside stipulated, by his 
 bond, to pay forfeitures, and repay advances ; and that he owed 
 the department on both accounts, wiien these acceptances were 
 given ; and that in this sense his conti'acts were not complied 
 with. If this be so, in one sense the contracts would not be com- 
 plied with ; but is that the construction which should be i)ut upon 
 such a condition, when the snlyect-matter to which it relates is 
 considered ? 
 
 If one purpose making a conditional acceptance only, and com- 
 mit that acceptance to writing, he should be careful to express the 
 condition therein. He .cannot use general terms, and then exempt 
 himself from liability, by relying upon particular facts whicii have 
 already happened, though they are connected with the condition 
 expressed. Why? Because the particular fact is of itself sus- 
 ceptible of being made a distinct condition. This case furnishes 
 as good an illustration of the rule as any other can do. Instead 
 of the words being used, " accepted on condition that his con-
 
 94 ACCEPTANCE. 
 
 tracts be complied with," could it not have been as easily said, 
 accepted on condition that forfeitures already incurred shall be _ 
 paid, and that advances made shall be refunded ? Tliis would have 
 conveyed a very different meaning; and v?^ould haveput the bank, 
 when the drafts were offered to it for discount, on inquiry. If 
 they had been discounted without inquiry, it would have been 
 done at the risk that the earnings upon the contracts, and such as 
 might be earned between the date of the acceptances and the times 
 of payment, would be enough to pay forfeitures, repay advances, 
 and to take up the bills. It matters not what the acceptor meant 
 by a cautious and precise phraseology, if it be not expressed as a 
 condition. And when we are told, as we are in this case, by the 
 person making these acceptances, that the form of words was 
 devised expressly for that purpose, meaning for the purposes of 
 having forfeitures paid and advances refunded, and to avoid prom- 
 ising to pay any thing to the order of contractors so long as any 
 thing should be due from them to the department, we think it will 
 be admitted that the purpose explained is larger than the con- 
 dition expressed. And from the passage in the evidence just 
 cited, how just does the rule appear which has been laid down by 
 the Court, that, in the case of acceptances of commercial paper, 
 that which can be made a distinct condition must be so expressed ; 
 nor can any thing out of the condition be inferred, unless it be in 
 a case where the words used are so ambiguous as to make it 
 necessary that parol evidence should be resorted to to explain 
 them. Then the onus of proof would be on the acceptor, and the 
 proof would be of no avail if the holder or any person under 
 whom he claims, took the bill without notice of such conditions 
 and gave a valuable consideration for it. The error in this case 
 arose from the acceptor supposing that the defendants did know, 
 and if they did not, they were bound upon such an acceptance to 
 inquire into the stipulations and conditions of Reeside's cojitracts 
 before they discounted the bills ; and it is said they did not use 
 " due diligence to acquire information." The objection then im- 
 plies that inlbrmation of these forfeitures and advances could have 
 been given, and that it was not given when these acceptances were 
 made. This makes it, then, a question of due diligence between 
 the acceptor and the defendants, as to his obligation to communi- 
 cate what he knew ; and their want of caution in not making the 
 inquiry.
 
 UNITED STATES V. BANK OF THE METROPOLIS. 95 
 
 Wc tliink it will be conceded to be a general principle, that one 
 having knowledge of particular facts upon which he intends to 
 rely to exempt him from a pecuniary obligation, about to be con- 
 tracted with another, of which facts that other is ignorant, and can 
 only learn them from ihc first or from documents in his keeping, 
 that the fact of knowledge raises the obligation upon him to tell 
 it. This would be the law in such a case, and it is in this case. 
 Inquiry by the defendants would, at most, have resulted in obtain- 
 ing what was already known to the acceptor. He held the con- 
 tracts ; he knew, or should have known, officially, the state of the 
 accounts ))ctween the contractor and the department; and wheu 
 he conditionally accepted his drafts, which were to be charged to 
 his account for transporting the mail, as his liability to pay them 
 would occur in ninety days, it was but reasonable that he should 
 have said, in plain terms, when giving his acceptances : " If the 
 earnings of the contractor from this time to the maturity of tlie 
 draft, shall be sufficient to pay what he owes, and the debt he may 
 incur until then, then these drafts will be paid." This would 
 have been a condition about which there would have been no mis- 
 take. 
 
 But, further, if two persons deal in relation to the executory 
 contracts of a third, as these contracts were, and one of them 
 being the obligee induces the other to advance money to the obligor, 
 upon " condition that his contracts be complied with ; " and he 
 knows that forfeitures have been already incurred by the obligor, 
 for breaches of his contract, and does not say so ; shall he be per- 
 mitted afterwards to get rid of his liability, by saying to the per- 
 son making the advance: " I cannot pay you, for when I accepted 
 there was already due to me from the drawer of the bill more 
 than I accej)ted for. I had knowledge of it then, and so might 
 you have had if you had made the inquiry, but you did not choose 
 to inquire ; so I will pay myself first, because my acceptance was 
 on condition that his contracts be complied with." 
 
 Such is the case before us as it was presented by the argument ; 
 and we cannot doubt it will be thought decisive that it was the 
 duty of the acceptor, in this instance, to communicate what he 
 knew of Reeside's account, if he had any conversation with the 
 defendants before the drafts were discounted, and that it was not 
 the duty of the defendants to inquire. It cannot be answered by 
 saying the words of the acceptance were intended to provide for
 
 96 ACCEPTANCE. 
 
 what might .exist, but what was not then known, or for breaches 
 of the contracts which had already occurred, but which had not 
 been charged with a penalty ; for either would be an admission 
 that inquiry by the defendants when the acceptances were made, 
 could not have resulted in getting tlie information at the depart- 
 ment. 
 
 But, again, will the terms of the acceptance admit in any way of 
 retroactive construction ? The words must be taken according to 
 the ordinary import of them. They are " accepted on condition 
 that liis contracts be complied with." Can there be compliance 
 with an executory contract, l)ut in future, if breaches have already 
 happened ? Supposing no breaches to have occurred, necessarily 
 implies such as may occur in future, and subsequent compliance. 
 If both past and future breaches, then, are, as contended for, to be 
 comprehended witliin the condition of this acceptance, why may 
 not the condition be extended to such as may happen after the ma- 
 turity of the drafts, as well as to such as had occurred before they 
 were accepted ? A literal interpretation must lead to both, and 
 that will not be contended for. But the argument is, that the de- 
 fendants should have inquired into the " stipulations of the con- 
 tracts and tlie extent of the condition ; " and it is said : " The 
 bank would have been informed that the department expected Mr. 
 Reeside to renew his drafts until the accumulation of his current 
 pay would be sufficient to meet them ; and had his pledge to take 
 them up himself, if earlier payment should be required." Be it 
 so. Can there be a plainer admission than there is in the preced- 
 ing sentence, written by the acceptor, that it is necessary to go out 
 of the condition of the acceptance to ascertain his meaning, and 
 that his construction rests upon facts, known by himself and Mr. 
 Reeside, which the defendants could not have known but from 
 one or the other of them ? — facts out of the condition, and which 
 could alone become a condition by being so expressed. Again, it 
 is taken for granted in the argument, if the defendants had in- 
 quired into the stipulations of the contract and the bond, that they 
 would have been informed of the forfeitures which had been in- 
 curred. But that would not follow. Before such knowledge could 
 have been obtained, it would have been necessary to take one step 
 fiirtlier beyond the condition, an inquiry into the accounts. Where 
 shall such construction stop, if it be allowed at all ? The law 
 does not permit a conditional acceptance to be construed by any
 
 UNITED STATES V. BANK OP THE METROPOLIS. 97 
 
 thing extraneous to it, unless where tlie terms used are so ambigu- 
 ous that it cannot be otherwise ascertained. 
 
 We will suppose, however, that the stipulations of Reeside's 
 contract, and his bond, had bee'n known to the defendants. Might 
 they not very justifuibly have concluded tliat his drafts were ac- 
 cepted to aid liim with an advance to fulfil his engagements ? The 
 bond in evidence shows that a necessity for advances was contem- 
 plated. It had been the habit of the department to make them to 
 contractors. Its exigencies, it is said, required advances to be 
 made. Tiie witness. Mason, says : " From the year 1830 the pecun- 
 iary aflfliirs of the department were much deranged, and it was 
 frequently unable to pay debts due by it to contractors. Under 
 such circumstances, the department was in the practice of giving 
 to contractors acceptances for sums less than was actually stand- 
 ing to their credit, unconditionally ; and such acceptances were 
 always taken up at maturity, ])rior to May, 1835. That occasion- 
 ally, and with the special approbation of the postmaster-general, 
 acceptances were given upon the faith of existing contracts, con- 
 ditional upon the performance of the contracts, which were under- 
 stood to become absolute, if the contractor performed the services 
 stated in the contract." The defendants, in the year 1835, lield 
 acceptances of the same character for more than f 70,000, all of 
 which were under protest for non-payment, but subsequently paid 
 prior to the institution of this suit*, except those in dispute in this 
 case. The witness further says, the Bank of the Metropolis and 
 other banks in the city of Washington and elsewhere, have been, 
 for many years, in the practice of discounting such acceptances. 
 That it was often done for the accommodation of the department, 
 often for the accommodation of the drawer, and frequently of both. 
 This testimony brings the department and the bank in connection 
 upon accc{)tanccs of the former for contractofs ; shows the course 
 of business upon them ; and aids to give a proper construction 
 to the acceptances under consideration. When it is remembered, 
 also, that these acceptances were given to renew others of tlie de- 
 partment which were overdue, we think it cannot be doubted that 
 the terms " accepted on condition that his contracts be complied 
 with," cannot retroact to embrace forfeitures which had been in- 
 curred, and to refund advances said to have been made before the 
 date of these acceptances. The argument upon this point was 
 made upon the false assumption that there had been a communica- 
 
 7'
 
 98 ACCEPTANCE. 
 
 tion between the postmaster-general and the defendants concerning 
 these acceptances, before they were discounted ; or that there was 
 an obligation upon the part of the defendants to make an inquiry 
 into the state of Reeside's contracts, and his fulfilment of them, 
 because the acceptances were conditional. It did not exist here, 
 nor does it in any case of a conditional acceptance. The acceptor 
 is bound by his contract as it is expressed, and so it may be nego- 
 tiated without any further inquiry. 
 
 Having fully canvassed the argument upon the point of the obli- 
 gation of the defendants to inquire into the condition of the accept- 
 ance, we turn, for a moment, to the case as it is shown to be by 
 the evidence. 
 
 Reeside's earnings between the date of the acceptances and the 
 time for the payment of them, were not applied to pay forfeitures, 
 or refund advances. They were exhausted by recharging him with 
 sums of money which Mr. Barry had allowed to him as contractor 
 for carrying the mail, which were credited in the journal, but not 
 entered into the ledger. That they were not posted, cannot affect 
 Reeside's right to such allowances ; and something more must 
 appear than the testimony in this case discloses, before it can be 
 admitted that credits, given by Mr. Barry, were legally withdrawn 
 by his successor. There is no evidence in this cause to impeach 
 the fairness and legality of the allowances credited by Mr. Barry ; 
 no proof that Reeside had incurred forfeitures, or that advances 
 had been made to liim. Proofs should have been given, if it was 
 intended to justify the recharges for the causes stated. No at- 
 tempt was made to do so. The allowances, then, are credits in 
 Reeside's account, which the defendants may use to prove his per- 
 formance of the conditions of the acceptance ; and they do show 
 performance, as the amount earned would have paid his drafts if 
 it had not been divei^ted. 
 
 The third instruction asked the Court to say, among other things, 
 if the credits given by Mr. Barry were for extra allowances, which 
 the said postmaster-general was not legally authorized to allow, 
 then it was the duty of the present postmaster-general to disallow 
 such items of credit. The successor of Mr. Barry had the same 
 power, and no more, than his predecessor, and tlic power of the 
 former did not extend to the recall of credits or allowances made 
 by Mr. Barry, if he acted within the scope of official authority 
 given by law to the head of the department. Tliis right in an in-
 
 UNITED STATES V. BANK OF THE METROPOLIS. 99 
 
 cumbent of reviewing a predecessor's decisions, extends to mis- 
 takes in matters of fact arising from errors in calculation, and to 
 cases of rejected claims, in which material testimony is afterwards 
 discovered and produced. But if a credit has been given, or an 
 allowance made, as these were, by the head of a department, and 
 it is alleged to be an illegal allowance, the judicial tribunals of the 
 country must be resorted to, to construe the law under wliich the 
 allowance was made, and to settle tiie rights between the United 
 States and the party to whom the credit was given. It is no longer 
 a case between the correctness of one officer's judgment and that 
 of his successor. A third party is interested, and he cannot be 
 deprived of a payment on a credit so given, but by the intervention 
 of a court to pass upon his right. No statute is necessary to au- 
 thorize the United States to sue in such a case. The right to sue 
 is independent of statute, and it may be done by the direction of 
 the incumbent of the department. Tiie Act of July 2, 183G,^ en- 
 titled " An Act to change organization of the post-office depart- 
 ment," is only affirmative of the antecedent right of the government 
 to sue, and directory to the postmaster-general to cause suits to be 
 brought in the cases mentioned in the 17th section of that Act. 
 It also excludes him from determining finally any case which he 
 may suppose to arise under that section. His duty is to cause a 
 suit to be brought. Additional allowances the postmaster-general 
 could make under the 43d section of the Act of March 3, 1825,^ 
 3 Story, 1985 ; and we presume it was because allowances were 
 supposed to have been made contrary to that law, that the 17th 
 section of the Act of July 2, 1836, was passed. In this last, 
 the extent of the postmaster-general's power in respect to allow- 
 ances, is too plain to be mistaken. 
 
 We cannot say that either of the sections of the Acts of 1825 
 and 1836, just alluded to, covers the allowances made by Mr. Barry 
 to Reeside. But if the postmaster-general thought tiiey did, and 
 that such a defence could have availed against the rights of the 
 bank to claim these acceptances as credits in this suit, the same 
 proof which would have justified a recovery in an action by the 
 United States, would have justified the rejection of them as cred- 
 its, when they are claimed as a set-off. 
 
 We pass to the credit claimed, and called E. F. Brown's over- 
 
 i 5 St. at Large, 80. 2 4 id. 114.
 
 100 ACCEPTANCE. 
 
 draft. But why it is so called avc do not know ; for certainly no 
 overdraft occurred when he checked alone upon the contingent fund 
 of the department deposited to his credit in the bank. $7070.24, 
 on the 30th April, 1835, were deposited to his credit. By 7th 
 June, he had drawn of that sum 13076.97. Then the postmaster- 
 general directed the bank not to pay Brown's checks, unless they 
 were approved by Robert Johnson, the accountant of the depart- 
 ment. It is in proof that no check of Brown's was afterwards paid 
 without Johnson's approval. On the 2d December following, the 
 original deposit to Brown's credit was drawn out in his checks, 
 approved by Johnson, and it was found there had been an over- 
 draft of something over $600. We do not say that an overdraft 
 out of the bank, by authorized officers of the United States, is in 
 any case chargeable to the United States, unless it can be shown 
 that the money overdrawn has been applied to the use of the Uni- 
 ted States ; but, in the present instance, we think no proof of such 
 application was necessary, and we cannot resist the conclusion that 
 the defendants are in equity entitled to this credit ; for the proof 
 is, that on the day that the overdraft was known, the postmaster- 
 general wrote a letter to the cashier of the bank, stating that " the 
 contingent fund of the department was exhausted, but the public 
 service requires that a number of bills chargeable to that appro- 
 priation, shall be paid sooner than the usual sums can be obtained 
 from Congress ; I therefore request the favor of your bank to pay 
 such bills against the department of that character as may be pre- 
 sented, with the certificate that the amount is allowed, signed by 
 Robert Johnson, accountant of this department." The request 
 was complied with, and the bank advanced, until the 14th May, 
 1836, more than 86000 to pay claims on the contingent fund. In 
 this case, as in those of more humble dealings, the course of busi- 
 ness between parties must be used when it can apply to explain 
 their understanding of past transactions. Nor can the inference 
 be resisted that, when the postmaster-general discovered the con- 
 tingent fund had been overdrawn, and requested that other over- 
 drafts might be made on the same account, that it was an admission 
 of the correctness of the first. We think, then, that the United 
 States was a debtor to the defendants for Porter's draft, and Ree- 
 side's drafts, and for the overdraft on the contingent fund, princi- 
 pal, interest, and costs. 
 
 But it is said, though the credits claimed by the defendants
 
 UNITED STATES V. BANK OF THE METROPOLIS. 101 
 
 shall be found to be due by the United States, they cannot be set 
 off in this suit. This was the first instruction asked, and refused 
 by tlie Court. 
 
 It is urged that, to allow them as credits in this suit is, in effect, 
 to permit money to be taken from the treasury, otherwise than it 
 is directed to be disbursed by law. That the money previously 
 held by the defendants, had been passed to the account of the 
 treasurer of the United States by direction of the postmaster- 
 general, in conformity with the Act of July 2, 1836. 4 Story, 
 2464. That when the defendants complied with the letter 
 of instruction, written to them by the postmaster-general, on the 
 16tli July, 1836, and transferred the money then on deposit to 
 the credit of the department, to the treasurer of the United States, 
 for the service of the post-office department, and when they con- 
 sented to receive future deposits according to a form sent, and to 
 transact the business according to the regulations contained in the 
 letter of the 16th July, 1836, that the defendants cannot legally 
 charge their claims against that account, by way of set-off in this 
 suit. 
 
 To the foregoing objections, a brief but conclusive answer may 
 be given. That is certainly the treasury of the United States, 
 where its money is directed by law to be kept ; but if those whose 
 duty it is to disburse appropriations made by law, employ, or are 
 permitted by law to employ, either for safe-keeping or more con- 
 venient disbursement, other agencies, and it shall become neces- 
 sary for the United States to sue for the recovery of the fund, that 
 the defendant in the action may claim, against the demand for 
 which the action has been brought, any credits to which he shall 
 prove himself entitled to, if they have been previously presented 
 to the proper accounting officers of the treasury, and been rejected. 
 Such is the law as it now stands. This right was early given, by 
 an Act of Congress, to all defendants in suits brought by the 
 United States. 1 Story. It has been repeatedly before this Court. 
 The decisions upon it need not be cited. They apply to this case. 
 The transfer of the deposit to the treasurer of the United States ; 
 the letter of tiie postmaster-general, directing it to be done ; his 
 regulations for keeping the account, and for disbursing it, were 
 directory to the defendants ; and their compliance with such direc- 
 tions was an acknowledgment that the postmaster-general had the 
 right to give them, as the conditions upon which they were to cou-
 
 102 ACCEPTANCE. 
 
 tinue the depository of the fund. But it cannot be inferred, either 
 from the Act of July 2, 1836, requiring that when the revenues 
 of the post-office department have been collected, that they shall 
 be paid, under the direction of the postmaster-general, into the 
 treasury of the United States ; or because appropriations for the ser- 
 vice of the department shall be disbursed by the checks of the 
 treasurer, indorsed upon warrants of the postmaster-general, and 
 countersigned by the auditor for the post-office department, under 
 the words " registered and charged ; " or from the declaration in 
 the postmaster-general's letter to the defendants, that no other 
 credit, set-off, or deduction will be admitted in this account. It 
 cannot be inferred that the defendants accepted the postmaster- 
 general's letter as a contract to surrender the right secured to 
 them by the statute, to claim credits in a suit brought against 
 them by the United States ; or that it imposed upon them any 
 legal obligation not to do so. 
 
 From the previous and contemporaneous correspondence be- 
 tween the bank and the postmaster-general, concerning these 
 drafts, it is clear such was not the apprehension of the defendant 
 when the account was open with the treasurer of the United 
 States, in compliance with the postmaster-general's letter. That 
 was done in compliance with the law, changing entirely the fiscal 
 arrangements of the department ; and for that purpose the post- 
 master-general was the proper organ to direct it to be done ; but 
 any condition in that letter not required by the Act of Congress, 
 under which he was acting, though officially made, is rather an 
 evidence of what he wished to do, than a conclusion that he had 
 the power to impose it, or that the defendants had consented to 
 look to Congress for the reimbursement of the debt due tliem, and 
 not to the courts of justice. When the account was changed to 
 the treasurer of the United States, there was a large balance on 
 deposit to the credit of the post-office department. The fund, 
 however, was not the less that of the United States, in the one 
 case or the other. The change, then, made no difference as to the 
 ownership of the fund, in their right to retain, if the defendants 
 had any right at all to retain it for th6ir debt. They had been 
 dealing with the executive branch of the government in a matter 
 of money, and could not be turned to the legislature without their 
 consent to ask it to do as a favor, what the judiciary could settle 
 as a right. If the defendants had supposed such was to be the
 
 UNITED STATES V. BANK OF THE METROPOLIS. 103 
 
 consequence of carrying the fund to the treasurer's account, it is 
 manifest, from the evidence in tiie case, that it would not have 
 been done. That they did not do so, it is to be inferred also, from 
 the evidence, arose from an indisposition to enforce a right until 
 every effort had been made to obtain it by amicable adjustment; 
 and from an indisposition to embarrass a department which had 
 been severely pressed, and was then just beginning to be relieved. 
 The postmaster-general says, in his letter of March 19, 1838, that, 
 " excepting the refusal, in common with other banks, to ])ay the 
 warrants of this department in gold and silver, or an equivalent, 
 commencing in May last, and the seizure of both a general and 
 special deposit of moneys in the treasury to meet alleged claims, 
 under the circumstances exliibited in the annexed papers, the 
 Bank of Metropolis has faithfully discharged its duties as a deposit 
 bank for this department." The circumstances alluded to are 
 those which have been the subject of comment in this case; and 
 it is our opinion that they confirm the right of the defendants to 
 tlie credits claimed. There was no error, then, in the Court not 
 giving the instructions asked for, and the judgment is affirmed. 
 
 It is proper for us to say, however, if the law and the merits of 
 the case were not with the defendants, that the Court might well 
 have refused to give the first instruction, from the manner in 
 which it is asked. After the evidence had been closed on both 
 sides, the Court was asked to say, " that, upon the evidence afore- 
 said, the defendants are not entitled, in this action, to set off 
 against the plaintiffs' demand, the amount of acceptances afore- 
 said, so given in evidence by the defendants, nor the amount of 
 the overdraft of E. F. Brown." It raises all the issues, both of 
 law and fact, in the case, and requires the Court to adjudge the 
 case for the ])laintiffs. Tbis the Court could not do, as there were 
 contested facts in the case, which it was the province of the jury 
 to decide. The Court could only have, said, alternatively, what 
 was the law of the case, accordingly as the jury did or did not 
 believe the fiicts ; and this, it will be admitted, would have been 
 equivalent to a refusal of the instruction. Wlien instructions are 
 asked, they should be precise and certain, to a particular intent ; 
 that the point intended to be raised may be distinctly seen by the 
 Court, and that error, if one be made, may be distinctly assigned.
 
 104 ACCEPTANCE. 
 
 MoRETON Newhall et al. v. Joseph W. Clark. 
 
 (3 Gushing, 376. Supreme Court of Massachusetts, March, 1849.) 
 
 Conditional acceptance. — An acceptance of tlie following order is conditional : " Please 
 pay, &c., out of the amount to be advanced to me, when the houses I am now 
 erecting on your land . . . are so far completed as to have the plastering done, 
 according to our contract," &c. And if the work was never done by the con- 
 tractor (the drawer), under the contract referred to, the event never occurred upon 
 which the defendant by his acceptance bound himself to pay. And it is imma- 
 terial that this contract was subsequently cancelled by the drawer and acceptor, if 
 there was no fraudulent interference by the acceptor to prevent the completion of 
 the work contracted for. 
 
 The plaintiffs, as the payees, brought this action against the 
 defendant, as the acceptor of two orders drawn on him by Henry 
 M. Reed, for different sums, and of different dates, but in other 
 respects of the same tenor. The declaration also contained the 
 general counts for work and labor, money paid, &c., in common 
 form. The following is a copy of one of these orders : — 
 
 " Boston, June -22, 1844. J. W. Clark : — Please pay to Newhall & Maguire, 
 or their order, one hundred and eighty-four dollars and sixty-six cents, out 
 of the amount to be advanced to me when the houses I am now erecting on your 
 land in Erie Street are so far completed as to have the plastering done, accord- 
 ing to our contract, dated April 12, 1844, now on record, and charge it to my 
 account. Yours, &c., respectfully, Henry M. Reed." 
 
 "Indorsed: Jos. W. Clark." 
 
 The plaintiff contended, in the Court below, that the orders and 
 acceptance were absolute ; and the defendant, that they were con- 
 ditional. The presiding judge ruled this point in favor of the 
 plaintiffs ; but considering the question doubtful, allowed tliem to 
 proceed and introduce evidence to show, and the fact was admitted, 
 that, on the 14th February, 1845, Reed, the contractor and drawer 
 of the order, made an assignment to Rice and Jenkins of all his 
 right in the contract, and that on the same day the contract was 
 cancelled by Rice and Jenkins and the defendant. 
 
 The plaintiffs contended, upon this evidence, that if the orders 
 were conditional, the defendant and the drawer having cancelled 
 the contract, the defendant had thereby rendered himself liable 
 absolutely, from the time of the cancellation ; and the presiding
 
 NEWHALL V. CLARK. 105 
 
 I 
 
 judge so ruled. The defendant thereupon offered to show the 
 following facts, by way of explaining and avoiding the effect of 
 the cancellation : — 
 
 That the contract had expired by its own limitation, at the time 
 of the cancellation ; that Reed had wholly failed to comply with 
 the terms of the contract, and had released the premises to Clark ; 
 that the work done by Reed was not done pursuant to the con- 
 tract ; that he was utterly unable to complete the work, and that 
 in February, 1845, the work was wholly suspended; that this was 
 well known to the plaintiffs ; and that the assignment was made 
 in consequence of the utter inability of Reed to go on with and 
 complete the contract. 
 
 This evidence, being objected to by the plaintiffs, was considered 
 inadmissible by the Court, and rejected. 
 
 It was agreed that the plaintiffs worked upon the houses men- 
 tioned in the contract to the full value of the sums for which the 
 orders were drawn, and on the faith of these orders. 
 
 Upon the facts in evidence, the presiding judge ruled that the 
 plaintiffs could recover, and a verdict being returned accordingly 
 in their favor, the defendant alleged exceptions. 
 
 Shaw, C. J. The Court are of opinion, that this verdict, under 
 the instructions given, and the evidence offered, as appears by the 
 bill of exceptions, cannot be sustained. 
 
 The plaintiffs declare in a general count for work and labor, 
 money paid, etc., in common form, and also upon two orders, 
 copies of which accompany the bill of exceptions. These orders 
 are alike, and the same remarks will apply to both : " Please pay, 
 (fee, out of the amount to be advanced to me, when the houses I 
 am now erecting on your land, in Erie Street, are so far completed 
 as to have the plastering done, according to our contract, dated," 
 &c. The orders refer to the contract subsisting between the par- 
 ties, and necessarily call for evidence, beyond that of the orders 
 themselves, to ascertain their meaning and legal effect, and to 
 determine when and from what fund the sums mentioned in them 
 are to be paid. They look to the future, to a certain quantity of work 
 to he done, and materials supplied, by the drawer, for the use and 
 benefit of the acceptor, according to contract. All future events 
 are contingent ; all unaccomplished enterprises, intended labors 
 and performances, fall within this category. The acceptance was
 
 106 ACCEPTANCE. 
 
 an agreement to the request expressed in the order, and as that was 
 contingent, the acceptance was an undertaking dependent on the 
 same contingency. That contingency was, luheji, or if, the work I 
 have undertaken to do, shall have been completed to a certain 
 stage, agreeably to our contract. If, then, the work was never 
 done by the contractor, the drawer of the order, under and in pur- 
 suance of this contract, the event never occurred, upon which the 
 defendant by his acceptance bound himself to pay. It follows, as a 
 necessary consequence, that by force of the defendant's express 
 promise, he was not bound to pay any thing. Payment was only to 
 be made, at a time which never arrived ; and out of a fund of the 
 drawer, to accrue by the performance of the contract, on the part of 
 the drawer, which never being performed, the fund of course never 
 existed. 
 
 The Court are therefore of opinion, that the direction of the 
 Court was incorrect, in ruling that this acceptance was an absolute 
 and unconditional promise for the payment of money. 
 
 But, for the purpose of presenting another question, the plaintiffs 
 offered evidence to prove, that, on the 14th February, 1845, Reed, 
 the drawer of the order, and the contractor with the defendant, 
 made an assignment to Rice and Jenkins of all his right in the 
 contract ; and that on the same day the contract was cancelled by 
 Rice and Jenkins and Clark ; and of these facts there is no dispute. 
 
 Upon these facts, the Court ruled, at the instance of the plaintiffs, 
 that if the order was conditional, the defendant, and the drawer, 
 that is, as the evidence was, the assignee of the drawer, having 
 cancelled the contract, the defendant had tliereby rendered him- 
 self absolutely liable from the time of such cancellation. 
 
 This direction was, in our judgment, incorrect. By such cancel- 
 lation, the condition on which the money was to be paid did not 
 occur ; the work on the houses was not done by Reed, conformably 
 to his contract, so as to bring the defendant's engagement within 
 the terms of the order and acceptance ; and the defendant, there- 
 fore, did not become liable by the force of his acceptance. 
 
 We do not mean to say, that when a party has obtained such an 
 order and acceptance, nothing short of an absolute performance of 
 the contract, on the part of the contractor and drawer, will give the 
 payee any remedy against the acceptor. The holder of such an 
 order is a holder for value, and has an interest in the contract, and 
 in its execution, as a means of raising the fund to which he has a
 
 NEWHALL V. CLARK. 107 
 
 right to look for his pay. If, therefore, after the acceptance of such 
 an order, the acceptor, without justifiahle cause, should prohibit 
 tlic drawer and contractor from proceeding to such a completion of 
 the contract, as will make the acce[)tance payable, or if he should 
 collude with the drawer of the order, to put an end to the contract, 
 when, but for such fraudulent interference, the drawer would be 
 able and ready to go on and complete it, we are not prepared to say 
 that the holder of the order would not have a remedy by a special 
 action, setting out such wrongful act of the acceptor, and the loss 
 sustained by the holder by means thereof. Tlie sum thus to be 
 recovered would not be the debt due by force of the contract, that 
 is, the acceptance, but damages for the wrongful act of the acceptor, 
 in preventing the completion of the contract, by means of which the 
 holder has sustained the loss of the debt. In such action, the 
 burden of proof would be on the plaintiffs to show, that the preven- 
 tion of the completion of the cojitract had been caused by the 
 defendant, to avoid the order ; and any evidence, on the part of the 
 acceptor, to show that the drawer had failed or been unable to per- 
 form his contract, by reason of death, sickness, insolvency, or other 
 inability, would be competent to rebut the charge, upon which such 
 action must be grounded. 
 
 But, even if the plaintiffs, under a count in indebitatus assumpsit, 
 ■could be permitted to prove facts tending to show that the perform- 
 ance of Reed's contract, and the earning of the money from which 
 the acceptance was payable, had been prevented by the defendant, 
 of which we have great doubt, it must be done not merely by show- 
 ing a cancellation of the contract, before its completion ; but also 
 that it was done without excuse or justification, on the part of the 
 defendant, and tliat the drawer was competent and willing, and, but 
 for such interference of the defendant, would have been able, to 
 complete his contract ; and thus to place in the defendant's hands 
 the fund from which the acceptance was payable. In the present 
 case, this must have been done by proof of facts aliunde ; and the 
 evidence of facts, offered by the defendant, to explain and avoid the 
 effect of these acts of the defendant in annulling the contract, to 
 wit, that Reed had wholly failed to comply with the terms of his 
 contract, &c., as stated in the bill of exceptions, would have been 
 competent and material, and the rejection of such evidence by the 
 Court was therefore incorrect. 
 
 Exceptions sustained, verdict set aside, and new trial granted.
 
 108 ACCEPTANCE. ^ 
 
 A conditional acceptor is not liable if compliance is prevented by the operation 
 of law. Browne v. Coit, 1 McCord, 408. 
 
 In this case the defendant accepted a bill upon condition that he should sell 
 certain goods of the drawer in his hands, which goods were attached before the 
 maturity of the bill and before they had been sold. The Court held that the 
 defendant was not liable. 
 
 So if a merchant undertake to accept a bill on condition that a cargo of equal 
 value be consigned to him, and the cargo consigned be not of equal value, he is 
 not bound. Mason v. Hunt, 1 Doug. 297. 
 
 In Wintermute v. Post, 4 Zabr. 420, the force of an acceptance " when in 
 funds," came under consideration. " The terra ' when in funds ' literally means 
 when the acceptor is in the possession of cash which the drawer has a present 
 right to demand and receive or to appropriate by his bill, whether such funds be 
 the product of labor or of commodities furnished, of goods sold or money de- 
 posited or collected, or any other source. And such, in my judgment, is its fair 
 commercial and judicial construction." Per Haines, J. In this case S., a day 
 laborer, drew on his employer, P. (to whom S. was indebted), in favor of the 
 plaintiff. P. wrote upon the bill " accepted when in funds." S. continued to 
 draw his wages as he earned them ; and the Court held that it was not to be 
 supposed that the parties meant that the pittance of each day's work should be 
 withheld from the necessities of the laborer's family till they should accumulate 
 to the amount of the bill. But If after such appropriation for the necessaries of 
 life a balance should be left In the hands of the acceptor, then his acceptance 
 would become absolute, and he would be bound to pay, and not till then. 
 lb. 424. 
 
 See Campbell v. Pettengill, 7 Greenl. 126, where it was determined, in con- 
 struing the same expression, that available securities were not funds until actually 
 converted into money. See also Hunter w. Ingraham, 1 Strob. 271; Gallery u. 
 Prindle, 14 Barb. 186 ; Owen v. Iglanor, 4 Cold. 15. 
 
 And the burden of proof in such case is on the plaintiff, in an action against 
 the drawer, to show funds In the hands of the acceptor. Andrews v. Baggs, 
 Minor, 173. See Owen v. Lavine, 14 Ark. 389. 
 
 If the funds are not received in the lifetime of the acceptor, but are collected 
 by his administrator, the latter Is liable in his representative character upon the 
 acceptance of the deceased. Swansey v. Breck, 10 Ala. 533. 
 
 In Perry v. Harrington, 2 Met. 368, It was held that an acceptance to pay a 
 certain sum out of the first money received by the drawee, bound the acceptor 
 to pay, from time to time, on reasonable request, such funds as he received of 
 the drawer ; and that a judgment for a sum which he had refused to pay was no 
 bar to an action for a further sum received since the first action. 
 
 But the payee is not bound to receive a conditional acceptance. He may 
 refuse, and protest the bill for non-acceptance. But if the plaintiff relies upon 
 such acceptance, he must show that the condition has been performed. Ford v. 
 Angelrodt, 37 Mo. 50 ; Wintermute v. Post, 4 Zabr. 420, and other cases, supra. 
 
 Whether an acceptance at a particular place Is a conditional acceptance, has 
 been a subject of considerable conflict. In England, after several decisions to 
 the contrary. It was finally decided in the House of Lords, in Rowe v. Young, 
 2 Brod. & B. 165; s. c, 2 Bligh, 391 (1820), that such an acceptance was con-
 
 NEWHALL V. CLARK. 109 
 
 ditional, requiring the holder, in an action against the acceptor to aver and prove 
 presentinent at the place designated. This decision gave rise to tiie Stat, of 1 
 ifc 2 (Jeo. IV. c. 78, declaring that acceptance at a particular place shall not be 
 considered conditional, unless the bill is payable at a designated place " only, 
 and not otherwise or elsewhere." 
 
 In America, the doctrine generally prevails that in case of a note payable at a 
 particular place, if the suit is against the maker, demand need not be averred ; 
 but if the maker was at the place designated at the proper time, and was ready 
 and olFered to pay the note, it is matter of defence to be pleaded and proved on 
 his part. And the acceptor of a bill being regarded in the same light as the 
 maker of a note, it follows that an acceptance at a particular place is not con^ 
 ditional, and presentment at that place need not be averred. Wallace v. M'Con 
 nell, l;i Pet. 136, ante, 15 ; Watkins v. Crouch, 5 Leigh, 522 ; Bowie v. Duvall 
 1 Gill & J. 175; Ruggles i'. Fatten, 8 Mass. 480; Weed v. Houten, 4 Halst 
 189 ; Mulherrin v. Hannum, 2 Yerg. 81 ; Wolcott v. Van Santvoord, 17 Johns 
 248; Caldwell i\ C'assidy, 8 Cow. 271; Fairchild r. Ogdensburgh, &c. R. Co. 
 15 N. Y. 3;57; Fleming v. Potter, 7 Watts, 380; Brabston r. Gibson, 9 How 
 263; l\i[)ka v. Pope, o La. An. 61 ; McCalop v. Fluker, 12 La. An. 551. But 
 the rule is otherwise in Indiana. See Alden v. Barbour, 3 Ind. 414 ; Palmer v. 
 Hughes, 1 Blackf. 328. 
 
 The law is dilTerent as to an indorser ; he can require presentment at the 
 place designated. See cases above cited. See also State Bank v. Napier, 6 
 Humph. 270; Taylor v. Snyder, and Chicopee Bank v. Philadelphia Bank, post, 
 and note. 
 
 The following cases contain further examples of conditional acceptance: Kel- 
 logg V. Lawrence, Hill & D. 332 ; Kemble v. Lull, 3 McLean, 272 ; Atkinson 
 V. Manks, 1 Cow. 691.
 
 110 INDORSEMENT. 
 
 INDORSEMENT. 
 
 Brown v. The Butchers' and Drovers' Bank. 
 
 (6 Hill, 443. Supreme Court of New York, May, 1844.) 
 
 Form of indorsement. — The following figures in pencil, on a bill of exchange, viz., " 1, 2, 
 8," in connection witli evidence tending to show that the person who placed them 
 there meant thereby to bind himself as an indorser, constitute a valid indorsement ; 
 though it also appeared that he could write. 
 
 Brown, the defendant below, was sued as indorser of a bill of 
 exchange, upon which he had placed the figures " 1, 2, 8," in pen- 
 cil. It was in evidence that he intended thereby to bind himself 
 as an indorser ; though it was also proved that he could write. 
 
 Nelson, C. J. It has been expressly decided that an indorse- 
 ment written in pencil is sufficient. Geary v. Physic, 5 Barn. & 
 Cress. 234 ; and also that it may be made by a mark. George v. 
 Surrey, 1 Mood. & Malk. 516. In a recent case in the K. B., it 
 was held that a mark was a good signing within the statute of 
 frauds ; and the Court refused to allow an inquiry into the fact 
 whether the party could write, saying that would make no differ- 
 ence. Baker v. Dening, 8 Adol. & Ellis, 94. And see Harrison v. 
 Harrison, 8 Ves. 185 ; Addy v. Grix, ib. 504. 
 
 These cases fully sustain the ruling of the Court below. They 
 show, I think, that a person may become bound by any mark or 
 designation he thinks proper to adopt, provided it be used as a 
 substitute for his name, and he intend it to bind himself. 
 
 Judgment affirmed. 
 
 In 2 Parsons, Notes and Bills, 16, note, the doctrine of this case is ques- 
 tioned ; but on the ground of the evidence, that the defendant intended to bind 
 himself as indorser by the use of the figures, the decision seems to be satisfac- 
 tory. If he thereby induced another party to take the bill, it is clear, both on 
 principle and authority, that he would be precluded from setting up the defence
 
 BROWN V. THE BUTCHERS* AND DROVERS* BANK. Ill 
 
 that his indorsement was not formal and valid. It is possible that, in an ac- 
 tion against (he maker of a note or acceptor of a bill thus indorsed by the 
 payee, the unusual form of the indorsement might be considered as a circumstance 
 of suspicion so strong as to rcj)el the holder's claim ; but even this is doubtful. 
 See George r. Surray, 1 Moody & M. olC. However this may be, the case is 
 very different where the action, as here, is against the party who made such in- 
 dorsement, — the proof being that he intended to render himself liable as an 
 indorser. It is, perhaps, to be inferred that the defendant had adopted this 
 method of indorsement for some special and private reason ; and if it was in 
 proof that he was in the habit of thus indorsing paper, the case would be stronger 
 still against him. 
 
 The case has never been (juestioned in the courts, and is cited as authority in 
 Palmer v. Stephens, 1 Denio, 471, where it was held that, if one sign a note 
 with his initials, intcndinri thereby to bind himself, he is as effectually bound as 
 if he had written his name in full. See Merchants' Bank r. Spicer, 6 Wend. 443, 
 to the same effect. Also Williamson v. Johnson, 1 Barn. & C. 146 ; Bank v. 
 Flanders, 4 N. Hamp. 239, 247, 248 ; Ildgers v. Coit, 6 Hill, 322. 
 
 Vincent r. Horlock, 1 ("amp. 442, is not in conflict with this view. In that case 
 B wrote above the blank indorsement of A, the following : " Pay the contents to 
 C." It was held that B was not an indorser, on the ground that he did not 
 intend to render himself liable as such. The words quoted were not a substitute 
 for his name as in the principal case. 
 
 In Partridge r. Davis, 20 Vt. 499, the payee of a promissory note wrote the 
 following words upon the back of it : "I guaranty the payment of the within 
 note. Isaac D. Davis." The Court held that the transaction amcunted to an 
 indorsement, rendering Davis liable upon demand and notice, to any subsequent 
 holder, even though not the immediate assignee of the payee. To the same 
 effect is Leggett v. Raymond, 6 Hill, 639; but Bronson, J., in delivering the 
 opinion of the Court, says tliat his own opinion, which is overruled, is that the 
 contract is a guaranty, void under the statute of frauds for want of a considera- 
 tion, and not negotiable so as to pass a title to any one except to the person to 
 whom the promise was made. He distinguishes the case from Ketchell v. Burns, 
 24 Wend. 456, in that the defendants' contract (guaranty) in that case was to 
 bearer, and therefore negotiable. In this case (24 Wend. 456), the defendant 
 was held liable as the maker of a new note. The case was also distinguished 
 from Manrow v. Durham, 3 Hill, 584, as the guaranty in this case was made to 
 the plaintiff; whereas 'in Leggett r. Raymond, as in 'Partridge v. Davis, the 
 plainlilf was a subsequent assignee, and not the party to whom the promise was 
 made. The contract in Manrow v. Durham was: "We guarantee the payment 
 of the within note." Signed by the defendants. It was held in legal effect a 
 promissory note, importing a consideration. Bronson, J., dissented, consider- 
 ing the promise as a guaranty, as he did that in Leggett r. Raymond afterwards. 
 This case of Manrow v. Durham, will be found interesting as containing an 
 able review of the early cases, both by Nelson, C. J., in delivering the opinion 
 of the Court, and in the dissenting opinion of Bronson, J. The later New York 
 cases, however, substantiate the view taken by the latter. See Waterbury v. Sin- 
 clair, 26 Barb. 455 ; Ellis v. Brown, 6 Barb. 282 ; Cottrell r. Conkiin, 4 Duer,' 
 453 ; Spies v. Gilmore, 1 Comst. 321 ; Hall v. Newcomb, 7 Hill, 410 ; and such
 
 112 INDORSEMENT. 
 
 a contract as that in Leggett v. Ra)'mond, would, now be considered a guaranty 
 and nothing more. This shakes the authority of Partridge v. Davis ; and it 
 may be considered very doubtful whether a contract, such as the one in that case, 
 can be held an indorsement. The early case of Upham v. Prince, 14 Mass. 14, 
 held the same doctrine as Partridge v. Davis. See also Riggs v. Waldo, 2 Cal. 
 485 ; Pierce v. Kennedy, 5 Cal. 138. See Indorsement by one not a party, infra. 
 ■ A written agreement to pay a note "as if by me indorsed," is an indorse- 
 ment. Pinnes r. Ely, 4 McLean, 173. 
 
 It is most usual and proper to place an indorsement upon the back of the bill 
 or note, in acc*brda.nce with the literal import of the term ; but this has been 
 held not essential. It may be upon its face, upon a paper attached, and with 
 pencil as well as ink. Folger v. Chase, 18 Pick. 63 ; Geary r. Physick, 7 Dowl. 
 & R. 653 ; Partridge v. Davis, 20 Vt. 499. 
 
 If there is an intention so to indorse as to effect negotiation, the form of the 
 writing is immaterial. lb. 503 ; Sanford v. Norton, 14 Vt. 228 ; Sylvester v. 
 Downer, post. 
 
 The result is, as stated by Davis, J., in Partridge v. Davis, "that no pre- 
 scribed formula need be observed to constitute an indorsement. It is governed, 
 like the instrument on which it is made, by those liberal principles of construc- 
 tion which pervade all mercantile contracts, paying little attention to mere tech- 
 nical rules, but endeavoring to ascertain and carry into effect the real intentions 
 of the parties to them." 
 
 John B. Camden et al.^ Plaintiffs in Error, v. Kenneth 
 McKoY et al., Defendants in Error. 
 
 (3 Scammon, 437. Supreme Court of Illinois, December, 1842.) 
 
 * Indorsement by one not a party. — If one not a party to a promissory note place his 
 name on the back thereof, the payee not having indorsed it, he is to be regarded 
 as a guarantor, and not as maker or surety ; and the holder has no authority to 
 write over tlie name any thing which would render such person liable as an 
 original promisor, in the absence of proof of intention. 
 
 The case is stated in the opinion of the Court. 
 
 Douglas,! J. This was an action of assumpsit, by the plain- 
 tiffs against the defendants, McKoy, Johnson, and Gray, as maker 
 of a promissory note. McKoy and Johnson pleaded the general 
 issue, which was joined, and Gray pleaded a former recovery, to 
 which the plaintiffs demurred. Before any decision was had on 
 the demurrer, the plaintiffs entered a nolle prosequi as to Gray, 
 
 ^ Stephen A.
 
 CAMDEN V. M'KOY. ' 113 
 
 and proceeded to trial against McKoy and Johnson. By agree- 
 ment of the parties, a jury was dispensed with, and the matters of 
 fact as well as law were submitted to the Court. The plaintiffs 
 offered in evidence the following promissory note and indorse- 
 ment: "Three months after date, I promise to pay J. B. and M. 
 Camden & Co., or order, four hundred and eighty dollars, value 
 received, without defalcation. 
 
 John C. Gray. 
 
 "January 26, 1838." 
 
 Jitdorsc7nent. 
 
 " For value received, we jointly and severally acknowledge our- 
 selves as securities of John C. Gray, for the payment of the within 
 note at maturity. 
 
 Kenneth McKoy, 
 Jacob Johnson." 
 
 The signatures of Gray, McKoy, and Johnson were all proven to 
 be genuine, and the plaintiffs' counsel admitted that the names of 
 McKoy and Johnson were written in blank on the back of the note, 
 and that they wrote said indorsement over said signatures on the 
 trial. Various witnesses were then examined for the purpose of as- 
 certiaining at what time, and under what circumstances, McKoy and 
 Johnson indorsed said note ; but the whole evidence left it extremely 
 doubtful whether they placed their names on the back of the note 
 at the time of its execution, or long subsequently ; and there was 
 no evidence showing that they were privy to, or participated in tlie 
 consideration. The plaintiffs then offered to read said note in evi- 
 dence, under a declaration charging said McKoy, Johnson, and 
 Gray as joint and several makers of said promissory note, to wiiich 
 the defendants objected, and the Court sustained tlie objection ; and 
 the plaintiffs offering no other evidence, a judgment of nonsuit, and 
 for costs, was entered against the plaintiffs. 
 
 Tiie assignment of errors questions the decision of the Court, 
 excluding the note from evidence, and entering the judgment of 
 nonsuit. Supposing the names of McKoy and Johnson to have 
 been indorsed upon the note at the time of its execution by Gray, 
 it becomes necessary to inquire into the nature and extent of their 
 liability, and especially whether they, in connection with Gray, are 
 liable, as joint and several makers of the note. 
 
 The general rule is, that an indorsement in blank operates as 
 
 8
 
 114 INDORSEMENT. 
 
 authority to the bona fide holder of the note to fill up the indorse- 
 ment, by writing any thing over the signature which shall be con- 
 sistent with the nature of the instrument, and the intention of the 
 parties. Great difficulty and confusion have arisen in applying the 
 rule to the peculiar state of facts existing in each case. Upon an 
 examination of the various cases cited in the argument, and others 
 to which I have directed my attention, I find many apparently con- 
 tradictory decisions, which will render it necessary to review the 
 leading cases, in order to arrive at a satisfactory conclusion. 
 
 Ilerrick v. Carman ^ was a case where one Ryan had executed 
 his note to Carman & Co., and procured Herrick to indorse it in 
 blank. Carman & Co. assigned the note to J. V. Carman, who 
 sued Herrick, seeking to charge him on his indorsement. The 
 Court held that as it did not appear that Herrick gave Ryan credit 
 with Carman & Co., by indorsing the note, or that he was in any 
 wise informed of the use to which Ryan meant to apply the note, it 
 would intend that Herrick meant only to become second indorser, 
 with all the rights incident to that situation ; that the fact of his 
 indorsing first, in point of time, could have no influence, for he 
 must have known, and we are to presume he acted on that knowl- 
 edge, that though the first to indorse, his indorsement would be 
 nugatory, unless preceded by that of the payees of the note. -The 
 Court also says, had it appeared that Herrick indorsed the note for 
 the purpose of giving Ryan credit with Carman & Co., he would 
 have been liable to them, or any subsequent indorsers, and his 
 indorsement might have been converted into a guarantee to pay the 
 note, if Ryan did not, according to the decision of the Supreme 
 Judicial Court in Massachusetts.^ From this decision, it appears 
 that the indorser was not liable, either as maker or guarantor, for the 
 reason that it was not proven that the payees gave the credit to 
 him at the time they received the note ; and if that fact had been 
 proven, he would have been responsible as guarantor, and not as 
 maker of the note. 
 
 The case of Herrick v. Carman,'^ was an action on the same note, 
 and the Court decided that it could not be maintained, either in the 
 names of the payees, or the assignees of the note. 
 
 In Nelson v. Dubois,* the Court maintains the same doctrine, 
 upon a case similar in all respects, except that the person who 
 indorsed the note in blank, did so for the purpose of inducing the 
 1 12 Johns. 159. 2 3 Mass. 274. 3 10 Johns. 224. * 13 Johns. 175.
 
 CAMDEN V. M'kOY. 115 
 
 payees to accept it, and part witli their property in lieu of it. In 
 delivering the opinion, Chief Justice Sjyencer says, the facts in that 
 case (Ilerrick v. Carman) are tiie same as in this, with the diiference 
 only, that it did not appear that Ilerrick indorsed the note for the 
 purpose of giving Ryan credit with Carman & Co. It was then, and 
 still is, my oj)inion, that, had he done so, he would have been liable 
 to them, or any sulisecpient indorsee, and that Ilerrick's indorse- 
 ment might have been converted into a guarantee to pay the note, 
 if Ryan did not. In the present case, it does appear clearly and 
 affirmatively, that the plaintiff" refused to sell the horse for which 
 the note was given, on Brundige's (the maker's) responsibility, and 
 that the defendant put his name upon the note as guaranty for 
 Brundige's payment of it, when it fell due ; and that but for the 
 defendant's undertaking, as guaranty, the })laintiff" would not have 
 parted with his property. 
 
 The case of Campbell v. Butler,^ was founded upon a state of 
 facts precisely similar in all respects to the preceding one. One 
 Law executed his note to Butler, and Campbell and Harvey indorsed 
 their names on the back of the note, for the purpose of enabling 
 Law to oljtain from Butler a horse and wagon, in exchange for the 
 note. Butler sued Campbell upon his indorsement, and on the 
 trial filled up the blank indorsement as follows : — 
 
 " For value received, I undertake and promise to guaranty the 
 payment of the money within mentioned, to the within named 
 James Butler. William Campbell." 
 
 " Per Curiam : The question is, whether the plaintiff" below was 
 authorized to write such a contract over the names of the indorsers 
 of the note, respectively, and can sustain an action upon that con- 
 tract. According to the decision in Nelson v. Dubois, and as the 
 law is recognized in Herrick v. Carman, we think the plaintiff" had 
 a perfect right to recover, as on an original undertaking to pay, by 
 each of the indorsers, as guarantors of the note. The defendant 
 in error is, therefore, entitled to judgment." ^ 
 
 The case of Josselyn v. Ames,- which was cited in Herrick v. 
 Carman, was an action by the assignee against the assignor of 
 a note. The facts disclosed in the pleadings and proofs are these : 
 Josselyn held a note against John Ames, and demanded security 
 upon it. John proposed his brother Oliver as surety, who was 
 1 14 Johns. 349, 35L 'i 3 Mass. 274.
 
 116 INDORSEMENT. 
 
 # 
 
 accepted ; and accordingly, John executed a note to Oliver, who 
 indorsed it in blank, and delivered it to Josselyn in lieu of the 
 first note. Josselyn sued Oliver on his note, averring in his 
 declaration, that '"the said Oliver then and there promised the 
 said Josselyn, to guaranty to him the payment of the contents of 
 said note, on demand, and then and there, in consideration of the 
 premises, promised the said plaintiff to pay him the contents of 
 said note, agreeable to the tenor of the same," &c. The Court 
 held that the blank indorsement did not authorize such an aver- 
 ment ; but did authorize the following indorsement over the sig- 
 nature : — 
 
 " For value received, I undertake to pay the money within men- 
 tioned, to E. J." 
 
 I confess that I am unable to discover what principle this case 
 does establish, for the reason that I can perceive no material differ- 
 ence between the averment in the declaration, which the Court 
 held to be unauthorized by the blank indorsement, and the one 
 dictated by the Court ; and it seems the parties took the same 
 view of it, for they immediately agreed to have judgment entered 
 upon the declaration as it stood. 
 
 The case of Ulen v. Kittredge,^ was upon a state of facts sub- 
 stantially the same as Nelson v. Dubois, and Butler v. Campbell. 
 Ulen declared against Kittredge, who had indorsed the note in 
 blank, as guarantor, and proved a parol agreement that he was to 
 guaranty the payment in the event that the maker did not pay it 
 by a certain time ; and he recovered according to his averments 
 and proof. The question there was, whether the indorsement 
 was valid, as against the statute of frauds, and the Court says, 
 we are of opinion that the defendant's signature on the back 
 of the note, with the authority given by him to the witness to 
 write over the signature a sufficient guarantee, and such guarantee 
 being accordingly written by the witness, pursuant to such author- 
 ity, may be considered as a memorandum signed by the party, 
 within the intent of the statute, as fally as if it had been written 
 in the defendant's presence, immediaiely after the signature. 
 
 In Moies v. Bird,- the action was brought by the payee against 
 an indorser in blank, who was not in any other manner a party 
 to the note ; but there w'as proof, showing that the indorser had 
 affixed his signature there in pursuance of an agreement between 
 
 1 7 Mass. 233. 2 11 Mass. 435.
 
 CAMDEN V. M'KOY. 117 
 
 the maker and the payee, at the time of the sale of the land, and 
 the execution of the note. The defendant insisted, that if liable 
 at all, he was only rcsimnsible as indorscr ; but the Court held 
 that in consequence of the parol agreement, \\t was liable as orig- 
 inal obligor. 
 
 Tenney v. Prince,^ was a case where a person indorsed a note in 
 blank, nine months after date, and three montlis before maturity, 
 and the payee brought suit against the indorser, charging him as 
 original promisor. The Court held that he could not be rendered 
 liable in that capacity, nor in any other, unless the indorsement 
 was based upon some new consideration, and then only as guar- 
 antor. 
 
 In Sumner v. Gay ,2 the plaintiff declared against the defendant, 
 who had indorsed a note in blank, as maker of the note in the first 
 count, and as guarantor in the second ; and the suit was main- 
 tained ; but it docs not appear whether as maker or guarantor, 
 nor was it material in that case, for the liability would have been 
 the same. 
 
 Baker v. Briggs,^ was an action brought to recover the amount 
 of a note made by Ryan to Baker, and indorsed in blank by 
 Briggs. It appears, from the report, that one count charged 
 Briggs as maker of the note ; but we have no means of knowing 
 in what character he was declared against in the other counts. 
 The proof in the case shows that it was the understanding of the 
 parties that he should be held responsible as surety, and the Chief 
 Justice treats him as an original promisor. 
 
 It is wortliy of note, that, in each of the preceding cases, the 
 indorsement was in blank ; the indorser was sued alone, uncon- 
 nected with the maker ; and in every one, where a recovery was 
 had, there was proof showing, affirmatively, the understanding of 
 the parties, and the nature of the transactions between them. 
 There are two other cases in the Massachusetts Reports, which 
 belong to a dilTorent class, and deserve attention. 
 
 The case of Hunt (Adra'r) v. Adams,'* was on a promissory 
 note made by one Chaplin, to the plaintiff, with the following 
 indorsement at the bottom : — 
 
 "I acknowledge myself holden as surety for the payment of the 
 demand of the above note. Witness my hand. 
 
 " Barnabas Adams." 
 
 1 4 Pick. 385. 2 4 Pick. 311. ' 8 Pick. 122. * 6 Mass. 358.
 
 118 INDORSEMENT. 
 
 Adams was sued as surety in said note ; and the Court decided 
 that the suit was well brought, saying that the defendant is an 
 original party to the contract, as well as Chaplin. The contract, 
 in its legal construction, is a promise made, as well by the defend- 
 ant as by Chaplin, for value received, to pay fifteen hundred 
 dollars to plaintiff's intestate. To this promise Chaplin has signed 
 as principal, and defendant as surety. This mode of signing is 
 an accommodation between the promisors, by which the defendant 
 is entitled, if he pay the note, to an indemnity from Chaplin ; 
 but as to the intestate, they must be considered as joint and sev- 
 eral promisors. Again the Chief Justice says, the legal effect of a 
 note in this form is not different from a note in the form of " I, A 
 B, as principal, and I, C D, as surety, promise to pay, &c." This 
 last form is not uncommon, and the promise has always been 
 holden to be made by each as original promisor. 
 
 The other is the case of White v. Howland,^ and is similar to 
 this in the facts of the case, the form of the action, and the reason- 
 ing of the Court. These are distinguishable from all the other 
 Massachusetts cases in this, that the indorsement was written out 
 in full, and mutually agreed upon, by the parties, before signing. 
 The terms of the contract, and the character and extent of the 
 indorser's liability, were matter of agreement between the parties, 
 and it only remained for the Court to execute that agreement 
 according to its spirit and legal effect. If the indorser was liable 
 as a joint maker of the note, in the capacity of surety, he became 
 80 in pursuance of the provisions of an agreement written and 
 signed by himself, and not by virtue of a contract made for him, 
 by the Court, or the construction of law, over a blank indorsement 
 upon the back of a promissory note. 
 
 In Dean v. Hall,^ the doctrine upon this subject is discussed 
 with great learning and ability. The New York and Massachu- 
 setts cases are all reviewed ly Justice Coiven, and the conclusion 
 seems to be, that the indorser cannot be charged as maker unless 
 there are some peculiar circumstances arising out of a promise to 
 become originally and directly responsible, or a participation in 
 the consideration for which the note was given. In fact, such a 
 state of case was shown, by proof, to exist in Nelson v. Dubois, 
 and Campbell v. Butler, and, indeed, in all the New York cases 
 where the indorser in blank was held responsible as guarantor ; 
 1 9 Mass. 314. 2 17 Wend. 214.
 
 CAMDEN V. m'kOY. 119 
 
 and for the want of such evidence, it was held, in IleiTick v. 
 Carman, that the indorser was not lialjlc, citlicr as maker or 
 guarantor. 
 
 Besides the absence of any evidence connecting McKoy and 
 Johnson with the original consideration of the note, the case under 
 consideration diflers from those referred to, or any I have Ijeen 
 able to find in the books, in one essential particular. Here the 
 makers and indorsers are sued jointly, as makers of a joint and 
 sevei'al promissory note. In each of tlie others, the suit was 
 against the indorser alone ; and I have been able to find no case 
 in which the maker and indorser were joined in one action. This 
 difference becomes important, for the reason that in most, if not 
 all the cases, except Moies v. Bird, where the indorser has been 
 held to be an original j)roraisor, the declaration contained counts 
 charging the defendant as guarantor, as well as maker ; and the 
 language of the Court usually is, that he is responsil)le as original 
 promisor or undertaker, without distinguishing between maker 
 and guarantor. 
 
 In those cases it was not material in which character the defend- 
 ant was responsible, as the effect would have been the same, as it 
 regards tiie form of the action, and the extent of the lial)ility. If, 
 then, this question is to be determined upon the weight of author- 
 ity, we do not feel authorized, in the absence of any testimony 
 showing the understanding of the parties, to treat McKoy and 
 Johnson as joint and several makers of the note witii Gray. 
 Aside from authority, and relying upon general principles, tiie 
 question is, in our opinion, free of difficulty. Whilst the law 
 requires no particular form of words to constitute a j)romissory 
 note, and designates no particular place at which the owner shall 
 affix his name, in order to establish his liability in that capacity, 
 yet, by the universal consent and acquiescence of commercial and 
 business men, custom has established and sanctioned a form and 
 mode of signing, which furnish a legal presumption of the inten- 
 tion of the parties, and the precise character of the liability 
 attaching to the signature, which presumption may, in many cases, 
 be rebutted by parol evidence. For instance, a signature at the 
 bottom of a note, on the right-hand side of the paper, is prima 
 facie evidence that it was affixed there in the character of maker, 
 whilst the same signature, at tlie left-hand side of the paper, would 
 furnish equally satisfactory evidence that it was placed there only
 
 120 INDORSEMENT. 
 
 as a witness to the instrument. So the signature of a third per- 
 son, upon the back of a note, after the payee has indorsed it, is 
 evidence of a contract to become responsible as second indorser. 
 If custom has ripened into the form of legal presumption, in these 
 respects, it would seem to follow, that a departure from this cus- 
 tom would negative such presumption, and furnish prima facie 
 evidence of a different kind of liability. The authorities are not 
 definite and conclusive as to the technical character of this lia- 
 bility ; yet their general tendency, as well as the nature of the 
 transaction, lead us to the conclusion that it amounts to a guar- 
 anty. 
 
 Upon the ground of variance, the note was clearly inadmissible 
 in evidence. The note declared on purported to be made and 
 signed by McKoy, Johnson, and Gray, and the note offered in 
 evidence was signed by John C. Gray alone, and indorsed by 
 McKoy and Johnson, with implied authority to write a guaranty 
 over the signatures. Upon the well-settled principle, tliat the 
 pleadings and proofs must correspond, the note was properly re- 
 jected. 
 
 In this case, it is unnecessary to inquire whether the plaintiffs, 
 after entering a nolle prosequi as to Gray, could proceed to trial 
 and judgment against the other defendants. 
 
 The judgment is affirmed. 
 
 Caton, J., dissenting. I regret that I feel compelled to dis- 
 agree with a majority of the Court in this case. After a careful 
 examination of the authorities and general principles applicable 
 to the main questions involved, I am constrained to the conclu- 
 sion, that where a name is found on the back of a promissory 
 note in the hands of the original payee, the presumption of law 
 is, in the al)sence of proof on the subject, that it was put there 
 at the time of the making of the note, and as part of the original 
 transaction. In the case under consideration, the proof is so 
 entirely uncertain and unsatisfactory, that it leaves the mind 
 without a bias or inclination one way or the other, and the law 
 is left to raise its own presumption on the subject. The name 
 on the back of a note, while in the hands of the original payee, 
 does not make the writer, in a technical sense, an indorser. He 
 cannot be the first indorser, because he is not the payee of the note, 
 nor can he be a second or any subsequent indorser, because his
 
 CAMDEN V. M KOY. 121 
 
 indorsement is not preceded by the name of the payee. The very 
 term indorscr presupposes that the note, either is, or lias been 
 negotiated. The defendants, then, cannot I^c treated as indorsers 
 of this note. Then for what purpose were the names put on the 
 back of it? Not being indorsers, it was not for the jjurpose of 
 giving the note ncgotial)iUty, but must have been for the purpose of 
 increasing the payee's security ; and if this was the object, there is 
 nothing unreasonable in presuming that the security was required 
 and obtained, at the time the note was given. This security was 
 required because the payee was not satisfied with the responsibility 
 of the maker of the note. If this responsibility of the defendants 
 was undertaken at the time the note was given, then no new con- 
 sideration was necessary to make their undertaking obligatory on 
 them, because the presumption of law is, that it was a part of the 
 original contract between the plaintiff and Gray, that this security 
 should be given. l>y presuming that this indorsement (and I use 
 the terra not in its technical sense) was made at the time the note 
 was given, and was a part of the original contract, we give effect 
 and efficacy to the acts of the defendants. If we do not presume 
 that the undertaking was made at that time, we let go every thing like 
 certainty, and determine without any fixed principle or certain rule. 
 If we determine that it was made after the execution and delivery 
 of the note, and on a new arrangement, it would be an undertaking 
 on the part of the defendants to pay the pre-existing debt of Gray, 
 whicii, by the statute of frauds, must be in writing, on a good con- 
 sideration. By adopting the construction which I give, a manifest 
 embarrassment is avoided, and the evident intent of the parties is 
 carried into execution ; and unless we do adopt that construction, 
 we shall, in most instances, discharge the liabilities of such sureties 
 altogether. Unless the presumption of law is that such an indorse- 
 ment was made at the same time with the note, we must presume 
 it was made afterwards ; and if we do this, we determine that the 
 act was prima facie void, because we make it a new and independ- 
 ent transaction, unconnected with the consideration of the note, 
 and requiring a new consideration to be proved to support it. But 
 I do not understand the opinion of Mr. Justice Doujlas, to deter- 
 mine that the presumption of law is, that the names of the defend- 
 ants were written on the note after its execution. But in the 
 absence of all proof on the subject, the law must determine at what 
 time this undertaking was entered into^by the defeildants, whenever
 
 122 INDORSEMENT. 
 
 that question of time becomes material, as it most unquestionably 
 does in a case like this. It will not be denied, I presume, that if it 
 were proved by testimony on the trial, that the defendants wrote 
 their names on the back of this note, at the time the note was made, 
 it would all be considered one transaction, and supported by the 
 same consideration, and their liability would be fixed ; while, on 
 the other hand, if it were proved that their names were not put 
 there till afterwards, it would be a new and independent undertak- 
 ing, to support which the plaintiff must prove a new consideration. 
 I think, then, that tlie Courts of New York and Massachusetts, in 
 determining, in the absence of all proof on the subject, in cases like 
 the present, that the indorsement was made at the time the note was 
 made, and for the same consideration, have adopted a sound and 
 salutary rule, perfectly consistent with the general principles of 
 law, and, in fact, the only one that can secure to the parties, in 
 many, if not in most instances, the rights and liabilities intended 
 by them ; and against this I have been unable to find a solitary 
 decision or dictum. 
 
 If I have not failed, then, in what I have been attempting to 
 show was the time and consideration of this indorsement, then it 
 was competent for the payee to write any agreement over the 
 names of the defendants, consistent with tlie nature of the instru- 
 ment, and the agreement of the parties ; ^ and when this is done, 
 the parties are liable on that agreement, in the same way that they 
 would have been, had they filled up the indorsement themselves, 
 at the time. 
 
 The inquiry now is, what was the nature of the liability they 
 intended to assume ? This, too, in the absence of all proof on the 
 subject, the law must determine, from the nature of the case, and 
 the circumstances of the transaction ; while, if there is any satis- 
 factory proof, that must control and determine the nature and extent 
 of the liability. I have already said that the defendants here cannot 
 be considered indorsers, because the paper was never put in- circu- 
 lation,^ but has always remained in the hands of the original payee, 
 to whom alone the defendants are liable, if they are liable at all, and . 
 to wliom an indorser can never be liable, where, as in this State, 
 a note can only be put in circulation by indorsement. Tlie payee 
 of a note here must be the first indorser ; and he, as first indors- 
 
 ^ Chitty, Bills, 257, note 1 ; Josselyn v. Ames, 3 Mass. 274, and cases there cited ; 
 Beckwith v. AngellfB Conn. 315. 2 Chitty, Bills, 44.
 
 CAMDEN V. m'KOT. 123 
 
 er, must stand between all subsequent indorsers and danjrer ; so 
 tbat here, if we treat the defendants as indorsers at all, they are 
 second and third indorsers, so that, instead of their being liable to 
 the payee, he in fact might become liable to them. The liability of 
 an indorser is only conditional ; while I presume it will hardly be. 
 doubted, the liability these defendants intended to assume was 
 absolute. If I am not mistaken in the presumptions which the law- 
 raises, then the nature of the defendants' liability is precisely the 
 same as if it had been proved, on the trial, that the defendants and 
 Gray put their names to this paper at the same time, and for the 
 purpose of increasing the plaintiffs' security, and that in considera- 
 tion of their becoming such security, the plaintiffs gave the credit, 
 which, without their names, might not have l)ccn given. Upon 
 such a state of facts 1 hold, and upon the authority of the cases 
 referred to in tlie o[iinion of the majority of the Court ; that these 
 defendants became original joint and several promisors with Gray, 
 for the payment of the sum of money in this note mentioned, and 
 that their agreement with the plaintiffs was absolute, that the money 
 should be paid as in the note expressed ; and, in pursuance of such 
 understanding, the plaintiffs were authorized to write an agreement 
 over the defendants' names, so as to charge them either as guaran- 
 tors or as sureties ; this being perfectly consistent with the nature 
 of the instrument, and the agreement of the parties, which was that 
 their responsibility should be absolute, for the payment of the 
 money, and not conditional, as it would have been, had they been 
 technical indorsers. In this case, then, I hold tliat the plaintiffs 
 had a right to fill up this contract as they have done ; to wit, " For 
 value received, we jointly and severally acknowledge ourselves as 
 securities of John Gray, for the payment of the within note at 
 maturity." The plaintiffs having chosen, as they had a right to do, 
 to treat the defendants as sureties to this note, the authorities 
 clearly establish that they are liable as joint and several makers of 
 the note, precisely the same as if the note had read, '• We jointly 
 and severally promise to pay, the first as principal, and the other 
 as sureties," &c., and their names had all been put to the bottom 
 of the note. 
 
 It is said, however, that this case is distinguishalilo IVom any of 
 the cases to which reference has been made, in this, that, in the 
 case before us, the principal and sureties were all charged in the 
 same suit, whereas, in all the other cases, where tile person, whose
 
 124 INDORSEMENT. 
 
 name is found on the back of the note, has been treated as original 
 maker of the note, he has been sued separately. But this, I sub- 
 mit, can make no difference in principle, and is attributable rather 
 to accident tlian necessity. If all can be treated as joint and 
 several makers of the note, there is certainly no reason why all may 
 not be sued jointly, and the sureties surely ought not to object that 
 their principal is joined with them. But at the time this note was 
 offered in evidence, and rejected by the Court, Gray was not a 
 party to tlic suit. The Court had permitted the plaintiffs to dis- 
 miss their suit as to him, and proceed as to the present defendants, 
 so that, if the Court was correct in permitting this to be done, the 
 suit then stood precisely as if Gray had never been made a party 
 to it. 
 
 A majority of the Court differing with me in opinion on this 
 question, I have deemed it unnecessary to examine the question, 
 whether the Covirt below was correct in allowing the plaintiffs to 
 discontinue as to Gray, and proceed as to the other defendants ; 
 while this would have been an important inquiry, had a majority of 
 the Court been with the plaintiffs on the other points. 
 
 Judgment affirmed. 
 
 This case has been followed in Illinois by Cushman v. Dement, 3 Scam. 497 ; 
 Carroll v. Weld, 13 111. 682 ; Klein v. Currier, 14 111. 237 ; Webster v. Cobb, 
 17 111. 459. See also Watson v. Hurt, 6 Gratt. 633 ; Clark v. Merriara, 25 
 Conn. 576 ; Perkins v. Catlin, 11 Conn. 213; Beckwith v. Angell, 6 Conn. 315; 
 Ranson v. Slierwood, 26 Conn. 437 ; Schollenberger v. Nehf, 28 Penn. State, 
 189 ; Fegenbush v. Lang, 28 Penn. State, 193, and the cases infra. 
 
 President, Directors, &c., of The Union Bank of Wey- 
 mouth AND BrAINTREE V. TiLLEY WiLLIS. 
 
 (8 Metcalf, 504. Supreme Court of Massachusetts, October, 1844.) 
 
 Indorsement by one not a party. — If a person not a party to a note place his name upon 
 the back of it at the time it was made, he is liable as maker ; and when the note 
 is in the hands of a bona fide holder, the presumption in the absence of proof is 
 that the name was placed upon it at the time it was executed. 
 
 Assumpsit by the indorsees against the indorser of a promis- 
 sory note of the following tenor : " August 8th, 1843. For value
 
 UNION BANK OF WEYMOUTH AND BRAINTREE V. WILLIS. 125 
 
 received, I promise Tilley Willis, to pay hira, or order, $350, in 
 four mojitlis from date. T. D. Thomijsoii." On the back was the 
 name of B. L. Mirick & Co., and under that name was the name 
 of the defendant, both indorsements being in blank. 
 
 At the trial before the Chief Justice, the plaintiffs' cashier tes- 
 tified that they discounted the note for Thompson, and that, when 
 it was discounted, the names stood on the note as they now do. 
 There was no evidence that the note was presented to Mirick & 
 Co. for payment ; but there was evidence tending to show that 
 notice of dishonor was given to them, as indorsers, as well as to 
 the defendant. 
 
 The defendant contended that Mirick & Co. were to be considered 
 as joint, or joint and several, promisors, and that the defendant 
 was not responsible as indorser, without proof of presentment to 
 them for payment. But it was ruled that they were not to be so 
 considered as promisors, as that presentment of the note to 
 them, and demand of payment of them, were necessary to 
 charge the defendant. A verdict was returned for the plaintiffs, 
 which is to be set aside, and a new trial granted, if the ruling was 
 incorrect. 
 
 Hubbard, J. It is admitted that the note was not presented for 
 payment to Mirick <fe Co. ; and the question is, whether the omis- 
 sion to do it discharges the indorser. 
 
 If the subject now brought before us were a new one, we should 
 hesitate in giving countenance to such an irregularity, as to hold 
 that any person whose name is written on the back of a note 
 should be chargeable as a ])romisor. We should say, that a name 
 written on the paper, which name was not that of the payee, nor 
 following his name on his having indorsed it, was either of no 
 validity to bind such individual, because the contract intended to 
 be entered into, if any, was incomplete or within the statute of 
 frauds ; or that he should be treated, by third parties, simply as a 
 second indorser ; leaving the payee and himself to settle their 
 respective liabilities, according to their own agreement. 
 
 But the validity of such contracts has been so long established, 
 and the coflrse of decisions, on the whole, so uniform, that we 
 have now only to apply the law, as it has been previously settled, 
 in order to decide the present suit. 
 
 The first case' of this description, of which any mention is made
 
 126 INDORSEMENT. 
 
 in the reports, is that of Humner v. Parsons, tried before this 
 Court in Lincohi county, July term, 1801. The facts were these : 
 " Parsons wrote his name on a paper and gave it to John Brown, 
 but there was no evidence of the intent, or of any connection in 
 business between them. Brown made a note on the other side, 
 payable to Jesse Sumner or order, on demand, with interest, and 
 signed it, and thirty days after made a partial payment on it. 
 Sumner then got a writing in these words over the name of Par- 
 sons : ' In consideration of the subsisting connection between me 
 and my son-in-law, John Brown, I promise and engage to guaranty 
 the payment of the contents of the within note, on demand.' 
 And he sued Parsons, declaring on the promise, specially stating 
 it, and the note, but did not aver any demand on John Brown, or 
 notice to Parsons. In two trials in the Supreme Judicial Court, 
 it was held that Parsons was liable, and that Sumner had a right 
 to fill the indorsement so as to make Parsons a common indorser 
 of the note, with the rights and obligations of such, or a guar- 
 antor, warrantor, or surety, liable in the first instance, and in all 
 events, as a joint and several promisor would be." Am. Prec. 
 Declarations, 113. Mr. Dane, who cites it in his Abridgment, 
 Vol. I. 416, 417, remarks, that " this case was carried as far as 
 any case had gone, and on the review the Court was not unan- 
 imous ; and it has since been questioned ; " and we have no doubt 
 with good reason ; for the holder of the paper, having himself set 
 out the contract by the words written over the name of the de- 
 fendant, should have been held by its terms, and the legal effect 
 should have been given to the material word " guaranty." And in 
 that view of the contract, the promise of Parsons was only to pay 
 after a demand upon Brown for payment, and a refusal by him, 
 and of which Parsons should have had notice. But the Court 
 must have construed the writing as constituting him an original 
 promisor, and so bound, absolutely, without notice. And in our 
 apprehension, the writing of the guaranty over the name of Par- 
 sons ought not to have been held as an act obligatory on him ; but 
 he should have been treated, if held at all, as an indorser of the 
 note, and, as such, subject to the liabilities, and entitled to the 
 notice of an indorser. See Beckwith v. Angell, 6 'Conn. 325, 
 opinion of Hosmer, C. J. 
 
 The next case which came before the Court was that of Josselyn 
 V. Ames, 3 Mass. 274. By the report, it appears that John Ames
 
 UNION BANK OF WEYMOUTH AND BRAINTREE V. WILLIS. 127 
 
 was indebted on note to the plaintiff, who demanded security, and 
 Jolin ofTcred his brother Oliver as surety, who was accepted. 
 John then made a note to Oliver, not negotiable, and Oliver put 
 his name on the back in blank. The plaintiff received it and gave 
 up his formeir note, and afterwards wrote over the defendant's 
 name the same words as in Sumner v. Parsons, with this addi- 
 tional clause : " and in consideration of receiving from Elisha 
 Jossclyn a note of the said John of the same amount." The 
 Court held that the plaintiff could not recover in that action, but 
 might cancel the words written, and sul)stitute, " for value re- 
 ceived, I undertake to pay the money within mentioned to Elisha 
 Josselyn," and, upon such an indorsement, might maintain an 
 action upon the facts reported. 
 
 In what light the Court held the defendant, does not distinctly 
 appear ; but we presume as an original promisor, from the manner 
 in which the case of Sumner v. Parsons is spoken of. " The guar- 
 antor in that case," they say, " was not the promisee, but a 
 stranger, who warranted the payment to him. He cannot himself 
 warrant to a third person payment of a note made payable to him- 
 self and not negotiable." 
 
 Tiie next reported case is that of Hunt v. Adams, 5 Mass. 358, 
 which was assumpsit on a note given by Cliaplin to Bennet, under 
 which the defendant wrote, " I acknowledge myself holden as 
 surety for the payment of the demand of the above note. Wit- 
 ness my hand. Barnabas Adams." This cause was much con- 
 sidered, and the Court ruled that the defendant, Adams, was to be 
 charged as a promisor, and that his holding himself as surety did 
 not abridge or affect the plaintiff's rights, but only was evidence, 
 as between the promisor and himself, that he had signed for his 
 accommodation. Other cases between the same parties, on similar 
 notes, afterwards arose, and were decided in the same manner. 
 6 Mass. 519. 
 
 Immediately after, occurred the case of Carver v. Warren, 5 
 Mass. 545. That was on a note made by one Cobb to the plain- 
 tiff, and on the back of which the defendant wrote his name ; and 
 the plaintiff filled the indorsement, and declared upon it as his 
 promise. The defendant demurred to the declaration, on the 
 ground that this was but a promise to pay the debt of another, 
 and was void for want of consideration. But the Court held that, 
 by* the pleadings, each promised to pay the same sum, and that the
 
 128 • INDORSEMENT. 
 
 defendant's promise did not import any guaranty or collateral 
 stipulation ; and that if the defendant had indorsed as guarantor, 
 and the present indorsement was filled up without his consent, or 
 any authority from him, he should have pleaded the general issue, 
 and on the trial he might have availed himself of this defence. 
 And so the plaintiff had judgment on the demurrer. 
 
 The case of Hemmenvvay v. Stone, 7 Mass. 58, followed. There 
 the note ran, " I promise to pay F. M. Stone or order," and was 
 signed B, Chadwick ; and below was signed by the defendant. 
 The Court held that it was a joint and several note, like the case 
 of March v. Ward, Peake's Cas. 130. See also Bayley, Bills 
 (2d Am. ed.), 44. 
 
 The next case was White v. Howland, 9 Mass. 314, which was 
 on a note payable by one Taber to the plaintiff, and on the back 
 of it was written, " for value received, we jointly and severally 
 undertake to pay the money, within mentioned, to the said Wil- 
 liam White. I. Coggeshall, Jr. Jno. H. Howland." The Court 
 held that this undertaking was within the principle settled in 
 Hunt V. Adams, and was the same as if the party had signed his 
 name on the face of it ; and that he was well charged as a several 
 original promisor. 
 
 The case of Moies v. Bird, 11 Mass. 436, which succeeded, is 
 substantially like the present. A note was made to the plaintiff, 
 and signed by Benjamin Bird, and the defendant signed his name 
 in blank on the back of the note. The Court say, the defendant 
 " leaves it to the holder of the note to write any thing over his 
 name which might be considered not to be inconsistent with the 
 nature of the transaction. The holder chooses to consider him 
 as a surety, binding himself originally with the principal ; and we 
 think he has a right so to do. If he was a surety, then he may be 
 sued as an original promisor." 
 
 In the case of Baker v. Briggs, 8 Pick. 130, which was an 
 action to recover the amount of a promissory note made by one 
 Eyan to the plaintiff, the name of the defendant, Briggs, was 
 written on the back of it, and the Court say that, according to 
 several decisions, it was right to declare against him as promisor, 
 though he stood in the relation of surety to Ryan, who signed the 
 note on the face of it. 
 
 The case of Chaffee v. Jones, 19 Pick. 260, was assumpsit on a 
 note signed by Israel A. Jones, as principal, and Eber Jones and
 
 UNION BANK OF WEYMOUTH AND BRAINTREE V. WILLIS. 129 
 
 E. Owen and Sons, as sureties, l)y which tliey jointly and severally 
 promised to pay the president, &c., of the Housatonic Bank, or 
 their order ; and the plaintiff put his name on the back of the 
 note, in blank. The jduintiff was called upon, after the neglect 
 of the makers, and he paid it to the bank. The Court held that 
 where one, not a jjromisor, nor indorser, puts his name on a note, 
 meaning to make himself liable with the promisor, he is to be 
 regarded as a joint promisor and surety. He is not lial)le as 
 indorser, for the note is not negotiated, nor a title made to it, 
 through his indorsement; nor as guarantor, there being no dis- 
 tinct consideration ; but he means to give security and validity to 
 the note by his credit and promise, and it is immaterial, for this 
 purpose, on what part of the note he places his name. So in 
 Austin V. Boyd, 24 Pick. 64, where the defendant's name was, in 
 like manner, on the note, it was held that the party, by thus put- 
 ting his name on the back, makes himself an original promisor. 
 He intends by it to give credit to the note. 
 
 The case of Samson v. Thornton, 3 Met. 275, was assumpsit on 
 a note made by Benjamin Russell to the plaintiff, and was indorsed 
 by the defendant Thornton ; and the declaration charged him as 
 an original ])romisor. The Court there ruled that the defendant, 
 not being the payee of the note, must be held to stand in the 
 character of an original joint promisor and surety. 
 
 The case of Richardson v. Lincoln, 5 Met. 201, is of the same 
 type. There the Court held that the defendant, not being payee, 
 but having put his name, in blank, on the note, must be consid- 
 ered as an original promisor and surety, if he put it on simulta- 
 neously with the promisor, as an original contractor. See also 
 Sumner v. Gay, 4 Pick. 311. 
 
 The -same questions have arisen in New York, in various cases, 
 and have been decided in a similar manner. Tiiey will be found 
 cited in Story on Notes, §§ 59, 472-480, where the subject is fully 
 discussed, and the authorities examined. 
 
 To hold the party, however, as promisor, where the name alone 
 is written, it must appear that he made the promise at the time 
 when the note itself was made ; otherwise, he may cither not be 
 chargeable at all, or be chargeable as surety or guarantor, accord- 
 ing to the facts proved. Carver v. Warren, 5 Mass. 545 ; Tenney 
 V. Prince, 4 Pick. 3cS5 ; Baker f. Briggs, 8 Pick. 122, 130 ; Oxford 
 Bank v. Haynes, 8 Pick. 423; Story ou Notes, §§ 473, 474; 
 
 9
 
 130 INDORSEMENT. 
 
 Beckwith v. Angell, 6 Conn. 315. But that the promise was 
 made at the same time with the note, is a fact which is to be 
 presumed when the note is in the hands of a bona fide holder, and 
 nothing is shown to the contrary. And in the present case, the 
 note was offered to the plaintiffs for discount, by the maker him- 
 self, with the names of Mirick & Co. and Willis on the back of it; 
 showing it, therefore, to have been an original undertaking on 
 their part. 
 
 It was contended, in the argument, that Mirick & Co. were 
 merely sureties, and tliat the plaintiffs had a right to treat them 
 as such, and therefore were not bound to demand payment of 
 them as makers, as a necessary step to enable them to charge the 
 indorser ; the relation of promisor, surety, and guarantor being 
 distinct. There is, unquestionably, a distinction between these 
 several undertakings ; and always so in regard to a mere guarantor. 
 But as to the subsisting relations between a principal and surety, 
 they rarely affect the contract between the creditor and surety. 
 A man may be equally a surety and an original promisor ; as 
 where the promise is, I, A B, as principal, and I, C D, as surety, 
 promise to pay ; or where the party signs, and adds to his name 
 the word surety. This does not make him less a promisor. It 
 only defines the relation between him and his co-promisor ; and as 
 promisor, the necessity of a presentment to him is not dispensed 
 with, if the intention of the holder of the note is to charge the 
 indorser. It is not for the holder to choose in what character he 
 will consider the party who has put his name on the note ; but he 
 must treat him as sustaining that legal relation which the facts 
 establish. If he put his name on the note at the time it was 
 made, like the case at bar, he is a promisor ; if after the making 
 of the paper, he is a surety or a guarantor, according to the agree- 
 ment upon which he gives his signature. The fixing of the rela- 
 tion of the party, when he enters into the contract, is necessary 
 for the protection of holders, and for guarding the rights of in- 
 dorsers, whose liability is conditional. If it were held otherwise, 
 1 do not well see how such contracts could be supported against 
 the objection of being void as within the statute of frauds. And, 
 as it is, I consider these engagements rather as exceptions to the 
 statute, than in any other light, and as growing out of, or rather 
 ingrafted upon, the law merchant applicable to regularly drawn 
 bills of exchange and promissory notes.
 
 HALL V. NEWCOMB. 131 
 
 Upon this view of the law, as drawn from the various cases, we 
 consider Mirick <t Co. to have been joint and several j)romi8ors 
 with Thompson, and liable in like manner with him. 
 
 This case is f'ullowiMl ih Massachusetts by Ilawkcs v. Pliillips, 7 Gray, 284, 
 and by Draper v. Weld, l.j (jiray, 580; the latter holding evidence to show that 
 the third party put his name on the note witli authority to fill the blank with a 
 guaranty, inadmissible against one who took the paper without notice. But if 
 the payee afterwards indorse above the signature of the third . party, the latter 
 then becomes an ordinary itidorser, and his liability cannot be changed by parol. 
 Clapp V. Rice, 13 Gray, 403. See Howe v. Merrill, 5 Gush. 80; Vore v. Ilurst, 
 \'.\ Ind. 551. If the signature of such person is written subsequently to the 
 execution of the paper, and as an independent transaction, the signer is a 
 guarantor. Benthall c. Judkins, 13 Met. 265 ; Irish v. Cutter, 31 Maine, 536. 
 See preceding and following cases. 
 
 See also, to the same effect, Wetherwax v. Paine, 2 Mich. 555 ; Lewis v. Har- 
 vey, 18 Mo. 74; Schneider v. Schiffman, 20 Mo. 571; Childs v. Wyman, 44 
 Maine, 433; ^lartin t\ Boyd, UN. Hamp. 385 ; Carpenter i\ Oaks, 10 Rich, 
 Law, 17. In McCiuire v. Bosworth, 1 La. An. 248, it is held that such third 
 person binds himself as surety. 
 
 Hall v. Newcomb. 
 
 (7 Hill, 41G. Court of Errors of New York, December, 1844.) 
 
 Indorsemcul by one not a juirty. — If one who is not a party to a promissory note place 
 his name upon the back thereof, the payee not having indorsed it, he is to be re- 
 garded as an indorser, and not as maker or guarantor. 
 
 The case is stated in the opinion of the Court. 
 
 The Chancellor. In April, 1840, Peter Farmer made a prom- 
 issory note for two hundred and fifty dollars, payable to Samuel 
 Hall, the plaintiff, or his order, on demand, with interest ; on the 
 back of which note Newcomb, the defendant, indorsed his name in 
 blank, at the request of Farmer, to enable him to get the money 
 on the note. In November, 1841, Hall, without having demanded 
 payment of the note from the maker, or given notice of non-pay- 
 ment to the indorser, brought a suit against the indorser alone, to 
 recover the amount of the note and interest. And the question 
 for our consideration is, whether a person who ])uts his name in 
 blank u})on the back of a negotiable note, which is drawn in such
 
 132 INDORSEMENT. 
 
 a form that lie may be charged as indorser in the usual mode, if a 
 demand is made and notice of non-payment given, can be charged 
 as a general surety, without such demand and notice, by parol 
 evidence merely. In the case of Prosser v. Luqueer, which was 
 decided by this Court in December last, I expressed the opinion 
 that he could not. See 4 Hill, 420. Tlie reporter misunderstood 
 my opinion in that case, however, if he supposed I intended to 
 intimate that I thought the holder of the note, which was recovered 
 on there, could have maintained a joint action against the makers 
 and the indorser of the note in a count charging them all as joint 
 and several makers of the note. The joint action was sustained 
 against them, in that case, upon the common money counts, under 
 the statute, as makers and indorsers, and the service of a copy of 
 the note with the declaration. But as the indorser had waived 
 notice of non-payment, and had absolutely guaranteed the payment 
 of the money, for value received, I thought, upon the authority of 
 the decisions there referred to, his guaranty w^as itself a several 
 promissory note payable to the bearer of the note written by Edson 
 and Arnold on the other side of the paper ; not tliat he could be 
 considered as having made a joint promise with them. 
 
 The courts have gone far enough in repealing the statute to 
 prevent frauds and perjuries, by introducing parol evidence to 
 charge a mere surety for the principal debtor, by showing that his 
 written agreement means something else than what upon its face 
 it purports to mean. And I fully concur in the opinion expressed 
 by Mr. Justice Branson, in Seabury v. Hungerford, 2 Hill, 80, that 
 where a man writes his name in blank upon the back of a nego- 
 tiable promissory note, he only agrees that he will pay the note to 
 the holder, on receiving due notice that the maker, upon demand 
 made at the proper time, has neglected to pay it. Mere proof that 
 he indorsed the paper to enable the maker to raise money on it, 
 does not change the nature of his legal liability as indorser, where 
 the note is in the hands of a bona fide holder for a good considera- 
 tion. Such was the whole effect of the parol proof in this case. 
 And for the courts to allow proof by parol to charge a mere surety, 
 beyond the legal effect of his written blank indorsement on such 
 paper, would bring them in direct conflict with the provisions of 
 the statute of frauds. 2 Rev. Sts. 135, § 2, sub. 2. 
 
 Here there was no difficulty in charging Newcomb as indorser 
 of the note, in favor of Hall, from whom it appears the' maker
 
 HALL V. NEWCOMB. 133 
 
 intended to get the $250 to enable him to take up a former note. 
 It docs not appear in this case whether the former note had been 
 protested, so as to charge Newcomb as indorser, or not ; or who 
 was the holder of that note. All that appears is, that Newcomb 
 knew that Hall would lend Farmer the $250 to enable him to take 
 it up ; and that Newcomb indorsed this note for Farmer, "fls a mere 
 accommodation indorser, when the name of Hall, to whose order 
 the note was made payable, was not indorsed thereon. Where a 
 note is made payable to an individual or his order, and is indorsed 
 by iiim in blank, and in that situation is presented to anotlier per- 
 son for his accommodation indorsement, who indorses it accord- 
 ingly, the legal effect of his indorsement is to make him liable in 
 the character of second indorser merely ; and he can in no event 
 be made legally liable to the first indorser. And if the maker, or 
 the first indorser, or any other person into whose hands the note 
 might subsequently come, should, without the consent of the 
 second indorser, fill up the first indorsement specially, without 
 recourse to such first indorser, so as to deprive the second in- 
 dorser of his remedy over in case he should be compelled to pay 
 the note, it would be a gross fraud upon him, if not a forgery. 
 But when such a note is presented to the accommodation indorser, 
 and is indorsed by him without having been previously indorsed 
 by the person to whose order tiie same is made payable, the latter 
 may, at tiie time he puts his indorsement upon it, indorse it 
 specially without recourse to himself; so as to leave the second in- 
 dorser lial)le to any person into whose hands it may subsequently 
 come for a good consideration, and without any remedy over 
 against the first indorser. Or, if tbe ol)ject of the second indorser 
 was to enable tiie drawer, as in tliis case, to obtain money from 
 the payee of the note, upon the credit of such accommodation 
 indorser, he may indorse it in the same way without recourse ; 
 and by such indorsement may cither make it payable to tlie second 
 indorser, or to tlic Ijcarer. And such original payee may then, as 
 the legal holder and owner of the note, recover thereon against 
 such second indorser, upon a declaration stating such s|)ecial in- 
 dorsement by him, and subsequent indorsement of the note to 
 him by tiie second indorser. Or ho may recover on the common 
 money counts, under tiie statute, by serving a copy of the note 
 and of the indorsements so made thereon, with his declaration. 
 But as the second indorser, if he has not waived notice of the
 
 134 INDORSEMENT. 
 
 demand of and non-payment by the maker, cannot be made liable 
 upon his indorsement without proof of such demand and notice, 
 the plaintiff at the trial must prove the same, or he cannot re- 
 cover. 
 
 In the case of Herrick v. Carman, 12 Johns. 159, the payees of 
 the note,Vho had received it on the credit of Herrick, had them- 
 selves made a general indorsement of the note, instead of a 
 restricted one ; so that if Carman recovered against Herrick who 
 had been duly charged as indorser, the original payees would be 
 liable to him as first indorsers. And a recovery by Carman would 
 therefore, have rendered them liable, contrary to their agreement 
 with him. And in Tillman v. Wheeler, 17 Johns. 326, the payee 
 of the note attempted to charge the indorser as upon a general 
 guaranty, without having made him liable as indorser by a demand 
 of the makers of the note, and notice of its non-payment. Both 
 cases, therefore, were rightly decided. The remarks of the judges 
 as to the right of the Court to turn an indorsement into an abso- 
 lute guaranty, upon a different state of facts, were uncalled for, 
 and are therefore not entitled to the weight of judicial decisions 
 in' opposition to the provisions of the statute of frauds. The 
 decision of the majority of the Supreme Court in the case of Nel- 
 son V. Dubois, 13 Johns. 175, was clearly wrong. The note in 
 that case being payable to Nelson or bearer, the defendant might 
 have been charged as the indorser of the note without any indorse- 
 ment by Nelson. For where a note payable to bearer is indorsed 
 by another person generally, the person who thus puts his name 
 upon it is liable as an indorser, and may be charged as such upon 
 due notice to him of demand and non-payment of the note by the 
 maker. Hill v. Lewis, Skin. 410 ; Bank of England v. Newman, 
 1 Ld. Raym. 442 ; Eccles v. Ballard, 2 McCord, 388 ; Brush v. 
 The Administrators of Reeves, 3 Johns. 439, 440. It was improper 
 therefore to allow parol evidence to enable the holder of the in- 
 dorsement to turn a conditional liability, as indorser, which, the 
 plaintiff had lost the benefit of by his neglect to give notice of 
 demand and non-payment, into an absolute contract to pay the 
 note, in disregard of the provisions of the statute of frauds. In 
 declaring specially upon such an indorsement, the proper course 
 is to set out the making of the note, the special indorsement 
 thereof by the plaintiff to tlie defendant, where it is payable to 
 order, or the delivery to him where it is payable to bearer or to
 
 ' HALL V. NEWCOMB. 13/) 
 
 the plaintiff or bearer ; and then to state the subsequent indorse- 
 ment of the note by the defendant, by which he ordered and 
 appointed the contents thereof to be paid to the plaintiff, and the 
 demand of the maker of the note and notice of non-payment duly 
 given to the defendant as such indorser. The erroneous decision 
 of the majority of the Judges of the Supreme Court in Nelson v. 
 Dubois not having received the sanction of this Court and being 
 in conflict with the statute of frauds, it is. not too late to declare 
 the law in conformity to the statute, as a majority of the judges 
 of the present Supreme Court have done in tliis case. I conclude, 
 therefore, that the decision of the common pleas in this case was 
 right, and that the judgment of the Sujjremc Court sustaining 
 that decision was not erroneous, and -should be affirmed. 
 
 Senators Barloiv and Wright delivered opinions in favor of 
 affirming the judgment of the Supreme Court, concurring in the 
 view taken of the case by the Chancellor. 
 
 Bockee, Senator. It appears very satisfactorily from the testi- 
 mony in this cause, and the nature of the transaction, that the 
 parties intended to give a note or security on which Newcorab, as 
 well as Farmer, should be liable to the plaintiff for the money to 
 be advanced by him. They failed in effecting that object in the 
 usual form of an indorsed promissory note, probably from mistake 
 or ignorance of the proper form of negotiable instruments. In the 
 form in which the note is presented to us, Xewcomb cannot be 
 treated as an indorser. An indorser is one who, by his signature, 
 transfers the legal interest in the note. From sucli indorsement, 
 whether tiie signature is on the back or the face of the note, result 
 the liabilities and privileges of a commercial indorser. Newcomb 
 had no such legal interest in the note, and could not make such an 
 indorsement, because the note is payable to Hall, and is not indorsed 
 by him. Newcomb can never be made liable to Hall as indorser. 
 The payee of a note cannot maintain an action against the in- 
 dorser. So it was ruled in the case of Herrick r. Carman, 10 
 Johns. 224, where the indorsee failed in maintaining an action 
 against the second indorser, because it was proved that he was the 
 mere agent of the payee and first indorser. Taking this note in 
 the precise form in which it is, payable to Hall, with the signature 
 of Newcomb on the back of it, and laying aside all the other tes- 
 •
 
 136 INDORSEMENT. 
 
 timony in the cause, it would be the case of Herrick v. Carman 
 above cited, and Newcomb could not be made liable in any form. 
 Had Newcomb put his name on a note designed for discount at 
 a bank or otherwise, intending to be the second indorser, and 
 knowing that his indorsement would be inoperative until the note 
 was indorsed by the payee, he would then be strictly within the 
 rule applicable to a commercial indorsement, and entitled to its 
 privileges. The evidence in this case, however, excludes such a 
 snpposition. It is very clear that Newcomb put his name on the 
 note, knowing that the money was to be obtained from Hall, the 
 payee. The inference is very strong, at least a jury might think 
 so, that Newcomb intended to be surety for the money so advanced 
 by Hall to Farmer, and did not intend to make himself the in- 
 dorser of a negotiable promissory note. The signature of New- 
 comb is a nullity, unless he is liable as guarantor, or on an original 
 undertaking as surety, to pay the note. It is immaterial in which 
 character he is made liable. Here we may safely rest upon the 
 principle laid down by the Supreme Court in the decision of this 
 cause, that such a construction should be given to the contract as 
 will prevent its failure altogether. The maxim ut magis res valeat 
 quam pereat, quoted by the learned judge, comes in aid of the 
 plaintiff, and is decisive in his favor. It is suggested by the 
 learned judge who delivered the opinion of the Supreme Court, 
 and the decision appears to be mainly founded upon this sugges- 
 tion, that the plaintiff, by indorsing the note, might have put it in 
 a form in which it would be available to the holder against New- 
 comb as second indorser. True, he might have indorsed the 
 note and sent it into the market, so that an innocent bona fide 
 holder might have recovered against Newcomb as second indorser, 
 but in such case Hall, as first indorser, would have been liable 
 to Newcomb. The order of liability would be reversed. Hall 
 would become surety to Newcomb, instead of holding Newcomb 
 as surety for Farmer. 
 
 It is said that Hall might have indorsed the note without re- 
 course, and then, althougli he was the payee and first indorser, 
 might himself have recovered as the indorsee of Newcomb. This 
 would be placing Hall in a position never intended by the contract. 
 I think we must take this instrument and decide the rights of the 
 parties under it in the precise shape and form in which it appears 
 to us, without indorsement by the payee. Viewing this instru-
 
 ** HALL V. NEWCOMB. 137 
 
 ment as commercial paper, indorsed by Newcomb for tlie accom- 
 modation of the maker, I doubt the ri^ht of the jiayee to nego- 
 tiate it by a restricted indorsement, in which case it might operate 
 as a fraud upon the person who puts his name upon the note with 
 the view of being the second indorser. If the payee makes such 
 indorsement, I think it would not avail. An indorsement is 
 strictly and literally an order to pay money. Hall orders the 
 money to be paid to Newcomb, wliose name already stands upon 
 the note, we may presume, as second indorser. He writes over 
 Newcoinlt's signature an order to i)ay back the money to himself. 
 By this little contrivance it is supposed that a right of action would 
 accrue to Hall against Newcomb as indorser, when he had not 
 before any such right of action. This sort of finesse and shutliing 
 game is below the dignity of the law. We must take this con- 
 tract as the parties left it, complete and perfected when the note 
 was delivered to Hall, and we have no right to ask iiim to resort 
 to practices bordering on trick and deception, for the purpose of 
 clianging the character and liability of the parties. If Mr. Hall 
 could legally and properly pursue the course advised by some of 
 our learned friends, I can see no reason why a restricted indorse- 
 ment may not be written over the name of any prior indorser of 
 accommodation paper, and so the person who has lent his signa- 
 ture on the faith of the responsibility of those who have preceded 
 him, may be utterly ruined, and that without remedy. I think 
 that Judge Spencer, in the case of Herrick v. Carman, 12 Johns. 
 101, states the law of this case correctly, and draws the proper 
 distinction. Where a person indorses a note for the purpose of 
 giving the maker credit with the payee, and with knowledge of 
 the use to be made of tiie note, he is liable as on an original un- 
 dertaking, and his indorsement may be turned into a guarantee. 
 Otherwise, if he indorses tlie note without any such knowledge. It 
 must tiien be presumed that he intended only to become a second 
 indorser, with all the rights which i)ertain to that character. In 
 the latter case he is not liable to the payee, nor to any person de- 
 riving title from him with knowledge of the circumstances attend- 
 ing the indorsement. This j)rinciplo has, I think, been recognized 
 and sanctioned by every analogous case to be found in the books 
 from 12 Johns, down to "> Hill, and ought at this day to be con- 
 sidered as settled and established law, if in the conflict of deci- 
 sions and diversity of opinion among judges any principles can
 
 138 INDORSEMENT. 
 
 be considered as settled and established. The case of Seabury 
 V. Hungerford, 2 Hill, 80, on the authority of which the decision 
 of the Supreme Court mainly rests, is not an exception. The 
 principle of that case is not adverse to the present plaintiff's 
 right to recover. The maker drew a note payable to Seabury or 
 bearer, with a view of borrowing money from him, which note, 
 before delivery, was indorsed by Hungerford ; and it was held 
 that Hungerford could not be charged as maker or guarantor, 
 but only as indorser. Now two remarks may be made explana- 
 tory of the difference between that case and the present. It does 
 not appear that Hungerford knew that the money was to be ad- 
 vanced by the payee, and it is not disputed that, on a mere naked 
 indorsement of negotiable paper, unconnected with knowledge of 
 the use to be made of it, the party could be charged only as in- 
 dorser. It may be further remarked, that the note in that case 
 was payable to Seabury or bearer, and the observation of Judge 
 Cowen would be apt and pertinent, that the payee might, by trans- 
 ferring the note, render it available to any holder against Hunger- 
 ford as indorser. Not so in the present case, where, though words 
 of negotiability are used, they are entirely inoperative, and might 
 as well have been left out of the instrument. The plaintiff" could 
 not have transferred the note without involving himself in re- 
 sponsibilities never intended, and entirely inconsistent with the 
 contract between the parties. Tiien let the rule of Seabury v. 
 Hungerford be applied to this case, and as there is no possibility 
 of charging Newcomb as indorser, consistently with the contract 
 and intention of the parties ; and as he knowingly undertook to 
 be surety for Farmer to Hall in some form, lie must be held liable 
 either as guarantor or as an original promisor. He may be sued 
 in either character. 
 
 Another point made on the argument of this cause is, " that the 
 statute of frauds would bar a recovery against the defendant on 
 any other ground than that of an indorser." The case of Leon- 
 ard V. Vredenburgh, 8 Johns. 29, is exactly analogous to the 
 present, and appears to settle the principle very conclusively in 
 favor of the plaintiff". Here, as well as there, the undertaking 
 was a part of the original transaction, and tlie defendant's under- 
 taking was the inducement to the creation of the debt. Parol 
 testimony was admitted without objection on the trial, and was 
 properly admitted to show the attending circumstances, and the
 
 SYLVESTER V. DOWNER. 139 
 
 purpose and design for which the signature of the defendant was 
 affixed to the instrument. 
 
 The nonsuit was improperly granted, and the judgment of the 
 Court of Common Pleas, and of the Supreme Court are erro- 
 neous, and should be reversed. 
 
 Judgment affirmed} 
 
 This case is followed in New York by Spies v. Gilmore, 1 Comst. 321 ; Ellis 
 V. Brown, 6 Barb. 28J ; Watcrbury v. Sinclair, 26 Barb. 4.')5. See also, to the 
 same effect, Clouston v. Barl)ierc, 4 Sneed, 33G, approving Comparree v. Brock- 
 way, 11 Hum. 3.^0 ; Fear r. Dunlap, 1 Greene (Iowa), 331 ; Jennings i'. Thomas, 
 13 Sniedes & M. 617 ; lliggs r. Waldo, 2 Cal. 485 ; Pierce v. Kennedy, 5 id. 138 ; 
 Wells r. Jackson, 6 Blackf. 40; Vore r. Ilurst, 13 Ind. 551. See preceding 
 and following cases. 
 
 Barzillai Sylvester, Executor, &c., v. Solomon Downer. 
 
 (20 Vermont, 355. Supreme Court, March, 1848.) 
 
 Indorsement hi/ one not a party. — One who is not a party to a promissory note, by plac- 
 ing his name upon the same, the payee not having indorsed it, renders himself 
 prima facie Uable as maker ; but evidence may be received to show the real inten- 
 tion of the signer. 
 
 Assumpsit against the defendant as maker of a promissory note 
 payable to Austin and Fay, or order, and by them indorsed to the 
 plaintiffs intestate. The declaration also contained a count for 
 money had and received. Plea, the general issue, and trial by 
 jury, Alarch term, 184G, — Redjicld, J., presiding. 
 
 On trial the plaintiff offered in evidence a promissory note, for 
 $75.00, signed by one David E. Strong, dated March 27, 1837, and 
 made payable to Austin and Fay, or order, in the month of February 
 then next, with the following indorsements : " For value received, 
 pay the contents to Lemuel Sylvester, (signed) Austin and Fay ; " 
 " For value received, I promise to pay this note according to its 
 tenor to Lemuel Sylvester, (signed) Solomon Downer." To this 
 evidence the defendant objected, for variance ; but the objection 
 was overruled by the Court. It appeared that the indorsements 
 
 1 The vote of the Court stood : For aflirmance, 17 ; for reversal, 8.
 
 140 INDORSEMENT. 
 
 were made in blank, and were filled up by the plaintiff before 
 trial. 
 
 Redfield, J. This is an action, in common form, against the 
 defendant as a sole maker of a promissory- note. The note, on 
 being produced, showed his name indorsed upon it, and also that 
 of the payees of the note. This, according to the decisions of this 
 Court, repeatedly made, imposed upon the defendant the obligation 
 of the maker of the note, with this difference only, that, his under- 
 taking being in blank, as between the parties to it, it was suscep- 
 tible of being controlled by oral evidence of the real obligation 
 intended to be assumed at the time of signing. This has been so - 
 often declared by this Court, that it seems needless to refer to the 
 decisions. But I will advert to some of them, with a view to 
 extract from them the principle of the decisions. 
 
 The first case, which distinctly assumed this ground, is that of 
 Knapp V. Parker, 6 Vt. 642. In that case the note had been due, 
 before it was indorsed by the defendant, and he was sued as maker, 
 and the suit sustained. It is true, the Court, in their opinion, 
 advert to a prior contract, resting in parol merely ; but this was 
 clearly merged in the writing. It was of no importance, in deter- 
 mining the prima facie legal obligation resulting from the signature. 
 The law determines that ; and the oral evidence was important only 
 as tending to show, that the defendant intended to assume just such 
 an obligation, as he did by the blank signature. 
 
 But to show that the circumstance of the previous contract is not 
 of importance, we need only advert to the subsequent cases. In 
 Flint V. Day, 9 Vt. 345, the former case is cited by the late Chief 
 Justice, as a decision of the Court to the effect, that one, who signs 
 a note after it becomes due, and by merely indorsing his name upon 
 the back, is nevertheless holden as a maker, and to the same extent 
 as those who sign upon the face of the note. And in this latter 
 case the defendant, who wrote his name upon the back of the note, 
 because the bank would not take it upon the names already upon 
 it, was holden liable to contribute with a surety, who signed the 
 note upon its face, and who was compelled to pay the whole 
 note. The Court declare, that the defendant (who declared at the 
 time he signed the note, that he knew the plaintiff to be good, and 
 was not afraid to " back the note ") became a joint principal to the 
 bank (the payee), and must stand as a co-surety with the other 
 sureties.
 
 SYLVESTER V. DOWNER. 141 
 
 The case of iSanford v. Norton, 14 Vt. 228, was where the de- 
 fendant wrote his name npon the back of the note, after it was 
 negotiated, and l)efure it came into the hands of the plaintiff. And 
 the Court had no difficulty in holding the defendant jonwia/acz'g 
 liable, as a maker of the note, and lialjle to all the incidents result- 
 ing from becoming a maker. But the judgment of Chief Justice 
 Williams^ in tlic County Court, was reversed in the Supreme 
 Court, upon the ground that he should have received evidence, 
 which was oifered by the defendant, to show that, at the time he 
 wrote his name upon the back of the note, he was understood to 
 assume only the obligation of a common indorser, and was there- 
 fore entitled to require a demand upon the maker and notice back. 
 At the next trial in the County Court I was myself present, and 
 admitted the evidence, according to the decision of the Supreme 
 Court, and the plaintiff again ol)tained a verdict by showing demand 
 and notice. And that jndgmcnt was affirmed in this Court. It is 
 true that the Chief Justice, in declaring the judgment of this Court, 
 or rather, in writing out his opinion for the press, took occasion to 
 pass some strictures upon the decision of the Court in the former 
 case. And however just they may be, or however unjust, it is not 
 important now to inquire. They were certainly not pertinent to 
 the decision then made, which was, in fact, a full and unqualified 
 affirmance of the former decision, and not, as the Chief Justice 
 undertook to show, a departure from it. 
 
 This case, then, establishes the doctrine, that one who indorses 
 his name on the back of a negotiable promissory note, while it is 
 in circulation, prima facie assumes the obligation of maker, if he 
 were not before a party to the instrument ; and that his obligation 
 is negotialjle, in the same sense as the original contract, and may 
 be sued in the name of any person into whose hands the note comes 
 in the course of its circulation. 
 
 • The same was in effect decided in Strong v. Riker, 16 Yt. 554. 
 The point was expressly made in that case, that the defendant 
 indorsed his name upon the note long after it was made ; but the 
 Court held that fact to be unimportant. In that case the note had 
 passed out of the hands of the payee, long before the defendant 
 indorsed it, but had not been indorsed by the payee. In passing it 
 to still another person, not a party to the note, the defendant wrote 
 his name upon the back of tiie note ; and the Court held that he 
 « was holdcn as maker, and that he might be sued in the name of the
 
 142 INDORSEMENT. 
 
 payee^ who had no interest whatever in the note, at the time the 
 defendant became a party to it, — thus making the defendant liable 
 as maker of the note to the fullest extent, the same as if he had 
 signed the note originally, and in the same form. 
 
 In all this it is not understood that the Court have ever decided 
 that a more guaranty is negotiable, whether it be collateral and 
 conditional, or absolute. The contrary is no doubt true, as was 
 declared in Sanford v. Norton, 14 Yt. 228. 
 
 But what this Court has repeatedly held upon this subject, is, that 
 he who writes his name upon the back of a note, if he were not 
 before a party to it, assumes the same obligation as if he wrote his 
 name upon the face of the instrument ; and that, although he do 
 this long after the making of the note, it shall make no difference ; 
 if he consent to be thus bound, and induce others to take the note 
 under that expectation, he shall be estopped to deny that fact, and 
 is treated to all intents the same, precisely, as if he had signed the 
 note in its inception. But, the signature being blank, he may 
 undoubtedly show that he was not understood to assume any such 
 obligation. 
 
 But the proof in the present case tended to show, and the jury 
 have so found, that the defendant did intend to assume an uncondi- 
 tional obligation to pay the note, according to its tenor. This puts 
 at rest all pretence, that the defendant was not understood to assume 
 the common obligation, which his signature imported. This was, 
 that of the maker of the note to Austin and Fay, as that was the form 
 of the note at the time he indorsed it ; and had they refused to 
 indorse it, the defendant might have been sued, as maker, in their 
 na7nes, according to the case of Strong v. Riker, 16 Vt. 554. But 
 they did indorse it. He was then liable, as maker, to any person 
 who might become a holder of the note ; and especially to the 
 plaintiff's testator, for he assumed the obligation with the under- 
 standing that the note was going immediately into his hands, and 
 that the defendant was liable to him. This point is fully decided 
 by Sanford v. Norton, 14 Vt. 228. The declaration in this case, 
 then, was precisely according to the proof, — that the defendant 
 made a note to Austin and Fay, which was indorsed to the plaintiff's 
 testator. 
 
 The fact, that the defendant's indorsement was filled up differ- 
 ently from the declaration, and differently from the import of his 
 undertaking, is of no importance, as that is mere form, and may be ,
 
 GREENOUGH V. 8MEAD. 143 
 
 made at any time, and, if made wrong, may be corrected at any 
 time. It is just as well if it be not made at all. 
 
 Judgment affirmed. 
 
 Cook V. Southwick, 9 Texas, G15, and Carr v. Rowland, ll Texas, 275, hold 
 a similar doctrine to that of the above case. It is true those cases say, that 
 where the name of the third party is on the bill or note at its inception, 
 which is the presumption in the absence of proof, he is regarded as a guarantor 
 or surety ; but they use the word guarantor as ecjuivalent to maker in both cases, 
 citing, in Cook v. Southwick, the case of Leonard v. Sweetzer, 10 Ohio, 1, which 
 holds that a guaranty of the fulfilment of a contract, written below the contract, 
 and executed at the same time, renders the party liable as an original contractor. 
 See also Watson i'. Hurt, 6 Gratt. 633 ; Clark v. Merriam, 25 Conn. 576 ; Per- 
 kins V. Catlin, 11 Conn. 213; SchoUenberger v. Nehf, 28 Penn. State, 189; 
 Jennings v. Thomas, 13 Smedes & M. 617 ; Schneider v. Schiffman, 20 Mo. 
 571. In the last-named case it is held that, although it may be shown, as 
 between parties entitled to look into the real transaction, that the third person 
 signed as indorser, and not as maker, this cannot be shown against a subsequent 
 bona Jide holder. But see Carpenter v. Oakes, 10 Rich. Law, 19. See pre- 
 ceding and following cases. 
 
 B. F. Greenough et al. v. W. Smead et al. 
 
 (3 Ohio State, 415. December, 1854.) 
 
 Indorsement by one not a party. — If one not a party to a note put his name on the bafck 
 thereof, the note being subsequently indorsed by the payee below liis signature, 
 but not being intended for the payee, such party is to be regarded as an indorser ; 
 but if tlie note were intended for the payee, the liability of such third person is 
 that of maker or guarantor. 
 
 The case is stated in the opinion of the Court. 
 
 Ranney, J. An action was brought and recovery had by the 
 defendants in error in the Commercial Court of Cincinnati, upon 
 the promissory note following : — 
 
 $4000. Cincinnati, 30th May, 1850. 
 
 Sixty days after date I promise to pay to the order of Samuel R. Bates, 
 four thousand dollars, value received. 
 
 Written on the back in the following order : — 
 
 George H. Bates. 
 
 B. F. Greenough. 
 Samuel R. Bates. 
 Butler & Brotuer.
 
 144 INDORSEMENT. 
 
 From the bill of exceptions, taken at the trial, it. appears that 
 the note was discounted by the defendant in error, after all the 
 names were upon it, for the exclusive benefit of t\]£ maker, George 
 H. Bates. On the morning of the day the note matured, George 
 H. Bates died. It was duly presented at his last place of busi- 
 ness, and also at his dwelling-house, and payment requested, and 
 notice of non-payment immediately given to all the persons appear- 
 ing upon the back of the note as indorsers. The plaintiff's coun- 
 sel insist that Greenough was in fact, and should have been, treated 
 by the holders as an original promisor and joint maker of the 
 note with Bates ; and, inasmuch as no demand of payment was 
 made upon him, tliat the indorsers, Samuel R. Bates and Butler 
 and Brotlier, are discharged from all liability upon it. This is sup- 
 posed to result from the fact that his name was placed upon the 
 paper before it was indorsed by the payee, and from the position it 
 is there found to occupy. 
 
 Notwithstanding the great importance of a definite and uniform 
 rule, fixing the liability incurred by a party to negotiable paper 
 thus situated, a most perplexing contrariety of opinion is found to 
 exist in the reported cases. 
 
 In Massachusetts, and several of the New England States, he is 
 presumed, in the absence of proof of a different intention, to be 
 an original promisor. 
 
 The cases will be found collected and ably examined, by J. 
 Hubbard, in the Union Bank of Weymouth v. Willis, 8 Met. 504.^ 
 In that case A made a note payable to B, and C put his name in 
 blank on the back of the note. B, the payee, then placed his 
 name in blank on tlie back of the note under that of C. 
 
 In this condition, it was discounted by the plaintitf for A, the 
 maker. 
 
 It was held that C was an original promisor, and in an action 
 against B, the payee and indorser, the holders were defeated, be- 
 cause no demand of payment had been made of C. The Court 
 regarded itself bound, by the previous course of decisions in that 
 ^'?tate, remarking that if the subject were brought before it for the 
 first time, they " should say, that a name written on the paper, 
 which name was not that of the payee, nor following his name on 
 his having indorsed it, was either of no validity to bind such indi- 
 vidual, because the contract intended to be entered into, if any, 
 was incomplete, or within the statute of frauds ; or, that he should 
 
 1 Ante, 124.
 
 GREENOUGII V. PMEAD. 145 
 
 be treated bv third parties, simply as a second indorser, leaving 
 the payee antl himself to settle their rcspcetive lialnlities according 
 to their own agreement." 
 
 Whatever may have been the principle upon which the earlier 
 decisions in New York j^roceeded, the snbjoct has more recently 
 been fully examined Ijy the Supreme Court of that State in tiie 
 case of Ellis v. Brown, G Barb. S. C. 282, and l)y the Court of 
 Appeals in Spies v. (Jilmore, 1 Comst. 321, and Hall v. Newcomb, 
 7 Hill, 41G.1 
 
 These cases seem to affirm that he can only be made liable as a 
 second indorser; that he is within the protection of the statute of 
 frauds, and therefore parol evidence is not admissible to show that 
 he intended to bind liimself as an original promisor or guarantor. 
 That the indorsement is entirely nugatory until the note has been 
 indorsed by the i)ayee, and that he is then to be charged l)y a sub- 
 sequent holder only upon due demand of the maker and notice 
 thereof. 
 
 In Ohio, the case of Champion and Lathrop v. Griflfith, 13 Ohio, 
 228, followed by Robinson v. Abell, 17 Ohio, 30, 42, has settled that 
 the mere indorsement upon the note, of a stranger's name in 
 blank, is prima facie evidence of guaranty. That to charge such 
 person as maker there must be proof that his indorsement was 
 made at the time of execution by the other party, or, if afterward, 
 that it was in pursuance of an agreement or intention that he 
 should become responsible from the date of the execution ; that 
 such agreement or intention' may be proved by parol evidence ; and 
 that the rule is the same whether the instrument is negotiable or not. 
 
 The dilTerence amounts to this: in Massachusetts such a party 
 is presumed t<j be an original promisor ; in Ohio, he is presumed 
 to be a guarantor: but, in either State, parol evidence is received 
 to rebut tlic j)resunii)lion, and show what liability it was intended 
 he should assume, and what relation he should sustain to the 
 paper. In New York, he is presumed to have intended to assume 
 the liabilities of an indorser, and parol evidence is not admissible 
 to show a ditterent intention. 
 
 We are not disposed to doubt the correctness of tlio rule laid 
 
 down in the decisions already made in this State, when confined 
 
 to the facts of the several cases in which it has been applied. 
 
 This rule admits parol evidence to ascertain the intention of the 
 
 » Ante,Vdl. 
 10 "
 
 146 INDORSEMENT, 
 
 parties, and requires iis to consider what evidence w^s before the 
 Commercial Court. 
 
 From the bill of exceptions it appears that the note was indorsed 
 by all tlie i)arties for the accommodation of George H. Bates. 
 That Greenough indorsed it before it was filled np ; that George 
 H. Bates on the samp day filled up the note for $4000, payable to 
 the order of Samuel R. Bates, whose indorsement he then pro- 
 cured, and subsequently that of Butler and Brother. In this con- 
 dition he took it to the defendants in error, and procured it to be 
 discounted. It further appeared from the testimony of Greenough, 
 who was called and examined as a witness for Butler and Brother, 
 that he had been in the habit of exchanging accommodation 
 indorsements with George H. Bates ; that Samuel R. Bates had 
 usually been a party to this paper ; and that whenever it was in- 
 tended that he should be the first indorser, his name was used as 
 the payee. That without having any distinct recollection of this 
 particular note, he was able to say from the course of business 
 between them, that he intended to authorize George H. Bates to 
 make him appear in any character upon the paper that would best 
 serve the purpose of raising the money. This constituted a gen- 
 eral letter of attorney to Bates to bind Greenough in any form he 
 saw fit ; but while it obligated Greenough to submit to any obliga- 
 tion that Bates saw fit to impose upon him, it also entitled him to 
 the full benefit of any arrangement that Bates intended for his 
 benefit. Looking at tlie transaction fairly, we cannot doubt that 
 Bates, the maker, and his brother, the payee, intended to bind him 
 as one of the indorsers of the paper, and to impose upon him all 
 the obligations, and secure him all the privileges of that position ; 
 and that such was the understanding of Butler and Brother is per- 
 fectly manifest from the declarations of one of them, made after 
 the note had been protested, in which he treated George H. Bates 
 as the sole party primarily liable. 
 
 But if this testimony is loft entirely out of view, and we have 
 nothing but the fact that the note was discounted for the sole ben- 
 efit of the maker, and became first legally operative when received 
 by the defendants in error, we are still brought to the same con- 
 clusion. 
 
 In the common understanding of business men, it is very sel- 
 dom supposed that one placing his name upon the back of a note 
 becomes primarily liable for the payment of the debt. Tiiis under- 
 standing ought to be no further interfered with than is absolutely
 
 GREENOUGH V. SMEAD. 147 
 
 necessary ta give full effect to the lawful contracts of parties, and 
 alTortl a remedy to the creditor conirnonsurate with what he may 
 1)0 presumed to have expected when the promise was made. To 
 do tliis it is only necessary to give effect to the undertaking of 
 each of the parties upon the paper, precisely as they appear at the 
 moment the instrument itself takes effect and becomes legally 
 operative. If he then appears to be a stranger to tiie title, he 
 must assume the position and responsiliilities of a stranger, and 
 as lie cannot in such case be charged as an indorser, and as it can- 
 not l)e supposed that he did not intend to bind himself in some 
 way, he must be charged as a maker or guarantor. This will 
 happen in all cases where the i)aper is designed for the payee, and 
 the name of the stranger is i)ut on the back for security. .Such 
 were all tiic cases yet decided in this State. There was no middle 
 course ; either the undertaking which the party intended to as- 
 sume, and upon the faith of whicii the creditor had parted with 
 his money or property, must take effect in that manner, or it was 
 nugatory and without any effect whatever. 
 
 Nor would his position or responsibilities be changed, although 
 the payee should afterward transfer the obligation. Once im- 
 pressed with the character of maker or guarantor, they remain 
 the same into whose hands soever it may come. 
 
 But the case is widely different when the paper is not designed 
 for the payee, and the arrangement contemplates his indorsement 
 as an accommodation party also, before it is used. In such case, 
 there is no oldigation incurred, no contract made, until the note 
 is accepted by the person advancing the consideration upon it. 
 Where it is so accepted, it then, for the first time, has its effect. 
 It then has the indorsement of the payee, to transfer it to the 
 party whose name is already upon it, evidencing his willingness to 
 receive and transmit the title, and in his turn to assume the re- 
 sponsibility of an indorser when the note shall have accomplished 
 its purpose, by being accepted by the party becoming benelicially 
 entitled thereto. The order of this indorsement, in point of time 
 or locality, is of no importance, but it is controlled wholly by the 
 order contemjilated by the contract of indorsement. Chalmers v. 
 McMurdo, o Muul'ord, 2.")2. The fact that the party indorsed 
 before the payee, as was well said by Spencer, J., in llcrrick v. 
 Carman, 12 Johns. IGl, " can iiave no inllucnce, for he must have 
 known, and we are bound to presume that he acted on that knowl-
 
 148 INDORSEMENT. 
 
 edge,- that though the first to indorse, his indorsement would be 
 nugatory, unless preceded by that of the i)ayee." 
 
 Two governing principles should be kept constantly in view : 
 first, that such a construction should be placed upon the contract 
 as will prevent its failure, and will give effect to tlic obligation of 
 each of the parties appearing upon it at the moment the contract 
 itself takes effect, — ut res magis valeat quam pereat ; second, when- 
 ever the obligation of a party appearing upon the back of nego- 
 tiable paper, can, at that time, take effect as an indorsement, it 
 should always be held to do so, as conforming more nearly to the 
 general intention of parties assuming that position upon it. 
 
 The first of these principles is disregarded by the present hold- 
 ing of the courts in New York, in treating as nugatory the obliga- 
 tion assumed by a stranger to the paper, when it is designed for 
 and received by the payee, and when the name is indorsed to give 
 credit to the paper with him. The last is disregarded in the case 
 cited from Metcalf, in pushing the principle of original liability 
 beyond the necessity of its application, and when at the moment 
 the contract is consummated, the obligation of the party thus situ- 
 ated, can, and should have effect as an indorsement. 
 
 In New York, the present holding is directly opposed to a long 
 series of earlier decisions, as is abundantly proved by the dissent- 
 ing opinions in Hall v. Newcomb, and Ellis v. Brown, in which 
 the very distinction we have made, is recognized and enforced, 
 while in Massachusetts, not one of the numerous cases cited by 
 the Court in the Union Bank v. Willis, had carried the principle 
 beyond the liability assumed for the benefit of the payee. 
 
 Two states of the case may be supposed, in neither of which 
 would Smead & Co. be obliged to treat Greenougli as an original 
 promisor. If the paper upon its face placed him in that position, 
 yet, if in point of fact the arrangement between the parties was 
 such as to entitle him to the privileges of an indorser, no demand 
 need be made upon him, for the other indorsers having no re- 
 course against him as maker, could lose nothing for the want 
 of it. 
 
 On the other hand, if he appeared to be an indorser, but in fact, 
 as between him and the other indorsers, he had agreed to assume 
 the responsibilities of maker, yet Smead & Co., having no notion 
 of such an arrangement, would not be bound to regard it. 
 
 In our opinion, not only the paper upon its face presented him 
 as an indorser, but the evidence given, also comes to the same
 
 GREENOUGH V. SMEAD. 149 
 
 result, and sliows him a joint accommodation indorser witli the 
 other parties appearing; upon the back of the note; and, as such, 
 under the ruling in Douglas v. Waddle, 1 Ohio, 413, liable only 
 for his proper proportion of the debt, as a co-security. 
 
 This view of the sul)ject makes it unnecessary to pass upon the 
 question made, as to the sufficiency of the demand. It may not 
 be improper, however, to say that if Greenough could be treated 
 as a joint maker, we should be of the opinion that the demand 
 made, or rather the excuse for not making a demand, would be 
 insufficient to charge the indorsers. 
 
 The question is not covered by the case of Harris v. Clark, 10 
 Ohio, 5, and we feel no hesitation in saying that the rule tliere 
 adopted, should be confined to the precise state of facts upon 
 which the decision was made. A demand upon one of several 
 partners in business, is clearly sufficient, and the Court, in that 
 case, considered the several " makers of a joint and several prom- 
 issory note, in the light of jjartners in that particular transaction.''^ 
 But surely the principle could have no application after the death 
 of one of the parties had terminated the implied agency of the 
 survivor ; and it could not be deemed due diligence in the holder 
 to present the note at the residence of the deceased partner, when 
 the survivor was within his reach. 
 
 It is also assigned for error, that the Court refused to require 
 the plaintiffs to fill up the blank indorsements, upon the trial. In 
 this, we think there was no error. When the plaintiffs gave tliQ 
 note in evidence, with the names of all the defendants upon it, 
 they, at tiie same time, established the lialiility of all, and title in 
 themselves. They were as well entitled to the legal presumptions 
 and inferences to be drawn from the face of the paper, as they 
 were to what was fully expressed in it. All this belonged to its 
 construction and legal effect, and as they claimed nothing more, 
 there was no occasion for writing out what the law presumed with- 
 out it. The name of the payee appeared, transferring the title ; 
 and while it is true that the precise order in which it had passed 
 to and from tlie other indorsers, might not be ap))arent, a sufficient 
 answer is, that tliis was wholly immaterial. In no ])ossible case, 
 could it defeat the title, or be a defence for any one of them. 
 
 If the plaintiffs had endeavored to establish a liability, not re- 
 sulting from a fair construction of the paper itself, there would 
 have been great propriety in compelling them to specify tiie precise 
 nature of the lyidertaking, and of confining the evidence to its
 
 150 INDORSEMENT. 
 
 support ; but when nothing but the legal consequences of the in- 
 strument arc invoked, we can see no possible benefit to accrue to 
 the defendants from complying with such a demand, unless it 
 should be the very illegitimate advantage arising from the plain- 
 tiffs having mistaken their legal rights. 
 
 The judgment of the District Court is affirmed. 
 
 This very ably considered case is cited as declaring the settled law of Ohio, 
 in Seymour v. Leyman, 10 Ohio State, 283. The same rule prevails in Minne- 
 sota, that the third party becomes liable as maker, if he signs before delivery 
 to the payee, and lor further security to him. Nor will parol evidence be 
 received in such case to show that he was to be bound as an indorser. Peckam 
 V. Oilman, 7 Minn. 446. The law in Georgia is similar. Quin v. Sterne, 26 Ga. 
 223. And in Rhode Island, Perkins v. Barstow, 6 R. I. 505. See following 
 case. 
 
 Alexander Rey, William R. Marshall, and. Joseph M. 
 Marshall, partners under the firm name of Marshall & 
 Co., Plaintiffs in Error, v. James W. Simpson. 
 
 (22 Howard, 341. Supreme Court of the United States, December, 1859.) 
 
 Indorsement by one not a party. — The defendants, W. M. and J. M., not parties to the 
 note in suit, placed their firm name on the back of the note, at its inception, and 
 before it liad been passed or offered to the plaintiff, at the request of the other de- 
 fendant, tlie maker, knowing that the note had not been indorsed by the payee, 
 and with a view to give credit to the same, for the benefit of the maker, held, 
 that W. M. and J. M. were original promisors with the maker ; evidence being ad- 
 missible to show their intention. 
 
 The case is stated in the opinion of the Court. 
 
 Clifford, J. This is a writ of error to the Supreme Court 
 of the Territory of Minnesota. 
 
 According to the transcript, the suit was commenced by James 
 W. Simpson, the present defendant, on the twenty-first day of 
 « December, 1855, in the District Court of the Territory, for the 
 second judicial district, against the plaintiffs in error, who were 
 the original defendants. It was an action of assumpsit, and was 
 brought upon a certain promissory note for the sum of three 
 thousand five hundred and seventeen dollars and seven and a half 
 cents, bearing date at St. Paul, in that Territory, on the four- 
 teenth day of June, 1855, and was made payable to the order of 
 the plaintiff six months after date, for value received. At the
 
 REY V. SIMPSON. 151 
 
 period of the date of the note, as well as at the time the suit wus 
 instituted, two of tiifs dcfiindauts, William R. Marshall and Jost?|»h 
 M. Marsnall, were partners, doing husiness under the style and 
 firm of Marshall and (Company. 
 
 As appears by the declaration, the note was made and signed hy 
 the defendant first naiyed in the original suit, at the time and 
 place it bears date. 
 
 And the plaintiif further alleges in the declaration, tha|^after 
 making and signing the note, the same defendant then and there 
 delivered the note to the other two defendants ; and that they then 
 and there, by their partnership name, indorsed the same, by writ- 
 ing the name of their firm on the back of the note, and then and 
 there re-delivered the same to the first-named defendant, who after- 
 wands, and i)efore the maturity of the note, delivered it so indorsed 
 to the plaintitf. He also alleges that the defendants, William R. 
 Marshall and Joseph M. Marshall, so indorsed the note for the 
 purpose of guaranteeing the i)ayment of the same, and of becom- 
 ing sureties and security to him, as the payee thereof, for the 
 amount therein specified, and that he, relying upon their indorse- 
 ment, took the note, and paid the full consideration thereof to 
 the first-named defendant. 
 
 Other matters, such as due presentment, non-payment, and j)ro- 
 test, are also alleged in the declaration, which it is unnecessary to 
 notice at the present time, as the questions to be determined arise 
 out of the allegations previously mentioned and described. 
 
 Personal service was made on each of the defendants, 1)ut the 
 one fust named did not apjiear ; and after certain interlocutory 
 proceedings, conforming to the laws of the Territory and the i>rac- 
 tice of the Court, he was defaulted. 
 
 On the thirty-first day of December, 185"), the counsel of the 
 other two defendants served notice of a motion to strike out all 
 that part of the declaration which sets forth the purpose for which 
 it is alleged they indorsed the note, and so much of the declara- 
 tion, also, as alleges that the plaintiff took the note as payee, rely- 
 ing upon the indorsement, and paid to the first-named defendant 
 the full consideration thereof, as before stated. That motion was 
 subsequently heard before the Court ; and on the ninth day of 
 February, 185G, was denied and wholly overruled. After the mo 
 tion was overruled, the defendants, whose firm name is on the 
 back of the note, demurred specially to the declaration. 
 
 None of the causes of demurrer need be stated, as they will be
 
 152 INDORSEMENT. 
 
 t 
 
 sufficiently brought to view in considering the several propositions 
 assumed by the counsel "on the one side and the otiier, iu the ar- 
 gument at the bar. Suffice it to say, that the demurrer was over- 
 ruled ; and on the tenth day of July, 1856, judgment was entered 
 for the plaintiff against all of the defendants for the amount of ■ 
 the note, with interests and costs. b 
 
 On the eighteentli day of September, 1856, the defendants sued 
 out fn writ of error, and removed the cause into the Supreme 
 Court of the Territory, where the judgment of the District Court 
 was in all things affirmed ; and on the fourth day of February, 
 1857, a final judgment was entered for the plaintiff, that he 
 recover the amount of the judgment rendered in the District 
 Court, with interest, costs, and ten per cent damages, amounting 
 in the wliole to the sum of four thousand three hundred seventy- 
 one dollars and ninety-seven cents. Whereupon the defendants 
 sued out a writ of error to this Court, which was properly dock- 
 eted at the December term, 1857. 
 
 All civil suits in the courts of Minnesota are commenced 
 by complaint ; and suitors are enjoined by law, in framing their 
 declarations, to give a statement of the facts constituting the 
 cause of action ; which statement is required to be expressed in 
 ordinary and concise language, without repetition, and in such a 
 manner as to enable a person of common understanding to know 
 wliat is intended. 
 
 Pursuant to that requirement, and the practice of the courts of 
 the Territory at the time the suit was commenced, the plaintiff in 
 this case set forth the facts already recited as contained in the 
 complaint or declaration. 
 
 Facts thus stated in the declaration, pursuant to the directions 
 of the law of the Territory, and which were material to the under- 
 standing of the rights of the parties to the controversy, could not 
 properly be suppressed by the Court. Irrespective, therefore, of 
 the question whether or not the motion of the defendants to strike 
 out that part of the declaration was waived, because not pressed 
 in the Supreme Court of the Territory, no doubt is entertained by 
 this Court that the motion was properly overruled by the District 
 Court upon the merits. 
 
 Proof of the attending circumstances under wliich the defend- 
 ants, William R. Marshall and Joseph M. Marshall, had placed 
 tlieir firm name upon the back of the note, would clearly have 
 been admissible in a trial upon the general issue ; and if so, no
 
 REY V. SIMPSON. 153 
 
 f 
 
 reason is perceived why it was not proper for the plaintiff, under 
 tlie peculiar system of pleading which prevailed in the courts of 
 the Territory at the time the suit was commenced, to state those 
 circumstances in the declaration. Beyond question, they were a 
 part of the facts constituting the cause of action ; and, if so. they 
 were exjtrcssly i-C(iuirud 4o l)e stated by the law of the Territory 
 prescribing the rules of pleading in civil cases. And having been 
 alleged in ])ursuance to such a requirement, and being material to 
 a proper understanding of the rights of the parties to the suit, it 
 must be considered, by analogy to the rules of pleading at common 
 law, that they are admitted by the demurrer. 
 
 l>y the admitted facts, then, it appears the defendants, William 
 R. Marshall and Joseph M. Marshall, placed their firm name on 
 the back of the note at its inception, and before it had been 
 passed or offered to the plaintiff. They placed their firm name 
 there at the request of the other defendant, knowing that the note 
 had not been indorsed by the payee, and with a view to give credit 
 to the note, for the benefit of the immediate maker, at whose re- 
 (jnest they became a party to the same. 
 
 Whatever diversities of interpretation may be found in the au- 
 thorities, where either a blank indorsement or a full indorsement 
 is made by a third party on the back of a note, payable to the 
 payee or order, or to the payee or bearer, as to whether he is to be 
 deemed an absolute promisor or maker, or guarantor or indorser, 
 there is one principle upon the subject almost universally admitted 
 by them all, and that is, that the interpretation of the contract 
 ought in every case to be such as will carry into effect the inten- 
 tion of the parties; and in most instances it is conceded that the 
 intention of the parties may be made out by parol proof of the 
 facts and circumstances which took place at the time of the trans- 
 action. Story, Prom. Notes, §§ 08, 50, 479. 
 
 When a promissory note, made payal)le to a particular person 
 or order, as in this case, is first indorsed by a third person, such 
 third i)erson is held to be an original promisor, guarantor, or in- 
 dorser, according to the nature of the transaction and the under- 
 standing of the parties at the time the transaction took place. If 
 he put his name on the back of the note at the time it was made, 
 as surety for the maker, and for his accommodation, to give him 
 credit with the payee, or if he particij)ated in the consideration 
 for which the note was given, he must l)e considered as a joint 
 maker of the note. On the other hand, if his indorsement was
 
 154 INDORSEMENT. 
 
 subsequent to the making of the note, and he put his name there 
 at the request of the maker, pursuant to a contract with the payee 
 for further indulgence or forbearance, lie can only be held as a 
 guarantor. l>ut if the note was intended for discount, and he put 
 his name on the back of it with the understanding of all the par- 
 ties that his indorsement would be inojierative until it was in- 
 doi-sed by the payee, he would then be liable only as a second 
 inddtser in the commercial sense, and as such would clearly be 
 entitled to the privileges which belong to such indorsers. 
 
 Decided cases are referred to by the counsel of the defendants, 
 which seemingly deny that such parol proof of the attending cir- 
 cumstances of the transaction is admissible in evidence ; but the 
 weight of authority is greatly the other way, as is abundantly 
 shown by the cases cited on the other side. Whenever a written 
 contract is presented for construction, and its terms are ambigu- 
 ous or indefinite, it is always allowable to weigh its language in 
 connection with the surrounding circumstances and the subject- 
 matter, and we see no reason, as question of principle, why any 
 different rule should be adopted in a case like the present. Such 
 evidence has always been received in the courts of Massachusetts, 
 as appears from numerous decisions, and the same rule prevails in 
 most of the other States at the present time. 1 Am. Lead. Cas. 
 4th ed. 322. Repeated decisions to the same effect have been 
 made in the courts of New York, and until within a recent pe- 
 riod it appears to have been the settled doctrine in the courts of 
 that State. 
 
 Recent decisions, it must be admitted, wear a different aspect ; 
 but they have not had the effect to produce a corresponding change 
 in other States, and, in our view, deny the admissibility of parol 
 evidence in cases where it clearly ought to be received. Hawkes 
 V. Phillips ct al, 7 Gray, 284. 
 
 Applying these principles to the present case, it is obvious that 
 the contract of the two defendants whose firm name is upon the 
 back of the note was an original undertaking, running clear of all 
 questions arising out of the statute of frauds. 
 
 They placed their names there at the ince})tion of the note, 
 not as a collateral undertaking, but as joint promisors with the 
 maker, and are as much affected by the consideration paid by the 
 plaintiff, and as clearly liable in the character of original prom- 
 isors, as they would have been if they had signed their names 
 under the name of the other defendant upon the inside of the in-
 
 " REY V. SIMPSON. 155 
 
 strunicnt. Numerous decisions in the State courts might Ije cited 
 ill support of tlie )»ro|)Ositioii as stated, but we think it unnecessary, 
 as they will be found collated in the elementary works to which 
 reference has already been made, and in many others which treat 
 of this sul)ject. 
 
 Another objection to t}\e right of recovery in this case deserves 
 a brief notice. It is insisted by the counsel of the defendji^its, 
 that the complaint or declaration is not sufficient to maintaii»this 
 suit against tiiese defendants as original j>romisors. That ol»jec- 
 tion must be considered in connection with the system of plead- 
 ing which [prevailed in the courts of the Territory at the time the 
 suit was commenced. By that system, suitors were only required 
 to state the facts which constituted the cause of action. In this 
 case the plaintilT followed that mode of pleading, and we think he 
 has set forth enough to constitute a substantial compliance with 
 the law of the Territory, and the practice of the Court where the 
 suit was instituted. He alleges, among other things, that the 
 defendants whose firm name is on the back of the note placed it 
 there for the purpose of becoming sureties and security to him as 
 payee for the amount therein specified. That allegation, to use 
 the language of the statute of Minnesota, is expressed in ordi- 
 nary and concise language, and in such a manner as to be easily 
 understood, and that is all which is required by the law of the 
 Territory prcscrilMiig the rules of pleading in civil cases. Under 
 tlic system of pleading which prevailed in the courts of the Ter- 
 ritory, the objection cannot be sustained. 
 
 Tlic judgment of the Supreme Court of the Territory is there- 
 fore alhrmed with costs. 
 
 It may be stated, as the result ol' the foregoing cases and citations, that in 
 the folh)wing States, one who, not a party to negotiable paper, places his name, 
 without more, on the back of the same, before an indorsement by the payee, renders 
 himself, in the absence of proof, liable as maker or surety : ^Massachusetts, Vermont, 
 Maine. Xew Hampshire, Michigan, Louisiana, Missouri, South Carolina, Texas 5 
 also in Rhode Island, Georgia, Ohio, and Minnesota, if the party signed before 
 deliver}' to and to secure the payee. 
 
 In the following, as indorser: New York, Mississippi, Pennsylvania, Tennes- 
 see, Iowa, Wisconsin, California, Indiana. In New York this liability cannot 
 be changed by ])arol proof. 
 
 In the following, as guarantor: Illinois, Connecticut, Ohio: also in Virginia, 
 if the paper is not negotiable. In New York and Louisiana, if the paper is 
 uniiegotiable, such person becomes maker or guarantor. Griswold r. Slocum, 
 10 Barb. 402; Cooley v. Lawrence, 4 Martin, 639.
 
 156 
 
 INDORSEMENT. 
 
 In Kentucky, as indorser or guarantor, as to which proof of intention will be 
 received ; but evidence is inadmissible to bind such signer as maker. Kellogg 
 V. Dunn, 2 Met. Ky. 215. 
 
 But proof of intention is admissible in the courts of the United States, and 
 probably in all the above-named States excepting New York and Massachusetts ; 
 and in the latter State it may be shown that the third person signed subsequently, 
 to the execution of the paper, thus repelling the presumption that he is an orig- 
 inal^promisor. But if the flict is established, either by* direct proof or by the 
 legal presumption in the absence of proof, that the signature was contem- 
 poraneous with the making, no proof of intention will be received. See Essex 
 Company v. Edmands, 12 Gray, 273 ; Bigelow v. Colton, 13 Gray, 309 ; Lake 
 V. Stetson, ib. 310 ; Pearson v. Stoddard, 9 Gray, 199 ; Wright v. Morse, 9 
 Gray, 337; also note to Union Bank of Weymouth w. Willis, ante, p. 124. 
 
 The above supposes the mere signature of the name without more. If the 
 party write a guaranty over his own name, the better opinion seems to be that 
 his liability is that of guarantor. See Spies v. Gilmore, 1 Comst. 321 ; Tinker 
 V. McCauley, 3 Mich. 188, overruling Higgins v. Watson, 1 Man. 428. But 
 such a contract was held an indorsement in Partridge v. Davis, 20 Vt. 499, and 
 in some other early cases. See note to Brown v. Butchers' and Drovers' Bank, 
 ante, p. 110. 
 
 Leavitt, President of the American Exchange Bank, v. 
 Putnam et al. 
 
 (3 Comstock, 494. Court of Appeals of New York, July, 1850.) 
 
 Indorsement after maturity. — Negotiable paper does not lose its negotiable character by 
 being dishonored ; not even though indorsed to a particular person without other 
 words. 
 
 The case is stated in the opinion of the Court. 
 
 BuRLBUT, J. On the twenty-ninth day of August, 1844, Messrs. 
 J. W. and R. Leavitt made their note for $1570.52, payable to the 
 order of T. Putnam & Co. (the defendants), eight months after date. 
 A few days after the maturity of the note, the defendants indorsed 
 it as follows : " Pay the within to A, Thacher, value received, 
 May 21, 1845. T. Putnam & Co." Thacher indorsed without 
 recourse, and delivered the note for a valuable consideration to the 
 American Exchange Bank, in whose behalf this action is brought. 
 
 On the trial, the defendants urged, among other grounds of 
 objection to the plaintiff's recovery, that the defendants' indorse-
 
 LEAVITT V. PUTNAM. 157 
 
 inent was in effect a new draft payable to Thacher only, and not 
 negotiable, so that no action conld be maintained upon it in the 
 name of the i)laintill'. In this they were sustained by the Court, 
 and the plaintiff was nonsuited. 
 
 The other oljjcctions taken by the defendants on their motion 
 for a nonsuit were not considered by the Court below, and under 
 the circumstances of the case cannot be noticed on this appSal ; 
 so that the only thing for us to consider is, whether the indorse- 
 ment of a note made after due, differs from one made before 
 maturity in respect to its negotial)ility. It was conceded on the 
 argument that no express authority could be found sustaining 
 the distinction upon which the decision of the Superior Court 
 was based, l)ut it was urged that the defence could be sustained 
 upon the ])rinciple that a dishonored note loses its mercantile 
 character, and its indorsement l)ecomes an original contract wiiich 
 must be made expressly negotiable in terms, or it could not be 
 held to possess the character of negotiability. There is unques- 
 tional)ly a difference between the indorsement of a note after due 
 and one while it is running to maturity, but this relates only to a 
 single point arising from the necessity of the case ; to wit, the 
 time of payment, which, in the latter indorsement, is fixed at a 
 future day by the express agreement of the parties, while in the 
 former, it is declared by law to be within a reasonable time, upon 
 demand. But in all other respects the contract is the same as an 
 indorsement in tlie usual course of trade ; and it is difficult to 
 perceive how the single difference referred to can at all affect the 
 negotiability of the indorsement. A bill or note does not lose its 
 negotiable character by being dishonored. If originally negotiable 
 it may still pass from hand to hand ad infinitum until paid by the 
 drawer. Moremer the indorser after maturity writes in the same 
 form, and is l)ound only uj)on the same condition of demand upon 
 the drawer and notice of non-payment as any other indorser. 
 Thus the paper preserves its mercantile existence and retains the 
 main attributes of a proper ])ill or note, and circulates as such in 
 the commercial community. Exceptions to a general rule affect- 
 ing so important and numerous a class of transactions as the one 
 under consideration must be productive of great inconvenience, 
 and will not be indulged except for urgent reasons; and nothing 
 has been made to appear in tlie argument or seems to exist in the 
 case, which warrants the Court in treating the ordinary indorse- 
 ment of a dishonored bill or note as without the law merchant
 
 If 
 
 158 INDORSEMENT. 
 
 and not negotiable. While it was questioned whetlier such a note 
 was negotiable, and whether the indorser was chargeable except 
 upon the usual condition of demand and notice, there was perhaps 
 reason enough to sustain the decision of the Court below. But since 
 both the note and its indorsement, by a long course of decisions, 
 have been treated as within the law merchant in respect to their 
 main attributes, the indorsement ought to be regarded as negoti- 
 able to tiie same extent as an indorsement before maturity. The 
 latter follows the nature of the original bill, and is equally nego- 
 tiable. Edie V. The East India Co., 2 Burr. 1216 ; Mutford v. 
 Walcot, 1 Ld. Raym. 571; Allwood v. Hazelton, 2 Baylies, S. C. 
 457; Bishop v. Dexter, 2 Conn. 419; Berry v. Robinson, 9 
 Johns. 121. 
 
 The note in the present case was upon its face transferable, 
 and its character in respect to negotiability could only have been 
 changed by an indorsement containing express words of restric- 
 tion. The defendants' indorsement was a full one, containing the 
 name of the person in whose favor it was made, but omitting the 
 words " or order,^^ the legal effect of which was, nevertheless, to 
 make the note payable to him or his order, and his indorsement 
 therefore was effectual to transfer the note to the plaintiff. Chitty, 
 Bills, 136 ; Story, Prom. Notes, § 139. 
 
 I am of opinion that the judgment of the Superior Court should 
 be reversed, and a new trial awarded. Judgment revei'sed. 
 
 The doctrine of this case is well settled. See Chitty, Bills, 215 ; Story, 
 Promissory Notes, § 178; Id. Bills of Exchange, §§ 220-223, and cases cited. 
 
 Upon the subject of defences in the case of paper overdue, see Holder Foii 
 Value, i^ost. 
 
 Ebenezer R. Estabrook v. Willis Smith. 
 
 (6 Gray, 570. Supreme Court of Massachusetts, September, 1856.) 
 
 Indorsement of firm note bi/ partner in his own name. — An indorsement by one partner, in 
 his individual name, to liis copartner, the paper being payable to the firm or order, 
 will not enable the indorsee to sue thereon in his own name. 
 
 The case is sufficiently stated in the opinion of the Court. 
 
 Dewey, J. We take the rule to be uncontroverted, that a 
 promissory note payable " to A B or order " cannot be trans-
 
 EsTABIlOOK V. SMITH. 159 
 
 ferrcd, so as to give a right of action in the name of a liolder, 
 not the original party, without an indorsement hy the payee. 
 The a[)plication of tliis principle seems to be decisive against 
 the right of the [)UiintilT alone to maintain this action. The 
 action is brought by Estabrook upon a note made to a copartner- 
 ship, Estabrook and Richmond, promising them, by the name of 
 their copartnership, to pay them or order a certain sura of money. 
 That this action cannot 1)C maintained Ijy the plaintiff, as payee of 
 the note, is obvious ; as that would at once present a case^vhere 
 there was an omission to join all the payees as plaintiffs, which 
 would be fatal to the action. The only question therefore, is, 
 whether this note is legally indorsed, so as to enable the plaintiff 
 to maintain the action as indorsee. 
 
 The payees of the note are Estabrook and Riciimond, who cora- 
 j)ose a partnership. An indorsement of the note by the payees 
 would therefore be an indorsement by Estabrook and Richmond, 
 and this would correspond with the form of the note, and trans- 
 fer the same to their indorsee. One partner might properly 
 transfer the note by indorsement, but he must do it by indorsing 
 the partnership name. Any thing less than this seems to be an 
 irregularity, and a departure from the legitimate mode of transfer 
 of a negotial)le note or bill, payable to the order of a copartnership. 
 
 It is not contended that the indorsement by Richmond alone 
 would have l^ccn sufficient to authorize an action in the name of 
 a third })erson as indorsee ; but it is urged that such indorsement 
 is sufficient to authorize an action by the other partner, Esta- 
 brook, as indorsee. The position taken is, that Richmond, by his 
 indorsement, has parted with all his interest, and so vested the 
 entire note in Estal)rook. This may be all true as between Rich- 
 mond and Estabrook, and might be quite sufficient to settle, as 
 between them, to whose use this money was to be held when col- 
 lected. But the question still recurs, as to the effect of such an 
 indorsement as against the maker of the note, and whether it 
 creates the legal relation of indorsee. As already remarked, the 
 present action, if maintainable at all, is maintainable by Esta- 
 brook as indorsee of the note. To constitute a legal indorsement, 
 the payees, Estabrook and Richmond must be the indorsers. But 
 no such indorsement has ever been made. No one has ])rofessed 
 to indorse the note in the partnership name. The only indorse- 
 ment is that of Richmond individually ; and although it might be
 
 160 INDORSEMENT. 
 
 quite competent for the payees, Estabrook and Richmond, in their 
 partnership name, to have indorsed it to Estabrook, yet they have 
 not done so. 
 
 We have found no authority for maintaining an action by an 
 indorsee under such circumstances. Tlie case of Goddard v. Ly- 
 man, 14 Pick. 268, which seems to be the most favorable case 
 cited to sustain the position taken by the plaintiff, was widely 
 different from the present case. In that case, although the orig- 
 inal i^^dorscmcnt was by two only of three payees, and made to 
 the other payee and a third person, yet it was subsequently in- 
 dorsed by the third payee, and came to the hands of the plaintiff, 
 who instituted the suit with the indorsement of all the payees. 
 That case, upon its facts, does not therefore furnish any precedent 
 for this case ; although some of the remarks, as found in the 
 opinion of the Court, might seem to indicate a broader doctrine 
 than the case required. 
 
 Robb V. Bailey, 13 La. An. 457, was a case similai- to the principal case ; and 
 the same rule was adopted. See also Fergusons. King, 5 La. An. 642 ; Fletcher 
 V. Dana, 4 Blackf. 377 ; Desha v. Stewart, 6 Ala. 852 ; Moore v. Denslow, 14 
 Conn. 235; Absolon v. Marks, 11 Q. B. 19; Russell v. Swan, 16 Mass. 314; 
 Hooker v. Gallagher, 6 Fla. 351 ; 2 Greenl. Ev. § 163. 
 
 Upon the death of a member of a firm, the survivor may indorse in the firm 
 name paper payable to the firm. Jones v. Thorn, 14 Martin, 463. Though it 
 was not necessary in this case for the Court to go farther than to say that, in 
 indorsing the firm name, the survivor thus passes all of his own interest, still 
 the doctrine of survivorship in partnerships seems broad enough for the rule that 
 such indorsement passes full and complete title to the paper, as much so as if 
 recfularly indorsed by the firm in the lifetime of the deceased copartner. Mr. 
 Justice Story, in his Treatise on Promissory Notes, § 125, states that in such 
 case, " The note, or chose in action, vests exclusively in the partner by survi- 
 vorship, although he must account therefor, as part of the assets of the partner- 
 ship ; " citing Crawshay v. Collins, 15 Ves. 218, 226. 
 
 "Where the paper is indorsed in blank to a firm, and one of the firm dies there- 
 after and before suit, the other members need not, as in contracts generally, de- 
 clare as surviving partners, as they were not bound to prove the partnership, or 
 that the paper was indorsed or delivered to them jointly with their deceased 
 partner. Attwood v. Rattenbury, 6 J. B. Moore, 579. But it is otherwise if 
 the paper is indorsed specially. Ibid., per Pui^k, B., who said, in relation to spe- 
 cial indorsements : '* It has often been ruled that, in an action by the payees or 
 indorsees, strict evidence must be given that the firm to whom it is indorsed con- 
 sists of the persons who sue as plaintiffs on the record, whilst an indorsement in 
 blank conveys a joint right of action to as many as agree to sue on the bill." 
 
 This, in substance, is the language of Lord Ellcnborough in Ord v. Portal, 3 
 Camp. 239 ; and again in Rordasnz v. Leach, 1 Stark. 446. See also Machell v.
 
 STEVENS V. REALS. 161 
 
 Kinnear, 1 Stark. 499, in wliicli it appeared that, though the indorsement was in 
 blank, a rif^lit of aetion was vested in a firm as tru.ste<!s of an insolvent. It was 
 hild that two oi' this firm could not, jointly with a third trustee, not a ineinber 
 of the firm, maintain an action on the hill, without some evidence of the trans- 
 fer of the bill to them by the firm, by delivery or otherwise. See also Guidon v. 
 Robson, 2 C'anip. 302; Low r. Copestake, .'5 Car. & P. 300; Bawden v. Howell, 
 3 Man. & G. 638 ; Whitlo<k v. McKechnie, 1 Bosw. 427 ; Robb v. Bailey, 13 La. 
 An. 4.07 ; 2 Cireenl. Ev. § 1()3 ; and cases cited at the beginning of this note. 
 
 The following cases deny the |)ower of one of a firm to indorse paper pay- 
 able to the firm, when the partnership has been dissolved in the lifetime of 
 its members : Sanford v. Mickles, 4 Johns. 224 ; even though the partner may 
 have authority to settle the partnership effeets, Abel v. Sutton, 3 Esp. 108, 
 per Lord Kenyan; Humphries t). Chastain, 5 Ga. 166; Foltz v. Pourie, 2 De- 
 saussure, Eq. 40. See Parker v. Macomber, 18 Pick. 505, 
 
 But the contrary is held, if the dissolution was unknown to the indorsee, 
 Conyr. Wheelock, 33 Maine, 366. See Lewis v. Reilly, 1 Q. B. 349. So if 
 the firm note was made payable to the partner who, after dissolution, indorsed 
 it. Temple i\ Seaver, 11 Cush. 314. 
 
 " It is well settled that a note made by a partnership to one of its own mem- 
 bers, or his order, when indorsed will enable the indorsee to maintain an action 
 upon it. It is the promise of all to the order or appointee of one ; and when 
 the appointment is made by an indorsement, it is a valid contract with tlie in- 
 dorsee." Per Shaw, C. J., in Thayer v. BulTum, 11 Met. 398, citing Pitcher v. 
 Barrows, 17 Pick. 361 ; Smith v. Lusher, 5 Cow. 688 ; Blake v. Wheadon, 
 2 Hay. 109. See also Sherwood v. Barton, 36 Barb, 284 ; Fulton v. Williams, 
 11 Cush. 108; Temple v. Seaver, supra. 
 
 Daniel B. Stevens v. William Beals. 
 
 (10 Cushing, 291. Supreme Court of Massachusetts, October, 1852.) 
 
 Indorsement hy wife with consent of her husband. — A wife, with the consent of iier hus- 
 band, may indorse in her own name a promissory note made payable to her 
 during coverture, and pass a good title to the indorsee. 
 
 Assumpsit by the indorsee against the maker of the following 
 promissory note : " Lowell, June <S, 1848. For value received, I 
 promise to pay Lydia H. McFarland, or order, $150 on demand 
 with interest. Williaiu locals.'' 
 
 At the trial in the Court of Common Pleas, it appeared tliat at 
 the dale of the note the payee was a married woman, living in 
 this Commonwealth with her husband ; that her husband wrote the 
 
 11
 
 162 INDORSEMENT. 
 
 note, and always permitted his wife afterwards to retain possession 
 of it. There was evidence tending to show that the defendant 
 had promised, in presence of the payee's husband, to pay this 
 note to the wife, whenever she wanted the money ; and that the 
 money loaned to the defendant at the time of giving the note, was 
 given to tlic wife by the husband, at the time of tlicir marriage, 
 and liad been used and loaned by her ever since. Tiie note was 
 indorsed by tlie wife in her own name, and she testified that her 
 husband had given her tlie fullest assent to do as she pleased with 
 the note, and that she was to have the note as her own ; that the 
 defendant had promised her repeatedly to pay the note. 
 
 Tlie defendant objected that, by the indorsement of the wife no 
 legal title passed to the indorsee, and that this action could not be 
 maintained. But the presiding judge, Mellen, J., ruled that the 
 wife, with the assent of the husband, could indorse the note so as 
 to pass the property in it to the indorsee. 
 
 BiGELOW, J. Two objections only have been insisted on by the 
 defendant in support of the exceptions in this case. The first 
 relates to the authority of the wife, upon the facts reported, to 
 indorse the note in suit in her own name, and thereby vest a good 
 title thereto in the plaintiff. There can be no doubt, that the note, 
 having been given after marriage and during coverture, although 
 payable to the wife, was tlie absolute property of the husband, 
 and he could pass the title thereto by his own sole indorsement. 
 The authorities in this country are concurrent to this point. 
 Bingham on Inf. & Cov. 213, note. We think it is equally clear, 
 that a note made payable to the wife during coverture, when in- 
 dorsed by tlie wife in her own name, with the assent and author- 
 ity of the husband, passes by a good title to an indorsee ; but that 
 without such assent and authority no title passes by her indorse- 
 ment. The cases all turn upon this distinction. In the leading 
 case of Barlow v. Bishop, 1 East, 433, which decides that a mar- 
 ried woman cannot indorse a note made payable to her in her own 
 name, so as to pass a valid title thereto, proof of the authority or 
 assent of the husband was wanting. Subsequent decisions have 
 fully recognized this distinction ; and it is now the well-settled 
 rule of law that the assent or authority of the husband gives 
 validity to the wife's indorsement, and enables her to pass a good 
 title to choses in action made payable to her during coverture.
 
 STEVENS V. DEALS. 1C3 
 
 The principle upon wliicli this distinction rests is this : The C(nor- 
 ture of the wife creates an incapacity and disability in her to 
 make a valid contract. The assent of the husband removes this 
 disability or supplies the want of capacity. She then becomes to 
 a certain extent tlie agent of the husband, who is bound by jier 
 acts when done in pursuance of the authority conferred by him. 
 Chitty, Bills, 21, 200, 201 ; 2 Bright, Husband and Wife, 42 ; 
 Cotes V. Davis, 1 Camp. 485 ; Prestwick v. Marshall, 7 Bing. SO-O, 
 and 4 Car. & P. 5U4 ; Prince v. Brunatte, 1 Bing. ^. C. 435 ; 
 Miller v. Delamater, 12 Wend. 433. 
 
 The case of Savage v. King, 5 Rhep. 301, which was cited and 
 relied on by the defendant, is in conllict with the other authorities 
 upon this point. The Court put their decision in that case mainly 
 upon the authority bf Barlow v. Bishop, without adverting to the 
 distinction created by proof of the assent of the husband to the 
 indorsement, which seems to have escaped the attention both of 
 the counsel and the Court. We cannot, therefore, yield our assent 
 to the authority of that case. 
 
 It was urged by the counsel for the defendant as a strong argu- 
 ment against the recognition of the rule of law giving effect to 
 the wife's indorsement, when assented to and authorized by the 
 husband, that it might in some cases operate very greatly to the 
 prejudice of the rights of a promisor. The argument was this : 
 The note being given to the wife during coverture, the property 
 in it vests absolutely in the husband, and he can sue in his own 
 name upon it ; the indorsement of the note by the wife in her name 
 ex proprio vlgore, would pass no title to it ; and therefore the 
 recovery by the indorsee of the wife would be no bar to another 
 recovery by the husband, unless the promisor could show the 
 assent of the husband to her indorsement, which he might not be 
 able to do, because the wife in an action by the husband on the note, 
 could not be called by the promisor as a witness to prove it. But 
 it seems to us, that tliis argument entirely overlooks the effect of 
 a recovery on the note by the indorsee of the wife. The rule of 
 law being that such indorsement is inoi)crative without the hus- 
 band's assent, and passes no title to the indorsee, a recovery by 
 such indorsee necessarily implies the husband's assent and author- 
 ity, without which no recovery on it could have been had. The 
 indorsement, therefore, of the wife, under sucli circumstances, is 
 equivalent to that of the husband. Her act becomes in law his
 
 164 INDORSEMENT. 
 
 act. The person recovering a judgment as indorsee on such a 
 note, must claim through her husband by a title derived from him 
 and in privity with him. He thereby becomes bound by the 
 judgment recovered against the promisor, who can well plead it in 
 bar, in a suit brought on the same note against him by the hus- 
 band. 
 
 In the case at bar, the authority and assent of the husband of 
 the payee to the wife's indorsement were abundantly proved, and 
 the instructions of the Court upon this part of the case, were en- 
 tirely correct and in conformity with the authorities above cited. 
 
 Upon the other point in this case — that the allegation in the writ that the 
 note was indorsed to the plaintiff before the commencement of suit, is not legal 
 evidence of its truth — the exceptions of the defendant were sustained, and a 
 new trial granted. 
 
 The question decided in the principal case respecting indorsements by married 
 women arose again in Maine, in 1856, in the case of Hancock Bank v. Joy, 41 
 Maine, 568. That was an action upon a bill of exchange payable to the order 
 of the defendant's wife, and by her indorsed by authority of her husband. He 
 was held liable by a unanimous court. The principal case is cited as authority 
 for the decision. 
 
 In Savage v. King, 17 Maine, 801, disapproved by Chief Justice Bigelow, supra^ 
 it was not proved that the wife acted for her husband at the time of her indorse- 
 ment. It is cited to this effect in Hancock Bank v. Joy, supra. 
 
 The rule in the principal case is also the law in Pennsylvania. See Reakert v. 
 Sanford, .j Watts & S. 161; Leeds v. Vail, 15 Penn. State (3 Harris), 185. 
 Also probably in Delaware. See Fredd v. Eves, 4 Harr. 385. The same is 
 held again in England in Lindus v. Bradwell, 5 Com. B. 583, and may be cou- 
 sidered as established beyond question.
 
 DAY V. COUDINGTON. 1G5 
 
 IIOLDEK FOR VALUE. 
 
 Bay v. Coddington et al. 
 
 (5 Johnson's Ch. 54. ('curt of ( "liancery of New York, 1821.) 
 
 Note delivered as security for contingent liability. — A, the agent of B, received negotiable 
 notes to be delivered to B, but delivered them to C, as security for responsibilities 
 incurred by C in indorsing accommodation paper for himself, A. C liad not then 
 become chargeable on his said indorsements. Held, that C was not a bona fide 
 holder for value, though he did not know tiiat the delivery of the notes to himself 
 by A, was fraudulent, but believed A to be tlie real owner of them. 
 
 The plaintiff being owner of a vessel, employed Randolph and 
 Savage, defendants, who were carpenters, to sell her on a credit, 
 and take good notes in payment, and transmit the same to him, 
 with an account of their charges, which he would pay. R. and S. 
 sold the vessel for $3870, and on the third of June, 1819, received 
 the notes of the purchasers, payable in two, three, and four 
 months ; some of them being made payable to, and indorsed by, P. 
 Ay mar & Co., and tlie others by J. R. Stewari. On the twelfth of 
 June, 1810, R. and S. delivered the notes so indorsed, to tlie de- 
 fendants, J. and C. Coddington, who, were, at that time, as they 
 stated in their answer, under heavy responsibilities for R. and S., 
 as indorsers of notes for their accommodation, payable at different 
 times, but all subsequent to the twelfth of June, 1819, and wiiich 
 they were afterwards obliged to take up, as they fell due, amount- 
 ing to above $17,000. The answers admitted that R. and S. had 
 stopped payment, when the notes so held by them were to be 
 delivered to J. and C. Coddington. 
 
 The defendants, J. and C. Coddington, denied all knowledge of 
 the manner in which the notes had come to the hands of R. and 
 S., and alleged that they believed that they were the bona fide and 
 exclusive property of R. and S. ; that they received these notes
 
 166 HOLDER FOR VALUE. 
 
 with others, as a guaranty and indemnity, as far as they would 
 avail, for their responsibilities ; and three days after, disposed of 
 some of the notes for cash, and did not know, until several days 
 afterwards, that the notes belonged to the plaintiffs, as stated in 
 the bill. They admitted that when they so received the notes, R. 
 and S. were not,' in a strict legal sense, indebted to them ; but 
 that they were under large gratuitous responsibilities for them. 
 
 No proofs were taken, and the cause came on to be heard on 
 the pleadings only. 
 
 Kent, Chancellor. It is admitted that Randolph and Savage 
 held the notes belonging to the plaintiff, and which they trans- 
 ferred to the defendants, J. and C. Coddington, on tlie twelfth of 
 June, 1819, as agents or trustees for the plaintiff, and that they 
 had no authority to pass them away. It was a gross and fraudu- 
 lent abuse of trust, on the part of R. and S. The only question 
 now is whether J. and C. C. are entitled, under the circumstances 
 disclosed, to hold the notes, and retain the amount of them as 
 against the plaintiff. 
 
 Negotiable paper can be assigned or transferred by an agent or 
 factor, or by any other person, fraudulently, so as to bind the true 
 owner as against the holder, provided it be taken in the usual 
 course of trade, and for a fair and valuable consideration, without 
 notice of the fraud. But the defendants, J. and C. C, have not 
 entitled themselves to the protection of holders of that description. 
 Tlie notes were not negotiated to them in the usual course of 
 business or trade, npr in payment of any antecedent and existing 
 debt, nor for cash, or property advanced, debt created or respon- 
 sibility incurred, on the strength and credit of the notes. They 
 were received from R. and S., and after they had stopped payment 
 and had become insolvent within the knowledge of J. and C. C, 
 and were seized iipon by the Coddingtons, as tabula in navfragio^ 
 to secure themselves, against contingent engagements previously 
 made for R. and S., and on whicli they had not then become charge- 
 able. There is no case that entitles such a holder to the paper, in 
 opposition to the title of the true owner. They were not holders 
 for a valuable consideration within the meaning or within the 
 policy of the law. 
 
 Ii> Miller v. Race, 1 Burr. 452, a bank-note was stolen, and came 
 to the hands of the plaintifif, and he was held entitled to it. But
 
 BAY V. CODDINGTON. 167 
 
 the Court of King's Bench considered ))ank-notes as cash, which 
 passed as money iu the way of business; and the holder, in tiiat 
 case, came by the note, for a full and valualilc consideration, by 
 giving money in exchange for it, in the usual course of his busi- 
 ness, and without notice of the robbery, and on those considerar 
 tions he was entitled to the amount of the note. So, in Grant v. 
 Vaughan, 3 Burr. lolO ; 1 W. Black. 785, a bill of exchange payable 
 to bearer, was lost, and the finder paid it to a grocer for teas, and 
 took the change. There the Court laid stress on the facts that 
 the holder came by the l)ill bona fide, and in the course of trade, 
 and for a full and fair consideration, and that though he, and the 
 real owner were equally innocent, yet he was to be preferred, for 
 the sake of commerce and confidence in negotiable paper. Again, 
 in Peacock v. Rhodes, 1 Doug. 633, a bill of exchange, with a 
 blank indorsement, was stolen and negotiated to a person who 
 took it in the way of his trade, for cloth sold and cash for the bal- 
 ance, and he was held entitled to hold it. Lord Mansfield placed 
 reliance on the circumstance that it was received in the course of 
 trade. It was " by reason of the course of trade, which creates a 
 property in the assignee or bearer," that Holt, C. J., 1 Salk. 126, 
 Anon., held, that the owner of a bank-l)ill which was lost and 
 transferred by the finder to C, for a valuable consideration, could 
 not maintain an action against C. It will not be necessary to go 
 further in support of the principle which uniformly pervades the 
 cases upon this point, and I shall conclude with the case of Collins 
 V. Martin, 1 Bos. <fe Pul. 648, in which it was decided, that if 
 bills of exchange, indorsed in blank, be deposited with a banker, 
 to be received when due, and the banker laises money on them, by 
 pledging them to C, and then becomes bankrupt, C could not be 
 sued by the real owner, as he took them innocently, without 
 knowledge of the previous circumstances. But it is to be observed 
 that C there advanced money to the banker, on the credit of the 
 bills, and, as C. J. Eyre, observed in that case, "If it can be 
 proved that the holder gave no value for the bill, then, indeed, he 
 is in privity with the first holder, and affected by all that will 
 alfect him." 
 
 In shor/, I have not been able to discover a case in wiiioh the 
 holder of negotiable paper, fraudulently transferred to him, was 
 deemed to have as good a title, in law or equity, as the true owner, 
 unless he received it not only without notice, but in the course of
 
 168 HOLDER FOR VALUE. 
 
 business, and for a fair and valuable consideration given or allowed 
 on his part, on the strength of that identical paper. It is the 
 credit given to the paper, and the consideration bona fide paid on 
 receiving it, that entitles the holder, on grounds of commercial 
 policy, to such extraordinary protection, even in cases of the most 
 pali)able fraud. It is an exception to the general rule of law, and 
 ought not to be carried beyond the necessity that created it. 
 
 I shall accordingly declare, that the defendants, J. and C. Cod- 
 dington, are not entitled to the notes or the proceeds thereof, as 
 against the plaintiff, who was the lawful owner of them when they 
 were transferred to those defendants, inasmuch as they did not 
 receive the notes in the course of business, nor in payment, in 
 whole or in part, of any then existing debt, nor for cash or prop- 
 erty advanced, or debt created, or responsibility incurred on the 
 credit of the notes. And I shall direct that it be referred to a 
 master to compute the amount of the said notes, with interest 
 thereon from the times they were respectively payable, to the time 
 of making the report ; and that all the defendants in the amended 
 bill, or some or one of them, pay to the plaintiff the sum that shall 
 be reported as the amount of the said notes, with interest, as 
 aforesaid, within thirty days after tlie master shall have made and 
 filed his report, and notice thereof, and of this decree, or that the 
 plaintiff may have execution therefor, against all or either of 
 the said defendants, according to the course and practice of the 
 Court. 
 
 And it is further ordered, that the defendants, R. and S., pay to 
 the plaintiff his entire costs of this suit, to be taxed, including the 
 costs of the original bill, and that the plaintiff give credit upon 
 the costs so to be taxed, the charges and commissions due from 
 him to the said defendants, R. and S., upon the sale of the vessel 
 in the pleadings mentioned, and amounting to #96.87 ; and that 
 he have execution for the balance of costs, after such deduction, 
 against them, the said R. and S. according to the course and prac- 
 tice of the Court. And it is further ordered that no costs be 
 taxed or allowed to the plaintiff, or to the defendants, J. and C. C, 
 as against each other. 
 
 Decree accardingly. 
 
 This case was affirmed in the Court of Errors, in 1822, 20 Johns. 637. See 
 post, note to Swift v. Tyson, 195.
 
 STALKRlt V. m'DONALD. 169 
 
 Stalker v. M'Donald et al. 
 
 (G Hill, 93. Court of Krrors of New York, December, 18i:3.) 
 
 Paper taken as security fur anteadnit debt. — One who takes a note merely as collateral 
 security for an antcceilent debt, without advancing any tiling upon it, or relinquish- 
 ing any security, is not a holder in the due course of trade. 
 
 Trover for the alleged conversion of two promissory notes by 
 Stalker. He came by the notes in this way : The firm of Gil- 
 lespie and Edwards, who were in debt to Stalker on a certain note 
 which they found they could not pay, prevailed upon Stalker to 
 withdraw it by delivering to him the notes in question as security, 
 for a promise which they then made to pay their note in a short 
 time. This firm stopped payment and failed, without paying their 
 indebtedness to Stalker. The two notes in controversy were paid 
 to Stalker. 
 
 Walworth, Chancellor. The object of this writ of error ap- 
 pears to be to induce this Court to overrule its decision in th3 case 
 of Coddington v. Bay, 20 Johns. 637, and to make our decision 
 conform to the opinion of Mr. Justice Stori/ in the recent case of 
 Swift V. Tyson, 16 Peters, 1,^ decided by the Supreme Court of 
 the United States. Upon questions arising under the Constitu- 
 tion and laws of the United States, and upon the construction of 
 treaties, the decisions of that high tribunal are binding upon the 
 State courts ; and we are bound to conform our decisions to them. 
 But in questions of local law, and in the construction of the Con- 
 stitution and statutes of the State, the decisions of the highest 
 Court of judicature of the State are the evidence of what the 
 law of the State is ; and are to be followed in preference to those 
 of any other State or country, or even of the United States. On 
 a question of commercial law, however, it is (Ksiral)le that there 
 should be, as far as practicable, uniformity of decision, not only 
 between the courts of the several States and of the United States, 
 but also between our courts and those of England, from whence 
 our commercial law is principally derived, and with whicii country 
 our commercial intercourse is so extensive. 1 have, therefore, 
 
 1 Post, 186
 
 170 HOLDER FOR VALUE. 
 
 thought it my duty to re-examhie the principles upon which the 
 decision of this Court in Coddington v. Bay was founded, not- 
 witlistanding it was deliberately made, with the concurrence of at 
 least one of the ablest judges who has ever adorned the bench of 
 this State, and has been acquiesced in and followed by all the 
 courts of the State for more than twenty years. And I have done 
 it not only out of respect to the decision actually made by the 
 Supreme Court of the United States in the case alluded to, but 
 also because the opinion of the distinguished judge who pro- 
 nounced its decision, is of itself entitled to very great weight upon 
 a question of commercial law ; although what he said in that case 
 respecting the transfer of a negotiable note as a mere security for 
 the payment of an antecedent debt was not material to .the de- 
 cision of any question then before the Coiirt, and is therefore not 
 to be taken as a part of its judgment in that case. 
 
 In Coddington v. Bay, this Court did not, so far as I have been 
 able to discover, run counter to any decision which had ever been 
 made in this State or in England, previous to that time. For the 
 decision admits that the bona fide holder of negotiable paper, who 
 has received it for a valuable consideration, without notice or rea- 
 sonable ground to suspect a defect in the title of the person from 
 whom it was taken in the usual course of business or trade, is 
 entitled to full protection. But that where he has received it for 
 an antecedent debt, either as a nominal payment or as a security 
 for payment, without giving up any security for such debt which 
 he previously had, or paying any money or giving any new consid- 
 eration, he is not a holder of the note for a valuable consideration, 
 so as to give him any equitable right to detain it from its lawful 
 owner. This principle, of protecting the bona fide holder of nego- 
 tiable paper, who has paid value for it, or who has relinquished 
 some available security or valuable right on the credit thereof, 
 is derived from the doctrines of the courts of equity in other 
 cases where a purchaser has obtained the legal title without 
 notice of the equitable right of a third person to the property. It 
 has been uniformly held by the courts of equity in such cases that 
 the purchaser who has obtained the legal title as a mere secu- 
 rity or payment of a pre-existing debt, without parting with 
 any thing of value, is not entitled to hold the property as against 
 the prior equitable owner. And if he has paid but a part of the 
 consideration, or value of the property, he is only entitled to be
 
 STALKER V. m'DONALD. 171 
 
 considered as a bona fide purchaser pro tanto. Tliis last principle 
 was applied l)y one of the courts in England to. the purchaser of 
 a negotiable note, where the indorser of a note for £100, l)y hia 
 re[)lication to the plea that it was indorsed to him without consid- 
 eration, stated that it was indorsed to him for the consideration of 
 £49 ; and he was only permitted to recover that amount against 
 the defendant, from whom the note had been oljtained by the in- 
 dorser without consideration. Edwards v. Jones, 7 Car. & Payne, 
 688. 
 
 It is somewhat singular that Mr. Justice Story should rely upon 
 the opinion of Chancellor Kent in the case of Bay v. Coddington, 5 
 Johns. Ch. 54, as evidence that the decision of this Court sustaining 
 his opinion, and affirming his decree in the same case, was a de- 
 parture from the law of this State as previously settled. And the 
 previous case of Warren v. Lynch, 5 Johns. 2o'J, is not in conflict 
 with the decision of tliis Court ; nor does it decide that a pre- 
 existing deljt is a sufficient consideration to protect the holder of 
 a .negotiable note wliich was not valid as between the original 
 parties, against the equitable rights of the maker of the note, or 
 against the rights of a previous owner. For the note in that case 
 was given by Lynch for a valid and subsisting debt by the one to 
 whom the debt originally belonged. Although it was taken in the 
 name of another person, that person indorsed it in blank for the 
 purpose of enabling the person to whom the debt belonged to 
 negotiate it ; and it was then transferred to the plaintifl", imme- 
 diately for aught that appears, partly in payment or security of a 
 pre-existing debt. The question then arose whether other cred- 
 itors of the former owner of the note were not entitled to it, as 
 being still the property of Rose, the original owner, or of Robert- 
 son, the indorser. What is said, therefore, as to the pre-existing 
 debt, is merely as to its being a sufficient consideration as between 
 the plaintiff and Rose, from whom the plaintiff received the note. 
 For if the transfer was valid as between them, the creditors of 
 Rose, who were also endeavoring to obtain payment of a pre- 
 existing debt merely, acquired no right to the money due on the 
 note, by their subsequent suit in the nature of a foreign attachment 
 in the State of Virginia. The case of Birdscye r. Ray, 4 Hill, 
 loO, cited by the {)laintiff's counsel on the argument, is a case of 
 the same character. For both claimants in that case were en- 
 deavoring to obtain preference in pa'yment of pre-existing debts.
 
 172 HOLDER FOR VALUE, 
 
 And the Court decided tliat one of them who had secured a specific 
 lion upon tlie property by purchase from tlie owner, before the 
 other creditor's execution was actually levied thereon, was entitled 
 to hold it as against the execution, under the provision of the 
 statute on that subject. In other words, that, as between cred- 
 itors having equal equities, the debtor may lawfully prefer one to 
 the other, before an actual levy upon his property has been made. 
 
 There is no doubt that the cases of Wardell v. Howell, 9 Wend. 
 170 ; Rosa v. Brotherson, 10 id. 85 ; Ontario Bank v. Worthing- 
 ton, 12 id. 593 ; and Payne v. Cutler, 13 id. 605, in the Supreme 
 Court of this State, and of Francia v. Joseph, 3 Edw. Ch. 182, before 
 the Vice-Chancellor of the first circuit, follow the decision of this 
 Court in the case of Coddington v. Bay. And they fully estab- 
 lish the principle that to protect the holder of a negotiable secu- 
 rity which has been improperly transferred to him in fraud of the 
 prior legal or equitable rights of others, it is not sufficient that it 
 has been received by him merely as a security or nominally in 
 payment of a pre-existing debt, where he has parted with nothing 
 of value, nor relinquished any security upon the faith of the 
 paper thus improperly transferred to him without any fault on his 
 part. I may also add that many other decisions to the same effect 
 have been made in this State, in the different courts of law and 
 equity, within the last twenty years ; although most of them have 
 not been reported. 
 
 It is supposed, however, by the learned judge who delivered the 
 opinion of the Supreme Court of the United States in the case 
 before alluded to, that this strong column of decisions, supported 
 as it is by the decree of Chancellor Ke^it in the case of Bay v. 
 Coddington, by the opinions of Chief Justice Spencer and Justices 
 Woodworth and Piatt in that case, and by every judge who has 
 occupied a seat upon the bench of the Supreme Court since 1822, 
 has been greatly shaken, if not entirely overturned, by two recent 
 decisions of the Supreme Court. That the judges who made 
 those two decisions do not themselves so understand them, how- 
 ever, is evidenced by the fact that they have given judgment in 
 the case now under consideration, in conformity with the principle 
 of the decisions which they are supposed to have overruled. And 
 1 have not been able to discover any thing in the opiniojis of the 
 Court, as reported in the cases of The Bank of Salina v. Babcock, 
 21 Wend. 499, and the Bank of Sandusky v. Scoville, 24 id.
 
 8TALKBR V. m'dONALD. 173 
 
 115, wliich necessarily conlllcts with any previous decision of tlie 
 Supreme Court upon the (juestion now under consideration. In 
 the first case, the note was discounted at the bank in the ordinary 
 way. And the proceeds thereof were applied, by the authority of 
 the persons for whom it was discounted, to pay up and cancel 
 three other notes which were then due to the bank ; upon two of 
 which notes, amounting to nearly the whole of sucii proceeds, 
 there was a responsil)le indorser. The Court held that the effect of 
 the transaction was the same as if the parties for whose benefit the 
 note was discounted had actually received the money therefor, and 
 had afterwards applied it to pay and discharge the notes then due ; 
 and that the indorser upon those notes was discharged from his 
 liability. In the second case, the question arose under the usury 
 law as contained in the revised statutes, which protects usurious 
 notes in the hands of an indorsee or holder who shall have re- 
 ceived the same in good faith, and for a valuable consideration. 
 1 R. S. 172, § o. And the Court considered the transaction the 
 same as though the money had been actually paid to the person 
 for whose benefit tlie usurious note was discounted, and he had 
 then applied it in payment of the former note ; so that the original 
 indebtedness was extinguished, and the bank had no other remedy 
 to recover their money except upon the note which was alleged to 
 have been originally tainted with usury. The question in that 
 case was, whether the transaction was equivalent to an actual 
 payment of the money for the usurious note, so as to make the 
 bank a bona fide holder for a valuable consideration ; and not 
 whether giving the note for a pre-existing debt was a payment of 
 value. Under a similar provision in the English statute it has 
 been decided that a negotiable note tainted with usury was invalid 
 in the hands of an innocent party, who had merely taken- it in 
 payment of an antecedent debt. Vallance v. Siddel, 2 Nev. <fe 
 Per. 7<S. There is nothing in the reports of our own State theii, 
 which is in conflict with the principle established in Coddingtoii v. 
 Bay in this Court, that, to protect the holder of a negotiable secu- 
 rity which has been passed to him in fraud of the rights of others, 
 he must not only have taken it without notice, but must also have 
 parted with something of actual value, upon the credit or faith 
 thereof ; and that merely receiving it in security or payment of 
 an antecedent debt, where by the settled rules of equity he would 
 not be protected as a bona fide purchaser of property in other 
 cases, is not sufficient.
 
 174 HOLDER FOR VALUE. 
 
 Nor have I been able to find an actual decision in the English 
 reports whicli is in conflict with the uniform course of decisions on 
 this subject in this State. On the contrary, tlie English judges, 
 when speaking on this subject, generally use the words valuable 
 consideration., in contradistinction from a mere valid or sufficient 
 consideration as between indorser and indorsee. And that receiv- 
 ing the note in payment or security of a pre-existing debt merely, 
 is not understood as receiving it for a valuable consideration, in 
 legal language, is evident from the decision of the case of Vallance 
 V. Siddell, to which I have just referred. 
 
 I think the learned judge was under a mistake in supposing 
 that this question arose in England, and was decided in tlie case 
 of Rose V. Van Mierop, 3 Burr. 1663. That was a suit brought 
 against defendants who had actually agreed with the plaintiffs to 
 honor their drafts for money previously advanced by them to a 
 third person. And the only question was, whether the indebted- 
 ness of a third person was a sufficient consideration for the writ- 
 ten promise of the defendants to accept the bills on his account. 
 One of the earliest English cases upon the question which we are 
 considering, is the anonymous case before Chief Justice Holt.^ in 
 1698 ; where a bank-note payable to bearer was lost, and the finder 
 passed it for a valuable consideration. In an action of trover 
 brought by the loser against the person to whom it was thus 
 passed, his lordship decided that the action did not lie against the 
 defendant, because he had the note for a valuable consideration. 
 
 1 Ld. Raym. 738 ; 1 Salk. 126, S. C. The next in order of time 
 was the case of Tlie Ex'rs of Devallar v. Herring, in 1727, 9 
 Mod. 45 ; where an annuity ticket was lost or stolen, and, after 
 passing through several hands, came to Herring, the defendant, 
 wlio purchased it for a valuable consideration. And it was decided 
 that he was entitled to it, upon the ground that it had come to his 
 hands bona jide^ and for a valuable consideration. In Haly v. Lane, 
 
 2 Atk. 181, which came before Lord Hardwiche in 1741, he 
 thus lays down the rule : " Where there is a negotiable note, if 
 it comes into the hands of a third or fourth indorsee, though some 
 of the former indorsees might not pay a valuable consideration, yet 
 if the last indorsee gave money for it, it is a good note as to him ; 
 unless there should be some fraud or equity against him appearing 
 in the case." The same principle of protecting the holder of a 
 negotiable instrument, if received by him in the course of trade,
 
 STALKER V. m'DONALD. 175 
 
 and for a vnhmhle consideration, was recogiii/.od in the opinion of the 
 Court of King's li^nch, in 1753, while Chief Justice Lee i>resided 
 in that Court. Maclish v. Ekins, Say. 73. Then followed the 
 case of Miller v. Race, 1 Burr. 452, hefore Lord Manafield and 
 his associates in 175M, where a bank-note was stolen from the 
 mail and came into the hands of the plaintiff, as the report states, 
 for a full and valuable consideration, in the usual course and way 
 of his Inisiness, and without any notice or knowledge that it had 
 been taken from the mail ; but upon presenting it at the bank 
 for payment, it was detained by the defendant, who was a clerk 
 therein. And the decision of the Court was in conformity with 
 what is now understood to be the settled law both in that country 
 and in this. But that Lord Mansfield understood the holder must 
 have given a valuable consideration for the note to entitle him to 
 protection, is evident from what is said in his opinion in answer to 
 a case cited by the defendant's counsel as having been decided by 
 Lord Holt in 1700. Li reference to that case, he says : " But Lord 
 Chief Justice H<jlt could never say that an action would lie against 
 a person who, /or a valuable consideration, had received a bank-note 
 whicii had been stolen or lost, and bona fide paid to 1dm, even 
 though an action was brought by the true owner ; because he had 
 determined otherwise but two years before ; and because bank- 
 notes are not like lottery tickets, but money." And the words 
 " for a valuable consideration," as well as " bona fide paid to liim," 
 arc italicized in the opinion of Lord Mansfield, to sliow that l)oth 
 are material and necessary to protect the holder of a note against 
 the claim of the former owner thereof. This is also in accordance 
 with wliat he actually did in the case of Grant v. Vaughan, 1 
 W. Black. 485 ; 3 Burr. 151(3, S. C, which was tried before him 
 six years afterwards. There a bill of exchange payable to bearer 
 was lost, and was found by a stranger to the plaintiff, who gave it 
 to the plaintill'upon the purchase of a parcel of teas, and received the 
 change, after the plaintiff had made in(piiry and ascertained that the 
 drawer of the l)ill was a responsible person. And Lord Mansfield sub- 
 mitted it to the jury to decide, 1st. Whether the plaintiff came by 
 the bill bona fide for a valuable consideration ; and 2d. Whether such 
 bills payable to bearer were negotiable. The jury having found a 
 verdict for the defendant, a new trial was granted ; not upon the 
 ground that the first direction was wrong, but because his lordship 
 had erred iu submitting thS question as to the negotiability of such
 
 176 HOLDER FOR VALUE. 
 
 a bill to the jury, as a question of fact. And in answering. the 
 objection raised by counsel to the negotiability of drafts payable to 
 bearer, that it would be dangerous, because npon a casual loss the 
 finder might maintain an action upon them as bearer, he again 
 says : " but the bearer must show it came to him bona fide and upon 
 valuable consideration." The next case was that of Peacock v. 
 Rhodes, 2 Doug. 633, which came before the same Court in 
 1781, while Lord Mannfield still presided there. In that case ^ 
 suit was brought against the drawers of a bill which had been 
 indorsed in blank and was stolen, and had been passed to the 
 plaintiff by a stranger professing to be the owner thereof, for its 
 value, in payment of cloth and other articles in the way of the 
 plaintiffs ti-ade as a mercer, and partly for cash. And the case 
 was decided in conformity with the previous decisions. But I do 
 not find an intimation in this, or in either of the previous cases, 
 that if the person who received the note or bill had merely taken it 
 in payment or security of an antecedent debt, without having 
 parted with any thing of value on the credit or faith thereof, he 
 would have been entitled to hold the note or bill against the former 
 rightful owner. On the contrary, we may infer what Lord Mans- 
 field's opinion would have been upon the question of applying it in 
 payment of a precedent debt, from what he actually decided in 1777, 
 in the case of BuUer v. Harrison, 2 Cowp. 565. There, money had 
 been paid to an agent under a misapprehension of facts, and had 
 been passed by him to the credit of his principal, in satisfaction 
 of a previous indebtedness, before he had any notice or suspicion 
 that the money was not justly and equitably due to such principal. 
 And his lordship decided that the agent must refund the money, 
 and resort to his principal to recover what was due to him before 
 the money was so applied ; that, as no new credit was given, he 
 had not been legally prejudiced ; and that applying the money to 
 pay the precedent debt, was not equivalent to paying it over to his 
 principal before he had notice of the plaintiff's equital)le rights. 
 
 In the case of Collins v. Martin, 1 Bos. & Pul. 648, which came 
 before the Court of Common Pleas in England, in 1797, the bills 
 had been pledged by the plaintiff's bankers with the defendants 
 upon an advance of money thereon. The only question there was, 
 wheiher a banker with whom a negotiable security had been depos- 
 ited for collection, could pledge it to a bona fide holder, for money 
 advanced to him on the credit thereof. * And it was decided he
 
 STALKER V. m'DONALD. 177 
 
 could. But in that case the principle is again recognized, that to 
 protect the holdei^of a negotiable instrument against the former 
 owner, where it lias been fraudulently transferred, he must be a 
 holder thereof for value. For C. J. Fi/re says, " if it can be 
 proved that the holder gave no value for the bill, then indeed he is 
 in privity with the first holder, and will be affected by every thing 
 which would atfect the first holder." And in the case of Lowndes 
 V. Anderson, 13 East, 180, which was decided in 1810, the ques- 
 tion was, wiiether the defendants, who gave up a valid security 
 which had been remitted to them in payment of a balance and to 
 meet acceptances for a liankrupt, were answerable to his assignees 
 fer money and bills which they had received from a stranger in 
 payment of such security, although it turned out afterwards that 
 such money and l)ills ))elonged to the bankrupt ; but which fact 
 was concealed from their knowledge by the secret agent employed 
 by him to transact the business. In that case again, the necessity 
 of a valuable consideration is recognized by C. J. Ellenburoiigh. 
 For in delivering the opinion of the Court, he says, " it would be a 
 grievous inconvenience if bank-notes could be followed, in the man- 
 ner now attempted, through the hands of bona fide holders for a 
 valuable consideration without notice." 
 
 I have carefully examined the several subsequent cases, relied 
 upon in the opinion of Mr. Justice Story in Swift v. Tyson, to show 
 that the decisions of the courts in England are in conflict with the set- 
 tled law of this State upon the question now under consideration ; 
 and as I understand those cases, only two of them, and these by im- 
 plication merely, conflict in any degree with our decisions. I believe 
 1 have also examined every reported decision on the subject, down to 
 the present time, in the English reports which have reached this coun- 
 try ; though it is possible that some have escaped my researches. 
 And I do not find another case, or dictum^ in hostility to the prin- 
 ciple as settled by this Court in the case of Coddington v. Bay. 
 The English cases subsequent to 1810, referred to by Mr. Justice 
 Story as containing a contrary doctrine, are the cases of Bosanquet 
 V. Dudman, 1 Stark. 1 ; Ex parte Bloxham, 8 Ves. 531 ; Hey- 
 wood V. Watson, 4 Bing. 49G ; Bramah v. Roberts, 1 Bing. 
 N. C. 469; and Percival v. Frampton, 2 Cromp., Mees. A: Roscoe, 
 180. In the first case it is evident there is a typographical error 
 in substituting the word but ft)r icho^ in the fifth line of the state- 
 ment of the case by the reporter. The suit was brought by the 
 
 12
 
 178 HOLDER FOR VALUE. 
 
 indorsees of a bill drawn by Rains upon the defendant, payable to 
 his own order, and indorsed by him, and which ^ad been accepted 
 by the defendant. Clarkson & Co., who were the owners of the 
 bill, and who kept an account with the plaintiff's bankers in London, 
 deposited the bill with them as collateral security for such accept- 
 ances as they might make. And at the time the bill became pay- 
 able, on the fifth of February, 1812, the plaintiffs were the holders 
 of it, and had at that time accepted bills to a much larger amount 
 than the cash balance in their hands. They were therefore 
 undoubtedly entitled to hold it as against Clarkson & Co., for the 
 excess of such acceptances beyond the cash balance. But as they 
 held other collateral securities to a considerable amount, when tlrts 
 bill was dishonored they returned it to Clarkson & Co. They sub- 
 sequently remitted it again to the plaintiffs, requesting them to hold 
 it for Clarkson & Co., and to place the same to their account when 
 paid ; and the plaintiffs continued to hold the bill until Clarkson & 
 Co. became bankrupts. Upon the trial of the cause, the defendant's 
 counsel was proceeding to cross-examine the witness as to the 
 comparative amount of the cash balance and collateral securities, 
 and the amount of the acceptances on account of Clarkson & Co. at 
 the time the bill fell due ; with a view, I presume, to show that the 
 cash and other collateral securities were more than enough to meet 
 all their acceptances, and that they had no lien upon this particular 
 bill at that time, but that it belonged to Clarkson & Co. And it 
 was in reference to that cross-examination, as I understand the case, 
 that Lord Ellenhorough said he should hold that where collateral 
 securities were placed in the hands of a banker, under such circum- 
 stances all the collateral securities were held for value, whenever 
 acceptances should be made from time to time, upon the credit and 
 faith of such collateral securities, beyond the cash balance in the 
 hands of the bankers. In other words, that it was immaterial how 
 much the collateral securities amounted to. For if the acceptances 
 which had thus been made on the faith of them, exceeded at any 
 time the cash in hand to meet such acceptances, the bankers were 
 holders of all the collateral securities for value, to secure the pay- 
 ment of the deficiency ; and neither the depositors nor their 
 assignees in bankruptcy could claim a return of any part of such 
 securities, or prevent the bankers from collecting the money on 
 them, to meet such deficiency. This was unquestionably good law, 
 and is not a decision that, where a bill is fraudulently deposited
 
 STALKER V. M'DONALD. 179 
 
 with a banker in payment or security of a pre-existing debt, be is a 
 bona fide bolder tbcreof for value, as against the party d(;frauded. 
 And if tbc remark of bis lordsbij) in tbat case meant any tbing elae, 
 it is inif)Ossible to tell from tbe report wbat be did mean. For tbero 
 was no claim or pretence tbat tbe bill in question did not belong to 
 Clarkson <fe Co. at tbe time it was deposited witb tbe plaintififs, and 
 when it fell due ; although as between Rains, tbe drawer and 
 indorser, and tbe defendant, the acceptor, it was a mere accommo- 
 dation bill. Whether his lordship was right in holding tbat tbe 
 return of tbe bill to the plaintiffs, after it was dishonored and had 
 been paid to Clarkson & Co. by tbe drawer, who was in equity 
 bound to piiy it, restored the plaintiffs to all their former rights as 
 against the accommodation acceptor, is an entirely different ques- 
 tion. And if tbc reporter is right in his statement of tbe facts, I 
 think I should have decided, in such a case, tbat the jjlaintifis 
 could not recover against the accommodation acceptor, or against 
 Rains tbc drawer, even if they bad paid the whole amount of the 
 dishonored bill, in money, to Clarkson <fe Co., upon the return 
 thereof. Nothing further, however, is necessary to Ije said, in 
 reference to this very imperfectly reported case, than that it decides 
 nothing upon tbe question now under consideration. 
 
 In Ex parte Bloxbam, Lord Eldon merely decided that where 
 bills and securities are remitted to a banker by his customer, to 
 meet acceptances which the banker may make from time to time 
 for his customer, such banker, as between him and his customer, 
 has a general lieu thereon for the amount of his acceptances for 
 the customer. And that though some of the acceptances had not 
 become due at the time tbe customer became a Ijankrupt, tlie 
 banker was entitled to prove, under the commission, the amount 
 for which he was liable upon the acceptances for tbe bankrupt. 
 But that in making such proof to cover the acceptances, the proof 
 must be made on the securities upon which the bankrupt's name 
 appeared, and not upon a cash balance against the bankrupt which 
 did not exist until after tbe bankruptcy. If there is any thing in 
 that decision which has the least bearing upon tbe question now 
 under consideration, I am not al)le to discover it. 
 
 In Heywood v. Watson, the defendant and Morrall were cojiart- 
 ners, and obtained permission to overdraw their account with the 
 plaintiffs, their bankers, from time to time, to the extent of £2000 ; 
 for which amount Morrall gave his promissory note to the plaintiffs
 
 180 . HOLDER FOR VALUE. 
 
 as collateral security. The next day he received from the defend- 
 ant, his partner, a note payable to himself or order, for one-half 
 of that amount, to meet his note as collateral security to the 
 plaintiffs for their advances, and to secure to him the repayment 
 of the defendant's moiety of such advances, or so much as he 
 should individually have to pay the plaintiffs on account of the 
 firm. The partnership was dissolved about a year afterwards ; at 
 which time the plaintiffs had made advances for the firm to the 
 amount of X1300, which neither of the partners had paid. Mor- 
 rall had afterward's transferred the defendant's note to the bankers. 
 But there was no evidence that he had done so without considera- 
 tion, or that the plaintiffs knew for what the note was given. , And 
 the Court held that the plaintiffs were entitled to recover, whether 
 they did or did not know for what the defendant's note was given. 
 It is true, C. J. Best says, if there was a good consideration be- 
 tween Morrall and the plaintiffs, who were ignorant of the circum- 
 stances under which Morrall took the note, they were entitled to 
 recover. But it is evident he said this in reference to the legal 
 rule that the indorsee of a negotiable instrument is presumed to 
 have paid value for it, until the contrary is shown ; the onus of 
 disproving which, according to the decisions of the English courts, 
 is thrown upon the party contesting the right of the holder, except 
 where the note or bill is proved to have been lost or stolen, or to 
 have been obtained or put in circulation by fraud. What the 
 Chief Justice said in that case is not even a dictum, much less a 
 decision, in opposition to the principle of law as settled in this 
 State. For there was not a particle of equity in favor of the de- 
 fendant in that case ; as he was legally liable to the plaintiffs as a 
 partner, for the whole amount of their advances, even if his note 
 had been turned out by Morrall on account thereof. And all he 
 had to do was to pay up the amount of his note, and the other 
 £300, if they required it, and then sue Morrall for what he had 
 paid beyond his share. 
 
 The case of Bramah v. Roberts came before the Court upon 
 questions arising upon the pleadings. The plaintiffs were the in- 
 dorsees of a bill of exchange drawn and indorsed by W. Clare for 
 £500, at three months, and accepted by the defendants. To the 
 declaration on this bill the defendants pleaded first, the general 
 issue ; secondly, that it was accepted by them without value, was 
 delivered by one of them to T. Hunt for a special purpose, and
 
 STALKER V. m'DONALD. • 181 
 
 that lie fraudulently transferred the same to the plaintifTs, with 
 notice of his want of authority, and tliat there was not any consider- 
 ation or vahic given in jrood faith for the indorsement of tlie l>ill to 
 them ; and ///m////, that one of tlic defendants fraudulently ac- 
 cepted the l)ill, under a power to acccj)t it for all the defendants 
 for a special ])urpose, for a different purpose from what was in- 
 tended, and that the other defendants I'eceived no consideration or 
 value for such acceptance. To the second plea the plaintiffs re- 
 plied, in substance, that Ijefore the bill became due it was indorsed 
 and delivered to them fairly and bona fide for a good and valuable 
 consideration, that is to say, for moneys advanced by and due and 
 owing to them, the plaintiffs; and without notice of the matters 
 stated in the second j)lea, or of the want of power on the part of 
 Hunt to transfer the bill on his own account. To the third plea 
 they rci)lied substantially in the same manner, after denying the 
 want of authority of one of tlie defendants to accept the bill for 
 all of them. The defendants demurred specially to these replica- 
 tions, assigning as causes of demurrer that the plaintiffs had not 
 stated with suOicient certainty what consideration or value was 
 given for the bill, nor when or to whom the moneys were ad- 
 vanced, nor whether they were advanced at the time or had been 
 previously advanced, nor whether the moneys advanced were suffi- 
 cient to authorize them to recover the whole amount of the bill. 
 The Court decided that the third plea was bad, as it only alleged 
 that the defendants were defrauded of the bill, and that their ac- 
 ceptance was without consideration ; but set up no want of con- 
 sideration in the negotiation of the bill to the plaintiffs, or notice 
 of the alleged fraud, at the time they received the bill. No ques- 
 tion was therefore decided upon the sufficiency of the replication 
 to that plea. As to the replication to the second plea, C. J. Tin- 
 dal thought it was snifficient ; that it was only necessary for the 
 plaintiffs to deny notice of the want of authority of the person 
 from whom they received the bill, and aver that it was given to 
 them for a full and valual)le consideration ; and that the replica- 
 tion was sufficient to show there was a good consideration. He 
 says, " if money passed from the present indorsees, it appears to mo 
 sufficient, as against the acceptors of a bill of exchange, to allege 
 that the bill was received for money advanced by and due and 
 owing to them," &c. And after referring to the case of a replica- 
 tion in which an averment that the plaintiff was parson, and took
 
 182 HOLDER FOR VALUE. 
 
 for tithes, was construed in reference to the time of severance, he 
 again says, " a person of plain understanding will interpret this in 
 the same way, that there has been a money consideration passing 
 from the plaintiffs." But the Chief Justice went further, and 
 declared his opinion to be that if the replication had contained a 
 simple denial of the allegation of a want of consideration, it would 
 be sufficient. From his language in this case I should infer that 
 he understood the law to be that the holders of the bill must have 
 received the same for a valuable consideration at the time of the 
 transfer. But I admit that Mr. Justice Park uses the words valid 
 consideration in his opinion. He says, " If the bill of exchange 
 was indorsed and delivered to the plaintiffs for a good and valid 
 consideration, that is to say, for money advanced by and due and 
 owing to the plaintiffs, and they say that at the time it was in- 
 dorsed to them they had no notice whatever of the fraud, it must 
 be taken that the bill was taken for some antecedent debt." From 
 this it may perhaps be fairly inferred that he thought that was 
 sufficient to enable the holder of the note to recover thereon, al- 
 though no other available security for such antecedent debt was 
 given up or discharged upon the faith and credit of the bill, at the 
 time it was so received by the plaintiffs ; but he does not say so. 
 And Justice Bosanquet says, " I am disposed to think that the 
 replication would have been quite sufficient if it had not added the 
 words ' for money advanced by and due and owing to the plain- 
 tiffs,' thereby setting out the nature of the consideration ; but that 
 it was sufficient to say ' tliat after the bill was made, and before it 
 became due and payable, on a specified day, the bill was indorsed 
 and delivered to the plaintiffs fairly and hojia fide, and for a full 
 and valuable consideration." But whatever may have been the 
 opinion of the judges who decided that case, under the new rules 
 of pleading in England, and in reference to the fact that under 
 any form of replication which did not admit a want of a sufficient 
 consideration, the onus of proving that the bill was not passed to 
 the plaintiffs for a good and sufficient consideration would be upon 
 the defendants, I think it is not entitled to the weight of a judicial 
 decision upon the question now under consideration. 
 
 In the other case, Percival v. Frampton, the defendant had in- 
 dorsed the note for the accommodation of tlie maker thereof, to 
 enable liim to obtain money thereon generally. And he got it 
 discounted by his banker, who placed the proceeds to his credit,
 
 STALKER V. M'DONALD. 183 
 
 on which he afterwards drew out X198, and the residue was 
 applied to tlic balance of his account. The Court lield that this 
 was equivalent to an advance of the money to him. So far the 
 decision was in accordance with the case of The Bank of Rut- 
 land V. Buck, 5 Wend. G(!, and other cases decided in this State. 
 For, the object of the indorsement being to enable the maker of 
 the note to raise money generally, and not for any specific oliject 
 in which the indorser had an interest, it was wholly immaterial to 
 him whether the note was passed to the credit of the maker with 
 his banker, or the banker advanced him the money on the note 
 and then received it l)ack to make good his account, or the maker 
 received the money from any other person upon the note, and then 
 paid it to' the plaintilfs for their debt. But in that case Mr. Baron 
 Parke expresses the opinion that if the note had been given to the 
 plaintiffs as security for a previous debt, and they held it as such, 
 they might be properly stated to be holders for valuul)le considera- 
 tion. Prom which I infer that his opinion corresponds with that 
 of the Supreme Court of the United States upon the question now 
 under consideration. 
 
 The question was raised by the counsel for the defendant in a 
 subsequent case, Bartrum v. Caddy, Adol. & Ellis, 275, that a 
 by gone debt is not a sufficient consideration to give a fraudulent 
 assignee a title to recover. But as the judgment was given for 
 the defendant upon other grounds, no opinion was expressed by 
 the Court of Queen's Bench upon that point. And I do not think 
 there is any decision in any court of England directly upon the 
 question. 
 
 I have not had leisure to examine the reports of most of our sister 
 States in reference to this subject. But in addition to the case 
 from Connecticut referred to in the opinion of the Court in Swift v. 
 Tyson, there are two decisions in the State of Maine, Homes v. 
 Smyth, 4 Shepl. [16 Maine] 177, and Norton v. Waite,2 Appl. [20 
 Maine] 17'), in which it was held that the holder of a negotiable 
 security who had received it in absolute payment of a pro-existing 
 debt, without notice, was entitled to recover thereon, notwithstand- 
 ing any failure or want of consideration, or other equities previously 
 existing between other parties. But as I understand the opinion 
 of Judge Sheplcy in the first of those cases, a party who takes a 
 note or bill as collateral security for the payment of such a debt, 
 and not in absolute payment and discharge of the same, will not 
 be entitled to protection in that State against the rightful owner.
 
 184 HOLDER FOR VALUE. 
 
 The decision of the Supreme Court of Pennsylvania in Petrie v. 
 Clark, 11 Serg. & Rawlc, 377, appears to be in accordance with the 
 decision of Judge Slieplcy in Homes v. Smyth. For Judge Gibson, 
 who delivered the opinion of the Court, says, if the note had been 
 delivered in discharge of the debt, there would be no difficulty in 
 saying, in the absence of collusion, that taking it in the usual course 
 of business, as an equivalent for a debt which is given up, would be 
 a purchase of it for a valuable consideration. But as it was given 
 in pledge for securing an antecedent debt which was not dis- 
 charged, but suffered to remain, and as it does not appear that 
 money was advanced, or any act done that would in law be a pres- 
 ent consideration, the case presented was against the plaintiff. 
 
 In the case under consideration, the notes wliich were improperly 
 transferred by Gillespie in fraud of the rights of the owners, were 
 not received by the plaintiff in error in payment or discharge of his 
 debt, but as mere collateral securities for the payment thereof. He 
 therefore would not be entitled to protection as a bona fide holder, for 
 a valufible consideration, according to these decisions in the courts 
 of our sister States. Nor do I think that the settled law of this 
 State is so manifestly wrong as to authorize this Court to overturn 
 its former decision for the purpose of conforming it to' that of any 
 other tribunal, whose decisions are not of paramount authority. 
 
 I must therefore vote to affirm the judgment of the Court 
 below. 
 
 Lott, Senator. As a general rule, the true and rightful owner 
 of property is entitled to recover it from any person in whose 
 possession it may be, whether obtained by the latter under color 
 of a purchase or otherwise. An exception, however, founded on 
 principles of commercial policy, has been made in favor of the 
 holder of negotiable paper, received in the usual course of trade, 
 for a valuable consideration, though from a person having no right 
 to make the transfer, and without notice of the fraud. Under such 
 circumstances the right of the holder is allowed to prevail against 
 the claim of the previous owner. 
 
 To bring a case within the exception, it is not enough to show 
 that there was a consideration for the transfer, sufficient as between 
 the holder and the party transferring, but the consideration must 
 be such as the law denominates a valuable one. Ill Coddington v. 
 Bay, 20 Johns. 637, a case decided by this Court, in which the
 
 STALKER V. M'dONALD. 185 
 
 principle of the exception was fully discussed, Mr. Justice Wood- 
 worth said, " somctliinii: must have ))ccn paid in money or property, 
 or some existhig deljt satisfied, or some new responsibility incurred 
 in consequence of the transfer ; this would be paying value, and 
 making out a consideration within the reason and meaning of the 
 rule." lb. 646. Chief Justice Spencer there remarked : "1 under- 
 stand, by the usual course of trade, not that the holder shall 
 receive the bills or notes thus obtained, as securities for antecedent 
 debts, but that he shall take them in his business, and as payment 
 for a debt contracted at the time." lb. 651. Mr. Senator Vldie 
 observed that, "though indemnity for responsibilities is undoubt- 
 edly a good consideration for the sale or transfer of goods or nego- 
 tiable paper, as against the party making it or his representatives, 
 yet in none of the cases cited on the argument, and in no one that 
 I have been a1)lc to find, has it ever been held to l)ar the true 
 owner, upon a fraudulent transfer." lb. ()53. He added : " The 
 true test I take to be, that when the holder is left in as good a 
 condition, after a retransfer, as he would have l)een had no transfer 
 taken place, there the title of the owner shall prevail. This allows 
 the rule, so far as it is dictated by commercial policy, to have its 
 full effect, while it protects the owner of negotiable paper, neces- 
 sarily intrusted in the course of business to the care of agents, from 
 an injury revolting to every principle of moral equity." lb. 657. 
 
 If these doctrines are applicable to the case under consideration, 
 and are to guide our decision, it appears to me the right of the 
 defendants in error to the notes in question cannot be impeached. 
 
 It was contended on the argument, however, that the withdraw- 
 ing of the note of Gillespie and Edwards from the bank, where it had 
 been deposited for collection, caused a loss or prcjudrce to the plain- 
 tiff in error, which formed a sufficient consideration to entitle him 
 to protection. It might be enough to say, in answer to this position, 
 that the whole force of it is rebutted by the verdict of the jury ; for 
 under the charge of the Court, the verdict must be understood as 
 having found that no consideration was parted ivith by the plaintiff 
 in error ^ on the credit of the notes in question. But apart from this 
 view of the case, it appears that the note of Gillespie and Edwards 
 was merely lodged in the bank for collection, and that there were 
 no Jndorsers to be charged. A protest was therefore unnecessary, 
 and no injury or prejudice in that respect could have resulted from 
 the act of withdrawing it. True, it is said in the testimony that,
 
 186 HOLDER FOR VALUE. 
 
 after the note of Gillespie and Edwards was withdrawn, and before 
 tlieir failure, they paid " one or more notes in bank, in the regular 
 course of business ; " but the amount of these notes was not shown, 
 nor did it in any manner appear that the note of the plaintiff in 
 error would have been paid, had he suffered it to remain in the 
 bank, altliough one of the firm of Gillespie and Edwards was exam- 
 ined as a witncfffe upon the trial. 
 
 It should be remarked also that there was no stipulation or 
 agreement by the plaintiff in error, on withdrawing his note from 
 the bank, that he would not enforce payment of it. On the con- 
 trary, he ]iad still a perfect right to demand its immediate payment, 
 and to enforce his demand by action. 
 
 In every view which can be taken of this case, it appears to me 
 the title of the defendants in error to the notes in question has not 
 been divested, and that the judgment of the Court below ought to 
 be affirmed. 
 
 On the question being put, " Shall this judgment be reversed ? " 
 all the members of the Court present, who heard the argument, 
 except Strong, Senator, voted for affirming. 
 
 See following case and note. 
 
 Judgment affirmed. 
 
 John Swift v. George W. Tyson. 
 
 (16 Peters, 1. Supreme Court of the United States, January, 1842.) 
 
 Paper taken in paynient of pre-existing debt. — The honajide holder of a bill of exchange, 
 who has taken it before maturity, in payment of a pre-existing debt, without 
 notice of any equities between the drawer and acceptor thereof, will not be 
 affected by such equities. 
 
 Authority of the decisions of State courts. — The 34th section of the Judiciary Act (1 St. 
 at Large, 92), is limited to the laws of a State strictly local : that is, to the positive 
 statutes of the State and their interpretation by the local tribunals, and tlie rights 
 and titles to things having a permanent locality, such as real estate. It does not 
 apply to questions of general commercial law, such as bills of exchange and prom- 
 issory notes. 
 
 The case is stated in the opinion of the Court. 
 
 Story, J. This cause comes before us from the Circuit Court 
 of the Southern District of New York, upon a certificate of division 
 of the judges of that Court.
 
 SWIFT V. TYSON. 187 
 
 The action was brought by the plaintiff, Swift, as indorsee, 
 against the defendant, Tyson, as accc))tor, upon a bill of exchange 
 dated at Portland, Maine, on the first day of May, 1830, for the 
 sum of $1540.30, payable six months after date and grace, drawn 
 by one Nathaniel Norton and one Jairus S. Keith upon and ac- 
 cej)ted by Tyson, at the city of New York, in favor of the order of 
 Nathaniel Norton, and by Norton indorsed to the plaintiff. The 
 bill was dishonored at maturity. 
 
 At the trial, the acceptance and indorsement of the bill were 
 admitted, and the plaintiff there rested his case. The defendant 
 then introduced in evidence the answer of Swift to a bjll of dis- 
 covery, by which it appeared that Swift took the bill before it 
 became due, in payment of a promissory note due to him by Norton 
 and Keith ; that he understood that the bill was accepted in part- 
 payment of some lands sold by Norton to a company in New 
 Yoi-k ; that Swift was a bona fide holder of the bill, not liaving any 
 notice of any thing in the sale or title to the lands, or otherwise, 
 impeaching the transaction, and with liie full belief that the bill 
 was justly due. The j)articular circumstances are fully set forth 
 in the answer in the record ; but it 'does not seem necessary fur- 
 ther to state' them. The defendant then offered to prove that the 
 bill was accepted by the defendant as part consideration for the 
 purchase of certain lands in the State of Maine, which Norton and 
 Keitii represented themselves to be the owners of, and also repre- 
 sented to be of great value, and contracted to convey a good title 
 thereto ; and that the representations were in every respect fraud- 
 ulent and false, and Norton and Keith had no title to the lands, 
 and that the same were of little or no value. The plaintiff object- 
 ed to the admission of such testimony, or of any testimony, as 
 against him, impcai-hing or showing a failure of the consideration 
 on which the bill was accepted, under the facts admitted by the 
 defendant, and those proved l)y him, by reading the answer of the 
 plaintiff to the bill of discovery. The judges of the Circuit Court 
 thcreuj)on divided in opinion upon the following point or question 
 of law : Whether, under the facts last mentioned, the defendant 
 was entitled to the same defence to the action, as if the suit was 
 between the original parties to the bill, that is to say, Norton, or 
 Norton and Keitli, and the defendant; and whether the evidence 
 so offered was admissible as against the plaintiff in the action. 
 And this is the question certified to us for our decision.
 
 188 HOLDER FOR VALUE. 
 
 There is no doubt that a bona fide holder of a negotiable instru- 
 ment for a valuable consideration, without any notice of facts 
 which impeacli its validity as between the antecedent parties, if he 
 takes it under an indorsement made before the same becomes due, 
 holds the title unaffected by these facts, and may recover thereon, 
 although, as between the antecedent parties, the transaction may 
 be withoiit any legal validity. This is a doctrine so long and so 
 well established, and so essential to the security of negotiable 
 paper, that it is laid up among the fundamentals of the law, and 
 requires no authority or reasoning, to be now brought in its sup- 
 port. As little doubt is there, that the holder of any negotiable 
 paper, before it is due, is not bound to prove that he is a bona fide 
 holder for a valuable consideration, without notice ; for the law j 
 will presume that, in the absence of all rebutting proofs, and 
 therefore it is incumbent upon the defendant to establish by way 
 of defence, satisfactory proofs of the contrary, and thus to over- 
 come the prima facie title of the plaintiff. 
 
 In the present case, the plaintiff is a bona fide holder without 
 notice for what the law deems a good and valid consideration, that 
 is, for a pre-existing debt ; anfl the only real question in tlie cause 
 is, whether, under the circumstances of the present case, such a 
 pre-existing debt constitutes a valuable consideration in the sense 
 of the general rule applicable to negotiable instruments. We say, 
 under the circumstances of the present case, for the acceptance 
 having been made jn New York, the argument on behalf of the 
 defendant is, that the contract is to be treated as a New York con- 
 tract, and therefore to be governed by the laws of New York, as 
 expounded by its courts, as well upon general principles, as by 
 the express provisions of the 34th section of the Judiciary Act of 
 1789, c. 20. And then it is further contended that, by the law of 
 New York, as thus expounded by its courts, a pre-existing debt 
 does not constitute, in the sense of the general rule, a valuable 
 consideration applicable to negotiable instruments. 
 
 In the first place, then, let us examine into the decisions of the 
 courts of New York upon this subject. In the earliest case, War- 
 ren V. Lynch, 5 Johns. 239, the Supreme Court of New York 
 appear to have held, that a pre-existing debt was a sufficient con- 
 sideration to entitle a bona fide holder without notice to recover 
 the amount of a note indorsed to him, which might not, as between 
 the original parties, be valid. The same doctrine was affirmed by
 
 SWIFT V. TYSON. 189 
 
 Mr. Chancellor Kent, in Bay v'. Coddiiigton, 5 Johns. Ch. .04.^ 
 Upon that occasion he said that negotiable i)aj)cr can be assigned 
 or transferred by an agent or factor, or by any other person, fraud- 
 ulently, so as to bind the true owner as against the holder, pro- 
 vided it be taken in the usual course of trade, and for a fair and 
 valuable consideration, without notice of the fraud. But he 
 added, that the holders in that case were not entitled to the benefit 
 of the rule, because it was not negotiated to* them in the usual 
 course of business or trade, nor in payment of any antecedent 
 and existing debt, nor for cash, or property advanced, debt created, 
 or responsibility incurred, on the strength and credit of the notes ; 
 thus directly allirming, that a pre-existing debt was a fair and val- 
 uable consideration within the [jrotcction of the general rule. 
 And he has since alTirmed the same doctrine, upon a full review 
 of it, in his commentaries. 8 Kent, Com. § 44, p. 81. The de- 
 cision in the case of Bay v. Coddington was afterwards affirmed 
 in the Court of Errors, 20 Johns. (>37, and the general reasoning 
 of the Chancellor was fully sustained. There were, indeed, pecul- 
 iar circumstances in that case'which the Court seem to have con- 
 sidered as entitling it to be treated as an exception to the general 
 rule, upon the ground, either because the receipt of the notes was 
 under suspicious circumstances, the transfer having been made 
 after the known insolvency of the indorser, or because the holder 
 had received it as a mere security for contingent responsibilities, 
 with which the holders had not then become charged. There was, 
 however, a considerable diversity of opinion among the members 
 of the Court upon that occasion, several of them holdifig that the 
 decree ought to be reversed, otliers affirming that a pre-existing 
 debt was a valuable consideration, sufficient to protect the holders, 
 and otliers again insisting that a pre-existent debt was not suffi- 
 cient. From that period, however, for a series of years, it seems 
 to have been held, by the Supreme Court of the State, that a pre- 
 existing debt was not a sufficient consideration to shut out the 
 equities of the original parties in favor of the holders. But no 
 case to that effect has ever been decided in the Court of Eiy-ors. 
 The cases cited at the l)ar. and especially Rosa v. Brotherson, 10 
 Wend. 85 ; The Ontario Bank r. Worthington, 12 id. 593 ; and 
 Payne v. Cutler, 18 id. 005, are directly in point. But the more 
 recent cases. The Bank of Salina v. Babcock, 21 Wend. 499 ; and 
 The Bank of Sandusky v. Scoville, 24 id. 115, have greatly shaken, 
 
 1 Ante, 172.
 
 190 HOLDER FOR VALUE. 
 
 if they have not entirely overthrown, those decisions, and seem to 
 have brought back the doctrine to that promulgated in the earliest 
 cases. So that, to say the least of it, it admits of serious doubt, 
 whether any doctrine upon this question can at the present time 
 be treated as finally established ; and it is certain that the Court 
 of Errors have not pronounced any positive opinion upon it. 
 
 But, admitting the doctrine to be fully settled in New York, it 
 remains to be considered whether it is obligatory upon this Court, 
 if it differs from the principles established in the general commer- 
 cial law. It is observable that the courts of New York do not 
 found their decisions upon this point upon any local statute, or 
 positive, fixed, or ancient local usage ; but they deduce the doc- 
 trine from the general principles of commercial law. It is, how- 
 ever, contended that the 34th section of the Judiciary Act of 1789, 
 c. 20, furnishes a rule obligatory upon this Court to follow the 
 decisions of the State tribunals in all cases to which they apply. 
 That section provides " that the laws of the several States, except 
 where the Constitution, treaties, or statutes of the United States 
 shall otherwise require or provide, shall be regarded as rules of 
 decision in trials at common law in the courts of the United 
 States, in cases where they apply." In order to maintain the 
 argument, it is essential, therefore, to hold that the word " laws," 
 in this section, includes within the scope of its meaning tlie deci- 
 sions of the local tribunals. In the ordinary use of language, it 
 will hardly be contended that the decisions of courts constitute 
 laws. Tiiey are, at most, only evidence of what the laws are, and 
 are not of themselves laws. They are often re-examined, reversed, 
 and qualified by the courts themselves, whenever they are found 
 to be either defective, or ill-founded, or otherwise incorrect. Tlie 
 laws of a State are more usually understood to mean the rules 
 and enactments promulgated by the legislative authority thereof, 
 or long- established local customs having the force of laws. In all 
 the various cases, which have hitherto come before us for decision, 
 this Court have uniformly supposed that the true interpretation of 
 the 34th section limited its application to State laws strictly local, 
 that is to say, to the positive statutes of the State, and the con- 
 struction thereof adopted by the local tribunals, and to rights and 
 titles to things liaving a permanent locality, such as the rights and 
 titles to real estate, and other matters immovable and intraterri- 
 torial in their nature and character. It never has been supposed
 
 SWIFT V. TYSON. 191 
 
 by us that the section did apply, or was designed to apply, to ques- 
 tions of a more general nature, not at all dependent upon local 
 statutes or local usages of a fixed and permanent operation ; as, for 
 example, to the constrnction of ordinary contracts or other written 
 instruments, and especially to questions of general commercial 
 law, where the State tribunals are called upon to perform the like 
 functions as ourselves, that is, to ascertain, upon general reasoning 
 and legal analogies, what is the true exposition of the contract or 
 iilstrument, or what is the just rule furnished by the principles of 
 commercial law to govern the case. And we have not now the 
 slightest difficulty in holding that this section, upon its true intend- 
 ment and construction, is strictly limited to local statutes and local 
 usages of the character before stated, and does not extend to con- 
 tracts and other instruments of a commercial nature, the true 
 interpretation and elTcct whereof are to be sought, not in the deci- 
 sions of the local tribunals, l)ut in the general principles and doc- 
 trines of commercial jurisprudence. Undoubtedly, the decisions 
 of the local tribunals upon such subjects are entitled to, and will 
 receive, the most deliberate attention and respect of this Court ; 
 but they cannot furnish positive rules, or conclusive authority, by 
 which our own judgments are to be bound up and governed. The 
 law respecting negotiable instruments may be truly declared, in 
 the language of Cicero, adopted by Lord Mansfield in Luke v. 
 Lyde, 2 Burr. 882, 887, to be in a great measure, not the law of a 
 single country only, but of the commercial world. " Non erit alia 
 lex Roraae, alia Athenis, alia nunc, alia posthac, sed et apud omnes 
 gentes, et omni tempore, una eademque lex obtinebit." 
 
 It becomes necessary for us, thcrelbre, upon the present occa- 
 sion, to express our own opinion of tlie true result of the commer- 
 cial law upon the question now before us. And we have no 
 hesitation in saying, that a pre-existing debt does constitute a 
 valuable consideration in the sense of the general rule already 
 stated, as applical)le to negotiable instruments. Assuming it to 
 be true (which, however, may well admit of some doubt from the 
 generality of the language) that the holder of a negotiable instru- 
 ment is unaffected with the equities between the antecedent par- 
 ties, of which he has no notice, only where he receives it in the 
 usual course of trade and business for a valuable consideration, 
 before it becomes due ; we are prepared to say, that receiving it in 
 payment of, or as security for a pre-existing debt, is according to
 
 192 HOLDER FOR VALUE. 
 
 the known usual course of trade and business. And why, upon 
 principle, sliould not a pre-existing debt be deemed such a valuable 
 consideration? It is for the benefit and convenience of the com- 
 mercial world to give as wide an extent as practicable to the credit 
 and circulation of negotiable paper, that it may pass not only as 
 security for new purchases and advances, made upon the transfer 
 thereof, but also in payment of and as security for pre-existing 
 debts. The creditor is thereby enabled to realize or to secure his 
 debt, and thus may safely give a prolonged credit, or forbear from 
 taking any legal steps to enforce his rights. The debtor also has 
 the advantage of making his negotiable, securities of equivalent 
 value to casii. But establish the opposite conclusion, that nego- 
 tiable paper cannot be applied in payment of, or as security for, pre- 
 existing debts, without letting in all the equities between the 
 original and antecedent parties, and the value and circulation of 
 such securities must be essentially diminished, and the debtor 
 driven to the embarrassment of making a sale thereof, often at a 
 ruinous discount, to some third person, and then by circuity to 
 apply the proceeds to the payment of his debts. What, indeed, 
 upon such a doctrine, would become of that large class of cases, 
 where new notes are given by the same or by other parties, by way 
 of renewal or security to banks, in lieu of old securities discounted 
 by them, which have arrived at maturity ? Probably more than 
 one-half of all bank transactions in our country, as well as those 
 of other countries, are of this nature. The doctrine would strike 
 a fatal blow at all discounts of negotiable securities for pre-existing 
 debts. 
 
 This question has been several times before this Court, and it 
 has been uniformly held, that it makes no difference whatsoever 
 as to the rights of the holder, whether the debt, for which the 
 negotiable instrument is transferred to him, is a pre-existing debt, 
 or is contracted at the time of the transfer. In each case, he equally 
 gives credit to the instrument. The cases of Coolidge v. Payson, 
 2 Wheat. QQ, 70, 73,i and Townsley v. Sumrall, 2 Pet. 170, 182,- 
 are directly in point. 
 
 In England, the same doctrine has been uniformly acted upon. 
 As long ago as the case of Pillans and Rose v. Van Mierop and 
 Hopkins, 3 Burr. 1668, the very point was made, and the objection 
 was overruled. That, indeed, was a case of far more stringency 
 than the one now before us ; for the bill of exchange, there drawn 
 
 1 Ante, 43.
 
 SWIFT V. TYSON. 193 
 
 ill discharge of a pre-existing debt, was held to bind the party as 
 acceptor, upon a mere promise made by him to accept before the 
 bill was actually drawn. Upon tliat occasion, Lord Ulannjield, 
 likening the case to ^hat of a letter of credit, said that a letter of 
 credit may be given for money already advanced, as well as for 
 money to be advanced in future ; and the whole Court held the 
 plaintiff entitled to recover. From that period downward, there 
 is not a single case to i)e found in England, in which it has ever 
 been held by the Court, that a pre-existing debt was not a valuable 
 consideration, sufficient to protect the holder, within the meaning 
 of the general rule, although incidental dicta have been sometimes 
 relied on to establish the contrary, such as the dictum of Lord 
 Chief Justice Alfhutt in .Smith v. De Witts, 6 Dowl. & Ryl. 
 120, and De la Chaumette v. The Bank of England, 9 Barn. & 
 Cress. 208, where, however, the decision turned upon very different 
 considerations. 
 
 ^Ir. Justice Baijlci/^ in his valuable work on Bills of Exchange 
 and Promissory Notes, lays down the rule in the most general 
 terms. " The want of consideration," says he, " m lata or in part, 
 cannot be insisted on, if the plaintiff, or any intermediate party 
 betweeu him and tlie defendant, took the bill or note bona fide and 
 upon a vali'd consideration." Bayley, Bills, pp. 499, 500, 5th 
 London edition, 18:i0. It is observable that he here uses the 
 words " valid consideration," obviously intending to make the dis- 
 tinction, that it is not intended to apply solely to cases where a 
 present consideration for advances of money on goods or otherwise 
 takes place at the time of the transfer and upon the credit thereof. 
 And in this he is fully borne out by the aiithorities. They go 
 further, and establish that a transfer as security for past and even 
 for future responsibilities, will, for this purpose, be a sufficient, 
 valid, and valuable consideration. Thus, in the case of Bosanquet 
 V. Dudman, 1 Stark. 1, it was held- by Lord Elleiiboroiiyli^ that if 
 a banker be under acceptances to an amount beyond the cash l)al- 
 ance in his hands, every bill he iiolds of that customer's, hoiut Jide^ 
 he is to be considered as holding for value ; and it makes no differ- 
 ence, though he hold other collateral securities, more than suffi- 
 cient to cover the excess of his acceptances. The same doctrine 
 was affirmed by Lord Ehhii in Ex j/artc Bloxham, 8 Yes. 531, as 
 equally applicable to past and to future acceptances. The subse- 
 quent cases of Heywood r. Watson, 4 Bing. 490, and Braraah v. 
 
 13
 
 194 HOLDER FOR VALUE. 
 
 Roberts, 1 Biiig. N. C. 469, and Percival v. Frampton, 2 Cromp., 
 Mecs. & Rose. 180, are to the same effect. They directly establish 
 that a bona fide holder taking a negotiable note in payment of" or 
 as security for a pre-existing debt, is a holder for a valuable con- 
 sideration, entitled to protection against all the equities between 
 the antecedent parties. And these are the latest decisions which 
 our researches have enabled us to ascertain to have been made in 
 the English Courts upon this subject. 
 
 In the American Courts, so far as we have been able to trace the 
 decisions, the same doctrine seems generally, but not universally, 
 to prevail. In Brush v. Scribner, 11 Conn. 388, the Supreme 
 Court of Connecticut, after an elaborate review of the English and 
 Ne\y York adjudications, held, upon general principles of commer- 
 cial law, that a pre-existing debt was a valuable consideration, suf- 
 ficient to convey a valid title to a bona fide liolder against all the 
 antecedent parties to a negotiable note. There is no reason to 
 doubt that the same rule has been adopted and constantly adhered 
 to in Massachusetts ; and certainly there is no trace to be found to 
 the contrary. In truth, in the silence of any adjudications upon 
 the subject, in a case of such frequent and almost daily occurrence 
 in the commercial States, it may fairly be presumed that whatever 
 constitutes a valid and valuable consideration in other cases of con- 
 tract, to support titles of the most solemn nature, is held a fortiori 
 to be sufficient in cases of negotiable instruments, as indispensable 
 to the security of holders, and the facility and safety of their cir- 
 culatio i. Be this as it may, we entertain no doubt that a bona 
 fide holder, for a pre-existing debt of a negotiable instrument, is 
 not affected by any equities between the antecedent parties, where 
 he has received the same before it became due, without notice of 
 any such equities. We are all, therefore, of opinion, that the 
 question on this point, propounded by the Circuit Court for our 
 consideration, ought to be answered in the negative ; and we shall 
 accordingly direct it so to be certified to the Circuit Court. 
 
 Catron, J., said: Upon the point of difference between the 
 judges below, I concur, that the extinguishment of a debt, and the 
 giving a pos^ consideration, such as the record presents, will pro- 
 tect the purchaser and assignee of a negotiable note from the in- 
 firmity affecting the instrument before it was negotiated. But I 
 am unwilling to sanction the introduction of a doctrine into the 
 opinion of this Court, aside from the case made by the record, or
 
 ^ SWIFT V. TYSON. 195 
 
 argued by the counsel, assuming to maintain tliat a negotiable note 
 or bill, pledged as collatoi-al security for a previous debt, is taken 
 l)y the creditor iii the due course of trade ; and that he stands on 
 the foot of him who purchases in the market for money, or takes 
 the instrument in extinguishment of a previous debt. State 
 courts of high auth^-ity on commercial (juestions have held other- 
 wise ; and that they will yield to a mere expression of o{)inion of 
 this Court, or change their course of decision in conformity to the 
 recent English cases referred to in the [)i:inci})al oi)inion,is improb- 
 able ; whereas, if the (piestion wei'C ])ormittod to I'cst until it 
 fairly arose, the decision of it cither way I)y this Court, i)rol)al)ly 
 would, and I think ought, to settle it. As such a result is not to 
 be expected Irom the opinion in this cause, I am unwilling to em- 
 barrass myself with so much of it as treats of negotiable instru- 
 ments taken as a pledge. I never heard this question spoken of 
 as belonging to the case until the principal opinion was presented 
 last evening ; and therefore I am not prepared to give any opinion, 
 even was it called for by the record. 
 
 'J'lic following opinion, delivered in 1854, in Atkinson v. Brooks, 26 Vt. .")74, 
 contains a snnnnary of the decided cases at that time, and a statement of the 
 several cjuestions involved. 
 
 Rkdfikld, C. J. This case, as the defendant's testimony tended to prove, 
 and as the jury seem to have found, in giving a verdict for defendant, was a bill 
 of exchange, drawn by one Asa Low, at Bradford, Vermont, upon the defendant, 
 at Sherbrook, Canada East, payable to the order of the drawer, at the Ijank in 
 Boston, Mass., three months from date, and being accepted and indorsed, was 
 de|)Osited with a firm of merchants in Boston to raise money for Low, and remit 
 to him at Bradford. But they, before its maturity, passed it to one of their 
 creditors as security for a note of some eleven hundred dollars, which ihey were 
 owing them at the time, and which was ovi-rdue. The bill being dishonored, was 
 duly protested, and is sued in tlu' plaintilf 's name for the benefit of the house to 
 whom it was passed', as security (or their note. The defendant is merely an 
 acconnnodatioii acceptor. 
 
 The important question in the case is, whether the plaintilfs in interest can be 
 regarded as holders for value. No question was made but that they took the bill 
 in good faith, and without knowledge even of the di'lendant being merely an 
 accouunodation acceptor, or of any confiiience between the parlies of whom they 
 took the bill, and any prior ])arty. The impiiry seems naturally to resolve itself 
 into two leading questions': — 
 
 1. Did the plaintiff, in fact and ujion principle, give value lor ihe bill, and 
 can he, upon this ground nierely, l)e justly regarded as a Ixnui Jhlc holder for 
 value? It seems now to be pretty generally conceded, that one who takes a 
 note or bill indorsed while current, in payment and extinguishment of a pre-
 
 196 HOLDER FOR VALUE. 
 
 existing debt, must be regarded as a holder for value. This is certainly the 
 general course of decision upon the subject, with some exceptions to be sure, 
 and we do not well see how it can fairly be argued that one who gives up a debt 
 and accepts a note or bill for the same, either on time or at sight, can be said to 
 give no consideration for the same. He certainly does forego the pursuit of his 
 own debt, and thus certainly puts himself, for the time, in a different, and, in 
 law, a worse situation. And this must be regarded a^ prima facie a foregoing 
 of some advantage by the indorsee and also an accommodation to the indorser, 
 who may fairly be presumed to prefer this mode of meeting his debt. The trans- 
 action, tlicrefbre, possesses both the cardinal ingredients which constitute the 
 text-book (lelinition of a valuable consideration ; it is a detriment to the prom- 
 isee, and an advantage to the promisor. And it is no satisfactory answer to the 
 case, to say the party who takes such bill or note, which proves unproductive, is 
 in the same condition he was before. This is by no means certain. He has for 
 the time foregone the collection of his debt, and in such matters, time is the es- 
 sence of the transaction. And the debtor thereby gains time, — it may be more 
 or less, — but of necessity some time is thereby gained ; and in such matters this 
 is always accounted an advantage, and is often of the most vital consequence to 
 the debtor. How then can it iiairly be said that this mere suspension of the 
 debt during the currency of the note or bill, is no consideration? It seems to 
 me such reasoning upon other subjects — indeed upon any subject where one is 
 not pressed to the wall by the necessities of his case — would almost be regarded 
 as frivolous ; surely it is scarcely specious. 
 
 But it has often been claimed that there is an essential difference in principle 
 between taking a current note or bill in payment, and as security for a prior 
 debt then due. The transactions are certainly different in form, at least. But it 
 seems to me, the ordinary case of taking such a securitj^ as payment, or as col- 
 lateral to the prior debt, is the same in principle. One whose debt is due, in 
 the conmiercial world, must pay it instantly, or he becomes a bankrupt. If, in- 
 stead of money, he gives a bill or note, either on time or at sight, whether this 
 is in form, in payment, or collateral to his debt, he gains time, and saves the dis- 
 grace and ruin consequent upon stopping payment. And, in either case, there 
 is an implied undertaking that he shall wait upon his debtor till the result of the 
 new security can be known ; and in both cases, when that proves unproductive, 
 the creditor may pursue his original debt, or he may sue the prior parties on the 
 new security, except his immediate indorser, and sue him upon the original 
 debt; or he may sue him as indorser, and also all prior parties. In this State, 
 and some other of the American States, where a note or bill, when taken as pay- 
 ment, prima facie extinguishes the debt, it is more common to sue the debtor as 
 indorser. But according to the English law, and the general commercial law, 
 taking a current note or bill for a prior debt only suspends the right of action till 
 the dishonor of the new security. According to the general commercial usage, 
 there is, then, no essential difference in principle, whether a current note or bill is 
 taken in payment or as collateral security for a prior debt, provided the note is, 
 in both cases, truly and unqualifiedly negotiated, so as to impose upon the holder 
 the obfigation to conform to the general rules of the law merchant in enforcing 
 payment. If, indeed, the note or bill is not so negotiated as to make the holder 
 a pai ty to it, or so as to require of him to pursue the strict rules of mercantile
 
 SWIFT V. TYSON. 197 
 
 usap;e in making di^mand of |)aynu'nt, and giving notii-o of dishonor, so as to 
 chiiigc liis iiidorsor, witli all the prior parties, upon the peril of making the note 
 or bill his own in payment of liis debt, then he eould not bi; regarded probably 
 as having so taken the paper in the due course of business bona Ji<1e, and for 
 vahie, as to shut out equitable defences existing between the original parties. 
 But, ordinarily, we suppose it fair to conclude that one who takes a note or bill 
 negotiated to hitn while eurrent, although merely as coll^ral to a prior debt, is 
 expected to pursue the same course in enforcing payment, as if he paid money 
 for the bill. And it is scarcely supposable that one so taking security for a 
 debt, will not conduct diflTcrently on account of the security. It is of necessity 
 he should, if he puts any confidence in its ultimate availability ; and one would 
 scarcely part with such security, unless he expected more or less indulgence 
 on account of it. And when the prior debt is suffered to remain uncollected, it 
 is, under the circumstances, fair to conclude such was the stipulation. And the 
 case of one who takes a note or bill so negotiated, whether in pni/ment or in 
 secitritij of a prior debt, implicitly stipulating to forego the collection until the 
 maturity of the collateral paper, when such paper proves unproductive, is the 
 same in both altcrnntives. In either case he may pursue his remedy upon the 
 negotiable paper against all the prior parties, including his immediate indorser, 
 or omitting him, he may pursue the other parties to the bill or note, and sue his 
 original debt eipially, wlicther he took the paper in ptiyiiient or as coll:iter.il 
 security of such debt, so that the dilference between the two cases is merely, 
 formal. And if, in case of negotiating current paper as collateral security for a 
 prior debt, the holder is not regarded as having taken it upon a valuable con- 
 sideration, then the indorser may recall it at will. For if there is no such con- 
 sideration as to make the contract binding, it is revocable at will. 
 
 And if not upon consideration as to one party, neither is it as to the other. 
 And in such case the holder is merely the agent of the indorsee for purposes of 
 collection, and, as such agent, subject to his control, and bound to surrender the 
 security at will. This was the view taken in De La Chaumette r. The Bank of 
 England, 9 Barn. & C 208. But that case turned upon the peculiar construction 
 given to the facts of the case. Such is certainly not the common case of taking 
 negotiable paper as collateral security for a del)t already due. The imlorser. 
 in sui'h case, can no more recall or control the pa])er, than if he had received 
 the money or goods in payment of the same. And when one takes a bill or 
 note negotiated before maturity, in payment of money advanced or goods sold, 
 such paper is, in fact, only collateral security for the money or the price of the 
 goods, and suspends such debts only till the dishonor of the bill ; and is in law 
 j)recisely the same thing as if the lender of the money or the vendor of the goods 
 took a note for the money or goods, and a bill or note negotiated as collateral to 
 such note, with the agreement to wait till such collateral was paid or dishonored. 
 In all these cases, it would never be claimed that the indorser of such bill or 
 note could take it out of the hands of the indorsee at will. But this he clearly 
 might do, if such indorsee had not taken it upon consideration. If for instance, 
 one holds a debt due six months hence, and his debtor, as a mere volunteer ser- 
 vice, indorses a current note or bill as collateral security, the collateral being 
 due in three months, it could not be made to appear that such transaction, be- 
 fore the indorsee had been at any pains in the matter, was a contract upon cou-
 
 198 HOLDER FOR VALUE. 
 
 sidenition. The prior debt not being due, the creditor could forego nothing, and 
 tlie debtor receive no iidvantage frcm the transaction. And the agreement to 
 ap[)ly the colhiteral upon a debt not yet due — being without consideration — 
 wouhi, prol)aljly, in the first instance, be revocal)le at will, and so, also, as long 
 as the parties remained in the same situation. It seems needless to spend more 
 time to show that, upon principle and in fact, one who, having a debt due, ac- 
 cepts of his debtor a ciMrent note or bill indorsed to himself as collateral security 
 for the debt, with the understanding that indulgence is to be shown on the prior 
 debt, which in fact follows, docs take such paper upon consideration, and gives 
 value. Upon careful examination of this matter, it seems strange that such a 
 question should ever have been raised; and it probably never would have been, 
 but from tlie indefiniteness of the implied obligations growing out of such a 
 transaction. 
 
 2. The more important question growing out of the case is, perhaps, what is 
 the true commercial rule establi.-ihed upon this subject? And it is of vital im- 
 portance in regard to commercial usages, that they should, as far as practicable, 
 be uniform throughout the world. And such is necessarily the ultimate desidera- 
 tum, and will inevitably be the final result. It is, therefore, always a question 
 of time as to uniformity in such usages. The basis of such uniformity is con- 
 venience and justice combined ; and until such rules become measurably settled 
 by practice, they have to be treated as matters of fact, to be passed upon by 
 juries ; and when the rule acquires the quality of uniformity and the character 
 of general acceptance, it is then regarded as matter of law. It is thus that most 
 of the commercial law has, from time to time, grown up. In the case of Foster v. 
 Pearson, 1 Cromp. M. & R. 849, Lord Lyndhurst, while Chief Baron of the Court 
 of Exchequer, left it to the jury to determine, upon the evidence, as to general 
 commercial usage in the city of London, whether the plaintiff had taken the bill 
 in the due course of business, and the full Court h(dd that the question was prop- 
 erly submitted .to the jury. But in this case it seems to be recognized as settled 
 law, that one who fakes an indorsed note or bill still current as collateral securi- 
 ty (or a prior debt, is a bona fide holder for value. So, too, as early as 1814, in 
 Bosanquet v. Dudman, 1 Stark. 1, Lord Ellenborough said, " that whenever the 
 acceptances exceed the cash balance, the plaintiff held all the collateral bills for 
 value ; " and the Court of Exchequer, in Percival v. Frampton, 2 Cromp. M. & R. 
 180, decide the same point. Parke, B., says: "If the note were given to the 
 plaintiffs as a security for a previous debt, and they held it as such, they might 
 be properly stated to be holders for valuable consideration." This is in 1835. 
 And the same rule is certainly recognized in Heywood v. Watson, 4 Bing, 496. 
 So also in Bosanquet v. Forster, 9 Car. & P. 659, and Same v. Corser, ib. 664. 
 Palmer v. Richard is a full authority to show that it is not material whether the 
 note or hill be deposited as security for an advance, or in payment, as some of 
 the American cas^s seem to siq)pose. (1851), 1 Eng. Law & Eq. 529; s. c, 
 16 Jur. 51. 
 
 In Smith v. Braine, 3 Eng. Law & Eq. 379; s. c, 15 Jur. 41, the proper 
 distinction between accommodation paper and paper fraudulently or illegally 
 obtained or put in circulation is discussed, and placed upon the sensible and true 
 ground no doubt, viz., that in the former case it is incumbent upon the maker 
 or acceptor to show that the holder took it without consideration, the law mak-
 
 • SWIFT V. TYSON. 199 
 
 ing the ordinary presumption in favor of the holder of accommodation paper, 
 which is, in fact, made for the purpose of being put in circulation ; and it being, 
 therefore, fair to {jresunu! the holder took it for value, and bona Jide. But in 
 case of a note or bill, il!e;,ral in its inception, or fraudulently put in circulation, 
 if these facts be proved in defence, it has sometimes been held that it imposes 
 upon the holder the necessity of proving in answer that he gave value for the 
 
 sire 
 
 ago declared by Lord Abiiujer, that the courts in VVesTminster Hall had,. upon 
 consultation, determined so to decide the law. The same distinction between 
 accounnodation paper and paper fraudulently put in circulation, obtains in many 
 of the American States. Hut this distinction is not, perhaps, very important 
 here, inasmuch as the defendant claims both want of consideration for iiis ac- 
 ceptance, and fraud in putting the paper in circulation. Harvey v. Towers, 4 
 Law & Eq. 531 ; 8. c, 15 Jur. 544. 
 
 But that the English law is fully settled in favor of the indorsee of current 
 negotiable paper, who takes it as collateral security for a prior debt, there can, 
 I think, be no doubt, since the decision of Poirier r. Morris, 20 Law & Eq. 103; 
 s. c, 22 Law Journal (x. .s.), Q. B. :5i;3; 2 El. & Bl. 89, May, 18.^^5, long 
 since the present action was pending. This was an action upon a foreign bill 
 which was negotiated to j)laintiffs as security for a previous debt, and at the time 
 of receipt passed to the credit of the debtor. It being dishonored was protested, 
 and therefore charged in account against the debtor to balance the former cre<lit, 
 with the addition of expenses. This would seem to be the usual course of doing 
 business in Europe, and prol)abIy olitained to a consid(!rable extent in the Amer- 
 ican cities, — bills and notes being credited on receipt and charged upon dishonor, 
 and all the collaterals being thus holden for the ultimate balance. This case was 
 decided upon the general ground of the plaintiff's title at the time he took the 
 bill as security for the balance of his account. Lord Campbell, C. J., in giving 
 judgment, says: "There is nothing to make a difference between this and a 
 common case where a bill is taken as security for a debt, and in that case an an- 
 teccilent debt is a sufficient consideration^ Crompton, J., says: '■'■Whether the 
 hill was a collateral security, or whether it had the effect of suspending the pay- 
 ment of the antecedent debt, is quite immaterial. The plaintiffs had a perfect 
 right to keep it." We think, therefore, it must be regarded as settled law in 
 England at the present day, that such a bill or note taken as collateral security 
 for a prior debt, is taken in the due course of business and for value. Such 
 being the settled rule of the English law, which is confessedly of great and para- 
 mount force upon a question of this kind, it is certainly desirable that, in regard 
 to conunercial law of such extensive application in the every-day transactions of 
 business, the law of the American States should also be uniform, and, as far as 
 reasonable and practicable, correspond with the acknowledged rule in other 
 States and countries. The case of Swifr r. Tyson, 1(5 l\t. 1, upon the 
 most elaborate examination an<l debate, adopts the English rule, and upon 
 general grounds of settled commercial law. The decisions of the national tri- 
 bunal are not indeed of any liiiuling authority upon the general rules of the law 
 merchant in a State Court, further than they commend themselves to our sense 
 of reason and justice. But such a decision as that of Swift v. Tyson, upon such 
 a subject, could scarcely fail to be regarded as of very considerable force, and.
 
 200 HOLDER FOR VALUE. 
 
 if sound in principle, would, almost of necessity, ultimately form the basis of that 
 uniformity of commercial law in these States wliicli, sooner or later, must, from 
 its very great convenience, ultimately prevail. If not sound in principle, it 
 would with difliculty be maintained even by that Court. 
 
 Aside from our former remarks, going, as we think, to show the soundness of 
 the rule laid down in Swift v. Tyson, the course of decision in the several States 
 since the date of that decision, show a general disposition to adopt it. Indeed, 
 in many of the States, a similar rule prevailed before that. In Pennsylvania, 
 Petrie v. Clark, 11 Serg. & R. 377 (1824), recognizes fully the sufficiency of the 
 consideration for the indorsement of a note or bill where it is taken in payment 
 of a prior debt, and even as collateral security, if there is any agreement to wait 
 on the prior debt, or any other damage is sustained in consequence, or the in- 
 dorsee waives or temporarily foregoes any of his other rights. This ground, 
 assumed by Oilmm, J., at that early day, is certainly a very near approacli to 
 the rule of Swift v. Tyson, and the present English rule upon the subject. The 
 ouIt diiference seems to be in not holding that one who takes such paper as col- 
 lateral security, is presumed to conduct differently on account of it. Walker v. 
 Geisse, 4 Wharton, 252, maintains very much the same ground. 
 
 In Maine, Holmes v. Smith, 16 Maine, 177, decides that, if such paper be 
 taken in payment of a pre-existing debt, it defeats all equitable defences between 
 the original parties. So also in New Hampshire, Williams v. Little, 11 N. Hamp. 
 66. The decision in this case, that such paper being indorsed as collateral secu- 
 rity for a loan made at the time, is not held for value, is certainly not justified 
 by the decisions in any other State, so far as I can find. The New York courts, 
 who have resisted this rule with the most unflinching pertinacity, do not so hold, 
 but the contrary. Williams v. Smith, 2 Hill, 301 ; Watson v. Cabot Bank, 5 
 Sandford, 423; Carlisle v. Wishart, 11 Ohio, 172, adopts the view of Holmes v. 
 Smith. Blanchard v. Stevens, 3 Cush. 162, holds tlie same. So also Norton v. 
 Walte, 20 Maine, 175. So too, Bostwick v. Dodge, 1 Douglass (Michigan), 413. 
 Bush V. Peckard, 3 Harrington (Delaware), 385, goes to the same extent. ' So 
 also the case of Brush v. Scribner, 11 Conn. 388. In none of these cases ex- 
 cept Williams v. Little, did the question arise, whether taking a note or bill 
 indorsed as collateral security for a prior debt, is the same as taking it in pay- 
 ment. There is, therefore, every reason to suppose that no such distinction will 
 be attempted in any of those States, unless it be the latter State. The case of 
 Barney v. Earle, 13 Alabama, 106, is to the same extent. In Reddick v. Jones, 
 6 Iredell (North Carolina), 107, all distinction between taking negotiable paper 
 in payment and as collateral security is repudiated, and both held to be valuable 
 and sufficient considerations. In this case the paper was taken in payment, to 
 be sure. So also in Georgia, Gibson v. Connor, 3 Kelly, 47, expressly decides 
 that taking such paper as collateral security for a prior debt, is sufficient to shut 
 out e(|uitable defences. So also in Indiana, Valette v. Mason, 1 Smith, 89. 
 And the same is held in New Jersey, Allaire v. Hartshorn, 1 Zabriskie, 665 ; 
 and in Chicopee Bank v. Chapin, 8 Met. 40, the same rule is recognized, although 
 there the debt was created at the time the paper was negotiated as collateral 
 security. Thus, we think, most of the States may be regarded as virtually hav- 
 ing adopted the rule laid down in Swift v. Tyson. Chancellor Kent, too, 3 Com. 
 96 and note, adopts the same rule, " as the plainer and better doctrine; " and
 
 SWIFT V, TYSON. 201 
 
 Allen V. Kinfj, 4 McLean, C. C. 128. It is to be borne in mind that, upon the 
 othiT side. New York contends strenuously that such paper, taken either in pay- 
 ment or as security for a prior debt, is not held upon any suflicient considerati<jn 
 to shut out equitable defences. I think the N<'\v York courts are con.si>ti'nt 
 and sound, in denying all distinction between taking such pai)er in payment, and 
 as security for a prior debt. There obviously is no difference in regard to the 
 consideration. Hut, even in New York, they have felt compelled to decide that, 
 if such paper*is taken in payment of a prior debt, being indorsed irithout 
 rcrour.sc, the holder acijuires perfect title, and may shut out equitable defences 
 between the original parties. Bank of St. Albans r. Gilliland, 2.'! Wend. oil. 
 And if one gives his own note for such paper, it makes him a holder for value 
 even in New York. 4 Barb. S. C. 304. These two eases seem very much like 
 an abandonment of the principle of the rule even there. In Kentucky, too, a 
 similar rule to that in New York has prevailed. Breckinridge v. Moore, 8 B. 
 Monroe, 629. It is claimed, too, tliat Virginia adopts the same ground inTPren- 
 tice V. Zane, 2 Grattan, 2(J2 ; liut that case does not decide the point, a new trhl 
 being awarded for defect in the special verdict. Similar decisions have been 
 made in Tennessee. In Wormley v. Lowry, 1 Humphrey, 468, Greene, J., .says: 
 " Where one receives a note for a pre-existing debt, he parts with nothing. He 
 is in the same situation after a successful defence by the maker, that he was be- 
 fore he took the note." This is certaiidy a remarkable instance of the iton sequi- 
 tur. to have imposed any delusion upon the mind of an experienced judge. 
 He is in tlie same situation. But how can that be made to appear? He has let 
 the collection of his debt or its security surcease for the time, and time is often 
 fatal in such matters, and has incurred the expense and vexation of litigation ; 
 and is still in the same situation. Surely he is in one respect; his debt is still 
 unpaid ; and in another also, which is somewhat important, he is again out of 
 court. And it seems to me that all refinements upon such absurd premises are 
 always liable to involve one in similar contradictions and incomprehensible con- 
 clusions. I certaiidy feel no disposition to deal lightly or in a vainglorious 
 spirit, with the general argument upon which this view is attempted to be main- 
 tained. It will be found ably stated by Walworth, Cliancellor, in Stalker v. Mc- 
 Donal.l. 6 Hill, 93.' 
 
 Tliis euil>races most of the decisions upon the subject both in this country 
 and in England. And we could scarcely (juestion that the decided and increas- 
 ing preponderance is in favor of the plaintiff's claim to hold the bill free fi-om all 
 efjuities of the acceptor ; and, coinciding as it does with our views of the reason 
 and justice of the case, we could not hesitate to adopt it. We might probably 
 have decideil the case upon the Massachusetts law, as the contract seems, upon 
 its face, to have been made with reference to that i)lace. But as this (juestion 
 was not made in the Court below, it does not properly arise here, prc)l)aiily. 
 Anel we have chosen to put the case upon the general rule of tiie law merchant, 
 the ordinary presumption being that the law of any particular place, in regard to 
 commercial contracts, conforms to tlie general law, unless the contrary be shown. 
 The party who claims the benefit of the law of a particular place, on the ground 
 of its lieing different from the general rule of law on that sul)ject, must prove the 
 law of that place to be difl'crent. as he would prove any other fact in the case. 
 This leaves that question open. 
 
 1 Ante, 169.
 
 202 HOLDER FOR VALUE. 
 
 We do not understand the plaintiff to claim seriously that he can recover the 
 balance of this bill above the amount of the note which was due at the time of 
 the negotiation of the bill, and as security for which it was negotiated. We 
 do not see how he could claim that. The valuable consideration must be lim- 
 ited to the amount of the prior debt, due at the time of the negotiation of the 
 bill. 
 
 1. A note or bill q^gotiated in security for a debt not yet due, is not upon 
 sufficient consideration ordinarily, unless the creditor wait in faith of the col- 
 lateral after his debt becomes due. 
 
 2. If the debtor is notoriously insolvent before the note or bill is negotiated 
 as collateral security, it is said the creditor can only stand upon the rights of his 
 debtor. 
 
 3. If a note or bill is taken merely to collect for the debtor, to apply when 
 collected, the creditor not becoming a party by indorsement so as to be bound 
 to pursue the rules of the law merchant in making demand of payment and giv- 
 ing notice back, the holder is merely the agent of the owner. De La Chaumette 
 V. Bank of England, supra. Allen v. King, 4 McLean, C. C. 128. 
 
 4. So too probably, if it were shown positively that the holder gave no 
 credit to the indorsed bill, and did, in no sense, conduct differently on that ac- 
 count, he could not be regarded as a holder for value. 
 
 These four exceptions are probably based upon good sense, and may be 
 found sustained by authority, but we have no occasion to say more in regard to 
 them here. This case stands upon the general broad ground of paper taken in 
 the due course of business as collateral security for a debt due, and, prima 
 facie, the holder is under such circumstances to be regarded as holding the paper 
 for a valuable consideration, and so entitled to recover against an accommodation 
 acceptor. 
 
 Judgment reversed. 
 
 The following note, prepared for the " American Law Register," in 1861, 
 1862, Vol. I. N. s. 35, by one of its present editors is now adopted as the best view 
 we could give of the law upon the questions discussed up to that date. Le 
 Breton v. Peirce, 2 Allen, 8 ; s. c, 9 Am. Law Reg. 
 
 One of the questions involved in this case is of great interest with business 
 men ; and it seems almost incomprehensible how there should have been so much 
 conflict in the decisions of the courts in this country in regard to it. It probably 
 may have arisen from not clearly discriminating the precise state of facts upon 
 which the different views found themselves. This will readily be perceived by 
 carefully examining the opinions of the different judges. But we think something 
 of this embarrajisment may be got rid of by careful classification. 
 
 I. Where the negotiation of the note or bill, as between debtor and creditor, 
 is understood to operate either as conditional payment, or to create an ex[)ecta- 
 tion between the parties that the collection of the principal debt shall be delayed 
 until the time of payment of the collateral security, there can be no question 
 that, upon principle and authority, the creditor must be said to take the paper 
 upon full consideration, and in tlie due course of business. The conflict in the 
 cases seems to arise upon the question, what is implied by accepting a note or 
 bill, on time, fur a pre-existing debt then due?
 
 SWIFT V. TYSON. ■ 203 
 
 1. This will (Icpond, to some extent, u[)on eoinmercial usage, and the ordi- 
 nary counse of doing business, and tlie natural implications, from the mere ait of 
 accepting the note or bill, and is, therefore, matter of fact, in part, at leafct. 
 The implication, as matter of flact, is different in some respects, whether the 
 new note or bill is for the precise amount of the existing debt, as in Michigan 
 St;iti! Hank v. The Estate of Leavenworth, 28 Vt. 2U9 ; or for a different sura, 
 either more or less, and es|)ecially when it is for a less sum. Where the new 
 security is for' the [irecise sum of the debt, and is payable on time, there is, in 
 fact, a very strong inii)li<ation that the creditor will wait until the maturity of 
 the new security. And in that view the cases all agree that the new security is 
 taken for value, and tliat all ecpiities in favor of other parties will be excluded. 
 And a similar imj)lication results where the new security is for a larger sum than 
 the existing debt, as in Atkinson v. Brooks, 26 Vt. 569, supra. 
 
 2. But where the security is of a different character from the original debt, 
 as where the creditor takes a mortgage from the debtor for the payment of the 
 sum due in six months, it is not understood there is any implication of a contract 
 to delay the collection of the debt of other parties. United States v. Hodge, 6 
 How. U. S. 279. 
 
 3. And where the new security is not given in lieu, or on account of tlie ex- 
 isting debt, but as a mere pledge, the title of the new security remaining in the 
 del»tor, and not passing to the creditor, thus making the creditor the mere trus- 
 tee or agent of the debtor for the collection of the new security, to be applied 
 wlien collected, upon the existing debt, between them, as was hehl in the case of 
 Austin t'. Curtis, 31 Vt. 64; the cases all agree that there is no implied under- 
 taking not to collect the existing debt in the mean time. 
 
 The following cases may therefore be regarded free of doubt, both upon prin- 
 ciple and autiiority : — 
 
 1. If the collateral is given in security at the time the debt is created, and as 
 an inducement for the credit, and is a negotiable instrument and still current, 
 and is, in fact, negotiated to the creditor so as to make him a party to the paper 
 and impose upon him the duty of demand and notice, according to strict com- 
 mercial usage, the cases all agree, so far as they have comprehended the ques- 
 tions involved, that all ccpiities of third parties are excluded. Chicopee Bank v. 
 ("iiajiin, 8 Met. 40; (h-iswolil v. Davis, Ml Vt. :)90 ; Palmer v. Richards, 1 Eng. 
 L. »t E(|. 529. The declaration in Williams r. Little, 11 N. Hamp. 6(). and many 
 other cases to the contrary, is certainly not maintainable upon any fair view of 
 the (piestion in that precise form of it. 
 
 2. If the ( ollateral is not so negotiated as to make the creditor a party to 
 the paper, and thus impose upon him the iluly of making demand and giving 
 notice, but making the creditor the mere agent of the debtor for the collection 
 of the new bill or note, there is no ground of excluding equities in other parties, 
 unless the creditor negotiates the security thus left in his hand to some third 
 party for value and while current. Palmer v. Richards, 1 Eng. L. & E(j. 529; 
 Atkinson v. Brooks, 26 Vt. 569; I)e La C'haumette v. Bank of England, 9 B. & 
 C. 208; Allen v. King, 4 McLean, 128. 
 
 In such case, the debtor, it would seem, may recall his collaterals, as the 
 creditor, being his agent, is under his control. But this is certainly not the 
 ordinary case of collateral security.
 
 204 • HOLDER -FOR VALUE. 
 
 3. Whore there is either an express contract with the creditor, that he shall, 
 in consideration of the indorsement of the new bill or note, as collateral, delay 
 the collection of the existing debt until the maturity of the new security; or 
 where such an understanding is reasonably to be presumed from the facts and 
 circumstances attending the transaction, and the delay is thereby obtained, there 
 is no ground of question, since they stand upon the same footing in point of prin- 
 ciple, as if an ailvance were made upon the credit of the new security. Okie v. 
 Spencer, 2 Whart. 253; s. c, 2 Am. Lead. Cas. 232, and numerous cases there 
 cited. These cases are so obvious upon principle, to the mind of all lawyers, that it 
 would be a useless labor to attempt to render them more perspicuous. "What is 
 self-evident thereby becomes incapable of simplification, since there is nothing 
 more obvious by which it can be illustrated. 
 
 II. In coming to the inquiry, what is the precise legal implication, from the 
 mere fact of receiving a negotiable security without surrendering any of the 
 former securities for an existing debt, we encounter more perplexity. 
 
 1. This will depend, undoubtedly, to a great extent upon the course of doing 
 business, and the commercial usages of the place. From all we can learn of 
 this commercial usage in England, judging both from the reported cases and the 
 elementary works, we infer that each new security is there credited as so much 
 cash at the time it is received, and is charged to the debtor, in case of dishonor, 
 with the addition of expenses attending the protest. Poirier v. Morris, 20 Eng. 
 L. & Eq. 103; Bosanquet v. Dudman, 1 Stark. 1. In this last case Lord Ellen- 
 horougli said, " that whenever the acceptances exceed the cash balance, the plain- 
 tiff holds all the collateral bills for value." Ex parte Pease, 19 Vesey, 25. In 
 this mode of transacting business, the new notes or bills, from time to time 
 remitted to the creditor by his debtor,' are upon receipt, passed to his credit, 
 and thus virtually discounted. This, we apprehend, is the usual course of doing 
 business in this country, where one has an open account with banks or bankers, 
 and not unfrequently with brokers. How far it obtains with merchants it is not 
 very certain, depending upon the nature and the amount of the dealings. But 
 whenever the business is conducted in this form, there would be no difference 
 as to the right of the creditor to hold the collaterals, whether they were taken in 
 payment, or as security, or whether any advances in money were made at the 
 precise time the colkiterals were negotiated, since passing thet!i to the credit of 
 the debtor as so much money, is strictly advancing the money upon them. This, 
 we apprehend, is the true explanation of the reason why we find so little said, 
 in the English cases, or treatises on bills and notes in regard to these distinc- 
 tions, which occupy so much space in our own reports. The case of the Bank 
 of the Metropolis r. The New England Bank, 1 How. U. S. 234, is precisely of 
 this character, and the creditor was allowed to hold the collaterals free from all 
 equities. 
 
 2. But in whatever mode the business is transacted, if we look carefully into 
 the true principles involved, we shall come much to the same result. It has 
 always seemed to us that most of the controvei'sy upon this subject has grown 
 out of the different sense in which the terms used are understood. If the terra 
 •' collateral " is understood to import that the bills thus held are not taken on 
 account of the existing debt, but only to be held until due, and if paid, the 
 amount to be applied, and in the mean time the creditor assumes no respon-
 
 SWIFT V. TYSON. • 205 
 
 siliility in regard to them, exti-pt as the mere af^cnt of the debtor for cullertion, 
 tlieie eonld be no <;rouiid uf claim that any property passed, or tliat exi.sting 
 ecpntit s in former parties were extinguished. The En<;lisli eases in bankruptcy 
 show very ek'arly that, in such eases, the title in tlie bills does not pass to the 
 assignee, but may be retained by the correspondent. Ex parte Pease, 19 Vesey, 
 2o ; I)e la Chaumette r. The Bank of England, supra. 
 
 . o. fJut we apineliend this is not the ordinary aeeeptanec of the term collateral, 
 or collateral security ; for it is no security at all. J'lie etymology of collateral 
 security indicates that it is something running along with, and, as it were, par- 
 allel to, something else, of a similar character. It is collateral to the original 
 indebtedness. It is, of course, a security, but it need not be in the precise 
 form of the original. A bond may be secured by a collateral indebtedness in 
 the form of a bill or note, and vice i-ersa, and the collateral will always include 
 otlier p irties. lUit as far as the debtor is concerned, they are holden for the 
 jiayment of the debt, and tlie creditor is equally at liberty to pursue all in all 
 legal modes, unless there is some express or implied restriction upon the title of 
 the collaterals. 
 
 In this sense the title passes, by the negotiation of a bill or note, as collat- 
 eral, the same as if the money were advanced. The only dilference is, that this 
 form is (lispeuscd with, and the creditor retains his original security. Ordinarily, 
 tlie collateral may not l)ind the same parties as the original security, or not all of 
 thciii. In such cases the creditor will wish to retain the original, so as to lose 
 none ot his security. All that the word collateral imports is, that there is a 
 prior or existing debt, and the collateral depends upon that, stands or falls with 
 it, so far as the creditor is concerned. 
 
 4. Hut if the party takes the indorsement of a bill of lading, or of a bill of 
 exchange, or note, he acquires no different rights as to the parties to these new 
 instruments, whether he takes them in payment, or as collateral to an existing 
 debt. In either case he becomes a party to the transaction or contract to the 
 fullest extent, and, in the case of negotiable instruments is bound to pursue the 
 law merchant in making demand and giving notice, at the peril of making them 
 his own, in actual exoneration of the party negotiating them. 
 
 ;'). In such cases it can be of little importance whether the original debt is 
 treated as extin<?iiished or not, since, if the debtor negotiate the note or bill by 
 his own indorsement, which is the nsual course, he is bound by such indorse- 
 ment, and the double bond is of no essential importance. And if the creditor 
 do not take steps to charge his debtor as indorser, he makes the collateral his 
 own in payment of his debt, and the result is the same, whether he is bound 
 doubly or singly, since the release extinguishes both or one, as the case may be. 
 
 G. The mere giving of a negotiable note or bill for an existing debt, is only 
 conditional payment in any case, by the general law merchant, unless there is an 
 express agreement that it shall extinguish the original debt. Upon the dis- 
 honor of the new note or bill the creditor may sue the original debt, or the in- 
 dorser of the new bill or note, at his election, so that the note or bill is but a ^ 
 collateral in any case, unless there is some special contract, or some special 
 usage, as in the New England States, that the acceptance of the new note or 
 bill shall, j)rima facie, extinguish the debt. These propositions are familiar, 
 and scarcely require specific authority for tlieir sup|)ort. The cases are carefully 
 collated, in 2 Am. Lead. Cas. 241-273.
 
 206 HOLDF]R FOR VALUE. 
 
 III. Most of the conflicts in the American cases, and in all the English cases, 
 •will be readily reconciled by reference to the foregoing distinctions. And those 
 anomalous cases in the American States, which will not cdbie into these distinc- 
 tions harmoniously, have been decided without properly apprehending the true 
 principles involved, and must be left in their appropriate solitude until they are 
 either abandoned, or else the course of business, or the principles of natural 
 justice bcfome so far modified that they can be adopted by others. 
 
 1. In the case of Poirier v. Morris, supra, Crompton, J., said : " Whether the 
 bill was a collateral security, or whether it had the effect of suspending the pay- 
 ment of the antecedent debt, is quite immaterial." And Lord Campbell said: 
 " There is nothing to make a difTerence between this and the common case, 
 where a bill is taken as security for a debt, and in that case an antecedent debt is 
 a sufficient consideration." And in Percival r. Frampton, 2 Cromp. M. &R. 180, 
 Farkc, B., said: " If the note were given to the plaintiffs as security for a pre- 
 vious debt, and they held it as such, they might be properly stated to be holders 
 for valuable consideration." The same rule is recognized in numerous other 
 English cases. Heywood v. Watson, 4 Bing. 496 ; Bosanquet v. Forster, 9 Car. 
 & P. 659; Same v. Corser, ib. 664; 2 Am. Lead. Cas. 250, 251. The rule is 
 thus stated in the work last quoted, which has almost become a book of author- 
 ity in the American courts. " The result of the English cases would seem to be, 
 that accepting a note or bill payable at a future day, on account of a pre-exist- 
 ing debt, will suspend the debt until the note reaches maturity. Byles, Bills, 6th 
 ed. 304." " The law is clear," said Lord Kenyan, in Steadman v. Gooch, 1 Esp. 
 4, " that if in payment of a debt the creditor is content to take a bill or note 
 payable at a future day, he cannot legally commence an action for his original 
 debt until such note or bill becomes payable and default is made in the pay- 
 ment." And the cases all agree that no recovery can be had in any case, upon 
 the original debt, where the collateral, given in security, was indorsed while 
 current, and is still outstanding. Price v. Price, 16 Mees. & W. 232, 243. And 
 in every case where the party accepts a collateral as security for a previous debt 
 then due, there is no implied obligation not to negotiate the collateral before 
 maturity. In nine cases out of ten that is done among business men immedi- 
 ately, for the purpose of raising the money which should have been paid when 
 the debt matured ; so that the collateral is always received for the ease of the 
 debtor, and it is not ordinarily received as a mere pledge, so that nogotiating it 
 would be a breach of good faith. On the contrary, the security being negotiable, 
 passes as money, and operates as payment conditionally, and it is expected to be 
 passed into the market at once. 
 
 All that is implied, then, by its being collateral is, that there is no agreement 
 or implication that the original debt is extinguished. The creditor intends to 
 hold on to his original debt and all other securities. The new security, then, is 
 collateral to the previous debt : but the new security, as between the parties to 
 it and the creditor, is not affected b\' its being collateral to the previous debt, 
 any differently from what it would be if it were received in extinguishment of it. 
 It is negotiated in the fullest manner, and subject to the law merchant, and with 
 no restrictions upon its further negotiation. We think, therefore, that the 
 English courts have taken the true view in saying that such paper passes for 
 value, and in the ordinary course of business, and excludes all existing equi-
 
 SWIFT V. TYSON. 207 
 
 ties, without regard to tlie understanding, agreement, or implication, as matter 
 of fiict, that the creditor sliouhl delay the enforcement of the existing fleljt until 
 the maturity of the ne# security. And that they are also right in saying that 
 it makes no difference in principle or legal effect, whether the existing del)t is 
 extinguished or not, or wiiether the original evidence of debt, or the existing 
 securities are surrendered or not. Kearslake v. Morgan, .') T. R. ;j14; liaker v. 
 Walker. U Mees. & W. 4(5.-) ; Helsi.aw v. Bush, 11 C. H. 191, 200 ; Ford v. Beech, 
 11 Q. B. 852, 873. These transactions, indorsing negotiable securities on ac- 
 count of previous debts, without special agreement as to the effect, are there 
 treated as " necessary exceptions to the general rules of law, in favor of the 
 law merchant." This ride has been adopted in this country by the national 
 tribunal of last resort. Swift v. Tyson, 16 Pet. 1. This decision was made 
 upon the maturest consideration, and has prevailed in most of the States, and is 
 expressly extended to collaterals. Bank of the Metropolis v. New England 
 Bank, supra. Petrie v. Clark, 11 Serg. & R. 377, as early as 1824, adopts al- 
 most precisely the same view, except that it is not assumed as matter of necessary 
 implication that one who accepts security for a debt will, to some extent, change 
 his conduct in consequence. See also Walker v. Geisse, 4 Whart. 2.^2. In 
 Holmes V. Smyth, Ki Maine, 177, it is decided that where negotiable paper is 
 taken in payment of a jjrevious debt, it will exclude all equities in other parties. 
 To the same extent is Williams v. Little, supra. The same view is a<lopted in 
 Carlisle u. Wishart. 11 Ohio, 172; Norton v. Waite, 20 Maine, 175; Bostwick 
 V. Dodge, 1 Doug. ]\Iich. 413; Bush v. Peckard, 3 Harrington, 385; Brush v. 
 Scribner, 11 Conn. 388; Barney i'. Earle, 13 Alabama, 106. In these cases, 
 except Williams v. Little, the question did not arise in regard to negotiable 
 paper being taken as collateral security. But in many of the States, as 
 well as in Swift v. Tyson, and the Bank of the Metropolis v. The New 
 England Bank, supra, all such distinction is disclaimed, and held to have no 
 existence in principle. Reddick v. Jones, 6 Iredell, 107; Gibson v. Conner, 
 :5 Kelley, 47 ; A^alette v. Mason, 1 Smith, 89 (Indiana) ; Allaire v. Hartshorn, 
 1 Zaliriskie, 665; Blanchard v. Stevens, 3 Cush. 162. The fallacy of suppos- 
 ing that the creditor is in the same condition after having failed to enforce 
 the collection of his collaterals, as if he had not received them, is here placed 
 in the clearest light by Dewey, J. : " If the party had not received the note as 
 collateral security, he might have pursued other remedies to enforce the secu- , 
 rity or payment of his debt. He might have obtained other securities or, 
 l)erhaps, payment in money. It is a fallacy to say that if the plaintiffs are 
 defeated in their attempt to enforce the payment of these notes they are in as 
 good a situation as they wuuM have been if the notes had not been transferred 
 to them. That fact is assumed, not proved, and from the very nature of the 
 case is matter of entire uncertainty. The convenience and safety of those deal- 
 ing in negotiable, paper seem to require and justify the rule that when a person 
 takes a negotiable note not overdue or ajtparently dishonored, and without no- 
 tice, actual or constructive, of want of consideration or other defence thereto, 
 whether in payment of a precedent debt or as collateral security lor a debt, the 
 holder would have the legal right to enlorce the same against the parties thereto, 
 notwithstanding such defence might not have been effectual as between the orig- 
 inal parties." And the Supreme Court of Rhode Island, after very careful and
 
 208 SWIFT V. TYSON. 
 
 thorouffh examination of the cases, have recently come to the same conchision. 
 Bank of the Ri'[)ul)lic r. Carrington, 5 11. I. fjlS. See also Atkinson v. Brooks, 26 
 Vt. biVd, supra. It scarcely seems necessary to eniinieral# the cases in New York 
 and some other States which have followed their lead, where it has been held that 
 paper negotiated as collateral on account of a previous debt is not taken for xalue, 
 and is subject to all equities. We think it most imquestionablc that the New 
 York courts are right in saying there is no distinction in principle between 
 taking such paper in payment, and as collateral to a pre-existing debt. But- 
 the trutii undoubtedly is, that either foi'ms a good consideration, and the title 
 of the creditor depends upon the character of the paper, and is an exception to 
 all rules attaching to the delivery of other property as security for a debt. 
 
 The main point of the decision in the very case before us, that the trust which 
 unquestionably attached to the property which formed the consideration of the bills 
 could nut attach to the bills after they had been bona Jide negotiated in the market, 
 althougii merely between debtor and creditor, and no new advance made spe- 
 cifically on such account, goes exclusively upon the peculiar quality and character 
 of negotiable paper as to the transmission of its title. It passes in the market 
 as money. No man is bound to make any inquiry into the title of the holder. 
 And even carelessness, short of bad faith, will not defeat one's title to such pa- 
 per, taken for value. Goodman v. Harvey, 4 Adol. & Ellis, 870, overruling 
 Gill V. Cubitt, 3 Barn. & C. 466. See Goodman v. Simonds, post. And whether 
 one advances money and then takes the money in payment of his debt, or takes 
 the note or bill on account of the debt or as collateral security is not material, 
 either in fact or in law. And to be consistent, we must either adopt the New 
 York rule that in both cases there is no value given for the new note or bill, or 
 else insist that value is given in both cases. 
 
 It is impossible, as it seems to us, to successfully contend for the contrary, 
 unless where the previous debt is not due, or the new security is such that no 
 trust is reposed in it; and these are exceptional cases. In every other case, the 
 creditor will conduct differently on account of the new security, and will delay 
 the collection of the previous debt until the result of the new security is deter- 
 mined. And then it is impossible to restore the creditor to his former position, 
 since time is a very important matter in commercial transactions. AVe trust 
 that, before many years, all our American courts will adopt the sensible views 
 of the English <'Ourts upon this question, and not expend so much strength here- 
 after in determining the precise difference between receiving a note or bill ' ' on 
 account of," " in payment of," " as collateral to," and " as security for," an ex- 
 isting deljt, since no one whose perceptions were not rendered very acute by the 
 study of refinements and hair-breadth distinctions, would ever dream that there 
 could be any essential difference in the rights of the creditor to have the full 
 benefits of the new securities, and of " all the collaterals," in the language of 
 Lord Kllenborouyh in Bosanquet v. Dudman, supra, until he obtained full satis- 
 faction of his debt. 
 
 Smce the preparation of the foregoing note for the Law Register, in 1861. 
 the only important English case bearing directly upon the question mainly 
 involved, is Peacock v. Purcell, 10 Jur. x. s. 178; s. c. U C. B. N. s. 728. It 
 is here decided that where the defendant, being indebted to the plaintiff, 
 indorsed to him a bill of exchange of which he was indorsee, as collateral security
 
 SWIFT V. TYSON. 209 
 
 for the debt, ami the plaintifT failed to present it when due, or to give the defend- 
 ant notice of its dishonor wlien presented, ho eould not recover, either upon the 
 bill or the original delft. This seems to confirm one im])ortant contention in 
 the preceding note and opinion ; viz., that although the negotiable securities are, 
 in tcxnis, indorsed as eollaleral to an existing debt, the creditor will nevertheless 
 become a party to the securities indorsed, with all the rights and duties of any 
 other boiut J'ulc holder, wliicli will of necessity cut off efpiitalile defences. It 
 seems to have been considered in some of the American cases that indorsing 
 and passing negotiable paper as collateral security for a prior debt, does not give 
 the creditor the rights, or impose upon him the duties, of a bona Jide holder 
 for value. But the case last cited is very explicit upon that point. 
 
 The ('art.s of this case were that the defendant was indebted to the plaintiff in a 
 larger sum tlian the amount of the bill, and first offered the bill in part-payment 
 of the debt, and the lialance in cash. The j)laintiff declined to accept the bill in 
 part-payment, and the defendant then consented to it being retained as collateral 
 security for an amount of the debt etiual to the bill, paying money for the balance. 
 Tiie judges were very clear and explicit upon the point of the creditor having 
 become a party to the bill, with all the rii/hts and duties pertaining to that rela- 
 tion. Ili/les, J., said : "That as depositees of the bill, as tliey had the riyJits [one 
 of which must be to exclude e(iuitable defences], so they had the duties of hold- 
 ers. " The Court do not seem here to consider that the legal rights of the 
 creditor, as indorsee, would be materially affected by the precise form of the con- 
 ditions upon which he accepted the paper, provided he took it in the ordinary 
 course of business, and so as to become a legal and substantial party to the 
 instrument. WiUes, J., said : " It may be taken for and on an account [of the 
 debt] but with an understanding that the party receiving it is to have the option 
 of suing lor the debt before the maturity of the bill." The forms of expression 
 most in use in the English courts, to express the idea of accepting negotiable 
 paper on account of a prior debt are, " for and on account of; " "in payment 
 o( ; " " instead of payment ; " and as " collateral security for " the debt. And 
 i( we assume that the new paper is so received by the creditor, as that he becomes 
 a valid party to it, it does not seem important either to his rights or interests, in 
 which of the preceding forms he receives it. If received in j)ayment of the debt, 
 the (lel)t is not thereby extinguished, unless there is some special agreement to 
 tliat edect, as it will be where money or other property is given in payment of a 
 debt. In the latter case the debt is gone, and cannot be revived unless the 
 property is wholly worthless, and there was fraud. But in the case of accepting 
 negotiable paper in payment of a debt, the only effect is to suspend the debt until 
 the maturity of the paper. If the latter is then paid, it operates as absolute pay- 
 ment of the debt; if not paid, the debt remains as before, and the creditor may 
 sue upon It, or upon the new security, or upon both, until he obtains satis- 
 faction. 
 
 If the new paper is accepted as collateral security, there is no certain implica- 
 tion tiiat the right of action upon the prior debt is suspended. It may be, or it 
 may not. If there is a dear implication, as there will be In most eases, from the fact 
 that the new security is cither of the same or greater amount, or If there is an 
 express agreement to that effect, or circumstances from which a jury may infer 
 one, then there is no substantial dillerence between the creditor accepting nego- 
 
 14
 
 210 HOLDER FOR VALUE. 
 
 liable paper in payment, or as collateral security for a prior debt. In both cases, 
 the cause of action is suspended until the maturity of the new paper ; in both, if 
 paid at maturity, it absolutely extinguishes the debt ; if not so paid, in either case, 
 the creditor may sue upon the debt, or upon the new securities, or upon both, 
 and in both cases, if the creditor do not pursue the rules of the law merchant with 
 the new securities, he loses all remedy. In the case of Peacock v. Purcell, supra, 
 Erie, C. J., said : "It clearly would be payment if, at maturity, the money were 
 obtained for the bill." And the learned judge further argued, that the creditor 
 having so conducted as to defeat all remedy upon the bill, he makes it his own in 
 payment of the debt, and continued : " The security is marred by the plaintiff's 
 own laches." " The legal effect," says the learned judge, " of taking a bill as 
 collateral security, is that if, when the bill arrives at maturity, the holder is guilty 
 of iaehes, and omits duly to present it and to give notice of its dishonor, if not 
 paid the bill becomes money in his hands, as between him and the person from 
 whom he received it." This last case affords, as we understand it, full confirma- 
 tion of most of the propositions attempted to be maintained in the preceding note 
 and opinion; viz., that all which is required, when current negotiable paper is 
 indorsed on account of an existing debt, in order to exclude equitable defences 
 is, that the creditor should so receive the new paper as to assume the position of 
 a bona fide party to it. 
 
 It does not seem indispensable that there shall be any contract, either express 
 or implied, to suspend the remedy upon the debt, in order to give the creditor the 
 rights of a bona fide holder of the new paper, although that is a decisive circum- 
 stance in favor of the creditor being a bona fide holder when it exists, as it more 
 commonly does, in all cases where new paper is accepted " instead of pajTuent" 
 of an existing debt. But where there is no evidence of such an understanding, 
 and even when there is an express reservation on the part of the creditor of the 
 right to pursue his remedy upon the debt, as will be necessary, in order to avoid 
 impairing the claim against guarantors and sureties ; even in such cases the 
 rights of the creditor to be regarded as a bona fide holder, are most unquestion- 
 able in every instance where he assumes the responsibility of a party to the 
 paper. That, of itself, is consideration sufficient to give him all the rights of a 
 bona fide purchaser, to the extent of his interest ; that is, until his debt is paid. 
 ,This, we think, must now be regarded as the unquestionable state of the English 
 law, since the decision of Peacock v. Purcell, supra, and the American law, 
 since the decision of Swift v. Tyson, is fast approaching the same quiet and 
 rational line of demarcation and rest. 
 
 It is clear, of course, that if the new paper received " instead of payment" of 
 a prior debt is not negotiable, in form, or not in fact negotiated ; Whistler v. Fos- 
 ter, 1-i Com. B. N. s. 248 ; Boody v. Bartlett, 42 N. Hamp. 558 ; Franklin v. Two- 
 good, 18 Iowa, 615 ; or if the creditor accepts the new paper merely for collection 
 and "to be applied when collected," and not assuming the responsibility of 
 a party ; in either of the preceding cases he cannot claim the rights of a party so 
 as to exclude equitable defences. See the learned opinion o£ Bosworth, C. J., in 
 Hoffman v. Miliar, 1 Am. Law Reg. n. s. 676, 681, and cases cited ; Warner v. 
 Lee, 6 N. Y. (2 Seld.) 144 ; Scott v. Ocean Bank, 23 N. Y. 289 ; s. c, 5 Bosw. 192. 
 
 It could serve no useful purpose to discuss the numerous recent decisions in the 
 American States upon this point. Tiiere will be found among them all a constant
 
 SWIFT V. TYSON. 211 
 
 tendency towards the line indicated by the English decisions, and by Swift r. 
 Tyson, in our own national court of last resort; whose authority may well be 
 rej^anied as of paramount wi'ighl in regard to (juestions of general commercial 
 law. That rule is fully recognize I in Massachusetts. Stoddard v. Kimball, G 
 Cush. 4t!y ; Ives v. Fanners' IJank, 2 Allen, 23G ; Fislier v. Fisher, 98 Mass. 'M)'.\. 
 So also in Connecticut. Bridgeport City Bank v. Welch, 2'J Conn. 475 ; Osgood 
 V. Thompson Bank, 30 Conn. 27. Rhode Island seems to have ailupted 
 much the same view. Cobb v. Doyle, 7 R. I. 550. So also in Calilbrnia. 
 Naglcc r. Parrott. 14 Calif. 450; Robinson r. Smith, ib. 94. New Hapipshire 
 seems still tenacious of maintaining some distinction between the rights of the 
 creditor, wlien he accepts current negotiable paper in payment of, and when he 
 receives it merely as collateral security for a prior debt. Fletcher v. Chase, Ki 
 N. Hamp. 38 ; Rice v. Riatt, 17 id. 116. And Maine may be reckoned in the same 
 category. Nutter v. Stover, 48 Me. 163. And in Vermont the law upon this 
 question has certainly been very considerably agitated ; and, as is not uncommon 
 in such cases, is not yet very clearly settled. Atkinson v. Brooks, supra, was 
 followed in Michigan Bank v. Leavenworth, 28 Vt. 209, without any division of 
 tiie Court ; wliile in Austin v. Curtis, 31 Vt. 64, one of the same judges, who 
 had silently concurred in the two former decisions, delivered a labored and 
 learned opinion, to show that accepting negotiable paper "instead of payment" 
 of a debt falling due, if called " collateral security," does not raise any implication 
 of the suspension of the remedy. The majority of the Court, as then constituted, 
 concurred in tiiis view. This is by no means fatal to the ground maintained in 
 the former cases of Atkinson v. Brooks, &c., but removes one ground of argu- 
 ment upon wliicli they rest. Since that, it has been there held, that where one 
 gives his own note for negotiable paper, he is entitled to all the rights of a bona 
 Jide holder for value, and equitable defences are excluded. Adams v. Soule, 33 
 Vt. 538 ; s. p., Meckles v. Colvin, 4 Beav. 304. This must be regarded as one 
 of the most suspicious modes of shutting out equitable defences ; far more so 
 than where the paper passes, in the ordinary course of business, "instead of 
 payment" of an existing debt, although called "collateral security." 
 
 There are some other States where the courts still ^eem to cling to the fallacy 
 of attempting to maintain an equitable distinction between passing negotiable 
 paper in payment of or only as collateral security for an existing debt. Ryan 
 r. Chew, 13 Iowa, 589. And there are others where this distinction is not appar- 
 entlv adlicred to. Stevens v. Campbell, 13 Wis. 375; Outhwite v. Porter, 13 
 Uk-h. 533 ; Manning v. IMcClure, 3i) 111. 490 ; Stevens v. Ileyland, 11 :\Iiun. 198 ; 
 Citizens' Bank r. Payne, 18 La. An. 222. This distinction was mainly a New 
 York invention, and from the high judicial and commercial character of that 
 State, it became nearly universal throughout the country at one time, and until 
 the decision of Swift v. Tyson. But the New York courts, in the full tide of 
 their exjieriinent, were consistent in one particular at least; they denied all dis- 
 tinction between accepting negotiable paper in payment of and as collateral secu- 
 rity for an existing debt. In yielding by degrees to the tide of the more recent 
 decisions, they seem to have yielded the former point altogether.. Brown r. Leav- 
 itt, 31 N. Y. 113 ; Pratt v. Coman, 37 N. Y. 440. They hold, too, that if such 
 paper is given as collateral security for a loan made at the time, it will exclude 
 equitable defences. Bank of New York v. Vanderhorst, 32 N. Y. 553; Book-
 
 212 HOLDER FOR VALUE. 
 
 man v. Metcalf, id. 591. So also where other collaterals are surrendered at the 
 time. Park Bank v. Watson, 42 N. Y. 490. In the case of Bookman v. Metcalf, 
 the debt was upon an account stated at the time tlie collaterals were received, 
 and the creditor had permission to dispose of them for money in the market. 
 This seems to be coming so near the rule of the English courts that we should 
 not expect to hear much more of the distinction between payment and collateral 
 security by way of negotiable paper, even in the New York courts. They will 
 find it much easier to yield the whole distinction, and become consistent in truth, 
 as they. formerly were in error, than to struggle against yielding a fallacy which 
 is sure to escajje their grasp, sooner or later. 
 
 There are numerous cases in the different States where the precise rule, or 
 ratio decidendi, as some express it. in Swift v. Tyson, supra, has been adopted. 
 Conkling v. Vail, 31 111. 166 ; Foy v. Blackstone, id. 538. Indeed, the rule that 
 where current negotiable paper is accepted as payment of a pre-existing debt, 
 equitable defences will be excluded, has become so nearly universal in the Amer- 
 ican States, that it would be a useless labor to further enumerate the cases. 
 There has been a marked change since the preparation of the preceding note and 
 opinion, from the effect of Swift v. Tyson. And since New York has given in 
 her adherence to the rule, there seems little use in further debate upon that pre- 
 cise point. The recent case of May v. Quimby, 3 Bush, 96, takes the same view, 
 when the paper is received in payment of a prior debt ; but the late cases, even 
 Swift V. Tyson, are not referred to. 
 
 All courts seem involuntarily to yield the point that the indorsee of negotia- 
 ble paper delivered at the time of creating a new debt, although expressed to be 
 as collateral security, must be regarded as a bona fide holder for value. Stotts 
 V. Byers, 17 Iowa, 303; Lyon v. Ewings, 17 Wis. 61; Curtis v. Mohr, 18 id. 
 615. So also where any new credit or indulgence is given in faith of the new 
 paper, all agree that equitable defences must be excluded. Housum v. Rogers, 
 40 Penn. State, 190; s. p.. Trustees v. Hill, 12 Iowa, 462; Wa?:hington Bank v. 
 Krum, 15 id. 53. In some cases the mode of doing the business, and whether 
 the collaterals or new securities are passed to the credit ,of the debtor at the 
 time they are received, or only when they are collected, seems by some courts, 
 to be held decisive of the point whether the holder can be regarded as a holder 
 for value or not. Scott v. The Ocean Bank, 23 N. Y. 289. This latter ques- 
 tion seems to be the same as that between the creditor becoming a party to the 
 new paper, and only receiving it as the agent of the debtor for collection, 
 to be applied when collected. In the latter case, of course, the creditor is never 
 a holder for value. In all cases where the creditor so receives the new paper as 
 to become a party to it, he does become for the time a debtor for it, and if he 
 keeps any account of such paper, the proper mode is to pass it to the credit of 
 the debtor, and charge it off when it proves unproductive. We apprehend 
 this is the common course of dealings among merchants and bankers. And in 
 such case, if the creditor reserve the right to sue upon the prior debt, still he 
 cannot recover judgment upon the debt until he return the collaterals. They 
 are payment until restored, or, at the least, quasi payment. The Court cannot 
 know, except by their surrender, that the creditor may not have negotiated 
 them for value ; and, if so, how is the debtor to recover them? 
 
 Enough has been before said upon the question how far accepting new paper
 
 SWIFT V. TYSON. 213 
 
 instead of payment of an existing debt, will siispeml the remedy until the matu- 
 rity of tiie new paper. It seems to be considered on all hands that, if the new 
 paper is in terms accepted in payment of a prior debt, the remedy is suspended 
 until the maturity of the new paper. Sayer v. Wagstaff, .5 Beav. 415, 4G2, by 
 Lord Lau(/dalc, M. K. Jle The Hank, «&c, 11 Jur. n. s. 316; National Savings 
 Bank v. Tranah, Law Kep. 2 (". P. 556; The Kimball, .'5 Wallace, 'il. In all 
 other cases the implication will depend u[)on the circumstances, and may be 
 submitted to the jury where there is any ground of controversy. Okie v. Spen- 
 cer, 2 Wliart. 253; 2 Am. Lead. Cas. 232, and notes; Michigan Bank v. Leav- 
 enworth, 2!S Vt. 209; Austin v. Curtis, 31 Vt. 64, and cases cited. 
 
 It nee<l hardly be said that, where the collatiirals are not negotiable, or, if so, 
 not so negotiated as to m.ake the creditor a valid party to tliem, but are only de- 
 livered for collection or as a pledge, the eflect is the same only as to suspending 
 the remedy upon the debt, as in the case of pledging any other property as col- 
 lateral security for a debt. The debt and the collaterals are wholly independent 
 of each other, and the creditor is responsible only for actual negligence in the col- 
 lection of the securities. Van Wart v. Woolley, 3 Barn. & C. 439. And where 
 negotiable paper is tuken as security for a debt without indorsement, although 
 while still current and indorsed after it falls due, it will not have the elfcct to 
 exclude ccjiiitable defences. Lancaster Nat. Bank v. Taylor, 100 Mass. .18. 
 And so if the indorsement is procured after the holder knew thfe paper to be 
 fraudulent. Whistler v. Foster, 14 Com. B. N. s. 246, 248. 
 
 There are some other questions incidentally connected with the one already 
 discussed, which may be here briefly adverted to. There is always a presump- 
 tion as to a negotiable note or bill, when the name of the pityee appears indorsed 
 upon it, that it was done while the same was current, unless the contrary appear. 
 Leland v. Farnham, 25 Vt. 553. And the admissions of the payee, made after 
 he is thus presumed to have parted with his interest, are not competent evidence 
 to show the time such paper was indorsed. Ibid. The cases are too numerous 
 upon these points to need citation, and all in one direction. 
 
 And where negotiable paper is taken while current, it raises the presumption 
 that it was taken hona fide and for value. Pettee v. Prout, ;jo.s7, 217. And upon 
 the maker showing that the same was given without consideration, or was fraud- 
 ulently obtained, as between the original parties, the holder cannot be required 
 to prove that he gave value for it unless his title is in some way impeached. 
 Woodman v. Churchill, 52 Me. 58. A different rule at one time obtained in the 
 English courts. Bassett r. Dodgin, 10 Bing. 40; s. c, 25 Eng. Com. Law, 25; 
 Paterson r. Ilardacre, 4 Taunt. 114; Heath v. Sansom, 2 Barn. & Adol. 291. 
 These cases are reviewed in Sanford r. Norton, 14 Vt. 228, and the doctrine 
 indorsed. And there is no doul)t much to be said in favor of its justice and 
 equity, and as a safeguard against dishonest practices. But the great incon- 
 venience of the rule, and the embarrassment thereby produced among commercial 
 men, has caused it to be long since abandoned, and the rule in Woodman v. 
 Churchill, sujyra, to be adopted, which has now become nearly or quite univer- 
 sal ; too much so to require the further citation of cases. 
 
 What precise evidence will be recpiired to impeach the title of the holder, must 
 depend largely upon the circumstances of each case. It must be shown that 
 the note was in some way discredited when the bolder took it, in order to subject
 
 214 HOLDER FOR VALUE. 
 
 hira to such equitable defences as Avould be valid between the original parties, 
 or that he knew of some defect in it. . If the note or bill were payable at a time 
 certain, and that had passed when the holder became a party, the cases all agree 
 that he holds it subject to all equitable defences. A note or bill overdue can- 
 not be said to pass in the ordinary course of business. Farrington v. The Park 
 Bank, 39 Barb. 045. And it has been held that, where a note is payable by 
 instalments, and one of the instalments is overdue, the person who takes it will 
 be subject to all equities, on the ground that the paper was discredited at the 
 time of the transfer. Vinton v. King, 4 Allen, 562. But where more than one 
 note is executed upon the same consideration, they are not all to be regarded as 
 dishonored, when one of them is overdue and not paid. Boss v. Hewitt, 15 
 Wis. 260. Nor will the fiict that the interest had not been paid annually, ac- 
 cording to the terms of the notes, discredit them. Ibid. 
 
 But there is some conflict in the cases as to the time when paper payable on 
 demand may be said to become dishonored or discredited. In one recent case 
 it was held never to be so discredited until after demand and refusal of payment. 
 Stewart v. Smith, 28 111. 397. In another lite case such paper was held not dis- 
 credited when transferred three months after date. Herrick v. Woolverton, 42 
 Barb. 50. In Tomlinson Co. v. Kinsella, 31 Conn. 208, it is said that the time 
 when a note payable on demand will become discredited will depend upon the 
 circumstances of each case, and the understanding of the parties, and is a proper 
 question for the jury. It has been held that a note payable on time and trans- 
 ferred on the last day of grace, is discredited. Pine v. Smith, 11 Gray, 38. The 
 fact that the paper has been before discounted at the bank and taken up by the 
 party benefited, will not discredit the same if it is still current. Harpham v. 
 Haynes, 30 111. 404. Slight discount from the amount of the paper will not ex- 
 pose the holder's title to suspicion or defeat. Eckhert v. Cameron, 43 Penn. State, 
 120; Baily v. Smith, 14 Ohio, N. s. 396. But a sale very much below the fair 
 value might have that effect. Ibid. But see Brown v. Penfield, 36 N. Y. 473, 
 contra . 
 
 It is scarcely necessary to say that one must pay value for a note or bill in order 
 to be regarded a honajidc holder, so as to exclude equitable defences ; and it will 
 not avail to that end that the paper was still current and in no sense discredited 
 at the time of the transfer. Harpham v. Haynes, 30 111. 404. And if one who 
 pays value for current paper leaves it with the payee for collection, and he trans- 
 fers it for value to one ignorant of the facts, the first purchaser's title will fail, 
 unless he can impeach the second transfer as against the holder. Livingston v. 
 Littell, 15 Wis. 218. But notice to the purchaser of negotiable paper that it 
 was given in paynient of a subscription to railway stock, will not entitle the 
 maker to show that the same was obtained by fraud. Andrews v. Hart, 17 
 Wis. 297. 
 
 The cases are all one way upon the point that even a bona Jlde holder can 
 only recover to the extent of his interest at the time of the judgment. Easter 
 V. Minard, 26 111. 494. This was where the plaintiffs' debt had been paid pend- 
 ing the action. 
 
 If the first indorsee takes negotiable paper while current, the title of his 
 indorsee will not be affected by the fact that he acquired title after the same 
 became due. Lickbarrow v. Mason, 2 Term, 63, 71 ; Robinson v. Reynolds, 2
 
 SWIFT V. TYSON. 215 
 
 Q. B. 196, 211 ; Bassett v. Avery, Ih Ohio, N. s. 299 ; Peabody «. Rees. 18 Iowa, 
 571. See also Woodinaii v. C'hiircliill, 52 Me. 58. And tlie bona fide holder of 
 negotiable paper is not allected by any knowledge obtained after his title be- 
 comes perfected. Hoge r. Lansing, 35 N. Y. 13G. 
 
 Where the time of payment of a negotiable note is extended by an agreement 
 indorsed upon the back, one who takes it afterwards will be subject to all 
 eijuitios between the parties. i\Iarcal v. Melliet, 18 La. An. 223. 
 
 Wliere the acceptance of a bill appears upon its face to have been by procu- 
 ration as it is called, that is, by the agent of the acceptor or by some one claiming 
 to act as his agent, all purchasers will be affected by any want of authority in 
 such agent. Stagg v. Elliott, 12 C. B. n. s. 373; s. c, 9 Jur. n. s. 158. But 
 the acceptance of a bill drawn by procuration admits the power of the agent, 
 and the acceptor is estopped to deny it. Ashpitel v. Bryan, 3 F. & F. 183 ; s. c, 
 9 Jur. X. s. 791. And where a note or bill is made or accepted in blank, 
 this will enable the party intrusted with the paper so in blank to fill it with any 
 amount unless there is some limitation by way of the stamp or figures in 
 the margin. Henderson v. Bondurant, 39 Mo. 3G9. 
 
 The law in regard to acceptances and other acts in connection with negotiable 
 paper being made in blank, is considerably discussed in Van Duzer v. Howe, 21 
 N. Y. 531, and the authorities cited and commented upon. But one very impor- 
 tant consideration connected with the subject is not here adverted to, and does not 
 seem to have much attracted the notice of the profession or the courts. We refer 
 to the proper limitations indicated by a signature in blank. The person who ac- 
 cepts it of course understands that he may not use it beyond the amount for which 
 it was given, and that if he do so he will incur the penalties of forgery. Rex 
 V. Hart, 7 Car. & P. 652 ; Reg. r.-Wilson, 2 Car. & K. 527 ; Reg. v. Bateman, 
 1 Cox, Crim. Cas. 186. But nevertheless for the vindication of the title of a 
 bona fide holder for value, he is permitted, as in some other cases, to trace his 
 title through a transaction which was in fact felonious. But the party guilty can 
 have no benefit of such a filling up of the blank signature, even to the extent 
 for which it was given. And even an indorsee for value of a blank acceptance 
 or signature thus wrongfully filled up, cannot recover upon it, provided he were 
 cognizant of the fact that it was issued blank and fdled up by force of the author- 
 ity confided to a former holder. It is the same as an acceptance by procuration. 
 Knowledge of the fact of a note or bill having been made by virtue of an au- 
 thority is sufficient to put any party taking the paper with such knowledge upon 
 incpiiry as to the extent of such authority. And whether he make the inquiry or 
 accept the paper without it, he will be subject to any defence depending upon an 
 excess or abuse of such authority. This is fully recognized by Vice-Chancellor 
 Stuart, in Hatch v. Searles. 2 Sm. & Gif. 147. The learned judge said : " If 
 the holder has notice of the imperfection [that the signature was made in blank] 
 he can be in no better situation than the person who took it in blank, as to any 
 right against the acceptor or indorser who gave it in blank." This qualification 
 of the general rule laid down in the leading case of Russel v. LangstaflTe, 2 
 Doug. 514, and others following it, seems to be entirely well established in the 
 English courts. But we infer that it has not, as yet, obtained recognition with us 
 to the same extent, although in principle it seems most unquestionable. 
 
 But as a general rule it will not be sufficient to show facts known to the holder
 
 216 HOLDER FOR VALUE. 
 
 before purchase, suflicient to put him upon inquiry, as was formerly held in Gill 
 V. Cubitt, 3 Barn. & C. 466. That case was overruled in Goodman v. Harvey, 4 
 Adol. & J^Uis, 870 ; and it is now entirely well settled that, in order to impeach the 
 title of the purchaser of current negotiable paper, it must be shown that he acted 
 in bad foitli, believing at the time of the purchase that there was some infirmity 
 about the paper. This is rather an extreme view, and not required in any other 
 similar case, but it has been considered necessary in order to protect the title to 
 negotiable paper, and is settled beyond all question. See Goodman v. Simonds, 
 post, 239. It could answer no good purpose to say what is most unquestionable, 
 that the doctrine of Gill v. Cubitt will answer the necessities of fair dealers in 
 most cases, since that class of holders will not ordinarily shrink from the strictest 
 scrutiny in regard to the circumstances under which their title was acquired. 
 
 The more recent decisions are all based upon Goodman v. Harvey ; and Gill v. 
 Cubitt is never named except to be condemned. We recollect the time when the 
 doctrine of the latter case was regarded as quite commendable, and entirely 
 salutary. And while the English courts now require proof of bad faith in the 
 purchase in order to impeach the title of the holder, it is not uncommon there to 
 find cases submitted to the jury upon that question, where the evidence would 
 not seem of the most conclusive character, not more so than that required in 
 Gill V. Cubitt. We should not be surprised to have the pendulum of judicial 
 opinion swing back more and more in that direction, until we reach the old 
 equitable ground of notice sufficient to put the party on inquiry, — the same 
 rule by which all our other legal and equitable rights are considered as suf- 
 ficiently protected, and which might be sufficient for the holders of nego- 
 tiable paper if it were not considered specially sacred. See Dailey v. De Frees, 
 11 W. R. 376 ; Steinhart v. Boker, 34 Barb. 436 ; Benior v. Paquin, 40 Vt. 199 ; 
 Bassett v. Avery, 15 Ohio, n. .s. 299. But the doctrine of Goodman v. Harvey 
 is now too well established to be called in question. We only desire that specu- 
 lators in negotiable paper shall be content to shield themselves under the rule in 
 that case, and not ask the courts finally to hold that nothing short of proof of a 
 felonious intent shall impeach their title. 
 
 There seems to be some conflict in the recent cases, how far the fact of nego- 
 tiable paper being made or indorsed for the accommodation of the parties in 
 interest will affiard ground of defence against holders for value, but who received 
 the same when overdue, or with notice that it was accommodation paper. It was 
 held at an early day, Charles v. Marsden, 1 Taunt. 224, that it affiarded no 
 ground of defence to a note taken before due for value, that the indorsee knew 
 at the time that the maker made it for accommodation of the payee. And the 
 same rule has been since repeatedly recognized. Powell v. Waters, 17 Johns. 
 176 ; Grandin v. Leroy, 2 Paige, 509 ; Bank of Ireland v. Beresford, 6 Dow, 
 237. And if the indorsee knew of the fact of the paper being made for accom- 
 modation at the time he received it, there could be no diffijrence whether he took 
 it before or after it fell due. The question would be in either case, how far the 
 fact of its being given for accommodation affiarded ground of defence in the hands of 
 the holder for value. And that question, as it seems to us, will always depend upon 
 whether the paper was used by the party accommodated in the manner contem- 
 plated by the original parties, and especially by those signing or indorsing for 
 accommodation. It is true that this question will not be important where the
 
 PETTEE V. PIIOUT. 217 
 
 pajjcr passes while current; hut where the paper is taken when overdue, or with 
 knowledf^e tliat it was j^iven for accouunodation, the defence is eijually available. 
 And in both cases the proper question seems to be, whether the paper was mis- 
 applied by the party accommodated. If not, the holder for value may i ecover to 
 the extent of his interest. East River Bank v. liutterworth, 4o Barb. 47G. But 
 in a recent case, Chester r. Dorr, 41 N. Y. 279, by a divided court, a contrary 
 rule seems to be declared. That was an action ajiainst an accouunodation in- 
 dorser. No question is made in the opinion, whether the party accommodated 
 used the paper diiferently from what he was expected to do. The majority of 
 the Court seemed to consider that, unless the paper was negotiated while current, 
 all parties sij^ning for accommodation might claim to be exonerated. This has 
 certainly not hitherto been the understanding of the profession in regard to ac- 
 commodation paper, unless the jiaper was in some way misapplied l)y the party 
 acconunodatcd. The Court here argued that the indorser for accouunodation 
 was entitled to make the same defence against a purchaser for value after the 
 note fell due, which lie might if the action were for the benefit of the party ac- 
 commodated. But this will surely not be so where the indorsement is made to ena- 
 ble the party acconmiodated to negotiate the paper, to raise money, or to secure 
 or pay his own debts. In sucli cases the indorser is equally l)ouud, whether the 
 transfer is made before or after the paper falls due, and whether the purchaser 
 kn< \v the indorsement was made for accommodation or not. To hold otherwise 
 would be to encourage fraud, and to relieve the party from the very respon- 
 sibility which he expected to meet, and which, upon every principle of justice 
 and fair dealing, he should be compelled to abide by. 
 
 Seneca Pettee v. Richard Prout. 
 
 (3 dray, 502. Supreme Court of Massachusetts, September, 1855.) 
 
 Piisiim/ilion of title. — In an action upon a note payable to A, or bearer, the production 
 of tlic note by the plaintiff, H, is suthcient evidence of his title, tliou-^li he is the 
 general agent of A, who, the answer alleges, is the owner of tiie note. 
 
 Equities. — One to whom a note payable to A, or bearer, is transferred before matu- 
 rity, takes it subject to no equities or rights of set-off which the maker might have 
 against A. 
 
 Action of contract on a promissory note for $50, dated ^farch 
 14, IS")!, signed by the defendant, and payable in one year to tlie 
 Cheshire Iron Works or bearer, with interest. Tiie defendant, in 
 his answer, denied that the phiintiff was the owner and bearer of 
 the note sued u))on, and alleged that it was the property of the 
 Cheshire Iron Works ; and also filed a declaration in set-off upon 
 the following note: "$49.74. Cheshire, June 11, ISol. Six
 
 218 HOLDER FOR VALUE. 
 
 months after date we promise to pay to the order of Oilman Bow- 
 ker, forty-nine dollars -{^\, value received, ten dollars of which is 
 to be paid in goods, with interest. 
 
 " Cheshire Iron Works, by S. Pettee, general agent." 
 
 The case was submitted to the Court upon a statement of facts, 
 in which it was agreed that the plaintiff was the general agent of 
 the Cheshire Iron Works ; that the two notes were duly executed 
 on the days of their respective dates ; that the note in set-off was 
 assigned by the holder thereof to the defendant, for a valuable.con- 
 sideration, with the intention of securing a debt against the 
 Cheshire Iron Works ; that the Cheshire Iron Works were insol- 
 vent, and had no property ; and that their stockholders, of whom 
 the plaintiff was one, were individually liable for their debts. 
 
 There being no evidence to whom the note sued upon belonged, 
 beyond the note itself, the defendant contended that tlie plaintiff 
 had not proved his title to the note ; and further contended that if 
 he had, the note for $49.74 should be allowed in set-off. 
 
 Shaw, C. J. The plaintiff brings his action, as bearer of a note 
 made by the defendant to the Cheshire Iron Works or bearer. He 
 therefore claims as the holder of a negotiable promissory note, 
 payable on time, and not dishonored ; and if he establishes this 
 title by proof, he is entitled to the same privileges and immunities 
 as an indorsee, having taken a note by indorsement in the course 
 of business, before it has become due. He is not subject to any 
 equities as between the promisor and the original payee, nor to the 
 set-off of any debt, legal or equitable, which the promisor may 
 afterwards acquire. Wheeler v. Guild, 20 Pick. 545. By giving 
 a note payable to bearer at a future day, which is strictly a nego- 
 tiable note, the defendant agreed to pay the amount to any person 
 to whom it should be transferred, before the day of payment, with- 
 out claiming to set off any demand which he then had or might 
 have, against the promisee. It is in this respect like mercantile 
 notes (in use, we believe, in some of the States where the law 
 allows set-offs and other equitable defences, even against indorsees 
 of promissory notes),- payable " without defalcation," thereby 
 meaning, by force of the contract itself, to bind the maker to pay 
 the amount absolutely to the regular holder, and renouncing any 
 benefit of set-off or other equitable defence against the payee. 
 
 Then tlie question is, as to the proof. Where a plaintiff brings
 
 PETTEE V. PROUT. 219 
 
 the note flcclared upon in his hand, and olTers it in evidence, this 
 is not only evidence tiiat he is the bearer, but also raises a pro- 
 sumption of fact that he is the owner ; and this will stand as proof 
 of title, until other evidence is produced to control it. Ordinarily, 
 such bearer, relying on the general presumption, has no means of 
 proving the transfer of the note to himself. 
 
 The defendant contends that, as the plaintiff was the general 
 agent of the corporation to whom the note was payable, and, as 
 such, had the custody of all their notes, his possession may have 
 been the possession of the corporation. But we think this fact 
 alone is not sufiicicnt to rebut the general presumption. 
 
 The demand relied on l)y the defendant is a note signed by the 
 Cheshire Iron Works, payees of the note in suit, and payable to 
 order; still it was not negotial^le, because payable in part in goods. 
 A negotiable note must be payable in money. But though the 
 defendant could not sue on this note in his own name, yet we be- 
 lieve by the Rev. Sts. c. 9G, § 5, as the assignee of a chose in 
 action, the holder of such note might use it as a set-off, in a proper 
 case, as against a suit brought by the debtor, in the same manner 
 as if it were a legal debt. But it is unnecessary further to remark 
 on the validity of the set-off; the ground of our decision is, that 
 the plaintiff held the note in suit under such a title that no de- 
 mand of the defendant, legal or equitable, against the Cheshire 
 Iron Works, could avail him as a set-off. 
 
 Judgment for the plaintiff . 
 % 
 See Ellicott v. Martin, G Md. 509 ; Goodman i*. Simonds, pout, 239 ; Picquet v. 
 Curtis, 1 Sumner, 478; Hunter v. Kibbe, 5 McLean, 279; Warren e. Gilman, 
 15 Me. 70; note to Swift v. Tyson, ante, 213; and the following case.
 
 220 holder for value. 
 
 John M. Way v. Ivory W. Richardson. 
 
 (3 Gray, -112. Supreme Court of Massachusetts, March, 1855.) 
 
 Presumption of title. — It is not competent for the defendant to deny that the plaintiff 
 is the owner and holder of a note upon which he brings suit as such, without trav- 
 ersing tlie signature, or the indorsement, or the delivery of the note ; and in such case 
 evidence is inadmissible to prove that the plaintiff never owned the note, and never 
 employed counsel to prosecute the action, and that he had no interest in the suit. 
 
 Action op contract on a promissory note for 8100, made by the 
 defendant, payable to his own order, and thus indorsed : " I. W. 
 Richardson," " Without recourse, J. Wetherbee, Jr." Answer, 
 that the defendant executed the note declared upon, without any 
 consideration, and for the accommodation of Nathaniel Richard- 
 son ; that the note was delivered by Nathaniel Richardson to 
 "Wetherbee, and, at the time it fell due, was in the hands of Weth- 
 erbee, and held by him, and was paid by Nathaniel Richardson to 
 Wetherbee while it was so in his hands ; that Wetherbee is still 
 the owner of the note, and that this suit is prosecuted for his ben- 
 efit ; and that if the plaintiff is the owner of the note, he received 
 it after it had been paid and was overdue, with a full knowledge 
 that it was an accommodation note, and had been paid, and that 
 he paid no consideration for it. Trial in the Court of. Common 
 Pleas at January term, 1854, before Wells, C. J., who signed the 
 following bill of exceptions : — 
 
 " The plaintiff read the note declared on and the indorsements 
 thereon to the jury, and rested his case. The defendant then 
 offered to prove that the plaintiff in this action never owned the 
 note declared upon, and never had said note in his possession, nor 
 employed counsel to pursue or prosecute said action ; and that 
 the plaintiff had no interest in the suit or judgment, should one be 
 recovered in his favor ; and that the note was never assigned to 
 the plaintiff by delivery or otherwise ; and that the plaintiff never 
 paid any thing for said note. To this the plaintiff objected, upon 
 two grounds : first, that it was not admissible under the defend- 
 ant's answer ; second, that if proved, it would form no defence to 
 this action. And the Court rejected the evidence. The defendant 
 offered no other evidence, and the Court directed a verdict for the 
 plaintiff. To all which rulings of the Court the defendant excepts."
 
 WAY V. RICHARDSON. 221 
 
 Shaw, C. J. The evidence offered by the defendant was rightly 
 rejected. Indci)endcntly of" the consideration that it was not 
 sjjecified in the answer, the evidence would have constituted no 
 defence. The action was uj)on a note made by the defendant, 
 payable to his own order, and by him itidorsed in blank, and then 
 by Wetherbee indorsed in blank, by which the plaintiff, if holder, 
 had a ri<2;ht to fill up the indorsements, and make the note payable 
 to himself, as second indorsee, which we are to presume was done, 
 or considered as done, at the trial. The genuineness of the sig- 
 nature and indorsements was admitted. This, with the production 
 of the note, was priiiKi farir evidence of title, and good unless 
 rebutted ; for, although Wetherljee's indorsement was " without 
 recourse," yet this was as effective to transfer the note, as if those 
 words had not been used ; it was a blank indorsement. 
 
 The plaintiff, by his attorney, whose authority to appear it was 
 then too late to contest, produced the note at the trial ; the |)lain- 
 titf's possession must be presumed to be lawful, and to have 
 existed from the time of the indorsement, until the contrary ap- 
 peared ; and no evidence to the contrary was offered. It was not 
 competent for the defendant to deny that the plaintiff was the 
 owner and holder of the note, without traversing the signature, or 
 the indorsement, or the delivery of the note, which he did not 
 offer to do. 
 
 The plaintiff was not bound to prove that he gave value for 
 it ; the first indorsee might have given it to him, or authorized 
 him to sue on it as his trustee. If the plaintiff's possession of 
 the note was lawful, it nuist have been delivered to him by the 
 holder. 
 
 Had the defendant even proved what in his answer he pro- 
 posed to prove, — that the note was indorsed to the plaintiff after 
 it was due, — this would not have been of itself a defence. A note 
 does not cease to be ncgolial)le and transferaljle by indorsement 
 or delivery, when it becomes due. Such proof wouUl merely have 
 let in the defendant to j)roof that it had been paid to some ante- 
 cedent holder, or that he had a good defence against the plaintiff's 
 indorser. But no offer was made of any such proof. 
 
 The cases cited by the defendant afford no authority to sustain 
 a contrary view. In Richardson v. Lincoln, 5 ^let. 201, there 
 was a constructive delivery of the note to the plaintiff's attorney, 
 simultaneous with the indorsement. In Emmett v. Tottenham, 8 
 Exch. 88-4, the decision was placed distinctly on the ground that
 
 222 HOLDER FOR VALUE. 
 
 the action was brought upon a copy of the note, and that there 
 was no delivery of the note to the plaintiff, or to any one as his 
 agent, until some time after the commencement of the action. 
 
 Exceptions overruled. 
 
 See ante, note to Swift r. Tyson, p. 213, also the preceding case and citations. 
 
 Davis et al. v. M'Cready et al. 
 
 (17 N. Y. [3 Smith], 230. Court of Appeals of New York, March, 1858.) 
 
 Defence of breach of executory agreement. — It is no ground of defence to an action 
 against the acceptor of a bill that the holder was informed that it was accepted in 
 consideration of an executory contract, if he had no notice of its breach. 
 
 Action by indorsees against acceptors of a bill of exchange ac- 
 cepted in part-payment for the price of a brig. It was agreed that 
 the vessel should be put in good repair, and made tight, staunch, 
 and strong. Defence that this agreement had not been performed. 
 Plaintiffs paid full value for the bill, and took it with a knowledge 
 of the said agreement ; but without knowledge of the breach. 
 
 Denio, J. The sale of the brig and the executory agreement 
 of the vendors to make the necessary repairs to render her sea- 
 worthy, formed a good legal consideration for the acceptance of the 
 bill. When, therefore, the plaintiffs at the time of receiving it 
 were informed that it was accepted on that consideration, they 
 were not notified of any fact which impeached its validity or ren- 
 dered it in any respect suspicious. If they had known nothing of 
 the consideration upon which it was given, they would nevertheless 
 have been bona fide holders, and they are not in a worse condition 
 because they had been informed that it was accepted on account 
 of a transaction legal in itself, and which formed an adequate 
 consideration for the undertaking of the acceptance. Considera- 
 tions founded upon reciprocal promises of the parties are of com- 
 mon occurrence in business, and bills and notes supported by such 
 considerations have always been held valid. It is upon this prin- 
 ciple that cross notes or acceptances for mutual accommodation 
 have been upheld whenever they have come before the courts.
 
 DAVIS V. m'creadt. 223 
 
 Cameron v. Chappcll, 24 Wend. 94, and cases cited by Nelson, J. ; 
 Dowc V. Schutt, 2 Dcnio, 021. In the first of these cases the 
 acceptance sued on was given in consideration of a promise by 
 the drawer to send the acceptor six Imndred busliels of wheat at 
 the opening of navigation the ensuing year. The bill became 
 payal)le the twelfth of May, after the time when the wheat should 
 have been delivered, and it was shown it never had been deliv- 
 ered. The Court held that the acceptance was not for accommo- 
 dation, but was business paper, and was valid in the hands of the 
 drawer, so that usury could not be set up against the plaintiffs, 
 who had discounted it for a premium beyond the legal rate of in- 
 terest. If one will issue his negotiable paper and send it into the 
 world, in consideration of an engagement of the party with whom 
 he deals to do some act for his benefit in future, he declares in 
 effect that he will pay the note or bill according to its terms to 
 any one who shall become the holder for value in the course of 
 business, and rely for his own indemnity upon the promise he has 
 received as the consideration for issuing it. 
 
 The plaintiffs were not bound to inquire whether the vendors of 
 the vessel had performed their agreement. A party receiving a 
 bill is not put ui)on inquiry unless circumstances of suspicion 
 have come to his knowledge ; ^ and I have already said that there 
 was nothing suspicious or out of the common course of business, 
 in the circumstances out of which this bill arose. The agent of 
 the acceptors chose to rely upon the personal responsibility of the 
 vendors of tlic vessel so far as the repairs were concerned. As 
 they gave their acceptance upon time, which they knew might be 
 transferred to a bona fid r holder the next day, so it is presumed 
 they would have parted with their money upon the personal en- 
 gagement of the vendors if a delay in payment had not been ma- 
 terial to them. It would not, in my opinion, alter the case if it 
 could be shown that the vendors, the payees of the bill, had 
 broken their contract respecting the repairs before they negotiated 
 tiie paper to the plaintiffs, it being found that the latter had no 
 notice of the breacii. The plaintiffs were not bound to follow up 
 the transactions between the original parties to the bill. To hold 
 otherwise would attach an inconvenient and repugnant condition 
 to such an acceptance. By accepting simply and unconditionally 
 a negotiable bill, the defendants are to be held as intending to give 
 
 ^ Nothing short of proof of bad faith will repel the prima facie title of the holder. 
 See Goodman v. Simonds, post, 239.
 
 224- HOLDER FOR VALUE. 
 
 it all the qualities of commercial paper, one of which is that it 
 shaU circulate freely for the purposes of business, and be available 
 in the hands of any holder for value. To decide that one who 
 proposed to purchase it, and who had a Icnowledge of the nature 
 of the transaction upon which it was given, must await the con- 
 summation of that transaction, would essentially impair its char- 
 acter and legal effect. But in this case it was not known to any 
 one tlfkt the payees had broken their agreement when the plain- 
 tiffs took the bill. The payees insisted that they had sufficiently re- 
 paired the vessel before she was sent to sea, and the plaintiffs' agent, 
 though he distrusted her condition as to seaworthiness, concluded 
 to receive and despatch her on her voyage to New York. Before 
 she arrived at her destination the plaintiffs purchased the bill. 
 After that it was demonstrated by the event that* the repairs were 
 insufficient ; for she leaked to such an extent as to damage the 
 cargo, and required extensive repairs upon her arrival. If, there- 
 fore, the plaintiffs had made inquiries when the bill was offered to 
 them they would have learned that the plaintiffs' agent had ac- 
 cepted the brig as a seaworthy vessel, and had sent her to sea. So 
 far from casting suspicion upon the bill this intelligence would have 
 confirmed them in the belief that it ought to be paid according to 
 its tenor. I conclude, therefore, that there were no merits in the 
 defence. 
 
 All the rulings of the referee to which exceptions were taken, 
 but one, related to testimony concerning breach of the agreement 
 of repairs, and the damages consequent thereon. The questions 
 overruled were wholly immaterial, because the plaintiffs could not 
 be affected by the breach and were not responsible for the dam- 
 ages. There is an exception of a different character. Before the 
 brig sailed, the defendants' agent made complaints to the vendors 
 of the insufficiency of the repairs ; the latter declared them suffi- 
 cient. The agent was sworn on behalf of the defendants, and 
 testified that upon an occasion when he made such complaint, Mr. 
 Davis, one of the plaintiffs, was present. This testimony was given 
 without objection. Subsequently, the defendants offered to prove 
 by the same witness that Davis was present when he made such a 
 complaint, and it is stated that the referee overruled the offer. 
 The desire seems to have been to repeat the evidence already given. 
 The fact that one of the plaintiffs was present when the complaint 
 was made had some tendency to show that he had knowledge of 
 the breach of the condition ; and the ruling cannot be defended
 
 BREWSTER V. M'CARDEL. 225 
 
 except on the supnosition that the offtir was rejected because the 
 fact was ahcady suniciently proved. It does not appear what4J,lie 
 objection was which tiie plaintiffs' counsel made, or indeed that he 
 did object. A party seeking a new trial on account of an erro- 
 neous exclusion of evidence, must show that he may have been in- 
 jured by the ruling. As the precise fact sought to be proved was 
 already in evidence, no prejudice could result from the referee's 
 refusing to have it repeated. These views lead to the affirinance 
 of the judgment of the Court of Common Pleas. 
 All the judges concurring, 
 
 Judgment affirmed. 
 
 In Craig v. Sibbctt, 15 Penn. State (3 Harris), 288, it is held that tlie mere 
 knowledge of the holder of the terms of the arrangement between the drawer 
 and acceptor is not material. In this case the holders were told that the bill 
 was drawn against Hour shipped by the drawer to the acceptor, and the bill of 
 lading was indorsed to them as security in case of non-acceptance. But the fact 
 was that the signature of the bill of lading was fraudulently procured. Per 
 Gibson, C. J. : *' The only additional matter is that the bill of lading was in- 
 dorsed to the plaintiffs as a security in case of non-acceptance ; and that it was 
 presented to the defendants with the bill of exchange ; whence an argument that, 
 as the plaintiffs were apprised of the course of dealing, they must have known 
 the acceptance was on a tacit condition that the flour should be forwarded. Has 
 it ever been supposed that the purchaser of a bill drawn against cotton to be 
 shipped to Liverpool is bound to guaranty the delivery of it? . . . The cases 
 show that the payee looks only to the terms of the acceptance ; and that when 
 he has acted in good faith, he is not to be prejudiced by the acts of the drawer." 
 
 Brewster v. McC.\rdel. 
 
 (b Wendell, 478. Supreme Court of New York, January, 1832.) 
 
 Postdated jmper. — An indorsee for value of a postdated note may recover tliereon, 
 though lie took it before tlie date at wliich it purported to be executed. 
 
 The case is sufficiently stated in the opinion of the Court. 
 
 SuTHEHLAND, J. The judgc erred in charging the jury that the 
 circumstance of the note having been negotiated to the plaintiff" 
 before the day when it bore date was a strong circumstance of 
 suspicion sufficient to put him upon inquiry, and that he therefore 
 
 15
 
 226 HOLDER FOR VALUE. 
 
 took it subject to any defence which might be made as against the 
 original payee. 
 
 The nolo was actually made and delivered to the payee in Oc- 
 tober, 1828, although it bore date in May, 1829, and was payable 
 ninety days after date. It was transferred to the plaintiff for a valu- 
 able consideration in February, 1829, six months before it became 
 due. The date of the notes is in no respect material, except for 
 the purpose of determining when it is payable. There is no legal 
 objection either to antedating or postdating a note, and I am not 
 prepared to say that either is, in itself, and disconnected from 
 other circumstances, a legal ground of suspicion, so as to put the 
 indorsee upon inquiry and subject him to all the equities existing 
 between the original parties ; 7 Cowen, 337 ; Chitty, Bills, 77. The 
 Court of King's Bench in Pasmore v. North, 13 East, 616, held 
 that a note which was postdated^ and which was transferred to the 
 plaintiff before the day when it bore date, could not be questioned 
 or impeached by the maker. That case is not distinguishable from 
 this, and I think was rightly decided upon the well-established 
 principles applicable to negotiable paper. 
 
 A new trial must therefore be granted, the costs to abide the 
 event. 
 
 See Chitty, Bills, 149 ; Story, Promissory Notes, § 48. 
 
 Thomas Bayley et al. v. John Taber et al, 
 
 (5 Massachusetts, 286. Supreme Court, May, 1809.) 
 
 Note void hij statute. — Commercial paper declared void by statute is void even in the 
 hands of a honajide holder for value ; and, therefore, where promissory notes were 
 antedated to avoid a statutory proliibition ; held, that in an action against the 
 maker he could prove the actual date at which they were made and issued, even 
 against an innocent indorsee. 
 
 The declaration in this action contained thirty-seven counts upon 
 as many promissory notes, alleged to have been made by the 
 defendants, each under five dollars, payable to bearer on demand, 
 for value received, and bearing date between the third day of Octo- 
 ber and the thirtieth day of December, 1804.
 
 BAYLEY V. TABKR, 227 
 
 The action was tried upon the general issue, before Parker, J., 
 at the sittings after the present term. ^ 
 
 At the trial, notes comporting with the several counts were pro- 
 duced in evidence, all bearing the impression of plates, types, or 
 printing. The signature of the defendants to all of them was 
 admitted. 
 
 The defendants offered to prove that some of the notes declared 
 on were in fact made and issued by them after the first day of 
 April, 1805, though bearing date before that day ; and that tiie 
 notes which had been so made were antedated by tliem, to avoid 
 the operation of the Statute of480-4, c. 58, which declares notes of 
 the like description, made or issued after that day, to be utterly 
 void. 
 
 Parker, J. This cause was tried before me at the sittings after 
 the last law term in Cumberland, in May last ; and I then inclined 
 to the opinion, that the defendants should not be permitted to allege 
 a falsity in an instrument made and signed by themselves, and 
 which had by them been put into general circulation as money. 
 Notes of this description, under the denomination of Taber's notes, 
 to a large amount, having become a common currency in the dis- 
 trict of Maine, it suddenly struck me as inconsistent with the com- 
 mon principles of justice, and the policy of the law, that the 
 promisors in those notes should be allowed to avoid payment of 
 them to an innocent holder, by alleging that they bore false dates, 
 and by showing that in uttering them they had contravened the 
 laws of the Commonwealth. 
 
 I therefore rejected the evidence offered ; but very soon after the 
 trial, having revolved the question in my mind at more leisure, I 
 came to doubt of the correctness of my opinion, and intimated my 
 desire to the counsel, that the question should be reserved for the 
 consideration of the wiiole Court. Thi§ was done in such manner 
 as to cause very little delay, and no inconvenience to the parties or 
 their counsel ; it having been agreed that the question should be 
 taken up by the Court at tiiis adjourned session, and that the argu- 
 ments of the counsel should be reduced to writing, and transmitted 
 to the Court. 
 
 Upon an attentive consideration of the question, and of the argu- 
 ments sent to us, which on both sides are concise and perspicuous, 
 we are unanimously and clearly of opinion, that the facts proposed
 
 228 HOLDER FOR VALUE. 
 
 by the defendants to be proved to the jury at the trial, constitute a 
 good defence against the counts, to wliich those facts are applicable, 
 and that it is competent to the defendants in this action to set up 
 and maintain such defence. 
 
 The Statute of 1804, c. 58, § 1, enacts that all bills, notes, checks, 
 drafts, or obligations whatsoever, under the amount of five dol- 
 lars, payable to bearer or to order, shall be wholly in writing ; and 
 that all notes, &c., under the aforesaid amount, and payable as 
 aforesaid, which should be made or issued after the first day of 
 April then next, and which should bear the impression of types, 
 plates, or printing, should be utterly void, and that no action should 
 be thereon sustained in any court of law. 
 
 The second section of the same statute imposes a penalty upon 
 any person who should issue or pass any of the securities described 
 in the first section, after the said first day of April, which was 
 April, 1805. 
 
 The same statute, c. 134, imposed an increased penalty upon any 
 person who should, after the tenth day of the same April, issue or 
 pass like notes, other tlian those of incorporated banks, for a less 
 sum than five dollars, or whereon less than five dollars should be 
 due, with intent that the same should be circulated as currency. 
 
 The statute first cited is peremptory and unequivocal, in enact- 
 ing that all notes like those declared on in this action, made or 
 issued after the first day of April, 1805, shall be utterly void ; and 
 it prohibits the sustaining of any suit upon them in any court of 
 law. The defendants say, and they offered to prove, that some of 
 the notes sued in this action were made and issued after that day. 
 To reject the proofs of these facts, because the defendants are the 
 original promisors, and because the plaintiffs may be supposed to 
 be innocent holders of the notes for valuable considerations, would 
 be, to all intents and purposes, to defeat the operation of the statute, 
 and would amount to a judicial repeal of an act of tlie legislature. 
 
 The maker of a note payable to bearer is generally the only per- 
 son to be called upon for payment, it passing from liand to hand, 
 on the credit of the promisor's name, like bank-bills, the receiver 
 seldom requiring any guaranty from him who passes it. Now the 
 declared object of the legislature was entirely to prevent the circu- 
 lation of such paper. But if by giving a fictitious date to them, the 
 maker is prevented from showing that they were made or issued 
 after the time when they were declared by the statute to be void,
 
 BAYLEY V. TABER. 229 
 
 they would continue to circulate, as lon^; as there should be confi- 
 dence in tiie ability of the makers to pay them. 
 
 However hard the operation of the statute may appear to be 
 against persons, into whose possession such notes, may liave come 
 bona fide, and for a valuable con'sideration, it is an hardship created 
 by law for the public good, and the courts of law are prohibited 
 from granting any relief against it. 
 
 Nor is it altogether certain that the receivers of such notes are 
 free from blame, although not privy to the actual making or ante- 
 dating of them. The laws of the government are presumed to be 
 known l)y all the citizens. If the notes were in fact made or issued 
 after they were declared void by statute, and after a penalty was 
 attached to the passing of them, although no penalty is expressly 
 enacted against the receiver ; yet the act of receiving was necessary 
 to enable the ofTender to pass them, and in this view the receiver 
 may be considered as having aided in the offence of passing. Nor 
 is it improbable that the legislature contemplated the punishment 
 of the receiver, when they took from him all power of coercing pay- 
 ment of such notes in the courts of law. But be this as it may, 
 whether the plaintiffs in this action are innocent or not, to author- 
 ize them to maintain a suit, and recover judgment on notes of this 
 description so situated, when the legislature has declared them to 
 be utterly void, would be effectually to annul an act, the wisdom 
 and policy of which the legislature alone had the right to deter- 
 mine. 
 
 Nor is it a novel doctrine, that a person shall be permitted to 
 avoid his contract by alleging his own criminality, provided it con- 
 sists in the violation of some positive statute of the government. 
 Contracts, the consideration of which is money won at play, or 
 loaned at unlawful interest, have always been subject to the same 
 rule, not only against those who participated in the offence, but 
 even against innocent indorsees, when* they have claimed the per- 
 formance of such contracts. 
 
 The case of Lowe v. Waller' shows this long to have been the 
 law in England ; and it is understood that the like principle has 
 been uniformly adopted and practised upon by the courts in this 
 country. 
 
 It has been suggested by the counsel for the plaintiffs in the close 
 of their argument, that to make this a good defence, it should have 
 
 1 Doug. 736.
 
 230 HOLDER FOR VALUE. 
 
 been specially pleaded. But it is not necessary ; for in assumpsit, 
 every thing which destroys the right of action may be given in 
 evidence under the general issue. 
 
 Indeed, there seems to be no room to doubt upon this question ; 
 and nothing but a reluctance to permit a man to avail himself of a 
 falsity in circulating these notes, and afterwards to avoid payment 
 by showing the truth, could have caused a hesitation at the trial. 
 
 The verdict must be set aside, and a new trial granted. 
 
 See following case and note. 
 
 Alexander Paton v. Augustus B. Coit et al. 3, 
 
 (5 Michigan [1 Cooley], 505. Supreme Court, October, 1858.) 
 
 Illegal consideration. Burden of proof. — Whenever the consideration of negotiable paper 
 between the original parties has been illegal, especially if it is as to them in viola- 
 tion of a positive prohibition of statute, proof of such illegality throws upon the 
 indorsee the burden of proving that he took it bona fide, and gave value for it. 
 
 Assumpsit against the acceptors of a bill of exchange given for 
 intoxicating liquors sold in violation of the Prohibitory Liquor 
 Law, which makes such paper " utterly null and void against all 
 persons, and in all cases, excepting only as against the holders," 
 " who may have paid therefor a fair price, and received the same ^^^ 
 upon a valuable and fair consideration, without notice or knowl- 
 edge of such illegal consideration." 
 
 The plaintiffs were indorsees of the payees. 
 
 IB '^N^ 
 
 On the trial, the acceptance having been given in evidence, the 
 plaintiff rested. 
 
 The defendant then introduced a witness, and being required to 
 state what he expected to prove by such witness, stated that he 
 expected to prove that such acceptance was given in payment and 
 as security for ten barrels of intoxicating liquor, called whiskey, 
 purchased by defendant, of the drawers of said draft, on the thir- 
 tieth day of March, 1857, in Detroit. 
 
 The plaintiffs objected to such evidence, upon the ground that 
 under the exception in section two of the Prohibitory Liquor Law 
 of 1855, the presumption was that said draft was in the hands of
 
 PATON V. COIT. 231 
 
 bona fide holders, to wit, the })laintilTs ; and tliat the onus was on 
 the defendant to show, or propose to show, notice before said testi- 
 mony could be received. The Court sustained the objection, and 
 refused to allow the testimony to be given ; and defendant ex- 
 cepted. 
 
 Judgment having been rendered for plaintiffs below, for the 
 amount of the acceptance, the defendant brought the case to this 
 Court by writ of error. 
 
 Christiancy, J. Whether the evidence in this case was properly 
 rejected, does not depend upon the question. Whether, standing 
 alone, it would have constituted a complete defence against 
 the draft in the hands of a bona fide holder for value ; but. 
 Whether it would have been sufficient to throw upon the plaintiff 
 the burden of proving himself to be such bona fide holder; or. 
 Whether, in fact, the evidence tended, prima facie , to establish a 
 defence. 
 
 It is assumed by the counsel for the defendants in error (plain- 
 tiffs below), that the only effect of the statute in reference to 
 negotiable paper given for liquors sold, " is to render such paper 
 without consideration as between the immediate parties," and that 
 " the effect of the exception in section two is simply to put this 
 statute equity on a footing with all other equities " between the 
 original parties to negotiable paper. 
 
 If this be the only effect of the statute, then, according to the 
 prevailing current of recent decisions, the evidence was properly 
 rejected, though the cases upon this point are by no means uni- 
 form ; and we do not wish to be understood as giving any opinion 
 upon the question presented by this hypothesis, as we do not 
 think it involved in the present case. 
 
 The defence here proposed was not merely the ivanl, but the 
 illegality of consideration ; and this, being allowed as a defence 
 between the original parties, irrespective of and even contrary to 
 the equities of the parties, cannot, without perversion of laniruage, 
 be called an equity. It is not on the defendants' account that sucli 
 a defence is allowed, as will more fully appear in the sequel. 
 
 The effect of the statute in question is not merely to render 
 such paper without consideration, but absolutely void and illegal, 
 between the immediate parties, and all others who have not ob- 
 tained it for value, and without notice, — not only void in the
 
 232 HOLDER FOR VALUE. 
 
 negative sense of having no legal basis, but aflEirmatively illegal as 
 violating the positive provisions of the statute. It was not even 
 contended that the facts offered to be shown by the defendant 
 would not have made 2i prima facie case of an illegal sale, without 
 showing that the sale did not come within any of the exceptions 
 of the statute ; and if the plaintiffs claimed to maintain the valid- 
 ity of the sale under any such exception, the burden of proof 
 (this being a civil case) rested upon them to bring it within the 
 exception. 
 
 Now, upon principle, as a question of statute construction, and 
 without reference to any authority, when the statute expressly 
 declares all such paper void and illegal, and forbids any action to 
 be brought or maintained upon it, " except when brought by a 
 bona fide holder who has received the same upon a valuable and 
 fair consideration without notice or knowledge," &c., it would 
 seem to follow as a logical necessity, that when the paper is shown 
 to have been given for such illegal consideration, the plaintiff's 
 right of recovery is cut off by the general prohibition of the stat- 
 ute, unless, in avoidance of this, he gives evidence of those facts 
 which alone can bring him within the exception. 
 
 We do not propose to give a definite opinion upon the point, 
 whether, the illegality being first shown, the burden of proof in 
 this case would have rested upon the plaintiffs to show actual 
 want of notice ; this might be requiring actual proof of a nega- 
 tive. But we are inclined to the opinion that they should have 
 shown the nature of the transaction accompanying the transfer ; 
 and if that disclosed no suspicion of such notice, it might make 
 a prima facie case of want of notice, and throw upon the defend- 
 ant the burden of proving notice. But the amount of the consid- 
 eration given by the plaintiff is distinct from the question of 
 notice, and the absence of such consideration, in such a case, 
 would be a defence, though the paper had been taken by the plain- 
 tiff without notice. The amount of consideration given by the 
 plaintiff is an affirmative fact peculiarly within his own knowl- 
 edge, and not generally in that of the defendant, and being neces- 
 sary to bring the plaintiff's case within the exception of the 
 statute, should be proved by him. To allow him to recover with- 
 out such proof, would be an evasion of the statute. Such proof 
 (the illegality being first shown) is a necessary part of the plain- 
 tiff's case, without which he shows no prima facie right to recover ;
 
 PATON V. COIT. 233 
 
 and tliough, in ordinary cases, this fact would be presumed in 
 favor of the holder, this presumption can never be allowed with- 
 out proof, when tiie paper was absolutely void between the original 
 parties, on the ground of fraud, illegality, or duress. 
 
 This construction of tlie statute is sustained by authority. In 
 England, by tiie statute of Anne, a note or bill given or indorsed 
 upon a usurious consideration, was void, even in the hands of a 
 bona fide holder for value, Chitty, Bills, 9 Am. ed. 110 ; but 
 the statute, 58 Geo. 111. c. 08, made such note valid in the hands 
 of a bona fide holder for value without notice. In the case of 
 Wyat V. Campbell, 1 Mood. & M. 80, where the note had been in- 
 dorsed by a previous indorser upon a usurious consideration, and 
 no notice given to plaintiff to prove consideration, it was con- 
 tended that the plaintiff was not bound to prove it. But, by 
 Lord Tenterden C. J. : " The statute, 58 Geo. III. c. 93, 
 makes a note tainted with usury valid in the hands of a bona fide 
 holder ; the onus is therefore upon the holder to prove he is such ; 
 otherwise the statute does not apply, and the note is void under 
 the statute of Anne." 
 
 In that case, it is true, the exception was in a subsequent stat- 
 ute ; here it is in the same statute ; but we are unable to perceive 
 how this can make any difference as to the burden of proof. If 
 the fact was not to be presumed in that case, it cannot be in this. 
 
 But whether this conclusion be right or wrong, as depending 
 purely upon a question of statute construction, can make little 
 difference in this case. The rule as to the burden of proof is the 
 same upon principle and authority at common law. "Whenever 
 the consideration of the paper between the original parties has 
 been illegal, especially if in violation of a positive prohibition of 
 statute, proof of such illegality throws upon the holder the bur- 
 den of proving that he got it bona fide^ and gave value for it. 
 Northam v. Latouche, 4 Car. <fe P. 140 ; Bailey v. Bidwell, 13 Mees. 
 & W. 73 ; Harvey v. Towers, 6 Exch. 656 ; Smith v. Braine, 16 Q. B. 
 201 ; Fitch v. Jones, 32 Vax^. L. & Eq. 134 ; Yallett v. Parker, 6 
 Wend. 615 ; Edwards, Bills, 686, 687 ; Chitty, Bills, 11th Am. ed. 
 661, 662 ; Story, Bills, § 193. 
 
 The case of Bailey v. Bidwell is directly in point ; and Parke, 
 B., gives a very satisfactory reason why the fact in question is not 
 to be presumed for the plaintiff. " If," he says, " the note were 
 proved to have been obtained by fraud, or affected by illegality,
 
 234 HOLDER FOR VALUE. 
 
 that afforded a presumption that the person who had been guilty 
 of the illegality would dispose of it, and would place it in the 
 hands of another person to sue upon it." The subsequent case 
 of Fitch V. Jones, above cited, shows that in such case the original 
 payee is still presumed to be the owner, and that the plaintiff sues 
 for his benefit ; and it is to overcome this presumption that the 
 plaintiff is required to prove himself a bona fide holder for value. 
 
 The rule is the same as to the burden of proof, where it is shown 
 that the paper was obtained by fraud or duress, and when stolen, 
 or put in circulation by fraud. See authorities above cited, and 
 Mills V. Barber, 1 Mees. & W. 425 ; Holme v. Karsper, 5 Binn. 
 469 ; Aldrich v. Warren, 16 Me. 465 ; N. Y. & Va. State Stock Bank 
 V. Gibson, 5 Duer, 574. In fact, many of the cases, and most of 
 the elementary works, place illegality in the same category with 
 fraud or duress, as casting the burden of proof upon the holder. 
 
 But while the result is the same, it is manifest that the basis of 
 the rule in the case of illegality, though equally solid, is quite 
 different. In the case of duress and fraud, as well as where the 
 paper has been stolen, the equities of tlie defendant constitute the 
 basis of the rule. But in the case of illegality of consideration, 
 both parties are generally equally in fault ; and it is not to protect 
 the equities of the defendant, but on broad grounds of public 
 policy, — to uphold the law, and to discourage its violation or 
 evasion, — that the burden of proof is cast upon the plaintiff. It 
 is as much the duty of courts to discourage the violation or eva- 
 sion of law as to protect the equities of parties. And it is upon this 
 principle only that the naked defence of illegality is allowed. See 
 opinion of Lord Mansfield in Holman v. Johnson, 1 Cowp. 341. 
 And upon this principle, courts should be careful to avoid doing 
 any thing to facilitate the enforcement of such contracts, unless it 
 appear affirmatively that the plaintiff is not in fault, and that he 
 has real equities to be protected. 
 
 The evidence offered was improperly rejected. The judgment 
 must be reversed, and a new trial granted. 
 All the justices concurred. 
 
 There is no controversy in regard to the law upon the subject discussed in the 
 two preceding cases. Where negotiable paper is by statute declared void ab initio, 
 it will be so held in the hands of a honajide holder. Aurora v. AVcst, 22 Ind. 88. 
 But it was held in Marine Bank v. Clements, 31 N. Y. 33, that in order to render 
 a note, transferred by an insolvent corporation void in the hands of a bona fide
 
 FOWLER V. BRANTLY. 236 
 
 holder, it must appear that the corporation was either insolvent at the time or then 
 contemplating insolvency, and that the transfer was made to give a preference 
 to particular creditors. But in the absence of statutory provisions declaring the 
 securities void, the bona fide holder will not be affected by any ille<;ality in the 
 consideration of negotiable securities. Story, Promissory Notes, § l'J2; Wil- 
 liams V. Cheney, 3 Gray, 210: opinion by Bigelow, J., and cases cited; Hub- 
 bard V. Chapin, 2 Allen, 328. Savage, C. J., in Vallett v. Parker,G Wend. 615, 
 622, lays down the distinction between paper declared ^'Did by the legislature and 
 by the courts. He says : " Wherever the statutes declare notes void, they are 
 and must be so in the hands of every holder; but where they are adjudged by 
 the Court to be so, for failure or the illegality of the consideration, they are 
 void only in the hands of the original parties, or those who are chargeable with 
 or have had notice of the consideration." 
 
 See Goodman v. Simonds, post, 239, and note ; ante, note to Swift v. Tyson, 
 186 ; also Bayley v. Taber, ante, 229 ; Fowler v. Brantly, infra. 
 
 Samuel L. Fowler, Plaintiff in Error, v. Harris Brantly 
 et al., Defendants in Error. 
 
 (14 Peters, 318. Supreme Court of the United States, January, 1840.) 
 
 What sufficient to put the holder upon inqinry. — A note made payable to the cashier of a 
 bank, and drawn within a peculiar form to be within tlie usages of tlie bank, was 
 sent to an agent to procure a discount at the bank. The note was rejected, and 
 marked in pencil, with a mark employed by the bank to indicate that it liad been 
 offered and refused. The agent then sold the note and applied the proceeds to his 
 own use. Held, tliat the note on its face was sufficient to put the liolder upon 
 inquiry, and that he could not recover thougli he had no knowledge of the 
 fraud. 
 
 The case is stated in the opinion of the Court. 
 
 Catron, J. This is an action of assumpsit by the assignee of a 
 note against the makers. The questions of law arising in this 
 cause depend on the construction of a note of hand, in the following 
 words : — 
 
 " Selma, Dallas County, Alabama, March 1, 1836. 
 
 " Eleven months after date, we, Harris Brantly, Peyton S. Graves, 
 and Hugh Ferguson, jointly and severally promise to pay Andrew 
 Armstrong, cashier, or bearer, $2000, value received, negotiable
 
 236 HOLDER FOR VALUE. 
 
 and payable at the Branch Bank of the State of Alabama, at 
 Mobile. 
 
 (Signed) Harris Brantly, 
 
 Peyton S. Graves, 
 Hugh Ferguson. 
 "Credit: Diego M'Voy. 
 
 Harris Brantly, 
 Peyton S. Graves, 
 Hugh Ferguson." 
 
 The note had on it the two indorsements of Diego M'Voy and 
 William D. Primrose ; and that of Taulmin, Hazard, and Company 
 was stricken out. On the face of the note there was, in pencil, the 
 figures " 169." 
 
 The defendants, the three makers, introduced evidence to prove 
 that the note, in its present form (except the indorsements), was 
 sent by one of the makers to M'Voy, who was his factor in Mobile, 
 to be offered for discount in the Branch Bank of the State, in that 
 city, as an accommodation note ; the proceeds of which were to be 
 forwarded to said maker. That the note was ofifered for discount 
 and rejected. The factor then proposed to raise money on the note 
 for his own use, without the knowledge of the makers, and intended 
 to conceal the appropriation of the note from them. The first per- 
 son to whom he ofifered to sell the note deemed the attempt a 
 fraud, and refused to purchase. M'Voy then indorsed and trans- 
 ferred the note to Primrose for $1200, communicating to him it 
 had been offered for discount at the bank and rejected. 
 
 Taulmin, Hazard, and Company held a note for $3250, on Black, 
 indorsed by Vail and Dade, and by Primrose, and which was past 
 due ; to discharge which, in part. Primrose transferred the note in 
 controversy to Taulmin, Hazard, and Company ; and Taulmin, 
 Hazard, and Company indorsed the same before its maturity, to the 
 plaintiff. Fowler, and received credit on their account ; they being 
 largely indebted to him at the time. 
 
 The leading feature in the cause, involving the principle on which 
 it turns, is this : the note was in the form prescribed by the bank 
 to those who desired accommodations at it ; which form was not in 
 use before its adoption there. The memorandum on the left-hand 
 side of the note, and signed by the drawers, was designed to show 
 the officers of the bank to whose credit the money was to be placed,
 
 FOWLER V. BRANTLY. 237 
 
 should the note be discounted ; and by tlie usages of the bank, no 
 other person tlian the one thus named could receive the money. 
 
 Primrose testified he knew from the pencil-mark on the face of 
 the note, it had been offered for discount and refused, when he 
 purchased it. The cashier proved the pencil-mark was made 
 according to the usage of the bank on all notes offered for discount 
 and refused. 
 
 To a part of the first instruction, that held if the plaintiff took 
 the note in payment of a pre-existing debt, due to him from Taul- 
 min, Hazard, and Company, then the jury ought to find for the 
 defendants, excei)tion is taken ; and the Court refused to instruct 
 the jury, that, if tlie plaintiff took the note fairly in payment of a 
 debt due to him, before its maturity, without notice of the purpose 
 for which M'Voy had held it, then he was entitled to recover. 
 
 And also refused to instruct, if the jury believed plaintiff took 
 the note bona fide in payment of a previous debt, that he had no 
 notice of any fraud, and there were no circumstances to put him 
 upon an inquiry into any fraud committed on the part of M'Voy, 
 he was entitled to recover. 
 
 There were other instructions asked and refused ; but, as they 
 are in effect the same as those recited, an answer to which will 
 cover the whole case, they need not be further noticed. 
 
 The known customs of the bank, and its ordinary modes of trans- 
 acting business, including the prescribed forms of notes offered for 
 discount, were matters of proof, and entered into the contract ; and 
 the parties to it must be understood as having governed themselves 
 by such customs and modes of doing business ; and this whether 
 they had actual knowledge of them, or not ; and it was especially 
 the duty of all those dealing for the paper in question to ascertain 
 them if unknown. .Such is the established doctrine of this Court, 
 as laid down in Renner v. The Bank of Columbia, 9 Wheat. 581 ; 
 Mills V. The Bank of the United States, 11 Wheat. 431, and the 
 Bank of Washington v. Triplett and Neale, 1 Peters, 32, 33. 
 
 The note sued on is peculiar in its form ; it was made for the 
 purposes of discount, and only intended for negotiation at the 
 bank, and not for circulation out of it. The pencil-mark on its 
 face when sold, was common to all rejected paper, and was put 
 there by the othcers of tlie bank as evidence of the fact that it had 
 been offered and rejected ; and those dealing for it, with the mark 
 on its face, must be presumed to have had knowledge what it
 
 238 HOLDER FOR VALUE. 
 
 imported ; as the slightest inquiry would have ascertained its 
 meaning. These were tlie legal presumptions attached to the con- 
 tract, when the plaintiff purchased it ; and the explanatory evidence 
 to prove the customs of the bank, was introduced to enlighten the 
 Court and jury in regard to the rules governing the transaction, 
 and furnishing the law of the case ; and which the plaintiff, when 
 he purchased the paper, is presumed to have known and understood, 
 as the Court knew and understood it after it was proved on the 
 trial. 
 
 This was the case, made up of law and fact, on which the Court 
 was asked to charge the jury ; and not the abstract proposition 
 whether, on a proper construction of the statutes of Alabama, nego- 
 tiable paper, payable in bank, purchased bona fide, and without 
 notice of an existing infirmity, but taken in discharge of a pre- 
 existing debt, carried the infirmity with it into the hands of the 
 purchaser ; for the reason that the mode of payment was not in 
 the usual course of trade. 
 
 A note overdue, or bill dishonored, is a circumstance of suspicion, 
 to put those dealing for it afterwards on their guard ; and in whose 
 hands it is open to the same defences it was in the hands of the 
 holder when it fell due. 13 Peters, 79. After maturity, such paper 
 cannot be negotiable " in the due course of trade ;" although still 
 assignable. 
 
 So the paper before us carried on its face circumstances of sus- 
 |)icion, so palpable as to put those dealing for it, before maturity, 
 on their guard ; and as to require at their hands strict inquiry into 
 the title of those through whose hands it had passed. Failing to 
 be thus diligent, they must abide by the misfortune their negligence 
 imposed, and stand in the condition of M'Voy. 
 
 As between him and the defendants, there was no contract or 
 liability on their part ; nor as bearer of the note, could he lawfully 
 pass it off in the due course of trade, so as to communicate a better 
 title to another ; the face of the paper betraying its character and 
 purposes, and M'Voy's want of authority. 
 
 All the rulings of the Court below must be referred to this paper, 
 and to the special case made by the proofs. Any instruction asked, 
 which cannot be given to the whole extent asked, may be simply 
 refused ; or it may be modified at the discretion of the Court. No 
 instruction was asked that could have been lawfully given ; to 
 every one the Court could well say, and did in substance say, that
 
 GOODMAN V. SIMONDS. 239 
 
 under no circumstances could a purchase of this note he made by 
 the plaintifi", from Tauhnin, llazard, and Company, so as to exempt 
 it in the hands of the assignee, from the infirmity it was subject to 
 in the hands of M'Voy, 
 
 And in regard to the last part of the first instruction, where the 
 jury is in substa'hce told, that if they believed the note was taken 
 in payment of a pre-existing debt, due to plaintiff, from Taulmin, 
 Hazard, and Company, still, they should find for the defendants ; 
 the Court might have gone further, and instructed the jury, that 
 neither could the plaintiff recover had the note been purchased bona 
 fide, and without notice of the fraudulent conduct of M'Voy. 
 
 The judgment is, therefore, ordered to be affirmed. 
 
 The distinction between the class of cases to which the above decision belongs, 
 and that to which Goodman v. Simonds, infra, belongs, is this : In the latter case 
 the paper was valid, and in itself clear of all suspicion ; while in the preceding 
 case the paper bore upon its face the evidence of its defects. In Goodman r. 
 Simonds, the bill or note could only be impeached by extraneous circumstances ; 
 in Fowler v. Brantly the paper itself was its own impeachment. See Goodman 
 r. Simonds, infra. 
 
 Timothy S. Goodman, Plaintiff in Error, v. John Simonds. 
 
 (20 Howard, 343. Supreme Court of the United States, December, 1857.) 
 
 Bonajide holder's claim only to be rqyelled by had faith. — In an action by the holder of a 
 bill of exchange placed by tlie drawer in tiie hands of the holder as collateral 
 security for his debt, the following instruction was given to tlie jury : " That if such 
 facts and circumstances were known to the plaintiff as caused him to suspect, or 
 that would iiave caused one of ordinary prudence to suspect that the drawer had 
 no interest in tlie bill, and no autiiority to use the same for his own benefit, and 
 by ordinary diligence he could have ascertained these facts," the plaintifi' could 
 not recover. Held, that the instruction was erroneous, and that notliing short of 
 bad faith in the holder would overcome his title ; and the burden of proof is upon 
 him who assails the title to show such bad faith. 
 
 The case is stated in the opinion of the Court. 
 
 Clifford, J. This was a writ of error to the Circuit Court of 
 the United States for the district of Missouri. 
 
 Timothy S. Goodman, a citizen of the State of Ohio, complained
 
 240 HOLDER FOR VALUE. 
 
 in the Court below of John Simonds, a citizen of the State of 
 Missouri, in a plea of trespass on the case upon promises. The 
 declaration was filed on the first day of March, 1854. It con- 
 tained two counts ; one upon a bill of exchange, and the other 
 upon an account stated. At the April term following, the defend- 
 ant appeared and pleaded the general issue, which was joined, 
 and several special pleas in bar of the action. The special pleas 
 were held bad on demurrer, and at the October term, 1855, the 
 parties went to trial on the general issue. Robert M. Nesbit, a 
 witness called for the plaintiff, testified that he was a notary public 
 of the county of St. Louis ; and that as such, on the fifteenth day of 
 January, 1848, he presented the bill in suit for payment to John Si- 
 monds, the acceptor, who refused to pay it, and that he afterwards 
 gave due notice of the presentment and refusal to both indorsers. 
 And the witness further testified that he was well acquainted with 
 the signatures of all the parties to the bill, except that of the draw- 
 er, and that they were genuine. Whereupon the plaintiff read in 
 evidence the bill of exchange described in the first count of the 
 declaration, together with the indorsements thereon, as they appear 
 in the record. W. Nesbit & Co. were merely nominal holders of 
 the bill, never having had any interest in it, and only indorsed it 
 to the plaintiff for the greater convenience in bringing tlie suit. 
 Evidence was then introduced on the part of the defendant, exhib- 
 iting substantially the following state of facts : On the twenty- 
 "first day of June, 1847, the defendant addressed a letter to Wallace 
 Sigerson, who resided at Cincinnati, informing him that he wished 
 to avail himself of banking facilities in that place to carry on cer- 
 tain business in which he and John Sigerson had determined to 
 engage, and asking his assistance as a correspondent, to negotiate 
 discounts, inclosing at the same time his letter of credit for ten 
 thousand dollars, and two bills of exchange, each for the sum of 
 five thousand dollars, and suggesting in tlie same letter that they 
 should require some twenty to twenty-five thousand dollars during 
 the next four or five months, in sums of about five thousand dol- 
 lars, as the same could be used from time to time. In the same 
 letter also he instructed his correspondent to negotiate five thou- 
 sand dollars immediately, authorizing him to use for that purpose 
 either the letter of credit or the bills of exchange. When those 
 bills were transmitted to Cincinnati they were in all respects per- 
 fect bills of exchange, except that the name of the drawer was
 
 GOODMAN V. SIMONDS. 241 
 
 wanting, and tliey wore witliont date. They were l)otli made pay- 
 able to the order of John Sigerson, and hy him indorsed in blank, 
 and were accepted by the defendant. Soon after their receipt, 
 Wallace Sigerson, as drawer, procured one of the bills to be dis- 
 counted according to his instructions, and remitted the proceeds, 
 or a part thereof, to the defendant ; and it also appeared that, dur- 
 ing that season, he procured other lulls of the same kind to be 
 discounted for the same jjarties, to the amount of twenty-five 
 thousand dollars. The other bill forwarded at that time is the one 
 now in suit. Wallace Sigerson had also large transactions of his 
 own the same season, amounting to four hundred thousand dollars. 
 Many of his own transactions were with his bnjther, John Siger- 
 son, who was the payee and indorser of this bill, and was jointly 
 engaged in the same business with the defendant. He and his 
 brother interchanged accommodation paper, and some of their 
 acceptances were regularly discounted in blank, and it did not 
 appear that any complaint was made, either by the acceptor or 
 indorser, that this bill had not been accounted for or returned. 
 There were dealings, also, the same season, between T. S. Good- 
 man & Co. and Wallace Sigerson. They made a settlement on the 
 twelfth day of October, 1847, when it was ascertained that the 
 amount due to T. S. Goodman & Co, was about five thousand six 
 hundred dollars, arising principally from notes discounted, secured 
 by bills of exchange as collaterals, on which nothing had been 
 realized. At the settlement the debt was divided into two notesf 
 one having sixty and the other seventy-five days to run ; and Wal- 
 lace Sigerson testified that he gave his two notes in payment of 
 the debt, and left this bill as collateral security to the notes, fixing 
 the dates so that the notes would mature twelve or fifteen days be- 
 fore the bill. Two drafts on Ravisess, Bulock, & Co., previously 
 held as collaterals, were embraced in the settlement, and formed a 
 part of the indebtedness for which the notes were given ; and Afc- 
 Donald, who was the book-keeper of the plaintiff's firm, and a wit- 
 ness for the defendant, testified he knew of no other collateral 
 security than this bill, which the firm held for those noies. It 
 would seem, therefore, that all the prior collaterals were surren- 
 dered to the defendant at the settlement. There is some confu- 
 sion, and perhaps uncertainty, in the evidenre reported, respecting 
 the history of the bill from tlie time it went into the possession of 
 Wallace Sigerson till it was thus placed in the hands of T. S.
 
 242 HOLDER FOR VALUE. 
 
 Goodman &, Co., as collateral security to the above-mentioned 
 notes. It may, however, be gathered from the testimony of Wal- 
 lace Sigerson, that he first oriered it for discount to the Ohio Life 
 and Trust Company, and shortly afterward to the plaintiff, for the 
 same purpose, and that the plaintiff declined to discount it, but 
 soon after took it as collateral security for temporary loans. How 
 long the bill remained in the possession of the plaintiff as collat- 
 eral security for temporary loans does not appear, nor for whose 
 benefit the money was obtained. When the settlement took place, 
 Wallace Sigerson told the plaintiff that he had a right to use the 
 bill, and the plaintiff agreed that it should not be sent to St. Louis^ 
 for collection till after the maturity of the notes to which it was 
 collateral. Nothing of the kind was agreed when it was left as 
 collateral security for temporary loans. Wallace Sigerson became 
 the drawer of this bill, as he had previously done with respect to 
 the other, which was sent him at the same time, and filled up the 
 date, but whether at the time of the settlement or previously, was 
 liot entirely certain. He failed in business in November, 1847, 
 and on the twentieth day of the same month, T. S. Goodman & Co. 
 addressed a letter to C. W. Clark and Brothers, inclosing this bill, 
 and requesting them to pass it at the least rate, not exceeding 
 twelve per cent interest, saying : " We do not indorse it, as we are 
 selling it for another ; " and when L. C. Clark, one of that firm, 
 a few days afterward offered the bill for sale to the defendant, " he 
 said it was a forgery of his name ; that Wallace Sigerson had no 
 authority to use it." At the trial, the Court, on the prayer of the 
 plaintiff, instructed the jury to the effect that, if the plaintiff ac- 
 quired the bill of Wallace Sigerson as collateral security without 
 notice of his want of authority to transfer it, that the plaintiff was 
 unaffected by such abuse of trust, and that the defendant was pre- 
 cluded from setting it up as a defence in this suit, to which no ex- 
 ceptions were taken. We pass over the first instruction given to 
 the jury on the prayer of the defendant, for the same reason that 
 it was not excepted to, and proceed to examine the second, as 
 amended by the Court, which presents the principal subject of 
 controversy at the present time. It was to the effect that, " if such 
 facts and circumstances were known to the plaintiff as caused him 
 to suspect, or that would have caused one of ordinary prudence to 
 suspect, that Wallace Sigerson had no interest in the bill, and no 
 authority to use the same for his own benefit, and by ordinary dili-
 
 GOODMAN V. SIMONDS. 243 
 
 ^encG he could have ascertained these facts, then the jury will find 
 for tlie defendant." 
 
 I. The general question which the bill of exceptions presents, 
 arising upon that instruction, is certainly one of very considerable 
 importance, especially to the mercantile community, as it affects 
 the transfer and free circulation of bills of exchange and promis- 
 sory notes, which, by virtue of their negotiable quality, constitute 
 the principal medium fur the transaction of their business affairs. 
 There is, however, some reason to doubt whether the evidence at 
 the trial furnished any proper basis for the application of the in- 
 struction in this case, even supposing the principle announced to 
 be correct as an alistract proposition ; and tliis gives rise to a pre- 
 liminary question, which will be first considered, whether the in- 
 struction ought not to be regarded as objectionable on that account. 
 When a prayer for instruction is presented to the Court, and there 
 is no evidence in the case for the consideration of tiie jury, it ought 
 always to be withheld ; and, as a general rule, if it is given under 
 such circumstances, it will be error in the Court, for the reason 
 that its tendency may bo and often is to mislead the jury, by with- 
 drawing their attention from the legitimate points of inquiry in- 
 volved in the issue. All that was shown at the trial, in addition 
 to the description of the bill, was the refusal of the plaintiff to 
 discount it when it was offered for that purpose, his possession 
 and control of it shortly after as a pledge for temporary loans, and 
 the subsequent transfer of the bill to him as collateral security at 
 the settlement, together with the circumstances of that transaction 
 and what appeared in the letter of T. S. Goodman &, Co., trans- 
 mitting the bill to St. Louis for sale. Other circumstances are 
 adverted to in the printed argument for the defendant ; but as 
 they do not appear to be sustained by the evidence in the case, 
 they are omitted. Nothing transpired when the bill was offered 
 for discount more than what occurs on similar occasiojis in the 
 daily transactions among business men. It was offered and de- 
 clined, and that was the whole transaction so far as it was dis- 
 closed in the evidence. No reasons were assigned by the plaintiff 
 for declining, and none were asked for by the holder who offered 
 the bill. Mere speculative inferences are never allowable, and 
 cannot be regarded as evidence. The refusal to discount the bill 
 mi'uht have been for the reason supposed in the instruction ; and 
 so also it might have been for a very different reason, such as a
 
 244 HOLDER FOR VALUE. 
 
 prior obligation to other customers, want of available funds, or 
 from a desire for further information as to tlie pecuniary standing 
 of the parties to this bill ; and whether it was for any one of the 
 reasons suggested or some other, in the absence of any explana- 
 tion, was a mere naked conjecture. Another answer may also be 
 given to this suggestion which is equally decisive, and that is the 
 subsequent conduct of the plaintiff in taking the bill as a pledge 
 for temporary loans, which seems to negative the supposition alto- 
 gether that the previous refusal to discount it was on account of 
 any suspicion he entertained, either as to the genuineness of the 
 paper, or of tlie authority of the holder to pass it. Some time 
 elapsed after the bill was offered for discount, before it was finally 
 transferred to the plaintiff, and tliat fact undoubtedly was well 
 known to the plaintiff at the time of the transfer ; and so also was 
 the more important one in this investigation, that during all that 
 time the bill remained in the custody or under the control of Wal- 
 lace Sigerson, as the ostensible owner, and that he claimed and 
 exercised over it all the rights of a holder for value. If these cir- 
 cumstances are taken in connection with each other, as they unques- 
 tionably should be, there can be no doubt they were far better suited 
 to inspire confidence in the title of the holder than to excite sus- 
 picion in regard to his authority to pass the bill ; and if they had 
 that effect, it was plainly the fault of the defendant in executing 
 and forwarding the bill to his correspondent, and in intrusting it 
 to his control, and suffering it to remain in his custody without 
 inquiry or complaint. The want of date to the bill at the time it 
 was offered for discount, under the circumstances disclosed in the 
 evidence, was entirely an immaterial consideration. When the de- 
 fendant sent the bill to Wallace Sigerson, indorsed in blank and 
 without date, and intrusted it to his care and discretion to be used 
 for his own benefit, he thereby empowered him to fill the blank as 
 a necessary incident to the trust conferred, just as effectually as 
 if the authority had been expressly delegated by the terms of the 
 letter in which it was sent. Nor was it of any consequence that 
 it was antedated, as compared with the time when it was passed to 
 the plaintiff, inasmuch as it was filled up by his own correspondent 
 before he parted with its possession and control, and was actually 
 made to bear date subsequent to the time when it was received 
 from the defendant. In filling it up he but carried into effect one 
 of the purposes for whicli it had been forwarded, as is plainly in-
 
 r.OODMAN V. SIM0ND3. 245 
 
 dicatcd from the general scope and design of the letter. lie was 
 authorized to use the hill to raise money for tliu henefit of the 
 defendant ; and, in order to use the bill for tliat purpose, it must 
 have been expected that he would become tiie drawer, and fill up 
 the date at his discretion. Independently, however, of the terms 
 of tlie letter, it may be asserted as a general i)rinciple that, where^ 
 a party to a negotiable bill of exchange or promissory note intrusts ^ 
 it to the custody of another, wlien it is without date, whether it be 
 for tlie purpose to accommodate the person to whom it was intrust- 
 ed or to be used for his own benefit, such bill or note carries on its 
 face an implied authority to fill up the blank ; and, as between 
 such party to the bill or note and innocent third parties, the per- 
 son to whom it was so intrusted must be deemed the agent of the 
 party who committed such bill or note to his custody, and as act- 
 ing under his authority, and with his approbation. Mitchell v. 
 Culver, 7 Cow, 33G, and note. 
 
 The general doctrine on this subject, and the reasons on which 
 it is founded, are stated by Shaw, C. J., in Androscoggin Bank v. 
 Kimball, 10 Gush. 378, as follows : " Tlie rule is very clear, that if 
 one party, intending to accopamodate another, signs his name to a 
 blank paper, he authorizes the other to whom he delivers it, and 
 for whose accommodation it was made, to fill up the blank ; and 
 the filling up, being done by his authority, is his act, and he is 
 bound by it ; and we concur in the principle, and think it applies 
 with even more force when it was done for his own benefit, as in 
 this case." Violett ik Patton, 5 Cranch, 142 ; Russel v. Langstaflfe, 
 2 Doug. 514 ; CoUis v. Emett, 1 H. Black. 313 ; Montague v. Per- 
 kins, 22 Eng. L. <t Eq. 510. 
 
 The circumstances thus far considered we think afforded no 
 ground of inference wliatever to support the theory of fact assumed 
 in the instruction. But it is more difiicult to dispose of those that 
 follow in the same way, on account of the extremely indefinite 
 nature of the inquiry arising under the instruction. One man is 
 more readily influenced to suspect fraud in matters of business 
 tiian another, and the same individual may be differently impressed 
 by similar transactions occurring at different times under precisely 
 similar circumstances ; so that in some cases, where the evidences 
 to excite suspicion were slight, it might be impossible to determine 
 whether they were or were not of a character to be regarded as 
 tending to support an issue like the one presented under the first
 
 246 HOLDER FOR VALUE. 
 
 branch of the instruction, without first ascertaining the general 
 characteristics of the mind of the individual who was tlie subject 
 of tlie inquiry, and his usual habit in conducting his business 
 affairs, A striking illustration of the difficulty attending the in- 
 vestigation is to be found in the instruction itself, assuming for 
 fthe present that it must, be understood according to the usual 
 import of the language employed. Under its first branch it was 
 necessary, in order to relieve the defendant, that the jury should 
 find that such facts and circumstances were known to the plaintiff 
 as caused him to suspect the title or authority of the holder to 
 transfer the bill. But the jury might come to the conclusion that 
 the plaintiff was thoughtless, confiding, or inattentive on the occa- 
 sion, and that he in fact took the bill without any such suspicion; 
 and to guard against the effect of such a finding, the second 
 branch of the instruction was framed, and under that it was of no 
 consequence whether the plaintiff himself suspected the title of 
 the holder or not, as the defendant was nevertheless to be fully 
 exonerated if the jury found that such facts and circumstances 
 \^ere known to him as would have caused one of ordinary pru- 
 dence to suspect, and by ordinary diligence he could have ascer- 
 tained the true state of the title. Here was an attempt to 
 prescribe a standard in the investigation, by which the degree of 
 suspicion intended to be required to defeat the claim of the plain- 
 tiff could be ascertained and measured by the jury ; but under 
 the first branch of the instruction no such attempt was made, and 
 no other criterion was furnished to guide the jury in their deliber- 
 ations, than mere naked suspicion ; and consequently, if the jury 
 believed, from the evidence in the case, that the plaintiff at the 
 time of the transfer suspected the title or authority of tlie holder 
 to pass the bill, no matter how slight his suspicions were, they 
 were directed to return their verdict for the defendant. With this 
 explanation as to the nature of the present inquiry, we will pro- 
 ceed to notice the remaining circumstances relied on as evidence 
 in the case to support the instruction. They consist of the knowl- 
 edge that the plaintiff is supposed to have acquired at the settle- 
 ment, that Wallace Sigerson was embarrassed in his business 
 affairs, and of the subsequent conduct of his firm, in forwarding 
 the bill to St. Louis before the maturity of the notes, and the re- 
 mark in their letter that they did not indorse the bill, as they were 
 selling it for another. These circumstances are consistent with
 
 GOODMAN V. SIMONDS. 247 
 
 the proposition of fact assumed in the instruction ; and though 
 they arc susceptible of an entirely diiferent exj>lanation, yet per- 
 liaps it woukl be going too far to say, as matter of law, that they 
 afforded no ground of inference in the direction supposed Ijy the 
 defendant. We think, therefore, that the judgment ought not to 
 be reversed on the ground that there w^s no evidence in the case- 
 to authorize tlie instruction. We say so, however, in reference to 
 the peculiar issue arising under that instruction, and the form of 
 the questions sul)mittcd to the jury, and not in respect to any 
 different issue which may properly a»ise hereafter in cases of tliis 
 description. There is a wide difference between suspicion and 
 knowledge in respect to the subject-matter under consideration, 
 and even as between the evidence of suspicion, and sucli as would 
 show gross negligence on the part of a banker or business man 
 when discounting or purchasing negotial)le paper transferable by 
 delivery. A person may often suspect in matters of business what 
 i» fact he does not believe, and experience teaches that he will 
 sometimes suspect what he has no reason to believe, and that too 
 when the evidences to excite suspicion are so slight that he himself 
 would scorn to acknowledge them as the basis of his action in the 
 premises. Evidence merely tending to show, as in this case, that 
 a party, in acquiring a negotiable bill of exchange or promissory 
 note, sus])ected the title of the holder at the time of the delivery, 
 would clearly be insufficient to authorize the conclusion that he 
 was guilty of gross negligence when the transfer was made, and it 
 would hardly constitute an approach towards proof that he had 
 knowledge that such holder, who was known to be dealing in such 
 paper, and claimed the right to use it, was guilty of any breach of 
 trust in passing it. 
 
 II. The more important question, whether the instruction was 
 correct, remains to be considered ; and in aj)proaching that (pics- 
 tion it becomes necessary, in the first place, to ascertain what the 
 instruction was, and to deduce from it the principle of commercial 
 law which was apj)lied to the case. It was somewhat peculiar in 
 its language, and, in fact, contained two distinct propositions, 
 differing essentially in certain aspects, and not entirely reconcilable 
 with each other ; and yet we cannot doubt that the Circuit Court, 
 in giving the instruction to the jury, intended to apply the doc- 
 trine to the case, that the title of the holder of a negotiable bill of 
 exchange acquired before maturity is not protected against prior
 
 248 HOLDER FOR VALUE. 
 
 equities of the antecedent parties to the bill, where it was taken 
 without inquiry, aud under circumstances which ouglit to have 
 excited the suspicions of a prudent and careful man. Such was 
 certainly the general scope of the instruction, especially its second 
 proposition ; and such, it may be presumed, was the general prin- 
 ^ciple intended to be embo4ied in the questions submitted to the 
 jury. They have been so treated here in the oral argument for 
 tlie plaintiff, and were treated in the same way in tlie printed 
 argument filed for the defendant. Whether either or both of the 
 questions, in the form in which they were submitted, were objec- 
 tionable as involving a departure from the doctrine intended to be 
 applied, it will not become necessary to inquire. One thing is cer- 
 tain, — if the general principle cannot be sustained, there is nothing 
 in the features of the departure from it, or the particular phrase- 
 ology of the questions submitted, to benefit the defendant. Un- 
 doubtedly the same general idea pervaded the instruction, though 
 the questions were submitted to the jury in different forms, ill 
 order to meet the different aspects of the evidence in the case. It 
 was to the effect, that if the plaintiff had acquired the bill under 
 tlie circumstances described in either branch of the instruction, 
 then he had acted without due caution, and was not entitled to 
 recover. All the other grounds of defence had been provided for 
 in other prayers for instruction. This one was obviously prepared 
 to raise the single question, whether the plaintiff had acted with 
 due caution in acquiring the bill, and consequently assumed all 
 the other requisites of a good title in favor of the plaintiff. The 
 only question, therefore, arising under the instruction, is, whether 
 tlie rule of commercial law applied to the case was correct. Bills 
 of exchange are commercial paper in the strictest sense, and must 
 ever be regarded as favored instruments, as well on account of 
 their negotiable quality as their universal convenience in mercan- 
 tile affairs. They may be transferred by indorsement ; or when 
 indorsed in blank, Or made payable to bearer, they are transferable 
 by mere delivery. The law encourages their use as a safe and 
 convenient medium for the settlement of balances among mercan- 
 tile men ; and any course of judicial decision calculated to restrain 
 or impede their free and unembarrassed circulation, would be 
 contrary to the soundest principles of public policy. Mercantile 
 law is a system of jurisprudence acknowledged by all commercial 
 nations ; and upon no subject is it of more importance that there
 
 GOODMAN V. 8IMOND9. 249 
 
 should be, as far as practicable, uniformity of decision throughout 
 the world. A well-defined and correct exposition of the ri<rhts of 
 a bo)ui fide holder of a negotiable instrument was given by tliis 
 Court in .Swift v. Tyson, 10 Peters, 1,' as long ago as 1842 ; and 
 we adoj)t that exposition relative to the point under consideration 
 on the present occasion, as one accurately defining the nature and. 
 character of the title to those instruments which such holder ac- 
 quires when they are transferred to him for a valuable considera- 
 tion. This Court then said, and we now repeat, that a bona fide 
 holder of a negotial>le instrument for a valuable consideration, 
 without notice of facts which impeach its validity between the 
 antecedent parties, if he takes it under an indorsement made 
 before the same becomes due, holds the title unaffected by these 
 facts, and may recover thereon, although, as between the antece- 
 dent parties, the transaction may be without any legal validity. 
 That question was not one of new impression at the date of that 
 decision, nor was it so regarded either by the Court or the learned 
 judge who gave tlie opinion ; on the contrary, it was declared to 
 be a doctrine so long and so well established, and so essential to 
 the security of negotiable paper, that it was laid up among the 
 fundamentals of the law, and required no authority or reasoning 
 to be brought out in its support ; and the opinion on that point 
 was fully approved by every member of the Court, and we see no 
 reason to qualify or change it in any respect. Such being the 
 settled law in this Court, it would seem to follow as a necessary 
 consequence from the proposition as stated, that if a bill of ex- 
 change indorsed in blank, so as to be transferable by delivery, be 
 misappropriated by one to whom it was intrusted, or even if it be 
 lost or stolen, and afterwards negotiated to one having no knowl- 
 edge of these facts, for a valuable consideration, and in the usual 
 course of business, his title would be good, and that he would be 
 entitled to recover the amount. .The law was thus framed, and has 
 been so administered, in order to encourage the free circulation of 
 negotiable paper by giving confidence and security to those who 
 receive it for value ; and this principle is so comprehensive in 
 respect to bills of exchange and }jromissory notes, which pass by 
 delivery, that the title and 'possession are considered as one and 
 inseparable, and in the al)sence of any explanation the law pre- 
 sumes that a party in possession holds the instrument for value 
 until the contrary is made to appear, and the burden of proof is 
 
 I Ante, 186.
 
 250 HOLDER FOR VALUE. 
 
 on the party attempting to impeach the title. These principles 
 are certainly in accordance with the general current of authorities, 
 and are believed to correspond with the general understanding of 
 those engaged in mercantile pursuits. The word notice, as used 
 by this Court on the occasion referred to, we think must be under- 
 . stood in the same sense as knowledge, and indeed that is one of 
 its usual and appropriate significations. Where the supposed 
 defect or infirmity in the title of the instrument appears on its face 
 at the time of the transfer, the question whether a party who took 
 it had notice or not, is in general a question of construction, and 
 must be determined by the Court as matter of law ; and so it was 
 understood by this Court in Andrews v. Pond et al., 13 Peters, 65, 
 where it is saiid that " a person who takes a bill which upon the 
 face of it was dishonored, cannot be allowed to claim the privileges 
 which belong to a bona fide holder. If he chooses to receive it 
 under such circumstances, he takes it with all the infirmities be- 
 longing to it, and is in no better condition than the person from 
 whom he received it." And the same doctrine was adopted and 
 enforced in Fowler v. Brantly, 14 Peters, 318,^ where, in speaking of 
 a promissory note, so marked as to show for whose benefit it was 
 to be discounted, this Court held that all those dealing in paper 
 " with such marks on its face, must be presumed to have knowledge 
 of what it imported." See Brown v. Davies, 3 T. R. 80. 
 
 Other cases of like character, where the defect appears on the 
 face of the instrument, are referred to in the plinted argument for 
 the defendant as affording a support to tlie instruction under con- 
 sideration ; but it is so obvious that they can have no such ten- 
 dency, that we forbear to pursue the subject. Ayer v. Hutchins, 
 4 Mass. 370 ; Wiggin v. Bush, 12 Johns. 306 ; Cone v. Baldwin, 12 
 Pick. 545 ; Brown v. Taber, 5 Wend. 566. 
 
 But it is a very different matter when it is proposed to impeach 
 the title of a holder for value, by proof of any facts and circum- 
 stances outside of the instrument itself. He is then to be affected, 
 if at all, by what has occurred between other parties, and he may 
 well claim an exemption from any consequences flowing from their 
 acts, unless it be first shown that he had knowledge of such facts 
 and circumstances at the time the transfer was made. Nothing 
 less than proof of knowledge of such facts and circumstances can 
 meet the exigencies of such a defence ; else the proposition as 
 
 1 Ante, 235.
 
 GOODMAN V. SIMONDS. 251 
 
 stated is not true, that a party who acquires commercial paper in 
 the usual course of business, for value and without notice of any 
 defect in the title, may hold it free of all equities l^etweeii the an- 
 tecedent parties to the instrument. Admit the ])roposition, and 
 the conclusion follows. And the (jucstion whether the party had 
 such knowledge or not, is a question of fact for the jury, and, like 
 other disputed questions of scienter, must be submitted to their 
 determination, under the instructions of the Court; and the proper 
 inquiry is, did the party, seeking to enforce the payment, have 
 knowledge, at the time of the transfer, of the facts and circum- 
 stances which impeach the title, as between the antecedent parties 
 to the instrument? and if the jury find that he did not, then he is 
 entitled to recover, unless the transaction was attended by bad 
 faith, even though the instrument had been lost or stolen. Every 
 one must conduct himself honestly in respect to the antecedent 
 parties, when he takes negotiable paper, in order to acquire a title 
 which will shield him against prior equities. While ho is not 
 obliged to make inquiries, he must not wilfully shut his eyes to 
 the means of knowledge which he knows are at hand, as was 
 plainly intimated by Baron Parke, in May v. Chapman, 16 Mees. 
 & W. 355, for the . reason that such conduct, whether equiv- 
 alent to notice or not, would be plenary evidence of bad faith. 
 Mere want of care and caution, which was the criterion assumed 
 in the instruction, falls so far below the true standard required by 
 law, which is knowledge of the facts and circumstances that im- 
 peach the title, that we feel indisposed to pursue the general dis- 
 cussion, and proceed to confirm the views we have advanced as to 
 what the law is, by referring to some of the decisions in the Eng- 
 lish courts, from which, as an important source of commercial 
 law, most of our own rules upon the subject have been derived. 
 
 Tiie leadini:; case, among the more modern decisions in that 
 country, is that of (Joodman v. Harvey, -4 Adol. & Ellis, 870. That 
 was a case in bank, on a rule nisi, which was made absolute. 
 Lord Benman, in delivering judgment, said : " We are all of 
 opinion that gross negligence only would not be a sufficient an- 
 swer, where a party has given consideration for the bill ; gross 
 negligence may be evidence of mala fides, but it is not the same 
 thing. Where the bill has passed to the plaintiff without, any 
 proof o[ bad fa nil in iiim, there is no objection to his title." That 
 case was followed by Uther r. Rich, 10 Adol. & Ellis, 784, which
 
 252 HOLDER FOR VALUE. 
 
 was also argued before a full Court, and the same learned judge 
 held that the only proper mode of implicating the plaintiff in the 
 alleged fraud by pleading was to aver that lie had notice of it, 
 leaving the circumstances by which that notice was to be proved, 
 directly or indirectly, to be established in evidence ; and he fu» 
 ther held, that an averment that the plaintiff was not a bona fide 
 holder was not equivalent. According to the rule laid down in 
 Goodman v. Harvey, which indubitably is the settled law in all the 
 English courts, proof that the plaintiff had been guilty of gross 
 negligence in acquiring the bill, ought not to defeat his right to 
 recover ; and if not, it serves to exemplify the magnitude of the 
 error assumed in the instruction, that any facts and circumstances 
 which would excite the suspicion of a careful and prudent man 
 were sufficient to destroy the title. It is clear that one or the 
 other of these rules must be incorrect ; both cannot be upheld. 
 Gross negligence is defined to consist of the omission of that care 
 which even inattentive and thoughtless men never fail to take of 
 their own property ; and if such neglect would not defeat the right 
 to recover — and clearly it would not, unless attended by bad 
 faith — it cannot require any further reasoning to demonstrate 
 that tlie instruction was erroneous. Several cases have been 
 decided in England upon the same subject, and to the same effect, 
 and the rule laid down in Goodman v. Harvey is now adopted and 
 sanctioned by the most approved elementary treatises upon com- 
 mercial law. Raphael v. The Bank of England, 33 Eng. L. & Eq. 
 276 ; Palmer v. Richards, 1 Eng. L. & Eq. 529 ; Arbouin v. An- 
 derson, 1 Adol. & Ellis, N. s. 498 ; May v. Chapman, 16 Mees. & 
 W. 355 ; Chitty, Bills, 12th ed. 257 ; Story, Bills, 3d ed. § 416 ; 
 Byles, Bills, 4th Am. ed. 121-126 ; Smith's Mer. Law, ed. 1857, 
 255 ; Edwards, Bills, 309 ; 1 Saund. PI. & Ev. 591 ; Wheeler v. 
 Guild, 20 Pick. 545 ; Brush v. Scribner, 11 Conn. 368 ; Backhouse 
 V. Harrison, 5 Barn. & Adol. 1098 ; Gwynn v. Lee, 9 Gill, 138. 
 
 These cases, beyond controversy, confirm the rule laid down by 
 this Court in Swift v. Tyson, and they also furnish the fullest evi- 
 dence, by their harmony each with the other, as well as by their 
 entire consistency with the principal case, that the law has been 
 uniform since the decision in Goodman v. Harvey, which was de- 
 cided in 1836 ; and we think it will appear, upon an examination, 
 that it has always been the same, at least from a very early period 
 in the history of English jurisprudence down to the present time.
 
 GOODMAN V. SIMONDS. 253 
 
 except for an interval of about twelve years, while the doctrine 
 prevailed which is now invoked in support of the instruction in 
 this case. Tlmt doctrine had its origin in Gill v. Cul>itt, -j Barn. 
 & C. 466, and it was followed by the other cases referred to in 
 |he printed art^uraent for defendant. It was decided in 1824, and 
 it is true, as the cases cited abundantly show, that it was acqui- 
 esced in for a time, as a correct exposition of the commercial law 
 upon the subject undcM- consideration. At the same time, it is 
 proper to remark, that there is not wanting respectable authority 
 that it had been much disa}>proved of before it was directly ques- 
 tioned ; and it is certain, that nearly two years before it was 
 finally overruled, Parke, J3., in delivering judgment in Foster v. 
 Pearson, regarded it as mere " dicta, rather than the decision of the 
 judges of the King's Bench." See Raphael v. The Bank of England, 
 '[supral per Cresswell. The reasons assigned for that departure 
 from the long-established rule upon the subject are as remarkable 
 and unsatisfactory as ilie change was sudden and radical, and yet 
 their particular examination at this time is unnecessary. It is a 
 sufficient answer to the case to say, that it has been distinctly 
 overruled in the ti"ibunal where it was decided, and has not been 
 considered an authority in that Court for more than twenty years. 
 The doctrine, says Mr. Chitty in his Treatise on Bills, is now com- 
 pletely exploded, and the old rule of law that the holder of bills 
 of exchange, indorsed in blank and transferable by delivery, can 
 give a title which he does not possess, to a person taking them 
 bona fide for value, is again re-established in its fullest extent. It 
 was not, however, accomplished at a single blow, but the error, so 
 to speak, was literally broken up and destroyed by instalments. 
 The foundation of the superstructure was severely shaken in Crook 
 V. Jadis, 5 Barn. & Adol. 909, when the full bench first came to 
 the conclusion that want of due care and caution was insufficient 
 to constitute a defence, and that gross negligence, at feast, must 
 be shown, to defeat a recovery. But it was left to the case of 
 Goodman v. Harvey to announce a complete correction of the 
 error, when Lord Dennian declared, we have shaken otf the last 
 remnant of the contrary doctrine. 
 
 A brief reference to some of the earlier cases will be sufficient 
 to show that the decision in Gill v. Cubitt, was a departure from 
 the well-known and long-estal)lislied rule upon the subject under 
 consideration. One of the earliest cases usually referred to is that
 
 254 HOLDER FOR VALUE, 
 
 of Hinton's case, reported i» 2 Show. 247. It was an action on 
 the case against the drawer upon a bill of exchange payable to 
 bearer. The Court ruled that the holder must entitle himself to 
 it on a consideration ; " for if he come to be bearer by casualty or 
 knavery^ he sliall not have the benefit of it ; " and so in Anonymous| 
 1 Salk. 12G, wliore a bank-note payable to A, or bearer, was lost, 
 and found by a stranger, and by him transferred to C, for value. 
 Holt, C. J., held that " A might have trover against the stranger, 
 for he had no title to it, but not against C, by reason of the course 
 of trade, which creates a property in the bearer." And again in 
 Miller v. Race, 1 Burr. 452, 462, where an inn-keeper received a 
 bank-note from his lodger in the course of business, and paid the 
 balance, Lord Mansfield held he might retain it, as he came by it 
 fairly and bona fide, and for value, and without knowledge that it 
 had been stolen. And on a second occasion, in Grant v. Vaughan, 
 3 Burr. 1516, where a bill payable to bearer was lost, and the 
 finder passed it to the plaintiff, the same Court left it to the jury 
 to find whether he came to the possession fairly and bona fide. 
 But a still stronger case is that of Peacock v. Rhodes, 2 Doug. 
 632, where a bill of exchange, indorsed in blank, was stolen and 
 passed to the plaintiff by a man not known. It was argued for 
 the defendant, that a holder should not in prudence take a bill 
 unless he knew the person. Lord Mansfield answered, " that tlie 
 law is well settled, that a holder covamg fairly by a bill has nothing 
 to do with the transaction between the original parties. . . . 
 The question oi mala fides was for the consideration of the jury." 
 And lastly, and to the same effect, is Lawson v. Weston et ah, 4 
 Esp. bQ, where a bill of exchange for X500 was lost or stolen, and 
 was discounted by plaintiff for a stranger. It was insisted for the 
 defendant, that " a banker or any other person should not dis- 
 count a bill for one unknown, without usiny diligence to inquire 
 into the circumstances." Lord Kenyan replied, that " to adopt 
 the principles of the defence would be to paralyze the circulation 
 of all the paper in the country, and with it all its commerce ; that 
 the circumstance of the bill having been lost, might have been 
 material, if they eoidd bring knowledge of that fact home to the 
 plaintiff.'''' Tiie cases cited, commencing in 1694 and ending in 
 1801, are sufficient to show what the state of the law was in 1824, 
 .when Gill v. Cubitt was decided, especially as the judges of the 
 King's Bench, in giving their opinions on that occasion, did not
 
 GOODMAN V. SIM0ND9. 255 
 
 pretend that there were any later decidons in which it had been 
 modified. 
 
 111. But, assuming that the in.struction was erroneous, it is still 
 insisted by the course of the argument for the defendant, that it 
 ^as immaterial ; and the arjrument proceeds upon the ground tliat 
 the case, as made in tlie bill of exceptions, shows that the plain- 
 tiff was not the holder of the bill foi* a valuable consideration, in 
 the usual course of business. On the contrary, it is insisted that 
 he held it merely as a collateral security for a pre-existing debt, 
 without any present consideration at the time of the transfer, and 
 that a party who takes negotiable paper under such circumstances 
 does not acquire it in the usual course of business, and conse- 
 quently takes it subject to prior equities. Whatever may be our 
 impressions in a case like the one supposed, we think the question 
 does not arise in the present record, assuming the facts to be as 
 they are exhibited in the bill of exceptions ; and the answer to the 
 argument will be based entirely upon that assumption, without 
 prejudice to what may hereafter appear. When the settlement 
 was made, the new notes were given in payment of the prior in- 
 debtedness and the collaterals previously held were surrendered 
 to the defendant, and the time of payment was extended and defin- 
 itively fixed by the terms of the notes, showing an agreement to 
 give time for the payment of a debt already overdue, and a forbear- 
 ance to enforce remedies for its recovery ; and the implication is 
 very strong that the delay secured by the arrangement constituted 
 the principal inducement to the transfer of the bill. Such a sus- 
 pension of an existing demand is frequently of the utmost impor- 
 tance to a delator, and it constitutes one of the oldest titles of the 
 law under the head of forbearance, and has always been considered 
 a sufficient and valid consideration. Eltingu. Vanderlyn, 4 Johns. 
 437 ; Morton v. Burn, 7 Adol. & Ellis, 19 ; Baker v. Walker, 14 
 Mees. & W. 465 ; Jennison v. Stafford, 1 Gush. 108 ; Walton 
 V. Mascall, 13 Mees. & W. 453 ; Com. Dig. action assumpsit, 
 B. 1 ; -Wheeler v. Slocum, 10 Pick. 62 ; Story, Promissory Notes, 
 § 186, and cases cited. The surrender of Other instruments, al- 
 though held as collateral security, is also a good consideration ; 
 and this, as well as the former proposition, is now generally ad- 
 mitted, and is not open to dispute. Dupeau v. Waddington, 6 
 Whar. 220 ; Hornblower r. Proud, 2 Barn. & xUd. 327 ; Hideout 
 V. Bristow, 1 Cromp. & J. 231 ; Bank of Salina v. Babcock, 21 
 Wend. 499 ; Youngs v. Lee, 2 Ker. 551. It seems now to be
 
 256 HOLDER FOR VALUE. 
 
 agreed that, if there was a*present consideration at the time of 
 the transfer, independent of the previous indebtedness, a party 
 acquiring a negotiable instrument before its maturity as a col- 
 lateral security to a pre-existing debt, without knowledge of the 
 facts which impeach the title as between the antecedent parties, 
 thereby becomes a holder in the usual course of Ijusiness, and that 
 his title is complete so that it will be unaffected by any prior equi- 
 ties between other parties, at least to the extent of the previous 
 debt for which it is held as collateral. White v. Springfield Bank, 
 3 Sandf. S. 0. 222 ; New York M. Iron Works v. Smith, 4 Duer, 
 362. And the better opinion seems to be in respect to parol con- 
 tracts, as a general rule, that there is but one measure of the suffi- 
 ciency of a consideration, and, consequently, whatever would have 
 given validity to the bill as between the original parties, is suffi- 
 cient to uphold a transfer like the one in this case. We are not 
 aware that the principle as thus limited and qualified, is now the 
 subject of serious dispute anywhere, and that is amply sufficient 
 for the decision of this cause. Whether the same conclusion 
 ought to follow where the transfer was without any other consid- 
 eration than what flows from the nature of the contract at the time 
 of the delivery, and such as may be inferred from the relation of 
 debtor and creditor in respect to the pre-existing debt, is still the 
 subject of earnest discussion, and has given rise to no small diver- 
 sity of judicial decision. It seems it is regarded as sufficient in 
 England, according to a recent case. Poiricr v. Morris, 20 Eng. 
 L. & Eq. 103 ; Byles, Bills, pp. 96, 127. A contrary rule pre- 
 vails in New York, as appears by several decisions. Codding- 
 ton V. Bay, 20 Johns. 637 ; Stalker v. McDonald, 6 Hill, 93 ; and 
 also in Tennessee, Napier v. Elam, 5 Yerg. 108. It is settled that 
 it is a sufficient consideration in Massachusetts, Vermont, and 
 New Jersey, and such was the opinion of the late Justice Story, 
 as appears from his remarks in Swift v. Tyson, and in his valua- 
 ble treatise on Bills of Exchange. Stoddard v. Kimball, 6 Gush. 
 469 ; Story, Bills, § 192 ; Chicopee Bank v. Chapin, 8 Met. 40 ; 
 Blanchard ?;. Stevens, 3 Cush. 162; Atkinson v. Brooks, 26 V. 
 669 ; Allaire v. Hartshorne, 1 Zabr. QQb. We think, however, that 
 the point does not arise in this case, for the reasons before stated, 
 and consequently, forbear to express any opinion upon the sub- 
 ject. The judgment of the Circuit Court is reversed, and the 
 cause remanded Ibr further proceedings, with directions to issue a 
 new venire.
 
 GOODMAN V. SIMONDS. 257 
 
 The doctrine of this case was aji^ain maintained in the Supreme Court of the 
 United States, in Bank of Pittsburgh v. Neal, 22 How. Ii6, and in Murray r. 
 Lardner, 2 Wall. 110; and in the latter, the doctrine of Gill v. Cubitt is again 
 emphatically denied. Murray r. Lardner was a case of stolen coupon bonds, 
 payable to bearer. It was held that the rules pertaining to ordinary coiniMercial 
 paper applied to these ; and tiiat a purchaser, in good faitli, is unaffected by 
 want of title in the vendor; the burden of proof resting upon the party who 
 assails the possession. Mr. Justice tixvayne, in delivering the opinion of the 
 Court, after stating the points decided in the principal case, proceeds to say : 
 " Such is the settled law of this Court, and we feel no disposition to depart from 
 it. The rule may perhaps be said to resolve itself into a question of honesty or 
 dishonesty, for guilty knowledge and wilful ignorance alike involve the result of 
 bad faith. Tliey are the same in effect. Where there is no fraud there can 
 be no ([uestion. The circumstances meniioned, and others of a kindred char- 
 acter, while inconclusive in themselves, are admissible in evidence ; and fraud 
 established, whether by direct or circumstantial evidence, is fatal to the title of 
 the holder. 
 
 "The rule laid down in the class of cases of which Gill r. Cubitt is the ante- 
 type, is hard to cumprehend, and dillicult to apply. One innoeent holder may be 
 more or less suspicious under similar circumstances at one time than at another; 
 and the same remark applies to prudent men. One prudent man may also sus- 
 pect where another would not, and the standard of the jury may be higher or 
 lower than that of other men ecjually prudent in the management of their affairs. 
 Tiie rule established by the other line of decisions has the advantage of greater 
 clearness and directness. A careful judge may readily so submit a case under it 
 to the jury that they can hardly fail to reach the right conclusion.'' 
 
 Upon the important subject of coupon bonds, he says: " We are well aware 
 of the importance of the principle involved in this inquiry. These securities 
 are found in the channels of commerce everywhere, and their volume is constantly 
 increasing. They represent a large part of the wealth of the commercial world. 
 The interest of the community at large in the subject is deep-rooted and wide- 
 branching. It ramifies in every direction, and its fruits enter daily into the affairs 
 of persons in all conditions of life. While courts should be careful not so to 
 shape or apply the rule as to invite aggression or give an easy triumph to fraud, 
 they should not forget the considerations of equal importance which lie in the 
 other direction. In Miller r. Race [1 Burr. 452], Lord Mansfield placed his 
 judgment mainly on the ground that there was no difference in principle between 
 bank-notes and money. In Grant r. Vaughan [3 Burr. 1516], he held that there 
 was no distinction between bank-notes and any other commercial paper. At that 
 early period his f;\r-reacliing sagaiity saw the importance and the bearings of the 
 subject." 
 
 The doctrine of Gill v. Cubitt was however adopted in the courts of several 
 States before the overruling case of Goodman r. Harvey had become generally 
 known in this country. See Sandford r. Norton, 14 Vt. "JJS ; Hall r. Hale, 8 
 Conn. 336 ; Cone v. Baldwin, Vl I'ick. 545 ; Boyd i'. Mclvor, 11 Ala. 822 ; Nichol- 
 son V. Patton, 13 La. 213 ; Smith r. Alechanics' Bank, 6 La. An. 610, Slulell,J., 
 dissenting. Goodman v. Harvey is adopted in Worcester Bank i'. Dorchester and 
 M. Bank, 10 Cash. 488. But see Mcrriam v. Granite Bank, 8 Gray, 254, 259. 
 
 17
 
 258 HOLDER FOR VALUE. 
 
 It is also the law in Georgia, Maryland, and Texas. Matthews v. Poythress, 4 
 Ga. 287, 306 ; Ellicott v. Martin, 6 Md. 509 ; Grenaux v. Wheeler, 6 Texas, 515. 
 Goodman v. Harvey was directly denied in Pringle v. Phillips, 5 Sandf. 157 ; 
 but this case was overruled in the Court of Appeals in 1866, and Goodman v. 
 Harvey adopted. Magee v. Badger, 34 N. Y. (7 Tiff.) 247. See also Belmont 
 Branch Bank v. Hoge, 35 N. Y. (8 Tiff.) 65, reaffirming Magee v. Badger, and 
 stating that Gill v. .Cubitt has been repeatedly overruled, both in England and 
 in America. Goodman v. Harvey is cited by all the text-writers as declaring the 
 soundest law. See authorities cited by Mr. Justice Clifford, srqjrn. Also 
 Story, Promissory Notes, § 197 and note ; Id. Bills of Exchange, §§ 194, 416 ; 
 3 Kent, Com. 81, 82, note. With so many strong authorities in favor of the 
 rule in the principal case, there can be little doubt that the early cases which 
 follow Gill V. Cubitt will eventually be overruled. 
 
 It follows from the rule in the principal case that mere proof of want of con- 
 sideration will not throw the burden upon the plaintiff of showing that he is a 
 bonajide holder for value, and without notice. And so are the cases since Good- 
 man I". Harvey. See Whittaker v. Edmunds, 1 Moody & R. 366 ; Mills v. Bar- 
 ber, 1 Mees. & W. 425 ; Low v. Chifney, 1 Bing. N. C. 267 ; Smith v. Braine, 
 16 Q. B. 244, 253 ; Knight v. Pugh, 4 Watts & S. 445 ; Fletcher v. Gushee, 32 
 Maine, 587 ; Ellicott v. Martin, 6 Md. 509 ; Ross v. Bedell, 5 Duer, 462. 
 
 George Fisher v. Daniel Leland, Jr., et al. 
 
 (4 Gushing, 456. Supreme Court of Massachusetts, October, 1849.) 
 
 Indorsee affected with notice. — One who has taken commercial paper by indorsement 
 before it is due, with notice of fraud in its inception, is subject to the same de- 
 fences, in an action against the maker, that could be raised against the payee to 
 whom the fraud had attached. And the maker, against such indorsee, can give in 
 evidence tlie fraudulent acts of tlie payee, and the admissions and confessions of 
 the latter, while he was the holder of the note. 
 
 The case is stated in the opinion of the Court. 
 
 Shaw, C. J. The single question is, whether, after the defend- 
 ant had proved that the plaintiff took the note in question by 
 indorsement before it was due, but with notice that the promisors 
 intended to defend on the ground that the note was obtained by 
 the payee of the maker by fraud, they could give in evidence the 
 fraudulent acts of the payee ; and wliether they could give in 
 evidence the admissions and confessions of the payee, whilst he 
 was the holder of the note and before the indorsement, to prove
 
 FISHER V. LELAND. . 259 
 
 such fraud. The distinction appears to be this : tliat when an 
 indorsee takes a bill or note, by indorsement, before it is due, and 
 without notice of fraud or other matter of defence, he takes it on 
 an independent title by the indorsement, and will not be affected 
 by any payment, set-off, fraudulent consideration, or other matter 
 of defence, which the acceptor or promisor might have had against 
 any i)revious holder or prior party. He is not in privity with such 
 prior party, does not claim under him, and is not bound by the 
 acts, frauds, or admissions of any such prior party. And in order 
 to give the highest credit and the freest circulation to negotiable 
 securities, transferred by indorsement, in favor of commerce, this 
 principle is held with great firmness and strictness ; and by a 
 series of recent decisions, the rule upon the subject, instead of 
 being relaxed, is held with greater strictness than formerly. 
 O'Keefe v. Dunn, G Taunt. 305 ; Dunn v. O'Keefe, 5 Maule & S. 
 282 ; Gill v. Cubitt, 3 Barn. & C. 466 ; Goodman v. Harvey, 4 
 Adol. & Ellis, 870 ; Foster v. Pearson, 1 Cromp., Mees. & R. 849 ; 
 Arbouin v. Anderson, 1 Adol. & Ellis, n. s. 498. 
 
 But where a negotiable note is found in circulation after it is 
 due, it carries suspicion on the face of it. The question instantly 
 arises. Why is it in circulation ; why is it not paid ? Here is 
 something wrong. Therefore, although it does not give the in- 
 dorser notice of any specific matter of defence, such as set-off, 
 payment, or fraudulent acquisition, yet it puts him on inquiry ; 
 he takes only such title as the indorser himself has, and subject to 
 any defence which would be made, if the suit were brought by the 
 indorser. The note does not cease to be negotiable ; the indorsee 
 takes a title, and may sue, but he is so far in privity with his 
 indorser that he takes only his title ; and if the defendant could 
 make any defence against a suit brought by such indorser, he can 
 make it against the indorsee. 
 
 This rule is settled in the case of a suit by an indorsee taking 
 the note overdue, by a series of authorities, which show not only 
 that such defence may Ije made, but that it may be proved by 
 the same evidence, i)y which it might have been proved if the in- 
 dorser were plaintitit'; to wit, tlie admissions of such indorser, 
 made whilst he was the holder. Sylvester v. Crapo, 15 Pick. 92 ; 
 Barough v. White, 4 Barn. & C. 325 ; Phillips v. Cole, 10 Adol. & 
 Ellis, 106 ; Beauchamp r. Parry, 1 Barn. & Ad. 89. These author- 
 ities might be multiplied almost indefinitely.
 
 260 HOLDER FOR VALUE. 
 
 But the indorsement of a note overdue is only one mode of 
 giving the indorser notice that there is some matter of defence 
 relied on ; if he has express notice, he may take it and may sue 
 the note, but he takes subject to such defence as the defendant 
 might make against the indorser. 
 
 Tlie case in an early volume of the reports of this Court, Wil- 
 son V. Holmes, 5 Mass. 543, was one where tlie plaintiff had no- 
 tice in the form of the indorsement, which was: " Pay T. W., or 
 order, for our use, value received in account." See Humphries 
 V. Blight, 4 Dall. 370 ; White v. Kibling, 11 Johns. 128. In the 
 early leading case on this subject. Brown v. Davies, 3 T. R. 80, 
 83, Lord Kenyon^ who was not disposed to go quite the length of 
 the doctrine held by Mr. Justice Buller, says, "1 agree, &c., if it 
 appears on the face of the note to have been dishonored, or if 
 knowledge can be brought home to the indorsee that it had been 
 so." In a note to the same case, in Taylor v. Mather, where the 
 defence was that the note was obtained by fraud, and where it was 
 negotiated when overdue, Buller, J., says : " Such a note is nego- 
 tiable, but if there are any circumstances of fraud in the transac- 
 tion, I have always left it to the jury, on the slightest evidence, to 
 presume that the indorsee was acquainted with the fraud." 
 
 It seems, therefore, that it is not that the indorsement of a note 
 after it is due is, per se, such as to render the note void, or to 
 defeat the right of the plaintiff ; but if there are anterior circum- 
 stances, such as fraud in obtaining the note, the fact that the 
 indorsee takes it when overdue, is a circumstance of suspicion, 
 which should put him on inquiry, and leads to a presumption that 
 he knew, or by inquiry might know, of such fraud, and is deemed 
 constructive notice of it. It identifies the title of the indorsee 
 with that of the indorser. This being so, actual notice of such 
 fraud, brought home to the knowledge of the indorsee at the time 
 he took the note by indorsement, is equally availing to prove that 
 he is not a bona fide holder, and to give the defendant the same 
 ground of defence as he would have had against the indorser. 
 
 Exceptions overruled. 
 
 See Goodman v. Simonds, ante, 240, and note, 257, 258.
 
 IIASCALL V. WniTMORE. 261 
 
 William Hascall and "Roland TI. Gerry v. Joel 
 
 AVniTMORK. 
 
 (19 Maine, 102. Supreme Court, April, lS-11.) 
 
 Indorsee with notice claimimj under holder without. — (Jne who purchases commercial paper 
 for value, with notice of dcfi-ct in its inception, from a bonn Jul holder without no- 
 tice, stands upon .the rij;hts of the latter, antl may recover the amount of the paper. 
 
 The case is stated in the opinion of the Court. 
 
 Shepley, J. The plaintiffs are joint owners of a negotiable 
 promissory note purchased before it became payable. One of them 
 is a holder for value without notice ; the other with notice, but 
 deriving his title through others who were bona fide holders with- 
 out notice. As between the original parties the note may be 
 regarded as made without consideration. Andrews, who was the 
 first and an innocent indorsee for value, did not indorse it, when 
 he disposed of it, and he was properly admitted as a witness. 
 Whitaker v. Brown, 8 Wend. 490. He could have collected it, for 
 the want of consideration could not be set up against him. A 
 knowledge of the facts acquired afterward would not affect his 
 rights. He had not only a legal right to hold and collect it, but to 
 negotiate it. And the maker could not impair that right by giving 
 notice that it was made without consideration. Nor would he be 
 injured by a transfer to one having a full knowledge of the facts ; 
 for his position would not be more unfavorable than before. 
 
 Bayley states, that the want of consideration cannot be insisted 
 upon " if the plaintiff, or any intermediate party between him and 
 the defendant, took the bill or note bona fide and upon a valuable 
 consideration." Bayley, o.lO, ed. by Phillips k Sewall. 
 
 The case of Thomas v. Newton, 2 Car. & P. 606, was assumpsit 
 on a bill drawn by Wilson on the defendant and accepted, and by 
 him indorsed to Dandridgc and by him to the plaintiff. The de- 
 fence was a want of consideration. Lord Tenterden says, " if the 
 defendant shows, that there was originally no consideration for the 
 bill, that throws it on the plaintilf to show that he gave value for 
 it, or that value was given for it by Dandridgc ; for if cither the 
 plaintiff or Dandridgc gave value for it, the plaintiff may recover ; 
 
 otherwise the defendant is entitled to recover." ^ 
 
 « 
 
 In Solomons v. The Bank of England, 13 East, 134, 135, note (6), 
 
 1 This doctrine has been exploded. See Goodman v. Sinionds, ante 240, and note 
 257, 258 ; also ante, note to Swift v. Tyson, p. 186.
 
 262 HOLDER FOR VALUE. 
 
 it appeared, that the bank-note had been obtained fraudulently from 
 Batson & Co., who informed the bank of it. The plaintiff as holder 
 claimed payment of the bank, and it was refused. He had received 
 the bill of Hendricks & Co. ; and it did not appear, that he paid 
 value for it before notice. Lord Keyiyon says, " upon this evidence 
 
 1 think Solomons must be considered to be in the same situation 
 as Hendricks & Co." But as it did not appear, that they were 
 holders for value without notice, the plaintiff did not recover. 
 
 In Smith v. Hiscock, 14 Maine, 449, where a negotiable promis- 
 sory note had been indorsed bona fide and for value before it was 
 payable, the Chief Justice says, " the want of consideration is not 
 an available defence against a subsequent holder, to whom it may 
 have been passed after it was due. The promise is good to the first 
 indorsee free from that objection ; and the power of transferring it 
 to others with the same immunity is incident to the legal right 
 which he had acquired in the instrument. By the first negotiation 
 the want of consideration between the original parties ceases as a 
 valid ground of defence." 
 
 If the relations between the maker and holder only were to be 
 considered, the want of consideration would be a good defence 
 against one, who did not purchase for value, or who did so after it 
 was once due. And yet it has been decided, that one so situated 
 may avoid that defence by showing, that it could not have been 
 interposed against a prior holder. The same principle appears to 
 .be equally applicable to a holder who has purchased with notice. 
 If the relations between himself and the maker only were to be 
 considered he could not recover. But purchasing of one who had 
 no notice he must be considered to be in the same situation and as 
 entitled to the same protection. 
 
 Defendant defaulted and judgment for amount due on the note. 
 
 The doctrine of this case is well settled. See Boyd v. McCann, 10 Md. 118; 
 Prentice v. Zane, 2 Grat. 262 ; Watson v. Flanagan, 14 Texas, 354 ; Howell 
 V. Crane, 12 La. An. 126 ; Woodworth v. Huntoon, 40 111. 131 ; Bassett r. Avery, 
 15 Ohio State, 299 ; Lickbarrow v. Mason, 2 T. R. 63, 71 ; Robinson v. Reynolds, 
 
 2 Q. B. 196, 211 ; Story, Promissory Notes, § 191, where the rule is thus stated: 
 " The partial or total failure of consideration, or even fraud between the antecedent 
 parties, will be no defence or bar to the title of a bona fide holder of a note 
 for a valuable consideration, at or before it becomes due, without notice* of 
 any infirmity therein. The same rule will apply, although the present holder 
 has such notice, if he yet derives a*title . . . from a prior bona fide holder for 
 value. This doctrine, in both its parts, is indispensable to the security and cir- 
 culation of negotiable instruments : and it is founded in the most comprehensive 
 and liberal principles of public policy."
 
 grant v. ellicott. 263 
 
 Grant and Gary v. Ellicott. 
 
 (7 Wendell, 227. Supreme Court of New York, May, 1831.) 
 
 Accommodation paper. Holder with notice. — In an action by an indorsee of a bill of ex- 
 change against the acceptor it is no defence tliat the bill was accepted for the 
 accommodation, of the drawer, and tiiat the indorsee had knowledge of the fact 
 when he took tlie bill. 
 
 The case is stated in the opinion of the Court. 
 
 Savage, C. J. The defendant says he ought not to pay the bill, 
 because no consideration passed between him and Graham, and 
 this was known to the plaintiffs : that is, the defendant accepted the 
 bill for the accommodation of the drawer, which the plaintiffs knew. 
 This is no defence ; it was so decided in Smith i\ Knox, 3 Esp. 
 46. Lord Eldon there held that where a bill is given for the 
 accommodation of the drawer or payee, and is sent into the world, 
 it is no answer to an action upon it against the acceptor, that lie 
 accepted it for the accommodation of the drawer, and that the fact 
 was known to the holder ; in such case the holder, if he gave a 
 bona fide consideration for it, is entitled to recover, though he had 
 full knowledge of the transaction. In that case the plaintiff pro- 
 duced no proof but of handwriting of the parties to the bill. 
 
 The case of Charles v. Marsden, 1 Taunt. 224, was very like this 
 case. The action was brought by the indorsee against the acceptor. 
 The defendant pleaded that it was accepted for the accommodation 
 of the drawer, and without any consideration, and that this was 
 known to the plaintifis when they took the bill, after it was due. 
 Mansfield^ C. J., says : " There is no allegation of fraud in this 
 plea, nor any allegation that the plaintiff did not give a valuable 
 consideration for this bill ; it must therefore be presumed that he 
 did." Lawrence, Justice, says : " In the present case, it is to be 
 supposed that the party (drawer) persuades a friend to accept a 
 bill from him because he cannot lend him money, would there be 
 any objection, if, with the knowledge of tiie circumstance that this 
 is an accommodation bill, some person should advance money upon 
 it before it was due ? Then what is, the objection to his furnishing 
 it after it is due ? For there is no reason why a bill may not be
 
 264 HOLDER FOR VALUE. 
 
 negotiated after it is due, unless there was an agreement for the 
 purpose of restraining it." 
 
 I know of no decision supporting this plea, and it would be 
 extremely prejudicial to commercial paper if it could be supported. 
 Tlie acceptor in a bill is considered in the same light as an indorser 
 of a promissory note ; and it is well known that much of the paper 
 discounted in our banks is accommodation paper, and it never has 
 been supposed that the indorser in such case is not liable. 
 
 Judgment for plaintiffs on demurrer, with leave to amend, on 
 payment of costs. 
 
 This rase enunciates an elementary principle, and does not require the cita- 
 tion of authorities to sustain it. There are, however, some peculiar doctrines 
 growing out of the law of accommodation paper; these are illustrated in the 
 following cases. See also note to Swift v. Tyson, ante, p. 186. 
 
 It is no defence that the paper was overdue when the indorsee took it with 
 knowledge that it was accommodation paper. Thompson v. Shepherd, 12 Met. 
 311. 
 
 Small et al. v. Smith. 
 
 (1 Denio, 583. Supreme Court of New York, October, 1845.) 
 
 Fraudulent diversion. — One who purchases accommodation paper with knowledge that 
 the terms and conditions on which the accommodation was given have been vio- 
 lated is not a bonajide holder as against the party who lent his name for accommo- 
 dation. 
 
 The case is stated in the opinion of the Court. 
 
 Beardsley, J. If the evidence given on the trial was true, and 
 that was for the jury to determine, it is perfectly clear that the 
 note was delivered to the plaintiffs in violation of the agreement 
 upon which it had been indorsed by the defendant. The plaintiffs 
 therefore were not entitled to recover, unless they received it bona 
 fide and upon a valuable consideration. Both were necessary. It 
 must have been received in good faith, without notice of the 
 arrangement on which the indorsement had been made, and tlie 
 transfer must have been upon what the law regards as a valuable
 
 8MALL V. SMITH. 265 
 
 consideration. These principles admit of no dispute ; and al- 
 tliough upon some points of commercial law in close proximity to 
 those I have stated, discordant opinions may l)e found, Stalker v. 
 McDonald, 6 Hill, 93, Swift v. Tyson, 16 Peters, 1, there is entire 
 harmony as to those I have mentioned. 
 
 The judge charged that if the plaintiffs received the note in pay- 
 ment and satisfaction of a deht due to them from Hulburt, the 
 maker of the note, that was a sufficient consideration for its trans- 
 fer, and they thereby became purchasers for value. This, as a 
 legal proposition, is not questioned ; but the bill of exceptions fails 
 to show any evidence to which this principle could be applied. 
 There was no proof which tended to show that the note had been 
 transferred in extinguishment of the debt of llull)urt. The judge, 
 therefore, in my view of the case, erred in submitting that question 
 to the jury. 
 
 Bnt I shall not. dwell on this point, for the case may be disposed 
 of on the question of good faith. 
 
 It appears by the testimony of Hulburt, that he was indebted to 
 the plaintiffs in a sum exceeding the amount of this note, and that 
 Small, one of the plaintiffs, came to Vienna, where Hulburt resided, 
 to secure payment of said debt. Small proposed to Hulburt to 
 give a note at one year with security, and the defendant, who lived 
 in another county, was spoken of for that purpose. Small said he 
 would take the defendant as surety, and it was arranged that while 
 Small was absent (as he was going "West for a few days), Hulburt 
 should go to the defendant's residence in order to obtain him as 
 such surety. Pursuant to this arrangement Hull)urt went to see 
 the defeiulant, and told him what he wanted. At first the defend- 
 ant refused to indorse, but it was finally agreed between them that 
 he would indorse the note upon condition that one Austin, who 
 then held a note given by the defendant, should deposit the same 
 with a third person, there to remain until the defendant should be 
 discharged from said indorsement. The note in question was ac- 
 cordingly signed by Hulburt and indorsed by the defendant, but it 
 was not to be transferred to Small, or used in any manner, until 
 the one held l)y Austin had been deposited under said arrangement. 
 Hulburt returned with the note to Vienna, where Austin lived, and 
 told him of the arrangement under which the indorsement had 
 been made. Austin declined to comply with that arrangement, but 
 Hulburt, as he states, left the note in suit on Austin's table, and
 
 266 * HOLDER FOR VALUE. 
 
 did not see it again until Small had returned to Vienna. Hulburt 
 first saw Small after his return at Austin's office, where, on arriv- 
 ing at the office, according to the testimony of Hulburt, Small said 
 to him : " We have fixed that matter, and Mr. Austin has let me 
 have the note." The witness then inquired of Austin, in Small's 
 presence, in what manner the note had been turned out, and 
 whether the arrangement of the defendant had been complied with, 
 to which Austin made no answer, but Small said he had pre- 
 vailed on Mr. Austin to indorse the note and he had got it. This, 
 according to the witness Hulburt, was all which passed at that 
 time. Another witness (Paul), who was present, said the remark 
 of Hulburt to Austin was, that he supposed he had not turned out 
 the note without complying with the request of Mr. Smith, the 
 defendant, to which Austin made no answer, but Small said he 
 had prevailed on Mr. Austin to indorse the note and had released 
 Mr. Smith. 
 
 It is not material which of these witnesses was correct as to the 
 form of the remarks made at that time. Both come to the same 
 result ; for what was said, according to the statement of either 
 witness, was full notice to Small that the indorsement had been 
 procured upon some arrangement or condition which had not been 
 complied with. Here, then. Small had actual notice that the in- 
 dorsement was conditional ; and if the note was subsequently 
 transferred to him, he would necessarily take it subject to that con- 
 dition. When this notice was given, the note was in Small's 
 hands. He had received it, as he said, of Mr. Austin. But it can- 
 not be pretended he had received it of Austin upon any considera- 
 tion moving between them. Indeed, the first remark of Small to 
 Hulburt, and all that was said on that occasion, goes to show that 
 whatever might have been done by Austin had been done for Hul- 
 burt and not for himself, and in furtherance of the negotiation 
 which had been commenced between Hulburt and Small. It is not 
 shown that Austin had authority from Hulburt to transfer this note 
 to Small on any terms, although it may be inferred that he was 
 authorized to do so, on complying with the condition upon which 
 the defendant's indorsement had been made. Small did not set up 
 that he had received the note as the property of Austin, and the 
 whole transaction shows he did not. He could not, therefore, upon 
 the facts as disclosed by the witnesses, pretend that he had acquired 
 title to the note in any manner before lie was apprised by Hulburt
 
 MOHAWK BANK V. COREY. * 2G7 
 
 that the indorsement was made on a condition which had not been 
 performed. It is more a matter of inference than of any thing 
 like direct proof, tliat Hullnirt at any time assented to the transfer 
 of the note to Small ; bnt if he did so, after notice to Small of the 
 condition on which tlic indorsement had been made, it is plain that 
 the plaintiffs ought nut to recover, as the condition has never l)een 
 performed. If the plaintiffs claim as purchasers of the note from 
 Austin, they are met by two oVyections : first. Small, one of the 
 plaintiffs, was aware that the note l>clongcd to Hulburt and not to 
 Austin ; and, secondly, it is not shown that the plaintiffs paid or 
 advanced any thing to Austin, or that any consideration passed 
 between them for the transfer of the note. And as to Hulburt, if 
 he assented to the transfer of the note to Small, it was after ex- 
 plicit notice that the indorsement was conditional, as is proved by 
 the testimony of both Paul and Hulburt. Had the case been put 
 to the jury upon the point of notice, with suitable explanations, 
 there is no doubt what the verdict should and would have been, 
 unless these witnesses were wholly discredited. I think the case • 
 was not so submitted to the jury, and that it should be sent back 
 for a new trial. 
 
 Neiv trial granted. 
 
 See preceding and following cases. 
 
 Mohawk Bank v. Corey and Livermore, Impleaded. 
 
 (1 Hill, 513. Supreme Court of New York, July, 1841.) 
 
 Accommodation paper. Diversion. — Where it does not appear tliat the acconinioilation 
 party had any interest in tlie manner in which liis paper was to be applied, it is 
 immaterial that it was not used according to agreement. 
 
 The case is stated in the opinion of the Court. 
 
 Bronson, J. The indorscrs, Corey and Livermore, lent their 
 names to Borst, the maker, for the purpose of giving him credit, 
 and he was at liberty to negotiate the note in any way he thought 
 proper. Borst says, he got them to indorse it for the purpose of
 
 268 " HOLDER FOR VALUE. 
 
 enabling liim to get it discounted at the Albany City Bank, to 
 raise money to buy barley. But it does not appear that the in- 
 dorsers had any interest in having it discounted by the Albany 
 City Bank, or that the use which Borst should make of the money 
 was in any way important to them. They merely asked Borst 
 what he was going to do with the money, and he told them he was 
 going to purcliase barley with it. If the note had been made for 
 the purpose of taking up another note in the Albany City Bank, 
 to which the indorsers were parties, it would have presented a dif- 
 ferent question. But here, although the indorsers had the curios- 
 ity to inquire what use the maker designed to make of the note, 
 they had no interest in the question ; and, so far as appears, they 
 would just as readily have lent their names if the maker had told 
 them he wished to take up his notes in the plaintiffs' bank, — the 
 use which he afterwards made of the paper. Within the proper 
 legal sense of the term, there has been no diversion of the note 
 from the purpose for which it was made and indorsed. The in- 
 dorsers lent their names for the purpose of giving the maker credit 
 generally, and without any concern with the use which should be 
 made of that credit. 
 
 But if there had been a diversion of the note from its proper use, 
 the plaintitfs would still be entitled to recover. They not only took 
 the note in payment of two other notes which they then held 
 against Borst indorsed by Voorhees, but they gave up those secu- 
 rities. They also gave up, of course, the suit which had been 
 commenced and was then pending on the two notes. This is a 
 stronger case than that of the Bank of Salina v. Babcock, 21 
 Wend. 499. There have been several other decisions to the same 
 eifect, which are not yet published.^ It is not denied that the 
 plaintiffs are bona fide holders of the paper, and it is equally clear 
 that they paid a valuable consideration for it. 
 
 New trial denied. 
 
 The rule is thus stated in Wardell v. Howell, 9 Wend. 170, per Sutherland, 
 J. : " Where a note has effected the substantial purpose for which it was de- 
 signed by the parties, an accommodation indorser cannot object that it was not 
 effected in the precise manner contemplated at the time of its creation. . . . But 
 where a note has been diverted from its original destination, and fraudulently 
 put in circulation by the maker or his agent, the holder cannot recover upon it 
 against an accommodation indorser, without showing that he received it in good 
 faith, in the ordinary course of trade, and paid for it a valuable consideration." 
 
 1 Bank of Sandusky v. Scoville, 24 Wend. 115.
 
 STODDARD V. KIMBALL. 209 
 
 Charles Stoddard et al. v. John Klmuall. 
 
 (6 Gushing, 469. Supreme Court of Massachusetts, October, 1850.) 
 
 Misapplication. — In an action by the indorsee against the indorser who liad indorsed 
 the paper for tlio maker's accommodation, the indorser cannot raise the defence 
 that the note was misapplied by tlie maker, without showing that the plaintiff liad 
 knowledge of the misapplication. 
 
 Amount of recovery. — If accommodation paper has been tiken to secure a pre-existing 
 debt of a less amount than tiiat expressed on the face of the paper, the holder can 
 recover against the accommodation indorser only the amount of the debt, if he 
 (the holder) is not liable to any third person for any surplus. 
 
 The case is stated in tlie opinion of the Court. 
 
 Shaw, C. J. This was a suit brouglit by the plaintiff as indorsee 
 of a promissory note, against the defendant as indorser. The 
 defence reHed on was, tliat tlie defendant indorsed the note, at the 
 request and for tlie accommodation of the maker, for a special pur- 
 pose, that of taking up another note, on which he was indorser, and 
 that it was not so applied, but w-as negotiated to the plaintiffs, as 
 collateral security for a debt due to them. The defendant also 
 contended, that the plaintiffs, at the time of taking the note, had 
 notice of the misapplication of the same, as above stated ; but this 
 fact was left to the jury, who found that the plaintiffs had no such 
 notice. 
 
 It further appeared that some payments had been made by tlie 
 maker of the note to the jjlaintiffs, towards the discharge of tlie 
 debt, for securing which to the plaintiffs this note was received, and 
 also that the maker being insolvent, the plaintiffs proved this debt 
 against his estate, and received a dividend. 
 
 The defendant contended that if liable at all, he was liable only 
 for the balance of the debt diie the plaintiffs, if less than the amount 
 of the note, and the judge, who tried tlie cause, so ruled, subject to 
 the opinion of the whole Court, and in case they should be of 
 opinion that the plaintiffs are entitled to recover the whole amount, 
 the verdict is to be altered and amended accordingly. 
 
 "We think the direction was right. An indorser of an accommo- 
 dation note, passed by indorsement to a bona fide holder, in due 
 course of business, is effectually bound to all the liability, to w'liich,
 
 270 ^, HOLDER FOR VALUE. 
 
 by law, the indorser of a business note is liable. He stipulates to 
 take on himself the qualified obligation of one, who indorses and 
 puts in circulation a note taken by himself for value in the course 
 of business. 
 
 If indeed an accommodation note is obtained from another, by 
 fraud, deception, or false practices, or having been o1)taincd for one 
 purpose, is fraudulently misapplied to another, and it is negotiated 
 to one, even for value, with full notice of the fraud in obtaining or 
 misusing it, he cannot recover ; he is not a bona fide holder ; an 
 attempt to recover it would make him a partaker in the fraud ; and 
 the same would be true of a business note. 
 
 In the present case, it appearing that the note was negotiated to 
 the plaintiffs before it was due, for a valuable consideration, and 
 the jury having found that they took it without notice of the mis- 
 application by the maker, it is clear that they have a right to 
 recover ; and the only remaining question is, for what amount they 
 may recover. In general, the holder of an indorsed note will be 
 entitled to recover the whole amount of the face of the note, because 
 the presumption of fact, in the absence of counter proof, is, that he 
 gave the full value for it, or that he took it from some other holder 
 for value, to collect the amount, receive a certain part to his own 
 use, and account to the party from whom he took it for the surplus. 
 Having taken it to secure a pre-existing debt, of a less amount, he 
 is a holder for value in his own right, only to the amount of the 
 debt due him. If, therefore, it appears in proof, that the plaintiff 
 is not accountable to any third person for any surplus, then there 
 is no reason why he should recover any more than the balance of 
 the debt, for which he is a bona fide holder for value. Here, it 
 appears that the plaintiff received this note of the maker, for whose 
 accommodation the defendant indorsed it. It being obvious that 
 the plaintiff can recover nothing as trustee for the party from 
 whom he received it, he is liable over to nobody for the surplus, 
 and therefore can have judgment only for the amount due to him- 
 self, for his own use and in his own right, which is so much of the 
 note as may be necessary to satisfy the balance of the debt, for the 
 security of which he received it. 
 
 Judgment on the verdict for the plaintiff for the smaller sum. 
 
 See Allaire v. Hartshorne, 1 Zabr. 665, holding that, if the paper is invalid 
 between the original parties for want of consideration, the holder can recover 
 only the amount which he has actually advanced ; citing Edwards v. Jones, 7
 
 BAXTER V. LITTLE. . 271 
 
 Car. & P. 633 ; s. c, 2 Meos. & W. 414 ; Robins v. Maidstone, 4 Add. & 
 Ellis (n. .s.), 811 ; Chitty, Bills (Hth cd.), 81 ; Sedffwick, Damages, 241. This 
 doctrine is also sustained liy the following authorities: Chicopee Bank v. Cha- 
 pin, 8 Met. 40; Hilton i\ Smith, 5 Gray, 400; Ilolenian v. Ilobson, 8 Ilninph. 
 127; Williams v. Smith, 2 Hill, 301; Valotte v. Mason, 1 Smith, Ind. 89; 
 WilFin V. Roberts, 1 Esp. 2G1 ; Jones v. Hibbert, 2 Stark. 304. See also 
 Bond I'. Fitzpatrick, 4 Gray, 89. 
 
 James Baxter v. William Little. 
 The Same v. Joseph Harris, Jr. 
 
 (6 Metcalf, 7. Supreme Court of Massachusetts, March, 1843.) 
 
 Paper overdue. Set-off. — Wiien the first indorsee of a promissory note negotiates it 
 after it is dishonored, and the second indorsee brings an action thereon against the 
 maker or first indorser, the defendant cannot set off any claim which he has 
 against the first indorsee, except such as existed at the time of the transfer of the 
 note to tlie i)laintiff, although he had no notice of such transfer when he acquired 
 Ills claim against the first indorsee. 
 
 The Jirst of these actions was by the indorsee against the maker 
 of a promissory note for $330, dated March 1, 1837, payable to 
 Joseph Harris, Jr., in four months, and by him indorsed. The 
 action was commenced October 4, 1889. 
 
 At the trial before the Cliief Justice, the signatures of the 
 maker and indorse.r were admitted by the defendant, and he relied 
 upon a set-off of notes against the Franklin Bank, upon the 
 ground that the note in suit was held by that bank, after it was 
 due, and that he had a right to make the same defence against the 
 plaintiff, as if the action were brought by the bank. 
 
 In order to present the question of law, it was mutually con- 
 ceded, that the note was discounted by the Franklin Bank, in the 
 due course of business ; that it was held by the bank, when it be- 
 came due ; that afterwards, and after the bank had stopped pay- 
 ment, in pursuance of a vote of the directors to pay the debts of 
 the bank in sucli securities as they liad, the note in question, on 
 the twentieth of December, 1837, was delivered to the plaintiff, or 
 to the person under whom the plaintitT claims title, in excliange for 
 bills of said bank, at par, which bills were then at a discount in 
 the market : That before this action was brought — upon notice
 
 272 HOLDER FOR VALUE. 
 
 of the plaintiffs' attorneys that they had such a note, and de- 
 manded ])ayment thereof, but without notice to the defendant that 
 the note had been transferred by the bank, — the defendant ten- 
 dered to said attorneys, in satisfaction of the note, lulls of the 
 Franklin Bank, which they declined to accept ; that the defend- 
 ant has ever since had said bills, and has filed them in offset in 
 this action, and now relies upon that tender and set-off. 
 
 The second of these actions was by the indorsee against the in- 
 dorser of tlie same note, and all the facts stated in the previous 
 case were agreed to in this. The defendant further, in this case, 
 relied upon a balance due to him from the Franklin Bank, by way 
 of set-off to the note. And it was further agreed by the parties, 
 that on the fifth of June, 1838, there was due to the defendant, on 
 the books of said bank, a balance of $293.63, and that he had no 
 notice of the transfer of the note to the plaintiff, until this suit 
 was commenced ; that within a month or two after the twentieth of 
 December, 1837, when the note was passed out of the bank, notice 
 was given to the defendant by the cashier, that it was so passed 
 out ; that the balance above mentioned, due to the defendant, on 
 the fifth of June, 1839, arose from post notes deposited on that 
 day, except $12.88, which previously stood to his credit ; and that 
 the deposit then made cancelled all demands which the bank had 
 against him, and left the above balance. 
 
 It was agreed in each case, that judgment should be entered 
 for the plaintiff, if in the opinion of the Court he was entitled to 
 recover ; otherwise, that the plaintiff should become nonsuit. 
 
 Shaw, C. J. When a negotiable note is indorsed and trans- 
 ferred after it is due, and the defendant relies upon matter of set- 
 off which he may have against the promisee, he can avail himself 
 only of such matter of defence as existed between himself and tiie 
 promisee, at the time of the actual indorsement and transfer of 
 the note to the holder. A note does not cease to be negotiable, 
 because it is overdue. The promisee, by his indorsement, may 
 still give a good title to the indorsee. Notes or other matters of set- 
 off, acquired by the defendant against the promisee, after such trans- 
 fer, cannot be given in evidence in defence to such note, although 
 the maker had no notice of such transfer, at the time of acquiring his 
 demand against the promisee. Having made his promise negoti- 
 able, he is liable to any bona fide holder and actual indorsee ; and
 
 BAXTER V. LITTLE. 273 
 
 therefore, even after the note has become due, in making payments 
 to the original promisee, or in further dealings l>y whicli he gives 
 him a credit, he lias no right to presume, without proof, that the 
 promisee is still the holder of the note. Besides, in case of pay- 
 ment of a negotiable note, or of a credit which the maker intends 
 shall operate by way of payment, he has a right to have his note 
 given up, if paid in full, or to see the payment indorsed, if partial. 
 Should he insist on this rigiit, in the case proposed, he would at 
 once perceive that the person to whom he is making payment or 
 giving credit, is no longer the holder of the note. And this ap- 
 pears to us to be the true distinction between the indorsement of a 
 note overdue, and the assignment of a chose in action. In the 
 latter case, notice of the assignment must be given by the as- 
 signee to the debtor, to prevent him from making payment to the 
 assignor. Without such notice, he has no reason to presume 
 that the original creditor is not still his creditor ; and payment to 
 him is according to liis contract and in the due and ordinary 
 course of business. The assignee takes an equitable interest only, 
 which must be enforced in the name of the assignor ; and, until 
 notice, he has no equity against the debtor, which can be recog- 
 nized and protected by a court of law or equity. The indorsee of 
 a note overdue takes a legal title ; but he takes it with notice on 
 its face that it is discredited, and therefore subject to all payments 
 and offsets in the nature of payment.- The ground is, that by this 
 fact he is put upon inquiry, and therefore he shall he bound by all 
 existing facts, of which incpiiry and true information would ap- 
 prise him ; but these could only apprise him of demands then 
 acquired by the maker against the payee. 
 
 We are aware that in the marginal note to Sargent v. South- 
 gate, 5 Pick. 312, which is the leading case on this subject, it is 
 stated, that " in an action by the indorsee against the maker of a 
 negotiable note indorsed when overdue, the defendant may file in 
 set-off a negotiable note made to him by the payee before he had 
 notice that the note in suit was assigned." And the point is so 
 stated in Minot's Digest, 640. No such decision was called for 
 in that case, because all the demands, relied uj)on by way of set- 
 off, were acquired by the defendant, whilst the original payee was 
 holder of the note. But further; on a careful examination of the 
 opinion, we think it will not be found that there is any such 
 dictum in regard to notice. The inadvertence, in extracting the 
 
 18
 
 274 HOLDER FOR VALUE. 
 
 marginal note from the case, probably arose from the very obvious 
 analogy between the case of the indorsement of a note overdue, 
 and the assignment of a chose in action, especially as there was 
 nothing in the facts or the argument to call for a distinction be- 
 tween the two cases. The opinion of the Court in that case, 
 therefore, is not an autliority opposed to the ground of decision 
 adopted in this, namely, that this right of set-off must be con- 
 fined to those demands against the payee or prior holder, which 
 accrued to the defendant, whilst such payee or prior holder was 
 the actual holder of the note, and will not extend to demands 
 which accrued afterwards, although no notice of the indorsement 
 was given to the debtor. 
 
 The defendant Little, the maker of the note now in suit, not 
 having shown that he held the bills of the Franklin Bank at the 
 time that his note was transferred to the plaintiff, he cannot set 
 them off in this suit. In a case in New York, it was held that 
 bills of a bank, held by the defendant when his note became due, 
 could not be set off in an action brought on the note by receivers 
 appointed previously. Haxtun v. Bishop, 3 Wend. 13. 
 
 The English rule, in allowing set-off in an action upon a note, 
 is somewhat more limited than our own, confining such defence 
 to equities arising out of the same note, or transactions connected 
 with it. Burrough v. Moss, 10 Barn. & C. 558. Here, it has 
 been held, that an independent demand may be set off, where in 
 other respects the party is entitled to go into that defence. Sar- 
 gent V. Southgate, 5 Pick. 312 ; Ranger v. Gary, 1 Met. 369, 375. 
 
 Since the decision in Sargent v. Southgate, the principle de- 
 cided by it has been confirmed, and the whole subject of set-off 
 placed, by the Rev. Sts. c. 96, upon grounds more distinct and 
 satisfactory than it was under the former statutes. 
 
 The principles already stated apply a fortiori to the case of 
 Harris, the defendant in the second action, who was indorser of the 
 same note. The note was transferred to the plaintiff by the Frank- 
 lin Bank, in December, 1837, soon after which, the defendant had 
 actual notice of it from tlie cashier ; and it is found that the de- 
 posit to the credit of the defendant, upon whicli he relies by way 
 of set-off, was made, and the credit obtained, in June, 1838. It is 
 stated indeed, that prior to that time there was a small balance to 
 his credit, on deposit of $12.88, but there were other demands 
 of the bank, at that time, against tlie defendant, exceeding that
 
 BAXTER V. LITTLE, ^ ( O 
 
 deposit ; so that tlic whole of the defendant's demand against the 
 bank, oirered in set-off", accrued subsequently to tiio transfer (;f the 
 note, which is now in suit, to the plaintiff. 
 
 Ji(i.l(jment, in both rases, for the jylaintiff. 
 
 This qiu'stiun is discussed and decided in Britton v. Bishop, 11 Vt. 70. The 
 facts in the case will sudicieiitly appear in the opiiiion of the Court by 
 
 RKDriKLD, J. The only (piestion presented lor the consideration of this Court, 
 arises upon the third and foin-tli pleas of the defendant. These pleas are sub- 
 stantially the same, and amount to nothing more than an alleffed agreement on the 
 part of Ballou, the original payee of the note in suit, to apply a lesser note, given 
 by him to the firm of Buskirk and Proudfit, and by them indorsed to the defend- 
 ants, upon the note now sued. It is alleged that this agreement was made on the 
 twenty-ninth of August, 1S37, and that at that time, and for a long time thereaf- 
 ter, to wit, twenty ilays, Ballou was the owner of the note now sued in the name 
 of plaint ilV. The latter note lell due on the first day of September, 1837, and 
 the above allegation is by no means equivalent to an allegation that Ballou nego- 
 tiated the note to the plaintiff when the same was overdue. For the allegation 
 by way of a continuendo, being under the videlicet, is immaterial, and the whole 
 allegation is satisfied by proof that the payee of the note retained it till the twenty- 
 ninth day of August. It is to be taken, then, that the note was negotiated while it 
 was still current, and the signers cannot, as a<:ainst this plaintiff, avail them- 
 selves of the defence attempted, without showing notice of such agreement 
 brought home to the plaintiff at the time of receiving the note. The pleas in 
 controversy contain no such allegation, and are therefore bad. 
 
 But, as the counsel seem to understand the fact in the case to be that the note 
 was negotiated to the plaintiff when overdue, and desire a derision upon the 
 merits of the question thus presented, the Court have passed upon it. 
 
 There can be no doubt that, at common law, the holder of a negotiable bill 
 or note who receives it from the payee after it falls due, takes it subject to all 
 defences which attach to the note or bill in the hands of the indorser. 
 
 It was first doubted whether a bill or note, overdue, could be so negotiated 
 as to enable the indorsee to sue it in his own name. But, upon the opinion 
 of merchants, the Court of King's Bench decided such action would lie. 
 Mitlbrd V. Wallicot, 1 Salk. 129. But in Brown v. Davies, 3 T. R. 80, and 
 Tayler v. Mather, il). 84, it is expressly decided that the indorsee, in such case, 
 takes the bill or note subject to all defences. In the former case some stress is 
 laid upon the fact that the bill had been noted for non-payment, but in the latter 
 case that was considered of no importance. This is the well-settled doctrine of 
 the couunon law. In the case of Sargent v. Southgate, 5 I'ick. 312. it was 
 holden that the maker of a note or bill negotiated when overdue, and sued in the 
 name of the indorsee, might in his defence plead any matter in set-off, which he 
 could have pleaded if the suit had been in the name of the payee. This was 
 allowed by an ecjuitable construction of the Massachusetts statute of set-offs. 
 No English decision has gone that length. The case of Burrough v. ]Moss, decided 
 in the King's Bench, 1830, reported in 10 Barn. & C. O.J8, and in 2) Eiig. C. L. 
 128, puts this question upon the true ground. The Court there held that the
 
 276 HOLDER FOR VALUE. 
 
 indorsee of an overdue promissory note is liable to all equities arising out of 
 the note transaction itself, and to the application of demands due the maker from 
 the payee, when there was an agreement, either express or implied, to that effect. 
 That rule would clearly enable the defendants in the present case to avail them- 
 selves of the note mentioned in the third and fourth pleas, for the purpose of 
 reducing damages, even after judgment or default. 
 
 The recent American cases hold substantially the same doctrine. Barlow v. 
 Scott, 12 Iowa, 63 ; 10 id. 208. All defences as between the original parties, so 
 far as the note is concerned, are equally available against the indorsee who re- 
 ceives the paper when overdue. Bates v. Kemp, 12 Iowa, 99. But a set-ofif 
 against the holder of paper taken before maturity is not an admissible defence, 
 even when known to the purchaser at the time of the indorsement to him. Bar- 
 ker V. Valentine, 10 Gray, 341 ; Flint v. Flint, 6 Allen, ?A. But an agreement 
 to accept payment by application upon other outstanding notes due the maker from 
 the payee will be a valid defence in such case. Staley v. Mathers, id. 937. So 
 where a promissory note, negotiable but not indorsed, was given for stock sub- 
 scribed in a railway corporation, and at the time of its execution and being secured 
 by mortgage, the company gave the maker a counter contract, guaranteeing him 
 against loss upon the stock, such counter contract will be a defence against a 
 bill for foreclosure of the mortgage, the stock having become worthless. Peck v. 
 Bligh,37 111.317. 
 
 An interesting and important question arose in Oulds v. Harrison, 28 Eng. L. 
 & Eq. 524. It was there held that the right of an indorsee of an overdue bill of 
 exchange to sue the acceptor is not defeated by the existence of a debt due from 
 the drawer to the acceptor, and notice by the latter to the drawer, before indorse- 
 ment, of his election to set off the amount against the Vjill ; nor is the indorsee 
 of such overdue bill of exchange affected by the existence of a right of set-off as 
 between the acceptor and the drawer, although the bill was indorsed without 
 value and for the purpose of defeating the set-off. Parke, B., said : " This plea, 
 though inaccurately stated, we think amounts to an averment that both the 
 indorser and indorsee knew that there was a debt due, and that the defendant 
 would probably set it off, if the action were brought by the indorser against the 
 defendant, knowing there would probably be a set-off (because it was not quite 
 certain that the debt would still remain due) ; but knowing there would probably 
 be a set-off, they fraudulently, so far as it was a fraud in law, and no further, 
 agreed that the bill should be indorsed ; and it was therefore indorsed without 
 value to the plaintiff. . . The holder's power to circulate it is not restrained 
 simply by the existence, at the time, of a debt of equal value, and his circulating 
 it is no infringement of any existing right of the defendant. . . . Does it become 
 a fraud in defeating the title, if he actually intends to do that which, under the 
 circumstances, would be the necessary result of this act ? and would it become 
 so, if he communicates that intention to the indorsee, and the latter agi-ees to 
 assist him ? This we think is no fraud, and does not avoid the transaction." 
 
 This doctrine proceeds on the ground that set-off, strictly so called, is not 
 such an equity as can be interposed against the indorsee of commercial paper, 
 whether taken before or after maturity. Whitehead v. Walker, 10 Mees. & W. 
 696 ; Way v. Lamb, 15 Iowa, 79 ; Arnot v. Woodburn, 35 Mo. 99.
 
 knight8 v. putnam. 277 
 
 William Knights v. Samuel Putnam. 
 
 (3 Pickering, 184. Supreme Court of Massachusetts, September, 1825.) 
 
 Usury. When maker can set up this defence. — Commercial paper which is valid in its 
 inception cannot be tainteil with usury afterwards, except as between the imme- 
 diate parties ; and, therefore, the maker of a note, valid when executed, cannot 
 raise the defence against an indorsee that the latter purchased the note of the payee 
 at a usurious rate of interest. 
 
 Assumpsit upon a promissory note made by the defendant, pay- 
 able to W. Putnam or order, and by him indorsed to the plaintiff. 
 Plea, the general issue. 
 
 At the trial before Putnam, J., the defendant offered the indorser 
 as a witness, to prove that the consideration of the indorsement 
 was usurious ; but he was rejected as incompetent, on the author- 
 ity of Manning v. Wheatland, 10 Mass. 502. 
 
 The indorser had released to the defendant all liis claims upon 
 the note, and the defendant offered to prove by him that the note 
 was pledged to the plaintiff' as collateral security for a debt much 
 less than the amount of it, contending that the plaintiff ought not 
 to recover more than the amount of such debt. This evidence was 
 considered as irrelevant, and was rejected. 
 
 A verdict was returned for the plaintiff", but if either of these 
 determhiations was incorrect, a new trial was to be granted. 
 
 "Wilde, J. As to the question of usury, the case of Manning 
 V. Wheatland ^ is directly in point. But the authority of that case 
 has been questioned, and the objection to the doctrine, as it was 
 there laid down, is entitled to great consideration. 
 
 The witness was held to be incompetent, not because he was in- 
 terested, but on the ground of legal policy, which will not permit 
 one who has transferred a negotiable security as valid, to invali- 
 date it by his testimony .^ But in that case, as in this, there was 
 no illegality in the original contract, and no usury except in the 
 transfer, in which the plaintifif himself was the guilty party. No 
 deception therefore was practised on him. The note was a valid 
 
 1 10 Mass. 602. 
 
 '■* This subject is considered under Evidence ;xw^
 
 278 HOLDER FOR VALUE. 
 
 contract ; precisely what he supposed it to be at the time of tlie 
 transfer. 
 
 But notwithstanding these objections, we arc of opinion that 
 the case of Manning v. Wheatland was rightly decided. For if the 
 witness was competent, we consider the point to which he was called 
 to testify as immaterial, and that consequently his testimony was 
 properly excluded. We are aware there are conflicting opinions 
 and contradicting decisions on this point, but after examining all 
 the cases, we are satisfied that the defendant cannot avail himself 
 of the defence of usury, and that a note, valid in its inception, 
 may be recovered against the maker by an indorsee, although dis- 
 counted by him at a rate exceeding legal interest. 
 
 It is a well-established principle that, if a note or security is 
 valid when made, no usurious transaction afterwards between the 
 parties or privies will affect its validity. Ferrall v. Shaen, 1 Saiind. 
 295, Williams's note. 
 
 But it is objected that, as the transfer is usurious, the plaintiff's 
 title fails, although the original contract remains good, 'and that he 
 cannot derive title from an illegal transaction in which he was a 
 guilty party. This objection would have weight if a usurious 
 contract were malum in se or merely void. But it has been fre- 
 quently held that a contract contaminated with usury is only void- 
 able by the party injured or tliose claiming under him. 
 
 Now it is manifest that the maker of a note is not affected by a 
 usurious agreement between the indorser and indorsee. He is 
 liable on his contract, and it is immaterial to him whether the 
 action be brought in the name of the indorser or in that of the 
 indorsee. But I hold further, that the transfer of a note on a 
 usurious consideration is neither void nor voidable. So far as the 
 indorsement operates as the transfer of the note it is an executed 
 contract, and the statute against usury is not applicable. It only 
 applies to the implied promise or guaranty of the indorser, which 
 being an executory contract may be avoided. But in no case can 
 an executed contract be set aside on the plea of usury. It is 
 not, however, necessary to insist on tliis distinction for tlie purpose 
 of sustaining the present verdict. It is sufficient for this purpose, 
 that the transfer is voidable only, and that it is not competent for 
 the defendant, he not being a party to the transfer, to avoid it. 
 The note being free from usury between the immediate parties to 
 it, no after transaction with another person can, as respects those 
 persons, invalidate it.
 
 KNIGHTS V. PUTNAM. 279 
 
 In New York, this principle is fully established by repeated de- 
 cisions. The cases of Bush v. Livingston, 2 Caincs's Cas. in Err. 
 60, and Braman v. Hess, 13 Jojins. 52, and Munn v. Commission 
 Co. 15 Johns. 44, are directly in point. The only case which 
 has been decided on a contrary doctrine is that of Lloyd v. Keach, 
 2 Conn. 175. It is somewhat remarkable that in this case and 
 in the case of Munn r. Commission Co. it is said the point 
 under consideration was too clear to be questioned, although the 
 two decisions are directly contradictory. Tlie cases referred to by 
 Gould, J., as establishing tiie principle laid down in the case of 
 Lloyd I'. Keach, do not ajtpear to me at all decisive. It is true, in 
 those cases the law seems to be taken for granted as it is laid down 
 by the learned judge in the case of Lloyd v. Keach. But he does 
 not appear to have taken into consideration an important distinc- 
 tion in relation to these cases between notes or bills given on a 
 valuable consideration and in the usual course of business, and 
 accommodation notes or bills, made for the purpose of raising 
 money, and not existing as valid contracts before they are dis- 
 counted. The distinction is noticed and the law correctly stated 
 by Spencer, J., in the case of Munn v. Commission Co. He says : 
 " It is clear that, if a bill or note be made for the [iurpose of rais- 
 ing money upon it, and it is discounted at a higher premium than 
 the legal rate of interest, and where none of the parties whose 
 names are on it can, as between themselves, maintain a suit on the 
 bill when it becomes mature, provided it had not been discounted ; 
 that then such discounting of the bill would be usurious, and the 
 bill would be void." The reason of the distinction is obvious. 
 In the case supposed, the bill or note is mere waste paper before it 
 is discounted ; it is then that it first exists as a contract, and if 
 tainted with usury it is voidable even in the hands of a bona fide 
 holder. The case of Jones v. Brooke, 4 Taunt. 464, and the case 
 of Churchill v. Sutcr, cited by Gould, J., fall within this class of 
 cases, and wliethcr the other cases referred to were business notes 
 or bills, or were made for the purpose of raising money, does not 
 appear. Besides, these are nisi j}rii(s cases, and not at all decisive, 
 nor can opinions incidentally expressed, and in support of which 
 no reasons are given, be entitled to much weight of authority. 
 
 In the case of Parr v. Eliason, 1 East, 92, it was decided that 
 a l)ill free from usury in its concoction, may be sold at a discount 
 greater than the legal rate of interest, without avoiding the bill in
 
 280 HOLDER FOR VALUE. 
 
 the hands of a bona fide holder. That was an action of trover, 
 and it seems to be implied that, if it had been brought against the 
 immediate indorsee, wlio was a party to the usurious transfer, it 
 might have been maintained. But this is decided only by infer- 
 ence, and it was a point not involved in the decision of that case. 
 But if the inference be admitted to be just, it does not follow that 
 the maker of the bill can take advantage of the usury. If the 
 transfer was voidable only, and Lord Kenyon clearly so con- 
 siders it, for he likens it to a sale which is fraudulent against cred- 
 itors, I see no legal reason why the maker of the note should be 
 allowed to avoid it. If, however, the transfer is merely void, as 
 Crould, J., contends, then the case of Parr v. Eliason cannot be 
 supported, for the bona fide holder in that case had no right to the 
 bill. The transfer being void is a mere nullity, and it was imma- 
 terial whether the holder was or was not a party to the usurious 
 transfer. This is the necessary legal consequence of considering 
 the transfer as absolutely void ; it is opposed to the current of the 
 English authorities, and cannot be maintained either on principle 
 or authority. Judgment according to verdict. 
 
 A very full citation of authorities upon the points discussed in this case will 
 be found in Perkins's edition of 3 Pickering. 
 
 4 
 
 Holmes et al. v. Williams. 
 
 (10 Paige, 326. Court of Chancery of New York, 1843.) 
 
 Usury. — Where the holder and apparent owner of negotiable securities sells them at 
 a discount, to a bo7ia fide purchaser, who has no knowledge of the purpose for 
 which such securities were made, the holder representing such securities to belong 
 to himself, and to be business paper, the transaction is not usurious, as between the 
 vendor and purchaser, though the representations of the vendor were false, the 
 paper having been made to be sold at usurious discount in the market. 
 
 The case is stated in the opinion of the Court. 
 
 Gridley, V. C. The two first-named complainants constituted 
 a mercantile firm in Utica, and were indebted to the defendant in 
 a large sura of money. In the month of December last, S. Holmes,
 
 nOLME3 V. WILLIAMS. 281 
 
 one of the said firm, had in his liands a draft for 82500 drawn upon 
 the house of Morgan, Cutler, c^- Co., of New York, hy Ford and Smith, 
 D. Vanderbilt, and F. C. Chapman, and indorsed in blank by L. 
 Harvey, which draft at the time had never been accepted or nego- 
 tiated, but was acconunodation paper, belonging to the drawers, 
 made and indorsed to raise money on, for their benefit, and placed 
 in the hands of Holmes for that purpose alone. This draft Holmes 
 negotiated, sold, and transferred by indorsement to the defendant, 
 at a sum considerably below the amount due by its terms, and 
 applying a portion of the consideration upon an existing demand of 
 the defendant, and receiving the remainder in cash ; Holmes rep- 
 resenting to Williams at the time that the draft was business paper, 
 and was the property of himself or himself and partners. In Jan- 
 uary following, the drawers api)lied to Holmes for the re-delivery of 
 the draft ; whereupon he applied to the defendant to take \ip the 
 draft, which was effected under the following agreement : That the 
 two Holmeses, with Kellogg as surety, should give the defendant 
 their note, due on May 4th, 1839, for the amount due on the draft, 
 and that a suit should be commenced against the Holmeses, upon 
 which they should give a cognovit, upon which judgment should be 
 entered and execution issued and levied on the property of the two 
 Holmeses, returnable at the next term thereafter. The bill prays 
 that the defendant may be perpetually enjoined from prosecuting 
 the judgment execution, and that the same may be decreed to be 
 satisfied of record, by the said defendant ; and that he also may be 
 decreed to deliver up the note to be cancelled. 
 
 The first question material to be decided is whether the purchase 
 of the draft was usurious so that it was a void security in the 
 defendant's hands. Were this a new question of construction to 
 be settled under the statute, I confess I should think it was not. 
 There is a good legal reason why a security, actually tainted with 
 an original act of usury, should be held void in the hand of a bona 
 fide and innocent holder. For the statute has declared it so in 
 terms, and in all such cases as of notes given in violation of the 
 statute against gaming, horse-racing, &c. Courts have uniformly 
 held the securities void not merely against the payees and holders, 
 with notice, but against holders receiving them for value, and before 
 maturity and without notice. But to hold a security purchased as 
 this draft was, tainted with usury and void in the hands of the 
 purchaser, the purchase must be decreed, pro hac vice, a. loan, — a
 
 282 HOLDER FOR VALUE. 
 
 mere contract of borrowing and lending. It is true that a contract 
 of purchase in words is very properly held to be in construction of 
 law a contract of loan, when such a -device is resorted to to cover a 
 transaction which is really a loan. But how is such a transaction 
 to be regarded as a loan upon principle when the purchase is bona 
 fide ? Suppose the contract to be written out, describing A, the 
 owner of a bond made by B, and setting out the sale of it for a sum 
 less than the amount due on its face, and providing that a portion 
 should be applied on a demand due from the seller to tlie purchaser 
 and the residue paid in money ; and suppose, farther, that on the 
 part of the purchaser it is a bona fide purchase, and not intended by 
 him as a cover for a loan, there being nothing in the law making 
 such a purchase (if real) unlawful ; it would seem to be doing vio- 
 lence to the contract as it is set forth in words, and also as under- 
 stood in the minds of the parties, especially of the purchaser, to 
 hold it a loan and not a purchase. Was there ever an agreement 
 to loan money in the case supposed, either in fact or intent ? Did 
 two minds ever meet and assent in fact or intent upon any such 
 contract, and does not the law by its potent power of construction, 
 when it declares such a purchase usurious, annihilate the actual 
 agreement of the parties, and substitute another in its stead totally 
 different from it, thus changing an act in itself lawful into one 
 which is declared to be a violation of a penal statute ? When one 
 intentionally takes eight instead of seven per cent, though he may 
 not intend to be guilty of usury, he is nevertheless guilty, for he 
 intends to do what he does, but mistakes the law. Here, however, 
 he buys a security which turns out to be accommodation paper, but 
 he never agreed to buy any such paper ; he contracted to buy it as 
 being business paper. He was mistaken in the fact, not in the 
 law. Nevertheless, it is the settled doctrine of the courts that such 
 a transaction is usurious. See 2 Johns. Cas. (jQ, 206, 2d ed. ; 15 
 Johns. 44, 355 ; 7 Wend. 569. The consequence of this doc- 
 trine as applied to this case is, that the draft was, in the hands of 
 the defendant, so far as respects his right to maintain an action on 
 it, tainted witli usury and void. 
 
 The next question is whether the note made by the complainants 
 to secure the amount due upon the draft when such draft was 
 taken up, is also usurious and void. Tiie complainant's counsel 
 insists that it is a new security, substituted in the place of an usu- 
 rious one, and therefore is itself tainted with usury. And such is
 
 IIOLMKS V. WILLIAMS. 283 
 
 uiidciiiahly tlie true doctrine as a|)j)lied to ordinary cases of new 
 securities substituted in the place of usurious ones, and is illus- 
 trated by the case of renewals of a usurious note ; and I apprehend 
 that a change of a part, or even all of the names njjon the |)aper, 
 would not alter the legal rule. The defendant's counsel admits the 
 existence of this rule, but maintains that it is not a[)plicable to a 
 case where the holder of the tainted security is innocent of the 
 usury in fact ; and that the defendant in this case, though his pur- 
 chase of tl\e draft was technically usurious, is entitled under this 
 rule to stand in the })lace of an innocent holder. 
 
 What then is the rule as to securities given in the place of 
 usurious ones, to secure the amount to an innocent holder of the 
 latter ? In Cuthbert et al. v. Haley, 8 Durnford & East, 390, the 
 plaintiff brought del)t on a bond for £2080, conditioned to pay 
 c£l-j-iO with interest, and the defendant pleaded tiiat the bond was 
 given for securing money lent by one Plank to the defendant upon 
 a usurious contract between Plank and the defendant, &c. On the 
 trial, it appeared that Plank discounted eighteen promissory notes 
 of the defendants, amounting to <£lo44 2s. 3f/., and took usurious 
 interest on them. Plank afterwards carried them to the plaintiffs, 
 his l)ankcrs, wlio gave him credit for them. When the notes fell 
 due, the jilaintiff applied for payment, and the defendant paid him 
 £44 2s. '6d. in money, and gave the bond in question for the res- 
 idue. Lord Ke)ujijii was of opinion that the plaintiff should recover, 
 and so ruled, allowing a rule to show cause. On the argument of 
 the cause at bar, the defendant's counsel strenuously urged that the 
 bond in (piestion was but a sul)stituted security, and cited various 
 cases in which such securities had been held usurious. The 
 Judges, however, were unanimously of opinion that this rule, 
 though they fully admitted its existence, and its application in or- 
 dinary cases, did not apply to a case where the substituted secu- 
 rity was given to an innocent holder. So, too, in Powell v. Waters, 
 8 Cowen, 669, 690, 691, 692, Chancellor Jones (after having said 
 that Parish, who discounted the first note, knew it was not business 
 paper, and that his knowledge affected his partners), declares that 
 the note then before the Court was a substituted security for the 
 first, and therefore void ; and adds that such substituted security, 
 given to an innocent holder, would l)c valid. He says that a new 
 security taken by such a meritorious holder of the usurious 
 note has a just claim to jirotection. The rule then is clearly
 
 284 HOLDER FOR VALUE. 
 
 established, that an innocent holder of paper substituted for 
 usurious paper will be protected, and that the ordinary principle, 
 which declares that a new security is infected with the same usury 
 which tainted that for which it is substituted, is inapplicable to an 
 innocent holder of usurious paper. 
 
 Is the defendant to be^regarded as an innocent holder of the draft 
 in question in this suit ? It is true that by a series of decisions, 
 which I have already cited, the act of purchasing the draft (though 
 he erroneously supposed it to be business paper, and therefore a 
 lawful article of sale and purchase), was technically legally usurious. 
 But was he guilty in intent and in fact ? Could he have been pun- 
 ished by an indictment under the Act of 1837 ? On the contrary, 
 was he not the innocent purchaser of this paper, and the victim of 
 the civil disabilities incurred under the act by the most flagrant 
 false pretences of one of the individuals who now asks a court of 
 equity to visit upon him the consequences which flow from such 
 fraudulent misrepresentations ? Though this draft be held void in 
 the defendant's hands, yet, could he not sustain an action against 
 S. Holmes for the loss he suffered by reason of his false affirmation 
 that the draft in question was his own property, and therefore a 
 lawful subject of purchase, when it was not ; by reason of which 
 the very act of purchasing rendered the purchase void ? Could he 
 not also recover in an action for money had and received, the 
 money he advanced upon this purchase ; which was valueless, solely 
 by reason of the fraudulent concealment and misrepresentation of 
 a fact in relation to the draft ? Can a man by the grossest fraud, 
 amounting, as I think, to the offence of obtaining money by false 
 pretences, get another's money (without any intentional fault on 
 the part of that other), and not be responsible for it at law ? I 
 think not. I think S. Holmes was liable to the defendant for the 
 ^money he obtained from him by the fraudulent transfer of paper 
 which he falsely declared to be his own, and which, if it had been 
 so, would have been a valid and available security in the defendant's 
 hands. If, then, this money was really due and recoverable from 
 Holmes, would not a note given by S. Holmes alone, to secure it, 
 be good and available against him ? Suppose that the defendant 
 had, while he held the draft, learned that it was not the property 
 of Holmes, and that by Holmes's false representation he had 
 parted with his money under circumstances which rendered the 
 draft void in his hands, and had called on Holmes and charged
 
 HOLMES V. WILLIAMS. 285 
 
 liim with tlie fraud, and Holmes had tlien taken up the draft and 
 given his own note instead of it ; could Holmes defend himself 
 against a suit on such note on the ground of usury ? Would, it not 
 be allowing him to succeed in a defence founded on his own fraud 
 instead of the fraud of his antagonist ? Suppose he had transferred 
 a forged note, or a note infected witli exiting usury, or void for 
 any other cause, affirming it to be good, and denying the facts which 
 rendered it void, would he not be liable ? And if he had got l)ack 
 the void paper and given bis own note in its stead, could he defend 
 himself in a suit upon such note ? I think the merits of his defence 
 would be the same in all the cases I have supposed. If the new se- 
 curity then would have been free from objection for usury, if exe- 
 cuted by S. Holmes alone, it must be so notwithstanding others 
 signed the note as sureties. In Cram v. Hendricks, 7 Wend. 569, 
 584, the chancellor, in commenting on the case of Munn v. Ruggles, 
 15 Johns. 57, says in express terms, that the l)roker who sold the 
 bill to the purchaser was liable to him for the money advanced, 
 though the note might be void in the hands of such purchaser, he, 
 like the defendant in this case, supposing that the agent owned the 
 bill. Tiiis opinion of the chancellor, though not necessary to the 
 decision of that case, is entitled to great weight as tlie opinion of a 
 learned jurist ; and the weight of that authority I think is somewhat 
 strengthened by the fact that the chancellor was for holding the 
 doctrine impeaching securities for usury with greater strictness and 
 rigor than a majority of the court in the case then before them. I 
 am not prepared to say that Holmes would have been responsible 
 for more than the money he advanced, especially in an action for 
 money had and received or money paid ; though he probably might 
 be for the full amount of the draft in an action on the case. But 
 however that may be, I do not think that embracing in the new 
 note the whole amount of the draft would render that note usurious, 
 provided it would not otherwise be so. If the false affirmation had 
 been true, the draft would have been available to the defendant for 
 the whole amount of it, and if Mr. Holmes had chosen to indemnify 
 him by giving him a note for that amount, I do not see that it 
 would be usurious ; or even that he could in a suit upon this note 
 have set up a defence as to the excess. To sustain this bill, how- 
 ever, the note must be adjudged void for usury, which, for the rea- 
 sons before stated, I am of opinion cannot be maintained. To 
 sustain it would be to make the Court the organ of great mjustice ; I
 
 286 HOLDER FOR VALUE. 
 
 do not mean merely by enforcing the statute against usury even in 
 its utmost rigor, severe as that statute is ; for he who will know- 
 ingly violate the statute must not complain if he is compelled to 
 suffer the extreme penalties of the act ; but it would present Mr. 
 Holmes in the attitude of fraudulently obtaining the defendant's 
 money for worthless paj^r, and after receiving back the paper and 
 giving his own note as an equivalent, then asking the Court of 
 Ciiancery to make his fraud successful, and to protect him in tlic 
 possession of its fruits, by declaring the note thus given void for 
 usury. 1 cannot but think that to carry the principle to such an 
 extent would be, in the language of Lord Kenyon in the case before 
 cited from Durnford k East, extending it further than policy or the 
 words of the act require. I have already remarked that in my 
 judgment the securities must stand or fall with tliis principle, that 
 if this note would be good if made by Sylvanus Holmes alone, it 
 must be adjudged good though others unite with him in secur- 
 ing a demand due from and legally collectible of him. 
 
 The conclusion to which this view of the subject brings me, 
 without examining the other questions raised and discussed by the 
 counsel, is that the bill should be dismissed with costs. 
 
 Walworth, Chancellor, said that he concurred in the opinion 
 of the vice-chancellor, that where the holder and apparent owner 
 of negotiable securities sells them at a discount to a bona fide pur- 
 chaser who has no knowledge of the purpose for which such secur- 
 ities were made, the holder representing such securities to belong 
 to himself, and to be business paper, the transaction was not usu- 
 rious as between the vendor and the vendee ; although the repre- 
 sentation of the vendor was false, and the securities were in fact 
 made for the sole purpose of being sold at an usurious discount 
 in the market. 
 
 Decree affirmed with costs.
 
 CAMERON V. CHAPPELL. 287 
 
 Cameron v. Chappkll et al. 
 
 (24 Wendell, 94. Supreme Court of New York, May, 1840 ) 
 
 «i 
 f 'sitri/. — Acceptance of a bill in consideration tliat a shipment of wheat shall be made 
 to the drawee by the drawer does not make the bill accommodation paper between 
 the parties ; and such bill is not tainted with usury by the fact that the drawer 
 afterwards procured it to be discounted at a rate of interest beyond tliat allowed 
 by law. 
 
 This was an action on Ijill of exchange, for 8797, drawn by 
 Joseph Strangliam, on the defendants, dated 12th December, 1836, 
 payable to his own order five months after date. The defendants 
 accepted the draft in consideration of a promise on the part of 
 Strangham, to send the acceptors 600 bushels of wheat, to be 
 shipped on the opening of navigation at Buffalo. The wheat was 
 in Canada, and the acceptors resided at Rochester. Strangham, 
 before maturity of the bill, had it discounted by an agent of the 
 Commercial Bank of Upper Canada, who charged him beyond the 
 legal rate of interest of Canada, one per cent for agency, in collect- 
 ing, (fee. The defendants insisted, by way of defence, that the bill 
 was accepted merely for the accommodation of Strangham, and that 
 consequently it having no legal inception until negotiated to the 
 bank, they could avail themselves of the usury. Witnesses were 
 examined on the part of the defendants to establish the facts 
 alleged by them, and that not any wheat was received by the de- 
 fendants from Strangham. The cause was heard by a referee, who 
 reported in favor of the defendants. The plaintiff, in whose name 
 the suit was prosecuted, for the benefit of the bank, moved to set 
 aside the report and for a re-hearing. 
 
 Nelson, C. J. The only question made in the case is whether 
 the defendants are to be regarded as accommodation acceptors, 
 and standing in the light of sureties upon the paper, or as having 
 parted with it to Strangham for value, to wit, on an engagement 
 upon his part to i)ay the amount at maturity in wheat. If the 
 former is the true exposition of the case, then the accc{)tance had 
 no inception till the negotiation with the agent of the bank, and, 
 therefore, is tainted with usury ; if the latter, it is to be regarded 
 
 t
 
 288 HOLDER FOR VALUE. 
 
 as business paper in the hands of Strangham, and the transfer 
 by him valid witliin the case of Cram v. Hendricks, 7 Wend. 
 669. 
 
 No doubt the promise thus to pay would be binding and consti- 
 tute a good consideration for the acceptance of the draft, and the 
 taking of it up by the defendants would be but the payment of 
 their own debt, and not money paid for' the use of the drawer. 
 This is abundantly settled in the cases of cross notes or accept- 
 ances for the mutual accommodation of tlie parties ; they are 
 respectively considerations for each other. Rolfe v. Caslon, 2 
 H. Bl. 570 ; Cowley v. Dunlop, 7 T. R. 565 ; Buckler v. Buttivant, 
 3 East, 72 ; Rose v. Sims, 1 B. <fe A. 521 ; Rice v. Mather, 3 
 Wend. 62 ; Byles, Bills of Exch. 62 ; Chitty, Bills, 443. Mr. 
 Byles lays down the proposition thus : If a man gives his accept- 
 ance to another, that will be a good consideration for a protnise, or 
 for another bill, though such acceptance be unpaid. 
 
 I have looked attentively into the facts of the case as disclosed 
 by the three witnesses who were present at the arrangement 
 between the parties, and am of opinion that the preponderance is 
 decisively in favor of the conclusion, that the undertaking of 
 Strangham to deliver wheat in the spring, constituted the consid- 
 eration of the acceptance. His own account of it is express and 
 precise, that he was to deliver 600 bushels, to be shipped at Buf- 
 falo. The other two are less distinct, but in the main, rather con- 
 firm than weaken this view of the transaction. They do not 
 recollect that this precise quantity was fixed upon, but agree that 
 it was the understanding to pay in wheat ; and one states that he 
 thinks the price was not to exceed 10s. 6d., which would bring the 
 quantity about as stated by Strangham himself. 
 
 Again : what affords a strong corroborative circumstance of 
 Strangham's account, and that he was not the mere agent of the 
 acceptors, as contended, is, that neither of the two witnesses pre- 
 tend that the acceptance was not to be used except in the purchase 
 of wheat. On the contrary, Alleyn states that it was understood 
 if wheat could not be purchased on satisfactory terms, then Strang- 
 ham was to put the acceptors in funds to take up the draft at 
 maturity ; impliedly conceding the right to use it as his own for 
 any purpose, and that the acceptors would look exclusively to his 
 personal responsibility for the liabilities they had assumed. 
 
 In all the cases to which I have referred in respect to counter
 
 CAMERON V. CnAPI'ELL, 289 
 
 bills or notes, it is conceded that there can be no reraedy npon tlie 
 implied promise of indemnity as in the case of principal and 
 surety, or principal and agent, because the party had assumed his 
 liability in consideration of a delivery of notes or acceptances to 
 an equivalent amount, and therefore he must seek his remedy 
 upon them ; that the implied promise was negatived by the facts, 
 and could not be raised ultra the bills or notes. This ground is 
 very fully and satisfactorily examined by Lawrence, J,, in Cowley 
 V. Dunlop, and Lord EllcnburoKgh in Buckler v. Buttivant. 
 
 So here, the defendants trusted to the undertaking to purchase 
 and deliver the wheat as the consideration for the acceptance, and 
 will be obliged to look to that for their remedy in case of failure 
 to perform. They made the paper their own by the arrangement, 
 and in taking it up they but pay their own debt. 
 
 Upon the whole 1 am satisfied the referee has mistaken the legal 
 effect of the proof, and therefore the report must be set aside, costs 
 to abide the event. 
 
 We have inserted the foregoing cases upon the law of usury, as affecting bills 
 and notes, because they embrace some of the most essential and controlling 
 questions upon that subject ; and we scarcely felt at liberty wholly to ignore all 
 questions of that character which not many years since occupied so large a space 
 in the reported oases upon our general subject, and are still of interest upon all 
 questions of illegality in the consideration of bills or notes. But the present 
 state of legislation, in most of the States, upon the subject of usury, seems to 
 give a very decided indication, that there will soon be little occasion to discuss 
 these questions in court. We shall therefore occupy no further space in regard 
 to them. 
 
 19
 
 290 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 Michael Musson and George O. Hall, surviving partners 
 of William Noll, v. William A. Lake. 
 
 (4 Howard, 262. Supreme Court of the United States, December, 1845.) 
 
 Necessity of presentment. — The notary should present the paper when he demands pay- 
 ment ; and this rule has not been changed by statute in Louisiana. Even if it had 
 been there changed, as the defendant's contract was to be performed in Mississippi 
 where the law merchant prevails in this particular, presentment could not be dis- 
 pensed with. 
 
 Protest, how far evidence. — A protest which only states that payment was demanded, is 
 not evidence to prove presentment. 
 
 The case is stated in the opinion of the Court. 
 
 M'KiNLEY, J. The plaintiffs brought an action of assumpsit, in 
 the Circuit Court of the United States for the Southern District of 
 Mississippi, against the defendant, as indorser of a bill of exchange, 
 drawn at Vicksburg, in said State, by Steele, Jenkins, & Co., for 
 86133, payable twelve months after the first day of February, 1837, 
 to R. H. and J. H. Crump ; and addressed to Kirkman, Rosser, & 
 Co., at New Orleans, .and by them afterwards accepted, and in- 
 dorsed by the payees and the defendant. 
 
 On the trial of the cause, the plaintiffs offered to read as evidence 
 to the jury a protest of the bill of exchange, to the reading of which 
 the defendant objected ; because it did not appear in the protest 
 that the notary had presented the bill to the acceptors, or either of 
 them, when he demanded payment thereof. And upon the ques- 
 tion, whether the protest ought to be read to the jury as evidence 
 of a presentment of the bill to the acceptors for payment, or as 
 evidence of the dishonor of the bill, the judges were opposed in 
 opinion. "Which division of opinion they ordered to be certified to
 
 MU8S0N V. LAKE. 291 
 
 this Court ; and upon that certificate the question is now before us 
 for determination. 
 
 The indorser of a bill of exchange, whether payable after date or 
 after sight, undertakes that the drawee will pay it, if the holder 
 present it to him at matnrity and demand payment ; and if he re- 
 fuse to pay it, and tho holder cause it to be protested, and due 
 notice to be given to tiie indorser, then he promises to pay it. All 
 these conditions enter into and make part of the contract between 
 these parties to a foreign bill of exchange ; and the law imposes 
 the performance of them upon the holder, as conditions precedent 
 to the liability of the indorser of the bill, A presentment to and 
 demand of payment must be made of the accejjtor personally, at 
 his place of business or his dwelling. Story, Bills, § 325. Bank- 
 ruptcy, insolvency, or even the death of the acceptor will not ex- 
 cuse the neglect to make due presentment ; and in the latter case 
 it should be made to the personal representatives of the deceased. 
 Chitty, Bills, 7th London ed. 246, 247 ; Story, Bills, 360 ; 5 Taunt. 
 30; 12 Wend. 439; 2 Douglass, 515 ; Warrington v. Furbor, 8 
 East, 242, 245 ; Esdaile v. Sowerby, 11 East, 117 ; 14 East, 500. 
 
 The reasons why presentment should be made to the drawee are, 
 first, that he may judge of the genuineness of the bill ; secondly, 
 of the right of the holder to receive the contents ; and thirdly, that 
 he may obtain immediate possession of the bill upon paying the 
 amount. And the acceptor has a right to see that the person 
 demanding payment has a right to receive it, before he is boui»d to 
 answer whether he will pay it or not ; for, notwithstanding his 
 acceptance, it may have passed into other hands before its maturity. 
 And he, as well as the drawee, has a right to the possession of the 
 bill upon paying it, to be used as a voucher in the settlement of 
 accounts with the drawer. Story, Bills, § 361 ; Hansard v. Robin- 
 son, 7 Barn. & C. 90. 
 
 Mr. Justice Storij has given the form of a protest now in use in 
 England, in his treatise on Bills of Exchange, by which it will be 
 seen that the words " did exhibit said bill " are used, and a blank 
 is left to be fdled up with '' the presentment, and to whom made, 
 and the reason, if Assigned, for non-payment." Story, Bills, 302, 
 note. This, with the authorities already referred to, shows that 
 the protest should set forth the presentment of the bill, the demand 
 of payment, and the answer of the drawee or acceptor. The holder 
 of the bill is the proper person to make the presentment of it for
 
 292 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 payment or acceptance. Story, Bills, § 360. But the law makes 
 the notary his agent for the purpose of presenting the bill, and 
 doing whatever the holder is bound to do to fix the liability of the 
 indorser. Every thing, tlierefore, that he does in the performance 
 of this duty must appear distinctly in his protest. He is the officer 
 of a foreign government ; the proceeding is ex parte ; and the evi- 
 dence contained in the protest is credited in all foreign courts. 
 Chitty, Bills, 215; Rogers v. Stevens, 2 T. R. 713; Brough v. 
 Parkings, 2 Ld. Raym. 993 ; Orr v. Maginnis, 7 East, 359 ; Ches- 
 mer v. Noyes, 4 Camp. 129. The evidence contained in the protest 
 must, therefore, stand or fall upon its own merits. It rests upon 
 the same footing with parol evidence ; and if it fails to make full 
 proof of due diligence on the part of the plaintiff, it must be re- 
 jected. 
 
 But the counsel for the plaintiffs insists that the statute of Lou- 
 isiana, and tlie interpretation given to it by the Supreme Court of 
 that State in the case of Nott's Executor v. Beard, 16 Louisiana, 
 308, have so changed the law merchant, as to render unnecessary 
 the presentment of a foreign bill for payment. After a careful 
 examination of the opinion of the Court in that case, we are unable 
 to perceive any intention manifested to depart from the settled 
 usages of the law merchant ; but, on the contrary, they attempt 
 by argument and authority to bring the case within that law. The 
 question before that Court was the identical question now before 
 us. The protest was objected to because it did not show that the 
 bill had been presented by the notary to the acceptors for payment. 
 To this objection, that Court said it might perhaps have been more 
 specific, if, in the protest, it had been stated that the bill was pre- 
 sented, and payment thereof demanded. And they admit the law 
 is well settled, that, before the holder of an accepted bill can call 
 on the drawer for payment, he must make a presentment for, or 
 demand of payment, and give notice of the refusal. Here, then, 
 is a definite proposition, asserting that a presentment for payment 
 and a demand of payment are convertible terms, and that the proof 
 of either would be sufficient. 
 
 To support this proposition, they refer to Chitty on Bills, and 
 Bayley on Bills, and the annotators on them. And as further 
 proof and illustration, and to show that demand of payment should 
 be preferred to presentment for payment, they refer to the statute 
 of Louisiana, passed in 1827, in which they say the word " demand "
 
 MDSSON V. LAKE. 293 
 
 is used ill it, and that the word " presentment " is not ; and they 
 refer to the statute, also, to show that notaries were vested witli 
 certain powers by it, which gave authority to their acts ; and tiiat 
 they being public officers, the presumption of law is, that they do 
 their duty ; and therefore, if the protest wcrc^defective, and liable to 
 the oljjection urged against it, this presumption of law would cover 
 all sucii defects. This is substituting presumption for j)roof, in 
 violation of all the rules of evidence. 
 
 With all duo respect for that distinguished tribunal, we are con- 
 strained to dissent from the general proposition they have laid down 
 on the subject of demand and presentment, and from all their rea- 
 soning in support of it. Due diligence is a question of law ; and 
 we think we have shown, by abundant authority, that the holder of 
 an accepted bill, to fix the liability of the drawer or indorser, must 
 present it to the acceptor and demand payment thereof. It may 
 be well here to repeat what Lord Tenterden^ C. J., said on this Jsub- 
 ject, in delivering the judgment of the Court of King's Bench, in 
 the case of Hansard v. Robinson, before referred to. He said : 
 " The general rule of the English law does not allow a suit by the 
 assignee of a chose in action. The custom of merchants, consid- 
 ered as part of the law, furnishes in this case an exception to the 
 general rule. What, then, is the custom in this respect? It is, 
 that the holder of the bill shall present the instrument, at its matu- 
 rity, to the acceptor, demand payment of its amount, and, upon 
 receipt of the money, deliver up the bill. The acceptor paying the 
 bill has a right to the possession of the instrument for his own 
 security, and as his voucher and discharge pro tanto, in his account 
 with the drawer. If, upon an oiTer of payment, the holder should 
 refuse to deliver up the bill, can it be doubted that the acce})tor 
 might retract his offer, or retain his money ? " This extract, we 
 think, furnishes a full answer to all that has been said by the Su- 
 preme Court of Louisiana to prove that it is not necessary to pre- 
 sent the bill to the acceptor for payment ; and to the presumption 
 of law relied on to cure the defects in the protest. 
 
 But to show that, by the statute of Louisiana, the presentment 
 of a bill to the acceptor for payment is not dispensed with, and that 
 the presentment is, by a fair construction of the act, as much within 
 its true intent and meaning as the demand, we proceed to examine 
 its provisions. The princii)al object of the legislature in passing 
 this statute seems to have been to give authority to notaries to give
 
 294 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 notices, in all cases of protested bills and promissory notes ; and to 
 make their certificates evidence of such notices. And, therefore, 
 all that is said on the subject of the demand and the manner of 
 making it, and the other circumstances attending it, was not in- 
 tended as a new enactment on these subjects, but as inducement to 
 the powers conferred on the notary, which was the principal object 
 of the statute, as will appear, we think, by reading it. That part 
 of it which relates to this subject is in these words : " That all 
 notaries, and persons acting as such, are authorized, in their pro- 
 tests of bills of exchange, promissory notes, and orders for the 
 payment of nwney, to make mention of the demand made upon the 
 drawee, acceptor, or person on whom such order or bill of exchange 
 is drawn or given, and of the manner and circumstances of such 
 demand ; and by certificate, added to such protest, to state the 
 manner in which any notices of protest to drawers, indorsers, or 
 other persons interested were served or forwarded ; and whenever 
 they shall have so done, a certified copy of such protest and cer- 
 tificate shall be evidence of all the notices therein stated." 
 
 It seems to have been taken for granted by the legislature, that 
 the notaries knew how to make out a protest, and therefore they 
 did not prescribe the form, but gave the substance of it, to which 
 the notary was required to add a certificate ofthe manner in which 
 he had given notices, and when done, according to the statute, a 
 certified copy of the protest and certificate should be evidence, not 
 of the demand and manner and circumstances of the demand, but 
 of the notice only. This shows that the intention of the legisla- 
 ture, in passing this part of the statute, was merely to authorize 
 the notaries to give notices, and to make the copy of the protest, 
 and the certificate added to it, evidence of notice in the courts of 
 Louisiana. But independent of this view of the subject, we think 
 the language employed in this statute includes the presentment of 
 the bill for payment, and for all other purposes, as fully as it does the 
 demand of payment. In giving construction to the act, the phrase, 
 " and of the manner and circumstances of such demand," cannot 
 be rejected, but must receive a fair interpretation. When taken in 
 connection with other parts of the statute, what do these words 
 mean ? The manner of making a demand of payment, we have 
 seen, is by presenting the bill to the drawee or acceptor ; and so 
 important is this part of the proceeding, that the omission to pre- 
 sent the bill to the acceptor will justify his refusal to pay it, al-
 
 MUSSON V. LAKE. 295 
 
 though payment be demanded. The legislature cannot be presumed 
 to iiave intended to make so important a change in the law mer- 
 chant as tiiat ascribed to them by the counsel for the plaintiffs, 
 witliout at the same time providing some other mode of obtaining 
 the acceptance and payment of l)ills of exchange, and of holding 
 drawers and indorsers to their liabilities. It is but reasonaljle, 
 therefore, to give to the phrase before referred to such construction, 
 if practicable, as will leave the law merchant as it stood before the 
 passage of tlie statute, and carry into effect the main intention of 
 the legislature. This, we think, may fairly be done without doing 
 any violence to the intention or the language of the statute. 
 
 The manner of the demand must, therefore, mean the present- 
 ment of the bill for either acceptance or payment ; and the cir- 
 cumstances of the demand, we think, means the place where the 
 presentment and demand is made, and the person to whom or of 
 whom it is made, and the answer made by such person. It is very 
 clear, that bills payable at sight, and. after sight, are within the 
 meaning of tlie statute ; because it provides for a demand of pay- 
 ment of the acceptor of a bill. Now, how can therG be an acceptor 
 of a bill, without a presentment for acceptance ? Until the bill 
 become due, payment cannot be demanded of the drawee. This 
 shows, that without the word presentment and the word demand 
 also, the plain meaning of the statute could not be carried into 
 effect. A bill, payable at a fixed period after its date, need not be 
 presented for acceptance ; it is sufficient to present it and demand 
 payment when it arrives at maturity ; but a bill payable at sight, 
 or after sight, can never become due until after it has been accepted. 
 How is the holder or the notary to obtain the acceptance of such a 
 bill, under the decision of the Supreme Court of Louisiana ? Will 
 it be sufficient to demand payment of the bill ? That would be a 
 nugatory act, because it is not due ; then it must be admitted, tliat, 
 by fair and necessary construction, the word presentment is within 
 the plain meaning and intention of the statute, and that the bill 
 may be presented for acceptance or for payment, and therefore 
 neither the statute nor the decision of the Supreme Court of Lou- 
 isiana has changed the law merchant in any of these respects. 
 
 There is, however, another question, entirely independent of the 
 statute and the decision of the Supreme Court of Louisiana, which 
 may be decisive of the case before this Court ; and that question 
 is, Wliether the contract between the holder and indorser of the bill
 
 296 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 ill controversy is to be governed by the law of Louisiana, where the 
 bill was payable, or by the law of Mississippi, where it was drawn 
 and indorsed. The place where the contract is to be performed is 
 to govern the liabilities of the person who has undertaken to per- 
 form it. The acceptors resided at New Orleans ; they became par- 
 ties to the bill by accepting it there. So far, therefore, as their 
 liabilities were concerned, they were governed by the law of Lou- 
 isiana. But the drawers and indorsers resided in Mississippi ; the 
 bill was drawn and indorsed there ; and their liabilities, if any, 
 accrued there. The undertaking of the defendant was, as before 
 stated, that the drawers should pay the bill ; and that if the holder, 
 after using due diligence, failed to obtain payment from them, he 
 would pay it, with interest and damages. This part of the contract 
 was, by the agreement of the parties, to be performed in Mississippi, 
 where the suit was brought, and is now depending. The construc- 
 tion of the contract, and the diligence necessary to be used by the 
 plaintiffs to entitle them to a recovery, must, therefore, be governed 
 by the laws of the latter State. Story, Bills, § 366 ; 4 Peters, 123 ; 
 2 Kent's Comm. 459 ; 13 Mass. 4 ;' 12 Wend. 439 ; Story, Bills, 
 § 76 ; 4 Johns. 119 ; 12 Johns. 142 ; 5 East, 124 ; 3 Mass. 81 ; 3 
 Cowen, 154 ; 1 Cowen, 107 ; 5 Cranch, 298. 
 
 Whatever, therefore, may have been the intention of the legisla- 
 ture in passing the statute, and of the Supreme Court of Louisiana 
 in the decision of the case referred to, neither can affect, in the 
 slightest degree, the case before us. In Mississippi, the custom of 
 merchants has been adopted as part of the Common Law ; and by 
 that law and their statute law, this case must be governed. We 
 think, therefore, the protest offered by the plaintiff, as evidence to 
 the jury, ought not to have been received as evidence of present- 
 ment of the bill to the acceptors for payment, nor as evidence of 
 the dishonor of the bill ; which is ordered to be certified to the 
 Circuit Court accordingly. 
 
 McLean and Woodbury, JJ., dissented as to the effect of the protest, regard- 
 ing it as sufficient evidence of presentment. They agreed with the majority as to 
 the necessity of presentment, — the point intended to be illustrated here. 
 
 The principal case is supported, as to the necessity of presentment, by Ar- 
 nold V. Dresser, 8 Allen, 435 ; Shaw v. Reed, 12 Pick, 132 ; Freeman v. Bojii- 
 ton, 7 Mass. 483 ; Whitwell v. Johnson, 17 Mass. 449 ; Gilbert v. Dennis, 3 Met. 
 495. 
 
 The loss of negotiable commercial paper will not dispense with the necessity
 
 RENNER V. THE BANK OF COLUMBIA. 297 " 
 
 of due presentment and the subsequent proceedings necessary in ordinar}- cases 
 to charge prior parties. Presentment in such case can be easily made upon a 
 copy, if a new bill cannot be obtained, and will be sufBcient. Hinsdale v. Miles, 
 6 Conn. 331; Dehers v. Harriot, 1 Show. lG-1; Wain v. Bailey, 10 Adol. & 
 Ellis, 616; Charnley r. Grundy, 2;3 Eng. L. & Eq. 318; Story, Bills of Ex- 
 change, § 348; Kyd, Bills, 139 (3d. ed.) ; 2 Parsons, Notes and Bills, 260. 
 
 If the lost paper was not negotiable, no presentment would be necessary in the 
 case of a note, as there would be no one to charge by notice ; but in the case of 
 a bill it would be necessary to make the presentment, in order to charge the 
 drawer. Sec Lost Bills and Notks, j)ost. 
 
 If the holder or notary has the paper with him when he makes the demand, 
 but does not present it, yet so describes it as to leave no doubt that the payor 
 may understand of what paper payment is demanded, this is sufficient. Etheridge 
 V. Ladd, 44 Barb. 60. 
 
 Renner, Plaintiff in Error, v. The President, Directors, 
 &c., OF the Bank of Columbia, Defendants in Error. 
 
 (9 Wheaton, 581. Supreme Court of the United States, February, 1824.) 
 
 WTien demand should be made. Usage of hanks. — A custom of all the banks of the Dis- 
 trict of Columbia to demand payment and give notice to indorsers of commercial 
 paper on the fourth day after the day of payment named, which has been uniformly 
 followed for upwards of twenty years, and whicli was known to and understood by 
 the defendant when he indorsed the paper, is to be considered as entering into the 
 contract, so that demand and notice on the fourth day are sufficient to charge the 
 indorscr. 
 
 The case is stated in the opinion of the Court. 
 
 Thompson, J. This case comes up on a writ of error to tlie Cir- 
 cuit Court of the District of Columbia ; and by the record it appears 
 that the action in the Court below was prosecuted against Renner, 
 the plaintiff in error, as indorser of a promissory note, drawn by 
 James Poyles, and discounted at the Bank of Columbia. The 
 note bears date on the ninth day of January, 1817, for four thou- 
 sand six hundred dollars, and .is payable sixty days after date. 
 In the declaration it is averred, that demand of payment of the 
 maker was made on the fourteenth of March, wliich was ou the 
 fourth day after tlie expiration of the sixty days, which the note 
 had to run.
 
 298 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 Several questions, arising out of the record, have been presented 
 for the consideration of the Court, The principal one, however, 
 is that which relates to the time of demand of payment of the 
 maker of the note, and grows out of a bill of exceptions taken 
 upon the trial. This has been pressed upon the Court as a ques- 
 tion of great importance, and the decision of which, in its appli- 
 cation to the concerns of the bank, will have a very wide and 
 extensive effect. 
 
 We shall proceed to the consideration of this point, in the first 
 place, leaving the others, which are of minor importance, to be 
 noticed hereafter. 
 
 The testimony given at the trial was for the purpose of showing 
 that the Bank of Columbia had, from its first establishment, in 
 1793, adopted the practice of demanding the payment of notes 
 discounted by it, on the fourtli day after the time limited for the 
 payment thereof, according to the express terms of the note. And 
 that such was the universal custom of all the banks in Washing- 
 ton and Georgetown. That this custom was well known and 
 understood by the defendant, when he indorsed the note in ques- 
 tion. After this testimony had been received, without objection, 
 the counsel for the defendant below called upon the Court to in- 
 struct the jury, that upon the evidence so given by the plaintitfs, 
 of a demand upon the maker of the note, on the fourth day after 
 the time limited by the note for the payment, the defendant was 
 not liable on his indorsement ; which instruction the Court re- 
 fused to give, and a bill of exceptions was thereupon taken; 
 
 This Court must, therefore, assume as established facts (and, 
 looking at the evidence before the jury, no doubt could be enter- 
 tained on the subject), that the custom of the Bank of Columbia, 
 and all the other banks in Washington and Georgetown, from their 
 first institution, had been, to demand payment of notes due them, 
 on the fourth day after the time limited therein ; and that this 
 custom was known and well understood by the defendant, Renner, 
 when he indorsed the note in question ; and it may be added, with 
 full knowledge and expectation, that this note was to be dealt with 
 in the same way ; for it was a renewal of a discount, continued 
 for a considerable time before, on other notes similarly drawn and 
 indorsed, some of which had been demanded in like manner, and 
 protested, and afterwards paid and taken up by himself. Under 
 such circumstances, it would seem, that nothing short of some
 
 RENNER V. THE BANK OF COLUMBIA. 299 
 
 positive and unbending principle of law, could shield the defendant 
 from responsil)ility. But, so far from trenching upon any such 
 princij)le, \vc think his liability completely established, by well- 
 settled rules of law. 
 
 It seems to be assumed as the settled law of promissory notes, 
 yiat in order to charge an indorser, demand of the maker must be 
 made on the third day after that limited in the note ; and that this 
 is so stubborn a rule, that parties are not permitted to violate it, 
 even by their mutual agreement. 
 
 We admit, in the most unqualified manner, that the usage of 
 making the demand on the third day of grace, has become so gen- 
 eral, that courts of justice will notice it ex officio ; and in the ab- 
 sence of any proof to the contrary, will presume that such was 
 the understanding of all parties to a note, when they put their 
 names upon it. But that this rule has any attributes so inviolable 
 as not to l)e touched by the parties to negotiable paper, cannot be 
 admitted. It has its origin in custom, and that custom, too, com- 
 paratively, of recent date ; and is not one of those, to the contrary 
 of which the memory of man runneth not, and which contributed 
 to make up the common-law code, which is so justly venerated. 
 So far from this, that the allowance of any days of grace, is in 
 derogation of the common-law rule, applicable to other contracts. 
 They are, emphatically, the mere creatures of usage, varying in 
 different countries, to suit the views and convenience of men in 
 business, originally gratuitous, and not binding on the holder. 
 The common law would require payment on the last day limited 
 by the contract, and would also give to the maker the whole of 
 that day. It is a settled principle of the common law, applicable 
 to all contracts, that a party has until the last day limited by his 
 agreement, to perform his engagement, and even until the last 
 hour of the day. The common law knows of no fractions of a 
 day ; custom, however, and that introduced, too, principally by 
 banks, has limited the day to a few hours of business. But this, 
 and whatever other rules have been adopted by consent, and 
 merely for the convenience of commercial men, arc departures 
 from the common-law doctrine. When, therefore, the allowance 
 of only three days of grace, is said to be the law of the contract, 
 by bills of exchange and promissory notes, nothing more can be 
 intended, than that custom has so long sanctioned this rule, that 
 all dealers in paper of this description, are understood to govern
 
 300 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 themselves by it. The law of the contract, properly speaking, is 
 to pay when due ; and that time is to be ascertained, either from 
 the contract j»er se, or that taken in connection with some known 
 custom, which the parties are presumed to have tacitly consented 
 should be made a part of the contract. And it is in this view 
 only, that three days of grace are allowed, where the custom is 
 recognized as the rule ; for a note, which upon its face has sixty 
 days to run, is in truth and in fact a contract for sixty-three days, 
 and interest is taken for that time. And how is it ascertained that 
 it is a note for sixty-three days, but l)y looking out of the contract, 
 and fniding what was the understanding of the parties ? Where 
 the custom has existed for a long time, and has become general, 
 courts of justice, as before observed, will notice it ex officio ; and 
 where it has not, it is matter of proof. If this is not the light in 
 which these transactions are to be considered, all banks are charge- 
 able with usury ; for all take interest beyond what is allowed by 
 law, if time is to be determined by the note itself. The general 
 rule of law is, that demand of payment must be made of the 
 maker when the note falls due ; and that time, as now settled, is 
 on the last day of grace ; and even this rule is of recent date, for 
 in the King's Bench in England, as late as the year 1791, about 
 coeval with the institution of this bank, and the custom established 
 by it, we find Leftley v. Mills, 3 T. R. 370, Lord Kenyon and Mr. 
 Justice Buller differing on this very point ; the former holding that, 
 by analogy to other contracts, the acceptor of a bill of exchange 
 had the whole of the third day of grace to pay the bill, and that a 
 demand on the fourth day was not too late. Mr, Justice Buller 
 thought the demand ought to be made on the third day of grace ; 
 that the nature of the acceptor's undertaking, was to pay the bill 
 on demand, on any part of the third day of grace ; and he inferred 
 this from its having been, as he said, the practice to make the 
 demand on' that day. If it was a doubtful question in England, so 
 late as the year 1791, whether the demand ought to be made on 
 the third day of grace, or the day after, this bank is not chargeable 
 with any culpable innovation upon long-established rules of law 
 or usage, by adopting the practice of making the demand on the 
 fourth day. 
 
 It is said, however, that the effect of this testimony is, to alter 
 and vary, by parol evidence, the written contract of the parties. 
 If this is the light in which it is to be considered, there can be no
 
 RENNER V. THE BANK OF COLUMBIA. 301 
 
 doubt that it ought to Ijo laid entirely out of view ; for there is no 
 rule of law l)ctter settled, or more salutary in its application to 
 contracts, than that which precludes the admission of parol evi- 
 dence, to contradict or substantially vary the legal import of a 
 written agreement. Evidence of usage .or custom is, however, 
 never considered of this character ; hut is received for the purpose 
 of ascertaining the sense and understanding of parties by their 
 contracts, which are made with reference to such usage or custom ; 
 for the custom, then, becomes a part of the contract, and may not 
 improperly be considered the law of the contract; and it rests 
 upon the same principle as the doctrine of the lex loci. All con- 
 tracts are to be governed by the law of the place where they are 
 to be performed ; and this law may be, and usually is, proved as 
 matter of fact. The rule is adopted, for the purpose of carrying 
 into ellect the intention and understanding of the |)arties. That 
 the note in question was to be paid at the Bank of Columbia, and 
 to be governed by the regulations and custom of the institution, 
 and so understood by all parties, cannot admit of a doubt. 
 
 It would be a waste of time, to go very much at large into an 
 examination of the various usages and customs, that are admitted 
 in evidence and recognized in courts of justice, both in England 
 and in this country, in almost every branch of business, and 
 especially in commercial transactions, for the purpose of ascertain- 
 ing the meaning and interpretation of contracts. A few only will 
 be noticed, that are somewhat analogous to the present case. 
 
 In the case of Cutter v. Powell, 6 T. R. 320, where was brought 
 under consideration the legal effect of a promissory note, given to 
 the mate of a ship for a certain sum of money, provided he pro- 
 ceeded on her voyage, and continued to do duty to the port of 
 destination. The legal construction to be given to this note was 
 clear, and so considered by the Court, that nothing was due, im- 
 less the mate continued to do duty to the port of destination. He 
 having died, however, on the voyage, the Court directed an imjuiry 
 into the usage of merciiants in such cases, declaring that if it 
 sanctioned an allowance for the time the service was performed, 
 the plaintiff should recover according to such usage. 
 
 No intimation is here given, that such proof would be repugnant 
 to the contract, although it was against the legal import of the 
 note, if construed without reference to the usage ; and although 
 the usage related to trade, it was very limited in its application.
 
 302 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 So in Noble v. Kennovvay, 2 Doug. 511, usage of trade was ad- 
 mitted in evidence, to explain the understanding of parties, in a 
 policy of insurance, although the usage had not existed three 
 years. Lord Mansfield said, the usage could only l)e known by 
 proof, and must be tried by a jury ; that underwriters must be 
 presumed to be acquainted with the practice of the trade they 
 insure, whether recently established or not. If it were necessary, 
 cases miglit be multiplied almost without end, sliowing the same 
 principle and same recognition of local and particular usages, in 
 almost every branch of business. 
 
 We liavc also in the State courts in our own country, the deci- 
 sions of very enlightened judges, adopting the same principles, 
 and governing themselves by the same rules ; and, in many cases, 
 not unlike the one before us. 
 
 In Jones v. Fales, 4 Mass. 245, 252, the same doctrine as to usages 
 of banks, was fully sanctioned ; and although that particular usage 
 might have been found, in practice, inconvenient, and not to meet 
 public approbation, yet the principle which governed the decision 
 of the Court, is not thereby weakened ; viz., that the usage with 
 which the defendant was conversant, was proper evidence to be 
 submitted to a jury, to infer from it the agreement of the party. 
 And although, as suggested at the bar, this custom was altered by 
 the banks, we do not find the courts of justice in that State at- 
 tempting to control it, in its application to notes made in reference 
 to the usage. 
 
 The doctrine of this case was again fully recognized in tlie Lin- 
 coln and Kennebeck Bank v. Page, 9 Mass. 155, where it was 
 held, that bank usages, established respecting demands on makers 
 of promissory notes, and notices to indorsers, being known to 
 dealers in the banks, they were bound by them, and that the usage 
 was proper evidence to be submitted to a jury. These cases are 
 not referred to for the purpose of approving the particular usages, 
 but to show that evidence of such usage was never considered as 
 contradicting the written contract. 
 
 Halsey v. Brown and others, 8 Day, 346, is a very strong case 
 on this subject. The question was as to the liability of ship- 
 owners, for the loss of money taken on freight by tlie captain. 
 The defence set up was, that the master, according to established 
 custom, was permitted to take money on freight, as a perquisite to 
 himself, and the owners discharged from responsibility ; and the
 
 RENNER V. THE BANK OF COLUMBIA. 303 
 
 question directly presented to the Court was, wlietlicr a particular 
 custom or usage could be given in evidence, to control the general 
 law. And the Court says, it is a principle, that the general com- 
 mon law may he, and in many instances is, controlled by special 
 custom. So the general commercial law may, l)y tlie same reason, 
 be controlled by a special local usage, so far as that usage extends, 
 wliich will operate upon all contracts of this nature, made in view 
 of, or with reference to, such usage. 
 
 In Smith v. Wrigiit, 1 Caines, 43, this general principle is laid 
 down ; the true test of a commercial usage is, its having existed 
 long enough to have become generally known, and to warrant a 
 presumption that contracts are made in reference to it. 
 
 In the case of The Bank of Utica v. Smith, 18 Johns. 230, a 
 note, payable at the Mechanics' Bank in New York, was presented 
 and })ayment demanded, fifteen minutes after ])ank hours, and this 
 was held sufficient ; it appearing, that although it was a quarter of 
 an hour after the usual time of closing the bank as to other busi- 
 ness, it was within bank hours, it appearing that, according to the 
 general course of doing business at this bank, these fifteen minutes 
 were the usual and accustomed time for these presentments, and 
 of this course of business the defendant ought to have informed 
 himself. 
 
 It is unnecessary to pursue this subject farther by particular 
 reference to decisions in the State courts. The same doctrine, as 
 to the effect of particular usages in controlling the general law, 
 will be found to accompany the administration of justice, wherever 
 the sul))ect is brought under consideration. Wiiether these usages 
 are, in all instances, wise and beneficial, may, perhaps, be ques- 
 tionable, but where they do exist, they are considered as regu- 
 lating and controlling contracts, made under and in reference 
 thereto. 
 
 The same principle is recognized by this Court, in the case of 
 Yeaton v. The Bank of Alexandria, 5 Cranch, 49 ; 2 Cond. 18G. 
 Tiic Chief Justice, in speaking of the effect of usage upon the 
 legal o])ligation of parties, observes, if the case showed that such 
 was the usage of the bank, and such the understanding under 
 which notes were discounted, this Court is not prejiared to say 
 that the undertaking created by the indorsement, would not be so 
 fashioned as to give effect to the real intention of the parties. 
 
 These cases are sufficient to show, in the most satisfactory man-
 
 304 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 ner, the light in which courts of justice consider contracts, made 
 in reference to any particular usage, and the effect that such usage 
 is to have upon them. And no good reason is perceived why 
 these principles should not be applied to the case before us. The 
 custom, under which this banii; has transacted business for five 
 and twenty years, of demanding payment of the drawers of notes 
 on the fourth instead of the third day after the time limited for 
 payment, is not unreasonable or repugnant to any principles of 
 general policy. It does not stand alone, but is in accordance with 
 the usage of every other bank in Washington and Georgetown. 
 The defendant indorsed the note in question, with full knowledge 
 of the custom. A demand on the fourth day is in perfect harmony 
 with the principles of the common law, if applied to the contract, 
 the maker having the whole of the third day to pay his note, and 
 not being in default until the fourth. The inconveniences sug- 
 gested on the argument growing out of a usage here, differing 
 from that which is in practice in other places on this subject, are 
 not of great public concern. If they exist, they affect the banks 
 and their customers only. And if felt to the prejudice of either 
 the one or the other, we may rest assured it would be altered. 
 Their private interest is a sure guaranty for this. 
 
 But, admitting the practice to be inconvenient, and that a uni- 
 formity, in this respect, with other parts of the country .would be 
 desirable, the remedy is not in the hands of courts of justice, 
 whose business it is to judge of contracts as made by parties 
 themselves, and not to prescribe the manner in which they shall 
 be made. We are, accordingly, of opinion that the Court below 
 did not err in refusing to instruct the jury that the demand upon 
 the maker of the note, on the fourth day after the time limited for 
 payment thereof, discharged the defendant from liability on his 
 indorsement. 
 
 One of the minor points, which has been alleged as error, ap- 
 pearing on the face of the record is, that the demand on the 
 maker of the note should, at all events, have been laid on the 
 third day after the time limited by the note for payment, and not 
 on the fourth. This objection cannot be sustained at this time. 
 Whether the declaration would not have been bad on demurrer, 
 not, however, because the demand is laid on a wrong day, but be- 
 cause it does not aver the usage, is a question not necessary now 
 to decide. But if, as we have determined, the demand was prop-
 
 RKNNER V. THK BANK OF COLUMBIA. 305 
 
 erly made on the fourth day, it would have been bad if laid at an 
 earlier day, because the maker would have l^eeu under no ob^ga- 
 tion to pay, and, of course, not in default. If, therefore, the cause 
 should be sent back to the Court below, no amendment in this 
 respect ought to be made. T4ie want of an averment, so as to let 
 in the proof of usage, cannot now be objected to the record. The 
 evidence was admitted without objection, and now forms a part of 
 the record, as contained in the bill of exceptions. Had an objec- 
 tion been made to the admission of the evidence of usage, for the 
 want of a proper averment in the declaration, aiid the evidence 
 had, notwithstanding, been received, it would have presented a 
 very different question. 
 
 The time of the demand, as laid in the declaration, is according 
 to the legal effect of the note. If made at an earlier day, it would 
 have given no cause of action against the indorser, for he was not 
 bound to pay until the default of the maker, and he was not in 
 default until the fourth day. It is a general rule, in declaring as 
 to time, that it must l)e laid after the cause of action accrues. 
 
 The case of Rushton v. Aspinall, 2 Doug. 679, does not apply. 
 The bill of exchange, ui)on which that suit was founded, was 
 dated on the twenty-seventh of November, in the year 1778, pay- 
 able three months after date. The declaration stated that the bill 
 was presented for acceptance on the day of the date thereof, and 
 duly accepted, and afterwards, on the same day, the acceptor was 
 requested to pay, &c., but neglected and refused, &c., and then 
 goes on to state the liability of the defendant, as indorser, and that 
 be, on the same day, assumed and promised to pay, &c. It ap- 
 pears, therefore, that the refusal of the acceptor, and the assump- 
 tion of the indorser, are laid on the day of the date of the note, 
 which was three months before it fell due. The plaintiff, there- 
 fore, by his own showing, had no cause of action when he com- 
 menced his suit. This was a defect which no verdict could cure. 
 He had not set forth his cause of action defectively, but shown 
 that he had no cause of action ; and this was the ground on which 
 it was placed by the Court. A cause of action, defectively or in 
 accurately set forth, is cured by the verdict, because, to entitle the 
 plaintiff to recover, all circumstances necessary in form or in sub- 
 stance, to make out his cause of action, so imperfectly stated, must 
 bo proved at the trial ; but when no cause of action is stated, none 
 can be presumed to have been proved. 
 
 20
 
 306 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 This case is not to be considered as if before us on demurrer to 
 the^declaration. Tlicrc being no averment of the special custom 
 as to the demand on the fourth day, and the general rule being 
 that the demand must be made on the third, if tlie declaration 
 alleges it to have been made on the* fourth, the joinder in demur- 
 rer admits the fact, and, of course, that the demand was too late. 
 But had the declaration contained an averment of the special cus- 
 tom, it must allege a demand on the fourth day. That is according 
 to the legal effect of the note ; and a demand laid on any other 
 day would have been bad. We must now consider the case as if 
 the declaration had contained a special averment of the custom, 
 the proof liaving been before the Court and jury without objection, 
 and now making a part of this record. 
 
 Judgment affirmed. 
 
 But the rule in the principal case respecting usage applies only in the case of 
 paper discounted by the banks. Cookendorfer v. Preston, 4 How. 317. In this 
 case Mr. Justice McLean, in delivering the opinion of the Court, said: " In the 
 Bank of Washington v. Triplett and Neale, 1 Pet. 25, this Court sanctions the 
 usage to make the demand of payment of a note, which was left in the bank for 
 collection, on the day after the last day of grace, placing such notes, in this 
 respect, on the same footing as notes discounted by the bank. And that such 
 was the usage in 1817, when payment on the note or bill in question Avas de- 
 manded, was proved in that case. But it was also proved, as appears from the 
 record, that the usage was changed in 1818, by all the banks of Washington and 
 Georgetown, so as to conform to the general commercial usage of demanding 
 payment on the last day of grace. This referred to notes or bills sent to the 
 banks for collection, and of course embraces all notes not negotiated in 
 bank. . . . 
 
 " Now if the usage, as sanctioiied in the cases above cited, governs this case, it 
 is clear that such diligence has not been used as to charge the indorser. For, 
 under that usage, the demand should have been made on the day after the third 
 day of grace, when it was in fact made on the third day of grace. This objec- 
 tion is met by the defendant in error by the proof of the usage as stated, which 
 he nsists governs all notes not discounted by the banks of the District. The 
 note in question was not discounted by the Bank of Washington, it being merely 
 left there for collection. But it is insisted that this usage cannot be shown to 
 overthrow that which has been sanctioned by judicial decisions. A local usage 
 may be changed in the same mode by which it was established. But parol evi- 
 dence is not admissible to show that the usage was dilfercnt, at the time, from 
 what the courts have solemnly adjudged it to be. The law merchant is founded 
 upon custom, and every modification of it, by local usage, shows that, like other 
 laws, it may be changed. 
 
 " The usage proved in this case, except in Bank of Washington v. Triplett and 
 Neale, and that is explained by the evidence cited, does not conflict wiih tliat
 
 RENNER V. THE BANK OP COLUMBIA. "07 
 
 decided by this Court, if the latter be limited to notes discounted by the banks, 
 and the former applies to all other notes payable in the District. In other words, 
 that the law merchant should l)e modified by the usage as to demand and notice 
 on notes discounted by the Ijanks. And it would seem from I he decision above 
 cited, tiie usage to ilemaiid payment tiie day after the third day of grace, had its 
 origin with tiie banks, and has not been extended, since 1818, to pajM-r not dis- 
 counted by them. On all other paper a demand is made on the tiiird day of 
 grace, and the usage is to extend the protest on the day on which the notice is 
 given, stating the demand to have been made on the last day of grace, and the 
 protest to be dated the same day on which tlie notice is dated. Now a demand 
 and protest on the last day of grace, and a notice on the following day, come 
 strictly within the law merchant. And this was the diligence used in the present 
 case, except the formal date of the protest on the day of the notice. No con- 
 fusion can therefore arise from this general commercial usage, as it conforms to 
 the established law. No inconvenience has arisen, it is supposed, from the bank 
 u.sage in the District, which has been so long and so firmly established." See, 
 also, upon the subject of the usage of banks in the District of Cohimhia, Raborg 
 V. Bank of Columbia, 1 Harris it (J. 2:51; Hank of Columbia v. Fitzhngh, ib. 
 239; Bank of Columbia v. Magruder, 6 Harris & J. 172; Adams r. Otterback, 
 16 How. .".39. 
 
 Days of grace are allowed only to promissory notes and bills of exchange 
 proper. Checks and notes payable on demand are not entitled to grace. 
 Barbour r. Bayon, 5 La. An. 303; Chitty, Bills, 377; Story, Bills of Exchange, 
 § 312. 
 
 There was formerly some doubt as to -whether bills payal)le at siuht were en- 
 titled to days of grace. In Beawes, Lex ]Mercatoria, PI. 2.06, it is said that they 
 are not, though days of grace would be allowed if the bill were payable one day 
 after sight. Kyd, Bills, 10, expresses the same view. But it may now be con- 
 sidered as settled that days of grace enter into such bills, and that in this respect 
 they dilfer from pa[)er payable on demand ; though the reason for any such dis- 
 tinction is ntt apparent. See Dehers r. Harriot, 1 Show. 163; Coleman v. Sav- 
 er, 1 Barnanliston, 303 ; Chitty, Bills, 377 ; Story, Promissory Notes, § 224 ; Oridge 
 I'. Sherborne, 11 Mees. & W. 37-i. In tJanson l\ Thomas, 3 Doug. -121 (1784), 
 it was held that a bill of exchange, payable at sight, was not a bill payable on 
 demand within the exception of the statute of 22 Geo. 3, c. 49. Bidler, J., 
 in this case says that, upon the point respecting days of grace there is doubt, 
 but that the question was not new; "for in a case before Willis, C. J., in 16 
 Geo. 2, a special jury (of merchants) certified that on bills at sight three days 
 were allowed." Mr. Justice Slor;/, as above cited, says: "lu England, davs of 
 grace are allowed on all notes, whether they are payable at a certain time alter 
 date, or after sight, or even at sight. As to the latter, there has been some 
 diversity of opinion among the profession, as well as among the eleineiitarv wri- 
 ters. But the doctrine seems now well established both in England ami .\meriea, 
 tluat days of grace are allowable on bills and notes payable at siiflit. And the 
 same rule has been applied, as in strict analojxy it should apply, to bank post- 
 notes payable after sight ; for they diller in nothing from ordinary bills of ex-
 
 308 PRESENTMENT FOR DEMAND AND PAYMENT. 
 
 change. The same rule seems to apply to bills payable by instalments ; and the 
 days of grace are allowed on the falling due of each instalment." Upon the 
 last point mentioned see Oridge v. Sherborne, 11 Mees. & W. 374. 
 
 It was formerly held doubtful also in some of our own courts, whether days of 
 grace could be extended to inland bills and promissory notes ; and as to the lat- 
 ter it was a vexata questio in England until the decision of Brown v. Harraden, 
 4 T. R. 148, in 1791, settled the question in favor of allowing days of grace. 
 The doubt in both cases, in England and America, has been removed, and there 
 is now no doctrine more firmly settled than that both inland bills of exchange 
 and promissory notes are subject to days of grace. See 1 Parsons, Notes and Bills, 
 393, and note ; Bank of Washington v. Triplett, 1 Peters, 25 ; Wood v. Corl, 4 
 Met. 203. 
 
 With regard to the question of usage respecting days of grace, presented in 
 the principal case, a further step was taken in the subsequent case of Mills v. 
 Bank of the United States, 11 Wheat. 431, post ; and it was there held that where 
 commercial paper is made payable or negotiable at a bank whose invariable usage 
 it is to demand payment on the fourth day of grace, the parties are bound by 
 that usage, being presumed to agree to be bound by it, though they do not in 
 fact know it. Story, J., in delivering the opinion of the Court, says that the 
 decision is made " upon the principles and reasoning" of the principal case. 
 
 This doctrine respecting usage has been denied in New York. In Woodruff 
 I). Merchants' Bank, 25 Wend. 673, Nelso?i, C. J., said: "The effect of the 
 proof of usage, as given in this case, if sanctioned, would be to overturn the 
 whole law on the subject of bills of exchange in the city of New York. We 
 need scarcely add, even if the witnesses were not mistaken, and the usage pre- 
 vails there as testified to, it cannot be allowed to control the settled and acknowl- 
 edged law of the State in respect to this description of paper." This was in the 
 Supreme Court of New York, in 1841 ; and the decision was unanimously af- 
 firmed in the Court of Appeals, 6 Hill, 174, in 1843. The principle is reaffirmed 
 in Brown v. Newell, 4 Seld. 190. But this case occurs again in the Court of 
 Appeals in 3 Kern. 290, on appeal from 2 Duer, 584, where it is held that the 
 law of the place where a draft is made payable governs as to its being payable 
 with or without days of grace ; and the draft in this case being drawn upon a 
 bank in Connecticut, payable on a specified day, and it being proved that days of 
 grace were not allowed on such paper in that State, it was held that the defend- 
 ants were liable on presentment and notice on the day designated, though the 
 law in New York, where the bill was drawn and indorsed, allowed days of grace. 
 From this case it would seem that the ground of the decision in 4 Seld. 190, was 
 that the usage was not satisfactorily proved. The former cases then seem to be 
 virtually overruled. 
 
 The general rule undoubtedly is, that the law of the place where the paper is 
 payable will govern respecting the days of grace ; and the origin of the indul- 
 gence being in usage, it seems consistent with reason that proof of the particular 
 custom should be received. See Kilgore r. Bulkley, 14 Conn. 362; Bryant 
 V. Edson, 8 Vt. 325; Ripley v. Greenleaf, 2 Vt. 129; Vidal v. Thompson, 
 11 Mart. La. 23 ; Goddin v. Shipley, 7 B. Mon. 575 ; 1 Parsons, Notes and Bills, 
 399.
 
 RENNER V. THE BANK OF COLUMBIA. 309 
 
 If commercial paper fall due on Sunday, or on a lioliday, it is payable tlie day 
 before ; and evidence will be received to show usage respecting what are holi- 
 days, in the absence of statutory provision. City Bank v. Cutter, 3 Pick. 41 -i. 
 In this case the question was whether comniencenient day at Harvard College 
 could be deemed a holiday. Parker, C. J., u\Hm this i)oint, said : " It is not in the 
 language of the conunou law a holiday, though it is a day of festivity and amuse- 
 ment in the neighborhood of the I'niversity. But it is a fit subject of a usage 
 which will bind all those dealing with a bank which has adopted it as a day when 
 business is not to be done. It is found to have been the usage of the City Bank 
 to regard it in this light, and the report finds that the defendants had express 
 knowledge of this usage." 
 
 But proof of four instances within two years in which a bank departed from 
 the law merchant as to the time ol' giving notice to an indorser, is not sufficient 
 to establish a usage binding on the indorser. Adams r. Otterback, lo How. 539. 
 Per McLean, J. : "To constitute a usage, it must apply to a place rather than 
 to a particular bank. It must be the rule of all the banks of the place, or it 
 cannot consistently be called a usage. If every bank could establish its own 
 usage, the confusion and uncertainty would greatly e.xceed any local convenience 
 resulting from the arrangement."' This reasoning is not at variance with that of 
 Parker, C. J., above, as it is predicated of a case in which the defendant had 
 no knowledge of the alleged usage. See also Dabney r. Campbell, 9 Humph. 
 680. 
 
 The reasonable rule and the result of the cases seem to be that, to give a 
 usage in respect to days of grace the force of law, it must at least be so general 
 and have such a notoriety that an inference may be drawn that the parties con- 
 tracted in reference to it ; or if it is not thus general and notorious, that the 
 defendant had knowledge of the usage, or acquiesced in the particular instance. 
 
 Mr. Justice Story mentions another important rule respecting days of" grace. 
 It is that the days of grace are all to be counted consecutively and in direct suc- 
 cession, no deduction being allowed by reason of the circumstance that a Sunday 
 or holiday intervenes between the first and last day of grace ; or, he migiit have 
 added, though the first day of grace falls on Sunday or a holiday. Story, Bills 
 of Excliange, § 337.
 
 olo presentment and demand for payment. 
 
 Ephraim Dana v. Samuel H. Sawyer. 
 
 (22 Maine, 244. Supreme Court, April, 1843.) 
 
 At ii-hat tiivc of day presentment should he made. — When a bill or note is not payable at a 
 place where there are established business hours, presentment for payment maybe 
 made at any reasonable hour of the day ; but presentment to the maker at near 
 midnight, after he had retired to rest, is not a reasonable hour, and will not charge 
 an indorser on notice, unless there was a waiver of any objection as to the time, or 
 unless it appear that payment would not have been made upon a demand at a 
 reasonable hour. 
 
 This case was submitted on the following statement of facts. 
 The action is on a promissory note, signed by T. Sawyer & Co., 
 dated Dec. 24, 1838, for $202.50, on four months, payable to and 
 indorsed by the defendant. 
 
 It is agreed that on the day the note fell due, George W. Smith 
 came to the house occupied by said Thorndike Sawyer and Samuel 
 H. Sawyer, the defendant, in the evening, between eleven and twelve 
 o'clock, called up said T. Sawyer from his bed, and presented the 
 note to him for payment, which he did not pay, and left with him a 
 notice and demand for payment, and delivered another notice of 
 non-payment by the makers of the note, directed to said S. H. 
 Sawyer, and demand of payment to said T. Sawyer for said Samuel, 
 wJiich said Thorndike did not deliver to said Samuel. Said Samuel 
 was then in the house, but was in bed. He had his residence in 
 the same house. 
 
 The Court were to enter a nonsuit or default, as they might 
 determine to be the law in the matter. 
 
 Shepley, J. This case is presented upon an agreed statement of 
 facts, from which it appears that a demand for payment was made 
 upon the maker of the note, between eleven and twelve o'clock at 
 night on the day that it became payable, by calling him from his 
 bed ; and that he did not pay it. There is no further statement of 
 any thing else said or done, except that a notice and demand for 
 payment was left with him. When a bill or note is payable at a 
 banking-house, or other place, where it is well known that business 
 is transacted only during certain hours of the day, the law presumes 
 that the parties intended to conform to such established course of 
 business, and requires that a demand should be made during those
 
 DANA V. SAWYER. 311 
 
 business hours. Parker v. Gordon, 7 East, 385. The cases of 
 Garuett v. Woodcock, 1 Stark. 475, and of Henry v. Lee, 2 Chitty, 
 124, may show an exception to this rule that, when a person is 
 found at such place after business liours, authorized to give an 
 answer, the demand will be good. While it may be difficult to 
 reconcile those cases with the case of Elford v. Teed, 1 M. & S. 28. 
 When the lull or note is not payable at a place where there are 
 established business hours, a presentment for {)ayincnt may be 
 made at any reasonable hour of the day. Leftley v. Mills, 4 T. R. 
 174; Barclay v. Bailey, 2 Camp. 527; Triggs v. Newnliam, 10 
 Moore, 24<i ; Wilkins r. Jadis, 2 Barn. & Adol. 188. What hour may 
 be a reasonable one has come under consideration in those cases. 
 In the first of them Mr. Justice Buller observes, that " to say that 
 the demand should be postponed till midnight, would be to establish 
 a rule attended with mischievous consequences." In the second, 
 Lord EUenhorough said, " if the presentment had been during the 
 hours of rest, it would have been altogether unavailing." h\ the 
 third, this remark, among others, is quoted and approved by C. J. 
 Beat. In the fourth, Lord Tenterden remarked, that " a i)resent- 
 ment at twelve o'clock at night, when a person has retired to rest, 
 would 1)0 unreasonable." Those observations, so just and so appli- 
 cable to this case, authorize the conclusion, that the demand was 
 not made at a reasonable hour, unless the fact that the maker was 
 seen and actually called upon at that time should make a difference. 
 Perhaps in analogy to the exception already noticed, it might be 
 proper to admit of one in this and the like cases, if it should appear 
 from the answer made to the demand, that there was a waiver of 
 any objection as to the time, or that payment would not have been 
 made upon a demand at a reasonable hour. But there is nothing 
 in this agreed statement to show that payment might not have been 
 refused because the demand was made at such an hour, that the 
 maker did not choose to be disturl)ed, or because he could not then 
 have access to funds prepared and deposited elsewhere for safety. 
 
 Plaintiff nonsuit. 
 
 The general rule respecting the proper time of day at which presentment for 
 payment shouM be made, — that it must be made within reasonable hours, — is 
 the same as in the case of presentment for acceptaiue. Story, Bills of Ex- 
 change, § :U9; Chitty, Bills, :W7. 
 
 What is a reasonable hour will depend partly on the ])lai'e of business or dom- 
 icile of the maker, and partly on the usage of trade where the paper is payable ;
 
 312 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 and in the case of paper payable at bank, while it must in general be presented 
 during banking hours, still it may be presented after such hours, provided a per- 
 son be stationed there by the bank to return answers, or if there is a custom of 
 the bank which allows a certain length of time after closing for transacting such 
 business. Bank of Utica v'. Smith, 18 Johns. 230; Chitty, Bills, 387; Story, 
 Promissory Notes, § 226 ; Story, Bills of Exchange, § 349. 
 
 If the presentment is made at unseasonable hours, either too early or too late, 
 at a bank or banker's, or at the counting-house or dwelling-house of the maker, 
 and there is no person there authorized to act, or ready to act, for the maker ; if 
 the presentment is made before the counting-house is open or after it is shut ; 
 in these cases the presentment will be a mere nullity. Story, Promissory 
 Notes, § 226; Story, Bills of Exchange, §§ 236, 349. 
 
 But in the case of presentment after the maker or acceptor has retired to rest, 
 it is worthy of note that the rule in the principal case applies only when the 
 party has retired at the usual or proper time. If he has retired at an unusual 
 hour, a presentment before it has become unseasonably late will be good. 
 Farnsworth v. Allen, 4 Gray, 453. 
 
 In this case, presentment was made at nine o'clock in the evening, in the 
 month of August, when it was found that the maker of the note had retired to 
 rest ; and as it appeared that he lived ten miles distant from the residence of the 
 holder, and due diligence had been used to find him, the presentment was held 
 to have been made at a reasonable hour. And it would seem that the same rule 
 should apply where the presentment is made in the morning at a reasonable hour, 
 and the maker has not arisen. See Lunt v. Adams, 17 Maine, 230, holding pre- 
 sentment at eight o'clock in the morning too early. 
 
 With the above qualification it is undoubtedly true, as stated by Cotcen, J., 
 in Cayuga County Bank v. Hunt, 2 Hill, 635, that, except where paper is due 
 from a bank, proper hours of business range through the whole day down to 
 bedtime; citing Chitty, Bills, 421, Am. ed. 1839, and cases there cited. 
 
 It is held also in England that presentment between oight and nine o'clock in 
 the evening, at the house of a trader or merchant, is sufficient. Triggs v. Newn- 
 ham, 10 Moore, 249 ; s. c, 1 Car. & P. 631. And this, too, though the house be 
 shut, and no one there to give an answer. Wilkins v. Jadis, 2 Barn. & Adol. 
 188, cited in the principal case. See Chitty, Bills, 388. 
 
 So In Morgan v. Davison, 1 Stark. 114, In which the paper was presented at 
 a trader's between six and seven o'clock in the evening, when no one was present 
 but a girl taking care of the counting-house. Lord Ellenhoroiigh held that the 
 hour was a proper one, and that the holder might reasonably expect to find the 
 payor there. 
 
 In Barclay v. Bailey, 2 Camp. 527, the distinction between paper payable at 
 bank and elsewhere Is again observed. Lord Ellenhoroiigh said: " I think this 
 presentment sufficient ; a common trader is different from bankers, and has not 
 any peculiar hours for paying or receiving money ; if the presentment had been 
 during the hours of rest, it would have been altogether unavailing ; but eight in 
 the evening cannot be considered an unseasonable hour for demanding payment 
 at the house of a private merchant who has accepted a bill."
 
 taylor v. snyder. 813 
 
 Taylor v. Snyder. 
 
 (3 Denio, 145. Supreme Court of New York, May, 1846.) 
 
 Where to be made. — Tlie place of date of a promissory note payable generally, is only 
 prima facie tlie place of payment ; and though a note be made and dated in New 
 York, if the maker tlien resided in Florida, and the holder knew this at the time the 
 note was executed, and tiie maker hii.s not changed his residence since that time, 
 demand must be made of the maker in Florida in order to charge an indorser. 
 
 The case is stated in tlic opinion of the Court. 
 
 Beardsley, J. As the note bears date at Troy, it is presumed 
 to have been made at that place, although the maker then resided 
 in Florida, as was well known to tJie original bolder, Morris, and 
 to Stevenson, to whom it was subsequently transferred. The resi- 
 dence of the maker had not been changed when the note fell due, 
 his domicile still being in Florida. 
 
 The indorser resided in Troy. It was not shown that he ever 
 owned the note, or was under any other obligation for its payment 
 than that of an ordinary indorser ; and it may fairly be inferred 
 from the case that the note was given for a debt due from the 
 maker to Morris, and was indorsed for his benefit at the request of 
 the maker. 
 
 Some months before the note fell due, the indorser had been 
 asked by the then holder, Morris, if it would be paid at maturity, 
 to which he replied that it would be ; that his brother, the maker, 
 would send the money to him, and he should see the note was paid. 
 But on being requested to stipulate, absolutely, to pay the note 
 himself, he declined to do so. It does not appear that on this or 
 any other occasion, any thing was said as to the place where pay- 
 ment would be made, or where the note should be presented for 
 payment at maturity. 
 
 Upon the evidence as stated in the case, I think it (jannot be said 
 that any thing has been done by the indorser to change or affect 
 bis original liability or his rights, in tiiat character. He had not 
 designated any particular place in Troy, or that city at large, as 
 the place at which the note would be paid, or where demand should 
 be made, nor had he been requested to designate any place for
 
 t 
 314 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 that purpose. And althongh he certainly gave a strong assurance 
 that the maker would remit the money to him,. and therefore that 
 the note would be duly paid, he at the same time refused to bind 
 himself absolutely for its payment. He chose to leave his own 
 responsibility where his contract and the law had placed it ; and 
 no one had a right to understand from what he said, that he in- 
 tended to assume any new obligation, or to dispense with the per- 
 formance of any act which the law required the holder of the note 
 to perform. It does not appear to have been suggested on the 
 trial, that the action was to be sustained on any such ground, nor 
 was the judge requested to submit the question of a waiver of 
 demand of payment, by the indorser, to the jury. It was doubt- 
 less then urged, as it was on the argument at bar, that this note 
 was by law payable at Troy, and therefore the defendant had been 
 duly charged as indorser, and not that he had in any manner 
 waived a demand at the proper place. 
 
 What, then, is this case ? A debtor, whose residence is in Florida, 
 being at Troy, makes a note, which he dates at that place, to his 
 creditor, a resident of this State, for an amount due to him, and 
 procures a friend residing at Troy to indorse the same. No place 
 of payment is specified in the note, nor is there any thing to indi- 
 cate a place, unless that follows fiom the note bearing date at Troy. 
 The holder knows the residence of the maker to be in Florida, but 
 when the note falls due, instead of making demand of the maker 
 personally, or at his residence or place of business in Florida, pay- 
 ment is demanded at Troy and not elsewhere. Was this a sufficient 
 demand as respects the indorser ? It clearly was, if the note was 
 by law payable at that place, and it, as clearly, was not, if the note 
 was payable elsewhere. This is the only question to be determined. 
 
 The date of a note at a particular place does not make that the 
 place of payment, or at which payment should be demanded for the 
 purpose of charging the indorser. This was expressly adjudged in 
 the case of Anderson v. Drake, 14 Johns. 114. That was an ac- 
 tion against the indorser of a promissory note, bearing date in the 
 city of New iTork, but not made payable at any particular place. 
 When the note was made, the maker lived in New York ; but before 
 it fell due he removed to Kingston in the county of Ulster. The 
 counsel for the plaintiff insisted " that as the note was dated in 
 New York, and the parties resided there at the time it was made, 
 it must be presumed, no particular place being designated for the
 
 TAYLOR V. SNYDER. 315 
 
 payment, that it was payable in New York ; that the removal of 
 the maker from New York to any other place did not render it 
 necessary for the holder to follow him for the purpose of demand- 
 ing payment." But the Court thought otherwise, and held that a 
 demand of the maker personally, or at his residence or pfcice of 
 business in Kingston, as in ordinary cases, was necessary, and that 
 the indorser could not be charged upon a demand made in the city 
 of New York, although the note Ijoro date at that place. Tiiis I 
 understand to be the settled and invariable rule where the maker 
 has not removed from the State, but has a known residence within 
 its limits. Where, after a note has been given, the maker absconds, 
 removes into another State or country, or is without a fixed resi- 
 dence anywhere, other principles, as we shall see, apply : but in 
 no case does the date of a note, of itself, make that the place 
 where payment should be demanded in order to charge the in- 
 dorser. 
 
 It has been supposed that the case of Stewart v. Eden, 2 Gaines, 
 121, countenances a different doctrine. Livingston^ 3.^ there said, 
 " the note being dated in New York, the maker and indorser are 
 presumed to have resided, and contemplated payment there." This 
 remark was in part strictly correct, for the date of the note was 
 presumptive evidence of residence; and in a general sense it may 
 also be true that the date raises a presumption that the parties 
 contem])latcd payment at that place. Judge Livingston did not say 
 that the note was by law payable at the place of its date ; on the 
 contrary, the form of expression conclusively repels that idea. He 
 was not speaking of what the parties were bound to do by the terms 
 of the note, of their legal obligations flowing from their engage- 
 ments as maker and indorser, but simply of what they were pre- 
 sumed to have contemplated. If the learned judge intended to 
 affirm that a note, when no particular place of payment is otherwise 
 indicated, is by law payal)le at the place where dated, he would 
 have said so in direct terms, and would not have said it was to be 
 presumed payment at that place was contemplated. -This would 
 have been absurd. But in truth the question whether the note in 
 that case was payable where it bore date, was not before the Court, 
 nor was it tliere pretended that payment had not been duly de- 
 manded. It was an action against the representatives of a deceased 
 indorser, and although an objection was taken to the form in which 
 the presentment for payment was alleged in the declaration, it was
 
 316 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 not pretended by any one that the demand of payment had not 
 been strictly correct. The main question in the case was, as to the 
 suflficiency of the notice to the indorser, and the remark of the judge 
 was made in discussing that point. I admit that upon the question 
 of du%diligence in giving notice to an indorser, it may have been 
 very pertinent and proper to say that the parties are presumed to 
 have contemplated payment at the place where the note was given 
 and was dated, although such a remark would be altogether out 
 of place in deciding upon the construction of an agreement, and 
 whether the parties by its terms, were bound to make payment at 
 a particular place. There is nothing therefore in this remark of 
 Judge Livingston which can be made to countenance the idea that 
 a note, when no other place of payment is specified, is by law pay- 
 able at the place of its date. Anderson v. Drake, supra; Bank of 
 America v. Woodworth, 18 Johns. 315, 322. 
 
 Where a promissory note is not made payable at any particular 
 place, the general rule of law is, that in order to charge the indors- 
 er payment must be demanded of " the maker personally, or at 
 his dwelling-house, or other place of abode, or at his counting- 
 house or place of business." Story, Promissory Notes, § 235 ; 
 Bank of America v. Woodworth, 18 Johns. 315 ; s.c, in error, 19 
 id. 391. But although such is the general rule, yet, under various 
 circumstances, a demand in any form or manner may be dispensed 
 with. It is a question of diligence, and if a demand is found to be 
 impracticable, proper efforts for that purpose having been made, 
 the indorser will still be held liable, due notice having been given 
 to him by the holder. 
 
 Thus where the maker has absconded, that will ordinarily excuse 
 a demand, and notice of the fact is sufficient to hold the indorser. 
 1 Ld. Raym. 443, 743 ; 3 Kent, 5th ed. 96 ; Putnam v. Sullivan, 
 4 Mass. 45, 53 ; Lehman v. Jones, 1 Watts & S. 126 ; Chitty, 
 Bills, 10th Am. ed. 354, n. 1 ; Story, Promissory Notes, § 237. 
 
 Where the maker is a seaman on a voyage, having no domicile in 
 the State, the indorser is liable without a demand being made. 
 Barrett v. Wills, 4 Leigh, 114. But although the maker may be 
 absent on a voyage, if he has a domicile in the State, payment must 
 be demanded there. Dennie v. Walker, 7 N. Hamp. 199 ; Whit- 
 tier V. Grafifam, 3 Greenl. 82. 
 
 And in every case where the maker has no known residence or 
 place at which the note can be presented for payment, the holder
 
 TAYLOR V. SNYDER. 317 
 
 will in like maimer be excused from making any demand whatever. 
 Story, Promissory Notes, § 287 ; Whittier v. Graffam, supra; Put- 
 nam c. Sullivan, sj/^^ra ; Duncan v. McCullough,4Serg. &Rawle,480. 
 But in all such cases, the reason for not making a demand must be 
 shown on the trial of the cause. It must a})pear that the %naker 
 had absconded, was at sea, or had no known domicile or place where 
 the note should be presented. The rule is strict, that a demand 
 must be made, or a proper excuse shown for its omission. 
 
 There is a further exception to the rule requiring a demand to 
 be made of the maker, or at his domicile or place of business ; for 
 where a note is made by a resident of the State, who, before it is 
 payable, removes from the State and takes up a permanent res- 
 idence elsewhere, the holder need not follow him to make demand, 
 but it is sufficient to present the note for payment at the former 
 place of residence of the maker. M'Gruder v. Bank of Washing- 
 ton, 9 Wlieat. .")98 ; ^ Anderson v. Drake, supra ; Dennie i*. Walker, 
 supra; Gillespie v. Hannahan, 4 M'Cord, 503; Reid v. Morrison, 
 2 Watts k S. 401; 8 Kent, 90. And this is just : for it is but 
 reasonable to suppose that neither party, when the note was given, 
 looked for a change of residence to a foreign country, and that 
 each contracted upon the supposition that no such change would 
 take place. Nevertheless, as was said in Dennie v. Walker, supra, 
 " this is an exception to the general rule, and must be construed 
 strictly." " We think," say the Court in M'Gruder v. Bank of 
 Washington, supra, " that reason and convenience are in favor of 
 sustaining the doctrine that such a removal is an excuse from 
 actual demand. Precision and certainty are often of more impor- 
 tance to the rules of law, than their abstract justice. On this 
 point, there is no other rule that can be laid down, which will not 
 leave too much latitude as to place and distance. Besides which, 
 it is consistent with analogy to other cases, that the indorser should 
 stand committed, in this respect, by the conduct of the maker. 
 For his absconding or removal out of the kingdou), the indorser is 
 held, in England, to stand committed." 
 
 These exceptions to the general rule, it will l)e seen, all rest on 
 peculiar reasons. In one, the maker has absconded; in another, 
 he is temporarily absent, and has no domicile or place of business 
 within the State ; in a third, his residence, if any he has, cannot 
 be ascertained ; while in the fourth, he has removed out of the 
 
 Post.
 
 318 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 State and taken up his residence in another country. In each of 
 these instances, let it be observed, the fact constituting the excuse, 
 occurs subsequently to the making and indorsement of the note ; 
 and it is this new and changed condition of the maker, and that only, 
 by whteh the indorser stands committed, without a regular demand. 
 
 We are, then, to inquire whether these exceptions are to be 
 multiplied, and extended to a case where no change in tlie condi- 
 tion of either party has taken place ; where the maker, when the 
 note was made and indorsed, had a known residence in another 
 State, and which had remained unchanged at the maturity of the 
 note. It is palpable that this exception, if made, must be placed 
 on some new principle ; it cannot be allowed on the ground which 
 upholds the others. The facts in this case are unchanged, and as 
 the reason for making an exception does not exist, the exception 
 itself should not be allowed. Unless, therefore, the general posi- 
 tion is true, that one who indorses for a maker who lives in another 
 State may be " held liable without any demand being made on the 
 maker," I think the defendant was not liable in the case at bar. 
 And if any such general rule of law, as I have stated, exists, it 
 certainly may be shown ; but that it has no existence, is, as I be- 
 lieve, not only according to the universal understanding amongst 
 commercial men, but also according to the settled course of busi- 
 ness in the commercial world. 
 
 The indorsement of a note is an order to the maker to pay the 
 amount to the indorsee or holder, as is specified and agreed in the 
 note, and an engagement by the indorser that if the note is duly 
 demanded of the maker and not paid, or if it shall be found im- 
 practicable to make a demand, the indorser will himself, on re- 
 ceiving due notice, pay the amount to the indorsee or holder. 
 Now, where such an order is drawn upon a maker who resides in 
 another State, and which is well known to the person in whose 
 favor the order is drawn, upon what principle can it be said that 
 a demand of the maker is unnecessary ? The indorsee volun- 
 tarily consents to take such an order, and why should he not per- 
 form the' condition on which the ultimate liability of the indorser 
 depends ? I confess I see no reason why he should not. Here is 
 no mistake, or misapprehension of fact, at the time the indorse- 
 ment is made. The indorsee knows where the maker resides, and 
 that it is in another State. He knows that by law, unless the in- 
 tervention of a State line makes a difference, the maker must be
 
 TAYLOR V. SNYDER. 319 
 
 sought where he resides, and the demand must be made there. 
 When the time for payment arrives, the maker is still at his former 
 residence ; the facts of the case are precisely as they were when 
 the order was drawn. Why, in such a case, should the State 
 lino make a dilTcrcnce in the construction and legal elllect of this 
 contract of 'the indorsur V It was fairly entered into between the 
 parties ; let it then be fairly observed and performed by them. 
 
 1 can well understand why such an order made by an indorser 
 upon the maker of a note then residing loithin this *State, but who 
 removes into another State before the note Aills due, should re- 
 ceive a different construction, and that it would be unreasonable 
 to require the holder to follow the maker to his new residence in 
 order to demand payment. Here, a new and unlooked-for event 
 lias occurred, which, like the absconding of a maker, or an ina- 
 bility to discover his residence, may very reasonably be held to 
 excuse a demand. In these respects, the indorser should be held to 
 stand committed by the act of the maker. But where the facts, in 
 reference to which the parties contracted, were fully known to 
 them, and are in no respect changed, I am unable to discover any 
 principle winch will excuse the maker from making a demand, or 
 using proper diligence to make a demand, as in orcUnary cases. 
 The intervention of a State line has, in my opinion, no possible 
 bearing on the question. 
 
 I admit that I have not found any case in which this point has 
 been expressly adjudicated, as I have stated it. It seems, how- 
 ever, to have been taken for granted, in the case of M'Gruder i\ 
 The Bank of Washington, already referred to. The case of Dun- 
 can r. McCuUough, Adm'r, &c., 4 Serg. & Rawle, 480, was, in 
 some of its features, nuich like the one at bar. It was an action 
 against the administrator of an indorser of a note made by one 
 Adams, bearing date at Baltimore, in Maryland, June 4, 1814, 
 payable nine months from date, no place of payment being speci- 
 fied in tlio note. It did not appear otherwise, than by its date, 
 where the note was actiuiUy made ; and it may be inferred from 
 the evidence, that Adams was, at that time, a resident at Green 
 Village, Pennsylvania. It did not appear where he was when the 
 note fell due, and no demand of payment had been made any- 
 where ; nor was it shown that any search for the maker had been 
 made. Here, then, was a note dated at Baltimore, no [)lace of 
 payment being stated in it, the maker living in another State. So
 
 320 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 far it is the case in hand, yet it was not even suggested, by the 
 counsel or the Court, that a demand was unnecessary, or that Bal- 
 timore was the proper place to make the demand. The case was 
 disposed of on other grounds, and which could not have been in 
 any respect material, if a demand at Baltimore would have been 
 proper, or if none whatever was necessary. On the trial, the 
 Court charged that the plaintiff was bound to prove a demand of 
 payment of the maker, or due diligence used for that purpose, and 
 upon this part of the case the final opinion of the Court was thus 
 stated by Chief Justice TilgJiman : " If the' plaintiff had proved 
 that Adams had absconded, and was not to be found when the 
 note fell due, a demand of payment would have been dispensed 
 with, because it would have been impossible to make it. But no 
 such thing was proved, and therefore a demand was necessary. 
 The note being dated at Baltimore, would raise a presumption that 
 Baltimore was the drawer's place of residence, as was decided by 
 the Supreme Court of New York, in 2 Caines, 127. Baltimore, 
 then, was the place at which inquiry should have been made. The 
 Court laid down the law fairly. A demand, or at least due dili- 
 gence in endeavoring to make a demand, was necessary." All 
 this seems to me very just and proper. A demand was necessary : 
 the note was dated at Baltimore, and if the residence of the maker 
 was unknown, Baltimore was the place where the inquiry should 
 have been made. But if, as is now urged, Baltimore was the 
 place to demand payment, or, if no demand was required, the ar- 
 gument of counsel in the case referred to and the views of the 
 Court were entirely wide of the mark. And here let me observe, 
 that, although the date of a note does not make it payable at that 
 place, still the date may, in one respect, be very important. It 
 raises a presumption that the maker resides there, although it is 
 only presumption. 3 Kent, 96, 97 ; Lowery v. Scott, 24 Wend. 
 358 ; Galpia v. Hard, 3 M'Cord, 394. And where it becomes a 
 question of due diligence in seeking to make a demand, it may be 
 all important to show that inquiry was made at the place where 
 the note"bears date. But here, this point is of no consequence, 
 for the residence of the maker was known to all parties, and not 
 the least effort was made to make demand of him where he lived, 
 or at any other place than Troy, where the indorser resided, the 
 maker then being at his home in Florida. 
 I am aware that Judge Story ^ in his treatise on Promissory Notes,
 
 TAYLOR V. SNYDER. 321 
 
 after adverting to various grounds on which a demand of payment 
 may be excused, says : " It seems also, tliat if the maker of a 
 promissory note resides and has his domicile in one State, and act- 
 ually dates and makes, and delivers a promissory note in another 
 State, it will be sufficient for the holder to demand payment there- 
 of at the place where it is dated, if the maker cannot personally, 
 upon reasonable inquiries, be found within the State, and has no 
 known place of business there." § 280. For this he refers to the 
 case of Hepburn v. Tolcdano, 10 Mart. La. 643. It will be observed 
 that Judge Story does not give to this position the authority of his 
 name and character ; the point is stated doubtingly. It seems, 
 he says, that under such circumstances the maker need not bg 
 sought in the State where he resides, and hot that it is clear this 
 will excuse the usual demand. The learned author was obviously 
 doing no more than to state what seemed to him to have been de- 
 cided in Louisiana, and he does it in a manner which precludes 
 the idea that he intended to adopt the principle, or give to it any 
 authority beyond that of the elevated and able tribunal by which 
 the case was determined. I have looked at tlie report of the case 
 of Hepburn v. Tolcdano. It was an action against the indorser of 
 a promissory note dated at New Orleans, but not made payable 
 there. When the note was payable the maker resided in Ken- 
 tucky ; but where his residence was when the note was given, is 
 not expressly stated. The only question in the case, as the Court 
 said, was whether the holder was obliged to go out of the State to 
 demand payment ; but whether that question arose upon a note 
 given by a resident of Louisiana, who had subsequently removed 
 to Kentucky, or by a ])erson who lived in Kentucky when the note 
 was made, is a fact upon which I cannot satisfy myself from any 
 thing to be found in the report of the case. We have already 
 seen that where the maker removes from one State to another, 
 after the giving of a note, the holder need not follow him. This was 
 said in Anderson v. Drake, in 14 Johnson, 114, upon the authority 
 of which the Louisiana case was decided. In the latter case, the 
 Court say : " There is some difficulty as to the place where demand 
 is to be made, when tiie maker of a note or acceptor of a bill has 
 been a resident of the State, and before the time of payment had 
 changed his domicile ; but if he lives in another country, the in- 
 dorsees cannot be presumed to know his residence, and all that • 
 the law requires of the holder is due diligence at that place where 
 
 21
 
 322 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 the note is drawn. Thus in the case cited by the appellant, 14 
 Johns. 116, it is stated by the Court to have been previously de- 
 cided, that, where a note was dated at Albany, and the drawer of 
 it afterwards removed to Canada, the demand where it was drawn 
 was sufficient to charge the indorser." And it was held that the 
 demand at New Orleans was sufficient. I must say that my im- 
 pression upon this case is that the maker of the note had re- 
 moved from Louisiana after the giving of the note ; but if the fact 
 were otherwise, I think the decision should not be followed. The 
 case is not strictly authority, although harmony in the decisions 
 of the several State courts, upon such a point, is exceedingly de- 
 sirable. But I cannot assent to the principle that where no change 
 has taken place in the residence of the maker, between the mak- 
 ing of the note and the time of its payment, the intervention of a 
 State line dispenses with the necessity of making due demand of 
 payment, or at all affects the question. I therefore think the non- 
 suit was right, and a new trial should be denied. 
 
 New trial denied. 
 See following case and note. 
 
 Chicopee Bank v. Philadelphia Bank. 
 
 (8 Wallace, 641. Supreme Court of the United States, December, 1869.) 
 
 Payable at hank. Negligence of collecting hank. — Though commercial paper be physi- 
 cally in the bank at which it is payable, yet if the bank is ignorant of tliis by rea- 
 son of the fact that the letter in which it was sent slipped through a crack in the 
 cashier's desk and disappeared before it had been seen by him, then there is no pre- 
 sentment, even though the acceptor liad no funds there, and did not mean to pay 
 the bill. And such a disappearance carries a presumption with it of negligence in 
 the collecting bank, and throws the burden of proof upon the bank to repel tliis 
 presumption. In the absence of such proof, the bank is responsible to the holder 
 for the amount of the bill or note. 
 
 TfflS was a suit by the Seventh National Bank of Philadelphia 
 against the Chicopee Bank of Springfield, Massachusetts, founded 
 upon the allegation, that by reason of the neglect of the latter 
 bank, the former lost its remedy against the prior parties on a bill 
 of exchange ; to wit, the drawer and payee.
 
 CHICOPEE BANK V. PHILADELPHIA BANK. 323 
 
 The bill was drawn by one Coglin, of Philadelphia, on Mon- 
 tague, of Springfield, payable to one Rhodes, of Philadelphia, for 
 $10,000, and accepted by Montague specially payable at the Chico- 
 pee Bank. The day of payment was Saturday, Feb. 18, 1865. 
 On the loth, Rhodes, the holder, indorsed the bill for value to the 
 Philadelphia Bank, which sent it at once by mail, inclosed in a let- 
 ter to the Chicopee Bank, to receive payment. The course of the 
 mail between Philadelphia and Springfield is two days. On the 
 loth, this letter, with other letters and papers, was duly delivered 
 by the postman, and placed on the cashier's table ; but (as was 
 afterwards ascertained) this letter slipped from the pile through a 
 crack in the table, into a drawer of loose papers, and its presence 
 in the bank was not known to the cashier, and as the two banks 
 had no previous dealings, he was not expecting any thing from the 
 other bank. On the 18th, Montague, the acceptor, made no attempt 
 to pay the bill, either by calling for it or depositing funds, and 
 subsequently, at the trial, made oath that he intended not to pay 
 the bill, and had a defence against it. The cashier of the Piiiladel- 
 phia Bank, not receiving on the 17th an acknowledgment of the 
 letter which he had sent on the 13th, felt somewhat anxious ; and 
 on the 18th consulted the president. On Monday, the 20th, he 
 telegraphed to the cashier of the Chicopee Bank as follows : — 
 
 " Did not you receive ours of 13th instant, with Montague's 
 acceptance, $10,000 ? " 
 
 The despatch did not indicate either the time or place of payment 
 of the draft ; and the reply was sent, — 
 
 " Not yet received." 
 
 This despatch was received by the cashier of the Philadelphia 
 Bank at noon of the 20th. He testified at the trial that he wrote 
 to Mr. Rhodes the same day, informing him of what he had learned, 
 that he had no recollection of writing to Coglin, but, as he knew 
 they were jointly concerned in dealings in petroleum lands, he 
 presumed Rhodes would inform him. This was the only step the 
 cashier took toward charging the prior parties. They both did 
 business at that bank ; Coglin was a director ; both were Irequently 
 there, and well known to the cashier. As the mail required two 
 days, and the 19th was Sunday, there was no question but the 
 cashier had until and including the 24th, to give notice to Rhodes 
 and Coglin. After the receipt of the reply of the 20th, at noon, he 
 took no steps, by post or telegraph, to ascertain from the Chicopee
 
 324 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 Bank whether the acceptor had or liad not been ready to pay on the 
 18th. The Pliiladelphia Bank brought no suit against Rhodes or 
 Coglin,but sued the Chicopee Bank for the amount of the note, on 
 the ground that, by its negligence, they had lost the power to charge 
 the ])rior parties. 
 
 Tlie Court below instructed the jury that the prior parties were 
 absolutely discharged by what took place at the Chicopee Bank, on 
 the 18tli ; that wliere a bill is accepted payable at a particular bank, 
 the bank need not seek the acceptor, but that there must still be a 
 presentment, in order to charge prior parties ; that the presence of 
 the bill at the bank, ready to be delivered to the acceptor upon his 
 tendering payment, was equivalent to a presentment, but that if the 
 bill is not at the bank on the day of payment, ready to be delivered 
 as aforesaid, there is a failure of presentment, and the prior parties 
 are discharged, although the acceptor made no attempt to pay ; that 
 in this case, therefore, the prior parties could not be held by any 
 notice of whatever description, whenever or by whomsoever given ; 
 and that if the loss or mislaying of the bill during the whole of the 
 18th was owing to the negligence of its cashier, the Chicopee Bank 
 was liable for the amount of the note. 
 
 After the charge was fully delivered, the Court was asked by the 
 counsel of the Cliicopee Bank to instruct the jury as to the burden 
 of proof. This the Court refused to do, considering that it had 
 already sufficiently instructed the jury. 
 
 The verdict and judgment were accordingly for the plaintiifs. 
 
 Nelson, J. The case was put to the jury, whether or not the 
 loss of the bill, and consequent inability of the collection bank to 
 take the proper steps against the acceptors to charge the prior 
 parties, was attributable to negligence, and want of care on the- 
 part of the Chicopee Bank, and that, if it was, the bank was 
 responsible. The jury found for the plaintiffs. 
 
 In cases where the drawee accepts the bill, generally, in order to 
 charge the drawer or indorser, the holder must present the paper, 
 when due, at his place of business if he has one, if not, at his 
 dwelling or residence, and demand payment ; and, if the money is 
 not paid, give due notice to the prior parties. If he accepts the 
 bill, payable at a particular place, it must be presented at that 
 place, and payment demanded. In these instances, as a general 
 rule, the bill must be present when the demand is made, as in case 
 of payment the acceptor is entitled to it as his voucher. "When the
 
 CHICOPEE BANK V. PHILADELPHIA BANK. 325 
 
 bill is made payable at a bank, it has been held that the presence 
 of the bill in the l)aiik at maturity, with tlie fact that the acceptor 
 had no funds there, or, if he had, were not to Ije applied to payment 
 of the paper, constitute a sufficient presentment and demand ; and, 
 if the bill is the property of the bank, the presence of the paper 
 there need not be proved, as the presumption of law is, that the 
 paper was in the bank, and the burden rests upon the defendant 
 to show that the acceptor called to pay it.* 
 
 In the present case, it is ar}j:ued that the bill was in the Chicopee 
 Bank at the time of its maturity, and, as the acceptors had no funds 
 there, a sufficient presentment and demand were made, according 
 to tlie law merchant. It is true, the bill was there physically, but, 
 within tlie sense of this law, it was no more present at the bank 
 than if it had been lost in the street by the messenger on his way 
 from the post-office to the bank, and had remained there at maturity ; 
 and this loss, which occasioned the failure to take the proper steps, 
 or rather, in the present case, to furnish the holder with the proper 
 evidence of the dishonor of the paper, so as to charge the prior 
 parties, and enable him to liave recourse against them, is wholly 
 attributable, according to the verdict of the jury, to the collecting 
 bank. In the eye of the law merchant there was no presentment 
 or demand against the acceptors ; and,- as a consequence of this 
 default, the holder lias lost his remedy against the drawer and 
 indorser, which entitles him to one against the defendant. The 
 radical vice in the defence being the failure to prove a presentment 
 and demand upon the acceptors at the maturity of the bill, the 
 question of notice is unimportant. 
 
 But if it had been otherwise, the notice itself was utterly defec- 
 tive. That relied on is the answer of the defendant tu the telegram 
 of the plaintiff of the 20th February, which was, that the liill had 
 not yet been received. This was after its maturity, and it simply 
 advised the holder and payee indorser, to whom the information 
 was communicated the same day, that the drawer and indorser 
 were discharged from any liability on the paper. It showed that the 
 proper steps had not been taken against the acceptors to cluirge them. 
 
 Some criticism is made upon the refusal of the Court below to 
 charge as to which side the burden of proof belonged, in respect to 
 the question of negligence and want of care, after the paper came 
 
 1 FuUerton v. Bank of United States, 1 Peters, G04 ; Bank of United States c. Carneal, 
 2 id. 543 ; Seneca Co. Bank v. Neass, 5 Denio, 329 ; State Bank v. Napier, 6 Humph. 
 270 ; Folgar i-. Chase. 18 Pick. 63.
 
 326 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 into tlic hands of the defendant. No objection is taken to the 
 charge itself, upon this question, and, indeed, could not have been, 
 as the point was submitted to the jury as favorably to the defend- 
 ants as could have been asked. We think the Court, after having 
 submitted fairly the evidence on both sides bearing upon the ques- 
 tion, had a right, in the exercise of its discretion, to refuse the 
 request. 
 
 If, however, the Court had inclined to go further, and charge as 
 to the burden of proof, it should have been that it belonged to the 
 defendant. The loss of the bill by the bank carried with it the 
 presumption of negligence and want of care ; and, if it was capable 
 of explanation, so as to rebut this presumption, the facts and cir- 
 cumstances were peculiarly in the possession of its officers, and the 
 defendant was bound to furnish it. Where a peculiar obligation is 
 cast upon a person to take care of goods intrusted to his charge, if 
 they are lost or damaged while in his custody, the presumption is 
 that the loss or damage was occasioned by his negligence, or want 
 of care of himself or of his servants. This presumption arises with 
 respect to goods lost or injured, which have been deposited in a 
 public inn, or which had been intrusted to a common carrier. But 
 the presumption may be rebutted.^ Judgment affirmed. 
 
 Adams v. Leland, 30 N. Y. 309, is an additional authority on the point 
 stated in the opinion in the principal case, Taylor v. Snyder, that where a note 
 is made by a resident of a State, who, before it matures, removes from the 
 State and takes up a permanent residence elsewhere, the holder need not follow 
 him to present the note for payment. See also, to the same effect, Foster v. 
 Julien, 24 N. Y. (10 Smith) 28. 
 
 The question arose in Pearson v. Bank of Metropolis, 1 Peters, 89, in 1828, 
 whether parol evidence could be received of an agreement of all the parties to a 
 note that demand of the maker might be made at a certain place, — no place of 
 payment being specified on the face of the note. The Court held the evidence 
 admissible. Marshall, C. 3 ., in delivering the opinion, said : "The plaintiffs 
 in error contend that the testimony ought not to have been admitted, because it 
 is an attempt, by parol proof, to vary a written instrument. But this is not an 
 attempt to vary a written instrument. The place of demand is not expressed on 
 the face of the note, and the necessity of a demand on the person, when the 
 parties are silent, is an inference of law, which is drawn only when they are si- 
 lent. A parol agreement puts an end to this inference, and dispenses with a per- 
 sonal demand. The parties consent to a demand at a stipulated place, instead 
 of a demand on the person of the maker; and this does not alter the instrument, 
 so far as it goes, but supplies extrinsic circumstances which the parties are at 
 
 1 Dawson v. Chamney, 5 Q. B. 164; Coggs v. Bernard, 2 Ld. Raym. 918; Day 
 V. Riddle, 16 Vt. 48.
 
 CHICOPEE BANK V. PHILADELPHIA BANK, 327 
 
 liberty to supply. No demand is necessary to sustain a suit againjit the maker. 
 His undertaking is unconditional, but the indorser undertakes conditionally to 
 pay, if the maker does not ; and this imposes on the holder the necessity of tak- 
 ing the proper steps to obtain payment from the maker. This contract is not 
 written, but is implied. It is, that due diligence to obtain payment from the 
 maker shall be used. When the parties agree what this due diligence shall be, 
 they do not alter the written contract, but agree upon an extrinsic circumstance, 
 and substitute that agreement for an act which the law prescribes only when they 
 are silent." 
 
 A Contrary doctrine is held in Pierce v. Whitney, 29 Me. (16 Shepl.) 188, 
 citing Story, Promissory Notes, § 49, and note ; but Pearson v. Bank of Metrop- 
 olis, supra, is not noticed in either place. And Mr. Justice Story, in support of 
 his position, refers to the rule that parol evidence is not admissible to vary the 
 terms of a written contract; a rule which Chief Justice Marshall very clearly 
 shows is not infringed by the decision which he pronounces. 
 
 Thompson, C. J., in Anderson v. Drake, 14 Johns. 114, decided in 1817, also 
 makes the statement that parol testimony is inadmissible to show such an agreement ; 
 disapproving a dictum to the contrary in Thompson v. Ketcham, 4 Johns. 285; 
 but his statement was also a dictum ; that point not being involved in the case. 
 
 In State Bank v. Ilurd, 12 Mass. 171 (1815), the note was made payable 
 at the State Bank. By direction of the maker and indorser, notices were left 
 at a certain shop for the promisor and for the indorser, the defendant. No other 
 notice or demand was given or made. It was held that the agreement that no- 
 tice left for the maker at the shop should be equivalent to a more formal demand 
 upon him, removed the necessity of making demand at the bank, and the indorser 
 was liable. 
 
 And it is held in Sussex Bank v. Baldwin, 2 Harrison, 487 (184<J), that the 
 indorser cannot object to presentment made at an improper place, where the 
 maker alone had directed the holder to present the note at such place. But this 
 may be doubted. The reason given in that case is this : The maker is estopped 
 from objecting by his conduct; "and that which is good against the drawer 
 is good against the indorser." The proposition in quotation marks may be 
 generally true, so far as presentment is concerned ; but a drawer is not & 
 maker. The drawer's liability is that of an indorser, while the maker's liability 
 is absolute. The Court evidently confused the terms maker and drawer. 
 
 On this point State Bank v. Hurd, supra, was cited ; but there is this mate- 
 rial dilTerence between the two cases, that in the former the indorser and maker 
 together gave the directions ; while in the latter case the indorser was not privy 
 to the matter ; at least it is not stated that he knew any thing of it. And the 
 ground taken in Pearson v. Bank of the Metropolis, supra, was that it was an 
 agreement of all the parties. 
 
 With respect to the place at which presentment should be made, it is not suf- 
 ficient to charge an indorser that it was made in the street. When a bill is pay- 
 able generally and not at a specified place, demand must be made at the place of 
 business of the maker or acceptor, if he has one ; if not, at his residence. King v. 
 Holmes, 11 Penn. State, 456. But it was held in this case that if the notary, on 
 his way to the acceptor's place of business, meets him in the street and informs him 
 of his business and where he is going, and the acceptor offers, if he will go to his
 
 328 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 place of business, to give bim only a cbeck on a broker, it is not necessary for 
 the notary to proceed farther. The demand at the place of business is waived. 
 
 In Sussex Bank v. Baldwin, sujna, the Court, Dayton, J., say that there 
 is "no doubt where a person has an ofBce or known and settled place of 
 business for the transaction of his moneyed cohcerns, whether he be a hanker, 
 broker, merchant, manufacturer, mechanic, or dealer in any other waf^, a pre- 
 sentment and demand at that place " as well as at his residence, will be^ffectual. 
 " It must not, however, be a place selected and used temporarily for the transac- 
 tion of some particular business, as settling up some old books or accounts mere- 
 ly, but his regular and known place of business for the transaction of his moneyed 
 concerns. The counting-room of a banker or merchant may be a proper place 
 for a demand, though the manufactory or workshop would not. Yet if the 
 manufacturer or mechanic have an office or known place of business for the pur- 
 pose aforesaid, a good demand may be made there." 
 
 In West V. Brown, 6 Ohio State, 542, it was contended that demand should 
 have been made at the maker's residence, since he had no well-established 
 place of business. But he had a room at which he received business calls, and 
 where he directed them to be made. Demand was there made, and it was held 
 sufficient, though the same office was occupied as a place of business by other 
 persons. 
 
 And if the maker or acceptor had neither place of business nor residence in 
 the city in which the paper is payable, it is sufficient to charge an indorser or a 
 drawer that the holder was there on the day of payment, ready to receive the 
 money. Boot v. Franklin, 3 Johns. 207, Kent, C. J.; Mason v. Franklin, 3 
 Johns. 202 ; Maiden Bank v. Baldwin, 13 Gray, 154. See also Stivers v. Pren- 
 tice, 3 B. Mon. 461 ; Deyraud v. Banks, 16 La. 461 ; Shamburgh v. Commagere, 
 10 Mart. La. 18. 
 
 The result of the cases seems to be that if the maker or acceptor of paper 
 payable' at no designated place has a regular place of business and an office, de- 
 mand should there be made to charge the indorser, otherwise the demand should 
 be made at his residence. 
 
 Where the bill or note is payable at a particular bank or other place certain, 
 in order to charge an indorser, " it is well settled, not only that the holder is not 
 bound to present it to the promisor at any other place, but that a presentment at 
 any other place would be unavailing." Per Shaw, C. J., in North Bank j;. Ab- 
 bot, 13 Pick. 465. See also Bank of the United States v. Smith, 11 Wheat. 
 171; Watkins v. Crouch, 5 Leigh, 522; Shaw v. Reed, 12 Pick. 132; Bank of 
 the United States v. Carneal, 2 Peters, 543. 
 
 If the bank at which the paper is payable is owner of the same, all that 
 " ought to be required is that the books of the bank should be examined, to 
 ascertain that the maker had any funds in their hands ; and, if not, there was 
 a default which gave to the holder a right to look to the indorser for payment." 
 If the maker had any balance standing to his credit, "the bank would have a right 
 to apply it to the payment of the note, and no default would be incurred by the 
 maker, which would give aright of action against the indorser." Per Thompson, 
 J., in Bank of the United States v. Smith, supra. See, to the same effect, Bank 
 of South Carolina v. Flagg, 1 Hill (S. C), 177. But this is matter of defence, 
 and need not be alleged in the declaration. State Bank v. Napier, 6 Humph. 270. 
 
 A bill of exchange may be accepted payable at a particular place in the city
 
 CHICOPEE BANK V. PHILADELPHIA BANK. 329 
 
 or town in which the acceptor resides, though it be not his place of business. 
 Troy City Bank v. Lauinati, 19 N. Y. (5 Smith) 477. 
 
 But it cannot be made payable by the accejjtance in a city or town other than 
 that of the acceptor's residence (the bill itself not stating such place of payment ?) 
 so as to charge the drawer or inclorser by presentment at the place named in the 
 acceptance. Niagara District Bank v. The Fairman, &c., Manufacturing Co., 
 31 Barlj. •403; Rowe v. Young. 2 Brod. & B. 165; Walker v. Bank of New 
 York, 13 Barb. 636. But see Mason v. Franklin, 3 Johns. 202, in which the 
 bill was drawn on a person in Liverpool, payable m London, and protested for 
 non-acceptance and non-payment in the former place. Kent, C J., said: "We 
 are of opinion that, as no place of payment in London was designated, the de- 
 mand for payment and protest for non-payment were well made upon the draw- 
 ees personally at Liverpool." 
 
 It is said that, when the payor of comtnercial paper has become insolvent be- 
 fore its maturity, and has abscondedyVo/n the State and gone into parts unknown, 
 there must be a presentment and demand of payment at his last place of busi- 
 ness or of residence, or due efforts should be made to find the one or the other, 
 in order to charge the indorser. Grafton Bank v. Cox, 13 Gray, 503. But this 
 statement does not seem to be strictly accurate ; and the learned judge perhaps 
 had in mind the case of an ordinary removal by the payor into another juris- 
 diction. It would seem from the language of the rule stated in lleid v. Morrison, 
 2 Watts & S. 401, that the party need not have left the State to dispense with 
 presentment. Sergeant, J., says on p. 405: "The rule of law on this subject 
 seems to be that, if the drawee has merely removed from his usual place of resi- 
 dence to another in the same State or kingdom, it is incumbent on the holder to 
 make every reasonable endeavor to find out whether he has removed, and, in 
 case he succeed in such attempt, to present the note or bill for payment at that 
 place. But if the drawee or maker has absconded, that circumstance will dis- 
 pense with the necessity of making any further incjuiry after him," citing Chitty, 
 Bills, 261 ; Bayley, 95; Duncan v. McCullough, 4 Serg. & R. 480. 
 
 The connection of the two sentences indicates that the learned judge regard- 
 ed as immaterial the place to which the payor had absconded ; whether he had 
 left the State or not. At any rate, it seems highly probable that if he had 
 thought that there was such a distinction, he would have mentioned it. And 
 there seems to be no solid ground for the distinction. An absconding debtor 
 always endeavors to cover up his tracks, and usually succeeds in doing so ; and 
 how can it be determined whether or no he has left the State ? Shall the holder 
 wait in the probably vain endeavor to ascertain whether the payor has passed the 
 jurisdiction, in order to determine whether he must make presentment at the 
 debtor's last place of residence ? Such a requirement would be unreasonable, if 
 not absurd. If the absconding is any excuse at all, it should be so without ref-. 
 erence to the locality of the hiding-place, unless this is within the jurisdiction 
 and the holder knows where it is. In such a case it would certainly be his duty 
 to present the paper at the debtor's residence or place of business. But this is not 
 the case stated in Grafton Bank v. Cox, supra. That case speaks of an ab- 
 sconding " into parts unknown." 
 
 This view is confirmed by Duncan v. McCullough, 4 Serg. & R. 480. 
 2'il<jhman, C. J., said : " If the plaintiff had proved that Adams had absconded
 
 330 PRESENTMENT AND DEMAND FOR PAYMENT. 
 
 and was not to be found wlien the note fell due, a demand of payment would 
 have been dispensed with, because it would have been impossible to make it." 
 There was evidence that Adams had been seen in the State, and none that he had 
 left the State. And Lehman v. Jones, 1 Watts & S. 12G, directly decides the 
 point that presentment in such case need not be made at the payor's last abode. 
 See also Foster v. Julien, 24 N. Y. (10 Smith) 28, 37 ; Ratcliflf v. Planters' 
 Bank, 2 Sneed, 425, 555; Hale v. Burr, 12 Mass. 85, 89; Gist u. Lybrand, 
 3 Ohio, 307; Shaw v. Reed, 12 Pick. 132; Bruce v. Lytle, 13 Barb. 163; 
 Edwards, Bills, 485-487, and note; 1 Parsons, Notes and Bills, 449, 450. But 
 Pierce v. Cate, 12 Cush. 190, declares a more strict rule than that held in 
 the early Massachusetts cases. It is there held that where the maker of a note 
 absconds, leaving no visible property that may be attached, a want of demand 
 or inquiry for liim is not thereby excused, though the indorser knew of the ab- 
 sconding. Opinion by Shaw, C. J. It is not stated, however, in the report 
 that this point was argued ; and It is said in 1 Parsons, Notes and Bills, 450, note, 
 that " it is a fact personally known to us that this point was not argued, nor 
 indeed raised by counsel in this case. The defence was based upon other 
 grounds." See Story, Promissory Notes, §§ 205, 237 ; Chitty, Bills, 280, 330, 
 367. 
 
 A very different question arises in the case of a mere removal by the payor 
 into another jurisdiction ; but there is conflict upon the necessity of present- 
 ment at the debtor's last abode, even in this case. The general rule is well 
 settled that in such case the holder need not follow the maker or acceptor 
 into another State ; but the question is, must he still make presentment at the 
 payor's last place of residence ? Wheeler v. Field, 6 Met. 290, Wilde, J., holds 
 the affirmative. Gist v. Lybrand, 3 Ohio 308, and Foster v. Julien, 24 N. Y. 
 (10 Smith) 28, Mason, J., dissenting, held the negative. Reid v. Morrison, 
 supra, says that the rule which applies in the case of an absconding debtor, 
 applies equally in the case of the removal of the payor into another State. 
 M'Gruder v. Bank of W^ashington, 9 Wheat. 598, merely decides that in case of 
 such removal, presentment at the maker's last abode is sufficient ; but it does not 
 hold that it is necessary. That point was not involved in the case. In 3 Kent, 
 Com, 96, the rule is stated in the same way. It is there said: " If he [the 
 payor] has removed out of the State, subsequent to the making of or accepting 
 the bill, it is sufficient to present the same at his former place of residence." 
 
 The reason of requiring presentment at the payor's last residence, is probably 
 that he may have provided and left funds there for the payment of the paper ; 
 which is indeed a strong argument for the recjuirement, and seems sufficient to 
 decide the question in the case of an honest removal. It wholly fails, however, 
 in the case of an absconding debtor ; such a person is not apt to leave funds 
 with which to pay his debts. See note to M'Gruder v. Bank of Washington, 
 post.
 
 WHEELER V. GUILD. 331 
 
 PAYMENT. 
 
 [The subject to be illustnited here, in regular course, is the extinguishment of a bill or note 
 by payment. Commercial jiaper received in payment of debt will be considered under Bank 
 Bills, post ; and the effect of releases, extension of time, &c., will be considered under Dis- 
 
 CHAKGING InDORSEH, pvst.'\ 
 
 John Wheeler v. Albert H. Guild et al. 
 
 (20 Pickering, 5-15. Supreme Court of Massachusetts, October, 1838.) 
 
 Payment to one not authorized to receive it and before maturity. — The plaintiflF, holder of a 
 note indorsed in blank, delivered it to B. and G., attorneys in partnership, to be 
 held by them as collateral security for the payment of certain debts due from the 
 plaintiff" to B. and G., and other persons ; and the note was placed among the pri- 
 vate papers of G., by whom the business was transacted. Some time after pay- 
 ment of the debts so secured, but before the maturity of the note, the maker paid 
 to B. the amount due on the note, exclusive of interest, and took therefor a receipt 
 signed by B. alone, setting forth that it was in full payment of the note, and that 
 the note was to be delivered up to the maker. Held, that as the note was not in 
 fact delivered up to the maker, and as the right of B. and G. to transfer or collect 
 the note had ceased upon payment of the debts for which it was pledged, and as 
 the note was paid before maturity, the payment to B. did not operate as a dis- 
 charge of the note ; and that the plaintiff' might, notwithstanding such payment, 
 recover the amount from the maker. 
 
 The case is stated in the opinion of the Court. 
 
 Shaw, C. J. The facts of this case present a very important 
 question for the consideration of the Court. Whatever affects the 
 negotiability, and the free currency of promissory notes and bills 
 of exchange, is of the utmost importance to a mercantile commu- 
 nity, the business of which is to a great extent transacted tlirough 
 the medium of these instruments. . 
 
 The facts which may be deemed material are these. The plain- 
 tiff became the holder of the note in question by regular indorse- 
 ment for valuable consideration* soon after it was made, being a 
 note dated September 1, 1833, payable in three years, with interest,
 
 332 PAYMENT. 
 
 and the last indorsement bein*? in blank. Witbin a year from the 
 date of the note, to wit, in March, 1834, the plaintiff, John Wheeler, 
 as surety, joined with Daniel G. Wheeler in three promissory notes, 
 one to Brigham and Goodrich, attorneys and partners, in Worces- 
 ter, one to Tappan & Co., and one to Stewart & Co., of New York, 
 for both of wiiicb parties Brigham and Goodrich were agents and 
 attorneys. On that occasion, the plaintiff, John Wheeler, delivered 
 to Brigham and Goodrich, as collateral security to his three joint 
 and several promises, the note in question, indorsed in blank, and 
 took their receipt, specifying that it was so received, and to be by 
 them held, as collateral security for the payment of those notes. 
 In September, 1885, these three notes had been fully paid. Though 
 Brigham and Goodrich were in partnership as attorneys-at-law, yet 
 Brigham was engaged in much other business, and had many 
 separate negotiations, and the business in question had been done 
 in the partnership name, but in fact by Goodrich. In Decem- 
 ber, 1835, the plaintiff applied to Goodrich for the note, who then 
 produced and exhibited it from a file of private papers, where it 
 had been kept by him, and he would then have given it up to the 
 plaintiff, but the plaintiff had not his receipt with him, to exchange 
 for it. In the mean time, before this application of the plaintiff to 
 Goodrich, viz., on the twenty-eighth of November, 1835, Brigham 
 had received of Stafford, one of the firm of A. H. Guild & Co., and one 
 of the defendants, $500 to pay the note in question, describing it 
 as a note payable in September, 1836, and gave him a receipt, in 
 his separate name, signed D. T. Brigham, stating that the $500 had 
 been received in full payment of the note, and the note to be 
 delivered up to Stafford. Soon after the application of the plaintiff 
 to Goodrich above stated, viz., about the twenty-fourth of December, 
 Stafford, one of the defendants, producing Brigham's receipt, applied 
 to Goodrich for the note, who declined giving it, on the ground that 
 Brigham had no right to receive pay for, and discharge the note, 
 and by mutual consent it was placed in the custody of a gentleman, 
 for the use of the party having the better title to it, by whom it was 
 produced in this Court on the trial. 
 
 Some inferences are to be drawn from this evidence, which may 
 have a bearing on the case ; but we think they are plainly deducible 
 from the circumstances stated, and they are these : that Goodrich 
 did not assent to the payment received by Brigham, and did not in 
 fact know of it till after he had been applied to by the plaintiff for
 
 WHEELER V. GUILD. 333 
 
 the note ; that Goodrich liad the actual j)ossession and custody of 
 the note, and that at the time that Brighani received the money 
 and gave the receipt, lie not only did not produce or exhibit the 
 note, but that he had not the actual custody of it, nor was it so 
 amongst the partnership papers, as that it was in the actual joint 
 custody of the parties as partners. If he had it in his possession, 
 or had regular access to it, in the ordinary way of business, there 
 is no reason why he did not deliver it up to Stafford, instead of 
 giving him a receipt, and a ])romise to deliver it. 
 
 The law in regard to bills of exchange and promissory notes is 
 so framed as to give confidence and security to those who receive 
 them for valuable consideration, in tiie ordinary course of business, 
 when payable to bearer or indorsed in blank, sp as to be transfer- 
 al)le by delivery ; and in general a party taking such a bill under 
 such circumstances, has only to look to the credit of the parties to 
 it, and the regularity and genuineness of the signatures and 
 indorsements. So that if such a bill or note be made without con- 
 sideration, or be lost or stolen, and afterwards be negotiated to one 
 having no knowledge of these facts, for a valuable consideration and 
 in the usual course of business, his title is good and he shall be 
 entitled to receive the amount. Miller v. Race, 1 Burr. 452; Pea- 
 cock V. Rhodes, 2 Doug. 633 ; Grant v. Vaughan, 3 Burr. 1516. 
 The credit which the law thus attributes to notes and bills of 
 exchange which are transferable by delivery, arises mainly from 
 the conlideiice inspired by the actual custody and possession, and 
 the actual delivery of the security upon such negotiation. To so 
 great an extent is this principle carried, that in regard to bank- 
 notes, and in most respects in regard to all other bills and notes 
 transferable by delivery, the title and the possession are con- 
 sidered to be inseparable. And it will be presumed that the party 
 thus in possession of a bill holds it for value, until the contrary 
 appears ; and the burden of proof is on the party impeaching his 
 title. Collins v. Martin, 1 Bos. & Pul. 648. 
 
 But these rules are aih)pted with this limitation, that the party 
 thus taking the note or bill docs it in the ordinary course of trade, 
 when not overdue or otherwise dishonored by any thing ajjparent 
 upon the face of it, and without notice that it had been lost or 
 stolen, or that the holder had obtained it wrongfully, or iiad no just 
 right to receive it in the way of IJusiness. Paterson v. Hardacre, 4 
 Taunt. 114. If one takes a note or bill with actual notice that it
 
 334 PAYMENT. 
 
 has been lost by the owner, he cannot hold it against the true 
 owner. Lovcll v. Martin, 4 Taunt. 799. 
 
 It has been argued that where a party has a legal title by indorse- 
 ment and delivery, and the actual possession of the bill or note, 
 although he holds without any just right to negotiate or collect it, 
 still as he has a legal title, a transfer from him will vest a legal 
 title in another, and authorize such other to take for his own use. 
 But this consequence, we think, does not follow. The true ground 
 is expressed by Eyre^ C. J., in the case above cited, Collins v. Mar- 
 tin. He says, " for the purpose of rendering bills of exchange 
 negotiable, the right of property passes with the bills themselves. 
 The property and the possession are inseparable. This was neces- 
 sary to make them negotiable, and in this respect they differ essen- 
 tially from goods." In another part of his judgment, in assigning 
 the reason why a person thus having a legal title may not enforce 
 the collection of the bill, whether he has given value for it or not, 
 he says : " If it can be proved that the holder gave no value for the 
 bill, then he is in privity with the first holder, and will be affected 
 by every thing that affects the first. This all proceeds upon an 
 argumentum ad hominem. It is saying, you have the title, but you 
 shall not be heard in a court of justice to enforce it against good 
 faith and conscience." The same reasoning applies to other cases, 
 where a party has the custody of a bill, without any just right or 
 lawful authority to collect or negotiate it, as where it has been lost 
 or stolen, or embezzled from the true owner, or intrusted to an 
 agent, for a special purpose only ; if these facts are known to the 
 party receiving it, he is in privity with the party from whom he 
 receives it, and cannot be heard in a court of justice, though having 
 a legal title to enforce an inequitable and unjust demand. Such a 
 case is not within the reason of the rule, which is designed only to 
 protect bills and notes, when taken in good faith, in the course of 
 business. If a note is paid, not in the usual course of business, or 
 to a person having the custody, but not authorized to receive pay- 
 ment, and that known to the party paying, though the note be 
 given up, it is no discharge against the true owner. Kingman v. 
 Pierce, 17 Mass. 247. 
 
 So payment of a bill or check, before it is due, will not be a dis- 
 charge unless made to the real proprietor of it ; and therefore where 
 a banker, contrary to usage, paid a check the day before it bore 
 date, which had been lost by the payee, it was held that he was Ha-
 
 "WHEELER V. GUILD. 335 
 
 ble to repay the amount to the person losing it. Da Silva v. Fuller, 
 Sel. Cas. 238, cited in Chitty, Bills (0th Eng. ed.) 148. In this 
 case, although the holder had the legal title arising from the pos- 
 session of the check; yet he was not boyia fide the holder with 
 authority to collect, and as the banker paid it out of the usual 
 course of business, he paid it at the risk of being obliged to pay it 
 again, if the party presenting it had not just right to receive it. 
 
 Most of the same principles and reasons apply alike to trans- 
 fers and to payments. We think the rules dcducible from the 
 cases are these : where a party takes a bill transferable by deliv- 
 ery, not overdue nor otherwise apparently dishonored, for valuable 
 consideration, in the usual course of business, and without notice, 
 actual or constructive, that the holder came by it unlawfully or 
 without title, and has no just right to collect and receive it, the 
 party taking it shall hold it as a valid security, notwithstanding 
 that it has been lost by the true owner, or stolen from him, or 
 taken by the holder as a mere agent to keep, or for other special 
 purpose, without any authority to collect or transfer it, otherwise 
 he shall not be deemed to have a good title to hold and enforce 
 payment of it, or to withhold the bill itself or the proceeds of it, 
 from the party justly entitled. Bleaden v. Charles, 7 Bing. 
 '246. The same rule applies to payments ; if a bill be paid at 
 maturity, in full, by the acceptor, or other party liable, to a person 
 having a legal title in himself by indorsement, and having the 
 custody and possession of the bill ready to surrender, and the 
 party paying has no notice of any defect of title or authority to 
 receive, the payment will be good. But in both cases faith is 
 given to the holder, mainly on the ground of his possession of the 
 bill, ready to be surrendered or delivered, and the actual surren- 
 der and delivery of it upon the payment or transfer. If, there- 
 fore, upon such payment, the holder has not the actual possession 
 of the bill ready to be delivered, and does not in fact surrender it, 
 but gives a receipt or other evidence of the payment ; and if it 
 turns out that the party thus receiving, had not a good right and 
 lawful authority to receive and collect the money, but that another 
 person had such right, the payment will not discharge the party 
 paying, but will be a payment in his own wron^ ; he must pay the 
 bill again to the right owner, and must seek his redress against 
 the party receiving his money, on the pretence that he had a right 
 to receive it as the holder of the bill, when in fact he had no such 
 right.
 
 336 PAYMENT. 
 
 Applying these principles to the present case, the Court are of 
 opinion, that the payment made by Stafford to Brigham, under the 
 circumstances, did not operate as a payment and discharge of thig 
 note, and that the plaintiff is entitled to recover. 
 
 The plaintiff was the holder of this note by indorsement, before 
 it was pledged to Brigham and Goodrich, and had the complete 
 legal and equitable title to it, and the whole beneficial interest in 
 it. Being transferable by delivery, when transferred to Brigham 
 and Goodrich, they took the legal title, with a right to collect it, 
 and apply the proceeds to the payment of the notes, for the secu- 
 rity of which it was pledged, if they should not be otherwise paid. 
 But when those notes were paid, all right of Brigham and Good- 
 rich to transfer or collect it ceased, and they had the mere naked 
 possession of it for the plaintiff, to be surrendered on demand. 
 Now whatever might have been the effect of an actual surrender 
 and delivery of this note to one of the promisors, on receiving 
 payment, it is very clear that, according to all the rules applicable 
 to this subject, without surrendering and delivering up the note, 
 the payment must be considered as made at the risk of the party 
 paying ; and as the party receiving in fact had no right to receive 
 payment, such payment and receipt did not discharge the note, as 
 against the true owner. It is not necessary to consider whether 
 Brigham was acting in his partnership capacity or not ; because 
 after the purpose was accomplished, for which the note was 
 pledged to the partners, they had no just right or lawful authority 
 to transfer or collect the note, as against the plaintiff. If they 
 had jointly transferred it in the due course of business, although 
 their transfer without notice might have held it, it would be in 
 virtue of the law which protects such transfers to a party without 
 notice, in order to give effect to the currency of bills and notes, 
 and not because Brigham and Goodrich had any right or lawful 
 authority. If therefore they had given a transfer in writing with 
 a promise to deliver the note, not delivering or producing it, no 
 title would have passed as against the plaintiff, because such 
 transfer without delivery would not be within the reason or prin- 
 ciple of the rule. 
 
 But we think the other point is equally decisive. Brigham not 
 only did not produce or exhibit the note, but he had not the actual 
 custody or possession of it. He did not profess to act for the 
 partnership, but signed the receipt in his own name. . Had Brig-
 
 WHEELER V. GUILD. 337 
 
 ham and Goodrich, as partners, been the true holders of the note, 
 or if they had had a Joint authority to collect it, it iflay well be 
 j^dmittcd, that the act of one or the receipt of one would Ijind both. 
 But all the right and autliority which they ever had over the note, 
 except to give it back to the plaintiff, agreeably to tlicir contract, 
 had ceased. A rcccij)t of one therefore in his own name and not 
 purporting to be for the use of both, was not within tiie scope of 
 the partnership autliority, and did not bind his partner. The de- 
 fendant Stafford gave credit to Brigham only. For though his 
 receipt purports to be, not merely executory, but a present dis- 
 charge of the note, yet as he had no authority to discharge it, 
 either by himself, or for himself and partner, and as he had not the 
 note to surrender and give up, the legal effect and operation of his 
 receipt was, an executory undertaking, that he would procure 
 a discharge of the note and surrender it. The consequence is, 
 that Stafford paid his money to the wrong person, and must look 
 to him for an indemnity. 
 
 Besides, the note was not paid in the due course of business. 
 It was paid many months before it was due ; the full sum was not 
 paid, there being more than two years' interest due on the notes, 
 wliich was wholly relinquished ; no notice was given to Goodrich, 
 the partner who transacted the business of taking these notes, 
 and giving the receipt for them, and who had the actual custody 
 of this note, all of which would be strong evidence to go to a jury, 
 to establish the fact of constructive notice to Stafford, that Brig- 
 ham had no right, either in his own name or as a partner with 
 Goodrich, to receive payment of, or to discharge tliis note. But 
 the other grounds are sufficient, without relying upon these circum- 
 stances. 
 
 The grounds upon which the Court place their judgment are 
 these : The plaintiff had once a good title to the note. It was 
 delivered to Brigham and Goodrich, for a special purpose, which 
 was accomplished^ After that, Brigham and Goodrich liad a 
 mere naked custody of the note for the plaintiff and had no rigbt 
 or lawful authority either to negotiate or collect it ; a fordori, 
 Brigham alone had no such authority. The defendant Stafford 
 was not lawfully called upon to pay Brigham, as having the posses- 
 sion and custody with a, prima facie title, because he had no such 
 custody or possession, and the note was not due. StatTord was not 
 deceived into. taking the note by the production and delivery of it, 
 
 22
 
 338 PAYMENT. 
 
 because it was not delivered or produced ; if he paid it therefore 
 to BrighanV, without having [taken] up his note, he did it on the 
 faith that Brighani iiad good right to receive ])ayment and discharge 
 it, and of course under the liability to pay it over again to the right- 
 ful proprietor if Brigham had not such right. In fact and law, 
 Brighani had no such right, but the plaintiff was at the time the 
 rightful proprietor, and of course the defendants obtained no dis- 
 charge by such payment, but upon the maturity of the note they 
 were bound to pay it to the plaintiff. The note having been put by 
 Mr. Goodrich into the hands of a common friend, for the use of the 
 party entitled, and the plaintiff having shown himself entitled, 
 the note was rightly brought in by the person to whom it was thus 
 intrusted, as evidence for the plaintiff. 
 
 Judgment for plaintiff. 
 
 The rule then is, in the case of negotiable paper, that the promisor is not dis- 
 charged, ^?'6-^, if he pays to one not entitled to receive payment; or, secondly, if 
 he pays before the maturity of the paper, unless payment is thus made to the 
 real holder and the paper surrendered, or unless the indorsee was informed of 
 the payment before he took the paper. See White v. Kibling, 11 Johns. 128; 
 Hortsman v. Henshaw, ante, p. 57, and note; Dod v. Edwards, infra. 
 
 The learned judge who delivered the opinion seems to lay considerable stress 
 upon the circumstance that the note was not surrendered to the maker when he 
 made the payuient to the agent ; but this was, perhaps, to show more clearly the 
 want of authority in the latter to grant a discharge, and not that the delivery of 
 the note would have aided the plaintilf 's case. The other objection, that the pay- 
 ment was made before maturity, would still have been in the way. See Eckert 
 V. Cameron, 43 Penn. State, 120; De Silva v. Fuller, Chitty, Bills, 392; Gris- 
 wold V. Davis, 31 Vt. 390; Morley v. Culverwell, 7 Mees. & W. 174; Burridge 
 V. Manners, 3 Camp. 193; Story, Bills of Exchange, § 417. 
 
 So it is no defence to an action by an indorsee against the acceptor of a bill, 
 that the drawer, who had made the bill payable to his own order, had given the 
 acceptor a general release before his own indorsement, unless it is shown that 
 the indorsee knew of the release. Dod v. Edwards, 2 Car. & P. 602, per Lord 
 Tenterden. 
 
 It is held that, in an action against the acceptor, evidence is admissible to 
 show that the person who indorsed the bill in question as payee was not the real 
 payee, though he had the same name. Mead v. Young, 4 T. R. 28. In this 
 case, Ashurst, J., said: " In order to derive a legal title to a bill of exchange, it 
 is necessary [for the holder] to prove the handwriting of the payee ; and there- 
 fore, though the bill may come by mistake into the hands of another person, 
 though of the same name with the payee, yet his indorsement will not confer a 
 title." Buller, J., said: "lam of opinion that it is incumbent on a plaintiff 
 who sues on a bill of exchange to prove the indorsement of the person to whom 
 it is really payable. Here it is clear that the indorsement was not made by the
 
 WIIRRLER V. GUILD. 339 
 
 sariK! II. Davis to whom tlie hill was payabk-, and no indorsemotit by any other 
 pirsoM will give any title whatever.'" • 
 
 A creditor, residing in Mendota, 111., requested his debtor, residing in New 
 York, to send him the amount of his debt " in a check on the Marine IJank of 
 Chicago, or any other way that is safe." The bill was drawn payable to the 
 order of the creditor, without any further description, either by stating his resi- 
 dence, or otherwise designating him. By a mistake of the debtor, the bill was 
 directed to La Salle, 111., instead of to Mendota, at which place there resided a 
 person of the same name as that of the creditor, the payee of the bill. The 
 mistake, however, was corrected, and the letter sent to Mendota ; but it was de- 
 livered to this other person instead of to the creditor. He sold the draft to one 
 who had no notice of the facts, and itVas paid in the usual and regular course 
 of business. The creditor after this payment assigned his interest to the plain- 
 till", who sued the acceptors in trover; and the Court held him entitled to 
 recover; Roostvelt, J., dissenting. Selden, and Strong, JJ., expressed no 
 opinion. Graves v. American Exchange Bank, 17 N. Y. (3 Smith) 205. Mr. 
 Justice Roosevelt, in his dissenting opinion, said: "The payee had no desig- 
 nation but his name ; none at all events was given by the drawer. The bank 
 in good faith paid the draft to a person presenting it with the indorsement 
 of Charles F. Graves, a genuine indorsement, but not the indorsement, it is 
 said, of the genuine Graves. Which of the two, under these circumstances, 
 should bear the loss ; the drawer who carelessly omitted all designation, or the 
 drawee who innocently paid the wrong person in consequence of such omission ? 
 As between these parties, the loss, it seems to me, should fall on the former. 
 Nor do I perceive that the payee, the qnaai assignee of the drawer, occupies any 
 better position than his assignor. Hurd was his debtor, and bought the draft to 
 remit in payment of the debt. Ilurd directed the form. He did nothing to sup- 
 I)ly the drawer's omission, but aggravated the error by another of his own ; he 
 mailed the.draft to Charles F. Graves, La Salle, 111., intending it, he says, for 
 Charles F. Graves, Mendota, 111., the two places being only fifteen miles apart. 
 ... He thus by his own act put the draft into the hands of the La Salle 
 Graves, and held out the La Salle Graves as the real payee. Can he complain, 
 then, that the Exchange Bank recognized his indorsement? Must they pay 
 twice because he, after ' full warning' as he ailmits, chose to be careless of his 
 own interests ? *' 
 
 If the drawer put a bill into circulation bearing a forged indorsement of the 
 payee, and the acceptor pay the same to a honajide holder, he cannot, on discov- 
 ering the Ibrgery, recover the sum paid. He must pay the bill twice. See 
 Ilortsuian v. Ilenshaw, ante, p. 57, and note. 
 
 The rule in the principal case as to the time of payment, relates of course to 
 negotiable paper. In the case of unnegotiable bills or notes, payment may be 
 made before maturity ; for here there can be no party not affected with notice 
 as in the case of an innocent indorsee of negotiable paper. The assignee of un- 
 negotiable paper stands oidy on the rights of the assignor and payee ; and as 
 the defence of payment can always be raised between the original parties, so it 
 can be raised against the assignee in this case. Story, Bills of Exchange, 
 §§ GO, 199, 201, and cases cited. See Whistler v. Forster, 14 Com. B. (n. 8.) 
 2-4G. See following cases.
 
 340 • PAYMENT. 
 
 SwoPE et al. V. Ross et al. 
 
 (40 Pennsylvania State, 186. Supreme Court, 1861.) 
 
 Paper not accepted discounted hy drawee before maturity. — The drawee of a bill not ac- 
 cepted by him may discount the same before maturity and thus become holder of 
 the paper. Sucli proceeding is not a payment, and the drawee can recover against 
 the drawer at the maturity of the paper, upon taking the usual proceedings to 
 charge him. 
 
 Assumpsit between George Ross & Co., plaintiffs, and Swope and 
 Karns, in which the following case was stated for the opinion of 
 the Court in the nature of a special verdict. 
 
 Ross Forward gave to Swope and Karns the following instru- 
 ment of writing : — 
 
 " Somerset, Pa., August 18, 1859. 
 " George Ross & Co., bankers, pay to Swope and Karns, or order, 
 ninety days from date, six hundred and sixteen dollars. 
 
 " Ross Forward." 
 
 On or about the first of September thereafter, Swope, one of 
 the firm of Swope and Karns, delivered this paper, (indorsed 
 Swope and Karns) to the plaintiffs' bank, had the same dis- 
 counted, and received the money thereon, less the discount, 
 $16.40. 
 
 At the time this check was given, and wlien it was discounted 
 at the bank, Ross Forward was one of the firm of George Ross & 
 Co., but went out on the nineteenth of September, 1859. 
 
 Wlien the day of payment named in the check came round. 
 Forward had no funds in the bank, and the paper was regularly 
 protested for non-payment on the nineteenth of November, 1859. 
 
 If the Court be of the opinion that on the above state of facts, 
 ihe plaintiffs are entitled to recover, the judgment to be entered in 
 favor of plaintiffs for 8616, with interest from November 19, 
 1859 ; otherwise judgment for defendant with costs. Notice 
 of dishonor of the bill was admitted in the argument. The 
 Court below entered judgment for plaintiffs for $616, with interest 
 from November 19, 1859.
 
 SWOPE V. ROSS. ■ 341 
 
 The defendants thereupon sued out t\\h writ, and assigned tlie 
 entry of judgment for plaintiffs for error. 
 
 Strong, J. The question presented l>y the case stated is (juite 
 novel, and we liave not been able to find that it has been adjudi- 
 cated. Undoubtedly the acceptor of a bill of exchange is the 
 principal delator, and the drawer and indorsers are l)ut sureties. 
 Of course the acceptor, even after ])ayinent, cannot sue either the 
 drawer or indorscr of the bill unless his acceptance was supra 
 protest. His payment of the bill extinguishes it, but tlie case 
 stated finds that the plaintiffs discounted the bill for the payees 
 before it became payal»lc, not that they accepted it or paid it. 
 Discounting a bill, though it be done by the drawee, is neither 
 acceptance nor payment: Acceptance is an engagement to pay the 
 bill according to its tenor and effect when it becomes due, not be- 
 fore. A l)ill is paid only when there is an intention to discharge 
 and satisfy it. In Burbridge v. Manners, 3 Camp. 194, Lord 
 EUenhoroiujIi said " that even payment of a l)ill before it became 
 due, does not extinguish it any more than if it were merely dis- 
 counted," and added that " payment means payment in due course 
 and not by anticipation." His lordship evidently thought that 
 discounting a bill by a drawee is neither payment nor extinguish- 
 ment. In Attenborough v. McKenzie, in the English Court of 
 Exchequer, 36 Eng. L. <fe Eq. 562, it was held that if the ac- 
 ceptor of a bill discounts it, he may reissue it so as to charge the 
 drawer ; that nothing will discharge the drawer but payment ; i. e., 
 payment when due, or payment for the purpose of discharging and 
 satisfying the bill. Therefore, if the acceptor discounts the bill 
 for the drawer and then indorses it away, the drawer will be liable 
 upon it to the holder, and the transfer by the drawer to the acceptor 
 will operate as an indorsement, although, at the time, the drawer 
 does not intend to transfer by way of indorsement, being under 
 the impression that the bill is discharged by coming into tiie hands 
 of the acceptor. Nor will the payment of the amount less the 
 discount, be deemed a payment of the bill by the acceptor. In 
 that case the holder of the bill took it by indorsement after it was 
 due, from the transferee of the acceptor. The ruling goes to the 
 length that even the accepting drawee of a bill may take it as an 
 indorsee, and as such may issue it. It also decides that he does 
 take it as an indorsee when he discounts it. Can then the drawee
 
 342 PAYMENT. 
 
 of a bill, payable on time, who has discounted it, maintain an 
 action on it against the drawer or indorser if it be protested for 
 non-payment and notice be given ? He is not a party to the bill 
 until he has accepted it. Until then, he has not assumed the 
 position of principal debtor, nor undertaken any obligation in re- 
 gard to it. His discounting has neither paid nor extinguished it, 
 and it is not a promise to pa yaccording to its tenor and effect. 
 Is he precluded from becoming an indorser by the fact that the 
 bill was directed to him ? It seems well settled that the drawee 
 of a bill may accept or pay it, swpra protest, for honor of the 
 drawer or indorser, and if he takes it up he stands in the position 
 of an indorsee paying full value for it, has the same remedies to 
 which an indorsee would be entitled against all prior parties, and 
 can of course sue the drawer or indorser.- Chitty, Bills, 375. In 
 such cases the fact that the bill was drawn upon him does not inca- 
 pacitate him from acquiring the rights of an indorsee. No reason 
 is apparent for a different rule where the drawee becomes the 
 holder by discounting the bill before its dishonor. Uncertain 
 whether the drawer will put funds into his hands to meet the bill 
 at maturity, he may well refuse to accept, and yet may discount 
 it on the credit of botli the drawer and indorser. If he does not 
 accept he is as much a stranger to it as any other person dis- 
 counting it for the drawer or indorser ; is but purchasing the con- 
 tract, and the contract thus purchased is that the drawee will pay 
 the bill on presentment, when it shall fall due, or in case of his 
 failing to do so, that the parties whose names are already upon it 
 will pay, if due notice of its dishonor be given to them. The 
 promise is made by the parties to the bill. The purchaser enters 
 into no engagement. 
 
 These views accord with the doctrine laid down in Desha 
 Sheppard <fe Co. v. Stewart, 6 Ala. 852, a case which more 
 closely resembles the present than any we have been able to find. 
 In it the Supreme Court of that State ruled that the drawees of a 
 bill may sue the drawer or indorsers after it has been dishonored, 
 even though they obtained the bill before its dishonor ; and that 
 until acceptance they are strangers to the bill, and may acquire 
 riglits to it, and stand in the same condition as any other holder.. 
 It was said that tliere is no legal presumption if the drawee comes 
 into possession of the bill previous to its dishonor, that he takes 
 it with the obligation to accept.
 
 EASTMAN V. PLUMER. 343 
 
 Such being in our opinion the law, it was not error that the 
 Court of Common Pleas gave judgment for the plaintiff upon the 
 case stated. Tiie fact is not distinctly found that notice of dis- 
 honor of the l)ill was duly given to the defendants, but it was 
 conceded on tiie argument that such was the fact, and tbat such 
 is the meaning of the case stated. 
 
 The judgment is affirmed. 
 
 So where the maker of an indorsed note offers it for discount before maturity, 
 this is not notice to the purchaser of payment. Eckert v. Cameron, 43 Penn. 
 State, \'10, citing the same authorities as those referred to in the principal case. 
 But if the paper comes into the possession of one o( the parties liable to pay it, 
 after it has been negotiated, such possession is prima J'acie evidence of pay- 
 ment. McGee v. Prouty, 9 Met. 547 ; Dugan v. United States, 3 Wheat. 172. 
 See also Fisher v. Marvin, 47 Barb. 159. See also upon the subjects discussed 
 in the princi[)al case, 2 Parsons, Notes and Bills, 455, 456, and cases cited. 
 
 Eastman v. Plumer. 
 
 (32 New Hampshire, 238. Supreme Court, December, 1855.) 
 
 Wrongiful payment (>>/ principal debtor. Effect as to surety. — Tlie defendant signed a 
 negotiable note as surety for the principal maker. Tlie note was indorsed in 
 blank, and the indorsee called upon tlie principal debtor for payment. The latter 
 brought the money, paid the amount, and received tlie note. In point of fact this 
 money paid by the principal had been furnished by a third person, who sent it 
 to purchase the jiaper through the principal as his agent, though this fact was 
 unknown to the holder. This third person, the owner of the money, brought an 
 action on the note against the defendant, the surety. Held, that the payment by 
 the principal discharged the paper as to the surety, and that the action could not 
 • be maintained. 
 
 Assumpsit upon a promissory note, payable to order, and in- 
 dorsed in blank. 
 
 Defence, payment. The defendant, a surety, proved that the 
 note had been paid to the indorsee of the payee by the principal 
 maker, and the note delivered to bini. The plaintiff then proved 
 that the j)rincipal debtor had received the money from himself, 
 under an arrangement not connnunicated to the holder, Ijv which 
 the plaintiff was to become purchaser of the note ; that, on pay- 
 ment of the money to the holder, the principal received the paper
 
 344 PAYMENT. 
 
 and delivered it to the plaintiff; and that he had acted in the 
 matter as the plaintiff's agent. 
 
 Perley, C. J. The defendant signed the note in question as 
 surety for Young, the other maker ; the note was indorsed in blank 
 by Roby, the payee, and the indorsee and holder called on Young, 
 the principal, for payment. Young came with the money, paid it 
 over to the holder, and took the note. The holder called for pay- 
 ment of the party primarily bound to pay, and received of him the 
 amount of the note, as and for payment, without notice of any 
 interest that a third person had in the money paid. The holder 
 therefore made no contract to transfer the note. 
 
 Tlie contract of the defendant was to pay the note to Roby, the 
 payee, or his order. By his indorsement in blank, Roby ordered 
 the note .to be paid to the indorsee, or to such other person as 
 should become the holder of the note by transfer of the note from 
 Roby. But the holder under Roby's indorsement has made no 
 transfer of the note as an existing security. He has received the 
 amount due on the note from the principal debtor, and given up 
 the note to him, as paid and discharged. Looking at the case, then, 
 as a mere matter of contract, according to his original undertaking 
 on the note, the defendant has not bound himself to pay it to this 
 plaintiff, because Roby, the payee, has never ordered the contents 
 to be paid to him. 
 
 The holder of the note was not bound to assign it. He might 
 insist that the note should be paid and discharged before he deliv- 
 ered it out of his hand. If he transferred the note by delivery 
 merely, though he would not be liable as indorser, his assignment 
 would still be a contract involving certain liabilities on his part. 
 He would, for instance, be held to warrant that the note was gen- 
 uine. Story, Bills, 118. 
 
 In this case there was no assignment of the note, in any proper 
 sense of those terms, by the holder to this plaintiff, and the de- 
 fendant made no contract to pay, except to the payee, or an as- 
 signee under him. 
 
 This has little resemblance to the case where the surety pays a 
 debt and the law subrogates him to the securities which the cred- 
 itor holds from the principal debtor ; or to the case of one inter- 
 ested in a mortgage, who discharges an incumbrance to protect his 
 own interest, and holds a security on the mortgaged property for
 
 EASTMAN V. PLUMER. 345 
 
 the money he has advanced. In siicli cases, though the form of tlie 
 transaction is payment, and though it operates as payment, so far 
 as to discharge the original debtor from any action on his contract 
 to recover the money, the hiw keeps the security on foot to jjrotcct 
 tlie erpiitahh} interests of the i)arty who has })aid hi» money under 
 such circumstances. 
 
 This defendant was surety, and was interested that the note 
 should be ])aid by the princijial. The holder called on the princi- 
 pal to pay, and he came with the money, paid it over, and the note 
 waiS given up to him by the holder, with- the understanding on his 
 part that it was paid and discharged. So far as the holder of the 
 note and the surety had any information, the note was paid, and 
 the surety was discharged, and had a right to rely on the transac- 
 tion as a payment. But if the plaintilT can maintain this action, 
 the surety might be called on to pay the debt at any time within 
 six years after it fell due, in virtue of a secret arrangement between 
 the plaintiff and the principal debtor, by which the principal would 
 be ena])led to deceive his surety with every apj)carance of having 
 paid the debt, and so relieved the surety from his liability. 
 
 The manifest object of the arrangement with the plaintiff, as 
 stated by the principal debtor, was to gain time, and defer payment 
 longer than the holder of the note would allow, by getting the 
 plaintiff to advance the money and wait for repayment. If the 
 plaintiff intended to resort to the surety for payment, the arrange- 
 ment was unfair towards him ; and if the bargain had been positive 
 to wait on the principal for a defuiite time, it would have discharged 
 the surety, without regard to any other defence. 
 
 On this case we think there was no sucli transfer of the note 
 to the plaintiff as would give him a right of action on it against 
 this defendant, and that as to him it must be regarded as paid and 
 discharged. 
 
 According to the agreement of the parties, the verdict must be 
 set aside, and judgment entered for the defendant. 
 
 With respect to the kindred .subject of payment by the drawer or indorser, 
 there seems to be some confusion among the cases ; but it is believed that tlie 
 confusion has arisen from not carefully distinguishing between ordinary and 
 accommodation paper. It is plain that in the case of accommodation paper, the 
 party accommodatccL is the real and ultimate debtor; and in sound reason pay- 
 ment by him should discharge the paper. See Lazarus v. Cowic, o Q. 15. 459. 
 But in tile case of ordinary commercial paper, the maker or acceptor is the real
 
 346 PAYMENT. 
 
 debtor, and he alone as it should seem ean give a valid discharge. Mechanics' 
 Bank V. Hazard, 13 Johns. 353. 
 
 Cresswell, J., in Jones v. Broadhurst, 9 Com. B. 173, discusses this subject in 
 an able manner, both on principle and authority. In delivering the opinion 
 of the Court he said : — 
 
 " The declaration in this case charges the defendant as the acceptor of a bill of 
 exchange fur £49, drawn by W. & C. Cook, payable to their order at three 
 months alter date, and indorsed by the drawers to the plaintiffs ; and, among 
 other pleas not material to be noticed on the present occasion, the defendant by 
 his fourth plea alleged that, after the indorsement of the bill of exchange to the 
 plaintiffs, and before the commencement of the action, the drawers of the bill 
 had delivered to the plaintiffs, and the plaintiffs had accepted, divers goods of 
 the value of £oO in full satisfaction and discharge of the said bill of exchange, 
 and all damages and causes of action in respect thereof; and that the plaintiffs, 
 from the time of the said satisfaction of the said bill of exchange to the time of 
 the pleading of the plea, had always held the same against the will and consent 
 of the said drawers, and so still held the same ; and that the plaintiffs commenced 
 this action, and still prosecuted the same, against and in opposition to the will 
 and consent of the said drawers. 
 
 To this plea the plaintiffs replied de injuria ; and a verdict was found for the 
 defendant upon the trial of the issue joined on that plea. 
 
 A rule has since been obtained by the plaintiffs, calling upon the defendant to 
 show cause why judgment should not be entered for them non obstante veredicto, 
 in respect of the insufficiency of that plea. 
 
 Upon this record the bill of exchange must be taken to have been accepted 
 upon a good consideration. The interest of the acceptor, therefore, is not lia- 
 ble to be affected by the state of accounts or equities between any other parties 
 connected with the bill ; and the only question in which he has any interest is, 
 whether the party seeking to enforce payment by him is the legal owner of the 
 bill, and whether recovery by and payment to such party will enure as a satisfac- 
 tion and absolute discharge of his liability upon the bill. By the indorsement 
 averred in this declaration, and not traversed, the plaintiffs became the legal 
 owners of the bill ; and the recovery of the amount thereof will have the effect 
 of discharging the defendant from all future liability. The plea does not allege 
 whether such satisfaction was given and accepted before or after the bill became 
 due ; nor is it averred to have been at the request, or for, or on behalf of the 
 defendant, or in satisfaction of his liability upon the bill, or of the cause of ac- 
 tion of the plaintiffs against him ; nor does it in any way connect the defendant 
 with the transaction, or show any privity between him and the parties to the sat- 
 isfaction given, except so far as such parties were the drawers of the bill, and 
 the defendant was the acceptor. 
 
 As the plea did not allege that the satisfaction was made at the request, or for 
 or on behalf of the defendant, or in respect of the cause of action stated in the 
 declaration, the defendant was not required to give any evidence to such effect, 
 to entitle him to the verdict he obtained ; and therefore the verdict will not war- 
 rant an intendment of any such facts, or of any other fact lending to extend the 
 import of the plea as stated upoiH the record ; and the ([uestlon raised by the 
 plea according to its terms is, whether satisfaction of a bill as between a drawer
 
 EASTMAN V. PLUMER. 347 
 
 or indorscr and an indorsco, made before or after the l)ill becomes duo, enures 
 as a satisfaction on behalf of tlie acceptor, and operates to discharge him from 
 liability to the indorsee. 
 
 In support of the rule it was contended that the plea did not show sufficient 
 matter to bar the plaintiffs from judgment, because the satisfaction therein ^et 
 forth was not, as before stated, averred to have been made at the request, or for 
 or on behalf of the defendant, or for or in respect of the cause of action de- 
 clared upon ; and that no legal privity was shown between the parties who made 
 satisfaction, and the defendant, and therefore the satisfaction made did not enure 
 as a discharge of the defendant ; and that the satisfaction was made by parties 
 who were under a personal liability upon the bill declared on, either absolute or 
 contingent ; and that the plea imports that the satisfaction made by them re- 
 ferred and was limited to their own pers(jnal liability, and was not shown to have 
 extended beyond; and that the satisfaction to the indorsee of a bill made by the 
 drawer or indorser did not, as a legal consequence, enure as a satisfaction 
 of the bill (pioad the acceptor or any other person other than those who, if 
 called upon by the indorsee to pay the bill, would have a remedy over against 
 the party who made the satisfaction, and thereby subjecting such party to a lia- 
 bility to make double satisfaction. 
 
 It was also insisted that the plea did not show any legal privity between the 
 drawers who made the satisfaction and the defendant ; and that the plea, there- 
 fore, at most amounted to a plea of satisfaction made by a stranger, and, as such, 
 could not be pleaded in bar against the plaintiffs. 
 
 On the part of the defendant, it was contended, upon showing cause, that, 
 upon principal and authority, satisfaction made by the drawer of a bill to an in- 
 dorsee, eiuired by law as a satisfaction by or on behalf of the acceptor, and might 
 therefore be pleaded in bar to any action afterwards brought by the indorsee 
 against the acceptor ; and that the drawer and acceptor's being parties to the same 
 bill was a sufficient legal privity to make satisfaction by the drawer enure as a 
 discharge of the acceptor, as against the indorsee who received the satisfaction ; 
 and further, it was contended that it was competent to any one to plead in bar 
 satisfaction, even by a stranger, for the cause of action sued upon, which had 
 been accepted by the plaintiffs. 
 
 The case was very elaborately argued, and many authorities were referred to 
 on both sides. The Court has examined all the authorities referred to, and con- 
 sidered the case, and in the result is of opinion that the plea, as proved and sus- 
 tained by the verdict, does not show sufficient matter to bar the plaintiffs, and 
 that the rule to enter judgment for the jjlaintiffs non obstante veredicto, must be 
 made absolute. 
 
 In considering the case upon principle, it will be proper to advert to the 
 legal relation in which the respective parties stand towards each other, upon the 
 effect of whose acts and rights the determination of the rule must depend. It 
 is to be observed that the drawers and acceptor are parties to the same instru- 
 ment as contractors with each other, and not as joint contractors with a thtfd 
 person; and that, by the indorsement of the bill, independent and different con- 
 tracts arise on the respective, parts of the drawers and the acceptor, with the 
 indorsees. The acceptor is primarily and absolutely liable to jiay the bill, 
 according to its tenor. The drawers are liable only upon the contingencies of
 
 348 PAYMENT. 
 
 the acceptor's or drawee's making default, and of the holder's performing certain 
 conditions precedent, such as presenting the bill according to its tenor, and giv- 
 ing due notice of the failure of the acceptor or drawee to pay upon a proper 
 presentment. 
 
 The contracts created by the bill, as regards the drawers and the acceptor, 
 are therefore essentially distinct ; and thei'e seems to be no legal ground why the 
 indorsee of a bill may not accept satisfaction of the contingent or absolute lia- 
 bility of the drawer, without, by so doing, discharging the acceptor. 
 
 The competency of an acceptor to pay may be doubtful ; and no valid reason 
 is apparent why the indorsee may not release and discharge the drawer or an 
 indorser by competent legal means, either upon consideration more or less valu- 
 able, or without, and retain his remedies against the acceptor ; unless in the case 
 of an accommodation bill, in which case the acceptor is a mere surety as between 
 him and the drawer, and entitled to recover against the drawer whatever he may 
 be compelled to pay in discharge of his suretyship. In such a case, where an 
 indorsee who has received satisfaction from the drawer with notice sues the accept- 
 or, a different question may arise ; but upon the record in this case' the bill must 
 be taken to have been a bill accepted for value, and which the acceptor therefore 
 ought, in all events, to pay ; and, having received value, it is difficult to discover 
 any valid reason why he should be discharged from his liability to make the pay- 
 ment, which for value he has contracted to make, by reason of any arrangements 
 between others to which he is no party, in which he is not shown to have inter- 
 fered, or his rights and liabilities are not shown to have been in the contempla- 
 tion of the parties to any such arrangements, and by which his interests are not 
 in any respect compromised or affected. 
 
 By the indorsement of a bill, the indorsee becomes the legal owner of it ; and 
 satisfaction of the contingent or absolute liability of the drawer, or of an indors- 
 er, does not necessarily vacate or avoid the effect of the indorsement, or destroy 
 the title of the indorsee to the ownership of the bill. Payment of the bill by a 
 drawer or an indorser may or may not, according to circumstances, entitle the 
 party paying to the possession of the bill ; there may be a satisfaction of the bill 
 between such parties, which may not entitle them to the possession of the bill. 
 The plea in question has no statement to the effect that the drawers, by reason 
 of the satisfaction made, were entitled to have the bill delivered up ; it only 
 states that the plaintiffs hold the bill against the will and consent of the drawers, 
 which is by no means equivalent to a statement that they were entitled to have 
 the bill delivered to them. The plea does not aver that the value of the goods 
 delivered in satisfaction was equal to the amount of the bill ; and it is consistent 
 with the language of the plea that the drawers may have made satisfaction of the 
 bill, so far as regarded their lial)ility, by any small composition, leaving the 
 plaintiffs with all their remedies in point of law against the acceptor, and other 
 parties to the bill ; and yet the drawers may afterwards have dissented from the 
 plaintiffs' retaining the bill, or suing the acceptor upon it. 
 
 ^ The terms of the plea do not import that the satisfaction was made upon any 
 contract or condition, either that the bill should be delivered up, or be deemed to 
 be satisfied as between the plaintiO's and the acceptor ; and, when the nature of 
 the relation in which the respective partie's stand towards each other is consid- 
 ered, no principle is apparent upon which, as a consequence in law, the satisfac-
 
 EASTMAN V. PLUMER. 349 
 
 faction of a bill as between the indorsee and the drawer, should operate as a 
 satisfaction and discharge in favor of the acceptor. 
 
 Supposing the effect of the plea to be that the plaintiffs are suing as trustees 
 for the drawers, but against their consent, such matters would furnish no legal 
 bar to the plaintiffs, as the law can take no notice of the trust, nor, consequent- 
 ly, whether the trustee is enforcing his legal rights against a third j)erson witii <jr 
 against the consent of his cestui que inist. And we are of opinion that the de- 
 fendant has not established any legal principle which will entitle him to judgment 
 upon this plea. 
 
 But it has on his behalf been contended, that the plea ought to be supported, 
 and judgment given for the defendant upon authority. 
 
 We have reviewed the autliorities relied upon, and they do not appear to us 
 to entitle the defendant to judgment. 
 
 The case of Bacon v. Searles, 1 II. Bl. 88, was cited ; and it nmst be ad- 
 mitted that in that case, according to the report, it was held that the indorsee of 
 a bill who had received from the drawer a part of the amount of the bill, was 
 entitled to recover from the acceptor only the balance ; and Lord Loughborough 
 then Chief Justice, is reported to have said that, " if the drawer of a bill antici- 
 {)ates the acceptor, and pays the money himself, he thereby releases the acceptor 
 from his undertaking; " and he adds : " so that, if the acceptor were to pay the 
 bill after notice given to him that the drawer had already paid it, an action would 
 lie for the drawer against the acceptor to recover back the money so paid." 
 Lord Loughborough concludes his judgment by saying: " Another reason which 
 weighs much with me is, the great mischief which would ensue to merchants, 
 among whom accommodation bills are circulated to a vast extent, if, after a bill 
 had been taken up by the drawer, the acceptor should be called upon for pay- 
 ment." The report of this case is not satisfactory. Lord Loughborough is made 
 to say that, if the drawer anticipates the acceptor and pays the money himself, 
 he thereby releases the acceptor from his undertaking ; and yet he is said to have 
 added, " that if the acceptor were to pay the bill, after notice given to him that 
 the drawer had already paid it, an action would lie for the drawer to recover it 
 back again ; " which, as applied to the facts of the case, is not very iutelligiljle. 
 If it was meant that, supposing the drawer should sue the acceptor upon the bill 
 tlie acceptor could not plead in bar the payment to an indorsee, after notice that 
 the drawer had paid it, it is intelligible, but not, upon the liicts stated, very sat- 
 isfactory. The point in judgment was, whether an indorsee, after having re- 
 ceived payment of part of the bill from the drawer, was entitled, in an action 
 against the acceptor, to recover the whole amount of tiie bill, or only the balanee 
 of the bill remaining unpaid ; and it was held that the balance only was recov- 
 erable. As a decision upon that point it has been overruled. The observations 
 made by the judges render it uncertain whether it was the case of a bill lor value, 
 or an accommodation bill ; but those observations are of doubtful accuracy in 
 either view of the case. If it was a bill for value, the remark is not correct that 
 payment by the drawer discharged the acceptor from his promise ; because the 
 acceptor in such a case would be clearly liable to the drawer, who, by his pay* 
 ment to the indorsee, would become entitled to sue the acceptor upon tiie bill; 
 and if it was tiie case of an acconnnoda||on lull, the remark is uniutelligihlf that, 
 if the acceptor, who would be surety only for the drawer, was to pay ll;e bill
 
 350 PAYMENT. 
 
 after notice, the drawer, who was the principal debtor, might recover the money- 
 back again IVoni the acceptor, his surety. 
 
 It may be that what was intended to be said was that such a payment by the 
 acceptor would make the indorsee a trustee for the drawer, and liable to refund 
 to him what should be paid by the acceptor; but it is by no means clear 
 that this was intended to be said, because the remarks refer to tlie acceptor's lia- 
 bility to refund, in terms, and speak of a payment by the acceptor after notice 
 of payment by the drawer, — which would be quite immaterial upon the ques- 
 tion whetlier the indorsee would become a trustee for the drawer, in regard 
 to the sum received from the acceptor. The doubt whether it was the case of a 
 bill for value or an accommodation bill, is increased by the observations of Mr. 
 Justice Wilson, who referred to a case of Beck v. Robley. 
 
 Considering tliis case of Bacon v. Searles with reference to the point decided, 
 — that part of a bill (accepted for value) being paid by a drawer or indorser, 
 disentitles the indorsee to recover from the acceptor more than the balance 
 remaining unpaid, — it has been overruled by^ modern decisions, and is not 
 now to be deemed to be law ; and, if it is to be considered as the case of an 
 accommodation bill, it is inapplicable to the questions which arise upon this 
 plea. 
 
 Mr. Justice Wilson referred to the case of Beck v. Robley, reported in a 
 note to Bacon v. Searles, and which, it would seem from the statements in the 
 report, was the case of an accommodation bill. The facts were these : Brown 
 drew the bill upon Robley, payable to Hodsou, and gave the bill to Hodson as 
 security for an advance made to him by Hodson. Robley accepted the bill, and 
 Brown, the drawer, took it up when due, in Hodson's hands, and received back 
 the bill with Ilodson's indorsement upon it. Brown, after the bill had become 
 due, paid it to Beck, who brought the action against Robley. The action was 
 belli not to be maintainable ; and correctly so, as, after the bill had become due, 
 the drawer could only negotiate it subject to such equities as existed against 
 him ; and, it being an accommodation bill, Brown, the drawer, could not have 
 sued the acceptor, and so neither could a subsequent holder claiming under him 
 after the bill bad become due. The decision against the plaintiff, therefore, 
 would have been correct, irrespectively of another fact relied upon in that case, 
 viz., that Beck, the plaintiff, was compelled to claim through the indorsement of 
 Hodson, the payee ; and the Court was confirmed in its decision against the 
 plaintiff, upon the ground, that, if effect were given to Hodson's indorsement 
 under the circumstances, Hodson himself might be rendered liable, — a result 
 which ought not to occur. It is unnecessary to consider the correctness of that 
 opinion ; but both the cases of Bacon v. Searles and Beck v. Robley would be 
 well decided, if the bills upon which those actions were brought were accommo- 
 dation bills ; and Beck v. Robley, in that event, might be considered as an 
 authority for the determination of Bacon v. Searles. 
 
 Upon Bacon v. Searles being cited as an authority, in Purssord v. Peek, 9 
 Mees. & W. 196, as deciding that a payment by the drawer of a bill discharged 
 the acceptor pro tctnto, Lord Abimjer, C. B., said, that, "if that were the prin- 
 ciple of that case, it might be a question whether, if it were now considered, it 
 would not be overruled." • 
 
 The case of Johnson v. Kennion, 2 Wils. 262, was cited as an authority, on
 
 EASTMAN V. PLUMKR. 3.01 
 
 tlie part of th(! plaintifTs, that the contract created by tlie liill, could not he sev- 
 creil and niad(! tlie <;roiiMd of two actions, and tliat the lioldcr must brin<^ an 
 action fur the whole, and be considered trustee for the drawer, for so much as 
 he had paid. Mr. Justice Wilson is said to have referred to the case of Beck v. 
 Robley, as contrary to that position ; but it is not obvious that such is the effect 
 of lieck V. Roljley. .Johnson r. Ivennion, however, distinctly decided that the 
 indorsee was entitled to recover the whole amount of the l)ill, althon<^h he had 
 received a part from the drawer: and, unless IJacon r. Searles and Beck v. Rob- 
 ley were distinjiui.shable, u])un the ground of the actions being upon acconuno- 
 (lalioM hills, it does not a|)pear how the authority of Johnson t'. Ivennion was 
 avoiileij. 
 
 Assuuiinj,^, however, Bacon i". Searles and ]5eck v. Robley to be authorities 
 that the acceptor of a bill for value is discharged altogether, or pro iaiito, by 
 l)aymints made by a drawer or indorser to an indorsee, wlio afterwards sues the 
 accej)tor, they cannot be considered as binding authorities; and they are incon- 
 sistent with Callow r. Lawrence, 3 M. & S. l»a, where the continued liability 
 of the acceptor is distiix tly determined; and Hubbard i". Jackson, 1 M. & P. 11 
 [K. C. L. R. vol. 17] ; s. c. 4 Bing. 390 [E. C. L. R. vol. 13, 15] ; 3 Car. & P. 
 134 [E. C. L. R. vol. 14] is a decision to the same effect, following the authority 
 of Callow r. Lawrence; and, in both cases, Beck v. Robley was treated as a 
 decision upon the ground that the plaintiff" could not claim through llodson's 
 indorsement. 
 
 Pierson v. Diinlop, 2 Cowp. 571, was an action against the acceptor of a bill 
 for £300. The drawer having, paid £180, the plaintiffs took a verdict for the 
 whole amount, which the Court compelled them to reduce, at their own cost. 
 There can be little doubt that this also was the case of an acconnnodation bill ; 
 as it appears, that, after the verdict, a bill in equity was filed to obtain a discov- 
 ery of the payment, and reduction of the verdict; and, if the ce.s-(ui que iriist of 
 the plaintiffs was not entitled to receive the £180, the Court, in its equitable 
 jurisdiction, could not have permitted their trustee to recover it. The case 
 would resolve itself into that of a payment by the principal debtor, in ease of 
 the surety. 
 
 In the ease of Walwyn v. St. (.^uintin, 1 Bos. & Pul. t)52, the plaintilfs were 
 re (juired to give the acceptor credit for the amount of the payment made by the 
 drawer, the Court holding the bill to be an acconnnodation bill. 
 
 The several other cases which were cited on the part of the defendant, are no 
 authorities for the purpose for which they were cited : indeed, they are rather 
 against him. 
 
 In Purssord i'. Peek, 9 Mees. cV: W. 19(5, the Court held that the plea was bad 
 fur duplicity : it alleged that the defendant, the acceptor of a bill of exchange, 
 had accepted it I'ur the acconnnodation of the drawer, and that the drawer had ' 
 satisfied the bill ; and it further stated, that, at the time of the action, the plain- 
 tiff was a holder of the bill without consideration or value. 
 
 Reynolds v. Blackburn; 7 Adol. & Ellis, 161 [E. C. L. R. vol. 34] ; 2 N. & 
 P. 137, was an action by indorsee against the acceptor of an accommodation 
 bill ; and the plea alleged, by way of discharge, notice to the plaintiff, and that, 
 after such notice, he received other bills liom the drawer, and agreed to give 
 time upon the bill sued upon, until such other bills should become due, and be
 
 352 PAYMENT. 
 
 dishonored ; the plea proceeded to state that the biHs were so delivered and 
 accepted in payment of the l)ills in the declaration, and that the agreement was 
 made without the defendant's knowledge, privity, or assent. The plaintiff re- 
 plied de injtiria ; to which the defendant demurred, for duplicity. The Court 
 said the replication was as good as the plea, which had set up two defences, and 
 gave judgment for the plaintiff. 
 
 Surd V. Rhodes, 1 Mees. & W. 153; Tyr. & G. 298; 4 Dowl. P. C. 743; 1 
 Gale, 376, was also an action against the acceptor of an accommodation bill, in 
 which the defendant pleaded, that the bill was an accommodation liill, and that 
 the drawer had given another note, for a larger sum, in payment and satisfaction, 
 which the plaintiff ha'd accepted. The plaintiff replied that the note so given 
 was dishonored. The defendant demurred, and the replication was held ill, and 
 the plea good. 
 
 In each of the three last-mentioned cases, the pleas alleged the bills to be 
 accommodation bills, — showing what is now understood to be the law in regard 
 to payments or arrangements between subsequent parties to the bill, which can 
 have little application to the present case, which is that of a bill accepted for 
 value. 
 
 . Field V. Carr, 5 Bing. 13 [E. C. L. R. vol. 15] ; 2 M. & P. 46 [E. C. L. R. 
 vol. 17] is also inapplicable: it was an action by bankers, as indorsees, against 
 the acceptor; the drawer having delivered the bills to the plaintiffs, his bankers, 
 as security, and the acceptor having paid the amount of the bills to the drawer 
 without obtaining the bills, which remained in the hands of the bankers : and 
 the point really in contest was, whether, upon, the application of the rule in 
 Clayton's Case, 1 Meriv. 572, 604, the bills, as against the bankers, the plaintiffs, 
 were to be considered as satisfied ; the Court held that they ought to be so con- 
 sidered. 
 
 The case of Thomas v. Fenton, 5 Dowl. & L. 28, was argued before ]\Ir. Jus- 
 tice Coleridfje. It was an action against the drawer of an accommodation bill ; and 
 it appeared that, the bill being dishonored, an action had been brought by one 
 Clark against the acceptor, and that the plaintiff, as a volunteer, — being the 
 son-in-law of the acceptor, — had paid the debt and costs, and obtained the bill 
 from the then plaintiff, with the defendant's indorsement upon it, and brought 
 the present action upon the bill. One question was, whether the bill ought to 
 be deemed an accommodation bill. A further question was, whether there was 
 a sufficient dispensation of giving notice of the dishonor ; also, whether the pay- 
 ment which had been made supported the plea of payment by the acceptor. 
 An objection was also made that the bill required a new stamp. Mr. Justice 
 Coleridge held that the bill did not require a new stamp, inasmuch as it had 
 never been paid, payment meaning payment by the party ultimately liable, 
 and the payment in question not being such a payment. He also held, that 
 sufficient excuse was alleged for not giving notice, the bill being an accommoda- 
 tion bill. And the learned judge distinctly intimates that payment by an inter- 
 mediate party is no discharge to the acceptor. 
 
 Hemming v. Brook, Car. & M. 57 [E. C. L. R. vol. 41], was an action 
 against the acceptor, where the drawer had paid part of the bill. The cause 
 was undefended ; the counsel for the plaintilf was instructed as to the payment, 
 but altogether uninformed whether the bill was an accommodation bill, and of
 
 EASTMAN V. PLUMER. 353 
 
 every other oircumstaiK* respecting it. The judge, therefore, recommended 
 that a verdiet should be taken, giving credit lor the payment. 
 
 Pownal V. Ferrand, i\ Barn. & C. 439 [E. C. L. R. vol. l:J], 9 Dowl. & 
 Ryl. 603 [E. C. L. R. vol. 22], determined tliat the indorser of a bill, paying a 
 part of the bill to the holder, might recover from the acceptor the amount so 
 paid, as money paid to his use. It is to be observed, that the plaintiff in that 
 case had paid £40 on account of a bill indorsed by him, and which had been 
 accepted by tlie defendant, for £3o0. After the payment of £40 by the plaintiff, 
 the holiler of the bill brought an action upon the bill against the defendant, the 
 acceptor, and recovered a verdict for the whole amount of the bill, £'ioO, but 
 afterwards levied the balance only due to him, giving credit for the £40 which 
 the plaintiff had paid ; and, in consequence of the defendant's having thus de- 
 rived the benefit of the plaintiff's payment, the action was brought by the plain- 
 tiflT, to recover the amount as money paid to the defendant's use, when it was 
 contended that the j)laintilf could only sue upon the bill; but the Court held, 
 that there might be a dilliculty in suing upon the bill, by reason of a judgment 
 having been recovered against him for the whole amount of the bill, by a former 
 holder; and that the defendant having had the benefit of the payment, an action 
 for money paid might be maintained. 
 
 Lane v. Ridley, 10 Q. B. 479 [E. C. L. R. vol. 59], was to the same effect as 
 Reynold v. Blackburn, Purssord v. Peek, and Pascoe v. Vyvyan, 1 Dowl. n. s. 
 939 ; viz., that where the plea is double, it is no objection that the replication is 
 also double.' 
 
 Reference has thus been made to the several cases which were cited, with some 
 regret, as the only result is to show that they are inapplicable to this case, and 
 afford no assistance to the Court in determining the question raised upon the 
 record ; and in fact no determination has been brought to the notice of the 
 Court showing this plea to be good, although there are some expressions in some 
 of the older cases which have that aspect, but which dicta were not necessary to 
 the decision of the cases in which they are to be found ; and such dicta are not 
 consistent with subsequent determinations. It eertainly has been no rare prac- 
 tice for indorsees of bills of exchange and promissory notes, to take verdicts for 
 the full amount of the instruments, after having received partial payments from 
 other parties to such instruments ; and there are reporte<l authorities in distinct 
 affirmation of the right so exercised by the plaintiffs. Callow v. Lawrence, be- 
 fore mentioned, Reid v. Furnival, 1 Cromp. & M. .538, and numerous cases in 
 bankruptcy, where proof is admitted against the acceptors of bills and makers of 
 notes for the full amount, notwithstanding partial payments made by other par- 
 ties. In Ex parte l)e Tastet, la re Corson, 1 Rose, 10, Warren and Bruce were 
 held entitled to prove against the estate of the bankrupts, who were the accept- 
 ors for £13(J4, and take dividends for that amount, notwithstanding they had 
 received payments from other parties, reducing their demand to £420. 
 
 We think, therefore, that this plea is contrary to principle, and that it has 
 no authority to support it. 
 
 The plaintiffs stand upon the record the legal owners of the bill, and the de- 
 fendant as having failed to perform hi.s contract, without any legal excuse for the 
 broach. The defendant was the party primarily liable, and by his plea he sets 
 
 up, by way of discharge, satisfaction by one not in privity with him in relation to 
 
 23
 
 354 PAYMENT. 
 
 such satisfaction, and which we think did not enure to his discharge ; and we 
 think the plea, therefore, bad, and the plaintiffs entitled to judgment as 
 prayed/' 
 
 An indorsee for value of a bill of exchange, who became such before its matu- 
 rity, and in ignorance that it was given for accommodation, has a right to treat 
 all parties thereon as liable to him according to their relative positions on the 
 bill, and to regard the acceptor as the principal debtor, and the liability of the 
 drawer as collateral ; and this right is unaffected by any subsequently acquired 
 knowledge that the bill was given for accommodation. In such case a release of 
 the drawer by the holder has no effect upon the ultimate liability of the acceptor. 
 Farmers and Mechanics" Bank v. Rathbone, 26 Vt. 19, given in full as a leading 
 case under Discharging Indorser or Drawer, post. See also Carstairs v. 
 Rolleston, 5 Taunt. 551 ; s. c. 1 Marsh. 207. 
 
 Payment by a stranger of the amount of a bill of exchange to the bankers at 
 whose house the bill is payable, under an arrangement with such bankers where- 
 by the party paj^ing obtains possession of the bill for a collateral purpose of his 
 own, is not payment by the acceptor. Deacon v. Stodhart, 2 Man. & G. 317. 
 
 But if a stranger makes payment of a note overdue, and declines to have the 
 same cancelled, but takes it away with him, this will be * regarded as payment 
 and satisfaction against a party who afterwards received the note from the 
 stranger ; the latter not being a bona fide holder. Burr v. Smith, 21 Barb. 
 262. 
 
 The fact that the holder of a bill, accepted for the drawer's accommodation, 
 sends it to a bank for collection, and the bank passes the amount to the credit 
 of the holder at the maturity of the paper, will not constitute such payment as 
 to discharge the acceptor. Pacific Bank v. Mitchell, 9 Met. 297. 
 
 It is no discharge of a note given with security to a bank for the purpose of 
 obtaining credit, which is given to the amount of the note, that the maker at 
 one time had a balance in the bank exceeding the amount of the note. Pease v. 
 Hirst, 10 Barn. & C. 122. 
 
 If the drawer retain the acceptor's funds in his hands, for the express purpose 
 of meeting the bill, the holder's releasing the acceptor does not discharge the 
 drawer. Sargent v. Appleton, 6 Mass. 85. Upon this subject, see Discharging 
 Indorser ob Drawer, post.
 
 BURKE V. m'kay. 355 
 
 PROCEEDINGS ON NON-PAYMENT. 
 
 Glendy Burke v. Robert McKay. 
 
 (2 Howard, 66. Supreme Court of the United States, January, 1844.) 
 
 Protest of promissory note. — It is not necessary in Mississippi, or by the general law 
 merchant, that a promissory note siiould be protested by a notary, or that he should 
 give notice of dishonor. 
 
 The case is stated in the opinion of the Court. 
 
 Story, J. This is a writ of error to the Circuit Court of the 
 District of Mississippi. The plaintiff in error brought an action 
 of assumpsit in that Court, against the defendant in error, as in- 
 dorsee upon a promissory note, dated at Clinton, Mississippi, Jan- 
 uary 20, 1837, whereby R. E. Stratton, Samuel W. Dickson, and 
 B. Garland, or either of them, on the first day of January, 1840, 
 promised to pay Robert Mathews, or order, $2800, for value re- 
 ceived. The note was indorsed by Mathews as follows : " I assign 
 the within note to Robert McKay, and hold myself responsible for 
 the same, waiving notice of demand and protest, if not paid at 
 maturity." The note was afterward indorsed by McKay (the 
 defendant), as it should seem, in blank, and the plaintiff in error, 
 in his declaration, made title as immediate indorsee to McKay. 
 
 At the trial of the cause, upon the general issue, the plaintiff 
 read the note and the indorsement, and also proved that, at the 
 maturity of the note, due demand of payment was made of the 
 makers by S. W. Humphreys, a justice of the peace of Hinds 
 county, Mississippi, styling himself "acting notary public;" who, 
 upon the non-payment, made due protest thereof (the protest being 
 by consent admitted as evidence of the facts), and gave due notice 
 thereof to the payee of the note and to all the indorsers. The
 
 356 PROCEEDINGS ON NON-PAYMENT. 
 
 defendant (McKay) also admitted that, in £^ settlement with the 
 makers of the note, in some other transactions, the present note 
 was included, and the defendant released the makers from all lia- 
 bility thereon, but he denied that he had ever received of the 
 makers full payment of the said note ; and that, upon a compro- 
 mise of all claims and controversies between them, he released the 
 makers from all liability to the defendant ; and he agreed that the 
 same statement should be read and received at the trial of the case 
 by the Court and the jury. Tiie district judge (who alone sat in 
 the cause) instructed the jury that, in order to charge the indorser 
 of a promissory note, the plaintiff must prove that it was protested 
 on the day of its maturity by a notary public, and demand made, 
 and notice of non-payment given by him ; that the statement of 
 Humphreys admitted as evidence, not proving that fact, they must 
 find for the defendant. Whereupon the jury returned a verdict 
 for the defendant, and judgment passed accordingly. A bill of 
 exceptions was taken by the plaintiff, to the instruction of the 
 Court at the trial ; and the cause now comes before us upon the 
 writ of error to examine the correctness of that instruction. 
 
 And we are all of opinion that the instruction was incorrect, and 
 not maintainable in point of law. In the first place, by the gen- 
 eral law merchant, no protest is required to be made upon tlie 
 dishonor of any promissory note, but it is exclusively confined to 
 foreign bills of exchange. This is so well known that nothing 
 more need be said upon the subject than to cite the case of Young 
 V. Bryan, 6 Wheat. 146, where the very point was decided. It is 
 true tliat it is a very common practice for a notary public to be 
 employed to make demand of payment of promissory notes from 
 the makers, and also to give notice of the dishonor to the indorsers 
 thereon. But this is a mere matter of convenience and arrange- 
 ment between the holder and the notary, and is by no means a 
 requisite imposed or recognized by law as binding upon the holder. 
 Unless, therefore, there be some statute in Mississippi requiring 
 the intervention of a notary in such cases (as we understand there 
 is not), or some general usage equally binding, it is clear that the 
 instruction proceeded upon a mistaken ground. In the next place, 
 it is no necessary part of the official duty of a notary (subject to 
 the like exceptions) to give notice to the indorsers of the dishonor 
 of a promissory note, although certainly it is a very convenient and 
 useful course in the transactions of such affairs in commercial
 
 BTIRKE V. m'kay. 357 
 
 cities. In the next place, if a protest were necessary, it is equally 
 clear that it is not indispensable in all cases that the same sliould 
 he actually made by a person who is in fact a notary. In many 
 cases, even with regard to' foreign bills of exchange, the protest 
 may, in the absence of a notary, be made by other functionaries, 
 and even by merchants. IJut where, as in Mississippi, a justice of 
 the peace is authorized by positive law to perform the functions 
 and duties of a notary, there is no ground to say that his act of 
 protest is not equally valid with that of a notary. Quoad hoc he 
 acts as a notary. See Howard and Hutchinson's Statutes of Mis- 
 sissippi, c. 37, § 24, p. 430. 
 
 In the next place, in the present case, under the circumstances, 
 the indorser (McKay) was not entitled to any notice whatsoever of 
 the dishonor. He had actually discharged the makers from all 
 liability for the payment of the note by his release and settlement 
 with them. Of course, the notice could be of no use or value to 
 him ; for he would in no event be entitled to any recourse over 
 against them ; and, therefore, no notice to him would have been 
 necessary, although it fully appears that he 'had received due notice 
 of the dishonor. 
 
 For these reasons, we are of opinion that the judgment ought to 
 be reversed and venire facias de novo awarded. 
 
 Nor is a protest of inland bills necessary ; and a protest either of a promis- 
 sory note or inland bill of exchange is not evidence of the statements made in 
 it. Union Bank v. Hyde, 6 Wheat. 572. 
 
 Fees for protesting promissory notes or inland bills cannot be recovered. 
 City Bank v. Cutter, 3 Pick. 414.
 
 358 PROCEEDINGS ON NON-PAYMENT. 
 
 Mills, Plaintiff in Error, v. The President, Directors, 
 «&c., OF the Bank of the United States, Defendants in 
 Error. 
 
 (11 Whcaton, 431. Supreme Court of the United States, February, 1826.) 
 
 Form of notice. — Notice to an indorser is not defective by reason of not stating the 
 name of the iiolder, or by reason of a misdescription of the date of the note in 
 question, provided tliere was no other note payable at the same place and made 
 and indorsed by the same parties. Nor is it fatal to the notice that^it did not con- 
 tain a formal allegation that payment was demanded at the bank when the note 
 became due. It is sufficient that it states the fact of the non-payment of the note, 
 and that the holder looks to the indorser for indemnity. "Whether the demand 
 was duly and regularly made is matter of evidence to be established on the trial. 
 
 The case is stated in the opinion of the Court. 
 
 Story, J. This is a suit originally brought in the Circuit Court 
 of Ohio, by the Bank of the United States, against A. G. Wood 
 and George Ebert, doing business under the firm of Wood and 
 Ebert, Alexander Adair, Horace Reed, and the plaintiff in error, 
 Peter Mills. The declaration was for $3600, money lent and ad- 
 vanced. During the pendency of the suit. Reed and Adair died. 
 Mills filed a separate plea of non-assumpsit upon which issue was 
 joined ; and, upon the trial, the jury returned a verdict for the 
 Bank of the United States, for $4641, upon which judgment was 
 rendered in their favor. At the trial, a bill of exceptions was 
 taken by Mills, for the consideration of the matter of which the 
 present writ of error has been brought to this Court. 
 
 By the bill of exceptions, it appears that the evidence offered by 
 the plaintiffs in support of the action, " was, by consent of counsel, 
 permitted to go to the jury, saving all exceptions to its competence 
 and admissibility, which the counsel for the defendant reserved the 
 right to insist in claiming the instructions of the Court to the jury 
 on the whole case." , 
 
 The plaintiffs offered in evidence a promissory note, signed Wood 
 and Ebert, and purporting to be indorsed in blank by Peter Mills, 
 Alexander Adair, and Horace Reed, as successive indorsers ; which 
 note, with the indorsements thereon, is as follows ; to wit : " Chili- 
 cothe, 20th July, 1819. $3600. Sixty days after date, I promise
 
 MILLS V. BANK OF THE UNITED STATES. 359 
 
 to pay to Peter Mills, or order, at the office of discount and deposit 
 of the Bani< of the United States, at Chilicothe, -"ji^fJOO, for value 
 received. Wood and Ebert." Indorsed, " Pay to A. Adair, or 
 order, Peter Mills." " Pay to Horace Reed, or order, A. Adair." 
 " Pay to the President, Directors, and Company of the Bank of 
 the United States, or order, Horace Reed." On the upper riglit- 
 hand corner of tiie note is also indorsed : " 3185. Wood and 
 Ebert, '^oOOO, Sept. l.S-21." It was proven that this note had 
 been sent to the office at Chilicothe, to renew a note wiiich had been 
 five or six times previously renewed by the same parties. It was 
 proven, Ity the deposition of Levin Belt, Esq., Mayor of the town 
 of Chilicothe, that, on the 22d September, 1819, immediately 
 after the commencement of the hours of business, he duly pre- 
 sented the said note at the said office of discount and deposit, and 
 there demanded payment of the said note, but there was no person 
 there ready or willing to pay the same, and the said note was not 
 paid, in consequence of which the said deponent immediately pro- 
 tested the said note for the non-payment and dishonor thereof, and 
 immediately thereafter prepared a notice foV each of the indorsers 
 respectively, and immediately, on the same day, deposited one of 
 said notices in the post-office, directed to Peter Mills, at Zanesville 
 (his place of residence), of which notice the following is a copy: 
 " Chilicothe, 22d of September, 1819. Sir, — You will hereby take 
 notice that a note drawn by Wood and Ebert, dated 20th day of 
 September, 1819, for ."JBGOO, payable to you, or order, in sixty days, 
 at the office of discount and deposit of the Bank of the United 
 States at Chilicothe, and on which you are indorser, has been 
 protested for non-payment, and the holders thereof look to you. 
 Yours, respectfully. Levin Bolt, Mayor of Chilicothe." (^Peter 
 Mills, Esq.) It was further proven by the plaintiffs, that it had 
 been the custom of the banks in Chilicothe, for a long time pre- 
 viously to the establishment of a branch in that place, to make 
 demand of promissory notes and bills of exchange on the day after the 
 last day of grace (that is, on the sixty-fourth day), that the Branch 
 Bank, on its establishment at Chilicothe, adopted that custom, and 
 that such had been the uniform usage in the several banks in that 
 place ever since. No evidence was given of the handwriting of 
 either of the indorsers. The Court charged the jury : 1. That the 
 notice, being sufficient to put the defendant upon inquiry, was 
 good, in point of form, to charge him, although it did not name the
 
 360 PROCEEDINGS ON NON-PAYMENT. 
 
 # 
 
 person who was holder of the said note, nor state that a demand 
 had been made at the bank when the note was due ; 2. That if 
 the jury find that there was no other note payable in the office at 
 Chilicothe, drawn by Wood and Ebert, and indorsed by defendant, 
 except the note in controversy, the mistake in the date of the note, 
 made by the notary in the notice given to that defendant, does not 
 impair the liability of the said defendant, and the plaintiffs have a 
 right to recover ; 8. That, should the jury find that the usage of 
 banks, and of the office of discount and deposit in Chilicothe, was 
 to make demand of payment, and to protest and give notice on the 
 sixty-fourth day, sucli demand and notice are sufficient. 
 
 The counsel on the part of the defendant prayed the Court to 
 instruct the jury, " that before the common principles of the law 
 relating to the demand and notice necessary to charge the indorser, 
 can be varied by a usage and custom of the plaintiffs, the jury 
 must be satisfied that the defendant had personal knowledge of the 
 usage or custom at the time he indorsed the note ; and also that 
 before the plaintiffs can recover as the holder and indorser of a 
 promissory note, they must prove their title to the proceeds by 
 evidence of the indorsements on the note," which instructions 
 were refused by the Court. 
 
 Upon this posture of the case no questions arise for determina- 
 tion here, except such as grow out of the charge of the Court, or 
 the instructions refused on the prayer of the defendant's (Mills') 
 counsel. Whether the evidence was, in other respects, sufficient 
 to establish tlie joint promise stated in the declaration, or the joint 
 consideration of money lent, are matters not submitted to us upon 
 the recprd, and were proper for argument to the jury. 
 
 The first point is, whether the notice sent to the defendant at 
 Chilicothe was sufficient to charge him as indorser. The Court 
 was of opinion that it was sufficient, if there was no other note 
 payable in the office at Chilicothe, drawn by Wood and Ebert, and 
 indorsed by the defendant. 
 
 It is contended that this opinion is erroneous, because the notice 
 was fatally defective, by reason of its not stating who was the 
 holder ; by reason of its misdescription of the date of the note ; and 
 by reason of its not stating that a demand had been made at the 
 bank when the note was due. The first objection proceeds upon a 
 doctrine which is not admitted to be correct ; and no authority is 
 produced to support it. No form of notice to an indorser has been
 
 MILLS V. BANK OF THE UNITED STATES. 3G1 
 
 prescribed by law, 'J'lie wliolu object of it is to iiifonn the party 
 to whom it is scut that jjayiuent lias been refused by the maker ; 
 that he is considered liable ; and that payment is expected of him. 
 It is of no consequence to the indorscr who is the holder, as he is 
 equally bound by the notice, whomsoever he may be ; and it is 
 time enough for him to ascertain the true title of the holder when 
 he is called upon for payment. 
 
 The objection of misdescription may be disposed of in a few 
 words. It cannot be for a moment maintained that every variance, 
 however immaterial, is fatal to the notice. It must be such a vari- 
 ance as conveys no sulTicient knowledge to the party of the par- 
 ticular note which has been dishonored. If it docs not mislead 
 him, if it conveys to iiim the real fact, without any doubt, the 
 variance cannot be material, either to guard his rights or avoid his 
 responsibility. In the present case the misdescription was merely 
 in the date. The sum, the parties, the time and place of payment, 
 and the indorsement, were truly and accift'ately described. The 
 error, too, was api)arent on the face of the notice. The party was 
 informed that, on the 22d September, a note indorsed by him, 
 payable in sixty days, was protested for non-payment ; and yet the 
 note itself was stated to be dated on the 20th of the same month, 
 and, of course, only two days before. Under these circumstances, 
 the Court laid down a rule most favorable to the defendant. It 
 directed the jury to fnid the notice good, if there was no other note 
 payable in the office of Chilicothe, drawn by Wood and El)ert, and 
 indorsed by the defendant. If there was no other note, how could 
 the mistake of date possibly mislead the defendant? If he had 
 indorsed but one note for Wood and Ebcrt, how could the notice 
 fail to be full and unexceptionable in fact ? 
 
 The last objection to the notice is, that it does not state that 
 payment was demanded at the bank when the note became due. 
 It is certainly not necessary that the notice should contain such a 
 formal allegation. It is sufficient that it states the fact of non- 
 payment of the note, and tliat the holder looks to the indorscr for 
 indemnity. Whetlier the demand was duly and reguhiily made, 
 is matter of evidence to be estal)lishcd at the trial. If it be not 
 legally made, no averment, however accurate, will iielp the case ; 
 and a statement of non-payment and notice is, by necessary impli- 
 cation, an assertion of right by the holder, founded upon his having 
 complied with the requisitions of law against the indorscr. In
 
 3G2 PROCEEDINGS ON NON-PAYMENT. 
 
 point of fact, in commercial cities, the general if not universal 
 practice is, not to state in the notice the mode or place of demand, 
 but the mere naked non-payment. 
 
 Upon the point then, of notice, we tliink there is no error in the 
 opinion of the Circuit Court. 
 
 As to the deci.sion in this case respecting usage, see note to Renner v. Bank of 
 Cokimbia, ante, 308. 
 
 Tlie concluding portion of the opinion in the case of Bank of Alexandria v. 
 Swann, 9 Peters, 33, post, 383, relates to this subject of the fonn of notice, and is 
 given here in further illustj-ation of the doctrine of the principal case. 
 
 Per Thompson, J. : "The next question is, whether, in the notice sent to the 
 indorser, the dishonored note is described with sufficient certainty. 
 
 " The law has prescribed no particular form for such notice. The object of it 
 is niertdy to inform the indorser of the non-payment by the maker, and that he 
 is held liable for the payment thereof. 
 
 " The misdescription complained of in this ease, is in the amount of the note. 
 The note is for $1400, and the notice describes it as for the sum of $1457. In 
 all other respects the description is correct ; and in the margin of the note is set 
 down in figures 1457, and the special verdict finds that the note in question was 
 discounted at the bank, as and for a note of $1457 ; and the question is, whether 
 this was such a variance or misdescription as might reasonably mislead the in- 
 dorser as to the note, for payment of which he was held responsible. If the 
 defendant had been an indoi-ser of a number of notes for Humphrey Peake, 
 there might be some plausible grounds for contending that this variance was 
 calculated to mislead him. But the special verdict finds that from the filth of 
 February, 1828 (the date of a note for which the one now in question was a 
 renewal), down to the day of the trial of this cause, there was no other note of 
 the said Humphrey Peake, indorsed by the defendant, discounted by the bank, 
 or placed in the bank for collection or otherwise. There was, therefore, no 
 room for any mistake by the indorser as to the identity of the note. The case 
 falls witbin the rule laid down by this Court in the case of Mills v. The Bank of 
 the United States, 11 Wheat. 431 [the principal case], that every variance, 
 however immaterial, is not fatal to the notice. It must be such a variance as 
 conveys no sufficient knowledge to the party of the particular note which has 
 been dishonored. If it does not mislead him, if it conveys to him the real fact 
 without any doubt, the variance cannot be material, either to guard his rights or 
 avoid his resj)onsibility. In that case, as in the one now before the Court, it 
 appeared that there was no other note in the bank indorsed by Mills ; and this 
 the Court considered a controlling fact to show that the indorser could not have 
 been misled by the variance in the date of the note, which was the misdescrip- 
 tion there complained of" 
 
 Mr. Justice Story, in his Treatise on Promissory Notes, § 348, after stating 
 the general rule thai no precise form of words is necessary to the notice, states 
 that it should, however, either expressly, or by just and natural implication, con- 
 tain in substance these matters : — 
 
 1. A true description of the paper, so as to ascertain its identity. 
 
 2. An assertion that it has been duly presented at maturity and dishonored.
 
 GILBERT V. DENNIS. 363 
 
 3. That the liolder, or otlier person givinj^ the notice, looks to the person to 
 wlioni the notice is given, lor reimbursement and indemnity. 
 
 The first rule lias been sufBeiently considered in the principal cas« and note, 
 supra. The following authorities, collected in Story, Promissory Notes, §§ 348, 
 349, are added as throwing additional light on the rule. Hartley ». Case, 4 Bam. 
 & C. 3;>ti ; Heauchamp r. Cash, Dowl. tt R. C. N. P. 3 ; lleedy v. Seixas, 2. Johns. 
 Cas. 337 ; Bank uf Rochester v. (iould, 9 Wend. 279 ; Smith v. Whiting, 12 Mass. 
 6, 7; Cook v. Litchfield, 9 N. Y. (5 Seld.) 279; Cayuga Bank v. Warden, 
 1 Comst. 413; Ransom i;. Mack, 2 Hill, .087-593; Bradley v. Davis, 13 Shepl. 
 45; Clark v. Eldridge, 13 Met. 96; Wheaton v. Wilraarth, 13 Met. 422; 
 Young.s V. Lee, 18 Barb. 187. In the last case it was held sufficient that the no- 
 tice gave the names of the maker and indorser, and the amount. See to the same 
 effect, Beals v. Peck, 12 Barb. 245. See also Bank of Cooperstown v. Woods, 
 28 N. Y. 545; Snow r. Perkins, 2 Mich. 238, a misdescription in the amount, 
 as in Bank of Alexandria i;. Swann, supra, and held not fatal for the same rea- 
 son, that the indorser could not have been misled. Dennistoun v. Stewart, 17 
 How. 606, a misdescription of the name of the acceptor held not fatal. But if 
 the name were omitted, that would vitiate the notice. Home Ins. Co. J^. Green, 
 19 N. Y. (5 Smith) 518. See also Stockman v. Parr, 11 Mees. & W. 809 ; 8. C, 
 
 I Car. & K. 41 ; Rowan v. Odenheimer, 5 Sm. & M. 44; Routh v. Robertson, 
 
 II Sm. & M. 382. 
 
 The second rule is illustrated in the following case. 
 
 Caleb C. Gilbert v. Louis Dennis. 
 
 (3 Metcalf, 495. Supreme Court of Massachusetts, March, 1842.) 
 
 Form oftiolicn. — jMere notice of non-paj'nient, wliicli does not express or imply demand 
 and dislionor, is not such notice as will render the indorser liable. 
 
 The case is stated in the opinion of the Court. 
 
 After considering the subject of presentment, the Court say, — 
 
 Shaw, C. J. But tlie more formidable objection to the plaintiff's 
 right of recovering is, that the notice, wiiich is recited in the report, 
 did not inform tlie defendant that demand had been made of the 
 promisor, and payment refused, or in any otiier way, by express 
 declaration or reasonable implication, inform the indorser that the 
 note was in fact dishonored. 
 
 No particular form of notice is necessary. It may be either 
 written or verbal. Tindal v. Brown, 1 T. R. 1G7. Nor will a 
 mistake or misdescription of the note render the notice insuffi- 
 cient, if on the whole it cannot mislead the indorser, and if it so
 
 364 PROCEEDINGS ON NON-PAYMENT. 
 
 designates and distinguishes the note, as to leave no reasonable 
 doubt in the mind of the indorser, what note was intended, and 
 that it was the same with the note in suit. Smith v. Whiting, 12 
 Mass. 6 ; Bank of United States v. Carneal, 2 Peters, 543. 
 
 But though no special form of notice is requisite, still in some 
 form the fact to be notified is, that the note is dishonored by the 
 default of the promisor ; and this may be done verbally or in 
 writing, in any language which communicates the information to 
 the indorser, in terms, or by reasonable implication. Indeed the 
 same formula, in terms, may communicate this information or not, 
 according to circumstances. Suppose a note payable at a bank, in 
 terms, or by the agreement of parties, or tacit agreement arising 
 from usage or otherwise ; it is the duty of the promisor to pay it at 
 such bank on the last day of grace. The dishonor of such note 
 by the promisor consists in the non-payment at the bank. If then, 
 after the time of payment has elapsed, notice be given to the in- 
 dorser that the note is unpaid, it is notice that it is dishonored ; 
 whereas, in case of a private holder, in regard to a note, which 
 requires presentment and demand to fix the holder with a default, 
 notice in the same words, that the note is unpaid, would not neces- 
 sarily imply that it was dishonored, because that fact might be 
 strictly true, though the note had never been presented, nor pre- 
 sentment waived or excused. 
 
 But whatever may be the form of the notice, whether written or 
 verbal, we think the result of the decided cases is this : that the 
 notice should be such that it will inform the indorser that the 
 note has become due and be^n dishonored, and that the holder 
 relies on the indorser for payment ; that this information may be 
 express, or may be inferred by necessary implication, or reason- 
 able intendment, from the language ; construing such language in 
 reference to its accustomed meaning, when applied to similar sub- 
 jects, and with reference to the terms of the note, the time and 
 place at which the note is to be paid, as fixed by express or tacit 
 agreement, or inferred from general or particular usages. It is 
 not necessary to inform the indorser of the time, place, or mode of 
 presentment and demand, nor the means by which it was dishon- 
 ored, nor matter of excuse or waiver. Whatever legally fixes the 
 promisor with dishonor, is sufficient, on due notice given, to charge 
 the indorser. If, for instance, the promisor had absconded before 
 the note is due, without having made provision for its payment,
 
 GILBERT V. DENNIS. 365 
 
 80 that no presentment and demand can be made, that is a dis- 
 honor, of which the holder may, immediately after the note has 
 become due, notify the indorser; or if the promisor has agreed 
 that notice left at a particular place shall be deemed a good sub- 
 stitute, and notwithstanding notice is so left, he does not make 
 payment, this is likewise a dishonor. 
 
 But without considering further what constitutes a dishonor, it 
 may be useful to examine more particularly, in reference to the 
 present case, the authorities in relation to the effect and purport 
 of the notice to be given to an indorser. The rule is laid down in 
 general terms by the text-writers, that notice is to be given of the 
 fact of dishonor. Bayley states the duty of the holder. He is 
 under an implied undertaking to every party to the bill or note, 
 who would be entitled to bring an action on paying it, to present, 
 in proper time, the one for acceptance and each for payment ; to 
 allow no extra time for payment, and to give notice without delay 
 to such person, of a failure in the attempt to procure a proper 
 accej)tancc or payment. Bayley, Bills, 1st Am. ed. 124. 
 
 In general, it is incuml)cnt on the holder to give notice of the 
 dishonor to those persons to whom he means to resort for payment ; 
 otherwise they will be discharged. Chitty, Bills, 893. 
 
 In Tindal v. Brown, 1 T. R. 167, and 2 T. R. 186, note, it was 
 held that no particular form of notice was necessary, but that such 
 notice must come from the holder of the bill or note, or some 
 party to it, and that mere knowledge of the fact of non-payment, 
 coming to the indorser from any other source, would not be suffi- 
 cient. It ought to purport that the* holder looks to him for pay- 
 ment. The Court do not say, in terms, that the notice mugt 
 directly, or by implication, state the fact of dishonor, but it is im- 
 plied. The case decides that the holder must do an act, electing 
 to assert his right to recover the note of tiic indorser, whicli right 
 can only exist in case of a dishonor of the promisor. The case 
 did not call for a decision as to what must be the tenor or purjjort 
 of the notice, as to the fact of dishonor. It ought, said Mr. Jus- 
 tice BuUer, to purport that the holder looks to him (the indorser) 
 for payment. In regard to this it may be remarked, that when 
 notice is given by the holder to the indorser, of the dishonor of a 
 note, it necessarily implies that he looks to him for payment. 
 That is the natural, and may in general be regarded as the neces- 
 sary inference from the fact of giving such notice.
 
 366 PROCEEDINGS ON NON-PAYMENT. 
 
 This question seems not to have arisen in England until a re- 
 cent period ; but since the point has been started, there have been 
 a series of decisions on the subject. The first was Hartley v. Case, 
 4 Barn. & C. 339 ; s. c, 6 Dowl. & Ryl. 505. The notice from 
 the holder was, " I am desired to apply to you for the payment of 
 the sum of £150, due to myself on a draft drawn by Mr. Case on 
 Mr. Case, which 1 hope you will on receipt discharge, to prevent 
 the necessity of law proceedings, which otherwise will immediately 
 take place." The Court held it insufficient, because it did not 
 apprise the party of the fact of dishonor. They said, the lan- 
 guage used must be such as to convey notice to the party what 
 the bill is, and that payment of it has been refused by the ac- 
 ceptor. This was in 1825. 
 
 The next case was that of Solarte v. Palmer. On a trial before 
 Lord Tenterde7i, he expressed an opinion, that the notice was in- 
 sufficient. A bill of exceptions was taken, and the case brought 
 before the Exchequer Chamber, who confirmed the decision. 7 
 Bing. 530 ; 5 Moore & P. 475 ; 1 Cromp. & J. 417 ; 1 Tyr. 371 ; 
 On appeal to the House of Lords, the judgment was affirmed. 8 
 Bligh, N. R. 371, 874 ; s. c, 2 CI. & Fin. 93 ; 1 Bing. N. R. 194 ; 
 1 Scott, 1. 
 
 The action was brought by the assignees of a bankrupt, and the 
 notice was given by the attorneys of the assignees. It described 
 the bill, and stated that it had been put into their hands by the 
 assignees, with directions to take legal measures for the recovery 
 thereof, unless immediately paid. 
 
 In giving judgment in the 'Exchequer Chamber, Tindal, C. J., 
 states the rule to be, that the notice does not require the formality 
 of a regular protest, but it should at least inform the party to 
 whom it is addressed, either in express terms, or by necessary 
 implication, that the bill has been dishonored, and that the holder 
 looks to him for payment. This was decided in the House of 
 Lords, June, 1834. 
 
 The next case, I believe, is that of Boulton v. Welsh, 3 Bing. 
 N. R. 688 ; s. c, 4 Scott, 425. The notice to the ihdorser was 
 thus : " The promissory note for .£200, drawn by, &c., dated 
 18th July last, payable three mouths after date, and indorsed 
 by you, became due yesterday, and is returned to me unpaid. 
 I therefore give you notice thereof, and request you will let me 
 have the amount thereof forthwith." It was strongly urged
 
 GILBERT V. DENNIS. 3G7 
 
 that the words returned nnjiaid would import to the understaiiditig 
 of mercantile men that the note had been dishonored. But the 
 Court held themselves bound by the case of Solarte v. Palmer, and 
 l)elicving this case to be within it, held the notice insufficient, 
 although all the judges expressed their regret at the result. But 
 they state the rule of law, as it had before been stated, that the 
 notice should show a presentment to the maker, a demand of pay- 
 ment, and a refusal. As to any thing further than the general 
 rule, this case is of no autiioiity, unless in a case where the form 
 of notice is precisely the same. Whether in such case the words 
 retnrmd loi/mid would import the fact of dishonor, would depend 
 much upon the usage of each mercantile community in which 
 they should be used, and the conventional use and meaning of 
 particular forms of expression used in such community. This 
 was a decision of the Court of Common Pleas, Easter term, 1<S87.^ 
 
 About the same time was decided, in the Court of Exchequer, 
 the case of Hedger v. Steavenson, 2 Mees. & W, 799, where the 
 attorney addressed a letter to the defendant, informing him that his 
 note, describing it, became due the day before, and had been re- 
 turned unpaid, and requested him to remit the amount, with Is. 
 Qd. noting ; and the notice was held to be good. 
 
 The case of Messenger v. Southey, 1 Man. & G. 76, and 1 
 Scott, N. R. 180, was decided in the Court of Common Pleas, in 
 1840. The notice was as follows : " This is to inform you tliat the 
 bill I took of you for 15/. 28. 6d. is not took up, and 4s. ijd. ex- 
 pense ; and the money I must pay immediately." Held, it was 
 insufficient, because it did not state or intimate, by intelligible in- 
 ference, that the note had been dishonored. 
 
 About the same time, the case of Lewis v. Gompertz, G Mees. 
 & W. 899, came before the Court of Exchequer. The notice from 
 the holder to the indorser stated that the bill bearing iiis indorse- 
 ment had been presented to the acceptor, and returned dislionored, 
 " and now lies overdue and unpaid with me, as above, of wlucb I 
 give you notice." This was held sufficient, as giving all the re- 
 quisite information, although it did not, in terms, require payment 
 of tJie indorser. 
 
 The remarks of Mr. Baron Pfirkc, in this case, are well worthy 
 of consideration, as showing the extent to which the Court con- 
 sidered the authority of Solarte /'. P^mer as going, and the qual- 
 ifications with which it is to be taken. 
 
 1 Boultoii V. Welsh was overruled in 1842 by Uobson v. Curlewis, Car. & M. 378.
 
 368 PROCEEDINGS ON NON-PAYMENT. 
 
 In Grugeon v. Smith, 6 Adol. <fe Ellis, 499, the notice to the 
 drawer of a bill was, that the bill had been returned with charges ; 
 and the immediate attention of the drawer to it was requested. 
 This was held sufficient, as implying a demand and refusal, and 
 noting for non-payment. 
 
 See Houlditch v. Cauty, 4 Bing. N. E. 411 ; s. c, 6 Scott, 209 ; 
 Strange v. Price, 10 Adol. & Ellis, 125 ; Burgh v. Legge, 5 
 Mecs. & W. 418 ; Shelton v. Brothwaite, 7 Mees. & W. 436 ; Cooke 
 V. French, 3 Per. & D. 596; s. c, 10 Adol. & Ellis, 131, 
 note. 
 
 These are all recent cases, bearing more or less directly upon 
 the question, but do not essentially vary the result. Where, in 
 the notice, it is stated that the bill has been noted, or returned 
 with charges of protest, or the like, it is held to be notice, by rea- 
 sonable implication of the fact of dishonor. 
 
 It was contended at the argument, that although it has been 
 settled by recent authorities in England, that the notice to the 
 indorser must state the fact of dishonor, yet that the American 
 authorities would show that it was unnecessary. It becomes 
 therefore necessary to examine and compare them. 
 
 Mills, in error, v. U. S. Bank, 11 Wheat. 431.^ The note was in 
 terms payable at the branch of the U. S. Bank at Chilicothe, and 
 indorsed by the original defendant, plaintiff in error. It was de- 
 manded at the proper time at the bank, but there being no person 
 there ready and willing to pay the same , it was immediately pro- 
 tested, and notice given to the defendants. The notice described 
 the note by the date and amount, the time and place of payment, 
 and as a note on which the defendant was indorser, and stated 
 thus : " which has been protested for non-payment and the holders 
 thereof look to you " (Signed by the Mayor of Chilicothe acting 
 as notary, and addressed to the defendant). It was objected that 
 the notice was defective, because it did not state who was the 
 holder ; because there was a misdescription of the date ; and be- 
 cause it did not state that a demand had been made at the bank, 
 when the note was due. As to the misdescription, it was held to 
 be of no importance, if there was no other note to which it could 
 apply, if it was so described as to indicate the note in suit, and if 
 it did not mislead. 
 
 As to the sufficiency of tlie notice, the opinion was delivered 
 by Mr. Justice Story. Some particular expressions, taken alone, 
 
 1 Ante, 358.
 
 GILBERT V. DENNIS. 3G9 
 
 would seem to warrant the position for which it is cited. But taking 
 the whole together, and in reference to the case then before the Court, 
 we think it is not opposed to the rule as stated in the English 
 cases. Speaking in reference to the first objection, that the no- 
 tice did not state who was the holder, the judge says, " no form 
 of notice to an indorser has been prescribed by law. The whole 
 object of it is to inform the party to whom it is sent, that payment 
 has been refused by the maker ; that he is considered liable ; and 
 tiiat payment is expected of him." 
 
 In reference to the objection, that it did not state that payment 
 was demanded at the bank when the note became due, he says: 
 " It is certainly not necessary that the notice should contain such 
 a formal allegation. It is sufficient that it states the fact of non- 
 payment of the note, and that the holder looks to the indorser for 
 indemnity." He then speaks of the fact of presentment and de- 
 mand, as matter of fact to be proved, and adds, " a statement of 
 non-payment and notice is, by necessary implication, an assertion 
 of right by the holder, founded on his having complied with the 
 requisitions of law against the indorser." One of these requisi- 
 tions is, of course, presentment and demand. And the learned 
 judge concludes, upon this point, by adding, that " in point of fact 
 the general, if not universal practice is, not to state in the notice 
 the mode or place of demand, but the mere naked non-payment." 
 
 In the case then before the Court, the notice contained a full and 
 precise statement of the presentment, demand, and non-payment 
 by the maker. The objection with which the Court were dealing 
 was, that the notice did not specify the time and place of demand. 
 The answer made was, that such particularity was unnecessary, 
 and that it is sufficient that it states the fact of non-payment. Ap- 
 plied to the facts of that case, it may be construed to mean non- 
 payment after due presentment. So when the learned jndge 
 speaks of the practice of commercial cities, he speaks of notice of 
 the mere naked non-payment, in contradistinction to stating, in the 
 notice, the mode and place of demand. That such is the mean- 
 ing, may be inferred from the passage before cited, in wliich he 
 speaks of the object of the notice, which is to inform the indorser 
 that payment has been refused by the maker. Refusal inqilies 
 non-payment on demand, or under such circumstances as render a 
 presentment and demand unnecessary. Indeed, in many cases, 
 simple notice of non-payment is notice of dishonor ; as where the 
 
 24
 
 370 PROCEEDINGS ON NON-PAYMENT. 
 
 note is in terms, or by usage or special agreement, payable at a 
 bank, a notice stating tlie date and terms of the note, showing that 
 it has become due, and averring that it is unpaid, is equivalent to 
 an averment that it is dishonored. 
 
 In Smith v. Whiting, 12 Mass. 6, no question was raised as to 
 the sufficiency of the notice. It was notice from a bank. It de- 
 scribed the note as due and unpaid ; and by usage it was held to 
 be payable at the bank. Of course it was dishonored, by not being 
 paid at the bank by the maker. 
 
 So in State Bank v. Hurd, 12 Mass. 172, notice was left at a 
 place agreed l)y the parties as a substitute for notice at the house 
 or place of business of the maker ; and it was licld sufficient, 
 being equivalent to a more formal demand ; and failure of the 
 promisor to pay, on such notice, rendered the indorser liable. 
 
 The case of Bank of Rochester v. Gould, 9 Wend. 279, is a 
 case of mere misdescription. The notice to the indorser stated 
 expressly that the note had been protested for non-payment ; and 
 the only qiiestion was, whether it was well described. It there- 
 fore does not affect the present question. 
 
 The case of Bank of United States v. Carneal, 2 Peters, 543, 
 may be considered as throwing some light on the subject of in- 
 quiry. It is lield, that when the note is payable at a bank, and 
 the bank is itself the holder of it, no demand is necessary. It is 
 the duty of the maker to go to the bank within the usual hours of 
 business and pay it ; and if he fail to do so, the note is dishonored. 
 Towards the close of tlie opinion, given by Mr. Justice Story^ it is 
 stated thus : " A suggestion has been made at the bar, that a letter 
 to the indorser, stating the demand and dishonor of the note, is 
 not sufficient, unless the party sending it also informs the indorser 
 that he is looked to for payment. But where such notice is sent 
 by the holder, or by his order, it necessarily implies such respon- 
 sibility over. The purpose may be reasonably inferred from the 
 nature of the notice." 
 
 We have thus attempted, at the risk of being somewhat tedious, 
 to ascertain what the rule is upon this subject, on account of the 
 extreme importance of certainty and uniformity in the rules of 
 law applicable to the rights and duties of holders and other parties 
 to notes and bills of exchange. And we take that rule to be, that 
 as an indorser is liable only conditionally for the payment, in case 
 of a dishonor of the note at its maturity by the maker, and notice
 
 niLBERT V. DENNIS. 371 
 
 • 
 
 thereof to the indorser, in order to charge him, notice of such 
 dishonor must be given him by the holder or his agent, or some 
 party to the bill ; that mere notice of non-payment, which does not 
 express or imply notice of dishonor, is not such notice as will ren- 
 der the indorser lia)»le. 
 
 In order to apply tlu; rule thus stated, to the present case, it 
 will be necessary to look at the facts stated in the report. It ap- 
 pears that the presentment and demand on the promisor were 
 made on the morning of the day on which the note fell due. 
 Afterwards, at about eleven o'clock, the plaintiff caused a written , 
 notice to be left at the defendant's dwelling-house, of which the 
 following is a copy : " Boston, May 4, 1838. Mr. Louis Dennis. 
 Sir, — I have a note signed by C. E. Bowers and indorsed by you 
 for seven hundred dollars, which is due this day and unpaid ; pay- 
 ment is demanded of you. C. C. Gilbert." 
 
 This notice comes from an individual, not from a l)ank. It was 
 delivered at eleven a.m. There would then be no defiiult and no 
 dishonor, unless a demand had been made on the j)romisor. An 
 averment, therefore, that it was unpaid, did not, by necessary im- 
 ])licatiou or reasonable intendment, amount to an averment or in- 
 timation that payment had been demanded and refused, or that 
 the note had been otherwise dishonored. The Court are therefore 
 of opinion, that the notice was not sufficient to render the indorser 
 legally liable. . 
 
 It will be seen that there is some confusion among the English authorities on 
 this subject ; and we cannot perhaps do better than to add to Chief Justice 
 Shaw's review the opinion of Lord I>cnham, in Furze v. Sliarwood, 2 Q. B. 
 388, 409. lie says : — 
 
 "Lord Mannfield, after observing, in the case of Tindal v. 15rown [1 T. R. 
 167 ; 2 T. R. 186], that certainty is of the highest importance in mercantile trans- 
 actions proceeded to settle the question there raisfed, whether the notice of dis- 
 honor was, in point of law, too late. The whole Court alhrmed that proposition, 
 and more than once set aside a verdict founded on the opposite assumption. Noth- 
 ing more was required for the decision. lUit i\Ir. Justice WiUca took a second 
 objection ; and Mr. Justice Ashhurst a third. ' Notice,' said his lordship, ' means 
 something more than knowledge ; because it is competent to the holder to give 
 credit to the maker. It is not enough to say that the maker does not intend to 
 pay ; but (it ought to be further said) that he (the holder) does not intend to give 
 credit. In the present case, there is no notice : for tlie party ought to kit)w wiiether 
 the holder intends to give credit to the maker, or whether he intends to resort to the 
 indorser.' This is repeated with great approbation by Biillcr, J. Near forty years 
 after, the sufficiency of a notice of dishonor was canvassed in an action between
 
 372 PROCEEDINGS ON NON-PAYMENT. 
 
 « 
 
 Hartley v. Case [4 Barn. & C. 339] , decided by Lord Tenterden at Nisi Prius. It 
 ran tlms : ' I am desired to apply to you for the payment of the sum of £150, due to 
 myself on a draft drawn by Mr. Case, which I hope you will on receipt discharge, 
 to prevent the necessity of law proceedings, which otherwise will immediately take 
 place.' The report says : ' The Lord Chief Justice was of opinion, as this letter did 
 not apprise the party of the fact of dishonor, but contained a mere demand of pay- 
 ment, it was not sufficient ; and the plaintiff was nonsuited.' After argument, on 
 a rule for setting aside the nonsuit, his lordship said : ' There is no precise form 
 of words necessary to be used in giving notice ' of dishonor, ' but the language 
 used must be such as to convey notice to the party what the bill is, and that payment 
 of it has been refused by the acceptor. Here the letter in question did not convey 
 to the defendant any such notice ; it does not even say that the bill was ever 
 accepted. We therefore think the notice was insufficient.' This short judg- 
 ment, in which the whole Court concurred, comprising Bayleij, HoJrotjd, and Lit- 
 tledale, JJ., is perfectly correct in Its statement of the fact and the law, and has 
 the merit of adhering closely to the point raised In argument. It has never been 
 questioned by any judicial authority. The same learned Chief Justice was after- 
 ■ wards called upon to decide on the sufficiency of the following notice : ' A bill of 
 £683, drawn by ' A, upon B C, ' and bearing your indorsement, has been put 
 into our hands by the assignees of Mr. J. R. de Alzedo, with directions to take 
 legal measures for the recovery thereof, unless immediately paid to, gentlemen, 
 your very obedient servants, J. and S. P.' Here was no statement of the dis- 
 honor, the presentment, or the acceptance. If any notice of the dishonor, as a 
 distinct fact, is necessary, this document is plainly worthless. It was so held by 
 Lord Tenterden ; but, from the magnitude of the sum and the importance of the 
 question, his lordship suggested that a bill of exceptions might be tendered. 
 This was done, and the case brought by writ of error into the Exchequer Cham- 
 ber, when, as might have been expected, the Lord Chief Justice delivered a 
 unanimous judgment, that Lord Tenterden^s direction to the jury was right, and 
 the notice insufficient. It was, however, thought right to bring the matter before 
 the House of Lords, where the late Mr. Justice Parke delivered the opinion of 
 all the judges present (nine in number) to the same effect. Thus, without one 
 dissentient voice, the judges of all the courts, on these different occasions, con- 
 curred with Lord Tenterden in holding express notice of the fact of dishonor to 
 be necessary; the only point on which he had given an opinion. This Avas the 
 celebrated case of Solarte v. Palmer [7 Bing. 530 ; s. c, 1 Bing. N. C. 194]. The 
 Lord Chief Justice, in the Exchequer Chamber, laid down this rule, that ' The no- 
 tice of dishonor should at least inform the party to whom it is addressed, either in 
 express terms, or by necessary implication, that the bill has been dishonored, and 
 that the holder looks to him for payment of the amount.' Parke, J., when deliver- 
 ing the judges' opinion to the lords, omits the latter clause, and merely says, that 
 ' such a notice ought. In express terms, or by necessary implication, to convey full 
 information that the bill had been dishonored.' This decision, therefore, did not turn 
 upon or require any allusion to the doctrine of Ashliurst and Duller, JJ., in TIndal 
 V. Brown, on the necessity of stating that the holder looks to the party addressed, 
 and does not give credit to any other person. But much controversy has arisen on 
 the branch of the notice, as to which the Lord Chief Justice and Parke, J., agree, 
 requiring notice of dishonor in express terms, or by necessary implication ; and
 
 GILBERT V. DENNIS. 373 
 
 « 
 hence the task of examiniiifr all the tlecisions is imposed upon us. In Grugeon v. 
 Suiitli, tliisCourt held the dishonor of a bill to he suniciently notified hythe phrase 
 * The 1)111 is this day returned with charges.' A few days after, but without being 
 aware of this decision, the Court of Common Pleas, Boulton v. Welsh pj Bing. N. 
 C. G88], held the notice insuilicient, where it is said : ' The promissory note ' ' be- 
 came due yesterday, and is returned to me unpaid ; ' the Lord Chief Justice there 
 observing, that he did not sec how it was ' possible to escape from the rule estab- 
 lished by the two decided cases, without resorting to such subtile distinctions as 
 would make the rule itself useless in practice. The rule requires that, either 
 expressly or by necessary inference, the notice shall disclose that the bill or note 
 has been dishonored.' Upon which we will merely observe in passing, that there 
 is no necessary difference of opinion between the two courts, as Parke, B., sup- 
 posed in Iledger v. Steavenson [2 Mees. & W. 799]. The Common Pleas might 
 have held, that ' returned with charges' did necessarily imply presentment and dis- 
 honor. And it does not follow from any thing we said, that we nn'ght not have 
 thought ' returned to me unpaid ' insuUicient. But the case of Hedger v. Steaven- 
 son brought the Court of Exchequer into direct collision with the Common Pleas, 
 not indeed on the sufficiency of the notice, for it was not identical in the two cases,, 
 but on the principle of decidmg. The note, &c., ' is returned impaid,' was the form 
 which the Common Pleas held wrong. The same form, with the addition of \s. Qd. 
 for noting, the Exchequer held right; and Parke, B., while submitting to the au- 
 thority of Solarte r. Palmer, excej)ts to the reasons given for the judgment, and the 
 language in which they are couched, and doubts whether he could go so far as to 
 say that' it ought to appear upon the face of the instrument " by express terms 
 or necessary implication, that the bill was presented and dishonored " ; ' thinking 
 it ' enough if it appear by reasonable intendment, and would be inferred b}- any 
 man of business, that the bill has been presented to the acceptor, and not paid 
 by him.' lie remarks, however, that, even if the rule were properly laid down 
 in those words, it ought to receive a more liberal construction than the Common 
 Pleas appeared to have adopted, in which sentiments Barons Bolland and Alder- 
 son agreed, having been two of the judges consulted by the lords when Parke, J., 
 promulgated their opinion there. The next case, in order of time, is Iloulditch 
 V. Cauty. There the general doctrine was discussed ; and the Lord Chief Justice 
 declared his adherence to Boulton r. Welsh, but distinguished the case then 
 before him. The sulUciency of the written notice was not directly in question ; 
 for it had been followed by a verbal communication between the plaintiff and 
 defendant. Strange r. Price [10 Ad. & E. 125] followed. This Court there held 
 it insufficient to ' inform Mr. James Price ' * that Mr. John Betterton's acceptance, 
 £87 0,9., is not paid.' A fortiori, the Common Pleas would have agreed with us. I 
 do not believe that the Exchequer would have differed. In Easter term, 1840, 
 doubts springing from the same fruitful source were stirred in the C ourt of 
 Common Pleas (Messenger r. Southey, 1 Man. & G. 76), and the Exchequer 
 (Lewis V. Gompertz, 6 Mees. & W. 399) ; the former condemning, the latter 
 supporting, the notice in those respective cases but the forms were so entirely 
 different, that the judgments given might have been consistently formed 
 by either Court. But Messenger v. Southey shows a great relaxation of 
 the rigor of the rule laid down in the Exchequer Chamber and House of 
 Lords, on the part of the Lord Chief Justice, who admits that Grugeon 
 V. Smith might have been well decided bv force of the words ' returned with
 
 374 PROCEEDINGS ON NON-PAYMENT. 
 
 charges,' and possibly Hedger v. Stcavenson also, because the notice declared 
 the bill to have been ' returned unpaid.' But these are the very words which 
 were held insufficient under the operation of the rule in Boulton v. Welsh, a 
 case decided by the Common Pleas reluctantly, from deference to what was 
 decided in Solarte v. Palmer, and which can hardly be now deemed a satisfactory 
 authority. Upon the whole, it is to be feared, that none of the rules for con- 
 struing this brancli of the instrument designed to be a notice of dishonor will be 
 found capable of very general application. The advantage of clear- and certain 
 rules, where it can be secured, is, indeed, inestimable. Perhaps Lord Mansfield 
 never conferred so great a benefit on the commercial world as by his decision of 
 Tindal r. Brown, where his perseverance compelled them, in spite of themselves, 
 to submit to the doctrine of requiring immediate notice as a matter of law. But 
 in the matter in hand we can scarcely hope to attain such a rule. For if we are 
 to refer the question to a reasonable intendment, and what a man of business 
 would naturally conclude from the words, we can hardly decide it without the 
 intervention of a jury, whose opinions will naturally vary with the circumstances 
 of each case ; and if, on the other hand, the Court must decide on examination of 
 4the document according to legal and grammatical rules of interpretation, we shall 
 frequently give it a sense in which neither party could ever have understood it. 
 If we adopt the middle course, requiring at least a necessary implication, but 
 qualifying these words by Lord Eldoii's comment in Wilkinson v. Adam, we have 
 just seen that (if the reports be accurate) the same eminent judge, who gave 
 them one sense in Boulton v. Welsh, may admit them to be susceptible of a sense 
 directly opposite in Hedger v. Steavenson. This rule, however, was recom- 
 mended by great authority, twice asserted by the Court of Exchequer, not repu- 
 diated by the Court of Common Pleas. Perhaps it goes no farther than to 
 require that the Court must see that, by some words or other, notice of dishonor 
 has been given. We have entirely excluded the supposition, that the mere fact 
 of making a communication respecting the non-payment of the bill at the proper 
 season can extend the meaning of the words conveying notice of dishonor. This 
 exists in almost every case ; and, as one can hardly conjecture any other motive 
 for giving the information, so the party addressed can hardly fail to infer that it 
 is given in order to fix hiui with liability. Yet no one disputes that the fact must 
 be stated, the notice of dishonor plainly given. But, if this be done, we may 
 now inquire where is the authority establishing the position oi Ashliurstdind Bul- 
 ler, JJ. (unnecessary for the case before them), that the notice must also tell 
 the party addressed that he looks to him for payment ? If not, why send the 
 notice ? True, he may have sonie other reasons for informing the party ad- 
 dressed of the dishonor, while looking elsewhere for his money. But, unless he 
 tells him this, the receiver of such a notice cannot but be certain that the sender 
 means to call upon iu'm for payment. The protest, for which notice was substi- 
 tuted, has no such clause, but begins and ends with the history of the dishonored 
 bill, including the protest itself. Where notice has been given by another party 
 than the holder, there may be good sense in requiring that it shall be accom- 
 panied by a direct demand of payment, or a statement that it will be required 
 of the party addressed ; but in no case has the absence of such information been 
 held to vitiate a notice in other respects complete, and which has come dirfectly 
 from the holder. Nothing now remains but to declare our opinion on the several 
 forms of notice set forth in the special verdict. And the second, of July 11th ;
 
 GILBERT V. DENNIS. 375 
 
 the third, July 20th; the fourth, July 13th; the fifth, September 11th; the 
 sixth, September 2oth ; and the eighth, September 2Gth ; we think bad, because 
 they contain no notice of dishonor according to any of the decisions, or within 
 any of the rules. Consistently with all that is set forth, the plaintiff, either from 
 ignorance or inadvertence, or because he may really have looked to another, may 
 have abstained altogether from presenting any one of these bills. But this 
 amount reduces the plaintid's claim below the defendants' set-off. Our judgment 
 must then be for the latter, even on the supposition that it would be against them 
 on all the important general points that have been raised." 
 
 Boulton V. Welsh, cited so frequently above, was overruled in Robson v. Cur- 
 lewis, Car. & M. .378; s. c, 2 Q. B. 421. So the English rule now is not so 
 strict perhaps as the American rule declared in Gilbert v. Dennis. 
 
 Ramieij, J., in Townsend v. Lorain Bank, 2 Ohio State, 355, quotes the rule 
 in the principal case of Gilbert v. Dennis witli approval, and states that to be 
 the present rule in New York, Massachusetts, Pennsylvania, and Ohio. See 
 also Pinkham v. Macy, 9 Met. 174; Clark v. Eldridge, 13 Met. 96; Ransom v. 
 Mack, 2 Hill, 587 ; Arnold r. Kinloch, 50 Barb. 44 ; Dole v. Gold, 5 Barb. 
 490; Ettingu. Schuylkill Bank, 2 Barr, 356; Sinclair v. Lynch, 1 Spears, 244; 
 Graham v. Sangston, 1 Md. 60; Armstrong v. Thruston, 11 Md. 118, 157; 
 Lockwood r. Crawford, 18 Conn. 361. 
 
 That the rigor of the early Englisii rule in Solarte v. Palmer, has been con- 
 siderably relaxed, may be seen in Caunt v. Thompson, 7 Com. B. 400, 410, 
 decided in 1849, and in Metcalfe v. Richardson, 20 Eng. L. & Eq. 301 ; 11 
 Com. B. 1011, decided in 1853. In the former case, Cresswell, J., said: "In 
 Solarte v. Palmer, which was finally decided in the House of Lords, a very strict 
 rule was adopted ; but that has not been adhered to." And it was held in this 
 case that knowledge derived from the holder that the bill has been dishonored, 
 where the drawer is himself the party who is to pay the bill, as when he is 
 executor of the acceptor, amounts to notice. See jjost, p. 428. In Metcalfe v. 
 Richardson, supra, it was held that the jury might infer dishonor from a state- 
 ment that the .icceptor " could not pay." See also Lewis v. Gompertz, 6 Mees. 
 «fe W. 399 ; Armstrong v. Christiani, 5 Com. B. 687 ; Houlditch r. Cauty, 4 Bing. 
 N. C. 411 ; Smith v. Boulton, 1 Hurl. & W. 3. 
 
 Notice without date, stating that the paper has been " this day presented for 
 payment " is fatally defective. Wynn v. Alden, 4 Denio, 163. 
 
 The word " protested " in the notice, clearly implies dishonor. 1 Parsons, Notes 
 and Bills, 471 ; citing Crawford v. Branch Bank, 7 Ala. 205 ; Spies r. Newbury, 2 
 Doug. Mich. 495 ; DeWolf v. Murray, 2 Sandf. 166, and other authorities. 
 
 See further upon this branch of the subject, Clark i'. Eldridge, 13 Met. 96; 
 Everard v. Watson, 18 Eng. L. & Ec}. 194 ; Dole v. Gold, 5 Barb. 490 ; Cayuga 
 Bank v. Warden, 1 Comst. 413 ; Story, Promissory Notes, §§ 350, et .sr*^. 
 
 The third rule, which was also followed ([uite strictly at one time, — requiring 
 the notice to state that the holder looks to the party to whom it is addressed for 
 indemnity, — has lost much of its force, and become nearly ob.«olete. Story, 
 Promissory Notes, § 353. 
 
 It is stated in Solarte i'. Palmer, 7 Bing. 530, supra, that such information 
 should be given to the drawer or indorser either expressly or by necessary im- 
 plication ; but it is the more recent doctrine that the very fact of notice necessa- 
 rily implies that the holder looks to the party notified for payment. Chard v.
 
 376 PROCEEDINGS ON NON-PAYMENT. 
 
 Fox, 14 Q. B. 200; Furze v. Sharwood, supra ; King v. Bickley, 2 Q. B. 419; 
 Micrs V. Brown, 11 ]\Iees. & W. 372; Metcalfe v. Richardson, 20 Eng. L. & 
 Eq. 301 ; Caunt v. Thompson, 7 Com. B. 400 ; Townsend v. Lorain Bank, 2 Ohio 
 State, 354; Bank of the United States v. Carneal, 2 Peters, 543; Cowles v. 
 Harte, 3 Conn. 316; Warren v. Gilman, 17 Maine, 360; Barstow v. Hiriart, 6 
 La. An. 98 ; Burgess t'. Vreeland, 4 Zabr. 71 ; Story, Promissory Notes, § 354; 
 1 Parsons, Notes and Bills, 472. 
 
 Stephen B. M.unn v. Luke Baldwin et al. 
 
 " (6 Massachusetts, 316. Supreme Court, March, 1810.) 
 
 Manner of sending) notice. Post-office. — Putting a letter into the post-oflSce, directed to 
 the indorserof a bill of exchange, and containing notice of protest for non-payment, 
 is sufficient, though it does not appear that the letter was ever received. 
 
 Assumpsit upon a bill of exchange drawn in Boston on Justin 
 Smith, of Philadelphia, in favor of the defendants, and by them 
 indorsed to the plaintiff. 
 
 The facts agreed were, that the notary in Philadelphia, who pro- 
 tested the bill for non-payment, on the day of the protest, or on 
 the morning of the next day, before the mail for Boston was closed, 
 put a letter into the post-office in Philadelphia directed to the de- 
 fendants in Boston, and containing the necessary notice ; but the 
 case adds : " It does not appear that the defendants ever received 
 that letter." 
 
 Parsons, C. J. The only question in this action is, whether the 
 defendants had legal notice of the protest for non-payment of the 
 bill of exchange. After taking a little time to advise, we are all 
 of opinion that the notice is prima facie sufficient. The holder of 
 the bill made use of the usual mode of conveying notice, by put- 
 ting the letter containing it into the post-office ; and a mode to 
 which- the indorsers must be considered as assenting, or the nego- 
 tiating of bills payable at a distance would be greatly embarrassed, 
 if not obstructed. For who would buy a bill, to be presented for 
 payment in a remote part of the United States, if it was to be un- 
 derstood, that if not paid, he must be at the expense of some private 
 messenger, whose accidental sickness or detention on the road would 
 defeat his remedy ? 
 
 When a letter is put into the regular post-office, we presume that
 
 , MUNN V. BALDWIN. 377 
 
 it was sent and received agreeably to its direction, unless the con- 
 trary is proved. Here there is no evidence on tliat point ; the case 
 only stating, that it does not appear that the letter was received by 
 the defendants; and vet, they might, in fact, have received it. If 
 it was agreed that the letter miscarried, and that the defendants 
 did not receive it, it might l>c a question at whose risk the letter 
 was sent by the mail ; and whether, the regular mail being the 
 method of conveyance assented to by the defendants, they must 
 not be answerable for the miscarriage, in the same manner as if a 
 letter sent by their private servant had not been delivered by him. 
 On this last point, however, it is not necessary now to decide. But 
 on the facts stated, we are satisfied that the notice must be consid- 
 ered as sufficient to make the indorsers liable, and that the plaintiflf 
 ought to recover. 
 
 Therefore, conformably to the agreement of the parties, let the 
 defendants be called. 
 
 See the following authorities : Saunderson v. Judge, 2 H. Bl. 500; Scott v. 
 Lifford, 9 East, 347 ; Leftley v. Mills, 4 Term, 174 ; Shed v. Brett, 1 Pick. 401 ; 
 Jones t'. Warden, 6 Watts & S. 399 ; Walker v. Stetson, post, 397 ; Chitty, Bills, 
 Co8 : Story, Promissory Notes, § 328; Ibid., Bills of Exchange, § 300 and cases 
 cited. These authorities further show that it is wholly immaterial whether the 
 notice ever reached the indorser or drawer or not. If the notice is duly mailed, 
 the liability is absolutely fixed. This of course is said of the case of an indorser 
 residing in a different town from that of the holder. If he lives in the same 
 town the notice should not be sent by mail, except where there is a penny-post. 
 Pierce v. Pendar, 5 Met. 352 ; Ransom v. Mack, 2 Hill, 587 ; Bank of Colum- 
 bia i\ Lawrence, 1 Peters, 578, post, 404, 407. This subject is more fully consid- 
 ered, in Bowling v. Harrison, infra. As to the employment of messengers to 
 serve notice, it is decided that if the holder resorts to this method, instead of 
 using the public mail, his responsibility continue* until delivery of th« notice, 
 either personally to the party to be charged, or at his place of business or resi- 
 dence. See pvst, pp. 408, 409, 410.
 
 378 PROCEEDINGS ON NON-PAYMENT. 
 
 John D. Bowling, Plaintiff in Error, v. Jilson P. 
 Harrison. 
 
 (6 Howard, 248. Supreme Court of the United States, December, 1847.) 
 
 Notice to be given personaUy, when. — If the parties reside in the same city or town the 
 indorser is entitled to personal notice of the dishonor of the bill or note, either ver- 
 bally or in writing, or a written notice must be left at his dwelling-house or place 
 of business. Notice by the mail in such case is not sufficient. And a memoran- 
 dum on a note, in these words : " Third indorser, J. P. Harrison, lives at Vicks- 
 burg," is not an agreement to receive notice through the post-office. 
 
 The case is stated in the opinion of the Court. 
 
 Grier, J. The first assignment of error in this case is to the 
 instruction given by the Court to the jury: "That, to charge an 
 indorser if he lived in the town in which the note was made paya- 
 ble, the notice must be personal, unless he had agreed to receive 
 it elsewhere, or unless, by custom and usage of the bank at which 
 the note is payable, the notice of «on-payment was left at the post- 
 office." 
 
 As the only question on the trial of the cause was the sufficiency 
 of notice left at the post-office at Vicksburg, to charge an indorser 
 residing there, and not whether a copy left at his dwelling-house or 
 place of business would be proper, the phrase " personal notice " 
 was evidently intended and understood to include the latter in 
 opposition to the former. This instruction is, therefore, not ob- 
 jected to on the ground of any inaccuracy of expression on that 
 point. But the complaint is, that the rule of law on this subject 
 was erroneously enunciated by the Court, in stating the conditions 
 under which a personal service of notice on an indorser is required 
 to be " residence in the town where the note was made payable." 
 
 It is true, the terms in which the rule of law on that subject is 
 usually stated differ from those used by the Court on this occasion. 
 In Williams v. United States Bank, 2 Peters, 96, 101, it is thus 
 stated by this Court : " If the parties reside in the same city or 
 town, the indorser must be personally noticed of the dishonor of 
 the bill or note, either verbally or in writing, or a written notice 
 must be left at his dwelling-house or place of business." 
 
 Mr. Justice Story^ Story, Bills, § 312, states the rule in these 
 words : " Where the party entitled to notice and the holder reside
 
 • BOWLING V. HARRISON. 379 
 
 in the same town or city, the general rule is, that the notice should 
 be given to the party entitled to it, either i)Crsonally, or at his 
 domicile or place of business." 
 
 The indorsee or owner of the note in this case resided in Mary- 
 land, and the indorser in Vicksburg ; and it is contended that, as 
 they are the only parties, and do not reside in the same place, the 
 rule is inapplicable to the case. 
 
 But we are of opinion that, whether we regard the reasons upon 
 which this rule is founded, or a correct construction of the terms 
 in which it is usually stated, the instruction given by the Court 
 below was correct, and not such as to mislead the jury in the 
 application of the law to the circumstances of the case before 
 them. 
 
 The best evidence of notice is proof of personal service on the 
 party to be alTccted by it, or by leaving a copy at his dwelling. 
 Depositing a notice in the post-oflfice affords but presumptive evi- 
 dence of its reception, and is permitted to be substituted for the 
 former only where the latter would be too inconvenient or expen- 
 sive. Hence, when the convenience of the public post is not needed 
 for the purpose of transmission or conveyance, there is no reason 
 for its use, or for waiving the more stringent and certain evidence 
 of notice ; and therefore, in the practical application of the rule, 
 the relative position of tlie person giving the notice and the party 
 receiving it forms the only criterion of the necessity for relax- 
 ing it. 
 
 A very large portion of the commercial paper used in this coun- 
 try is similar to that which is the subject of the present suit. 
 They are notes made payable at a certain bank. The last indorsee 
 or owner transmits it to that bank for collection ; if funds are not 
 deposited there to meet it when due, it is handed to a notary or 
 agent of the bank, who makes demaird and protest, and gives 
 notice of its dishonor to the indorsers ; if they live in the same 
 town or city where the bank is situated and the demand made, 
 and " where the note was payable," he serves it personally, or at 
 their residence or place of business ; if they live at a distance, so 
 that such a service would be inconvenient and expensive, lie sends 
 the notice by mail to the nearest post-office, or such other place as 
 may have been designated by the party on whom it is to be served. 
 This is and has been the daily practice and construction of the rule 
 in question over the whole country, and the only one consonant 
 with reason.
 
 380 PROCEEDINGS ON NON-PAYMENT. • 
 
 This practical application of the rule is correctly stated by the 
 Court in their instruction to the jury as connected with the circum- 
 stances of the case before them, and also within its terms as it is 
 usually stated in the books. The term " holder " is properly ap- 
 ••if, plied to the person having possession of the paper and making the 
 demand, whether in his own right or as agent for another. The 
 Planters' Bank of Yicksburg were the " holders " of this note for 
 collection, and were bound to give notice to all the indorsers. 
 Smedes v. The Utica Bank, 20 Johns. 372. The notary, also, who 
 held the note as agent of the owner for the purpose of making 
 demand and protest, may be properly considered as the " holder " 
 within the letter and spirit of this rule. On a careful examination 
 of the very numerous cases in the books in which the rule under 
 consideration has been enunciated in the terms above stated, they 
 will be found not essentially to differ from the present in their cir- 
 cumstances. In some instances, also, the rule has been stated in 
 the terms used by the Court below. See Bayley, Bills. 
 
 An exception is taken, also, to the instruction of the Court : 
 " Tliat the memorandum attached to the note in this case was not 
 a sufficient agreement to receive notice at the post-office, and to 
 dispense with personal notice on the iudorser ; and that tlie custom 
 and usage of the bank, as proved in this case, were not sufficient 
 to dispense with personal notice." 
 
 The memorandum is in the following words : " Third iudorser, 
 J. P. Harrison, lives at Vicksburg." The only direct evidence of 
 usage was, " that, for several years prior to the maturity of said 
 note, it had been the usage of the Planters' Bank of Vicksburg to 
 have notice served personally upon the indorsers resident in Vicks- 
 burg, unless there was a memorandum on the note designating a 
 place where notice was to be served ; then the notice was left at 
 such place." This is, in fact, no usage peculiar to Vicksburg, but 
 the general rule of commercial law. The notary appears to have 
 mistaken this memorandum for an agreement to receive notice at 
 the Vicksburg post-office ; and, however willing to excuse himself, 
 he has not ventured to swear directly that there was any known 
 usage to justify this construction, or rather misconstruction, of this 
 memorandum. The counsel for plaintiff in error complain that 
 the Court did not submit it to the jury to say whether an inference 
 might not be drawn, from some equivocal or obscure expressions 
 of the witness, that there was such a usage.
 
 BOWLING V. HARRISON. 381 
 
 It is true, the jury are the proper judges of the credibility and 
 weight of testimony, Ijut the Court should not instruct them to 
 presume or infer important facts, unless there be testimony which, 
 if believed, would justify such a conclusion. 
 
 It is of the utmost importance to commercial transactions, tliat 
 the rules of law on the subject of notice which is to charge an in- 
 dorser be stable and certain, and not suffered to fluctuate and vary 
 with the notions or caprice of banking corporations or village nota- 
 ries. A usage, to be binding, should be definite, uniform, and well 
 known. It should be established by clear and satisfactory evi- 
 dence, so tiiat it may be justly presumed that the parties had ref- 
 erence to it in making their contract. Every day's experience 
 shows • that notaries, in many places, fall into loose ways of per- 
 forming their duties, either through negligence or ignorance ; and 
 courts should be cautious how they encourage juries to presume 
 usages and customs contrary to the settled rules of law, in order 
 to sanction the mistakes or misconceptions of careless or incompe- 
 tent officers. It was as easy to have written the memorandum on 
 this note : " The indorser, J. P. Harrison, agrees to receive notice 
 at the Vicksburg post-office," as to write it in its present form ; and 
 one can hardly conceive of the possibility of a well-known and es- 
 tablished usage, that a written memorandum should be construed 
 without any regard to its terms or plain meaning. Those who 
 affirm the existence of such a strange usage should be held to strict 
 proof of it ; and the Court were right in not submitting it to the 
 jury to infer such an improbable and unreasonable custom, by 
 forced or astute construction of equivocal expressions from a willing 
 witness. 
 
 Let the Judgment be affirmed. 
 
 The rule established in the above case has beenfollowed throughout the Union, 
 though its reasonableness has in several instanees been questioned ; and tlu- rule 
 itself has been circumscribed within narrow limits. 
 
 In 1 American Leading Cases, 40.), it is said that the rule " has lost its rea- 
 sonable force, and exists only by authority." 
 
 In Eagle Bank v. Hathaway, 5 Met. 212 (1842), the rule is qualified to this 
 extent : That where the parties to the transaction to be notified live in different 
 places, a holder may send notice to an indorser residing in a different place, and 
 the latter may use the mail to notify a prior party in the same place. The same 
 doctrine substantially is held in ^Manchester Bank v. Fellows, S Foster, 302, and 
 in Warren D. Gilman, 17 Me. (5 Shepl.) .%0. In Eagle Bank v. Hathaway, 
 Shaw, C. J., said : ♦' Were it an original question, it is far from certain that no-
 
 382 PROCEEDINGS ON NON-PAYMENT. 
 
 tice by the post-ofTice would not frequently reach an indorser as soon and as 
 certainly as notice at his domicile. Perhaps in large commercial cities, where 
 bankers, merchants, and active men of Ijiisincss usually send to the post-office 
 several times a day, notice by the post-oflice would be as prompt as any other. 
 In smaller communities, however, and places more sparsely settled, such notice 
 might be likely to linger in the post-office. But it is not a new question. A 
 long course of judicial decisions, either following or governing the usage of mer- 
 chants and men of business, has settled it." 
 
 The rule is again qualified in Shaylor v. Mix, 4 Allen, 351. In tliis case the 
 cashier of the bank at which the paper in suit was payable, deposited in the post- 
 office at Stockbridge a notice of the non-payment, addressed to the indorser at 
 Curtisville (a distinct village within the town of Stockbridge) at which place (C.) 
 the indorser lived, and where there was a post-office at which he usually received 
 his letters. The notice was held good. It is proper to observe, however, that the 
 notice was duly received by the indorser. Bigelow, C. J., said : " The general rule 
 that notice of the dishonor of a bill or note may be sent by mail to a drawer or in- 
 dorser who resides in a different city or town from that in which the holder resides, 
 is founded on the universal usage of all persons engaged in commercial and other 
 business transactions, to resort to the public post as a safe and certain medium of 
 communication between places from and to which there is a regular transmission 
 of the mails. Indeed, if such was not the rule, and it was necessary in order 
 to charge a drawer or indorser either to give him personal notice of the dishonor 
 of a bill or note or to leave a notice at the place of his domicile, it is obvious that 
 in many eases a very serious burden would be put on the holder of negotiable 
 paper, and its free circulation beyond the limits of the domicile of the parties 
 would become almost impracticable. . . . 
 
 " The same reasons exist for holding a notice by mail sufficient, where the 
 drawer or indorser and the person who is to give the notice reside in the same 
 town, municipality, or district, but in distinct and separate villages, parishes, or 
 settlements, at a distance of several miles from each other, between which there 
 is a regular intercourse by mail, and where it is shown that the party to whom 
 the notice is .addressed is in the habit of receiving letters sent to him in the course 
 of his business at the post-office of the village in or near which he resides. On 
 the question, the fact that the parties both live within the territorial limits of a 
 large town and under the same municipal government, may be quite immaterial. 
 The real inquiry is, whether there are regular communications by mail from the 
 place where the notice is deposited to that where the drawer or indorser resides, 
 and a separate post-office in the latter place, to which he is in the habit of re- 
 sorting to receive letters which are forwarded to him there by mail." 
 
 We have quoted so much at length from these important cases as indicating 
 the tendency of the courts to take a departure from the old rule. See also note 
 to Bank of Columbia v. Lawrence, ]jost, p. 404. 
 
 The reasons set forth above for the exceptions mentioned, Avill apply with equal 
 force to all our large cities in which letters are delivered by carriers several times 
 a day ; and so are the authorities. See Story, Promissory Notes, § 323 ; Ibid. 
 Bills of Exchange, §§ 289, 291, 882; Chitty, BiUs, 473; 3 Kent, Com. 107; 
 Pierce v. Pendar, 5 Met. 352, 356 ; Smith v. Mullett, 2 Camp. 208 ; Ransom v. 
 Mack, 2 Hill, 587 ; Sheldon v. Benham, 4 Hill, 129, 133 ; Bank of Columbia v. 
 Lawrence, j^ost, 404, 408.
 
 CHANOINE V. FOWLER. 383 
 
 F. & II. Chanoine v. Fowler. 
 
 (3 Wendell, 173. Supreme Court of New York, August, 1829.) 
 
 By whom notice should be given. — Notice of dishonor cannot be given by a stranger ; it 
 sliould be given by tiie liolder, or by one who is a party to it, and who would, on 
 the same being returned to liim, iiave a rigiit of action on it. 
 
 Assumpsit by the payees against the drawer of a bill of ex- 
 change. The circuit judge, in charging the jury, instructed them 
 that if the defendant had information in due season of the non- 
 acceptance of the bill, it was good, no matter who sent it. 
 
 Marcy, J. To determine whether the defendant had legal no- 
 tice of the non-acceptance of the bill, it will be necessary to see 
 when it was given, and from whom it came. Messrs. Sewalls had 
 transmitted the bill to France, and received information of its non- 
 acceptance on the fourth or fifth of April. H. D. Sewall says he 
 did not himself give notice thereof to the defendant, nor does he 
 know that notice was given by his house ; although it was their 
 custom to give notice in such cases, and he has no doubt the de- 
 fendant received it. He learned, from a conversation with the 
 defendant between the time of receiving notice and the fourteenth 
 of April, that he had knowledge that the bill was dishonored. 
 The judge, at the trial, ruled that if the defendant had notice in 
 due time of the non-acceptance of the bill, it was no matter 
 whence it came, it was available to the plaintiffs. The rule of law 
 in relation to the notice was, I apprehend, laid down in a manner 
 too broad and uncjualified. Tlie rule has heretofore fluctuated ; 
 but it never has been authoritatively stated, as I can find, to be as 
 the judge laid it down on the trial, except in tlie case of Shaw v. 
 Coates, at the sittings Ijefore Lord Kenyon^ mentioned in Selwyn's 
 N. P. 320, n. 25.^ Repeated decisions since, both in term and at 
 nisi prius, have qualified and restricted the broad proposition of 
 the judge in tliis case, and of Lord Kenyon in the case of Sliaw v. 
 Coates. In some instances, it has been decided that the holders 
 or their agents are the only persons to give notice of the disiionor 
 of bills ; but it seems to be now settled that it is not absolutely 
 1 This citation should probably be Shaw v. Croft, cited in Selwyn's N. P. 354.
 
 384 PROCEEDINGS ON NON-PAYMENT. 
 
 necessary that the notice should come from the holder of a bill, 
 but may be given by any person who is a party to it, and who 
 would, on the same being returned to him, have a right of action 
 on it. Chitty, Bills, 229 ; 2 Camp. 373 ; 1 Stark. 29 ; Bayley, 
 Bills, 161. A notice from a mere stranger is not sufficient; 
 and the charge of the judge was broad enough to sanction such a 
 notice. Nevj trial granted. 
 
 The point determined in this case, that a stranger cannot give notice of dis- 
 honor, is well settled. See Story, Promissory Notes, § 301, and authorities 
 cited. See also Juniata Bank v. Hale, post, 423, and note, 428. But as indi- 
 cated by the Court, there has been some conflict in the cases upon the question 
 •whether a prior party having notice from the holder, may give notice to antece- 
 dent parties which shall be binding in favor of the holder. The earlier cases, 
 however, of which Tindal v. Brown, 1 T. R. 167; s. c, 2 T. R. 186, is the 
 leading case, may now be considered as overruled, and the doctrine established 
 as stated in the principal case. Chapman v. Keane, 3 Adol. & Ellis, 193, 
 decided in 1835, Lord Chief Justice Denman, in delivering the judgment 
 of the Court in this case, said: "On the trial of this action by the indorsee 
 against the drawer of a bill of exchange, the Lord Chief Justice of the Common 
 Pleas directed a nonsuit for want of due notice of dishonor. The bill had been 
 indorsed by the plaintiff by the desire of Wiltshire, who had discounted it and 
 left it in the hands of the plaintiff's clerk, with instructions to obtain payment or 
 give notice of dishonor. He did give notice to the defendant, but in the name 
 of the plaintiff, not in that of Wiltshire, the then holder, who had deposited the 
 bill with him." 
 
 The objection to the plaintiff's recovery was founded on the case of Tindal v. 
 Brown, 1 T. R. 167 ; 2 T. R. 186 ; in which all the Judges of this Court, except 
 Lord Mansfield, considered a notice given by one who was not the holder as no 
 notice, on the ground that the drawer was not thereby apprised of the holder's 
 intention to look to him for payment ; and this case was distinctly recognized 
 and its principle adopted by Lord Eldon, in Ex parte Barclay, 7 Ves. 597. 
 
 Notwithstanding these high authorities, it is clear from Jameson v. Swinton, 
 2 Camp. 373, Wilson v. Swabey, 1 Stark. 34, and also from the learned trea- 
 tises on Bills of Exchange, that the contrary doctrine has prevailed in the pro- 
 fession ; and we must presume a contrary practice in the commercial world. It 
 is universally considered that the party entitled as holder to sue upon the bill 
 may avail himself of notice given in due time by any party to it. In the nisi 
 prius cases just referred to, no express allusion was made to Tindal v. Brown, 
 or Ex'parte Barclay ; but we can hardly conceive that they were not present to 
 the recollection of Lord Ellenborour/h and Mr. Justice Laurence, or the counsel 
 engaged. These learned judges indeed decided tlieni at nisi ]iTius, but without 
 question. We are now compelled to determine whether the case of Tindal v. 
 Brown, as to this point, be good law. We think that it is not. If it were, the 
 holder might secure his own right against his immediate indorser by regular no- 
 tice ; but the latter and every other party to the bill would be deprived of all 
 remedy against anterior indorsers and the drawer, unless each of those parties
 
 CHANOINE V. FOWLER. 385 
 
 should in succession take up tlie bill iiiniieiliately on receiving notice of dishonor, 
 :i supposition which cannot reasonably be uiado. We may add that this point 
 was not necessary for the decision of the case, as this Court, including Lord 
 Manxjitld, granted a new trial on a different ground." 
 
 The rule in this case is declared the settled law in Harrison v. Ituscoc, 15 
 Mees. & W. 231, 234, and in l\owe v. Tijjper, 20 Eng. L. & Eq. 220, 222 ; o[.in- 
 ion of Jeri'is, C. J. 
 
 The rule declared in Tmdal r. lirown, supra, is stated with approval in Harris 
 V. Robinson, 4 How. 33G, though that point was not involved in the latter 
 case. The question was whether a notary acting for a collecting bank — tiie 
 agent of the holder — might give notice of dishonor, and it Avas held that he could. 
 
 The rule as declared above by Lord Denman, is stated to be the law in the text- 
 books. Mr. Justice Story, Promissory Notes, § 302, says: "But a person who 
 is- a party to the note, is not ordinarily to be treated as a mere stranger in the 
 sense of the rule [which denies the validity of notice by a stranger]. If he be 
 a party to the note, and at all events if he be at the time entitled to call for 
 payment or for reimbursement, notice from him will now be held sufficient, although 
 formerly it seems to have been otherwise held." See, to the same effect, 3 Kent 
 Com, 108; Story, Bills^of Exchange, §§ 2'J4, 303, 304; Thompson, Bills, 357, 
 358 (Wilson's ed. 1«()5)*; Chitty, Bills, 494, 495, and cases cited. ' 
 
 It is important to observe, however, that for the holder to avail himself of 
 notice by a prior party to a still earlier party not notified by the holder, the 
 latter must have given notice to such prior party. In other words, notice by a 
 prior to a still earlier party will not avail the holder, if he has neglected altogether 
 to give notice. His laclies should not be excused by the diligence of another ; he 
 must have rendered this prior party liable to himself, in order to have the advan- 
 tage of his notice. The same in reason should ajjply to an indorser who attempts 
 to gain the benefit of notice given to an earlier indorser, by a party prior to him- 
 self. It must be admitted that the rule has not in every instance been clearly 
 stated in this way, though ]\Ir. Justice Bayley so states it. Bills, c. 7, § 2, 
 pp. 254-250, 5th ed., where he says : " Though a holder or any other party give 
 no notice hut to the person of tvliom he took the l>ill, yet if notice be cuminuui- 
 catcd without laches to the prior parties, he may avail himself of such communica- 
 tion." In Thompson, Bills, 357 (Wilson's ed. 1865), the rule is thus stated: 
 "Although the holder of a bill or note should give notice qnhj to his immediafe 
 mdorser, he may avail himself of notice to any prior party, whether it proceeds 
 from his indorser or from some earlier indorser, to whom the latter has given no- 
 tice." Story, Promissory Notes, §§ 302, 303, states the doctrine in substantiallv 
 the same language. Ibid., Bills of Exchange, §§303, 304. 
 
 Bfit if there be any doubt upon the point, the case of Lysaght v. Bryant, 9 
 Com. B. 46, settles the question. It was here held that the holder of a bill of 
 exchange may, in an action agai^ist the drawer, avail himself of a notice of dis- 
 honor given in due time liy any party to the bill ichose lidlnlity to the holder has 
 been fixed. Mr. Justice Cresswdl said: "It seems, from the cases, that the 
 holder of a bill may avail himself ol' a notice given in due time by a prior in- 
 dorsee, provided he himself is in a condition to sue the party by whom the notice 
 was given. Here Lysaght the younger, hoMing the bill as his father's agent 
 duly presented it, and had it returned to him dishonored. Notice of that fact to 
 
 26
 
 386 PROCEEDINGS ON NON-PAYMENT. 
 
 bim therefore, operating as notice to the firm, the present plaintiff was entitled 
 to sue them, and consequently is in a condition to avail himself of the notice of 
 dishonor given by them to the defendant." 
 
 Mr. Justice Wilde said: "As to the notice of dishonor, the case seems to fall 
 within the authorities. The facts show that Lysaght and Smithett had due notice 
 of the dishonor of the bill, — one of them having caused it to be presented, and 
 having liad it returned to him. A notice therefore by Lysaght and Smithett, 
 then being under a liability to the present plaintiff, atcording to the authorities 
 inures as a notice to the defendant." See also United States Bank v. Goddard, 
 6 Mason, 366, 372. Turner v. Leech, 4 Barn. & Aid. 451 ; Roscow v. Hardy, 
 12 East, 434. 
 
 The rule in the principal case will exclude the holder from taking advantage 
 of notice from a party who has been discharged by laches or otherwise. Harri- 
 son V. Ruscoe, 15 Mees. & W. 231. 
 
 In two English cases it seems to have been held that notice by the acceptor 
 of a bill will avail the holder. Shaw v. Croft, per Lord Kenyan, Chitty, Bills, 
 494 (1798); Rosher v. Kieran, 4 Camp. 87 (1814). But Mr. Justice Bayley 
 explains this on the supposition that the acceptor in these cases had a special 
 authority to give notice. Bills, 254, 5th ed. And it is said in Thompson, .Bills, 
 359 (Wilson's ed. 1865), that "this explanation is now considered satisfactory, 
 it being held as settled that an indorser is not bound to regard a notice unless 
 it come from a party who would be entitled, on paying the bills, to demand reim- 
 bursement from him." Certainly the notice is bad if given by a drawee who 
 refuses acceptance. Stanton v. Blossom, 14 Mass. 116. 
 
 As to the effect of notice to anterior parties in favor of intermediate indors- 
 ers, see next case. 
 
 Simpson v. Turney. 
 
 (5 Humphreys, 419. Supreme Court of Tennessee, December, 1844.) 
 
 Intermediate parties. — Notice given by the holder of a promissory note to the second 
 indorser too late to fix his responsibility, will not avail an intermediate indorser, 
 though it would have been in due time if given by him. 
 
 The case is stated in the opinion of the Court. 
 
 Reese, J. The Branch Bank of the State of Tennessee was the 
 holder of a promissory note, payable at said bank, made by James 
 H. Jenkins, to Anthony Dibrell, and indorsed in the following 
 order: A. Dibrell, S. Turney, and Jno. W. Simpson. Turney's 
 residence is within one mile of the bank at Sparta, so known to 
 be to the bank, and to all the other parties to the note. The note
 
 SIMPSON V. TURNEY. 387 
 
 was legally due on the first day of February, 1843, that being the 
 third day of grace. It was on that day protested. On the second 
 day of February no notice of tiie protest for the non-payment of 
 the note was either served upon Turney personally, or left at his 
 residence. He had notice from the bank, the holder, on the third 
 day of February. John W. Simpson, the plainti^, the immediate 
 indorser of Turney, gave him no notice whatever. 
 
 Tiiese facts being specially found by the jury in the case, the 
 Circuit Court gave judgment for Turney, and the plaintiff has 
 appealed in error to this Court. 
 
 It is not insisted for the plaintiff here that the notice of the 
 bank to Turney, the only notice he received, was in time. But it 
 is urged, that if Simpson had given him notice on the day he 
 received notice from the bank, such notice would have been good ; 
 and that is certainly so : and tlie plaintiff further insists, that the 
 notice given by the bank shall inure to his l>enefit. If the notice 
 had been in time and valid, it would by law have inured to his 
 benefit, he being an intermediate party. But a notice of no benefit 
 to the bank, because not fixing the liability of the party notified, 
 cannot inure to the benefit of another. So to hold, would be to 
 introduce a new principle into the law merchant. Suppose there 
 were ten indorsers upon a note : if the holder ten days after 
 the protest gave notice to the first indorser, this, according to the 
 argument, would fix all the indorsers, for it would be just the 
 time necessary to them to have given notice to each other succes- 
 sively. 
 
 It is perhaps a universal principle, where substitution exists at 
 all, that the matter or thing to be substituted to must be valid and 
 effective in behalf of the principal ; if it be ineffectual in his behalf, 
 it is difficult to see how it can inure to the benefit of others. 
 
 Upon the direct question raised in tliis case, Bayley on Bills 
 expressly says : " Nor is it any excuse that there are several 
 intervening parties between him who gives the notice and the 
 defendant to whom it is given ; and if the notice had been commu- 
 nicated through those intervening parties, and each had taken 
 the time the law allows, the defendant would not have had the 
 notice the sooner." 
 
 The same principle is also decided in the case of Turner v. Leech, 
 4 Barn. & Aid. 454. 
 
 We have been referred by the plaintiff to what has been said by
 
 388 , PROCEEDINGS ON NON-PAYMENT. 
 
 this Court in the case of McNeil v. Wyatt, 3 Humph. 125, 128. The 
 bank at Lagrange in that case gave notice to one Glover on the 
 14th, to be served on Wyatt and McNeil. Wyatt was served on 
 the 14th, and McNeil on the 15th. But Glover proved in the Cir- 
 cuit Court that he was the general agent of Wyatt, to serve notices 
 for him when his name was on paper. And the Circuit Court left 
 it to the jury to say whether Glover, who served the notice, was 
 not Wyatt's agent as well as the agent of the bank ; and if he was, 
 then the notice to McNeil on the 15th, one day after Wyatt re- 
 ceived notice, was sufficient. 
 
 This Court held that there was not any error in this part of the 
 charge ; and placing the validity of the notice, as this Court did, 
 upon that special ground, is a distinct recognition of the general 
 principle maintained by us in this case. 
 
 Upon the whole, we affirm the judgment. 
 
 That notice by the holder or any other party inures to the benefit of all inter- 
 mediate indorsers, though they may not have notified the prior parties, when 
 given in time to fix the liability of the notified party to him who gives notice, see 
 Marr v. Johnson, 9 Yerg. 1 ; Beale v. Parrish, 20 N. Y. 407 ; Palen v. Shurt- 
 leflF, 9 Met. .581; Stanton v. Blossom, 14 Mass. 116; Chitty, Bills, 494; Story, 
 Promissory Notes, § 303 ; Story, Bills of Exchange, § 294. See also Etting v. 
 Schuylkill Bank, 2 Penn. State, 355. 
 
 The President, Directors, &c., of the Bank of Alexan- 
 dria, Plaintiffs in Error, v. Thomas Swann. 
 
 (9 Peters, 33. Supreme Court of the United States, January, 1835.) 
 
 When the notice should be sent. — It is sufficient to charge an indorser that notice of the 
 default of the maker of a note be put into the post-office early enough to be sent by 
 the mail of the succeeding day. The holder is not required to give notice the day 
 upon which the demand was made. 
 
 The case is stated in the opinion of the Court. 
 
 Thompson, J. This suit was brought in the Circuit Court of 
 the District of Columbia, for the county of Alexandria, upon a 
 promissory note made by Humphrey Peake, and indorsed by the
 
 BANK OF ALEXANDRIA V. SWANN. 389 
 
 defendant in error. Upon the trial the jury found a special ver- 
 dict, upon which the Court gave judgment for the defendant, and 
 the case conies here upon a writ of error. 
 
 The points upon which the decision of tlie case turns, resolve 
 themselves into two questions. 
 
 1. Whether notice of the dishonor of the note was given to the 
 indorscr in due time ? 
 
 2. Wiiether such notice contained the requisite certainty in the 
 description of the note ? 
 
 The note bears date on the twenty-third day of June, 1829, and 
 is for the sum of -f'HOO, payable sixty days after date at the Bank 
 of Alexandria. The last day of grace expired on the twenty-hfth 
 of August, and on that day the note was duly presented, and 
 demand of payment made at the bank, and protested for non-pay- 
 ment ; and on the next day notice thereof was sent by mail to the 
 indorser, who resided in the city of Washington. 
 
 The general rule, as laid down by this Court in Lenox v. Rob- 
 erts, 2 Wheat. 373, 4 Cond. 163, is, that the demand of payment 
 should be made on the last day of grace, and notice of the default 
 of the maker be put into the post-office early enough to be sent by 
 the mail of the succeeding day. The special verdict in the present 
 case finds, that according to the course of the mail from Alexan- 
 dria to the city of Washington, all letters put into the mail before 
 half-past eight o'clock p.m., at Alexandria, would leave there 
 some time during that night, and would be deliverable at Wash- 
 ington the next day, at any time after eight o'clock a.m. ; and it 
 is argued on the part of tlie defendant in error, that as demand of 
 payment was made before three o'clock p.m., notice of the non- 
 payment of the note should have been put into the post-office on 
 the same day it was dishonored, early enougii to have gone with 
 the mail of that evening. The law does not require the utmost 
 possible diligence in the holder in giving notice of the dishonor of 
 the note ; all that is required is ordinary reasonable diligence ; 
 and what shall constitute reasonable diligence ought to be regulated 
 with a view to practical convenience, and the usual course of busi- 
 ness. In the case of the Bank of Columbia v. Lawrence, 1 Peters, 
 578, 583,1 it; ig gaid by this Court to be well settled at this day, that 
 when the facts are ascertained, and are undisputed, what shall 
 constitute due diligence is a question of law; that this is best cal- 
 
 l Post, 404.
 
 390 PROCEEDINGS ON NON-PAYMENT. 
 
 Ciliated for the establishment of fixed and uniform rules on the 
 subject, and is highly important for the safety of holders of com- 
 mercial paper. The law, generally speaking, does not regard the 
 fractions of a day ; and, although the demand of payment at the 
 bank was required to be made during banking hours, it would be 
 unreasonable, and against what the special verdict finds to have 
 been the usage of the bank at that time, to require notice of non- 
 payment to be sent to the indorser on the same day. This usage 
 of the bank corresponds with the rule of law on the subject. If 
 the time of sending the notice is limited to a fractional part of a 
 day, it is well observed by Chief Justice ITosmer, in the case of the 
 Hartford Bank v. Stedman and Gordon, 3 Conn. 489, 495, that it 
 will always come to a question, how swiftly the notice can be con- 
 veyed. We think, therefore, that the notice sent by the mail, the 
 next day after the dishonor of the note, was in due time. 
 
 The second point in this case is given in full in the note to the case of Mills v. 
 Bank of the United States, ante, p. 358, as illustrating the subject of misdescription 
 in the notice. There is nothing in this pai't of the case relating to the time of 
 sending notice. 
 
 In the case of several successive indorsements, the rule is that each indorser 
 has the same time within which to notify antecedent parties, after the receipt of 
 notice himself, that the holder has ; and this, in the case of a daily mail to the 
 place in which the party to be notified resides, is until the next day. But if no 
 mail leaves the next day, or if a mail leaves before business hours, he need not 
 post the notice until the next regular mail. 
 
 But the party, whether holder or indorser, must in all cases send his notices to 
 antecedent parties at the same time that he would to his immediate indorser ; he will 
 not be allowed as many days as there are intermediate parties. These rules are so 
 well settled that it will not be necessary to cite the cases. They will be found 
 in 1 Parsons, Notes and Bills, 506, et seq. ; Story, Promissory Notes, §§ 319, 
 et seq. 
 
 The holder, however, will have the advantage of every notice duly sent by a 
 prior party whose liability he has fixed by notice. See note to Chanoine v. Fow- 
 ler, ante, p. 383. 
 
 There has been some doubt concerning the proper interpretation of the term 
 " one day," used by some of the text- writers, whether it means that the party 
 giving notice has twenty-four hours within which to do so, or whether the ex- 
 pression means that he shall only have until a seasonable mail of the next day. 
 The subject is learnedly discussed by Mr. Justice Bartley, in Lawson v. Farmers' 
 Bank, 1 Ohio State, 206, 212. He said: — 
 
 " Touching the second question, then, did the Court of Common Pleas err in 
 charging the jury that, if the notice to the indorsers of the demand and non- 
 payment of the bill was deposited in the post-office at Pittsburgh at any time 
 durinj the day after the day of dishonor, without regard to the time of the
 
 BANK OF ALEXANDRIA V. SWANN. 391 
 
 departure of the mail for that day, it would be sufficient notice ; and, moreover, 
 that if it was found inconvenient to deposit tlie notice in the post-ofh<e in time 
 for the mail of tliat day, it was in proper time if the notice was depositeil in time 
 to be sent otF by the next mail of the day next after the day following the day of 
 the dishonor of the bill ? 
 
 Tiiis involves a very important question of the law merchant, and it is not a 
 little surprisinj^ tliat there should remain any doubt or uncertainty at this late 
 day, upon a question of such vital importance to the interest of commercial 
 countries, respecting the duties and liabilities of holders and parties to dishon- 
 ored paper. And it is a matter of no small moment, that a question which en- 
 ters so largely as does this into the every-day business transactions of different 
 commercial states and countries should be settled, not only upon a certain and 
 unvarying, but also upon a uniform basis. 
 
 The liability of the indor.«er is strictly conditional, dependent both upon due 
 demand of payment upon the maker or acceptor, and also due and legal notice 
 of the non-payment. The purpose and object of such demand and notice is to 
 enable the indorser to look to his own interest, and take immediate measures for 
 his indemnity. The demand and notice being conditions precedent to the indors- 
 er's liability, it is incumbent on the holder to make clear and satisfactory proof 
 of them before he can recover. The plaintiffs in error in this case, being accom- 
 modation indorscrs, may well insist upon strict proof of due diligence in giving 
 notice of the dishonor of the bill. 
 
 The law does not require the utmost diligence in the holder, in giving notice 
 to the dishonor of a bill or note. All that is requisite is ordinary or reasonable 
 diligence. And this is not only the rule and requirement of the law merchant, 
 but a statutory provision of this State. But what amounts to due diligence or 
 reasonable notice is, when the facts are ascertained, purely a question of law, 
 settled " with a view to practical convenience, and the usual course of business." 
 
 The question was at one time strenuously contested, whether due diligence 
 did not recjuire that where the parties reside in the same place, the notice of non- 
 payment should be given on the day of the dishonor of the bill ; and where the 
 parties reside in different places, should be sent by the mail of that day, or the 
 first possible or practicable mail after the default. Tindal i\ Brown, 1 T. R. 107 ; 
 Darbishire v. Parker, East, ;] ; iSIarius, Bills, 24. But the rule was established 
 and is supported by great weight of authority, that, where the parties reside in 
 different places, and the post is the mode of conveyance adopted, — although it 
 was in no case necessary to send the notice by the post of the same day of the 
 dishonor, or of the knowledge of the dishonor, the holder being entitled to 
 the whole of that day, being the day of the dishonor, or knowledge of the dis- 
 honor, to prepare his notice, — yet that the notice would be insufficient unless 
 put into the post-office in time to go by the next mail after that day. And this 
 is in conformity with the rule laid down by Mr. Chitty in his learned treatise on 
 Bills of Exchange, in the following explicit language : " When the parties do not 
 reside in the same place, and the notice is to be sent by general post, then 
 the holder or party to give the notice, must take care to forward notice by the 
 post of the next day after the dishonor, or after he receives notice of such dis- 
 honor, whether that post sets off from the place where he is early or late ; and 
 if there be no post on such next day, then he must send off notice by the very 
 next post that occurs after that day." Chitty, Bills, 485.
 
 392 PROCEEDINGS ON NON-PAYMENT. 
 
 This is in accordance with the rule as settled by the Supreme Court of the 
 United States. In Lenox v. Roberts, 2 Wheat. 37;^, Chief Justice Marshall' 
 says: " It is the opinion of the Court that notice of the default of the maker 
 should be put into the post-office early enough to be sent by the mail of the day 
 succeeding the last day of grace." And in the case of the Bank of Alexandria 
 V. Swann, 9 Peters, ."3 [the principal case], Mr. Justice Thompson approved of 
 the general rule laid down in the case of Lenox v. Roberts, holding that notice of 
 the dishonor need not be forwarded on the last day of grace, but should be sent by 
 the mail of the next day after the dishonor. The same rule was adopted by Mr. 
 Justice Washington in the case of the United States v. Parker's Administrators, 4 
 Wash. 465 ; and in which case subsequently that decision was affirmed on error by 
 the Supreme Court, 12 Wheat. 559. The same rule received the sanction of Mr. 
 Justice Story, in the case of the Seventh Ward Bank v. Hanrick, 2 Story, 416, 
 although, in the case of Mitchell v. Degrand, 1 Mason, 180, he appears to have 
 been disposed to even greater strictness, holding that when a bill is once dishon- 
 ored, the holder is bound to give notice by the next practicable mail, to the par- 
 ties whom he means to charge for the default. This, however, is explained by 
 Mr. Justice Washington in the case of United States v. Parker's Administrators, 
 to mean that the notice should be put into the office in time to be sent by the 
 mail of the succeeding day. This rule, adopted by the Supreme Court of the 
 United States, and which is supported by the great weight of authority in Eng- 
 land and in the several States of the Union in which the question appears to 
 have been settled by reported adjudications, is subject to some qualification re- 
 laxing its rigor. If two mails leave the same day on the route to the place of the 
 residence of the indorser, it is sufficient to deposit the notice in the post-office in 
 time to go by either mail of that day, inasmuch as the fractions of the day are 
 not counted. Whitewell v. Johnson, 17 Mass. 449, 454; Howard v. Ives, 1 Hill, 
 N. Y. 263. 
 
 And for the reason that the mail of the day succeeding the day of the default 
 may go out in some places soon after midnight or at a very early hour in the 
 morning, and is sometimes made up and closed the evening preceding, it has . 
 been adjudged that, inasmuch as the holder is allowed till the day after the day 
 of default to send off the notice, reasonable diligence would not require him to 
 deposit the notice in the post-office at an unseasonably early hour, or before a 
 reasonable time can be had for depositing the notice in the post-office after early 
 business hours of that day. The rule, as qualified and settled by the late author- 
 ities, and which I take to be the correct one, is that where the parties reside in 
 the same place or city, the notice may be given on the day of default ; but if 
 given at any time before the expiration of the day thereafter, it will be sufficient ; 
 and when the parties reside in different places or States, the notice may be sent 
 by the mail of the day of the default ; but if not, it viust be deposited in the 
 office in time for the mail of the next day, provided the mail of that day be not 
 made up and closed at an unreasonably early hour. If, however, the mail of that day 
 be closed before a reasonable time after early business hours, or if there be no 
 mail sent out on that day, then it must be deposited in time for the next possi- 
 ble post. In the case of Downs v. The Planters' Bank, 1 Sm. & M. 261, and 
 also the case of Chick v. Pillsbury, 24 Me. 458, the doctrine on this subject 
 has been more fully examined than perhaps in any of the older cases ; and the 
 rule adopted is that the notice, in order to charge the indorser living in another
 
 BANK OP ALEXANDRIA V. SWANN. 393 
 
 place or State, mnst be dei)osIt('d in the post-olFicc in time to be sent by tlic mail 
 of the (lay succeeding the day of the disiionor, providin;^ the mail of that day be 
 not closed at an unreasonably early hour, or before early and convenient business 
 hours. And this rule is well sustained by authority. Fullerton et al. v. The 
 Bank of the United States, 1 Peters, 605, 618 ; Eagle Bank v. Chapin, 3 Pick. 
 180, 183; Talbot v. Clark, 8 Pick. .01 ; Carter v. Burley, 9 N. Ilamp. 559, 570; 
 Farmers' Bank of Maryland v. Duvall, 7 Gill & Johnson, 79 ; Freemans' Bank 
 V. Perkins, 18 Me. 292 ; Mead v. Engs, 5 Cowen, 303 ; Sewall v. Russell, 3 
 Wend. 276 ; Brown v. Ferguson, 4 Leigh, 37 ; Dodge v. Bank of Kentucky, 
 
 2 Marshall, 610; Hickman v. Ryan, 5 Littell, 24; Hartford Bank v. Steedman, 
 
 3 Conn. 489 ; Brenzer v. Wightraan, 7 Watts & S. 264 ; Townsley v. Sprin- 
 ger, 1 La. 122; Bank of Natchez v. King, 3 Robinson, 243; Brown v. Turner, 
 1 Ala. 752; Lockwood v. Crawford, 18 Conn. 361, 363; Bayley, Bills, 262; 
 Story, Promissory Notes, § 325 ; and Hyles, Bills, 160. 
 
 Some obscurity and uncertainty have been created on this subject, by the 
 expression used in some of the cases, and by some of the elementary writers, 
 that the holder or person giving the notice, has " one day" or " an entire day" 
 in which to give the notice after the day of the dishonor. The term one day or 
 an entire day, seems not to have been used always in the same sense ; and the 
 confusion appears to have in part arisen from the fact, that where the parties 
 reside in the same place, notice at any time before the e.xpiration of the day 
 after the day of the default, will be sufficient, while where the parties reside in 
 different places, the notice must frequently be mailed early in the day, to be in 
 time for the mail of that day. 
 
 The defendant in error relies upon the doctrine laid down in the elementary 
 works of Chancellor Kent and ]\Ir. Justice Story, as fully sustaining the charge 
 of the Court below. Inasmuch as precision and certainty, in the settlement of 
 this rule, are of very great importance, a careful examination of the subject 
 seems to be required. 
 
 Chancellor Kent, whose accuracy in his Commentaries on American Law, is 
 never to be questioned without graye consideration, in the late editions of his 
 works, 3 Kent's Com. 106, states the rule as follows : — 
 
 "According to the modern doctrine, the notice must be given by the first 
 direct and regular conveyance. This means the first mail that goes after the 
 day next to the third day of grace so that, if the third day of grace be on 
 Thursday, and the drawer or indorser reside out of town, the notice may indeed 
 be sent on Thursday, but must be put into the post-office, or mailed on Friday, 
 so as to be forwarded as soon as possible thereafter." 
 
 And in a note by the learned author explanatory of the text, it is said, that, — 
 
 "The principle that ordinary reasonable diligence is suflicient, and that the 
 law does not regard the fractious of the day in sending notice, will sustain the 
 rule as it is now generally and best understood in England and in the commercial 
 part of the United States, that notice put into the post-office on the next day at 
 any time of the day, so as to be ready for the first mail that goes thereafter, is 
 due notice, though it may not I)e mailed in season to go by the mail of the day 
 next after the day of the default." 
 
 Several cases are cited by the U-arned author, but they do not sustain his 
 position. The case of Jackson v. Richards, 2 Caines Cases, 343, referred to, is
 
 394 PROCEEDINGS ON NON-PAYMENT. 
 
 not in point; Haynes v. Birks, 3 Bos. & Pul. r)99, decides that when the note 
 fell due on Saturday, the notice sent by the post on Monday, was sufficient. 
 Sunday being excluded and not taken into the account, the notice was sent by 
 the post of the next legal day. In the cases of Bray v. Hadwen, 5 Maule & 
 Sel. 08, and Wright v. Sliawcross, 2 Barn. & Aid. 501, it was decided that 
 the notice having arrived on Sunday, was to be considered as having been 
 received on Monday, and then the party had till Tuesday, the next post day for 
 giving the notice. In Geill v. Jeremy, 1 M. & M. 61, where no mail went out 
 on the day next after the day of the default, it was held that the rule being an 
 impossible one on that day, a notice sent by the next succeeding mail da:y would 
 be in season. The case of Firth v. Thrush, 8 Barn. & C. 387, turned upon the 
 question whether the attorney employed to ascertain the residence of the de- 
 fendant, should be allowed a day to consult his client after information of the 
 defendant's residence. And Lord Tenterden said, "if the letter (giving informa- 
 tion of the defendant's residence) had been sent to the principal, he would 
 have been bound to give notice on the next day." The only other case referred 
 to, is that of Hawkes v. Salter, 4 Bing. 715 ; and this is the only one which even 
 tends to sustain the position of the learned author. In that case the bill was 
 dishonored on Saturday, and the mail left at half-past nine o'clock on Monday 
 morning ; and an unsuccessful attempt was made to prove that the notice was 
 put into the post-office on Tuesday morning. Best, C. J., expressed himself 
 clearly of opinion, " that it would have been sufficient if the letter had been put 
 into the post-office before the mail started on the Tuesday morning, but that 
 there was no sufficient evidence that it had been put in even on Tuesday morn- 
 ing.''' The opinion in this case was, therefore, a mere dictum, which determined 
 nothing, the case being decided upon a different ground. 
 
 But the position of Chancellor Kent, above referred to, is in direct conflict 
 with the rule as laid down by himself in the first edition of his work. In the 
 edition of 1828, 3 Kent's Com. 73, the rule is stated in these words : — 
 
 " According to the modern doctrine the notice must be given by the first 
 direct regular conveyance. This means the first convenient and practicable mail 
 that goes on the day next to the third day of grace ; so that if the third day of 
 grace be on Thursday, and the drawer or indorser reside out of town, the notice 
 may indeed be sent on Thursday, but must be sent by the mail that goes on Friday." 
 
 In the last edition of this work, published in 1851, the editor, Mr. William 
 Kent, admits the weight of authority to be in favor of the rule as laid down in 
 Chick V. Pillsbury and Downs v. Planters' Bank above referred to ; and he says, 
 that, — 
 
 "The opinion of C. J. Best, in 4 Bing. 715, is the only one that sustains the 
 rule suggested, and that the observations of Mr. Justice Story were too latitu- 
 dinarian in allowing the entire whole day next after the dishonor." 
 
 It is true, that Mr. Justice Story in his work on Bills of Exchange, § 291, 
 says that an indorser need not give notice to his antecedent indorser, till twenty- 
 four hours have elapsed after the receipt of his own notice of the dishonor. 
 And in his note to § 290, of the same work, the author says, that, — 
 
 " The rule does not appear to be so strict as it is laid down by Mr. Chitty, 
 and that it would be more correct to saj', that the holder is entitled to one whole 
 day to prepare his notice, and that, therefore, it will be sufficient, if he sends
 
 BANK OF ALEXANDRIA V. SWANN. 395 
 
 it liy the next post that goes after twenty-four liours from the time of the dis- 
 ' honor," «fec. 
 
 And he adds, — 
 
 " I have seen no late case wliich imports a different doctrine ; on the contrarj-, 
 they appear to me to sustain it ; but as I do not know of any direct authority 
 which positively so decides, this remark is merely propounded for the considera- 
 tion of the learned reader." 
 
 It is not necessary here to inquire wlieth^ the ])Osition taken by the learned 
 author is in c'onHiet with the decisions made by himself in 1 Mason, 180, and 
 2 Story, 416, above referred to. In his same work on Bills of Exchan<(e, he 
 has stated the rule with great precision and accuracy in the following language, 
 in § 382 : — 
 
 "In all cases where notice is required to be given, it is sufficient, if the 
 notice is personal, that it is given on the day succeeding the day of the dishonor, 
 early enough for the party to receive it on tiiat day. If sent by the mail, it is 
 sufficient if it is sent by the mail of the next day, or the next practicable mail." 
 And in § 288: " If the post or mail leaves the next day after the dishonor, 
 tlic notice should be sent by that post or mail, if the time of its closing or de- 
 parture, is not at too early an hour to disable the holder from a reasonable per- 
 fdrmance of tlie duty. So that the rule may be fairly stated in more general 
 terms to be, that the notice is in all cases to be sent by the next practical post 
 or mail after the day of tiie dishonor, having a due reference to all the circum- 
 stances of the case." 
 
 The same learned author has laid down the rule very fully to the same effect 
 in his work on Promissory Notes, § 32-1. 
 
 The statement of the rule in the last extract, is consistent with the doctrine 
 estal)lished by the Supreme Court of the United States, and fully sustained by 
 authority. 
 
 The discrepancies which have arisen on this subject appear to have grown out 
 of an inaccurate use in some of the books and decisions of the terms " his day," 
 "an entire day," and "a whole day," &c., these phrases being at one time 
 understood or taken literally, and at another time to mean a space of time equal 
 to a full day. If these phrases are to be taken to mean the duration of a full 
 day instead of tiie day itself, in their general application, the effect would be to 
 change and break down numerous well-settled and useful rules. The law as a 
 general thing does not have regard to the fractions of a day, and thus compel 
 parties to resort to nice questions of the sufficiency of a certain number of hours 
 or minutes, and to the taking of the parts of two different days to make up what 
 may be considered in one sense a day, because equal in duration to one entire 
 day. If this Avere the case the indorscr, after having been notified, would often 
 be unable to determine whether he had been notified in season or not, until he 
 had learned the hour of the day when the default occurred; and the holder would 
 have it in his power at times of affecting injuriously the right of the indorser to 
 an early notice, by delaying the presentment until a late hour in the day. Noth- 
 ing more could have been intemled by the use of these phrases than that each 
 party should have a specified day upon which the act enjoined upon him should 
 be performed. This is the sense in which Lord EUenboroufih used it in the case 
 of Smith V. MuUett, 2 Camp. 208, when he said : " Ka party has an entire day,
 
 396 PROCEEDINGS ON NON-PAYMENT. 
 
 he must send ofF his letter conveying the notice -within post time of that 
 day." And it is said by a learned elementary author, " if a party has an entire 
 day, he must send off his letter conveying the notice of the dishonor of the bill 
 •within post time of that day." Byles, Bills, 101. 
 
 The rule laid down in Smith's Mercantile Law, to which the defendant in error 
 has referred, will not, as I apprehend, be found on close examination to be at 
 variance with the doctrine here adopted. Smith's Mercantile Law, 310. 
 
 It is claimed on behalf of the plaintiffs in error in this case, that the notice of 
 the dishonor of the bill should have been sent immediately to them, instead of 
 being sent, as it was in the first place, to the Bank of Salem. The holder is not 
 bound to give notice of the dishonor to any more than his immediate indorser ; 
 and each party to a bill has the same time after notice to himself for giving 
 notice to other parties beyond him, that was allowed to the holder after the 
 default. Sheldon v. Benham, 4 Hill, N. Y. 129 ; Eagle Bank v. Hathaway, 
 5 Met. 213. And when a bill is sent to an agent for collection, the agent 
 is required simply to give notice of the dishonor in due time to his prin- 
 cipal ; and the principal then has the same time for giving notice to the indors- 
 ers after such notice from his agent, as if he had been himself an indorser 
 receiving notice from a holder. Bank of the United States v. Davis, 2 Hill, N. 
 Y. 452; Church v. Barlow, 9 Pick. 547. The party in this case, therefore, was 
 not at fault by sending the notice directly to the Bank of Salem, leaving that bank 
 to send the notice to the plaintiffs in error. 
 
 Applying the rule, therefore, which we have adopted as the correct one, to 
 this case, it was incumbent on the plaintiff below, in order to be entitled to a re- 
 covery, to show that the notice of the dishonor of the bill was deposited in the 
 post-office in Pittsburgh, in time to be sent by the mail of the twenty-eighth day 
 of July. Ten minutes past nine o'clock in the morning was not an unreasona- 
 bly early hour, or before a reasonable and convenient time after the commence- 
 ment of early business hours of the day. The neglect, therefore, to send the 
 notice by the mail of the next day after the day of the default, operated to dis- 
 charge the plaintiffs in error as indorsers, unless from some other cause no- 
 tice had been dispensed with or rendered unnecessary. And for the charge of 
 the Court of Common Pleas to the jury to the contrary, the judgment is reversed, 
 and the cause remanded for further proceedings." 
 
 See Stephenson v. Dickson, 24 Penn. State, 148 ; Prideaux v. Criddle, Law 
 Rep. 4 Q. B. 455 ; also Simpson v. Turney, ante, p. 386. 
 
 If notice is sent by private conveyance, the holder's responsibility continues 
 until delivery ; and this must not be later than the day on which it would have 
 arrived if sent by mail. Van Vechten v. Pruyn, 13 N. Y, (3 Kern.) 549, 555. 
 See post, p, 410.
 
 WALKER V. STETSON. 397 
 
 Frederick W. Walker v. Charles Stetson. 
 
 (l-l Ohio State, 89. Supreme Court, December, 1862.) 
 
 Domicile. Where notice should be sent. — Tlie fact that a drawer or indorser gws from 
 the place of his actual residence to another place to dispose of property, which 
 occupies him for several weeks of time, does not make such town his place of 
 business within the moaning of the rule upon the subject of notice, in the absence 
 of all explanation as to the mode of doing the business, or of his relations to the 
 post-office there. 
 
 The case is stated in the opinion of tlie Court. 
 
 Ranney, J. The bills of exchange upon which this action was 
 brought, were drawn and indorsed by the plaintiff in error. His 
 liability upon them was conditional, and his obligation to pay 
 them depended upon their being duly dishonored, and legal notice 
 of such dishonor ; unless, indeed, he had waived such diligence 
 on the part of the holder. The bills were legally dishonored and 
 properly protested, and notices for all the parties conditionally 
 liable were in due time forwarded to the defendant in error, a 
 subsequent indorser of the bills. The right to recover was placed 
 upon two grounds : 1. That the defendant in error had, on the day 
 he received these notices, forwarded by mail, those directed to the 
 plaintiff in error, to his place of business at Chicago ; and, 2. That 
 a few days thereafter, in a personal interview with the defendant 
 in error, he had recognized his liability as still existing, and had 
 expressly promised to pay the bills. The verdict of the Jury may 
 have been founded upon the ground last stated, but, as there was 
 a conflict in the evidence upon it, there is nothing in the record to 
 show that it was ; and we are, consequently, compelled to examine 
 the facts applicable to the first ground, and the instructions of the 
 Court based upon that state of facts. 
 
 Stating these facts as broadly as any thing in the evidence will 
 warrant, they amounted to this : The plaintiff" in error was a resi- 
 dent of Morristown, New Jersey, and had no fixed residence in 
 the State of Ohio, or at Chicago ; but during most of the season 
 of 1856 had been engaged in the lumber business, staying at 
 Cleveland, and in Ottowa county, where he owned a saw-mill. That
 
 398 PROCEEDINGS ON NON-PAYMENT. 
 
 about the first of November he left Cleveland, and, before doing 
 so, informed the defendant in error that he was going to Chicago 
 to disjiose of a quantity of lumber which he w-as about shipping to 
 that place, and should return from there to Cleveland ; and had 
 not returned when the notices were mailed to him at Chicago on 
 the 22d of that month, — that being the very day upon which 
 they were received by the defendant in error from the notary in 
 New York. In point of fact, the plaintiff in error was in Chicago 
 when the notices were mailed to him, but probably left there before 
 they arrived, and shortly after was in Cleveland, where he was 
 met by the defendant in error, and fully informed of all that had 
 transpired. 
 
 Upon this state of the facts, counsel for the plaintiff in error 
 requested the Court to charge the jury, " That if the defendant's 
 residence was not in Chicago, or he was not engaged in any per- 
 manent business there, but was there temporarily, and for a tem- 
 porary purpose only, the sending to him, at Chicago, notices of the 
 protest of said bills of exchange would not be, unless the defendant 
 actually received them, due diligence, and sufficient to charge the 
 defendant with the payment of said bills." 
 
 To which the Court responded as follows : " That if the defend- 
 ant did not reside in Chicago, and was not engaged in any perma- 
 nent business there, but was there for a purpose merely temporary, 
 sending notices of protest to him at Chicago would not, as a propo- 
 sition of law, constitute due diligence sufficient to charge the 
 defendant. But if the defendant had gone to Chicago on business 
 which would detain him an indefinite period of time, and might 
 occupy him there during the remainder of the season of navigation 
 on the lakes, that might be the proper place to send the notices to 
 him ; and it was a question of fact for the jury to find, referring 
 to all the testimony on tliat question, whether the business of the 
 defendant at Chicago was of that character, or whether the plaintiff 
 had sufficient reason from his information derived from the defend- 
 ant, or from his own knowledge of the defendant's business, to believe 
 the defendant was at Chicago at the time the notices were sent by 
 him, such notices would be due diligence on the part of the plain- 
 tiff, and sufficient to charge the defendant." 
 
 If we were permitted to treat the matter as a question of injury 
 to the plaintiff in error, there would be no difficulty whatever in 
 saying that he lost nothing by the course pursued by the defendant
 
 WALKER V. STETSON. 399 
 
 in error, and probably was actually informed of the dishonor of 
 the bills sooner than he could have been, if the notices had been 
 sent to his residence in New Jersey. But we are not at liberty to 
 take so wide a view of the suliject. The law has very definitely 
 settled what shall constitute due diligence in such cases, and when 
 the facts are ascertained, it is the duty of the Court to determine, 
 as a question of law, whether reasonable diligence has been used ; 
 and it cannot be submitted to the jury as a question of fact. Bank 
 of Columl)ia r. Lawrence, 1 Peters, 578 ; ^ Bank of Utica v. Bender, 
 21 Wend. 643 ;''^ Carroll v. Upton, 3 Com. 272 ; Wheeler v. Field, 
 . 6 Met. 290 ; Belden v. Lamb, 17 Conn. 442 ; Lorain Bank of Elyria 
 V. Townsend, 2 Ohio .State, 343. The object has been to attain 
 the greatest possible certainty in a matter so vital to the interests 
 of the mercantile community, and the equities of particular cases 
 have not been allowed to interfere with the attainment of this 
 object. In this State, these rules have been fully adopted and 
 constantly enforced, and if we saw reason now to doubt their 
 justice or policy, we should find ourselves unable to change them, 
 without a corresponding change should take place in States and 
 countries with which our commercial relations are so extensive 
 and important. 
 
 The parties in this case not residing in the same place, there is 
 no doubt that it was a proper case for sending the notices by mail, 
 and in such cases it is well settled, that putting into the post-office 
 seasonably a notice properly directed is, in itself, due diligence, or 
 constructive notice, and will be sufficient, although it never reaches 
 the party to whom it is directed. Woodcock v. Ilouldsworth, 16 Mees. 
 & W. 124 ; Dickens v. Beal, 10 Peters, 570 ; Jones v. Lewis, 8 Watts 
 & S. 14. As to the itlace to which the notice should be directed, 
 it is equally well settled, that it should be sent to the drawer or 
 indorscr's residence or place of business, if either is known to 
 the holder, or, upon diligent inquiry, can be ascertained ; and if 
 neither are known nor can be found, the law dispenses with any 
 notice whatever. Bank of the United States v. Carneal, 2 Peters, 
 543 ; Chitty, Bills, 486 ; Bayley, Bills, 280. But while this is the 
 general principle, the spirit of the rule certainly is, that the notice 
 should^ be sent to such place that it will be most likely promptly to 
 reach the person for whom it is intended; and hence, in its appli- 
 cation to particular cases, it has often been held that a notice is 
 
 .' Post, -404. .» Post, 410.
 
 400 PROCEEDINGS ON NON-PAYMENT. 
 
 sufficient if sent to the post-oAicc where the party usually receives 
 his letters, although not that of his residence, as well as to that 
 where he resides ; and in all cases the notice may be sent to the 
 place pointed out by the drawer or indorscr, and in general will 
 be sufficient, both in reference to himself and parties who stand 
 behind him on the bill. Reid v. Payne, 16 Johns. 218 ; Bank of 
 Geneva v. Howlett, 4 Wend. 328 ; Bank of United States v. Lane, 
 3 Hawks, 453 ; Shelton v. Braithwaite, 8 Mees. & W. 252. Indeed, 
 it is suggested in the present case that the statement made by the 
 plaintiff to tlie defendant in error, sufficiently indicated Chicago as 
 the place to which the notices might be sent. Whatever of weight 
 this suggestion may properly have, it can only be considered by us 
 when the case in the Court below appears to have been decided 
 upon that ground. As yet this consideration has not been passed 
 upon in that Court. 
 
 How then, in view of the foregoing principles, stands the case 
 before us ? Was Chicago, in the sense of the legal rule, so far the 
 residence or place of business of the party as to make the notices 
 sent there constructive notice of the dishonor of the bills ? A very 
 careful examination of all the evidence now contained in the record 
 has fully satisfied us that it was not. Upon this point there is no 
 conflict in the evidence. The plaintiff below says the defendant 
 informed him he was going to Chicago " to dispose of a quantity 
 of lumber, which he was about shipping to that place, and should 
 return from there to Cleveland ; " that he knew the defendant had 
 been to Chicago, but did not know that he was there when the 
 notices were mailed, and had reason to believe he did not receive 
 them there, as he was soon afterward back to Cleveland. Tlie 
 defendant says he went to Chicago, and was there from the first to 
 the twenty-fourth of November, " disposing of a quantity of lum- 
 ber," and in the afternoon of the day last named, he left Chicago, 
 and arrived at Cleveland on the morning of the 26th ; that he had 
 no permanent business at Chicago, and was there for a temporary 
 purpose only, and never received the notices sent. 
 
 The question is then reduced to this: Does going to a city to 
 dispose of property, wliicli occupies the party for three weeks of 
 time, without one word of explanation as to the mode of dqing the 
 business, or his relations to the post-office, make such city his place 
 of business within the meaning of the commercial rule ? If we 
 were to affirm that it did, the principle must have a "very wide,
 
 WALKER V. STETSON. 401 
 
 and as we think a very disastrous, application to a large class of 
 business men, dealing more largely than any other in commercial 
 paper. Tlie stock and j)roduce of the West are taken to the east- 
 ern cities, by persons engaged in that business, to be sold ; and 
 most western merchants, once or twice in each year, spend from a 
 few days to a few weeks at the same places, replenishing their 
 stocks oi goods. Did anybody ever suppose that these persons 
 were bound to watch the post-oflRces in those cities for notices of 
 the protest of their j)aper ? We think not ; and yet if these notices 
 are sufficient, we see no distinction to lie taken between this case 
 and theirs. It is very certain tliat no decided case has given any 
 countenance to the sujtposition that such a notice, not received by 
 the party, would be sulhcient. 
 
 The cases of Tunstall v. Walker, 2 Sm. & M. »);]8, and Chou- 
 teau r. Wel)ster, G Met. 1, have, perhaps, gone to the verge of the 
 law, but they are very far from reaching this case. In each of 
 those cases the defendant was, at the time the notice was forwarded 
 to him at Washington, a senator in Congress, and in actual attend- 
 ance on that body. The first of these cases had been before decided 
 by the High Court of Errors and Appeals, and is. reported in 1 How. 
 Miss. 259. Upon the then state of the evidence, the Court held 
 that a notice sent to Washington city, when the senator had a resi- 
 dence in tiie .State which he represented, would not l)e sufficient to 
 charge him as an indorser ; and the reason assigned is, that " his 
 absence was but temj)orary, and the duration of that absence un- 
 certain. In case of such absence from home, the law presumes 
 that some member of the family is still at the residence, and that 
 communications will l>e forwarded to the proper address." But, 
 upon a further trial of the case, it was proved that the defendant 
 had no actual residence in Mississippi, and had left no agent at his 
 last place of abode to receive or forward his letters ; that from the 
 fourth of February, when the notice was forwarded, to the fourth of 
 March ensuing, he was in the actual discharge of his official duties 
 at Washington, and in the daily hal)it of receiving his letters at 
 the post-office in that city ; and, upon this state of facts, the Court 
 held the notice sent to that city sufficient. In the case of Cliouteau 
 V. Webster, the defendant had left an agent in Boston in charge of 
 his business, but this was unknown to the holder of the paper ; 
 and upon an agreed statement of the facts showing that the notice 
 was, in due time, deposited in the post-office directed to the de- 
 
 26
 
 402 PROCEEDINGS ON NON-PAYMENT. 
 
 fendant at Washington, where he was then, and for some time 
 afterward, in attendance upon a session of Congress ; and that all 
 letters addressed to members were regularly and immediately 
 taken from the post-office by officers of the Senate, and delivered 
 to such members, the Court held the notice sufficient. C. J. Shaw, 
 after premising the caution that the " decision is founded on the 
 circumstances of the particular case, and may be varied tby other 
 facts," proceeds to place it upon the ground that, while the de- 
 fendant's domicile was at Boston, his " actual residence " was at 
 Washington, " to which, for the time being, he was fixed by his 
 public duty." We have no doubt of the correctness of these 
 decisions ; and no comment can be necessary to distinguish them 
 from a case where the party simply visits a place for a purpose 
 clearly temporary and special, with no proof to show that he has 
 identified himself with its business, or establish any relations with 
 its post-office. Regarding that as this case, we are clearly of the 
 opinion that the plaintiff in error was entitled to the instruction 
 he asked, and that the learned judge erred in the qualifications he 
 annexed to the instruction given. 
 
 If we were entirely satisfied of the correctness of this qualifica- 
 tion in the abstract, we should still be compelled to reverse the 
 judgment, for the reason that there was no evidence to give any 
 wider scope to the inquiry than that contemplated in the instruction 
 asked for. Tliat this was an error lias been settled by this Court, 
 and the value of jury trial will very much depend upon the observ- 
 ance of the principle. In Bain v. Wilson, 10 Ohio State, 16, the 
 instruction asked and given, as well as the qualification annexed 
 by the Court, were all held to be a correct exposition of the law ; 
 and yet, as " there was no evidence before the jury which required 
 or even authorized the qualification annexed by the Court," the 
 judgment was reversed. The Court say : " The judge must con- 
 fine himself in his remarks to the law and evidence of the case. 
 So far from being under any obligation to call the attention of the 
 jury to a conjectural state of facts, it would be highly improper for 
 him to do so." And the reason for this is very pertinently stated 
 in one of the cases referred to : " Jurors are constantly inclined 
 to look to the opinion of the judge for instruction as to what is 
 and what is not evidence. When he tells them to determine a 
 given problem from the evidence before them, they can hardly do 
 otherwise than infer that, in his judgment, there is evidence upon
 
 WALKER V. STETSON. 403 
 
 wliich their verdict, when given, may rest." Fa/ v. Oriuasteed, 
 10 Barb. ;521. 
 
 J3ut we are very far from being satisfied that the qualification 
 annexed in this case does contain a correct statement of the law. 
 After stating that if the plaintifl" in error was in Chicago for a pur- 
 pose merely temporary, the notices would not be sufficient, the Court 
 proceed_to say, that if his business there was sucli as would detain 
 him an indefinite time, and " might occupy him there during the 
 remainder of the season of navigation on the lakes," it might be 
 proper to send the notices to that place. If he went there for the 
 special purpose stated in the evidence, we do not think it would 
 make any difference that he could not tell precisely when he 
 would be able to sell his property ; and when it is remembered 
 that this was in the month of November, we do not think that a 
 delay in effecting his object until the navigation should close, 
 would ^e in any way decisive. At most, it would be liut a cir- 
 cumstance, entitled to its just weight with others in determining 
 tlie question whether Chicago was his place of business, or whether 
 he was a mere sojourner there for a special and limited purpose. 
 In the one case, he might be charged by a notice sent to that post- 
 office, because he is presumed to have established relations with 
 it ; in the other, no such presumption arises, and he can be charged 
 only upon the actual receipt of the notice. Indeed, when the 
 whole instruction is taken together, it amounts to little less than a 
 request to the jury to go beyond the uncontradicted and legally 
 insufficient facts in evidence, and inquire into the motives of the 
 plaintifT below ; and concluding with the positive instruction that, 
 if he had sufficient reason " to believe the defendant was at Chicago 
 at the time the notices were sent," they would be sufficient to 
 charge him. 
 
 Without perhaps intending to do so, it seems to us that the 
 Court has incautiously surrendered its rightful province to judge 
 of the sufficiency of the facts to constitute due diligence, and has 
 devolved that duty upon the jury. To approve of that, would be 
 to abandon all that has been gained in the way of certainty, in the 
 determination of questions of this character. 
 
 While it is true that the rules necessary to be observed in charg- 
 ing parties conditionally liable upon negotiable paper are strict, 
 and require much care and promptitude on the part of the holder ; 
 yet they are such as long experience has demonstrated to be neces-
 
 404 PROCEEDINGS ON NON-PAYMENT. 
 
 sarj, and a substantial compliance with them lies at the very foun- 
 dation of the contract into which the drawer or indorser enters. 
 His contract is conditional, and to make it absolute, without a fair 
 performance of the conditions, would be to make a contract for 
 him, instead of enforcing the one he has made for himself. 
 
 The judgment must be reversed, and the cause remanded to the 
 District Court of Cuyahoga county for further proceedings. 
 
 At the time a promissory note was made, the maker and indorser both re- 
 sided in Rochester, at which place the note was dated, and it was discounted at 
 the plaintiffs' bank, wliich was also located there, and where the plaintiffs re- 
 sided. It was held that the plaintiffs had the right, when the note matured, to 
 assume that the indorser still resided in Rochester, and to act accordingly in 
 taking the requisite steps to charge him as such, unless they knew that in the 
 mean time he had changed his residence. Ward v. Perrin, 54 Barb. 89. See 
 further upon this subject. Bliss i\ Nichols, 12 Allen, 443 ; Berridge v. Fitzger- 
 ald, Law Rep. 4 Q. B. 639; Bank of Columbia v. Lawrence, infra, and note. 
 
 The Bank of Columbia, Use of the Bank of tfie United 
 States, v. John Lawrence. 
 
 (1 Peters, 578. Supreme Court of the United States, January, 1828.) 
 
 Where notice should be sent. — Actual notice to an indorser is not required ; due dili- 
 gence only is necessary. Therefore, in the case of an indorser who lived in the 
 country, two or three miles distant from the place (G.) at which the note in ques- 
 tion was payable, where he usually received his mail ; held, that notice left in the 
 post-office at G:, directed to him at that place, was sufficient to charge him. 
 
 The case is stated in the opinion of the Court. 
 
 Thompson, J. This case comes before the Court upon a writ of 
 error to the Circuit Court of the District of Columbia. 
 
 The defendant was sued as indorser of a promissory note for 
 '$5000, made by Joseph Mulligan, bearing date the fifteenth of 
 July, 1819, and payable sixty days after date, at the Bank of Co- 
 lumbia. The making and indorsing the note, and the demand of 
 payment, were duly proved ; and the only question upon the trial 
 was touching the manner in which notice of non-payment was
 
 BANK OF COLUMBIA V. LAWRENCE. 405 
 
 given to the indorser ; no objection being made to tbe suflficiency 
 of the notice in point of time. 
 
 The material facts before the Court npon tliis part of the case, 
 as shown by the l»ill of exceptions, were : Tliat the banking-liouse 
 of tlie plaintiffs was in Georgetown, at which place the note ap- 
 pears to be dated. Tliat some time before tlie note fell due the 
 defendant had lived in the city* of Washington, and carried on 
 the business of a morocco leather-dresser, keeinng a shop and liv- 
 ing in a house of his own in the said city. That about the year 
 1818, he sold his shop and stock in trade and relinquished his 
 business, and removed with his family to a farm, in Alexandria 
 county, within the District of Columbia, and about two or three 
 miles from Georgetown. That the Georgetown i)Ost-office was the 
 nearest post-office to his place of reeidence, and the one at which 
 he usually received his letters. 
 
 The notice of non-payment was put into the post-office at George- 
 town, addressed to the defendant at that place. It was proved on 
 the part of the defendant, that at the time of his removal into the 
 country, and from that time until after the note in question fell 
 due, he continued to be the owner of the house in Washington, 
 where he formerly lived, and which was occupied by his sister-in- 
 law, Mrs. Harbaugh. That he came frequently and regularly every 
 week, and as often as two or three times a week, to this house ; 
 where he was employed in winding up his former business and 
 settling his accounts, and where he kept his books of account, and 
 where his bank notices, such as were usually served by the runner 
 of the bank on parties who were to pay notes, were sometimes left, 
 and sometimes at a shop opposite to his house ; and where also 
 his newspapers and foreign letters were left. That his coming to 
 town and so employing himself was generally known to persons 
 having business with him. That his residence in the country was 
 known to the cashier of the bank. Tiiat there was a regular daily 
 mail from Georgetown to the city of Washington, and that the 
 defendant's house was situated in Washington less than a quarter 
 of a mile from Georgetown. 
 
 There was also some evidence given on the part of the plaintiffs 
 tending to show that the usage of the bank in serving notices in 
 similar cases, was conformably to the one here pursued, and that 
 the defendant was apprised of such usage. But that the testi- 
 mony may be laid out of view, as this Court does not found its
 
 406 PROCEEDINGS ON NON-piYMENT. 
 
 opinion in any measure upon that part of the case. Upon this 
 evidence the plaintiffs prayed the Court to instruct the, jury, that 
 it was not incumbent on them to have left the notice of the non- 
 payment of the note at the house occupied by Mrs. Harbaugh, as 
 stated in the evidence ; but that it was sufficient, under the cir- 
 cumstances stated, to leave the notice at the post office in George- 
 town ; which instructions the Court refused to give, but instructed 
 the jury that their verdict must be governed according to their 
 opinion and finding on the subject of usage which had been given 
 in evidence. 
 
 The jury found a verdict for the defendant. 
 
 From this statement of the case it appears that the note was made 
 at Georgetown, payable at the Bank of Columbia in that town. 
 That the defendant, when he indorsed the note, lived in the county 
 of Alexandria, within the District of Columbia, and having what 
 is alleged to have been a place of business in the city of Wash- 
 ington ; and the notice of non-payment was put into the George- 
 town post-office, addressed to the defendant at that place, by which 
 it is understood that the notice was either inclosed in a letter, or 
 the notice itself sealed and superscribed with the name of the de- 
 fendant, with the direction " Georgetown " upon it ; and whether 
 this notice is sufficient is the question to be decided. 
 
 If it should be admitted that the defendant had what is usually 
 called a place of business in the city of Washington, and that no- 
 tice served there would have been good, it by no means follows 
 that service at his place of residence in a different place, would 
 not be equally good. Parties may be and frequently are so situ- 
 ated that notice may well be given at either of several places. 
 But the evidence does not show that the defendant had a place of 
 business in the city of Washington, according to the usual com- 
 mercial understanding of a place of business. There was no pub- 
 lic notoriety of any description given to it as such. No open or 
 public business of any kind carried on, but merely occasional em- 
 ployment there two or three times a week in a house occupied by 
 another person ; and the defendant only engaged in settling up 
 his old business. In this view of the case, the inquiry is narrowed 
 down to the single point, whether notice through the post-office at 
 Georgetown was good ; the defendant residing in the country two 
 or three miles distant from that place in the county of Alexan- 
 dria.
 
 BANK OF COLUMBIA V. LAWRENCE. 407 
 
 The general rule is, that the party whose duty it is to give 
 notice in such cases is bound to use due diligence in communicat- 
 ing such notice. But it is not required of him to see that the 
 notice is brought home to the party. He may employ the usual 
 and ordinary mode of conveyance, and, whether the notice roaches 
 the party or not, the holder has done all that the law requires of him. 
 
 It seems at this day to be well settled, that when the facts are 
 ascertained and undisj)Utcd, what shall constitute due diligence is 
 a question of law. This is certainly best calculated to have fixed 
 on uniform rules on the subject, and is highly important for the 
 safety of holders of commercial paper. 
 
 And these rules ought to be reasonable and founded in general 
 convenience, and with a view to clog as little as possible, consist- 
 ently with the safety of parties, the circulation of paper of this 
 description ; and the rules which have been settled on this sultject 
 have had in view these objects. Thus, when a party entitled to 
 notice, has in the same city or town a dwelling-house and counting- 
 house or place of business within the compact part of such city or 
 town, a notice delivered at either place is sufficient; and if his 
 dwelling and place of business be within the district of a letter- 
 carrier, a letter containing such notice, addressed to the party and 
 left at the post-office would also be sufficient. All these are usual 
 and ordinary modes of communication, and such as affijrd reason- 
 able ground for presuming that tlie notice will be brought home to 
 the party without unreasonable delay. So when the holder and 
 indorser live in diffijrent post-towns, notice sent by the mail is 
 sufficient, whether it reaches tlie indorser or not. And this for the 
 same reason, that the mail being a usual channel of communica- 
 tion, notice sent by it is evidence of due diligence. And for the 
 sake of general convenience it has been found necessary to enlarge 
 this rule. And it is accordingly held, that when the party to be 
 affected by the notice resides in a diffi3rent place from the holder, 
 the notice may be sent by the mail to the post-office nearest to the 
 party entitled to such notice. It has not been thought advisable, 
 nor is it believed that it would comport with practical convenience, 
 to fix any precise distance from the post-office within Avhich the 
 party must reside, in order to make this a good service of the 
 notice. Nor would we be understood as laying it down as a uni- 
 versal rule, that the notice must be sent to the post-office nearest 
 to the residence of the party to whom it is addressed. If he was
 
 408 PROCEEDINGS ON NON-PAYMENT. * 
 
 in the liabit of receiving his letters through a more distant post- 
 office, and that circumstance was known to the holder or party 
 giving the notice, that might be the more proper channel of com- 
 munication, because he would be most likely to receive it in that 
 way ; and it would be the ordinary mode of communicating in- 
 formation to him, and therefore evidence of due diligence. 
 
 In cases of this description, where notice is sent by mail to a 
 party living in the country, it is distance alone, or the usual course 
 of receiving letters, which must determine sufficiency of the notice. 
 The residence of the defendant, therefore, being in the county of 
 Alexandria, cannot affiact the question. It was in proof that the 
 post-office in Georgetown was the one nearest his residence, and 
 only two or three miles distant, and through which he usually re- 
 ceived his letters. The letter containing the notice, it is true, was 
 directed to him at Georgetown. But there is nothing showing 
 that this occasioned any mistake or misapprehension with respect 
 to the person intended, or any delay in receiving the notice. And 
 as the letter was there to be delivered to the defendant, and not 
 to be forwarded to any other post-of3fice, the address was unimpor- 
 tant, and could mislead no one. 
 
 No cases have fallen under the notice of the Court which have sug- 
 gested any limits to the distance from the post-office within which 
 a party must reside in order to make the service of the notice in 
 this manner good. Cases, however, have occurred, where the dis- 
 tance was much greater than in the one now before the Court, and 
 the notice held sufficient. 16 Johns. 218. In cases where the party 
 entitled to notice resides in the country, unless notice sent by mail 
 is sufficient, a special messenger must be employed for the pur- 
 pose of serving it. And we think that the present case is clearly 
 one which does not imposfe upon the plaintiffs such duty. We do 
 not mean to say no such cases can arise, but they will seldom if 
 ever occur, and, at all events, such a course ought not to be re- 
 quired of a holder, except under very special circumstances. 
 Some countenance has lately been given to this practice in Eng- 
 land in extraordinary cases, by allowing the holder to recover of 
 the indorser the expense of serving notice by a special messenger. 
 The case of Pearson v. Crallan, 2 Smith, 404 ; Chitty, 222, n., is 
 one of this description. But in that case, the Court did not say 
 that it was necessary to send a special messenger ; and it was left 
 to the jury to decide whether it was done wantonly or not. The
 
 B-ANK OF OOLUMBIA r, LAWRENCE. 409 
 
 holder is not bound to use the mail for the purpose of sending no- 
 tice. He may employ a special mess(3ngcr if he pleases, hut no 
 case has l)ccn i'ouiid where the English courts have directly de- 
 cid(Ml that he must. To compel the holder to incur such exjicnse 
 ^vould be unreasonable, and the policy of adopting a rule that will 
 throw such an increased charge upon commercial paper on the 
 party bound to pay, is at least very questionable. 
 
 We are accordingly of opinion that the notice of non-payment 
 was duly served upon the defendant, and that the Court erred in 
 refusing so to instruct the jury. 
 
 Judgment reversed, and venire facias de novo awarded. 
 
 Alany of tlu; riiU-s relating to tliis subject are common to the sul)ject of pre- 
 sentment, to wliich the reader is referred. There is one material distinction, 
 however, \vhi( h is worthy of note ; that is, that, though presentment should be 
 made only at the residence or place of business of the maker or acceptor, per- 
 sonal notice to a drawer or indorser, in due time, is good wherever given. 
 Hj-sloj) r. Jones, 3 McLean, 9G. 
 
 If there are two post-offices in the same town, notice in a letter directed 
 to the indorser generally at the town or to either of the offices, will be good, 
 uidt'ss the party sending notice knew, or might by inquiry have learned, 
 wliicii was the proper office. Upon this subject Shaw, C. J., in Morton v. 
 Westccjtt, 8 ("ush. •125, said : "It seems well settled that where there are two 
 post-offices in a town, notice by letter to an indonser addressed to him at the 
 town generally is sufficient, unless the party addressed has been generally accus- 
 tomed to receive his letters at one of the offices in particular, and to have his 
 li-ttirs addressed to him there by his correspondents. Such being the rule, the 
 plainiiff proves his case j)rima J'acie by proving notice by letters addressed to 
 the defendant at the town generally. If then the defendant would rebut this 
 presumption of fact, and bring himself within the exception, it lies on him to 
 l)rovc that he did usually receive his letters at one office only, and that this 
 miL;ht have been known by reasonable incjuiry at the place where the letter was 
 mailed. Without this proof it may be true that the defendant received his let- 
 ters habitually as well at one post-otlice as the other, and then the plaintiff's 
 jir'uiKi I'dcic proof remains uurebutted, and he must prevail." See Downer v. 
 Ivcmcr, L'l Wend. 10, to the same effect. See also Shaylor r. Mix, 4 Allen, 351, 
 cited at length, ;k>.9<, 413; Woods v. Neeld, 44 Penn. State, 86. 
 
 If the party to be notified lives in a town in which there is no post-office, it 
 seems that notice by letter sent to the nearest postroffice will be sufficient. Shed 
 V. Hntt, 1 Pi.k. 401, 411 ; Ireland r. Kip. 11 Johns. 232; Union Bank i'. Sto- 
 ker, 1 La. An. 269. And it is held th.it where the nearest post-office is unknown, 
 if diligent inquiry is made to ascertain the fact, and notice is sent accordingly, 
 that is sufficient. Marsh v. Barr, Meigs, 68; s. c, 9 Yerg. 253. See Moore v. 
 Ilardcastle, 11 Md. 4S6 ; Davis v. Beckham, 4 Humph. 53; Davis v. Williams, 
 :^eck, 191 ; Bank of United States i\ Carneal, 2 Peters, 543, 551. ^ee 
 also Woods V. Neeld, 44 Penn. State, 86.
 
 410 PROCEEDINGS ON NON-PAYMENT. 
 
 Where the drawer or iiulorscr receives his mail at either one of several post- 
 ofTices, notice may he sent to either. Bank of United States v. Carneal, 2 Peters, 
 543; Bank of Louisiana v. Tournillon, 12 La. An. 132. See also Bank of Gen- 
 eva V. Hewlett, 4 Wend. 328 ; Chouteau v. Webster, 6 Met. 1 ; Bank of Colum- 
 bia V. Magruder, 6 Harris & J. 172 ; Seneca Co. Bank v. Neass, 5 Denio, 329, 
 338 ; Ransom v. Mack, 2 Hill, 587 ; Mercer v. Lancaster, 5 Penn. State, 160. 
 
 As to the employment of messengers discussed in the principal case, the fol- 
 lowing points are settled : If the holder elect to send notice by private convey- 
 ance instead of by mail, his responsibility continues until delivery of the notice, 
 either personally to the party to be charged, or at his place of business or res- 
 idence. Van Vechten v. Pruyn, 13 N. Y. (3 Kern.) 549, 555. In this case if it 
 reach its destination on the same day, within business hours, on which it would 
 have arrived by mail, it is in time ; but if it does not reach the place until the 
 next day, it is too late. Bancroft v. Hall, Holt, N. P. 476 ; Beeching v. Gower, 
 id. 315, note; Darbishire v. Parker, 6 East, 3. See Jarvis v. St. Croix Manuf. 
 Co., 23 Maine, 287. 
 
 Bank of Utica v. Bender. 
 
 (21 Wendell, 643. Supreme Court of New York, October, 1839.) 
 
 r 
 
 Diligence. Law and fact. — When the facts are all found, what is reasonable diligence 
 is a question of law. 
 
 Reasonable diligence, not excessive, reqidred. — The holder of a bill inquired of the drawer, 
 upon discounting the same, where the defendant, an accommodation indorser of 
 the drawer, resided. Notice was sent according to the answer given. Held, that 
 this was reasonable diligence, nothing having occurred to lead the holder to dis- 
 trust the information received, though the indorser actually lived in a different 
 place from that named, and received his mail in a third. 
 
 The case is sufficiently stated iu the head-note and in the opin- 
 ion of the Court. 
 
 Bronson, J. When the facts are all ascertained, what is reason- 
 able diligence is a question of law. " This results," said Spencer^ 
 J., in Bryden v. Bryden, 11 Johns. 187, "from the necessity of 
 having some fixed legal standard, by which men may not only 
 know the law, but be protected by it." Bayley, Bills, 142, 144, 
 and notes. The judge was not requested to submit the question 
 of due diligence to the jury ; but had it been otherwise, he was 
 right in treating it as a question of law, there being no dispute 
 about the facts.
 
 BANK OF UTICA V. BENDER. 411 
 
 Was there reasonal)lc dilifronce in endeavoring to ascertain the 
 place to which the notice should he directed ? Not knowing where 
 the defendant lived, the plaintiffs inquired of the drawer, for whose 
 accommodation the hill was discounted, and relying upon the infor- 
 mation given hy him, they sent the notice to Chittenango, when it 
 should have been sent to Manlius or Ilartsville. This is not like 
 the case of the Catskill Bank v. Stall, 15 Wend. 304, affirmed in 
 error, 18 id. 406 ; for there the person whottook the note to the 
 bank, and gave the information on which the notice was misdi- 
 rected, was the agent of the indorsers, and they had no right to 
 complain that credit had been given to what was, in effect, their 
 own representation. 
 
 But 1 am unable to distinguish this from the case of the Bank of 
 Utica V. Davidson, 5 Wend. 587. That was an action against the 
 indorser of a note which had been discounted for the accommoda- 
 tion of the maker, and the notice of protest was sent to Bainbridge, 
 when it should have been sent to Masonville, where the indorser 
 lived. The person who took the note to the bank, and gave the 
 information on which the plaintiffs acted, was the agent of the 
 maker, and it was held that there had been due diligence, and 
 judgment was rendered for the plaintiffs. Sutherland^ J., men- 
 tions the fact that the note was dated at Bainbridge, where the 
 notice was sent, and that the indorser had but recently removed 
 from that place ; but the case was put mainly on the ground, that 
 the plaintiffs had a right to rely on the information given by the 
 agent of the maker when the note was discounted. In the case at 
 bar, notice was directed to the place where the bill purports to 
 have been drawn ; and the only diflference between this and the 
 case of the Bank of Utica v. Davidson, consists in the single fact, 
 that the indorser of this bill had never lived at Chittenango. That 
 does not, I think, furnish sufficient ground for a solid distinction 
 between the two cases. 
 
 How does the question stand upon principle ? It is not absolutely 
 necessary that notice should be brought home to the indorser, nor 
 even that it should be directed to the place of his residence. It is 
 enough that the holder of a bill make diligent inquiry for the in- 
 dorser, and acts upon the best information he is able to procure. 
 If after doing so, the notice fail to reach the indorser, the misfor- 
 tune falls on him, not on the holder. There must be ordinary or 
 reasonable diligence, — such as men of business usually exercise
 
 412 PROCEEDINGS ON NON-PAYMENT. 
 
 when their interest depends upon obtaining correct information. 
 The holder must act in good faith, and not give credit to doubtful 
 intelligence when better could have been obtained. 
 
 Now, what was done in this case ? The plaintiffs inquired of 
 Cobb, the drawer of the bill, who would of course be likely to know 
 where his accommodation indorser lived. Tiiey saw that the de- 
 fendant, by lending his name, had evinced his confidence in the 
 integrity of the drawer; and so far as appears, nothing had then 
 occurred which should have led the plaintiffs, or any prudent man, 
 to distrust the accuracy of Cobb's statements concerning any matter 
 of fact within his knowledge. He professed to be able to give the 
 desired information, and his answer was unequivocal. If Cobb 
 was worthy of being believed, there was no reason for doubt that 
 the indorser resided at Chittenango. The plaintiffs confided in 
 this information, and acted upon it. 
 
 But it is said that Cobb had an interest in giving false informa- 
 tion for the purpose of protecting his accommodation indorser, and 
 consequently that the plaintiffs should not have trusted to his 
 statement. He certainly had no legal interest in the question. 
 If the bill was not accepted and paid by the drawee, Cobb, as the 
 drawer, was bound to pay and take it up from the holder ; and if 
 the indorser was charged, Cobb was bound to see him indemnified. 
 In a legal point of view, it was wholly a matter of indifference to 
 him whether notice of the dishonor of the bill should be brought 
 home to the indorser or not. Before any thing can be made out 
 of the objection, we must say that the plaintiffs were bound to sus- 
 pect that Cobb, when he presented the bill, intended to commit a 
 fraud ; that he was obtaining a discount upon a draft which he 
 knew would not be paid, either by the drawee or by himself; that 
 the money was to be lost to some one, and that he preferred the 
 loss should fall on the holder rather than the indorser ; and conse- 
 quently, that he would give false information concerning the proper 
 place for directing notice. It is quite evident that the plaintiffs 
 entertained no such suspicion ; for if they had, they would neither 
 have confided in the statements of Cobb, nor would they have 
 loaned him the money. I think they were not bound to believe 
 that a fraud was intended. There was nothing in the circum- 
 stances of the case calculated to induce such a belief in the mind 
 of any man of ordinary prudence and foresight. This was an every- 
 day business transaction, where men must of necessity repose a
 
 BANK OF UTICA V. BENDER. 413 
 
 reasonable degree of confidonce in each other, and no one can be 
 charj^cablc with a want of diligence for trusting to information 
 which would usually l)e deemed satisfactory among business men. 
 If there was any ground whatever for suspecting fraud on the part 
 of Cobb, it was, to say tlie least, very slight, and was fully counter- 
 balanced by the fact that the defendant had testified his confidence 
 in Cobb by lending his name as indorser. The plaintiffs have, I 
 think, lost nothing by trusting to informat^n derived from the 
 drawer of tlic bill, instead of seeking it from some other individual. 
 The case then comes to this. The plaintiffs applied for infor- 
 mation to a man worthy of belief, and who was likely to know 
 where the indorser lived. They received such an answer as left 
 no reasonable ground for doubt that Chittenango was the place to 
 which the notice sliould be sent. I think they were not bound to 
 push the inquiry further. Men of business usually act upon such 
 information. They buy and sell, and do other things affecting 
 their interest, upon the credit which they give to the declarations 
 of a single individual concerning a particular fact of this kind 
 within his knowledge. This is matter of common experience. 
 Ordinary diligence in a case like this can mean no more than that 
 the inquiry shall be pursued until it is satisfactorily answered. 
 This is the only practical rule. If the holder of a bill is required 
 to go further, it is impossible to say where he can safely stop. 
 Would it be enough to inquire of two, three, or four individuals, 
 or must he seek intelligence from every man in the place likely to 
 know any thing about the matter ? It would be difficult, if not 
 impossible, to answer this question. Neio (rial denied. 
 
 So where the holder of a bill inquired of a person trading at a particular 
 place if he knew where an indorser resided, and lie rei)lied that lie resided at the 
 place where he traded, and it did not appear that the holder had any better 
 means of knowledge, it was held that he had used due diligence to learn the resi- 
 dence of the indorser, and that notice put into the post-office directed to him 
 there was sufficient. Lambert r. Ghiselin, 9 How. 552. 
 
 It was further held in this case that after due diligence had been used and no- 
 tice sent accordingly, the holder is not obliged to give any further notice, though 
 he afterwards discover that the notice was directed to the wrong j)lace. But 
 Beale i\ Parrish, 20 N. Y. (6 Smith) 407, holds a contrary view; without no- 
 ticing Lambert v. Ghiselin, however. And the doctrine of Heale v. Parrish is 
 not stated with perfect confidence. See latter portion of the Opinion by Mr. 
 Justice Grover. 
 
 That due diligence is a question of law when the facts are ascertained, is well 
 settled. See Walker v. Stetson, ante, pp. ,'397, 399, and cases cited.
 
 414 EXCUSES OP PRESENTMENT AND NOTICE. 
 
 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 4 
 The Windham Bank v. Norton, Converse, & Co. 
 
 (22 Connecticut, 213. Supreme Court, July, 1852.) 
 
 Unavoidable accident. — Presentment of commercial paper must be made on the day on 
 which it becomes due, unless it is out of the power of the holder, hy the use of 
 reasonable diligence to present it. Failure of such presentment is excused by any 
 * inevitable or unavoidable accident, not attributable to the fault of the holder, pro- 
 vided he make presentment as soon thereafter as he is able. 
 
 This was an action of assumpsit, brought by the Windham 
 Bank, as holders of a bill of exchange, against the defendants, as 
 indorsers. 
 
 The bill of exchange referred to was drawn by George Hobart, 
 of Norwich, in this State, upon Mansfield, Hall, and Stone, of Phila- 
 delphia, and by them accepted, for 8417.26; dated January 31, 
 1849, and payable four months after date, to the order of the de- 
 fendants. 
 
 The declaration was in the common form, and contained the 
 usual averments of a due presentment of the bill in question, and 
 notice of its non-payment. The defendants pleaded the general 
 issue, and the cause came on for trial at Brooklyn, October term, 
 1851. The facts were found by the Court, by agreement of the 
 parties, as follows. Said bill of exchange, was, on the day of its 
 date, accepted by said Mansfield, Hall, and Stone, " payable at the 
 Farmers' and Mechanics' Bank," in the city of Philadelphia. On 
 
 the day of February, 1849, the defendants procured said draft 
 
 to be discounted by the plaintiffs, and then indorsed and delivered 
 it to them. During the same month of February, the plaintiffs 
 forwarded said draft, by the United States mail, to the Ohio Life 
 and Trust Co., a banking corporation in the city of New York, for 
 collection, and indorsed the same to Iheir cashier, as follows: 
 " Pay G. S. Coe, Esq., cashier, or order; " signed, " Samuel Bing-
 
 WINDHAM BANK V. NORTON. 415 
 
 ham, cashier." The bill, so indorsed, was, in a day or two there- 
 after, and in due cour.sc of mail, received by said Ojjio Life and 
 Trust Co. The third day of grace, June 3d, being Sunday, the 
 draft was actually due and payable on .Saturday, June 2d. During 
 the year 1849, there were two mails per day, each way, between 
 New York and Philadclpliia, — those for the latter place, leaving 
 New York, one at nine a.m., the other at four and a half p.m., and 
 both due at Philadelphia in five hours from i,hcir departure. The 
 Farmers' and Mechanics' Bank were tiic Philadelphia correspondents 
 of the Ohio Life and Trust Co., and communication? by mail passed 
 between them daily. On the morning of June 1st, the cashier of 
 the Ohio Life and Trust Co. inclosed this draft with others, ad- 
 dressed in the proper and usual mode, to the Farmers' and Mechan- 
 ics' Bank, and deposited said letter in the United States' post-office, 
 at the city of New York, in season for the afternoon mail of that 
 day for Philadclpina. That letter was duly deposited in said mail, 
 and said mail left New York, and arrived at Philadelphia in due 
 and usual time ; but the mail-bags, containing the letters for Phil- 
 adelphia, were, by the post-office clerks in the office at New York, 
 marked to be forwarded to Washington, and were, therefore, 
 not delivered at Philadelphia, but carried to Washington. At 
 Washington, the mistake was discovered, and said mail-bags for- 
 warded to Philadelphia, which place they reached in the course of 
 Sunday, June 3d. On the morning of the next day said letter, 
 with the draft inclosed, was delivered from the post-office at Phila- 
 delphia, to said Farmers' and Mechanics' Bank, who, by their 
 cashier, refused payment of the same, and between the hours of 
 nine and ten a.m. of the day placed said draft in the hands of a 
 notary public, for protest. Said notary, between the hours of nine 
 A.M. and three p.m. of said day presented said draft at the counter of 
 said bank for payment, and received for answer from said cashier 
 that he was ordered by the acceptors not to pay it, and that, had 
 he presented it on Saturday, June 2d, he should have given him 
 the same answer. Said notary thereupon, on said 4th day of June, 
 in due and proper form, protested said draft, and made out written 
 notices to the drawer and the several indorsers, of the non-payment 
 of said draft, and inclosed said notices, with the notice of protest, 
 in a letter, and on the same day deposited the same in the post- 
 office in said Philadelphia, duly addressed to George S. Coe, cash- 
 ier of Ohio Life and 'Trust Co., New York, who had indorsed said
 
 416 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 draft to tlie Farmers' and Mechanics' Bank, and by whom said 
 letter was, in due course of mail, received. Said Coe,on the same 
 day in which lie received tliem, inclosed said letter of protest and 
 said notices, except the one to himself, in a letter duly addressed 
 to the plaintiffs, and deposited tlie same in. the city of New York 
 in season for the next mail. The same was, in due course of mail, 
 received by the plaintiffs, who, on the day of the receipt thereof, 
 inclosed said notices to the defendants, as indorsers, and said 
 notice to said drawer (his residence being unknown), in a letter 
 duly addressed to the defendants, and deposited it in the post-office 
 at Windham, in season for the next mail, and the same was, in due 
 course of mail, received by the defendants. Mansfield, Hall, and 
 Stone became insolvent, and suspended payment on the twelfth day 
 of April, 1849, and on the next day, sent to the Farmers' and Me- 
 chanics' Bank the following notice in writing: — 
 
 " E. N. Lewis, Esq., Cash. 
 
 " You will please pay no more notes or drafts drawn by us, and 
 payable at your bank, until further notice, as they will not be 
 provided for. 
 
 " Very respectfully yours, 
 
 " Mansfield, Hall, and Stone." 
 
 No further notice was sent, and said bank, from that time for- 
 ward, acted upon this order, and refused payment of all notes or 
 drafts, payable at the bank, by said firm. The business hours of 
 the Philadelphia banks, were, in 1849, from nine a.m. to three p.m. 
 Owing to the miscarriage of the United States mail, as above 
 stated, said draft was not presented for payment on Saturday, 
 June 2d, when it became due, and was never presented for pay- 
 ment at any other time than on said fourth day of June. 
 
 It has been the usage of the banks and merchants of this country, 
 for the last forty years, to make use of the United States mail in 
 forwarding negotiable notes and bills of exchange, for collection or 
 acceptance. It is the custom of the Windham Bank, and the four 
 Norwich banks, to forward all paper in their hands, payable abroad, 
 within five or eight days after it comes into their hands, without 
 reference to the length of time it has to run. 
 
 The questions of law arising upon these facts, and on such 
 further facts as the jury might rightfully infer, were reserved for 
 the advice of this Court.
 
 WINDHAM BANK V. NORTON. 417 
 
 Storrs, J. The defendants first insist, that the averments in 
 this declaration, of a due presentment of the draft in question and 
 notice of its non-payment, must be strictly proved, and that they 
 are not sustained by proof of tlie facts set up by the plaintiff's, l)y 
 way of excuse. Whatever may be the cojirse of authorities else- 
 where, it is well settled here, that those alle^jjations are supported 
 by evidence of matter of excuse, or a waiver of demand and notice. 
 Norton v. Lewis, 2 Conn. 47'^, and Camp v. Bates, 11 id. 487, are 
 decisive on this point. 
 
 The otlicr and more important question in tills case is, whether 
 the plaintiffs are excused for the non-presentment of this draft for 
 payment, on the day when it became due. The last day of grace 
 being Sunday, it was payable on the preceding Saturday, which 
 was the second day of June, 1849. This question depends on 
 whether the plaintiffs arc chargeable with negligence, in not pre- 
 senting it on that day. 
 
 If the agent of the plaintiffs, to whom they sent it, to be for- 
 warded for presentment and collection, and who transacted this 
 business for them, was guilty of sucii negligence, it is, of course, 
 imputable to the plaintiffs. And it is not important to this ques- 
 tion, either that the defendants in fact sustained no damage, by the 
 draft not having been presented for payment when it lell due, or 
 that it would not have been paid by the acceptor, if it had then 
 been presented. The indorser, on a question of due presentment 
 for payment, is not aifected by either of these circumstances. Nor 
 indeed do the plaintifts claim to recover on either of these 
 grounds. 
 
 The question of negligence here presented depends on the in- 
 quiry, whether, under the circumstances of this case, the delay of 
 the plaintilfs' agent, in not forwarding this draft to Piiiladelphia, 
 until the last mail left New York for that place, on the day next 
 preceding that on which the draft fell due, constituted a want of 
 reasonable or due diligence in regard to its presentment. We 
 say, under the circumstances, because there is no positive or abso- 
 lute rule of law wliich determines within what precise time the 
 holder of a bill of exchange must, in all cases whatever, or at all 
 events avail himself of the authorized mode of transmission 
 adopted in this instance, to forward such paper for presentment. 
 The general principle, established by all the adjudged cases, as 
 well as the approved elementary writers is, that reasonable dili- 
 
 27
 
 418 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 gence in the presentment of a bill for payment, is required of the 
 holder, and that, therefore^ if there has been no want of such dili- 
 gence lie is excused. Story, Bills, c. 10 ; Chitty, Bills, c. 9, 10 ; 
 Story, Prom. Notes, c. 7, § 3G8 ; Patience v. Townley, 2 Smith, 
 223, 224. 
 
 In applying this principle, the general rule is, that it must be 
 presented for payment on the very day on which, by law, it becomes 
 due, and that, unless the presentment be so made, it is a fatal ob- 
 jection to any right of recovery against the indorser. But, although 
 this is the general rule, it is not an universal one, and prevails 
 only under the qualification, which is really a part of the rule itself, 
 that there is no negligence or want of reasonable diligence in not 
 making such presentment. The whole rule, therefore, more prop- 
 erly stated is, that the presentment must be on the day on which 
 the bill becomes due, unless it is not in the power of the holder, 
 by the use of reasonable diligence, so to present it. By the very 
 statement of this rule, as thus fully expressed, it is plain that, on 
 the question whether the holder is excused on this ground for not 
 thus presenting it, or, in other words, whether there was negligence 
 on his part, or a want of reasonable diligence, no absolute or posi- 
 tive rule can, from the nature of the case, be laid down which 
 shall apply under all circumstances. We have no evidence of any 
 general custom of merchants in regard to the precise time within 
 which mercantile paper is usually forwarded, in order to be pre- 
 sentedfor payment, so that the law merchant furnishes us no guide 
 on this point. And it is clear that the strict rule of the common 
 law, by which an inability to perform the terms or condition of a 
 contract, by reason of inevitable accident or casualty, constitutes 
 generally no excuse for their non-performance, is not applicable to 
 mercantile instruments of this description. Therefore, the excuse 
 for non-presentment in this case presents the ordinary question of 
 negligence.' That question may, and often does, depend on such a 
 variety of circumstances, or those of such a peculiar character, 
 that it is very difficult, if not impossible, to reduce them to any 
 fixed or invariable rule. But, in regard to such a question, as 
 applicable to the non-presentment of a bill or note when it is due, 
 it is considered a well-settled rule that such want of presentment 
 is excused by any inevitable or unavoidable accident not attributa- 
 ble to the fault of the holder, provided there is a presentment by 
 him as soon afterward as he is able ; by which is intended that
 
 WINDHAM BANK V. NORTON, 419 
 
 class of accidents, casualties, or circumstances which render it 
 morally or physically impossible to make such presentment. Judge 
 Story, in speaking of this ground of excuse, says : " It has been 
 truly observed, by a learned author," referring to Mr. Chitty, 
 " that there is no positive authority in our law which establishes 
 any such inevitable accident to be a sufficient excuse for the want 
 of a due presentment. But it seems justly and naturally to flow 
 from the general principle, which regulates all matters of present- 
 ment and notice, in cases of negotial)le paper. Tlie object, in all 
 such cases is, to require reasonable diligence on the part of the 
 holder; and that diligence must be measured by the general con- 
 venience of the commercial world, and the practicability of accom- 
 plishing the end required, by ordinary skill, caution, and effort." 
 And he cites the remark of Lord EUcnborovgh in Patience v. 
 Townley, 2 Smith, 223, 224, that due presentment must be 
 interpreted to mean, presented according to the custom of mer- 
 chants, which necessarily implies an exception in favor of those 
 unavoidable accidents which must prevent the party from doing it 
 within regular time. Story, Bills, § 25S. 
 
 Applying these principles to this case, we are of opinion that the 
 plaintiffs are not chargeable with a want of reasonable diligence. 
 
 No fault or impropriety is imputable to them, by reason of their 
 having selected the public mail as the mode of forwarding the 
 draft in question, to the bank in Philadelphia, where it was pay- 
 able. It is properly conceded by the defendants that such mode 
 of transmission was in accordance with the general commercial 
 usage and law, in the case of paper of this description. Indeed, it 
 is recommended in the books, as the most proper mode of trans- 
 mission, as being the least hazardous, and therefore preferable to a 
 special or private conveyance. But, although the public mail was 
 a legal and proper mode by which to forward this paper, it was 
 their duty to use it in such a manner that they should not be 
 chargeable with negligence or unreasonable delay. If, therefore, 
 they put the draft into the post-office at ^o late a period that, by 
 the ordinary course of the mail, it could not, or there was reason- 
 able ground to believe that it would not, reach the place of its 
 destination in season for its presentment when due, we have no 
 doubt that there would be on their part, a want of reasonable dili- 
 gence, which would exonerate the indorser. On the other hand, 
 to throw the risk of every possible accident, in that mode of for-
 
 420 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 warding the draft upon the holder, where there has been no such 
 delay, would clearly be most inconvenient, unreasonable, and un- 
 just, as well as contrary to the expectation and understanding of 
 the indorser, who is presunaed to be aware of the general usage 
 and law in regard to the transmission, by mail, of this kind of 
 paper, and must therefore be suj)posed to require only reasonable 
 diligence in this respect on the part of the holder ; and would, 
 indeed, be inconsistent with the rule itself, which sanctions its 
 transmission in that manner. It has been suggested that the 
 principle should be adopted, that when the holder resorts to the 
 public mail, he should be required to forward the presentment at 
 so early a period, that if by any accident it should not reach the 
 place of its presentment in the regular course of the mail there 
 should be time to recall it, and have it presented when and where 
 it falls due ; or that, at least, it should be forwarded in season to 
 ascertain whether it reached there by that time, and to make such 
 a demand or presentment for payment as is required in the case 
 of lost bills. We find no authority whatever for any such rule, 
 nor would it, in our opinion, comport with the principle now well 
 established, requiring only reasonable diligence on the part of the 
 holder, or with the policy which prevails in regard to such commer- 
 cial instruments. It would, in the first place, be the means of 
 restraming the transfer of such paper within such a limited time as 
 to impair, if not to destroy, its usefulness and value, arising out 
 of its negotiable quality ; and, in the next place, it would in many 
 cases be wholly impracticable. The casualties incident to this 
 mode of transmission are most various in their character, and can 
 not, of course, be foreseen ; and they might, in the case of for- 
 warding mercantile paper, be such as to render it impossible to 
 ascertain its miscarriage, or to recall it in season to remedy the 
 difficulty. In the case of the draft now before us, for example, if 
 it had been placed by the plaintiffs in the post-office at Windham, 
 where they were located, and transacted their business, for trans- 
 mission, direct from thence to Philadelphia, on the very day when 
 they became the holders of it, which was between three and four 
 months before it became due, and, by an accident or mistake of the 
 postmaster in the former place, similar to that which occurred in 
 this case at New York, it had been mailed to one of the most 
 distant parts of our country, or to a foreign country (which would 
 not have been more singular than that it should have been mis-
 
 WINDHAM BANK V. NORTON. 421 
 
 takingly mailed, as in the present case, for Washington), it might 
 not have been practical)lc for the plaintiffs to learn the accident, or 
 obviate its effect before the paper fell due. In shoi't. such a rule 
 as that suggested, wiMild l)e merely artificial in its character, \n'0- 
 ductive of great inconvenience and injustice in particular cases, 
 without any corresponding general benefits, and cliange the whole 
 course of business in regard to a most extensive and important 
 class of mercantile transactions. Nor has any other arbitrary or 
 positive rule been suggested which is not equally oljuoxious to the 
 same or similar objections. 
 
 The only remaining inquiry is, whether the plaintiffs are charge- 
 able with negligence for not forwarding the draft in question by 
 an earlier mail from New York to Philadelphia. It was sent by 
 the usual, legal, and proper mode. It was deposited in the post- 
 office in season to reach the place where it was payable, before it 
 fell due, by the regular course of the next mail ; and there was no 
 reason to believe that it would not Ije there duly delivered. It 
 was actually sent by that mail, and, but for the mistake of the 
 postmaster where it was mailed in misdirecting the packnge con- 
 taining it, would have reached its proper destination, and been 
 received there in season for its presentment when due. It in fact 
 reached that place when it should have done ; but was carried 
 beyond it in consequence of that mistake. As that mistake could 
 not be foreseen or apprehended by the plaintiffs, it is not reason- 
 able to require them to take any steps to guard against it. Indeed, 
 they could not have done so, as they had no control or supervision 
 over the postmaster. They had a right to presume that the latter 
 had done his duty. Tbey could not know that he had misdirected 
 the package until it was too late to remedy the consequences. 
 The occurrence of the draft being sent beyond its place of desti- 
 nation was, therefore, so far as the plaintiffs were concerned, an 
 unavoidable accident. It happened, not in consequence of any 
 delay of the plaintiffs in putting the draft into the post-office at so 
 late a period that it could not, or probably would not, reach its 
 destination in due season, but merely in consequence of the act of 
 the official to whom it was properly confided, done after it was 
 properly in his charge, by the plaintiffs, for transmission. The 
 accident, moreover, was of a very peculiar and extraordinary char- 
 acter, and quite different from those which are ordinarily incident 
 to that mode of transmission, and against which it would l)e ex-
 
 422 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 tremcly difficult, if not impossible, to guard. It would have been 
 equally liable to occur at any time when the draft should have 
 been placed in the post-office. It was not owing in any sense to 
 the fault of the plaintiffs, but solely to tliat of the postmaster. 
 Under these circumstances, we do not feel authorized to impute 
 any blame or negligence to the plaintiffs. We are, therefore, of 
 opinion that judgment should be rendered for the plaintiffs. 
 In this opinion the other judges concurred. 
 
 Judgment for the plaintiffs. 
 
 Schofield V. Bayard, 3 Wend. 488, may at a cursory glance seem at variance 
 with the above important case ; but a closer scrutiny of the case will show that 
 there is no conflict. In Schofield v. Bayard, the plaintiffs were holders of a bill 
 payable in London. By a mistake of their men the bill was sent to Liverpool for 
 presentment. The agent of the holders at the latter place mailed it back in time, 
 indeed, if it had reached the holders when it should have reached them, to be duly 
 sent to London ; but, by a mistake at the post-office, it failed to reach the holders 
 soon enough to be presented at the proper time. The Court held that the fault 
 lay with the holders in sending the bill to Liverpool ; and that therefore the fail- 
 ure to make due presentment could not be excused. In delivering the opinion 
 of the Court, Savage, C. J., said: " This presents no impossibility, if due dili- 
 gence had been used. The plaintiffs should not have sent the bill to Liverpool 
 at all. It is true that, after the letter containing it had been left at Liverpool, it 
 could not have reached London in season ; but it was the fault of the plaintiffs to 
 have parted with the bill in the manner they did. Instead of sending it to Liv- 
 erpool they should have sent it to London, and then it would have been in sea- 
 son, and probably would have been paid. I am of opinion that, by the law mer- 
 merchant, payment should have been demanded in London on the twelfth of 
 November, and that not having been done, and there being no impossibility to 
 prevent it but what is attributable to the want of due diligence on the part of the 
 holder, the defendants are legally discharged, and are entitled to judgment."
 
 JUNIATA BANK V. HALE. 423 
 
 The Juniata Bank v. Hale et al. 
 
 (16 Sergeant & Rawle, 157. Supreme Court of Pennsylvania, June, 1827.) 
 
 Death of maker. I ndorser appointed administrator. — The death of the maker of a note 
 before it becomes due, and the taking out letters of administration upon his 
 estate by the indorsers and others, before the note arrived at maturity, do not dis- 
 pense with the necessity of notice to the indorsers of non payment by tlie maker. 
 
 The case is stated in the opinion of the Court. 
 
 Duncan, J. This was an action against the defendants, on a 
 negotiable note, dated the tenth of Xovember, 181(3, for six hun- 
 dred dollars, in which Starrett was the drawer, E. W. Hale the 
 payee, Hale the first indorser, and Chriswell the second. It was 
 a note for the accommodation of the drawer, and Hale declares, in 
 the memorandum subjoined to it, that it was for the use of the 
 drawer. It was payable in six months, and was discounted by the 
 Juniata Bank. The drawer died before the day of payment ; and, 
 on the second of December, 1816, letters of administration issued 
 on his effects to Rebecca, his widow, Robert, his brother, and Hale 
 and Chriswell. 
 
 On the fourteenth of May, 1817, the note was protested, but no 
 notice of demand or non-payment was given to the indorsers, or 
 either of them. 
 
 Tlie Juniata Bank contended that notice of non-payment was 
 unnecessary, inasmuch as the indorsers were two uf the adminis- 
 trators, who, in their character of administrators, must have had 
 knowledge of the non-payment of the note, and had all the estate 
 of the drawer in their hands to secure themselves. 
 
 The indorsers insist, that if knowledge was proved on them of 
 the fact of non-payment, still they were entitled to notice from the 
 Juniata Bank, the holder of the note, of the intention of the bank 
 to call on them. And Chriswell who is joined in the action under 
 the act of assembly, insists further, that he should have had notice ; 
 for although the note migiit not have been paid by the drawer, wiio 
 died before it became due, still it might have been paid by tlie first 
 indorser, and the notice of the non-payment was an important mat- 
 ter to him. It is further insisted by the defendants, that so far
 
 424 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 from the bank giving notice of an intention to look to them for 
 payment, in 1818 they obtained a judgment by confession from the 
 administrators, a special judgment de bonis intestati, and not other- 
 wise ; and that they delayed to proceed on this judgment, and did 
 not call on tlic indorsers until this action was brouglit, which was 
 lacking a few days of six years, when the statute of limitations 
 would have barred the recovery. 
 
 On the trial of the cause before the Chief Justice at the late 
 Circuit Court, for the purpose of having the question settled in this 
 Court, which is admitted to be new in species, he instructed the 
 jury that neither the demand of payment nor notice of non-payment 
 was necessary, and it is from this decision the defendants appealed ; 
 and on this opinion it is now only necessary for this Court to de- 
 cide. From the view they have taken of this subject, if the Court 
 did not decide on the general doctrine of the necessity of notice of 
 non-payment from the holders of the note, the circumstances of the 
 situation in which Chriswell, tlie second indorser, stood, and the 
 judgment against the administrators, and the long delay in bring- ' 
 ing tlie action, were matters worthy of serious consi^leration ; but 
 they have judged it most advisable to decide upon the general 
 principle. 
 
 What is tlie nature of the engagement of the indorser ? It is 
 founded on the law merchant, and is governed by its principles ; 
 his undertaking is only to pay in case the maker does not pay. 
 The indorser takes it on the condition that he will first apply to the 
 maker ; and, in an action by the indorsee against the indorser, the 
 declaration must aver that on the note becoming due, the demand 
 was made of the drawer, and that he refused to pay, of which the 
 defendant had notice. It is an essential part of the plaintiff's 
 case, and even a verdict would not cure the omission. This was 
 decided in the Court of Errors and Appeals, and the judgment of 
 the Supreme Court reversed. Miles v. O'Hara.^ And though the 
 declaration alleged that the drawer of the bill became liable by the 
 custom of merchants, this is not sufficient, because the law mer- 
 chant is not a matter of fact, but of law, and the want of notice is 
 the very gist of the action ; for it is that which raises the implied 
 promise. M'Kinney v. Crawford, 8 Serg. & Rawle, 351, 353. 
 
 That knowledge of Jion-payment is not notice, is very clear ; for 
 the notice must come from the holder himself, or some one who is 
 a party ; for the notice must assert that the holder intends to stand 
 
 1 1 Serg. & R. 32.
 
 JUNIATA BANK V. HALE. 425 
 
 Oil his legal rights, and to resort to the iiidorser for payment ; and 
 therefore, where the drawer had notice before the bill was due that 
 tiie ■acceptor had failed, and gave another person money to pay the 
 bill, and the holder neglected to give notice of its dishonor, it was 
 held that the drawer was discharged. Nicholson v. Gouthit, 2 H. 
 Bl. (il2 ; AVhitfield v. Savage, 2 Bos. & Pul. 277 ; Esdaile v. 8ow- 
 erby, 11 East, 114, 117. And where a few days before the l)ill 
 became due, the acceptor informed the drawer that he must take 
 it up, and gave him part of the money to assist him in so doing, 
 and the latter promised to take up the bill accordingly, it was held 
 the latter might nevertheless set up, as a defence, that the bill was 
 not duly presented for payment, and that he had not regular notice 
 of the dishonor. Baker v. Birch, 3 Camp. 107. The notice must 
 come from one who cati give the drawer or indorser his immediate 
 remedy on the bill, and not from a stranger ; otherwise it is merely 
 an historical fact ; it nuist be legal notice, otherwise the j)arty is 
 discharged from the liability he contracted by indorsing it. 2 Cowp. 
 177 ; Ciiitty, Bills, 292. The reason given in Ex parte Baizley, 7 
 Ves. Jr. 597,.is very satisfactory ; for the ground of discharging 
 the drawee is, that the drawer gave credit to some other person 
 lial)le, as between him and the drawer. Notice from any other 
 person than the holder that the note is not paid, is not notice that 
 the holder does not give credit to a third person. This is very 
 strongly put by Ashhurst and Bullcr, JJ., in Tindal v. Brown, 
 1 T. R. 1G7. According to Ashhurst, " notice means something 
 more than knowledge, because it is competent to the holder to give 
 credit to the maker. It is not enough to say that the maker does 
 not intend to pay, but that the holder does not intend to give credit 
 to such maker; the party ought to know whether the holder in- 
 tends to give credit to the maker, or to resort to him." And, by 
 Buller, J., it was said, " The notice ought to purport that the 
 holder looks to the party for payment, and a notice from another 
 party cannot be sufficient ; it must come from the holder." And 
 tliis doctrine of Buller has been acted upon in many cases there, 
 as Lord Eldon observed in Baizely's Case. Now, here these in- 
 dorsers ought to have had notice from the Juniata Bank ; for that 
 would be notice that they did not mean to resort to the estate on 
 which, with others, they had administered, but to them in the char- 
 acter of indorscrs ; whereas, by not giving notice, they had a right 
 to conclude the bank intended to look to the drawer. And, accord-
 
 426 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 ing to AsJihursVs opinion, they had a right to know from the liolder, 
 the Juniata Bank, that they intended not to give credit to tlie estate 
 of John Starrett, but to look to them personally as indorsers.^ 
 
 Tlic argument that the indorsers received no injury from the 
 want of notice does not now liold. Whatever vacillation prevailed 
 in courts for a time, it is now settled that the insolvency of the 
 drawer of a note does not dispense with the necessity of demand 
 and notice of non-payment. Between the parties to the notice the 
 rule is inflexible, and it is not open to the inquiry whether notice 
 could hajre availed the indorser. The holder has no right to spec- 
 ulate and judge what may be the interest of the parties ; his duty 
 is a plain one, — to give notice ; and, if that rule is dispensed with, 
 it opens a door for endless litigation and perplexing inquiries. 
 Death, bankruptcy, notorious insolvency, or the drawer's being in 
 prison, constitute no excuse either in law or equity. Gibbs v. 
 Gannon, 9 Serg. & Rawle, 201. Notice to one of several partners 
 who are joint indorsers, is notice to all ; and, if one of tlie drawers 
 of the bill be also an acceptor, and there is no fraud in the trans- 
 action, no notice, in fact, is necessary to the others. Neither is 
 notice necessary to a party who by his conduct dispensed with it, 
 as, by engaging to call on the holder, and ascertain whether the 
 acceptor has not paid the bill. Ciiitty, Bills (Carey & Lea's ed.), 
 297. So, if the drawer of a bill promises to pay, this is a waiver 
 of the objection of the want of notice, where the party knew all the 
 facts and the legal consequences. But it has been recently held, 
 that though the drawer of a bill may impliedly waive his right of 
 defence, founded on the laches of the holder, yet an indorser can 
 only do so by an express waiver. Borradale v. Lowe, 4 Taunt. 93, 
 96, 97 ; Brown v. M'Dermot, 5 Esp. 265. And there is, in all 
 those cases of want of notice, a material and essential difference 
 between the drawer of a bill and the indorser ; for, if the drawer 
 of a bill had no effects in the hands of the drawee or acceptor, and 
 the bill is drawn for the accommodation of such drawer, he is prima 
 facie not entitled to notice of the dislionor of the bill, nor can he 
 object in such case.^ He, being the real debtor, acquires no right 
 of action against the acceptor by paying the bill, and suffers no 
 injury from want of notice of non-acceptance or non-payment (12 
 East, 171), and therefore, the laches of the holder affords him no 
 
 1 See Chanoine t-. Fowler, ante, 383, and note. 
 
 2 See Hopkirk v. Page, post, 430.
 
 JUNIATA BANK V. HALE. 427 
 
 defeiT^e. 4 Taunt. 733. But it is no excuse for not giving notice 
 to the indorser of a bill, that the acceptor had no eflfects. Pcakc, 
 202. " That circumstance," said Lord Kenyan^ " will not avail 
 the plaintiff. The rule extends only to actions brought against the 
 drawer ; the indorser is, in all cases, entitled to notice." See 
 Chitty, 259, 295. 
 
 It has been attempted to bring this within the principle of Bond 
 V. Farnham, 5 Mass. 170, and Barton v. Baker, 1 Serg. <fe Rawle, 
 334 ; ^ but those cases were decided on very different grounds. In 
 the first, Chief Justice Parsons says : " The opinion was*founded 
 on this, that if the indorser, representing himself liable for the 
 payment of particular indorsements, receives a security to meet 
 them he shall not afterwards insist on a fruitless demand upon the 
 maker, or a useless notice to himself, to avoid payment of demands, 
 which on receiving security he has undertaken to pay." In the 
 latter, the late Chief Justice put it on the ground that it was not 
 unreasonable to suppose that the defendant took upon himself the 
 payment of the indorsed notes, and on no other ground could it be 
 held that the notice of non-payment was not necessary. 
 
 But here the indorsers had no security beyond any other simple 
 contract condition of John Starrett ; they obtained no advantage 
 beyond strangers to the administration ; for, by the death of the 
 intestate, his goods and lands were seized by act of law, by a kind 
 of statute execution in the hands of his administrator, just as in 
 the case of a commission of bankruptcy, and to be discharged in a 
 prescribed order ; in which the administrator cannot prefer himself 
 or retain his own debt, as he could by the laws of England. The 
 lands, the fund here for tiie payment of debts, do not come into 
 the possession of the administrator ; he has no right of entry, and 
 can bring no ejectment ; the possession descends to the heir. The 
 executor or administrator, have, by virtue of their office, in no case 
 a right to the possession of the deceased's lands. As 1 do not find 
 the case of an indorser becoming an administrator to the di'awcr, 
 in any decision among the books of authority, to form an exception 
 to the necessity of giving notice to the drawer, and as there is no 
 reason why it should, I am not for relaxing one jot further than it 
 has been done, this wholesome and convenient rule. Indeed wo 
 find judges regretting that it had ever been departed from in any 
 case. 
 
 1 Post, 458.
 
 428 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 Tlie Chief Justice, who decided the case in this Court, for the 
 purpose of bringing this new question before the Court, joins in the 
 opinion of the other members of the Court, that the indorsers not 
 having received notice of non-payment, are not liable on the in- 
 dorsement, and that the appeal be sustained. 
 
 Tiie rule of demand and notice is one of universal obligation. 
 I would not extend the exceptions further than to the cases which 
 have been expressly decided. Policy and the convenience of the 
 public require a rigid adherence to the rule ; for, otherwise, excep- 
 tion would creep in after exception, and leave the law, which ought 
 to be certain, open to speculation and to doubt. 
 
 Judgment reversed. 
 
 The Supreme Court of the United States, in 1830, declared the same rule in 
 the case of Magruder v. Union Bank of Georgetown, 3 Peters, 87, and re-af- 
 firmed it in the same case, 7 Peters, 287. The decision in Caunt v. Thompson, 
 7 Com. B. 400, has perhaps been somewhat misunderstood. That case does not 
 decide that where the party sought to be charged has become executor of the 
 payor, notice is dispensed with, but that the circumstances in that particular case 
 constituted notice. It was proved at the trial that the bill in the case was duly 
 presented at the house of the acceptor ; and that the defendant (the drawer) , to 
 whom it was there shown, said that the acceptor was dead, and that he was his 
 executor ; adding a request that it might be allowed to stand over for a few days 
 and he would see it paid ; and it was held that this was sufJicient notice of dis- 
 honor. It will be seen that the drawers knowledge of the dishonor, which was 
 held to constitute notice, came from the holder and proper party. It was not a 
 mere " historical fact," which the drawer may have derived from a stranger, but 
 it was legal notice within the rule laid down in the principal case. It was imma- 
 terial, as the Court held, that the notice was not given with all the formalities 
 which are usual, so long as it was given by the holder. The very impoi'tant dis- 
 tinction drawn in the principal case between knowledge and notice is also main- 
 tained in Caunt v. Thompson. Cresswell, J., quotes with approval the following 
 language of Alder son, B., in Miers v. Brown, 11 Mees. & W. 372 : "Knowledge 
 of the dishonor obtained from a communication by the holder of the bill amounts 
 to notice." Also the following language of Ashhurst, J., in Tindal v. Brown, 1 
 T. R. 167 : " Notice means something more than knowledge ; because it is com- 
 petent to the holder to give credit to the maker." Mr. Justice Cressivell proceeds 
 to say: "In substance these cases seem to establish that, in order to make a 
 prior holder responsible, he must derive_/ro?rt some jierson entitled to call for pay- 
 ment information that the bill has been dishonored, and that the party is in a 
 condition to sue him, from which he may infer that he will be held responsible." 
 See Chanoine v. Fowler, ante, 383, and note; also Gower v. Moore, 25 Me. 16. 
 
 We do not see then that there is any conflict between Caunt v. Thompson 
 and the principal case ; though it must be admitted that the former goes to the 
 verge of the law.' 
 
 But there may be an exception to the rule in those States in which the personal
 
 JUNIATA BANK V. HALE. 429 
 
 representative is allowed l)y statirtf a certain period for settling the estate of the 
 payor, during which time he cannot be sued. And it has been held that, if the 
 maker of a note die and an administrator be appointed before the note fall due, 
 demand upon the latter is not necessary to charge an indorser, unless the paper 
 fall due after the period during which the administrator is exempt from suit. 
 Hale V. Burr, 12 Mass. 8G. But this was not the case of an indorser appointed 
 administrator. 
 
 Shejiley, J., in Gower r. Moore, 25 Me. IG, cites this case as an exception, 
 and states that the doctrine of it is questionable ; but it has been followed in 
 Massachusetts in Oriental Bank r. Blake, 22 Pick. 200, and m Louisiana in Lan- 
 dry V. Stansbury, 10 La. 4.'S-t. 
 
 But in Gower v. Moore it is held that if the maker of a note die before its 
 maturity, the indorsee sliouhl make inquiry for his personal representative if 
 there be one, and present the note to him at maturity for payment. 
 
 It would seem advisable, if not necessary, to present the paper at maturity, 
 even where the personal representative is exempt from suit for a certain time, 
 — which is believed to be generally the case throughout the United States, — 
 and give notice to the indorser or drawer of the payor''s death and of the matter 
 of administration, so that he may take the proper measures to secure himself 
 in case the paper is not finally paid. There is a strong reason for this where 
 the indorser is not aware of the payor's death ; for in that case if notice were not 
 given he would be led to suppose that the paper had been duly paid, and thus 
 be thrown off his guard, and perhaps lose altogether an opportunity to secure 
 himself in the event of non-payment from the estate of the payor. And the 
 modern inclination of the courts is to adhere more strictly than formerly to the 
 rule requiring presentment and notice. See Pierce v. Gate, 12 Cush. 190. 
 
 Putnam, J., in Oriental Bank v. Blake, 22 Pick. 206, after stating the rule 
 laid down in Hale v. Burr, supra, states an important non sequitur, involving the 
 point in issue in the case before him. He says : " But it does not follow that 
 because to charge an indorser, no demand is necessary to be made on the admin- 
 istrator of the maker of a note, or the acceptor of a bill of exchange falling due 
 within the year after the appointment, notice of the dishonor of the bill is not 
 necessary to be given to the administrator of the indorser in a reasonable time. 
 He stands in the place of the indorser ; and a want of notice of the dishonor of 
 the bill may be prejudicial to all persons interested in the estate of his intestate. 
 He, for example, may have paid to the party liable to him upon the bill, money 
 which he might have retained, or have otherwise omitted to obtain, security against 
 the undertaking of his intestate. To the same effect is Merchants' Bank r. Birch, 
 17 Johns. 25. 
 
 In Ilaslett j". Kunhardt, Rice (S. Car.), 189, the maker of a note payable May 
 25th, was drowned, with his whole family, two or tiiree days before the ma- 
 turity of the paper. Notice was given to the indorser on the 2.jth. The 
 maker had left no will, and, up to the time of notice, no administration had been 
 or could have been taken out. It was held that demand was excused ; Rich- 
 ardson, J., dissenting. Sec also Price i'. Young, 1 McCord, 331); s. c, 1 Nott 
 & M. 438.
 
 430 EXCUSES OP PRESENTMENT AND NOTICE. 
 
 James Hopkirk, surviving partner of Spiers, Bowman, & 
 Co., n. William Byrd Page, Executor ofWiLLiAM Byrd. 
 
 (2 Brockenbrough, 20. Circuit Court of the United States for Virginia, 
 
 May, 1822.) 
 
 Drawinci without funds. — If the drawer have no funds in the hands of the drawee at 
 the time of drawing, and no right to draw, and has the strongest reasons to beheve 
 that his draft will not be paid, he is not entitled to notice of dishonor. 
 
 Effect of war. — The effect of war is to suspend all commercial intercourse between 
 the countries engaged in it ; and therefore presentment and notice will be excused 
 during the continuance of hostilities. But these steps should be taken within a 
 reasonable time after the cessation of the war. 
 
 The case is stated in the opinion of the Court. 
 
 Marshall, C. J. This suit is brought to obtain payment of two 
 bills of exchange drawn by the late William Byrd, of Virginia, 
 on Robert Gary & Co., merchants of London, the one in the year 
 1774, and the other in 1775. These bills were regularly pro- 
 tested ; but the defendant makes several objections to paying them. 
 The first to be considered is, that no notice of their non-payment 
 and protest was given either to William Byrd in his lifetime, or to 
 his representatives, since his death. 
 
 The i^laintiff contends that this notice was uimecessary, because 
 the drawer had no funds in the hands of the drawee. 
 
 Although this application, in consequence of the state of the 
 fund to which the plaintiff must resort, it consisting of equitable 
 assets, is made *to a court of equity, it is admitted to be a law 
 case depending entirely on legal principles. It requires an atten- 
 tive consideration of the question, how far the want of funds of 
 the drawer in the hands «f the drawee discharges the holder of a 
 bill of exchange from the necessity of giving notice to the drawer 
 of its dishonor. 
 
 The rule requiring this notice was for a long time supposed to 
 be general, and Mr. Justice Blackstone in his Commentaries lays 
 it down without any exception. The first case in which an ex- 
 ception was admitted, is Bikerdike v. Bollman, decided in Novem-
 
 HOPKIRK V. PAGE. 431 
 
 bcr, 1786, and reported in 1 Durn. «t East, 40o ; in that case the 
 Court stated, that if it be proved hy the holder that " from the 
 time the bill was drawn till the time it became due, the drawee 
 never liad any etfects of the drawer in his hands," notice to the 
 drawer is not necessary. The reason given is, that he had no 
 right to draw, and could not be injured by not receiving notice. 
 An additional observation made by one of the judges is, that to 
 draw in such a case " is a fraud in itself." 
 
 It does not appear from tlic report of this case, nor is there any 
 reason to believe, that there were any running accounts between 
 the parties ; the whole complexion of the case ; and the reasons 
 assigned by the judges for their opinions, negative the idea ; it is 
 simply the case of a debtor drawing a bill on his creditor, without 
 a prospect of its being paid. In such a case, notice is declared by 
 the Court to be unnecessary. 
 
 It is remarkable that in this case, although the principle is ex- 
 pressly asserted by both the judges, each declares that the case 
 would be decided in the same way on a different principle. 
 
 In Goodall and others v. Dolley, decided in ITHT, 1 Durn. <fe 
 East, 712, the judgment was against the holder of the bill, for 
 want of notice ; but in giving his opinion, Mr. Justice Buller rec- 
 ognizes the principle established in Bikerdike v. BoUman. 
 
 In Rogers v. Stevens, 2 T. R. 713, decided in 1788, the law is 
 said to be settled, that no effects of the drawer in the hands of the 
 drawee, excuses the holder from the necessity of giving notice, 
 yet, it is remarkable that in this case, all three of the judges rely 
 very much on a subsequent assumpsit made by the drawer. 
 
 In Gale v. Walsh, 5 T. R. 239, decided in 1793, the principle 
 appears to be recognized ; but a rule to show cause why a new 
 trial should not be granted for this cause, was discharged, because 
 the fact did not exist in the case. 
 
 These are the earliest cases on this point : it has occurred very 
 frequently in subsequent cases, and the principle seems to be 
 firmly established ; but as the q\icstion has come forward in differ- 
 ent forms, and been viewed under different aspects, the principle 
 has been greatly modified, and is no longer laid down in the gen- 
 eral terms which were carelessly used on its introduction. It has 
 been found necessary to define its extent with more precision, and 
 to state the rule with more accuracy. It was perceived, that in 
 the course of commercial dealing, it would frequently occur that a
 
 432 EXCUSES OP PRESENTMENT AND NOTICE, 
 
 person might draw a bill with the best reasons for believing that it 
 would be honored, although, in fact, he might have, at the time, 
 no funds in the hands of the drawee ; and that all the reasons for 
 requiring notice, would apply in such a case, with the same force 
 as if the bill had been drawn on actual funds. In Legge v. Thorpe, 
 12 East, 171, Le Blanc and Bayley, JJ., stated the principle 
 laid down in Bikerdike v. Bollman, and afterwards adhered to, in 
 these terms : 
 
 They said, " that the Court in that case, looking to the reason 
 for which notice was required to be given, laid down the rule, not 
 generally, that where the drawer had no effects in the hands of the 
 drawee at the time (which perhaps might turn out to be the case 
 upon a future settlement of accounts between them) no notice of 
 dishonor should be given : but that it need not be given where the 
 drawer mud have hioum at the time that he had no effects to an- 
 swer the bill, and could have no reason to expect tiiat his bill 
 would be honored." 
 
 In Blackhan v. Doren, 2 Camp. 503, Lord Ellenhorovgh said: 
 " If a man draw upon a house with whom he has no account, 
 he knows that the bill will not be accepted, he can suffer no injury 
 from want of notice of its dishonor, and, therefore, he is not en- 
 titled to such notice. But the case is quite otherwise where the 
 drawer has a fluctuating balance in the hands of the drawee." 
 
 In Walwyn v. St. Quintin, 1 Bos. & Pul. 652, one of the 
 strongest cases in the books in favor of dispensing with notice, 
 Eyre, C. J., said: " But it may be proper to caution bill-holders 
 not to rely on it as a general rule, that if the drawer has no effects 
 in the acceptor's hands, notice is not necessary. The cases of 
 acceptances on the faith of consignments from the drawer, ijot 
 come to hands, and the case of acceptances on the ground of fair 
 mercantile agreements, may be stated as exceptions, and there 
 may possibly be many others." 
 
 In Brown et al. v. Maffey, 15 East, 216, Lord Ellenhorough 
 said : " The doctrines of dispensing with notice of the dishonor of 
 a bill has grown almost entirely out of the case of Bikerdike v. 
 Bollman. That decision dispensed with the notice to the drawer, 
 where he knew beforehand that he had no effects in the hands of 
 the drawee, and had no reason to expect that the bill would be paid 
 when it became due." 
 
 '' But that exception must be taken with some restrictions.
 
 HOPKIRK V. PAGE. 433 
 
 which, since I sat hero, 1 have often had occasion to put on it, as 
 where the drawer, thouuh he migiit not have cnbcts ut the time of 
 tlic drawing of tlie hill in the drawee's hands, has a running ac- 
 count with him, and there is a flliictuating balance between them, 
 and the drawer has rcasonai)le ground to expect that he shall have 
 effects in the drawee's hands when the bill becomes due. In such 
 cases, I have always held the drawer to be entitled to notfce, he- 
 cause he draws the l)ill upon a reasonable presumption that it will 
 be honored." 
 
 In Rucker et al. v. Hiller, 16 East, 43, Lord Ellenhorongh said : 
 " Where the drawer draws his bill in the bona fide expectation of 
 assets in the hands of the drawee to answer it, it would be carry- 
 ing the case of Bikerdike v. Bollman farther than has ever been 
 done, if he were not at all events entitled to notice of the dis- 
 honor. And I know the opinion of my lord chancellor to be, that 
 the doctrine of that case ought not to be pushed farther.'' 
 
 " The case is very different where the party knows tiiat he has no 
 right to draw the bill. There are many occasions where a drawee 
 may be justified in refusing from motives of prudence to accept a 
 bill, on which notice ought nevertheless to be given to the drawer ; 
 and if we were to extend the exception farther, it would come at 
 last to a general dispensation with notice of the dishonor, in all cases 
 where the drawee had not assets in hand at the very time of pre- 
 senting the bill, and thus get rid of the general rule requiring 
 notice, than which nothing is more convenient in the commercial 
 world. A bona fide reasonable expectation of assets in the hands 
 of the drawer has been several times held to be sufficient to en 
 title the drawer to notice of the dishonor, though such exj)ectation 
 may ultimately fail to be realized." 
 
 And in the same case, Bayley^ J., said : " The general rule re- 
 quires notice of the dishonor to be given in due time to the 
 drawer, and it lay upon the plaintiff to show that he could not 
 possibly be injured by the want of it. It would be somewhat hard 
 to call upon the drawer towards the end of six years after the bill 
 given ; and when he objected that he had no notice of the dis- 
 honor, to tell him that he had no effects in the drawee's hands at 
 the time when the bill was presented, though they might haye 
 come to his hands the very day after, *and the drawee might have 
 settled his accounts with the drawer on the presumi)tion that the 
 bill was paid." 
 
 28
 
 434 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 The subject was considered by the Supreme Court of the United 
 States, in the case of French v. The Bank of Columbia, reported 
 in the fourth volume of Cranch. 4 Cranch, 141, 2 Cond. 58. 
 In that case, it was said, " to be the fair construction of the Eng- 
 lish cases, that>-a person having a riglvt to draw in consequence of 
 engagements between himself and the drawee, or in consequence 
 of consignments made to the drawee, or from any other cause, 
 ought to be considered as di^wing u})on funds in the hands of the 
 drawee, and, therefore, as not coming within the exception to the 
 general rule." When the drawer is continually*making consign- 
 ments to the drawee, and continually drawing on those consign- 
 ments, his conduct may be essentially affected by knowing that 
 any of his bills have been protested. He may stop in transitu, or 
 may suspend further consignments. It may be as material to his 
 interest to place no more funds in the hands of the drawee in 
 such a case, as to withdraw the funds previously placed in his 
 hands. Notice may be as important to him in the one case as in 
 the other, and there seems to be the same reason for requiring it, 
 supposing the rule to be, that every person having a right to draw, 
 or having reason to believe that his bill will be honored, is entitled 
 to notice. I will proceed to apply the principle to the facts of this 
 case ; and, in doing it, I shall consider the two bills separately. 
 
 On the nineteenth of July, 1774, William Byrd drew on Robert 
 Cary <)e Co., in favor of Edward Brisbane, for the sum of £353 6s. 
 This bill was indorsed by Edward Brisbane to Alexander Spiers, 
 and by him to the company. On the seventeenth of November, 1774, 
 it was protested for non-payment. The first information that appears 
 to have been given of this protest to Colonel Byrd, or his repre- 
 sentatives, was the institution of this suit in 1819. 
 
 The executor of Byrd resists its payment for want of notice, 
 and the plaintiff alleged that notice was unnecessary, because the 
 drawer had no effects at the time in the hands of the drawee. To 
 support this allegation, he relies on several letters written by Rob- 
 ert Cary & Co. to William Byrd, which have been exhibited by the 
 executor on his requisition. 
 
 The defendant objects to this testimony, that the letters are the 
 mere allegations of Robert Cary & Co., and do not contain a full 
 statement of the correspondence between the parties, or of their ac- 
 counts ; that Colonel Byrd may not have acquiesced in the accounts 
 transmitted with these letters, or in the statements they contain,
 
 ^ HOPKIHK V. PAGE. 436 
 
 although, from tlic loss of papers, the death of parties, and tlie 
 great lapse of time, the papers cannot now be produced. 
 
 The general ruh." is, that a long ac(iuiescence in letters contain- 
 ing accounts, is prima facie evidence of an acquiescence in their 
 contents ; and there is less reason for excepting thJfe case from the 
 rule, because the letters of Robert Gary & Co., from November, 
 1773 to October, 1775, do not notice any objection on the part of 
 William Byrd to any of the accounts which, one of those letters 
 says, were annually transmitted to him. 
 
 The letter from Robert Gary & Go. to AVilliam Byrd, dated the 
 tenth of November, 1773, incloses an account current, showing a 
 balance due Robert Gary & Go. of £616 9«. Id, Tiiis letter gives 
 notice of the completion of a contract for the sale of Byrd's Eng- 
 lish estate ; says the money is to be paid the fifth of April ; that 
 they shall immediately afterwards take up the whole of his bills ; 
 and says that they have referred Farrell and Jones to him, to deter- 
 mine whether they shall pay a debt of about <£800, claimed by 
 Farrell and Jones. 
 
 Tiie next letter is dated the thii'teenth of May, 17 74. It states the 
 receipt of £5000 on account of the estate which had been sold, 
 and the expectation of receiving the farther sum of .£11,500 on 
 the same account. It states the payment of debts to the amount 
 of X5544 Is. 4:d. and gives a list of other debts due from Byrd, to 
 the amount of £11,577. The letter concludes with saying, that 
 by Greenland's estimate, the produce of the estate will not exceed 
 £15,500, out of which great charges are to be deducted. From 
 this sketch the letter proceeds : '* You will be able to judge how 
 the account may stand, and what bills must be returned." 
 
 It is observable, that among the debts paid, are several bills of 
 exchange, which had been long protested, one of them as early as 
 February, 1708. This fact shows an understanding by which bills 
 were held up after a protest, in the expectation that they would be 
 paid by tke drawee, notwithstanding the protest. In such a case, 
 if no notice be given, the law seems to be, that the holder looks to 
 the drawee, not to the drawer for payment. 
 
 The next letter, of the fifth of August, 1774, states that there 
 are many bills which must be returned, after paying all the money 
 received on account of the English estate. This letter speaks of 
 a further sum for a half year's rent, accruing before the purchaser 
 took possession, to be received after Michaelmas. This would be
 
 436 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 £371 is. Qd. There is, too, a subsequent letter, of the foiirteenth of 
 March, 1775, which mentions a farther receipt of .£448 12s. 1^., 
 on account of the English estate. 
 
 Colonel Byrd appears to have drawn to the full amount of his 
 English estate, *o far as Robert Gary & Co. had stated the money 
 to have been received ; and if the transactions between the par- 
 ties had gone no farther, these letters would furnish strong reasons 
 for the opinion that, in July, 1774, he acted at least incautiously in 
 drawing the bill under consideration. But there were transac- 
 tions between the parties. Colonel Byrd held a large estate in 
 Virginia, and the usage of the considerable planters to ship their 
 tobacco to London mercliants, and to draw on their consignments, is 
 of general notoriety. In their letter of the seventeenth of November, 
 1774, Robert Cary & Co. say : " "We shall, in the disposal of your 
 tobacco, hope to render you a safe and pleasing tale." 
 
 In a letter of the tenth of February, 1775, is an account of sales 
 of fifteen hogsheads of tobacco, shipped in a vessel commanded by 
 Captain Powers ; and there is also notice taken of a mortgage on 
 the estate sold to Mrs. Otway, for which no claimant had appeared, 
 but for which Mrs. Otway had retained a considerable sum in her 
 hands. The letter says : " We were compelled to settle the con- 
 veyance in the manner we did, yet at the same time, it no ways 
 precluded you from receiving your part of this other mortgage, if 
 no claimants." The letter shows that Colonel Byrd had written 
 on this subject, and had manifested the expectation of receiving a 
 further sum on this account. The letter mentions the payment of 
 some small orders given by Byrd. 
 
 It may be considered as probable, from these letters, that Colonel 
 Byrd was not perfectly satisfied with the sums retained on account 
 of charges on the estate, and expected more money from it. 
 
 A letter of the twentieth of June, 1775, states the payment of a 
 draft drawn by Colonel Byrd, in favor of Hornsby, for <£75, and 
 their payment for his honor of another draft on Farrell and Jones 
 for the same sum. 
 
 The last letter is dated second of October, 1775. It mentions 
 the payment of several little drafts, as desired b}' Colonel Byrd, 
 " which are mentioned in an account current inclosed," but th^ 
 account itself does not appear. It shows a balance, as the letter 
 says, of 16s. lid. in favor of Colonel Byrd. 
 
 From this review of the letters in the cause, it is obvious that
 
 HOPKIRK V. PAGE. 437 
 
 Colonel Byrd was much pressed for money ; that he was sanguine 
 in his calculations of the sums to l)e yielded by his estate in Eng- 
 land ; that he drew upon that fund by anticij)ation, and to an 
 amount greater perhaps than was strictly justifiable. It is also 
 apparent that a considerable part of the money fgi* which the es- 
 tate sold was retained for incumbrances, some of which were 
 questionable, and there is reason to believe that he questioned 
 them. It is also apj)aront that there were running transactions 
 between the parties, and tbat the holders of his l)ills were in 
 the habit of retaining them, and of receiving payment long after 
 protest. That he made sliipments of tobacco in the time, is un- 
 questionable ; but the amount of his shipments is uncertain ; his 
 letters are not produced ; they would throw much light on this 
 transaction. The letters giving notice of this particular draft, 
 might, and probably would, show the idea on which it was drawn, 
 and the calculations of the drawee ; it might be drawn on actual 
 consignment of tobacco, or it might be drawn on a calculation that 
 something farther miglit be yielded by those items of the English 
 estate, which the letters sliow had not finally been adjusted. These 
 calculations may have been erroneous ; but if they were made, 
 the bill was not drawn with a knowledge that it would not be hon- 
 ored, and therefore notice of its dishonor was unnecessary. The 
 Court will not presume that these calculations were made ; the 
 Court will not presume that the letter of advice which usually 
 accompanies a bill of exchange, did show that the drawer cal- 
 culated on his bills being honored ; but the Court cannot 
 presume the contrary ; and it is to be recollected that when a pro- 
 tested bill is held up for a great length of time without notice, the 
 whole onus prohandi is thrown on the holder ; he must prove every 
 thing, and nothing is required from the drawer. 
 
 The case furnishes strong reason for the opinion, that this bill 
 was not returned to A^irginia, but was held up by Spiers, Bowman, 
 k Co. in the expectation of its being paid by Robert Cary «fe Co. 
 It was drawn on the nineteenth of July, 1774, and protested for 
 non-payment on the twenty-sixth day of November of the same 
 year. Another bill for £218 los. drawn on the fourth of July, 
 1774, in favor of Spiers, Bowman, & Co., and protested on the 
 ninth of November, 1774, was returned to Colonel Byrd, and was 
 taken up ; these bills drawn l)y the same persons, and held by the 
 same house, at the same time, would probably have been returned
 
 438 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 by the same vessel had they been both returned. The circum- 
 stance that one was drawn in favor of Brisbane, an agent of the 
 company, and indorsed by him to a member of the company, and 
 by that member to the company, would not account for the appear- 
 ance of one bili without the other, if both were returned. They 
 were both the property of the same company, both due by the 
 same person, both in possession of the company at the same time, 
 and would probably have been both returned, if they ivere both 
 returned by tlie same vessel. The bill, said not originally to have 
 been drawn in favor of Spiers, Bowman, & Co., would probably 
 have been transmitted to the same agent to whom the other bill 
 was transmitted. The appearance of the one bill without the 
 other is, then, a strong circumstance in favor of the opinion that 
 the bill retained was held up in England in the expectation of its 
 being paid by the drawee. In estimating the probabilities of the 
 circumstances and prospects under which the bill was drawn, this 
 fact is entitled to some consideration. 
 
 We have no regular accounts, no statements of the consign- 
 ments made by Byrd to Robert Gary & Co. We know that their 
 connection was of long standing ; that there was a considerable 
 degree of mutual kindness and confidence ; that Byrd was in the 
 habit of shipping tobacco to Robert Cary & Co., that there may 
 have been a shipment at the very time this bill was drawn ; that 
 money was paid for Byrd by Robert Cary & Co., after this bill 
 was protested ; that a bill of <£75 was taken up for his honor ; 
 and that in October, 1775, the balance of ,£616 9s. ocZ., which 
 stood against him in November, 1773, was converted into a bal- 
 ance of 16s. lie?, in his favor. We have not all the intermediate 
 accounts, and we do not know how this balance may have fluct- 
 uated ; add to this, that the bill is not said to have been protested 
 foj want of effects. 
 
 Under all these circumstances, I cannot say that the bill was 
 drawn with a knowledge that it would be protested ; and that no- 
 tice of the protest could not be necessary. I cannot say that it 
 was a fraud upon the payee, by giving him a bill which the drawer 
 knew would not be paid. If the onus probandl lay on the drawer 
 of the bill, the case would be clearly against him ; but as it lies 
 entirely on the holder, whose laches are without a precedent in 
 a court of law or equity, I think he has not made out a case of 
 complete justification, on which he can entitle himself to a decree 
 for the bill drawn on the nineteenth of July, 1774.
 
 m)PKIRK V. PAGE. 439 
 
 The second bill was drawn on the twenty-sixth day of Novem- 
 ber, 1775, for <£24<i '4h. Id., and was protested on tlie twenty-sixth 
 day of June, 1770.* It was drawn after the coaimencement of 
 liostilities in Virginia ; and before it was protested all intercourse 
 between the two counties was interdicted. Under these circum- 
 stances, notice is not to be expected and ought not to be required. 
 I at first doubted whether a bill, which, f(jr a length of time, is 
 held under circumstances which dispense with notice, does not 
 lose its commercial character, and become an ordinary debt. But 
 on reflection, I am satisfied that this idea cannot be sustained : 
 and that to charge the drawer, notice of the dishonor of his bill 
 ought to be given within a reasonable time after the removal of 
 the impediment. The question, therefore, on this bill, also i#, 
 were the circumstances under which it was drawn such as to dis- 
 pense with notice ? Was it drawn without reasonable ground for 
 an expectation that it would be paid ? It may reasonal)ly be sup- 
 posed tiiat, on the twenty-sixth of November, 1775, the letter of 
 the second of October, 1775, which came by the last packet to 
 New York, was received. In attempting to show that notice of 
 the dishonor of this bill was unnecessary, because the drawer had 
 no effects in the hands of the drawee, the holder is met in limine, 
 by the fact that this letter shows a balance in his favor of 16«. l\d. 
 and the exception under which the plaintiff withdraws himself 
 from the general rule is, that tlve drawer had at the time no 
 effects in the hands of the drawee. If we may depart from the 
 letter of the exception, there is no point at which to stop ; and if 
 notice may be dispensed with when a small sum is in the hands of 
 the drawer, it may also be dispensed with when a large sum is in 
 his hands, provided that sum be one cent less than . the bill i^ 
 drawn for. 
 
 I am aware of this argument, but think it more perplexing than 
 convincing. There arc many {piostions in which no precise line 
 can be marked, which must depend on sound legal discretion, and 
 where the case itself mtist Ite decided by a jury or by the Court, 
 acting on the princii)les which ought to regulate a jury. The 
 sound sense and justice of the exception .is, that where a drawer 
 knows he has no right to draw, and has the strongest reason to be- 
 lieve his bill will not be paid, the motives for requiring notice of 
 • its dishonor do not exist, and his case comes within reason of the 
 exception. Where all transactions between partieff have ceased,
 
 440 EXCUSES OF PRESENTMENT JiliD NOTICE. 
 
 and there is nothing to justify a draft but a balance of one penny, 
 it would l)e sporting with our understanding to tell us, that a 
 creditor for this balance, who should draw fora thousand pounds, 
 would be in a situation substantially different from what he would 
 be in, were he the debtor in the same sura. The true inquiry 
 appears to me to be, whether the connection between William Byrd 
 and Robert Gary & Co. remained such as to justify a hope that his 
 bill would be honored, and to afford any shadow of justification 
 for drawing it. 
 
 I think it as demonstrable as any proposition of this sort can be, 
 'that he knew that this bill would not be paid. 
 
 He had no funds in the hands of the drawee except 16s. lid., 
 a^id no prospect of having any. He had made no shipment of 
 tobacco by the last vessel, and Robert Gary & Go. speak of the 
 fact with some resentment. In their letter of June, 1775, they 
 had mentioned sendiwg a vessel to Virginia chartered at a high 
 price, in which they expected consignments of tobacco from their 
 friends, and, among others, from Golonel Byrd. In their letter of 
 the second of October, they say : " When Power came in, we were 
 \\i hopes you would have offered him some assistance, but we ob- 
 serve the high price in the country was the cause of the disappoint- 
 ment, and no compliment to our charter. However, if we are no 
 losers, we are not beholden to our friends for it." 
 
 With respect to the mortgage for whicli it had been supposed 
 that the mortgagee was dead without a representative, he says, " it 
 is feared the representative is found ; but be this as it may," he adds, 
 " the estate will be always liable, and therefore, without a proper 
 indemnity, little can be expected. What indemnity you may offer 
 we know not, but we shall not engage for our own parts." After 
 mentioning the payment of some bills, they add, " but for paying 
 a^iy more, or raising money on the uncertainty of the mortgage, 
 we'shall not attempt." 
 
 With this letter before him, Colonel Byrd must have drawn, I 
 think, with a moral certainty that his bill would be dishonored : 
 and if in any case a holder can be excused for not giving notice, 
 this is that case. There was an end of all consignments, of all 
 intercourse between the parties ; there were no funds to withdraw, 
 and no remittances to stop. The want of notice would be no in- 
 jury to him. This case seems to me to come within the exception- 
 of Bikerdike ♦. Bollman, as modified in the subsequent cases.
 
 HOPKIRK V. PAGE. 441 
 
 Dorset/, J., in Cathell v. (ioodwin, 1 Harris & G. 468. 471, tlius states what is 
 . meant 1))' reasonable ground to expect that the drawer's bill will be honored : 
 '* The ' reasonable grounds ' required by law, are not such as would excite an 
 idle hope, a wild expectation, or a remote probability, that the bill mipht be hon- 
 ored ; l)ut such as create a full expectation, a strong probability of its payment; 
 sudi in(lec<l as would induce a merchant of common prudence and ordinary re- 
 gard for liis commercial credit, to draw a like bill." 
 
 The above language is quoted with approval in Orear v. McDonald, 9 Gill, 
 350, 357, and Martin, J., adds: "Tlie right to demand and notice does not de- 
 pend upon the fact that the drawers had, at the maturity of the draft, funds in 
 the hands of the drawees, as ascertained by ulterior events, adequate to its pay- 
 ment. There is to be found in the adjudications on this subject, no such stringent 
 rule. On the contrary, we consider the principle as now established to be that 
 if the drawers, at the time when the bill should have been presented, had the 
 right to expect, reasoning upon the state of facts connected with the transac- 
 tions as they then existed between the drawees and themselves, that their bill 
 would be honored, they were entitled to demand and notice."' See also, to the 
 same elfect, Clopper v. Union Bank, 7 Harris & J. 92, H»2 ; Kupfer v. Bank of 
 Galena. 34 III. 328, 351 ; Wood r. Price, 46 III. 435; Walker v. Rogers, 40 111. 
 278; Valk r. Simmons, 4 ^Nlason, 113; Adams r. Darby, 28 Mo. 162; Kingsley 
 V. Robinson, 21 Pick. 328, SJiaic, C. J.; Rhett r. Foe, 2 How. 457; Dickens 
 V. Beal, 10 Peters, 577 ; Williams v. Brashear, 19 La. 370 ; Youngue v. Ruff, 
 3 Strob. 311 ; Wollenweber v. Ketterlinus, 17 Penn. State, 389; Oliver v. Bank 
 of Tennessee, 11 Humph. 74 ; Farmers' Bank v. Van Meter, 4 Rand. 553 ; Miser 
 V. Trovinger, 7 Ohio State, 281; Cook v. Martin, 5 Sm. & M. 379; Spear r. 
 Atkinson, 1 Ired. 262; Claridge v. Dalton, 4 Maule & S. 230; Blackham v. 
 Doren, 2 Camp. 503. These and many other cases hold that the presence or 
 absence of funds in the hands of the drawee is not the criterion by which to de- 
 termine whether the drawer is entitled to notice or not ; but that the true test is 
 whether or no he has reasonable ground to expect his bill to be honored. The 
 weight of authority is almost altogether this way ; though the doctrine has been 
 denied in Alabama. See Shirley v. Fellows, 9 Port. 3(»0; Foard r. Womack, 2 
 Ala. 368. An opposite opinion had been entertained in the earlier case of Hill 
 V. Norris, 2 S. & P. 114. But Foard r. Womack is approved in Tarver v. Nance, 
 5 Ala. 712. See also v. Stanton, 1 Hay. 271. Two New York cases (Hoff- 
 man V. Smith, 1 Caines, 157, 160, and Commercial Bank of Albany r. Hughes, 17 
 Wend. 94) were cited in Foard r. Womack, as authority for the decision in that 
 case, but the doctrine of the principal case does not afipear to have been raised 
 in either case. Jetvett, J., in Dollfus r. Frosch, 1 Denio, 367, also states that the 
 absence of funds is sufficient excuse for failure to notify the drawer, but he im- 
 mediately quotes as authority the language of Story, J., in Valk v. Simmons, 4* 
 Mason, 113, that " no notice was necessary when the acceptor had not in fact or 
 in the ea-pectanei/ of the drawer, any funds in his hands at the time of payment, 
 nor had entered into anv arrangement with the drawer at all events to pay the 
 bill.'' And again : " He was then, to say the least of it, in the predicament of 
 a party drawing without funds, awl having :io ritjht to expect the bill to be paid.^^ 
 But the point was directly decided in Robinson v. Ames, 20 Johns. 146 ; and 
 the same rule adopted as that laid down in the principal case. SpenCer, C J. , said :
 
 442 EXCUSES OF PRESENTMENT OF NOTICE. 
 
 " I am entirely satisfied that there is no foundation for sayino; the defendants are 
 precluded from setting up laches, because they had no right to draw the bill.. 
 The case of Bikerdike v. BoUman, 1 T. R. 405, is considered the first case de- 
 ciding that notice to the drawer of the dishonor of the bill was unnecessary ; and 
 in that case the drawer had no funds, and knew he had none, in the hands of 
 the drawee. The drawing the bill was considered a fraud, and it was held that 
 he was not entitled to notice, and could not be injured by the want of it. It has, 
 however, since that case, repeatedly been decided that, where there are any funds 
 in the hands of the drawee, so that the drawer has a right to expect the bill will 
 be paid, or where there are not any funds, yet if the bill was drawn under such 
 circumstances as induced the drawer to entertain a reasonable expectation that 
 the bill would be accepted and paid, the person so drawing it is entitled to no- 
 tice ; and a fortiori, he is entitled to have the bill duly presented. The rule is 
 correctly laid down in Claridge v. Dalton, 4 Maule & S. 229, by Lord Ellenbor- 
 ouijh. The principle which has been stated is very ably supported by Chief 
 
 'Justice Marahall, in French v. The Bank of Columbia, 4 Cranch, 153, where the 
 principal authorities are reviewed. There is nothing more important than that, 
 in questions of a general mercantile nature, there should be a uniformity of de- 
 cision ; and, although the justice and equity of this rule may not in some cases 
 be perceived, where the payee has purchased a bill, and it is drawn in good 
 faith, and no conceivable loss has happened by the want of notice, yet, as there 
 may be cases where, though there were no funds in the hands of the drawee, the 
 drawer may be injured by the want of notice, it is better that the rule on the 
 subject should be general and uniform throughout the mercantile world." 
 
 In Benoist v. Creditors, 18 La. 522, it was held that where the drawers de- 
 pended on the issue of a lawsuit, they could not be regarded as having drawn on 
 funds, so as to be entitled to notice. But this was probably on the ground that 
 the drawer had no right under such circumstances to expect his bill to be hon- 
 ored ; for in Williams v. Brashear, 19 La. 370, the doctrine of the principal case 
 is held ; and such was declared to be the law of Louisiana in Bloodgood v. Haw- 
 thorn, 9 La. 124. See also Whaley v. Houston, 12 La. An. 585 ; LaCoste v. 
 Harper, 3 La. An. 385. 
 
 iThe fact of the indebtedness of the acceptor to the drawer will warrant the 
 drawing, though the acceptor have no funds of the drawer in his hands. Walker 
 V. Rogers, 40 111. 278 ; Thackray v. Blackett, 3 Camp. 164. 
 
 The authorities are not uniform upon the point which was befoi'e the Court in 
 the principal case, and which Chief Justice Marshall forcibly said (p. 439), was 
 " more perplexing than Convincing; " viz., in regard to the amount of funds in 
 the hands of the drawee which will justify the drawing. In the Matter of Brown, 
 2 Story, 502, the same doctrine is maintained by Story, J. as that held in the 
 
 r principal case. See also v. Stanton, 1 Hay. 271; Blackenship v. Rogers, 
 
 10 Ind. 333; Smith v. Thatcher, 4 Barn. & Aid. 200; Wollenweber v. Ketter- 
 linus, 17 Penn. State, 389, 399; Hill «. Norris, 2 Stew. & P. 114; Sutcliflfe 
 V. McDowell, 2 Nott & M. 251 ; LaCoste v. Harper, 3 La. An. 385. 
 
 The difficulty of laying down any inflexible rule in dollars and cents to meet 
 this particular phase of the case is apparent ; and it results only in confusion to 
 attempt it. It should suffice that the cases of this character may be decided upon 
 the broad and just principle determined by Chief Justice Marshall, that the mat-
 
 HOPKIRK V. PAGE. 443 
 
 ter of notice sliould depend upon the question whether the drawer had reasona- 
 •ble ground to expect his bill to be lionored. The question of amount may funiisb 
 a prima facie presumption ; but it can never be conclusive of the drawer's right 
 to draw. There may have been a private agreement or understanding upon the 
 subject; or then; may have been other circumstances which justified the draw- 
 ing, though the drawer had no funds at all in the hands of the drawee. 
 
 It has been held not to afi'eet the (juestion of the necessity of notice in this class 
 of cases, that the bill had been accepted. Notwitlistanding the fact of acceptance, 
 the drawer is not entitled to notice of non-payment, if he had no right to draw. 
 Hoffman v. Smith, 1 Caines, IGO; Hill v. Norris, 2 S. & P. 114; Foard i\ 
 Womack, 2 Ala. 368, 371; Gillespie ». Cammack, 3 La. An. 248; Kinsley p. 
 Robinson, 21 Pick. 327; Mobley v. Clark, 28 liarb. 390; Valk v. Simmons, 4 
 Mason, 113; Allen r. King, 4 McLean, 128; Rhett v. Poe, 2 How. 457. 
 And see Sargent v. Appleton, (3 Mass. ^b. 
 
 But a contrary view ha3 been entertained. See Pons v. Kelly, 2 Hay. 45, 
 47; Richie v. McCoy, 13 Sm. & M. 541. See also Campbell r. Pettingill, 
 7 Greenl. 126; English v. Wall, 12 Rob. La. 132; Orear v. McDonald. 9 Gill, 
 350, 358. 
 
 The cases also show that, thoiigii the drawer may have had funds in the hands 
 of the drawee, and therefore ground to draw, still, if he withdraw the funds be- 
 fore the bill matures, or having funds on the way intercept them so that they do 
 not reach the drawee, -notice of non-payment is excused. Valk r. Simmons, 4 
 Mason, 113 ; Rhett v. Poe, 2 How. 457 ; Adams v. Darby, 28 Mo. 162 ; Eiche- 
 berger v. Finley, 7 Harris & J. 381, 385; Spangler v. McDaniel, 3 Ind. 275; 
 Hammond v. Dufrene, 3 Camp. 145. But see Orr v. INIaginnis, 7 East, 359. 
 
 But none of the circumstances above mentioned will excuse notice to an in- 
 dorser. He has no concern with the state of accounts between the drawer and 
 drawee, and should be notified of the dishonor. Wilkes v. Jacks, Peake, 202, 
 per Lord Kemjon ; Byles, Bills, 293, 10th Lond. ed. See Carter u. Flower, 16 
 Mees. & W. 743, 751. 
 
 As to what particular circumstances come within the rule respecting reasonable 
 ground, see the numerous cases collected in 1 Parsons, Notes and Bills, 532, 
 et seq. 
 
 In the case of paper payable at bank it is sufficient presentment, demand, and 
 refusal of payment that it was in the banking-house on the day it fell due, and 
 that there were no funds of the^payor there, and no provision for payment. 
 Ilollowell V. Curry, 41 Penn. State, 322; Bailey r. Porter, 14 Mees. & W. 44; 
 United States Bank v. Smith, 11 Wheat. 171 ; Fullerton v. Bank of the United 
 States, 1 Peters, 604, 017 ; Bank of the United States v. Carneal, 2 Peters, 604. 
 But notice must still be given. Phipps v. Chase, 6 Met. 492, and cases just 
 cited. 
 
 Respecting the effect of war upon the obligation of the holder to make pre- 
 sentment and give notice, the recent case of House r. Adams, 48 Penn. State, 
 2G1, growing out of the late war, is interesting and important. The facts will 
 suiheiently appear in the opinion by 
 
 Rkad, J. Presentment for acceptance is not necessary in the ease of a Itill of ex- 
 change, payable at a certain period after date, and in Pennsylvania the drawer is 
 not discharged for want of notice of non-acceptance, provided he receives notice of
 
 444 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 non-payment. Read v. Adams, 6 Serg. & Rawle, 356. The question therefore 
 in the present case narrows itself down to whether due notice was ^iven of the 
 non-payment of the two bills of exchange which are the subject of this suit. 
 
 The first bill was for $112, and was protested at New (!)rleans for non-pay- 
 ment on the 11th June, 1861. The second bill for $351 25, was protested 
 at the same place for non-payment, orf the 29th July, 1861. Notice of non- 
 payment was not received by the holders of these bills at Pittsburgh until 
 14th July, 1862, when the protests and drafts were received by them by 
 mail, and proper notice of their dishonor was given to the indorser and drawers. 
 According to strict commercial law in ordinary cases this notice came too late, 
 but the state of the country is alleged as an excuse, and it therefore becomes 
 necessary to determine the rule in such cases, and its applicability to the history 
 of the times, and the facts disclosed on the trial. 
 
 Judge Story, in his Commentaries on the Law of Promissory Notes, § 257, 
 has enumerated, among the sufficient excuses for non-presentment and demand at 
 the time and place when and where the promissory note is due and payable, the 
 following: " (3.) The presence of political circumstances amounting to a virtual 
 interruption and obstruction of the ordinary negotiations of trade, called the 
 vis major. (4.) The breaking out of war between the country of the maker and 
 that of the holder. (5.) The occupation of the country where the parties live, 
 or where the note is payable by a public enemy, which suspends commercial in- 
 tercourse. (6.) Public and positive interdictions and prohibitions of the State 
 which obstruct or suspend commerce and intercourse." And in § 356 of the 
 same work, the learned commentator enumerates them also as constituting suf- 
 ficient excuses for the omission of due and regular notice of the dishonor. 
 
 Upon this subject there are two leading cases : one in England, and one in 
 America. In Patience v. Townley, 2 Smith, 224 (1805), which was an action on 
 a bill of exchange by the holder against one of the antecedent parties, the bill 
 was drawn the 1st June, 1800, at three months' usance on Leghorn, and was 
 due on the 10th September, 1800, but was not presented either for acceptance 
 or payment until the 31st October, 1800. The protest stated that it was 
 not paid because not presented in due time. At the trial, before Lord Ellen- 
 Jforough, C. J., this was relied upon as a defence to the action, but the plaintiff 
 proved that, from the particular situation of the country, Leghorn being then 
 occupied by the enemy, or in some such critical situation, though the bill was 
 sent out by the plaintiff for the purpose of being presented, it was impossible to 
 present it in due time, and it was presented as early as could be afterwards, 
 and there was a verdict for the plaintiff. This was affirmed by the Court of 
 King's Bench, on a motion for a new trial by Mr. Erskine, on a technical ground 
 not disputing the ruling at nisi prius, where Lord EUenborough said: "It was 
 left to the jury to say whether, from the situation of the country, it was possible 
 for the plaintiff to present it in due time." 
 
 In Hopkirk v. Page, 2 Brock. 20 [the principal case], a case growing out of 
 our revolutionary war. Chief Justice Marshall, p. 34, uses this language: '"The 
 second bill was drawn on the twenty-sixth day of November, 1775, for £246 35. 
 Id., and was protested on the twenty-sixth day of June, 1776. It was drawn 
 after the commencement of hostilities in Virginia, and before it was protested all 
 intercourse between the two countries was interdicted. Under these circumstances
 
 HOPKIRK V. PAGE. 445 
 
 notice is not to be expectinl, and ouf^lit not to be required. I at first doubted 
 wlu'tliLT a bill which, for a length of time is held under circumstances which dis- 
 pense with notice, does not lose its commercial iliaracter, and become an ordi- 
 nary debt. But on rellection I am satisfied that this idea cannot be sustained, 
 and that to charge the drawer, notice of the dishonor of his bill ought to be 
 given within a reasonable time after the removal of the impediment." 
 
 To apply these principles to the present case, it is necessary briefly to refer to 
 the history of the times. On the 2Uth December, 1860, South Carolina passed a 
 secession ordinance, which example was followed by Mississippi, Alabama, Flor- 
 ida, Georgia, and on the 'JMi Jainiary, 180 1, by Louisiana, Avhose State authori- 
 ties inunediately seized the United States branch mint and the custom-house at 
 New Orleans, with the Government funds amounting to more than .$500,000, and 
 the United States revenue cutter Robert ^IcClelland was traitorously surren- 
 dered by Captain Breshwood to the State of Louisiana. On the 1st February., 
 Texas seceded, and on the ninth of the same month the rebel Congress at Mont- 
 gomery elected .lellcrson Davis President of the Confederate States of America, 
 and on the 11th March the Constitution of the Confederate States was unanimous- 
 ly adopted. On the 12th April, Fort Sumter was bombarded, and on the 14th 
 capitulated, and on the 21st May the rebel Congress adjourned to meet at Rich- 
 mond on the 2<ith July, where their meetings have since b(;en held. 
 
 On the 19tt> April, the President issued his proclamation establishing a block- 
 ade of the ports of the seceded States above stated, which, on the 27th of the 
 same month was extended to tiie ports of the States of Virginia and North Caro- 
 lina. On the 3d May a proclamation was issued, calling for three years' volun- 
 teers, and increasing the regular army and navy, and on the 10th May martial 
 law was declared on certain islands on the coast of Florida. On the 2Gth Au- 
 gust, the President, in pursuance of the Act of Congress of ll3th July, 1861, de- 
 clared the inhabitants of these States in a state of insurrection against the United 
 States, and that all commercial intercourse between the same and the inhabitants 
 thereof and the citizens of other States and other parts of the United States is 
 unlawful, and will remain unlawful until such insurrection shall cease or have 
 been suppressed. On the 12th May, 1861, the President by his proclj^niation de- 
 clared that the blockade of the ports o( Heaufort, Port Royal, and New Orh-ans 
 should so far cease and determine from and after the first day of June next, that 
 commercial intercourse with these ports, except as to persons, things, and informa- 
 tion contraband of war, may from that time be carried on, subject to the laws of 
 the United States, and to the limitations and in pursuance of the regulations pre- 
 scribed by the Secretary of the Treasury, in his order appended to the proclama- 
 tion. On the 1st July, 1862, in pursuance of the second section of an Act of 
 Congress of 7th June, 1862, the President by his proclamation declared that cer- 
 tain States, including Louisiana, were then in insurrection and rebellion, and the 
 civil authority of the United States so obstructed that the provisions of the Act 
 of 6th August, 1861, could not be peaceably executed; that the taxes upon real 
 estate under the Act aforesaid, within said States, with a penalty of fifty per 
 centum of said taxes, should be a lien upon the same till paid. 
 
 Flag-oifucr Farragut having run past Forts Jackson and St. Philip. New Or- 
 leans was surrendered 'on the 28111 April, 1862, and the American Mag was hoisted 
 on the custom-house, post-olUce, mint, and city hall, and the forts were also
 
 446 EXCUSES OP PRESENTMENT AND NOTICE. 
 
 surrendered that evening. In the report of the postmaster-general of the 2d 
 December, 1801 (Message and Documents 1861-2, part 3, p. 558), he says : " In 
 conscqueiiee of the defection of the insurrectionary States, and the termination 
 of the mail service in those States, on the 31st May last, under the; Act of Con- 
 gress approved Feb. 28, 18G1 (with the exception of service in Western Vir- 
 ginia), it becomes necessary to present the transportation statistics in two 
 divisions ; these are shown in Tables A and B attached to the report." Table 
 B, at page (502, is headed "Table of Mail Service in the following States" (in- 
 cluding Louisiana), " as it stood on the 31st May, 1861, discontinued under Act 
 of Congress, approved Feb. 28, 1861." 
 
 By the evidence it appears that the Farmers' Deposit Banking Company, with 
 whom these drafts were left by the plaintiff for collection about 1st May, 1861, 
 returned them, declining to collect them on account of the irregularity of the 
 mails. They were then immediately transmitted by the plaintiffs to Burbridge & 
 Co., their agents at New Orleans. 
 
 It also appeared by the evidence of the postmaster at Pittsburgh, that all 
 postal service in Louisiana and other named places was suspended on and after 
 31st May, 1861. On the 26th May, 1862, the first mail went out to New Orleans 
 carrying ten thousand letters, including the letters which had accumulated in the 
 dead-letter office. This mail was carried by the steamer Blackstone ; since then 
 the regular rohte to New Orleans has been by New York. This cause was tried 
 on the 9th December, 1862, and the testimony, of course, is to be taken as de- 
 livered at that time. 
 
 " The first mail from New Orleans was an enormous one. We received ours 
 from it about the 1st July, 1862," says the postmaster at Pittsburgh. "There 
 were considerable intervals between the reception of the first mails after re- 
 sumption." 
 
 The omission of due and regular notice of the dishonor of these bills is there- 
 fore satisfactorily accounted for by the entire cessation of all mails and commer- 
 cial Intercourse with New Orleans, a blockaded port, and the only question is, 
 whether such notice was given within a reasonable time after the removal of the 
 impediment. It will be recollected that the only communication between Pitts- 
 burgh and New Orleans was by sea through the port of New York, and that the 
 very first mail received was about the 1st July. Under these circumstances 
 particularly, as connected with the unsettled state of affairs at New Orleans, 
 although in our possession, we cannot say the notice received at Pittsburgh on 
 the 14th July, was not within a reasonable time after the removal of the impedi- 
 ment. 
 
 The judgment of the Court must therefore be reversed, and judgment 
 entered on the verdict in favor of the plaintiffs. 
 
 See also Apperson v. Union Bank, 4 Cold. 445 ; Polk i\ Spinks, 5 Cold. 431.
 
 M'GRUDER v. THK bank of WASHINGTON. 447 
 
 George McGruder, Plaintiff in Error, v. The President, 
 Directors, &c., of the Bank of Washington, Defend- 
 ants in Error. 
 
 (9 AVheaton, 5'JS. Suprcine Court of the United States, February, 1824.) 
 
 Removal into another Jurixdirliou. — Tlie removal of the maker of a note, before its matu- 
 rity, into aiiotlier jurisdJL'tion from tliat in which tlie note was executed, will excuse 
 the IFolder from makintr a juTsonal presentment and demand. 
 
 The case is stated in the opinion of the Court. 
 
 Johnson, J. This case comes up from the Circuit Court of the 
 District of Columbia, in which a suit was instituted against the 
 plaintiff here, as indorser of one Patrick M'Gruder. 
 
 The facts are exhibited in a stated case, upon which, l)y consent, 
 an alternative judgment is to be entered. The judgment below 
 was for tlie plaintiffs in the action, and the defendant brings tliis 
 writ of error to have that judgment reversed, and a judgment 
 entered in his favor. 
 
 Tlie leading facts in the cause are so much identified with those 
 in the case of Renner v. The Bank of Columbia, 9 Wheat. 581 ,i 
 decided at the present term, on the question relative to the days of 
 grace, that the decision in that cause disposes of the principal 
 question raised in this. 
 
 But there is another jioiiit presented in the present cause. There 
 was no actual demand made on the drawer of this note, and the 
 question intended to be presented was, whether the facts stated 
 will excuse it. 
 
 At the time of drawing the note, and until within ten days of its 
 falling due, the maker was a house-keeper in the District of Colum- 
 bia. But he then removed to the State of Maryland, to a place 
 within about nine miles of the district. The case admits that 
 neither the holder of the note, nor the notary, knew of his removal 
 or place of residence ; but the circumstances of his removal had 
 nothing in them to sanction its being construed into an act of ab- 
 sconding. The words of the admission to this point are, that he 
 " went to the house where the said Patrick had last resided, and 
 
 1 AnU, 297. 
 
 A
 
 448 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 from which he had removed as aforesaid, in order there to present 
 the said note, and demand payment of the same ; and not finding 
 him there, and being ignorant of his place of residence, returned 
 the said note under protest." 
 
 The alternative in which the judgment of the Court is to be 
 rendered is not very appropriately stated; but since the absurdity 
 cannot have entered into the minds of the parties, that, not know- 
 ing of the removal or present abode of the .drawer, the holder was 
 still bound to follow him into Maryland, we will construe the sub- 
 mission with reference to the facts admitted; and then the question 
 raised is, — 
 
 Whether the holder had done all that he was bound to do, to 
 excuse a personal demand upon the maker. 
 
 On this subject the law is clear ; a demand on the maker is, in 
 general, indispensable ; and that demand must be made at his place 
 of abode or place of business. That it should be strictly personal, 
 in the language of the submission, is not required ; it is enough if 
 it is at his place of abode, or generally, at the place where he ought 
 to be found. But his actual removal is here a fact in the casp, and 
 in this, as well as every other case, it is incumbent upon the in- 
 dorsee, to show due diligence. Now, that the notary should not 
 have found the maker at his late residence was tlie necessary con- 
 sequence of his removal, and is entirely consistent with the suppo- 
 sition of his not having made any one of those inquiries which 
 would have led to a development of the cause why he did not find 
 him- there. Non constat^ but he may have removed to the next 
 door, and the first question would, most probably, have extracted 
 information that would have put him on further inquiry. Had the 
 house been sliut up, he might, with equal correctness, have re- 
 turned " that he had not found him," and yet that clearly would 
 not have excused the demand, unless followed by reasonable in- 
 quiries. 
 
 The party must, then, be considered as lying under the same 
 obligations as if, having made inquiry, he had ascertained that the 
 maker had removed to a distance of nine miles, and into another 
 jurisdiction. This is the utmost his inquiries could have extracted, 
 and marks, of course, the outlines of his legal duties. 
 
 Mere distance is, in itself, no excuse from demand ; but, in gen- 
 eral, the indorser takes upon himself the inconvenience resulting 
 from that cause. Nor is the benefit of the post-office allowed him, 
 as in the case of notice to the indorser.
 
 m'gruder v. the bank of Washington. 449 
 
 • 
 
 But tlie question on the recent removal into another jurisdiction, 
 is a new one, and one of some nicety. In case of original resi- 
 dence in a State dill'crent from that of the indorser, at the time of 
 taking the paper, there can l)c no question ; hut how far, in case * 
 of suhsequcnt and recent removal to anoth(3r State, the holder 
 shall he recjuired to pnrsne the maker, is a question not withtjut its 
 difficulties. 
 
 We think that reason and convenience are in favor of sustaining 
 the doctrine, that such a removal is an excuse from tactual demand. 
 Precision and certainty are often of more importance to the rules 
 of law, than their abstract justice. On this point there is no other 
 rule that can be laid down, which will not leave too much latitude 
 as to place and distance. IJesides which, it is consistent with 
 analogy to other cases, that the indorser should stand committed, 
 in this respect, by the conduct of the maker. For his absconding 
 or removal out of the kingdom, the indcfl-ser is held, in England, 
 to stand committed ; and, although from the contiguity, and, in 
 some instances, reduced size of the States, and their union under 
 the general government, the analogy is not perfect, yet it is obvious 
 that a removal from the seaboard to the frontier States, or vice 
 versa, would be attended witii all the hardships to a holder, espe- 
 cially one of the same State with the maker, that could result from 
 crossing the British Channel. 
 
 With this view of the subject, we are of opinion that the judg- 
 ment below, although rendered on a different ground, nuist be 
 sustained. 
 
 Judgment (ij/irnird. 
 
 The doctrine of the above case is well settled. See Taylor v. Snvder, ante, 
 p. 327, and note ; Adams r. Leland, 30 N. Y. 309 ; Foster v. Julien, 24 N. Y. 28. 
 But the question whether, in case of removal into anotiier jurisdiction, present- 
 ment should be made at the payor's last abode, has given rise to some conflict. 
 It will 1)0 observed that that point is not directly decided in the principal case ; 
 it is only held that such a presentment is sufficient. If no such presentiiunt iiad 
 been made, the question of the necessity of it might have arisen. 
 
 In Massachusetts it is held that in case of removal from the State, the present- 
 ment should 1)0 made at the payor's last place of residence. Wheeler r. Field, 6 
 Met. 2UU. See also Fierce v. Cate, 12 Cush. l')0, eited at length in note to 
 Lehman v. tloiies, post, 451. In New York and Ohio the contrary rule otitains. 
 Foster r. Julien, 2-i N. Y. (10 Smith) 2t>, Mdson, .]., dissenting; tiist r. Lybrand, 
 3 Ohio, 308. The same may possibly be inlened in Pennsylvania from Keid r. 
 Morrison, 2 Watts & S. 401, where it is said that the rule which applies in the case 
 of an absconding debtor applies equally in the case of the removal of the payor into 
 
 2U
 
 450 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 • 
 anotluT State. This may mean, however, only that a personal demand is in such 
 case dispensed with ; for it is very obvious that so far as the necessity of making 
 presentment at the payor's last abode is concerned, there is a very material dif- 
 (ierence between an al)sconding and an honest removal from the State. In the 
 latter case it is not unusual lor the maker or acceptor to leave funds behind him 
 to meet his obligations ; but a circum.stance of that kind in the former case 
 would be remarkable indeed. And this seems to be a Strong reason for main- 
 taining the rule held in Massachusetts. Chancellor Kent (3 Com. 96), and 
 Bcarddey, J., in Taylor v. Snyder, aiite, p. 327, carefully state that presentment 
 at the payor's last abode is sufficient; but say nothing of the necessity of- such 
 presentment. See Taylor v. Snyder, ante, p. 327, and latter part of note ; also 
 Lehman v. Jones, infra. 
 
 Lehman v. Jones. 
 
 (1 Watts & Sergeant, 126.- Supreme Court of Pennsylvania, May, 1841.) 
 
 Absconding of the payor. — If the maker of a promissory note absconds before the 
 maturity of the note, this will excuse the holder from making presentment at his 
 last place of residence. 
 
 Assumpsit against Lehman and Stroh, as indorsers of a promis- 
 sory note. 
 
 It was proved that Robinson, the maker of the note in suit, had 
 absconded to parts unknown and had not returned. 
 
 The objection was that no demand was made upon Robinson, 
 and that the notice was informal. 
 
 The Court below thus instructed the jury : — 
 
 Parsons, President. — The Court instruct the jury, as a matter 
 of law, if they believe that Robinson absconded in December, 
 1835, as testified to by his mother, and did not return before the 
 note became due, nor since, it was not requisite that the holders 
 of the note should go to Jonestown, and attempt to make a de- 
 mand upon him in order to charge the indorsers ; provided the 
 indorsers were cognizant of the fact that the drawers had left the 
 State, of which there would seem to be no doubt, if the testimony 
 of Mrs. Robinson is believed. 
 
 Per Curiam} — The rule in Lambert v. Oakes (1 Ld. Raym. 
 443), is, that the holder must have demanded, or done his en- 
 
 1 Gibson, C. J., Rogers, Huston, Kennedy, Sergeant, JJ.
 
 LEHMAN V. JONKS. 451 
 
 deavor to demand the money. But the law is not so uureasouahle 
 as to retjiiire an iinpossiljility ; and therefore it is said HI). Anon. 
 743), that where the drawee of a bill has abseonded before the day 
 of payment, notice of tlMJ fact is equivalent to notice of demand 
 and di.shoiior. In Duncan v. McCullough, 4 Herg. & Rawle, 480, 
 the principle was fecogni/.ed as Ijeing applicaljle to a promissory 
 note; and it has l)cen established l)y direct decision in some of 
 our neighboring Stales. It would have been idle for the i)hiiiitifT 
 to demand jniymont at tiie late residence of Robinson, tlie drawer, 
 after he had absconded. Where, indeed, the drawer of a note or 
 the drawee of a bill has merely removed from the place of his 
 residence, indicated by the bill, it is the business of the holder to 
 inquire for liim and ascertain where he has gone, in order that he 
 may follow him ; but when he has secretly fled, an application at 
 the place would lead to no information in respect to him ; and the 
 law requires notliing which is nugatory. The other errors are 
 either resolvable by this precedent, or are plainly unfounded. 
 
 Judgynent affirmed. 
 
 This case is followed by lleid v. ^lorrison, 2 Watts & S. 401 ; ami the same 
 doctrine is stated to be the law in New York. See Taylor v. Snyder, ante, p. 327 ; 
 Spies V. Gilniore, 1 Coinst. 321. See also Wolfe v. Jewett, 10 La. 383, stating 
 the same rule ; Bruce v. Lytle, 13 Barb. 163 ; Gillespie v. Hannalian, 4 McCord, 
 o03, in which Johnson, J., says : " Now I take it that there is nothing in the prin- 
 ciples of justice which would require the indorsee to make a demand, when, as in 
 the case of Putnam v. Sullivan, 4 Mass. »3, it had become impracticable, the maker 
 having absconded. Nor can I perceive in what way it would promote commerce. 
 But on the contrary, that rule which enjoined the performance of impossibilities, 
 would deter the most hardy and adventurous from placing themselves within its 
 operation. And it seems to be generally agreed that the absconding of the 
 maker of a note, or the acceptor of a bill of exchange, will excuse the holder 
 from making a demand." 
 
 This was the doctrine in Massachusetts until the case of Pierce v. Gate, 12 
 Gush. I'JO, decided in 1853, when a more stringent rule was declared. See Graf- 
 ton Bank v. Cox, 13 Gray, 503. See as to the former rule, Hale v. Burr,*12 
 Mass. v85 ; Shaw v. Keed, 12 Pick. 132. But in Pierce r. Gate, supra, it was hold 
 that if the payor absconds, leaving no visible property subject to. attachment, a 
 want of demand or inquiry for him will not thereby be excused, though the 
 indorser knew of tlie absconding. .SV/a/r, G. J., said : " We are aware xhat in 
 some of the earlier cases in Massachusetts, it was held that proof that the maker 
 had absconded, or failed, and become insolvent, so that a demand would bo 
 unavailing, would be an excuse lor want of presentment. Putnam r. Sullivan, 4 
 Mass. 45. But it has been decided, on consideration, and upon principle, that 
 the obligation of an indorser is conditional ; that is, that he will be answeral)le if,
 
 452 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 at the maturity of the note, the holder will present it to the maker for payment ; 
 and if thereupon the maker shall neglect or refuse to pay it, and the holder will 
 give seasonable notice to the indorser, he will pay it himself. ^Sandford v. Dilla- 
 way, 10 Mass. 52 ; Farnum v. Fowle, 12 Mass. 89. These are the conditions of 
 his liability. The holder, therefore, to charge the indorser, must show a com- 
 pliance with these conditions, or that proper means have been taken to effect a 
 compliance with them, unless, indeed, he can prove a waiver of them by the 
 indorser. And this, we think, is the rule as now settled. Granite Bank v. 
 Ayres, IG Pick. ;592 ; Lee Bank v. Spencer, 6 Met. 308. If the maker has left 
 the State, the holder must demand payment at his actual or last place of abode, 
 or of business, within the State. Wheeler v. Field, 6 Met. 290." But, after 
 giving the same extract from this case in 1 Parsons, Notes and Bills, 450, it is 
 there said, in the note : " It is a fact personally known to us, that this point was 
 not argued, nor indeed raised, by counsel in this case. The defence was based 
 upon other grounds, because it was supposed that the decisions overruled by this 
 case, and the practice under them, had established the law." 
 
 Under these circumstances, it would not be strange that the old rule, as stated 
 in the principal case should, on the next raising of the question, be re-established. 
 
 But though demand upon the maker or acceptor is excused in the case of an 
 absconding, still notice should be given that the party has absconded. Anony- 
 mous, 1 Ld. Raym. 743 ; Foster v. Julien, 24 N. Y. (10 Smith) 28, 37 ; Ex parte 
 Rohde, Mont. & M. 430 ; Michand v. Lagarde, 4 Minn. 43 ; 1 Parsons, Notes 
 and Bills, 449, 528. 
 
 MicAJAH T. Williams, Plaintiff in Error, v. The Bank of 
 THE United States, Defendant in Error. 
 
 (2 Peters, 96. Supreme Court of the United States, January, 1829.) 
 
 Absence of payor. — In an action against an indorser, it appeared that the notary called 
 at his dwelling-house to serve notice of dishonor, and found the house shut up, the 
 doors locked, and the family out of town (as he learned on inquiry of the next 
 neighbor), upon a visit of unknown duration. Held, that he had used due dili- 
 gence, and that the indorser was liable. 
 « 
 
 The case is stated in the opinion of the Court. 
 
 Washington, J. This was an action of assumpsit, brought in 
 the Circuit Court of Ohio by the president, directors, and company 
 of the Bank of the United States, against J. Embree, the maker, 
 and D. Embree and M. T. Williams, the indorsers of two several 
 promissory notes. The only count in the declaration is for money 
 lent and advanced by the plaintiffs to the defendants.
 
 WILLIAMS V. BANK OF THE UNITED STATES. 453 
 
 Upon the plea of the general issue, the case at the trial was, by 
 consenfof the parties, submitted to the Court ; aiul the above notes 
 were given in (Evidence by the plaintiffs, in support of the action. 
 The Court gave judgment against the defendants, and ordered it to 
 be certified in pursuance to the statute of Oliio, that it appeared 
 to the satisfaction of the Court that J. Embree had signed the 
 notes on which the suit was brought as principal, and D. Embree 
 and M. T. Williams, as sureties. 
 
 At the trial of the cause tiius submitted to the Court, the plain- 
 tiffs, having proved the demand and the handwriting of the in- 
 dorsers of the notes, offered the following evidence of the notice 
 to the defendant, Williams, namely, " that the notary public, after 
 the protest of the notes and the expiration of the usual days of 
 grace, called at the house of the defendant Williams, who resided 
 in the city of Cincinnati, wiiich lie found shut up, and the door 
 locked, and on inquiry of the nearest resident, he was informed 
 that tlie said Williams and family had left town on a visit, whether 
 for a day, week, or month, he did not know, nor did he inquire. 
 He made use of no further diligence to ascertain where Mr. Wil- 
 liams had gone, or whether he had left any person in town to 
 attend to his business. The witness left a notice at the house of 
 a person adjoining, with a request to hand it to the defendant when 
 he should return." 
 
 The Court being of opinion that this evidence was conclusive of 
 legal notice to charge Williams, his counsel took a bill of exceptions, 
 and the cause is now for judgment before this Court upon a writ 
 of error. 
 
 The only question which this bill of exception presents is, whether 
 due diligence was used l)y the defendants in error to give notice 
 to the indorser of the non-payment of these notes by the maker of 
 them ? 
 
 The general rule of law applicable to the subject has long been 
 settled, that to enable the holder of a bill of exchange or promissory 
 note to charge the indorser, it is incumbent on him to prove that 
 timely notice of the dishonor of the bill or of the non-payment of 
 the note was given to the indorser, or, if this could not be done, he 
 must excuse the omission by showing that due diligence had been 
 used to give such notice. 
 
 If the parties reside in the same city or town, the indorser must 
 be personally noticed of the dishonor of the •bill or note, either
 
 454 EXCUSES OP PRESENTMENT AND NOTICE. 
 
 verbally or in writing ; or a written notice mnst be left at his 
 dwelling-house or place of business. Either mode is sufficient, but 
 one or the other must be observed unless it is prevented by the act 
 of the party entitled to the notice. 
 
 In the case now under consideration, the banking-house of the 
 defendants in error and the dwelling-house of the plaintiff were 
 located in the same city. The notary called at the plaintiff's house, 
 which he found shut up, and the door locked. Upon inquiry of 
 the nearest resident, he was informed that the defendant, with his 
 family, had left town on a visit, but for how long a period was 
 unknown to tbis person ; no further attempt was made to ascer- 
 tain where the plaintiff in error was gone, or whether he had left 
 any person in town to attend to his business. The question to be 
 decided is, whether, under these circumstances, the defendants 
 are excused for not having given the notice which tlie law re- 
 quires ? 
 
 In the case of Goldsmith and Bland, Bayley, Bills, 224, note, 
 it was decided that it was sufficient to send a verbal notice to the 
 defendant's counting-house, and if no person be there in the ordi- 
 nary hours of business to receive it, it is not necessary to leave or 
 send a written one. The principle of this decision is, that the 
 counting-house of tbe defendant is the place in which the holder 
 was entitled, during the regular hours of business, to look for the 
 person for whom the notice was intended, or for some person 
 authorized by him to receive it, and that the omission to give it 
 was occasioned, not by the want of due diligence in the holder, but 
 by the fault of the party who claimed a right to receive it. 
 
 The principle here stated is not peculiar to this class of con- 
 tracts. If a party to a contract who is entitled to the benefit of a 
 condition, upon the performance of which his responsibility is to 
 arise, dispense with, or by any act of his own prevent the perform- 
 ance, the opposite party is excused from proving a strict compliance 
 with the condition. 
 
 Thus, if the precedent act is to be performed at a certain time or 
 place, and a strict performance of it is prevented by the absence 
 of the party who has a right to claim it, the law will not permit 
 him to set up the non-performance of the condition as a bar to 
 the responsibility which his part of the contract had imposed upon 
 him. 
 
 The application of this general principle of law to tlie subject
 
 WILLIAMS V BANK OF THK UNITED STATES. 455 
 
 before us, may be ilhisti-atcd l)y otber cases than the one inime- 
 diatcly under consideration. The hohler of a bill or promissory 
 note, in order to entitle himself to call upon the drawer or indorser, 
 must give notice of its dishonor to 'the party whom he means to 
 charge. But if, when the notice should be given, the party entitled 
 to it be absent from the State, and has left no known agent to 
 receive it ; if he abscond, or has no place of residence which rea- 
 sonable diligence used by the holder can enable him to discover, 
 the law dispenses with the necessity of giving regular notice. 
 
 So where the parties, as in this case, reside in the same city or 
 town, the notice should be given at the dwelling-house or place of 
 business of the party entitled to claim it, and the duty of the holder 
 does not require of him to give the notice at any otiier j)lace. If 
 the giving of the notice at either of these places l)e prevented by 
 the act of the party entitled to receive it, the performance of the 
 condition is excused. 
 
 In this case, the notary called at the dwelling-house of the in- 
 dorser, at the regular time and at a seasonable hour, for aught 
 that appears, to serve the notice, and found the house shut up, the 
 doors locked, and the family absent from town upon a visit of 
 unknown duration to the agent of the bank or to his informer. 
 What was he to do ? He was not bound to call a second time, nor 
 was he under any obligation to leave a written notice, even if he 
 could have found an entrance into the house. 
 
 But it is insisted that the defendants in error were bound, under 
 the circumstances of this case, to give notice to the plaintiff through 
 the channel of the post-ofTice : and the case of Ogden v. Cowley, 
 2 Johns. 274, is relied uj)on in support of this j)osition. 
 
 In that case, tiio notary called at the houses of the indorser. and 
 of his deceased partner, for the jmrpose of giving them notice of 
 the non-payment of the note, but found their house locked up, and 
 on inquiring at the next door was told they were gone out of town. 
 On the same day, the notary put a letter into the post-office in the 
 city of New York, addressed to the defendant and his partner, 
 informing them of the non-payment of the note, and that they were 
 looked to for payment. It appeared that at that time the yellow 
 fever. j)revailed in the city. The Court decided that all proper steps 
 were taken to communicate the requisite notice to the indorser, 
 and that the notice was, of course, sufficient. 
 
 It may be remarked upon this case, that the absence of the
 
 456 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 indorsers from their houses was probably the consequence of a 
 temporary removal from the city, on account of the prevailing 
 sickness, and that the case does not inform us whether the place 
 to which they had removed was known to the notary. We arc not 
 prepared to say that in such a case the parties entitled to notice 
 were bound to be at their dwclling»house8, or to have any person 
 there at the time the notary called to receive notice, and conse- 
 quently that their absence, and the closing of their houses, ought 
 to have excused the holder from taking other steps to communicate 
 notice to them. But laying these circumstances out of the case, 
 the Court decided no more than that the steps taken to give notice 
 were sufficient, in point of law, for that purpose ; and it is not to 
 be doubted but tliat they were so. They do not decide that, in a 
 case freed from the circumstances before noticed, it was necessary 
 that notice to the indorsers should have been given through the' 
 post-office. 
 
 In the case of Crosse v. Smith, 1 Maule & Sel. 545, the cashier 
 called at the counting-house of the drawer, for the purpose of 
 giving him notice of the dishonor of the bill. He found the out- 
 ward door open, but the inner locked. The cashier knocked, and 
 made noise enough to have been heard, if anybody had been within. 
 After waiting a few minutes and no person appearing, he left the 
 house, and took no further legal step to give the notice. It was 
 insisted, in opposition to the sufficiency of the notice, that a notice 
 in writing, left at the counting-house, or put into the post-office, 
 was necessary. Tiie answer given by the Court was, that the law 
 did not require either mode to be pursued. " Putting a letter in 
 the post," says Lord Ullenborough, " is only one mode of giving 
 notice ; but where both parties are residing in the same post-town, 
 sending a clerk is a more regular and less exceptionable mode." 
 The decision in this case, as to the suffioiency of the notice, was 
 the same as that given in the case of Goldsmith v. Bland, before 
 referred to. 
 
 The case of Ireland v. Kip, 10 Johns. 490, and 11 Johns. 231, 
 was much pressed upon the Court in the argument of the present 
 cause by tlie counsel for the plaintiff in error. We have examined 
 that case with great attention and respect, but have not been able 
 to view it in the same light as it seemed to have struck the learned 
 counsel. The place of residence of the defendant, the indorser, 
 was three and a half miles from the post-office, within the limits
 
 WILLIAMS V. BANK OF THE UNITED STATES. 457 
 
 of tlie city of New york, l)ut without tlic compact part of the city, 
 and without the district of any letter-carrier. Tiie case does not 
 State that the indorser had any counting-house, or place of husiness 
 in the city, at which the notice could have heen left. The only 
 notice given to the defendant was a written one, put into the post- 
 office in the city of New York, directed to the defendant, and 
 stating that the note had not heen paid. The place of the defend- 
 ant's residence was known to the clerk of the notary, wflo put the 
 written notice to the defendant into the post-ofiice. Tlie only 
 question decided hy the Court was, that, under the circumstances 
 of that case, the holder of the note was bound to give personal 
 notice to the defendant, or to see that the notice reached his 
 dwelling-house ; and that merely putting the notice into the post- 
 office was not sufficient. 
 
 * Upon a second trial of the cause it appeared in evidence, that 
 the defendant had given directions to the letter-carriers of the post- 
 office to leave all letters that came to the post-office for him at a 
 house in Frankfort Street, in the city of New York ; that the letter- 
 carriers called at the post-office tliree or four times every day, and 
 took out and delivered all letters left there ; and that the defendant 
 usually called or sent every day for his letters to the house in 
 Frankfort Street. 
 
 The learned judge who delivered the opinion of the Court stated, 
 that, admitting a service of the notice at the house in Frankfort 
 Street would have been good and equivalent to a service at tlie 
 defendant's dwelling or counting-house ; still, the delivery of the 
 notice at the ))Ost-office, \inaccompanicd with proof that it was actu- 
 ally delivered at the house, was not notice, lie adds, that '' the 
 invariable rule with us is, that when the parties reside in the same 
 city or place, notice of the dishonor of bills or notes must be 
 personal, or something tantamount; such as leaving it at the 
 dwelling-house or place of business of the party, if absent." Now 
 it is apparent, that the question which arises in the case under 
 consideration was not and could not be decided in the case just 
 referred to. The objection to the notice in the latter case was, 
 that it ought to have been given at the dwelling-house of the de- 
 fendant, and could not be given through the post-office, unless it 
 also appeared that the notice so given reached the dwelling-house 
 or the house in Frankfort Street. No attempt was made to give 
 the notice in the former mode, as was done in this case ; and the
 
 458 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 latter mode, SO far from being considered as. tantamount to the 
 former, or as being necessary in order to excuse the want of 
 personal notice, is declared throughout to be insufficient without 
 further proof. 
 
 The opinion of this Court is that the defendants in error were, 
 under tlie circumstances of this case, excused from taking any 
 other steps than they did, to give notice to the plaintiff of the non- 
 payment ^f these notes ; and that the judgment of the Court below 
 ought to be affirmed, witli costs. 
 
 The text-writers state the rule as declared in this case. See Story, Promis- 
 sory Notes, § 238; Story, Bills of Exchange, § 352; Chitty, Bills, 279, 280; 
 Bayley, Bills, 216, 6th Lond. ed. 
 
 But if the payor's place of business or residence is closed, the holder as in the 
 principal case, must make inquiry for him. Collins v. Butler, 2 Strange, 1087 ; 
 Bateman v. Joseph, 12 East, 433; Beveridge v. Burgis, 3 Camp. 262; Brown- 
 ing V. Kinnear, 1 Gow, 81 ; Hine v. AUely, 4 Barn. & Adol. 624; Granite Bank 
 V. Ayres, 16 Pick. 392; Lanusse v. Massicot, 3 Mart. La. 261, 265 ; Franklin v. 
 Verbois, 6 La. 727. Howe v. Bowes, 16 East, 112; s. c, in error, 5 Taunt. 
 30; Baumgardner v. Reeves, 35 Penn. State, 250; Shedd v. Brett, 1 Pick. 413. 
 In the last-named case, Parsons, C. J., seemed to think the inquiry unnecessary, 
 though there was proof of diligent search for the maker in the case. 
 
 Barton v. Baker. 
 
 (1 Sergeant & Rawle, 334. Supreme Court of Pennsylvania, April, 1815.) 
 
 Insolvenaj. Assignment to indorser. — Though the maker of a note was insolventwhen 
 the note was made and indorsed, and also when it fell due, and this fact was known 
 to the indorser, this will not excuse due notice of non-payment. But if the in- 
 dorser has received from the maker a general assignment of his estate and effects, 
 notice is not necessary. 
 
 The case is sufficiently stated in the opinion of the Court. 
 
 TiLGHMAN, C. J. The objection to the verdict in this case is, 
 that due notice of non-payment by the maker of the note on which 
 the action is founded, was not given to the defendant who was the 
 indorser. It is confessed that due notice was not given ; but the 
 plaintiff contends, that under the circumstances of the case, notice 
 was not necessary. The circumstance principally relied on at the
 
 BARTON V. BAKER. 459 
 
 trial, and on which the plaiiitilT had the charj^e of the Court in 
 his favor, is, that at the time when tlie note was made and 
 indorsed, and also at the time when it fell due, it was known to 
 the defendant that James Brown <fe Co. were insolvent. If the 
 case rested solely on this objection, I should be for <rrantin<j a new 
 trial, because the cases cited by tlio plaintitf, of De Berdi v. Atkin- 
 son, 2 II. Bl. ^)3G, and Corney v. Da Costa, 1 Esp. 302, have 
 been overruled in Niciiolson v. Gouthit, 2 H. Bl. t509, and 
 Esdaile v. Sowcrby, 11 East, 114. The case of Jackson v. Rich- 
 ards, 2 Caines, 343, agrees with the law as settled by the 
 last English cases. But I do not rest my opinion solely upon the 
 authority of these cases. Tiie reason of the thing demonstrates 
 that the insolvency of the maker of a note, though known to the 
 indorser, ought not to discharge the holder from giving notice. 
 There are various degrees of insolvency, and it rarely happens 
 that a man is totally insolvent. So that there is a chance of 
 getting something by an application to the debtor. Besides, if a 
 man has nothing of his own he may have friends, who, to relieve 
 him from j)rcssure, will do something for him. The indorser, 
 therefore, has a chance of securing himself at least in part. The 
 only reason that can be assigned for insolvency taking away the 
 necessity of notice, is, that notice could be of no use to the indors- 
 er. But it is almost impossible to prove that it miglit not have 
 been of use. Therefore it is necessary. Tliere is another circum- 
 stance in this case, however, operating powerfully in favor of the 
 plaintiff. The house of James Brown & Co. consisted of James 
 Brown and Armat Brown. When the note fell due, James Brown 
 was in Europe, and Armat Brown in this city. A few months 
 before it was due the defendant received from Armat Brown an 
 assignment o^ his whole estate, for the purpose, among other things, 
 of indemnifying him against his indorsements on account of James 
 Brown & Co. Now, by the taking of this assignment, it is not 
 unreasonable to presume, tliat the defendant took upon himself 
 the payment of the indorsed notes, especially as wIumi he did 
 receive notice (ten days after the note fell due), although he knew 
 and remarked, that it was out of time, he did not deny his respon- 
 sibility, but said that his ability to pay would depend on the arrival 
 of a vessel, I agree, therefore, with Bond v. Farnham, 5 Mass. 
 170, where it was held, tliat in such a case the indorser dispenses 
 with notice. Inasmuch then as it appears upon the whole of
 
 460 EXCUSES OP PRESENTMENT AND NOTICE. 
 
 this case, that notice of non-payment was not necessary, no injus- 
 tice has been done by tlie verdict, and therefore, a new trial ought 
 not to be granted. 
 
 Yeates, J. I have no hesitation in admitting, tliat my charge 
 to the jury in the particular of notice to the defendant of the non- 
 payment of the note by the drawers, does not accord with the most 
 modern authorities. I considered the cases De Berdt v. Atkinson, 
 in 1794, ^ H. Bl. 336, and of Corney v. Da Costa in 1795, 1 
 Esp. 302, under circumstances very similar to those disclosed in 
 evidence on the trial, as decisive of the question of notice ; and 
 that, according to the expressions of BuUer, J., in the first case, 
 the general rule as to notice was only applicable to fair transac- 
 tions, where the note had been given for value, in the ordinary 
 course of trade. The justice of the case in favor of the plaintiff 
 struck my mind forcibly, and I thought Nicholson v. Gouthit, in 
 1796, 2 H. Bl. 610, and Jackson v. Hitter, in 1805, 2 Caines, 
 343, might be admitted to be law, without overthrowing the two 
 former decisions. In the first of them, 2 H. Bl. 610, it is 
 stated, that if the note had been presented when it became due, it 
 would have been paid, as Burton, a prior indorser, had lodged a 
 sufficient sum of money in the defendant's hands for that purpose, 
 but which he paid away, when he found the note did not come to 
 him as he expected. It appeared to me very singular, that al- 
 though Eijre, Chief Justice, and Heath and Rooke, Justices, sat in 
 the Common Pleas, and decided both cases, the decision in De 
 Berdt v. Atkinson was not cited nor adverted to in Nicholson v. 
 Gouthit, if it established a different principle, either by the Court 
 or counsel, although nineteen months only had intervened. I was 
 led to remark on the trial that Chitty (who is generally deemed a 
 very correct compiler, in his treatise on Bills and Notes, p. 87, I 
 Lond. ed.) lays down the broad proposition that the payee of a 
 note, indorsing it to give it currency, and knowing the insolvency 
 of the maker at the time, cannot insist on the want of notice as a 
 defence ; and yet, though he cites Nicholson v. Gouthit, in the fol- 
 lowing page he does not consider it as effecting any change in tlie 
 commercial law before asserted. In the New York case, 2 Caines, 
 343, notice was given to the indorser of non-payment by the 
 drawer, prior to any demand upon the drawer, and consequently 
 the notice was null, as the drawer was not in default when he 
 received notice. I placed too much reliance on the circumstances
 
 BARTON V. BAKER. 461 
 
 detailed in the cases of 1794 and 1795, without sufTicicnfly attend- 
 ing to the reasoning of the Court therein, wliich is contradicted in 
 the later cases, Esdailc v. Sowerby, in 1809, 11 East, 117, was 
 not cited on the trial, but it is held therein by the whole court that 
 Nicholson v. Gouthit is so decisive an authority on this suliject, 
 that the Court could not again enter into the discussion of the 
 doctrine. It seems now settled, that notwithstanding it sounds 
 harsh that a known bankruptcy should not be equivalent to a de- 
 mand or notice, the rule as to both is too strong to be dispensed 
 with. At the same time, 1 cannot see how the defendant can get 
 over the late case of Bond cf ul. v. Farnham, in 1809, 5 ^lass. 
 170. In this instance, James Brown, one of the partners in the 
 firm, when the note fell due on the fifth of June, 1812, was in 
 Europe, and had been there some time before; Armat Brown, the 
 only resident partner in America,- had assigned all his real and 
 personal estate to the defendant to indemnify him for his advances 
 and indorsements. Against neither could any en'octive measures 
 be pursued within the period of imputed delay. In the language 
 of Chief Justice Parsons, "any demand by the defendant would be 
 fruitless, as he had secured all the property the drawer on the spot 
 had, for the express purpose of keeping him harmless." The 
 reason of the rule as to notice, must wholly fail under such cir- 
 cumstances. On this last ground, I am of opinion, that judgment 
 be rendered for the plaintiff on the verdict. 
 
 Neiv trial refused. 
 
 Thoui^li there is some conflict among the early cases, as shown by the cases 
 referred to in the opinion supra, re.«pcctin<j the necessity of notice in the case of 
 the insolvency of the payor, known to tlie drawer or indorser, the later authori- 
 ties, and the text- writers state the rule as declared in tlie principal case. Mr. 
 Justice' Story (Promissory Notes, § 2S()) says that " it is by our law, as well as. 
 by the French law, no excuse that the maker is a bankrupt, or is insolvent, at 
 the time wlien the note becomes due ; and this (as is asserted) for two reasons : 
 first, that it is part of the implied obligations or conditions of tlie contract of the 
 indorscr, that due presentment ^li;ill be made in order to bind him to pay upon 
 the dislionor; and sccoiully, that it is not certain, that if due presentment liad 
 been made, the note, notwithstanding tlie failure, might not have been paid, cither 
 by the maker or by some friend for him. Eacii of these reasons has been pro- 
 mulgated, nut only in the common-law authorities, but by foreign jurists of liigh 
 repute, such as Pothier and Savary."' 
 
 Upon this subject, Chitty (Bills, Wdo) says: "The death, bankruptcy, or 
 hnown insohnici/, of the drawee, or his being in prison, constitute no excuses, 
 either at law or in cc^uity, for the neglect to give due notice of non-acceptance or
 
 462 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 non-payment ; because many means may remain of obtaining payment by the 
 assistance of friends or otherwise; of which it is reasonable that the drawer and 
 indorsers should have the opportunity of availing themselves, and it is not com- 
 petent to the holders to show that the delay in giving notice has not in fact been 
 prejudicial." The same writer again uses this language, in substance, on p. 450; 
 with the additional statement that an offer of composition by the acceptor, not 
 acceded to, with a declaration in the presence of the drawer and holder that he 
 (the acceptor) had not and should not provide for the bill, will not dispense with 
 notice of dishonor. See Ex ixirte Bignold, 2 Mont. & A. 633. See also Chitty, 
 Bills, 493; Story, Bills of E.xchange, § 375. 
 
 The early cases which support a different doctrine are Bogy v. Keil, 1 Mo. 
 743; Stothart v. Parker, 1 Tenn. 260; Clark v. Minton, 2 Brev. 185. See Kid- 
 dell v. Ford, 3 Brev. 178; Ex parte Solarte, 2 Deac. & C. 261, as explained 
 in Ex parte Johnston, 1 Mont. & A. 622, 626, per Erskine, C. J. In the 
 early case of Jackson v. Richards, 2 Caines, 343, Kent, C. J., said that the 
 rule in Nicholson v. Gouthit, requiring notice, was " best, and ought to be 
 followed." The cases to the contrary have long since been disregarded; and 
 the rule stated in the principal case is now considered as well settled. See 
 Allwood V. Haseldon, 2 Bailey, 457 ; Mechanics' Bank v. Griswold, 7 Wend. 165, 
 169 ; Buck i-. Cotton, 2 Conn. 126 ; Sandford v. Dillaway, 10 Mass. 52 ; Barker 
 V. Parker, 6 Pick. 80; Shaw v. Pteed, 12 Pick. 132; Granite Bank v. Ayres, 16 
 Pick. 392 ; Hunt v. Wadleigh, 26 Me., 271 ; Lawrence v. Langley, 14 N. Hamp. 
 70; Bank of America v. Petit, 4 Dall. 127; Benedict v. Caffe, 5 Duer, 225; 
 Watkins v. Crouch, cited at length, infra ; Boultbee v. Stubbs, 18 Ves. 21, per 
 Lord Eldon; Sta{)les v. Okines, 1 Esp. 332 ; Esdaile v. Sowerby, 11 East, 117, 
 
 Upon the other point made in the principal case, that notice may be dispensed 
 with in case of an assignment of all the assets of the payor to the drawer or 
 indorser, the law is pretty well settled that way, especially if the fund is sufficient 
 to protect him. See Mechanics' Bank v. Griswold, 7 Wend. 165; Spencer v. 
 Harvey, 17 Wend. 489; Coddington v. Davis, 3 Denio, 16; s. c, 1 Comst. 
 186 ; Bank of South Carolina v. Myers, 1 Bailey, 412 ; Kramer v. Sandford, 4 
 Watts & S. 328 ; Stephenson v. Primrose, 8 Port. Ala. 155 ; Perry v. Green, 4 
 Harrison, 61; Andrews v. Boyd, 3 Met. 434; Prentiss v. Danielson, 5 Conn. 
 175 ; Duvall v. Farmers' Bank, 9 Gill & J. 31, 47 ; Lewis v. Kramer, 3 Md. 265 ; 
 Marshall v. Mitchell, 34 Me. 227; Denny v. Palmer, 5 Ired. 610; Martel v. 
 •Tureauds, 18 Martin, 118; Watkins v. Crouch, 5 Leigh, 522, cited at length, 
 infra. 
 
 But if the payor make an assignment in trust for the benefit of his creditors, 
 and among them of the indorser, this will not excuse demand and notice ; for 
 such a trust is a mere indemnity against his legal liabilities, which being con- 
 ditional would become absolute only by due demand and notice. Creamer v. 
 Perrv, 17 Pick. 332. In this case Shaw, C. J., said: "On the first ground we 
 think that the most which could be made of the evidence, is that after this note 
 was made, but several months before it became due, the promisor made an 
 assignment to trustees, upon trust, among other thing>, to secure the defendant 
 for all debts due to him from the promisor, and to indemnify him against all his 
 liabilities. AVithout stopping to consider whether, after his property was sur- 
 rendered by the trustees, the defendant could have availed himself of it, we
 
 BARTON V. BAKKR. 4G3 
 
 think the effect of tliis assif^nment was to secure and indemiiify tlie defendant 
 against his h-gal liabilities; and as his liability as an indorser on this note was 
 conditional, and depended upon the contingency of his having seasonable notice 
 of its dishonor, his claims upon the property depended upon the like contin- 
 gency." See Haskell v. Boardman, 8 Allen, .'38; Moses v. Ela, 43 N. Hanip. 
 557 ; Wilson v. Senier, U Wis. 380. 
 
 And the same is true where the indorser has received from the payor a chose 
 in action as collateral security to indemnify him for his indorsement. He is still 
 entitled to notice. Kramer r. Sandford, 3 Watts ct S. 328; Seacord r. Miller, 
 3 Kern. i")."> ; Otsego County Bank r. AVarren, 18 Barb. 2'JO, in which the decision 
 was based in part on the ground that the security was given after the maturity 
 of the note. 
 
 The case may also require notice, if the fund assigned is insufficient to save 
 the drawer or indorser harmless ; and the burden of proof seems to be on the 
 plaintiff suing without notice, to show that the fund was sufficient to protect 
 the defendant. In the absence of proof the latter will have judgment. AVat- 
 kins V. Crouch, 5 Leigh, 522 ; lirooke, J., dissenting. See also Denny v. Palmer, 
 5 Ired. GIO. In Watkins v. Crouch, the Court said: — 
 
 Cakr, J. This case turns upon the correctness of the opinions expressed by 
 the Court in instructions to the jury. These instructions were, in effect, that the 
 indorser having taken a transfer to trustees for his indemnity, of all the effects of 
 the maker, was thereby placed in the shoes of the maker; and as a demand of 
 payment at the place apjiointed in the note, is not necessary to charge the maker, 
 so no such demand was necessary under such circumstances, to fix the liability 
 of the indorser. The deed is made an exhibit in the bill of exceptions, and I 
 think may fairly be considered a conveyance of all the grantor's property. It is 
 given for the security of several enumerated debts ; and among others, of oiie- 
 J'aurth of the note on which the suit was brought. What was the value of the 
 property, or what proportion it bore to the debts intended to be secured by it, 
 does not appear ; that it was not sufficient to secure the whole, we are obliged to 
 conclude. The question is, was this opinion of the Court correct? 
 
 Whether, where the spit is against the maker of a promissory note, payable 
 at a particular place, it is necessary to prove a demand of payment at such 
 place, is a question that need not be discussed, until we are satisfied that the 
 indorser in the case before us stands in the shoes of the maker. But we may 
 lay it down as imquestioned law, that as a general proposition, the indorser 
 stands in a situation very different from the maker. He is not the real debtor, 
 but a surety only ; his undertaking is collateral, that if upon due diligence having 
 been used against the maker, the money is not paid, he will become liable ibr it. 
 This due diligence is a condition precedent to a right of recovery against him. 
 Therefore, when a note is maile payalile at a particular place, proof of a demand 
 at the place, is indispensable, in a suit against the indorser. Did the deed place 
 the indorser completely in the shoes of the maker? I should agree that it did, 
 if it appeared, that the property conveyed was sufficient for full indemnity 
 against the note, and was by the deed appropriated to such indemnity ; but the 
 sufficiency of the property makes no part of the case ; and it appears by the 
 deed, that the trustees are not authorized to appropriate any part of it to indem- 
 nity against more than a fourth of the note. It was said, however, that the
 
 464 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 property, whether adequate or not, was all the maker had ; and that havinj^ thus 
 become utterly insolvent, there could be no hope of his provi(lin<f funds at the 
 bank to discharge the note, and therefore no necessity of presenting it. But we 
 see, from many cases, that the most perfect knowledge of the insolvency or even 
 bankruptcy of the maker, does not dispense with a due presentment and notice 
 of dishonor. He may have friends or credit ; or the sagacity and vigilance of 
 the indorser may discover other sources of indemnity. It is his own affair, and 
 he ought to be the judge. It is in this aspect of the case, tliat Lord Eldon in 
 BouUbee v. Stubbs, 18 Ves. 21, says, that "if the acceptor of a bill becomes 
 bankrupt, the holder must give notice to the drawer ; as another perton has no 
 right to judge what are his remedies." But it was said, that here the insolvency 
 is produced by the indorser himself; that he has appropriated to his own use the 
 funds which might have gone to discharge the note ; and that we cannot suppose 
 such a conveyance would be made, without an agreement between the parties, 
 that the indorser should attend to the note, take the maker's place, and release 
 him from all further care about it. I cannot perceive the correctness of this 
 reasoning. Why should the indorser take the maker's place ? Was it not better 
 that he should continue to hold his station of collateral surety ? better both for 
 himself and the maker? He was bound conditionally for the debt; and he 
 might well say to the maker, "My friendship for you has led me into this 
 engagement ; it is but fair, that you secure me, so far as you can ; your property 
 may not pay a fourth of the debt, yet it will be something ; in the mean time, we 
 •will continue to hold our relations of principal and surety : before the note 
 comes to maturity, new prospects may open upon you, new friends may arise, 
 new accessions of fortune may fall in ; and the holder of the note will have to 
 proceed with due diligence before he can come upon me." Is not this the more 
 natural course ? And does it invade any right of the holder, or impose any 
 hardship on him ? No ; he has only to attend to his own interest, and pursue 
 the beaten track of due diligence. I cannot think then that by the execution of 
 the deed, the indorser lost his character of surety, and became a principal 
 debtor; and I am of opinion, that in order to charge him, it was incumbent on 
 the holder of the note to prove, at least, a presentment.at the place of payment, 
 if not due notice of such presentment. It will be observed, that I have cited no 
 cases in support of this opinion ; not that I have not read, and considered, and 
 puzzled myself with, the multitude that were commented on in the argument ; 
 but because, finding them like the Swiss troops, fighting on both sides, I have 
 laid them aside, and gone upon what seems to me the true spirit of the law. I 
 think the judgment should be reversed. 
 
 Cabell, J. As to the indoi-ser, he does not become a debtor by his indorse- 
 ment. He is a surety for the debt of another, and becomes bound to pay, only 
 on the condition that the debt shall not be paid by the maker, after due diligence 
 shall have been used, and notice given of non-payment. Where a note is pay- 
 able at a particular time and place, due diligence requires that it shall be pre- 
 sented at that time and place. Such bemg the terms of the undertaking of an 
 indorser, it is incumbent on the holder of a note, to show a compliance with 
 them, on his part, by suitable averments in his declaration, and by proper proofs 
 at the trial, or to show, in like manner, a proper excuse for their omission. 
 These terms not having been complied with in this case, we have only to examine 
 into the sufficiency of the excuse offered by the plaintiffs.
 
 BARTON V. BAKER. . 465 
 
 It is perfectly settled that the insolvency or bankruptcy of the acceptor of a 
 bill of txchange, or the maker of a promissory note, and knowledge, on tlie part 
 of the indorser, of that insolvency or bankruptcy, and that the note cannot and 
 will not be paid- l)y the acceptor or maker, will not exempt the holder from 
 the obli;ration of due presentment and notice of dishonor. Nicholson v. Gou- 
 thit, 2 II. Bl. 610; Staples v. Okines, 1 Esp. 332; Esdaile r. Sowerby, 11 
 East, 147. Many other cases to the same effect might be cited from the courts 
 of England and of our own country ; but it cannot be necessary. In Staples v. 
 Okines, the drawer of a bill of exchange, having effects in the hands of the 
 drawee, was told by the drawee, before it became due, that he, the drawee, could 
 not pay it ; and it was then nmlcrslood between them that the drawer would have 
 to provide for it ; yet even this knowledge on the part of the drawer, and this 
 understanding between him and the drawee, did not excuse the want of notice- 
 In fact, if the indorser remains passive, if he does nothing, and the holder fails 
 either to make due demand of payment, or to give notice of the dishonor of the 
 note, the indorser can rarely, if ever, be made liable. 
 
 There are, however, some acts of the indorser, antecedent to the time of 
 payment of the note, that will excuse the want of notice. But an examination 
 of the cases will show that they are such acts of the indorser as would make it 
 fraudulent or improper in him, towards the holder or maker, to insist on notice. 
 Thus, where the drawer of a bill, a few days before it became due, stated to the 
 holder that he had no regular residence, and that he would call and see if the 
 bill had been paid by the acceptor, it was held that he was not entitled to notice 
 from the holder, " he having taken upon himself the duty of inijuiring if the bill 
 ■was paid." Phipson v. Kneller, 4 Camp. 285. So also where the drawer of a 
 bill, upon being applied to by the holder, before it became due, to know whether 
 it would be paid, said it would not be paid, it was held that notice of non-pay- 
 ment was not necessary. Brett v. Levett, 13 East, 213. This case, seemingly 
 inconsistent with previous decisions, may be reconciled to them on this ground, 
 and on this ground only ; namely, that it would be a fraud in the drawer towards 
 the holder to avail himself of the omission to give notice of the non-payment of 
 the bill, after he himself had declared to the holder that it would not be paid; a 
 declaration which probably produced the very omission of which he sought to 
 avail hiin.self.' 
 
 In Cornay r. Da Costa, 1 Esp. 303, it was decided, that where the indorser 
 of a note had taken from the maker, before the note became due, eflects to the 
 amount of the note, for the ])urpose of paying it, he was not entitled to notice. 
 Bayley, in his treatise on Bills of Exchange, p. 202, referring to this case, 
 says: " If the payee of a note lends his name, and takes effects of the drawer 
 to answer it, he is not entitled to notice, because he is the proper person to pay 
 it, and would be entitled to no remedy over on making payment.'' And in 
 Brown t'. Malfey, lo East, 217, 222, lie farther explains the ground of the deci- 
 sion, by saying, that "it would have been a fraud in the indorser to call upon 
 the maker of the note, because, before it became due, the maker had deposited 
 effects in his hands to answer the amount of his indorsement." 
 
 Let us now see if the case before us comes within the ])rinciples of any of 
 
 1 See post, p. 475. 
 80
 
 4 
 466 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 these cases. In our case, there was no communication between the indorscr and 
 holder; nothing was said or done, calculated to mislead the holder, and seduce 
 him into the neglect of a duty which he might otherwise have performed. As to 
 his consent that the note should be negotiated at the Bank of the United States, 
 it was of no kind of consequence ; the holder had a right, without his consent, 
 to negotiate it where he pleased. The face of the note told the holder that it 
 has to be paid at the Farmers' Bank. It is, therefore, unlike the cases of Phip- 
 son V. Kneller, and of Brett v. Levett, already commented on. It is equally 
 unlike the case Cornay v. Da Costa; in that case, there was an assignment to 
 the indorscr, of effects to ihe amount of the indorsement. Here, there is an 
 assignment of all the property of the maker ; but it does not appear that it was 
 equal to the amount of the indorsement. We are not at liberty to say that it 
 was so ; for it is neither averred nor proved. And we must not forget that the 
 burden of proving every matter of excuse is upon the holder. It was not 
 incumbent on the indorser to prove any thing. We must take it, then, in this 
 case, that the property was not sufficient ; and, not being sufficient to discharge 
 the whole amount of the indorsement, " the indorser was not the proper person 
 to pay the note ; " that part of it at least to which the assigned eflfects were 
 insufficient. It cannot be said of him, as was said of the drawer in Cornay v. 
 Da Costa, that "he had no remedy over on making payment," or, that "it 
 would have been a fraud in the indorser to call on the maker." As to the part 
 of the note, to the payment of which the assigned property was insufficient, he 
 had an unquestionable right to call on the maker ; and as to this he stood on his 
 original undertaking as indorser, under no more obligation to pay it than he 
 would have been to pay the whole note if no property at all had been assigned, 
 and, consequently, all the original obligations of the holder still subsisted. 
 
 The indorser, in taking an assignment of property sufficient to pay only part 
 of the note, did not undertake to pay the residue. It may be confidently 
 asserted that there is not, in the terms of the assignment, any express contract 
 to that effect ; nor can I see a single circumstance in the whole transaction from 
 which such a contract can be implied. The assignment of property sufficient 
 only for the partial indemnity of the indorser was a matter between him and 
 the maker of the note. There was no motive in either of the parties to that 
 arrangement, which could induce a wish that the indorser should waive the con- 
 dition of his liability. How, then, can we imply such waiver, in favor of a per- 
 son who was no party to the arrangement? In the case of Staples v. Okines, 
 where the acceptor of a bill of exchange told the drawer that he, the acceptor, 
 could not pay it, and where it was even understood between the drawer and 
 acceptor that the drawer would have to provide for it, no waiver of notice was 
 implied, in favor of the holder. How then can we imply it from the mere fact 
 of a partial indemnity ? Suppose the maker of this note had had no other prop- 
 erty but money (not equal however to the amount of the note), and had put 
 that money, all he had, into the hands of the indorser, to be applied by him to 
 the payment of the note. Would this have exempted the holder from the obliga- 
 tion of presenting the note, and giving notice of its dishonor? Certainly not; 
 and I am unable to see any difference between the deposrt of money and the 
 assignment of property so far as regai'ds the point under consideration. 
 
 Nor is there any resemblance between an indorser of a note, partly indem-
 
 BARTON V. BAKER. 467 
 
 nified, and the drawer of a hill of exchange, who withdraws his cfTccts from the 
 hands of the acceptor, before the day of payment. In the latter case, the 
 drawer has no right to expect that the acceptor will pay ; and therefore he is 
 not entitled to notice. But the indorser's right to notice from the holder, de- 
 pends on another principle ; namely, his remedy over against the maker. And 
 tbis principle ajjplies as forcibly to a case where a part only of a note remains 
 unpaid or unprovideil for by the maker, as where the whole of it remains so uniiaid 
 or unprovided for 
 
 Again, the assignment in this case was made about a month before the note 
 was to fall due. It is impossible for us to say, that no accession was made, in 
 that interval, to the maker's means of payment; and, of course, we cannot say, 
 that notice to the indorser would have been unavailing. 
 
 Although I have not adverted, by name, to the cases which have been decided 
 on this subject, in our sister'States, I have not been inattentive to them. I have 
 not, however, bi-en convinced by them ; and I have, in the course of the preced- 
 ing remarks, controverted every reason on which they were founded ; whether 
 successfully or not, is left for others to determine. 
 
 Upon the whole, I am of opinion, that the holders of the note before us, were 
 bound to proceed strictly with it, as respects the indorser, both as to demand of 
 payment, and as to notice ; and, consecjuently, that the judgment must be 
 reversed, on account of the erroneous instruction given at the trial. 
 
 Judgment reversed. 
 
 However the rule may be in case the fund assigned is not sufficient to cover 
 the paper, though embracing all the effects of the payor, the authorities are 
 agreed that if the fund is placed directly in the hands of the indorser or drawer, 
 and is sufficient to protect liim, notice may be dispensed with. Farther than this 
 it seems difficult to go, without impairing one of the most salutary and reason- 
 able rules of the law. It is impossible to predict what may be the circumstances 
 or situation of the insolvent to-morrow. It is not infrequent for fortune and 
 friends to favor such a one in his adversity, and place him in a situation to meet 
 his obligations. At any rate it is a slight matter for the holder to present his 
 paper and give notice of dishonor; he expected and assumed that duty in taking 
 it ; and he would be either careless or imprudent to fail in performing it. From 
 this the law should not e.xcuse him.
 
 468 EXCUSES OP PRESENTMENT AND • NOTICE. 
 
 The President. Directors, &c., of the Berkshire Bank 
 V. Isaac Jones. 
 
 (6 Massachusetts, 524. Supreme Court, September, 1810.) 
 
 Waiver of notice. Payable at bank. — Waiving notice by an indorser does not excuse 
 the indorsee from making demand of payment ; but if the paper was payable at a 
 designated place, and tlie indorsee was ready to receive payment at tlie time and 
 place, no further demand is necessary. 
 
 The plaintiffs declare on a promissory note made by one Amasa 
 Glesen, on the twenty-first of October, 1807, by which he promised 
 the defendant to pay him or his order $125, at the Berkshire Bank, 
 in sixty-one days ; and on an indorsement by the defendant, he 
 waiving all right to the notice, to which, by law or custom, he was 
 entitled as indorser. The plaintiffs also allege a request and re- 
 fusal by Glesen, the maker, and also notice to the defendant. 
 
 The action was tried before iSedgwick,J., who directed a nonsuit, 
 subject to the opinion of the Court, whether it was necessary to the 
 support of this action, that, previous to the commencement thereof, 
 the contents of the note declared on should have been demanded 
 of the promisor. 
 
 Parsons, C. J. The defendant has argued that, although he 
 waived notice of a refusal of payment by the maker, yet he did not 
 thereby dispense with a demand upon him ; for he might waive the 
 notice from a confidence that the maker would pay the note on 
 demand. 
 
 This construction of the waiver we think correct ; and the ob- 
 jection would be conclusive, if the indorsement had not been made 
 to the plaintiffs, at whose office the note was to be demanded and 
 paid. The note was payable on a day and at a place certain ; and 
 the place is the Berkshire Bank. A demand of payment need not 
 be made at any other place ; and if the holder of the note is at the 
 bank on the prescribed day, ready to receive the money, if the maker 
 be there, it is enough for him. And if the maker does not come to 
 the bank, or direct the payment there, he has broken his promise ; 
 and no other notice to him is necessary.
 
 BERKSHIRE BANK V. JONES. 4G9 
 
 In the case at bar, as the plaintiffs lield this ^ote, we must pre- 
 sume it was in their bank, and there it was made payable. They 
 were not to look up Glesen, or to "demand payment of him at any 
 other place. The defendant, by his indorsement, guaranteed that 
 on the day of payment the maker would be at the bank, and pay 
 the note ; and if he did not pay it there, he agreed that he would 
 be answerable in a suit at law, without previous notice of the de- 
 fault of the jjromisor. 
 
 Although we arc satisfied that the judge was correct in his con- 
 struction of the terms of the defendant's waiver of notice, consid- 
 ered in a general view, yet we are of opinion that, from the special 
 tenor of the note decjarcd on, the nonsuit ought to be set aside ; 
 and if, on the trial, the plaintiffs can show that on the day of pay- 
 ment the note was in the bank, and that the servants or officers of 
 the plaintiffs were there during the usual bank hours, to receive 
 payment and give up the note, they will be entitled to recover, as, 
 by the terms of the note, they were not holden to demand payment 
 but at the bank, which was impracticable tlirough the default of 
 the maker ; and by the defendant's waiver he cannot claim notice. 
 
 # 
 The doctrine that waiver of notice does not embrace waiver of demand may 
 be regarded as well settled. See Buchanan v. Marshall, 22 Vt. 561 ; Low v. 
 Howard, 11 Cush. 268, 270; Drinkwater v. Tebbetts, 17 Me. (5 Shepl.) 16; 
 Burnbam v. Webster, ib. 50; Lane v. Steward, 20 Me. (2 Appl.) 98; Backus 
 V. Shii)herd, 11 Weiid. 629. But the contrary was held in ]\Iatthey c. Gaily, -4 
 Cal. (i2. 
 
 The indorsement, "eventually accountable, E. A. E.," is held to waive both 
 demand and notice. McDonald v. Bailey, 14 Me. (2 Shepl.) 101. So of the 
 following: "William Arnold, Holden, Aug. 11th, 1836." Bean v. Arnold, 16 
 Me. (1 Shepl.) 251. 
 
 Whether waiver of protest will excuse both demand and notice has. been the 
 subject of conflict. The (jue.stion is discu^iscd in Union Bank v. Hyde, 6 Wheat. 
 572, and arose from the following writing, signed by the defendant, an indorser : 
 " I do request that hereafter any notes that may fall due in the Union Bank, on 
 which I am or may be indorser, shall not be protested, as I will consider myself 
 bound in the same manner as if tlie said notes had been or should be legally pro- 
 tested." The Court held that this constituted a waiver of demand and notice, in 
 connection with the fact that both ])arties had had a course of dealing founded on 
 that con.'-truction. Mr. Justice Johnson, in delivering the opinion of the Court, 
 said : " The case presents the right of the plaintilTs under two a.^^pects : 1. Upon 
 the just construction of the written instrument. 2. The practical exposition of 
 it by the defendant himself; and it might also have presented a third : the spe- 
 cific waiver ol demand and notice on the note in suit. By some assumed an.alogy, 
 or mistaken notions of law, this practice of protesting inland bills has now
 
 470 EXCUSES OP PRESENTMENT AND NOTICE. 
 
 become very jijenerally prevalent ; and since the inundation of the country with 
 bank transactions, and the general resort to this mode of exposing the breaclies of 
 punctuality which occur upon notes, a solemnity, cogency, and legal effect have 
 been given to such protests in public opinion, -which certainly has no foundation 
 in the law merchant. The nullity of a protest on the legal obligations of the 
 parties to an inland bill, is tested by the consideration that, independently of 
 statutory provision (if any exists anywhere) or conventional understanding, the 
 protest on an inland bill is no evidence in a court of justice of either of the inci- 
 dents which convert the conditional undertaking of an indorser into an absolute 
 assumption. 
 
 "The protest belongs altogether to foreign mercantile transactions, upon 
 which, on the contrary, it is an indispensable incident to making a drawer of a 
 bill, or indorser of a note, liable. On foreign bills, it is the evidence of demand, 
 and an indispensable step towards the legal notice of non-payment, in conse- 
 quence of which the undertaking of the drawer or indorser becomes absolute. 
 Hence, as to foreign transactions, it is justly predicated of a protest, that it has 
 a legal or binding effect. 
 
 " But the writing under consideration has reference exclusively to inland bills, 
 and as to them the protest has no legal or binding effect. The indorser became 
 liable only on demand and notice, and of these facts the protest is no evidence. 
 How, then, shall the waiver of the protest be adjudged a waiver of demand and 
 notice, or in effect convert his conditional into an absolute undertaking? 
 
 "Had the defendant omitted one word from his undertaking, it would have 
 been difficult to maintain an affirmative answer to this proposition. But what 
 are we to understand him to intend, when he says : ' I will consider myself 
 bound in the same manner as if said notes had been or should be legally pro- 
 tested ? ' Except as to foreign bills, a protest has no legal binding effect, and 
 as to them it is evidence of demand, and incident to legal notice. It either then 
 had this meaning or it had none. 
 
 " This reasoning, it may be said, goes no further than to a waiver of the de- 
 mand ; but what effect is to be given to the word bound ? It must be to pay the 
 debt, or it means nothing. But to cast on the indorser of a foreign bill an obli- 
 gation to take it up, protest alone is not sufficient ; he is still entitled to a rea- 
 sonable notice in addition to the technical notice communicated by the protest. 
 To bind him to pay the debt, all these incidents were indispensable, and may, 
 therefore, be well supposed to have been in contemplation of the parties, when 
 entering into this contract. 
 
 "It is not unworthy of remark, that the writing under consideration asks a 
 boon of the plaintiff, for which it tenders a consideration. It requests to be 
 exempted from an expense, exposure, or mortificati6n, on the one hand ; and on 
 the other, what is tendered in return ? The ihtcnded object and conceived effect 
 of the protest, on the one hand, is to convert his undertaking into an uncondi- 
 tional assumption, and the natural return is to make his undertaking at once 
 absolute, as the effectual means of obtaining the benefit solicited. 
 
 " If this course of reasoning should not be held conclusive, it would at least be 
 sufficient to prove the language of the undertaking equivocal ; and that the sense 
 in which the parties used the words in which they express themselves, may fairly 
 be sought in the practical exposition furnished by their own conduct, or the
 
 BERKSHIRE BANK V. JONES. 471 
 
 conventional use of language establisheil by their own customs or received 
 opinions. 
 
 " On this point the evidi'nce proves that, by the understanding of both j)artic'8, 
 this writing <lid dispense with demand and refusal ; that the company, on tlie one 
 hand, discontinued their practice of putting the notes indorsed by defendant in 
 the usual course for rendering his assumption absolute, and the defendant, on the 
 other, continued up to the last moment to accjuiesce in this practice, by renewing 
 his indorsements, without ever reijuiring demand or notice. This was an une- 
 quivocal acquiescence in the sense given by the com[)any to his undertaking, 
 and he cannot be permitted to lie by, and lull the company into a state of secu- 
 rity, of which he might at any moment avail himself, after making the most of the 
 credit thus acquired. 
 
 " Judgment reversed, and venire facias de novo awarded." 
 
 See Duvall r. Farmers' Bank, 7 Gill & J. 44 ; 9 id. 31. 
 
 The same (juestion arose in ("oddington i'. Davis, 1 Comst. 1^6. Gardner, 3 ., 
 in delivering the opinion of the Court, said: " The plaintifFin error, the defendr 
 ant below, was the indorser of a note made by Thomas Coddington for 810,000. 
 Th/amas Coddington failed, and on the twenty-third of January, 1840, made an 
 assignment to Davis, one of the firm of Davis, Brooks, & Co., the indorsees 
 and holders of the note and the plaintiffs below. On the twenty-eighth of Jan- 
 uary, and prior to the maturity of the note, the defendant, with full knowledge 
 of the above facts, wrote the following letter : — 
 
 " 'Mf.ssrs. Davis, Brooks, & Co. Gents, — Please not protest T. B. Cod- 
 dington's note due second of February, for ten thousand dolhrs, and 1 will 
 waive the necessity of the protest thereof; and oblige respect'ly, &c. 
 
 'Samuel Coddixgtox.' 
 
 " The construction of this letter is the first important question presented in the 
 cause. 
 
 " The term protest in a strict technical sense is not applicable to promissory 
 notes. The word, however, as I apprehend, has by general usage, acquired a 
 more extensive signification, and in a case like the present includes all those acts 
 which by law are necessary to charge an indorser. When among men of busi- 
 ness a note is said to be protested, something more is understood than an official 
 declaration of a notary. The expression would be used indifferently to indicate 
 a series of acts necessary to convert a conditional into an alisolute liability, 
 whether those acts were performed by a mere ilerk or a public officer. It is 
 obvious that the word was used in its popular acceptation by the defendant bilow. 
 He requests the indorsees ' not to protest the note, and tiiat he would waive the 
 necessity of the protest thereof.' 
 
 "The protest to which the indorser alluded was something ' necessary" to be 
 done, something also for the benefit of the indorser, for he assumed to waive it. 
 It could not therefore be a memorandum, or a declaration matle by a notary, 
 because neither of them were rcipiired. Nor could he have intended to waive 
 that which whether performed or omitted, his right would in no maimer be 
 affected. The only things necessary on the part of the indorsees was a demand 
 of payment of the maker, and notice to the indorser. By waiving the necessity 
 of protest the defendant dispensed with both, or his communication is destitute of 
 all meaning.
 
 472 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 " It was arjuied indeed that the defendant mifjht have referred to the notarial 
 « . ? . 
 
 certificate authorized by statute. But this certificate is made prima Jacie evi- 
 dence of a demand and notice in favor of the indorsees. It is for their benefit. 
 The defendant in making such reference must have supposed that the certificate 
 ■was necessary evidence, because he waives the necessity of a protest, which, 
 according to the argument is equivalent to dispensing with the necessity of a 
 notarial certificate. Now to every fair mind, waiver of proof necessary to estab- 
 lish a particular fiict, is equivalent to an agreement to admit it. Whether, there- 
 fore, the defendant by waiving the necessity of a protest, intended to dispense 
 •with demand and notice, or with the evidence of them, the result would be the 
 same, and in either case he is concluded by his own stipulation from raising the 
 objection taken upon the trial. I agree with the learned judge who delivered 
 the opinion of the Supreme Court, that the circumstances attending the written 
 stipulation of the defendant confirm this view ; but I prefer to rest my opinion 
 upon the letter alone, as furnishing prima facie evidence of an intent by the 
 jndorser to waive demand of payment and notice to which be was otherwise 
 entitled." 
 
 But it is held in Buckley v. Bentley, 42 Barb. 646, that waiver of notice of 
 protest does not waive presentment and demand. The expression " I waive de- 
 mand of protest" was held in Porter v. Kemball, 53 Barb. 467, to include pre- 
 sentment and notice. It was also held in that case that if the expression was 
 ambiguous, pai'ol evidence was admissible to explain its meaning. See 1 Par- 
 sons, Notes and Bills, 584, 585. 
 
 The strict construction has been adopted in Louisiana, upon the authority of 
 Union Bank v. Hyde, supra. In that State it is held that waiver of protest 
 does not dispense with notice. Bird v. LeBlanc, 6 La. An. 470; Wall v. Bry, 
 1 La. An. 312. In Bird v. Le Blanc, the case of Coddington v. Davis, siqjra, 
 was before the Court. See also Scott v. Greer, 10 Penn. State, 103. 
 
 K one write a guaranty over his name, on the back of a bill or note, the bet- 
 ter opinion is that his liability is that of guarantor, and not of an indorser ; so 
 that demand and notice are not required as to him. See Hall v. Newcomb, 7 
 Hill, 416, aiite, p. 131.
 
 8IGERS0N V. MATilKWS. 473 
 
 John Sigerson, Plaintiff in Error, v. Edward Matiit.ws. 
 
 (20 Howard, 496. Supreme Court of the United States, December, 18.j7.) 
 
 Promise to jxiy, when a imirer. — If, before tlie maturity of a note, tlie indorscr dis- 
 pensed with a presentation of the note and demand of payment, and promised to 
 pay it or to provide for its payment at maturity, lie cannot set up sis a defence to a 
 suit upon the note, tiiat it was not presented for payment, and demand made there- 
 for, when it was due, and tliat no notice of its dislionor was j^iven. Or if, atler the 
 maturity of the note, tlie indorser promised the holder or his agent to pay the 
 same, having? at the time of making said promise knowledge of the fact that 
 the note had not been presented for pajment, and that no demand had been made 
 therefor, or notice of non-payment given, the indorser cannot now set uj) as a de- 
 fence to the note, a want of such demand and notice. 
 
 The case is stated in the opinion of the Court. 
 
 McLean, J. This is a writ of error to the Circuit Court for 
 the district of Missouri. 
 
 An action was brought by Mathews against John Sigerson, as 
 indorser on a note of James Sigerson, now deceased, dated the tentli 
 of March, 1852, for the payment of the sum of two tliousand dol- 
 lars, two years after date, at the Bank of the State of Missouri, 
 with interest from the date. 
 
 It was proved on the trial that in 1851 Mathews advanced 
 largely to John Sigerson on some transactions in pork, whereby 
 Sigerson became indebted to him in the sum of two tliousand dol- 
 lars ; that Sigerson wanted two years' time, on which Mathews 
 required a mortgage on real estate as security ; but Sigerson 
 offered to give the note of his brother James, indorsed by himself, 
 instead of the mortgage ; and he represented that his brother James 
 was the owner of a vahiable real estate near St. Louis ; which otler 
 was accepted, and the note was given. 
 
 Some time in the fall of 1852, Joseph E. Elder, a witness, re- 
 ceived the note from Matiiews for collection, soon after the death 
 of James Sigerson, and before the note became due. Witness 
 called on John Sigerson, and asked him if he should have the note 
 protested against* the estate of James Sigerson. lie replied, that 
 the witness need not do so, and that the note should be paid at 
 maturity. The witness then placed tlic note in his portfolio, 
 where it remained until after due. After it was due, witness
 
 474 EXCUSES OP PRESENTMENT AND NOTICE. 
 
 called on John Sigerson, and informed him that he had neglected 
 to put the note in bank for collection, and asked him what lie was 
 going to do ; he said he would see witness in a few days, and 
 arrange it. Afterwards Sigerson said to the witness that he did 
 not consider himself liable as indorser, as the note had not been 
 protested. 
 
 In February, 1852, John Sigerson sold his interest in the farm 
 near St. Louis, which was one-half of it, and which contained about 
 one thousand acres, to James Sigerson, who was to pay off the 
 incumbrances on the land, which amounted to about sixteen thou- 
 sand dollars. James executed twenty notes for two thousand dollars 
 each, payable in six, twelve, and eighteen months ; and John Siger- 
 son made him a deed. In July, 1852, James reconveyed the land 
 to John, and the bargain was rescinded. This was done because 
 James had not fulfilled his contract. Nineteen of the notes were 
 given up, but the note now in suit was not surrendered, and for 
 which the account of James was credited on tlie books of John. 
 James, on his decease, left no property. 
 
 On the above facts, the Court charged the jury, " if they believe 
 from the evidence, that, before the maturity of the note, in conver- 
 sation with the agent of the plaintiff, the defendant dispensed with 
 a presentation of the note and demand of payment, and promised 
 to pay it or provide for its payment at maturity, he cannot now set 
 up as a defence to this suit, that the note was not presented for 
 payment, and demand made therefor, when it was due, and that no 
 notice of its dishonor was given." 
 
 Tliat, " if, after the maturity of the note, the defendant promised 
 the plaintiff or his agent to pay the same, having at the time of 
 making said promise knowledge of the fact that the note had not 
 been presented for payment, and that no demand had been made 
 therefor, or notice of non-payment given, the defendant cannot 
 now set up, as a defence to said note, a want of such demand or 
 notice." 
 
 " If the defendant dispensed neither with the presentation of the 
 note and notice, nor promised to pay the same, having knowledge 
 as above stated, the plaintiff cannot recover." 
 
 Exception was taken to these instructions. • 
 
 Certain instructions were asked by the defendant, which were 
 refused ; but it is unnecessary to state them, as they are substan- 
 tially embraced in those given by the Court.
 
 RIGERSON V. MATHEWS. 476 
 
 As there was no formal demand of {)ayment, nor protest for non- 
 payment and notice, those requisites must have been waived by the 
 defendant, to make liini responsible as indorscr ' and to this effect 
 were the instructions of the Court ; and we think the testimony 
 not only authorized the instructions given, but also the verdict 
 rendered l)y the jury. IJefore the note was due, the defendant 
 said to Elder, the agent of Mathews, and who held the note, that 
 he need not take steps to collect it from the estate of his brother 
 James, as it should l)c paid at maturity. This was an assurance 
 which could not be mistaken, and it was relied on by the agent. 
 He placed the note in his portfolio, where It remained until after 
 it became due. After tliis, the agent called on tiie defendant, and 
 informed him that he had neglected to take measures for the col- 
 lection of the note, and asked him what he was going to do ; he 
 answered, that in a few days he would see the witness, and arrange 
 it. This was an unconditional promise to pay the note, which no 
 one could misunderstand, and which he could not repudiate at any 
 subsequent period. 
 
 A promise by an indorser to pay a note or l)ill, dispenses with 
 the necessity of proving a demand on the maker or drawer, or 
 notice to himself. Pierson v. Hooker, 3 Johns. 68 ; Hopkins v. 
 Liswell, 12 Mass. o2.^ Where the drawer of a protested bill, on 
 being applied to for payment on behalf of the holder, acknowledged 
 the debt to be due, and promised to pay it, saying nothing about 
 notice, it was held that the holder was not bound to prove notice 
 on the trial. Walker v. Laverty, 6 Munf. 487. An unconditional 
 promise by the indorser of a bill to pay it, or an acknowledgment 
 of his lial)ility, and knowledge of his discharge by the laches of 
 the holder, will amount to an implied waiver of due notice of a 
 demand of the drawee, acceptor, or maker. Thornton *. Wynn, 
 12 Wheat. 183 ; Bank of Georgetown v. Magruder, 7 Peters, 287. 
 We think the instructions of the Court were correct, and that 
 consequently the judgment must be affirmed, with costs. 
 
 But the promise to pay niusit be dear and distinct. Creamer v. Perry, 17 
 Pick. 332. In delivering the opinion of the Court in this case, Chief Justice 
 Shaw said : " If an indorser, knowing that there has been no demand and no- 
 tice, and conversant witli all the circumstances, will promise to pay the note, this 
 is to be deemed a waiver. But these rules in regard to notice and waiver are to 
 
 1 Sec aute, p. 465.
 
 476 EXCUSES OF PRESENTMENT AND NOTICE. 
 
 be held with some strictness, in order to insure uniformity of practice and regu- 
 larity in their ap[)lic;ition. . . . 
 
 In the present case we are of opinion that the evidence falls short of proving 
 a promii<e by the defendant, either to pay the note or see it paid. The agent of 
 the plaintiff applied to the defendant, some days after the note had become due, 
 obviously for the purpose of obtaining from him a renewed promise. The strong- 
 est expression used by the defendant in the course of a long conversation was, 
 * the note will be paid.'' This is quite as consistent with tlie hypotiiesis that it 
 was a mere assertion of his expectation that it would be paid by the promisor, 
 as of a promise on his part to pay it ; and from the general tenor of the conver- 
 sation, we think it cannot be inferred that it was his intention, knowing of his 
 discharge, to waive his defence and promise to pay the note, or see it paid at all 
 events." In Rogers v. Stephens, 2 T. R. 713, however, it was held that the reply 
 of the drawer of a bill upon its dishonor that " it must be paid," amounted to a 
 promise to pay, and removed the necessity of notice. See also Borradaile v. 
 LoAve, 4 Taunt. 93 ; Richter v. Selin, 8 Serg. & Rawle, 425, 438 ; Griffin v. Goff, 
 12 Johns. 423 ; Martin v. IngersoU, 8 Pick. 1 ; Harrison v. Bailey, 99 Mass. 620; 
 Low V. Howard, 11 Gush. 268 ; Kelley v. Brown, 5 Gray, 108 ; Arnold v. Dres- 
 ser, 8 Allen, 435. In the last case Bigelow, C. J., said in reference to waiver of 
 demand : " No such waiver is made where an Indorser promises to pay the note 
 in ignorance of the fict that he has been discharged by the laches of the holder, 
 in not making due demand of the promisor, or where such promise is made under 
 a misapprehension or mistake of facts concerning the due presentment and de- 
 mand of the note." See to the same effect, Walker v. Rogers, 40 111. 278 ; 
 Morgan v. Peet, 32 111. 281, 288 ; Tobey v. Berly, 26 111. 426 ; Farrington v. 
 Brown, 7 N. Hamp. 271 ; Woods v. Dean, 3 Best'& S. 101. 
 
 In Gove v. Vining, 7 Met. 212, Shmv, C. J., said : " The Court are of opinion 
 that when the indorser, at or shortly before the time when the note becomes due, 
 says to the holder that an arrangement for its payment is about being made, and in 
 direct terms or by reasonable implication requests the holder to wait or give time, 
 it amounts to an assurance that the note will be paid, — that the promisor or in- 
 dorser will pay it, — and is a waiver of demand and notice. It tends to put the 
 holder off his guard, and induces him to forego making a demand at the proper 
 time and place ; and it would be contrary to good faith to set up such want of 
 demand and notice — caused perhaps by such forbearance — as a ground of de- 
 fence. Leffingwell v. White, 1 .lohns. Cas. 99 ; Mechanics' Bank v. Griswold, 
 7 Wend. 165 ; Leonard v. Gary, 10 Wend. 504 ; Taunton Bank v. Richardson, 
 5 Pick. 436 ; Thornton v. Wynn, 12 Wheat. 183 ; Wood v. Brown, 1 Stark. 
 217." See also Union Bank v. Magruder, 7 Peters, 287; Spencer t\ Harvey, 
 17 Wend. 489; Creamery. Perry, 17 Pick. 332; Hoadley v. Bliss, 9 Ga. 303; 
 Marshall v. Mitchell, 35 Me. 221 ; Phipson v. Kneller, 1 Stark. 116 ; Sheldon v. 
 Horton, 53 Barb. 23 ; Amoskeag Bank v. Moore, 37 N. Hamp. 539 ; Baa-clay v. 
 Weaver, 19 Penn. State, 396 ; Ridgway v. Day, 13 id. 208 ; Kent v. Warner, 
 12 Allen, 561 ; Wood v. Price, 46 111. 435.
 
 PEARCE V. AUSTIN. 477 
 
 ACTIONS. 
 
 Pearce v. Austin. 
 
 (4 Wharton, 489. Supreme Court of Pennsylvania, March, 1839.) 
 
 Who may sue. — One to whom negotiable paper is indorsed as agent for another, may 
 bring an actior^upon the same in iiis own name ; unless such agent's possession is 
 shown to be malajide. 
 
 The case is stated in tlie opinion of tlie Court. 
 
 Rogers, J, The suit was brought to recover the amount due 
 on a promissory note, drawn by John Pearce, tlie defendant, pay- 
 able sixty days after date, to the order of John Houghtin. It was 
 indorsed in blank to Charles B. Austin, agent of the Union Glass 
 Works, transferred by him to T. W. Dyott, and the suit is brought 
 in the name of Charles B. Austin, agent of the Union Glass Works, 
 who is the holder of the bill. The question is, can an agent bring 
 a suit on a promissory note in his own name ? This is a question 
 whicli depends altogether on authority. A holder of negotiable 
 paper can maintain an action on it in his own name, witliout show- 
 ing title to it. The Court will not inquire into his right to the 
 paper, or his right to maintain a suit upon it, unless circumstances 
 appear showing his possession to be mala fide. Dean i\ Hewit, 5 
 Wend. 257 ; Talman r. Gibson, 1 Hall, 808 ; Livingston v. Clinton 
 [cited], 3 Johns. Cas. 2()4. 
 
 In Ogilby v. Wallace, 2 Hall, 553, the right to sue even by a fic- 
 titious |)erson, when the name of tlie real party was disclosed, 
 unless some question arose as to the mala fide possession, was 
 asserted. The Court nonsuited the plaintiff, on the ground that 
 he was a fictitious person ; but on an a))peal tlic nonsuit was set 
 aside, that the question of fact, connected with the possession and 
 presentation of the note, should be submitted to a jury. This 
 principle applies to a note payable to bearer or indorsed in blank ;
 
 478 ACTIONS. 
 
 for ill either case an action can be maintained in the name of any 
 person, without the plaintiff being required to sliow that he has 
 any interest in it, unless he came into the possession of the note 
 under suspicious circumstances. Here there is no allcgatiort of 
 mala fide^ so that the case stands clear of that objection. Tlie suit 
 is brought by Austin, who is a trustee or agent for the company. 
 He has the legal title to the bill, and the suit is brought in the 
 name of the legal owner. Stating that he is the agent of the Union 
 Glass Works is equivalent to saying that the suit is for their use. 
 This brings it within the principle of the cases cited. But Mauran 
 V. Lamb, 7 Cow. 174, is still nearer the point. It is there held 
 that one holding a check or note payable to bearer, as a mere agent, 
 may sue on it in his own name, and that it does not lie with the 
 opposite party to assert the plaintiff's want of interest. It can 
 certainly make no difference whether the note is payable to bearer, 
 or indorsed in blank and in the possession of a bona fide holder. 
 
 Judgment affirmed. 
 
 The doctrine in a word is this : Possession of negotiable paper indorsed in blank 
 IS prima facie evidence of title ; to defeat this presumptive title and right to sue, 
 the defendant must prove that the plaintiff's possession is mala fide. This will 
 shift the burden of proof upon the plaintiff. See Goodman v. Simonds, ante, p. 
 242, and note; Pettee v. Prout, ante, p. 217 ; Way v. Richardson, ante, p. 220. 
 
 In the case, however, of unnegotiable paper, or negotiable paper payable to 
 order, the rule requires some qualification ; for if A sues as payee of a bill or 
 note payable to the firm of A, B, & Co., he must show that he alone constitutes 
 that firm. 2 Greenl. Ev. §§ 163, 478; Ferguson v. King, 5 La. An. G42 ; Robb 
 V. Bailey, 13 La. An. 457 ; Fletcher v. Dana, 4 Blackf. 377 ; Desha v. Stewart, 
 6 Ala. 852. 
 
 If the paper be payable to order and not indorsed, the rule is qualified to this 
 extent, that the holder under the payee cannot sue in his own name, but must 
 bring his action in the name of the payee. Farwell v. Tyler, 5 Iowa, 535; 
 Allen V. Newbury, 8 Iowa, 65. So if it is payable to A for the use of B, A 
 is the proper party to bring the action. Cramlington v. Evans, 2 Ven. 307 ; 
 Barry County v. McGiothlin, 19 Mo. 307. But in Vermont the person bene- 
 ficially interested may sue upon the paper in his own name. Arlington v. Hinds, 
 1 D. Chip. 431 ; Rutland & B. R. Co. v. Cole, 24 Vt. 33; Johnson v. Catlin, 27 
 Vt. 87. 
 
 In the case of a note or bill given by a firm to one of its members, the prom- 
 isee cannot sue, as that would be to bring an action in part against himself; but 
 if he indorse the paper, the indorsee may sue. Thayer v. Buffum, 11 Met. 398 ; 
 Pitcher v. Barrows, 17 Pick. 361 ; Smith v. Lusher, 5 Cow. 688 ; Davis v. Briggs, 
 39 Me. 304. 
 
 But a different doctrine has been declared in Kentucky. Morrison v. Stock- 
 well, 9 Dana, 172; AUin v. Shadburne, 1 Dana, 68. It is there held that where
 
 PEARCE V. AUSTIN. 47'J 
 
 the name of a firm is sif^ned by one of two partners to a note payable to tin- 
 other, it is, in cfleft, merely the note of the former to the latter; the payee may 
 sue the other [lartner upon tlie note and recover the whole amount. 
 
 It is held in Kii^^land that where the maker or aceiptor has become executor 
 of the payee, the debt is discharged, so that an indorsee cannot sue upon the 
 paper. Freakley v. Fox, 9 Barn. & C. 130. Lord Tenterden explains that " it 
 is considered to have been paid by the executor to himself, and becomes assets 
 in his hands." But see Kent v. Somervell, 7 Cill & J. -JO.^, 271; Mitchell v. 
 Rice, 6 J. J. Marsh. G23. G28. 
 
 One wiio has inilorsed pa{)cr for collection may sue uj)on it in his own name, 
 notwithstanding his indorsement. I)u{,'an v. United States, 3 Wheat. 172. Mr. 
 Justice Livingston, on p. 182, went a step further and said: "If any person 
 who indorses a bill of exchange to another, whether for value or for the purpose 
 of collection, shall come to the possession thereof again, he shall be regarded, 
 unless the contrary appear in evidence, as the honajide holder and i)roprietor of 
 such bill, and shall be entitled to recover, notwithstanding there be on it one or 
 more indorsements in full, subsequent to the one to him, without producing any 
 receipt or indorsement back from either of such indorsees, whose names he may 
 strike from the bill or not, as he may think proper." Welch v. Lindo, 7 Cranch, 
 159, is overruled by this case ; and Dugan v. United States is now the settled 
 law. See Bank of the United States r. United States, 2 How. 711 ; Dollfus v. 
 Frosch, 1 Denio, 367 ; Watervliet Bank v. AVhite, 1 Denio, 608 ; Bowie v. Du- 
 vall, 1 Gill & J. 175; Wood v. Tyson, 13 La. An. 104. 
 
 Possession is not necessary to the plaintiff's right of action where the paper 
 has been indorsed to another as agent or trustee for the plaintiff, if it be shown 
 that such agent or trustee is ready to give up possession of the paper to the 
 plaintiff for the purposes of the suit. Stones v. Butt, 2 Cromp. & Mees. 416. 
 See Iladwen v. Mendizabel, 10 J. B. Moore, 477; Marsh r. Newell, 1 Taunt. 
 109 ; Fisher v. Bradford, 7 (Jreenl. 28. 
 
 Though a person who holds commercial paper as agent or trustee can sue upon 
 it in his own name, a mere depositary must sue in the name of his principal. 
 Sherwood v. Roys, 14 Pick. 172. 
 
 " The maker of a note payable to bearer, cannot defeat an action thereon 
 brought in the name of one who had possession of the note at the coinmenceniont 
 of the suit, and has contmued to hold it ever since, by showing that a third par- 
 ty was the real owner of the note, when it ap[)ears that such third parly has 
 never objected to the possession of the plaintid'and the suit brought by him, but 
 has expressly consented to and ratified such possession, and the prosecution of 
 the action." Per Foster, J., in Wheeler v. Johnson, 97 Mass. 39; citing Beek- 
 man v. Wilson, 9 Met. 436.
 
 480 ACTIONS. 
 
 James N. Staples et al. v. President, Directors, &c., of 
 THE Franklin Bank. 
 
 (1 Metcalf, 43. Supreme Court of Massachusetts, March, 1840.) 
 
 When aclion may be brought. — The maker of a promissory note is bound to pay it 
 
 upon demand made at any seasonable hour of the last day of grace, and may be 
 
 sued on that day, if lie fail to pay on such demand. 
 Post-notes, issued by a bank, are payable on demand made at any time on the last 
 
 day of grace, after the known and usual hour of opening the bank for business, 
 
 and may be -put in suit on that day, if payment is refused. 
 
 The case is stated in the opinion of the Court. 
 
 Shaw, C. J. The present question comes before the Court upon 
 the petition of a subsequent attaching creditor, to set aside and 
 dissolve the attachment in the present suit. The Rev. Sts. c. 90, 
 §§ 83-94, authorize an after attaching creditor to come in and ob- 
 tain a dissolution of the prior attachment, by showing, if he can, 
 either that the sum demanded in the first suit was not justly due, or 
 that it was not payable when the action was commenced. The peti- 
 tioner insists that his case is within the last provision of the stat- 
 ute ; that the sum demanded in this writ was not payable when 
 the action was commenced ; and this is the question for our con- 
 sideration. 
 
 The action is brought upon a bank post-note issued by the de- 
 fendants, dated November 8, 1836, demanded at the bank, July 
 11, 1837, in the forenoon, after the commencement of banking 
 hours. Payment was then refused, and an action was commenced, 
 after the demand, the same forenoon. No tender, or offer of the 
 amount, was made to the plaintiffs, either on the same day, or at 
 any time afterwards. 
 
 In a recent case, it was held that the statute, giving days of 
 grace on all promissory notes payable at a future day certain, in 
 which there is not an express stipulation to the contrary, Rev. 
 Sts. c. 33, § 5, applies to bank post-notes, and is not controlled or 
 affected by the usages of banks. Perkins v. Franklin Bank, 21 
 Pick. 483. This note being entitled to grace by the statute, the 
 eleventh of July was the last day of grace ; and then the question
 
 STAPLES V. FRANKLIN BANK. 481 
 
 is, whether upon a demand and refusal of payment, within banking 
 hours on the last day of grace, a right of action immediately 
 accrue8»to the holder, so that he may then commence his action ; 
 or whether he is bound to wait till the next succeeding day. It 
 certainly struck me with some surprise that such a question 
 should now be made, thinking, as I did, that it was well settled, 
 by the law and practice of this Commonwealth, that a promissory 
 note was due at any time within reasonable hours, on the last day 
 of grace, and that upon presentment to the promisor, and a demand 
 of payment, and on a neglect or refusal to pay, the note was dis- 
 honored, and a right of action immediately accrued to the holder 
 against the maker ; and after due notice, actual or constructive, to 
 the indorser, a like right of action, on the same day, accrued to 
 the holder against the indorser. But as it appeared upon the argu- 
 ment that there is respectable authority for the contrary opinion, 
 it becomes necessary to examine the subject with attention. Noth- 
 ing is more important to a commercial community, than to have 
 all questions relative to the rights and duties of holders, and all 
 other parties to negotiable bills and notes, definitely settled. And 
 it is greatly desirable, that throughout all the States of the Union, 
 which, to many purposes, constitute one extended commercial 
 community, the rules upon this subject should be uniform. 
 
 We will first consider the Massachusetts authorities on this sub- 
 ject, and then see how far they are supported or opposed by those 
 of England or the other States. 
 
 The only question now is, whether a note is payable on demand 
 on the last day of grace, when a note is entitled to grace. A dif- 
 ferent construction may perhaps apply, when a note is payable 
 without grace. As grace was originally matter of indulgence and 
 courtesy, and not of contract, it perhaps may be contended, that 
 although a debtor has the whole of the last day of the credit stip- 
 ulated for by contract to make payment, yet a different rule may 
 apply to grace, which is not part of the contract. So when the 
 third day of grace falls on Sunday, as the riglit of one or the 
 other of the parties must yield, it shall be that of the one who 
 claims jndulgence, and not of him who claims of right ; whereas 
 if a bond were to be payable on Sunday, the debtor would have 
 till the close of Monday, to pay it. Some of the cases appear to 
 turn on this distinction. 
 
 Formerly it was held, in Massachusetts, that unless a promissory 
 
 81 
 
 •
 
 482 ACTIONS. 
 
 note expressed grace, it was payable without grace ; now it is 
 otherwise by statute. Whether a note, expressed to be payable 
 in thirty days, without grace, is considered due on demand* on the 
 thirtieth day after the day of the date, it is not now necessary to 
 decide ; tliough we are inclined to think that such was the rule 
 formerly, when notes were not entitled to grace. 
 
 The first case of which a report is published, and which is 
 directly in point, is a nisi prius decision of Chief Justice Parsons, 
 and is reported in an American edition of Chitty on Bills, p. 225, 
 note 1/, published in 1809, and edited by Mr. Story, now Mr. Jus- 
 tice Story, of the Supreme Court of the United States, that of 
 Park V, Page, Suffolk, November term, 1808. He says, " the note 
 is due on the last day of grace, and if payment is refused, the 
 maker may be sued on that day." I have examined the record of 
 that case, and find that it was a suit by the indorsee against the 
 indorser of a promissory note, dated 7 July, 1807, payable at 
 sixty days with customary grace. The last day of grace was 
 therefore the eighth of September. The writ is dated on the eighth 
 of September, and was served by an attachment of real estate, at 
 eleven o'clock on that day. To this opinion at nisi prius, no excep- 
 tion appears to have been taken, and parties and counsel acquiesced. 
 The only difference between the case thus appearing, and the note 
 cited is, that the action was against the indorser and not against the 
 maker. But if an action wovild lie against the indorser, who is only 
 provisionally liable on the default of the maker, rt/oriiori, as it seems, 
 would it lie against the maker, who is the principal debtor. This 
 edition of Chitty, by Mr. Justice Story, was extensively in use in this 
 Commonwealth, for many years, amongst lawyers and merchants, 
 and was regarded as high authority on the law of negotiable bills 
 and notes. 
 
 The case of Henry v. Jones, 8 Mass. 453, decided in 1812, ap- 
 pears to me to have a strong application to the point in question. 
 It was a suit against an indorser, on a note dated March 4, 1809, 
 payable in sixty days ; and, as the law then stood, was not en- 
 titled to grace. The question was, whether the day of the date 
 should be excluded from the computation of the sixty day^ ; if it 
 should be, the note was at maturity on the third of May ; if in- 
 cluded, it was on the second. The note was presented to the 
 maker on the second, and payment refused, and notice was given 
 to the indorser at a very early hour on the morning of the third.
 
 STAPLES V. FRANKLIN BANK. 483 
 
 and payment not being made, a suit was then commenced. The 
 Court held that the day of the date should be excluded, and from 
 there l^ing no grace, the third of May was the last day of the 
 sixty days' credit stipulated for by the contract. The Court, in 
 concluding their judgment say : " No auction lies against tiie in- 
 dorscr, until after demand made on the day of the maturity of the 
 note. In this case the demand was made on the day preceding, 
 and not on the day fixed by the parties for the payment." Here, 
 it will be perceived, the rule was prescribed, as well when the note 
 was payable witliout grace, as when it is with grace; and it is 
 payable on demand, on the last of the days specified in the note. 
 Otherwise, the note in question would not have been demandable 
 till the fourth. 
 
 Tliis case is recognized and confirmed, as to a demand on the 
 day of maturity, in Farnum v. Fowle, 12 Mass. 89. 
 
 But the case in which the point was directly decided, and a case 
 which received great consideration, is that of Shed v. Brett, 1 
 Pick. 401. Several other questions were considered, and the case 
 underwent great discussion. The action was commenced against 
 tiie indorser, on the last day of grace, after a demand on the 
 promisor, and notice put in the post-office for the indorser, who 
 lived in another town, and held well to lie. The point, that all 
 parties are in default, and liable to an action on the last day of 
 grace, after demand and refusal to pay, seems rather to have 
 been taken as a well-settled rule, than an open question. The 
 Court, in giving judgment, say that the right of action accrues 
 against the indorser of a note, when the maker refuses to pay. 
 
 The case of N. E. Bank v. Lewis, 2 Pick. 125, goes on the same 
 ground. The action was against the indorser, and commenced on 
 the last day of grace, and it was conceded that if the notice had 
 been given to the indorser before the service of the writ, which 
 might have been done in a few minutes, the action might have been 
 sustained. The case was decided on a distinction between the 
 case where the parties live in the same and in diflerent towns. In 
 the latter case, putting a letter in the post-office is held sufficient 
 constructive notice, although it cannot by possibility have reached 
 the indorser by the course of the mail. And the point in this 
 case was, that if the notice precedes the suit ever so short a time, 
 as if the officer go with the notice in one hand, and the writ in the 
 other, it will be sufficient. This is an express declaration, that an 
 action will lie after a default on the last day of grace.
 
 484 ACTIONS. 
 
 The case of City Bank v. Cutter, 3 Pick. 414, is quite decisive 
 of the same point. In that case, wliich was against an indorser, 
 the defendants pleaded a tender on the day after the las#day of 
 grace. If the promisor and indorser had to the last hour of the 
 last day of grace to make payment, there was no default till the 
 day after ; and as there can be no fraction of a day in such case, 
 a tender on that day would be a complete performance of the 
 contract, and a good bar to the action. Tiie Court, in overruling 
 the plea, say : '• Our doctrine, as established in the case of Shed v. 
 Brett, and indeed always practically recognized is, that the suit 
 may be brought on the very day the note becomes due, after de- 
 mand and notice, for there is then a breach of the promise. If 
 the note is not paid during the business |jours of the day, if the 
 money is to be paid into a bank, a right of action has accrued." 
 
 The same doctrine is recognized and declared in Boston Bank 
 V. Hodges, 9 Pick. 420. The Court, on dealing with an argument 
 of the plaintiff, that the note being due on the ninth of May, the 
 last day of grace, a demand and refusal to pay on any part of that 
 day, with immediate notice to the indorser, will give a right of 
 action against the latter, say : '• This is true, when there is an 
 actual demand upon the maker according to the general rule of 
 law." But the case was decided against the plaintiffs, on the 
 ground that they had neither conformed to the general rule of 
 law, nor to the substituted course established by their own usage. 
 
 The principle I am stating was again recognized in Church v. 
 Clark, 21 Pick. 310, The note was made payable at a bank, and 
 the suit was commenced against the maker at one minute after 
 twelve o'clock at night, being the morning of the last day of grace. 
 Held, that it would not lie. The Court again repeat the general 
 rule, that a note is payable at any time on demand on the last day 
 of grace, or day it becomes due. But such a rule may be mod- 
 ified by the terms of the note ; and making a note payable at a 
 bank, is making it payable within usual banking hours. 
 
 From this view of the cases decided in Massachusetts, it seems 
 to have been uniformly held, that on demand and refusal of pay- 
 ment by the maker, at any reasonable time on the last day of grace, 
 the note is due and payable ; that if not then paid an action may 
 be immediately commenced against the maker, and after actual or 
 constructive notice to the indorser, against him. And as stated 
 by Chief Justice Parker, in 3 Pick. 418, this rule seems to have 
 been always practically recognized.
 
 STAPLES V. FRANKLIN BANK. 485 
 
 This j)oiiit has lieen decided in the same way in Maine. It is 
 there hel<l, that l)ills and notes are payable on demand, at any 
 reasonable hour, on the day they fall due, and if n(jt then paid, 
 the acceptor or maker may be sued, and also the drawer and iu- 
 dorser, after notice. Greeley v. Thurston, 4 Greenl. 479 ; Flint 
 V. Rogers, 3 Shepl. G7. It is a little remdrkable, as mentioned 
 by Mr. Justice Weston, that there is no direct English authority 
 upon this point.^ There appears to be no case in which it has been 
 decided, either that an action may or cannot be commenced on 
 the last day of grace, or day the note becomes due. The general 
 rule in regard to payment of debts, for rent, on bond, for goods 
 sold on credit or otherwise, is, that the debtor has till the last 
 hour of the day in which to make payment : Webb v. Fairmaner, 
 3 Mees. & W. 473 ; but the case of negotiable bills and notes 
 is uniformly treated as an exception. All the authorities hold, 
 that a foreign h\\\ must be demanded on the last day of grace, 
 and, if not paid, must be noted for protest ; and the authorities 
 are equally uniform, that if not thus paid on demand* on the last 
 day, by the acceptor or maker, they may be treated as dishonored, 
 and notice may be immediately given to the drawer and indorsers, 
 and they will be held liable. Leftley v. Mills, 4 T. R. 170. In 
 this case, Mr. Justice Buller lays down the rule very explicitly, 
 and it seems to have been subsequently followed. He states the 
 rule to be, that if not paid on demand, on tiie last day, the bill is 
 dishonored, the parties are in default, and the bill may be, and, 
 in case of a foreign bill must be, protested on that day, although 
 notice will be seasonable if given the following day. Burbridge 
 V. Manners, 3 Camp. 193 ; £x parte Moline, 1 Rose, Bankr. Cas. 
 303 ; s. c, 19 Ves. 216. It was there held, that demand on the 
 acceptor at eleven o'clock, and notice of non-payment to the 
 drawer the same morning, was good, and warranted the proof of 
 a debt against the drawer, who had become bankrupt. 
 
 The rule is uniformly laid down by the text-writers, that the 
 bill must be presented for payment on the last day of grace. 
 Bayley, Bills, 12G ; Chitty, Bills, 365. The latter writer seems 
 to consider the rule established, that the contract of the maker 
 of a note or acceptor of a bill, is to pay on demand on the ap- 
 pointed day, and if payment be not made on such demand, the 
 contract is broken, and the holder may treat the bill as dis- 
 honored. 
 
 1 See Castrique i'. Bernabo, 6 Q. B. 498, note, post, 492.
 
 486 ACTIONS. 
 
 In a late work, Byles on Bills, it is stated, p. 131, that the ac- 
 ceptor of a bill, whether inland or foreign, or the maker of a note, 
 should pay it on a demand made, at any time within business 
 hoiirs, on the day it falls due, and if it be not paid on such demand, 
 the holder may instantly treat it as dislionored. But the acceptor 
 has the whole of that day within which to make payment ; and 
 though he should, in the course of that day, refuse payment, 
 which entitles the holder to give notice of dishonor, yet if lie sub- 
 sequently, on the same day, makes payment, the payment is good, 
 and the notice of dishonor becomes of no avail. 
 
 This writer cites Hartley v. Case, 1 Car. & P. 556, 676 ; s. c, 
 4 Barn. & C. 339, 341. The point was made in that case, that no- 
 tice coiild not be given on the day the note becomes due ; but the 
 case went off on another ground, and no opinion was given on 
 this question. 
 
 The passage cited appears contradictory to itself, inasmuch as 
 it declares that the note is due and payable on demand on the last 
 day of gracS, and is dishonored if not then paid, and yet that the 
 maker and acceptor have the whole day to pay it in. It would 
 seem that there could be no dishonor, unless the maker had failed 
 to comply with his contract : and if he has failed to comply with 
 his contract, then, by a general rule of law, the holder has his 
 remedy by action. 
 
 Perhaps the state of the law upon this point may be accounted 
 for by a remark made in Chitty on Bills, 36, who, after saying that 
 notice of dishonor may be given on the same day, adds, it is not 
 usual or necessary to give notice of non-payment before the fol- 
 lowing morning, and therefore there can be no objection to the 
 allowance of the whole day on which the bill becomes due, to pay 
 it in. It is probable, therefore, that though the holder may have 
 a strict right to proceed in all respects as upon a dishonored bill 
 on the last day, after demand, refusal, and notice, yet it is so far 
 the general practice to postpone notice and other proceedings till 
 the day following, that it is regarded amongst merchants as a right. 
 That it seems so to have been understood by men of business, 
 appears by a remark of Mr. Justice Buller, in Colkett v. Freeman, 
 2 T. R. 59, 61, and also by an obiter dictum of Bolland, B. in Webb 
 V. Fairmaner, 3 Mees. & W. 473, 4'74. But the case of negotiable 
 bills and notes was not then under consideration. 
 
 No doubt there is a prevailing understanding in England, that
 
 STAPLES V. FRANKLIN BANK. 487 
 
 the maker or acceptor has, by right or by courtesy, the whole of 
 tlie last day to make payment in, and if it is so in fact paid or 
 tendered, there would be little occasion for the holder to insist 
 on his right of action, and decline receiving payment; and so no 
 case has arisen in which it has become necessary to decide that 
 precise question. Possibly it may be considered, that the holder 
 has a right to treat the bill as dishonored, after demand and 
 refusal, and even to commence an action, sulyect to be defeated 
 and barred in case the maker should pay the amount due, at 
 any time on the last day of grace ; though it is difficult to per- 
 ceive how the holder can have a perfect right to treat the note as 
 dishonored by breach of the contract, and, at the same time, 
 that tiie acceptor can have a perfect right, by payment of the bill, 
 to perform his contract and save himself from the consequences 
 of such breach. In Hartley v. Case, 1 Car. & P. 556, already 
 cited, Abbott, C. J., on a motion to show cause, says: "I think 
 the notice of dishonor, given on the day on which the bill is pay- 
 able, will be good or bad, as the acceptor, may, or may not, after- 
 wards pay the bill. If he does not afterwards pay it, the notice 
 is good ; and if he does, it of course comes to nothing." 
 
 This certainly implies that after non-payment on demand, on 
 any part of the last day, there is a breach of the contract of the 
 maker, and no further demand is necessary to complete the 
 holder's right against the maker, acceptor, and indorsers. But 
 whether, after such breach and before the close of the day, an 
 action might be commenced against either, does not appear by 
 this case, nor, as we believe, by any case decided in England. 
 
 The only decided case opposed to the opinion which we have 
 adopted, and one entitled to great respect, is that of Osborn v. 
 Moncure, 3 Wend. 170.^ In this case, which was an action by the 
 payee against the maker of a note, demand was made on the last 
 day of grace, and, payment being refused, a suit was commenced 
 at three o'clock on the same day. The Court were of opinion 
 that a demand on the maker should be made on the third day of 
 grace, and, on refusal, the holder might treat the bill as dis- 
 honored, so far as immediately to give notice to the indorser ; 
 yet that the maker has the whole day to pay it in, if he thinks 
 proper to seek the holder. They rely upon the general rule appli- 
 cable to the case of other debts, that the debtor has to tiie last 
 
 1 Post, p. 493.
 
 488 ACTIONS. 
 
 instant of the day to make payment, and they consider that in this 
 respect there is no disthiction in case of negotiable bills and 
 notes. 
 
 It had been frequently held in the courts of New York, that 
 demand must be made on the last day of grace, as well on inland 
 bills and promissory notes as on foreign bills ; and if not then 
 paid, the holder might treat them as dishonored and notify the 
 drawer and indorsers. Jackson v. Richards, 2 Caines, 344 ; 
 Corp V. M'Comb, 1 Johns. Cas. 328. 
 
 Indeed the rule seems to be settled l>y all the authorities, Eng- 
 lish and American, that a demand must be made on the maker 
 or acceptor, within reasonable hours, on the day of maturity, and 
 when the bill or note is in a bank, which has certain fixed and 
 known hours for being open for business, those will be construed 
 to be reasonable hours ; that if the bill or note is not paid on de- 
 mand, it is dishonored, and notice may be immediately given to 
 the drawer and indorsers, and, without further demand or notice, 
 they will be legally bound to make payment. Tindal v. Brown, 
 1 T. R. 1(37, affirmed in Ex. Ch. 2 T. R. 186, note ; Bussard v. 
 Levering, G Wheat. 102. But what shall be the legal consequence 
 of such dislionor, does not appear to have been decided in Eng- 
 land. In the case cited, 1 Car. & P. 676, it was argued by coun- 
 sel, Scarlett, Holt, and Chitty, and not controverted by the Court, 
 because the decision of the case did not require it, that a pay- 
 ment of a bill on the day of maturity, but after actual dishonor, 
 is no better than paying at any time before action brouglit. And 
 it had long before been decided in Hume v. Peploe, 8 East, 168, 
 that a plea of tender after the day of payment, though of all the 
 money due on the bill, was not a good plea in bar, because it did 
 not show a performance of the contract. If then there is a breach 
 of contract, by a non-payment on demand, and the tender after a 
 breach is no bar, it would seem to follow as a necessary legal con- 
 sequence that an action would then lie. 
 
 But upon this point, the courts of different States have come to 
 different conclusions. In New York it has been decided, as in 
 the case cited, that an action will not lie till after the day. In 
 Maine, as we have already seen, it has been decided that an action 
 will lie, against all the parties, on the day of maturity, after an 
 actual dishonor. 
 
 In New Hampshire, Dennie v. Walker, 7 N. Hamp. 201, the 
 Court say, it may now be considered as settled, that notice may
 
 STAPLES V. FRANKLIN BANK. 489 
 
 be given and suit brought against the indorscr on the last day of 
 grace, after demand and notice. * 
 
 In Maryland, in the case of Farmers' Bank v. Duvall, 7 Gill 
 <fe Johns. 89, the Court say, it is now settled, that demand may be 
 made on the last day of grace, and if payment be not made, the 
 holder may at once treat the note as dishonored, and give notice 
 accordingly. It is not however stated, in terms, that an action 
 may be at once brought. 
 
 In South Carolina, in Wilson v. Williman, 1 Nott & M'Cord, 
 440, it was decided on great consideration, by a majority of the 
 Court, that the maker may be sued on the third day of grace 
 after demand. 
 
 On the whole, we think the weight of authority is in favor of 
 the conclusion to which we have come ; and if it were a new 
 question, it seems to follow, on legal principles, as a fair and legiti- 
 mate conclusion from the established fact that the contract of 
 the acceptor or maker is broken by a neglect or refusal to i)ay on 
 demand, within reasonable time, on the last day of grace, that 
 the holder may then have his remedy by action. But in this 
 Commonwealth it is not a new question ; it has been settled, we 
 believe, by a uniform series of decisions, and by a long and un- 
 broken course of practice. 
 
 It may be proper to make a remark on the point, that some of 
 the cases in Massachusetts "manifestly go upon the ground that 
 when a third person has accepted a bill or made a note payable 
 at a bank, or when, from circumstances, it may be inferred that 
 the parties intended tliat the note should be paid at a bank, the 
 maker has the whole of the usual time of banking hours to pay it. 
 This proceeds upon the ground that the parties have entered into 
 an express or implied agreement, that the note shall be so paid 
 and treated. But when the bank itself has undertaken to pay a 
 sum on any given day, they are bound, like any other promisor, 
 to pay on demand, on that day ; and the only difference, in this 
 respect, between a bank and an individual is this, that what would 
 be reasonable time for a demand, in case of individuals, is fixed, 
 in case of a bank, by their known usual hours of being open for 
 business. This is the case in regard to common bank-notes, and 
 it would be most jjernicious, in regard to them, to establish a dif- 
 ferent rule, or raise a doubt respecting it. And a post-note, when, 
 by the lapse of time and the force of the contract, it has become
 
 490 . ACTIONS. 
 
 payable on demand, stands in this respect on tlie same footing with 
 a- bank-note, which is payable on demand in its terms. 
 
 The Court are therefore of opinion, that the post-note in ques- 
 tion was due and payable when the action was commenced ; that 
 the attachment of the plaintiffs was well made, and that the peti- 
 tion must be dismissed. 
 
 The rule in Pennsylvania, California, Illinois, Mississippi, and perhaps in 
 England, is different from that laid down above. See Smith v. Bank of Wash- 
 ington, infra, and note, p. 492. 
 
 Shaw, C. J., again says in Pierce v. Gate, 12 Cush. 190, 193 : " The rule in re- 
 gard to notes like the one in question is, that the note is payable at any time on act- 
 ual demand, on the last day of grace ; and if such actual presentment and demand 
 are so made and paj'ment is not made, the maker is in default, and notice of dis- 
 honor may forthwith be given to the indorser. But if no presentment or demand 
 is made by the holder upon the maker, the latter is not in default till the end of 
 the business day." 
 
 See also the following cases which sustain the above doctrine : Ammi- 
 down V. Woodman, 31 Me. 580; Veazie Bank v. Wynn, 40 Me. 62; Butler «. 
 •Kimball, 5 Met. 94; Coleman v. Ewing, 4 Humph. 241; McKenzie v. Durant, 
 9 Rich. 61 ; Crenshaw v. McKiernan, Minor, 295. See Radolph v. Cook, 2 
 Porter (Ala.), 286; Poole v. Tumbrldge, 2 Mees. & W. 223; Ex jmrte Moline, 
 19 Ves. 216. 
 
 Smith v. The Bank of Washington. 
 
 (5 Sergeant & Rawle, 318. Supreme Court of Pennsylvania, 1819.) 
 
 When action may be brom/fd. — Notice to an indorser of non-payment of a promissory 
 note was put into the post-office on the 13th, and by the course of the mail could 
 not reach him before the 19th. Suit was brought on the 16th. Held, that it was 
 premature. 
 
 The case is stated in the opinion of the Court. 
 
 Gibson, J. The note which the defendant indorsed to the plain- 
 tiff was protested at Washington for non-payment, on the 13th 
 May, and on the morning of that, or the next day, a regular notice 
 of the protest and non-payment was sent by the mail in a letter 
 addressed to the defendant at Burgettstown, near which he lived. 
 According to the course of the mail, which left Washington but
 
 SMITH V. THE BANK OF WASHINGTON. 491 
 
 once a week, the notice could not have reached the defendant before 
 the nineteenth, and the present suit was commenced on the sixteenth 
 of the same month. The Court instructed the jury that, the object 
 of tlie notice being to enable the indorser to arrange his relations 
 with the drawer, it was necessary that notice should be given only 
 in a reasonable time, and that it was not an essential ground of 
 the plaintiff's action ; in so far that, if it were received from the 
 post-office by the usual and regular operations of the mail at a 
 period subsequent to the issuing of the writ, the suit might, never- 
 theless, be sustained. In support of this it has been argued that 
 the only use of notice being to warn the indorser that it is neces- 
 sary for him to look to the drawer, and secure himself if he can, 
 it is a measure re([uisite only to ])revent the previous responsibil- 
 ity of the indorser from being discharged ; but that it was not an 
 ingredient in the right of action, which arose immediately on fail- 
 ure to pay by the drawer. But I think it clear that, whether 
 notice be necessary only to enable the indorser to look to his con- 
 cerns with the drawer, or whether it be to apprise him that he has , 
 encountered an immediate instead of a secondary responsibility, 
 it is nevertheless a substantive part of the plaintiff's title to bring 
 the action. This was expressly decided in Rushton i'. Aspinall, 2 
 Doug. 679, on great consideration, and, as Lord Mansfield tells us, 
 against the wishes of the Court ; by whom it was held, in a case 
 exactly like the present, that the want of an allegation of notice of 
 non-payment was fatal, even after verdict ; and this on the ground 
 that the title of the plaintiff was not merely set out defectively, 
 but that he had set out no title. Now as the plaintiff's title must 
 be complete before suit is brought, it follows the indorser must 
 have notice before the impetration of the writ ; or, at least, that 
 some fact be averred and proved, that will excuse the giving of 
 notice altogether ; such, for instance, as that the indorser had ac- 
 cepted of a general assignment of the drawer's effects and estate. 
 But the question is, what shall be considered notice. It is not ne- 
 cessary that actual notice be given in every case ; but it will be 
 sufficient, and considered constructive notice, if it be left at the 
 house of the indorser or sent by the mail, even though the letter 
 should miscarry. To affect a party with constructive notice is 
 always a harsh measure, and sometimes attended with absolute 
 injustice, though general convenience requires that, in particular 
 cases, it should be resorted tO. Still, however, neither policy nor 
 convenience requires that the party should be affected, unless there
 
 492 . ACTIONS. 
 
 was at least a possibility of his having had actual notice. From 
 certain facts the law raises a conclusive presumption of actual 
 notice ; but it is not so absurd as to raise it from facts which nega- 
 tive all possibility .that the presumption accords with the truth of 
 the case. The putting a letter into the post-office shall be consid- 
 ered as notice whether it be received or not, provided it might have 
 reached the person to be affected in the regular course of the mail, 
 but it shall be so only from the time at which it ought to have 
 been received. Here there is no question about the reasonableness 
 of the notice ; the material point is the time when it shall be con- 
 sidered as having been received ; for before that time the plaintiff 
 had no right to commence an action. It may be said that if the 
 plaintiff wait until the actual receipt of notice, the indorser may 
 abscond before a writ can be served on him ; but the same reason 
 might be urged in every other case where a plaintiff sues before 
 his cause of action is complete. The notice being for the benefit 
 of the indorser, cannot be dispensed with ; and it would be ex- 
 tremely absurd to suppose that any benefit could flow from it 
 before there was a possibility of its having been received. The 
 judgment must therefore be reversed, and a venire facias de novo 
 awarded. 
 
 See Bevan v. Eldridge, 2 Miles, 353 (1840). In this case, Stroud, J., said: 
 "The practice of including interest in this way [to the end of the third day of 
 grace], is generally, if not universally, adopted by the banks in Pennsylvania. 
 If, then, interest can be charged to the end of the last day of grace, there can 
 be no propriety in treating any party to a note as in default in respect to pay- 
 ment, until that day has expired." 
 
 Castrique v. Bernabo, 6 Q. B. 498 (1844), holds the same rule, that the hold- 
 er cannot sue the indorser until time has elapsed for notice to reach him. Lord 
 Denman, C. J., said: " The rule of law is that, when there is a doubt which of* 
 two occurrences took place first, the party who is to act upon the assumption 
 that they took place in a particular order is to make the inquiry. That is found- 
 ed on reason. An opposite rule would justify a party in suing where he had not 
 ascertained his right. It follows that the plaintiff in this case has taken upon 
 himself to show that a right of action existed before he commenced his suit ; and, 
 not having done this, he must fail." 
 
 So in Mississippi: Wiggle v. Thomason, 11 Sm. & M. 452; and in Cali- 
 fornia : McFarland v. Pico, 8 Cal. 626 ; and in Illinois : Walter v. Kirk, 14 111. 
 555.
 
 08B0RN V. MONCURE. 493 
 
 OSBORN V. MoNCURE AND RoBINSON. 
 
 (3 "Wendell, 170*. Supreme Court of New York, August, 182'J.) 
 
 When action may he brour/ht. — An action brought against the maker of a promissory 
 note on tlie thinl day of grace is premature. 
 
 This was an action of assumpsit, tried at the New York circuit, 
 in June, 1828, before the Hon. Ogden Edwards one of the cir- 
 cuit judges. 
 
 The suit was by the plaintiff, as payee against the defendants, as 
 makers of a promissory note. On tlic tliird day of grace, pay- 
 ment was demanded at the counting house of the defendants, of 
 a clerk therein (the defendants not being present), who said the 
 note would not be paid. The defendants had stopped payment a 
 few days before. The defendant had a capias issued, upon which 
 the defendants were arrested previous to three o'clock p.m. of the 
 third day of grace. The note having been proved, and these facts 
 appearing, the defendant's counsel moved for a nonsuit, on the 
 ground that the action was prematurely brought. The judge re- 
 fused to grant the motion, and a verdict was rendered for the 
 plaintiff. The defendants excepted to the opinion of the judge, 
 and now moved to set aside the verdict. 
 
 SuTHKRLAND, J. The Only question in this case is, whether the 
 case was prematurely commenced. It is admitted that the writ 
 was served before three o'clock p.m. of the third day of grace, 
 payment having previously l)een regularly demanded and refused ; 
 the defendants having failed some days before. It is not denied 
 that the maker is entitled to the days of grace. 2 Cowen, 7GG ; 
 8 Cowen, 205, and the cases there cited. Chitty, Bills, 420, 421. 
 
 Notice to the indorser vn the third day of grace, after a demand 
 upon the maker and his default of payment, is good, although it 
 need not be given until the following day. It being earlier than 
 is required, cannot form any objection on the part of the indorser. 
 1 Johns. Cas. 328 ; Ciiitty, Bills, 3(i2 ; 3 Camp. 193. The demand 
 upon the maker should be made on third day of grace, and within 
 a reasonable time before the expiration of the day, 2 Caiiies. 244 ;
 
 494 ACTIONS. 
 
 12 Johns. 424 ; and if he then refuses payment, the holder has 
 done all that is incumbent upon him to do, and may treat it as a 
 dishonored bill, so far as immediately to give notice to the in- 
 dorser ; but' still I apprehend the maker has the whole of the day 
 to pay in, if he thinks proper to seek the holder. It is undoubt- 
 edly true in relation to other contracts, that the party has until 
 the last instant of the day to make payment ; and I perceive no 
 reason for making negotiable paper an exception to the general 
 rule. 3 Bos. & Pul. 602 ; 4 T. R. 170 ; Chitty, Bills, 365, note. 
 Mr. Chitty seems to think the rule is differently settled. 
 
 The cases of Crygier v. Long, 1 Johns. Cas. 393, and Lawrence 
 V. Bowne, 2 Johns. Cas. 225, seem to decide, that after appear- 
 ance and pleading in chief, a defendant cannot object, the suit 
 being upon a note, that it was commenced before the note was 
 due ; and it is there said that he should apply to the Court to be 
 discharged from the arrest. But, upon general principles, I do 
 not see how a defendant can be deprived of the benefit of such a 
 defence upon the trial. The plaintiff, under the plea of non-as- 
 sumpsit, is bound to show a good cause of action at the thne of the 
 commencement of the suit, and the defendant may give in evidence 
 any thing which shows that the plaintiff had not such cause of 
 action at that time. 1 Phil. Ev. 131. It is well settled that the 
 issuing of the capias is the commencement of the suit, and the 
 plaintiffs' cause of action must exist at that time. 3 Johns. Cas. 
 149 ; 1 Caines, 69, 72 ; 3 id. 133 ; 2 Johns 346 ; 3 id.' 42 ; 10 id. 
 119, and 8 Cowen, 205, where the cases are collected. Mr. Chitty, 
 1 Chitty, Plead. 443, says, that where a suit is prematurely brought, 
 it is ground of demurrer or nonsuit. This appears to me to be 
 the true rule. I am, therefore, of opinion that the judge ought 
 
 to have nonsuited the plaintiff. 
 
 Wew trial granted. 
 
 The foregoing cases will be sufficient to show the different views that have 
 been entertained by courts of high authority upon a very important branch of the 
 law. 
 
 The doctrine of Osborn v. Moncure is reaffirmed in Smith v. Aylesworth, 40 
 Barb. 104. Mr. Justice Johnson, who delivered the opinion of the Court in this 
 case, said : " The action is brought by the payee, against the maker of the note in 
 question. Of course no demand was necessary in order to charge the defendant. 
 The only question in the case is whether the action, having been commenced 
 after banking hours at the bank where the note was payable, on the last day of 
 grace, is not prematurely brought. This precise question was decided in Osborn
 
 OSBORN V. MONCURE. 495 
 
 V. Moncure, 3 Wend. 170, upon full argument and mature deliberation. That 
 case, like this, was an action between payee and makers, and the action was 
 brouglit before three o'clock in the aftqpnoon of the last day of grace, but after 
 demand of payment and refusal. The Court unanimously held that the makers 
 had the whole of the third day of grace in which to make payment, and that an 
 action commenced upon the third day, though after demand, was brought prema- 
 turely, and could not be maintained. Sutherland, J., who delivered the opinion 
 of the Court, says : ' It is undoubtedly true in relation to other contracts, that 
 the party has until the last instant of the day to make payment ; and I perceive 
 no reason for making negotiable paper an exception to the general rule.' It 
 would be difficult to assign any valid reason for any distinction. Negotiable 
 paper, by law, becomes due on the third day of grace, precisely as other con- 
 tracts do on the day when the term of credit expires according to their date, and 
 not otherwise in any respect, that I am able to perceive. That is the law in 
 regard to such paper, and it is part and parcel of the obligation, precisely as 
 much as though it were written in the note. The only dillerence between the 
 two cases is, that in this case the note was payable at a bank, while in that case 
 it was payable generally, at no particular place. But in that case demand was 
 actually made before action brought, and no question raised that the demand 
 was insuHicient, or in any respect improper, There is no essential difference, 
 therefore, in the two cases. I am aware that the rule is laid down differently in 
 Chitty on Bills, which the Court notice in the case referred to. 
 
 " Parsons, in his recent work on Notes and Bills, also lays down the rule as 
 follows : ' We are however of opinion that after demand and refusal on that day 
 an action may be at once maintained.' He also says : ' But without such prior 
 demand and refusal, an action commenced on the day of maturity is premature, 
 unless the note is payable at a bank, when it seems that a suit may be commenced 
 after bank or business hours.' 2 Parsons, Notes and Bills, 461, 4G2. Several 
 cases are cited, decided in other States, to sustain the rule as laid down in the 
 text, though the author admits that the rule may not be positively determined by 
 authority. If it be true, as our Supreme Court has decided, that the maker has 
 up to the last instant of the last day of grace in which to make ])aymciit, as part 
 of his contract, I do not see how a demand before that time, or the expiration of 
 the business hours at a bank where the note is payable, can alter the time of the 
 note becoming due and payable. Generally the law does not notice the fractions 
 of a day, and it is difficult to see how the act of a payee or holder, in making 
 demand of payment at any particular hour in the day, or the custom of a bank in 
 closing its doors ?it a particular hour, is to work a severance of time, so that a 
 note payable on a particular day, and not at any specified hour of such day, shall 
 be both due, and not due, on the same day. Certainly there is nothing in the 
 contract, nor, so far as I am advised, in the mercantile custom, by which a payee 
 by his own voluntary act can shorten the day or the hour of payment. It seems 
 to me our rule is the only safe and consistent one, and that it ought to be fol- 
 lowed, especially by this Court. All that is decided in the Bank of Syracuse v. 
 Ilollister, 17 N. Y. 46, is that a presentment of a note and demand of payment 
 by a notary, of himself, at the bank door after banking hours, and after the bank 
 was closed, was a sufficient presentment to charge an indorser. This only 
 relates to the rtde between holder and indorser, and is to the effect that a holder
 
 496 ACTIONS. 
 
 is not confined to banking hours in making his demand, but may make it at any 
 time in the day, afterwards, provided he can find a proper person at t]ie place, to 
 answer. If this decision has any bearmg upon the present case, it is rather 
 against the plaintiff than in his favor. It necessarily holds that the demand was 
 made before the time for the payment of the note had expired. Otherwise the 
 demand could not have been held sufficient to charge the indorser. 
 
 " On the whole I am of the opinion that the action was prematurely brought, 
 and that the nonsuit should have been granted. 
 
 "The judgment must therefore be reversed, and a new trial ordered, with 
 costs to abide the event." 
 
 Whether the above is or is not sound as to paper payable at bank, — and our 
 opinion is that it is not, — it is certainly the true doctrine, as it seems to us, in 
 the case of paper payable generally. The maker or acceptor by analogy to all 
 other branches of contract, and, as we think, by the weight of authority upon 
 this point, and by reason, should have in this case until the close of the third 
 day of grace within which to make payment. There can then be no breach during 
 that day ; and an action before the fourth day would be premature. 
 
 The circumstance of refusal is considered in some of the cases as sufficient to 
 warrant suit before business hours have expired, in the first case above stated, 
 and before the close of the third day, in the second ; but this is not satisfactory. 
 The maker or acceptor, notwithstanding his refusal, may change his mind, and 
 tender the money within the time allowed him ; and shall the holder by excessive 
 zeal, perhaps by malice, throw upon him the burden of costs by suing within 
 that time ? Such a rule would be unreasonable and productive of no good. 
 
 If the above is sound doctrine respecting the party primarily liable, a fortiori 
 ■will it apply to the case of an indorser. But we apprehend that the Pennsylvania 
 rule has gone too far in this direction, in requiring the holder to wait until the 
 indorser shall have had'time to receive notice. He should not sue until after a 
 breach of the contract, it is true, — and we have indicated when that occurs, as 
 we understand it, — but as soon as the contract is broken and notice is sent, his 
 title has accrued against the indorser. Chief Justice Parsons forcibly states this 
 view in Shed v. Brett, 1 Pick. 401, 411. He says: "The argument is, that 
 notice of the non-payment is essential to the plain tiflf's right of action ; that it is 
 necessary to aver it in the declaration as a fact existing ; and that as the case 
 shows this could not be true, the plaintiff has failed in an essential point. But 
 this argument proceeds upon the ground that there must be an actual reception 
 of notice before the plaintiff can sue ; and this is certainly fallacious. If the 
 putting the letter into the post-office is notice in itself, which we have shown, then 
 it was given before the commencement of the suit. And it would be mischievous 
 to decide otherwise; for every plaintiff's right of action would commence at 
 different times according to the distance of the party sued ; and the time of suing 
 must be conjectured, as it cannot be known when the notice will be actually 
 received. Besides if the object of waiting be to give the party opportunity to 
 take up the note, there must be a sort of double usance ; for the holder must 
 wait till his letter is received, and for a reasonable time afterwards for the party 
 receiving it to come and pay the money. Who would take a bill or note remitted 
 from New Orleans, if this doctrine be correct? And if the parties liable be 
 beyond sea, such instruments would be mere waste paper. If the bill could not
 
 OSBORN V. MONCURE. 497 
 
 be accepted, or the indorsed note not paid, the unfortunate holder, witli prop- 
 erty belonging to the drawer or indcjrser before his eyes, must remain an idle 
 spectator of the scramble of other creditors for it, or suffer it to be withdrawn by 
 the debtor himself without the power of arresting it. This cannot be sound 
 doctrine ; an averment of notice will be sufficiently proved, by showing that the ' 
 steps necessary to give the notice have been taken ; if subsequently received, it 
 will relate to the time when it was sent; if never received, the fact of having put 
 it in the proper train is enough." 
 
 It will be observed that the doctrine combated above is a step in advance of 
 the position taken in Pennsylvania; the doctrine of that State requiring the 
 holder only to wait until sufficient time has elapsed for notice to reach the in- 
 dorser, and not until an actual reception of the notice. But the reasoning of 
 Chief Justice Parso7is overturns this position also. In every case under the rule 
 in Pennsylvania, the time must be uncertain when the holder can sue the indorser 
 or drawer, and the probability of satisfying his claim by execution will grow more 
 and more remote in proportion as the distance increases over which the notice 
 must travel; at least in all cases where the debtor has vigilant creditors, and 
 especially if he himself possesses a disposition to take advantage of the holder by 
 removing or secreting bis property. 
 
 32
 
 498 EVIDENCE. 
 
 EVIDENCE. 
 
 Wells v» Whitehead. 
 
 (15 Wendell, 527. Supreme Court of New York, July, 1836.) 
 
 Production. Bill drawn in sets. — In a suit against the indorser of a bill of exchange 
 drawn in sets, the defendant may require the production of the identical one of the 
 set dishonored. 
 
 Assumpsit against the indorser of a bill of exchange drawn in 
 sets. The plaintiff declared on the first of the set, but without 
 producing or accounting for the non-production of the third, which 
 was the one actually dishonored. 
 
 Nelson, J. Two objections were taken in this case to the plain- 
 tiff's right to recover, which were overruled by the circuit judge : 
 
 1. Tliat the suit being against an indorser, on a protest for non- 
 acceptance of a bill of exchange drawn in parts, it was incumbent 
 upon the plaintiff to produce at the trial the identical bill, or num- 
 ber of the set that was protested, or account for its absence ; and 
 
 2. That sufficient evidence was not given to establish the fact that 
 the defendant had been duly notified of the non-acceptance, or that 
 due diligence had been used for that purpose. 
 
 The law on this point is correctly laid down by Chancellor Kent 
 in his Commentaries. He says : " If several parts, as is usual, of 
 a bill of exchange be drawn, they all contain a condition to be paid, 
 provided the others remain unpaid, and they collectively amount to 
 one bill, and a payment to the holders of either is good, and a pay- 
 ment of one of a set is payment of the whole. The drawer or in- 
 dorser, to be charged on non-acceptance or non-payment, is entitled 
 to call for the protest, and the identical bill or number of the set 
 protested, before he is bound to pay ; and it would be sufficient to 
 produce it at the trial, or account for its absence. His rights at- 
 tach to the bill dishonored, and he is entitled to call for it. He
 
 WELLS V. WUITEHKAD. 499 
 
 may want it for his own indemnity, and without it he might he ex- 
 posed to chiinis for some bona fide holder, or person who liad pai<l 
 supra protest for his honor." 3 Kent, Com. 109. As to the right 
 of the drawer or indorser to call for the i)rotest, the chancellor 
 must be considered as referring to a foreif/n bili, no |)rotest l)eing 
 necessary in respect to a domestic or inland bill. 
 
 Where the bill has been protested for non-acceptance, any per- 
 son may accept it mpra protect for the honor of the bill, the draw- 
 er, or any particular indorser. This usage promotes the negotiation 
 of it when the drawers credit is suspected, and may save the 
 character and prevent the prosecution of some of the parties, in 
 case the drawee cannot be found, is not capable of accepting, or 
 refuses. Chitty, Bills, 241 ; 3 Kent, Com. 87. The person accept- 
 ing supra protest subjects himself to the same obligations as if the 
 bill had been directed to him ; and if he accepts for the honor of 
 the drawer or indorser, though without his knowledge, he has a 
 remedy against such persons and all others liable to them, for his 
 responsibilities assumed, the same as if he acted under their direc- 
 tion. Chitty, 243 ; 3 Kent, Com. 87 ; 1 Esp. N. V. 113 ; 1 Ld. 
 Raym. 57;'). If he takes up the bill for the honor of the in- 
 dorser, he stands in the light of an indorsee paying full value for 
 it, and has the same remedies to which he would be entitled against 
 all prior parties. From this doctrine it seems to me clearly to fol- 
 low, that if the hill presented to the payees in this case had been 
 accepted by a friend of the defendant for his honor, after the re- 
 fusal by the payees to accept, the defendant would be bound to 
 indemnify him, notwithstanding a recovery, on the number of the 
 set produced at the trial. It is true, as a general rule, payment of 
 one of the set is payment of the whole ; l)ut if the drawer or in- 
 dorser is entitled to call for the identical bill dishonored before he 
 is obliged to pay it, the omission to do so would subject him to the 
 charge of negligence, and make him, notwithstanding, accounta- 
 ble to the persons who had accepted it for his honor. Indeed, if 
 he stands in the light of an indorsee for the value of a bill trans- 
 ferred before due, there is no escape from this liability. His se- 
 curity, therefore, requires that he should be allowed to call for 
 the bill protested before a recovery is permitted to be had against 
 him. 
 
 The view of the law as taken by Chancellor Kent is supported by 
 several approved authorities. Chitty, Bills, 387 ; 2 Stark. Evid.
 
 500 EVIDENCE. 
 
 142 ; 1 Saund. PI. & Ev. 275, 318 ; 4 Petersdorff, Abr. 536. Ac- 
 cordinp: to these autliorities, all the sets should be produced iu case 
 of aforctf/ii bill. In tlie case of Keuworthy v. Hopkins, 1 Johns. 
 Cas. 107, to which Chancellor Kent refers to sustain his qualifica- 
 tion of this rule, the second of the set was declared on, which was 
 the one accepted and the only one produced at the trial. It was 
 there objected tliat notice of protest for non-payment was insuffi- 
 cient, on tlie ground that tlie identical bill protested had not accom- 
 panied it. It was accompanied by one of the set that had not been 
 accepted or protested, and payment was refused on that ground. 
 The Court decided that the holder had a right to retain the bill 
 accepted, as he might want it to proceed against other parties, and 
 intimated that the production or presentation of it was essential 
 only when payment was demanded. The margiiial note of that 
 case does not correctly state the point decided ; nor did the facts 
 call for an examination or decision of the question as there stated. 
 The note would sustain tlie ruling of the judge in this case : it is 
 there laid down that, where one of a set of three bills of exchange 
 on London was protested for non-payment, it was held an action 
 miglit be maintained here against the indorsers on one of the set 
 not protested, with the protest of the other. In truth the point 
 particularly examined in that case is no longer of any importance, 
 because the better opinion now is that a copy of the bill and protest 
 need not accompany the notice in the case of a foreign bill. No- 
 tice of the fact of non-acceptance or non-payment is sufficient. 
 Chitty, Bills, 217, and cases there cited ; 3 Kent, Com. 93, 109 ; 
 3 Camp. 334 ; 2 Esp. N. P. 511 ; 10 Mass. 5, and note ; 1 Selw. 
 273 ; 4 Esp. N. P. 48. Production of the protest at the trial is all 
 that is necessary. 
 
 Whether the bill in this case be considered a foreign or inland 
 bill can make no difference, so far as the material question involved 
 is concerned. The rule of evidence should be the same in both 
 cases as to the production on the trial of the identical bill presented. 
 Either may be accepted supra protest, and the reasons for the pro- 
 duction or accounting for the absence of the protested bill on the 
 trial, are alike applicable in both cases. In Buckner v. Finley and 
 Van Lear, 2 Peters, 58(3, bills of exchange drawn in one State on 
 persons residing in another, were held to partake of the character 
 of foreign bills. It had been before held, in Townsley v. Sumrall, 
 ib. 170, that such bills were to be deemed foreign in respect to the
 
 WELLS V. WHITEHEAD. 501 
 
 protest and proof of the dishonor. A dift'erent opinion liad hoLMi 
 expressed hy Mr. Justice ( a/t Ness, in Miller r. Hiickhn*, "> Johns. 
 375. It was not, however, the point in the case, and should not, 
 perhaps, 1x3 considered as conclusive upon the Ccnirt. When the 
 question arises directly for consideration, it may be proper to re- 
 view. it. The convenience of trade and commerce preponderates 
 strongly in favor of viewing such bills as foreign, so far, at least, 
 as respects the protest and proof, as then the certificate of the no- 
 tary, under the seal of office, is evidence of the protest in the for- 
 eign State without any auxiliary support, and is so received in all 
 courts, according to the usage and custom of merchants. 
 New trial granted, costs to abide the event. 
 
 On the second point, respecting diligence, the decision was in favor of the 
 plaintiir. That subject has already been considered, under Pkk.sentmext and 
 Demand for Pay.ment. 
 
 Upon the question of production it has been held in the Supreme Court of 
 the United States that in an action by the holder on the particular one of the set 
 which was dishonored, the defendant cannot require the plaintiff to produce the 
 other numbers of the set, or account for their non-production. Downes v. Church, 
 13 Peters, 205. The principal case was before the Court. Mr. Justice Story, 
 who delivered the opinion in Downes r. Church, said : " This is the case of a 
 certificate of division of the judges of the Circuit Court for the district of Mis- 
 sissippi. The action was assumpsit, founded on the second part of a foreign bill 
 of exchange, by the indorsee against the indorser for non-acceptance. The 
 plaintiffs declared upon the second of the set of exchange, which second of the 
 set was protested for non-acceptance, and the same, with the protest attached 
 thereto, was read to the jury. Whereupon a question arose, whether the plain- 
 tiffs could recover upon the said second of exchange without j)roducing the first 
 of the same set, or accounting for its non-production ; upon which question the 
 judges were opposed in opinion. And the same has l)een accordingly certified 
 to this Court under the Act of Congress. 
 
 " We are of opinion that the plaintiffs are entitled to recover upon the second 
 of the set without produiing the first, or accounting for its non-production. No 
 authority has been referred to which is exactly in point, nor are we aware that 
 the question has ever been judicially decided. Mr. Starkie, in his work on 
 Evidence, part 4, p. 228, 1st ed., has said : ' In the case of a foreign bill drawn 
 in sets, both the sets should be produced.' But for this proposition he has cited 
 no authority. The question must, then, be decided upon principle. The object 
 of drawing a foreign bill in sets is for the convenience of the payee, or other 
 holder, to enable him to forward the same for acceptance by diflerrnt convey- 
 ances, and thus to guard against any loss, by acciilent or otherwise, which might 
 occur if there were but a single bill. Btit from the very frauu- of the set, if one 
 is paid or discharged by the acceptor, or other party liable on it, he is ordinarily 
 discharged from the others, since each part contaijis a condition that it shall be
 
 502 EVIDENCE. 
 
 payable only when the others remain unpaid. Now, when one of the set is pro- 
 tested for non-acceptance, and due noti<'e is given to an indorser, and on the 
 trial of an action brought against him by the indorsee, the same bill of the set 
 on whieh the protest is made is produced, that is prijna facie proof of his being 
 responsible thereon. J^ither of the set may be presented for acceptance, and, if 
 not accepted, a right of action presently arises upon due notice against all the 
 antecedent parties to the bill, without any others of the set being presented ; for 
 it is by no ineans necessary that ail the parts should be presented for acceptance 
 before a right of action accrues to the holder. Under such circumstances, it is 
 properly a matter of defence on the other side, to show either that some other 
 bill of the set has been presented and accepted, or paid ; or that it has been 
 presented at an earlier time and dishonored, and due notice has not been given ; 
 or that another ])crson is the proper holder, and has given notice of big title to 
 the party sued ; or that some other ground of defence exists, which displaces the 
 prima facie title made out by the plaintiff. The law will not presume that 
 the otlier bills of the set have been negotiated to other persons, merely because 
 they are not produced. And the indorser is not put to any hazard or peril by 
 the non-production of them ; since, like the acceptor, if he once pay the bill, 
 without notice of any superior adverse claim, by a negotiation of another of the 
 set to another party, he will be completely exonerated. On the other hand, 
 great inconveniences might arise from compelling the plaintiff to produce the 
 other parts of the set, or to account for their non-production, as he might not 
 be able satisfactorily to prove that they had not been negotiated, or that they 
 had been lost. In short, if the plaintiff, before he could recover, were required 
 to produce or to account for all the parts of the set, he would be obliged, in 
 every case where the bills had been transmitted by different conveyances abroad, 
 to arm himself with proofs of every stage of their route and progress, until they 
 should come back again into his hands, as preliminaries to his right to recover 
 upon their being dishonored. Such a requirement would create most serious 
 embarrassments in all commercial transactions of this sort ; and instead of bills 
 drawn in sets being a public convenience, they would be greatly obstructed in 
 their negotiability, since the rights and the remedies of the holder might be 
 materially impaired thereby. We are therefore of opinion that the question 
 upon which the judges of the Circuit Court were opposed, ought to be answered 
 in the affirmative, and we shall send a certificate to the Court accordingly." 
 
 It may be worthy of note that no counsel appeared for the defendant in this 
 case. Upon the general subject of production, see Chitty, Bills, 625. 
 
 It is a general rule that the paper sued upon must be produced, or its absence 
 accounted for ; and this rule is not changed by a statute which dispenses with 
 pi'oof of signatures unless their genuineness be denied on oath. Sebree v. Dorr, 
 
 9 Wheat. 558 ; Matossy v. Frosh, 9 Texas, 610. See also Shearm v. Burnard, 
 
 10 Adol. & Ellis, 593; Read v. Gamble, ib. 597, note; s. c. 5 Nev. & M. 433; 
 Cunliffe V. Whitehead, 3 Dowl. 634.
 
 BANK OP THE PNITED STATES V. DUNN. 503 
 
 Bank of the United States, Plaintiffs in Error, v. John O. 
 Dunn, Defendant in Error. 
 
 (6 Peters, 51. Supreme Coiiit of tlie United States, January, 18I52.) 
 
 Evidence to vary liahililij of indorser. — The indorser of commercial paper will not be 
 permitted to show tliat his indorsement was intended to be merely formal ; and 
 that he was informed by the payor that he would incur no responsibility by in- 
 dorsing the paper, as its payment had been secured by a pledge of stock. 
 
 The case is stated in the opinion of the Court. 
 
 McLean, J. In the Circuit Court for the District of Columbia, 
 from wliich this cause is brought by writ of error, the plaintiffs com- 
 menced their action on the case against the defendant, as indorser 
 of a promissory note. The general issue was pleaded, and at the 
 trial the plaintiffs read in evidence the following note : — 
 
 " $1000. Sixty days after date, I promise to pay John 0. Dunn, 
 or order, one thousand dollars, for value received, negotiable and 
 payable at the United States Branch Bank in Washington. 
 
 "John Scott." 
 On the back of which was indorsed, 
 
 " Overton Carr, 
 " J. 0. Dunn." 
 
 The signatures of the parties were admitted, and proof was given 
 of demand at the bank, and notice to the indorsers. 
 
 The defendant then offered as a witness, Overton Carr, an in- 
 dorser of said note, who testified tliat before he indorsed the same, 
 he had a conversation with John Scott, the maker, and was in- 
 formed by him that certain bank stock had been pledged, or was to 
 be pledged, by Roger C. Weightman, as security for the ultimate 
 payment of tlie said note, and that there would be no risk in in- 
 dorsing it. That the witness tlien went into the room of tlie cashier 
 of the plaintiffs' oflice of discount and deposit at Washington, and 
 found there the said cashier, and Thomas Swann, the president of 
 the said oflice, to whom he communicated the conversation with 
 Mr. Scott, and from whom he understood, upon inquiry, that the 
 names of two indorsers residing in Washington were required upon 
 the said note, as matter of form ; and that he would incur no re-
 
 504 EVIDENCE. 
 
 sponsibility (or no risk) by indorsing the said note. He does not 
 recollect the conversation in terms, but such was the impression 
 he received from it. 
 
 That he went immediately to the defendant and persuaded him 
 to indorse the note, by representing to him that he would incur no 
 responsibility or no risk in indorsing it, as the payment was secured 
 by a pledge of stock ; and to whom he repeated the conversation 
 with Mr. Scott, and said president and cashier. That no person 
 was present at the conversation, the tefms of which he does not 
 recollect ; but that the impression he received from this conversa- 
 tion with the aforesaid president and cashier, and with the said 
 Scott, and which impression he conveyed to the defendant was, 
 that the indorsers of said note would not be looked to for payment, 
 until the security pledge had been first resorted to ; but that the 
 said indorsers would be liable in case of any deficiency of the said 
 security to supply the same. That neither this witness nor Mr. 
 Dunn was, at the time, able to pay such a sum, and that both in- 
 dorsed the note as volunteers, and without any consideration, but 
 under the belief that they incurred no responsibility (or no risk), 
 and were only to put their names to the paper for form sake. 
 
 To which evidence the plaintiffs, by their counsel, objected ; but 
 the Court permitted it to go to the jury. 
 
 The plaintiffs examined as a witness Richard Smith, the cashier, 
 whose testimony was overruled; and then Thomas Swann, the 
 president of the bank, was offered as a witness and rejected ; it 
 appearing that they were both stockholders in the bank. To this 
 decision of the Court, a bill of exceptions was taken by the plain- 
 tiffs, and exception was also taken to the evidence of Overton Carr. 
 On this last exception the plaintiffs rely for a reversal of the 
 judgment of the Circuit Court. And first, the question as to the 
 competency of this witness is raised. 
 
 He is not incompetent merely from the fact of his name being 
 indorsed on the bill. To exclude his testimony, on this ground, 
 he must have an interest in the result of the cause. Such interest 
 is not apparent in this case ; and any objection which can arise 
 from his being a party to the bill, goes rather to his credibility 
 than his competency. 
 
 But it is a well-settled principle, that no man who is a party to 
 a negotiable note shall be permitted, by his own testimony, to in- 
 validate it. Having given it the sanction of his name, and thereby
 
 BANK OF THE UNITED STATES V. DUNN. 505 
 
 added to the value of the instrument by giving' it currency, lie shall 
 not be permitted to testify that the note was given for a gambling 
 consideration, or under any other circumstances which would de- 
 stroy its validity. This doctrine is clearly laid down in the case 
 of Walton et al. assignees of Sutton v. Shelley, reported in 1 T. R, 
 296, and is still held to be law, although in 7 T. R. 56, it is decided 
 that in an action for usury, the borrower of the money is a compe- 
 tent" witness to prove the whole case. 
 
 Several authorities arc cited by the plaintiff's counsel to show 
 that parol evidence is not admissible to vary a written agreement. 
 
 In the case of Hoare et al. v. Graham et al.., 3 Camp. o7, the 
 Court lay down the principle that, " in an action on a promissory 
 note or bill of exchange, the defendant cannot give in evidence a 
 parol agreement entered into when it was drawn, that it should 
 be renewed and payment should not be demanded when it became 
 due." 
 
 This Court, in the case of Renner v. The Bank of Columbia, 9 
 Wheat. 581,1 jj^ answer to the argument that the admission of proof 
 of the custom or usage of the bank would go to alter the written 
 contract of the parties, say : " If this is the light in which it is to 
 be considered, there can be no doubt that it ought to be laid en- 
 tirely out of view ; for there is no rule of law better settled, or 
 more salutary in its application to contracts, than that which pre- 
 cludes the admission of parol evidence to contradict or substantially 
 vary the legal import of a written agreement." 
 
 Parol evidence may be admitted to explain a written agreement 
 where there is a latent ambiguity, or a want of consideration may 
 be shown in a simple contract ; or, to defeat the plaintiffs' action, 
 the defendant may prove that the note was assigned to the plaintiffs, 
 in trust, for the payor. 6 Mass. 482. 
 
 It is competent to prove by parol that a guarantor signed his 
 name in blank, on the back of a promissory note, and autliorized 
 another to write a sufficient guarantee over it. 7 Mass. 233. 
 
 To show in what cases parol evidence may be received to explain 
 a written agreement, and where it is not admissible, the following 
 authorities have been referred to : 8 Taunt. 92 ; 1 Chitty, G61 ; 
 Peake's Cases, 40; Gilbert. 154. 
 
 On the part of the defendant's counsel it is contended, tiiat be- 
 tween parties and privies to an instrument not under seal, a want 
 of consideration, in whole or in part, may be shown. That the 
 
 1 Ante, 297.
 
 506 EVIDENCE. 
 
 indorsement in question was made in blank, and that it is compe- 
 tent for the defendant to prove under what circumstances it was 
 made. That if an assurance were given at the time of the indorse- 
 ment that the names of the defendant and Carr were only required 
 as a matter of form, and that a guarantee had been given for the 
 payment of the note, so as to save the indorsers from responsibil- 
 ity, it may be proved, under the rule which permits the promisor 
 to go into the consideration of a note or bill between the original 
 parties. 
 
 In support of this position, authorities are read from 5 Serg. & 
 Rawle, 303, and 4 Wash. C. C. 480. In tlie latter case, Mr. Jus- 
 tice WciHlnngton says : " The reasons which forbid the admission of 
 parol evidence to alter or explain written agreements and other 
 instruments, do not apply to those contracts implied by operation 
 of law, such as that which the law implies in respect to the indorser 
 of a note of hand. The evidence of the agreement made between 
 the plaintiffs and defendants, whereby the latter were to be dis- 
 charged on the liappening of a particular event, was therefore 
 properly admitted." The decision in 5 Serg. & Rawle was on a 
 question somewhat analogous to the one under consideration, ex- 
 cept in the present case there is no allegation of fraud, and the 
 decision in that case was made to turn in part, at least, on that 
 ground. 
 
 In Pennsylvania, there is no Court of Chancery, and it is known 
 that the courts in that State admit parol proof to affect written 
 contracts, to a greater extent than is sanctioned in the States 
 where a chancery jurisdiction is exercised. The rule has been dif- 
 ferently settled in this Court. 
 
 The note in question was first indorsed by the defendant to Carr, 
 and by him negotiated with the bank. It was discounted on the 
 credit of the names indorsed upon the note. This is the legal pre- 
 sumption that arises from the transaction ; and if the first indorser 
 were permitted to prove that there was a secret understanding be- 
 tween himself and his assignees that he should not be held respon- 
 sible for the payment of the note, would it not seriously affect the 
 credit of this description of paper ? Might it not, in many cases, 
 operate as a fraud upon subsequent indorsers ? 
 
 The liability of parties to a bill of exchange, or promissory note, 
 has been fixed on certain principles which are essential to the credit 
 and circulation of such paper. These principles originated in the
 
 TOWNSEND V. BUSH. 507 
 
 convenience of commercial transactions, and cannot now be de- 
 parted from. 
 
 The facts stated by the witness Carr are in direct contradiction 
 to tbc obligations implied from the indorsement of the defendant. 
 By bis indorsement, be promised to pay the note at maturity, if the 
 drawer should fail to pay it. The only condition on which this 
 promise was made was, that a demand should be made of the 
 drawer when the note should become due, and a notice given to the 
 defendant of its dishonor. But the facts stated by the witness 
 would tend to sliow that no such promise was made. Does not 
 this contradict the instrument? and would not the precedent tend 
 to shake, if not destroy, the credit of commercial paper? On this 
 ground alone the exception would be fatal ; but the most decisive 
 objection to the evidence is, that the agreement was not made with 
 those persons who have power to bind the bank in such cases. It 
 is not the duty of the cashier and president to make such con- 
 tracts ; nor have they the power to bind the bank, except in the 
 discharge of their ordinary duties. 
 
 Upon a full view of the case, the Court are clearly of the opinion, 
 that the evidence of Carr should have been overruled by the Circuit 
 Court ; or they should have instructed the jury that the facts proved 
 were not in law sufficient to release the defendant from liability on 
 his indorsement. The judgment of the Circuit Court must, there- 
 fore, be reversed, and a venire de novo awarded. 
 
 See the following cases. 
 
 K. AND E. ToWNSEND V. BuSH. 
 (1 Connecticut, 260. Supreme Court, November, 1814.) 
 
 Competeucy of parly to commercial paper to prove it invalid. — A party to a negotiable 
 instrument, who is divested of interest, is competent to prove usury in the incep- 
 tion of the paper. 
 
 This was an action of assumpsit against Bush as acceptor of a 
 bill of exchange drawn by Ebenezer and Atwater Townsend, and 
 payable to the plaintiffs or order. There was also a count for 
 money paid, laid out, and expended for the defendant's use. The 
 cause was tried at New Haven, August term, 1814, before Swift^
 
 508 EVIDENCE. 
 
 Brainard and Baldivin, JJ. On the trial, the defendant admitted 
 the drawing and acceptance of the bill, as stated in tlie declara- 
 tion. His defence was usury under the following circumstances. 
 E. and A. Townsend, applied to W. Leffingwell in New York for 
 the loan of a sum of money. Leffingwell agreed to loan them the 
 money at twelve per cent interest, upon their giving him a bill of 
 exchange for the amount, drawn by themselves on the defendant 
 and accepted by him payable to the plaintiffs K. and E. Townsend, 
 and by them indorsed. These terms were complied with ; the 
 defendant at the time of accepting the bill, and the plaintiifs at 
 the time of indorsing it, having no notice of the corrupt agree- 
 ment. Leffingwell indorsed the bill to the Derby Bank, and there 
 procured it to be discounted. When it became payable, the Derby 
 Bank gave due notice to the several parties to the bill ; and after- 
 wards commenced a suit against the plaintiffs on their indorse- 
 ment in the State of New York, and by the judgment of the 
 Supreme Court of that State recovered the amount of the bill 
 with interest and costs, which the plaintiffs accordingly paid. The 
 defendant accepted the bill for tlie honor of the drawers, having 
 no effects of the drawers in his hands. To prove these facts, the 
 defendant offered the individuals composing tlie firm of E. and A. 
 Townsend as witnesses ; offering also, at the same time, to show, 
 that they had no interest in this suit, being discharged from all 
 liability on the bill under an act of insolvency in the State of New 
 York. The plaintiffs objected to the admission of these witnesses, 
 on the ground that having drawn the bill, and thereby given credit 
 to it, they were incompetent to show that it was invalid on account 
 of usury ; and also on the ground that any proof of said corrupt 
 agreement would be irrelevant on this trial. The Court excluded 
 the witnesses, and directed the jury to find a verdict for the plain- 
 tiffs ; which being accordingly done, the defendant moved for a 
 new trial. This motion was reserved for the consideration of all 
 the judges. 
 
 Tkumbull, J. The principal question in this case is. Whether 
 Ebenezer and Atwater Townsend, the drawers of the bill in ques- 
 tion, are admissible witnesses in an action by the plaintiffs as 
 payees of the bill against the defendant as acceptor, to prove that 
 it was executed on an iisurious contract, and therefore is void in 
 law. 
 
 The rule that no person can be permitted to give testimony to
 
 TOWNSEND V. BUSH. 509 
 
 invalidate any instrument to which lie has made himself a party 
 by aflixing iiis signatnre, in cases wherein he has no interest in 
 the event of the suit on trial, was first adopted in the case of Wal- 
 ton V. Shelley, 1 Durn. & East, 29G, by Lord Mansfield, and the 
 other judges of the King's Bench. He states that " the rule is 
 founded in public policy ; that there is a sound reason for it; be- 
 cause every man, who is a party to an instrument gives a credit [to] 
 it ; that it is of consequence to mankind, that no person should 
 hang out false colors to deceive them, by first affixing his signa- 
 ture to a paper, and then afterwards giving testimony to invalidate 
 it; that it is emphatically right in case of notes, because in conse- 
 quence of different statutes, two very hard cases have arisen : first, 
 with respect to a gaming note, which, though in possession of a 
 bona fide purchaser without notice, is void ; and in the case of 
 usury, a note given for an usurious consideration, though in the 
 hands of a fair indorsee, is equally void ; and therefore, whenever 
 a man signs these instruments, he is always understood to say, 
 that to his knowledge there is no legal objection to them what- 
 ever." He then quotes the maxim of the civil law, nemo suam 
 allegans turpitudinem est audiendus, and applies it as conclusive on 
 the present point. The other judges concurred, and established 
 this as a general rule of law. 
 
 The English courts soon found the principle was laid down on 
 too broad a scale, and narrowed it in its application, to negotiable 
 instruments only. No new or additional reasons were ever ad- 
 duced in its support. It was adhered to on the grounds stated by 
 Lord 3Iansfield, and the authority of the decision in that case. 
 But at length, the rule was exploded in the King's Bench, and 
 such a witness determined to be admissible, unless interested in 
 the event of the suit on trial. See Jordaine v. Lashbrooke, 7 
 Durn. & East, 601. 
 
 As the decisions of the highest court and ablest judges at West- 
 minster Hall have been thns directly contradictory, and as their 
 principle (notwithstanding the dicta of several of the judges in 
 Allen V. Holkins, 1 Day's Cases in Error, p. 17, adopting the rule 
 as sound law, and the decision in Webb v. Danforth, p. 301, de- 
 nying its application as to facts subsequent to the execution' of the 
 instrument) has never till now come directly in question before 
 the highest courts in this State, it is our duty to decide it accord- 
 ing to the general rules and principles of law respecting admissi- 
 bility of testimony ; and if the grounds and reasons in Walton v.
 
 510 EVIDENCE. 
 
 Shelley are found to be fallacious, we cannot consider the case and 
 its authority conclusive. 
 
 Tiie first ground Lord Mansfield takes, is, that every person who 
 signs an instrument, thereby gives it a credit, and can never be 
 admitted to dispute its validity. Before we adopt this principle of 
 universal exclusion and estoppel, we must inquire what credit 
 each several party, by putting his signature upon a negotiable in- 
 strument, thereby gives to it, and what obligation he thereby 
 incurs ; for each signer stands on a different ground. 
 
 The drawer of a bill or [indorser of a ?] negotiable note, acknowl- 
 edges himself indebted to the payee to the amount of the sum it 
 contains, and engages to pay the damages, in case the bill shall be 
 dishonored, or the note uncollected, without the fault of the payee, 
 or of those to whom it may be indorsed. 
 
 The indorser of a bill or note acknowledges his receipt of a 
 valuable consideration, and contracts to pay the sum, in case it 
 cannot be obtained of the drawer.^ 
 
 The acceptor acknowledges it to be duly drawn ; he is not ad- 
 mitted to deny the handwriting of the drawer ; and lie contracts 
 to pay the sum according to its contents to the legal holder. 
 
 These are the rules and principles of common law as adopted 
 and sanctioned by the courts in this State. 
 
 The indorsee or holder of a negotiable security has nothing to 
 do with the transaction between the original parties. See. Jordaine 
 V. Lashbrooke. Nor has the drawer or acceptor any thing more 
 to do with the contracts between subsequent indorsers and indor- 
 sees. Each party is bound only so far as his own obligation ex- 
 tends, and cannot be precluded from denying any fact not acknowl- 
 edged by his signature. All these contracts are separate and 
 independent. No party by his signature warrants the validity of 
 any contract but his own, or gives any farther credit to the 
 security, or is interested in the event of any suit on the several 
 contracts of other parties, whose names may appear on the instru- 
 ment. He warrants nothing farther with respect to the validity of 
 the draft, he hangs out no false colors, and is not estopped by his 
 signature from testifying to any facts respecting the instrument, or 
 any legal objections within his knowledge.^ 
 
 1 Tliis word " drawer " is of course used for " maker ; " and the words " or of 
 the acceptor " should have been added. 
 
 2 An indorser warrants the genuineness of all prior signatures. See Story, Prom- 
 issory Notes, § 135.
 
 TOWNSEND V. BUSH. 511 
 
 The only fundamental principle of the common law, applicable 
 to the present question, is this, that no man can be a witness in 
 his own cause ; and this rule hath ever been considered as appli- 
 cable to every case in which lie is a party, or is interested, and to 
 no others. It was formerly '*holden as well in the Engli.sh courts 
 as our own, that an interest in the question was a sufficient ground 
 for excluding a witness. It is now settled law in both, that an 
 interest in the event of the suit is the only ground on which he 
 can be rejected ; and that a mere interest in the question does not 
 affect his competency, but his credit with the jury only. But this 
 distinction was not fully settled at the time the case of Walton v. 
 Shelley was tried. Justice Buller, though he concurred in the 
 principle that no man can invalidate his own security, relied much 
 in his argument on the fact that the witness was interested in the 
 question, because the question put to him was upon the validity of 
 the notes he had indorsed ; although he clearly was not interested 
 in the event of the suit on trial, as it must be uncertain whether 
 he would ever be subjected to a subsequent action on the instru- 
 ment, was already liable on his signature, and could never give the 
 verdict in evidence in his favor. 
 
 The maxim of the civil law, that no man is to be l\pard who 
 alleges his own turpitude or crime, was never by any court or 
 judge, before Lord Mansfield^ applied to the inadmissibility of a 
 witness, but only to the rights of the parties in a suit or action. 
 No suitor can support a claim in which the ground or considera- 
 tion is an unlawful act of his own ; nor can any defendant be 
 heard on a defence grounded on his own unlawful act. But an 
 accomplice in a crime, a fraud, or any illegal transaction, was al- 
 ways an admissible witness, unless immediately interested in the 
 suit. I may further observe, that the term " turpitude," can with 
 no propriety be applied to an act, not malum in se, but only malum 
 prohibihim, by force of some statute, making it penal in some par- 
 ticular country, or jurisdiction. 
 
 In Jordaiue v. Lashbrooke, Lord Kent/on says : " The rule con- 
 tended for is this : Whatever fraud may have been committed, if 
 the party to the fraud can get on the instrument the name of the 
 person who may be the only witness to the transaction, he will 
 stand entrenched within the forms of law, and impose silence on 
 that only witness, though he be a person of imimpcachable char- 
 acter, and not interested in the cause." This he denies to be
 
 512 EVIDENCE. 
 
 law. Grose, Justice, says: "Let the plaintiff in this case resort 
 to his indorser to recover back the consideration he gave for the 
 bill." 
 
 Indeed, if a man sell and indorse a note executed by an infant, 
 or feme covert, and void at common* law, or void by statute as 
 being usurious, unstamped or a forgery, I see no legal defence he 
 can set up against an action of assumpsit by the indorser, for the 
 money paid on a consideration which has wholly failed. For that 
 is not an action on the bill or note, but rests entirely on the ground 
 that the note is void in law. If such an action can be supported, 
 there is no hardship in the case of an innocent purchaser ; he 
 has his remedy. If in any case he is deprived of every legal 
 remedy, no court can have a right, in compassion to the hard- 
 ship of his situation, to assist him in evading the law by ex- 
 cluding such witnesses, or evidence, as is admissible m all other 
 cases. 
 
 The hardship upon the innocent indorsee, which seems so 
 strongly to have influenced the mind of Lord Mansfield, is indeed 
 no more than this ; by the statutes to which he refers, all bills or 
 notes, where the consideration is money lent on usury or for gam- 
 ing, are declared void to all intents . and purposes whatever ; and 
 consequently, the indorsee, whenever he brings his suit on the 
 note or bill itself, against the drawer, promisor, or acceptor, must 
 fail of a recovery in that action. But he is not without remedy ; 
 for, if a fair and bona fide purchaser without notice, he may re- 
 cover of the indorser on his indorsement. Bowyer v. Bampton, 
 2 Stra. 1155. 
 
 In the case of Lowe and others v. Waller, Doug. 736, in 
 which all the former cases are well considered. Lord Mansfield 
 himself says : " It is better that the law should be as it is with re- 
 spect to bills and notes, than other securities ; because they are 
 generally payable in a short time, so that the indorsee has an early 
 opportunity of recurring to the indorser, if he cannot recover on 
 the bill." 
 
 I am therefore of opinion that the witnesses offered are ad- 
 missible, notwithstanding they have put their signature upon 
 the bill. 
 
 Swift, J. The question whether a party to a negotiable instru- 
 ment, who is divested of his interest, is a competent witness to
 
 TOWNSEND V. BUSH. 513 
 
 show it void in its creation, now comes for the first time before 
 this Court for decision. We arc unshackled by any precedent, 
 and are at liberty to decide it on principle. 
 
 In the case of Walton v^. Shelley, the rule was laid down, that 
 no party who had signed an instrument should ever lie permitted 
 to give testimony to iiivtilidate it. Though llic Coiirt and counsel 
 speak of it as a well-known rule, yet it can be fouii<l in no prior 
 case. 
 
 Lord Majisjield^ wiio had borrowed many valual)le j^rinciples 
 from the civil law and incorporated them with the common law, 
 attempts to support his decision by what he says is a maxim of 
 the civil law, nemo allegans suam turpitudinem est audiendus ; but 
 there is no such rule to be found in the civil law as ai)plicable to 
 witnesses, and it is the daily practice in common-law courts to 
 admit witnesses to testify to facts which show they have been par- 
 ties to trespasses, frauds, and crimes. 
 
 The rule, as laid down in the case of Walton v. Shelley, com- 
 prehends instruments not negotiable as well as those which are, 
 and docs not require tiie action to be brought on the instrument; 
 but if the consideration be antecedent notes given up, yet if the 
 witness indorsed such notes, he is incompetent. If this ])rinci})le 
 should be carried to its full extent, it would furnish an effectual 
 shield for usury, gambling, fraud, and illegal contracts. Let all 
 who are concerned in the transaction, or who have knowledge of 
 it, become parties to the writings made use of, and there will be 
 neither danger nor possibility of detection. So manifest was the 
 mischief of this rule on so broad a basis, that the Court of King's 
 Bench, in the case of Bent v. Baker, in order to avoid it, were 
 obliged to restrict it to negotialtle securities, and in the case of 
 Jordaine v. Lashbrooke, wholly to cx|)lode it. So that the case of 
 Walton V. Shelley has been overruled, and is not now law in that 
 country. 
 
 But as this rule, as far as it relates to negotiable instruments, 
 has been adopted by higlily respectable judicial tril)unals in our 
 sister States, it may be proper to examine it. 
 
 In the case of Walton v. Shelley, Lord Mansfichi says that 
 whenever a man signs these instruments he is always undcr.stood 
 to say that to his knowledge there is no legal objection. In the 
 case of Coleman v. Wise and others in the State of New York, 
 the same principle is recognized. But there is not a precedent or 
 
 33
 
 514 EVIDENCE. 
 
 dictum to warrant tliis position. When a man subscribes or in- 
 dorses an instrument, he contracts certain legal liabilities, and he 
 sets his name to it for no other purpose. He enters fnto no 
 engagement that he will never testify that the instrument was 
 ol)tained by fraud or duress ; or was given for a gambling or 
 usurious consideration ; or that he will never make such plea. 
 Every party to ah instrument has a right by his plea to show it 
 was originally void. How then can it be pretended, that by sign- 
 ing it he is understood to say that to his knowledge there is no legal 
 objection to it? If he contracts such obligation, the true principle 
 would be not to permit him to make a plea or defence repugnant 
 to it. To allow him to plead a fact which shows the instrument 
 void in its creation, and then to refuse him the privilege of prov- 
 ing it, at least by one species of testimony, is a palpable absurdity. 
 The iniquity really consists in the defence itself, and not in the 
 mode of proof; for certainly it would be as unjust for the defend- 
 ant to make out his defence by a witness not a party to the instru- 
 ment as by one that is a party. 
 
 In the case of Churchill v. Suter, 4 Mass. 156, Chief Justice 
 Parsons says : " If the parties to4he usury or the gambling, hav- 
 ing received the fruits of their illegal contract, and having given a 
 circulation to the note, can be admitted by their testimony to de- 
 stroy it, besides the injury to the fair purchaser, the negotiation of 
 paper will be greatly checked, to the no small injury of the pub- 
 lic." This supposes that the indorser combines with the maker of 
 the note to have it transferred to an innocent indorsee, and then 
 by his testimony to avoid it for usury. All will acknowledge such^ 
 conduct to be highly criminal. But suppose there was originally 
 no intent to defraud an innocent indorsee, and while the note is 
 held l)y an indorsee having knowledge of the usury, for a usurious 
 consideration, the indorser, by an act of bankruptcy, becomes dis- 
 charged of his interest, it will be agreed then to be perfectly right 
 for him to testify to the usury to avoid the note. Again, suppose 
 a usurer has taken a most unreasonable advantage of the distress 
 and misfortunes of another, and has compelled him to obtain 
 security by the indorsement of a friend whom he cannot indem- 
 nify ; he then puts the note in suit, and there is an indorser who • 
 has becone disinterested who is knowing to the oppression and 
 usury ; it would clearly be his duty to come forward and testify to 
 the usury for the purpose of destroying the uote. Yet by the
 
 TOWNSEND V. BUSH. 515 
 
 • 
 
 rule contended for, tlie indorsor in both these cases would not be 
 permitted to testify. 
 
 Hei;e then, for the purpose of protecting the possible case of the 
 innocent indorsee, ample protection is furnislicd to the certain case 
 of the usurer and oppressor. 
 
 Again, it is said, " that persons may be witnesses against their 
 accomplices, because their testimony tends to prevent fraud and 
 injustice, but in this case it tends to encourage it, by enabling 
 parties to enjoy the fruits oT it, and throw the consequence on an 
 innocent indorsee." When accomplices are admitted to testify, 
 the inquiry is not made whether it will or will not tend to encour- 
 age fraud ; for if it should, it was never heard that this would be 
 an objection to their testimony. The object is to punish crimes ; 
 and as in many cases this cannot be done without the testimony of 
 accomplices, the law admits them. 
 
 But to illustrate the subject : suppose a combination to defraud 
 an innocent indorsee by a usurious note ; the real usurer, to 
 accomplish this plan, does not set his name to the note, and is 
 rendered by releases disinterested ; he would then be a competent 
 witness to prove the usury ; yet his testimony would tend to en- 
 courage fraud and injustice as much as if his name had been set 
 to the note. This clearly shows that no such rule as that above 
 mentioned exists. 
 
 It is further said, " Xo man shall be admitted to allege his own 
 turpitude, when that allegation will tend to encourage fraud, or 
 illegality. Nor shall the defendant in his defence allege his own 
 wrong." This is no more than laying down the well-known maxim 
 that no man shall take advantage of his own wrong ; but this has 
 always been applied to the parties, and is now for the fust time 
 attem{)tcd to be applied to witnesses. Though this rule be gen- 
 erally true, yet a statute can control its operation. Suppose a 
 fraudulent combination to cheat an innocent indorsee by a usurious 
 note, and a party to the fraud and the note is sued thereon ; he 
 may plead the usury to avoid it. Suppose the plaintiff replies the 
 fraudulent combination, and that an indorsee is the only person 
 who has knowledge of the fact. Unquestionably, the replication 
 would be bad, and the note void. Here, then the party is per- 
 mitted to take advantage of all the turpitude, fraud, and wrong 
 which the above rule intended to exclude. Suppose an issue 
 should be joined on the fraudulent combination ; a }>arty to the
 
 51G EVIDENCE. 
 
 fraud, if not a party to the note, might, on the principles con- 
 tended for on the otlier side be admitted as a witness : he would 
 then testify to his own fraud and turpitude. The truth is, the 
 real question in all these cases is, whether the note was given for 
 usury ; and this the party by force of statute may always plead, 
 however base and shameful the transaction may be ; and may 
 prove it by competent witnesses, however deeply they may have 
 been concerned in it. It is in vain to talk about the turpitude of 
 witnesses and the wrong of the defendant. Ita lex scripta est. 
 
 But public policy is the strong argument against the admission 
 of parties to an instrument to invalidate it by their testimony. It 
 is said, the makers and indorsers of negotiable notes may combine 
 to defraud innocent indorsees, which would check and embarrass 
 their negotiation, and prevent their circulation. It is true, such 
 fraudulent combinations can be made, and tlie indorser of the 
 note may testify to the usury on a suit against the maker, and the 
 note may be avoided in the hands of an innocent holder. It is 
 also true, that a similar fraud may be practised without the aid of 
 an indorser or party to the note for a witness. Suppose two men 
 wicked enough to contrive such a plan : they may make use of 
 some friend expressly for the purpose of being a witness to the 
 usury ; they may indorse the note to some person ignorant of it, 
 and divide the spoils ; and on a suit by the indorsee, such friend 
 may be called as a witness, and prove the usury. Here is pre- 
 cisely the same inconvenience and fraud as in the other case, and 
 the same injury to the circulation of negotiable notes, yet it can- 
 not be denied that in this case the note must be set aside ; for 
 there is no legal objection to the witness, he has no interest, his 
 name is not on the paper. When men are unprincipled enough 
 to practise frauds of this description.^ I think it is much more prob- 
 able that it will be done by the intervention of some friend whose 
 name is not on the note than by an indorser. Of course, this rule 
 would furnish very inadequate relief if such a fraudulent scheme 
 should seriously be adopted. 
 
 But if principles of public policy are to govern, they ought to 
 extend to all cases where the injury is the same ; and the rule 
 ouglit to be, that no defendant should ever be admitted to plead 
 usury, or any other fact, to avoid a negotiable instrument in the 
 hands of an innocent holder. This would do complete and equal 
 justice in all cases. But how unequal is this rule. It will pro-
 
 TOWNSEND V. BUSH. 517 
 
 tect the innocent holder in one case, but not in another under the 
 same circumstances, and within the same reason ; and where it f»ro- 
 tects the innocent hohler, it furnishes the same protection to the 
 usurer ; for the rule in Walton v. Shelley makes no difference 
 whether the holder knew of the usury or not; and in the case de- 
 cided in Massachusetts the plaintiff on the record was the actual 
 usurer. A rule cannot be right which protects the very usurer the 
 law intended lo ])unisli in one case, and in another subjects the inno- 
 cent holder to a loss whicli it was the object of tiiis rule to prevent. 
 But to decide on the policy of this law it is necessary to con- 
 sider the object of the legislature in making it. It is manifest 
 they intended in the most effectual manner to suppress usury. If 
 they had admitted the principle, that usurious notes sliould be 
 valid in the hands of innocent holders, they would have furnished 
 a mode by which usury could have been practised with safety, -and 
 the law rendered nugatory. To shut the door against all such 
 artifices, the law enacts that usurious securities shall be absolutely 
 void. It must liave been well understood that instances would 
 occur where innocent indorsees might be prejudiced, and that par- 
 ties to instruments, when not otherwise disqualified, might, by the 
 general rules of evidence, be admitted to invalidate, l)y their testi- 
 mony. It is not probable that the legislature contemplated pre- 
 cisely such a fraud as it is suggested may be practised ; it must 
 however have been known that notes might be set aside in the 
 hands of innocent holders, which would operate hardly, if not un- 
 justly, in particular cases ; but as a special provision in such cases 
 would iiave defeated the statute, it must be understood that they 
 intended to declare the notes void in the hands of innocent holders, 
 considering the great object of suppressing usury of more impor- 
 tance than to promote the negotiation and circulation of notes by 
 protecting innocent holders in the few cases where they might be 
 affected. If there is any thing wrong in this business, any thing 
 opposed to public policy, it is in the statute which makes void 
 usurious notes in the hands of innocent holders ; but tills is a 
 wrong which no court of law can remedy. It would l)c strange 
 indeed for tliem to say, that a statute is not founded on jirinciples 
 of public policy, and then, though they cannot declare it void, yet 
 they will refuse legal evidence to carry it into effect. This is an 
 attempt by indirect means to rejieal a statute. The legislature 
 have decided on the policy of the measure ; and it is the duty of 
 courts to give it due operation.
 
 518 EVIDENCE. 
 
 But it lias been said by Justice Buller : " It would be attended 
 with consequences the most injurious to society if these securities 
 might be cut down by the persons passinj^ them ; it is only for two 
 men to conspire together to cheat all the world." Peake's Cases, 
 118. Chief Justice Parsons- says : " For any man by contriving 
 with another may take up money of him at usurious interest, and 
 give him a negotiable note for security. The promisee may sell it 
 for a valuable consideration, and when the indorsee attempts to 
 recover the money, the promisor and indorser may (at least by 
 releases) be witnesses for each other, and defeat the purchaser of 
 his remedy, and quietly enjoy the money he has paid for the note." 
 4 Mass. 162. 
 
 >. It might be inferred from these observations, that innumerable 
 frauds would be practised, if a party to a negotiable instrument 
 could be a witness to impeach it, and that all confidence in 
 negotiable paper would be destroyed : yet the truth is, no inno- 
 cent holder of a note could ever sustain a loss, unless by the bank- 
 ruptcy of his indorser, or the person from whom he received it ; 
 and he has nothing to do, to guard against a fraud, but to require 
 tlic same ability in his indorser as prudent men ordinarily require 
 when they give credit. It would also seem, from the remarks 
 above quoted, that an opinion was entertained that the parties to 
 a usurious note could transfer it without liability to the vendee. 
 Chief Justice Parsons says, that they may defeat the party of his 
 remedy, and quietly enjoy the money. It is true, in a suit by the 
 indorsee against the maker of the note, the indorser might be a 
 witness, as he would testify against his interest ; but in a suit by 
 the innocent indorsee against the indorser, the testimony of the 
 promisor would be of no avail, unless the indorsement was void 
 on account of the usury contained in the note ; and that the in- 
 dorsement was void must have been the opinion of Ciiief Justice 
 Parsons, otherwise he could not have said that the promisor might 
 be a witness for the indorser, and thereby defeat the remedy of 
 the purchaser. But it is an unquestionable principle, tliat though 
 the note is void on account of the usury so that no action can be 
 sustained upon it, yet if the promisee indorse it to a bona fide pur- 
 chaser ignorant of the usury, he is liable on his indorsement ; for 
 this is a new contract not contaminated with usury, and it is bind- 
 ing on him, though the original note is. void. If it should pass 
 into the hands of an innocent purchaser without indorsement, if
 
 TOWNSEND V. BUSH. 619 
 
 the seller conceal the usury, an action would lie for the fraud. 
 The consequence then is, that men of property can never conibino 
 to practise a fraud of this description : for one or tljc other would 
 always he responsible in some shape on the sale ; and though they 
 might defeat the purchaser of one remedy, they would be liable in 
 some other mode ; and consequently could not enjoy vovf peace- 
 ably the fruits of their fraud, or very successfully cheat all the 
 world. Tlie apprehension, then, of danger from a fraudulent 
 combination of the parties to a negotiable instrument, is founded 
 on a mistaken view of the operation of the law respecting their 
 liabilities. 
 
 But what are the frauds that can be practised in such cases ? 
 The only successful mode must be by the instrumentality of in- 
 dorsers, without ability to respond. Let us examine what frauds 
 can be practised by the combination of a poor and a ricii man. 
 The poor man must always be the indorser. A man of property 
 would never give his note to a bankrupt without consideration, on 
 the risk that he will sell it, divide with him the spoils, and swear 
 him clear of the debt. A poor man would hardly loan money or 
 other property to a rich man on a usurious security, for the priv- 
 ilege of selling it, under an obligation to discharge the usurer by 
 his testimony, and with a liability of going to jail himself for 
 another man's debt. A man of property would have little induce- 
 ment, unless he received the full sum, to execute a note and run 
 the risk that the promisee should swear him clear of it. The 
 promisee could not be compelled to testify, as it would be against 
 his interest ; and he might die before the trial. A man of prop- 
 erty runs a further risk ; if he should practise such a fraud and 
 avoid the note, yet he would be liable to an action in favor of the 
 innocent indorsee whom he had cheated ; and it would always be 
 in the power of his coadjutor in the fraud to betray and subject 
 him. So remote is the prospect of deriving any advantage from a 
 fraud of this description, that I very much question whether an 
 attempt ever has been, or ever will be, made to practise it. The 
 calling on an indorser or other party to testify will always be an 
 after calculation, and will probably occur only where there has 
 been some failure or embarrassment. 
 
 What can be the injury to the circulation of negotiable paper to 
 admit the parties to invalidate it by their testimony ? It might 
 prevent prudent men from taking the indorsements of bankrupts.
 
 520 
 
 EVIDENCE. 
 
 This would not be very injurious to the commercial world. In the 
 case of failure of the parties to the instrument after the indorse- 
 ment, it might in some cases throw the loss upon a different party, 
 but this would in reality, be little more than the common risk of 
 loss by failures, which every man runs in a commercial country 
 where extensive credit is given. 
 
 I apprehend, then, there is no solidity in the argument drawn 
 from considerations of public policy. 
 
 But let us consider what will be the effect not to admit a party 
 to negotiable paper to invalidate it by his testimony. It will cer- 
 tainly furnish very ample protection to usurers. Conceal the 
 usury from all who are not parties, and there can be no proof in 
 an action founded on the obligation. The only method, then, 
 must be a public or qui tarn prosecution. The parties affected by 
 the usury will usually be the witnesses, and can get no redress. 
 They can rarely calculate on such advantages from qui tarn prose- 
 cutions as to realize any thing more than a gratification of re- 
 venge ; and if a usurer has nothing more to restrain him than 
 such prosecutions, the statute against usury will be of little con- 
 sequence. 
 
 In practice it will be found that this rule has much oftener 
 protected the usurer than innocent indorsees. In the case of 
 Walton V. Shelley, Sutton, by whose assignees the action was 
 brought, must have known the usury. The bond was executed in 
 consideration of notes given up. If he had been ignorant of the 
 usury, the bond would have been good. In the case of Churchill 
 V. Suter, the usurer was the plaintiff. In both cases, the usurers 
 were protected. 
 
 In the case before us, the rule in Walton v. Shelley wquld have 
 screened the party charged with the usury, and would have sub- 
 jected the defendants to pay ; but the rule I contend for would 
 have visited the consequences of the usury upon the usurer. In 
 the suit by Derby Bank against the plaintiffs in New York, if E. 
 and A. Townsend had not been excluded from testifying on the 
 ground that they were parties to tlie bill, then the plaintiffs (ad- 
 mitting the usury existed as conceded by the pleadings) would 
 have made good their defence, and the Derby Bank would have 
 had a complete remedy against their indorser, who is stated to be 
 the usurer. But the application of that rule has effectually pro- 
 tected him.
 
 TOWNSEND V. BUSH. 521 
 
 In this case, tliere would liave been no difficulty, had it not been 
 for the failure of E. and A. Townsend. As the plaintiffs indorsed 
 and the defendants accepted as sureties for them, though their in- 
 dorsements and acceptance were void as they were made to secure 
 the usury to LeffingwcU ; yet if they had been subjected to pay, 
 they could clearly have recovered of E. and A. Townscrtd for 
 money paid by them as sureties ; for in the implied promise to 
 indemnify there was no usury, as they were unacquainted with the 
 nature of the transaction between Leffingwell and them. But now, 
 by their failure, they have lost their remedy ; the application of 
 different rules by the courts in the State of New York and Con- 
 necticut has subjected the plaintiffs to suffer a loss by the bank- 
 ruptcy of E. and A. Townsend, which the defendant must have 
 sustained, if the bill had not been usurious. This loss, however, 
 is owing to the bankruptcy of E. and A. Townsend, and not to any 
 preconcerted plan to cheat them. 
 
 As to the question respecting the usury ; it appears from the 
 facts stated, that on a contract between Leffingwell and E. and A. 
 Townsend, they were to draw a bill on Bush, in favor of E. and 
 A. Townsend, to be accepted and indorsed ; and on this security 
 the money was to be loaned at twelve per cent. Here the drawing, 
 accepting, and indorsing were to secure the usury to Leffingwell ; 
 and though the acceptors and indorsers were ignorant of the 
 usury, yet this does not prevent the transaction from being usuri- 
 ous ; for it was manifestly a contrivance to evade the statute, and 
 if allowed of, usury might be practised with impunity. 
 
 The otlier judges concurred. 
 
 New trial to be granted. 
 
 See preceding and following cases.
 
 522 EVIDENCE. 
 
 Royal Thayer v. William Grossman. 
 
 (1 Metcalf, 416. Supreme Court of Massachusetts, September, 1840.) 
 
 WTien indorser competent to prove payment. — In an action by the indorsee against the 
 maker of a note indorsed overdue, the indorser is competent to sliow payment 
 before the note was indorsed. 
 
 The case is stated in the opinion of the Court. 
 
 Shaw, C. J. This case comes before the Court by exceptions 
 from the Court of Common Pleas. The action is on a promissory 
 note, by an indorsee against the promisor, tlie note being dated 
 November, 1832, payable on demand to the promisee or his order, 
 and indorsed to the plaintiff. The defendant offered the indorser 
 as a witness, to prove payment of the note before the indorsement ; 
 but the presiding judge at the trial rejected this testimony. The 
 ground of this rejection was, as we understand by the argument, 
 the rule laid down in Churchill v. Suter, 4 Mass. 156, that an 
 indorser shall not be permitted by his testimony to invalidate a 
 security, which he has put in circulation, and given credit to by 
 his indorsement. 
 
 We do not think it necessary now to consider at large the au- 
 thority of the rule in question, as a rule of law in this State. It 
 was first formally laid down, in the time of Lord Mansfield, in the 
 case of Walton v. Shelley, 1 T. R. 296. It was afterwards over- 
 ruled in the same Court, the Court of King's Bench, in the time 
 of Lord Kenyon, by three judges against one ; Mr. Justice Ash- 
 hurst, who had concurred in the former opinion, dissenting. Jor- 
 daine v. Lashbrooke, 7 T. R. 601. Both these cases were before 
 the Court when the t'ule was sanctioned in this Commonwealth. 
 Warren v. Merry, 3 Mass. 27 ; Churchill i\ Suter, 4 Mass. 156. 
 It continued to be acted on as a settled rule here, and was again 
 considered and confirmed in the case of Packard v. Richardson, 
 17 Mass. 122. It was adopted in 1802, by a majority of three to 
 two, in the Supreme Court of New York ; Radcliff and Keiit, JJ., 
 dissenting. Winton v. Saidler, 3 Johns. Cas. 185. But it was 
 afterwards overruled, and has ceased to be regarded as a rule of 
 law in that State. Stafford v. Rice, 5 Cow. 23 ; Williams v. Wal-
 
 THAYER V. GROSSMAN. 623 
 
 bridge, 3 Wend. 415. Ii^ Connecticut, the rule has been rejected 
 by a formal decision in 1818. Townsend v. IJush, 1 Conn. 200.' 
 
 But supposing the rule settled for this Comraonwealtii, l)y a 
 course of decisions too direct and uniform to be now drawn in 
 question, still it becomes necessary to examine the rule itself, to 
 ascertain its extent, limits, and qualifications, in order to deter- 
 mine whether the present case is within it. The general rule is, 
 that any person, not infamous, or interested in the event of the 
 cause, may be a witness ; and it is manifest that the rule in ques- 
 tion, which excludes a witness on the grounds of public policy, is 
 an excei)tion to the general rule ; and an exception ought not to 
 be extended beyond the limits to which those reasons of policy 
 fairly carry it. 
 
 In Walton v. Shelley, the rule laid down, as the rule founded 
 on public policy, was, that no party who has signed a paper or 
 deed shall ever be permitted to give testimony to invalidate the 
 instrument. Very shortly after, in the case of Bent v. Baker, 3 
 T. R. 27, some of the judges in alluding to Walton v. Shelley, 
 take care to confine the rule to the case of negotiable instruments, 
 upon the ground that a man shall not by putting in circulation a 
 negotiable instrument, which any man may take and make himself 
 a holder of, and which passes solely upon the credit of the names 
 of the parties appearing upon it, hold out false colors to the 
 public. And almost the entire argument of Mr. Justice Ash- 
 hurst, in Jordaine v. Lashbrookc, in support of the rule of 
 Walton V. Shelley, was founded upon the policy of giving security 
 to negotiable instruments, put into circulation in the course of 
 business. 
 
 In Warren v. Merry, 3 Mass. 27, the rule and the reasoning are 
 confined to the case of negotiable securities, and this rule is ex- 
 pressly so limited by a decision in Loker v. Haynes, 11 Mass. 498. 
 In Churchill v. Suter, 4 Mass. 156, after considering the author- 
 ities, and considering them as leaving the point unsettled, the 
 Court proceed to consider the case on principle. They confine the 
 rule to the case of negotiable securities ; and the whole course of 
 the reasoning further limits this rule to securities negotiated in 
 the course of business, and which are not dishonored. Tiie Court 
 recognize tlic general rule, that in order to give security to the 
 circulation of negotiable paper, in an action between indorser and 
 promisor, the consideration cannot be inquired into. An exception 
 
 1 Ante, 607.
 
 524 
 
 EVIDENCE, 
 
 to this rule arises from the statutes of usury and gaming, which 
 declare securities, given on a gaming or usurious consideration, 
 absolutely void ; and such defence therefore may be taken advan- 
 tage of by a promisor, in a suit by an indorsee. And therefore 
 the rule of policy is mainly confined to the case of a defence on the 
 ground of a gaming or usurious consideration, which by force of 
 the statutes in question affects these securities with a secret taint, 
 which cannot be known to an indorsee. 
 
 In the case of Fox v. Whitney, 16 Mass. 118, the rule is still 
 further limited and explained, by the considerations of public 
 policy on which it was founded. The general rule is recognized, 
 but it is held to apply only to a case where a man indorses a nego- 
 tiable security, and by that act gives a currency and credit to it; and 
 it was held that it did not apply to a case between original parties, 
 each of wliom was conusant of all the facts. The suit, in that case, 
 being by the representative of the promisee against the representa- 
 tive of the promisor ; a party to the note, as co-promisor, was held 
 to be a competent witness, to prove the note given on a usurious 
 consideration, and, as the law then stood, void. 
 
 In the case of Barker v. Prentiss, 6 Mass. 430, Taber, one of the 
 indorsers, was admitted to prove that theindorsement was intended 
 to be limited, and that the indorsee knew it. The reasoning of 
 the Court obviously confines the rule in Churchill v. Suter, so as 
 to prohibit a party to a usurious or gaming negotiable security, 
 which is void in the hands of an innocent purchaser, from impeaching 
 it in the hands of such purchaser. And they held that a party to 
 such security may be a witness to prove subsequent facts, which 
 admit the legality of the instrument in its original form. The 
 authority of this case, on other points, has been often called in 
 question ; but I am aware of no case, in which the point now stated, 
 has been doubted. 
 
 Taking this case as thus stated, it would seem that a party is 
 restrained from testifying only as to facts which render the security 
 void in its creation, and that consistently with the rule, an in- 
 dorser, if not interested, might be called to prove payment before 
 he indorsed the note, being a fact subsequent to its creation and 
 not rendering it originally void. Tliis is opposed, apparently, to 
 what is implied at least, if not decided,' in Warren v. Merry, 3 
 Mass. 27. That was an action by an indorsee against theindorser, 
 and the maker was held admissible to prove that he paid the plain- 
 tiff after the indorsement, and before the note was payable. But
 
 THAYER V. GROSSMAN. 525 
 
 the remarks of the Court seem to imply that a i)ayee would not be 
 admitted to prove payment to himsuli' before his indorsement. It 
 may, however, be remarked, that if a note is paid before it is due, 
 and is afterwards indorsed, before it is due, to one who has no 
 notice of the payment, such payment is no defence to a suit by the 
 indorsee against the promisor. 
 
 A similar princii)le seems to have been adopted in Parker v. 
 Hanson, 7 Mass. 47U, where an indorser was called to prove that a 
 note had been fraudulently altered in the date. The Court say he 
 is not within the rule ; the note not being objected to as originally 
 void, but as having been fraudulently altered. 
 
 Perhaps the case of Knights v. Putnam, 3 Pick. 184, may be 
 considered as countenancing the rule, that a note indorsed in .the 
 ordinary course of business cannot be impeached by the testimony 
 of the indorser, for any cause existing at the time of the indorse- 
 ment. This question will therefore deserve consideration, when it 
 shall expressly arise for adjudication. 
 
 In a review of the cases, that of Butler v. Damon, 15 Mass. 223, 
 deserves consideration. It implies that the principle of Churchill 
 V. Suter would so apply, as to exclude a party who had indorsed a 
 note after it was due,. as well as one who had indorsed it before it 
 was due, from showing facts antecedent to the transfer, to defeat a 
 holder of his recovery. The opinion does not state this ; but it may 
 be implied from the fact, which appears by a comparison of the 
 dates, that in that case the note was overdue, when indorsed. But 
 it is manifest from the very brief report of that case, that the atten- 
 tion of the Court was not drawn to that distinction ; nor does the 
 remark of the judge, who gave the opinion, refer to it. But what 
 is a more material observation upon that case as an authority is 
 this ; that the indorser had not been offered as a witness, but the 
 , defendant had been allowed to give in evidence, not the testimony, 
 but the declarations of the indorser, made, after the indorsement, 
 to the plauitiff. This was obviously inadmissible. It could not be 
 received as an admission, because made after his interest had 
 ceased, and he could not confess away a title he had given by his 
 indorsement ; nor as proof of any fact, because it was iiearsay. 
 The point, whether the indorser could have been received as a wit- 
 ness, having indorsed the note after it was due and dishonored, 
 was not before the Court, and the cause was decided on other 
 grounds. As an authority, therefore, that case has but a slight 
 bearing upon the present.
 
 526 EVIDENCE. • 
 
 From this view of the authorities, and assuming that the rule, 
 as laid down in Churchill v. Huter, is the true rule of law in this 
 Commonwealth, we think it will appear to be confined to negotiable 
 bills and notes, actually indorsed and put into cii'calation by the 
 witness, with a view to give them currency as negotiable securities. 
 The object, which the law has in view, is to give a secure currency 
 and circulation to negotiable securities, taken in the ordinary 
 course of business by an innocent indorsee, without notice of its 
 dishonor. But it is no object of the law, or of public policy, to 
 give currency to dishonored bills ; and a note overdue carries 
 notice of its own dishonor on its face. An indorsee of such a note 
 is presumed by law to have notice of every defect which may exist, 
 eitlier in the original creation of the note or subsequently ; he takes 
 it, therefore, not upon the credit of the names it bears, but solely 
 upon the faith he may have in the indorser. He takes, in legal 
 contemplation,^ legal title, indeed, that is, a right to sue in his 
 own name ; but he takes a right to recover only as the indorser 
 himself could recover, and of course he takes with full constructive 
 notice of all grounds, legal and equitable, which the defendant 
 might have, if the suit were brought by the promisee, and subject 
 to all the same species of defence. As between the original parties, 
 and to a note not negotiated and put in circulation, we have seen 
 the rule does not apply. Fox v. Whitney, 16 Mass. 118. By the 
 rules of law, an indorsee, taking a note overdue, takes it subject to 
 every defence ; and that case, therefore, is an authority for the ad- 
 mission of an indorser, when the plaintiff can claim only the same 
 rights as if the suit were between the original parties. The author- 
 ities are so numerous and explicit, that the indorsee of a dishonored 
 note takes it subject to all defences, that it is unnecessary to cite 
 them. Sargent i\ Southgate, 5 Pick. 312. 
 
 In applying these rules to the present case, the Court are of 
 opinion that the case was not within the principle of Churchill v. 
 Suter, because the note was overdue and dishonored, when it was 
 indorsed to the plaintiff. 
 
 In the first place, it appears that this was a note payable on de- 
 mand, and the evidence is, that it was indorsed nearly two years 
 after its date. What is the shortest time, within which a note on 
 demand will be deemed a dishonored note, has not been explicitly 
 settled. But we have no hesitation in considering such a note as 
 overdue and dishonored in a much shorter time than two years.
 
 THAYER V. GROSSMAN. 527 
 
 In Spring v. Lovett, 11 Pick. 417, it was considered that an 
 indorser would be a competent witness to prove that the note was 
 indorsed after it was due. But there is no necessity of relying on 
 this point, in the present case, because it appears by other evidence, 
 indcj)endent of the testimony of the indorser. Before coming to 
 the (juestion, therefore, wlicther the indorser in this case was a 
 competent witness, it is proved by unobjectionable evidence, that 
 the plaii) tiff took the note by indorsement, as a dishonored note. 
 In Pennsylvania, where, it is believed, the rule of AValton y. Shelley 
 is still in force as a rule of evidence, it is held that it only applies 
 to a negotiable security, indorsed and put into circulation in the 
 usual course of business, and that it does not apply to a note overdue 
 or otherwise dishonored. Baird v. Cochran, 4 Serg. & Rawle, 397. 
 This appears to us to be a just limitation and modification of the 
 rule relied upon, and supported as well by authorities, as upon the 
 reasons and principles of public policy, on which the rule itself is 
 founded. The Court are tlicreforc of opinion, that Waters, the 
 indorser, ought to have been admitted as a witness, to prove pay- 
 ment of the note before its indorsement ; and because he was not 
 so admitted, the exceptions must be sustained, and a new trial 
 had. 
 
 Heiu trial to be had at the bar of the Court of Cor)imon Pleas. 
 
 No branch of the law is in greater confusion in this country than that discussed 
 in the three preceding cases. It is now too late to hope for any uniform doctrine 
 upon the subject in the American courts. We have presented three well-consid- 
 ered cases, the first adopting, the second rejecting, and the third substantially 
 rejecting, the doctrine of Walton v. Shelley, eacli recognized and followed in dif- 
 ferent States of the Union, and each supported by higlily resjiectable authority. 
 
 We cannot expect to add any thing to the learning that has been displayed 
 upon the subject ; and will merely state that in our opinion tlie doctrine of Town- 
 send V. Bush and of Thayer v. Grossman presents the most just and sound view 
 of tlie law. In cases of usury, and between immediate parties, or, what is the 
 same tiling, as against an indorsee who is not a bona fide holder, in due course of 
 trade, the signer may invalidate the paper, according to those cases ; but this is 
 the extent of the rule ; and this is virtually the present doctrine of the English 
 courts, and has been ever since Walton v. Shelley was overruled. See Chitty, 
 Bills, G69. Our reasons for maintaining this view are substantially those advanced 
 in the above-named cases of Townsend v. Bush and Thayer v. Crossman, and need 
 not be repeated. 
 
 The rule of exclusion has been aduptcd in the following States. In Maine, 
 Clapp V. Hanson, 15 Me. (3 Shepl.) .Uo ; in Iowa, Strang r. AVilson, 1 Morris, 
 84 ; in Ohio, Treon v. Brown, 14 Ohio, 482 ; in Mississippi, Drake c. Henly, 
 Walker, 541.
 
 528 EVIDENCE. 
 
 The rule has been rejected in New York, Stafford i\ Rice, 5 Cow. 23 ; in 
 Kentucky, (iorhani v. Carroll, 3 Litt. 221; in Alabama, Todd v. Stafford, 1 
 Stewart, 199 ; in Maryland, Ringgold v. Tyson, 3 Harris & J. 172 ; in New 
 Jersey, Freeman v. Brittin, 2 Harr. 192 ; in Virginia, Taylor o. Beck, 3 Rand. 
 31G ; in Tennessee, Stump v. Napier, 2 Yerg. 35 ; in New Hampshire, Haines 
 V. Dennett, 11 N. Hamp. 180; in "Vermont, Nichols v. Holgate, 2 Aiken, 138; 
 but see Chandler v. Mason, 2 Vt. 193 ; in Missouri, Bank of Missouri v. Hull, 7 
 Mo. 273. 
 
 But one Avho signs in the usual manner of an indorser cannot show that it was 
 the intention of the parties that he should merely guarantee the signature of the 
 payee to be genuine. This would be to vary the terms of a written contract by 
 parol. Prescott Bank v. Caverly, 7 Gray, 217. See Riley v. Gerrish, 9 Cash. 
 10-1 ; Hall V. Newcomb, ante, p. 131 ; Bank of the United States v. Dunn, ante, 
 p. 503. 
 
 The Commercial Bank of Albany v. George W. Strong. 
 
 (28 Vermont, 316. Supreme Court, Febi-uary, 185G.) 
 
 Sufficiency of proof. — A decision of the county Court, as to the suflBciency of certain 
 proof, held, to refer to its character, or quality and competency, and not merely to 
 its quantity or force, in convincing the mind. 
 
 Where notice should he sent. — A notice of the dishonor of a bill of exchange, or promis- 
 sory note, should be addressed to an indorser at the place of his residence, unless 
 he is shown to have a place of private business elsewliere. The office of a corpora- 
 tion, of which lie is an officer (in this case the i)resident), in a town difierent from 
 that in which lie resides, will not, in the absence of proof be regarded as his 
 private business place ; and a notice addressed to him there will not be sufficient. 
 
 Number of Witnesses. — That a notice to an indorser was seasonably deposited in the 
 post-office need not be proved by a single witness. If more persons than one par- 
 ticipated in the act, the testimony of all of them should be adduced. 
 
 Consideration of the probability as to the manner in which the notice in the present 
 case was directed and sent to the defendant ; and of the testimony, in reference to 
 its legal sufficiency, to prove that the notice addressed to the defendant as indorser, 
 was put into the post-office, seasonably to charge him. 
 
 Assumpsit against the defendant as an indorser of a bill of ex- 
 change, drawn by the Rutland & Washington Railroad Company, 
 by George W. Strong, president, upon, and accepted by the treas- 
 urer of that company, dated at the office of the Rut. & W. R. Co., 
 West Poultney, and made payable to the order of Eastman and Page, 
 at the American Exchange Bank, New York, indorsed by Eastman 
 and Page, John Bradley, George W. Strong, J. W. Baldwin, and M. 
 Clark. Plea, the general issue ; trial by the Court, September 
 term, 1855, — Pierpoint, J., presiding.
 
 COJtMERCIAL BANK OF ALBANY V. STRONG. 529 
 
 Tlie drawing, acceptance, indorsements, presentment, non-pay- 
 ment, and protest of -the bill were duly proved. The testimony 
 tending to prove notice to the defendant of the non-payment and 
 protest was as follows : — 
 
 The notary, by whom the bill was protested, deposed that he 
 enclosed to the cashier of the plaintiffs a notice, in due form, to 
 the defendant as indorsor. Attached to his deposition were three 
 notices, produced and exhibited to him by the defendant, which 
 the notary testified were filled up in his handwriting, but he could 
 not testify further as to their identity. One of these notices was 
 addressed, on the inside, to " George W. Strong," and purported to 
 be a notice to him as indorser, and was directed on the outside 
 to " George W. Strong, Esq., West Poultney, Vt. ; " another was 
 addressed, on the inside, to " George W. Strong, Pres't, Rut. & 
 Wash. R. Co.," and purported to be a notice to him as drawer, 
 and had the word "■' Rutland " on the lower right-hand corner, in 
 writing different from that of the notary ; and the other was ad- 
 dressed on the inside to " Geo. W. Strong, Esq., Pres't, <tc., and 
 to Geo. W. Strong," and purported to be a notice to him, both as 
 drawer and indorser, and w^as postmarked with the New York 
 city post-office stamp, and was directed on the outside to " Geo. W. 
 Strong, Esq., Pres't, and Geo. W. Strong, West Poultney, Yt." 
 
 William D. Case testified that during the month of June, 1854, 
 he was a clerk in the Commercial Bank of Albany ; that it was 
 his special duty to make a record, in a book kept for that purpose, 
 of the notices of protests of the non-payment, (fcc, of notes, bills 
 of exchange, <fec., received at the bank, and to send said notices to 
 the different persons, whose paper had been protested ; tiiat in the 
 forenoon of the twentieth of June, 1854, said bank received by 
 mail, from the city of J^ew York, a notice of the protest for non- 
 payment of the bill of exchange or draft in question, and that 
 enclosed with said notice were four notices in all respects like it, 
 addressed to George W. Strong, Merritt Clark, James W. Baldwin, 
 and John Bradley ; that on the twentieth of June, 1854, in the 
 forenoon, and immediately after the receipt by said bank, of said 
 notice of said protest, he enclosed one of said four notices of pro- 
 test, which was addressed to George W. Strong, in an envelope, 
 which was addressed by him to " George W. Strong, Rutland, Yer- 
 mont," whose place of residence w'as communicated to him by the 
 cashier of said bank, on his inquiry for the residence of said Strong, 
 
 34
 
 530 EVIDENCE. 
 
 at the time of addressing said letter ; that after enclosing said 
 notice in the envelope addressed to said Strong, he laid it on his 
 desk, to be taken and deposited in the post-office in Albany, and 
 afterwards, on that day, the letter was gone from his desk ; that it 
 was the daily and special duty of Edwin W. Belden, the youngest 
 clerk, to take all letters from the bank to the post-office, and in his 
 absence it was the duty of James P. White, the next oldest clerk, 
 and in the absence of both, he, said Case, took the letters ; that it 
 was his daily and uniform practice to place all his letters, including 
 those enclosing notices of protest, on his desk ; that each clerk had 
 his separate desk, and no person, excepting the officers of said 
 bank, could have access to them; that he did not know the residence 
 of said Strong, at the time of enclosing said notice to him, but was 
 informed and directed by the cashier so to direct, and he did so 
 direct U ; that the word " Rutland," at the lower right-hand corner 
 of the notice, addressed to George W. Strong, Pres't of the Rut. 
 & Wash. R. Co., attached to the deposition of the notary, was made 
 by, and in his (the said Case's) handwriting. 
 
 Edwin W. Belden deposed that on, prior, and subsequent to the 
 twentieth of June, 1854, he was a clerk in the Commercial Bank 
 of Albany, and that if he took a letter from the desk of William 
 D. Case, on the said twentieth of June, 1854, or at any other time, 
 for the purpose of depositing the same in the post-office, at Albany, 
 he did so deposit the same, on the same day on which it was taken 
 for deposit in said office ; that it was his duty to take the letters 
 from the said bank to the post-office, and he usually did so during 
 the month of June, 1854 ; that he generally took the letters from the 
 bank to the post-office, and had frequently taken letters from the 
 desk of Case, and deposited them in the post-office at Albany ; and 
 on his cross-examination he deposed that he had no recollection of 
 ever taking, or putting into the post-office, a letter addressed to the 
 defendant. 
 
 James P. White deposed to substantially the same, in effect, 
 with Belden, that if he took such a letter from the desk of Case, 
 to deposit in the post-office, he did so deposit it on the same day, &c. 
 
 The foregoing was all the testimony upon this point, except that 
 it appeared that the residence of the defendant was in Rutland, 
 and that the office of the Rutland & Washington Railroad Company 
 was in West Poultney. 
 
 The Court found the facts proved as stated in the foregoing
 
 COMMERCIAL BANK OF ALBANY V. STRONG. 531 
 
 testimony of the witnesses, but upon that evidence they decided 
 that there was not sufficient proof of notice to the defendant, to 
 charge him as indorscr, and rendered judgment in favor of tho 
 defendant. 
 
 Exceptions by the plaintids. 
 
 Redfield, C. J. This is an action upon a bill or draft against 
 the defendant, *s indorser. The only question made in the case 
 is in regard to the proof of notice of dishonor to the defendant. 
 The case being tried in the Court below, without the intervention 
 of the jury, some question has been made upon the bill of excep- 
 tions, whether any question of the sufficiency of the evidence of 
 notice is properly before this Court. But as the testimony is 
 detailed very much at length, and the Court say they " found the 
 facts proved, as stated in the testimony of the witnesses," and also 
 that, upon the foregoing evidence, which is certified to be all the 
 evidence given upon this point, they decided that " there was not 
 sufficient proof ol notice to the defendant, to charge him as in- 
 dorscr," we can only conclude that they did refer to the character 
 and competency of the proof, and not to the quantity ; to the 
 quality, rather than the amount and force of the evidence in con- 
 vincing the mind. 
 
 We must, then, see what was the character of the evidence 
 given. 
 
 I. We do not think there is any doubt as to the particular notices 
 sent, either from New York, where the bill was made payable, and 
 where it was protested, or from Albany, where the bill seems first 
 to have been negotiated. It is obvious that the notice, having the 
 New York city post-mark upon it, and which is addressed to the 
 defendant in the double capacity of president of the Rutland & 
 Washington Railroad, on whose behalf he drew the bill, and also 
 as indorscr, in his private and personal capacity, was sent by the 
 notary, protesting the bill, direct from New York to West Poultney, 
 where the railroad office seems to have been kept. But as the 
 defendant, at the time, had his residence in Rutland, we do not 
 regard a notice addressed to hito at West Poultney sufficient to 
 charge him as indorser, there being nothing to show that he had 
 any private business place at West Poultney. No case of that 
 character has been shown to us, and the general course of decision 
 is certainly, that notice to an indorser must be sent to the place
 
 632 EVIDENCE. 
 
 of his residence, unless lie is shown to have his place of hnsiness 
 elsewhere. There may be cases where one l|as different places of 
 business, that notice addressed to either is sufficient. But although 
 the defendant is not shown licre to have any particular place of 
 business in Rutland, distinct from his dwelling, yet, as he had 
 no place of private business out of Rutland, his dwelling was his 
 place of business, to which notice should be addressed to charge 
 him as indorser.^ ♦ 
 
 II. "We think it is obvious that the notary, having sent this 
 double notice direct from New York, would not have probably sent 
 another addressed to the defendant at the same place, as indorser 
 only. The strong probability is, that he sent two distinct notices 
 to Albany for the defendant, one as drawer, on behalf of the rail- 
 road, and the other as indorser only. These being put into each 
 other, and the outside one addressed, upon the back, West Poult- 
 ney. Case, the teller, doubtless took them to the cashier, in the 
 manner he testifies, and learning the residence of the defendant, 
 marked it upon the inside one, which happens to be the one ad- 
 dressed to the defendant as president, &c. But most undoubtedly 
 both were sent to Rutland by Case in the manner testified, as there 
 is no other reasonable mode of accounting for their being in the 
 possession of the defendant, or, indeed, of their being made by 
 the notary, in addition to the double one already sent. The teller, 
 indeed, calls it one notice, and it was so, in some sense, being to 
 one person, but in two quite different capacities. The teller might 
 not liave recollected precisely the facts, but it must have been so, 
 to account for his own memorandum upon one of these notices, 
 and also his entry of the notice sent to the defendant, as indorser, 
 upon the notice sent to the Commercial Bank, and produced upon 
 the trial, with the memorandum of the notice sent to Strong, as 
 indorser. 
 
 III. The question is reduced then to the narrow point, whether 
 there was sufficient evidence that the notice to the defendant, as 
 indorser, which Case testifies he enclosed in an envelope, and ad- 
 dressed to the defendant at Rutland, and which the county Court 
 finds to be true, and which there is no reason to question, and 
 which he also says he laid upon his desk, and which was afterwards, 
 on the same day, gone from the desk, was really shown to have 
 been deposited in the post-office at Albany, in season for the mail 
 
 1 See Munn v. Baldwin, ante, 376, and note ; Bowling v. Harrison, ante, 378, and 
 note; Bank of Columbia v. Lawrence, ante, 404, and note.
 
 COMMERCIAL BANK OF ALBANY V. STRONG. 533 
 
 of the next day. As it was gone from the desk the same day, tlie 
 only question would ^eem to be, whether the proof is sullicicnt to 
 show that it went from the desk directly into the post-oftice. For 
 if so, that will char<^c the defendant, although the notice never 
 reached him. After that the conveyance is at his own risk.' And 
 if it did not go direct to the post-office, there is no certainty 
 how long it might have been delayed, or indeed whether it ever 
 reached the de[cndant, except that he had it in possession many 
 months after. 
 
 The cases are undoubtedly very strict upon this point, as they 
 should lie, in requiring very great certainty of proof of depositing 
 the notice in the post-office. But the cases certainly do not require 
 that tills should be proved by a single witness, who can swear posi- 
 tively that he deposited the notice in the proper place. This, in 
 practice, in large commercial cities, where the vast majority of 
 such cases arise, would seem not generally to be the course of 
 doing such things. The depositing of such letters in the post- 
 office, as of other notices, is perhaps more generally done, in such 
 places, by porters and messengers. But it would scQm to be the 
 rule, that all who had any thing to do about the matter of deposit- 
 ing the notice should be called. Is this shown to have been done 
 in the present case ? 
 
 It would seem, from the testimony, that this bank had a cashier 
 and three clerks to transact the business. There is nothing to 
 indicate that any other persons had any thing to do with sending 
 notices of dishonor of bills and notes generally, or in this case in 
 particular. From the fact that Case was upon the stand, and that 
 the uncertainty of this notice was made a leading point in the 
 trial, we may fairly presume, perhaps, that if there had l)cen 
 others, having probable connection with the transaction, whoso 
 testimony was not taken by the pluintitl's, which would very much 
 tend to increase the uncertainty, we should have been apprised of 
 that fact. 
 
 From the testimony of Case it seems that it was the special duty 
 of Case, the first clerk, to make out and deposit in the post-office, 
 or see that it was done, all such notices. The cashier does not 
 seem to have had any connection with this notice, or to have been 
 expected, ordinarily, to have any thing to do with such notices, 
 except probably to give directions when applied to by Case, as in 
 the present case. It was the daily and special duty of Belden, the 
 
 1 See Munn v. Baldwin, ante, 376, and note.
 
 534 EVIDENCE. 
 
 youngest clerk, to take all letters from the bank to the post-office, 
 and in his absence the same duty devolved ypon White, the next 
 older cleric, and in the absence of both, the duty devolved upon 
 Case. None but the officers of the bank had access to Case's desk. 
 The letter was deposited in the proper place for them to take to 
 the post-office, or where they often took them. They both testify 
 that at this date it was their business, in the manner and order 
 stated by Case to carry letters from the bank to the post office, and 
 that they often took letters from Case's desk for that purpose, 
 and that if they took any letter on that day, or any other, they 
 carried it to the post-office the same day. Tiicre is no pretence of 
 any motive in any officer of the baiik to detain the letter, or that 
 they would be liable to do so by mistake, or indeed that any others 
 but those named had access at- the time to the desk of Case, although 
 it is probable the directors must have had. But the probability of 
 their carrying off such a letter, by design or mistake, is quite too' 
 remote to be taken into the account. It is, perhaps, quite as 
 probable that one of the clerks might have lost it upon the way 
 to the post-office, without being aware of the loss, and really 
 suppose he delivered it at the post-office, and that is not a con- 
 tingency which is ever taken into the account of uncertainties in 
 such cases. 
 
 We may say here, then, safely, that all the persons having any 
 connection with the business of depositing the letters of this bank, 
 at that time, in the post-office, or who would be likely, upon any 
 rational conjecture, either by design or mistake, to take such letter 
 from the desk, have testified explicitly that if they did take it 
 up from the desk, they deposited it in the post-office the same day. 
 In addition to this, the notice is found to have reached the defend- 
 ant at some time. And we have before said, if the letter had 
 been dropped by mistake, or purloined, it would in all rational 
 probability never have reached its destination. Can there be, 
 then, any longer any reasonable doubt of the deposit of this letter 
 in the post-office the same day it was written ? We think not. 
 The evidence rises to a sufficient degree of certainty to answer 
 any demand, even in a criminal court, if it be of the proper 
 quality. 
 
 The authorities relied upon to show this was not the case, do 
 not seem to us to establish any such proposition. 
 
 The proposition in Mr. Chitty's Treatise upon Bills, that it is 
 incumbent upon the holder " to prove distinctly and by positive
 
 COMMERCIAL BANK OF ALBANY V. STRONG. 535 
 
 evidence that due notice was given, and tliat it cannot be left to 
 inference or presumption," seems to be based altogether upon the 
 case of Lawson v. .Sherwood, 1 Stark. 314, a mere nisi prius 
 decision. The language of the author seems to be taken from 
 the case. But the case seems to justify no such rule of proof, as 
 to cases generally of this kind. The witness there testified that 
 he gave notice in eitlier two or three days, three dats not being in 
 time, which is no testimony at all of the fact of legal notice. It 
 leaves the probabilities precisely equal, whether notice was given 
 or not, which is precisely no proof at all. Any one who knew 
 nothing about the case, might safely testify that he either did give 
 notice, or did not, which is this case as reported. 
 
 And the next proposition of the same author is e(][ually unsup- 
 ported by the cases referred to. It ia that " the party who puts a 
 letter, giving notice of the dishonor of a bill, into the post-office, 
 must be able to swear to a certainty, and not doubtfully, that he 
 put the letter in himself, and not that he was doubtful whether he 
 did not deliver it to another clerk to put it in." The case referred 
 to is Hawkes v. Salter, 4 Bing. 715. The difficulty here was, that 
 the witness could not swear whether he put the letter in the post- 
 office, or another clerk did it, and the testimony of the other clerk 
 was not taken in the case ; so that there was, in fact, no testimony 
 to connect the letter with the office. And the case of Toosey v. 
 Williams, 1 Moody & M. 129, although more in point for the 
 defendant, as it seems to me, than any other cited, is by Lord 
 Tenlerdcti put upon the ground that, after the letter was copied by 
 the clerk, it had to go into the defendant's hands to be sealed, and 
 there was nothing in the case to show that he ever returned it to 
 the clerk whose business it was to convey it to the post-office, and 
 who testified very much as the two younger clerks do here. But 
 here the letter is shown, to a moral certainty, to have been taken by 
 the clerks, and they testify, if they took it, they deposited it in the 
 post-office the same day. The case of the Bank of Yergennes v. 
 Cameron, 7 Barb. 143, a note of which was read to us, seems to be 
 a case where there was no proof of notice, except the notice being 
 in the indorser's hands after the time for giving it had expired. 
 It could not from that be inferred, of course, that it was given in 
 time.^ But, in the present case, it is shown that if the notice was 
 ever deposited in the office, it was done in time, and the notice 
 
 1 See Smedes i;. Utica Bank, 20 Johns. 372.
 
 53G EVIDENCE. 
 
 being in the defendant's hands", is strong confirmation of the 
 notice having reached the office in due time. 
 
 On the other hand, the reasoning of Lord Ellenborovgh, in 
 Hcthcrington v. Kemp, 4 Camp. 193, wliose opinions are always 
 regarded as good evidence of the law, shows very fully that the 
 evidence in tiie present case ought to be regarded as sufficient. 
 " Had you called the porter," says his lordship, " and he liad said 
 that, altliough he liad no recollection of the letter in question, he 
 invariably carried to the post-office all the letters found upon the 
 table, this might have done." " A letter was then put in from 
 the defendant," acknowledging the receipt of a letter of the proper 
 date from the plaintiff, and Lord Ellenborovgh said he would 
 presume this was the letter written to inform him of the dishonor 
 of the bill, although nothing was said of that in the defendant's 
 letter. 
 
 The case of Miller v. Hackley, 5 Johns. 375, is a case where far 
 more uncertain evidence than the present was held sufficient. 
 
 In this last case, the witness, being the notary who protested the 
 bill, only testified that it was his usual course to send notices by 
 mail, deposited on the evening of the same day of protest, and that 
 he believed he did so in the present case, and it was held sufficient. 
 We think there is no question the proof in the present case should 
 have been held competent to prove notice to the defendant of the 
 dishonor. Judgment reversed^ and case remanded. 
 
 See next case and note. 
 
 The Commercial Bank of Albany v. Merritt Clark. 
 
 (28 Vermont, 325. Supreme Court, February, 1856.) 
 
 Admissions. Notice. — A written admission by the indorser of a bill or note, tliat he 
 received due notice of its dishonor, tliough strong evidence, is not conclusive of 
 the fact against him. He may show tliat the paper was signed under a misappre- 
 hension or mistake as to the bill or note referred to, and that no notice of the dis- 
 honor was, in point of fact, given. 
 
 Contract. Estoppel. — Sucli a writing, in the present case, held not to operate either 
 as an admission for the purpose of a trial, as a contract, or as an estoppel in pais. 
 
 Assumpsit upon a bill of exchange against the defendant as 
 indorser. Plea, the general issue ; trial by the Court, September 
 term, 1855, — Pierpoint, J., presiding.
 
 COMMERCIAL BANK OF ALBANY V. CLARK. 1)61 
 
 The plaiiitUr iiitTodiiccd the l)ilf of exchange counted upon, with 
 the notarial ccrtilicate of protest, together with a writing signed 
 by the defendant, of which the followijig is a copy, viz. : — 
 
 " Commercial Bank of All)any v. M. Clark. Rutland County 
 Court, Sept. Term. June G, 1855. I, Merritt Clark, defendant 
 in the ahove entitled cause, acknowledge and say that I had legal 
 and due notice by mail of the protest of non-payment of the bill 
 of exchange or draft described in the above-entitled cause, and on 
 which I am an indorser, with other indorsers on same bill." 
 
 It appeared that the foregoing admission of the defendant was 
 drawn up by the attorney for the plaintiff, and enclosed to the 
 defendant in a letter, of which the following is a copy : — 
 
 " M. Clark, Esq. Dear Sir, — If the enclosed admission is signed 
 by you, it \\\\\ save cost and trouble of taking testimony in N. Y., 
 to prove notice. If declined, I am going to N. Y. last of next 
 week, and shall issue notice of the time and place, &c., of taking 
 the deposition, to prove notice to you as indorser. . . . 
 
 " Respectfully yours," 
 and that, in answer to said letter, the admission was returned, 
 signed by the defendant. 
 
 The defendant offered testimony to show that said writing was 
 signed by him under a misapprehension of the facts, and that at the 
 time he signed it he had in his mind a different draft from that 
 described in the writ, and that no notice of the protest or non- 
 payment was ever sent to or received by him ; and offered to 
 accompany this with proof that, immediately upon discovering his 
 mistake, he informed the plaintiff's attorney thereof, both by letter 
 and verbally, and that he should not abide by the concession or 
 admission, and that he withdrew it. 
 
 To this testimony the plaintiff objected, on the ground that, 
 whether true or not, the defendant was concluded by his written 
 concession, and could not thereafter show the fact to be differ- 
 ent. This objection was sustained by the Court, and the testi- 
 mony excluded. Judgment for the plaintiffs. Exceptions by the 
 defendant. 
 
 IsHAM, J. The bill of exchange, on which this action is brought, 
 was duly protested for non-})ayment. The notice to the doiendant, 
 as indorser, of its dishonor, was proved on the trial of the case by 
 his written acknowledgment, in which he admitted that he did
 
 538 EVIDENCE. 
 
 receive due and legal notice of the protest and non-payment of the 
 bill. That acknowledgment was full and strong proof that such 
 notice was in fact given to the defendant, and it is not competent 
 for him to avoid or weaken the effect of that admission, by notifying 
 the plaintiffs that he should not abide by that statement, and that 
 he withdrew it. It will always be evidence against him whenever 
 the question arises whether he had notice of the dishonor of that 
 bill. The question in the case now arises, whether that admission 
 is conclusive upon the defendant ; or whether it is competent for 
 him, on the trial of the case, to introduce testimony to show that 
 it was made under a misapprehension of facts, and with reference 
 to another bill of a similar character. That testimony, in con- 
 nection with evidence showing that, in fact, no notice whatever was 
 ever given to the defendant of the dishonor of the bill, was offered 
 and rejected by the Court. It is insisted that the testimony 
 offered was inadmissible, as the written admission was made for the 
 purpose of a trial, and that it is for that reason conclusive upon 
 him. On this question, it is sufficient to observe that the cases on 
 that subject have no reference to admissions made out of Court, 
 though they were made with the understanding that they would be 
 used as evidence, on the trial of a particular case. Those' admis- 
 sions only are referred to, which are made by a party, or his 
 attorney, during the progress of a trial, and as a substitute for 
 legal evidence. Admissions of that character, as a general rule, 
 will be conclusive, for that trial at least, as they become a part of 
 the record of the trial. The same rule may apply to admissions 
 made out of Court, when they are entered, as is sometimes prac- 
 tised, upon the calendar or records. 2 Phil. Evid. by Cowen, 
 200 ; note 192. When the admissions are not of that character, 
 and he is in no way concluded by the records of the case, they 
 are not rendered conclusive upon him, as being admissions made 
 for the purpose of a trial. The acknowledgment, in this instance, 
 is not of that character, and does not fall within that class of cases, 
 as they are recognized in this State. 
 
 It is very clear, that the testimony offered by the defendant is 
 not objectionable as contradicting or in any way affecting a written 
 contract or writing. If this written acknowledgment contained 
 any provisions placing it in the light of a written contract of the 
 parties, the objection would merit a different consideration. But 
 it is not of that character. It has none of the elements of a
 
 COMMERCIAL BANK OF ALBANY V. CLARK. 539 
 
 contract, nor was it designed for one. It is merely an admission that 
 notice had been given, the same as a receipt is an acknowledgment 
 of a settlement in full, or of a receipt of money for a particular 
 purpose ; or indorsements upon a note, which are written acknowl- 
 edgments that so much has been paid. In all these cases the 
 autliorities arc uniform, that, if the receipt or the indorsement was 
 made by mistake, and under a misapprehension of facts, though 
 they are evidence against the party, yet they may be t^xj)lained, 
 controlled, and contradicted by parol evidence, and the mistake of 
 the party corrected, and the truth given in evidence. 1 Aik. 311 ; 
 2 Vt. 138 ; Yt. 41 ; 5 Johns. G8 ; 1 Greenl. Evid. § 305. 
 
 There is nothing in the case, as it now stands, that renders that 
 testimony inadmissible, on the ground that the written acknowl- 
 edgment operates as an estoppel in pais. That doctrine aj)plies in 
 cases of fraud, where some act has been done, or statements made, 
 with a fraudulent intent, and with a view to induce a line of con- 
 duct which otherwise would not have been taken, and from which 
 advantages have been derived. When the case is destitute of those 
 considerations, there is no ground upon which the application of 
 that doctrine can be made. The doctrine was so held in the case of 
 Wakefield v. Grossman, 25 Vt. 298, 301. It was upon that ground 
 the case of Daviess v. Burton, 4 Car. & P. 166, was decided. The 
 party in that case agreed to admit certain facts on the trial, and 
 for that admission he was not to be held to bail. The admission 
 was held conclusive, as it had induced a line of conduct which 
 would not otherwise have been pursued ; for, upon the strength of 
 it, the right to insist upon bail had been surrendered. It was 
 not a mere acknowledgment, but it assumed the character of an 
 agreement or stipulation of the parties, and therefore the party 
 was concluded by it. There is no pretence that this admission was 
 made with a fraudulent intent, and from which the defendant has 
 received any advantages. It was an admission against his interest, 
 and designed for the accommodation of the plaintiffs. In the case 
 of Heane v. Rogers, Barn. & C. 577, Bnylcij, J., observed, that 
 " there is no doubt but that the express admissions of a party to 
 the suit, or admissions implied from his conduct, are evidence, and 
 strong evidence, against him ; but we think that he is at liberty to 
 prove that such admissions were mistaken or untrue, and that he 
 is not estopped or concluded by them, unless another person has 
 been induced to alter his condition by them." The case of Jones v.
 
 540 EVIDENCE. 
 
 O'Brien, 2G Eng. Law & Eq. 283, is a direct authority on tin's subject. 
 The question in tliat case was, whetlier notice of a dishonor of a 
 bill had been given, and which was proved by a written promise 
 to pay the bill. The defendant was permitted to introdnce evi- 
 dence showing that no such notice was given. He was not estopped 
 from making that defence by his promise. It may be true that the 
 testimony oitored in this case, as it was in that, may be insufficient 
 to overcome the evidence of the written acknowledgment ; but that 
 relates to the credibility of the testimony, not its competency. It 
 is proper evidence to be taken into consideration and weighed by 
 the jnry. In Byles, Bills, 350, it is said that " after a bill is due, 
 a promise to pay it, or an admission of a liability upon it, by a 
 drawer or indorser, will be evidence not only that due notice of its 
 dishonor was given, but that it was duly presented." The same 
 rule applies, whether the promise to pay the bill, or the liability on 
 it, was by parol or in writing. In either case, it is strong evidence 
 of notice against the party making it ; but the authorities are 
 decisive upon the question, that it is competent for the party to 
 prove that the promise, or admission, was made under a misappre- 
 hension of facts, and that in fact no notice of dishonor was ever 
 given. Story, Bills, § 320, and note ; Chitty, Bills, 535-539. In 
 all these cases the party is not concluded from introducing that 
 evidence, on the ground that it contradicts any written stipulation, 
 nor as a matter of estoppel. 
 
 The judgment of the County Court must be reversed, and the 
 case remanded. 
 
 The two preceding cases discuss questions of considerable practical importance 
 in regard to the kind and degree of proof admissible or required in establishing 
 demand of payment on commercial paper and giving notice of dishonor to the 
 parties interested. We are not aware that the rules of evidence here declared 
 have since been essentially modified. 
 
 I. The first point illustrated by Strong's case is the disposition of the courts 
 not to release the responsibility of the parties to negotiable paper upon the 
 merest trifling irregularity, where the substance of the requirements of the law 
 has been complied with. There was at one time a degree of strictness of con- 
 struction upon questions affecting demand of payment and notice of dishonor of 
 negotiable paper, amounting almost to a denial of justice ; as if indeed there 
 ■was something specially meritorious, in finding some plausible ground upon 
 which to release all parties collaterally holden for the payment of a bill or 
 note. That intense degree of strictness of construction almost requiring cer- 
 tainty to a certain intent in every particular, which was at one time applied 
 to numerous questions aifecting matters not considered the special favorites of the
 
 COMMERCIAL BANK OF ALBANY V. CLARK. 541 
 
 courts, such as estoppels, orders of removal in settlement cases, the title to 
 land derived under tax sales and some others, as well as that under considera- 
 tion, has certainly been relaxed. The question under consideration is ally and 
 judiciously commented upon hy Mr. Justice Easlman, in Manchester Hank v, 
 Fellowes, S Foster, 302. The cases are here very largely quoted and dis- 
 cussed. The case of Warren v. Oilman, 17 Me. [.5 Shepl.] .%0, bears upon this 
 question, and the pinion of Weston, C. J., contains many valuable sug- 
 gestions. From the cases and the text-writers upon this subject it is apparent 
 tliat all which is now required in regard to giving notice of the dishonor of 
 negotiable p.ipcr is the exercise of that degree of diligence which careful and 
 prudent men put forth in their own business of equal importance. Story, Prom- 
 issory Notes, § 335, et seq., citing Chitty on Bills; Bayley on Bills. But where 
 definite rules have been established by the common consent of commercial men, 
 either as to the time, or place, or manner of giving such notices, or making 
 ilemaud of payment, they must be followed; not so much, necessarily, because 
 they are absolutely the wisest and best which could be supposed, but more 
 because, having been established and acted upon by common consent, they will 
 be presumptively reasonable, and others will naturally depend and act npon them ; 
 and if any one were at liberty to disregard them it would naturally lead to dis- 
 appointment with others, and might lead the latter into conduct different from 
 wiiat they would otherwise take. Hence such rules, when once establi.-hed, must 
 be followed, unless there is some necessity for pursuing a different course in the 
 particular case. 
 
 As to the degree and kind of proof to be required in such cases, there seems 
 tu be no reasoh why any dilferent rules or constructions should obtain, as to cer- 
 tainty, fiou) those which are regarded as salutary and sufficient in other cases 
 and upon ether subjects. 
 
 II. Tiie point discussed in Clark's ca«e is also one of considerable practical 
 importance. There have been some few cases holding that where the indorser is 
 once released by want of notice in time, a mere waiver of such notice or 
 acknowledgment of the same, or a promise to pay the bill, will not bind him, 
 unless made upon some new consideration. Bronsot}, J., in Tebbetts r. Dowd, 
 23 Wend. 379, 412, contends for the soundness of this view, upon principle, 
 although he confesses the weight of authority is against the view. And the con- 
 trary is held in the late case of Xeal v. Wood, 23 Ind. 623. But the law, as 
 laid down by L'oncn, J., in Tebbetts v. Dowd, that a promise to pay the note or 
 bill after the time for demand and notice has passed, is presumptive evidence 
 of such demand and notice having been regularly made, seems clearly estab- 
 lished. But where it appears on trial that the holder was guilty of laches in 
 regard to making such demand and notice, he cannot recover upon a subsequent 
 promise of the indorser, witliout showing that he knew of such laches at the time 
 of making the promise. But ui)on principle it would seem that any admission of 
 liability upon, or promise to pay a bill or note, based upon the belief or represen- 
 tation that it had been dishonored by the acceptor or maker, which must be the 
 natural inference, where such admission is made after the time of p.ayment has 
 elapsed, can only be regarded in the nature of evidence and as such liable to be 
 rebutted or shown to have been made under misapprehension, the same as any 
 other admission which has not led the opposite party into any different course of
 
 542 EVIDENCE. 
 
 conduct from what he would otherwise have adopted. It being settled that such 
 promise need not be made upon any new consideration, and that it must, in 
 order to be binding, be made with full knowledge of the facts in the case, there 
 can be no reason whatever to exclude proof of any matter which might tend to 
 break the force of such admission, whatever that may be. But it would scarcely 
 be useful to go more into detail upon this question, which when fully analyzed 
 will be found to depend upon very simple and familiar pri#;iples of the law of 
 evidence, and much the same which ajiplies to other cases of admis.-ion or decla- 
 ration by a party against his interest. See Hazelton v. Colburn, 1 Rob. La. 345. 
 
 The late English cases are all in one direction in regard to the cflTtct of a 
 promise to pay a note or bill by the party entitled to notice of dishonor. If the 
 promise is made before the bill or note falls due, that amounts to waiver of 
 demand and notice of the default of other parties ; and if made after the time of 
 dishonor it amounts to an admission of demand and notice at the proper time and 
 in proper form. Cordery t'. Colvin, 9 Jur. n. s. 1200; s. C, 14 C. B. N. s. 
 374, opinion by Byles, J; Woods v. Dean, 3 Best & S. 102; Bartholomew v. 
 Hill, 10 W. R. 273. See Sigerson v. Matliews, ante, 473, and note. 
 
 And it does not seem that the effect of a promise to pay the bill or note after 
 the time of payment has elapsed, is answered or in any way qualified, by the fact 
 appearing that due notice of dishonor was not in fact given. Killby v. Rochussen, 
 18 Com. B. N. s. 357 ; Rabey v. Gilbert, 6 Hurl. & N. 536 ; s. c, 9 W. R. 386. 
 But unquestionably it may be shown that the admission or promise was made under 
 mistake or misapprehension, and thus its effect be defeated. And where a question 
 arises in regard to the sufficiency of notice of dishonor by reason of its indefinite- 
 ness, it may be submitted to the jury how far the party was thereby deceived. So 
 also it may be submitted to a jury whether the holder of a note or bill exercised 
 a reasonable degree of diligence in finding the parties and giving notice of dis- 
 honor, although not given within the ordinary time. Gladwell v. Turner, Law 
 Rep. 5 Exch. 59. There are no other English cases of recent date bearing 
 directly upon these questions ; ard they all treat the admissions by way of prom- 
 ise or otherwise, of the party entitled to notice of dishonor, or merely in the 
 nature of evidence, to be weighed in connection with all the other evidence in 
 the case, with the ordinary qualification that where such admissions have induced 
 different action in other parties from what would otherwise have been taken, the 
 party making them will be estopped from withdrawing or qualifying them. This 
 subject is more fully considered under Excuses of Presextjiext axd Notice, 
 and particularly in Berkshire Bank v. Jones, ante, 468 and note, and in Sigerson 
 V. Mathews, ante, 473, and note. 
 
 In the i^merican courts it has been held improper to submit to the jury the 
 question of the reasonableness of the presentment of a bill payable on sight, 
 where the same was not presented for twenty-one days after it might have been 
 in the due course of communication between the residence of the payee and the 
 drawee, and there was no evidence to account for the delay. Phoenix Insurance 
 Co. V. Allen, 11 Mich. 501 ; Same v. Gray, 13 id. 191 ; Walker v. Stetson, 
 ante, p. 189. Bills of exchange between the different American States are held 
 foreign for the purpose of aduiitting the certificate of the notary as prima facie 
 evidence of demand and notice. Orono Bank v. Wood, 49 Me. 26 ; Starr v. 
 Sanford, 45 Penn. St. 193 ; Lee v. Buford, 4 Met. (Ky.) 7. And where a bill is
 
 COMMERCIAL BANK OF ALBANY V. CLARK. 5-13 
 
 duly protested for non-acceptance, it need not be again presented and protested 
 for non-payment. Plato v. Reynolds, 27 N. Y. o8G. The diligence required in 
 giving notice of the disiionor of a note or bill is such as men of business usually 
 exercise, when their interests depend upon obtaining correct information. Palm- 
 er V. Whitney, 21 Ind. 58. The holder of a draft, as between himself and the 
 drawer is not bound to present it at maturity. But if he do not he incurs the 
 risk of the insolvency of the drawee. Springfield Ins. Co. v. Tincher, 30 111. 399. 
 But a delay of two years is fatal. Bridgeford v. Simonds, 18 La. An. 121. The 
 mere want of effects in the hands of the drawee will not always excuse present- 
 ment and notice. Saul i'. Jones, 1 Ellis & Ellis, 59. See Hopkirk v. Page, ante, 
 p. 430, and note. 
 
 As to the necessity of the presentation of bills and notes for payment, see Gay 
 V. Haseltine, 18 N. Ilanip. 530; Benton v. Martin, 31 N. Y. 382; Sheldon v. 
 Chapman, 31 N. Y. 644 ; House v. Adams, 48 Penn. St. 261, cited in iull in note 
 to Hopkirk v. Page, ante, p. 443.
 
 544 DISCHARGING INDORSER OR DRAWER. 
 
 DISCHARGING INDORSER OR DRAWER. 
 
 [Having considered commercial paper in its regular stages from inception to suit inclu- 
 sive, we now present a number of important miscellaneous cases upon branches of the general 
 subject, of every-d;iy occurrence in the courts, not alread}' fully illustrated. 
 
 The subject of presentment and notice has already been considered, under Presentment 
 AND Demand foh Payment, Pkoceedings on Non-Payment, and Excuses of Pkesent- 
 MENT AND NoTiCE; and "we here introduce other matters relating to the discharge of the 
 indorser or drawer.] 
 
 Sterling v. The Marietta and Susquehanna Trading 
 
 Company. 
 
 (11 Sergeant & Rawle, 179. Supreme Court of Pennsylvania, May, 1824.) 
 
 Additional securiti/. — Taking a bond from a third person for the money due upon a 
 note is no discharge of an indorser, unless it be so agreed; nor will proceeding to 
 judgment on the bond alter the case. 
 
 Ddaijiurj suit. — Neither giving time to the maker, by forbearing to proceed to recovery 
 on the paper by legal process ; nor delay to sue the indorser for several years, 
 within the period of limitation, will operate as a discharge to the indorser; pro- 
 vided no time was given before the indorser's liability was fixed.. 
 
 The case is stated in the opinion of tlic Court. 
 
 TiLGHMAN, C. J. Tliis is an action brought by The Marietta and 
 Susquehanna Trading Company against Daniel Sterling, the plain- 
 tiff in error, on a promissory note for |1350, dated June 16, 1814, 
 drawn by Wait S. Skinner, payable to the said Daniel Sterling, or 
 order, at Henry Cassel's banking-house, one hundred and seventeen 
 days after date, and indorsed by the said Sterling and Christian 
 Shirk. This note was regularly protested for non-j)aymciit, of 
 which notice was given to the indorscrs. On the twenty-fifth of 
 February, 1815, Isaac Osterliauk, Charles Otis, and John Bucking- 
 ham, gave their bond to Wait S. Skinner (on which judgment was 
 afterwards confessed in the Court of Common Pleas of Luzerne 
 county), for the use of Ucnry Cassel's bank, at Marietta, for -$1350, 
 with interest to be paid on the first of May, 1815. This bond
 
 STERLING V. THE MARIETTA, ETC., TRADING COMPANY, 545 
 
 was given expressly as a collateral security for the note on which 
 this suit was brought, and was assigned by the obligee to The 
 Marietta and Susquehanna Trading Company on the fifteenth of 
 July, 1819. Henry Cassel's bank and The Marietta and Susque- 
 hanna Trading Company may l)e considered as one. In the month 
 of June, 1814, Cassel's bank ceased to do business, and the business 
 was from that time carried on in the name of the Marietta and Sus- 
 quehanna Trading Company, of which Cassel was president, until 
 November, 1817. On the trial, in the Court below, the defendant 
 (Sterling) offered in evidence the depositions of Osterhauk, Otis, 
 Buckingham, and Skinner, all of which were excepted to by the 
 plaintifT, and rejected by the Court, and in my opinioa very prop- 
 erly. Osterhauk, Otis, and Buckingham were interested in the 
 event of this suit, having given their bond and judgment as a 
 collateral security ; so that if a verdict and judgment had ])assed 
 for the defendants, they would have been discharged from the judg- 
 ment entered on their bond. Skinner was interested also as drawer 
 of the note. It was an accommodation note, and if the defendant 
 had succeeded in this suit. Skinner would have been altogether 
 discharged ; so that his interest was immediate. 
 
 The defendant next requested the Court to charge " that if the 
 plaintiff took a bond for the payment of this note from any other 
 person, before this suit was brought, without the knowledge or con- 
 sent of the defendant, and obtained judgment on the said bond, the 
 defendant would be thereby discharged, and the jury should find in 
 his favor." But the Court charged that, in such case, the plaintiff 
 would be entitled to a verdict. The taking of a bond from a third 
 person was no more than a collateral security for the money due 
 on the note, and would be no discharge of the drawer or indorsers, 
 unless so agreed. Why should it ? Wi)y might not the plaintiffs 
 strengthen themselves by additional security, without discharging 
 the original debtors ? Such transactions are very frequent. All 
 depends on the intent of the parties. If they agree that the drawer 
 and indorsers shall be discharged, they will be discharged. But 
 if it be not so agreed, the presumption is that it was not so in- 
 tended, and they will still be held liable. The proceeding to judg- 
 ment on the bond taken as collateral security would not alter the 
 case. The judgment would be of the same nature as the bond ; 
 that is to say, it would be but collateral security for the debt due 
 on the note. 
 
 35
 
 546 DISCHARGING INDORSER OR DRAWER. 
 
 The last question put to the Court by the counsel for the defend- 
 ant was as follows : " If the plaintiffs took a judgment bond, 
 entered up the judgment, issued process upon it, gave time to the 
 drawer of tlie note (Wait S. Skinner), without the defendant's 
 knowledge, and have delayed bringing suit against the defendant 
 (one of the indorsers of the said note) for several years, by such 
 arrangement, proceedings, and delay, the defendant is discharged." 
 On these points also the opinion of the Court below was against 
 the defendant. I have said already that the taking of a bond as a 
 collateral security, and proceeding to judgment on it, is no dis- 
 charge of the original debtor. Neither is the giving of time, in 
 the manner it was here given (that is to say, by forbearing to 
 proceed to the recovery of the money by legal process), a dis- 
 charge, provided no time was given till after the note was protested. 
 If the original time of payment had been enlarged without the 
 consent of the indorsers, they would have been discharged. But 
 the money having been demanded, the note protested, and notice 
 given to the indorsers, they are fixed, and the holder of the note 
 may afterwards delay his suit as long as he pleases, without injur- 
 ing his security. By the notice to the indorsers, they are given to 
 und'erstand that they are held liable, and nothing but payment will 
 discharge them. The holder may sue all or any of them. He 
 may pursue one, and indulge the others, or he may indulge them 
 all, and proceed at any time against any of them, provided he 
 keeps within the act of limitations. 
 
 The charge of the Court, therefore, was in all respects correct. 
 But, for the error in rejecting the receipt of Henry Cassel, offered 
 in evidence by the defendant, the judgment must be reversed, and 
 a venire de novo awarded. 
 
 There is considerable conflict as to the first proposition in this case, respecting 
 taking security payable at a future day ; and although the principal case is sup- 
 ported by several cases emanating from high authority, the weight of decision seems 
 opposed to it, if the security taken had the effect to suspend the holder's right of 
 action. Okie v. Spencer, infra, 547. See also McLemore v. Powell, post, 551 ; 
 Michigan State Bank v. Leavenworth, 28 Vt. 209. Cases which favor the rule 
 above declared are Pring v. Clarkson, 1 Barn. & C. 14 ; Ripley v. Greenleaf, 
 2 Vt. 129. See also Story, Promissory Notes, § 416, and cases cited. 
 
 The second point is well settled, that so long as the holder remains passive, 
 after having fixed the liability of the drawer or indorser, he does not lose any 
 rights. McLemore r. Powell, post, 551 ; Couch v. Waring, post, 563.
 
 OKIE V. SPENCER.* 547 
 
 Okie -y. Spencer. 
 
 (2 Wharton, 253. Supreme Court of Pennsylvania, December, 1836.) 
 
 Additional security. Extension of lime. — If the liolder of a promissory note take a check 
 upon a bank from tlie maker, dated six days after the maturity of the note, 
 the check to be in full satisfaction of the note if paid, this oi)erates as an exten- 
 sion of time to the maker, and discharges an indorser. 
 
 At the maturity of the note in question, the holder took from 
 the maker a draft on other parties, payable six days afterwards, 
 to be in full satisfaction of the note if duly paid. 
 
 Kennedy, J. The defendant here having indorsed the note in 
 question, for the accommodation of the drawer, and therefore being 
 regarded as a surety merely, it is admitted that if further time was 
 given, when it fell due, by the holder to the drawer, for the pay- 
 ment thereof, the defendant is thereby discharged. And the only 
 question to be decided is, whether from the facts set forth by the 
 defendant in his special plea, to which the plaintiff has demurred, 
 the law will imply an agreement made on the third of May, the 
 day the note became payable, by the holder of it, to give further 
 time until the sixth of the same month, to the drawer for the pay- 
 ment thereof. 
 
 Had the defendant pleaded the general issue only, and under it, 
 as he certainly might, given evidence of the facts set forth in his 
 special plea, and the truth of them had been clearly established by 
 the evidence or the admission of the plaintilT, witiioiit more having 
 been shown to the jury, it would undoubtedly have been the duty 
 of the Court to have instructed the jury that the facts thus 
 established, implied an agreement on the part of the holder of 
 the note, for an adequate consideration received by him, to give 
 time to the drawer for the payment of it, without having the con- 
 sent of the defendant ; and that the latter was thereby discharged 
 from his liability as indorser. In the absence of all proof to the 
 contrary, it cannot be supposed here, that the drawer, when the 
 note had become payable, could have had any otlier motive for 
 giving the check of himself and his partner, securing the payment 
 of it at the expiration of six days, than that of procuring indul- 
 gence for that space of time upon his note from the holder of it.
 
 548 DISCHARt3ING INDORSEE OR DRAWER. 
 
 That such, too, must have been the understanding of them both 
 at the time, seems to be the necessary inference ' from the facts 
 stated, if our judgments are to be guided in this respect by what 
 we know to be the common and ordinary motives which generally 
 influence and produce such arrangements. Marshall, the partner 
 of the drawer of the note, does not appear to have been bound for 
 the payment of it in any way before it fell due, which tends gen- 
 erally to strengthen, and in truth to make the inference that the 
 check was given to procure further time for the payment of the 
 note, irresistible. And although the check cannot be considered 
 as having been taken in satisfaction of the note, nor as having 
 extinguished it, yet the right of the holder to proceed against the 
 drawer to enforce the payment of it, by suit, was thereby sus- 
 pended until after the expiration of the six days. It was in effect 
 changing, without the consent of the defendant, the terms upon 
 which he had agreed as indorser to become liable for the payment 
 of the note, and depriving him of the right to pay the note at 
 maturity, if the drawer failed to do so, and then to sue him imme- 
 diately for it, and therefore amounted to a release of him from his 
 liability. He had guaranteed by his indorsement, the payment of 
 the note on the third of May, 1833 ; and it was not competent for 
 the liolder and the drawer without his concurrence, to extend his 
 guaranty to the ninth of that month, which would clearly have 
 been the effect of their agreement and the giving of the check, if 
 the defendant were still to be held liable for the payment of the 
 note. Tiiat the holder, by accepting the check, put it out of his 
 power to proceed on the note, by suit against the drawer, until 
 after the six days, cannot, as it appears to me, be controverted 
 upon any ground that would seem to be consistent with the nature 
 of the transaction, and what must have been the intent of the 
 parties. Had the drawer given his own check merely, for the 
 payment of the note at the expiration of the six days, there might 
 have been some color for saying that he had not thereby precluded 
 himself from bringing suit on it during that period ; because it 
 might then have been argued with great plausibility, if not cor- 
 rectly, that he had obtained by it no additional security, and 
 consequently no adequate consideration to make a promise of 
 indulgence binding ; that by the check he acquired nothing except 
 the personal responsibility of the drawer, which he had before by 
 virtue of the note ; and therefore had he even made an express 
 promise of indulgence for the six days, it might have been alleged
 
 OKIE V. SPENCER. 549 
 
 tliat lie would not have been bound by it for want of a sufficient 
 consideration ; i)ut as the case is presented by the special plea and 
 demurrer, no such argument can be advanced or pretended ; for 
 by the check, the holder of the note received the additional respon- 
 sibility of Marshall, as a security for the payment of it ; and it 
 would therefore seem almost impossible to imagine any other rea- 
 son for giving such additional security, than that of procuring an 
 extension of payment for the six days. It is true, that it may 
 seem to have been but a short indulgence ; but being a suspension 
 of the right of the holder of the note ta sue the drawer upon it 
 during that period, it operated as effectually to discharge the de- 
 fendant from his liability, as if it had been six years; for in either 
 case, to hold the defendant to be still bound by his indorsement, 
 would be making him liable upon terms, and in short, for the ful- 
 filment of a contract, dilTerent from what he had agreed to. The 
 time of payment mentioned in a note, is always a very material 
 part of it ; and if it may be enlarged without the consent of the 
 indorser, and he notwithstanding, be held liable upon his indorse- 
 ment, there is no reason why the amount may not also be enlarged ; 
 but it is obvious, that nothing of the kind can be done, without 
 operating great injustice towards him ; and therefore it is, if it be 
 done, it shall release him from his liability. Every man, as long 
 as he is a free agent, must be permitted to declare the terms upon 
 which he is willing to incur an obligation ; and having done so, it 
 cannot be altered in any material point whatever, without his con- 
 sent ; nor yet any thing be done which may affect his rights in 
 relation thereto. 
 
 The counsel for the plaintiff has cited in opposition to this, the 
 case of Pring v. Clarkson, 1 Barn. & C. 14 ; 8. c, 8 Eng. Com. 
 Law, 10, where a bill of exchange having been dishonored, the 
 acceptor transmitted a new bill for a larger amount to the payee, 
 without having had any communication with him respecting the 
 first: the payee discounted the second bill with the holder of the 
 first, which he received back as part of the amount, and afterwards 
 for a valuable consideration, indorsed it to the plaintiff. It was 
 held that the second bill was merely a collateral security, and that 
 the receipt of it by the payee, did not amount to giving time to the 
 acceptor of the first bill, so as to exonerate the drawer. Mr. Chief 
 Justice Abbott, in pronouncing the opinion of the Court, says : " In 
 no case has it been said, that taking a collateral security from the
 
 550 DISCHARGING INDORSER OR DRAWER. 
 
 acceptor, shall have that effect ; " that is, of discharging the other 
 parties to the bill : and concludes by saying, " lltere the second 
 bill was nothing niore than a collateral security." Now it is not 
 easy to perceive why a collateral security should not have such an 
 effect ; for surely there is nothing in the nature of it which renders 
 the giving or the taking of it inconsistent with the holder's agree- 
 ing to give time to the acceptor of a bill or the drawer of a note. 
 On the contrary, such indulgence may be, and doubtless is in most 
 cases, the very consideration upon which the collateral security is 
 given and obtained ; and as I have endeavored to show, makes the 
 case, in the absence of proof of an express agreement to give time, 
 still stronger in favor of an implied agreement to that effect, than 
 where there is nothing more given than a bare renewal of the 
 promise by the acceptor of the original bill, or the drawer of the 
 former note, to pay the amount at a future date. But Chief Justice 
 Abbott was mistaken, when he said, " in no case had it been said, 
 that taking a collateral security from the acceptor shall have that 
 effect ; " for in Gould v. Robson, 8 East, 576, decided some fifteen 
 years before, it was not only said, but the case itself turned upon 
 the very point. There the holder of the bill of exchange, who when 
 it fell due, after taking part-payment of the acceptor, agreed to 
 take a new acceptance from him for the remainder, payable at a 
 future day, but in the mean time, the holder to keep the original 
 bill in his hands as security ; and it was held that it amounted to 
 a giving of time, and a new credit to the acceptor, and therefore 
 discharged the indorser. Besides, the authority of Pring and 
 Clarkson has been doubted by the profession. Mr. Chitty in his 
 Treatise on Bills, 442 (8th Eng. ed.), after repeating the principle 
 laid down in it, adds, " but it is submitted that the mere receiving 
 further security, payable at a future day, would in general imply 
 an engagement to wait till it becomes due." See also Bayley, 
 Bills (5th ed.), 345, note 31 : and Chitty, Jr., Bills (ed. of 1834), 
 100 w. a. note 1 ; and in Kendrick v. Lomax, 2 C. & J. 405, it 
 would seem to be overruled ; for it was decided there, that the 
 holder', by taking a renewed bill, impliedly agrees to give time 
 until it becomes due, and cannot sue in the interim, on the original 
 bill. ' Judgment affirmed. 
 
 See to the same effect Bangs v. Mosher, 23 Barb. 478 ; but see Sterling v. 
 Marietta, &c., Trading Co., ante, 544, and note.
 
 M'LEMORE v. POWELL. 561 
 
 McLemore, PlaintifF in Error, v. Powell and OpiERs, 
 Defendants in Error. 
 
 (12 Wheaton, 554. Supreme Court of the United States, January, 1827.) 
 
 Ai/reemf-nt /or delay. — Mere agreement by the holder witli tlie drawer of a bill of 
 exchange for delay, made without consideration, and not communicated to the 
 indorser, does not discharge the indorser. 
 
 The case is stated in the opinion of the Court. 
 
 Story, J. This is a writ of error to the Circuit Court of the 
 United States for the District of West Tennessee. 
 
 The original action was assumpsit, brought by Powell, Fosters, 
 & Co., as holders of a bill of exchange, drawn by one Thomas 
 Fletcher, in May, 1819, at Nasliville, upon Messrs. McNeil, Fisk, 
 and Rutherford, at New Orleans, payable to Thomas Read, or 
 order, for two thousand dollars, in sixty days after date, and by 
 him indorsed to the defendant, John C. McLemore, and by him to 
 the plaintiffs. The bill, upon presentment for acceptance, was 
 dishonored, and due notice of the dishonor was given to the de- 
 fendant. 
 
 At the trial, upon the general issue, Thomas Fletcher, the 
 drawer, was, under a release from the defendant, McLemore, ex- 
 amined as a witness, and among other things, testified that, in the 
 month of October following the dishonor of the bill, '' one of the 
 plaintiffs applied to him at Nasliville for the money on the bill, and 
 threatened to sue immediately if an arrangement was not made to 
 pay the bill. The witness then proposed to the plaintiff, if he 
 would indulge him four or five weeks, he would himself, to a cer- 
 tainty, pay the bill. To this the plaintiff agreed, and told the 
 witness he was going to Louisville, Kentucky, and would return 
 by Nashville, about the exj)iration of that time, and would receive 
 said payment. Since said time the witness has never seen said 
 plaintiff." The witness farther testified, that the defendant was 
 an accommodation indorser for him on the bill ; that the plaintiff 
 told him that the bill would be left with a Mr. Washington, at 
 Nashville ; that lie expected he would himself be at that place at 
 the time agreed on, but that, if he did not come, he would give
 
 552 DISCHARGING INDORSER OR DRAWER. 
 
 the instructions to Mr. Washington, by letter, what to do if the 
 witness did not pay at the expiration of the time agreed on. It 
 did not •ppear that any consideration was paid or stipulated for 
 this delay ; and no suit was commenced until after this period had 
 elapsed. The district judge instructed the jury, that if they be- 
 lieved the conversation above stated amounted to no more than an 
 agreement that a suit should not be brought for four or five weeks, 
 and that no premium or consideration was given or paid, or to be 
 paid by Fletcher, the indorsers were not discharged, that an agree- 
 ment for giving day must be an obligatory contract for a consider- 
 ation which ties up the hands of the creditor, and disables him 
 from suing, thereby affecting the interests and rights of the in- 
 dorser ; that the indorser has a right to require and demand of 
 the creditor to bring a suit against the drawer, and if he has dis- 
 abled himself from bringing a suit by a contract for a considera- 
 tion, he has thereby released the indorser ; and that if the jury 
 were satisfied from the testimony that time was given for a valu- 
 able consideration paid or to be paid, or that a new security was 
 taken by the holder, that the' indorser was discharged and absolved 
 from all the obligations of the indorsement. 
 
 Under this instruction, the jury found a verdict for the plain- 
 tiffs, upon which there was judgment given in their favor. A bill 
 of exceptions was taken to the charge of the Court ; and the 
 present writ of error is brought for the purpose of ascertaining its 
 legal correctness. 
 
 It is unnecessary to give any opinion upon that part of the 
 charge which respects the right of an indorser to require the 
 holder to commence a suit against the drawer. In general, the in- 
 dorser, by paying the bill, has a complete power to reinstate 
 himself in the possession and ownership of the bill, and thus to 
 entitle himself to a personal remedy on the instrument against all 
 antecedent parties. The same reason, therefore, does not exist, 
 as may in common cases of suretyship, to compel the creditor to 
 active diligence by suit against the principle. Without expressing 
 any opinion on this point, it is sufficient to say, that the error, if 
 any, was favorable to the defendant, and, therefore, it can form no 
 subject of complaint on his part. 
 
 The case then resolves itself into this question, whether a mere 
 agreement with the drawers for delay, without any consideration 
 for it, and without any communication with or assent of, the in-
 
 M'LEMORE v. POWELL. 553 
 
 dorser, is a discharge of the latter, after he lias been fixed in his 
 responsibility by tiie refusal of the drawee, and due notice to him- 
 self. And we are all of opinion that it does not. We admit the 
 doctrine, that although the indorser has received due notice of tiie 
 dishonor of the bill, yet if the holder afterwards enters into any 
 new agreement with the drawer for delay, in any manner changing 
 the nature of the original contract, or afTecting the rights of the 
 indorser, or to the prejudice of the latter, it will discharge him. 
 But, in order to produce such a result, the agreement must be one 
 binding in law upon the parties, and have a sufficient consideration 
 to support it. An agreement without consideration is utterly 
 void, and does not suspend for a moment the rights of any of the 
 parties. In the present case, the jury have found that there was 
 no consideration for the promise to delay a suit, and, consequently, 
 the plaintiffs were at liberty immediately to have enforced their 
 remedies against all the parties. It was correctly said by Lord 
 Eldon, in English v. Darley, 2 Bos. <fe Pul. Gl, that "as long as 
 the holder is passive, all his remedies remain ; " and, we add, that 
 he is not bound to active diligence. But if the holder enters into 
 a valid contract for delay, he thereby suspends his own remedy on 
 the bill for the stipulated period ; and if the indorser were to pay 
 the bill, he could only be subrogated to the rights of the holder, 
 and the drawer could or might have the same equities against him 
 as against the holder himself. If, therefore, such a contract be 
 entered into without his assent, it is to his prejudice, and dis- 
 charges him. 
 
 The cases proceed upon the distinction here pointed out, and 
 conclusively settle the present action. In Xatwyn v. St. Quintin, 
 1 Bos. & Pul. 652, where the action was by indorsees against the 
 drawer of a bill, it appeared, that, after the bill had become due, 
 and been protested for non-payment, though no notice had been 
 given to the drawer, he having no effects in the hands of the ac- 
 ceptor, the plaintiffs received part of the money on account from 
 the indorser ; and to an application from the acceptor, stating, 
 that it was probable he should be able to pay at a future period, 
 they returned for answer, that they would not press him. The 
 Court held it no discharge ; and Lord Chief Justice Ei/re^ in deliv- 
 ering the opinion of the Court, said, that if this forbearance to sue 
 the acceptor had taken place before noticing and protesting for 
 non-payment, so that the bill had not been demanded when due, it
 
 554 DISCHARGING INDORSEE OR DRAWER. ' 
 
 was clear the drawer would have been discharged, for it would be 
 giving a new credit to the acceptor. But that, after protest for 
 non-payment, and notice to the drawer, or an equivalent to notice, 
 a right to sue the drawer had attached, and the holder was not 
 bound to sue the acceptor. He might forbear to sue him. The 
 same doctrine was held in Arundel Bank v. Goble, reported in a 
 note to Chitty on Bills. Chitty, 379, note c. ed. 1821. There 
 the acceptor applied for time, and the holders assented to it, but 
 said they should expect interest. It was contended, that this was 
 a discharge of the drawer ; but the Court held otherwise, because 
 the agreement of the plaintiffs to wait was without consideration, 
 and the acceptor might, notwithstanding the agreement, have been 
 sued the next instant ; and that the understanding that interest 
 should be paid by the acceptor made no difference. So, in Bad- 
 nail V. Samuel, 3 Price's Exch. 521, in a suit by the holder against 
 a prior indorser of a bill of exchange, it was held, that a treaty 
 for delay between the holder and acceptor, upon terms which were 
 not finally accepted, did not discharge the defendant, although an 
 actual delay had taken place during the negotiation, because there 
 was no binding contract which precluded the plaintiffs from suing 
 the acceptor at any time. 
 
 Upon authority, therefore, we are of opinion, that this writ of 
 error cannot be sustained, and that the judgment below was right. 
 Upon principle, we should entertain the same opinion, as we think 
 the whole reasoning upon which the delay of the holder to enforce 
 his rights against the drawer is held to discharge the indorser 
 after notice, is founded upon the notion that the stipulation for 
 delay suspends the present rights and remedies of the holder. 
 
 The judgment of the Court below is, therefore, affirmed with 
 costs. 
 
 Payne v. Commercial Bank of Natchez, 6 Sm. & M. 24, is an important 
 case upon this branch of the subject. The facts will appear in the opinion of the 
 Court. 
 
 Sharkey, C. J. The plaintiffs in error were sued as indorsers of a promissory 
 note, and after verdict against them moved for a new trial, which motion was 
 overruled. The defence set up was, that the holder of the note had discharged 
 the indorsers by giving time to the maker. 
 
 The question depends mainly on the evidence introduced on the trial, which 
 is to the effect following : The maker of the note testified that, about tlie 28th 
 March, 18-10, he executed a note to the plaintiffs below for $31,593, payable 
 three days after date, the consideration of which was sundry notes then held by
 
 m'lemorb»v. powkll. 555 
 
 the bank, on which he was liable either as maker or indorser, his object being to 
 concentrate all his indehtedness in one note. On bt-ing asked where the note 
 given then was, he stated that it was in judgment in Louisiana, and that >f2'J*)<) 
 had been paid on the judgment by a sale of bank-stock, and that the judgment 
 was also a lien on certain i)romissory notes given by 11. C. Ballard to the witness 
 for property sold to liallard, which notes were secured by mortgage. He also 
 stated that these notes were liable to be sold under execution. A transcript of 
 the judgment in Louisiana was also introduced. 
 
 To rebut this proof the plaintiff lielow introduced Thomas Henderson, the 
 cashier of the bank, who explained the transaction with Lillard, the maker of the 
 note, in the following manner : Lillard called on him and expressed a wish to 
 take up all his liabilities to the bank, and proposed to confess judgment for the 
 full amount due, and to bind thereby all of his property. On consultation with 
 one or two of the directors, the witness agreed with Lillard that when such a 
 judgment should be confessed so as to bind all his property, and evidence thereof 
 produced to the bank, the pajjcr of Lillard should be given up, — Lillard em- 
 ploying his own attorney, and paying all the expenses incident to the consumma- 
 tion of this arrangement. In order to effect the arrangement, Lillard called on 
 the witness for a statement of the amount of his indebtedness, which was fur- 
 nished. The agreement was entirely conditional, intended, and so understood, 
 to depend upon the confession of a judgment which should bind all of Lillard's 
 property in Louisiana ; and on the further condition that this should be done at 
 Lillard's expense, and the bank notified. After this understanding took place, 
 and before any confession of judgment, Lillard sold all of his property in Louisi- 
 ana, consisting of land and negroes, to R. C. Ballard, which was the property 
 intended to have been bound by the judgment. Some time before this under- 
 standing took place, Lillard delivered to witness two hundred shares of stock of 
 the Commercial Bank of Manchester, to be held for him as collateral security for 
 all of his debts due to the bank. After the sale of the property to Ballard, the 
 witness was informed that Lillard did confess judgment, and that an execution 
 had issued, under which the bank-stock was sold by the sheriff of Concordia for 
 $2200, but the bank had never received any of the money. On the order of the 
 sheriff of Concordia the bank-stock was delivered to Ballard. The witness 
 never gave, nor did he agree to give, any time whatever to Lillard, The memo- 
 randum was given at his request to enable him to carry out his own arrange- 
 ment. The witness had no authority, by resolution of the board of directors or 
 otherwise, to make this arrangement, but was in the habit of making such 
 arrangements on consultation with some of the directors. The deposit of the 
 bank-stock as collateral security occurred after the maturity of all of Lillard's lia- 
 bilities, and the bank never relinquished the right ta sue on the notes at any 
 time. 
 
 At the request of the counsel for the bank, the Court charged the jury that the 
 agent or cashier had no authority to bind the bank by any contract that would 
 release parties from their notes. 2. To release an indorser, the engagement 
 must be upon a good consideration and binding, and one that will suspend the 
 remedy. 3. That unless the judgment in Louisiana bound all of Lillard's 
 property, and the contract was ratitied by the plaintilfs, the law is for them. 
 The kind of contract with the principal which will discharge the surety, is well
 
 556 DISCHARGING INDORBER OR DRAWER. 
 
 defined and settled. The efTect of giving time to the principal in a forthcoming 
 bond was considered by this Court in the case of Newell and Pierce v. Hamer, 4 
 IIow. [Miss.] 684. It was decided that a mere voluntary engagement to indulge 
 the principal debtor would not discharge the surety. There must be a positive and 
 binding agreement, based upon some new and valuable consideration, which is 
 sufilcient to tie up the creditor, and prevent him from asserting any remedy dur- 
 ing the time for which the indulgence has been given. The same rule was holden 
 to apply to indorsers of promissory notes. Wade v. Buckner, Stanton, & Co., 5 
 How. [Miss.] Gil. In this last case a bill of exchange had been taken, payable 
 at twelve months, and a receipt given expressing that the note was to be credited 
 with the proceeds of the bill; and this was decided to be insufficient to discharge 
 the indorser. 
 
 Was there any such contract in this case ? The evidence seems to fl^ll far 
 short of establishing any contract whatever that was binding on the plaintiffs be- 
 low for one moment, even assuming that Henderson was authorized to do all that 
 he did do. Lillard states that he executed a note, but he does not state that he 
 did so by request, or with the knowledge of the bank, or that it was ever deliv- 
 ered. His testimony is unsatisfactory. He omits to state any thing of the trans- 
 action which led to the making of the note. He merely says that he made such 
 a note, and that it was then in judgment in Louisiana. Henderson states the 
 transaction in such a manner as to make it intelligible. It was a mere unexe- 
 cuted promise to contract, on the performance of certain conditions. There was 
 nothing in it binding. Lillard had promised to do certain things, and Hender- 
 son promised if they were done in a particular manner, he would deliver up the 
 notes of Lillard. Lillard defeated the proposed settlement by selling his prop- 
 erty. There was no consideration for this agreement ; nor was there in fact any 
 agreement to give time. Lillard does not state that there was, and Henderson 
 states positively that there was not. Try this by the true test. Was there any 
 period of time at which the bank was not at liberty to sue ? There was not. 
 When the proposed arrangement was spoken of, nothing was said about his giv- 
 ing a new note, and if by so doing his indorsers were discharged, then every in- 
 dorser may be discharged in the same way. Lillard seems to have been the only 
 actor in the matter. Even the money raised by the execution was never re- 
 ceived by the bank. 
 
 This subject is also discussed in Bank of Utica v. Ives, 17 Wend. oOL The 
 facts will sufficiently appear in the opinion of the Court, delivered by 
 
 Nelson, C. J. The defence to the action in this case is, that the plaintiffs 
 gave time to the principal debtor, IMorris ; the jury have found in favor of it 
 upon the facts, under correct instructions from the Court. The only question, 
 therefore, presented is, whether the evidence warranted the verdict. Mere in- 
 dulgence at the tcill of the creditor extended to the debtor, in no way impairs 
 the obligation of the surety ; if it did it would be a most inconvenient and op- 
 pressive rule, as then suits must immediatelv follow the maturity of the paper. 
 It is well settled there must be a valid common-law agreement to give time, 
 founded of course upon a good consideration, to have this effect. Was such an 
 agreement proved here ? 
 
 Morris, the maker, called by the defendant, is the only witness ; and if there 
 was an agreement he was a party to it, and in a situation to place the fact beyond
 
 M'LEMORE v. POWELL. 557 
 
 controversy. His interest was balanced, and for aught that appears, he is a man 
 of respectable diaracter. The witness was called \>\ the defendant because he 
 held the aflirmatlve, and must establish the af^reement giving time with reason- 
 able certainty in the first instance. I have looked through the case, and do not 
 find that this witness undertakes to prove any such contract, — not even that it 
 was his purpose to procure one in the several interviews with the cashier of the 
 bank ; and if he is not able to assert the fact, so far as he himself was concerned, 
 it cannot be expected that he could prove one on the part of the bank. The ut- 
 most that he testifies to is, that he solicited indtdtjence to arrani/e hin affairs, and 
 try to relieve his indorsers ; and that he was given to understand this would be ex- 
 tended to him. No time, terms, or conditions upon which it would be granted 
 ■were mentioned, asked for, or agreed upon. It is not pretended by the witness 
 that the indulgence was assented to in consideration of the giving of the judg- 
 ment, or the turning out of the notes and ol)ligations. These are the considera- 
 tions urged, and the only ones tliat can be relied on. If it was thus understood 
 and intended by the parties, the witness could not well have forgotten the facts ; 
 at all events they are not to be presumed when one of the parties is not willing 
 to assert them under oath ; it would be presuming against the recollection of a 
 party to the transaction the most deeply interested in it at the time, and therefore 
 the most likely to remember it. To infer a contract under such circumstances 
 would be not only substituting conjecture for, but against evidence ; as the ina- 
 bility of a witness to testify to the existence of a contract to which he is alleged 
 to have been a party, is something more than mere negative testimony. As the 
 charge, however, was correct, assuming the point to be put to the jury, and there 
 is no exception to the instructions in this respect, the new trial should have been 
 granted by the circuit judge on payment of costs. There was an exception to 
 the application of the doctrine giving time to the case, for reasons given by the 
 counsel ; but none respecting the submission of the question of fact to the jury. 
 
 New trial granted on payment of costs. 
 
 See also Twopenny i\ Young, 3 Barn. & C. 208 ; Ripley v. Greenleaf, 2 
 Vt. 129; Oxford Bank v. Lewis, 8 Pick. 458; Michigan State Bank v. Leav- 
 enworth, 28 Vt. 20y.
 
 558 discharging indorser or drawer. 
 
 Tiernan's Executors v. James Woodruff. 
 
 (5 McLean, 350. Circuit Court of the United States for Michigan, June, 1852.) 
 
 Agreement for delay. Bankruptcy. — A bankrupt maker of a promissory note procured 
 from his creditor two months' time, within which the right to sue on the note was 
 suspended. Tlie agreement was upon a valuable consideration. Ueld, no dis- 
 charge to an indorser. 
 
 Per Curiam.^ This is an action on several promissory notes, 
 given by'Theodore Romeyn to the plaintiff's testator, indorsed by 
 the defendant. The plea sets up in defence that time was given 
 by the plaintiff to Romeyn. To this plea the plaintiff replied, that 
 at and before the alleged time was given, Romeyn was a discharged 
 bankrupt ; that the debt was provable against his estate. Aver- 
 ments were added covering all the exceptions in the statute, 
 under which it is permitted to go behind the certificate. To this 
 replication the defendant demurred. Joinder in demurrer, <fcc. 
 
 On the part of the defendant it is contended, that under the 
 authorities the defendant is discharged. It appears from one of 
 the pleas that he was an accommodation indorser, and this is not 
 denied by the pleadings. 
 
 It appears that after the maturity of the note, the plaintiffs en- 
 tered into a sealed agreement with Romeyn, the maker, without 
 the knowledge or consent of the indorser, and for a good consid- 
 eration ; to wit, a proposal for settlement made by Romeyn, and 
 also of five dollars paid to the plaintiffs, the receipt thereof was 
 acknowledged, the plaintiffs would not, for the space of two months 
 from the date, commence any proceeding in law or in equity or 
 otherwise against the said Romeyn, upon all or either of the four 
 promissory notes therein mentioned, nor sue him^upon the same 
 or either of them, <fec. 
 
 Great care seems to have been taken, in drawing this agreement, 
 to cover the entire ground necessary for the discharge of the in- 
 dorser. It was under seal, for the valuable consideration of five 
 dollars paid, and suspending suit on each of the notes, &c. There 
 is certainly no want of skill shown in drawing this agreement, and 
 no objection can be made to it for want of form or substance. It 
 would serve for a safe precedent in all such cases. 
 
 For the defendant it is argued that the bankruptcy of the prin- 
 
 1 McLean and Wilkins, JJ.
 
 TIERNAN V. WOODRUFF. .5o9 
 
 cipal cannot afTect the (|Uostion of law. That althou^li tlie dis- 
 charge takes away the legal remedy against the l^ankrupt, yet this 
 exists only where he avails himself of his right. It is a mere 
 personal privilege, which no one can set up but himself; and if 
 not set up, judgment may be rendered against him. Also tiiat 
 the moral obligation on tlie debtor to pay still continues, and the 
 cause of action still remains, so that it is not necessary to declare 
 specially on a new i)romise to pay. That the legal effect of our 
 bankrupt act is the same as the English act. The provisions of 
 both acts are substantially the same, and the English decisions are 
 applicable here. A new promise would be Ijinding under the 
 English act. Chitty, Contracts, 190, 191 ; 13 :Mees. k W. 34, 709 ; 
 8 Mass. 128 ; 5 Barb. 369 ; 11 id. 17, 369 ; 28 Me. 550 ; 9 B. Mon. 
 45 ; Cowp. 448. 
 
 Tlie theory of law is, that the surety cannot be prejudiced by 
 such an agreement ; he may be benefited, and yet if time be given 
 to the principal the surety is discharged. The case don't turn 
 upon the fact of inconvenience or injury, but giving time for a 
 valuable consideration is presumed to prejudice the surety. Giving 
 time for a day discharges the surety. 5 Peters, Com. 728 ; 3 
 Wash. 70, 76 ; Paine, 305 ; 7 Hill, 250. 
 
 On the other side it is urged, in the language of the Supreme 
 Court of the United States, 6 How. 283 : " The principle on which 
 sureties are released is not a mere shadow without substance. It 
 is founded upon a restriction of the rights of the sureties, by which 
 they are supposed to be injured." 
 
 The contract for delay to effect the discharge of the indorser 
 must atTect the rights of the indorser, or prejudice him. McLemore 
 V. Powell, 12 Wheat. 554.i 
 
 In King v. Baldwin, 2 Johns. Ch. 559, Chancellor Kent says : 
 " On paying the debt, he (the surety) is entitled to the creditor's 
 place by substitution, and if the creditor, by agreement with the 
 principal debtor, without the surety's consent, has disabled himself 
 from suing when he would otherwise be entitled to sue, under the 
 original contract, or has deprived the surety, on his paying the 
 debt, from having immediate recourse to his principal, the contract 
 is varied to his prejudice, and he is consequently discharged." 
 Bank of United States v. Hatch, 6 Peters, 250 ; 1 McLean, 93. 
 
 Our bankrupt law is different from the bankrupt law of England. 
 
 Ante, p. 651.
 
 560 DISCHARGING INDORSEE OR DRAWER. 
 
 The latter operates by way of persojial exemption from debts 
 provable. 2 Bl. Com. 473 ; 2 Maule & S. 23 ; 2 Com. Dig. 157 ; 
 1 Steph. N. P. 689 ; 1 Barn. & Adol. 54 ; Stat. 37 Eliz. 7 ; 4 & 5 
 Anne, 17 ; 6 Geo. 4, c. 16. But our bankrupt law extinguishes 
 the debt of the bankrupt even against bis indorser. In Mace v. 
 "Wells, 7 How. 275, the Supreme Court say : " The fourth section 
 of the bankrupt law provides that a discharge and certificate, when 
 duly granted, shall, in all courts of justice, be deemed a full and 
 complete discharge of all debts," &c. And under the fifth section, 
 " All creditors, whose debts are not due and payable until a future 
 day, indorsers, &c., shall be permitted to come in and prove such 
 debts or claims under this act," <fec. And a person who neglects so 
 to prove a liability, cannot afterward recover the amount from the 
 bankrupt. So the Court held in the above case. 
 
 In the case before us, Romeyn, the bankrupt, procured from the 
 plaintiffs a suspension of their right to sue for two months. This 
 agreement, being founded on a valuable consideration, was a valid 
 contract. The indorser within that period could not pay the debt, 
 and sue Romeyn. This, in law, prejudiced the rights of the in- 
 dorser. But Romeyn was a bankrupt ; what remedy was there for 
 the indorser against the bankrupt ? There was no remedy but to 
 present his demand against the estate of the bankrupt, before it 
 was due, under the fifth section of the bankrupt law. He has no 
 recourse, at any time, against the bankrupt, if the proceedings 
 were regular under which he was discharged, as alleged in the 
 pleading, and not contradicted. The time given to Romeyn, under 
 these circumstances, by no possible means could have operated to 
 the prejudice of the defendant. The settled rule of law, therefore, 
 as to the effect of giving time to the principal debtor, does not 
 and cannot apply in tins case. After the extension complained of, 
 as well as before it, the indorser could have proved the extent of his 
 liability against the bankrupt's estate, and that was the only rem- 
 edy which, under the circumstances, the law gave him. 
 
 The demurrer to the replication is overruled, and judgment for 
 the plaintiff. 
 
 So though the agreement to give time be upon a valuable consideration, if it 
 was made with a stranger, it will not have the effect to discharge the drawer or 
 indorser. ' Frazer v. Jordan, 8 El. & Bl. 303. In this case the opinion of the 
 Court was pronounced by 
 
 Coleridge, J. This was an action by the indorsee against tlie drawer of a 
 bill of exchange ; and the defendant pleaded that the plaintiff, without the de-
 
 TIERNAN V. WOODRUFF. 5G1 
 
 fendant's consent, had entered into an af^reenient with Messrs. Kerin that they 
 would <^ive time to the acceptor, in consideration of Messrs. Kerin promising 
 that they wouhl see the bill paid. 
 
 The first (juestion for our consideration on the special case stated for our de- 
 cision, was whether the plea was proved. This was a question of fact ; and we 
 intimated our opinion during the argument, that that plea was proved by the 
 facts stated. 
 
 The remaining question on which we took time to consider was, whether a 
 binding agreement for a good consideration with a person who is no party to a 
 bill of exchange, to give time to the acceptor without the consent of the drawer, 
 discharges the drawer. 
 
 It was said, in support of the plea, that the plaintiff had placed himself in such 
 a situation as that he could not sue the acceptor without rendering himself liable 
 to an action for damages. And it was said that the case fell within the doctrine 
 laid down by the Court of Exchequer in the case of Moss v. Ilall, ."> Exch. 46, 
 50, where Parke, B., says: " Whenever a party's hands are effectually tied up 
 so that he cannot break such an engagement without being made liable for a 
 breach of it, the surety is discharged ; the rule being that there must be either a 
 new security given to extend the time, or a binding agreement upon a sufhcient 
 consideration to suspend the remedy." It was said that the case of Ford v. 
 Beech, 11 Q. B. 852 [E. C. L. R. vol. 63], had established that a contract of 
 this nature with the acceptor to suspend proceeding does not constitute a defence 
 to an action, but only gives a cross-action for breach of the agreement to give 
 time, and therefore that the exoneration of the surety in such case does not de- 
 pend on the action against the principal debtor being barred by the agreement ; 
 and that the real reason of the discharge is that the party has subjected himself 
 to an action for suing in breach of the agreement ; and that this extends to the 
 case of a contract with a stranger as well as to one with the principal debtor, as 
 the being liable to an action if he sues the debtor, will render the creditor less 
 likely to sue the debtor in proper time. 
 
 There certainly were authorities from which it has been often supposed that 
 the reason of the discharge of the surety, by an agreement with the princi- 
 pal debtor to give time to him, arose from the right of action against the accept- 
 or being suspended or gone. The doctrine so well established, that a parol 
 agreement on good consideration to give time to a bond debtor does not discharge 
 the bond surety at law, because a parol contract cannot afl'ect a contract under 
 seal, seems founded on this notion ; as does also the doctrine of its being neces- 
 sary that there should be a consideration for the promise to make it binding in 
 point of law, though such consideration would be requisite as well to found an 
 action for damages on the promise, as to raise a defence to the action on the orig- 
 inal cause of action. Since the case of Ford v. Beech, however, we must take it 
 for granted that agreements of this nature operate only to give a cross-action, 
 and do not prevent an action on the original cause of action. 
 
 However the doctrine arose, we must consider it quite settled that an agree- 
 ment for good consideration with the principal debtor, so far ties up tli^ hands of 
 the creditor who has entered into such an agreement, as that the surety is dis- 
 charged ; and we (luite agree with the doctrine of Lord Weiislcydalc, in Moss r. 
 Hall, 5 Exch. 46, that this remains law, notwithstanding the argument which 
 
 36
 
 562 DISCHARGING INDORSEE OR DRAWER. 
 
 appears to have been raised in that case, founded on Ford v. Beech. The surety 
 has a right at any time to go to the creditor and say : " I suspect the principal 
 debtor to be insolvent; I will pay you, and I wish you to sue him." See the 
 observations of Williams, J., in Strong v. Foster, 17 Com. B. 201, 219 [E. C. 
 L. R. vol.84]. If, by a binding agreement with the principal debtor, the creditor 
 has agreed not to sue him for a limited time, it would be a breach of faith of 
 which the principal debtor would have a right to complain, if an action were 
 brouglit against him within the period. And this is held to discharge the surety, 
 although it seems from Ford v. Beech that he could still do so at tlie risk of an 
 action by the principal debtor, on the contract to suspend suing. It is, however, 
 a very different question whether this doctrine is to be extended for the first time 
 to a case of a contract with a stranger, of which the debtor is ignorant, to which 
 he is not privy, and in which the damages to the stranger for breach of contract 
 may be merely nominal. The doctrine contended for would go the length of 
 establishing that, whenever the creditor has placed himself in a position in 
 which it is against his interest to sue the debtor, he has discharged the surety. 
 
 We think that the doctrine ought not to be extended to the case of a contract 
 with a stranger. The principal debtor having given no consideration for the 
 promise, has no ground to complain of the breach of it, and cannot say that 
 faith has been broken with him. There is no privity of contract with him ; and 
 we see nothing on which any right, either at law or in equity (see Lord Ahinga'''s 
 observations in Lyon v. Holt, 5 Mees. & W. 250, 253, 254), for him to insist on 
 such a contract can be founded. The stranger may have some private reason of 
 his own to wish for some indulgence to be shown ; and if he has given a good 
 consideration, may be entitled to damages, nominal, or large or small, according 
 to any legal interest he may have ; but surely he is the only person to take ad- 
 vantage of his contract. 
 
 No such doctrine as that there can be a discharge in such case arising from a 
 contract with a stranger has ever yet been established. In all the text-books 
 which were cited, the rule is laid down as to a binding contract xcith the acceptor 
 or jyrincipal debtor. The case of Moss v. Hall, 5 Exch. 46, on which the princi- 
 pal reliance was placed by the defendant, was the case of a contract with the 
 acceptor ; and it was to such a case that the observations of Lord Wensleydale 
 were addressed ; and the only case in which it has been suggested that a contract 
 with a stranger would be sufficient, is a strong authority against such a doctrine. 
 That was the case of Lyon v. Holt, 5 Mees. & W. 250, which was an action by the 
 indorsee of a bill of exchange, alleged in the declaration to have been drawn by 
 Hobson on Hynes, and indorsed by the drawer to the defendant, and by him to 
 Messrs. Woosters, and by them to the plaintiffs. The defendant pleaded that 
 the indorsement by the defendant was not directly to Woosters, but was an in- 
 dorsement by the defendant to John Holt & Co. (persons other than the de- 
 fendant), and by John Holt & Co. to Woosters, and that there had been an 
 agreement between the plaintiffs and John Holt & Co. to give time to all the 
 parties on the bills in question amongst others, and a giving of time in con- 
 sequence. At the trial, the agreement between the plaintiff and John Holt & 
 Co. to give time to all the parties on the bill, and the giving the time, was 
 proved ; but it was not proved that John Holt & Co. were parties to the bill. A 
 verdict having passed for the defendants, and a rule having been obtained to en-
 
 COUCH V. WARING. 503 
 
 ter a verdict for the plaintiflTs, the question arose whether it was a mati-rial alle- 
 gation that John Holt & Co., the [)ersons witli wlioin the agrieinent was made, 
 were parlies to the liill ; and it was snggested that it was suflicient to show a 
 contract to give time to the acceptor, and that there was nothing in the aiitliori- 
 ties to show that the contract must be U'ith him. Tiie Court, after taking time to 
 consider, held that the plea was not proved, and ordered the verdict to be entered 
 for the plaintiffs. This was a decision that the allegation that the person with 
 ■whom the agreement to give time to prior parties on the bill is made is a party to 
 tlie bill, is a material part of the plea. If, as contended in the present case, a 
 contract with a stranger was suflicient, the plea would have been proved by 
 proof of the contract witii Holt & Co., though they were strangers to the bills. 
 
 This ia a distinct authority in favor of the plaintiffs ; there is no case or doc- 
 trine the other way ; and the text-writers all treat the agreement which is to dis- 
 charge the surety as one made with the principal debtor. 
 
 We are not inclined to extend the rule for the first time to a contract with a 
 stranger; but, for the reasons already stated we think that the plea is bad, and 
 therefore that judgment should Ite entered for the defendant. 
 
 Judgment for the defendant. 
 
 See also, as to agreements for delay. Bank of the United States v. Hatch, 6 
 Peters, 2o0 ; Lenox r. Prout, 3 Wheat. 520 ; Lee v. Levi, 1 Car. & P. 553 ; 
 Price r. Edmunds, 10 Barn. & C. 578; Kennard v. Knott, 4 Man. & G. 474; 
 Bray v. Manson, 8 Mees. & W. 668. 
 
 The last-named case holds that, where time was given to a prior indorser after 
 judgment had been signed in an action upon the same bill of exchange against a 
 subsequent indorser, the Court will not interfere to set aside the judgment on 
 that ground, as the judgment could not be affected by such indulgence given 
 after it was signed. See also Baker v. Flower, 5 Jur. 635. 
 
 Couch v. Waring. 
 
 (9 Connecticut, 261. Supreme Court, June, 1832.) 
 
 Judqment and execution wjainst maker. Indorser sued for balance. — The holder of a prom- 
 issory note sued the maker thereof, and obtained judgment, which was satisfied on 
 execution. He tlien brouglit an action against an indorser to recover a balance 
 of interest due on tiie note, not included in tlie judgment and execution. Held, 
 that tlie ctlect of the former proceedings was to discliarge the maker from further 
 liability, and to preclude the holder from resorting to the indorser. 
 
 The case is sufficiently stated in the head-note. 
 
 BissKLL, J. It has been strongly insisted upon, in the argu- 
 ment of this case, that the judgment and execution otTered in the
 
 564 DISCHARGING INDORSER OR DRAWER. 
 
 Court below, being res inter alios acta;, were admissible only to 
 prove a payment ;vro tanto. To this it may be answered, that the 
 records offered, are evidence of the facts therein contained ; and 
 of the legal consequences which result from those facts. If, 
 therefore, the legal effects of the facts disclosed upon these records 
 be to discharge Waterbury, the maker of the note, it is idle to 
 contend, that the evidence is not available for this purpose, as well 
 as to prove payment. 
 
 What, then, is the legal effect of the facts, appearing upon this 
 record ? This is the qviestion now presented for decision. 
 
 Some principles, regarding bills of exchange and promissory 
 notes, and having a bearing on this case, are too well settled to 
 admit of dispute or doubt. 
 
 There is, for instance, no principle better established, than that 
 a judgment against the maker, discharges none of the subsequent 
 parties to a promissory note. Nor does a mere technical satisfac- 
 tion constitute, for them, any defence ; as where the acceptor of 
 a bill of exchange was charged in execution, and discharged under 
 the lords' act. And where the maker of a promissory note, being 
 taken in execution, was discharged under an insolvent debtor's 
 act, it was holden, that the subsequent parties still remained lia- 
 ble. Chitty . Bills, 161, 362 ; Macdonald v. Bovington, 4 T. R. 825 ; 
 Nadin v. Battle & al., 5 East, 147. 
 
 So also, if the maker become a bankrupt, and the holder prove 
 his debt under the commission, and receive a dividend, this will 
 not prevent him from resorting to the subsequent parties to the 
 note. Nor will he be thus precluded, although he receive part- 
 payment from the maker, or levy a part under a Ji. fa. against 
 him ; for this is for the benefit of all parties. Gould v. Robson 
 & al., 8 East, 576 , 580 ; Walwyn v. St. Quintin, 1 Bos. & Pul. 652 ; 
 Ux parte Wilson, 11 Ves. 411 ; Kenworthy v. Hopkins, 1 Johns. 
 Cas. 107. 
 
 On the other hand it is equally well settled, that if the holder 
 give time to the maker, or take from him any new security pay- 
 able at a future day, without the assent of the other parties to the 
 note, they are thereby discharged from their liability. 
 
 So also, if the holder enter into a composition with the maker, 
 or discharge him, or do any act, the effect of which is to dis- 
 charge him, (as by letting him out of custody upon a ca. sa.^ the 
 subsequent parties to the note are also discharged. Claxtori v.
 
 COUCH V. WARING. 5G5 
 
 Swift, 3 Mod. 87 ; English v. Darley, 2 Bos. & Piil. 61 ; s. c, 3 
 Esp. 49 ; Clark & al v. Devlin, 3 Bos. k Pul. 303 ; Gould v. Rol)- 
 8on, 8 East, 576, 580 ; James v. Badger, 1 Johns. Cas. 131. 
 
 The principles involved in these decisions, are oi)viously 
 these : — 
 
 1. That the holder of a promissory note is entitled to actual 
 payment of it. This right the mere act of the law never takes 
 from him, and so long as he remains passive, or does not act to 
 imi)air this right, he may enforce such payment from any or all 
 the parties liable. But 
 
 2. As the maker of a note is previously liable ; and the indors- 
 ers are in the nature of sureties, for the performance of his act, 
 and have a right to look to him for indemnity ; if the holder do 
 any act, the effect of which is to suspend, or to impair, or to de- 
 stroy that right, he cannot afterwards resort to them. 
 
 Within which of these principles does the case before us fall ? 
 It seems to me to fall clearly within the latter ; and that the 
 maker of this note is for ever discharged, 1)y the acts of the plain- 
 tiff, lie had the entire dominion of the note, upon wliicli he 
 caused the action to be brought. He stated his own demand, 
 prayed out execution, and procured that execution to be satisfied 
 out of the goods and estate of the maker. In this the plaintiff 
 has acted voluntarily. No part of the proceedings were, as to 
 him, in invitum. He was not bound to take judgment for a less 
 sum than was due on the note ; nor was he obliged to enforce that 
 judgment even after it was obtained. He might then have re- 
 sorted to the indorser. He did not choose to do so ; but proceeded 
 to compel the actual payment of his judgment against the 
 maker. 
 
 What is the effect of these acts of the plaintiff ? Is it not to 
 discharge the maker of the note from all liability? That the 
 plaintiff cannot again resort to him, is clear beyond all doubt. 
 This would be to defy all principle and all analogy. 
 
 The debt as to him, is extinguished ; and as against him, the 
 maker has the highest discharge known to the law. He can have 
 no relief even by petition for a new trial. Can he, then, by pro- 
 ceeding against the indorser, authorize him to resort to the maker ? 
 Or, in other words, may he do that indirectly, which he has pre- 
 cluded himself from doing directly ? It has been gravely con- 
 tended that he may. It is said, this action is sustainable, because
 
 566 DISCHARGING INDORSER OR DRAWER. 
 
 the defendant may have his remedy over, against the maker of the 
 note. « 
 
 If the premises were true, the conclusion would, undoubtedly, 
 follow. But they are denied ; and if found to be false, it is 
 admitted that the conclusion must fail. Now I very well know 
 that tliere are cases, in which the holder of a note is precluded 
 from resorting to the maker, and yet may proceed against the sub- 
 sequent parties ; and they, having paid the note, may resort to the 
 maker for their indemnity. As where he is discharged under the 
 lords' act, or under the insolvent debtor's act, or has become bank- 
 rupt, and obtained his certificate., But in all these cases, an act 
 of the law has intervened, and prevented the holder from resort- 
 ing to the drawer of the note, on the ground, that as between 
 them, there is a technical satisfaction. 
 
 But these cases do not go one step towards establishing the 
 principle here contended for. Here the holder has, by his own 
 voluntary acts, precluded himself from resorting to the maker. 
 And is there a case to be found, where this has been done, and 
 the subsequent parties to the note have still been held liable ? Can 
 a debt be extinguished, by the act of its owner, and yet the surety 
 for that debt remain unanswerable ? Upon what principle is it, that 
 where time is given to the maker, the subsequent parties to the 
 note are discharged ? Clearly, upon this principle ; that if pay- 
 ment might be enforced against a subsequent party he would have 
 an immediate right of action against the maker ; and the law will 
 not endure, that the holder may do that indirectly, which he has 
 precluded himself from doing directly. It would be a breach of 
 faith. 
 
 But here the holder has done an act which prevents him from 
 resorting to the maker in all time. He has discharged him. Can 
 he, then, without a violation of all principle, authorize a subse- 
 quent party to the note, to do that which he can never do ? and 
 which he is prevented from doing, not by an act of the law, but 
 by a course of proceedings entirely voluntary on his part ? 
 
 But it has been urged, that the undertaking of the indorser is, 
 that the maker shall pay the entire sum due on the note ; and as 
 only a part has been paid, the indorser is liable. 
 
 If the preceding observations are correct, they furnish a decisive 
 answer to this claim. 
 
 But why was not the whole sum due on the note paid ? The
 
 COUCH V. WARING. 507 
 
 only reason assigned is, tliat the holder saw fit to take jud^nnont 
 for a less sum. And having enforced payment of the judgment, 
 he now resorts to the indorser to recover the balance. And this, 
 it is contended, he has a legal right to do ; that is, tiie holder of a 
 promissory note may so sever and divide an entire contract, as to 
 'sue for and recover distinct portions of it, of each of the parties 
 lia])le. If, for instance, he hold a note of 83000 with two 
 indorsements, he may sue for and recover 81000 of the maker, 
 and SIOOO of each of the indorsers ; and they, in their turn, 
 may have their remedies over against the maker for the sums 
 recovered of them respectively ; so that after having satisfied 
 one judgment, the maker is still liable to two further judg- 
 ments on one and the same undertaking. In what book of 
 authority or upon what ))rinci]jle is this doctrine sanctioned ? 
 
 It has, indeed, been urged, that this is nothing more than what 
 obtains, almost daily, in practice. 
 
 It is said, that the holder of a note may proceed against all the 
 parties to it, may recover judgment against all, and may obtain a 
 partial satisfaction of one party and the residue of another. 
 All this is true. But he can obtain but one satisfaction and his 
 costs. And I have yet to learn, that where a party has rightfully 
 paid a judgment recovered against him, he may be a second time 
 subjected upon the contract, which was the foundation of that 
 judgment. 
 
 In Windham v. Wither, 1 Stra. 516, the plaintiff bronglit two 
 actions on a promissory note ; one against the maker and another 
 against the indorser, and recovered in both. And the principal 
 in one judgment and the costs in both having been tendered, it was 
 moved, that no execution might be taken out, which was ordered 
 accordingly ; and the Court said, they would have laid the plain- 
 tiff by the heels if he had taken out execution upon both. 
 
 I am of opinion that this action cannot be sustained ; and that 
 the rule to show cause must be discharged. 
 
 Tlie other judges were of the same opinion. 
 
 New trial not to he granted. 
 
 See the preceding cases and notes.
 
 568 discharging indorser or drawer. 
 
 Newcomb v. E-aynor and Others. 
 
 (21 Wendell, 108. Supreme Court of New York, May, 1839.) 
 
 Release of first indorser. — If the holder of a promissory note release the first indorser, 
 this discharges the subsequent indorsers. 
 
 Assumpsit against the maker and second and third indorsers of 
 a promissory. Plea by the indorsers that the holder had given a 
 release under seal to the first indorser. Demurrer to the plea. 
 
 Nelson, C. J. I am of opinion the plea constitutes a good bar 
 to the action. As between the first and subsequent indorsers, the 
 former must be regarded in the light oi principal ; he stands 
 behind them upon the paper, and is bound to take it up, in case of 
 default of the maker. A discharge of him, therefore, by the holder 
 (regarding the relative position of the parties), on general princi- 
 ples, operates to release them. 
 
 It is said their rights are not prejudiced, as they may still resort 
 to an action against him if subjected to the payment of the note, 
 as the release leaves the implied contract existing between t\\Q first 
 and subsequent indorsers unimpaired. Conceding this to be so, to 
 permit a recovery against the defendants would but lead to an 
 unnecessary circuity of action. The plea shows a discharge for a 
 presumed good consideration (as it is under seal) of the first 
 indorser, and it cannot be doubted as the case stands, that if the 
 defendants should be obliged to call upon him, the plaintiff would 
 be bound to take his place. The case, therefore, comes within the 
 familiar rule, that a release of the principal operates to discharge 
 the surety. 
 
 It is further said that Goings may. not have been legally charged 
 as an indorser. If this were so, the plaintiff should have replied 
 the fact, as we will not presume it in the face of the acts of both 
 him and the plaintiff to the contrary. The release would not have 
 been necessary on such a supposition. 
 
 'Judgment for defendants on demurrer ; leave to amend on usual 
 terms.
 
 PANNELL V. M'MECHEN. 609 
 
 Pannell v. M'Mechen. 
 
 (•i Harris & Johnson, 474. Court of Appeals of Maryland, June, 1810.) 
 
 Composition ckrd. Jiemidy (ifjctinsi intluisei- resevfed. — A made a negotiable note payalile 
 to 15, wiio indorsed it to C, by wliom it was indorsed to D. A and B made a com- 
 position deed witli tlieir creditors, and conveyed all their estate to trustees, among 
 whom was C, and were discharge<l, with the proviso " that the said release shall 
 not operate in favor of or be construed to release any persons or person wlio may 
 be bound, &c., for A and B, or eitlier of them, or who may have indorsed any note 
 or notes drawn or indorsed by the said A and B, or either of them." Held, that C, 
 who had received due notice of dishonor, was liable to D. 
 
 Api'h.vl from Baltiiuore County Court. Assumpsit on a promis- 
 sory note by the indorsee (the appellant), against the last indorser 
 (the appellee). The declaration contained two counts, one on the 
 note, and one for money lent and advanced. The facts as agreed 
 upon were these : The action is brought upon a promissory note 
 drawn on the twenty-seventh of April, 1813, by John E. Dorsey, 
 for $3000, payable ninety days after date to Walter Dorsey, or 
 order, by him indorsed to the defendant, or order, and by the de- 
 fendant indorsed to the plaintiff, or order. Across the face of the 
 note was written in red ink, " This note, lield by Edward Pannell, 
 at the time of signing the deed of trust from Wm. H. Dorsey and 
 others to Henry Payson and others, forms part of the lien of $G4,o00 
 to W. M'Mechen, mentioned in said deed. John E. Dorsey." 
 
 All the signatures to the note were admitted. Due and legal 
 notice of its non-payment by the drawer was given to the several 
 indorsers ; and the plaintiff was the holder of the note at the time 
 it became due. The above-mentioned writing in red ink was 
 made and signed by John E. Dorsey, and was so made and 
 signed by him in pursuance and in execution of a power vested 
 in him by the deed hereinafter mentioned. A deed of trust 
 was executed by William H. Dorsey and others to Henry Payson 
 and others, on the twenty-third of June, 1813, a copy of which 
 was annexed, and admitted to be a true and correct copy, and that 
 the signature and seal of Edward Pannell, the plaintiff, to the said 
 deed, was his signature, and that he had duly executed tlie deed 
 within the fifty days prescribed therein. No part of the sum 
 specified in the note, and for the recovery of which this action was
 
 570 DISCHARGING INDORSER OR DRAWER. 
 
 brought, had been paid or satisfied to the plaintiff. The question 
 on this statement of facts was, wliether or not the plaintiff was 
 entitled to recover ? The deed referred to was dated the twenty- 
 third of June, 1813, and was between William H. Dorsey, John E. 
 Dorsey, and Walter Dorsey, of the first part, Robert Gilmor, &c., 
 of the second part, Henry Payson, William M'Mechen, &c., of the 
 third part, " and the creditors of the said William H. Dorsey, John 
 E. Dorsey, and Walter Dorsey, who shall sign and seal these 
 presents within fifty days next ensuing the day of the date hereof, 
 and also such other creditors of the said William H. Dorsey as are 
 hereinafter specially provided for (without their signing and seal- 
 ing these presents), of the fourth or other part." The deed then 
 states that sundry tracts of land, &c., thereinafter mentioned, had 
 been mortgaged to Robert Gilmor, &c. ; that William H. Dorsey, 
 (fee, were indebted to sundry persons in divers sums of money, 
 which they were incapable of discharging otherwise than in the 
 manner thereinafter mentioned ; that " in order to discharge the 
 said several debts, they have proposed and agreed to convey, &c., 
 unto the parties of the third part, and the survivors, &c., for the 
 benefit of the parties thereto of the second part, and of such of 
 the said parties of the third part as are creditors, and of the rest 
 of the creditors of the said William H. Dorsey, &c., in the manner 
 and under and subject to the powers, provisos, and conditions 
 hereinafter expressed and declared, all and singular the real and 
 personal estate hereinafter described or mentioned." The said 
 William H. Dorsey, &c., pursuant to the said agreement, and in 
 consideration of the said sums of money so due and owing from 
 them, and in consideration of the sum of one dollar, &c., granted, 
 (fee, to Henry Payson, &c., sundry tracts of land, &c. ; to have 
 and to hold the said lands, &c., unto the said Henry Payson, &c., 
 and the survivors, &c., upon certain trusts, <fec. That certain 
 funds be applied, in the first place, to discharge the debt due to 
 Robert Gilmor, &c. In the second place, one-half, <fcc., to be ap- 
 plied to the payment of 819,000 due and owing by John E. Dorsey 
 for borrowed money, and to extinguish the interest on 864,400, 
 and any indorsements or engagements which shall be admitted by 
 John E. Dorsey within fifty days, over and above that sum, being 
 the admitted lien of the said William M'Mechen on the estate and 
 property, <fec. After stating sundry other things it proceeds as fol- 
 lows : " And such of the parties hereto of the third part, as are
 
 PANNELL V. M'MECHEN. 571 
 
 creditors, and all the parties hereto^ of the fourth part whose 
 names are hereunto sul)scril)ed and seals aflixed, do hereby re- 
 spectively signify and declare their assent to the terms and con- 
 ditions of this deed, and their approbation of tlie jjrovisions hereby 
 made for the satisfaction and discharge of their several and 
 respective debts and claims, and in consideration thereof they do 
 severally and respectively release, acquit, and by these presents 
 for ever discharge, the said William H. Dorsey, John E. Dorsey, 
 and Walter Dorsey, their heirs, etc., and each and every of them, 
 and from the payment of the debts and sums of money due or 
 owing to them, the said creditors, from or by the said William H. 
 Dorsey, John E. Dorsey, and Walter Dorsey, jointly, or from or 
 by any or either of them jointly or individually ; and also from 
 all other claims and demands whatever, from the beginning of the 
 world to the date of these presents. Provided that the said release 
 shall not operate in favor of, or be construed to release any persons 
 or person who may Ijc bound for the said William H. Dorsey, Jolni 
 E. Dorsey, and Walter Dorsey, or any or either of them, or who 
 may have indorsed any notes or note drawn or indorsed by the 
 said William H. Dorsey, John E. Dorsey, and Walter Dorsey, or 
 any or either of them." This deed was signed, sealed, and ac- 
 knowledged by the Dorseys and Gilmor, and by all the parties 
 named therein, and among others by the plaintiff. On these facts 
 the County Court gave judgment for the defendant, and the plain- 
 tiff appealed to this Court. 
 
 Johnson, J. The present is an appeal from a judgment obtained 
 by the appellee on a suit brought against him l)y the appellant, 
 decided on a case stated. [After stating the facts he proceeded.] 
 
 On those facts the plaintilT ought and would have recovered a 
 judgment. The defence relied on is that the plaintiiT, the indorsee, 
 and holder of the note, released the drawer and the first indorser, 
 and thereby discharged the last indorser. 
 
 In forming an opinion in this cause, the nature of the release in 
 question, and the manner and terms on which it was obtained, 
 demand particular attention. The drawer and the first indorser, 
 finding themselves in emliarrassed circumstances, unal)lc to meet 
 their engagements as they became due, propose to compound with 
 their creditors ; and on the twenty-third of June, 1813, executed 
 a deed of trust to certain trustees, of whom the defendant was
 
 572 DISCHARGING INDORSEE OR DRAWER. 
 
 one, of a large real and personal estate, to be by them applied 
 towards the payment of their debts, in the order directed by the 
 deed ; thereby securing, or attempting to secure, to the defendant 
 in this cause, the payment of the notes in question, on the terms 
 that such of their creditors as should come in and assent, by be- 
 coming parties to the deed, should participate and have an interest 
 in the property so conveyed. The deed itself contains a clause by 
 which the drawer and the first indorser arS released, on the express 
 terms that such release should not extend to any other person, but 
 that such person should continue responsible as if the deed had 
 not been executed. To those terms the plaintiff and defendant 
 assented, and signed their names, and set their seals to the instru- 
 ment. 
 
 It is on that release, so obtained, and on such express stipulations, 
 that the defendant, against the express terms of the instrument 
 itself, relies for his exoneration. 
 
 The first question which arises is, ought a release on principle 
 so obtained, with the consent of all parties interested, specify- 
 ing its extent and object, to be extended beyond the stipulated 
 object ? 
 
 The second is, will the law, against the express agreement of all 
 the parties interested, enlarge the release so as to produce a result 
 different from the express stipulations ; in otlier words, to give to 
 the last indorser the benefit of the release against his express 
 agreement ? 
 
 The object of the deed of trust was to give to the creditors of 
 the drawer and first indorser all the benefit they could derive from 
 the property so conveyed, as between them this arrangement was 
 of considerable moment ; without it the second indorser would 
 have had nothing to rely on but the individual responsibility of the 
 drawer and first indorser ; that individual responsibility he was 
 willing to release, on the substitution of the property conveyed on 
 the terms and on the conditions prescribed by the deed. 
 
 It may be asked, why must a release, to which all persons in- 
 terested are parties, have an effect different from that they agreed 
 on ? Will it violate any well-known rule of law, or is it incon- 
 sistent with any principle of justice or propriety ? So far from 
 the latter being the case, the reverse appears to follow ; for as the 
 original debtors were bound to pay the whole, and as they could 
 not, but were willing to transfer, on terms acceptable to all inter-
 
 PANNELL V. M'MECHEN. 573 
 
 ested, what they had, for the easement of those wlio were bound 
 for them, the refusal of liim then holdnig the obligation to accede 
 to sucli terms, would present grounds of complaint ; not such, it 
 is true, as would exonerate those who were bound for them. But 
 although it would not free them, yet it is evident such refusal, in 
 Its result, must draw more from the funds of the last indorser 
 than otherwise would have been the case. With tlie assent of tiie 
 holder of tiic note, a part, if not the whole, might have been raised 
 from tiie funds of the drawer and first indorser. Those funds 
 could not be ol)tained except on their discharge ; that discharge 
 the second indorser was willing to assent to, remaining himself 
 responsible. But, if such discharges cannot be obtained without 
 releasing the last indorser also, then no accommodation for his 
 benefit, requiring the assent of the holder, can ever be ob- 
 tained. 
 
 The question then is, must the release of the drawer and first 
 indorser, by virtue of any fixed principle of law, release also 
 the next indorser, when he is a party to the instrument contain- 
 ing the release, expressly declaring such should not be the effect ? 
 
 In a case of this description, when a person claims tiie benefit 
 of a release against its terms, to which he has assented, it might 
 be expected some decisions in support of the position would have 
 been produced ; none such have been cited. 
 
 The cases relied on are, that a release given to a joint obligor, 
 or to joint and several obligors, will release the other, and that a 
 release to one trespasser, will release the co-trespasser. 
 
 As to tiie case of the joint obligor released, discharging the 
 other, the principle of the decision seems to be, that unless it ex- 
 tended to all, the person to whom the release was given could 
 obtain no benefit l)y it ; and therefore, that a release given to such 
 an obligor, should extend to the co-obligor, although the release 
 on its facts contained a proviso to the contrary. 
 
 The only case which has been produced of such a limited or 
 restricted release is Everard v. ilerne, in Littleton, 100 ; but the 
 counsel differ in opinion as to the real state of that case. The 
 one supposes the bond to have been joint only, the other joint and 
 several. The reason why it is conjectured to have been joint and 
 several is that the suit was brought against one. There is noth- 
 ing in the case from which it is to be inferred the bond was several 
 as well as joint, except only that one was sued. Nor is it deemed 
 of any importance whether joint, or joint and several. But sup-
 
 574 DISCHARGING INDORSER OR DRAWER. 
 
 posing the case in Littleton to have been on a joint and several 
 bond, yet it seems not to meet the case before the Court ; for 
 nothing is disclosed by that case of the assent of the co-obligor to 
 such release producing such an effect. It is presumed that the 
 release in that case was on a joint bond, for if the bond was joint 
 and several, the obligor might have sued one, omitting to sue him 
 he wished to benefit ; a release therefore was not necessary, un- 
 less it was intended, as between the obligors themselves, to change 
 the co-responsibility, and cast the whole burden on him whom the 
 obligor elected to remain liable. But the case in Littleton is 
 the only authority cited with a restrictive release. 
 
 All the other cases of releases are where the releases are gen- 
 eral, importing satisfaction ; and the debt, once satisfied, whether 
 joint, or joint and several, the demand of the obligee was at an 
 end, and of course he could recover from no person — differing 
 materially from a release showing by itself the claim still existed, 
 — differing materially from a case, where, by the facts as agreed on 
 by tlie parties, it is expressly admitted that no part of the money 
 has been paid or satisfied. 
 
 The cases most apposite to the cause before the Court are where 
 4;he holder of a note, or bill, gives time, which would exonerate 
 the drawer or indorser ; but which fact of giving time is deprived 
 of that effect in consequence of the assent of the person who would 
 have been bound, if such time had not been given. The time 
 given is the ground of discharge or exoneration, the assent de- 
 prives the time so given of such an operation. 
 
 Therefore, without saying that a release to a person bound 
 jointly ajid severally, with a proviso attempting to limit its effect, 
 can operate to the discharge of the co-obligors not included in the 
 release, the Court are clearly of the opinion, that the release given 
 in this case cannot discharge the defendant from his responsibility 
 as indorser of the note on which the suit is brought. The judg- 
 ment of the Court is therefore reversed. 
 
 Judgment reversed. 
 
 Sohier v. Loring, G Cusb. 537, was a similar case, except that the indorser 
 sued was not a party to the composition deed. The opinion of the Court was 
 delivered by 
 
 Metcalf, J. The composition made with the acceptors would have discharged 
 the drawers and indorsers, if there had not been inserted in the composition deed 
 a proviso that it should not prejudice the Iiohlers' remedies against any other par- 
 ties besides the acceptors. Bayley, Bills (2d Am. ed.), 357, 358. The first 
 question in the case therefore is, what is the legal effect of that proviso ?
 
 PANNELL V. M'MECHEN. 575 
 
 It is settled in Enj^land that a disdiarge or giving time by a creditor to his 
 principal debtor will not <lischarge the surety, if there be an agreement between 
 the creditor and the principal debtor that the surety shall not be dischargt'd. 
 And this rule of law is applicable to parties to bills of exchange and |)romissory 
 notes, who are liable only on the failure of i>rior parties, though they arc not 
 technically sureties of those parties. 1 Stepli. N. P. 9:50; Montagu, Composi- 
 tion, 36; Burge, Suretyship, 210; Chitty, Bills (10th Am. ed.),4->0; Byles, 
 Bills (2d Am. ed.), 202. See also Mallet v. Thompson, 5 Esp. 178. The 
 same doctrine was advanced by Messrs. Hamilton and Kiker in argument, and 
 was recognized by the Supreme Court of New York in Stewart v. Eden, 2 Caines, 
 121, very soon after it had been laid down by Lord Eldon, in Ex parte Giffonl, 
 6 Ves. 805. In this last case Lord Eldon said sureties would not be discharged 
 by a discharge of the principal, if there was '* a reserve of the remedy " against 
 the surety, and that Lord Thurlow had so admitted in a previous case not re- 
 ported. He afterwards laid down this principle more authoritatively in Boultbee 
 t?. Stubbs, 18 Ves. 20, and Ex jxDte Carstairs, 1 Buck, oGO. In Ex j)artr Glen- 
 dinning, 1 Buck, 517, he said: "If a man by deed agree to give his principal 
 debtor time, and in the deed expressly sti[)ulate for the reservation of all his 
 remedies against other persons, they shall still remain liable, notwithstanding the 
 arrangement between their principal and the creditor." 
 
 In Nichols v. Norris, 3 Barn. & Adol. 41, the Court of King's Bench decided 
 that a composition like that in the present case, made with the indorser of a note 
 given for his accommodation, did not discharge the maker. It was said by the 
 Court that such composition deeds were very common," and that the special pro- 
 viso took the case out of tlie common, rule as to the discharge of sureties bj^ 
 giving time to the principal. 
 
 In 18-46, the case of Kearsley v. Cole, 16 Mees. & W. 128, came before the 
 Court of Exchequer. That was an action for money paid for the defendant, for 
 whom the plaintiff had been surety. The defence was, that the defendant had 
 made an assignment to his creditors, who had covenanted not to sue him. But 
 it appeared that there was a proviso in the deed of assignment, that any creditor 
 might execute it without prejudice to any specific lien or security, or to any 
 claim against any surety, and that this proviso was inserted with the knowledge 
 and consent of the plaintiff. lie was afterwards called on as surety of the de- 
 fendant, and paid the claim. The (piestion was, whether this payment was to 
 the use of the defendant, or was a voluntary payment which gave him no right 
 to reimbursement. The Court held that the plaintiff was entitled to recover, — 
 he not having been discharged from his suretyship by the deed of assignment. 
 The opinion of the Court was given by Mr. Baron Parke, who fully and clearly 
 stated the decisions and the principles upon which they were made as follows : 
 " The question is, what is the effect of a discharge with reserve of remedies con- 
 sented to by the surety ? "We do not mean to intimate any doubt as to the effect 
 of a reserve of remedies without such consent; and the cases are numerous that 
 it prevents the discharge of a surety, which would otherwise be the result of a 
 composition with, or giving time to, a debtor by a binding instrument ; and the 
 reserve of remedies has that effect upon this principle : first, that it rebuts the 
 implication that the surety was meant to be discharged, which is one of the rea- 
 sons why the surety is ordinarily exoneratetl by such a transaction ; and, second-
 
 576 DISCHARGING INDORSER OR. DRAWER. 
 
 ly, that it prgvents the rights of the surety against the debtor being impaired, — 
 the injury to such rights being the other reason ; for the debtor cannot complain 
 if, the instant afterwards, the surety enforces those rights against him ; and his 
 consent tliat the creditor shall have recourse against the surety is, impliedly, a 
 consent that the surety shall have recourse against him. This is the effect of 
 what Lord Eldon says in Ex jiarte Gilford and Boultbee v. Stubbs, as to the re- 
 serve of remedies ; and the general proposition that, with that recourse, the 
 composition or giving time does not discharge the surety, is supported by those 
 and the following cases : Ex iiarte Glendinning : Nichols v. Norris ; Smith v. 
 Winter, 4 Mees. & W. 454, and others. This point must therefore be consid- 
 ered as settled. Some remarks have, indeed, been made by Lord Denman, in 
 the case of Nicholson v. Revill, 4 Adol. & Ellis, 675, on the doctrine of Lord 
 Ehlon, in Ex jxaie GifFord, throwing doubt on its correctness, on the supposition 
 that Lord Eldon had held that a creditor could release one joint and several 
 debtor, and hold another liable by a reserve of remedies ; which would certainly 
 be against the decision in Cheetham v. Ward, 1 Bos. & Pul. 630, unless the in- 
 strument of release could, by reason of the context, be construed to be a cove- 
 nant not to sue, as it was in the case of Solly v. Forbes, 2 Brod. & Bing. 38. 
 But we consider it clear that Lord Eldon meant only to apply the doctrine to cases 
 where there was no release, but a composition or giving time not amounting to a 
 release, which is the present case ; and, with reference to it, the rule laid down by 
 Lord Eldon is not impeached by Lord Denman\'s remarks." And the decision of 
 the Court was that the surety's consent to the creditors' reserve of their remedy 
 against him did not alter the law of the case in favor of the principal. 
 
 These doctrines were incidentally recognized by Mr. Justice Wilde, in Ameri- 
 can Bank v. Baker, 4 Met. 175, and were adopted and applied by the Court of 
 Appeals of Maryland, in Clagett r. Salmon, 5 Gill & J. 314. 
 
 It is very obvious that a principal debtor may gain little or nothing by such 
 a composition as this with his creditor, inasmuch as he is left liable to the like 
 proceedings against him by his sureties, which his creditor might have instituted 
 if no compositioji had been made. But if he pleases to subject himself to that 
 liability by voluntarily executing an agreement which has that effect, there is no 
 legal reason why he should not be held to that agreement. 
 
 On these grounds we are of opinion that the holders of the bills in the pres- 
 ent case were rightly permitted by the master to prove their claims thereon against 
 the drawers and indorsers, — the latter not having been discharged by the com- 
 position made by the former with the acceptors. 
 
 See also Hutchins v. Nichols, 10 Cush. 299 ; Gray v. Brown, 22 Ala. 262 ; 
 Cowper V. Smith, 4 Mees. & W. 519 ; Bruen v. Marquand, 17 Johns. 58. 
 
 Though the acceptor enter into a composition deed with his creditors, the 
 drawer will not be discharged by a release of the acceptor from the holder, if he 
 (the drawer) retain funds of the acceptor for the purpose of meeting the bill. 
 Sargent v. Appleton, 6 Mass. 85. 
 
 An agreement entered into between the holder and the acceptor of a bill dis- 
 honored for non-payment, that the acceptor shall pay to the holder the amount 
 of the bill and no more, discharges the drawer, though his assignees, he being 
 then a bankrupt, are parties to such agreement. De La Torre v. Barclay, 1 
 Stark. 7.
 
 mayiikw v. boyd. 577 
 
 William E. Mayiiew c. William Boyd. 
 
 (5 Maryland, 102. Court of Appeals, Deceiiibor, 1853.) 
 
 Mortf/af/e sinirili/ sold without iitdoiser's asseut. — An indorsement of tlirec notes was made, 
 in consideration of tlie execution of a mortgage at tlie same time by tlie maker to 
 tlie lioider, by tlie terms of wbich tlie mortg.agee was to sell the property only on 
 default of tbe maker to pay tlie notes at tlieir maturity. Wlien the first note was 
 due it was dishonored, but by the assent of all parties a new one was substituted 
 in its place. The mortgagee, after the original, but before the new note or any of 
 the others matured, sold the property with the assent of the mortgagor, but not of 
 the indorser, applied the proceeds to pay the first two notes, and sued the indorser 
 upon the third. Ilild, that the right to sell, which accrued upon the dishonor of the 
 first note, was taken from the mortgagee by the substitution of the new one in its 
 place, and the sale before the maturity of the latter was a violation of the contract 
 between the parties and discharged the indorser. 
 
 General rule. — Any dealings with the principal debtor by the creditor which amount 
 to a departure from the contract by which an indorser is to be bound, and which, 
 by possibility, might materially vary or enlarge the latter's liability without his 
 assent, discharge the indorser. 
 
 Appeal from Baltimore County Court. 
 
 Assumpsit by the appellant, as holder, against the appellee, as 
 indorser, of a promissory note for $900, drawn by one W. B. 
 Pyfer, in favor of one Robert Close, dated October 25, 1848, and 
 payable in one year after date. Plea non-assumpsit. 
 
 Exception. The making, indorsement, and protest of the note, 
 and due notice thereof to the defendant were admitted. Tlie de- 
 fendant tlien offered in evidence a mortgage executed V»y Pyfer, 
 the maker of the note, to Mayhew, the plaintiff, of certain iiouse- 
 hold furniture in a hotel in Baltimore city. This mortgage bears 
 the same date as the note, and recites Pyfer's indebtedness to 
 Mayhew for §2089.23, for which he had given three notes of the 
 same date with the mortgage, one payable to Boyd and the other 
 two to Close, and indorsed by Boyd and Close, one for §900, at 
 one year (being the one in suit), another for §594. Gl, at six 
 months, and the other for 8'")94.G2, at four months. The condition 
 was, that if Pyfer should pay to Mayhew the said sum of §2089.23 
 " according to the tenor and effect of said notes," the mortgage 
 should be void ; otherwi.se, ^layhcNV might sell the mortgaged 
 property, and apply the proceeds to the payment thereof and the 
 
 balance to the mortgagor, 
 
 37
 
 578 DISCHARGING INDORSER OR DRAWER. 
 
 When the note for 1594.62, at four months, became due it was 
 protested, and due notice given to the indorsers ; and shortly after- 
 wards another note for $614.39, dated eighth of March, 1849, was 
 made by Pyfcr, payable at forty days, to Close, and indorsed by 
 him and Boyd, by way of renewal of the protested note, including 
 the principal, interest, and costs of protest of the original note, and 
 the interest for the time tlie new note had to run, which was de- 
 livered by Close to Mayhew, who thereupon delivered to him the 
 said original note. It was further in proof, that on the eighth of 
 April, 1849, after the original, but before the new note or either of 
 the others mentioned in the mortgage became due, by the consent 
 of the mortgagor and the authority of the mortgagee, the mort- 
 gaged property was sold and the proceeds paid over to Mayhew, 
 who applied them to the notes as they fell due. The fund was 
 more than sufficient to pay the two first falling due, which were 
 not demanded of Pyfer nor protested, nor any notice given to the 
 indorsers of their payment or non-payment. The sale was fairly 
 made ; and it was proved that Pyfer's house was well furnished in 
 the summer of 1849. and that he went to California in June, 1849, 
 taking with him property or merchandise to the amount of $400 or 
 •1500, and died there in 1850. It was further proved, that Close 
 and Boyd indorsed said notes at the request of Pyfer ; and when 
 they called on Mayhew and proposed to become indorsers on said 
 notes mentioned in the mortgage, it was understood and agreed 
 that Pyfer would execute said mortgage. Upon the whole evidence 
 the plaintiff offered three prayers, in substance as follows : — 
 
 1. This prayer, after leaving to the jury to find the sale of the 
 mortgaged property by the mutual consent of Pyfer and Mayhew, 
 and payment over of the proceeds to the latter by the former on 
 account of the indebtedness mentioned in the mortgage before the 
 notes for $614.39 and $594.61 became due, asserts Mayhew's right 
 to apply the same to pay said notes without any demand on Pyfer 
 or giving any notice to the indorsers of their payment or non-pay- 
 ment ; provided the first was a renewal of one of the original notes 
 which was not otherwise paid, and that he was not bound to credit 
 the note in suit with any more of said proceeds than may remain 
 after paying those two. 
 
 2. This prayer leaves to the jury to find the making, indorse- 
 ment, and protest of the note in suit, that Mayhew fairly applied 
 the proceeds of sale to pay the notes secured by the mortgage, that
 
 MAYHEW V. BOYD. 579 
 
 the sale was fair and with the consent of the mortgagor, and such 
 application left only a balance of the last note due (the one sued 
 on), and then asserts that May hew was under no legal obligation 
 to protest the two former notes in order to hold Boyd lial)le on the 
 one in suit. 
 
 3. This asserts tliat if the jury find that no actual loss or dam- 
 age was sustained by Boyd from the sale of the mortgaged property 
 and application of the proceeds as above stated, then the facts of 
 the sale being made before the time limited for it in the mortgage 
 and without the consent of Boyd, are not sufficient of themselves 
 entirely to l)ar the plaintiff's right to recover in this action. 
 
 The defendant then asked an instruction, that if the jury find 
 the maiving and indorsement by Close and Boyd of the notes as 
 mentioned in tlie mortgage ; that Pyfer executed said mortgage to 
 secure their payment ; that the note for !r5")04.(j2 was paid and 
 settled by another for -^614.39, drawn by Pyfer and indorsed by 
 Close and Boyd ; that Mayhew, before said notes or either of 
 tliem became due, sold the mortgaged property without the consent 
 of Close and Boyd or either of them ; tiiat the notes for §014.39 
 and •$594.61 were not protested for non-payment, and Close and 
 Boyd did not receive, and Mayhew made no effort to give them, 
 any notice of their non-payment ; that Pyfer, at the time the two 
 last-mentioned notes became due, was in such circumstances that 
 Close and Boyd could or might have recovered their amount from 
 him ; that the proceeds of said sale amounted to more than the 
 note sued on with interest and were received by Mayhew, then he 
 is not entitled to recover. 
 
 The Court (^Frick, C. J. and Lc Grand, A. J.) rejected the 
 plaintiff's prayers and granted that of the defendant. To this 
 ruling the plaintiff excepted, and the verdict and judgment being 
 against him appealed. 
 
 Mason, J. The record in this case shows that the indorsement 
 by the defendant of Pyfer's notes to the plaintiff was I)ased ujwn the 
 security afforded by tiie mortgage, and therefore the mortgage may 
 be regarded as the consideration of the agreement into which the 
 surety entered when he consented to indorse the notes. Tiio terms 
 of the mortgage, therefore, nuist be strictly complied with by the 
 plaintiff in order to bind the defendant as indorser. One of those 
 terms is, there shall be no sale of the mortgaged property until
 
 580 DISCHARGING INDORSEE OR DRAWER. 
 
 default of the principal debtor to pay the notes upon their maturity. 
 We tiiink this part of the contract between the several parties 
 thereto has been departed from in the sale which has taken place, 
 under the circumstances detailed in the evidence. This sale took 
 place before the maturity and dishonor of the notes in question, 
 and without the assent, and, for all we know, without the knowl- 
 edge, of the indorsers. It is true the first of the original notes had 
 fallen due and was dishonored, but it is equally true, by the assent 
 of all parties, another note was substituted in the place of it, which 
 thereby took from the plaintiff his right to sell under the mortgage 
 for the non-payment of that note : the effect of the substitution 
 of the one note for the other was to place the new note in the same 
 relation to the mortgage that the first one had borne. Before 
 these notes became due, as we have already shown, the sale took 
 place. 
 
 But it may be said, that although this might have been a depart- 
 ure from the strict letter of the contract between the parties, yet 
 it cannot be shown that the indorsers were prejudiced thereby or 
 their liability enlarged. Whether this was or was not the result 
 of the premature sale, does not vary the question. Any dealings 
 with the principal debtor by the creditor which amounts to a de- 
 parture from the contract by which a surety is to be bound, and 
 which by possibility might materially vary or enlarge the latter's 
 liabilities Avithout his assent, operates as a discharge of the surety. 
 In this case it is not improbable, much less impossible, that if the 
 plaintiff had duly protested the first two notes as they fell due and 
 were dishonored, the indorsers, or one of them, might have paid 
 them off, and by immediately suing the debtor thereon, might have 
 secured the debt and thereby reserved the whole of the mortgaged 
 property in the hands of the plaintiff for the purpose of meeting 
 the third and last note upon its maturity. The sale of the mort- 
 gaged goods, under the circumstances under which it took place, 
 deprived the indorser of the opportunity of pursuing tlie course we 
 have pointed out, and of the chances, at least, of relieving himself 
 from liability altogether. 
 
 Believing that the sale of the property under the circumstances 
 was a violation of the terms of the contract with the indorsers, by 
 which their rights might have been prejudiced, they are thereby 
 discharged. 
 
 Judgment affirmed.
 
 farmers' and mechanics' bank v. rathhone. 581 
 
 Farmers' and ^Iechanics' Bank v. Henry Uathbone. 
 
 (26 Vcrinoiit, li). Supreme Court, , 185-J.) 
 
 Distinction betiveen bill for value and accommodation bill. — If a bill of exchange be drawn 
 and accepted at a time wlien the drawer has an open account witli the accept(jr, for 
 goods which he is in the course of sending to the acceptor for sale, and it appear to 
 have been the understanding of tlie parties, at the time, that the bill was to be paid 
 by the acceptor, and its amount be entered in the general account, it will be treated 
 as a bill drawn for value, imposing upon the acceptor the primary obligation to pay 
 it, and cannot be held an accommodation bill ; and its legal character, in this*espect, 
 will not be affected by any alteration of the balance of the account, nor by the fact, 
 afterwards ascertained, that the drawer was indebted to the acceptor at the time of 
 the acceptance. 
 
 The release of the drawer, in sucli case, by the holder, will not discharge the acceptor, 
 but will be treated as a reUnquishment, merely, by tlie holder, ot so much secu- 
 rity wiiich he had for the payment of the debt. 
 
 Accommodation paper. Release ofdraicer. — An indorsee, for value, of a bill of exchange, 
 who became such before its maturity, and in ignorance that it was given for accom- 
 modation, has a right to treat all parties thereon as liable to him according to their 
 relative positions on the bill, and to regard the acceptor as the principal debtor, and 
 the liability of the drawer as collateral ; and this right is unaffected by any subse- 
 quently acquired knowledge, that the bill was given for accommodation. In such 
 case a release of the drawer, by the holder, has no efTect on the ultimate liability 
 of the acceptor. And in this respect the rule is the same m equity as at law. 
 
 Assumpsit on two bills of exchange for $600 each. The declara- 
 tion contained two counts ; the first count was as follows : — 
 
 " The defendant is attached to answer to the ])laintifTs in a plea 
 of the case for that one Caleb E. Barton heretofore, to wit, on the 
 fifth day of October, a.d. 1844, at Charlotte, in said county of 
 Chittenden, according to the custom and usage of merchants from 
 time immemorial, used and approved of within this State, made 
 his certain bill of exchange in writing, bearing date the day and 
 year last aforesaid, and directed the said bill of exchange to the 
 said defendant, at number thirty-five. Water Street, New York, 
 and thcrel)y, then and there requested the said defendant thirty 
 days after the date thereof, to pay to the order of one Samuel H. 
 Barnes, the sum of six hundred dollars, for value received, and 
 then and there delivered said bill of exchange to the said Samuel 
 H. Barnes, which said bill of exchange the said defendant after- 
 wards, to wit, on the day and year last aforesaid, ui)on sight there-
 
 582 DISCHARGING INDORSER OR DRAWER. 
 
 of accepted according to the usage and custom of merchants. 
 And the said Barnes to whose order the payment of the said sum 
 of money in said bill of exchange specified was to be made, after 
 the making of said bill of exchange, and before the payment of 
 said sum of money, to wit, on the day and year aforesaid, at the 
 place last aforesaid, according to the said custom and usage of 
 merchants, indorsed said bill of exchange, and then and there 
 ordered* and appointed the said sum of money in the same speci- 
 fied to be ])aid to the said plaintiffs, and then and there delivered 
 the said bill of exchange so indorsed as aforesaid to the said plain- 
 tiffs, and the said plaintiffs aver that afterwards and when said 
 bill oS exchange became due and payable according to the tenor 
 and effect thereof, to wit, on the seventh day of November, a.d. 
 1844, to wit, at number thirty-five, Water Street, in the city of 
 New York, in the State of New York, one of the United States of 
 America, that is to say, at Charlotte, aforesaid, the said bill of ex- 
 change was duly presented and shown for payment thereof to a 
 clerk in the store of the acceptor, according to the said custom 
 and usage of merchants, and payment of the said sum of money 
 in said bill of exchange specified, was then and there duly re- 
 quired, but that neitlier the said defendant nor any person or 
 persons on behalf of said defendant, did or would when the said 
 bill of exchange was so presented and shown for payment thereof, 
 as aforesaid, or at any time before or afterwards pay the said sum 
 of money therein specified, or any part thereof, but then and there 
 wholly neglected and refused so to do, of all which said premises 
 said defendant afterwards, to wit, on the day and year last afore- 
 said, had notice, by means whereof according to said usage of 
 merchants, he, the said defendant, then and there became liable to 
 pay to said plaintiffs said sum of money in said bill of exchange 
 mentioned, when he should be thereunto afterwards requested ; 
 and being so liable, he, the said defendant, in consideration thereof 
 afterwards, to wit, on the day and year last aforesaid, at the place 
 aforesaid undertook and then and there faithfully promised the 
 plaintiffs to pay them tlie said sum of money, in said bill of 
 exchange specified, when he should be thereunto afterwards re- 
 quested." 
 
 The second count was for another bill of exchange for a like 
 sum, of which the following is a copy : —
 
 farmers' and mechanics' bank v. rathbone. 583 
 
 " $600. Charloti'e, Vt., 2otli Oct., 1844. 
 
 " Tliirty days after date please pay to the order of Samuel IT. 
 Barnes, six hundred dollars value received and charge to account 
 of Yours, (fee. Caleb E. Barton, 
 
 Charlotte, Vt. 
 " To Mr. Henry Rathbone, 
 
 35 Water Street, New York." 
 And indorsed by the said Barnes, and accepted by the defendant. 
 
 The case was tried March term, 1852, — Pierj}oi7it, J., prcRidrngr 
 Plea, the general issue and trial by tiie Court. 
 
 On the trial, the plaintiffs proved the drawing and indorsing of 
 the bills declared upon, and their acceptance by defendants as 
 averred, and that they were regularly discounted by them before 
 their maturity ; that the same were duly protested for non-pay- 
 ment, and due notice given to charge the drawer and indorser. 
 It appeared that no payments had been made upon them other 
 than what appear in statement, marked " B," which was as fol- 
 lows : — 
 
 Draft due Nov. 7, 1844 $600 OO 
 
 Protest, &c 1 75 
 
 Interest to July 10, 1846 70 52 
 
 Draft due Nov. 27, 1844 600 00 
 
 Expense 1 75 
 
 Interest to July 10, 1846 68 19 
 
 $1342 21 
 July 10, 1846, Cash 612 00 
 
 $730 21 
 Interest to March 17, 1848 86 28 
 
 $816 49 
 March 17, 1848, Cash 500 00 
 
 $316 49 
 
 It appeared from the depositions, of one Ferguson, and Curtis 
 Rathbone, introduced by defendant, that prior, and up to the ac- 
 ceptance of the drafts, Barton, the drawer, being in Charlotte, in 
 this State, had been in the liabit of consigning cheese to the de-^
 
 584 DISCHARGING INDORSER OR DRAWER. 
 
 fentlant at New York, for sale on commission and of drawing on 
 the defendant for the proceeds, and that the latter was in the habit 
 of accepting the drafts. That the bills in suit were so drawn and 
 accepted, the defendant believing, when the last-mentioned bills 
 were accepted, he had enough of Barton's property to meet them ; 
 but that at their maturity Barton was indebted to defendant on 
 account • apart from the bills in suit, and the latter had no 
 property or funds in his hands of the former wherewith to meet 
 them. 
 
 That the bills in suit are those charged October 11th and 30th, 
 1844, in the defendant's account appended to the deposition of 
 Ferguson, and were respectively accepted at those dates, and were 
 charged over to Barton iii the same manner in which the other 
 acceptances were in the said account. The defendant also intro- 
 duced in evidence the following instrument : — 
 
 "In consideration of five hundred dollars, to the Farmers' and 
 Mechanics' Bank, paid by Caleb E. Barton, of Charlotte, the said 
 bank hereby wholly release and discharge the said Barton from all 
 liability or indebtedness to said bank, which said bank have or 
 may claim to have for, or on account of, any and all notes, checks, 
 drafts, or bills of exchange or acceptances to which Henry Rath- 
 bone is in any wise a party, either as maker, drawer, indorser, or 
 acceptor, or payee, or drawee, and also from all liability on any 
 paper which has been sued against said Barton, in favor of said 
 bank or any other paper said bank may have against Barton, pre- 
 vious to the seventeenth of March instant, which said Rathbone 
 was or is any wise a party to. 
 
 " In witness whereof we have hereunto afhxed the seal of said 
 Bank, at Burlington, this thirtieth day of March, a. d. 1848. 
 
 (Signed) " Farmers' and Mechanics' Bank. [l. s.] 
 
 " By John Peck, Pres't " 
 
 The defendant also proved, that plaintiff's cashier impressed 
 their seal thereon, and subsequently delivered the instrument to 
 Barton's attorney, and that the plaintiffs were then as much in the 
 habit of sealing instruments by impressing their seal upon the 
 paper, as by sealing in any other way. 
 
 That July 10, 184G, Barton paid plaintiffs the six hundred and 
 twelve dollars entered in the above statement '' B," when they 
 discharged a mortgage, which they held against him as drawer ; 
 and that he supposed he was thereby discharged from any further
 
 farmers' and mechanics' bank v. RATHBON'E. 585 
 
 liability on the bills ; but tiiat the jilaintifTs understood that he 
 was not. Afterwards plaintiffs sued JJarton, as drawer, and after 
 suit and on March 17, 1848, rather than stand trial he paid five 
 lunidrcd dullars on the hills, the same entered in statement " B," 
 with the understanding that he was to be discharged as drawer; 
 but there was no other agreement to discharge him than what ap- 
 pears in said instrument, which was executed in pursuance of such 
 understanding, and in consequence of the last payment, which sum 
 last paid is the same mentioned in said instrument. 
 
 That on making said payment, the suit against him was with- 
 drawn. The signature to the instrument was admitted to be that 
 of John Peck's, then president of plaintiffs. The defendant also 
 introduced the affidavit of his attorney, Ashbel Peck, filed in the 
 cause, on a motion for continuance, March 2o, 1847, in which affi- 
 davit Mr. Peck testified that he " made arrangements with the 
 defendant, to take the testimony of his book-keeper in New York 
 (defendant's brother), to show that the drafts in suit are accom- 
 modation drafts, as between defendant and the drawer, Caleb E. 
 Barton, and that defendant had overpaid said Barton, exclusive 
 of the drafts in suit, and that defendant was to go to New York, 
 and expected to go in a few days, and write me the time and place 
 and person before whom he would take the testimony. I was 
 then to give notice to plaintiffs, and have the testimony taken in 
 in season for this term, &c." But there was no proof, that the 
 plaintiffs, previous to the execution of the release to Barton, had 
 notice of the contents of the affidavit, excei)t so far as it was 
 known to their prosecuting attorneys in this suit, to whom the 
 same was actually known at the time of its filing. 
 
 It appeared that the plaintiffs discounted the bills to Barton, 
 under his representations and iu the belief that they were drawn 
 on cheese consigned to the defendant, and supposed that the de- 
 fendant had in his hands property or funds of Barton sufficient to 
 meet them when they were discounted and accepted ; and that 
 plaintiffs never had any knowledge to the contrary, except so far 
 as they were informed of the same by said affidavit and by the 
 appearing at the taking of said depositions. It also appeared that 
 there was no evidence tending to show that the defendant had any 
 knowledge of, or consented to, the release of Barton previous to 
 its execution. 
 
 Tiie plaintiffs claimed judgment for the balance of said bills
 
 586 DISCHARGING INDORSER OR DRAWER. 
 
 unpaid, upon these facts and the evidence referred to. The 
 County Court rendered judgment for the defendant. 
 
 Exceptions hy plaintiffs. 
 
 IsHAM, J. This action is brought on two bills of exchange, 
 drawn by Caleb E. Barton on the defendant, Henry Rathbone, of 
 the city of New York ; both of which were duly accepted, and 
 before maturity, were discounted, and transferred by indorsement 
 to tlie plaintiffs. When the bills matured, they were dishonored, 
 duly protested, and notice thereof given to the drawer. 
 
 On the trial of the case, at the circuit, the defendant insisted, 
 that the bills were accommodation bills ; and, upon the facts stated 
 in the bill of exceptions, he now insists, that the bills are of that 
 character, that the drawer is the person primarily liable, that the 
 acceptor stands as his surety, and that the release of the drawer, 
 by the plaintiffs, operates as a discharge of the defendant, as ac- 
 ceptor. It is admitted, that if these bills are not accommodation 
 bills, but are really bills for value, the release will not affect the 
 liability of the acceptor. It will discharge all persons interme- 
 diate between the holders and drawer, but not those prior on the 
 bills, nor those on whom rests a primary or absolute liability 
 to pay them. English v. Derby, 2 B. & P. 61; Bailey, J., in Cla- 
 ridge v. Dalton, 4 Moore & S. 226 . Chitty, Bills, 451. 
 
 We are not satisfied that these bills are to be treated as accom- 
 modation papers. It is true the fact is found in the case, " that at 
 the maturity of the bills, the drawer was indebted to the acceptor 
 on account, apart from the bills in suit, and that the latter had no 
 funds in his hands of the former, wherewith to meet them." But, 
 in connection with this statement, it equally appears from the ex- 
 ceptions, that during the season of 1844, the drawer, at different 
 times, consigned to the defendant as commission merchant, for sale 
 on his account, a quantity of cheese, the gross proceeds of which 
 amounted to $7848.78 ; and from the statement in the account of 
 sales, we perceive that a much larger amount than the sum of 
 these bills was realized therefrom, after these acceptances were 
 given. The account arising from the sale of this property, com- 
 menced in July, 1844, and closed in November of that year. 
 There has been no statement of that account rendered, or balance 
 ascertained by the parties. As between them, tlie whole account 
 remains open and subject to their future liquidation. While this
 
 farmers' and MECFIANICS' bank v. RATIIBONE. 587 
 
 account was accruiii<r, these bills were drawn and accepted, oljvi- 
 oiisly and with the understanding that they w6re to be paid by the 
 defendant, and the amount so paid be entered into their general 
 account. 
 
 During that period, they doul)tless anticipated, that the balance 
 would be sufficient to pay these bills, and have been respectively 
 disappointed in the amount finally realized therefrom ; so that 
 there is now a balance due the acceptor, as stated in the account 
 of sales. But as these l)ills, at first, were drawn upon projjcrty 
 consigned to the accej)tor, and he accepted them with the same 
 means of knowledge whicii the drawer had, and thereby assumed 
 the primary obligation to pay them, there is no propriety in treat- 
 ing the bills otherwise than as creating obligations of that char- 
 acter, after they have passed, in due course of business, into the 
 hands of an indorsee. In so treating them, we are manifestly 
 carrying into eflfect the mutual intention of the parties when the 
 bills were drawn and accepted ; for it is distinctly stated in the case 
 that both the drawer and the drawee supposed and believed that 
 there were funds sufificient in the hands of the drawee to pay them 
 at maturity, and under that belief the drawer made such represent- 
 ations to the i)laintiffs, at the time of their indorsement and 
 discount. 
 
 The legal effect and cliaracter of bills of exchange, so drawn- 
 and accepted, is not changed, or affected, by any alteration of the 
 balance of the account, nor even by the fact if it should be after- 
 wards ascertained, that there was an indebtedness, at the time of 
 the acceptance, from the drawer to the acce])tor. This principle is 
 fully illustrated by the case of Bagnall v. Andrews, 7 Bing. 217. 
 Indeed, the facts in that case, and the principles there established, 
 have such a direct application to this case, that we cannot consider 
 these bills otherwise than as bills for value, without entirely disre- 
 garding the authority and principles of that decision. In that case 
 when the bill was drawn, the drawer had an open account with the 
 acceptor, for goods which he was in the course of sending to him 
 for sale ; neither of them at that time knew the state of the ac- 
 count ; " and it afterwards turned out, that the drawer was, at 
 the time of the acceptance, indebted to the acceptor, instead of 
 the acceptor being indebted to the drawer." Before the bill be- 
 came due, tiie drawer became bankrupt, and indorsed the bill to 
 the plaintiff, who was ignorant that an act of bankruptcy had been
 
 588 DISCHARGING INDORSEE OR DRAWER. 
 
 committed. The drawer being called as a witness, was objected to 
 as being interested, on the ground that this was an accommodation 
 bill, and that if the plaintiff recovered, he would be responsible to 
 the defendant, not only for the amount of the bill, but for the costs 
 of that suit. Tindal, C. J., after remarking that such conse- 
 quences would follow, if this was an accommodation bill, and that 
 the witness would be incompetent, observed, that " we think, upon 
 the facts in the case, the bill was not an accommodation bill. At the 
 time it was drawn, the drawer had an open account with the de- 
 fendant for goods sent, and which he was then in the course of 
 sending to him for sale. The drawer might, at that time, reason- 
 ably expect, that the acceptor would pay the bill out of funds that 
 might be in his hands, when the bill arrived at maturity ; for the 
 evidence is express, that, at the time the bill was drawn, neither 
 the drawer or acceptor knew the state of the account. A bill so 
 drawn and accepted cannot be treated as an accommodation bill, 
 nor, consequently, is there any implied obligation, on the part of 
 the drawer, to indemnify tlie acceptor against the costs of any 
 action which may be brought against him." 1 Phil. Evid. 61 ; 9 
 Serg. & Rawle, 237. 
 
 If that case is to be treated as sound in principle, it makes a 
 final disposition of the case under consideration ; for under that 
 authority, these bills cannot be considered as accommodation bills, 
 but must be treated as bills for value ; the acceptor being the party 
 primarily liable, and the drawer considered only as his surety, or 
 guarantor. In such case it was properly remarked, that the re- 
 lease of the drawer was a relinquishment merely of so much 
 security, which the plaintiffs had for the payment of the debt, and 
 which in no event can affect the liability of the acceptor. 
 
 It is very evident, also, that the plaintiffs could have sustained 
 no action against the drawer of these bills, unless they had been 
 duly protested and notice given. This principle is founded on the 
 consideration, that a primary liability for their payment rests only 
 upon the acceptor ; while that of the drawer is contingent and 
 collateral, and arises upon the default of the acceptor. The neces- 
 sity of protest and notice, in such cases, is not avoided by a fluc- 
 tuating balance in their accounts, nor even by the fact, where there 
 exists an open account, that there is an indebtedness from the 
 drawer to the acceptor. Orr v. Magenuis, 7 East, 359 ; Blackhaw 
 V. Doren, 2 Camp. 503 ; In re Brown, 2 Story's C. C. 502, 521 ;
 
 farmers' and mechanics' bank v. rathrone. 589 
 
 Story, Bills, § 811 ; 2 Smith's Lead. Cas. 20 ; Smith's Merc. Law, 
 31o; ];■> Fetors, 303. 
 
 But if these bills are to be regarded strictly as accommodation 
 bills, the same result, we think, must follow. In such case, it is 
 insisted, that the drawer is the person primarily liable ; that the 
 acceptor is to be treated as his surety, and that the holder of the 
 bills is bound so to regard and deal with them, notwithstanding 
 the terms of the bill, whenever he has notice, tliat the acceptance 
 was for accommodation ; whether that notice was received at the 
 time he took the bills, or at any subsequent period. 
 
 It is jiroper to ol)servc, that this question does not now arise be- 
 tween the drawer and acceptor ; as between tlicm the consideration 
 may be inquired into and the true relation of the parties shown ; 
 but the question is presented in a case between the acceptor and 
 an indorsee for value, without notice, that the bill was for accom- 
 modation at the time he became the holder. When these bills 
 were received by the plaintiffs, they were invested with those legal 
 rights, and became subject only to those duties that arose from 
 what appeared on the face of the bills. Their legal effect and the 
 relative liability of the drawer and acceptor could not be changed 
 or altered by any fact not then appearing. 
 
 These principles have a peculiar application to bills of exchange, 
 as they are designed for commercial purposes ; and their applica- 
 tion is required to impart to them that credit and currency which 
 is necessary to insure the purposes for which they were intended. 
 At the time the plaintiffs became indorsees they had the right, on 
 the one hand, and were bound, on the other, both at law and in 
 equity, to regard the acceptor as primarily liable, and the drawer 
 as his surety ; they could have released, compounded with, or 
 given time to the drawer, without in any way affecting their right 
 to hold the ultimate liability of the acceptor. Story, Bills, ^ 420, 
 430 ; 15 Peters, 303 ; 1 Mees. & W. 374. Such being their right 
 at the time they became the holders of the bills, there is no pro- 
 priety or authority in saying, that that right can be subsequently 
 changed, or affected, by a mere notice from the acceptor to the 
 holder, that the drawer had neglected to provide funds for the pay- 
 ment of the bills ; or by any act of the drawer and acceptor, to 
 which the plaintiffs were not a party, and to which they have never 
 given their assent. Theob. on Pr. <k Sur. 216. 
 
 The plaintiffs, as holders of these bills, were not subject to any
 
 590 DISCHARGING INDORSEE OR DRAWER. 
 
 of the equities existing between the original parties, and without 
 their assent those equities cannot be imposed upon them. The 
 case of Mallet v. Thompson, 5 Esp. 178, was an action by an in- 
 dorsee against the maker of an accommodation note for the payee. 
 The holder received part-payment, under a composition, from the 
 payee, and covenanted not to sue him, which is a virtual release, 
 knowing wlien he received the bill, that it was given for accommo- 
 dation. Lord Ellenborough ruled, that the maker was liable, not- 
 withstanding the payment and release ; for his liability on the face 
 of the note was primary and principal, and that of the indorsers 
 was collateral and secondary ; and whatever may be their liabilities 
 between themselves, such was their liability to the holder. It 
 was also held that the release would have no effect between the 
 maker and payee ; for whatever the maker was compelled to pay 
 he might call upon the payee to repay ; the release in no way dis- 
 turbed their relations. On the application of the same rule to 
 this case, whatever the acceptor may be compelled to pay, he can 
 call upon the drawer to repay, notwithstanding the release ; for 
 their relations are not disturbed by its execution. It is evident, 
 also, in this case, from the release itself, that a discharge of the 
 bill was not intended by the parties, but simply a release of the 
 drawer, by the holders, from any farther claim which they had 
 personally on him, leaving the holders to pursue their remedy 
 against the acceptor, as the party primarily liable. Story, Prom- 
 issory Notes, § 423. 
 
 In the case of Laxtou v. Peat, 2 Camp. 185, and CoUott v. 
 Haigh, 3 Camp. 281, a different doctrine was applied to accom- 
 modation bills, where the holder, at the time he received the bills, 
 knew that they were for the accommodation of the drawer. Lord 
 Ellenborough remarked, " that as it was an accommodation bill, of 
 which all parties had notice, the acceptor can only be considered 
 as a surety for the drawer ; " and the acceptor was discharged by 
 time being given tlie drawer. If these cases can be sustained on 
 principle, they have no application to this case ; for it may be 
 said with more propriety, that if one take a bill of excliange, 
 knowing at the time that it was for accommodation, he thereby 
 assents to receive and hold it subject to that equity of the parties ; 
 while no sucli suggestions can be made in this case, as tliese 
 plaintiffs had no such notice, when the bills were received and 
 discounted.
 
 farmers' and mechanics' bank v. rathbone. 591 
 
 The doctrine of those two cases was, liowever, sul)scquently 
 shaken by Justice Gibbs, in Kcrrisoa v. Cooke, 3 Camp. ot;2, and 
 was afterwards overruled in the Common Pleas, in the case of 
 Fentuni v. Pocock, o Taunt. 192, in which Mansjie/d, C. J., ob- 
 served " that the case of Laxton v. Peat was the first, in which it 
 was held, that the acceptor was not the first and last person com- 
 pelled to pay the bill to the holder; and that they were compelled 
 to differ, and hold, that it is impossible to consider the acceptor of 
 an accommodation bill in the light of a surety for the drawer ; and 
 that if the holder had known, in the clearest manner, that at the 
 time of giving the bill, it was for accommodation, it would make 
 no manner of dillerence." With this view of the case, Heath, J., 
 and Chamhre, J., agreed. It will be at once perceived, that in this 
 case, the acceptor was held as the principal and primary debtor 
 on an accommodation bill, known to be such l)y the holder, when 
 he received it ; and that act of the holder, which would have dis- 
 charged a sCirety, was held not to affect his liability. We are not 
 called upon, in this case, to approve or disapprove of the doctrine 
 of that case, to the extent to which it was carried ; but it is a de- 
 cided authority for saying, that an indorsee for value, of a bill of 
 exchange, who became such before its maturity, and in ignorance 
 that it was given for accommodation, has a right to treat all par- 
 ties thereon as liable to him according to their relative positions 
 on the bill, and to regard the acceptor as the principal debtor, and 
 the lialjility of the drawer as collateral ; and that tiiis right is un- 
 affected by any subsequently acquired knowledge, that the bill was 
 given for accommodation. In such cases it is regarded as a mere 
 truism to say, that a release of the drawer, by the holder, has no 
 effect on the ultimate liability of the acceptor. 
 
 The case of Fentum v. Pocock, has been sustained and approved 
 by the subsequent cases in England; Price v. Edmonds, 10 Barn. 
 & C. 578, 584 ; Nichols v. Norris, 3 Barn. & Adol. 41 ; Harrison 
 V. Courtauld, ib. 36 ; Rolfe v. Wyatt, 5 Car. & P. 181 ; 1 Moody 
 & M. 14 ; Yallop v. Ebers, 1 Barn. & Adol. 098, 703. It is to be 
 observed, also, that the same view of the subject is entertained by 
 the different elementary authors. Chitty, Bills, 344 ; Smith's 
 Merc. Law, 332 ; 3 Kent's Com. 104 ; Bayley, Bills, 304 ; Story, 
 Promissory Notes, §§ 418, 423. 
 
 This subject has arisen before many of the courts in this coun- 
 try, and the rule is generally sustained, " that the parties to a bill,
 
 592 DISCHARGING INDORSER OR DRAWER. 
 
 or note, are bound by the character which they assume upon' the 
 face of the bill ; if by that they are liable as primary debtors, or 
 as principal, then, as to the liolders, they are bound as such ; and 
 his knowledge, at the time when he takes the bill, that they or 
 either of them are accommodation parties, will not vary the case." 
 Montgomery Bank v. Walker, 9 Serg. & Rawle, 229; s. c, 12 
 Serg. & Rawle, 382; White v. Hopkins, 3 Watts & Serg. 99; 
 Lewis V. Hanchman, 2 Barr, 416 ; Commercial Bank v. Cunning- 
 ham, 24 Pick. 270, 275 ; Church v. Barlow, 9 Pick. 547, 551 ; In re 
 Babcock, 8 Story's C. C. 393'; Sanford v. Lambert, 2 Blackf. 137 ; 
 Clopper, Adm'r v. Union Bank of Maryland, 7 Har. & J. 92. 
 
 In the case of Claremont Bank v. Wood, 10 Vt. 582, where 
 several, some of whom were sureties, signed a note, " each as 
 principals," and promised to pay, it was held, that as to the hold- 
 ers, they were to be regarded as principals, and not as sureties ; 
 and yet the primary liability of the acceptor, and the secondary 
 liability of the drawer, is as expressly set forth on these bills, as if 
 it were written out in full over their respective signatures. In 
 either case, to vary their respective liabilities, as they have as- 
 sumed them on the face of the bills and note, would be to vary 
 and control their intended operation, and, in effect, to enforce a 
 contract, which the parties never made. 
 
 On this subject it is important to observe a material distinction 
 between joint and several promissory notes, or obligations, and 
 bills of exchange, or notes, on which the parties have assumed 
 only successive liabilities. In the former case, as between the 
 makers and tiie holders, who at the time received the note with 
 notice of the circumstances, under which it was given, the strict 
 relation of principal and surety may exist, and evidence of that 
 fact is not considered as contradicting its. specific provisions, but 
 as consistent with its terms ; and the right of contribution, arising 
 out of that relation, exists between them. 2 Am. Lead. Cas. 289, 
 303, in notes. But the drawer, and acceptor, and indorsers, of a 
 bill or note, have not assumed a joint and several liability ; neither 
 are they strictly sureties ; but are liable to each other, in the order 
 of their becoming parties ; and when the action is on the bill, or 
 instrument, creating such successive liabilities, by an indorsee for 
 value, without notice that the bill was given for accommodation, 
 such testimony is inadmissible for the purpose of converting their 
 successive liabilities into a joint and several obligation, or placing
 
 farmers' and mechanics' bank v. rathbone, 593 
 
 therrt in the relation of principal and surety. The testimony 
 clearly contradicts the express provision of the bill, and materially 
 changes its legal effect. Unquestionably those liabilities may be 
 changed, as between the parties, by an express contract to that 
 effect, which may be enforced between them. But this in no way 
 affects the rights of a holder, who, at least, became such in igno- 
 rance of that arrangement. Under such circumstances, the holder 
 has only to look to the bill itself and the genuineness of the sig- 
 natures, to ascertain the nature and extent of the liability of the 
 parties thereon ; and they are liable to him in the successive order 
 in which their names appear upon the face of the bill. McDonald 
 V. Magruder, 3 Peters, 471 ; Flint v. Day, 9 Vt. 345 ; Brown v. 
 Mott, 7 Johns. 361. 
 
 This doctrine is sustained in Story's Treatise on Promissory 
 Notes, in which, § 418, he observes, that " the strong tendency of 
 the more recent authorities, is to hold that, in all cases, the holder 
 has a right to treat all the parties to a bill as liable to him exactly 
 to the same extent and in the same manner, whether he knows, or 
 not, the note to be an accommodation note ; for, as to him, all the 
 parties agree to hold themselves primarily, or secondarily, liable, as 
 they stand on the note ; and that they are not at liberty, as to him, 
 to treat their liability as at all affected by any accommodation be- 
 tween themselves." And in § 483, he farther says: "Nor would 
 it make any difference in the case, that the released party was, in 
 point of fact, the party ultimately bound to pay the note, and that 
 the other party was a mere accommodation maker, payee, or indors- 
 er, for his benefit; or at least, it would not make any difference, 
 unless the fact of its being such accommodation note were, at the 
 time of receiving the note, and not merely at the time of the re- 
 lease, known to the holder." Story, Bills, §§ 291, 368, 432, 434. 
 Chancellor Kent, 3 Kent's Com. 104, also observes, that " the 
 acceptor of a bill is the principal debtor, and the drawer the 
 surety, and nothing will discharge the acceptor, but payment or a 
 release. Accommodation paper is now governed by the same rules 
 as other paper. This is the latest and the best doctrine, both in 
 England and this country." 
 
 As these bills were received and discounted by the plaintiffs l>e- 
 fore their maturity, witiiout notice that they were for accommoda- 
 tion, we are satisfied, from the authorities, that they had a right to 
 treat the acceptor as the principal debtor, and the drawer as liable 
 
 38
 
 594 DISCHARGING INDORSER OR DRAWER. 
 
 only on his default. In such cases there is no difference between 
 accommodation bills and bills for value ; in either case, a release 
 of the drawer from any farther liability to the holder will have no 
 effect, as a discharge of the acceptor from his primary liability on 
 the bill ; and this right, so to treat the parties on the bill, remains 
 unaffected by any notice subsequently given, that the bill was for 
 accommodation. 
 
 It is insisted, however, that the release of the drawer will in 
 equity discharge the acceptor, and that the principles which pre- 
 vail in that Court, are now equally available at law. From an 
 examination of the cases in chancery, we entertain a decided con- 
 viction that the same principles, on this subject, prevail in equity 
 as at law. If any diversity of opinion exists in that Court on 
 this question, it has arisen more from a misapprehension of the 
 rule at law, and a desire to conform to the principles there estab- 
 lislied, than from any rules prevailing in equity, at variance with 
 them. There is much propriety in this ; for the principles regu- 
 lating bills of exchange have their origin in mercantile usage, and 
 have been adopted to meet the exigencies and wants of com- 
 mercial transactions ; it is therefore equally the policy of courts of 
 equity, as of courts of law, to make the application of, and en- 
 force those principles, in relation to these securities, which 
 experience has found necessary, to preserve their negotiability and 
 credit. 
 
 In the case of the Bank of Ireland v. Beresford, 6 Dow, 233, 
 Lord Eldon expressed his opinion of the case of Fentum v, Pocock, 
 and observed, that, " if it went on the principle, that inquiry is 
 not to be made into the knowledge of the party, but that all shall 
 be taken as appearing on the face of the bill, I think it a most 
 wholesome doctrine." The case is important only, as showing 
 the individual opinion of Lord Eldon on that question, and as 
 showing that no different rule had then prevailed in chancery. In 
 the case of Glendinning, ex parte, 1 Buck, 517, Lord Eldon re- 
 fused to adopt the principle of the decision of Fentum v. Pocock, 
 and recognized the general doctrine, as held in Laxton v. Peat. 
 That was the case of an accommodation acceptance, and known to 
 be such, by the holder, when he received the bill. We are, there- 
 fore, not called upon to approve or disapprove of the doctrine of 
 that case, for in this case, the plaintiffs had no notice, when the 
 bills were received and discounted, that they were for accommo- 
 dation.
 
 farmers' and mechanics' bank v. rathbone. 595 
 
 If the plaintiffs in this case had received the bills with knowl- 
 edge that they wore given for accommodation, we do not say but 
 that the defence would l)e available > for when one takes a bill, 
 even before maturity, with notice of a given fact, it is not unrea- 
 sonaV)le that ho should be charged with the consequences that 
 result therefrom, as if the bill had been received overdue. But 
 that principle does not apply, when the bill is taken before matu- 
 rity, without notice, and for value ; for the bill is then held inde- 
 pendent of all equities existing between the original parties ; and 
 Lord Eldon, in that case, nowhere intimates that the principle 
 would have such an application. It is only to the case of an 
 accommodation 1)111, and known to be such by the holder when he 
 received the bill, that he made the application of that rule. 
 
 The case, however, which should and does exert a controlling 
 influence in our decision of this case, is that of Harrison v. Court- 
 auld, 8 Barn. & Adol. 36. That case, it will be perceived, was sent 
 from chancery by the Master of the Rolls, for the opinion of the 
 Court of King's Bench. This circumstance alone creates the 
 inference, that in relation to bills of exchange, on which the par- 
 ties have assumed successive liabilities, the principles of equity 
 are the same as at law, and that, if the acceptor of these bills is 
 not discharged at law he would not be in equity ; for it would 
 be an idle proceeding for chancery to send a case to a court of law 
 to ascertain the principles prevailing there, unless those principles 
 have equal application in chancery. In that case, as we have 
 assumed in this, the bill was accepted for the accommodation of 
 the drawer, and was indorsed for value before its maturity. In 
 that case, as in this, the holder was ignorant, at tlie time he re- 
 ceived the bill, that it was given for accommodation, but was after- 
 wards informed of that fact, before the act was done, which the 
 acceptor claimed operated as his discharge. It will at once be 
 perceived, how very similar are the two cases, in every important 
 particular. On the hearing of that case, the decisions at law and 
 in equity were considered ; and all the judges, C. J. Tentcrden, and 
 Parks, Taunton, and Patterson, JJ., certified to the Court of 
 Chancery that the acceptor was liable on the bill, the same as on 
 a bill for value. 
 
 Whether, therefore, we apply to this case the princijiles jirevail- 
 ing in equity, or at law, the result is the same. The plaintiffs 
 having no notice at the time they received the bills, that they
 
 596 DISCHARGING INDORSER OR DRAWER. 
 
 were given for accommodation, had a right to treat the drawer as 
 collaterally liable thereon, and the acceptor as the principal and 
 primary debtor ; and this right of tiie holder remains unaffected 
 by any subsequent knowledge which he may have, that they were 
 for the accommodation of the drawer. Under such circumstances, 
 the release of the drawer in no way affects the "liability of the de- 
 fendant as acceptor. This view of the case renders it unnecessary 
 to pass upon other questions which were urged in the argument 
 of the case. 
 
 The result is, that the judgment of the County Court must be 
 reversed, and the case remanded. 
 
 Bank of Montgomery Co. v. Walker, 9 Serg. &Rawle, 229, was a similar case, 
 except that the holder knew that the note was accommodation paper. It was 
 held that ihe maker was not discharged; the Court approving the language of 
 Lord Mansfield in Fentum v. Pocock, 5 Taunt. 192, quoted In the principal case. 
 To the same effect are Murray v. Judah, 6 Cow. 484 ; Cloppers v. Union Bank, 
 7 Harris & J. 92 ; Cronlse v. Kellogg, 20 111. 11 ; Lambert v. Sanford, 2 Blackf. 
 137 ; Hansbrough v. Gray, 3 Grat. 356. In all of these cases the holder knew 
 that the bill or note was accommodation paper ; and yet the acceptor or maker 
 was held liable. A different rule probably prevails in New Hampshire and 
 Louisiana. See Parks v. Ingram, 2 Foster, 283 ; Adle v. Metoyer, 1 La. An. 
 254. 
 
 But notwithstanding that the weight of American authority seems in favor of 
 the rigorous doctrine laid down by Lord Mansfield in Fenton v. Pocock, we still 
 think that in sound reason due payment by or release of the party for whose 
 accommodation a note or bill was made or accepted, should discharge the paper 
 in the hands of one who has notice that it was given for accommodation. In 
 addition to Glendinning, ex parte, 1 Buck, 517, per Lord Eldon, cited in the 
 principal case, Lazarus v. Cowie, 3 Q. B. 459, per Lord Denman, in 1842, Is an 
 authority directly holding this view. See note to Eastman v. Plumer, ante, 345.
 
 KEITH V. GOODWIN. 597 
 
 SURETYSHIP. 
 
 RoswELL R. Keith v. Major L. Goodwin. 
 
 (31 Vermont, 268. Supreme Court, November, 1858.) 
 
 When stircti/ hoUhn as principal, as to guarantors. — Wlien a person signs a note as surety 
 for tlie makers and intrusts it to them, for tlie purpose of obtaining tlie money 
 upon it, and they subsequently obtain furtlier guarantors, upon tlie credit of all 
 the signers, under the belief that they are joint principals, and in order to procure 
 the money upon the note, such surety will be holden as a principal to indemnify the 
 guarantors, if they are compelled to pay the note. 
 
 Contribution. Stipulation for full indemnity. — One who signs a note as guarantor or 
 surety, others having before signed the same as sureties, may stipulate for full 
 indemnity of each and all the former signers, or make that the condition of his 
 own undertaking ; and in that case he will not be liable to contribute with the 
 other sureties to the payment of the note. And the facts and circumstances attend- 
 ing the signing or the guaranty of payment of a note, may be sufficient to indi- 
 cate as clearly as an express stipulation or condition, the terms of the undertaking. 
 
 The case is stated in the opinion of the Court. 
 
 Redfield, C. J. The note in question was executed by the mem- 
 bers of a partnership or joint-stock company, and by this defendant 
 as surety for them, by their procurement. One of the principals 
 then procured the plaintiff and others to guaranty the payment 
 of the note. The fact that the defendant was surety did not 
 appear upon the face of the note, nor was it known to the plaintiff 
 at the time he made the guaranty. Tlie note was made payable 
 to the Vermont Bank, and was procured to be executed, and the 
 guaranty to be made, for the purpose of raising money upon it at 
 that bank, it would seem. John A. Page, the cashier of that bank, 
 on his own account discounted the note while it was still current, 
 and subsequently, but before it became due, sold and indorsed it, 
 in the name of the bank, to one Uubbard, who, after it fell due. 
 called upon the plaintiff for payment, and he paid it, taking Hub- 
 bard's indorsement upon the note.
 
 598 SURETYSHIP. 
 
 The plaintiff now seeks to recover the whole amount of the note 
 of the defendant, as a joint maker or principal in tlie note, and if 
 not in that capacity, then as co-surety, to recover of him his pro- 
 portion of the amount paid. The defendant had no knowledge 
 that any one was expected to guaranty, or that any one did 
 guaranty the payment of the note, or that tke note was put in 
 circulation, or if so, that it had not been paid, until called upon 
 by the plaintiff to pay it. 
 
 I. It is objected that the note was never discounted in the man- 
 ner contemplated at the time of its execution, and that therefore 
 the defendant never became liable upon the note. 
 
 We think the fact that this note was discounted by the cashier 
 of the bank where it was made payable, and by him indorsed as the 
 cashier, in the name of the bank, must be regarded as a sufficient 
 recognition or adoption of the note by the bank, to render it bind- 
 ing upon all the parties to the contract, within the decisions in this 
 State. This very point is, in effect, decided in Bank of Burlington 
 V. Beach, 1 Aik. 62. The doctrine of this case has been repeatedly 
 recognized in this Court, and never questioned. The same rule 
 prevails in the State of New York. Bank of Chenango v. Hyde, 
 4 Cow. 567 ; Bank of Rutland v. Buck, 5 Wend. 66. This last case 
 is where the note was procured, and made payable to the Bank of 
 Rutland, for the purpose of raising money to pay upon an execu- 
 tion. The bank refusing to make the discount, the note was 
 received substantially in payment upon the execution, and by 
 consent of the bank was sued in their name for the benefit of the 
 officer. And precisely the same point was decided by this Court, 
 not many years since, in the county of Orleans. We cannot think, 
 therefore, that the present case can be regarded as carrying the 
 rule beyond where it has already been carried. And there is noth- 
 ing in the principle of these decisions which does not commend 
 itself to our sense of justice and propriety. 
 
 We are aware that a different rule, to some extent, prevails in 
 the States of Massachusetts, Maine, and Ohio, as the cases referred 
 to in the argument show. But we think the rule adopted in this 
 State, Bank of Burlington v. Beach, supra, and which has been 
 so long acted upon here, far better calculated to subserve the ends 
 of justice and fair dealing, than that which denies the recovery 
 upon that ground. 
 
 When a note is executed for the purpose of raising money in the
 
 KEITH V. GOODWIN. 599 
 
 inai'kct, althougli made payable to a particular bank or firm, it is 
 well understood that this is generally regarded by Ijusiness men 
 as rather a formal than a substantial part of the note. If the 
 note were made payable at a particular bank, to the order of the 
 makers, it would be much tlie same thing. So, too, if made pay- 
 able to bearer gen.erally. The name of the person to whom the 
 note is payable is mere form. It is undcrstoojl that it is going 
 into the market as money, and in exchange for money, to any party 
 who will make the discount. If negotiated at the bank, it may 
 pass into other hands the next hour. And there is no claim that 
 this will have any tendency to release the sureties. "NVe think there 
 is no dilhculty with the case upon this point. 
 
 II. In regard to the right of the plaintiff as against the defendant, 
 upon the note, we think the law is settled l^eyond all question, that 
 he is, at all events, to be treated as a co-surety with the defendant, 
 if not also as a surety for the defendant as a joint maker and prin- 
 cipal in the note, so far as he is concerned. 
 
 As to the objection founded upon the case of Gardner i\ Walsh, 
 32 Eng. L. <fe Eq. 162, that the guaranty was such an alteration 
 of the note, being done without the consent of the defendant, as 
 will avoid the note, we cannot regard this as coming fairly within 
 the principle of that case. That case is not parallel with the 
 present. There the decision goes upon the ground that after a 
 note becomes effectual as a contract by delivery, it is not compe- 
 tent for the holder, without the consent of tlie makers, to procure 
 an additional signer ; that this is a material alteration and avoids 
 the contract, whether it operates favorably or unfavorably to the 
 other signers. Whether the decision to this extent is sound or 
 not (and we do not intend to question that case), we think the 
 rule thus laid down could have no application to a case like the 
 present. Here the note was signed by the defendant, as a joint 
 principal, and intrusted to his associates, and if he had signed as 
 surety upon the face of the note, and intrusted it to his principals, 
 the rule would have been the same. He thereby gives those to 
 whom he intrusts the note an implied authority to obtain cither 
 additional sureties, as joint makers, or guarantors, indefinitely, 
 until the note is fairly launched in the market as a security, 
 having two distinct parties, licfore that it is merely inchoate, and 
 it is clear that the procuring of additional signers, guarantors, or 
 indorsers, comes fairly within the implication of authority giveu
 
 600 SURETYSHIP. 
 
 the party to whom the defendant's signature is intrusted, and 
 which at that time, so far as additional signers are concerned, is 
 to be regarded as merely blank, or, in one sense, as an authority to 
 use the credit of the party, either alone or with others, in the 
 form in which he has signed. But the idea that no other indorse- 
 ment or guaranty is to be procured, and that if the note will not 
 go in that form* it is not to be used unless all the parties consent 
 to the introduction of other parties, is certainly contrary to the 
 understanding of commercial men, which is the law of such cases, 
 and the only just basis of the implied contract resulting from the 
 facts. 
 
 It being now well settled by the case of Deering v. The Earl of 
 Winchelsea, 2 Bos. & Pul. 270, that a surety, although signing 
 another instrument guarantying the same debt, must be regarded 
 as a co-surety with all the sureties to the original contract, there 
 w^ould seem to be no question of the right of the plaintiff to claim 
 a remedy to that extent against the defendant, even if he had, at 
 the time of making the guaranty, known the defendant to have 
 been a mere surety. This point was decided by this Court in 
 Flint V. Day, 9 Vt. 345. See also Norton v. Coons, 3 Denio, 130 ; 
 Barry v. Ransom, 2 Kern. 462 ; Tobias v. Rogers, 3 id. 59 ; Cray- 
 thorne v. Swinburne, 14 Yes. 160 ; Bering v. Earl of Winchelsea, 
 1 White & Tudor's Lead. Cas. in Eq. 85, and notes, English and 
 American, where the subject is elaborately examined, and the cases 
 fully presented and accurately digested. 
 
 III. But it seems to a majority of the Court that the plaintiff is 
 equitably entitled to treat the defendant as he held himself out upon 
 the contract ; i. e., as principal. There was nothing to ultimate 
 that the signers were any thing but joint principals. And the 
 defendant having so signed the note and intrusted to the others, 
 with authority to obtain additional signers, or guarantors, it was 
 giving them authority to represent the defendant as a co-principal ; 
 and by presenting the note merely, and asking a guaranty of the 
 plaintiff, a virtual representation was made that the defendant 
 stood as joint principal. The case may well be supposed of the 
 defendant being the only responsible signer, and the guaranty 
 being made wholly upon his credit. If he could afterwards be 
 allowed to falsify this representation, thus held out upon the 
 face of the paper, it might certainly work great injustice to the 
 guarantor.
 
 KEITH V. GOODWIN. 601 
 
 But this is a question depending mainly npon authority, we are 
 aware, and should be decided upon the settled principles deducible 
 from the adjudged cases. 
 
 It is admitted by all the writers upon this subject, and in all the 
 cases where the question has arisen, and l)y all the judges, without 
 exception, who have had occasion to speak of the point incident- 
 ally, that any one who is not in fact a joint or sole principal in a 
 contract, but who binds himself for its fulfilment as a surety 
 merely, may so stipulate at the time of entering into the obligation, 
 as not to be liable to contribution with the other sureties who have 
 signed before him. And the form of doing this is not important. 
 Nor is it important that this should appear upon the contract. 
 And where one signs as surety, after other sureties have signed, 
 and without privity with them, it is not important that they should 
 be made aware of the terms upon which subsequent sureties become 
 holden. If the subsequent sureties become bound for the perform- 
 ance of the very same thing as the former ones, and especially by 
 the same contract, the right of contribution is created in favor of 
 the former sureties, unless there is some stipulation to the con-, 
 trary. It is upon this ground that the action for contribution was 
 maintained in Flint v. Day, supra, against Mr. Day, who stood 
 much in the relation of the plaintiff here, the note being paid 
 by the prior sureties, and the suit brought to compel contribution 
 of the last surety signing, but who signed on the back of the 
 note in blank ; and the Court held that he thereby became a joint 
 maker, and liable to contribution with the other sureties. But 
 even that case, upon its facts, is more doubtful than it was then 
 regarded by the Court. The later cases do not fully suj)port it. 
 
 But where there is any thing in the form of the contract or the 
 nature of the transaction, to show that the subsequent sureties did 
 not expect to be holden as co-sureties with the others, but to stand 
 merely as sureties for all the former signers, they are entitled to 
 full indemnity from each of the others, or all jointly. As if the 
 surety sign expressly as surety for all the above signers, or when 
 he signs, saying he is willing to be responsible for all of them. 
 In such case he is not liable lo contribution. 1 Story, Eq. Jur, 
 § 498 ; Chitty, Contracts, 598 ; Lead. Cas. in Eq. GS^ and notes ; 
 Pendlcbury v. Walker, 4 Younge & C. 424 ; Moore r. Isley, 2 
 Dev. & B. Eq. 372. 
 
 This very point is expressly decided in Craythorne v. Swinburne, 
 14 Ves. 160.
 
 602 SURETYSHIP. 
 
 The facts of this last case seem to us very analogous to those of 
 the present case, so far as the liability of the plaintiff to share the 
 burden of paying this note, with the defendant, is concerned. lu 
 that case, as well as in this, the undertaking of the last surety was 
 without the knowledge, expectation, or privity of the former ones ; 
 it was done, too, in both cases, to induce the advance of money 
 upon the first contract, and because it could not be obtained with- 
 out such additional indemnity or guaranty. And in the case of 
 Craythorne v. Swinburne, it was clearly held that there was no 
 duty of contribution among the two classes of sureties. It is held 
 that in the case of Craythorne v. Swinburne the indemnity was by 
 a separate instrument, and here it is upon the same paper, but 
 by a distinct contract, referring to the other for brevity, as written 
 above. We cannot suppose it could have made any difference in 
 the present case if the plaintiff had given his guaranty upon a 
 separate piece of paper, writing the note or describing it, instead 
 of referring to it as written above. In the case of Craythorne v. 
 Swinburne, the question was determined upon the circumstances 
 and oral evidence in the case as matter of fact, and made depend- 
 ent upon the intention of the last surety. The same question 
 might here very properly have been submitted to the jury, if there 
 really is any conflict in the evidence, or if there should be here- 
 after, it might be proper to have the finding of the jury upon this 
 point. 
 
 But so far as the testimony is developed in the bill of exceptions, 
 it seems to be all in one direction. 
 
 1. The form of the plaintiff's guaranty shows that he merely 
 undertook for the solvency of all the primary signers of the 
 note. 
 
 2. The manner of executing the note, the purpose of obtaining 
 the guaranty, as well as the form of it, all look in the same direc- 
 tion. And unless the defendant can satisfy the jury that at the 
 time the plaintiff signed the guaranty, he really expected to stand 
 merely as a general surety, we think he is bound to indemnify him, 
 as much so as if he had signed at his request, and upon his express 
 assurance that he would see him harmless. As matter of fact, or 
 implication from facts, we cannot but regard the consideration 
 that the plaintiff's contract was in the form of a guaranty, as of 
 some significance. The word guaranty in strictness may not 
 import more than a promise or undertaking. But in commercial
 
 KEITH V. G'OODWIN. G03 
 
 circles, and among business men generally, the term is understood 
 in a more 8])eciric sense. A guarantor is not a maker or indorscr, 
 but one who is understood to assume more the oljligation of an 
 indorser than of a maker. JJoth the indorscr and guarantor are 
 understood to undertake for tiie maker, and as an aid to his 
 undertaking. And originally the guaranty was understood to be 
 operative only upon condition of the failure of the maker to per- 
 form the contract. And that is the present import of all guaranties 
 which are conditional or doi)endent upon some prior act to be 
 performed l)y some other party, as that the note or contract is 
 collectible ; /. e., may be enl'orccd by due process of law. And 
 even absolute guaranties, like the present, are understood differ- 
 ently, and therefore entitled to a different construction, from au 
 absolute promise to pay a note. 
 
 If that had been the purpose of the plaintiff, and those who 
 signed with him in this case, they would have merely underwritten 
 the other signers of this note. The very fact that they made a 
 separate contract, and that in the form of a guaranty, shows very 
 fully that they did not intend a mere joint undertaking with the 
 makers. We think the only fair construction of the plaintiff's 
 undertaking, as between himself and the makers of the note, is, 
 that he bound himself to whomsoever should be the holder of the 
 note that the signers were responsible, and would pay the amount 
 at maturity. And although, as between himself and the holder, 
 this l)ound him absolutely to the payment of the note, if not paid 
 by the makers, without notice of the default on the part of the 
 makers, tiiat being a fact of which he was bound to take notice, 
 yet, as between him and them, his undertaking was for them jointly, 
 and not jointly with them. 
 
 Judgment reversed., and case remanded. 
 
 The questions in regard to the responsibility of sureties upon notes or bills, 
 or, what is the same thing in other terms, the obligations of acconnnodation 
 makers and acceptors, both among tliemselves and in regard to other parties, 
 are of paramount interest to the profession. AVe will here, in a brief way, refer 
 to some few of the more recent decisions uj)on these questions. 
 
 There has been, first and last, considerable controversy how far one who is 
 induced to sign a note or bill by fraudulent representation, is legally bound by it ; 
 as where one or more of the former signatures upon the credit of which one sub- 
 scribes or indorses the paper is in fact forged or obtained by duress or fraud, or 
 for any other reason not binding upon tiie party. In the case of Seely r. The Peo- 
 ple, 2 Am. Law Reg. x. s. 3-14; s. c, 27 ill. 17.!, the plaintilf in error signed a
 
 604 SURETYSHIP. 
 
 bond as surety after others had executed it; but one of the names appearing upon 
 the bond as surety was shown to have been forged. The (Jourt held the fraud such 
 as to avoid the instrument as to sureties signing under such mistake. And it has 
 been often held that where one signs an instrument not negotiable, on condition 
 that some other name or names shall be procured to it before the same is delivered, 
 and this condition is not complied with, and the instrument delivered without it, 
 the party cannot be holden. Pawling v. The United States, 4(h-anch, 219 ; Fletcher 
 V. Austin, 11 Vt. 447. So if it be agreed that a composition deed shall not be de- 
 livered until all the creditors sign, that condition must be observed in order to 
 render the instrument binding upon any one who signed under that at^surance. 
 Johnson v. Baker, 4 Barn. & Aid. 440. And in Pidcock v. Bishop, 3 Barn. & 
 C. 605, it seems to be held that any departure from the contract of surety- 
 ship will exonerate the surety. Awde v. Dixon, 5 Eng. L. & Eq. 512 ; Lloyd v. 
 Howard, 1 id. 227 ; Palmer v. Richards, ib. 529 ; Leaf v. Gibbs, 4 Car. & P. 466. 
 And this seems to be the English rule upon the subject. The creditor must see 
 to it that he obtains a valid obligation against all upon whom he relies for its per- 
 formance. And he cannot excuse himself from responsibility for the fraud of 
 the principal debtor on the ground that the surety signed upon his assurance, 
 and must look to him exclusively for its performance, as has been held in some 
 American cases. York County Mat. Fire Ins. Co. v. Brooks, 3 Am. Law Reg. 
 N. s. 399 ; s. c, 51 Maine, 506, where it was held that a surety who signed a bond 
 at the request of the principal, and upon the assurance that he would also procure 
 two others named and known to him to be responsible also to sign it before he 
 delivered it, but failed to do so, this being wholly unknown to the obligee who 
 accepted the bond, is still responsible. There is undoubtedly great plausibility 
 in the argument that, in such cases, where the surety intrusts the bond to the 
 principal in perfect form and with nothing to indicate that other signatures are 
 required to complete the contract, as will be the case where other names appear 
 in the body of the instrument, that he thereby puts it in his power to impose upon 
 the obligee, and should therefore be held responsible for his conduct in that di- 
 rection. But where the paper is not negotiable, the obligee is bound to see that 
 all parties execute the same understandingly, and free from fraud or force. And in 
 the precise case stated above, in the English Court of Exchequer Chamber, Swan 
 V. The North British Australian Company, 10 Jur. N. s. 102 (1864) ; s. c, 8 
 Jur. N. s. 940 ; s. p. 7 Jur. n. s. 400, it was held that the surety was not hold- 
 en. We cannot but feel that the English rule is the more salutary one in com- 
 pelling caution in those who accept paper, as well as in those who execute it. 
 The opposite rule unquestionably has too much the appearance of attempting to 
 drag in every one where it can possibly be done, and turning them over to some 
 other remedy or redress to which they never expected to look for indemnity. 
 The whole subject is reviewed with great learning and ability by ]\Ir. Justice Hay, 
 in Deardorft' v. Foresman, 5 Am. Law Reg. n. s. 539, which is here adopted as 
 the best review of the authorities we could give. 
 
 Ray, J. Action by the appellee upon a promissory note, against Deeds, 
 DeardorfF, and Lehman. Deeds suffered a default. The other defendants an- 
 swered in two paragraphs. First, that at the date of the note in suit. Deeds, 
 who was insolvent, applied to them to execute the note Avith him, as his sureties, 
 to the plaintiff, which they refused to do ; that he fraudulently represented to
 
 KEITH V. GOODWIN. 605 
 
 thorn that if they woiihl sign the note he could procure as co-sureties with them 
 eU;ven other respoiisihle men, who are named, and tliat lie wouhl not dtdiver the 
 note to the phiintiff until such sifjnatures were procured; that he faih'd to [iro- 
 cure the names he liad promised, but delivered the note to the plaintiff. The 
 note was made payable to the order of the plaintiff. The second paragra[)h of 
 the answer averred the same facts, and was sworn to. The Court below sus- 
 tained a dcmiirier to both [)araj;raphs. Tills is here assigned as error. 
 
 Tiie appellants insist that the ruling in the ease of Pepper i'. The State, 22 
 Ind. o99, recjuires that the decision of the Court below in this case should be re- 
 versed. We will consider the ease cited only so far as may be necessary to de- 
 termine its effect upon the question now before us. That case holds that, in an 
 action upon an oflitial bond given to the State, the sureties may defend, either 
 upon the ground that the names of persons aj)pearing to be signed to such bond 
 were forged, and that they executed the bond upon the faith that such signatures 
 were genuine, or that they were induced to execute and deliver the bond to the 
 principal obligor upon the condition, or upon the consideration, or upon the 
 promise, that certain other persons would sign it. It is, however, expressly said 
 by the judge who delivered the opinion, in overruling the petition for a rehear- 
 ing, that " we do not say that the same rule that applies to bonds taken pursuant, 
 to a statute, would apply in private transactions." We are not disposed to ex- 
 tend the effect of that decision to instruments negotiable either by statute or by 
 the law merchant, unless required to do so upon authority or principle. And as 
 the case cited is put rather upon authority than principle, we will consider how 
 far the decisions require us to extend the ruling. Indeed, the opinion given 
 upon overruling the petition for a rehearing rests, except so far as it is based 
 upon the construction of the statute, which constru(;tion we are not called upon 
 to review, upon the case of Bibb i'. Reid ct al., 3 Ala. 88, which, it is stated in 
 the opinion, " is directly in point, and after much rellection we are prepared to 
 say is, in our judgment, good law." That case cites the law as stated thus, in 
 Sheppard's Touchstone, 59 : " So it must be delivered to a stranger ; for if I seal 
 my deed and deliver it to the party himself as an escrow, upon certain condi- 
 tions, &c., in this case, let the form of words be what it will, the delivery is ab- 
 solute, and the deed shall take effect as his deed presently, and (in reference to 
 the legal operation of the deed), he is not bound to perforin the condition." 
 
 The opinion proceeds : " The rule as above stated in the Touchstone, has 
 been recognized in the United States in the cases cited from 5 Cranch, 351, 8 
 Mass. 2i?0, and 2 Sumner, 487; but it does not appear to obtain at this day in 
 England, as appears by the case of Johnson el al. v. Baker, 4 Barn. & Aid. 440, 
 where a composition deed was delivered by a surety who had signed the deed to 
 a creditor, not to be operative unless all the other creditors executed it. It was 
 held that the deed ■was delivered as an escrow, and that all the creditors not hav- 
 ing executed it, the surety was not bound. To the same effect are the ca^es 
 cited from 3 Wend. 380; 11 Vt. 448; 4 Cranch, 219; 2 Harrington, 396; 11 
 Peters, 86." The Court seem evidently to have misconceived the effect of the 
 decision in the ease of Johnson et al. v. Baker. The creditors were all parties 
 to the deed of composition, and when the debtor alone had executed it '' the 
 deed was then delivered to one of the creditors, in order that he might get it 
 executed by the rest of the creditors." It does not very clearly appear that be-
 
 60b' 
 
 SURETYSHIP. 
 
 cause an instrument, after being executed by one party may be delivered to 
 anotlier party to be executed by him, and presented by him to otl)ers who are 
 parties to the deed for their execution, and still not become a deed fill executed 
 by all parties, that therefore a deed, perfect in form and execution, may be 
 delivered by the grantor to the grantee as an escrow. Nor is the citation of the 
 ruling in Pawling et cil. v. United States, 4 Cranch, as conflicting with the later 
 case of Moss r. Riddle, fj Cranch, satisfactory, especially as the later case 
 is in conllict with the doctrine asserted by the Alabama Court. But we will ex- 
 amine that case more carefully in the course of this opinion, only remarking in 
 passing that, whatever the case in 4 Cranch does decide, which we will endeavor 
 to determine in the subsequent review of the case, it certainly does not hold that 
 a delivery may be made by the obligor of the bond to the obligee, as an escrow. 
 Nor does the case of the United States v. Leffler, 11 Peters, examined hereafter, 
 establish any such doctrine. The case in 3 Wend. 380, was where a bond had 
 been executed by nine persons as obligors, " and sent to New York to be deliv- 
 ered to the plaintiff on certain terms and conditions, by which the obligors in- 
 tended to be indemnified for having become bound for the payment of the money. 
 The plaintiff's refused to receive the hand on the terms and conditions proposed. 
 Subsequently, on the 29th October, 1824, five of the obligors, but not those 
 sued in the action, without the knowledge or consent of the defendants in this 
 action, having made a new and different arrangement with the plaintiffs by which 
 the security relied on by the defendants for their indemnity was yielded up, de- 
 livered the bond to the plaintiffs." It was held that the bond was not obligatory 
 upon the four who never entered into the new arrangement with the plaintiffs. 
 The bond was dated Sept. 21, 1824, and the plaintiffs had then notice of the 
 terms upon which the delivery was authorized ; they refused to receive it upon 
 those terms, but, on the 29th October, made other terms with five of the parties 
 to the bond. The plaintiffs knew the terms on which the delivery was author- 
 ized, and refused to accept upon those terms ; and the case simply decides that, 
 where the extent of the agent's authority is known to the person who deals with 
 him, the principal cannot be bound outside of that authority. The case is good 
 law, but not specially relevant to the text. 
 
 The case cited from 11 Vt. was where the names of seven sureties appeared 
 upon the face of the bond, and only two of the sureties ever executed the same. 
 The instrument was plainly incomplete until executed by all those whose names 
 appeared as parties. 
 
 The decision in Herdman v. Bratten, 2 Har. supra, was that the deed could 
 not be delivered to the party as an escrow. This is an express denial of the doc- 
 trine it is cited to sustain. So also the case of The State v Chrisman et al., 
 2 Ind. 126, decides that " a bond cannot be delivered as an escrow to the 
 obligee." 
 
 In the case of The Madison. &c.. Plank Road Co. v. Stevens, 10 Ind. 1, Mr. 
 Justice PcrJfciTw states the decision thus: "One co-obligor may perhaps deliver 
 a bond to another co-obligor as an escrow ; but an instrument cannot be so de- 
 livered to the obligee or payee, or the agent of either. Such delivery is in law 
 absolute. Peters, U. S. Dig. tit. Escrow; Foley v. Cowgill, 5 Blackf. 18; The 
 State V. Crisman, 2 Ind. 126; Wright v. The Shelby, &c., Co., 16 B. Mon. 4. 
 See 7 Ind. 600 ; 6 id. 183 ; 9 id. 25. And parol evidence cannot be given to
 
 KEITH V. GOODWIN. 607 
 
 vary the legal efTect of such di'liverv, or the terms of the instrument delivered. 
 This has been too often decided to recjuire a citation of authorities to evidence 
 it. Hiatt et al. v. Simpson, 8 Ind. 2.56." 
 
 The case of Foley v. Cow;,'ill was for a failure to deliver hof^s at a ct-rtain 
 time and place, accordinj^ to a written agreement. The defendant answered that 
 the agreement mentioned " was delivered to tlie plaintifr as nn escrow, setting 
 out the contingency on which it was to become l)iiiding on tiie defendant, wliich, 
 it is averred, had never happened." The Court ruled that if the instrument " be 
 delivered to the obligee on such contingency, the condition is a nullity, and the 
 delivery absolute." 
 
 And yet, witiiout attempting to overrule or question these cases in our own 
 State, the Court, in overruling the petition (or a rehearing, rests the decision of 
 the case of Pepper v. Tlie State, supra, except so far as a construction is given 
 to the statute, upon an Alabama case in direct conflict with these repeated rul- 
 ings of our own Court. If the doctrine upon whix;h the Alabama case proceeds 
 be the law, that a deed or other written instrument may be delivered to the 
 grantee or obligee as an escrow, it of course follows that a surety may make 
 such a delivery to his principal. But, in our opinion, such a position is not only 
 without support, but is in conflict with all authority. In the case of Worrall v. 
 Munn, 1 Seld. 229, the instrument, an agreement to execute a conveyance, was 
 delivered conditionally to the agent of the party to whom the deed was afterward 
 to be executed. The Court declares that the law puts the question at rest ; that 
 the delivery to the agent was a delivery to his principal. " This was a delivery 
 as an escrow ; such a delivery can only be made to a stranger. It cannot be 
 made to the party. If made to the })arty, no matter what may he the form of 
 the words, the delivery is absolute." Ward v. Lewis, 4 Pick. 518; Fairbanks i'. 
 Met calf, 8 Mass. 230. Mr. Parsons says : " A note, as well as a deed, may be 
 delivered as an escrow, and the law of escrow is substantiallj* the same in both 
 cases. ... A note cannot be delivered directly to the promisee, to be held 
 by iiim as an escrow." 1 Notes tJi: Bills, 51 ; Badcock v. Steadman, 1 Root 
 (Conn.), 87. 
 
 W»! will examine the cases cited in tlie original opinion in the case of Pepper 
 V. The State, supra. Pawling ef al. r. The United States, supra, was an action 
 " upon an official bond given by Ballinger, as collector of the revenue, and 
 signed and sealed by Pawling, Todd, Adair, and Kennedy, as his sureties, who 
 pleaded that they delivered the same as an escrow to one Joseph Ballinger, to be 
 safely kept, &c., upon condition that, if Simon Ingleman and William Patton, 
 named on tlie face of the honil, should execute the same as co-sureties, then the 
 bond should be delivered to James Morrison, supervisor, on behalf of the Unit- 
 ed States as their deed, and not otherwise ; and that the same never was executed 
 by Ingleman and Patton." Here the representative of the government had no- 
 tice, on the face of the instrument, that the same was not complete, — not having 
 been executed by all tiie parties whose names appeared upon its face as co-obli- 
 gors. To have held this delivery of the instrument obligatory upon the parties 
 when the writing itself proved the execution to be incomplete, would have been 
 in contradiction of its express terms. 
 
 In the United States v. Leffler, 11 Peters, supra, the question under consid- 
 eration is not discussed either by court or counsel, and the statement of facts
 
 608 SURETYSHIP. 
 
 does not disclose whether tliere had ever been any Intentional delivery of the 
 bond, or, if delivered, by whom such delivery was made ; and* tlie only question 
 considered was as to the competency of witnesses to prove a conditional execu- 
 tion. Under what circumstances such a defence was admitted does not appear. 
 If the names of other parties appea'red on the face of the bond, such a defence 
 would have been admissible under the ruling in Pawling v. The United States, 
 supra. As no question was made by counsel, it was probably controlled by that 
 decision. If it were otherwise, the validity of such a defence was not so clearly 
 established upon authority, that Ave are authorized to suppose it would have 
 passed unquestioned when presented in the Supreme Court of the United States 
 for the first time. 
 
 The case cited from 3 Barr (Penn.), 308, was where a party, in executing a 
 bond, expressly stipulated that it should not be delivered up until twelve names 
 were obtained, and the persons who were procuring names to the bond for the 
 benefit of third parties agreed that they would not deliver it until it was so exe- 
 cuted. It was held that such bond was in their hands as an escrow, and until 
 the condition was performed it could not lie delivered. So in the case cited from 
 2 Leigh, 157, where the deputy-marshal procured a party to sign a forthcoming 
 bond taken upon execution, and agreed not to file the bond in Court until other 
 persons had signed it, it was held that he could not make a valid delivery until 
 the condition was performed. And again in 2 Johns. 248, it was held that a 
 sheriff might deliver a deed to an attorney to be held as an escrow, aiid only de- 
 livered to Ills client on compliance with the condition. The case of Sharp v. 
 United States, 4 Watts, 21, decided that a bond containing in its body two 
 names as sureties, was not binding on one who signed it, unless it was shown 
 that he dispensed with the execution of it by the other. The case in 7 Pick. 91, 
 ruled that " where a bond is signed and sealed but not delivered to the obligee, 
 and it is afterward put into the possession of the obligee by a person who has 
 no authority to deliver it, the obligee cannot maintain, an action on the instru- 
 ment." 
 
 In the case cited from 7 Ohio, 375, the Court permitted the party receiving 
 the deed to testify that he only received it for the purpose of enabling him to 
 convey to a third party. That the purpose and consideration of the deed was to 
 enable him, as agent of the grantor, to execute a conveyance to another. We 
 are unable to find the case cited, or any case in 4 Johns, having even as remote 
 relation to the subject under consideration as those we have commented upon. 
 In 34 N. Hamp. 460, the rule is stated that, " if a deed is placed in the hands 
 of a depositary to be delivered to the grantee upon the death of the grantor, 
 provided it is not previously recalled, but the grantor reserves the right and 
 power of recall at any time, it is not a good delivery." 
 
 In 13 Pick. 75, the presumption arising from the fact of a deed having been 
 registered, is discussed. 
 
 The case cited from 1 Johnson's Cases decides that, " where the grantor held 
 the deed until the consideration should be paid, and died before payment, there 
 was no delivery." 
 
 The remaining authorities cited in Pepper v. The State, supra, refer to the 
 question of agency ; the decision proceeding, so far as those authorities are rele- 
 vant, upon the ground that the obligor in a bond is the agent of the obligee, and
 
 KEITH V. GOODWIN. 609 
 
 the obligee is therefore responsible for all bis representations to his sureties. It 
 is unnecessary for us to examine these authorities, as the appellant in this caae 
 does not assume the position that a person may, as principal, make a valid con- 
 tract with himself as agent. As a (juotation is made from a note by Judge Red- 
 field in the April number, 1«G3, of the American Law Register, p. I34G, which rests 
 upon the case of Pawling r. The United States, supra, we will cite the opinion 
 of the same author in the May number 18G4, of the same magazine, p. 402 : " It 
 seems to us upon principle that, where there is nothing upon the face of the 
 paper indicating that other co-sureties were expected to become parties to the 
 instrument, and no fact Is brought to the knowledge of the obligee before he 
 accepts the instrument calculated to put him on his guard In regard to that point, 
 and which would naturally have led a prudent man interested in the opposite 
 direction to have made Imjulry before accepting the security, the fault cannot be 
 said to rest to any extent upon the obligee. And, on the other hand, where the 
 surety intrusts the bond to the principal obligor in perfect form, with his own 
 name attached as surety, and nothing upon the paper to indicate that any others 
 are expected to sign the instrument in order to give it full validity against all the 
 parties, he mcdce.s such principal his agent to deliver the same to the obliyee, be- 
 cause such Is the natural and ordinary course of conducting such transactions ; 
 and If the principal under such circumstances gives any assurances to the surety 
 in regard to procuring other co-sureties, or performing any other condition be- 
 fore he delivers the bond, and which he fails to perform, the surety ijiviny confi- 
 dence to such assurances must stand the hazard of their performance, and cannot 
 implicate the obligee in any responsibility in the matter, unless he is guilty of fraud 
 or rashness in accepting the security.''^ 
 
 In the note to the April number of the magazine referred to, some authorities 
 are cited as sustaining the application of the doctrine laid down in Pepper v. The 
 State, to " promissory notes and other contracts not negotiable, or to negotiable 
 contracts before negotiation." The case cited, Lloyd v. Howard, 1 Eng L. & 
 Eq. 227, was where "A, being the payee and holder of a bill of exchange, 
 wrote his name upon It, and gave it to B for the purpose of getting it discount- 
 ed. B never paid A any money in respect to the bill, but kept it until it teas 
 overdue, when he delivered it to C without receiving any value for it. Held, 
 that there was no indorsement by A to B." The fact that C received the bill 
 when overdue, could give him no right to insist that the apparent indorsement 
 , by A to B should be treated as real. The decision in the case of Palmer v. 
 Richards, lb. 529, wa^ where " the drawer of a bill of exchange Avhich had been 
 accepted, wrote his name across the back of the bill, and delivered It to A to get 
 discounted, who, instead thereof, while the bill was running, deposited It with B 
 as security for money advanced to himself, without fraud on the part of B. Held, 
 that this was a valid indorsement of the bill by the drawer to B." In the case of 
 Leaf V. Gibbs, 4 Car. & P. 4G0, the facts show that the plaintiff, who was the 
 payee of the note, knew that when the defendant signed as surety, the agreement 
 was that his mother was also to sign the note with him, and that she afterwards 
 refused, and the confidential clerk of the plaintiff stated to tlie agent of the 
 defendant and his mother that the arrangement was, in consequence of such refu- 
 sal, incomplete. The Court held that the defendant was not liable unless he 
 waived the execution of the note by his mother. Where the payee receives the 
 
 3y
 
 610 SURETYSHIP. 
 
 instrument with full knowledge of its incomplete condition, in fact it would, it 
 seems to us, be a fraud to permit him to take advantage of its apparently perfect 
 condition. The decision in the case of Awde v. Dixon, 5 Eng. L. & Eq. 512, 
 also cited, cannot be reconciled with the American decisions. Mr. Parsons re- 
 fers to that case as in conflict with the settled law in this country. 1 Bills & 
 Notes, 111. .The Court, to sustain their ruling, declare it to be the law in Eng- 
 land, that if one signs a negotiable instrument in blank, and delivers it with au- 
 thority to fill it up for £100, and it is filled up for £200 and negotiated, the 
 maker will not be liable. Lord Mansfield did not thus state the law in Russell 
 t'. Langstaffe, 2 Doug. 514, and in this country such a doctrine is against all 
 authority, and a decision resting upon it cannot be considered in our courts as 
 affording any -aid in the determination of legal questions. FuUerton v. Sturges, 
 4 Ohio State, 529 ; 1 Parsons, supra, and authorities cited. The decision in 
 Awde V. Dixon, proceeds upon the ground that the writing of the greater sum 
 in the instrument would constitute the crime of forgery, and Alderson, B., placed 
 the decision in the case upon that ground. This is perhaps correct under the 
 English statute, but the Supreme Court of Massachusetts, in Putnam v. Sullivan, 
 4 Mass. 45, held otherwise, on the ground that the instrument had been deliv- 
 ered upon a trust, intending that something should afterward be written, to which 
 the name should apply as an indorsement. 
 
 Judge Bedfield, however, seems to have regarded the English decision in the 
 case of Swan v. North British, &c. Co., 10 Jur. N. s. 102, as conflicting with 
 the view expressed in the note we have quoted from. In that case, " where A 
 was induced by his broker to send him blank forms of transfer, which the broker 
 filled up with numbers and descriptions of shares different from those of the com- 
 pany intended by A, being shares in the defendant's company, and by means of 
 a duplicate key which he had procured to be made without the knowledge of A, 
 obtained certificates from a box of A's, necessary to perfect the transfers, and 
 also forged the names of the attesting witnesses ; held, in an action against the 
 company for damages, and for a mandamus to restore the plaintiff's name to the 
 registry, that the acts of the plaintiff were not such as estopped him from show- 
 ing that the deed of transfer was a forgery." In other words, that where the 
 act of the plaintiff, in trusting the agent with the blank forms of transfer, did 
 not enable the agent to commit a fraud upon a third party, but such fraud could 
 only have been consummated by the addition of larcen}- and forgery, in such case 
 the plaintiff was not estopped. We admit that we are unable to understand • 
 what decision a Court could legitimately render in such a case having any rela- 
 tion to the question now under consideration. 
 
 There has also been a case decided by the Supreme Court of Tennessee, 5 
 Humph. 133, which rests for support upon the cases we have already examined in 
 4 Cranch and 11 Peters, and in our opinion is not sustained by those authorities. 
 Counsel have cited to us also the case of The State v. Bodly, 7 Blackf. 355. 
 There were in that case no questions decided or discussed by the Court involv- 
 ing any point now under consideration. Nor could such questions have been 
 presented in that case, as the bond when delivered contained the name, in the 
 body of the instrument, of the other party who was to execute it, and the clerk 
 who was to receive the bond had actual notice of its imperfect execution, he 
 being the witness called to prove the fact that the sureties signed on condition
 
 KKITH V. GOODWIN. 611 
 
 that the person whose name was witli theirs in tlie body of tlic l)on<l shoiihl also 
 execute it. 
 
 Since the decision in the case of Pepjjcr v. The State, tlie New York Court 
 of Appeals has rendered a decision, holding that where a bond is executed by 
 sureties, and delivered to one of their number to keep until also executed by 
 another surety, that the instrument, until so executed, is held as ai^ escrow. The 
 People V. Bostwick, 32 N. Y. 445. 
 
 Blackstone defines a delivery as an escrow, to be a delivery " to a tliird per- 
 son to hold till some conditions be performed on the part of the f/rantee.'''' See 
 also 4 Kent, 454 ; 1 Coke, 'Ad a. 
 
 In Greenleaf's Cruise on Real Property, b. 4, p. 29, it is said: " The deliv- 
 ery of a deed may be either absolute, that is to the grantee hirasdf or to some 
 person for him, or else conditional, that is to a third person, to keep it till some- 
 thiiui is done by the grantee; in which last case it is not delivered as a deed, but 
 as an escrow." The instrument is as perfect and complete in form when deliv- 
 ered as an escrow, as though it were to be delivered absolutely. An instrument 
 delivered as an escrow cannot be withdrawn, but remains in the liands of the 
 holder to be delivered over to the party for whose benefit it was executed, when- 
 ever he performs the conditions upon which the original delivery was made. But 
 so long as tile instrument remains in the hands of one of the parties, it has no 
 force whatever. 
 
 When a decision is based upon so total a disregard of the essentials constitut- 
 ing the delivery of an instrument as an escrow, it may be well to look closely to 
 the authorities which are cited to sustain this line of ruling. 
 
 Those authorities are the ones we have already reviewed, with the additional 
 one of The State Bank v. Evans, 3 J. S. Green (N. J.), 155, which was a case 
 *' where the defendant's name was on the bond as one of the sureties, and he 
 proved that the bond was brought to him by one of his co-sureties, and that when 
 he signed it he delivered it to his co-surety and said to him : ' Now this bond is 
 not to be delivered up until all the persons named in it have signed it.' " The 
 Court held that the testimony was admissible, and that it overcame the presump- 
 tion of any legal delivery arising from the mere fact of the obligee having pos- 
 session of the bond. This is simply another case where the instrument disclosed 
 upon its face that it had not been executed by all the parties. But while citing 
 authorities which, as we have seen, do not sustain the position they are quoted to 
 support, the case of The I'eoplc r. Bostwick entirely overlooks a decision ren- 
 dered a year earlier by the Supreme Court of Maine, in which it was held that 
 " where a surety to a bond signs upon the assurance that the principal will pro- 
 cure two other persons specified and known to such surety to sign the bond be- 
 fore he delivers the same, which he fails to do, but this is wholly unknown to 
 the obligee at tlic time lie accepts the bond, such surety is bound to perform the 
 obligation." 
 
 The case of Carr et al. v. Moore, 2 Ind. 602, was an action of " debt on a 
 bond given to a school commissioner, signed by A. C. and P. As to P. the bond 
 was a forgery. The bond was delivered to C, the principal, to be signed and 
 sealed, and it was redelivered to the connnissioner by A. and C. perfected. The 
 commissioner was ignorant of the forgery, the name of P. having been placed 
 upon the bond after its delivery to C. (or the signatures. Jleld, that A. was lia-
 
 612 SURETYSHIP. 
 
 ble on the bond." Mr. Justice rerkins, who delivered the opinion, says : " Had 
 Carr (the principal) induced Athon (the surety) by fraud to execute the bond, 
 still the school commissioner, being ignorant of the fact, could not, we suppose, 
 be alFected by it." There was no proof, however, of such fraud, and the ex- 
 pression must therefore be taken, we suppose, rather as the judgment of the 
 writer of the opinion, than as the ruling of the Court. But it is certainly enti- 
 tled to consideration and respect. 
 
 The case of IMillett v. Parker et ah, 2 Met. (Ky.) 608, reviews the authori- 
 ties very fully upon this question, and holds that " a conditional delivery to the 
 principal by a person who subscribes a paper as a surety, will not make such 
 paper a mere escrow. The delivery of the paper, to constitute an escrow, must 
 be made to a*third person, and not to a co-obligor ; and this whether the instru- 
 ment be assignable or not." 
 
 The case of The State v. Chrisman et al., 2 Ind. 126, was an action of debt 
 upon an administrator's bond. Nelson, one of the defendants, filed the follow- 
 ing plea, verified by oath: " That the said supposed writing obligatory in the 
 declaration mentioned, was signed by him upon condition that twelve or fifteen 
 other good men signed it, which was not done ; and that unless said number of 
 persons did sign it, it was not to be considered his deed." A demurrer was sus- 
 tained to the answer. The Court say: "This plea admits the signature to the 
 bond, and does not deny that the same was delivered to the obligee. When so 
 signed and delivered it became absolute." Upon the face of the bond it appears 
 that the name of Nelson was written next following that of the principal, and 
 was followed by the names of six other sureties. The presumption in law is that 
 the names were signed in the order in which they appear upon the instrument, 
 and as the obligee was the State, and the delivery was the filing of the completed 
 instrument with the clerk, no delivery could have been made by Nelson to the 
 obligee upon his signing it. So that the decision of the case results, that no de- 
 livery by any of his co-obligors could be made to the obligee of the instrument 
 as an escrow, but the delivery by any of them rendered Nelson liable on the 
 bond. 
 
 It was also held in the case of Taylor & Co. v. Craig, 2 J. J. Marshall, 449, 
 that a conditional delivery of a promissory note, by a surety in the note to his 
 principal, did not make the instrument an escrow, but that the plaintiff had the 
 right to hold the surety responsible without regard to the condition he had im- 
 posed upon the principal at the time of the delivery. The Bank of the Common- 
 wealth V. Cuny, 2 Dana, 142, recognizes this as the law. Again, in the case of 
 Smith V. Moberly, 10 B. Mon. 266, in deciding a similar question, this language 
 is used: "But a delivery of a writing of this character, under such circum- 
 stances, to the principal, does not have the effect of characterizing it as a mere 
 escrow ; but on the contrary the principal should be considered as the agent of 
 the surety, and empowered by him to pass the writing to the person to whom it 
 may be made payable, and his delivery as being sufficient to make it effectual, 
 unless the payee had notice of the special terms upon which it was signed. The 
 .implied discretionary authority to use the note, arising out of its possession by 
 the principal, uncontradicted by its terms or any thing apparent on its face, can- 
 not be restricted by any agreement between the payors themselves, of which the 
 payee had no notice." The Supreme Court of Vermont have also held that
 
 KEITH V. GOODWIN. 613 
 
 where a note payable to a bank was signed by a principal and one suret}-, with 
 an agreement on the part of the principal with such surety that he would procure 
 another surety, which was not done, before he procurcfl the note to be discount- 
 ed, it will constitute no defence, unless the officers of the bank were cognizant 
 of such agreement. Passumpsic Bank v. Goss, 31 Vt. 315. 
 
 It seems clear, on principle, that a surety cannot make a delivery of a bond 
 to his principal as an escrow, upon condition that other names shall be procured 
 before its delivery to the obligee. The very definition of an escrow involves the 
 holding of the instrument, complete in form, signed and sealed, prepared for 
 delivery to the obligee by a third person who acts as the agent of the obligors 
 and obligee, and who is to make the delivery, not upon some act done by the 
 obligors, but upon the performance of some condition by the obligee. There are 
 but two parties to the instrument, and so long as it is held by the principal it 
 cannot be said to be delivered for any purpose, for it remains still in the hands 
 of the one party, who is only to be bound in any manner upon its delivery to 
 the other. And where there is no delivery of the instrument by the one party 
 executing it, it cannot be said to be held as an escrow. 
 
 Can a delivery then be made to the principal, as the agent of his sureties, for 
 any other purpose than an unconditional delivery to the obligee ? 
 
 The interest of the principal is clearly to procure the acceptance of his bond 
 by the obligee at the earliest moment, and with the least number of sureties. 
 Experience proves, and the law so regards it, that it is a hardship to procure 
 bail, and the interest of the principal is to avoid this hardship. On the other 
 hand, the interest of the sureties is as clear to avoid a delivery until their pro 
 ra/rt liability has been reduced by the execution of the bond by other co-sureties. 
 
 It is a well-established principle of law, that he who has an interest in the do- 
 ing of a particular act, cannot accept an agency in the same matter for others 
 whose interests are adverse to his own. A person will not be permitted to as- 
 sume an agency for others, where the interests of his principal would be in direct 
 conflict with his personal interests. In Copeland v. Mercantile Ins. Co., 6 Pick. 
 198, Merlon, J., says: "It is a rule of law well settled, and founded in the 
 clearest principles of justice and sound policy, that the agent of the seller can- 
 not become the purchaser, or the agent of the purchaser." Judge Story, in liis 
 work on Agency, § 211, says : " For the like reason (that is, for the same reason 
 that forbids an agent of the seller himself to become the buyer), an agent of 
 the seller cannot become an agent of the buyer in the same transaction." And 
 again, § 9 : " Yet we are to understand that they cannot, at the same time, take 
 upon themselves incompatible duties and characters. . . . A memorandum made 
 and signed by a seller, at the request of the purchaser, will not bind." See 3 
 Parsons, Contracts, p. 11 ; Smith's Merc. Lsw, 149; Wright r. Dannah, '2 Camp. 
 203; Farebrother v. Simmons, 5 Barn. & Ad. 333; Rayner v. Linthorne, 2 
 Car. & P. 124 ; Cooper r. Smith, 15 East, 103. In The Utica Ins. Co. v. Toledo 
 Ins. Co., 17 Barb. 132, it is said: "The general principle that a party cannot 
 act for himself in the same transaction in wliich he undertakes to act for another 
 is well settled, and the validity of a contract in which he acts, and to which 'he 
 is a party as agent for a third person and also in his own behalf, does not depend 
 upon the question whether he makes an advantage by the transaction. . . . The 
 character of agent for one party to a contract, and that of principal upon the
 
 614 SURETYSHIP. 
 
 other part, are incompatible." Ex parte Bennett, 10 Ves. 381 : Florance v. 
 Adams, 2 Rob. 556 ; Beal v. McKiernan, 6 Louis. 407 ; Bentley v. Columbia Ins. 
 Co., 19 Barb. 595. 
 
 The law, indeed, makes the principal for a special purpose ; i. e., the delivery 
 of the instrument, the agent of liis sureties. Their delivery of the instrument to 
 the principal, after placing their names upon it, authorizes the principal to make 
 the delivery to the obligee ; for such is the channel through whicli the paper 
 would properly pass in reaching the obligee. And the delivery of the instru- 
 ment to be by him at once transferred to the obligee, is a delivery entirely con- 
 sistent with the interests and inclination of the principal, and for such a purpose 
 the delivery is proper. The original contract is between the principal on the 
 bond and the obligee. The compliance with the contract is the delivery of the 
 bond by the principal obligor to the obligee, duly executed by himself and his 
 sureties. The contract between the principal on the bond and his sureties is, 
 that they will enable him to comply with his original contract. For this purpose 
 they sign and deliver to him the instrument, that in the fulfilment of his original 
 contract he may deliver it to the obligee. 
 
 Now is it not clear that, as the general purpose of the delivery by the sureties 
 to the principal is that he may make a delivery to the obligee, no conditions im- 
 posed upon such delivery will bind the obligee unless they are known to him ? 
 In the case of Pickering v. Busk, 15 East, 38, Lord Ellenborrmgh, C. J., states 
 the law thus : " Strangers can only look to the acts of the parties, and to the 
 external indicia of property, and not to the private communications which may 
 pass between a principal and his broker ; and if a person authorize another to 
 assume the apparent right of disposing of property in the ordinary course of 
 trade, it must be presumed that the apparent authority is the real authority. I 
 cannot subscribe to the doctrine that a broker's engagements are necessarily, 
 and in all cases, limited to his actual authority, the reality of which is afterward 
 to be tried by the fact. It is clear that he may bind his principal tvithin the lim- 
 its of the authority with lohich he has been apparently clothed by the principal in 
 respect to the subject-mailer ; and there would be no safety in mercantile transac- 
 tions if he could not. If the principal send his commodity to a place where it 
 is the ordinary business of the person to whom it is confided to sell, it must be 
 intended that the commodity was sent thither for the purpose of sale. If the 
 owner of a horse send it to a repository of sale, can it be implied that he sent it 
 thither for any other purpose than that of sale ? Or if one send goods to an 
 auction-room, can it be supposed that he sent them th'ther merely for safe cus- 
 tody ? " And where the surety signs and delivers the bond to the principal, 
 from whom it would naturally pass to the obligee, are we to suppose that such de- 
 livery to the principal was merely for safe custody ? The rule laid down in the 
 case cited is, where the commodity is sent in such a way, and to such a place, 
 as to exhibit an apparent purpose of sale, the principal will be bound, and the 
 purchaser safe. " Bayley, J. : If the servant of a horse-dealer, with express 
 directions not to warrant, do warrant, the master is bound ; because the servant, 
 having a general authority to sell, is in a condition to warrant, and the master 
 has not notified to the world that the general authority is circumscribed." And 
 is not the surety upon a bond, who delivers it to his principal in apparent proper 
 condition to be by him delivered to the obligee, and with the general authority to
 
 KEITH V. GOODWIN. 615 
 
 make such delivery, but circumsoriljed by a condition unknown to the obligee, 
 bound by the delivery which the principal may make in disregard of the londi- 
 tion ? The rule is stated, by a learned author thus: "An agent's authority is 
 that which is given by the declared terms of his appointment, notwithstanding 
 secret instructing ; or that with which he is clothed by the character in which he 
 is held out to the world, althougli not within the words of his commission. What- 
 ever is done under an authority thus manifested, is actually within the authority, 
 and the pi'ineipal is bound for tliat reason; for he is bound equally by the author- 
 ity which he actually gives, and by that which, by his own acts, he appears to 
 give. . . . The appearance of the authority is one thing, and for that the princi- 
 pal is responsible." 1 Parsons, Contracts, 44. The surety places the instrument, 
 perfect upon its face, in the hands of the proper person to pass it to the obligee, 
 and the law justly holds that the apparent authority with which the surety has 
 clothed him, shall be regarded as the real authority, and as the condition imposed 
 upon the delivery was unknown to the obligee, therefore the benefit of such con- 
 dition shall not avail the surety. 
 
 Thus, in our opinion, should the rule be established upon principle ; and, as 
 it appears by the examination we have made, that the authok'itles relied upon to 
 sustain a contrary rule are In the main irrelevant, and are In turn quoted to sup- 
 port the cited decisions which are really in point, we are inclined, after a review 
 of all the cases, to regard the real weight of well-considered decisions as sus- 
 taining the rule which to us .seems to rest also upon a correct principle. 
 
 So far as the decision of the case of Pepper v. The State, supra, rests upon 
 the construction of the statute, and upon the fact of forgery, we are not called 
 upon to review it. 
 
 The action of the Court below upon the demurrer was correct. 
 
 Judgment affirmed. 
 
 It seems to be entirely well settled that where the instrument is of a negotiable 
 character, and is actually negotiated while current, in the due course of business 
 and for value to a bona fide party, the surety must be held responsible in all such 
 cases, unless there is something upon the face of the paper to indicate its incom- 
 pleteness. Passumpsic Bank v. Goss, 31 Vt. 315 ; INlcCramer v. Thompson, 7 
 Am. Law Keg. N. s. 92, In which latter case the authorities are very care- 
 fully commented upon by Wright, J. It has sometimes btHin made a question 
 how far a surety, before he Is made to pay any portion of the debt, can be 
 regarded as standing in the light of a creditor to the principal debtor. But it 
 seems, upon principle as well as authority, to be most undeniable that when the 
 surety is compelled to pay the debt, or any part of it, his right attaches to be 
 treated as a creditor from the time of assuming such suretyship. 
 
 So, too, securities given to Indemnify sureties are founded upon most unques- 
 tionable consideration for value. Uhler v. Semple, 5 C. E. tireen (20 N. J. 
 Ch.), 288. But it has sometimes been held that the creditor cannot under all 
 circumstances claim the benefit of such securities. Jones r. Quinnlpiack Bank, 
 29 Conn. 25. But see N. B. Savings Inst. v. Fairhaven Bank, 9 Allen. 175-178. 
 The subrogation of the surety upon the payment of the debt, to all the rights of 
 the creditor Is clearly recognized In the American courts, although subroga- 
 tion, in form. Is a remedv derived from the Roman civil law. Irick v. Black,
 
 616 SURETYSHIP. 
 
 2 C. E. Green (17 N. J. Ch.), 189. And in the case last cited the right of the 
 surety, by means of a bill in equity, to compel the principal debtor, after the 
 debt falls due, to make payment of the debt is fully recognized. And it is here 
 declared that where the creditor has the means of fully indemnifying himself out 
 of the property of the principal debtor, and will be subjected to mo loss or delay 
 thereby, he may in equity be compelled by the surety to seek his redress by 
 means of resort to the property of the principal debtor. But this rule is subject 
 to many exceptions ; and the better opinion now seems to be that in such cases 
 the surety must assume the debt and accept the transfer of such collateral rem- 
 edies as the creditor may possess. 1 Story Eq. Jur. §§ 499 et seq., 499 e, and 
 cases cited in note, tenth edition. 
 
 The question of the defences to which a surety for the husband to secure the 
 wife's separate estate to her may avail himself is discussed in Barr v. Greenawalt, 
 62 Penn. St. 172. 
 
 In cases of insolvency the surety may sometimes compel the creditor to resort 
 to collateral remedies for the collection of his debt before attempting to enforce 
 it against him. Thus it has been held that where the payee of a note had 
 deceased, and the administrator was attempting to enforce the same against a 
 surety, the maker of the note being insolvent, but entitled to a distributive share 
 in the estate of the payee, the surety might compel the administrator first to 
 resort to such distributive share. Wright v. Austin, 56 Barb. 13. The author- 
 ities are cited in the opinion, and carefully classified. 
 
 The operation of the statute of limitations as between surety and principal, 
 and accommodation parties among themselves, and between indorser or drawer 
 and prior parties, is a question of interest and importance. In the first two 
 cases mentioned, it is pretty well settled that the statute begins to run from the 
 time of payment. Barnsback v. Reiner, 8 Minn. 59 ; Preslar r. Stalworth, 37 
 Ala. 402 ; Hale v. Andrews, 6 Cow. 225 ; Tillotson v. Rose, 11 Met. 299 ; Rey- 
 nolds V. Doyle, 1 Man. & G. 753 ; Collinge v. Heywood, 9 Ad. & E. 633 ; Byles, 
 Bills, 333; Angell, Limitations, 112, 113. But see Webster v. Kirk, 17 Q. B. 
 944. 
 
 It would seem from analogy to these cases, and from the fact that the right of 
 action of the indorser or drawer accrues only upon payment, that the statute 
 should begin to run from that time. See Reynolds v. Doyle, and Collinge v. 
 Heywood, supra. But the contrary is held in Webster v. Kirk, supra, and by 
 the courts of Pennsylvania. Kennedy v. Carpenter, 2 Whart. 844 ; Farmers' 
 Bank v. Gilson, 6 Barr, 51. The ground taken in the Pennsylvania cases is, 
 that the indorser must sue upon the paper, as to which the statute begins to run 
 at maturity. Perhaps the rule may be different where it is held that such party 
 is not limited to an action upon the paper, but may sue for money had and re- 
 ceived. See Ellsworth v. Brewer, 11 Pick. 316. We are informed that a case 
 is now pending in the Supreme Court of Massachusetts, involving this point. 
 It may be well to note that Reynolds v. Doyle does not appear to have been be- 
 fore the Court in Webster v. Kirk ; and that no reasons are given for the deci- 
 sion in the latter case.
 
 BAYARD V. SHUNK. 617 
 
 BANK-BILLS AND OTHER PAPER TAKEN IN 
 PAYMExNT OF DEBT. 
 
 Bayard v. Shunk. 
 
 (1 Watts & Sergeant, 92. Supreme Court of Pennsylvania, May, 1841.) 
 
 Pmjment in bank-bills. — If a creditor receive current bank-notes in payment, tliis dis- 
 cliarges tlie debt; tbougli, by reason of the failure of the bank, of wliicii both par- 
 ties were ignorant at tlie time, tlie notes were wortliless wlien received. 
 
 In this case, notes of the Commercial Bank of Millington had 
 been received by the plaintiff's attorney in payment of a judgment 
 against the defendant and another. Said bank had actually failed 
 several days before this transaction, though both parties were 
 ignorant of this fact at the time ; and the bank-notes were worth- 
 less when received. The question was whether the judgment 
 were satisfied. 
 
 Gibson, C. J. Cases in which the bills or notes of a third party 
 were transferred for a debt, are not to the purpose ; and most of 
 those which have been cited are of that stamp. Where the parties 
 to such a transaction are silent in respect to the terms of it, the 
 rules of interpretation are few and simple. If the securities are 
 transferred for a debt contracted at the time, the presumption is 
 that they are received in satisfaction of it ; but if for a precedent 
 debt, it is that they arc received as collateral security for it ; and 
 in either case it may be rebutted by direct or circumstantial evi- 
 dence. But by the conventional rules of business, a transfer of 
 bank-notes, though they are of the same mould and obligation be- 
 twixt the original parties, is regulated by peculiar principles and 
 stands on a different footing. They are lent by the banks as cash ; 
 they are paid away as cash ; and the language of Lord Mansfield 
 in Miller v. Race, was not too strong when he said, " they are not 
 goods, nor securities, nor documents for debts ; but arc treated as
 
 618 BANK-BILLS AND OTHER PAPER TAKEN IN PAYMENT. 
 
 money, as cash, in the ordinary course and transaction of business 
 by the general consent of mankind, which gives them the credit 
 and currency of money to all intents and purposes ; they are as 
 much money as guineas themselves are, or any other coin that is 
 used in common payments as money or cash." If such were their 
 legal character in England, where there was but one bank, how 
 emphatically must it be so here where they have supplanted coin 
 for every purpose but that of small change, and where they have 
 excluded it from circulation almost entirely. It is true, as was 
 remarked in Young v. Adams, 6 Mass. 182, that our bank-notes 
 are private contracts without a public sanction, like that which 
 gives operation to the lawful money of the country ; but it is also 
 true that they pass for cash both here and in England, not by force 
 of any such sanction, but by the legislation of general consent, in- 
 duced by their great convenience, if not the absolute necessities of 
 mankind. Miller v. Race is a leading case which has never been 
 doubted in England or, except in a case presently to be noticed, in 
 America ; and it goes very far to rule the point before us ; for if 
 the wheel of commerce is to be stopped or turned backwards in 
 order to repair accidents to it from impurities in the medium which 
 keeps it in motion, except those which — few and far between — 
 are occasioned by forgery, bank-notes must cease to be a part of 
 the currency, or the business of the world must stand still. The 
 weight of authority bearing directly on the point, is decisively in 
 favor of the position that bona fide payment in the notes of a broken 
 bank discharges the debt. Though Camidge v. AUenby, 6 Barn. & 
 C. 373 ; s. c, 13 Eng. Com. Law Hep. 202, was not a case of pay- 
 ment in bank-notes, but in the cash notes of a banker who had 
 failed a few hours before, it was held that if they were to be con- 
 sidered as cash, the debt would be discharged ; but if as negotiable 
 paper merely, the holder was bound to use due diligence in pro- 
 curing payment of them ; and that in either aspect the same result 
 was inevitable. Such notes, however, though formerly called gold- 
 smiths' notes, have not been treated as cash by the merchants or 
 the courts. Strictly speaking, they are ordin*ary promissory notes ; 
 for none but those of the Bank of England are considered bank- 
 notes in that country. The judges, however, seem to have hesi- 
 tated as to their precise character in that case ; but they distinctly 
 decided that bona fide payment in notes which have received the 
 qualities of money from the conventional laws of trade, is absolute
 
 BAYARD V. SHUNK. 619 
 
 satisfaction, notwithstanding the previons faihirc of the drawer. In 
 America we have a decision directly to the point in Scruggs v. Gass, 
 8 Yerg. 175, in which the Supreme Court of Tennessee held that 
 payment in the notes of a bank which had failed, discharged the 
 debt; and in Young v. Adams, already quoted, we have a decision 
 of the Supreme Court of Massachusetts to tlie same purport. 
 
 In contrast with these stands Lightljody v. The Ontario Bank, 
 decided liy the Supreme Court of New York, 11 Wend. 9, and af- 
 firmed in the Court of Errors, 13 Wend. 101.^ The judges and 
 senator who delivered opinions in that case, seem not to have coin- 
 cided in their intermediate positions, though they arrived at the 
 same conclusion. The chief justice who delivered the opinion of 
 the Supreme Court, appears to have thought that a bank-note 
 stands on the footing of any other promissory note ; that as he 
 who parts with what is valuable ought on principles of natural 
 justice to receive value for it in return, a Aendor is not bound by 
 an agreement to accept promissory notes should they have been 
 bad at the time of the transaction ; and that payment in tiie notes 
 of an insolvent bank is no better than payment in counterfeit coin. 
 It is obvious that this involves a contradiction ; for to confound 
 bank-notes with ordinary promissory notes would sul)ject a debtor, 
 who had paid them away, to the risk of the bank's ultimate solven- 
 cy. In the Court of Errors, the chancellor, having premised that 
 a State is not at liberty to coin money, or make any thing a legal 
 tender but gold or silver, and consequently that the practice of 
 receiving bank-notes as- money is a conventional regulation, and 
 not a legal one, concluded that where the loss has already iiappened 
 by the failure of the bank, there is no implied agreement that the 
 receiver shall bear it ; and that if he were called on to express his 
 sense of the transaction at the time, he would say what natural 
 justice says, that the risk of previous failure in the value of the 
 medium must be borne by the debtor. He would more probably 
 say that he had not thought or formed an opinion about it. Sena- 
 tor Van Schaik also insisted much on the natural justice of the 
 principle, and asserted that no case in the books authorizes an in- 
 ference that bank-notes arc considered as money excci)t in the 
 universally implied condition that the banks which issued them 
 are able to redeem them at the time of the transfer. In Miller i'. 
 Race, however, we have seen that Lord Mansfield asserted on the 
 other hand that they arc money without any qualification whatever ; 
 
 1 Post, 404.
 
 620 BANK-BILLS AND OTHER PAPER TAKEN IN PAYMENT. 
 
 and Camidge v. Alleiiby, as well as Scrugc^s v. Gass, affirms that 
 they may retain the character of money after the period of the 
 bank's failure. To assume that solvency of the bank at the time 
 of the transfer is an inherent condition of it, is to assume the whole 
 ground of the argument. The conclusion concurred in by all, 
 however, was that the medium must turn out to have been what 
 the debtor offered it for at the time of the payment. How does 
 that consist with the equitable principle that there must be, in 
 every case, not only a motive for the interference of the law, but 
 that it must be stronger than any to be found on the other side ; 
 else the equity being equal, and the balance inclining to neither 
 side, things must be left to stand as they are (Fonb. b. 1, c. v. § 3 ; 
 ib. c. iv. § 25) ; in other words, that the law interferes not to shift a 
 loss from one innocent man to another equally innocent, and a 
 stranger to the cause of it ? 
 
 The self-evident justice of this would be proof, were it necessary, 
 that it is a principle of the common law. But we need go no 
 further in search of authority for it than Miller v. Race, in wliich 
 one who had received a stolen bank-note for a full consideration in 
 the course of his business, was not compelled to restore it. It was 
 intimated in The Ontario Bank v. Lightbody, that there was a pre- 
 ponderance of equity in that case, not on the side of liim who had 
 lost the note, but of him who had last giren value for it. Why 
 last ? The maxim, prior in tempore, potior in jure, prevails be- 
 tween prior and subsequent purchasers indifferently of a legal or 
 an equitable title. It is for that reason the owner of a stolen horse 
 can reclaim him of a purchaser from the thief; and were not the 
 field of commerce market overt for, every thing which performs 
 the office of money in it, the owner of a stolen note might follow it 
 into the hands of a bona fide holder of it. But general convenience 
 requires that he should not ; and it was that principle, not any 
 consideration of the equities betwixt the parties, which ruled the 
 cause in Miller v. Race. But a more forcible illustration of the 
 principle, were the case indisputably law, might be had in Levy v. 
 The Bank of the United States, 4 Dall. 234 ; s. c, 1 Binn. 27 ; in 
 which the placing even a forged check to the credit of a depositor 
 as cash — a transaction really not within any principle of conven- 
 tional law — was held to conclude the bank ; and to this may be 
 added the entire range of cases in which the purchaser of an 
 article from a dealer has been bound to bear a loss from a defect
 
 BAYARD V. SHUNK. 621 
 
 in the quality of it. And for the same reason that the law refuses 
 to interfere between parties mutually innocent, it refuses to inter- 
 fere between those who are mutually culpable ; as in the case of 
 an action for negligence. The rule of the admiralty, being that 
 of the civil law, would apportion the loss ; but it Wks no place in 
 any other court. 
 
 What is there, then, in the case before us to take it out of this 
 great principle of the common law ? The position taken by the 
 courts of New York is, that every one who j)arts with his property 
 is entitled to expect the value of it in coin. Doubtless he is. He 
 may exact payment in precious stones, if such is the bargain. 
 But where lie lias accepted without reserve wiiat the conventional 
 laws of the country declare to be cash, his claim to any thing 
 further is at an end. Bills of exchange and promissory notes 
 enter not into the transactions of commerce, as money ; but it 
 impresses even these with qualities which do not belong to ordinary 
 securities. The holder of one of them, who has taken it in the 
 ordinary course, can recover on it, whether there was a considera- 
 tion between the original parties or not ; and if no man can part 
 with his property, except subject to an inherent right to have the 
 worth of it, at all events, why should not the drawer of a note be 
 at liberty to show want of consideration against an indorsee, on 
 the ground that no one can pledge his responsibility without having 
 received what he expected for it ? Or why, on the supposed moral 
 and public considerations that were invoked in the discussion of 
 the general principle, should the vendee of a chattel be bound to 
 pay for it, though it turn out to be inferior in quality to what he 
 expected it to l)e ? It is because it would stop the wlieels of com- 
 merce to trace the defect through a series of transactions to the 
 author of it ; and dealers must therefore take the risk of it for 
 the premium of the profits. And may not dealers, as well as 
 insurers, take the risk of an event which may have already hap- 
 pened ? The creditor does agree to take the risk of the bank's 
 solvency when he makes its notes his own without reserve. 
 
 The assertion that it is always an original and subsisting part 
 of the agreement tliat a bank-note shall turn out to have been good 
 when it was paid away, can be conceded no farther than regards 
 its genuineness. Tiuit genuine notes are supposed to be e([ual to 
 coin, is disproved by daily experience, which shows that they cir- 
 culate by the consent of the whole communities at their nominal
 
 622 BANK-BILLS AND OTHER PAPER TAKEN IN PAYMENT. 
 
 value when notoriously below it. But why hold the payor respon- 
 sible for a failure of the bank only when it has been ascertained 
 at the time of the payment, and not for insolvency ending in an 
 ascertained failure afterwards ? As the bank may have been 
 actually insolvent before it chose to let the world know it, we must 
 carry his responsibility back beyond the time when it ceased to 
 redeem its notes, if we carry it back at all. Were it not for the 
 conventional principle tiiat the purchaser of a chattel takes it with 
 its defects, tlie i)urchaser of a horse, with the seeds of a mortal 
 disease in him, might refuse to pay for him, though his vigor and 
 usefulness were yet unimpaired ; and if we strip a payment in 
 bank-notes of the analogous cash principle, why not treat it as a 
 nullity, by showing that the bank was actually, though not osten- 
 sibly, insolvent at the time of the transaction ? It is no answer to 
 say the note of an unbroken bank may be instantly converted into 
 coin by presenting it at the counter. To do that may require a 
 journey from Boston to New Orleans, or between places still 
 further apart, and the bank may have stopped in the mean time ; 
 or it may stop at the instant of presentation, when situated at the 
 place where tlie holder resides. And it may do so even when it is 
 not insolvent at all, but perfectly able eventually to pay the last 
 shilling. This distinction between previous and subsequent failure, 
 evinced by stopping before the time of the transaction or after it, 
 is an arbitrary and impracticable one. To such a payment we 
 must apply the cash principle entire, or we must treat it as a 
 transfer of negotiable paper, imposing on the transferee no more 
 than the ordinary mercantile responsibility in regard to presenta- 
 tion and notice of dishonor. There is no middle ground. But to 
 treat a bank-note as an ordinary promissory note would introduce 
 endless confusion, and a most distressing state of litigation. We 
 should have reclamations through hundreds of hands, and the 
 inconvenience of having a chain of disputes between successive 
 receivers, would more than counterbalance the good to be done by 
 hindering a crafty man from putting off his worthless note to an 
 unsuspecting creditor. No contrivance can prevent the accom- 
 plishment of fraud, and rules devised for the suppression of petty 
 mischiefs have usually introduced greater ones. 
 
 The case of a counterfeit bank-note is entirely different. The 
 laws of trade extend to it only to prohibit the circulation of it. 
 They leave it, in all besides, to what is the rule both of the common
 
 BAYARD V. RHUNK. 623 
 
 and the civil law, which requires a thing parted with for a price to 
 have an actual, or at least a potential, existence (2 Kent, 408) ; 
 and a forged note, destitute as it is of the quality of legitimate 
 being, is a nonentity. It is no more a bank-note than a dead horse 
 is a living one ; and it is an elementary principle that what has no 
 existence cannot Ijo the subject of a contract. But it cannot ))e 
 said that the genuine note of an insolvent bank has not an actual 
 and a legitimate existence, though it be little worth ; or that the 
 receiver of it has not got the thing he expected. It ceases not 
 to be genuine by the bank's insolvency ; its legal obligation as a 
 contract is undissolved ; and it remains a promise to pay, though 
 the promisor's ability to perform it be impaired or destroyed. But 
 as the stockholders of a broken bank are the last to be paiti, it is 
 seldom unable in the end to pay its note-holders and depositors ; 
 and even where nothing is left for them, its notes may be })arted 
 with at a moderate discount to those who are indebted to it. We 
 seldom meet with so bad a case as the present, in which every 
 thing like etTects, and even the vestiges of the bank, disappeared 
 in a few hours after the first symptoms of its failure. But inde- 
 pendent of that, the difference between forgery and insolvency in 
 relation to the transfer of a bank-note, is as distinctly marked as 
 the difference between title and quality in relation to the sale of a 
 chattel. 
 
 What then becomes of the boasted principle that a man shall 
 not have parted with his property until he shall have had value, or 
 rather what he expected for it ? Like many others of the same 
 school, it would be too refined for our times, even did a sembUmce 
 of natural justice lie at tiie root of it. But nothing devised by 
 human sagacity can do equal and exact justice in the apprehension 
 of all men. Tiie best that can be done, in any case, is no more 
 than an approximation to it ; and when the incidental risks of a 
 business are so disposed of as to consist with the general con- 
 venience, no injustice will in the end be done to those by whom 
 they are borne. Commerce is a system of dealing in whicli risk, 
 as well as labor and capital, is to be compensated. But nothing 
 can be more exactly balanced than the equities of parties to a 
 payment in regard to the risk of the medium when its worthless- 
 ness was unsuspected liy cither of them. The diirerence between 
 them is not the tithe of a liair, or any other inlinitesinKil (piantity 
 that can be imagined ; and in such a case, the common law allows
 
 624 BANK-BILLS AND OTHER PAPER TAKEN IN PAYMENT. 
 
 a loss from mutual mistake to rest where it has fallen, rather than 
 to remove it from the shoulders of one innocent man to the shoul- 
 ders of another equally so. Tlie civil-law principle of equality, 
 liowever practicable in an age when the operations of commerce 
 were few, simple, and circumspect, would be entirely unfit for the 
 rapid transactions of modern times ; it would put a stop to them 
 altogether. No man can withhold his praise of the civil law, as a 
 wonderful fabric of wisdom for its day, or deny that it has con- 
 tributed largely to the best parts of our jurisprudence ; but all its 
 materials of superior value have already been worked up in our 
 more commodious modern edifice ; and if the cultivation of an 
 acquaintance with it is to beget a desire to substitute its abstract 
 principles for the maxims of the common law, — the accumulated 
 wisdom of a thousand years' experience, — it were better that our 
 jurists should die innocent of a knowledge of it. This longing 
 after its peculiar doctrines began with Mr. Verplanck's commentary 
 on the decision of the Supreme Court of the United States in 
 Laidlaw v. Organ, 2 Wheat. 178 ; and it was subsequently indulged 
 by the Supreme Court of his own State, so far as to sap the founda- 
 tion of its own sound decision in Seixas v. Woods, 2 Caines, 48. 
 In Laidlaw v. Organ, the purchaser refused to disclose his informa- 
 tion that the article had risen in the market, and there was there- 
 fore room for a pretence of inequality in the circumstances of the 
 parties ; but where they have acted, as in this case, in equal 
 ignorance, and with equal good faith, that pretence, flimsy as it 
 was even there, is wanting, and the law, on principles of justice as 
 well as convenience, refuses to interfere between them. It is 
 therefore unnecessary to insist on the provisions of our statute of 
 1836, which enacts that " it shall be lawful for the officer charged 
 with the execution of any writ of fieri facias, when he can find no 
 other real or personal estate of the defendant, to seize and take 
 the amount to be levied by such writ, of any current gold, silver, 
 or copper coin belonging to the defendant, in satisfaction thereof ; 
 or he may take the amount aforesaid of any bank-notes, or current 
 bills for the payment of money, issued by any moneyed corpora- 
 tion, at the par value of such notes." At least for the purpose of 
 seizure in execution, therefore, bank-notes are money ; and had 
 the sheriff returned tiiat he had seized these notes as the defend- 
 ant's property instead of the property itself, it would not be pre- 
 tended that the debt was undischarged. But though he returned
 
 ONTARIO BANK V. LIGIITBODY. C25 
 
 the facts specially, the notes were received as cash by the plaintiff's 
 attorney ; and after that, on no principle whatever could the trans- 
 action be thrown open. The plaintiff's case is an unfortunate one, 
 but we could not relieve him without imposing an equal misfortune 
 on the defendants. Judgment affirmed. 
 
 See next case and note. 
 
 Ontario Bank v. Lightbody. 
 
 (13 Wendell, 101. Court of Errors of New York, December, 1834.) 
 
 Payment in bank-bills. — If the holder of commercial paper receive bank-notes in pay- 
 ment of the same, the risk of the solvency of the bank whicli issued the notes is 
 upon him wlio gave tiiera, in the absence of agreement ; and tlierefore if the bank 
 liad actually failed or stopped payment at the time the notes were received, and 
 this was unknown at the time to the holder, this will not constitute paj;ment of 
 his paper, though such bank-notes were current at the place where they were 
 received, at that time. 
 
 Assumpsit to recover the amount of a note of the Franklin Bank, 
 paid to the plaintiff by the Ontario Bank^ the defendant below, on 
 a draft drawn by him upon his funds on deposit. The Franklin 
 Bank had actually stopped payment at this time, though the facts 
 were unknown to both parties, and though the notes of that bank 
 were current at that time at the place where they were received. 
 
 Walwouth, Chancellor. The question to be decided is, which 
 of the parties shall sustain the loss in reference to the bill of the 
 Franklin Bank, received l)y Lightbody, })aid upon the ]>rcscntment of 
 his check. The law is well settled, that where the note of a third 
 person is received in payment of an antecedent debt, the risk of his 
 insolvency is upon the party from whom the note is received, 
 unless there is an agreement or understanding between the parties, 
 either express or implied, that the party who receives the note is 
 to take it at his own risk. The same principle is applicable to the 
 notes of an incorporated bank, except that as to the latter there is 
 always an implied understanding between the parties that if the 
 bill, at the time it is received, is in fact what the party receiving it 
 supposes it to be, he is to run the risk of any future failure of the 
 
 4U
 
 626 BANK-BILLS AND OTHER TAPER TAKEN IN PAYMENT, 
 
 bank. This implied agreement between the parties arises from the 
 fact that bills of this description, so long as the bank which issued 
 them continues to redeem them in specie at its counter, are by 
 common consent treated as money, and are constantly passed from 
 hand to hand as such. The receiving them as money, however, is 
 not a legal, but only a conventional regulation, adopted by the 
 common consent of tlie community ; as no State is authorized to 
 coin money, or to pass any law by which any thing but gold or 
 silver coin shall be made a legal tender in the payments of debts. 
 Tliis principle of considering bank-bills as money, which the re- 
 ceiver is to take at his own risk, cannot, therefore, be carried any 
 further than the conventional regulation extends ; that is, to con- 
 sider and treat them as money so long as the bank by which they 
 are issued continues to redeem them in specie, and no longer. 
 When, therefore, a bank stops payment, its bills cease to be a con- 
 ventional representative of the legal currency of the country, 
 whether the holder is aware of that fact or not; from that moment 
 the bills of such bank resume their natural and legal character of 
 promissory notes, or mere securities for the payment of money ; 
 and if they are afterwards passed off to an individual who is isqually 
 ignorant of the failure of the bank, there is no agreement on his 
 part, either express or implied, that he shall sustain the loss which 
 has already occurred to the original holder of the bills. Upon the 
 principles applicable to cases of mutual mistake, as those principles 
 are administered in courts of equity, it is now settled that, if an 
 individual passes to another a counterfeit bill^ or an adulterated 
 coin, both parties supposing it genuine at the time it was received, 
 the one wiio passes it is bound to take it back and give him to 
 whom it was passed a genuine bill or an unadulterated coin in lieu 
 thereof, or, in other words, to make good the loss. Markle v. Hat- 
 field, 2 Johns. 455. That principle of natural justice is equally 
 applicable to the case under consideration. The actual loss had 
 been sustained by the failure of the bank while the plaintiffs in 
 error were the holders and owners of the bill ; and it is a maxim 
 of the law, that the loss is to him who was the owner at the time 
 such loss happened, if both parties were ignorant of the loss at the 
 time of making their contract. Here, the one party intended to 
 pay, and the other supposed he was receiving the bill of a bank 
 which was redeeming its bills at its counter. Suppose the inquiry 
 had been made of the defendant, " Do you expect to sustain the
 
 ONTARIO BANK V. LIGHTBODY. 027 
 
 loss if the ])ank slioiikl fail before you shall have j»artod witli this 
 bill?" The answer, according to the implied understanding of the 
 parties, arising from the nature of the transaction, and considering 
 the bills of specie-paying banks as money, would ofrtainly have 
 been the aflfirmative. iiut if he had been asked, " Do you under- 
 stand that you are to bear the loss, if it should hereafter be ascer- 
 tained that the Franklin Bank has now actually failed and stopped 
 payment? " he would unquestionably have answered, " No ; in that 
 event, as the loss would have happened while you was the owner 
 of the bill, natural equity requires that you should bear it ; and I 
 shall expect you to take Ijack the bill and give me one which is 
 good." 
 
 The principle adopted by the Supreme Court in this case, is also 
 the only one which can protect the honest and unsuspecting against 
 the frauds of those who might be disposed to take advantage of the 
 ignorance of others as to the failure of a banking institution. A 
 person who has heard of the failure of a bank while he has some of 
 its bills on hand, will naturally be tempted to get rid of them for 
 the purpose of avoiding a loss he might otherwise sustain ; and if 
 he was disposed to be a rogue, he would keep his knowledge of the 
 failure to himself until he could pay out his bills to those who 
 were ignorant of the fact, and in such case he would escape with 
 impunity, if those to whom he passed them were required to prove 
 that he was aware of the failure at the time they received the bills 
 from him. And even if the first person to whom a l)ill was passed 
 should be so fortunate as to obtain proof to establish the fraud, if 
 he had honestly parted with the l)ill while he was yet ignorant of 
 the fact, so that the one who had received it from him could not 
 call for repayment, the original holder of the l)ill, who was guilty 
 of the fraud, would still escape with impunity. On the whole, I 
 am satisfied with the judgment of the Supreme Court in this case ; 
 not only as perfectly legal and just, but also as that which is most 
 consistent with the substantial interests of the community, and 
 founded upon a correct principle of pul)lic policy. 
 
 Van Schaick, Senator. A powerful effort was made l)y the coun- 
 sel for the plaintitTs in error, and many authorities were cited to 
 prove that bank-notes have been treated and viewed as /none// both 
 in this country and in England ; and he argued that payment in 
 good faith, in bills current at the time and place of the transaction,
 
 628 BANK-BILLS AND OTHER PAPER TAKEN IN PAYMENT. 
 
 constituted a full discharge of the obligation of a debtor to his 
 creditor, even though, as in the present case, the bank, in the bills 
 of which the payment was made, had failed previous to the making 
 of the paym|nt. 
 
 The authorities adduced by the counsel were misapplied ; and I 
 consider it a full answer to the argument which was founded upon 
 them, to say, that there is no adjudged case in the books to author- 
 ize the inference that bank-notes have ever been considered as 
 money, except under the universally implied understanding, that 
 the banks which issued the paper were able to redeem or to substi- 
 tute a full equivalent for their issues ; and therefore it is not a 
 sound inference from the cases to say that the paper of a bank shall 
 be entitled to the same consideration as money, after the bank has 
 failed, that it had before, in consequence of the confidence in its 
 stability. To test this position, it will be sufficient to select a few 
 of the strongest cases. Miller v. Race, 1 Burr. 452, was the case of 
 a bank-note stolen from the mail, and which fell into the hands 
 of the defendant, an innkeeper, honestly in the course of his busi- 
 ness. The Court decided that the action would lie upon the 
 general course of business, and the consequences to trade and 
 commerce, which would be much incommoded by a contrary deci- 
 sion. Lord Mansfield, in that case, says that bank-notes ought not 
 to be compared to what they do not resemble, — goods, securities, 
 or documents for debts ; that they are treated as money, as cash by 
 the general consent of mankind. " They are as much money as 
 guineas themselves are, or any other current coin." The impor- 
 tance attached to the influence of the decision in this case upon 
 trade and commerce is evidently overrated. The equity of the case 
 itself is on the side of the party who last gave, in the pursuit of an 
 honest calling, a valuable consideration for the money. Circum- 
 stances might change this ; but, generally speaking, traders and 
 others cannot be upon their guard to learn whether the sums of 
 money they receive, suitable to the extent of their business, are 
 stolen or found. But the case itself, and the character given by 
 Lord Mansfield to bank-notes as money ,*assumes the fact of the 
 unquestioned solvency of the maker of the note. This is all im- 
 portant; for there is a vastly wider difference between the note of 
 an insolvent and that of a solvent bank, than there is between a 
 good note and an equal amount in guineas. In the case of The 
 Bank of the United States v. The Bank of the State of Georgia, 10
 
 ONTARIO BANK V. LIGHTBODY. 629 
 
 Wheat. 333,^ notes issued by the Bank of Georgia had been 
 altered so as to increase the amount of the promise to pay from 
 $590 to 'fioOOO. Having been received in the Bank of the United 
 States, they were, in the ordinary course of their exchanges, re- 
 mitted to the Bank of Georgia, which received them as (jenuine^ 
 but subsequently discovering the alterations, otTered to return them. 
 The tender to return the notes was not made until nineteen days 
 after their receipt. The case came before the Supreme Court of 
 the United States upon a writ of error from the Circuit Court of 
 Georgia. Tiie Supreme Court reversed the judgment of the Court 
 below upon two points : 1. Because the Circuit Court had refused 
 to instruct the jury, that, if they believed the evidence, the plain- 
 tiffs were entitled to recover the balance due 1)y their customer's 
 book ; 2. Tliat the plaintiffs were entitled to interest from the 
 commencement of the action. !Mr. Justice S'fory, who delivered 
 the opinion of the Court, did not consider that this was a case of a 
 special deposit, but the notes were paid as money upon general 
 account, so that, according to the course of business, and the 
 understanding between the parties, the identical notes were not to 
 be restored, but an equal amount in cash was to be paid ; that the 
 notes passed into the general funds of the Bank of Georgia, and 
 became its property. Upon this ground, the action as to form was 
 maintained. But in going into the merits, great stress was laid by 
 the Court upon the fact that these were not the notes of another 
 bank, or the security of a third person, but were received and 
 adopted by the bank as its own genuine notes, in the most absolute 
 and unconditional manner ; and the wliole general reasoning of 
 the case, separate from the principles of other cases wliich are 
 brought to sustain collateral points, goes upon the broad ground 
 that a bank is bound to know its own paper. This position is laid 
 down with so much emphasis, that it must be considered as the 
 controlling reason for the judgment of the Court. How the ques- 
 tion of a special deposit would have been treated by the Court, if 
 the paper had been the altered notes of the United States Bank 
 itself, or of any other bank, cannot now be known ; neither does 
 the case reach the question of the notes of a third bank, being at 
 the time of the exchange or deposit, an insolvent institution. 
 
 In l.Ld. Raym. 738, it was held, an action did not lie against 
 the assignee of a bank-bill, l)ecause he had it for a valuable consid- 
 eration ; and it always is an inquiry whether the bearer came fairly 
 
 1 Post, 650.
 
 630 BANK-BILLS AND OTHER PAPER TAKEN IN PAYMENT. 
 
 by it. None of the cases proceed exclusively upon the mere simil- 
 itude between bank money and cash, and the answer is the same 
 to all the cases which hold bank paper equal to money, as it must 
 be to that in. which Lord Mansfield declares that bank-notes are as 
 much money as guineas are ; that is, that the judges always allude 
 to genuine and solvent notes. There are some individual oj)inions 
 of judges, however, which appear to militate against this position. 
 In the case of Young v. Adams, 6 Mass. 182, a payee recovered 
 against a payer the amount of a $5 counterfeit bill, which had been 
 given him with other money. It is impossible to find in this case 
 any thing to support the doctrine, that a payment made in the 
 bills of an insolvent bank is valid. Yet the judge says, argumen- 
 tatively, in a supposed case, " When the bills paid are true and 
 genuine, the responsibility of the bank is, we believe, at the risk of 
 the receiver. But it is admitted that this construction goes 
 " farther in favor of the currency of bank-notes or bills, than the 
 authorities warrant in regard to private notes or bills, or even 
 bankers' notes in England when accepted in payment." But the 
 suggestion is afterwards qualified in the following manner : " Pri- 
 vate notes, that is, of individuals or companies, whether incorpo- 
 rated or not, where the currency of them is not regulated by some 
 notorious and peculiar usage, when accepted in payment or dis- 
 charge of an existing contract, are taken at the risk of the payer." 
 And the converse of this proposition must be, that such notes as 
 are regulated by notorious and peculiar usage are at the risk 
 of the payee. But if this proposition were the foundation of a 
 case to be decided, it is not certain that this would be a satis- 
 factory view of the question, since between the circulation and 
 appreciation of public bank-notes, issued by different institutions, 
 there is as great a difference as between public bank-notes as such, 
 and private notes, whether of private banks or individuals. To 
 say, because the community has become by habit inspired with 
 confidence in the trustworthiness of banks and bank paper, that 
 therefore a payment made in the paper of a broken bank, not 
 knowing it to be broken, discharges the debt, is a principle not 
 dispoverable in any system of ethics or jurisprudence. Policy may 
 be deemed to require that bank circulation should be protected by 
 a leaning in support of its reputation with the public ; but it is 
 unnecessary. If worthy, it will stand without the aid of legal 
 decisions, which tend to pervert the right, and which some judges
 
 ONTARIO BANK V. LIGHTBODY. 631 
 
 believe give a dangerous facility to bank circulation. Tiie conven- 
 ience of a bank, and the honesty of its administration, are its 
 safeguards. When these are withdraNrn, law can render to its 
 circulation no effectual aid. 
 
 In ordinary use, and for many legal purposes, as in a bequest in 
 a will or when bills are taken on execution, bank-notes are deemed 
 and taken to be money ; but after the payer has become insolvent, 
 they can be so considered only for the purpose, of identification. 
 In real payments, they must possess money's worth. Not having 
 that intrinsically, it is to be sought for in the ability of the issuer 
 to redeem his paper. The strict legal definite character given to 
 bank paj)cr l)y our laws is, that of ])romises to pay and evidences 
 of debt, and this is at least consistent with the reality ; and when 
 so considered, the case stands in a new light. When a bank 
 issues a note or bill, it creates a debt. By law, this dcl)t ninst be 
 paid in specie, if it be demanded. Into the engagement thus to 
 pay, every bank necessarily enters, when it receives its charter. 
 By the terms of this agreement, neither party regards bank paper 
 as money. The circulation of its bills is derived from its credit ; 
 and its credit is the concomitant of its acknowledged and perma- 
 nent solvency. Its bills circulate like coined metal, so long as 
 their representative character remains unimpaired ; but a bank- 
 bill is not money, according to the understanding between the 
 parties, any more than it is money according to the signification 
 of that word. It is admitted that bank-notes, as the circulating 
 medium of the country, have ac([uired the denomination of money, 
 from their convenience as a substitute for gold and silver, and 
 their utility in promoting the objects of trade, and in exchanging 
 the products of industry ; but after a bank has failed, its notes are 
 deprived of those characteristics of money which entitled them to 
 that appellation by the custom of trade, while they continued at a 
 value equivalent with specie, or nearly so. Their convertibility 
 into specie being lost, and their power of circulation having de- 
 parted, not one of the ingredients of money remains, and they can 
 be legally defined only as unpaid promissory notes. 
 
 But it may be well to show more particularly that our statutes 
 do not yield to bank-notes the character of money, even while they 
 circulate. In the act concerning " monied corporations," 1 R. S. 
 589, § 1, they are called notes or other evidences of debt. In the 
 Session Laws of 1830, c. 243, § 1, p. '2^jo, the designation is still
 
 632 BANK-BILLS AND OTHER PAPER TAKEN IN PAYMENT. 
 
 more explicit : " Notes, bills, or other evidence of debt, purporting 
 to be a bank-note." In the acts incorporating banks, their appel- 
 lation is evidence of debt ; and wlicn mentioned in connection with 
 bonds and promissory notes, they are not distinguished as money, 
 but are regarded in the light of promises to pay. Besides, the in- 
 herent qualities and appropriate characteristics of all bank paper, 
 are those which belong to promissory notes, " or documents for 
 debts," and so I think we must consider them for the purpose of 
 this adjudication. If bank-notes be considered as mere promissory 
 notes, then the rule to be applied to this case is, that " paper is no 
 payment of a precedent debt ; it is always taken under the condition 
 to be payment if the money be paid in convenient time." Ward v. 
 Evans, 2 Ld. Raym. 928. This is the settled law, and the custom 
 of trade in this country, " unless the party make it his own by 
 agreement, or by the act of negotiating it. The cases of Puckford 
 V. Maxwell, 6 T. R. 52, and Owenson v. Morse, 7 id. 64, were decided 
 upon modifications of this rule. The paper, possessing no value 
 at the time the contract was made, and there being no agreement 
 that the party was to take it at his own risk, was held to be a nul- 
 lity, and the party might act as if no such bill had been given. In 
 Markle v. Hatfield, 2 Johns. 455, the same principle prevailed ; the 
 party did not receive the compensation intended ; it was a forged 
 bank-note. In Johnson v. Weed, 9 Johns. 311, the Court says : 
 " The books all agree that there must be a clear and special agree- 
 ment that the vendor shall take the paper absolutely as payment, or 
 it will be no payment, if it afterwards turns out to be of no value." 
 The fact of an agreement is matter for the jury. 
 
 Owing to the extraordinary aptitude of the people of this country 
 for business and trade, — to the immense amount of our resources, 
 which the application of industry and science are developing with 
 constantly accumulating benefits to the community, and which 
 require the indispensable aid of capital to bring them to market, 
 and to the nearly total absence of specie in large districts of coun- 
 try, — paper money has been rendered the common medium of the 
 exchanges of property, or of barter, to a greater extent among us 
 than in any other nation on the globe. Its great convenience and 
 the hitherto indispensable necessity for its use have created the 
 idea that it should be clothed with the attributes of real money ; 
 and this opinion necessarily gains ground among the undiscerning; 
 but it ought not to be permitted to subvert the established princi-
 
 ONTARIO BANK V. LTGHTBODY. 633 
 
 pies of moral justice. When a citizen sells an article for cash, he 
 is entitled to demand for it, not false, or spurious, or insolvent, 
 but good money, whotiicr it be in coin or l)ills ; and when a man 
 pays a debt, the medium of payment must turn out to be what he 
 represented it to be at the time of payment. The preceding view 
 of the subject demonstrates that the understanding that bank-notes 
 shall pass current as cash is entirely conventional, and cannot be 
 traced to an original principle ; but the understanding that money 
 shall be good at the time of payment is an original and always 
 subsisting part of the agreement ; it goes to the root of every con- 
 tract ; it relates to its essence and substance ; and, in strict morals, 
 this consideration must take precedence of every other implication 
 that may arise upon a bargain for money, or in the payment of a 
 debt. In the case before the Court, tlie bill was not at the time 
 wliat the receiver supposed it to be. The tacit agreement and 
 understanding between tlie parties was, what the universal under- 
 standing is in every traffic for money ; that the paper is good at 
 the time of passing ; and this is a previously existing and more 
 important understanding than that it circulates as money. 
 
 Mr. Gallatin, in his essay on the Currency and Banking of the 
 United States, p. 29, says : " A payment made in bank-notes is a 
 discharge of the debt, the creditor having no recourse against the 
 person from whom he has received the notes, unless the bank had 
 previously failed." This sagacious statesman did not fail to per- 
 ceive that the inherent defects of paper money rendered it impos- 
 sible to make it fuKil at all times the offices of real money, and 
 that in the event of the failure of the bank, a question of equity 
 might arise l^etween innocent parties to the transfer and acceptance 
 of these notes. He does not merely reserve the point, but expresses 
 a decided opinion, without appearing to apprehend that the cur- 
 rency of paper money will be retarded by the promulgation of an 
 incontrovertible position. The principle adopted by Mr. Gallatin 
 is founded upon common usage and • general consent, by which 
 every person receives bank money which has become current, 
 under the implied understanding that it is good and the bank sol- 
 vent. If a bank lias failed before the transfer of its notes from one 
 person to another, the primary condition of the contract has been 
 touched in its vital part ; the understanding is not fulfilled ; the 
 contract is a nullity. The want of knowledge at Utiea of the fail- 
 ure of the bank jit New York cannot be permitted to remove the
 
 634 BANK-BILLS AND OTHER PAPER TAKEN IN PAYMENT. 
 
 consequences tluit ensued immediately upon the failure. The 
 money must be lost in the hands of him who hold it when the bank 
 failed. On great moral and public considerations. I can have no 
 hesitation in deciding the case upon this' principle, and especially 
 as it will have a tendency to prevent attempts which have fre- 
 quently been ma'de to commit frauds by the circulation of insolvent 
 bank paper. 
 
 There was no default in the party who received bad money for 
 good. He transmitted tlie note immediately to New York, and, 
 upon its return, offered it to the bank, but it was refused. 
 
 I am therefore of opinion that the judgment of the Supreme 
 Court ought to be affirmed. 
 
 On the question being put. Shall this judgment be reversed ? all 
 the members of the Court present, twenty in number, with one ex- 
 ception voted in the negative. So the judgment of the Supreme 
 Court was affirmed. 
 
 The rule declared in Ontario Bank v. Lightbody is certainly more consistent 
 ■with natural justice and fair dealing than that maintained in Bayard v. Shunk. 
 Mr. Justice Story, in his work on Promissory Notes, § 389, after stating, as the 
 rule, that declared in Ontario Bank v. Lightbody, says, in a note : "After all, the 
 point seems to resolve itself more into a question of fact, as to the intent, than 
 as to law ; and it must and ought to turn upon this, whether taking all the cir- 
 cumstances together, the bill was taken as absolute payment by the holder, at 
 his own risk, or only as conditional payment, he using due diligence to demand 
 and collect it." 
 
 Fogg V. Sawyer, 9 N. Hamp. 36.5, is a well-considered case which supports 
 the New York doctrine. In delivering the opinion of the Court, Parker, C. J., 
 said : — 
 
 " It is contended, in this case, that the equity is equal between the parties, — 
 that there must be a loss upon the bills which were received by the plaintiff, and 
 that, both parties being equally innocent, the law should not interfere. It is not 
 quite clear that both parties were equally innocent in this transaction. The case 
 finds that it did not distinctly appear that the failure of the bank was known to 
 the defendant, but it did appear that it was unknown to the plaintiflf. A sus- 
 picion, however, that the defendant had knowledge of the failure, at the time he 
 made the purchase, can have no effect upon the present decision, as no question 
 of that kind has been submitted to the jury. 
 
 " There are cases where the parties being ecjually innocent, or equally guilty, 
 neither can support an action against the other ; but the principle upon which 
 they are founded is not applicable to this case. On the supposition that neither 
 knew of the failure of the bank, at the time of the sale, the plaintiff contracted 
 to sell the oxen, and the defendant to pay therefor a certain price. There is 
 nothing in the case to show any agreement, in fixing upon the price, that payment
 
 ONTARIO BANK V. LIGHTBODY. 635 
 
 was to l)e received in bills of the Chelsea Bank. Tlie jtarties, then, niuft have 
 contemplated a payment in money, or in somethiiif^ which was equivalent to 
 money, and usually received as such. In fact the plaintiff might have declined 
 receiving any thing but coin, and the defendant could not have performed his 
 contract except by the payment of coin, if it had been rerjuired. The ri;,'ht to 
 require coin was waived, liut still there is nothing to sliow that an equivalent was 
 not to be received. 
 
 " When, therefore, the plaintiff received the bills, he received them, and the 
 defendant paid them, as money. It was in that way only that the defendant 
 could perform what he had undertaken to do, which was, to pay a sum of money. 
 The bills represented money, — were doing the oflice of money, — and should 
 have been of the value of money at the place where they purported to be re- 
 deemable, and convertible into money. The plaintiff was as much entitled to 
 receive good bills, if he consented to take bills, as he would have been to have 
 received good coin, in case the payment had been made with specie ; and it is 
 not doubted that in such case, if the payment had been made in counterfeit coin, 
 the plaintiff would have been entitled to recover The same is true of counter- 
 feit bills, when they have been passed in payment. Young v. Adams, 6 Mass. 
 1S2 ; Markle v. Hatfield, 2 Johns. 455 ; Grafton Bank v. Hunt, 4 N. Hanip. 
 4S,s. 
 
 " The case of a payment in bills of a broken bank cannot be distinguished, in 
 principle, from that of a payment in counterfeit money. From the time of the 
 failure of the bank they cease to be the proper representatives of money, 
 whether they are, at the time, near to, or at a distance from, the bank. They 
 may have a greater value than counterfeit bills, but in neither case has the party 
 received what in the contemplation of both parties he was entitled to receive, if 
 the contract was to pay a certain sum. In neither case has he received money, 
 or its representative. The sum contracted to be paid has not been paid in 
 money, or any thing which by usage passes as money, or which was entitled at 
 the time to represent it ; and the party has, therefore, failed to pay what he con- 
 tracted to pay. Wentworth i'. Wentworth, 5 N. Hamp. 410. Counterfeit coin 
 may contain a portion of good nutal, and thus have some value, but this would 
 not make it a good medium of payment. Entire worthlessness, or not, is not, 
 therefore, the criterion. 
 
 "It can make no difference whether the party making the payment knew, at 
 the time, that the bank had failed. That is of as little consequence as it is 
 whether he knew that the pieces of coin or bills which he paid were counterfeit. 
 Having undertaken to pay a sum of money, the question is, whether he has per- 
 formed his obligation. 
 
 " It is not sufficient that the bills, in this case, might have been current at the 
 place of payment, when the payment was attempted to be made. They should 
 have been current, or convertible into specie, at the place where they purported 
 to be redeemable. When the defendant paid them as money, he took this risk 
 upon himself If they were not so, they were not what they purported lo be, 
 and what they were taken for. 
 
 " There is no equity in the case which should lead to a different result. When 
 the bank failed the loss fell upon the defendant, as the holder of the bills, it he 
 held them at that time. If he had not received information of his loss, that is
 
 636 BANK-BILLS AND OTHER PAPER TAKEN IN PAYMENT. 
 
 of no consequence. The bills were no longer redeemed on demand, and a loss, 
 greater or less, had accrued. There is no equity in transferring this loss to the 
 phuntifF, because he afterwards received the bills supposing them to be equivalent 
 to money. If he had agreed to take the risk, that would have presented the 
 case in a different aspect. Or if he had agreed to exchange the oxen for the 
 bills, that might have altered the case. But the bare reception of the bills in 
 payment cannot be considered as evidence of an agreement to take the risk, 
 because the defendant offered thcMn as money, and the plaintiff received them as 
 such, without knowledge of the failure. 
 
 *' If the bills had been convertible into money, at the bank, when the plaintiff 
 received them, they would have been what they purported to be, and the risk of 
 a- subsequent failure, while they were in his possession, would have been with the 
 plaintiff. 
 
 "The plaintiff having offered to return the bills in a reasonable time, is 
 entitled to treat the case as if they had not been received, and to recover the 
 balance due on the sale of the oxen. 
 
 " Judgment for the plaintiff ^ 
 
 There are several other cases which sustain this view. See Wainwright v. 
 Webster, 11 Vt. 576; Frontier Bank v. Morse, 22 Me. 88; Timmis v. Gibbins, 
 14 Eng. Law & E. 64; Harley v. Thornton, 2 Hill (S. C), 509; Thomas v. 
 Todd, 6 Hill (N. Y.), 340; Townsends v. Bank of Racine, 7 Wis. 185; Westfall 
 V. Braley, 10 Ohio State, 188. 
 
 But the Pennsylvania doctrine has been adopted in several States. See cases 
 cited by Chief Justice Gibson ; also Lowrey v. Murrell, 2 Port. Ala. 280 ; Corbit 
 V. Bank of Smyrna, 2 Harr. Del. 235, Layton, J., dissenting; Ware v. Street, 
 2 Head, 609 ; Edmunds v. Digges, 1 Grat. 359. 
 
 See also Commonwealth v. Stone, 4 Met. 43; Snow v. Perry, 9 Pick. 539; 
 Alexander r. Dennis, 9 Port. Ala. 174 ; Alexander v. Byers, 19 Ind. 301 ; Dakin 
 V. Anderson, 18 Ind. 52 ; Aldrich v. Jackson, 5 R. I. 218 ; Houghton v. Adams, 
 18 Barb. 545; Baker v. Bonesteel, 2 Hilton, 397; Oilman v. Peck, 11 Vt. 516; 
 Ex ])arte Blackburne, 10 Ves. 204 ; Bank of the United ^tates v. Bank of 
 Georgia, j)ost, 650.
 
 THE PHfENIX INSURANCE CO. V. ALLEN. 637 
 
 The PricENix Insurance Company v. John Allen. 
 
 (11 Michigan, 501. Supreme Court, July, 1863.) 
 
 Pai^ment by paper of third jxtrli/. Duty of creditor. — Where a party receives a draft as 
 conditional payment of a debt due him, his right of action upon thetlebt is suspended 
 until tiie draft is properly i)resented for paj'ment and payment refused. By receiv- 
 ing such draft, the creditor accepts die duty of doing every thing with respect thereto 
 which is necessary to fix the liability of the parties ; and the onus is upon him to 
 show that he has performed that duty when he seeks to recover upon the original 
 cause of action. 
 
 The case is stated in the opinion of the Court. 
 
 Christiancy, J. This was an action of assumpsit brought by 
 Allen, the plaintiff below, against the company, to recover the 
 amount of a loss by fire under a policy issued by the company to 
 Allen. 
 
 The declaration contained counts upon the policy, and the com- 
 mon counts. The plea was the general issue. It appeared from 
 the evidence introduced by the plaintiff (and of these facts there 
 was no dispute), that on the twentieth day of April, 1861, the loss 
 under the policy had been adjusted by compromise between Allen 
 and the company (the latter acting through one Holden, their 
 agent, having power to adjust losses), at the sum of 81106.25, 
 whicli was agreed by said agent to be paid by a draft drawn by 
 him on the general agents of the Phcenix Company at Cincinnati 
 " payable in Chicago exchange." Tlie draft for the amount was 
 so drawn on the same day, upon R. H.' and H. M. Magill, general 
 agents of the company at Cincinnati, i)ayable to the order of Allen 
 at one day's sight. Tins draft was indorsed by, Allen to Stephens 
 and Beatty, of Detroit, for whose use the action was brouglit ; the 
 plaintiff, however, retaining some interest in it (but what, did not 
 appear). Stephens and Beatty indorsed and transmitted this draft 
 to Harrison and Hooper, their agents in Cincinnati, for present- 
 ment and demand of i)ayment, who duly presented it to the 
 drawees, on the second of May, 1861, and received and accepted 
 from the drawees, as and for a compliance with said draft or order, 
 a bill of exchange drawn by J. H. Bussing <fc Co., bankers at Cin-
 
 638 BANK-BILLS AND OTHER PAPER TAKEN IN PAYMENT. 
 
 cinnati, upon Hoffman and Gelpecke, bankers at Chicago, and 
 indorsed by said R. H. and H. M. Magill, general agents as afore- 
 said. This last draft was in the following words and figures : — 
 
 " 11106.25. Walnut Street Bank : Cincinnati, May 2, 1861. 
 
 " Pay to the order of R. H. and H. M. Magill, general agents, 
 
 11106.25 current funds. 
 
 " G. H. Bussing & Co. 
 
 " To Hoffman and Gelpecke, Chicago, 111." 
 
 This draft was received by Stephens and Beatty, at Detroit, from 
 their agents in Cincinnati, on the fourth day of May, 1861, and 
 on the twenty-fifth- day of the same month they transmitted it by 
 mail to their agents in Chicago, for presentment and demand of 
 payment ; and, on the twenty-ninth day of the same month, it was 
 duly presented to Hoffman and Gelpecke, the drawees, and payment 
 demanded, which payment was refused ; and it was thereupon pro- 
 tested for non-payment, and due notice thereof given. 
 
 It was admitted there were daily mails between Detroit and 
 Cincinnati, between Detroit and Chicago, and between Detroit and 
 Grand Ra[)ids, and that the several times occupied in the trans- 
 mission of the mails between these several points were as fol- 
 lows : Between Detroit and Cincinnati, from twelve to twenty-four 
 hours ; between Detroit and Chicago, from twelve to fourteen hours, 
 and between Detroit and Grand Rapids, less than twelve hours ; 
 There was no other evidence touching the question of diligence in 
 presenting the draft for payment. 
 
 The draft was offered in evidence by the plaintiff, under the 
 common counts, but rejected by the Court on the ground that it 
 was not negotiable, because payable in current funds, and not in 
 cash. As the plaintiff does not complain of the judgment, and 
 we think the draft was properly excluded for another reason, it is 
 only important to notice this point for the bearing it may be sup- 
 posed to have upon another question in tlie cause. But in the 
 absence of all evidence that any thing else than cash was treated 
 as current funds in Chicago, we do not see how the Court could 
 assume judicially to know the fact or presume it ; until this should 
 be made to appear, the current funds in which it was made pay- 
 able, should, we think, be held to be such funds only as were cur- 
 rent by law. We must therefore treat this draft as a negotiable 
 bill of exchange payable in money. It does not appear to have
 
 THE PHfENIX INSURANCE CO. V. ALLEN. 639 
 
 been obtained for tbe purposes of exchange, that is, for the pur- 
 pose of transmitting funds to Chicago ; but it is clear tliat it was 
 received in payment of tiie llrst draft or order drawn by Ibjlden 
 and indorsed to Stephens and Beatty, or, in other words, in j)ay- 
 moiit of tlie sum due the pkiintiff for liis loss under the policy. 
 Whether received in absolute or conditional payment, was a ques- 
 tion for the jury \\\m\\ the evidence. Had they found it was 
 received as absolute payment, they could not have found for the 
 plaintiff, as his remedy would then clearly have been confined to 
 the draft itself, which the plaintiff was not allowed to introduce in 
 evidence. It is only, therefore, in respect to its reception as con- 
 ditional payment that we are to consider the question of the plain- 
 tiff's right to sue for the original indebtedness, and the question 
 of diligence in presenting the draft for payment. Its reception as 
 conditional {)aymcnt would operate as a suspension of the plain- 
 tiff's original right of action till the draft sliould be properly 
 presented for payment, and such payment was refused. See 
 authorities cited 2 Am. Lead. Cas. 182. And wc think the plain- 
 tiff, by such acceptance, must also be understood to have accepted 
 the duty of doing every tlnng with respect to the paper which was 
 necessary to fix the liability of the drawer and indorsers, and the 
 onus of proving that he has performed this duty when he seeks to 
 recover upon the original cause of action for wiiich the paper was 
 received. 
 
 In Jennison v. Parker, 7 Mich. 355, it was held by a majority of 
 this Court that where a draft drawn by a third person was indorsed 
 by the debtor, and l)y him sent to the creditor to be applied when 
 paid, the creditor made the ])apcr his own, and could not sue u|)on 
 the original debt if he neglected the steps necessary to hold the 
 debtor liable as indorser. We sec no reason for departing from 
 the rule there laid down. We think the same reasons ai)ply here, 
 not only with reference to the indorser, but with at least equal 
 force to the drawers also ; since, if the drawers have been dis- 
 charged by the neglect of the holder to present for payment in 
 due time, the indorsers (who, so far as the present question is 
 concerned, may be considered as the company for whom they 
 acted) would lose their remedy over upon the drawers ; for there 
 is nothing in the case to show that the drawers could be held liable 
 without due presentment. 
 
 In 2 Am. Lead. Cases, p. 183, u[»on a careful review of the cases
 
 640 BANK-BILLS AND OTHER PAPER TAKEN IN PAYMENT. 
 
 it is laid down as a general priifciple of the law merchant that, 
 " a plea that the plaintiff has taken the note or bill of a third per- 
 son on acconnt of the cause of action, is a sufficient bar to the 
 suit, which can only be removed by showing that the ordinary 
 course of business has been pursued with reference to the security 
 thus taken, and that it has, notwithstanding, proved inadequate as 
 a means of payment." As a general rule we think this is just 
 and equitable to all parties, though we think the same special cir- 
 cumstances affecting the time of presentment and notice might be 
 shown as in cases between indorser and indorsee. Thus under- 
 stood, the rule is substantially the same as that which requires 
 presentment to be made within a reasonable time, having reference 
 to the ordinary course of business, and the circumstances of each 
 particular case. The law upon this subject, as a general rule, 
 adapts itself to the ordinary course of business, or, more properly 
 speaking, the ordinary course of business constitutes the general 
 rule of law. When the ordinary course of business has estab- 
 lished a rule as to time of presentment, which the law has recog- 
 nized, courts are bound judicially to notice it without proof, as in 
 the case of bills payable at a specified day or a certain number of 
 days after date ; and doubtless the ordinary course of business 
 may, to some extent, be judicially noticed in other cases. But 
 where the law has adopted no rule as to time of presentment, ex- 
 cept that it shall be within a reasonable time, as in the case of 
 bills payable at sight, like the present, the Court cannot, without 
 overlooking the objects for which such presentment and notice of 
 non-payment are required, say, as matter of law, that any delay is 
 reasonable beyond that which may be fairly required in the ordi- 
 nary course of business without special inconvenience to the 
 holder; or by the special circumstances of the. particular case. 
 And in a case like the present, where the paper does not appear to 
 have been obtained for mere purposes of exchange, but in payment 
 of a precedent debt ; and was not put in circulation, but detained 
 by the plaintiff for twenty-one days before it was transmitted for 
 presentment; if we cannot take judicial notice that tliis delay was 
 greater than required by any considerations of necessity or con- 
 venience in the usual course of business, we certainly cannot, 
 without evidence ujjon the point, determine, as matter of law, that 
 this length of time was required by any such considerations, or 
 authorized by any usage or course of business which we can judi-
 
 THE PIKENIX INSURANCE CO. V. ALLEN. 641 
 
 cially notice without proof. If fliere was any thing in the special 
 circumstances of the case to require it, or 'to excuse the delay, 
 those circumstances should have been proved. But no such evi- 
 dence was given or offered. Nothing whatever was shown to ex- 
 cuse or explain the delay, or to show why the paper might not, 
 with equal convenience to the holder or any other person, have 
 been sent by the first, or next succeeding mail. There was, there- 
 fore, no evidence before the jury tending to show that the time 
 was reasonable. Tlie time — the unexplained delay of twenty-one 
 days — was shown. But there was no evidence of. any usage or 
 course of business, nor any special circumstances connected with 
 the particular case, from which the jury could be authorized to 
 draw any inference that the time was reasonable. And the burden 
 of proof upon this point rested upon the plaintiff. So far as the 
 jury are to pass upon the question of reasonable time, their verdict 
 must be based u{)on evidence before them. If from the naked fact 
 of the length of time, the jury are to determine its reasonableness 
 without any evidence bearing upon the point, they must necessarily 
 determine it as a question purely of law ; and tliis is not within 
 their province. The Court therefore erred in submitting the ques- 
 tion to the jury. 
 
 Had there been evidence upon the point, the questions might 
 have arisen, which were so fully and ably discussed by the counsel, 
 whether the reasonableness of the time was a question of fact for 
 the jury, or, the facts being undisputed, a question of law for the 
 Court, or, if disputed, of mixed law and fact, to be. decided by the 
 jury under the charge of the Court upon the law. But tlie plain- 
 tilT, upon whom the burden of proof rested, having failed to pro- 
 duce any evidence tending to sliow that the time was reasonable, 
 and there being no such evidence in the case, these questions are 
 not i)roperly before us, and we shall not enter upon their discus- 
 sion. But whatever view may be taken of these (questions, we can 
 see no ground on wdiich the counsel for the plaintiff could be 
 allowed to read to the jury, and to comment upon decided cases 
 upon the question found in the books of reports. So far as the 
 question was one of law, these cases and the arguments upon 
 them were for the consideration of the Court only ; so far as it 
 was a question of fact, it was to l)e decided by the jury upon the 
 facts given in evidence in the regular course of the trial. .See 
 Darby v. Ouseley, 36 Eug. L. & Eq. 519 ; and the finding of courts or 
 
 41
 
 642 BANK-BILLS AND OTHER PAPER TAKEN IN PAYMENT. 
 
 juries in other similar eases would be wholly inadmissible as evi- 
 dence in any stage of the trial. 
 
 As there was no evidence tending to sbow the time to be reason- 
 able, and the Court held the question to be one of fact for the 
 jury, and permitted the reported cases to be read to them against 
 the objection of defendant's counsel, the jury must naturally have 
 inferred that they were at liberty to consider those decided cases 
 as evidence upon which they had a right to base their verdict. 
 Tiie cases could only be properly read to, or considered by, the 
 jury upon the hypothesis that they were to decide the question as 
 one of law ; and such, in this case, must have been the result, so 
 far as their verdict may have been in any way influenced by the 
 cases and the argument based upon them. 
 
 The judgment must be reversed, with costs, and a new trial 
 granted. 
 
 In most States of the Union taking a note or bill for a pre-existing debt is 
 prima fade only conditional payment, and the burden is upon the debtor, in an 
 action upon the original debt to show that the intention was otherwise. Story, 
 Promissory Notes, §§ 104, 117, 389, 438, and numerous authorities cited. But 
 in Maine, Massachusetts, Vermont, Indiana, and Louisiana, the presumption is 
 that the paper is taken in absolute payment, if it is negotiable ; the presumption, 
 however, may be repelled by proof. Descadillas v. Harris, 8 Greenl. 298 ; 
 Wiseman v. Lyman, 7 Mass. 286 ; Spooner v. Rowland, 4 Allen, 485 ; Wait v. 
 Brewster, 31 Vt. 516 ; Arnold v. Sprague, 34 Vt. 402 ; Gaskin v. Wells, 15 Ind. 
 253 ; Hunt v. Boyd, 2 La. 109. 
 
 The ruling in the principal case that the party who takes a bill or note for a 
 pre-existing debt must take the proper measures to charge the parties to the 
 same, on pain of discharging the party from whom he received it, is well settled. 
 See Story, Bills of Exchange, § 109 ; ib. Promissory Notes, § 117, and authori- 
 ties cited. 
 
 But if the debtor give his creditor a bill drawn on another who has no effects 
 in his hands, and who refuses to accept it, the creditor may treat the bill as waste 
 paper, and resort to his original demand. Stedman v. Gooch, 1 Esp. 3, per 
 Lord Kenyan. See Kearslake v. Morgan, 5 T. R. 513; Tarleton v. Allhusen, 
 2 Adol. & Ellis, 32 ; Puckford v. Maxwell, 6 T. R. 52 ; Ilsley v. Jewett, 2 Met. 
 168. 
 
 As to the receipt of forged paper, see Bank of the United States v. Bank 
 of Georgia, post, 650.
 
 CANAL BANK V. BANK OF ALBANY. 643 
 
 FORGERY. 
 
 Canal Bank v. Bank of Albany. 
 
 (1 Hill, -287. Supreme Court of New York, May, 184L) 
 
 Recovery of moneij paid upon for()ed indorsement. Notice. — Money paid by the acceptor 
 of a bill to an innocent holder under a forged indorsement of the payee may be 
 recovered, if seasonable notice of the forgery be given. 
 
 Assumpsit against the defendants, indorsees of a draft drawn on 
 the plaintiffs by the Montgomery County Bank, payal)le to the 
 order of E. Bentley, Jr. Bentley's indorsement was forged, and 
 the paper finally passed for value and without notice into the 
 liands of the defendants. It was then presented to the plaintiffs 
 and paid. A little over two months afterwards the acceptors noti- 
 fied the defendants that tiie payee's name was a forgery, and 
 called upon them to refund, which they refused to do ; whereupon 
 this action was brought to recover the sum paid. 
 
 After speaking of the competency of Bentley as a witness, the 
 Court proceeded ; the opinion being delivered by 
 
 CowEN, J. On the merits, there was nothing in the nature of 
 the transaction to conclude tlie plaintiffs against showing the forg- 
 ery. They had done no act giving currency to the bill on the 
 strength of Bentley's name. Even had they accepted it on the 
 day when it was drawn, the defendants could have holden them 
 concluded only in respect to the genuineness of the drawer's 
 name, he being their immediate correspondent. Chitty, Bills, 330, 
 7 Am. ed. of 1839. And the act of payment could amount to no 
 more. Id. Neither acceptance nor payment, at any time, 
 nor under any circumstances, is an admission tiiat the first, or any 
 other indorser's name is genuine. lb. G28. In point of title, 
 then, the case of the defendants was tlie same as if the name of 
 Bentley had not appeared on tlie bill. They have obtained money 
 of the plaintiffs without right, and on the exhibition of a forged
 
 644 " FORGERY. 
 
 title as a genuine one. The plaintiffs paid their money under the 
 mistaken belief thus^ induced that the name was genuine. To a 
 note or bill payable to order, none but the payee can assert any 
 title without the indorsement of such payee; not even a bona fide 
 holder. lb. 2SG a, 430. 
 
 But it is said, the equities of the parties are equal, and the de- 
 fendants having possession, must prevail. No doubt the parties 
 were equally innocent in a moral point of view. The conduct of 
 both was bona fide, and the negligence or rather misfortune of both 
 the same. It was the duty, or, more properly, a measure of pru- 
 dence, in each to have inquired into the forgery, which both 
 omitted. But this raises no preference at law or equity in favor 
 of the defendants, but against them. They have obtained the 
 plaintiffs' money without consideration ; not as a gift, but under a 
 mistake. For the very reason that the parties were equally inno- 
 cent, the plaintiffs have the right to recover ; and that was con- 
 ceded throughout, in the authority cited on another point by the 
 defendants' counsel. United States Bank v. Bank of Georgia, 10 
 Wheat. 333, 354. ^ The whole course of argument and authority 
 in that case, went on tlie fault of the party who paid the money. 
 It was likened to the case of a bank paying a check, on which the 
 name of the drawer was forged, which was again assimilated to 
 the acceptance of a bill of exchange, where the drawer's name is 
 forged. It was said that, in such cases, the payor or acceptor 
 takes upon himself the knowledge of his correspondent's hand- 
 writing, and shall be concluded. Even that is going a great way, 
 unless some bona fide holder has purchased the paper on the faith 
 of such an act. But it is sufficient to distinguish the case, that it 
 goes on the superior negligence of the party paying or accepting. 
 At page 355, the Court draw an express distinction between the 
 effect of acceptance or payment as a recognition of the drawer's, 
 and the indorser's handwriting. It is said, the forgery of an in- 
 dorsement is not a fact which the acceptor is presumed to know. 
 And perhaps the decision in the case cited should be rested 
 entirely on negligence in the Bank of Georgia. Vid. ib. p. 344 ; 
 also the case of the Gloucester Bank v. The Salem Bank, IT Mass. 
 33, cited 10 Wheat. 350. 
 
 But, it is said, the plaintiffs here delayed giving notice of the 
 forgery, from the twenty-eighth of March till the seventh of June. 
 
 1 Post, 650.
 
 CANAL BANK V. BANK OF ALBANY. 645 
 
 Under what circumstances, is not disclosed ; for tlie point of delay 
 was not made at the trial. That is a suf|^cieiit reason why it 
 should not be listened to liere. But I am not willing to concede 
 that delay in the abstract, as seems to be supposed, can deprive 
 the party of his remedy to recover l)ack money paid under the 
 circumstances before us. It is said, the defendants had indorsers 
 behind them ; and by delay, tiiey were prevented from charging 
 them, by giving seasonable notice. Admit this to be so ; the 
 plaintiffs did not stand in the relation of a holder. ' They were 
 the drawees, and advanced the money by way of payment. They 
 would never, therefore, think of notice to the defendants, till they 
 accidentally discovered the forgery. If there had been any unrea- 
 sonable delay after such discovery,' another question would he pre- 
 sented. I infer from the rigor of the case cited by the defendants' 
 counsel. Cocks v. Masterman, 9 Barn. & C. 902, that he would 
 exact as great, indeed greater diligence in giving notice, than is 
 necessary to fix an indorser. There the plaintiffs had paid to the 
 defendants, the holders, an acceptance, purporting to be in the 
 name of the plaintiffs' customers. The bill was drawn payable at 
 the plaintiffs' bank. The next day, discovering the forgery, they, 
 on the same day, gave notice to the defendants and the indorsers. 
 This was held too late. The Court even declined to give an 
 opinion, whether notice on the very day of payment would have 
 entitled the plaintiffs to recover ; but held, that notice on the very 
 day was at all events necessary, and that short of this, the plain- 
 tiffs were not entitled to recover. They said the holder must not, 
 by want of notice, be deprived of the right to take steps against 
 the parties to the bill on the very day when it was paid : and they 
 admitted that this was requiring one day increased diligence, be- 
 yond what would have been required in the ordinary case of dis- 
 honor. In the latter case, they allowed that notice on the next 
 day would have been in season. In a previous case of payment 
 under the like circumstances, notice having been given on the very 
 day, the bankers who paid for their customers, were allowed to 
 recover. Wilkinson v. Johnson, 3 Barn. & C. 428. In this 
 earlier case, the payment was made for the honor of indorsers, 
 whose bankers the plaintiffs were. Both cases were treated by 
 the Court, as standing on the same principles, thougli. in the latter 
 case, they do not put it distinctly on any principle. In tiie earlier 
 case, they said the plaintiffs were not the drawees, or acceptors,
 
 646 FORGERY. 
 
 nor the agents of any supposed acceptors. The same thing may, 
 I take it, l)c said of tbe latter case, though the plaintiffs assumed 
 to pay for the acceptors. They could scarcely have intended to 
 pay as mere agents for the acceptors, an act which would have 
 extinguished the bill, and cut them off from a remedy against the 
 drawers and indorsers. Where a bill or note is payable at a bank, 
 and no express direction given by the principal to the bank, on 
 its coming in with indorsers, the bank, of course, takes the paper 
 as a purchaser, or holder ; and, for its own indemnity, presents it 
 to the principal for payment, on the very day, or as soon as may 
 be. Thus, there is a good chance to detect the forgery of his 
 name ; and hurry the notices to the other parties. Whatever forg- 
 eries there may be, are soon brought to light. In the earlier of 
 the two cases cited, the Court said, " the general rule of law is 
 clear and not disputed; viz., that money paid under a mistake of 
 facts, may be recovered back, as being paid without consideration." 
 In the latter case, the Court do not deny the rule, nor that it 
 would apply to the case l^efore them. But to enforce it, they re- 
 quire an almost impracticable diligence. I doubt whether this 
 case can be sustained, except upon its own peculiar circumstances, 
 if it can be sustained at all. In all the previous cases, where a 
 recovery had been denied, there was carelessness, or delay, or 
 both. Smith v. Mercer, 6 Taunt. 76, was much like Cocks v. 
 Masterman, and there had been a neglect to discover the forgery 
 and give notice, for a week's time. The case of Price v. Neale, 3 
 Burr. 1354, was one of palpable neglect, in both payment and 
 delay. Some other cases turn on similar principles. Barber v. 
 Gringell, 3 Esp. 60 ; United States Bank v. Bank of Georgia, and 
 Gloucester Bank v. Salem Bank, before cited ; Levy v. Bank of 
 United States, 1 Binn. 27 ; s. c, 4 Dall. 234. If Cocks v. Master- 
 man is to be followed, it must, I think, be on the same principle. 
 The plaintiffs paid on the faith of their correspondent's name. 
 The former were not named as drawees ; but they had a superior 
 knowledge of their correspondents' handwriting, which they 
 neglected to exert. It might, therefore, have been reasonable to 
 require that they should overcome the objection of neglect, by such 
 a speedy movement as to save all possible advantage to the holder, 
 against the prior parties. But, where each party enjoys only tlie 
 same chance of knowledge, no case demands any thing more than 
 reasonable diligence in giving notice, after a discovery of the forg-
 
 CANAL BANK V. BANK OF ALBANY. 647 
 
 ery. The common case of paying forged bank-notes, is one 
 instance. And navy and victualling bills, have been treated as 
 standing on the same footing. Jones v. Ryde, 5 Taunt. 488 ; 
 Bruce v. Bruce, ib. 405, note. These are cases of transferring 
 notes from one to another, which turn out to be unavailal)l(; by 
 reason of a forgery, in respect to which botii parties are equally 
 ignorant, the one being no more guilty of neglect than the other ; 
 indeed, neither being negligent, but both being impo.sed upon 
 under the exercise of ordinary diligence. At all events, it does 
 not lie with the payor to complain of the very neglect imputable 
 to himself. Neglect to give notice, after cliscovering tlie forgery, 
 is another matter. Vide Chitty, Bills, Am. ed. of 1839, p. 463. 
 If the indorsers are to be charged, as such, why should not the 
 accidental delay in discovering the forgery, on a paid bill espe- 
 cially, operate as an excuse for not giving them immediate 
 notice ? 
 
 The defendants did not disclose their agency, and must, there- 
 fore, as between them and the plaintiffs, be taken to have acted as 
 principals. They obtained the money of the plaintilis on a bill of 
 exchange, payable to the order of Bentley, under a forged indorse- 
 ment of his name. Money has been successively paid by mistake 
 of the several indorsees, the plaintiffs, the defendants, the Bank of 
 New York, (fee, and the remedy by each is plain. It is by action 
 over, each against his respective indorser. The bill has never 
 been put in a regular course of negotiation, for want of Bentley's 
 name. No one who has advanced money on it, therefore, obtained 
 what he supposed he had got ; and the indorsers, beside being 
 liable as such, may each be sued, as having received money without 
 consideration. 
 
 The proof offered, relative to the custom of banks to collect 
 paper received liy them as agents, witliout communicating the 
 name of their principal, would have disclosed a case in which it 
 would be apparent that the defendants might or might not have 
 been agents. The object of the ])roposed proof was, to supply the 
 want of direct evidence, that notice of the agency had been given 
 by them at the time. Till they had superadded proof of another 
 custom, for banks never so to receive paper and collect as prin- 
 cipals, the proposed evidence could have had no tendency to affect 
 the plaintiffs with such notice. Knowledge that the defendants 
 might be acting as agents, was not enough. This is so of every
 
 648 FORGERY. 
 
 man ostensibly transacting business as a principal. Vide Mills v. 
 Hunt, 20 Wend. 481. The proof offered and rejected was, there- 
 fore, irrelevant. 
 
 JYew trial denied. 
 
 If the forgery of the, payee's signature were on the paper when tliu drawer 
 put it into circulation, the acceptor cannot recover from an innocent -hohler to 
 whom lie has paid it. See Plortsman v. Henshaw, ante, 57, and note. 
 
 But if the forgery is owing to the fault or carelessness of the drawer, he must 
 bear the loss. Young v. Grote, 4 Bing. 253 ; Morrison v. Buchanan, 6 Car. & 
 P. 18. Sec Belknap v. National Bank of North America, 100 Mass. 376, cited 
 in full in note' to Bank of the United States v. Bank of Georgia, post, 650. 
 
 Respecting the question of the reasonable time within which notice of the 
 forgery should be given, it has been said that the strict rule of the English 
 courts has not been adopted in this country ; and that what is reasonable time 
 will depend upon the circumstances of each case. 2 Parsons, Notes and Bills, 
 598, 599. See Bank of Commerce v. Union Bank, 3 Comst. 230 ; Worrall v. 
 Gheen, 39 Penn. State, 388 ; Gloucester Bank v. Salem Bank, 17 Mass. 33 ; Pope 
 V. Nance, Minor (Ala.), 299 ; Bank of St. Albans r. Farmers' and Mechanics' 
 Bank, 10 Vt. 141 ; McKleroy v. Southern Bank of Kentucky, 14 La. An. 458. 
 See also Chitty, Bills, 431, 432. 
 
 The late case of Merchants' National Bank v. National Eagle Bank, 101 Mass. 
 281, discusses this subject of negligence in its relation to the rules of the Clearing 
 House. The facts will sufficiently appear in the opinion of the Court, delivered by 
 
 Colt, J. This action is brought by the plaintiffs to recover the amount of a 
 check drawn upon them and paid by them through the agency of the Boston 
 Clearing House, there being no funds of the drawer in their hands at the time of 
 the payment. 
 
 It is Avell settled by recent decisions that money paid to the holder of a check 
 or draft drawn twithout funds may be recovered back, if paid by the drawee under 
 a mistake of fact. And though the rule was originally subject to the limitation 
 that it must be shown that the party seeking to recover back had been guilty of 
 no negligence, it is now held that the plaintiff in such case is not precluded from 
 recovery by laches in not availing himself of the means of knowledge in his 
 power. It is otherwise if the money is intentionally paid without reference to 
 the truth or falsehood of the fact, and with the intention that the payee shall 
 have the money at all events. Appleton Bank v. McGilvray, 4 Gray, 518 ; 
 Kelly V. Solari, 9 Mees. & W. 54 ; Townsend v. Crowdy, 8 C. B. x. s. 477. 
 This right to recover back the money, however, will in no case be permitted to 
 prejudice the payee who has suffered any damage, or changed his situation in 
 respect to his debtor by reason of the laches of the plaintiff, or his failure to 
 return the check within a reasonable time. 
 
 It is plain, in the case here presented, that if the plaintiffs had paid this check 
 at their own counter under a mistake of fact, they could have maintained this 
 action to recover it back. Is there any thing in the manner in which the pay- 
 ment was in fact made, or in the relation of the parties to each other as members 
 of the Clearing House Association, which prejudicially affects this right?
 
 CANAL BANK V. BANK OF ALBANY. 649 
 
 It is declarod hy tlic articles, wliich were sigiu*(l by the plaintifTand (l<'f»?n<lant 
 banks, to l)e the object of" tlie association to elFect at (^ne time ami ]tlace tlie 
 daily exchanges between the several assoeiated banks, and the paynaent of the 
 balances resolting from such exchanges. An early hour is fixed for making 
 these exchanges, and a later time in the day for the receipt and payment of 
 balances from the debtor and creditor banks. These settlements are ujafle, not 
 from an examination in detail of the vouchers presented, but from ujemoranda 
 and tickets accompany injx them. .And any mistakes resulting from this mode of 
 settlement are to be adjusted directly l)etween the banks which are parties tiierein. 
 It is furtiier provided that " whenever checks are sent through the Clearing 
 House which are not good, they shall be returned, by the banks receiving the 
 same, to the banks from which they were received, as soon as it shall be found 
 that said checks are not good ; aiul in no case shall they be retained after one 
 oVlock." Under this arrangement, the payment required of the Clearing House 
 to a creditor bank, upon a check presented, must be regarded as only provisional 
 until the liour of one o'clock, to become complete only in case the check is not 
 returned at that time. And if by any mistake of fact the return of the check is 
 not so made, then, as between the two banks, it is to be treated as a payment 
 made under a mistake of fact, precisely to the same extent, and with the same 
 right to reclaim, which would have existed if the payment Iiad been made by the 
 simple act of passing the money across the counter directly to the payee on 
 the presentation of the check. The manifest purpose of the provision is, to fix 
 a time at which the creditor bank may be authorized to treat the check as paid 
 and be able to regulate with safety its relations to other parties. 
 
 We cannot adopt the theory that a failure to present a bad check, before the 
 time named, to the bank sending it through the Clearing House, works an abso- 
 lute forfeiture, and is in itself a perfect bar to any action to recover the amount of 
 such check. The whole arrangement, in all its provisions and declared purposes, 
 is to be construed together. And the law will not construe any portion so as to 
 subject parties to a penalty or forfeiture of their rights, where other reasonable 
 inter])retation can be given which will give effect and consistency to the whole. 
 The parties have, in terms, affixed no penalty or forfeiture to the stii)ulation 
 under consideration ; and a failure to comply with its terms must leave the par- 
 ties in the same position, and precisely as they would stand when a payment 
 is made under a mistake of fact in the 'ordinary way. Afler one o'clock, the 
 defendants, upon the failure to return the check, had the right to consider it 
 paid, and to treat it so in their dealings with others. The report finds that the 
 delay in its return was occasioned by a mistake on the part of the messenger, a 
 mistake which was (juite as nuich a mistake of fact as if it had been produced 
 by the false time of a clock which was relied on. And no suggestion is made 
 that there has been any change of circumstances, after the time when the de- 
 fendants had a right to treat the check as i)aid, and before it was returned, which 
 would now subject the defendants to damage or loss, and render it unjust for the 
 plaintilFs to recover. 
 
 AVc have considered the case as if the agreement required the return of the 
 check to the bank from which it was received before or at one o'clock ; but it 
 will be noticed that the stipulation is, that the check shall in no case be retained 
 after one o'clock. If it were necessary to save a penalty or a forfeiture, it might
 
 650 FORGERY. 
 
 be hold that the delivery of it to a messenger before one o'clock, to be returned 
 to the bank depositing it, with suflicient time, in the absence of any accident or 
 mistake, to reach the bank before that hour, would be a compliance with its 
 terms, although it was not in fact delivered until some minutes after. 
 
 Judgment on the vei'dict for the plaintiffs. 
 
 See Overman v. Hoboken City IJank, 2 Vroom, 563; s. c, 1 Vroom, 61. 
 
 The President, Directors, &c., of the Bank of the 
 United States v. The President, Directors, &c., of 
 the Bank of the State of Georgia. 
 
 (10 Wheaton, 333. Supreme Court of the United States, February, 1825.) 
 
 Bank's own forged bills received as cjenuine. — If a bank receives from a debtor forged 
 notes purporting to be its own, as genuine, and passes them to the credit of the 
 debtor, who acts in good faith, the receiving bank is bound by such credit ; and 
 it cannot recover from the depositor and debtor tiie amount of the forged bills. 
 
 The case is stated in the opinion of the Conrt. 
 
 Story, J. This is a case of great importance in a practical 
 view, and has been very fnlly argued upon its merits. The Bank 
 of Georgia having originally issued the bank-notes in question, 
 they were, in the course of circulation, fraudulently altered, and 
 having found their way into the Bank of the United States, the 
 latter presented them to the former, who received them as genuine, 
 and placed them to the general account of the Bank of the United 
 States, as cash, by way of general deposit. The forgery was not 
 discovered until nineteen days afterwards, upon which notice was 
 duly given, and a tender of the notes was made to the Bank of 
 the United States, and by them refused. Both parties are equally 
 innocent of the fraud, and it is not disputed, that the Bank of the 
 United States were holders, bona fide., for a valuable considera- 
 tion. Under these circumstances, the question arises, which of 
 the parties is to bear the loss, or, in other words, whether the i)lain- 
 tiflfs are entitled to recover, in this action, the amount of this 
 deposit. 
 
 Some observations have been made as to the form of the action, 
 the declaration embracing counts for the balance of an account 
 stated, as well as for money had and received, &c. But, if the
 
 BANK OP THE UNITED STATES V. BANK OF GEORGIA. 651 
 
 plaiiitilTs arc entitled to recover at all, we see no oi)jcctioM to a 
 recovery upon either of these counts. The stiiu sued for is tiie 
 balance due upon the general account of the parties, and it is 
 money had and received to the use of the plaintilfs, if the transac- 
 tion entitled the plaintiiTs to consider the deposit as money. It is 
 clearly not the case of a special deposit, where the identical 
 thing was to be restored by the defendauts ; the notes were paid 
 as money upon general account, and deposited as such ; so that, 
 according to the course of business, and the understanding of the 
 parties, the identical notes were not to be restored, but an equal 
 amount in cash. They passed, therefore, into the general funds 
 of the Bank of Georgia, and l>ecame the property of the bank. 
 The action, has, therefore, assumed the proper shape, and if it is 
 maintainable upon the merits, there is no difficulty in point of 
 form. 
 
 We may lay out of the case, at once, all consideration of the 
 point, how far the defendants would have been liable, if these 
 notes had been the notes of any other bank, deposited by the 
 plaintiff, in the Bank of Georgia, as cash. That might depend 
 upon a variety of considerations, such as the usages of banks, 
 and the implied contract resulting from their usual dealings with 
 their customers, and upon the general [)rinciples of law applicable 
 to cases of this nature. The modern authorities certainly do, in 
 a strong manner, assert, that a payment received in forged paper, 
 or in any base coin, is not good ; and that if there be no negli- 
 gence in the i)arty, he may recover back the consideration paid 
 for them, or sue upon his original demand. To this effect are the 
 authorities cited at the bar, and particularly Markle v. Hatfield, 2 
 Johns. 4o5 ; Young v. Adams, G Mass. 182 ; and Jones r. Ryde, 
 6 Taunt. 488.^ But, without entering upon any examination of 
 this doctrine, it is sufficient to say that the present is not such a 
 case. The notes in question were not the notes of another bank, 
 or the security of a third person, but they were received and 
 adopted by the bank as its own genuine notes, in the most absolute 
 and unconditional mannor. They were treated as cash, and carried 
 to the credit of the plaintiff in the same manner, and with the 
 same general intent, as if they had been genuine notes or coin. 
 
 INlany considerations of j)ul)lic convenience and policy would 
 authorize a distinction between cases where a bank receives forged 
 ^ See Ontario Bank v. Lightbody, ante, 625, and note.
 
 652 FORGERY. 
 
 notes purporting to be its own, and those where it receives the 
 notes of other hanks in payment, or upon general deposit. It has 
 the benefit of circulating its own notes as currency, and command- 
 ing thereby the public confidence. It is bound to know its own 
 paper, and provide for its payment, and must be presumed to use 
 all reasonal)lo means, by private marks and otherwise, to secure 
 itself against forgeries and impositions. In point of fact, it is 
 well known, that every bank is in the habit of using secret marks, 
 and peculiar characters, for this purpose, and of keeping a regular 
 register of all the notes it issues, so as to guide its own discretion 
 as to its discounts and circulation, and to enable it to detect 
 frauds. Its own security, not less than that of the public, re- 
 quires such precautions. 
 
 Under such circumstances, the receipt by a bank of forged notes, 
 purporting to be its own, must be deemed an adoption of them. 
 It has the means of knowing if they are genuine ; if these 
 means are not employed, it is certainly evidence of a neglect of 
 that duty, which the public have a right to require. And in re- 
 spect to persons equally innocent, where one is bound to know and 
 act upon his knowledge, and the other has no means of knowl- 
 edge, there seems to be no reason for burdening the latter with 
 any loss in exoneration of the former. There is nothing uncon- 
 seientious in retaining the sum received from the bank in payment of 
 such notes, which its own acts have deliberately assumed to be 
 genuine. If this doctrine be applicable to ordinary cases, it must 
 apply with greater strength to cases where the forgery has not 
 been detected imtil after a considerable lapse of time. The 
 holder, under such circumstances, may not be able to ascertain 
 from whom he received them, or the situation of the other par- 
 ties may be essentially changed. Proof of actual damage may 
 not always be within his reach ; and therefore to confine the 
 remedy to cases of that sort would fall far short of the actual 
 grievance. The law will, therefore, presume a damage actual or 
 potential, sufficient to repel any claim against the holder. Even 
 in relation to forged bills of third persons received in payment of 
 a debt, there has been a qualification ingrafted on tlie general 
 doctrine, that the notice and return must be within a reasonable 
 time ; and any neglect will absolve the payor from responsibility. 
 
 If, indeed, we were to apply the doctrine of negligence to the 
 present case, there are circumstances strong to show a want of
 
 BANK OF THE UNITED STATES V. BANK OF GEORGIA. 653 
 
 due diligence and circumspection on the part of the Bank of Geor- 
 gia. It appears from the statement of facts, that all the genuine 
 notes of that bank of the denomination of one hnndred dcjllars, 
 in circulation at this time, were marked with the letter A ; whereas 
 twenty-three of the forged notes of one hundred dollars hore the 
 marks of the letter 1>, C, and I). Tiicsc facts were known to the 
 defendants, but unknown to the plaintiffs ; so that by ordinary 
 circumspection tlie fraud might have been detected. 
 
 The argument against this view of the subject, derived from tlie 
 fact, that the defendants have received no consideration to raise a 
 promise to pay this sum, since the notes were forgeries, is certainly 
 not of itself sufficient. There are many cases in the law, where 
 the party has received no legal consideration, and yet in which, if 
 he has paid the money, he cannot recover it back ; and in which, 
 if he has merely promised to pay, it may be recovered of him. 
 The first class of cases often turns upon the point, whether in 
 good faith and conscience the money can be justly retained ; in 
 the latter, whether there has l)een a credit therel)y given to or by a 
 tliird person, whose interest may be materially atTected by the trans- 
 action. So that, to apply the doctrine of a want of consideration 
 to any case, we must look to all the circumstances, and decide 
 upon them all. 
 
 Passing from these general considerations, it is material to in- 
 quire, how, in analogous cases, the law has dealt with this matter. 
 The present case, does not, indeed, appear to have been in terms 
 decided in any court ; but if principles have been already estab- 
 lished, which ought to govern it, then it is the duty of the Court 
 to follow out those principles on this occasion. 
 
 Tlic case has been argued in two respects : first, as a case 
 of payment, and, secondly, as a case of acceptance of the notes. 
 
 In respect to the first, upon the fullest examination of the facts, 
 we arc of opinion, that it is a case of actual payment. We treat 
 it in this respect, exactly as the parties have treated it ; that is, as 
 a case where the notes have been paid and credited as cash. Tlie 
 notes have not been credited as notes, or as a special deposit ; but 
 the transaction is precisely the same as if the money had been 
 first paid to the plaintitfs, and instantaneously the same money had 
 been deposited by them. It can make no difference that the same 
 agent is employed by both parties, the one to receive, and the 
 other to pay and credit. Upon what principle is it, then, that the
 
 654 FORGERY. 
 
 Court is called upon to construe the act different from the avowed 
 intention of the parties ? It is not a case where the law construes 
 an act done with one intent to be a different act, for the purpose 
 of making it available in law ; to do that, e// pres^ which would be de- 
 fective in its direct form. Here the parties were at liberty to treat 
 it as they pleased, either as a payment of money, or as a credit of 
 the notes. In either way it was a legal proceeding, effectual and per- 
 fect ; and as no reason exists for a different construction, we think 
 that the parties, by treating it as a cash deposit, must be deemed 
 to have considered it as paid in money, and then deposited ; since 
 that is the only way in which it could legally become, or be treated 
 as cash. Nor is there any novelty in this view of the transac- 
 tion. Bank-notes constitute a part of the common currency of 
 the country, and, ordinarily, pass as money. When they are re- 
 ceived as payment, the receipt is always given for them as money. 
 They are a good tender as money, unless specially objected to ; 
 and, as Lord 31ans/ield observed, in Miller v. Race, 1 Burr. 452, 
 they are not, like bills of exchange, considered as mere securities 
 or documents for debts. If this be true in respect to bank-notes 
 in general, it applies, a fortiori, to the notes of the bank which 
 receives them ; for they are then treated as money received by the 
 bank, being the representative of so much money admitted to be 
 in its vaults for the use of the depositor. The same view was 
 taken of this point in the case of Levy v. The Bank of the United 
 States, 4 Dall. 234 ; 1 Binn. 27, where a forged check had been 
 accepted by the bank, and carried to the credit of the plaintiff 
 (a depositor) as cash, and upon a subsequent discovery of the 
 fraud, the bank refused to pay the amount. The Court there 
 said : " It is our opinion, thai when the check was credited to the 
 plaintiff as cash, it was the same thing as if it had been paid ; it 
 is for the interest of the bank that it should be so taken. In the 
 latter case, the bank would have appeared as plaintiffs ; and every 
 mistake which could have been corrected in an action by them 
 may be corrected in this action, and none other." The case of 
 Bolton V. Richard, 6 Durn. & East, 139, is not, in all its circum- 
 stances, directly in point ; but there the Court manifestly con- 
 sidered the carrying of a check to the credit of a party, was 
 equivalent to the transfer of so much money in the hands of the 
 banker, to his account. 
 
 Considering, then, the credit in this case as a payment of the
 
 BANK OF THE UNITED STATES V. BANK OF GEORGIA. 655 
 
 notes, the question arises, whether, after a payment, the defend- 
 ants would be permitted to recover the money back ; if they would 
 not, then they have no right to retain the money, and the plain- 
 tiffs are entitled to a recovery in the present suit. 
 
 In Price v. Neal, o Burr. 1355, there were two bills of ex- 
 change, which had been paid by the drawee, the drawer's hand- 
 writing being a forgery ; one of these bills had been paid, when it 
 became due, without acceptance ; the other was duly accepted, 
 and paid at maturity. Upon discovery of the fraud, the drawee 
 brought an action against the holder to recover back the money so 
 paid, both parties l)eiiig admitted to be equally innocent. Lord 
 Mansfield, after adverting to the nature of the action, which was 
 for money had and received, in which no recovery could be had, 
 unless it be against conscience for the defendant to retain it, 
 and that it could not be allirmed that it was unconscientious for 
 the defendant to retain it, he having paid a fair and valuable con- 
 sideration for the bills, said, " here was no fraud, no wrong. It 
 was incumbent upon the plaintiff to be satisfied that the bill drawn 
 upon him was the drawer's hand, before he accepted or paid it. 
 But it was not incumbent upon the defendant to inquire into it. 
 There was notice given by the defendant to the plaintiff, of a bill 
 drawn upon him, and he sends his servant to pay it, and take it 
 up. The other bill he actually accepts, after which, the defendant, 
 innocently and bona fide discounts it. The plaintiff lies by for a 
 considerable time after he has paid these bills, and then found out 
 that they were forged. He made no objection to them at the time 
 of paying them. Whatever neglect there was, was on his side. 
 The defendant had actual encouragement from the plaintiff for 
 negotiating the second bill, from the plaintiff's having, witiiout 
 any scruple or hesitation, paid the first ; and he paid the wholo 
 value bona fide. It is a misfortune which has happened without 
 the defendant's fault or neglect. If there was no neglect in the 
 plaintiff, yet there is no reason to throw off the loss from one inno- 
 cent man upon another innocent man. But, in this case, if there 
 was any fault or negligence in any one, it certainly was in the 
 plaintiff, and not in the defendant." The whole reasoning of this 
 case applies with full force to that now before tlie Court. In re- 
 gard to the first bill, there was no new credit given by any accept- 
 ance, and the holder was in possession of it before the time it 
 was paid or acknowledged. So that there is no pretence to allege.
 
 656 FORGERY. 
 
 that there is any legal distinction hetween the case of a liolder 
 bcibre or after the acceptance. 13uth were treated in this judg- 
 ment as being in the same predicament, and entitled to the same 
 equities. The case of Neal v. Price has never since been departed 
 from ; and, in all the subsequent decisions in which it has been 
 cited, it has had the uniform support of the Court, and has been 
 deemed a satisfactory authority. Tiie case of Smith v. Mercer, 6 
 Taunt. 70, was a stronger application of the principle. There, 
 the acceptance was a forgery, and it purported to be payable at the 
 plaintiff's, who was a banker, and paid it, at maturity, to the agent 
 of the defendant, who paid it in account with the defendant. A 
 week afterwards the forgery was discovered, and due notice given 
 to the defendant. But the Court (Mr. Justice Chambre dissent- 
 ing) decided, that the plaintiff was not entitled to recover. Two 
 of the judges proceeded upon the ground, that the banker was 
 bound to know the handwriting of his customers ; and that there 
 was a want of caution and negligence on the part of the plaintiff. 
 The Chief Justice, without dissenting from this ground, put it upon 
 the narrower ground, that during the whole week the bill must be 
 considered as paid, and if the defendant were now compelled to 
 pay the money back, he could not recover against the prior indors- 
 ers ; so that he would sustain the whole loss from the negligence 
 of the plaintiff. The very case occurred in the Gloucester Bank 
 V. The Salem Bank, 17 Mass. 33, where forged notes of the latter 
 had been paid to the former, and, upon a subsequent discovery, 
 the amount was sought to be recovered back. The authorities 
 were there elaborately reviewed, both by the counsel and the 
 Court, and the conclusioji to which the latter arrived was, that the 
 plaintiffs were not entitled to recover, upon the ground, that by 
 receiving and paying the notes, the plaintiffs adopted tliem as 
 their own, that they were bound to examine them when offered for 
 payment, and if they neglected to do it within a reasonable time, 
 they could not afterwards recover from the defendants a loss 
 occasioned by their own negligence. In that case, no notice was 
 given of the doubtful character of the notes until fifteen days after 
 the receipt, and no actual averments of forgery until about fifty 
 days. The notes were in a bundle when received, which had not 
 been examined by the cashier until after a considerable time had 
 i^ elapsed. Much of the language of the Court as to negligence, is 
 to be referred to this circumstance. The Court said, " the true
 
 BANK OP THE UNITED STATES V. BANK OF GEORGIA. 657 
 
 rule is, that the party receiving such notes must examine them as 
 soon as he has opportunity, and return them immediately, if he 
 does not, he is negligent, and negligence will defeat his right of 
 action. This principle will api)ly in all cases where forged notes 
 have l>een received, l>ut certainly with more strength, when the 
 party receiving them is the one purporting to be bound to pay. 
 For he knows better than any other whether they are his notes or 
 not ; and if he pays them, or receives them in payment, and con- 
 tinues silent after he has had sufficient opportunity to examine 
 them, he should be considered as having adopted them as his 
 own." 
 
 Against the pressure of these authorities there is not a single 
 opposing case ; and we must, therefore, conclude, that both in 
 England and America, the question has been supposed to be at 
 rest. Tlie case of Jones v. Ryde, 5 Taunt. 488, is clearly distin- 
 guishable, as it ranged itself within the class of cases, where 
 forged securities of third persons had been received in payment. 
 Bruce v, Bruce, 5 Taunt. 495, is very shortly and obscurely re- 
 ported ; but from what is there mentioned, as well as from the 
 notice taken of it by Lord Ciiief Justice Gibbs, in Smith v. Mercer, 
 6 Taunt. 77, it must have turned on the same distinction as Jones 
 V. Ryde, and was not governed by Price v. Neal. 
 
 But if the present case is to be considered, as the defendants' 
 counsel is most solicitous to consider it, not as a case where the 
 notes have been paid, but as a case of credit, as cash, upon the 
 receipt of them, it will not help the argument. In that point of 
 view, the notes must be deemed to have been accepted by the de- 
 fendants, as genuine notes, and payment to have been promised 
 accordingly. Credit was given for them, as cash, by the defend- 
 ants for nineteen days, and, during all this period, no right could 
 exist in the ])laintifTs to recover the amount against any other per- 
 son from whom they were received. By such delay, according to 
 the doctrine of Lord Chief Justice Gibbs, in Smith v. Mercer, 6 
 Taunt. 76, the prior holders would be discharged ; and the case of 
 the Gloucester Bank c. The Salem Bank, 17 Mass. 33, adopts the 
 same principle ; so that there would be a loss produced by the 
 negligence of the defendants. But, waiving this narrower view, 
 we think the case may be justly placed upon the broad ground, 
 that there was an acceptance of the notes as genuine, and that it ♦ 
 falls directly within the authorities which govern the cases of 
 
 42
 
 « 
 
 658 • FORGERY. 
 
 acceptances of forged drafts. If there be any difference between 
 them, the principle is stronger here than there ; for there, the 
 acceptor is presumed to know the drawer's signature. Here, 
 a fortiori, the maker must be presumed, and is bound to know his 
 own notes. He cannot be heard to aver his ignorance ; and when 
 he receives notes, purporting to be his own, without objection, it 
 is an adoption of them as his own. 
 
 The general question, as to the effect of acceptances, has re- 
 peatedly come under the consideration of the courts of common 
 law. In the early case of Wilkinson v. Lutwidge, 1 Str. 648, the 
 lord chief justice considered that the acceptance of the bill was, 
 in an action against the acceptor, a sufficient proof of the hand- 
 writing of the drawer ; but it was not conclusive. In the subse- 
 quent case of Jenys v. Fawler, 2 Str. 946, the lord chief justice 
 would not suffer the acceptor to give the evidence of witnesses, 
 that they did not believe it the drawer's handwriting, from the 
 danger to negotiable notes ; and he strongly inclined to think that 
 actual forgery would be no defence, because the acceptance had 
 given the bill a credit to the indorsee. Subsequent to this was 
 the case of Price v. Neal, already commented on, in which it was 
 thought that the acceptor ought to be conclusively bound by his 
 acceptance. The correctness of this doctrine was recognized by Mr. 
 Justice Bulle7\ in Smith v. Chester, 1 Durn. & East, 654, by Lord 
 Kenyan, in Barber v. Gingell, 3 Esp. 60, where he extended it to 
 an implied acceptance ; and by Mr. Justice Dampier, in Bass v. 
 Olive, 4 M. &S. 15, and it was acted upon by necessary im- 
 plication by the Court, in Smith v. Mercer, 6 Taunt. 76. In Levy 
 V. The Bank of the United States, 1 Binn. 27, already referred to, 
 where a forged check, drawn upon the bank, had been accepted by 
 the latter and carried to the credit of the plaintiff, and on the re- 
 fusal of the bank afterwards to pay the amount, the suit was 
 brought, the Court expressly held the plaintiff entitled to recover, 
 4ipon the ground that the acceptance concluded the defendant. 
 The case was very strong, for the fraud was discovered a few hours 
 only after the receipt of the check, and immediate notice given. 
 But this was not thought in the slightest degree to vary the legal 
 result. " Some of the cases," said the Court, " decide that the 
 acceptor is bound, because the acceptance gives a credit to the 
 bill, ttc. But the modern" cases certainly notice another reason 
 for his liability, which we think has much good sense in it ; namely,
 
 BANK OP THE UNITED STATES V. BANK OP GEORGIA. 659 
 
 that the acceptor is presaraed to know the drawer's handwriting, 
 and by his acceptance to take this knowledge ujjon himseir.'' After 
 some research, we have not l)een able to find a single case, in 
 which the general doctrine, thus asserted, has been shaken, or 
 even doubted ; and the diligence of the counsel for the defendants 
 on the present occasion, has not been more successful than our 
 own. Considering, then, as we do, that the doctrine is well-estab- 
 lished, that the acceptor is bound to know the handwriting of the 
 drawer, and cannot defend himself from payment by a subsequent 
 discovery of the forgery, we are of opinion, that the present case 
 falls directly within the same principle. We think the defendants 
 were bound to know their own notes, and having once accepted 
 the notes in question as their own, they are concluded \>y their 
 act of adoption, and cannot be permitted to set up the defence of 
 forgery against the jjlaintifTs. 
 
 It is not thought necessary to go into a consideration of other 
 cases cited at the bar, to establish, that the acceptor may show that 
 the accepted bill was void in its origin, as made in violation of the 
 Stamp Act, etc. ; for all these cases admit the genuineness of the 
 notes, and turn upon questions of another nature, of public policy, 
 and a violation of the laws of the land. Nor are the cases appli- 
 cable, in which bills have been altered after they were drawn, or 
 of forged indorsements, for these are not facts which an acceptor 
 is presumed to know. Nor is it deemed material to consider in 
 what cases receipts and stated accounts may be opened for sur- 
 charge and falsification. They depend upon other principles of 
 general application. It is sufficient for us to declare that we 
 place our judgment in the present case, upon the ground that the 
 defendants were bound to know their own notes, and having re- 
 ceived them without objection, they cannot now recall their assent. 
 We think this doctrine founded on public policy and convenience ; 
 and that actual loss is not necessary to be proved, for potential 
 loss may exist, and the law will always presume a possible loss iiy 
 cases of this nature. 
 
 The remaining consideration is, whether there has been a legal 
 waiver of the rights of the plaintilfs derived under the cash de- 
 posit, or, in other words, whether they have consented to treat ^t 
 as a nullity. There is nothing on which to rest such a defence, 
 unless it is to be inferred from the letter of Mr. Early, the cashier 
 of the Bank of the United States, under date of the seventeenth of 
 March, 1819, addressed to the cashier of the Bank of Uuuts-
 
 660 FORGERY. 
 
 ville. That letter contains information of the forgery of the 
 notes, and then proceeds ; " by the person whicli we shall in a 
 few days send to your place, as heretofore intimated, we will 
 forward these altered bills for the purpose of getting yoii to 
 exchange them for other money." Now, there is no evidence 
 that this letter was ever shown to the Bank of Georgia, or its con- 
 tents ever brought to the cognizance of its officers. It states no 
 agreement to take back the notes, or to transmit them, on account 
 of the Bank of the United States, to Huntsville. For aught that 
 appears, the intention may have been to transmit tliem on account 
 of the Bank of Georgia, under the expectation that the latter 
 might desire it. But what is almost conclusive on this point is, 
 that on the same day the Bank of Georgia had made a tender of 
 the notes to the plaintiffs, which had been refused. This is wholly 
 inconsistent with the notion that they had agreed to take them 
 back, or to .treat the previous credit as a nullity. Assuming, 
 therefore, that the cashier had a general or special authority for 
 tlie purpose of extinguishing the rights of the plaintiffs, growing 
 out of the prior transactions (which is not established in proof), 
 it is sufficient to say, that it is not shown that he exercised such 
 an authority. And the case of Levy v. The Bank of the United 
 States affords a very strong argument, that a waiver witliout some 
 new consideisation, upon a sudden disclosure, and under a mistake 
 of legal rights, ought not to be conclusive to the prejudice of the 
 party, where, upon farther reflection, he refuses to acquiesce in it. 
 The subsequent letter of the twenty-fifth of March, demonstrates, 
 that the intention of waiving the rights of the l)ank, if ever enter- 
 taiiied, had been at that time entirely abandoned. 
 
 The letter from the Huntsville Bank, of the fourth of May, can- 
 not vary the legal result. What might be the rights of tlie plain- 
 tiffs against that Bank, in case of an unsuccessful issue of the 
 present cause, it is unnecessary to determine. The contract, 
 whatever it may be, is res inter alios acta, from which the defend- 
 ants cannot, and ought not to derive any advantage 
 
 It only remains to add, that if the plaintiffs are entitled to re- 
 cover the principal, they are entitled to interest from the time of 
 iiMBtituting the suit. 
 
 Upon the whole, it is the opinion of the Court, that the Circuit 
 Court erred in refusing the first and third instructions prayed for 
 by the plaintiffs ; and for these errors the judgment must be re- 
 versed, with directions to award a venire facias de novo. On the
 
 BANK OF THE UNITED STATES V. BANK OP GEORGIA. 661 
 
 second instruction asked by the plaintiffs, it is unnecessary to ex- 
 press any opinion. 
 
 Judgment reversed accordingly. 
 
 In Matlier v. Lord Maidstone, 18 Com. B. 273, (185G) the question 
 of f'orj^ed acceptance's is considered. Jervis, C. J., in delivering tlie opinion 
 of the Court, said: "lam of opinion tliat our judgment in this case must 
 be for the plaintifl". As a general rule, the holder of a bill of exchange has 
 a right to know whether or not it has been duly honored by the acceptor at 
 maturity ; and when tlie bill is presented, if the acceptor pays it, the money 
 cannot be recovered back, if the acceptor has the means of satisfying him- 
 self of his lial)ility to pay it, though it should turn out that the acceptance was 
 a forgery. Can it make any dinTerence that, instead of paying money for the 
 bill, he takes the bill, examines it, and gives another acceptance in ^ieu of it? 
 The replication in this case having been amended, the facts which appear upon 
 the whole record are these : A bill of exchange was drawn by Villiers upon the 
 defendant, and accepted by the defendant for the accommodation of Villiers, and 
 indorsed by Villiers to Clark, and by Clark to the plaintifl"; that bill was pre- 
 sented and dishonored, and notice of the dishonor duly given to Villiers and 
 Clark, in order to preserve the holder's remedy over against them; the bill was 
 subsequently offered to the defendant, who having had an opportunity of inspect- 
 ing it, kept it, and gave the plaintiff a renewed bill at three months ; and a 
 month afterwards he discovered that the acceptance was not his signature, and 
 that he was not liable, and he proposed to return the bill, having delayed the 
 plaintiir of his reuiedy against the parties liable for thirty days. Under these 
 circumstances, I appre!i(.'nd the defendant could not be allowed to say that the 
 acceptance was not his handwriting." 
 
 Mr. Justice Cresswell: " I am clearly of the same opinion. A man accepts a 
 bill of exchange purporting to be drawn by one Thompson, and pays.it, and it 
 afterwards turned out to be a forgery ; lie cannot afterwards be permitted to say 
 that he paid the money under a mistake. I apprehend the same result must 
 follow if in lieu of money a fresh acceptance is given ; and particularly where the 
 party has retained the instrument in his hands so long as the defendant has done 
 in this case." See Beeman v. Duck, 11 Mees. & W. 251 ; Leach v. Buchanan, 
 4 Esp 22G ; Cooper r. Le Blanc, 2 Strange, 1051; Barber v. Gingell, 3 Esp. 
 GO; Hall v. Fuller, 5 Barn. & C. 750; Levy v. Bank of the United States, 1 
 Binn. 27 ; and the recent case of Stout v. Benoist, 39 Mo. 277. See also Morris 
 V. Betiiell, Law Rep. 5 Com. P. 47, cited at length, post, p. 669. 
 
 But the acceptor does not warrant the genuineness of the signature of afiy 
 party except that of the drawer; not even that of the payee indorsed before 
 acceptance. See Ilortsman r. Henshaw, ante, 57, and note. If however the 
 drawer puts a bill into circulation, bearing a forged indorsement of the payee, 
 the former thus warrants such indorsement to be genuine ; and the acceptor 
 cannot, on discovering the forgery, recover the amount paid to a subsequent 
 bona fide holder. He has paid the bill to the person to whom the drawer 
 directed, and must look to the latter for indemnity. Id. See also bleacher v. 
 Fort, 3 Hill, (S. C.) 227, cited in full in note to Hortsman v. Henshaw, ante, 
 69.
 
 662 FORGERY. 
 
 And it has been held In one case that the rule that the acceptor admits the 
 genuineness of the signature of the drawer must be taken strictly, and does not 
 apply to a forgery In the body of the paper. Bank of Commerce v. Union Bank, 
 3 Comst. 230. But this may be doubted. See Ward v. Allen, 2 Met. 53 ; Van 
 Duzer v. Howe, 21 N. Y. (7 Smith) 5:51; Hall v. Fuller, 5 Barn. & C. 750; 
 Langton v. Lazarus, 5 Mees. & W. 629; Chltty, Bills, 428; Byles, Bills, 323; 
 note to Hortsman v. Henshaw, ante, 57. 
 
 An exception Is made to the rule where the defendant becomes the holder of 
 a forged draft before acceptance by the plaintiff, and before he had any knowl- 
 edge of its existence, and when the loss had already attached ; the acceptor 
 giving notice of the forgery immediately upon discovering the same. In such 
 case It has been held that the acceptor may recover the sum paid. McKleroy v. 
 Southern Bank of Kentucky, 14 La. An. 458. In this case the opinion of the 
 Court was delivered by 
 
 Land,^. The evidence In this case establishes the following facts, viz : — 
 
 The plaintiffs were the factors of James Smith, a cotton planter, residing in 
 the State of Arkansas. One John Zimraer, who had for a few months been a 
 private tutor in Smith's family, assuming the name of John Belmont, fo^-ged a 
 draft on the plaintiffs. In the name of Smith, as follows : — 
 
 $986. , " Homestead, Nov. 5th, 1857. 
 
 " On the loth December, 1857, pay to the order of John Belmont nine hun- 
 dred and eighty-six dollars, value received, and chai'ge the same to the account 
 of Jas. Smith. 
 
 "To Messrs. McKleroy and Bradford, New Orleans, La." 
 
 ZImmer also forged a letter of Introduction, in the name of Smith, to Shotwell 
 and Son, of Louisville, Kentucky, as follows: — 
 
 "Homestead, Nov. 5th, 1857. 
 "Messrs. Shotwell and Son. 
 
 ' ' Gentlemen, — I introduce to you Mr. John Belmont, a gentleman who resided 
 in my family as our tutor. Having been sick, he Is now ti'avelling to Improve 
 his health. I gave him a draft on McKleroy and Bradford, my commission house 
 in New Orleans, which he Is desirous to get cashed In your city. If you can 
 give Mr. Belmont any assistance, by perhaps recommending my draft, as Mr. 
 Belmont Is a stranger in your city, and not yet fully recovered, you will greatly 
 oblige me. I am, gentlemen, yours respectfully, 
 
 "James Smith." 
 
 The house of Shotwell and Son had been In correspondence with James Smith 
 for about twelve years ; and being deceived by the forger, indorsed the draft for 
 the purpose of enabling the holder to negotiate it. The draft bearing the In- 
 dorsements of John Belmont and of Shotwell and Son, was presented for discount 
 at the Branch of the Southern Bank of Kentucky, and being considered good, 
 was purchased by the bank. The draft was remitted to the Louisiana State 
 Bank, with the following additional indorsement upon it — " Pay to R. J. Pal- 
 frey, cashier, J. B. Alexander, cashier." The draft thus Indorsed, was presented 
 to plaintiff's for acceptance by the Louisiana State Bank, and was accepted on the 
 last of November, or first of December, and was paid at maturity, on the 18th 
 December, 1857, by the plaintiffs to the agent of the Southern Bank of Ken-
 
 BANK OF THE UNITED STATES V. BANK OF GEORGIA. GG3 
 
 tucky. In January, l.sr).S, Jainos Sinitli, bein;,' in the city, made known to the 
 plaintifTs, upon an examination of liis account with them, tliat the draft was a 
 forgery. Mr. Shotwell, of the house of Shotwell and Son, was in this city at the 
 time, and was immediately sent for, and the fact of forgery communicated to him. 
 On the 9th January, 1858, the plaintiffs gave formal notice by letter, of the 
 forgery, to A. L. Shotwell and Son, to the Southern Bank (jf Kentucky, and also 
 the Louisiana State Bank. 
 
 This suit was instituted by the plaintiffs to recover back the money paid on 
 the draft, on the ground of payment in error. 
 
 There was judgment for the defendant, and the plaintiffs have appealed. 
 
 The district judge held, that the acceptance of a bill of exchange admits the 
 genuineness of the drawer's signature, and that where an acceptor has pai<l to a 
 6o?irtj^(7e holder of a forged draft or bill, having no notice of the forgery, he can- 
 not recover back the money paiil, although the forgery is established by the most 
 conclusive evidence. And where one of two innocent persons must puffer, he 
 who has misled the other, or has omitted his duty, must bear the loss. 
 
 These principles of law are well established, and admit, perhaps, of neither 
 doubt nor controversy, and if applicable to this case, must determine the rights 
 of the parties. 
 
 The defendant became the holder of the draft, before it was accepted by the 
 plaintiffs, and before they had any knowledge of its existence, and consequently, 
 before the defendant had any right of action against them for its recovery. The 
 plaintiffs, therefore, had done no act which induced the defendant to believe the 
 signature of the di-awer to be genuine, at the time the bill was purchased. How, 
 then, can it be said that the defendant purchased the bill on the faith of the 
 plaintiffs' acceptance, or on their guarantee of the genuineness of the drawer's 
 signature? Or how can it be said that the plaintiffs misled the defendant at the 
 time of the purchase of the bill, or was then guilty of the omission of any duty 
 toward the defendant as the purchaser of the bill ? 
 
 If the defendant had purchased the bill on the faith of the acceptance of plain- 
 tiffs, or had sustained any loss in consequence of their negligence, we would 
 have no difficulty in affirming the judgment of the lower court ; but such are not 
 the facts made known to us by the record. 
 
 The defendant purchased the bill on the faith of the indorsement of Shotwell 
 and Son, which was a warranty of the genuineness of the drawer's signature to the 
 bank; and there is no good reason, why the accidental payment made by the 
 plaintiffs should inure to the benefit of the defendant. 
 
 IMr. Chitty says on this subject, " If he [the holder] thought fit to rely on the 
 bare representation of the party from whom he took it [the bill], there is no 
 reason that he should profit by the accidental payment, when the loss had already 
 attached upon himself, and why he should be allowed to retain the money, when, 
 by an immediate notice of the forgery, he is enabled to proceed against all other 
 parties, precisely the same as if the payment had not been made, and consequently, 
 the payment to him has not in the least altered his situation, or occasioned any 
 delay or prejudice. It seems that, of late, upon questions of this nature, these 
 latter considerations have influenced the Court in determining whether or not 
 the money shall be recoverable back ; and it will be found, on examining the 
 older cases, that there were facts affording a distinction, and that upon attempt-
 
 664 FORGERY. 
 
 ing to reconcile them, they are not so contradictory as might on first view have 
 been supposed." Chitty, Bills, 404. 
 
 The facts in this case afford the distiniition to which Mr. Chitty refers, and 
 take the case out of the general rule, which prevents the acceptor of a bill of 
 exchange from recovering back the money paid in cases of forgery of the 
 drawer's signature. 
 
 The loss had already attached, before the bill was either accepted or ])aid, and 
 the acceptors gave immediate notice to the defendant, and Shotwelland Son, after 
 ascertaining for the first time, from James Smith, in whose name the bill was 
 drawn, the fact of forgery. 
 
 The evidence shows that plaintiffs accepted the bill, in the language of the 
 witness, " chiefly through the respectability of the channels through which it 
 came." It is, therefore, difficult to conceive upon what principle of equity or 
 right the defendant can be permitted to retain the money paid in error by the 
 plaintiffs, upon the facts of this case. No authority applicable to the particular 
 circumstances of this case has been cited by the defendant's counsel, and we have 
 no hesitation in reversing the judgment upon the authority of Mr. Chitty, above 
 quoted. 
 
 . In a case like the present, the acceptor is not estopped from proving the forg- 
 ery of the bill. 
 
 It is, therefore, ordered, adjudged, and decreed, that the judgment of the 
 lower court be avoided and reversed ; and it is now ordered, adjudged, and de- 
 creed, that the plaintiffs do have and recover of the defendant the sum of nine 
 hundred and eighty-six dollars, with five per cent per annum interest, from the 
 eighteenth day of December, 1857, with costs in both Courts. 
 
 A case (National Bank of North America v. Bangs) is now pending in the 
 Supreme Court of Massachusetts, as we are informed by counsel, presenting facts 
 somewhat similar to those in McKleroy v. Southern Bank of Kentucky, supra ; 
 and which the plaintiff will endeavor to bring within the rule in that case. 
 
 Though the general rule is that the drawee by acceptance admits the genuine- 
 ness of the drawer's signature, or, more strictly speaking, is precluded from 
 alleging that the drawer's signature has been forged, still it seems that in sound 
 reason the doctrine should be restricted to the case of an action against an inno- 
 cent indorsee; and that it should not apply in a suit against the payee of an 
 unnegotiable or unindorsed bill, who has received money from the acceptor under 
 a forgery of the name of the drawer. The reason why the acceptor is jirecluded 
 from recovering against an innocent indorsee is that the latter has honestly paid 
 value for the bill, and that it would be an unjust loss to require him to refund ; 
 it would be a loss, because he had parted with his money in taking the bill ; it 
 would be unjust, because the inducement to take the bill may have been, and 
 usually is, the very fact of acceptance and confidence in the acceptor. See Bank of 
 St. Albans v. Farmers' & Mechanics' Bank, 10 Vt. 141. But no such reason exists 
 where the acceptor seeks to recover from the payee. The payee can be no loser 
 by refunding money paid under a forgery of the drawer's signature. His debt 
 against the one whose name was forged as drawer, if the latter owed the payee 
 any thing, would remain ; it could not be paid by a forgery. He could still re- 
 cover it, whether he refunded to the acceptor or not. So not being involved in
 
 BANK OF THIC UNITED STATES V. BANK OF GEORGIA. 6G5 
 
 any loss by being reijuircil to refinid, it woulil be great injustice to tiie aeceplor 
 t9 allow the j)ayee to retiiiii the money. 
 
 The recent case of National Park Bank v. Ninth National Bank, .5o Barb. 87, 
 is one of nnuh importance. It is there held, Mr. Justice Sutherland, dissenting, 
 that where the drawee of a bill, containing a forgery of the drawer's name, and 
 also an alteration of the sum payal)le and of the name ol' the payee, has paid the 
 same to a bona Jidc holder, he may recover the excess i)aid above tlie amount 
 originally inserted in the bill. This alteration of the amount of the draft was 
 held by a majority of the ( 'ourt to con.«titute an exception to the general rule 
 that the drawee must bear the loss when he pays a forged draft. See Bank of 
 Commerce v. Union Bank, .'5 Comst. 230; Goddard v. Merchants' Bank, 4 Comst. 
 147; Worrall v. CJheen, :i9 Penn. State, .388; Bruce v. Bruce, 5 Taunt. 49.">; 
 Hall V. Fuller, 5 Barn. & ('. 760; Young r. Grolc, 4 Bing. 2.03 ; Pagan r. W>lie, 
 Ross, Leading Cas. Bills and Notes, 194; Graham v. Gillespie, ib. 195; "Wilkin- 
 son V. Johnson, 3 Barn & C. 428. 
 
 Another exception has been made in Ohio, where either by express agreement, 
 or a settled course of business between the jjarties, or by a general custom in the 
 place, and applicable to the business in which both parties are engaged, the 
 holder takes ujjon himself the duty of exercising some material precaution to 
 prevent the fraud ; and by his negligent fltilure to perform it, has contributed to 
 induce the drawee to act upon the paper as genuine, and to advance the money 
 upon it. It is also held to be an exception to the rule, if the parties are in 
 mutual fault, or where the money is paid upon a mistake of facts in respect to 
 which both were bound to inquire. Ellis v. Ohio Life Insurance Co., 4 Ohio 
 State, ()28, per PiOnney, J. See Goddard v. Merchants' Bank, 4 Comst. 147; 
 In-ing Bank v. Wetherald, 36 N. Y. 335. 
 
 If a bill of exchange, payable to order, be accepted payable at the acceptor's 
 bankers, and the indorsement of the payee be forged, and the bankers pay the 
 bill to a party presenting it for payment, they are guilty of no breach of duty 
 towards the acceptor in making the payment ; but they cannot charge the amount 
 of the l)ill in account against him, though the payee be a stranger to them, and 
 they have no immediate means of ascertaining the genuineness of his signature, 
 and have dealt with the bill in the ordinary course of business. Robarts v. 
 Tucker, 4 Eng. Law & E. 236, in the Exchequer Chamber. Per Maule, J., in 
 the course of the argument : " I conceive that if a bill were presented to a banker 
 by a stranger, with an indorsement on it of a person necessary to make out the 
 title, but unknown to the banker, the banker would be justified in refusing to pay 
 at once." Per Parke, B., upon the same point: "Probably in such a case the 
 obligation wouM be to pay in a reasonable time." 
 
 The question of negligence on the part of the drawer arose in the recent case 
 of Belknap v. National Bank of North America, 100 Mass. 376. The case is one 
 of great interest, and we give the full report of it. It was 
 
 Contract to recover .'?70l. 49 deposited by the plaintiffs with the defendants. 
 Answer, that the defendants didy i)aid upon checks of the jjlaiutiffs the amount 
 sued for. 
 
 At the trial in the Superior Court before Morton, J., it was not disputed that 
 the defendants paid the amount on two checks, signed by the plaintiffs, the first
 
 QQG FORGERY. 
 
 of wliich was in form substantially as follows ; and the second precisely resembled 
 it, except in the name of the payee (Edward Williams), the number of the 
 check (10,982), and the amount thereof ($371.86) : — 
 
 o a 
 
 S 3 
 
 " The National Bank of North America. 
 $[329.63.] Boston, [June 12,] 1867. 
 
 =3 I Pay to [Alfred Boyden or bearer] -o r - ordor - [Three Hundred Twenty-Nine] 
 liars, [Sixty-Three] Cents. 
 
 No. [10,980] [Lyman Belknap & Co."] 
 
 Each check was filled out upon a lithographed blank, and those portions which 
 were written by hand in ink are designated by being inclosed within braeskets in 
 the foregoing copy. Across the lithographed words '' or order" in each check 
 was drawn a broad line with a lead pencil. 
 
 The only question raised was, whether the defendants were justified in making 
 payments on these checks ; and there was evidence tending to show facts as 
 follows ; — 
 
 One of the plaintiffs signed six such lithographed blanks, on June 13, 1867, 
 and left them in charge of Wilde, the plaintiffs' book-keeper, to be filled up and 
 sent by mail to parties living at a distance, in settlement of accounts due from 
 the firm. Wilde handed them, together with the six statements of account, to 
 Bryant, a clerk twenty-one years old, who had come into the plaintiffs' employ- 
 ment on June 10 ; and directed Bryant to fill them out to correspond in date and 
 amounts with the accounts, and make them payable to the respective orders of 
 the parties to whom they were intended to be sent. Bryant filled them out 
 accordingly, and returned all the papers to Wilde, who examined the checks, 
 compared them with the accounts, found them correctly drawn, placed internal 
 revenue stamps upon them, which he cancelled with the initials of the firm and 
 the date, and then put them, with the accounts, into envelopes, which he addressed 
 to the respective payees, sealed and delivered to Bryant, near evening, to take 
 to the post-ofHce. 
 
 The plaintilTs, who were commission merchants, had kept a bank account with 
 the defendants for six or seven years, and drew on the defendants, and mailed 
 to their consignors, as many as two or three thousand cheeks each year, using 
 always the same lithographed form, and invariably drawing them payable to 
 order, for the purpose of procuring receipts upon them. In drawing money for 
 their own use, or to pay notes, the plaintiffs frequently drew checks payable to 
 "notes payable or order," but in all such cases some one of the plaintiffs per- 
 sonally, or their book-keeper, received the money from the bank. 
 
 All of the six checks but the two in question were returned to the plaintiffs in 
 due course of business, indorsed by the parties to whom they were mailed. The 
 payees of these two, within a few days after June 14, gave notice to the defend- 
 ants that they had not received the remittances due to them on their accounts ; 
 whereupon the plaintiffs went to the defendants' bank and tliere found the two 
 checks, altered by the insertion, in ink, in Bryant's handwriting, of the words 
 " or bearer" after the names of Boyden and Williams, and by the cancellation of 
 the words " or order " by the line drawn by lead pencil ; and the teller of the
 
 BANK OP THE UNITED STATES V. BANK OF GEORGIA. 667 
 
 bank, being then asked, could not tell to whom he had paid these two checks, or 
 either of them. Bryant came to the plaintiffs' place of business early on the 
 morning of June 14, and about ten o'clock went away " to be gone for an hour 
 or two," and never came back. 
 
 Much evidence, which, by the decision of this Court, has become inimaterial, 
 was introduced on the question whether the defendant's teller used due care in 
 paying the two checks. 
 
 On the whole case, the plaintiffs requested the judge to rule as follows : 1. 
 *• That, if tlie checks were altered by erasing tfie words ' or order' and inserting 
 the words ' or bearer,' alter they were executed by the plaintiffs, and without 
 authority from them, the checks were void, and the defeiulaiits could not set up 
 a payment under them to defeat the plaintiffs' claim, unless the plaintiffs were 
 guilty of negligence with respect to them. 
 
 2. " That, if the checks were altered by erasing the words ' or order,' and in- 
 serting the words ' or bearer,' and the alteration was apparent on the face of the 
 instrumeiit^i, it was the duty of the defendants, before paying the checks, to as- 
 certain whether the alterations were authorized ; otherwise they would run the 
 risk of their being unauthorized. 
 
 3. " That, if the checks were taken from the letters in which they were 
 inclosed, and the alterations were made with a fraudulent purpose, after the 
 execution of the checks, by a clerk of the plaintiffs, who was merely employed 
 and authorized to take the letters containing the checks to the post-ofiice, the 
 plaintiffs were not responsible for his fraudulent acts, although lie may have been 
 employed to fill in the body of the checks under the direction of the book-keeper 
 who had charge of the filling in of the checks. 
 
 4. " That, if the checks were altered by cancelling the words ' or order,' and 
 inserting the words ' or bearer,' without the authority of the plaintiffs, and after 
 the plaintiffs had signed the checks, such alteration was a forgery, and the bank 
 paid the checks at its own risk." 
 
 The judge declined so to rule; and instructed the jury " tliat, if the words 
 ' or bearer ' were written in the checks before they were sent out by the plain- 
 tiffs' book-keeper, the bank was justified in paying the checks ; but if the words 
 * or bearer' were inserted after the checks were issued, it did not necessarily fol- 
 low that the plaintiffs would not be held on the checks ; that if the checks were 
 signed in blank by the plaintiffs, and given to Wilde to be filled up, and he 
 delivered them to Bryant, and directed him to fill them up, and they were filled 
 up by him, leaving a blank space after the names of the payees and before the 
 printed words ' or order,' and they Avere then issued in that form, and he, 
 Bryant, afterwards inserted in the blank space the words ' or bearer,' in the same 
 handwriting as the rest of the written part of the checks, and if the jury should 
 find there was nothing in the appearance of the checks, when presented to the 
 teller for payment, to excite any suspicion, or which ought to have excited any 
 suspicion on his part, or to indicate that the checks had been altered after they 
 were issued, and he exercised due care in paying them, then the bank would be 
 protected in making the payment ; that, as matter of law, the mere fact of the 
 printed words ' or order ' having been erased, the words ' or bearer ' being in 
 the checks, would not in itself alone be such a suspicious circumstance as would 
 deprive the bank of this defence, but that that fact, with the other facts in the
 
 668 FORGERY. 
 
 case, niiirht .show want of clue care on tlie part of the teller; " and the jury were 
 instructed on this point " to take into consideration the fact of the erasure of the 
 words ' or order ' and all the other facts in the case, and if, upon all the facts, 
 there was anj' thing suspicious in the appearance of the checks when presented 
 for payment, or which ought to have excited suspicion, or if the teller did not 
 exercise due care, then the fact that the plaintiffs had been careless in respect to 
 the checks would not relieve the defendants from liability; and further, that, if 
 there was any thing suspicious in the appearance of the checks, or whicli ought to 
 have excited suspicion, or if there was any want of due care on the i)art of the 
 teller in paying the checks, then any practice, at the banks in Boston, to pay 
 checks to persons presenting the same, if known to the teller, or identified by 
 some person known to him, though there was such identification upon payment 
 of the checks in question, would not protect the hank in paying the same.'" 
 The jury found for the defendants, and the plaintiffs alleged exceptions. 
 
 Chapman, C. J. It appears that the plaintiffs signed several checks di-awn 
 upon the defendants, payable to [blank] or order, and left them with Wilde, 
 their book-keeper, to be filled up and sent by mail to several parties living at a 
 distance, for the payment of debts owed to them severally. "Wilde handed these 
 checks to Bryant, the clerk, to be filled up with the proper dates, names and 
 amounts, leaving them payable to the order of the several creditors. Bryant did 
 so, and then returned them to t"lie book-keeper, who examined them, found them 
 correct, stamped them, cancelled the stamps, placed them, with the accounts to 
 be paid by them, in envelopes, sealed the envelopes, and addressed them to the 
 proper persons. 
 
 It is not necessary to consider the question whether any part of tl)e plaintiffs' 
 conduct thus far was careless ; for their confidence was not abused, but every 
 thing had been properly done. The case is not different from wiiat it would 
 have been if he had given the blanks to the clerk to fill up before they signed 
 them, and had sjgned them after they were filled up, stamped and returned to 
 them. 
 
 The sealed letters were delivered to the clerk to carry to the post-office. We 
 cannot assume, as is implied in the instructions, that it was careless on the part 
 of the plaintiffs to send sealed letters to the post-office by a clerk, although the 
 clerk knew their contents. For he could not obtain access to the contents with- 
 out committing a crime. The checks were not intrusted to him as in the cases 
 of Putnam v. Sullivan, 4 Mass. 45, or Young v. Grote, 4 Bing. 253. 
 
 He obtained possession of the checks surreptitiously; and, by the erasure of 
 the words " or order," and inserting the words " or bearer," he committed a 
 forgery ; for it was a fraudulent alteration of the instruments in a material part, 
 whereby a new operation was given to them. Before the alteration, the checks 
 could only be paid to the creditor or his order, and such payment would discharge 
 the debt which each check was designed to pay. After the alteration, each check 
 was payable to any one who should present it. Such an alteration would vitiate 
 the instruments, even in the hands of a bona fide holder for value. Wade v. 
 Withington, 1 Allen, 561. The case was presented to the jury upon the question 
 of the diligence or fault of the defendants, and the Court are of opinion that this 
 was an erroneous view of it. Exceptions sustained.
 
 BANK OF THP: UNITED STATES V. BANK OF GKOKGIA. G09 
 
 "When an innocent holder of nef.'otiable paper parts with it by delivery, 
 witliout indorsing it, in payment of a debt due, or then created, as, for example, 
 in payment for goods then purchased, or by way of discount for money then 
 loaned by a bank, banker, or individual, and the paper proves to have been 
 forged, the debt or loan not being paid by it may be recovere*]. In such case 
 there is a warranty implied by law that the paper is genuine, as there is tliat coin 
 or bank-notes used for like purposes are genuine. Per Hhcpley, C J., in Bax- 
 ter V. Duren, 29 Me. (1(J Shepl.) 434, 440 (1849), citing Jones v. Hyde, 5 
 Taunt. 488 ; Fuller i\ Smith, 1 Car. & P. 197 ,* Camidge i'. Allenby, 6 Barn. & 
 C. 873; Coolidge v. Brigham, 1 Met. 547. 
 
 " When no debt is due or created at the time, and the [forged] paper is sold 
 as other goods and elfects arc, the purchaser cannot recover from the seller the 
 purchase-money. There is in such case no implied warranty of the genuineness 
 of the paper. The law respecting the sale ol" goods is ai)plicable. The only 
 implied warranty is that the seller owns or is lawfully entitled to dispose of the 
 paper or goods." Id., citing Bank of England v. Newman, 1 Ld. Kaym. 442; 
 Fenn v. Harrison, 3 T. 11. 7o7 ; Fydell v. Clark, 1 Esp. 447 ; Emiy v. Lye, 
 15 East, 6; Ex j^aiie Shuttleworth, 3 Ves. 368; Ex parte Blackburne, 10 Ves. 
 204; Ellis v. Wild, 6 Mass. 321. 
 
 Tlie learned chief justice says that the cases upon this subject are in appar- 
 ent, but not real conllict; and that " the principal difliculty appears to have 
 been experienced in coming to a conclusion whetlier the paper when discounted 
 or sold was received in payment of a debt or loan due or then created, or taken 
 by way of purchase and sale." He proceeds to say : " The use of the, word 
 ' discount ' in two different senses, has also contributed to introduce obscurity; 
 it being used in some of the cases, and by some judges, to designate the re- 
 ception of paper in payment of a loan or debt, and in other cases, and by 
 other judges, in the sense in which it appears to have been used by the broker in 
 this case, to designate the reception of it on a sale as a piece of property." 
 
 But the editor of Story, Promissory Xotes, § 118, says that the distinction 
 above drawn may well be doubted, both on principle and authority; citing Rie- 
 man v. Fisher, 4 Am. Law Reg. 433, in which the doctrine of Baxter v. Duren is 
 directly denied. Rieman v. Fisher takes the broad ground tiiat a public bill-bro- 
 ker who sells commercial paper inipiiedly warrants the genuineness of the signa- 
 tures and indorsements ; and that if the paper should prove to be forged, the 
 loss must fall upon the vendor. And this is the doctrine of the English Courts, 
 and seems to be the better rule. See Gurney r. Womersley, 4 Ellis &, B. 
 133, decided in 1854. See also Cabot Bank v. Morton, 4 (iray, 156, per Shaw, 
 C. J.; IMerriani /-. Wolcott, 3 Allen, 258; Canal Bank v. Bank uf Albany, 
 ante, p. 643. 
 
 The question of estoppel by payment of a forged bill has arisen in several in- 
 stances. The most recent case is that of Morris v. Bethel!, Law Rep. 5 Com. 
 P. 47, decideil in 1869. TliIs was an Action by the holder against the defend- 
 ant as the acceptor of a bill. The case was this : In August, 1;S67, the defend- 
 ant paid a bill of exchange, of which the plaintiff was the holder, upon which 
 the defendant's name had been written as acceptor without his authority. In an 
 action against him upon another bill similarly accepted, the jury found that the 
 acceptance was not the defendant's signature, or written witii his authority; that
 
 670 FORGERY. 
 
 the forged signature was not adopted by the defendant ; that the defendant did 
 not know that tlie phiintifF was the holder of the former bill ; and that he did 
 not lead the plaintiff to believe that the acceptance written on the bill sued 
 upon was his. The Court unanimously held that the fact that the defendant had 
 paid the bill in August, above mentioned, did not estop him from denying that 
 the bill declared on was accepted by him or with his authority ; that the circum- 
 stances were properly submitted to the jury ; and that the judge was not bound 
 to tell them that, as matter of law, the plaintiff was entitled to recover. The 
 Court distinguished the case from Barber v. Gingell, 3 Esp. 60. Bovill, C. J., 
 said : *' If it were made to appear that there had been a regular course of mer- 
 cantile business, in which bills have been accepted by a clerk or agent whose sig- 
 nature has been acted upon as the signature of the principal, there would be 
 evidence, and almost conclusive evidence, against the latter, that the acceptance 
 was written by his authority. That was the case of Barber v. Gingell. It would 
 have been idle to contend there that the defendant was not responsible for the 
 signature." See also Beeman w. Duck, 11 Mees. «fc W. 251; Mather r. Lord 
 Maidstone, cited at length, ante, p. 661.
 
 PINTARD V. TACKINGTON. 671 
 
 LOST BILLS AND NOTES. 
 
 [As to stolen paper, see Goodman v. Simonds, ante, 230, and note.] 
 
 PiNTARD V. TaCKINGTON. 
 (10 Johnson, 104. Supreme Court of New York, January, 1813.) 
 
 When owner may recover. — Tlie plaintiff declared on a promissory note, payable on 
 demand, and stated that the note had been lost or destroyed ; and the existence 
 and contents of the note being proved, and it not appearing that the note was 
 negotiable, or if negotiable, that it liad been negotiated, htkl, that the plaintiff was 
 entitled to recover. 
 
 In error, on certiorari., from the justices' court of the city of New 
 York. Tackington brought an action in the Court below, against 
 Pintard, and declared for money had and received by the de- 
 fendant to the use of the plaintiff; and also that the defendant, in 
 May, 1811, being indebted to him, for work and labor to the amount 
 of $G2, gave his note to the plaintiff, for that amount payable on 
 demand ; that the plaintiff put the note in his chest on board of 
 the vessel of the defendant, and that the defendant sailed out of 
 the port, with the plaintiff's chest on board containing his clothes 
 and the note, leaving the plaintiff behind. 
 
 A witness for the plaintiff testified, that after the return of the 
 defendant to New York, in the vessel, Avhich was about three 
 months after the trunk was i)ut on board, he apjAied as attorney 
 of the plaintiff, for the note, to the defendant, wlio said he did not 
 know where it was, but supposed it was in the plaintiff's chest, in 
 the fore part of the vessel, but that he could not then get at the 
 chest, and that the witness must call again ; that he called again, 
 and on opening and examining the chest the note could not be 
 found. The defendant admitted that he had given such a note to 
 the plaintiff. Another witness testified that she saw the plaintiff, 
 (who was a sailor), put the note into the chest, which was put on 
 board of the defendant's vessel.
 
 672 LOST BILLS AND NOTES. 
 
 The Court below, being of opinion that there was sufficient 
 evidence of the loss of the note, and of the existence of a debt 
 due from the defendant to the plaintiff, for which the note was 
 given, gave judgment for foO, being the extent of their juris- 
 diction. 
 
 Per Curiam} The declaration of the plaintiff below consisting 
 of a detail of his case, is to be liberally construed so as, if possi- 
 ble, to meet and embrace the proof. We have never required any 
 technical nicety or form in pleadings, in the justices' courts, be- 
 cause tiie pleadings are usually by parol, and managed by the par- 
 ties, without the aid of counsel. The plaintiff, therefore, declared 
 for money had and received, and upon a lost note, which he par- 
 ticularly described, and as having been given for work and labor. 
 If, therefore, the testimony will entitle him to recover, either upon 
 the note, by proving its existence, loss and contents, or upon the 
 original debt, for work and labor, the judgment ought to be sup- 
 ported. We see no reason why the recovery upon the note, as a 
 lost note, was not good. It does not appear that the note was 
 negotiable, or, if negotiable, that it had ever been indorsed, and 
 the existence and contents of the note, were fully proved, and the 
 circumstances were enough to authorize a conclusion that it had 
 been lost or destroyed. The cases which have not permitted a re- 
 covery at law, upon negotiable paper which was merely lost and 
 not destroyed, were those in which the paper had been indorsed 
 before it was lost. Pierson v. Hutchinson, 2 Camp. N. P. 211, 
 and note ; and the cases cited by Lord Eldon in 6 Ves. 812. The 
 Court below went, perhaps, upon the ground of the existence of the 
 previoiis debt ; and that the recovery upon that was to be sup- 
 ported, notwithstanding the giving of the note. The better 
 opinion on this point seems to be, that the acceptance of negoti- 
 able paper, on account of a prior debt, is prima facie evidence of 
 satisfaction, and that you cannot recover upon the old debt with- 
 out some explanation, or giving some account of the note. Kear- 
 slake V. Morgan, 5 T. R. 515 ; Richardson v. Rikeman, cited in 
 5 T. R. 517 ; Holmes and Drake v. D'Camp, 1 Johns. 34. But this 
 was not shown to be negotiable paper, and if that was the intend- 
 ment, in the first instance, as seems to have been the conclusion 
 of the Court in Angel v. Felton, 8 Johns. 149, yet the plaintiff 
 below cave as sufficient an account as the nature of the case, and 
 1 Kknt, C J., Thompson, Spencer, Van Ness, and Yates, JJ.
 
 PINTARD V. TACKINGTON. ^ 673 
 
 the condition of the parties would well admit, of the loss of the 
 note, without i^s hciiig ne<rotiatcd and indorsed. On either ground 
 therefore, wo think tiie judgment ought to l)e supixjrted. 
 
 Juchjmeyit affirmed. 
 
 There is no conflict upon this subject. See Story, Prouiissory Xotes, § 451, 
 and authorities cited. But in respect to paper negotialile and negotiated, the 
 cases are not in harmony. See Rowley v. Ball, post, 080, and cases following. 
 
 Even in the case of destruction of negotiable paper, the plaintiff will not be 
 allowed to recover, if he voluntJirily destroyed it himself. Vanauken v. Ilurn- 
 beck, 2 Green (X. J.) 17H; Fisher i'. Mershon, 3 Bibb, .">27 ; Blade v. Noland, 
 12 Wend. 173. jNIr. Justice Nelson, in this last-named case, said: "I concede 
 the rule insisted on by the counsel for the plaintiff below to the fullest e.xtent 
 borne out by the authorities, and they are numerous ; and still am of opinion 
 that the plaintiff did U'Jt give such jjroof of the loss of the note to justify the 
 secondary proof of its contents, or to entitle him to resort to the original con- 
 sideration. \i tliere had been satisfactory proof of the loss or destruction of the 
 notf', the omission to give a bond of indemnity under the statute (2 Rev. Sts. 406, 
 §§ Ih, 70), would not have interfered with the recovery; for the provisfon of 
 the statute on this subject is limited to negotiable pajyo: There is no evidence 
 that the note in question was negotiable, and it seems to be settled that the 
 Court will not ]) resume a lost note to be negotiable. 10 Johns. 104 ; 3 Wend. 344. 
 
 "The proof is, that the plaintiff deliberately and voluntarily destroyed the 
 note before it fell due ; and there is nothing in the case accounting for or afford- 
 ing any explanation of the act, consistent with an honest or justifiable purpose. 
 Such explanation the plaintiff was bound to give affirmatively, for it would be in 
 violation of all the principle^! upon which inferior and secondary evidence is tol- 
 erated, to allow a party the benefit of it, who has wilfully destroyed the higher 
 and better testimony. The danger of this very abuse of a relaxation of the gen- 
 eral rule greatly retarded its introduction into the law of evidence, and it was for 
 a long time confined to a few extreme cases, such as burning of houses, robbing, 
 or some unavoidable accident. It was contended by Chancellor Lansiny, in the 
 case of Livingston v. Rogers, 2 Johns. Cas. 488, after an examination of all 
 the leading cases on the subject, that secondary evidence was not admissible to 
 ])rov(! the contents of a pa[)er, where the original had been lost by the neijligence 
 or /acZ/e*' of the party or his attorney. He failed to convince the Court of Er- 
 rors to adopt his views in a case where the negligence was not so great as to 
 create suspicion of design. Further than this I could not consent to extend the 
 rule. I have examined all the cases decided in this Court where this evidence 
 has been admitted, and in all of them the original deed or writing was lost, or 
 destroyed by time, mistake, or accident, or was in the hands of the adverse party. 
 Where there was evidence of the actual destruction of it, the act was shown to 
 have taken place under circumstances that repelled all inference of a fraudulent 
 design. 2 Johns. Cas. 38S ; 2 Caines, 303 ; lU Joims. 303,374; 11 id. 446 ; 
 8 id. 14y; 3 Cow. 303; 8 id. 77; 3 Wend. 344; Peake's Ev. 972, Am. ud.; 10 
 Co. b8 ; Leyfield's Case ; 3 T. R. 151 ; 8 East, 288, 289 : Gilb. Ev. 'J7. 
 
 "In Leyfield's Case, Lord Coke gives the obvious reasons why the deed or 
 
 43
 
 674 LOST BILLS AND NOTES. 
 
 instrument in writing sboukl be produced in Court. 1 . To enable the Court to 
 give a right construction to it from the words ; 2. To see that there are no ma- 
 terial erasures or interlineations ; 3. That any condition, limitation, or power of 
 revocation may be seen ; for these reasons oyer is required in pleading a deed. 
 But he says in great and notorious extremities, as by casualty by fire, &c., if it 
 shall appear to the judges that the paper is burnt, it may be proved by witnesses 
 so as not to add aiiliction to ailliction. 
 
 " The above is in brief the foundation of the rule in these cases of secondary 
 proof of instruments in writing, and it has been much relaxed and extended in 
 modern times from necessity, and to prevent a failure of justice ; yet I believe 
 no case is to be found where, if a party has deliberately destroyed the higher evi- 
 dence without explanation showing affirmatively that the act was done with pure 
 motives, and repelling every suspicion of a fraudulent design, that he has had 
 the benefit of it. To extend it to such a case would be to lose sight of all the 
 reasons upon which theTule is founded, and to establish a dangerous precedent. 
 We know of no honest purpose for which a party, without any mistake or mis- 
 apprehension, would deliberately destroy the evidence of an existing debt; and 
 we will not presume one. 
 
 " From the necessity and hardship of the case, courts have allowed the party 
 
 to be a competent witness to prove the loss or destruction of papers ; but it 
 
 would be an unreasonable indulgence, and a violation of the just maxim, that no 
 
 one shall take advantage of his own wrong to permit this testimony, where he 
 
 has designedly destroyed it. 
 
 ^^ Judgment reversed.'''' 
 
 See also Bank of Louisville v. Summers, 14 B. Mon. 306 ; Wade v. New 
 Orleans Canal, &c., Co., 8 Rob. La. 140; Des Arts v. Leggett, 16 N. Y. (2 
 Smith), 582; s. c, 5 Duer, 156; McGarr v. Lloyd, 3 Penn. State, 474; Tower 
 V. Appleton Bank, infra, 674, and note. 
 
 As to the presumption respecting negotiability, see Dean v. Speakman, 7 
 Blackf. 317 ; Chaudron v. Hunt, 3 Stew. 31 ; Hough v. Barton, 20 Vt. 455. 
 
 Thomas T. Tower v. The President, Directors, &c., of 
 THE Appleton Bank. 
 
 (3 Allen, 387. Supreme Court of Massachusetts, January, 1862.) 
 
 Bank-bills. Circumstantial evidence of destruction. — The owner of bank-bills wliich can- 
 not be identified or distinguished from other similar bills, cannot maintain an action 
 against the bank which issued them, upon circumstantial evidence that they have 
 been destroyed, and a tender of indemnity. 
 
 Contract against a banking corporation, to recover the amount 
 of sundry bank-bills issued by it, and alleged to have been destroyed 
 by fire.
 
 TOWER V. APPLETON BANK. " 675 
 
 At the trial in the Superior Court, there was evidence tending 
 to sliow that t^ie plaintiff left the bills in question in his trunk, in 
 his room in a house in Chicago, Avhich was burnt witliin an hour 
 afterwards, and that no person entered the room after ho left it, 
 and that the trunk and its contents were l>nrnt with Ibo house. 
 There was no other evidence of the destruction of the l)ills. Upon 
 this, and other evidence which is not necessary to be stated here, 
 Putnam, J., instructed the jury that if the plaintiff was the owner 
 of the bills, and they were destroyed by fire, and the plaintiff 
 notified the defendants and demanded the amount thereof, and 
 tendered a bond of indemnity, he was entitled to recover ; and the 
 jury returned a verdict for the plaintiff. The defendants alleged 
 exceptions. 
 
 Hoar, J. The reasons upon which it has been held that the 
 owner of a negotial)le promissory note, which is lost or destroyed, 
 may maintain an action upon it against the maker, although it 
 may have been indorsed in blank, and therefore made transferable 
 by delivery, were stated in the case of Fales v. Russell, 10 Pick. 
 315.^ The general doctrine is, that where a writing is evidence of 
 a contract, the loss or destruction of the writing does not destroy 
 the cause of action, and that secondary evidence of the contract is 
 admissible. The objection to the application of this doctrine to 
 the case of a negotiable bill or note, payable to bearer, or payable 
 to order and indorsed in blank, is given in Hansard v. Robinson, 
 7 Barn. & C. 90. Lord Tenterden there says : " The general rule 
 of the English law does not allow a suit by the assignee of a chose 
 in action. The custom of merchants, considered as part of the 
 law, furnishes, in this case, an exception to the general rule. 
 What, then, is the custom in this respect ? It is, that the holder 
 of the bill siuill present the instrument, at its maturity, to the 
 acceptor, demand payment of its amount, and upon receipt of the 
 money deliver up the bill. The acceptor, paying the bill, has a 
 right to the possession of the instrument for his own security, and 
 as his voucher and discharge pro tanlo in his account with the 
 drawer. If, upon an offer of payment, the holder should refuse 
 to deliver up the bill, can it be doubted that the acceptor might 
 retract his offer or retain his money?" This was the case of an 
 indorsee against the acceptor of a lost bill of exchange ; and the 
 judgment of the Court was, that the plaintiff's only remedy was 
 
 1 Post, 683.
 
 676 LOST BILLS AND NOTES. 
 
 ill equity, where the Court could provide for an adequate indemnity 
 to the defendant, as a condition of payment. And^such lias been 
 the rule in England, in tlie case of lost notes, niitil it was modified 
 by statute. The statute of 9 & 10 W. 3, c. 17, § 3, provided in 
 the case of inland bills expressed to be for value received, and 
 payable after date, " that in case any such inland bill or bills of 
 exchange sliall happen to be lost or miscarried within the time 
 before limited for payment of the same, then the drawer of the said 
 bill or bills is and shall be obliged to give another bill of the same 
 tenor with those first given ; the person or persons to whom they 
 are and shall be so delivered giving security, if demanded, to the 
 said drawer, to indemnify him," &c. The statute of 17 & 18 Vict, 
 c. 125. § 87, contains the more extensive provision, that "in case 
 of any action founded upon a bill of exchange or other negotiable 
 instrument, it shall be lawful for the Court or a judge to order 
 that the loss of such instrument shall not be set up, provided an 
 indemnity is given to the satisfaction of the Court or judge, or a 
 master", against the claims of any other person upon such nego- 
 tiable instrument." 
 
 But without any statute provision, the case of Fales v. Russell 
 *is an authority to show that in this Commonwealth the plaintiff, in 
 the case of a note lost or destroyed, will not be required to resort 
 to a court of chancery for a remedy ; but that a court of law, while 
 it fully recognizes the right of the defendant to the security which 
 the production and giving up of the negotiable instrument declared 
 on would afford, has authority to prescribe an equivalent security, 
 by a sufficient and reasonable indemnity. Almy v. Reed, 10 Cush. 
 421. It has been held otherwise in New York. Rowley v. Ball, 
 3 Cow. 303.1 
 
 Whether the same rule is applicable to bank-notes, intended to 
 circulate, and actually circulated as currency, is the question pre- 
 sented by the case at bar ; and we believe it has never been decided 
 in this Commonwealth. Although a bank-note is the promissory 
 note of a corporation, it differs in some important respects from 
 other promissory notes. It is intended not merely as the evidence 
 of a single contract, to become worthless when that contract is 
 performed, but to be issued repeatedly, and to pass from hand to 
 hand with the utmost freedom. They are commonly made upon 
 paper of a peculiar quality, embellished and distinguished by 
 vignettes and other ornamental engraving ; and are of some value 
 
 1 Post, 680.
 
 TOWER V. APPLETON BANK. 677 
 
 to the bank which issues them. In The People v. Wiley, 3 Hill 
 (N. Y.), 194, it was held that bank-notes jirepared for issue, but 
 still in the possession of the bank, were the subject of larceny. 
 It was said by Mr. Justice Wilde, in Hinsdale v. Larned, IG Mass. 
 68, that " there can be no ^reat doubt tliat the statute of limita- 
 tions is not aj)plicable to demands on bank-notes, where the action 
 is brought aj^ainst the corporation ; because the circulation of such 
 notes is daily renewed ; and because lapse of time is no presump- 
 tion of payment, these notes never being paid, unless given up by 
 the holder at tiie time of payment." This was so fixed by statute 
 afterward. Rev. Sts. c. 120, § 4. Whether payment can be en- 
 forced without a previous demand at the bank, if no place of 
 payment be stipulated in the note, is a question which we believe 
 has never been determined in this Commonwealth. In Maine, it 
 has been decided that they do not differ in this respect from other 
 promissory notes payable on demand, and that the commencement 
 of the action is a sufficient demand. Bryant v. Damariscotta 
 Bank, 18 Me. 240. The same opinion was given in tlie STipreme 
 Court of New York by Wood worth, J., in Bank of Niagara v. 
 M'Cracken, 18 Johns. 493 ; but in Jefferson County Bank v. Chap- 
 man, 19 Johns. 322, the same judge observed that this was only^i^ 
 his individual opinion, and was not decided by the Court. In 
 Haxtun v. Bishop, 3 Wend. 9, 21, Chief Justice Savage expressed 
 thfe same opinion ; but the point was not essential to the decision 
 of the case. 
 
 Some implication that the legislature regard the right of a 
 bank to the possession of its bills, as a condition of paying them, 
 to be different from that of .the maker of an ordinary promissory 
 note, may perhaps be found in the provision in St. 1859, c. 116, 
 § 1, " that banks may replevy their bills upon payment or tender 
 of the amount due upon them." Gen. Sts. c. oT, § 05. And a 
 similar inference might be drawn from the provision that banks 
 shall be subject to a penalty for not paying bills presented at 
 their banking-house in business hours ; as if this were regarded 
 as the breach of the contract with the bill holders. Gen. Sts. 
 c. 57, § 59. 
 
 The case of Hinsdale v. Bank of Orange, G Wend. 378,' was an 
 action to recover upon bank-notes which had been cut in two, for 
 the purpose of transmission through the mail, and one-half of 
 them lost. The plaintiff" was allowed to recover, on the ground 
 
 1 Post, 706.
 
 678 LOST BILLS AND NOTES. 
 
 that by severing the notes their negotiability was destroyed. But 
 Mr. Justice Marcij took a distinction between the loss and the 
 destruction of a note, and said : " If the owner of a bill loses it, 
 he cannot recover ; but if he can prove that it is actually destroyed, 
 he may." 
 
 In Bullet V. Bank of Pennsylvania, 2 Wash. C. C. 172, a similar 
 decision was given by Mr. Justice Washington; and again, upon a 
 very full discussion, in Martin v. Bank of United States, 4 Wash. 
 C. C. 253. In each of the two latter cases, no distinction is made 
 between a bank-note and any other promissory note payable to 
 bearer ; but the general principle is asserted, first, that the note 
 is only the evidence of the contract, the loss or destruction of which 
 may be supplied by secondary evidence ; and secondly, that, if 
 upon any other ground than fraud or perjury the maker might be 
 subject to be twice charged, the plaintiff should not be allowed to 
 recover, except upon furnishing an adequate indemnity, which 
 could only be provided by a court of equity. 
 
 But aside from any specific distinction applicable to all bank- 
 bills issued as currency, there is a difficulty in the plaintiff" 's case 
 as presented upon the facts reported. The evidence of the de- 
 fstruction of the bills is merely circumstantial, and not positive. 
 Upon the doctrine of Pales v. Russell, the plaintiff", by his own 
 negligence or misfortune, is unable to do what it was the right of 
 the defendants to require, for their own security, namely, to give 
 up the bills when paid. If the bills were shown to be actually 
 destroyed, beyond all question or controversy, the case might be 
 different ; as, for instance, if the destruction were admitted by the 
 pleadings. But upon the mere preponderance of proof, which is 
 sufficient to authorize a jury to find a fact in issue, we think it 
 is not to be assumed conclusively that the bills are destroyed, 
 without further provision for the defendants' security against their 
 reappearance. If, then, it is sought to provide this security by a 
 bond of indemnity, how can such a bond be given ? There is 
 nothing to distinguish or identify the bills which the plaintiff says 
 have been destroyed. Against a second payment of what bills 
 are the defendants to be indemnified ? How could they show that 
 any bills already redeemed, or hereafter to be redeemed, were or 
 were not the bills in question ? Clearly there could be no mode 
 of determining the fact, until their whole circulation of bills of 
 the same denojnination should be called in. But suppose that
 
 TOWER V. APPLETON BANK. 679 
 
 several parties should sue upon bills alleged to have been de- 
 stroyed, and should recover, each giving a bond of indemnity. 
 If it should afterward appear that all the bills had not been 
 destroyed, upon which bond would the defendants have a rem- 
 edy? 
 
 The answer given to this ol>jection by the plaintiff's counsel is, 
 that the defendants issue bills in such form as they choose, 
 and that the plaintiff should not be prejudiced because they are 
 issued in such a form as not to be distinguished from each other. 
 But this is not a satisfactory answer. The defendants have not 
 contracted to redeem their bills, except upon their production and 
 delivery ; and it is the negligence or misfortune of the plaintiff 
 that they cannot be produced. The plaintiff is then bound to 
 furnish an equivalent ; to put the defendants in as good a con- 
 dition as if the bills were produced. If he cannot do this, he has 
 no right to shift the consequences of the loss upon a party h\ no 
 wise answerable for- it. It is deserving of consideration, also, that 
 the defendants do not stand upon any equality with the plaintiff 
 in the trial of the question whether the bills are really destroyed. 
 The plaintiff is a competent witness for himself ; and the pro- 
 duction by the defendants of any number of bills exactly like 
 those said to be destroyed would be no defence, unless the whole 
 issue of such bills were accounted for. 
 
 Upon the whole matter, the Court are of opinion that to permit 
 a plaintiff to recover upon such proof as this case presents, upon 
 bills circulating as currency, and available to any one taking them 
 bona fide, without such means of distinguishing the particular 
 bills as would admit of an adequate indemnity, would ojien a wide 
 door to fraud, would be incompatible with the reason'able security 
 and rights of the defendants, and is not required by law. 
 
 Exceptions sustained. 
 
 It was at one time thoujiht in England that not even proof of destruction of a 
 negotiable note or bill was sudicient ground for an action at law. Han:<ard v. 
 Robinson, 7 Barn. & C. 90 (1^27). And this doctrine has the sanction of Judge 
 Story, Promissory Notes, § 449. But the opinion expressed in Hansard v. Rob- 
 inson was only a dictum ; and the more recent cases hold a different doctrine. 
 See Wright v. Maidstone, 1 Kay & J. 701 (1.S55) ; Blackie r. Pidding, 6 Com. 
 B. 196 (184S); Woo.lford v. Whiteley, Moody & M. 517 (18;Ut). And it is 
 now the accepted rule both in Eiijiland and America, that an action is maintain- 
 able at law on a bill or note which has been destroyed without the volition of the 
 holdeV. See Clarke v. Quince, 3 Dowl. 2G ; Moore v. Fall, 42 Me. 450; Des
 
 680 LOST BILLS AND NOTES. 
 
 Arts V. Leggett, 16 N. Y. (2 Smitli), 582; Aborn v. Boswortli, 1 R. I. 401; 
 Wade V. Wade, 12 111. 89; Thayer v. King, 15 Ohio, 242; Bank of the United 
 States V. Sill, post, 699 ; Pintai^d v. Tackington, ajite, 671 and note. 
 
 Rowley v. Ball. 
 
 (3 Cowen, 803. Supreme Court of New York, October, 1824.) 
 
 No action at law o)i lost negotiable note. — An action at law cannot be sustained on a 
 negotiable promissory note payable to bearer, by the owner, on proof that the note 
 was lost, though he siiow that it was lost after it became due. 
 
 When, the owner may sue at law. 
 
 Error, from the Common Pleas of the county of Munroe. The 
 cause was originally commenced by Rowley against Ball, before a 
 justice of that county, who. gave judgment against Ball, who ap- 
 pealed to the Common Pleas, where the cause was tried January 
 10th, 1822. 
 
 Rowley declared against Ball upon a promissory note given by 
 the latter to one William Huxley, payable to him or bearer, for 
 $30, dated on or about the middle of June, 1819, and transferred 
 to the plaintiff ; and the declaration averred that the note had 
 since been stolen, lost, or destroyed, or taken from the plaintiff 
 without his consent or knowledge. 
 
 Plea, the general issue. 
 
 Upon the trial, J. D. Bailis testified, that he had seen a note in 
 Rowley's possession, purporting to have been given by Ball, for 
 $30, dated some time in June, 1819. The precise time when it 
 was payable he could not tell ; but recollected that it was payable 
 to William Huxley or bearer, and whe]i he saw the note, which 
 was in April, 1821, it was due. It was admitted by Rowley's 
 counsel, that Ball could neither read or write, but signed by his 
 mark ; and that there was no subscribing witness to the note. 
 Rowley, the appellee, swore that he put the note into his pocket- 
 book, and sometime after made diligent search' for it, both in his 
 pocket-book and desk, but could not find it ; that the note was 
 either lost, stolen, or destroyed ; that he had reason to believe that 
 the note had been taken from his pocket-book, and given to Ball ; 
 for the story of his having lost the note came to him from -Ball
 
 ROWLEY V. BALL. 681 
 
 before he knew or suspected the loss. On being cross-examined, 
 be stated that it was first suf^gested to him that tl»e note was 
 lost by Samuel' Darling, his own brotfler-in-law. Hiram Huxley 
 swore that he came to Ball's in company with his brother, John 
 Huxley, who told Ball that he had a note against him, which was 
 given to William Huxley. Ball rej)lied, that whoever held the 
 notes must pay for keeping William Huxley's wife ; ))ut requested 
 John Huxley to take a gun of him, and apply it on the notes ; and 
 it was agreed between them tliat John Huxley should take the 
 gun upon trial, and, if he liked it, he should allow $14 on the 
 notes. If he did not like it, he was to return it. John Huxley 
 testified that he received of William Huxley, two notes against 
 Ball, in the State of Ohio, one for $30, and one for $20, as they 
 were read to him ; that be could neither read nor write ; that 
 he went to Ball's as stated by Hiram Huxley, in company with 
 him, and told Ball that he had notes against him, which were 
 given to William Huxley, one for $30, and one for $20, and 
 he answered, that whoever held the notes must pay him for 
 keeping William Huxley's wife. The witness requested Ball 
 to pay him some money ; but Ball said he could not. He 
 then requested him to let the witness have some leather ; but Ball 
 answered that he had none to spare. The conversation then fol- 
 lowed about the gun, as stated by Hiram Huxley. The witness 
 took the gun, but afterwards returned it, and sold the 8')0 note to 
 one Clarke. 
 
 The counsel for Ball insisted, that he ought not to be put upon 
 his defence, till Rowley had proved the actual destruction of the 
 note. The counsel for Rowley insisted, that there was already 
 suflicient evidence of the destruction of the note, or, at least, 
 sufficient to entitle him to go to the jury, upon the ground that he 
 had i)roved the loss of the note after it fell due. This was op- 
 posed by Ball's counsel ; and, — 
 
 The judges gave their opinion, that the several matters proved 
 and given in evidence, were not sufficient to entitle Rowley's coun- 
 sel to go to the jury, inasmuch as an actual destruction of the 
 note had not been proved ; that Rowley could not recover on a 
 negotiable note, although it was lost after it became due, unless 
 this was followed by proof of its destruction ; and gave judgment 
 of nonsuit. To this opinion, Rowley's counsel excepted ; and the 
 cause came to this Court upon a bill of exceptions, containing the 
 above matters.
 
 682 LOST BILLS AND NOTES. 
 
 WooDwoRTH, J. No exception was taken to the proof given 
 as to the execution of the note. Were it necessary, liowever, 
 to express an opinion, I should consider the evidence prima 
 facie sufficient. The witness stated to the defendant that he 
 held two notes against hiin, given to William Huxley ; one for 
 $30, the other for $20. The defendant, in reply, admitted the 
 notes, and offered to make part payment. The identity of the 
 note to which the confession related is established with reasonable 
 certainty. The case of Shaver v. Ehle, 16 Johns. 201, is clearly 
 distinguishable from the present. 
 
 Tlie remaining question is, whether an action at law can be sus- 
 tained on a negotiable promissory note, payable to bearer, by 
 a person who was the holder, on his proving that the note was 
 lost. 
 
 If the note had not been negotiable, or, if negotiable, had not 
 in fact, been negotiated, the plaintiff would be entitled to recover. 
 Pintard v. Tackington, 10 Johns. 104.^ The cases which have not 
 permitted a recovery at law upon negotiable paper lost, but not de- 
 stroyed, were those in which the paper had been indorsed before 
 it was lost. Pierson v. Hutchinson, 2 Camp. 211 ; Ex parte 
 Greenway, 6 Yes. 811. In this case, the note being payable to the 
 bearer, the holder could make out, prima facie, a cause of action, 
 and although the note was due at the time it was lost, the maker 
 v^ould be exposed to the hazard of showing that fact by legal evi- 
 dence. It would, therefore, seem to be a hard doctrine, which 
 should place the maker in this situation, without requiring an in- 
 demnity. In Such cases, it is better to leave the party to his 
 remedy in equity, where a suitable indemnity will be provided 
 against any subsequent recovery. This subject peculiarly belongs 
 to equity jurisdiction. In Ux parte Greenway, Lord Eldon ob- 
 serves : " I never could understand by what authority courts of 
 law compelled parties to take the indemnity." In Pierson v. 
 Hutciiinson, Lord Ellenborough held, that whether an indemnity 
 be sufficient or insufficient, is a question of which a court of law 
 cannot judge ; and although there are dicta, that, upon the offer 
 of an indemnity, the indoi'see of a lost bill may recover at law, 
 they are so contrary to the principles upon which the judicial sys- 
 tem rests, he could not venture to proceed upon them. Chitty, in 
 his Treatise on Bills, p. 173, ed. of 1817, is of opinion that where 
 the bill lias been lost after it became due, there is no reason why 
 
 1 Ante, 671.
 
 PALES V. RUSSELL. 683 
 
 the person who lost it should not be permitted to proceed at law, 
 without oflering an indemnity, inasmuch as the law would, in such 
 case, secure all the j)arties to the bill against future liability to a 
 person who becomes the holder of it after itJftills due. This is 
 undoubtedly correct, ))rovided the maker of the note, or acceptor 
 of the bill, could prove that it came to the liands of the holder 
 after due. If, in the present case, the plaintiff recovers against 
 the defendant, and subsequently a suit is commenced on the note 
 by another, claiming to l)e a hoim fide holder, the recovery had 
 would not alone be a sufficient defence. The defendant must also 
 prove the fact, that it was due when it was lost by the present 
 plaintiff". If he could not, then the subsequent holder would re- 
 cover, on the ground that it did not appear he received the note 
 after it became due. 
 
 It is not necessary that the plaintiff" should have a remedy at 
 law in such a case. His redress is ample in equity, where the 
 defendant can be protected against subsequent liability. I have 
 not found any adjudged case on this precise point ; but, from the 
 reason of the thing, and the analogy to cases where notes have 
 been lost after they were indorsed, I think the action cannot be 
 sustained, without proving that the note was destroyed. 
 
 Judgment affirmed. 
 
 A different rule from that declared in the above case prevails in several 
 States. See Fales v. Russell, infra. 
 
 Elisha F. Fales et ah v. William O. Russell et al. 
 
 (16 Pickering, 315. Supreme Court of Massachusetts, March, 1835.) 
 
 Actio7i at law mainlainable on lost negotiable jHijKr. — Wliere a negotiable promissory note, 
 indorsed in blank, was stolen from the holder before it was due, Juld, that he might 
 recover the amount from the maker, in an action at law, on filing a bond sufficient 
 for the maker's indemnification. 
 
 Assumpsit upon two joint and several promissory notes, dated 
 June 29, 1882, made by the defendants, and payable to E. W. 
 Calef or order, in nine months from the date, one note being for
 
 684 LOST BILLS AND NOTES.' 
 
 the sum of $313.56, and the otlier, for the sum of $300. The 
 declaration contained the general counts ; but there tvas no count 
 declaring upon the notes. 
 
 By an agreed stjgjeraent of facts it appeared, that the notes, 
 which had been indorsed in blank by the payee, were on Septem- 
 ber 10, 1832, stolen fgom the plaintiffs, who were then the iiolders, 
 that the notes had never been paid or heard of since the theft, to 
 the knowledge either of the plaintiffs or of the defendants ; that 
 immediately after the notes were stolen, the plaintiffs informed the 
 defendants of the fact, requesting them not to pay the notes to any 
 person but to the plaintiffs themselves, or to their order in writing, 
 separate from the notes ; that notice of the theft was given imme- 
 diately in the newspapers, cautioning all persons against buying 
 them ; and that the plaintiffs had offered to indemnify the defend- 
 ants against any loss, if they would pay to them the amount due 
 upon the notes. 
 
 Upon these facts, the Court were to enter up such judgment 
 for the plaintiffs or for the defendants, as should be conformable to 
 the law of the case, and to order a default or a nonsuit, according 
 as they should determine that the plaintiffs had sustained or failed 
 to sustain their action. 
 
 Shaw, C. J. There is little doubt, that according to the law as 
 now administered in England and New York, it would be held upon 
 the facts of this case, that the plaintiffs could not recover. But 
 we think it would be on the ground taken originally, that in such 
 cases it is much better for parties to go into chancery, where all 
 the circumstances of the loss of the securities can be better inves- 
 tigated, and the suitable indemnities for the defendants better esti- 
 mated and adjusted ; and having been so held in many instances, 
 the rule has become established by precedent, that an action at law 
 will not lie. If this rule is adopted for convenience, and is not 
 founded upon principles which exclude the action of a court of 
 law, then it will not apply where there is no such remedy in chan- 
 cery. Considering the question in this view, we think that with- 
 out usurping the powers of a Court of Equity, and upon well- 
 established common-law principles, we can afford the plaintiffs a 
 remedy. 
 
 The objection to the plaintiffs' recovery is, that they cannot 
 produce and file the notes. Is this conclusion correct ? The de-
 
 FALES V. RUSSELL. 685 
 
 livery up of notes and other negotialjlc securities, upon payment 
 of them, and 'the filing of them in court, on obtaining judgment, 
 are not conditions [)recedent of the right to recover in either case. 
 Tliat riglit depends upon other grounds. Th^ delivery up of the 
 note in tiie one case, and the filing it in the cither, is only that rea- 
 sonable acquittance and discharge, adapted «to the nature of the 
 obligation performed, which any man, upon making satisfaction of 
 a demand against him, is reasonaldy entitled to have. Inasmuch 
 as it is payable to any holder, the actual surrender of the security 
 upon payment is the proper and suitable acquittance. 
 
 I have said that the right to receive depends upon other grounds ; 
 to wit, that the note was made by the defendants, payable to the 
 payee or order, that it was duly indorsed by him to the plaintiff, 
 who became the bo7ia fide holder. All these must appear, and in 
 general the presence of the note is necessary to enaljle the ]ilain- 
 tiff to prove them ; but they may be proved without producing the 
 note, and in the present case they are admitted. The plaintiffs 
 having proved title in themselves, by a well-known rule of evi- 
 dence, such title will be presumed to continue, till a transfer, re- 
 lease, or satisfaction is shown. Upon a case like tliis, where a 
 note has been lost after it was due, it has often been held, that a 
 plaintiff is entitled to recover without the note. Jones v. Fales, 5 
 Mass. 101. But the title is in fact the same ; the only difference 
 is, that the defendants are exposed to greater risk in the one case 
 than in the other, because, if lost before it was due, there is a pos- 
 sibility that it may have been negotiated to a bona fide holder in 
 the ordinary and regular course of business before it was due. 
 But as this does not affect the plaintiff's title or his actual and 
 real interest in the debt and in the security according to its tenor, 
 but only leaves the defendant exposed to a hazard which, accord- 
 ing to mercantile law and the usage of trade, it is not understood 
 that he is to take, we think he ought to be protected ; and this 
 Court, as a court of law holding a just regulating power over the 
 judgments and proceedings before them, have authority to jire- 
 scribe an equivalent security to the defendants, by a sufficient and 
 reasonable indemnity. 
 
 To illustrate this view, let us consider a suggestion made by 
 one of the Court, at the argument, in the form of a query, whether 
 it would not be competent for the Court, in the exercise of a just 
 judicial discretion, to continue this action from term to term, until
 
 686 ' LOST BILLS AND NOTES. 
 
 the statute of limitations should become a bar to any action by any 
 ■ other holder. It cannot admit of any reasc^iable doubt, that this 
 would be within the power of the Court ; and cases may be imag- 
 ined in which this would be a proper remedy. But what would 
 this imply ? Not that the production of the note is a condition 
 precedent to the right of recovery ; because at the end of six 
 years the plaintiff must recover upon the legal right of action 
 which he had when the suit was commenced, or not at all. But it 
 must be on the ground that the lapse of time and the statute of 
 limitations, would afford to the defendants, on rendering judg- 
 ment against them, a security against the reappearance of the note, 
 equivalent to that usually obtained by the production and surren- 
 der of the note. Still it would not be the same identical security, 
 which the general rule of law requires. If that can be done, it 
 seems difficult to conceive any good legal reason why other ample 
 and equivalent security may not be substituted. 
 
 Considering it in this view, that the production of the note is 
 not essential to the plaintiff's title, but only to the defendant's 
 reasonable security, it appears to us that the objection that a 
 court of law has no jurisdiction to order, or to judge of the 
 sufficiency of an indemnity, is rather ideal tlian solid, and ought 
 not to prevail when the consequence would l)e an entire failure of 
 justice. On the whole, the Court are of opinion, that on filing a 
 sufficient bond of indemnity, with sureties, the plaintiffs will be 
 
 entitled to recover. 
 
 Defendants defaulted. 
 
 The cases which have considered the subject of the two preceding and con- 
 flicting decisions are very numerous, and about equally balanced. They are col- 
 lected in 2 Parsons, Notes and Bills, 297, 298, notes A-, I, and m. 
 
 An intermediate rule is adopted in Ohio, and supported with strong reasons. 
 The rule in that State is that an action at law will lie if the paper was lost after 
 maturity ; but if lost before maturity, the remedy must be in chancery. Thayer 
 V. King, 15 Ohio, 242. Read, J., in pronouncing the opinion of the Court, said : 
 " This case was reserved for the determination of the single question, whether a 
 recovery could be had upon lost negotiable paper, at law, or whether the remedy 
 in such case was in equity. 
 
 " Upon this question, there is a conflict of decisions, both in England and 
 the United States. In the decisions which have been made, diflerent and various 
 reasons have been assigned in support of either side ; but from a careful review 
 of the authorities, and a full comprehension of the principles of law controlling 
 the transfer and fixing the right of holders of negotiable paper, it would seem 
 that the only difiiculty in the case grows out of the question of indemnity. AH
 
 FALES V. RUSSELL. 687 
 
 other matters, and the rights of i)arties, can l>e governed, controlled, and modi- 
 fied in a court oi' law as well as eiiuitv. 
 
 "It is anecesftary and fundamental principle of negotiable paper, that the inno- 
 cent holder receiving it before due, is entitled to its |ik>ceed8. Tliis is the 
 essence and life of its negotiability. Hence, if the maker should be compelled 
 to pay in case of negotiable paper lost before due, such payment would be "no 
 bar to the recovery in the hands of an innocent holder, who had received it Ijefore 
 due ; and in such case a double recovery might be had upon the same instrument. 
 But if former payment or recovery would l)e a complete bar to any subsetjuent 
 papnent or recovery, the reason of the rule ceases, and the objection to a recov- 
 ery by the owner, no longer exists.- Hence, if the circumstances of the case are 
 such that the negotialjle paper can never be produced for payment a second time, 
 or if produced would permit no right of recovery in tlie hands of the holder, no 
 indemnity in such case being re(|uired to guard against a second payment, re- 
 covery may be had in a court of law. Thus, if the instrument be totally de- 
 stroyed, or if it pass into the hands of the holder, charged with all the e<^uities 
 •which exist against the original holder, the action may be at law. Now, it is a 
 well-recognized principle, that negotiable paper received after it is due, is 
 charged with all the equities existing between the original parties. So, if pay- 
 ment be made to the original holder, ami a recovery be had by him, it would 
 constitute a complete bar to another action brought by any person who should 
 receive it after due. But if it be lost before due, and the original holder com- 
 mence suit, there is a possibility that the paper may be outstanding in the hands 
 of an innocent holder — upon which recovery could be had ; and hence the law 
 will not permit, in such case, a recovery to be had until complete indemnity is 
 furnished against such possibility. Now a court of law has not the power to 
 compel this indemnity ; and hence is forbidden to give judgment or to entertain 
 jurisdiction of the case. A court of law proceeds upon fixed principles, and if 
 the party is entitled to judgment, he is entitled to execution without limit or 
 restraint. But a court of equity being called upon to give its aid, will guard the 
 rights of all parties, and will not permit a recovery until the party seeking it will 
 guard the opposite party from a danger which exists by the misfortune of the 
 very person seeking its aid. It will say, 'You have been unfortunate in the loss 
 of your instrument ; we will relieve you from this dilliculty, provided you will 
 fully guard the other party from all harm which may, by possibility, result from 
 what, except from our aid, would be a misfortune to you.' It has the power to 
 determine the nature of the indemnity and the security. Hence, in those cases 
 in which indenniity Is to be given, relief must be had in ecjuity. A court of law, 
 it is true, might do the same thing, if it had the power; and there is no direct 
 impossibility to prevent its having such powers ; yet, as such is not the case in 
 the distribution of law and equity jurisdiction, as the systems now stand, relief 
 can only be liad in eijuity. 
 
 " In the case, however, before the Court, no such difliculty exists, as those 
 notes were lost after they were due. 
 
 " Judgmmt for jilaiiUiJ's.^^
 
 688 LOST BILLS AND NOTES. 
 
 * *f 
 
 Pete^ Chewning v. Louisa Singleton. 
 
 (2 Hill, Chancery, 371. Court of Appeals of South Carolina, December, 1835.) 
 
 Remedy in eqniti/. — A party who has lost a note payable to bearer, altliough past due, 
 may come into equity for relief. The ground of jurisdiction is not only that he 
 may give indemnity to the defendant, but th-at he must swear to the loss. 
 
 This jdIU was filed against the defendant, as executrix and sole 
 legatee of Mrs. Anne Chewning, alleging that the testatrix, in her 
 lifetime, for a valuable consideration, gave the plaintiff her prom- 
 issory note for $650, payable to him or bearer, at ten days after 
 date, and dated in September, 1832. That the note was seen by 
 divers persons in his possession, and that in October, 1832, (after 
 the testator's death), he lost his pocket-book and in it the nT3te. 
 That he has (through her agent) given the defendant notice of 
 the note and its loss, and demanded payment, which has been 
 refused. The bill prays that defendant may answer its allegations, 
 and that the payment of the amount of the note with interest may 
 be decreed, on such terms of indemnity to the defendant against 
 any future liability, as the Court may think proper to impose, 
 and for general relief. , 
 
 The bill was sworn to loth January, 183.4, and filed the same 
 day. ^ 
 
 The answer of the defendant denies any knowledge of her tes- 
 tatrix's indebtedness to the plaintiff, or of the note, or of any 
 transaction by which such a debt could have been created. That 
 shortly before the testatrix's death, she heard her say she owed 
 the plaintiff nothing ; and the defendant does not believe that any 
 such note ever existed. She submits that the plaintiff has an 
 adeqnate remedy, if any, at law. 
 
 Johnson, Chancellor. This case was heard upon bill and an- 
 swer. A motion was made to dismiss the bill for want of equity. 
 'The motion is granted and the bill dismissed with costs. The 
 note alleged to be lost, and which the bill seeks to set up was, by 
 the plaintiff's own showing, past due when it was lost; and thus 
 the necessity for indemnity no longer exists. The bill is not a bill 
 for discovery ; and if it was, all evidence on the plaintiff's part is
 
 CHEWNING V. SINGLETON. ^89 
 
 excluded, inasmuch as the answer gives no discovery, but denies 
 that such a note ever qxisted ; and the plaintilf has adequate rem- 
 edy at law. 
 
 Tlje plaintiff appealed, and now moved to reverse the decree on 
 the following grounds : — 
 
 1. That tiic chancellor erred in supposing that the necessity for 
 indemnity is the ground of equity jurisdiction ; whereas it is sub- 
 mitted that the indemnity is the condition which the Court an- 
 nexes ; and that the fact that no necessity exists to require the 
 plaintiff to give it, cannot affect his claim to relief. 
 
 2. That there is no adequate relief at law, and chancery will 
 afford it. 
 
 Harper, J. My views of this case may be gathered from what 
 has been said by me in the case of Davis and Tarleton v. Benbow, 2 
 Bail.- 427. I have again looked into the authorities on the subject, 
 and find no reason to change any of the views there expressed. It 
 is not questioned but that in some cases a party may come into 
 equity to be relieved, when a bill or note has been lost or de- 
 stroyed. The cases of Walmsley v. Cliild, 1 Ves. Sr. 341 ; Ex 
 parte Grecnway, G Ves. 812, and many others, are sufficient to 
 establish this. The chancellor seems to have decided chiefly on the 
 authority of Mossop v. Eadon, 16 Yes. 430. The master of the rolls, 
 in that case, went upon the ground that the only purpose of com- 
 ing into equity is to offer an indemnity, and as I jjather from the 
 argument in the case, it appeared that the note was not payable to 
 order, so that it could not have been negotiated, and as no action 
 could be maintained upon it by any one into whose hands it might 
 come, indemnity was unnecessary. He therefore dismissed the 
 bill. So the chancellor supposes that as the note in this case, as 
 appears from the plaintiff's own statement was lost after it was 
 due, there was no need of indemnity. Hut with deference, this 
 seems to me to be founded in misconception. Tiie plaintiff does 
 indeed state that the note was lost after due ; but who shall assure 
 the defendant of the truth of that statement 'i Plaintiff states 
 that he has no proof of the loss. It is for defendant's benefit that 
 the party is required to come into equity. If an action had been 
 brought at law, she might well have said to the plaintilf, '' How can 
 you assure me that you yourself have not negotiated the note 
 before it became due, and that it may not now be in the iiands of 
 
 41
 
 690 LOST BILLS AND NOTES. 
 
 a ^l>o7ia fide holder ? " The right to indemnity would have been 
 apparent. 
 
 But the case of Mossop i\ Eadon, seems to have been overruled 
 by subsequent decisions. In the case of Hansard v. Robinson, 7 
 Barn. & C. 00, the bill was lost after due. Lord Tenterden, speak- 
 ing of the defendant, says : " But how is he to be assured of the 
 loss or destruction of the bill ? Is he to rely on the assertion of 
 the holder, or to defend the action at the peril of costs ? And if 
 the bill should afterwards appear, and a suit be brought against 
 him by another, a fact not absolutely improbable in the case of a 
 lost bill, is he to seek for the witnesses to prove the loss and to 
 prove tliat the new plaintiff obtained it after it became due ? Has 
 the holder the right, by his own negligence or misfortune, to cast 
 the burden upon the acceptor, even for not discharging the bill 
 on the day it became due ? We think that the custom of merchants 
 does not authorize us to say that this is the law. Is the holder, 
 then, without remedy ? Not wholly so. He may tender sufficient 
 indemnity, and if it be refused he may enforce payment thereupon 
 in a court of equity." In Macartney v. Graham, 2 Simons, 285, 
 the bill had been indorsed specially to the plaintiff, so that no 
 other holder could maintain a suit upon it, and it was argued, on 
 the authority of Mossop and Eadon, that as- no indemnity was 
 needed, the remedy was at law. But the Court said that Mossop 
 V. Eadon had been overruled by Hansard and Robinson. 
 
 Sir William Grant, in Mossop v. Eadon seems to have overlooked 
 a ground of equity on which the greatest stress is laid by Lord 
 Eldon — a still higher authority. This is the necessity imposed 
 on the party coming into equity to make affidavit of the loss. In 
 Ex parte Greenway, speaking of the decision of the court of law, 
 in Read v. Brookman, 3 T. R, 151, that in case of a lost deed, 
 profert may be dispensed with, he says: "It is questionable 
 whether sufficient attention was paid to the consideration, that in 
 equity the conscience is ransacked, and the party alleging that the 
 instrument is lost, must make an affidavit that it is not in his 
 possession or power." And in Bromley v. Holland, 7 Yes. 20, 
 " The protection this Court gives in that case, is most essential to 
 the iiiterest of justice. Here the party pledges his conscience by 
 his oath that the instrument is lost." East India Company v. 
 Boddam, 9 Ves. 464, was a case of a lost bond. Lord Eldon 
 says, that " if the bond was by a single obligee, the party sued in
 
 CHEWNING V. SINGLETON. 691 
 
 this Court, stating in his bill that tho.bond was lost, and accc^n- 
 panying his l)ill with an affidavit that it was lost, not as evidence 
 of tlie loss, but as a security for the propriety of jurisdiction." 
 Instances are put in the cases of frauds which might be practised 
 by the wilful suppression or destruction of the instrument, similar 
 to what is suggested in Davis and Tarlcton v. Benbow. It may be 
 observed that this apj)lies still more strongly in the case of a lost 
 bill or note than in that of a bond or deed, as, in addition to the 
 danger of fraudulent suppression or destruction, there is addi- 
 tional danger of tiie instrument's having been fraudulently nego- 
 tiated. There is no doubt, however, but that it was intended to 
 apply in all similar cases. Such is the view taken by Fonblanque 
 in his notes to tiic Treatise of Equity. 1 Fonb. 15, IG, 17, n. /, 
 and by Lord Bedesdale, Mitf. PL 105, 106. 
 
 It is ordered and decreed that the chancellor's decree be re- 
 versed, and the cause remanded for hearing. 
 
 Johnson, J., and 0''Neall, J., concurred. 
 
 If the note or bill lost was negotiable but not negotiated, no offer 
 of indemnity need be made as a ground of equity jurisdiction. A prayer 
 for discovery is sufficient. Hopkins v. Adams, 20 Yt. 407. The facts in this 
 case will sufficiently appear in the opinion of the Court pronounced by 
 
 Redfield, J. This is a bill to obtain relief, as well as discovery, in regard 
 to a negotiable promissory note, alleged to have been lost when overdue, and 
 not indorsed ; annexing to the bill an affidavit of loss, but no indemnity being 
 tendered to the defendants, either before or at the time of bringing the bill, the 
 plaintiH insisting all the time that none is necessary, though he offi^red a release 
 of the note. The defendants have answered the bill, testimony has been 
 taken, the case has been heard in the court of chancery, and a decree entered 
 for the orator, requiring him to give an indemnity, and to pay the defendants' costs. 
 The case has been argued in this Court mainly, on the part of defendants, upon 
 the ground that the jurisdiction of the court of chancery, in cases like the pres- 
 ent, depends exclusively upon the offer in the bill, of an indemnity to the de- 
 fendants, and that, while the orator resists this, he is not entitled to a decree. 
 
 Mr. Justice Story, (1 Eq. Jur. p. 103), seems to lay down the rule in the 
 very terms contended for by the defendants' counsel. *' In such a case 
 (that of a lost instrument), a court of equity will entertain a bill for relief and 
 payment, upon an offer in the bill to give a proper indemnity, under the direc- 
 tion of the Court, an not icithout.^'' And he farther says, that " siicii an offer 
 founds a just jurisdiction ; "' citing for the two last propositions, Walmsley r. 
 Child, 1 Yes. Sr. 342, 345 ; Teresy v. Gorey,- Finch, 301. He also cites Glynn 
 r. Bank of England, 2 Yes. Sr. 38; Mossop »» Eadon, IG Yes. 430, 434; 
 Bromley v. Holland, 7 Yes. 19-21 ; Davies v. Dodd, 4 Trice, 176. 
 
 Upon the slightest examination of these cases, it is apparent that they estab- 
 lish no such proposition* as that cited from the text. All, except the first, seem
 
 692 LOST BILLS AND NOTES. 
 
 to have no bearing whatever upon the point. Teresy v. Gorey, as reported by 
 Lord Ilardwiclce, in Walmsley v. Child, is only the case of a bill of exchange 
 properly negotiated, and where, by the custom of merchants, no holder is enti- 
 tled to require payment, until he surrenders the bill ; and if it be lost, he cannot 
 do this, and of course can maintain no action whatever at law. So that the only 
 remedy in such case is in equity, and an indemnity should, no doubt, be required 
 in all cases of that character. This is precisely the rule laid down in Hansard 
 r. Robinson, 7 Barn. & C. 901 [14 E. G. L. 20], where it was held, that upon 
 such a bill no action at law could be maintained, although the bill was lost when 
 overdue. The same rule has been adopted in this State. Lazell v. Lazell, 12 
 Vt. 443. In Glynn v. The Bank of England, Lord Ilardwicke does make an 
 incidental remark to the effect, that one is not ordinarily entitled to come into a 
 court of equity for relief on a lost note, but that he may come for a discovery, 
 and then must seek his relief at law. But the case is decided altogether upon 
 the ground of defect of proof, that the testator had the notes in his possession at 
 the time of his decease (the bill being for the benefit of the estate) . Mossop 
 V. Eadon is the case of a bill cut in halves, and one part only lost. In such a 
 case, I understand, there has never been any difficulty in recovering at law, even 
 where the bill or note is strictly negotiable, and had been negotiated.' This case 
 was tried by the master of the rolls, who seemed to suppose, as almost all the 
 elementary writers upon the subject do, that Walmsley v. Child had settled the 
 law, that the court of chancery had no jurisdiction in the oase of a lost note to 
 grant relief, except where an indemnity was necessary. Bromley v. Holland is 
 upon a totally different subject ; that is, whether a court of equity will sustain a 
 bill to decree the surrender of an impeached bill or note, to be cancelled. The 
 decision is in favor of the jurisdiction. The subject of equity jurisdiction in 
 regard to lost instruments is introduced in the opinion arguendo, merely to illus- 
 trate the subject in hand. The case of Davies v. Dodd is a mere dictum, at 
 most. In that case the only indemnity tendered was the bond of the plaintiff, 
 and he confessedly irresponsible. Still, the jurisdiction was entertained, and the 
 case referred to the deputy remembrancer to determine upon the sufficiency of 
 the indemnity offered, and if any other were requisite, what was sufficient. .... 
 And first, in regard to the case of Walmsley v. Child. Mr. Justice Story 
 says (Eq. Jur. p. 100, in note), " The passage is singularly obscure, and of diffi- 
 cult interpretation; and I have not been able to satisfy my mind, what Lord 
 nardicicJce's real doctrine was, or what were the three cases to which he alluded." 
 The three cases of Lord Hardickke are very apparent. 1. "If the deed, 
 or instrument, concede the title of land, and possession prayed to be estab- 
 lished." 2. " Another case is of a personal demand, where loss of a bond, a 
 bill in equity on that loss, to be paid the demand." 3. " Another case, in which 
 you may come into this Court on a loss, is, to pray satisfaction and payment of 
 it upon terms of giving security." But this case is put mainly upon the ground 
 of the want of an affidavit of the loss accompanying the bill. Lord Hardickke 
 more than once says that such an affidavit is indispensable to the jurisdiction. 
 The same course of reasoning, is pursued in Whitefield v. Fausset, 1 Ves. 388. 
 In Walmsley v. Child there was neither an affidavit of loss, nor offer of indem- 
 nity ; but the affidavit is no doubt indispensable. Without that, the whole pro- 
 ceeding may be a mere contrivance to change the jurisdistion, while the plaintiflF 
 1 See Bank of the United States v. Sill, jwst, 699.
 
 CHEWNING V. SINGLETON. 693 
 
 all the while has his note in his pocket. With this safeguard, there seems to me 
 to be no difficulty in maintaining the jurisdiction, upon grounds well recognized 
 in courts of equity. 
 
 It is obvious, there will be two classes of cases, where a court of ofjuity will 
 be|Called upon to interfere in the case of lost instruments; perhaps tiiree. 1. 
 The holder or loser of such instruments will ai)ply fur a decree of payment. 
 2. If the loser choose to proceed at law, the maker may apply to a court of 
 equity to decree him a suitable indemnity. 3. The loser may apply to a court 
 of equity for a discovery, merely, in aid of a court of law. 
 
 In regard to tiie first case, so far as relates to promissory notes not negotia- 
 ble, or not pegotiated, where the loser may sue at law, the principal ground of 
 the jurisdiction must be tiie necessity of a discovery and llie accident, by which 
 that which the parties have constituted the evidence of their contract, has become 
 incapable of performing its destined office. A court of equity will grant relief 
 in all cases of accident or mistake where one party has thereby put it out o 
 his power to obtain what it was intended he should enjoy. So, too, according to 
 the English equity practice before the time of Lord Thurlow, and which has been 
 adopted as the standing rule of practice in this country, the plaintiff may, in 
 every case of a bill for discovery, pray relief if he choose ; and if, upon ob- 
 taining the discovery, the case seems to be one, not specially requiring to be 
 heard in a court of law, for the purpose of a jury trial, or some other, then the 
 court of equity will, in their discretion, proceed and determine the case. In 
 practice, in this country, the case is almost uniformly determined in the court of 
 equity, when once carried there, even for a discovery. And for this purpose, all 
 that seems necessary, to found a jurisdiction for relief, is a bill for discov- 
 ery, alleging a defect of proof at law, by reason of the loss of the note, with 
 a prayer for relief, and an affidavit of the loss. The offer of indemnity seems 
 to be a matter, in which the defendant is solely interested, and not to form any 
 just basis of an equity jurisdiction on the part of the plaintiff, unless it is wliolly 
 to oust the legal forum, — which it has not yet done, except in the case of paper 
 negotiated. The indemnity is a matter in which it seems to us safe to suffer the 
 defendant to move. 
 
 2. If the bill is brought by the defendant to restrain the loser of the note 
 from proceeding at law until he give the maker indemnity, then, indeed, the 
 necessity for indemnity is the sole ground of the jurisdiction. The case will, in 
 this view, turn exclusively upon the cpiestion of the defendants' being entitled to 
 indemnity. If that point is made out, the case will be finished in the court of 
 equity ; if not, the bill will be dismissed. But that the plaintiff's case should 
 be made to rest, for its jurisdiction, upon offering an indemnity to the defendant, 
 which he may or may not be entitled to, is certainly not consistent with our 
 views of sound chancery law. 
 
 3. If the party seek a discovery merely, he is not required to make affidavit 
 of the loss. And when he seeks relief also, and omits to make allidavit of the 
 loss upon filing tiie bill, he may, no doubt, amend in this particular; and if the 
 defendant omit to demur, but answer admitting the loss, the want of an affidavit 
 is no ground of dismissing the bill. Findlay v. Hinde, 1 Peters, 241-244; 
 Livingston r. Livingston, 4 Johns. Ch. 294; 1 Dan. Ch. Pr. 449, 450; and 
 notes, Perkins' Ed.
 
 694 LOST BILLS AND NOTES. 
 
 But in the present case there is an aflidavit ; and we think there is not now, 
 the claim being barred by the statute of limitations, if there ever was, any neces- 
 sity of an indemnity to the defendant. The decree of the chancellor must be 
 reversed, and a decree for the plaintifi" without indemnity and without costs. 
 
 See Blade r. Noland, 12 Wend. 173; Des Arts v. Leggett, 16 N. Y. (2 
 Smith) 582; s. c, 5 Duer, 156. 
 
 Samuel B. Tuttle v. Lafayette F. Standish and 
 Trustees. 
 
 (4 Allen, 481. Supreme Court of Massachusetts, September, 1862.) 
 
 Action at law. Indemnity. — The owner of a lost note cannot maintain an action 
 at law against an indorser, in a case where a bond to indemnify tlie defendant 
 against being called on a second time to pay the note would not afford to him an 
 adequate protection. 
 
 Contract against the indorser of a lost note of $500, signed by 
 one Pritchard and given by him as a business note to the defend- 
 ant, to whose order it was payable, and by whom it was indorsed to 
 one Newell, who transferred it to the plaintiff before its maturity. 
 At the trial in the Superior Court, before 3Iorton, J., various ques- 
 tions arose which are not now material. The judge directed a 
 verdict to be returned for the plaintiff, and reported the case for 
 the determination of this Court. 
 
 Hoar, J. The principles upon which the right to recover on a 
 lost note depends, have been fully considered in a case which came 
 before us since this case was argued. Tower v. Appleton Bank, 
 3 Allen, 387.^ The general rule is, that where the writing is mere- 
 ly the evidence of a contract, the loss or destruction of the writing 
 does not destroy the cause of action, but renders secondary 
 evidence admissible. But where, from the nature of the contract, 
 the party answerable upon it is entitled to have the writing deliv- 
 ered up to him, for his security, or to enable him to enforce his 
 rights under it, when he is called upon to perform it, as in the 
 case of a negotiable bill or note, if it is lost or destroyed, an action 
 cannot be maintained upon it, unless his rights can be fully secured 
 by a bond of indemnity, or other sufficient security. In the case 
 of the maker of a negotiable promissory note payable to bearer or 
 
 1 Ante, 674.
 
 TDTTLE V. STANDISH. G95 
 
 indorsed in blank, the maker being the party ultimately chargeable, 
 the only hazard to which he is exposed, is that he may be called 
 upon a second time to pay it to a, bona fide holder ; ^nd ajrahist this 
 risk a bond of indemnity seems to afford an adequate protection. 
 The acceptor of a bill of exchange is in a similar position, except 
 that he may want the bill as a voucher in his settlement with the 
 drawer. But even in these cases, the settled doctrine in England 
 and in New York has Ijecn, that the only remedy was in equity, if 
 the note or bill was lost ; their courts considering that a court of law 
 had no authority to order an indemnity to a defendant, as a condi- 
 tion of the plaintiff's right to recover. This doctrine has been 
 recently modified by statutory provisions. 
 
 In the absence of general equity powers, it was early held in 
 this Commonwealth that the owner of a lost note might recover 
 against the maker, upon giving a bond of indemnity, and that a 
 court of law might require such a bond to be given. Jones v. 
 Fales, 5 Mass. lOl ; Fales v. Russell, 16 Pick. 315 ;i Almy v. Reed, 
 10 Cush. 421. But all the considerations against allowing such 
 a recovery apply more forcil)ly to the case where payment is de- 
 manded of an indorser ; for he is entitled to the possession of the 
 note, in order to have his recourse over against the maker. Story, 
 Notes, § 108. And see Smith v. Rockwell, 2 Hill (N. Y.), 482.2 
 And it is apparent that a mere bond of indemnity against being 
 compelled to make a second payment is usually no sufficient sub- 
 stitute to the indorser for the production and delivery of the note. 
 In pursuing his remedy over, he needs the instrument as the evi- 
 dence of his own right. When he has received it from the indor- 
 see by payment, it still retains its negotiable quality. He may 
 wish to dispose of it to a purchaser. If he may do this by an 
 indorsement on a coi)y, when the original is lost, how is he to 
 transfer or preserve the evidence necessary to make it available ? 
 He may have occasion to transmit it for collection to distant 
 places, and the mass of evidence to supply its place is by no means 
 equally transmissible, or ecjually permanent. If he sues the 
 maker, he is not only put to additional trouble and inconvenience 
 in establishing his claim, but is obliged in his turn to furnish a 
 bond of indemnity. There are many cases in which it is difficult 
 to see how a complete equivalent for all that he loses in the loss 
 of the paper can be secured to him. 
 
 1 Ante, 683. 2 Cited in full, p. G97.
 
 696 • LOST BILLS AND NOTES. 
 
 It is very evident that if one is bound by contract to furnish a 
 negotiable note to another, it would be no legal or equitable per- 
 formance of th^t obligation to furnish evidence that the note has 
 been lost or destroyed, and to assign the mere right of property 
 in the contract of which the missing paper was the evidence. 
 
 There was no case cited at the argument in which there had 
 been a recovery at law against an indorser on a lost note. In 
 Jones V. Fales, 5 Mass. 101, the action was upon several notes ; 
 and a part of them were indorsed by the defendant, and on the 
 others he was promisor. The Court in their opinion make no dis- 
 tinction as to his liability in these different capacities. But it is 
 to be observed of that case, 1. Tliat no point respecting such a 
 distinction was made or presented to the Court ; 2. That the notes 
 were lost from the files of the Court, so that one party was no 
 more responsible for the loss than the other ; and 3. That the 
 notes were found before any judgment was rendered. It is not 
 therefore an authority of much weight upon the question now be- 
 fore us. In Freeman v. Boynton, 7 Mass. 483, 486, it was said by 
 Mr. Justice Parker that a demand on the maker upon a lost note 
 would be sufficient to charge the indorser, if accompanied with a 
 tender of sufficient indemnity ; whicli would seem to imply that a 
 claim upon it might be maintained against the indorser; but the 
 point was not decided. 
 
 In Renner v. Bank of Columbia, 9 Wheat. 581, a judgment was 
 recovered against an indorser upon a lost note ; but no point was 
 made of any distinction between his case and that of a promisor. 
 In that case, also, it appeared that there had been a previous suit 
 against the maker, in which the note had been used. 
 
 Considering the point an open one in this Commonwealth, we do 
 not mean to say that the reasoning of the Court in Fales v. Russell 
 is not, in many cases, as applicable to the case of an indorser as 
 of a promisor. If, for example, the note were proved to have 
 been made for the accommodation of the indorser, a simple bond 
 of indemnity might be a sufficient protection to the defendant. If 
 the holder had previously recovered a judgment against the maker, 
 an assignment of the judgment, with such a bond, might secure 
 his rights substantially. And these securities might perhaps be as 
 well afforded in a suit at law, as a condition of the issuing of an 
 execution, as in a suit in equity. But with the full equity juris- 
 diction now existing in Massachusetts, it cannot be necessary to
 
 TUTTLR V. STANDISH. " 697 
 
 attempt to extend the functions of a court of law to any doubtful 
 cases, for which Cijuity atTords a more apjircjpriate remedy. Tliat 
 jurisdiction allows so much greater latitude in adapting its pro- 
 cesses and decrees to the particular circumstaiiTies of each case, 
 that, with its power of emln-acing and adjusting in one suit the 
 rights and claims of all parties in interest, it seems to furnish 
 the proper tribunal for the prosecution of a claim like that which 
 we are now considering. A simple bond of indemnity would not 
 be an adequate protection to the defendant ; and it would he a 
 novel, and as it seems to us, an impracticalde course, to attempt 
 to devise and impose* an obligation on the plaintiff to do all 
 the affirmative and jiositivc acts which the assertion of the de- 
 fendant's rights against the maker of the note might hereafter 
 require. 
 
 Whether even a court of equity could give relief, might depend 
 upon circumstances not fully develoi)ed. 
 
 The objection to the plaintiff's recovery not being the want of 
 an original cause of action, nor that the cause of action has been 
 extinguished, but that he is unable, perhaps by a misfortune only 
 temporary, to produce the paper necessary as the foundation of a 
 judgment, it seems to us that he should have the election to be- 
 come nonsuit, if he shall be so advised ; otherwise the verdict 
 to be set aside and judgment entered upon the report for the de- 
 fendant. 
 
 In Sinitli V. Rockwell, 2 Ilill, 482, it appeared that before the note sued on 
 became due, it was lost or mislaid by the plaintifr; but demand was made at 
 maturity, and notice of non-payment given, without any objection on account 
 of the absence of the note. No bond of indemnity was offered to or requested 
 by the maker or indorser, who Avere jointly sued in this action ; and it did not 
 appear that cither knew of the loss till suit was commenced. The note was 
 found before the trial, and produced and proved as in ordinary cases. Defend- 
 ants moved for nonsuit on two grounds: 1. That no bond of indemnity 
 was tendered to the defendants when the note was protested for non-payment. 
 2. That the plaintiffs were bound to prove that indemnity had been tendered to 
 the defendants before suit. The motion was denied, and verdict and judgment 
 given for the plaintiffs. Defendants appealed. The opinion of the Court above 
 was pronounced by 
 
 Nklson, C. J. If the makers had offered to pay the note in question, but 
 declined on finding that it was lost, or if the indorser had proposed to take it up 
 on receiving notice of protest, with a view of calling upon his principals, the 
 question would have been different from the one now presented. The note being 
 negotiable, neither was bound to make payment without receiving it as their
 
 698 LOST BILLS AND NOTES. 
 
 vouclier ; or upon tender of ample indemnity against any future liability. This 
 has been deliberately settled, and for the most satisfactory reasons. Hansard v. 
 Robinson, 7 Barn. & C. 90; Rowley v. Ball, 3 Cow. 303 ; ' Chitty. Bills, 423 ; 
 Chitty, Jr., 53. An indemnity may be required in such cases, with a view to 
 proceedings in a court of equity to compel payment notwithstanding the loss. 
 
 Tender of indemnity should be made to both maker and indorser at the time 
 of demand and notice ; because, as tlie former is not bound to make payment 
 without the production of the note, or indenmity in case of loss, for that very 
 reason payment ought not to be required of the latter till the proper steps have 
 been taken to secure his immediate recourse against his principal. Besides, the 
 indorser\s own liability upon the paper demands indemnity to himself, which 
 should be given without delay, so that he may be in a situation to pay the 
 demand at any time after notice, and look to the maker. Any prejudice he 
 might suffer by reason of neglect on the part of the holder to give the necessary 
 indemnity in either case, would no doubt afford ground for refusing to enforce 
 payment against him on application to a court of equity for that purpose. The 
 holder, therefore, should take the necessary steps, «with all reasonable diligence, 
 to secure a speedy resort to that court in behalf of the surety ; as the conse- 
 quences of delay would justly fall upon the holder, so far as the indorser or any 
 other party standing in that relation upon the paper is concerned. 
 
 The statute (2 Rev. Sts. 327, § 95, 96, 2d ed.) allows a remedy at law upon a 
 lost negotiable note and bill of exchange, upon giving a bond to the adverse 
 party in a penalty of double the amount of the note or bill, with two sureties to 
 be approved by the court in which the action is pending, conditioned to indem- 
 nify him, his heirs, and personal representatives against all claims on account of 
 the same, and against all costs and expenses by reason thereof. This statute, 
 however, only applies to the remedy, and in no way affects the rights or liabilities 
 of the parties arising out of the proceedings to charge the drawer or indorser. 
 These stand upon the principles of commercial law, the same as before the 
 enactment ; and any defence that might before have been available at law, if 
 the note had not been lost, or in equity, if lost, must be equally so since the 
 statute. 
 
 But the note in question does not fall either under the doctrine that calls for 
 indemnity with a view to proceedings in equity, or under the above provisions 
 of the statute. It is not a lost note, nor can it be so regarded by either maker 
 or indorser. A copy was duly served with the declaration according to the 
 statute, and the original produced on the trial ; and though it was supposed to 
 have been lost by the bolder at the time it fell due, still it was duly protested 
 and notice given in the ordinai-y way, without any exception being then taken 
 by either party on account of the non-production at the time. Xor have their 
 rights been at all affected one way or the other by the temporary loss of it. I am 
 of opinion, therefore, that the judgment is right, and ought to be afBrmed. 
 
 Judgment affirmed. 
 1 Ante, 680.
 
 BANK OF UNITED STATES V. SILL. 699 
 
 The Bank or the United States v. Sill. 
 
 (5 Cdnnecticut, lOG. Supreme Court, July, 1823.) 
 
 Commercial paper cut in halves. — If the bolder of a bank-bill voluntarily cut it in halves, 
 for the sole purpose of transmitting it by mail with greater safety, this will not 
 affect his rights upon such bill. To entitle him to recover on the production of but 
 one of tiie parts, he must show that he is owner of the whole, and account for 
 the absence of the other part. 
 
 The parts of a divided Ijank-bill are not separately negotiable. 
 
 Notice 1)1/ the payor of cut bills. — The board of directors of the Bank of the United States 
 gave notice that the bank would not hold itself responsible upon any of its notes 
 whicli should be voluntarily cut into parts, except on the production of all the 
 parts ; wliich notice was published in all the newspai)ers of the city of Phyadel- 
 phia, at whicli place said bank was located ; held, tliat the rigiits of a person in 
 Connecticut, who subsequently became the owner of a note so cut into parts, and 
 who was in possession of one of the parts, and who had never received the notice, 
 were not affected by the same. 
 
 This cau.se was tried before the Superior Court, October term, 
 1822, on the plea of non-assumpsit ; when the jury returned a 
 special verdict, containing the following statement of facts. On 
 the first of January, 1817, the defendants, at Philadelphia, made 
 and issued their promissory note, commonly called a bank-bill, 
 signed by ^Yilliflm Jones, their president, and countersigned by 
 Jonathan Smith, their principal cashier, promising to pay to 
 C. S. West, or bearer, on demand, one hundred dollars, of which 
 the plaintiflf, on the fourth of December, 1819, became the lawful 
 bearer. For the purpose of transmitting this bill safely, by mail, 
 from Harpersfield, in the State of Ohio, to Lyme, it was divided, 
 by Robert Harper, the agent of the plaintiff, who held it as the 
 plaintiff's property ; and one-half was enclosed in a letter, directed 
 to the plaintiff at Lyme, which was deposited in the post-office at 
 Harpersfield, and was, on the tenth of January, 1820, received by 
 the plaintiff. On the twelfth of February, 1820, Harper enclosed 
 the remaining half of the same bill, in another letter, directed to 
 the plaintiff at Lyme, and deposited it in the post-office at 
 Harpersfield. It was forwarded by the postmaster at Harpersfield
 
 700 LOST BILLS AND NOTES. 
 
 but never arrived at the post-office in Lyme, nor was it ever 
 received by tiie plaintiff, but was lost to him. On the fifteenth 
 of May, 1820, the plaintiff, having in his possession the first- 
 mentioned half, and being the lawful owner of ^aid bill, presented 
 such half to the defendants, and demanded payment of the bill, 
 according to its tenor, and gave notice and offered proof of the 
 facts before stated. The defendants refused to pay the bill on 
 any other terms than the production of both halves of it ; and 
 have never paid it. 
 
 On the twenty-fourth of August, 1819, the board of directors, 
 at their legal and regular meeting, at their banking-house in Phila- 
 delphia, passed the following order : " Bank of the United States, 
 August 24, 1819, The frequent demands made upon the bank, 
 for the payment of its notes, on production of half notes, alleging 
 the loss of the corresponding halves, and the liability to imposition 
 and fraudulent practices, to which it is exposed, by paying such 
 claims ; from which, it is advised, it cannot be duly protected by 
 any evidence, which may accompany such claims, or any security 
 which may be given to indemnify it, render it necessary to re-* 
 fuse payment of such demands. They grow out of the voluntary 
 act of the party who separates the parts of the notes ; and he alone 
 ought to bear the inconveniences and losses consequent upon the 
 act. But as the practice, however improper, has been a common 
 one, and the bank is unwilling, without apprising the public of its 
 intention to withhold even a questionable claim upon it, these 
 demands will be met as usual heretofore until the first of Novem- 
 ber next. But notice is hereby given, that the Bank ©f the United 
 States will not, after the first of November next, hold itself respon- 
 sible upon any of its notes, which shall be voluntarily cut into 
 parts, except on the production of all the parts. By order of the 
 board of directors. Jonathan Smith, cashier." 
 
 This notice the bank caused to be published in all the public 
 newspapers printed in the city of Philadelphia, for three weeks 
 successively, before the plaintiff's bill was divided ; but none of 
 such papers were received by the plaintiff, or circulated in the town 
 of Lyme. 
 
 Upon these facts the Superior Court rendered judgment for the 
 plaintiff to recover the amount of the bill, with interest from the 
 time he demanded payment of the bank. The ^defendants there- 
 upon brought the present writ of error.
 
 UNITED STATES BANK V. SILL. 701 
 
 Peters, J. The plaintiffs in error contend, 1. That the facts 
 alleged and found are not a sufiicient foundation for the admission 
 of secondary evidence to su)>i>ly the want of a jyrofcrt. 2. That 
 the loss or destruction of the bill proceeded from the voluntary act 
 of the defendant in error. 3. That the plaintiffs in error are not 
 liable, in any event, after the pul)lication of their determination not 
 to pay " cut notes," unless all the parts are produced. 
 
 As to the first exception, it is a well-settled rule, that in declar- 
 ing upon simple contracts a profcrt is not necessary ; and its 
 omission is a mere matter of form, and can be taken advantage of 
 only by a special demurrer. 1 Swift, Dig. 675 ; 1 Chitty, Plead. 
 349 ; Salisbury v. Williams, 2 Salk. 497. An excuse for the 
 omission is therefore unnecessary. But an excuse has been alleged 
 and found ; was this sufficient to introduce secondary evidence ? 
 If it was improperly admitted, the remedy is a motion for a new 
 trial. It is no ground for error. 8 Day, 29. 
 
 But it is said that the bill is not lost or destroyed, but only mis- 
 laid. In Beckford v. Jackson, 1 Esp. 3o7, the plaintiff counted 
 ou a deed as " lost or mislaid," upon which issue was taken ; and 
 the same was recognized by Lord Kenyon as warranted by law ; 
 and by the Court for the correction of errors in New York, 
 Livingstgjn v. Rogers, 1 Caincs Cas. in Error, 27, proof by a 
 witness that the paper in question was thrown aside as useless, 
 and that he believes it lost or destroyed, will be sufficient to let in 
 secondary evidence. 1 Phil. Evid. 347, et seq. ; Rex v. Johnson, 
 7 East, GO ; Kensington v. Inglis ct al., 8 East, 273. 
 
 2. It is said that the loss or destruction of the bill proceeded 
 from the voluntary act of the defendants. 
 
 When the holder of a bill voluntarily and intentionally destroys 
 it, or alters it fraudulently, he has no remedy ; but if he loses, 
 cancels, alters, or destroys it, by accident or mistake, his rights 
 are not affected; his evidence only is impaired. A bill or note 
 is not a debt ; it is only primary evidence of a debt ; and when 
 this is lost, impaired, or destroyed hotia Jidc, it may be supplied 
 by secondary evidence. Was this bill divided and put into the 
 post-office with a view to abandon or destroy it, or to defraud 
 the bank? The verdict expressly finds that this was done solely 
 for the purpose of transmitting it from Ohio to Connecticut by 
 mail, the most usual, safe, and expeditious mode of remittance. 
 The act was indeed voluntary ; but the intent was to preserve.
 
 702 LOST BILLS AND NOTES. 
 
 Where then is the evidence of voluntary, negligent, or fraudulent 
 loss, or destruction of the bill ? 
 
 But it is contended that the bank is equally liable to the bona 
 fide holder of the other moiety. This would be true if the moiety 
 of a bill were negotiable. Cases innumerable arc found in the books, 
 where a party may recover, who has lost the primary evidence of 
 his chxi m ; but not if it be negotiable, unless it be destroyed. 
 1 Phil.' Evid. 347, et seq., and cases.there cited. For the bo7ia fide 
 receiver or holder of negotiable paper without notice is always safe. 
 Miller v. Race, 1 Burr. 452, But a part of a bill is not negotiable ; 
 and the holder cannot recover upon it without proving a title to 
 all the parts. In the present case, the plaintiff is the possessor 
 and bearer of one moiety, and proves himself the "owner of the 
 other ; which the possessor or bearer of the last moiety can never 
 do. He must have received it with notice that the other moiety 
 belonged to somebody else ; and taken it, not on the credit of the 
 bank, but of the bearer, to whom alone he can look for indemnity. 
 Of all the authorities which have been cited, by the plaintiffs' 
 counsel, one only is in point ; for the case oi«Master et al. v. 
 Miller, 4 T. R. 320, so much relied on, has no beaming on the case. 
 It was an action by the indorsees against the acceptor of a bill, 
 the date of which the jury found had been altered after acceptance, 
 while in the hands of the payees, so as to accelerate the time of 
 payment ; and the Court, very properly, adjudged it void. But 
 the case of Mayor et al. v. Johnson et al., 3 Camp. 324, is directly 
 in point. In that case, judgment was rendered for the defendant, 
 by Lord Mlenborough, on the ground that the last half of a bank- 
 bill was negotiable, and would enable a bona fide holder to recover 
 of the bank ; which, with all due deference to an illustrious judge, 
 I am bound to say, is not law. As well might a vignette, or any 
 other fragment torn from a bill, be considered negotiable. The 
 only apology I can make for his lordship is, that he was on the 
 circuit, where business is done in haste, without time and means 
 for investigation and consideration, and where the greatest judges 
 frequently err. " Quandoque bonus dormitat Homerus.^^ 
 
 3. The last exception is as extraordinary as it is novel, and is 
 probably the first instance of a debtor's undertaking to prescribe 
 terms to his creditors. It is a sufficient answer to this objection, 
 that their notice never came to the knowledge of the defendant in 
 error, though it was published in the Philadelphia newspapers, at 
 the distance of two hundred miles.
 
 BANK OF UNITED STATES V. SILL. 703 
 
 All the questions presented by this record have been repeatedly 
 decided by American courts ; and the case of Mayor et al. v. John- 
 son et al. has been expressly overruled. In Patton v. State Bank, 
 and Idem # Bank of South Carolina, on a similar state of facts, 
 the Constitutional Court of South Carolina decided that the cut- 
 ting or severing of a bank-bill destroyed its negotiability ; that the 
 bona fide holder of a part, who owns the whole, can enforce pay- 
 ment ; and that the bearer of a part only has no claim on the 
 bank, because he cannot prove title to all the parts, and he receives 
 it with his eyes open. 2 Nott & McCord, 404. In Armot v. Union 
 Bank, 1(3 Niles Reg. 360, the Circuit Court for the District of 
 Columl>ia decided that the half of a bank-bill is not negotiable ; 
 and that the 'holder of a part, owning the whole, is entitled to 
 recover. And in a more recent case, Martin v. Bank of the United 
 States, Circuit Court, Penn. District, October, 1821, upon the pre- 
 cise statement of facts contained in the verdict in question, Judges 
 Washington and Peters rendered judgment for the plaintiff, not 
 in the hurry of a nisi j/riits trial, as has been suggested in argu- 
 ment, but upon a solemn review of all the cases on this subject, 
 especially of a previous decision of their own, and of Patton v. 
 The State Bank. With these decisions I entirely concur ; and am, 
 therefore, of opinion that there is no error in the judgment com- 
 plained of. 
 
 Chapman, Brainard, and Bristol, JJ., were of the same 
 opinion. 
 
 Mosiiicr, C. J., declined giving any opinion. 
 
 Judgment affirmed. 
 
 In the case of Martin v. Bank of the United States, 4 Wash. 2.j3, cited in the 
 opinion, supra, Mr. Justice Washington said : " I have carefully reviewed the 
 decision of this Court in the case of Bullet r. The Bank of Pennsylvania. 
 [2 Wash. 172] aided by the light shed upon the (juestion involved in that and in 
 the present case by the able arguments of the counsel on each side. My 
 opinion remains unchanged, and is indeed confirmed by the two American cases 
 cited at the bar, and particularly by the luminous argument of Judge Drayton, 
 in the case of Patton v. The State Bank. 
 
 "The principles upon which this Court decided the case of Btdlvt r. The Bank 
 of Pennsylvania were, that a bank, or any other promissory note, is the evidence 
 of a debt due by the maker to the holder of it, and nothing more. It is also the 
 highest species of evidence of such debt, and in fact the only proper evidence, if 
 it be in the power of the owner of the note to produce it. But if it be lost or 
 destroyed, or by fraud or accident has got into the possession of the maker, the
 
 704 LOST BILLS AND NOTES. 
 
 owner does not thereby lose Iiis debt, but the same continues to exist in all its 
 rigor, iinafTet'ted by the accident wliioh lias deprived the owner of the means of 
 proving it by the note itself. The debt still existing, the law, which always 
 requires of a party that he should produce the best evidence of his right of 
 which the nature of the thing is capable, permits him, where such better evidence 
 is lost or destroyed, or not in his power, to give inferior evidence, by proving 
 the contents of the lost paper ; and if this be satisfactorily made out, he is 
 entitled to recover. 
 
 " If tlie evidence be not lost, but is merely impaired by accident, or even by 
 design, if such design be not to injure the maker or to cancel the debt, the 
 princii)le of law is the same. Cutting a bank-note into two parts does not dis- 
 charge the bank from the debt, of which the note was but the evidence, nor 
 does it even impair the evidence itself, if, by uniting the parts, the contents of 
 the entire note can be made out. If one of the parts should be lost or destroyed, 
 the debt would be no more affected than if the entire parts had been lost or 
 destroyed. The evidence is impaired, indeed, not by the act of cutting the 
 note, bftt by the same accident which would have affected the entire note, had 
 that been lost. In both cases, the owner must resort to secondary evidence, 
 and is bound to prove that the note did once exist, that it is lost or destroyed, 
 and that he is the true, bona fide owner of the debt. If one part oVily of the 
 note be lost, the difficulty which the real owner of it has to encounter in proving 
 his right to the debt is diminished. For if the entire note be lost, the owner of 
 it at the time of the accident may not be entitled to the debt of which it was the 
 evidence, at the time he demands payment, because the note, passing from hand 
 to hand by bare delivery, may have been found, and have got into the possession 
 of a bona fide holder. 
 
 " But against the real owner of one-half of the note, there cannot possibly be 
 an opposing right. The finder or robber of the other half part cannot assert a 
 right to the debt, because he cannot prove that he came fairly to the possession 
 of the evidence of it. I speak judicially, when I say that he cannot prove that 
 fact, because he cannot do it without the aid of perjury, which the law does not 
 presume, and can in no instance guard against it. If the lost half note gets 
 fairly into the hands of a third person, he takes it with notice that there may be 
 a better title in the possession of the other half, and consequently he looks for 
 indenniity to the person from whom he received the half part, if it should turn 
 out that he was not the real owner of the entire note. It is impossible, there- 
 fore, that the bank can be legally called upon to pay the note twice ; and if the 
 officers of the institution suffer themselves to be imposed upon by insufficient or 
 false evidence, by which means the bank is brought into this predicament, she 
 must abide the loss as being occasioned by an error of judgment in the offuers 
 of the bank, or their want of due caution. The law cannot adapt its provisions 
 to every possible case that may occur, and it therefore proceeds from nccesisity 
 upon general principles applicable to all cases. 
 
 " If upon any other ground than fraud, or perjury, the maker of the lost note 
 may by possibility be twice charged, the law will not expose him to that risk by 
 relieving the asserted owner of it ; not because there may be imposition in the 
 case, or because the debt ought not to be paid ; but because the proof that 
 the claimant is the real owner of the debt is defective ; for it by no means
 
 I5ANK OF UNITED STATES V. SILL. 705 
 
 follows, that, because the lost note did belong to him, it may not then be the 
 property of some other person. A court of law therefore will, in such a case, 
 dismiss the parties from a forum which has no means of securing the maker of 
 the note against a double charge, and leave hira to one where those who ask 
 of it etjuity will be compelled to do equity. The case then resolves itself very 
 much into a question of jurisdiction. For it is quite clear tliat the real owner of 
 a debt, the evidence of wliicli is lost, is entitled to supjily the want of the better 
 evidence by that which is secondary, and this rule of evidence is the same in 
 equity as at law. But whether the application for relief shall be in the one 
 court or in the otlier, must depend upon the particular case, and its fitness for 
 the one jurisdiction or the other. 
 
 " Many diilieidties were stated by the defendants' counsel, to which the practice 
 of cutting the notes and transmitting them by mail exposes banking institutions 
 in identifying the part of a note when produced for payment. That these difTi- 
 culties do in a measure exist must be admitted. But the bank knows that there 
 can be but one owner of the note, and who that one is must be satisfactorily 
 proved, to entitle him to payment of it. The bank has a just right to call for 
 such proof; and if it be truly and faithfully given, there can be no risk in paying 
 it. The possessor of the other half part of the note, as already observed, by 
 whatever means he accpiired it, can never oblige the bank to pay the money over 
 again to him. But after all, the rule of law does not rest upon this circumstance. 
 The maker of the note is bound to pay to the person who proves himself to be 
 the legal owner of it; and the difficulties complained of are not greater than 
 those which attend most litigated questions. 
 
 " It may not be improper here to observe, that the decision in the case of Bullet 
 V. The Bank of Pennsylvania did not proceed upon any usage applicable to the 
 case. Nohe such was stated in the case agreed or alluded to by the Court. 
 
 " The next question is new : no case like it was cited at the bar, nor is there 
 any within the recollection of the Court. It is" nevertheless within the range 
 of some general principles of law, by the light of which I think it may be 
 decided. 
 
 "The question is, whether it was competent to the bank to notify the holders 
 of her notes, that, in case they should be voluntarily cut into parts, she would 
 not pay them, unless all tiie parts should be brought together? I mean to' treat 
 the question as if the notice were brought home to the plaintiff. 
 
 " It is unnecessary, in this case, to decide how far parties to a contract m.iy, by 
 positive stipulations, change the rules of evidence applicable to that jjarticular 
 contract. If they may do so, it must be upon tiie basis of an agreement assented 
 to by both parties. But upon what principle is it that one party to a contract 
 can prescribe terms to absolve himself from its obligations, without the assent of 
 the other? I know of none. If the bank can dictate to the holders of her 
 notes the condition stated in this notice, upon the performance of which, and not 
 otherwise, slie would pay them, she might with ecpial authority prescribe any 
 other condition, and declare in what case she would pay. and in what case she 
 would not. The note is the evidence of an engagement by the bank to pay a 
 certain sum of money to the bearer of it ; and the general law of the land 
 declares that if such note, or a part of it, should be lost or destroyed, the debt 
 shall nevertheless be paid, upon satisfactory proof being made of the ownership and 
 
 46
 
 706 LOST BILLS AND NOTES. 
 
 loss. Thus sanctioned, these notes pass from hand to hand ; and if the bank 
 can nevertheless discharge her»elf from her obligation to pay them, unless 
 both parts of the note be produced, or unless the note be produced entire (and 
 there is no difference between the two cases), then the arbitrary declaration of 
 the bank must be stronger than the law. This observation applies with equal 
 force to every other species of contract, where one of the parties to it attempts 
 to prescribe to the other the rules of evidence by which alone he will be gov- 
 erned. 
 
 " I thought the defendants' counsel seemed unwilling to contend that the bank 
 could go the length of declaring that they would not pay a lost note, or one 
 ■which had been torn or defaced by accident. But if the Court be correct in 
 their opinion upon the first point, it follows that the law as much compels the 
 bank to pay the owner of half a note, where the other half is lost, as to pay in 
 the two cases supposed ; and if so, the right of the bank to prescribe terms 
 in the one case, if admitted, would be equally valid in the others. There can be 
 no difference, unless it be that in the one the notes were voluntarily cut, and in 
 the other they were torn by accident. But the owner of the debt being also the 
 owner of the paper which is the evidence of it, he had a legal right to cut it 
 and by doing so, he could not impair the obligation, unless he intended to do so. 
 In all these cases, the note is cut with a view to the security, not to the destruc- 
 tion of the debt, by doubling the chances of preserving part of the evidence of 
 it, in case the other part should be lost. The defendants do not forbid or con- 
 demn the practice, even if it could for a moment be admitted that they had a 
 right to do either. That is not the gravamen stated in the notice ; it is the 
 production of one of the parts for payment, unaccompanied by the other part. 
 That is the case in which the bank declares she will not pay, and in which the 
 law pronounces she shall pay. 
 
 " I am of opinion that judgment should be entered for the plaintifi'." 
 
 Hinsdale v. Bank of Orange, 6 Wend. 378, was a similar case, in which Mr. 
 Justice Marcy discusses, with much force, the effect of cutting the paper upon 
 its negotiability. He said: "It has never been held, I believe, that the actual 
 production of a bill or negotiable note is indispensably necessary to enable the 
 holder, or him who last held it, to recover on it. If the owner of a bill loses it, 
 he cannot recover ; but if he can prove that it is actually destroyed, he may. 
 The reason of this distinction is very obvious. Although the note is lost to the 
 rightful owner, it may yet be in the hands of a bona Jide holder, or in the hands 
 of one claiming to be such, and the maker may be called on to pay it without 
 having the means of showing that the holder is not entitled to payment ; but if 
 the note be destroyed, such cannot be the case. Let us apply this principle to 
 the present case. What is the effect of severing the bills ? They may not be 
 absolutely annihilated, nor is their negotiability so effectually destroyed as to 
 prevent its being restored ; for after they have been cut into two parts, the parts 
 may be put together again, and thereby the bills become as valid and negotiable 
 as they were before ; but there is no negotiability in a separate half of any one 
 of the bills. The negotiability of these bills was destroyed, and so were the 
 bills themselves by the severance of them, and presenting one-half of them to 
 the defendant, for all the purposes for which a destruction of negotiable paper
 
 BANK OF UNITED STATES V. SILL. 707 
 
 is required to enable him who had the riglit to it to recover on it. Lorrl 
 KlloihoroiKjli, 8 Caiiij). :i:j4, tliuu^lit an aelion could not be maintained hy the 
 person who hail scivered a bill, and lost one-half of it ; because, if he could 
 recover on the half not lost, the oilier half might fall into the hand;) of a honajide 
 holder, who would also be entitled to recover, and the maker ought not to be 
 held liable to two parties at the same time. This opinion must proceed upon 
 the ground that the lost half of the bill was negotiable ; for if it was not, there 
 could not be a hoiui J'tiJc holder of it. This appears to me to be a mistaken 
 notion. That half of a bill by itself, and wholly separated from the other half, 
 is not negotiable, is as clear to my mind as the proposition is certain that a part 
 is not equal to the whole. When a bill ceases to exist as a whole, it ceases to 
 have those properties which belong to it as an entirety, one of which is negotia- 
 bility. If negotiability does not belong to a separate half of a bill or note, there 
 can be no objection to sustaining this action on account of the non-production 
 of the lost halves, that would not exist if those halves had been actually destroyed, 
 because they can give to the finder or holder no more right to sustain an action 
 against the defendants than he would have by possessing the ashes of them if 
 they were burned. The owner of a lost negotiable note is entitled, j)ri>7ia facie, 
 to recover against the maker by making proof of the instrument, and showing, 
 as he would be enabled to do, that it was executed by the defendant. But such 
 would not be the case with the holder of the lost half bills ; he would be obliged 
 to show what has been required of the plaintiffs in this case ; that his possession 
 of the half bills was rightful, and that he was the owner of the whole bills at 
 the time they were cut into two parts ; or, in other words, that he owned them 
 at the time of their destruction ; for I hold that the cutting them, under the cir- 
 cumstances of this case, amounts to a destruction of them as negotiable paper. 
 T would not be understood to assert that the cutting of the notes is an absolute 
 destruction ; but, in legal effect, it is a destruction where such a disposition of 
 either of the halves is made as to prevent their being brought together as whole 
 notes, and thus the payment of them claimed of the makers. Such must certainly 
 be the case where one part of them is surrendered to the makers, as was offered 
 to be done in this instance. As to authorities, I would observe that I consider 
 the decision of the Circuit Court of the United States for the District of Columbia, 
 16 Niles lleg. 360, entitled to as much respect as the niai pn»A- opinion of 
 Lord Ellcnhorouyh. But it is said that the plaintiffs do not show that they were 
 the owners of the bills when they were severed. On this point the evidence is not 
 very full. It was proved that the agent of the plaintiffs, on the thirtieth of Sep- 
 tember, enclosed the right-hand halves of the bills in question in a letter, which 
 was directed and sent to Mr. llossiter at New Haven ; and two days after he, as 
 such agent, enclosed and forwarded in like manner the left-hand halves, which 
 have not since been heard of. It would seem to me like cavilling, to say that 
 this evidence does not show that the bills, before they were severed, or both 
 halves, afterwards and at the same time, were in the hands of the plaintiffs ; and 
 if so, that fact is sufficient to entitle them to recover as holders. The fact of 
 their being the owners at the time the bills were cut and mailed was left to the 
 jury, and the evidence warranted their verdict. 
 
 " Judgmmt for lAainliffs."
 
 708 LOST BILLS AND NOTES. 
 
 See also Commercial Bank v. Benedict, 18 B. Men. 307; Farmers' Bank of 
 Virginia u. Reynolds, 4 Rand. 186; Allen v. State Bank, 1 Dev. & B. Eq. 1. 
 But if a bank-note be mutilated in a material part, for the purpose of fraudulently 
 imposing it upon the public, and defrauding the bank which issued it, it is no 
 longer binding on the bank. Northern Bank v. Farmers' Bank, 18 B. Mon, 
 506. 
 
 As to notice, see Matthews v. Poythress, 4 Ga. 287 ; Beltzhoover v. Black- 
 stock, 3 Watts, 20 ; Lawson v. Weston, 4 Esp. 56 ; Rowley v. Home, 3 Bing. 2 ; 
 Snow i\ Peacock, ib. 406 ; Beckwith v. Corrall, 2 Car. & P. 261 ; Strange v. 
 Wignev, 4 .Moore & P. 470.
 
 AYMAR V. SHELDON. 709 
 
 LAW OF PLACE. 
 
 B. AND I. Q. Aymar v. Sheldon and Others. 
 
 (12 Wendell, 430. Supreme Court of New York, October, 1»:J4.) 
 
 Bill draion in one country and indorsed in another. — In an action by an indorsee against 
 an indorser of a bill of excliange drawn in a foreign country, and indorsed and 
 negotiated to the plaintiff .in New York, the law of New York must determine 
 whetlier the proper steps have been taken to charge the indorser. 
 
 B. & I. Q. Aymar, the defendants below, were indorsers of a 
 bill of exchange drawn by certain parties at St. Pierre, in the 
 French Island of Martinique, on parties at Bordeaux, France. It 
 was made payable at twenty-four days sight to the order of the de- 
 fendants, a firm in New York, at which place they indorsed it to 
 the plaintiffs, they also being citizens of the United States. 
 
 The bill was presented for acceptance and dishonored; where- 
 upon due notice was given the defendants, and this action insti- 
 tuted. 
 
 The defendants insisted that they were protected by the law of 
 France, which is sufficiently stated in the opinion of the Court. 
 Verdict and judgment for tlie plaintiffs, to reverse which the de- 
 fendants sued out this writ of error. 
 
 Nelson, J. The only material question arising in this case is, 
 whether the steps necessary on the part of the holders of the bill of 
 exchange in question, to subject the indorsers upon defiiult of the 
 drawees to accept, must be determined by the Frencli law. or the 
 law of this State ? If by our law, the plaintiffs below are entitled 
 to retain the judgment ; if by the law of France, as set out and 
 admitted in the pleadings, the judgment must be reversed. 
 
 We have not been referred to any case, nor have any been found 
 in our researches, in which the point notv presented has been ex-
 
 710 LAW OF PLACE. 
 
 amined or adjudged. But tlierc are some familiar principles 
 belonging to the law merchant, or applicable to bills of exchange 
 and promissory notes, which we think are decisive of it. The per- 
 sons in whose favor the bill was drawn were bound to present it 
 for acceptance and for payment, according to the law of France, as 
 it was drawn and payable in French territories ; and if the rules 
 of law governing them were applicable to the indorsers and indor- 
 sees in this case, the recovery below could not be sustained, be- 
 cause presentment for payment would have been essential even 
 after protest for non-acceptance. No principle, however, seems 
 more fully settled, or better understood in commercial law, than 
 tliat the contract of the indorser is a new and independent con-, 
 tract, and that the extent of his obligations is determined by it. 
 The transfer by indorsement is equivalent in effect to the drawing 
 of a bill, the indorser being in almost every respect considered as 
 a new drawer. Chitty, Bills, 142 ; 3 East, 482 ; 2 Burr. 674, 675 ; 
 1 Str. 441 ; Selw. N. P. 256. On this ground, the rate of dam- 
 ages in an action against the indorser is governed by the law of 
 the place where the indorsement is made, being regulated by the 
 lex loci contractus, 6 Cranch, 21 ; 2 Kent's Com. 460 ; 4 Johns. 
 119. That the nature and extent of the liabilities of the drawer 
 or indorser are to be determined according to the law of the place 
 where the bill is drawn or indorsement made, has been adjudged 
 lx)th here and in England. In Hicks v. Brown, 12 Johns. 142, the 
 bill was drawn by the defendant at New Orleans, in favor of the 
 plaintiff, upon a house in Pliiladelphia ; it was protested for non- 
 acceptance, and due notice given ; the defendant obtained a dis- 
 charge under the insolvent laws of New Orleans after such notice, 
 by which he was exonerated from all debts previously contracted, 
 and, in that State, of course from the bill in question. He pleaded 
 his discharge here, and the Court say, " It seems to be well settled, 
 both in our own and in the English courts, that the discharge is to 
 operate according to the lex loci upon the contract where it was 
 made or to be executed. The contract in this case originated in 
 New Orleans, and had it not been for the circumstance of the bill 
 being drawn upon a person in another State, there could be no 
 doubt but the discharge would reach this contract ; and this cir- 
 cumstance can make no difference, as the demand is against the 
 defendant as drawer of the bill, in consequence of the non-accep- 
 tance. The whole contract or responsibility of the drawer was
 
 .AYMAR V. SHELDON. 711 
 
 entered into and incurred in New Orleans." The case of Potter v. 
 Brown, 5 East, 124, contains- a similar principle. See also 3 
 Mass. 81 ; Van Raugh v. Van Arsdaln, -j Caincs, 154 ; 1 Cowen, 
 107 ; 6 Cranch, 221 ; 4 Cowen, 512, n. 
 
 The contract of indorsement, was made in this case, and t^e 
 execution of it contemplated by the parties in this State ; and it is 
 therefore to be construed according to tiie laws of New York. 
 The defendants below, by it, here engage that the drawees will 
 accept and pay the bill on due presentment, or, in case of their 
 default and notice, that they will pay it. All the cases which de- 
 termine that the nature and extent of the obligation of the drawer 
 are to be ascertained and settled according to the law of the place 
 where the bill is drawn, arc equally applicable to the indorser ; 
 for, in respect to the holder, he is a drawer. Adopting this rule 
 and construction, it follows that the law of New York must settle 
 the liability of the defendants below. The bill in this case is pay- 
 able twenty-four days after sight, and must be presented for 
 acceptance ; and it is well settled by our law, that the holder may 
 have immediate recourse against the indorser for the default of 
 the drawee in this respect; 3 Johns. 202 ; Chitty, Bills, 231, and 
 cases there cited. 
 
 Upon the principle that the rights and obligations of the parties 
 are to be determined by the law of the place to which they had 
 reference in making the contract, there are some steps which the 
 holder must take according to the law of the place on which the 
 bill is drawn. It must be presented for payment when due, hav- 
 ing regard to the number of days of grace there, as the drawee is 
 under obligation to pay only according to such calculation ; and it 
 is therefore to be presumed that the parties had reference to it. 
 So the protest must be according to the same law, which is not 
 only convenient, but grows out of the necessity of the case. The 
 notice however must be given according to the law of the place 
 where the contract of the drawer or indorser, as the case may be, 
 was made, such being an implied condition. Chitty, Bills, 93, 
 217, 266 ; Baylcy, [Bills,] 28 ; Story's Conflict of Laws, 298. 
 
 The contract of the drawers in this case, according to the French 
 law, was, that if the holder would present the bill for acceptance 
 within one year from date, it being drawn in the West Indies, and 
 it was not accepted, and was duly protested and notice given of 
 the protest, he would give security to pay it, and pay the same if
 
 712 LAW OF PLACE. 
 
 default was also made in the payment by the drawee after protest 
 and notice. This is the contract of the drawers, according to this 
 law, and the counsel for the plaintiffs in error insists that it is also 
 the implied contract of the indorser in this State. But this can- 
 not be unless the indorsement is deemed an adoption of the orig- 
 inal contract of the drawers, to be regulated by the law governing 
 the drawers, without regard to the place where the indorsement is 
 made. We have seen that this is not so ; that notice must be 
 given according to the law of the place of indorsement ; and if, 
 according to it, notice of non-payment is not required, none of 
 course is necessary to charge the indorser. But if the above posi- 
 tion of the plaintiffs in error be correct, notice could not then be 
 dispensed with, the law of the drawer controlling. The above 
 position of the counsel would also be irreconcilable with the prin- 
 ciple that the indorsement is equivalent to a new bill, drawn upon 
 the same drawee ; for then the rights and liabilities of the indorser 
 must be governed by the law of the place of the contract, in like 
 manner as those of the drawer are to be governed by the laws of 
 the place where his contract was made. Both stand upon the 
 same footing in this respect, each to be charged according to the 
 laws of the country in which they were at the time of entering 
 into their respective obligations. 
 
 I am aware that this conclusion may operate harshly upon the 
 indorsers in this case, as they may not be enabled to have recourse 
 over on the drawers. But this grows out of the peculiarity of the 
 commercial code which France has seen fit to adopt for herself, 
 materially differing from that known to the law merchant. We 
 cannot break in upon the settled principles of our commercial law, 
 to accommodate them to those of France or any other country. 
 It would involve them in great confusion. The indorser, how- 
 ever, can always protect himself by special indorsement, requiring 
 the holder to take the steps necessary according to the French law, 
 to charge the drawer. It is the business of the holder, without 
 such an indorsement, only to take such measures as are necessary 
 to charge those to whom he intends to look for payment. 
 
 Judgment affirmed. 
 
 The rule declared in the principal case is stated to be the law in the text- 
 books. Story, Promissory Notes, § 339, note; lb., Bills of Exchange, §§ 176, 
 177, note ; C'hitty, Bills, 456. A contrary doctrine, however, seems to have 
 been declared in Rothschild v. Currie, 1 Q. B. 43. But Mr. Justice Story criti-
 
 .AYMAR V. SHELDON. 71S 
 
 •cises this case with his usual learning and ability, and considers it unsound. 
 Promissory Notes, § 339, note. And the case has been doubted in England. 
 See Gil)b.s v. Fremont, 20 Eng. Law & E. 555, 557 ; Allen i\ Kemljle, <i Moore, 
 P. C. 314. But Kotiiscliild v. ( urrie was cautiously cited as autlnjrity in the 
 recent case of Ilirschfield v. Smith, Law Rep. 1 Com. PI. 340. In this case, 
 Eric, C. J., in delivering the opinion of the Court, said : " The facts were, that 
 the bill was drawn in England, i)ayable to the drawer's order, directed to and 
 accepted by the drawee in France, payable in France, and was indorsed by 
 the drawer in blank, and delivered to the defendant in England, and by him 
 indorsed in blank and delivered to the plaintiff in England, and indorsed by tlie 
 plaintiff and delivered to one Berle, in France. The l>ill was duly presented 
 in France, and dishonored; and the holder took the stejis required by the law 
 of France to entitle him to recover from the other parties to the bill ; that is 
 to say, the bill was taken to the proper office and a due protest was made, and 
 a copy of the protest was transmitted to the consul for France in the foreign 
 country where the party to the bill was residing; that is to say, as respects the 
 defendant, to the French consul in London ; and by that consul the protest was 
 in due course, according to the French practice, made known to the defendant 
 without delay. 
 
 "If the action on the bill had been brought in France, upon an indorsement 
 made in France, these facts would have amounted to such notice of dishonor as 
 the law of France requires, and would have entitled the plaintiff to recover. 
 As, however, this action was brought in England, against an indorser indorsing 
 in England, the present question is, whether these facts are evidence of due 
 notice of dishonor, against the defendant, in an action brought ifl England. 
 
 " Our answer is in the affirmative, on two grounds: first, because the point 
 has been decided in Rothschild v. Currie, 1 Q. B. 43, where the bill was 
 drawn, accepted, indorsed, and dishonored, under circumstances similar to those 
 relating to the present bill, and the facts adduced to show notice of dishonor 
 were also similar, and were decided to be sufficient because they were sufficient 
 according to the law of France ; secondly, if the reason assigned in that be not 
 now adopted, and if the contract of an indorser in England of a bill accepted 
 payable in France be held to be a contract governed bj- the law of England, and 
 so the holder be not entitled to sue in England such an indorser unless he has 
 given due notice of dishonor, according to the law of England, then the ques- 
 tion is, what notice, under such circumstances, amounts to due notice. If the 
 parties lived in P^ngland, and their address was known, the rule is that notice 
 should be sent by the post of the day following the day of dishonor. But in 
 respect of bills dishonored in a foreign country, such a rule cannot always have 
 a literal application, because, among other reasons, the postal regulations may 
 make it impossible. 
 
 " Due notice is such notice as can be reasonably required under the circum- 
 stances ; and the reasonableness of the notice proved in evidence is a (juestion 
 of law depending on the facts of each particular case ; and such facts are for 
 the jury. . . . If by the law of the place where the bill is payable there are reg- 
 ulations for giving notice of dishonor, in order to make indorsers liable to the 
 holder, a presumption is raised that notice according to those regulations is all 
 that the indorser should require.
 
 714 LAW OF PLACE. 
 
 " The indorser of a bill accepted, j)ayable in France, promit^es to pay in the 
 event of dishonor in France, and notice thereof. By his contract, he must be 
 taken to know the law of France relating to the tyshonor of bills ; and notice of 
 dishonor is a portion of that law. Then, although his contract is regulated by 
 the law of England relating to indorsement, and although he may not be liable 
 unless reasonable notice of dishonor has been sent to him, yet the notice of 
 dishonor according to, the law of France may be, and we think ought to be, 
 deemed reasonable notice according to the law of England, and be sufhcient in 
 England to entitle the pkintiff to recover according to that law. 
 
 " It is reasonable to hold that the foreign holder should have time to make 
 good his right of recourse against all the parties to the bill, in whatever country 
 they may be. Here the holder was a Frenchman, in France, The indorsement 
 to him was by the plaintiff, a Frenchman, in Fi'ance. The indorsement to the 
 plaintiif was by the defendant, an Englishman, in England ; and the indorse- 
 ment to that J^nglishman by Lion, the payee, may have been in any country. The 
 inconvenience would be great if the holder was bound to know the place of each 
 indorsement, and the law of that place relating to notice of dishonor, and to 
 give notice accordingly, on pain, in case of mistake, of losing his remedy; 
 whereas there would be great convenience to the holder if notice, valid accord- 
 ing to the law of the place, should be held to be reasonable notice" for each of 
 the countries of each of the parties, unless an exceptional case should give occa- 
 sion for an exception." 
 
 'There seems then to be a conflict between the English rule and the American, 
 unless the difference of fact in the cases may afford a ground upon which to recon- 
 cile them. Tlie indorsement to the plaintiff in Hirschfield v. Smith, though 
 made in England was made to a foreigner residing in the country in which the 
 bill was payable. The Court say that there would be serious inconvenience in 
 requiring the holder, a Frenchman, to know the law relating to indorsement in 
 England, and so it would without doubt; but in the principal case, both the 
 plaintiff and defendant, the holder and the indorser, resided in New York, and it 
 was certainly reasonable to suppose that they contracted with respect to the law 
 of New York, and not that of France. And on the contrary, to follow the 
 reasoning of Mr. Chief Justice Erie, it would be quite inconvenient, if not 
 wholly unreasonable, to have required the holder in the principal case to know 
 the law of France, and to take the steps required in that distant country to ren- 
 der his own fellow-townsmen liable upon their indorsement. It is possible that 
 Hirschfield v. Smith may in this way be reconciled with the principal case ; but 
 it seems more difficult to harmonize the former with Allen v. Kemble, 6 Moore, 
 P. C. 314, decided in 1844. The last-named case is a strong authority support- 
 ing the American rule in Aymar v. Sheldon. In Allen r. Kemble the Court 
 said: " It is argued that this bill, being drawn [abroad] payable in Loudon, not 
 only the acceptor, but the drawer, must be held to have contracted with 
 reference to the English law. This argument however appears to us to be 
 founded on a misapprehension of the obligation which the drawer and indorser 
 of a bill incurs. The drawer, by his contract, undertakes that the drawee shall 
 accept and shall afterwards pay the bill, according to its tenor, at the place and 
 domicile of the drawee. If this contract of the drawer be broken by the drawee, 
 either by non-acceptance or non-payment, the drawer is liable for payment of
 
 AYMAR V. SHELDON. 715 
 
 the l)ill, not wlioro tlie liill is to be paid by the drawee, but where he, the drawer, 
 made his contraet, with his interest, damages, and costs, as tlie law of the 
 country wliere he contracted may allow. . . . 
 
 " What then is tiie conscciuence of altering in the bill itself, and by the 
 acceptance, the place at which the acceptor is bound to pay P Can it be more 
 than this, that as to the acceptor the locwf nohdionis is altered, and therefore as 
 to him, the lex loci solutionix is altered? But how does this affect the liabilities 
 of the other patties? These bills are addressed to Mr. Mackie, Stranmaer, 
 Scotland; if no place of payment had been mentioned," they would have been 
 payable by the drawee according to tlie law of Scotland. London being fixed 
 as the place of payuient, they are payable by the drawee according to the law of 
 England ; a different law is imported as regards the acceptor, but not as affects 
 other parties." See also Robinson v. Bland, 1 W. Black. 234, 2.3G ; s. c, 2 
 Burr. 1077 ; Cooper v. Waldegrave, 2 Beav. 282. 
 
 But the law of the place of payment was applied to an indorser in Ellis v. 
 Commercial Bank of Natchez, 7 How. (Miss.) 294. 
 
 The contrary rule, and the rule declared in Aymar v. Sheldon, has been 
 adopted or approved in the following cases : Conahan v. Smith, 2 Disney, 9, per 
 Storei; J.; Hatcher v. McMorine, 4 Dev. 122; Wallace «. Agry, 4 Mason, 
 336, 344, per Stonj, J.: Astor v. Benn, 1 Stuart (Canada), 69; Slacum v. 
 Pomery, 6 Cranch, 221 ; Hazelhurst v. Kean, 4 Yeates, 19; Crawford v. Branch 
 Bank at IMo!)ile, G Ala. 12; Williams v. Wade, 1 Met. 82. See also Allen v. 
 Merchants" Bank of New York, 22 Wend. 21;3, overruling s. C, 15 Wend. 482; 
 Lizardi v. Colien, 3* Gill. 430; Frazier v. Warfield, 9 Sm. & M. 220; Kear- 
 ney V. King, 2 Barn. & Aid. 301 ; Don v. Li])pman, o Clark & F. 1 ; Andrews 
 V. Ilerriot, 4 Cow. 508, and the very learned note of the reporter. 
 
 As a corollary to the rule declared in the principal case, it is held that the 
 obligation of the maker or acceptor of paper payable at no designated place, is 
 regulated by the law of the country where the paper was made; or accepted. 
 Story, Promissory Notes, §§ 172, d seq. and cases cited. But where a place of 
 payment is named, the law of such place will prevail. Ibid. 
 
 The following addition.il cases will be found to contain a further exposition of 
 the law of place, in connection with bills and notes. De La Chaumette v. Bank 
 of England, 2 Barn. & Ad. 385; s. c, 9 Barn. & C. 208; Milne j;. Graham, 1 
 Barn. & C. 192; Trimby r. Vignier, 1 Bing. (N. C.) 151; Worcester Bank ?'. 
 Wells, 8 ]\ret. 107; Rose i\ Park Bank, 20 Ind. 94; Brown v. Bunn, 1(J Ind. 
 406; Bernard?;. Barry, 1 Greene (Iowa), 388; Peck r. Hibbard, 26 Vt. 608; 
 Wilson V. Lazier, 11 Grat. 477, 482 ; Ory r. Winter, 16 Mart. La. 277 ; Bur- 
 rows V. llannegan, 1 McLean, 31.').
 
 716 CHECKS. 
 
 CHECKS. 
 
 Justin Morrison and Alexander Morrison v. 
 Bailey and Leonard F. Burgess. 
 
 (5 Ohio State, 13. Supreme Court, December, 1855.) 
 
 Fom. —The following draft is not a check : W. O. & B. : Pay to B. on the 13th of 
 July, '53, or order, three hundred dollars ; it being jjayable on a future day desig- 
 nated. It is one of the essentials of a check that it shall be payable on demand. 
 
 Days of grace are not allowed on checks. 
 
 Distinction between checks and bills of exchange. 
 
 The case is stated in the opinion of the Court. 
 
 Bartley, J. This suit was brought against Bailey, as drawer, 
 and Burgess, as indorser, of a paper, of whicli the following is a 
 copy : — 
 $300. Cleveland, O., June 30, 1858. 
 
 Wicks, Otis, & Brownell: Pay to L. F. Burgess, on the 13th day of July, '53, 
 or order, three hundred dollars. 
 
 R. B. Bailey. 
 Indorsed by L. F. Burgess. 
 
 The paper was presented to Wicks, Otis, and Brownell, for pay- 
 ment on the sixteenth day of July, 18';3 ; payment refused, and 
 notice of non-payment given on that day. 
 
 It is claimed, on the part of tlie defence, that presentment was 
 not made, and notice given, in due time. And the question for 
 determination is, whether this instrument, iipon which suit is 
 brought, is, or is not, entitled to days of grace ; and this depends 
 upon the question whether the instrument is a check eo nomine^ 
 or a bill of exchange, subject to the rules and usages governing 
 ordinary bills of exchange. 
 
 The distinction between a bill of exchange and a check, 
 although much confused in some respects, by the apparently
 
 MORRISON V. BAILEY. 717 
 
 inconsistent language of some of tlie adjudicated cases, as well as 
 of some of the elementary writers bearing upon it, is founded in 
 the difference in the nature of these two classes of commercial 
 paper. Checks, being drafts or orders for immediate payment 
 of money, have come into such common use as to supersede, in 
 frequent payments of considerable amounts, not only gold and 
 silver coin, but even hank-notes. And with their general use, 
 certain usages have grown up peculiar to that class of instru- 
 ments, and which have become engrafted on the commercial law 
 of the country. A check is subject to many of the rules which 
 regulate the rights and liabilities of parties to bills of exchange, 
 and so nearly resembles the latter class of instruments, that some 
 authors have defined a check to be, in substance and in legal 
 effect, an inland bill of exchange, payable on demand. But, as 
 Judge Story well* said, in the Matter of Brown, 2 f^tory, 502, 
 althougli a check " nearly resembles a bill of exchange, yet 
 nullum simile est idem.''^ By statute, in Ohio, all bills made 
 negotiable are entitled to three days grace in the time of pay- 
 ment. Rev. Sts. 576. But days of grace, in the time of pay- 
 ment, would be inconsistent with the nature and purpose of a 
 check, which requires no acceptance, and is always payable 
 immediately on presentment. 
 
 These two classes of commercial paper, although in many 
 respects similar, are to be distinguished in the following par- 
 ticulars, to wit : — 
 
 1. A check is drawn upon an existing fund, and is an abso- 
 lute transfer or appropriation, to the holder, of so much money 
 in tlie hands of the drawee ; whereas a l»ill of exchange is not 
 always, or necessarily, drawn \ipon actual funds in the hands 
 of the drawee, but very frequently drawn in anticipation of funds, 
 or upon a previously arranged credit. 
 
 2. Tlie drawer of a check is always the principal ; whereas 
 the drawer of a bill frequently stands in the position of a mere 
 surety. 
 
 3. As between the liolder of a check and an indorscr, demand 
 of payment within due time is essential to the liability of the 
 latter. Where the parties reside in the same place, the holder 
 should present ^tlie check on the day it is received, or within 
 business hours of the following day ; and when payable at a 
 different place from tluit in wiiich it is negotiated, the check
 
 718 CHECKS. 
 
 should b(3 forwarded by mail on the same, or the next succeed- 
 ing day, for presentment. B\|t days of grace being allowed to 
 bills of exchange, the time for demanding payment of a bill is 
 different. 
 
 4. As between the holder and drawer, however, mere delay 
 in presenting a check in due time for payment, would not dis- 
 charge the latter, unless he had been injured thereby, and then 
 only to the extent of his loss ; but a different rule, in this respect, 
 prevails in case of a bill of exchange. 
 
 5. A check requires no acceptance, and, when presented, the 
 presentment is for payment. 
 
 6. It is not protestable, or in other words, protest is not 
 requisite to hold either the drawer or an indorser. 
 
 It is also settled, in Woodruff v. Merchants' Bank, and Bowen 
 V. Newell, above referred to, that any supposed usage of banks 
 in any particular 'place to regard drafts upon them, payable at a 
 day certain after date, as checks, and not entitled to days of 
 grace, is inadmissible to control the rules of the law in relation to" 
 such paper. 
 
 Motion for new trial overruled and judgment for the plaintiffs. 
 
 This subject of the likeness of checks to bills, and of the distinction between 
 them, is considered in Keene v. Beard, 8 Com. B. (n. 8.) 372. The facts will 
 sufficiently appear in the opinion delivered by 
 
 Erle, C. J, I am of opinion that the plaintiff is entitled to judgment on 
 this demurrer. The action is brought by the holiler or bearer of a check against 
 the payee and indorser. The declaration states that one Bodenham on a certain 
 day made a draft or order in writing for the payment of money, commonly 
 called a check on a banker, and directed the same to certain persons trading as 
 bankers, and thereby required them to pay to the defendants or bearer the sum 
 of £11, and then delivered the said draft or order to the defendant, who then in- 
 dorsed and delivered the same to one Lewis, who transferred and delivered the 
 same to the plaintiff, who then became and was and still is the lawful bearer thereof 
 It then goes on to allege that the said draft or order was duly ^jresented for pay- 
 ment and was dishonored. The point urged by Mr. Grant on the argument of 
 the demurrer was, that a check is not to be classed with bills of exchange so far 
 as to be capable of creating a liability in an indorser to the person who may be 
 the holder or bearer of the instrument. I think he has failed to establish that 
 proposition. A check is strongly analogous to a bill of exchange in many re- 
 spects. It is drawn upon a banker ; and, though in practice the banker does not 
 accept the draft, he might for aught I know do so. A check has also some of 
 the incidents of a bill of exchange, if not all, as, in respect of its passing by de- 
 livery, and also in respect of a hona fide holder taking it for value having a 
 better title than the person from whom he received it. Having these incidents
 
 MORRISON V. BAILKY. 719 
 
 of a bill of cxclianjrc, lias it the further incident of being capable of passing by 
 indorsement ? That is, where the indorsement is made, not by merely placing the 
 name of the party on tlie back of the irlstrumont, but doing so with the inten- 
 tion of passing the title to it, and of incurring all the usual liabilities of an in- 
 dorser of a negotiable instrument? It is admitted here that the defendant's 
 name was placed upon the check animo indorsandi ; and therefore our judgment 
 for the plaintiff is in accordance with the real intention of the parties. The in- 
 dorser intended to give to the indorsee the security of his name and liability on' 
 the instrument. I also think our decision is in accordance with the law, when 
 we hold that a check is a negotiable instrument, and capable of indorsement. 
 
 Byi.ks, J. I am of the same opinion. I conceive that a check is in the na- 
 ture of an inland bill of exchange payable to the bearer on demand. It has 
 nearly all the incidents of an ordinary bill of exchange. In one thing it dif- 
 fers from a bill of exchange : it is an appropriation of so much money of 
 the drawer's in the hands of the banker upon whom it is drawn, for the 
 purpose of discharging a debt or liability of the drawer to a third person ; 
 whereas, it is not necessary that there should be money of the drawer's in 
 the hands of the drawee of a bill of exchange. There is another difference 
 between the two instruments : in the case of a bill of exchange, the drawer 
 is discharged by default of a due presentment to the acceptor; but, in the 
 case of a check, the drawer is not discharged by a delay in the presentment, 
 unless it be shown that he has been prejudiced thereby ; for instance, by the fail- 
 ure of the banker on whom it is drawn. In all other respects a' check is pre- 
 cisely like an inland bill of exchange. iNIr. Grant is in error when he supposes 
 that the negotiability of inland bills of exchange rested entirely on the statute 9 
 & 10 W. 3, c. 17. It reposes on the law merchant, as it had been understood 
 and applied for at least a hundred years before the passing of that statute. Bills of 
 exchange indorsed in blank, and promissory notes payable to bearer, were well- 
 known instruments. So, the bonds and notes of foreign States and princes are all 
 treated in this country as negotiable instruments, and are available in the hands 
 of persons taking them for value. That being so, it seems to me to be clear 
 that a check ftills within the class of ordinary bills of exchange ; and, if so, why 
 may it not be indorsed, so as to impose upon the indorser the ordinary liabilities 
 which flow from the indorsement of a negotiable instrument? No inconvenience 
 can result from our holding this ; for, it was distinctly decided in Waynam d. 
 Bend, 1 Camp. 175, that, in an action against the maker of a promissory note 
 payable to A B or bearer, if J;he declaration states that A B indorsed the note 
 to the plaintiff, the indorsement — that is, an indorsement UHimo indorftamU — 
 must be proved. So, in Story on Promissory Notes, § 132, it is said that, 
 " Although a note payable to bearer is transferable by mere delivery, it may also 
 be transferred by indorsement of the payee, or of any other subsequent holder. 
 In such a case, the indorser incurs the same liabilities and obligations as the in- 
 dorser of a negotiable note payable to order, from many of which, in the case 
 of a mere transfer by delivery, he is exempt." It is true that a man's name may 
 and very often is written on the back of a check or bill without any idea of ren- 
 dering himself liable as an indorser. Indeed, one of tha best receipts is the 
 placing on the back of the instrument the name of the person who has received 
 payment of it. Such an entry of the name on the instrument is not an indorse-
 
 720 CHECKS. 
 
 nient. So, a man froquently puts his name on the back of a hank-note. In all 
 these cases, the act of writing ma); or may not be an indorsement, according to 
 circumstances. All that we mean to decide on the present occasion is, that, 
 where a man indorses an instrument of this sort, animo indorsandi, and delivers 
 it so indorsed to a third person, he renders himself liable to be sued upon the 
 instrument, as indorsee, by any subsequent holder. I entertain no doubt what- 
 ever upon the subject ; and I do not tliink any mischief or inconvenience can 
 result from our so deciding. I may add that I do no injustice to the able argu- 
 ment of Mr. Gran when I observe that it would have been deserving of more 
 attention if it had been addressed to the Court a hundred years ago. 
 
 Keatinc;, J. I also am of opinion, upon all the authorities, that a check is 
 an instrument which is capable of being indorsed, and that the payee, if he in- 
 dorses it with intent to make himself liable as an indorser, as is alleged in this 
 declaration, is chargeable as such at the suit of any subsequent bona fide holder. 
 
 Judgment for tJie plaintiff. 
 
 In Harker v. Anderson, 21 Wend. 372, Cotoen, J., maintained the doctrine, 
 in an elaborate, opinion, that checks were to all intents and purposes bills of 
 exchange payable on demand, the particular point argued by him being that 
 the drawer of a check could always require the same diligence of the holder as 
 to presentment and notice, as the drawer or indorser of a bill. But a majority 
 of the Court expressed no opinion on the point so extensively discussed ; and 
 the weight of authority is against the view taken by that eminent judge. In 
 several later cases in New York, the view taken by Mr. Justice Coioen, has been 
 rejected. S.ee Little v. Phoenix Bank, 2 Hill, 425 ; Woodruff v. Merchants' 
 Bank, 6 Hill, 174. In the former case the question was, whether mere delay in 
 presenting a check for payment would discharge the drawer. The Court held 
 that it would not, unless the drawer had been injured thereby ; but that it was 
 incumbent upon the holder to show affirmatively that no loss had happened to 
 the drawer. Mr. Justice Coiven, however, adhered to his former opinion in 
 Harker v. Anderson, supra, that a check, like a bill, must be j)resented within a 
 reasonable time, or both the drawer and indorser will be discharged. 
 
 This question is also ably discussed in Matter of Brown, 2 Story, 502, in which 
 Mr.' Justice Story disapproves the doctrine of Judge Cowen in Harker v. Ander- 
 son, supra.
 
 MUSSRY V. EAGLE BANK. 721 
 
 Benjamin B. Mussey v. President, Directors, &c., of the 
 
 Eagle Bank. • 
 
 (9 Metcalf, 306. Supreinc Court of Massachusetts, March, 184.0.) 
 
 Certification of checks. Inherent power of teller. — Evidence that the teller of a bank, 
 during all the time of his holding office, whenever the convenience of the bank or 
 of its customers required it, certified that checks were " good," which were drawn 
 on the bank by its customers, when funds to the amount of such checks were to 
 the credit of the drawers, and tliat his so doing was, in some instances, known to 
 the bank, and was not forbidden, and that it was the usage of the tellers of otlier 
 banks to do the same thing, does not warrant a jury to infer that the power of so 
 doing was an original, inherent, implied power of the teller, as such. 
 
 Usage. The usage of issuing certificates of deposit, by a teller of a bank, is not 
 evidence to prove a usage of certifying checks. 
 
 A teller of a b.ank, as such, has no authority to certify that a check is "good," so as 
 to bind the bank to pay the amount thereof to any person who may afterwards 
 present it ; and a usage for him so to certify a check, to enable the holder to use it 
 at his pleasure, is bad. 
 
 Assu.MPSiT to recover the amount of a check drawn on the Eagle 
 Bank by G. F, Cook & Co., for $4000, payable to the drawers or 
 bearer, and on which the following words were written by the teller 
 of the bank : " Good. H. B. Odiorne, Teller." 
 
 Hubbard, J. It is proved that Cook & Co. had no deposit to 
 their credit, in the Eagle Bank, at the time tbe check was drawn, 
 nor when it was presented for payment ; and it is admitted that 
 the action cannot be maintained against the defendants, unless the 
 word " good," written by tlicir teller, and certified by iiis signa- 
 ture, binds the bank. It is also agreed, or proved, that the teller 
 had no direct authority conferred upon him to certify checks as 
 good. Unless, therefore, a teller has power, by virtue of his office, 
 thus to bind the bank ; or a custom thus to certify checks exists 
 among banks, for the purpose of giving them currency with third 
 persons, on the credit of the bank ; or the defendants have sanc- 
 tioned the practice of the making of such certificates, by their 
 knowledge of its use, which they have not forbidden ; this action, 
 it is admitted, cannot be sustained. 
 
 These several propositions emljrace, substantially, the subjects 
 which have been discussed, and upon which the plaintitr grounds 
 his motion for a new trial. One of the propositions of the plain- 
 
 46
 
 722 CHECKS. 
 
 tiff's counsel is stated thus : That the jury should have been 
 instructed, that if the pro»f should warrant the inference that 
 Odiorne, while teller, certified the checks of the customers of the 
 bank, and this was, in any instance, known to the bank, and was not 
 forbidden ; and that, during the same period, it was the custom of 
 all the tellers of other banks so to certify checks ; the jury would be 
 at liberty to infer an original, inherent, implied power in Odiorne, 
 as such teller, thus to certify checks. But certain facts are stated, 
 in this proposition, as furnishing evidence of inherent power, 
 which are rather applicable to the question and binding nature 
 of a usage. They may prove the latter, while they by no means 
 establish the former. The question of inherent power, and that 
 of usage, should be separately considered, in order to arrive at a 
 correct conclusion. 
 
 1. And first, has the teller of a bank an original, inherent, 
 implied power to certify checks as good, by virtue of his office ? 
 Or, in other words, has the teller of a* bank an inherent power to 
 bind the bank to the payment of any given sum of money, at a 
 future time, to any person who shall produce a check, which he 
 has, by writing upon it the word " good," in fact accepted to pay ? 
 Because, unless the word " good " carries with it binding evidence 
 of the fact that the money is in the bank to meet that particular 
 check, and that it will be paid to the bearer at any time when it is 
 presented, it is of no practical utility. It will amount to no more 
 than this; viz., that, at the moment of presentment, the check is 
 good, and will be paid, if then handed in ; but not that it will 
 continue good two hours after, if, not being offered, other checks 
 of the same drawer are presented, to the amount of his deposit in 
 the bank. 
 
 The office of the teller is implied in the word used to designate 
 it, — to tell or count the moneys of the bank, which are received 
 or paid out. The office is often divided into two branches : that 
 of receiving teller and of paying teller, where the business of the 
 bank is large, and the duties cannot conveniently be united in one 
 person. When united, the duty of the teller is, to receive all 
 moneys offered at the bank in payment of notes and bills pre- 
 viously discounted or lodged for collection, as they severally fall 
 due, and all moneys offered by customers of the bank, to be 
 deposited to their credit in account, whether arising from moneys 
 brought by them to the bank, or the proceeds of discounts made
 
 MUSSEY V. EAGLE BANK. T28 
 
 for them ; to pay tlie checks of depositors, as the money is, from 
 time to time drawn out, or for notes discounted ; and to redeem 
 the bills of the bank with specie, when the same is demanded. 
 Tills is his official employment; and, in the discharge of these 
 duties, l>e is regularly to account for the moneys he has received 
 and paid out, not only to prevent mistakes, but to charge him 
 when short or delinquent ; and he is also made responsible for the 
 payment of a check, when the drawer has not a like amount to his 
 credit, unless he applies to the book-keeper for information as to 
 the state of the drawer's account ; and then, if an over-payment 
 is made, through the mistake or fault of the book-keeper, he, and 
 not the teller, is responsible for the loss. And when checks on 
 other banks are received in payment, or on deposit, (as is tlie 
 usage among the banks in the city), it is made his duty to attend 
 to their collection by a given hour of the day. These are the 
 powers and duties usually assigned to the office of the teller ; and 
 they are plain and explicit. They relate to the direct receipt or 
 payment of moneys, and to a true and accurate accounting for 
 such receipts and payments. His duties respect the daily cash 
 transactions of the bank, and they do not relate directly to the 
 credits given by the bank to its customers, or borrowers, on the 
 loan of its funds. His office is not confounded with that of the 
 discount clerk, or the book-keeper ; but his daily minutes, and 
 the checks paid or received by him, are handed to the book- 
 keeper, for him to make the proper entries, by which the con- 
 cerns of the bank may be known when tested by the teller's cash 
 on hand. 
 
 In these powers and duties, thus conferred upon the teller," 
 and to be exercised by him in the discharge of the appropriate 
 functions of his office, there is no inherent, original power, 
 expressly conferred, to enable him to certify that the checks 
 of the depositors at the bank will be good, when presented for 
 payment, at some future time ; nor is such power incident to, or 
 necessary to, the faithful discharge of any of his duties. Powers 
 which are neither incidental nor necessary are not to be implied, 
 when the rights of others are thereby involved. The power in 
 question is, in fact, not only not implied as incidental to the 
 proper performance of the duties of the office, but the teller is 
 not a regular certifying officer, as to the state of any depositor's 
 account ; for he has not the means of certifying it. Nor is he 
 responsible for the book-keeper's statement. Nor does such
 
 724 CHECKS. 
 
 power exist in the book-keeper ; for, during the business hours 
 of tlie day, he is not the receiver of all the checks drawn by the 
 depositors, as they are paid at the bank, nor is he answerable 
 for the amount, nntil handed to him for entry in his books. Such 
 certificate would, in fact, require the names of l)oth the officers, 
 that the drawer's account was good for the face of the check, 
 before either of them could have evidence of the fact to be 
 certified. Nor could they be secure from difficulty arising out 
 of the constant pressure of business, without actually charging 
 the check thus certified ; and even if charged, they would be 
 without a voucher till the check should be handed in for pay- 
 ment. 
 
 Such a power of certifying is, in fact, a power to pledge the 
 credit of the bank to its customers ; a power which, by the consti- 
 tution of a bank, can alone be exercised by its president and 
 directors, unless specially delegated by them ; and consequently, 
 it cannot be implied as a resulting duty or authority in any 
 individual officer. Evidence of usage, therefore, can imply no 
 original, inherent, and implied power in tellers thus to certify, 
 however it may bear on the question of binding a bank by the 
 allowance of such a usage. 
 
 2. It is contended that a usage for tellers of banks thus to 
 certify that checks are good, and such usage being known to 
 the business community, is a usage binding on banks, and that 
 the holder of a check so certified may recover it from the bank 
 on which it is drawn ; and that proof of a usage, on the part 
 of this bank and the other banks of the city, to allow certificates 
 of deposit to be certified by their respective tellers, is evidence in 
 support of a usage of such tellers to certify checks, or of their 
 authority so to do. 
 
 Upon this point, the judge, at the trial, instructed the jury, 
 that if any such general usage existed, and if it was a good 
 usage, the defendants would be bound by it ; but whether the 
 usage was good or not, was matter of law for the Court to decide, 
 and was not a question for the jury ; and that a usage to issue 
 certificates of deposit was not evidence to prove a usage of certi- 
 fying checks. 
 
 In examining the evidence which was offered to the jury, and 
 which is reported at some length, we are well satisfied that no 
 such general usage has been proved ; but that, in some of the 
 banks a practice has existed for one of the officers of the bank,
 
 MUSSEY V. EAGLE BANK. 725 
 
 and generally the teller, to certify that the check of a depositor 
 is good, when it was necessary for him to use his check at 
 another bank, after bank hours, to prevent the protest of a note ; 
 in which case his check would, of course, be presented for pay- 
 ment, the next morning, by the bank receiving the same ; or 
 occasiojially, when a remittance was to be made to a correspondent 
 at a distance ; and sometimes, for the convenience of the officers, 
 where the money was needed, to be paid at another bank, and 
 the amount of the check was large, to save the labor of count- 
 ing the bill's. The cases vary from the one at bar. They were 
 evidently those of special convenience for a particular occasion, 
 and which, from the uprightness of the officers and the solvency 
 of the parties, worked no mischief. But even these cases were 
 neither proved to be general, nor applicable to all the banks, so 
 as to establish a usage. The case at bar, on the other hand, was 
 the giving of large credits to the persons drawing the checks, 
 to enable them to borrow money on the strength of the certifi- 
 cates. In some banks, checks were occasionally certified for 
 customers, to be used by them, at their convenience, where the 
 funds were in the bank to meet them ; but the practice, as 
 proved, was of such limited extent as not to bear on the question 
 of usage. 
 
 But if a usage had been proved of the certifying, by the 
 teller, that the clieck is good, to enable a holder to use it after- 
 wards, at his pleasure, we are clearly of opinion that such a 
 usage would be bad, and could not be upheld. It would give to 
 bank-checks, which are intended for immediate use, and are the 
 substitutes for specie, in the ordinary transactions of business, 
 the character of bills of exchange, payable to the bearer, the bank 
 being acceptor, and payable at an indehnite time. It would lead 
 to loans to favored individuals, without the usual security ; it 
 would substitute checks for cash, in the hands of tellers who 
 receive them, and would confer the power upon a single officer to 
 pledge the credit of the bank by the mere writing of his name ; 
 a power never contcmi»hited by the legislature, nor intended to 
 be conferred by the stockholders. It would expose the teller to 
 the frauds of a book-keeper, and both of them to the temptations 
 of unprincipled and greedy men, who might, under various ])re- 
 tences, procure their checks to be thus certified, in the lirst 
 instances, when their deposits were good, and afterwards, when
 
 726 CHECKS. 
 
 there was no balance to their credit ; allowing interest, as a 
 bonus for the certificate, to the certifying officer, who would 
 afterwards receive such checks as cash. And the present case 
 well illustrates the hazards and the evils to which banking com- 
 panies and their officers are exposed by the allowance of such a 
 practice. 
 
 It has been pressed, in the argument on the subject of usage, 
 that this certificate of " good," on the check, is but another form 
 of the exercise of a usage, so common in banks, to grant, by the 
 teller, a certificate of deposit of money to the credit of a third 
 person. But we are of opinion, with the judge before whom the 
 trial was had, that usage of the one will not support the practice 
 of the other. The two practices, while having the appearance 
 of resemblance, and although one may be used for the same pur- 
 pose as the other, in the form of a remittance, are, in their 
 character, essentially distinct. A certificate of deposit is regu- 
 larly issued only when money is actually paid into a bank, for 
 the benefit of a third person, and is placed to his credit ; by 
 means of which certificate, and on the return thereof, he can draw 
 for the money deposited ; or, if the money is not actually 
 deposited, but the check of the party procuring the certificate is 
 given, such check is immediately charged to the account of the 
 drawer. This is a transaction in which money is actually paid 
 for the certificate ; and the certificate is no more than entering 
 the amount in the depositor's bank-book. The difference is, that 
 the credit is given to the correspondent of the depositor, and 
 not to the depositor himself. But where a check is cei-tified, as 
 in the case at bar, no money is deposited, no check is received, 
 and the teller can only rely on the declaration of the book-keeper 
 that the check is good. The transaction enters not into the 
 books of the bank ; is not necessarily known by its higher 
 officers ; and yet, it is contended, the bank is bound by the trans- 
 action. 
 
 In examining the evidence, it is apparent that the defendants 
 have never sanctioned the practice of authorizing their teller to 
 certify checks as good, in order to their being used, by the 
 drawer, to raise a credit with third persons. And, admitting it 
 to be proved (though of that we are not satisfied), that the cashier, 
 in one instance, knew that the teller certified a check of Cook 
 & Co. as good, and did not prohibit him, still, the teller having
 
 THE farmers' bank V. BUTCHERS' BANK. 727 
 
 no legal right, either express or implied, thus to obligate the 
 bank^ the knowledge of thg easliier could not affect the defend- 
 ants. Such an aciniiescence on the part of the cashier, whether 
 the consequoncc of haste, or ignorance, or improper motive, or a 
 mistaken view of his own powers, could not create a contract 
 between the bank and the holder of any other check thus certified. 
 
 What the legal consequence would be, if the check was good 
 at the time of such certificate, and was certified with the knowl- 
 edge and acquiescence of the cashier, and was taken, bo7ia fide, 
 on the faith of such certificate so approved, we are not now called 
 upon to express an opinion. 
 
 The view taken of the case makes it unnecessary to decide on 
 that part of the instructions of the presiding judge, whether 
 Drake took the check under such suspicious circumstances that 
 he was bound to make inquiry. Leaving this subject, therefore, 
 for future consideration, if the point should hereafter arise, we 
 are satisfied that the instructions w^ere sufficiently favorable to 
 the plaintiff, and that there is no just cause for disturbing the 
 verdict. Judgment on the verdict. 
 
 But see the following case and note. 
 
 The Farmers' and Mechanics' Bank of Kent County, 
 Maryland, vi. The Butchers' and Drovers' Bank. 
 
 (16 New York [2 Smith], 125. Court of Appeals, September, 1857.) 
 
 Certification of checks. — Kbonaful' hoklcT, for value, of a negotiable check certified 
 to be good by tlie paying teller of tlic bank on which it is drawn, whose author- 
 ity to certify is limited to cases where the bank has funds of the drawer to meet 
 the check, can recover of the bank the amount of the check, though tlie drawer 
 had no funds in the bank, and though the certification by the teller was in viola- 
 tion of liis duty, and for the drawer's accommodation. 
 
 The action in this case was to recover the amount of five cheeks 
 drawn upon the defendants, by one Green, and certified to be good 
 by the paying teller of the defendants. The checks were not 
 drawn on funds, and the teller had no authority to certify checks 
 unless the drawer had funds in the bank to cover them. 
 
 The plaintiffs were bona fide holders for value, and had judg- 
 pient in the Court below.
 
 728 CHECKS. 
 
 Selden, J. The jury in this case have found, upon sufficient 
 evidence and under proper instruction^ from the Court, that the 
 plaintiffs were holders, for value, of the cliecks in question. Each 
 of these checks, if duly certified, imposes upon the bank an obliga- 
 tion to retain the amount for which the check is drawn, and which, 
 by the certificate, it admits it has in hand to the credit of the 
 drawer to meet the check when presented, and to pay the same to 
 the holder on demand. This obligation is substantially the same 
 as that assumed by the acceptor of an ordinary bill of exchange ; 
 and the certificates in this case, if authorized, may with propriety 
 be regarded as virtual acceptances of bills, and the bank as liable, 
 if at all, as acceptor. 
 
 The first ground upon which this liability is resisted is based, 
 not upon any want of authority in the particular agent by whom 
 the checks were certified, but upon a want of power in the bank to 
 bind itself by the contract sought to be enforced. It is insisted 
 that the bank was not authorized by its charter to engage in trans- 
 actions purely fictitious, having no connection with its legitimate 
 business, or to pledge its credit for tlie mere accommodation of 
 third persons. 
 
 The defendant is a banking corporation, organized under the 
 general banking law of this State ; and it is, I think, a sound 
 position, that such a corporation exceeds its powers when it becomes 
 the mere surety for another, upon a contract in which it has no 
 interest, or lends its credit in any form for the exclusive benefit 
 of other parties. Such a contract is ultra vires, and cannot be 
 enforced against the bank by any person cognizant of the facts. 
 But it by no means follows, when the unauthorized contract is in 
 the form of a negotiable instrument, that the bank can avail" itself of 
 the defence, as against one who, without notice, has become the 
 holder of the paper for value. This question appears to have 
 arisen in the case of Stoney v. The American Life Insurance Com- 
 pany, 11 Paige, 635, and the decision of the Court upon the point 
 is thus stated by the reporter : " A negotiable security of a cor- 
 poration, which upon its face appears to have been duly issued by 
 such corporation, and in conformity with the provisions of its 
 charter, is valid in the hands of a bona fide holder thereof, without 
 notice, although such security was in fact issued for a purpose 
 and at a place not authorized by the charter of the corporation, 
 and in violation of the laws of the State where it was actually 
 issued."
 
 THE FARMKIIS' HANK V. HUTCH EUs' BANK. 729 
 
 There is a dictum of the chancellor, to the same effect, in the 
 case of Safford v. Wyckoff, 4 Ilill, 442, whore the defence set up 
 was, that the act of the hank, in issuing the hill upon which the 
 action was brought, was iilfro vires. The chancellor there says : 
 " A l)ill, or any other negotiable security, which is not upon its 
 face illegal and unauthorized, is valid in the hands of a bona fide 
 holder, without notice, who has paid a valuable consideration 
 therefor, except in those cases in which the security is made void 
 by statute." So in the case of The Genesee Bank v. The Patchin 
 Bank, 3 Kern. 309, recently decided by this Court, a similar doc- 
 trine is distinctly asserted by Denio^J., although the point was not 
 passed upon by the Court. 
 
 I have uo hesitation in concurring with these learned judges in 
 the principles thus asserted, and am not aware that a contrary 
 opinion has ever been judicially expressed. A citizen who deals 
 directly with a corporation, or who takes its negotiable paper, is 
 presumed to know the extent of its corporate power. But when 
 the paper is, upon its face, in all respects such as the corporation 
 has authority to issue, and its only defect consists in some extrin- 
 sic fact, such as the purpose or object for which it was issued, to 
 hold that the person taking the paper must inquire as to such 
 extraneous fact, of the existence of which he is in no way apprised, 
 would obviously conflict with the whole policy of the law in regard 
 to negotiable paper. I pass, therefore, to the consideration of that 
 branch of the defence which rests upon the want of authority in 
 Pe1;k, the teller, to bind the bank. 
 
 In the case of Mussey v. Eagle Bank, 9 Met. 300,^ the Supreme 
 Court of Massachusetts held not only that such a teller had no 
 original inherent power to certify checks, but that a general custom 
 to that effect among banks would conflict with the public interests, 
 and would be bad. I am not entirely satisfied with the reasoning 
 of the Court in that case. The act 'of certifying a check is simply 
 answering the supposed inquiry of one about to take the check, 
 whether the bank has funds of the drawer to meet it ; and no 
 other officer or agent of the bank would seem to be so competent 
 to give the answer as the paying teller. His duties impose upon 
 him the necessity of knowing the state of every depositor's account, 
 lie is charged with all he pays out, and if he jiays a check, with- 
 out funds in hand, he is responsible to the bank for the amount. 
 His knowledge exceeds that of the book-keeper, because, to tiie 
 information obtained from the latter, he adds a knowledge whether 
 
 Ante, 721.
 
 730 CHECKS. 
 
 any deposits have been made or checks paid since the last entry in 
 the books. N'o doubt the cashier, by virtiie of his general powers, 
 and his presumed knowledge of all the affairs of the bank, would 
 be competent to answer the question ; but he could only do so by 
 first inquiring of the book-keeper and teller. Why should the 
 applicant be compelled to seek the information through this cir- 
 cuitous channel, instead of going directly to the ultimate source 
 of knowledge on the subject ? The teller is put in the place of 
 the cashier, to perform a portion of his duties. His appointment 
 is virtually a division of the office of cashier ; and that branch of 
 the office which the teller fills embraces those duties which par- 
 ticularly require a knowledge of the state of the accounts of the 
 depositors. Why then should he not be the organ of communica- 
 tion on that subject ? 
 
 But it is unnecessary in the present case to decide this question, 
 as it clearly appears not only that the teller, Peck, was in the 
 liabit of certifying the checks of customers, with the knowledge of 
 the officers of the bank, but that he was furnished with a book 
 for the express purpose of keeping a memorandum of such checks. 
 His authority to certify, therefore, in a proper case, cannot be 
 disputed. But it is insisted that his power extended only to cases 
 where the bank had funds in hand, he having been expressly pro- 
 hibited from certifying in the absence of funds, and hence that the 
 bank is not bound. 
 
 It may be doubted whether such a prohibition adds any thing to 
 the restrictions which would otherwise exist upon the powers of 
 the agent. A teller, acting under a general power to certify checks, 
 would be guilty of an excess of authority, and a clear violation of 
 duty, if he certified without funds. 
 
 The powers of the cashier himself, or other principal financial 
 officer of the bank, would no doubt be subject to the same limita-. 
 tion. To certify a check, when the bank has no funds to meet it, 
 is to make a false representation ; and neither the incidental power 
 of the cashier, nor a general power conferred upon any other 
 officer, could be construed to authorize that. Hence, if a bank is 
 holden, in any case, upon a certificate of its cashier that a check 
 is good, when it has no funds of the drawer, it is not because the 
 cashier is deemed authorized to make such a certificate, but because 
 the bank is bound by his representation, notwithstanding it is false 
 and unauthorized. 
 
 It would seem, therefore, that the defence insisted upon here
 
 THE farmers' bank V. BUTCHERS* BANK. 731 
 
 would liave been equally available if the checks in question had 
 been certified by the cashier himself. It might then have been 
 urged, with truth, tliat tlie cashier had violated his duty and 
 exceeded the proper limit of his powers in making the certificate ; 
 and if the argument be sound, that the principal is in no case 
 bound, unless the act of the agent is within the powers either 
 actually or apparently conferred upon him, the bank would not be 
 liolden in such a case. It is no more within the apparent power of 
 a cashier to certify that the bank has funds, when it has none, than 
 it is within that of a teller expressly authorized to certify only when 
 the bank has funds. p]very person would be bound to take 
 notice of the limitation imposed by law vipon the powers of the 
 casliier, or other general agents, no less than of that which is in 
 terms imposed upon the powers of the teller as special agent. 
 Hence, it cannot be pretended that a person who should take and 
 pay value for a check, with knowledge that the bank had no funds 
 of the drawer to meet it, would acquire any valid claim against 
 the bank, although such check was certified by the cashier himself. 
 He would be presumed to know that it was contrary to the duty 
 of the cashier to certify without funds, and this knowledge would 
 have the same effect as that which every one who should take a 
 check, certified by the teller, would be presumed to have of any 
 express restriction upon his powers. 
 
 It will be seen that, if these views are correct, the present case 
 does not turn in any degree upon the rules applicable to special 
 agencies, but that the question would have been precisely the same if 
 the check had been certified by the cashier or other principal financial 
 officer of the bank. As they may, however, admit of doubt, I shall 
 treat the case as one of an agency specially restricted, and shall 
 simply inquire whether a bona fide holder, for value, of a negotiable 
 check, certified by a special agent whose authority is limited to 
 cases where the bank has funds of the drawer in hand, can enforce 
 payment of the check, provided the bank has no such funds. 
 
 This is a complex question, depending partly upon the law of 
 principal and agent, and partly upon that of negotiable or com- 
 mercial paper. The defence assumes that principals are bound 
 only by the authorized acts of their agents, and admits of no quali- 
 fication of this general rule, except where the agent has been 
 apparently clothed with an authority beyond that actually con- 
 ferred. But this proposition is too broad to be sustained. Principals 
 have been repeatedly held responsible for the false representations
 
 732 CHECKS. 
 
 of their agents, not on tlic ground that the agents had any authority, 
 either real or apparent, to make such representations, but for 
 reasons entirely different. In Hern v. Nichols, 1 Salk. 289, the 
 leading case on the subject, where an agent authorized to sell a 
 quantity of silk had made certain fraudulent representations, by 
 which the purchaser was deceived, the principal was held liable. 
 Lord Sblt there said : " Seeing somebody must be a loser by this 
 deceit, it is more reasonable that he that employs and puts a confi- 
 dence in the deceiver should be a loser, than a stranger." The 
 principle of this case has never, I think, been overruled, but, on 
 the contrary, has been repeatedly approved and confirmed. It will 
 be found directly applicable to the present case. The certificate 
 of the teller is a positive representation that the bank has funds 
 to meet the check. If that representation is false, who ought to 
 bear the loss ? 
 
 The reasoning of Lord Holt, in the case of Hern v. Nichols, 
 applies here with peculiar force. The bank selects its teller, and 
 places him in a position of great responsibility. The trust and con- 
 fidence thus reposed in him by the bank leads others to confide in 
 his integrity. Persons having no voice in his selection are obliged 
 to deal with the bank through him. If, therefore, while acting in 
 the business of the bank, and within the scope of his employment, 
 so far as is known or can be seen by the party dealing with him, 
 he is guilty of misrepresentation, ought not the bank to be held 
 responsible ? It is worthy of consideration that the fact misrepre- 
 sented in this case is not only one peculiarly within the knowledge 
 of the agent, but one with which he is made acquainted by means 
 of the position in which he is placed by the bank, and which it is 
 his especial province and duty 'to know, and which could scarcely 
 be definitively ascertained except by application to him. These 
 circumstances would seem to bring the case decidedly witliin the 
 principles adopted in Hern v. Nichols, and in the subsequent 
 decisions based upon that case. 
 
 Tliis conclusion is in no respect in conflict with that doctrine of 
 tiie law of agency which makes it the duty of all persons dealing 
 with a special agent to ascertain the extent of his powers. It is 
 conceded that every one taking the checks in question would be 
 presumed to know that the teller had no authority to certify with- 
 out funds. But this knowledge alone would not apprise him that 
 the certificate was defective and unauthorized. To discover that, 
 he must not only have notice of the limitations upon the powers
 
 THE FARMKRS' BANK V. HUTCHERS' BANK. 733 
 
 of the teller, but of the extrinsic fact that the bank had no funds ; 
 and as to this extrinsic fact, which he cannot justly be presumed 
 to know, he may act upon the representation of the agent. There 
 is a plain distinction between the terms of a power and facts 
 entirely extraneous, upon which the right to exercise the authoiity 
 conferred may depend. One who deals with an agent has no riglit 
 to confide in the representation of the agent as to the extent of 
 his powers. If, tliorofore, a person, knowing that the bank has no 
 funds of the drawer, should take a certified check, upon the repre- 
 sentation of the cashier or other officer by whom the certificate 
 was made, that he was authorized to certify without funds, the 
 bank would not be liable. But in regard to the extrinsic fact, 
 whether the bank has funds or not, the case is different. That is 
 a fact which a stranger, who takes a check certified by the teller, 
 cannot be supposed to have any means of knowing. Were he 
 held bound to ascertain it, the teller would be the most direct 
 and reliable source of knowledge, and he already has his written 
 representation upon the face of the check. If, therefore, one who 
 deals witli an agent can be permitted to rely upon the representa- 
 tion of the agent as to the existence of a fact, and to hold the 
 princi[)al responsible in case the representation is false, this would 
 seem to be such a case. 
 
 ■ It is, I think, a sound rule, that where the party dealing with 
 an agent has ascertained that the act of the agent corresponds in 
 every particular, in regard to which such party has or is presumed 
 to have any knowledge, witli the terms of the power, he may take 
 the representation of the agent as to any extrinsic fact which rests 
 peculiarly within the knowledge of the agent, and which cannot 
 be ascertained by a comparison of the power with the act done 
 under it. The familiar case of the giving of a negotiable partner- 
 ship note, by one of the partners, for his own individual benefit, 
 affords an apt illustration of this rule. Each of the partners is 
 the agent of the partnership, as to all matters within the scope 
 of the partnershi]) l)usiness, and can bind the firm by making, 
 indorsing, and accepting bills and notes in such business ; but he 
 has no more authority than a mere stranger to execute such paper 
 in his own business, or for the accommodation of others. If he 
 gives the partnership note or acceptance for his own debt, it is 
 void in the hands of any party having knowledge of the consider- 
 ation for which it is given ; but when negotiated to a bona fide
 
 734 CHECKS. 
 
 holder, the firm is precluded from questioning the authority of the 
 partner, and is effectually bound. The cases in this State by 
 which this doctrine is illustrated and established are numerous 
 and uniform. Livingston v. Hastie, 2 Caines, 246 ; Lansing v. 
 Gaine, 2 Johns. 300 ; Laverty v. Burr, 1 Wend. 529 ; Williams 
 V. Walbridge, 8 id. 415 ; Boyd v. Plumb, 7 id. 309; Gansvoort v. 
 Williams, 14 id. 133 ; Joyce v. Williams, id. 141 ; AVilson v. Wil- 
 liams, id. 146 ; Catskill Bank v. Stall, 15 id. 364 ; s. c, 18 id. 466. 
 
 It will be found difficult to distinguish these cases, in principle, 
 from that now before the Court. Every person taking the nego- 
 tiable note or acceptance of a partnership, executed by one of the 
 partners in the name of the firm, is bound to know the extent of 
 the partner's authority to bind the firm; but this obligation does 
 not extend to the consideration for which the note or acceptance 
 was given. If given for the private debt of one of the partners, 
 or for the accommodation of third persons, all the cases agree that 
 the burden of proving the holder's knowledge of that fact rests 
 upon the partnership. That the execution is by an agent is as 
 apparent upon the face of the paper, in such cases, as in that of a 
 certified check ; because a partnership can only act in its partner- 
 ship name through agents. 
 
 The argument resorted to here, therefore, that parties are only 
 bound by the authorized acts of their agents, and that paper issued 
 by an agent without authority is no more obligatory upon the prin- 
 cipal than if it had been forged, is just as applicable to partnership 
 notes given by a partner for his individual debts as to these cer- 
 tified checks. The question is not, in such cases, whether the 
 principaljis bound by the unauthorized act of the agent, but 
 whether he is estopped by the representation of the agent, from 
 disputing facts which show that the act was authorized. There is 
 no analogy between these partnership cases, or the case before the 
 Court and cases where the paper is forged. The fact of the 
 agency, and the trust and confidence reposed by the principal in 
 the agent, create a broad line of distinction between them ; and it 
 is this trust and confidence which constitute the foundation of the 
 liability, and which justify the party dealing with the agent in re- 
 lying upon his representation in respect to facts especially within 
 the agent's knowledge. The giving of a note in the partnership 
 name, by one of the partners, is a virtual representation that it is 
 given in the partnership business, and, if negotiable, this repre-'
 
 THE farmers' bank V. BUTCHERS* BANK. 735 
 
 sentatiou is deemed in law to have been made to every subsequent 
 bona fide holder of the note. The State oi" Illinois v. Delafield, 8 
 Paige, 527 ; s. c. in error, 2 Hill, 15i», is another illustration of 
 the same principle. An agent of that State was authorized to dis- 
 pose of certain bonds, but was not to sell them below jjar or on 
 credit. He sold them to Delafield on time and at a sacrifice. The 
 State filed a bill against Delafield for relief, and applied to the Court 
 of Chancery for an injunction to restrain the defendant from nego- 
 tiating the bonds, on the ground that if negotiated the State would 
 be liable to pay them. The defendant's counsel insisted that if 
 the bonds were void in the hands of Delafield they would be equally 
 so in the hands of any person to whom he might transfer them. 
 The chancellor, nevertheless, granted the injunction, saying that, 
 if the securities should pass into the hands of a bona fide holder, 
 the State would be equitably and legally bound to pay them. On 
 appeal to the Court for the correction of errors, the decision of 
 the chancellor was affirmed by a nearly unanimous vote. 
 
 It would be difficult, I think, to discover any valid distinction, 
 in principle, between this case and the one we are considering. 
 The purchaser. of the bonds from Delafield would, equally with 
 Delafield himself, be presumed to know the limits of the authority 
 conferred upon the agent ; but it must have been held that he 
 would not be bound to inquire as to the extrinsic facts attending 
 the sale or negotiation of the bonds. 
 
 The principle is well stated in the following proposition, sub- 
 mitted to and approved by the Court, in the case of The North 
 River Bank v. Aymar, 3 Hill, 262: " Whenever the very act of 
 the agent is authorized by the terms of the power, that is, when- 
 ever, by comparing the act done by the agent with the words of 
 the power, the act is in itself warranted by the terms used, such 
 act is binding on the constituent, as to all persons dealing in good 
 faith with the agent. Such persons are not bound to inquire into 
 facts aliunde; the apparent authority is the real authority." 
 
 The opinion of Mr. Justice Ne/son, who dissented from the ma- 
 jority of the Court in this case, cannot be reconciled with the 
 principle maintained by the same judge in Boyd v. Plumb and 
 Gansvoort v. Williams, supra. The cases are strictly parallel. 
 In that of Aymar, the power of the attorney was limited to the 
 giving of notes, for the use of the principal ; in the others, the 
 authority of the partner was limited to the execution of paper, for
 
 736 . CHECKS. 
 
 the use and benefit of the partncrsliip ; in both, tlie plaintiffs were 
 regarded by the judge as equally cognizant of the limitations of 
 the power ; and yet, in the cases of Boyd v. Plumb, and Gans- 
 voort V. Williams, he held that the burden rested upon the defend- 
 ants to prove notice to the plaintiff that the paper was not given 
 in the business of the partnership ; while in the case of Ay mar he 
 held that the plaintiffs were presumed to know that the notes were 
 not given for the benefit of the principal, and that the burden of 
 proving the contrary rested upon them. These two positions are 
 diametrically opposed and cannot be made to harmonize ; that 
 taken in Boyd v. Plumb and Gansvoort v. Williams accords with 
 many other cases in this State, and with all the English cases ou 
 the subject. 
 
 It is true that the decision in the case of The North River Bank 
 V. Aymar was reversed in the Court of Errors ; but the opinions 
 pronounced in that Court have never been published, and conse- 
 quently the views there expressed upon the point in question are 
 unknown. Under these circumstances the principal reason against 
 the reconsideration of a question, which has been passed upon by 
 the Court of last resort ; viz,, that the public needs a fixed and 
 definite rule upon which it can rely in the transaction of business, 
 loses most of its force. The opinion of the Supreme Court, which 
 is published at large in the reports, is more likely to be taken as 
 the rule than that of the Court of Errors, to which attention is 
 rarely directed. The question, therefore, should, I think, be con- 
 sidered as still open for examination ; and I have little hesitation 
 in holding that it was properly decided by the Supreme Court. 
 
 It is supposed that the cases of Attwood v. Mannings, 7 Barn. 
 & C. 278, and Alexander v. McKenzie, 6 Mann. Gr. & S. 766, are 
 in conflict with the doctrine liere advanced ; but, upon a careful 
 scrutiny of the first of these cases, it will be seen that, if the 
 point we are examining was involved, it received no consideration 
 from the Court. The general principle laid down in that case is 
 in perfect accordance with the views here expressed. It is, sim- 
 ply, that where an agent accepts a bill, in a form which imports 
 that he acts by virtue of a special power, any person taking the 
 bill is bound to inquire into and is chargeable with knowledge of 
 the terms of the power. This is not denied. But the question is„ 
 whether, after inquiring into the terms of the power, and ascer- 
 tahiing, so far as can be done by comparison, that the act of the
 
 THE farmers' bank V. BUTCHERS' BANK. 737 
 
 agent is within tlie power, he is chargeable, without proof, with a 
 knowledge of extrinsic facts, which show the act to be unautlior- 
 ized. 
 
 This question, which is the only one which arises here, was not 
 decided, or even adverted to, in Attwood ^. Munnings. The report 
 of that case shows that the plaintiffs neglected even to call for the 
 production of the power, to which they were expressly referred by 
 the terms of the acceptance, and for this culi)al)le negligence they 
 are held responsible by the Court. Justice Bailey says : " A per- 
 son taking such a bill ought to exercise due caution, for he must 
 take it upon the credit of the party who assumes the authority to 
 accept, and it would be only reasonable prudence to require the 
 production of that authority." 
 
 It seems to have been taken for granted that, if the i)laintiffs 
 had informed themselves as to the terms of the power, they would 
 of course have ascertained the object for which the bill was drawn, 
 and the relation existing between the drawer and the defendant. 
 Indeed, for aught that appears in the report of the case, it may 
 have been shown upon the trial that they were actually apprised 
 of these facts. The case therefore is no authority, except for the 
 undeniable proposition that one who deals with an agent, knowing 
 that he acts by virtue of a special power, is bound to inquire into 
 and ascertain the precise terms of such power. 
 
 The case of Alexander v. McKenzie has even less bearing upon 
 the point. The report of the case, which is very imperfect, does 
 not show the terms of the special power nor the nature of its 
 limitations. All that the case decides is, that the words " per 
 procuration," affixed to an indorsement or acceptance by an agent, 
 import that the agent acts by virtue of a special power, and are 
 sufficient to charge any one who takes the bill with knowledge of 
 the precise terms of such power. The plaintilT in this case as in 
 that of Attwood v. Munnings, mpra^ Jiad neglected to call for the 
 production of the power, and no attempt was made to show that 
 the indorsement corresponded with its terms. The plaintiff relied 
 mainly upon the fact that the bank had paid two other bills in- 
 dorsed in the same manner. The case, taken as a whole, is a 
 somewhat obscure assertion of the same principle which was 
 adopted in Attwood v. Munnings ; viz., that one who takes a bill, so 
 indorsed, is bound to require the production of the special power, 
 
 47
 
 738 CHECKS. 
 
 and to ascertain by comparison that the bill and indorsement cor- 
 respond in all respects with its terms. 
 
 The cases of Grant v. Norway, 10 Com. B. 70 Eng. C. L. 
 665 ; Coleman v. Riches, 29 Eng. L. & Eq. 323 ; and the Me- 
 chanics' Bank v. Tiie Nef York and New Haven Railroad Com- 
 pany, 3 Kern. 599, are plainly distinguishable from the present 
 case. In neither of those cases was the document upon which the 
 question arose negotiable. It was sought there to make the prin- 
 cipal responsible for a false representation of the agent, not to the 
 person to whom the representation was made, but to one with 
 whom the agent had no dealings, and to whom he had made no 
 representation. Upon a careful examination, it very plainly, I 
 think, appears that this was the real obstacle to a recovery in each 
 of these cases. When Sergeant Crowder, counsel for the plaintiffs 
 in Grant v. Norway, cited the case of Hern v. Nichols, and invoked 
 the doctrine there laid down by Lord Holt, Justice Cresswell re- 
 plied : " There the factor entered into a contract with the plain- 
 tiff for his employer. Here you are a step further off. You say 
 your agent, with whom I made no contract, has enabled a man, 
 with whom I did contract, to cheat me." 
 
 This remark presents, in my judgment, the turning point of 
 the case, and the only obstacle to the plaintiff's recovery, viz., the 
 want of any privity of contract between the plaintiff and the 
 agent. This obstacle was precisely that which the negotiability of 
 the instrument, if established, would have removed ; because the 
 maker of a negotiable instrument is deemed in law to enter into a 
 contract with every one to whom it is afterwards negotiated ; and 
 where the instrument is made by an agent it is in this way 
 only that privity of contract can be established between such agent 
 and the subsequent holders, without which the principal can never 
 be held responsible for the false representations of the agent. 
 Hence it is that we find the counsel for the plaintiffs in the cases 
 of Grant v. Norway, and the Mechanics' Bank v. The New York 
 and New Haven Railroad Company, supra, contending so strenu- 
 ously for the negotiability of the documents in question in those 
 cases. 
 
 That the want of privity of contract, between the agent and 
 the party seeking to hold the principal responsible, constituted the 
 real difficulty in those cases is also apparent from the report in the 
 case of Coleman v. Riches, supra, which belongs to the same class. 
 
 t
 
 THE farmers' bank V. BUTCHERS' BANK.- 739 
 
 There Bond, the agent of Riches, had given a false receipt, not to 
 the plaintiff, hut to Lewis, and Lewis had exhihitcd this receipt to 
 the plaintiff and obtained money upon it. The difficulty in the 
 case was to show the relation between the parties to have been 
 such that the misrepresentation l)y Bond to the agent might prop- 
 erly I)e considered as made \>y him to the plaintiff. To establish 
 this, the counsel for the plaintiff relied upon a course of dealing, 
 which, as he alleged, was known to the defendant. To this the 
 chief justice answered : " I cannot see how the knowledge by 
 Riches of the course of business, according to which Coleman 
 paid on the production of the receipt, would make the showing of 
 the receipt by Lewis, even in Bond's presence, a representation by 
 Riches " (t. e., by the agent of Riches) ; and Justice Williams 
 adds : " Suppose Riches himself had given the fraudulent receipt, 
 would that have constituted a representation by Riches to Cole- 
 man ? " L'pon the same argument being afterwards repeated. Jus- 
 tice Cresswell said : " There is the vice of the argument ; I do not 
 find any evidence of such course of dealing between the plaintiff 
 and the defendant. The course of dealing proved, was that which 
 existed between the plaintiff and the vendors and not between the 
 plaintiff and defendant." 
 
 It seems impossible to mistake the purport of these remarks. 
 They show that the difficulty in the way of a recovery, in this case, 
 was that no privity of contract was established between Riches, or 
 his agent, Bond, and the plaintiffs, by means of which the misrep- 
 resentations made by Bond could be considered as made to the 
 plaintiffs. Had the receipt been a negotiable instrument, a privity 
 would have been established. 
 
 I entertain no doubt that had the stock certificates in question, in 
 the case of The Mechanics' Bank v. The New York and New Haven 
 Railroad Company, supra, been held to be negotiable, the plaintiffs 
 would have prevailed ; and such I understand to be the opinion of 
 two of my associates who took part in the decision of that case. 
 
 The judgment of the Supreme Court should be affu-med. 
 
 Judgment affirmed. 
 
 Comstockj J., dissented. 
 
 The most recent case upon this subject sustains the Now Yorli doctrine as 
 above declared. ^lercliants' National Bank of Boston r. State National Bank 
 of Boston, Supreme Court of the United States, December, 1870. This case 
 was one of the most important ever determined in America, both from the vast
 
 740 CHECKS. 
 
 amount of money involved, and the importance of the questions to be deter- 
 mined. It is proper to state that the cause was argued by some of the ablest 
 counsel in the country ; and it is to be hoped that for the sake of uniformity 
 the rule now adopted respecting the national banks, in the highest court of 
 America, may be generally accepted, and applied to all banking institutions. 
 The opinion of the Court, in the above-named case, was delivered by 
 
 SwAYNE, J. This is a writ of error to the Circuit Court of the United States 
 for the District of Massachusetts. The plaintiff in error was the plaintiff in the 
 Court below. It appears, by the bill of exceptions, that upon the evidence in 
 behalf of the plaintiff being closed, the defendant's counsel moved the Court to 
 instruct the jury that it was not- sufficient to warrant them to find a verdict for 
 the plaintiff upon either of the counts in the declaration. This instruction was 
 given. The jury found for the defendant. The plaintiff excepted, and has 
 brought that instruction here for review. This renders it necessary to examine 
 the entire case as presented in the record. . . . 
 
 On the twenty-sixth of February, 1867, Fuller, the plaintiff's cashier, received 
 from the Second National Bank of Boston $200,000 of gold certificates, and paid 
 the bank, upon their delivery, the amount of their face, and a premium of twenty- 
 five per cent. Payment was made in currency, and legal tender notes. The next 
 day he received from the same bank $200,000 more of like certificates, and paid 
 for them at the same rate in currency, and a ticket of credit by the Merchants' 
 Bank in favor of the National Bank for $175,000. Both transactions were 
 pursuant to an arrangement with Mellen, Ward, & Co., brokers, in Boston. 
 The market premium upon gold at that time was forty per cent. It was under- 
 stood between Fuller, the cashier, and Mellen, Ward, & Co., that the latter 
 might receive the same amount of gold from the Merchants' Bank, at any time 
 thereafter, by paying the amount advanced, compensation for the trouble the 
 bank had incurred, and interest at the rate of six per cent. There had been 
 like transactions upon those terms between the parties prior to that time. The 
 president of the bank was consulted in advance as to both the purchases from 
 the Second National Bank, and approved them. The following testimony is 
 taken from the record : — 
 
 George H. Davis testified as follows : I am the paying teller of the Merchants' 
 Bank. From about the first of January, 1867, and previous to the twenty-third 
 of February, the bank several times received gold or gold certificates from Mel- 
 len, Ward, & Co., for which it paid currency at the rate of $125 for $100 in 
 gold. At that time they had deposited in the bank about $90,000 in gold. No 
 note, memorandum, or check Avas taken connected with it in any way. The 
 gold was added to the gold of the bank ; on my cash-book it was added to the 
 item of gold, and the gold was mixed with the gold of the bank in the vault. 
 If it consisted of certificates, they were put in a pocket-book kept in my trunk 
 with other certificates and bills. (The paying teller's book was put in, and from 
 the entries in it on the twenty-sixth, twenty-seventh, and twenty-eighth of Feb- 
 ruary, 1867, it appeared that the gold received from Mellen, Ward, & Co., was 
 added to the gold of the bank.) 
 
 On the twenty-eighth day of February, Carter, of the firm of Mellen, Ward, & 
 Co., and Smith, the cashier of tlie State Bank, called together at the Merchants' 
 Bank. Carter said to Fuller, " We have come in for gold." Smith, the cashier, 
 
 4
 
 THK farmers' bank V. BUTCHERS' BAXK. 741 
 
 said, "Wo have come to f^et an atuount of goM," and that he would " pay for it Iiy 
 certifying these checks," referring to two papers wliich Carter heM in his liand. 
 The teller handed Fuller eighty-four gold certificates of SoOO) each, making the 
 sura of $120,000. Fuller announced the amount. Smith said that was the 
 amount wanted, and the amount covered by the checks. He received the certifi- 
 cates, certified the checks, and handed them over to the plaintiff's cashier. They 
 were drawn by Mellen, Ward, & Co., upon the State National Bank in favor of 
 Fuller, the plaintiff's cashier, or order, and were certified " (iood. C. II. .Smith, 
 cashier." One was for .^JoO.OOO, and the other for 8-7o,00U. Smith thereupon 
 left the bank with the certificates in his possession. Nothing was said by Fuller 
 to Carter, or by Carter to Fuller, in relation to the checks, and Fuller did not 
 know what checks Smith referred to until they were delivered to him. Smith 
 did not certify or deliver the checks until he had got possession and control of 
 the funds upon which his certificates were app.arently founded, and this was 
 known to the plaintilF's agent when he received the checks. Later, on the same day, 
 Smith and Carter called again at the Merchants' Bank. Fuller was absent. Smith 
 received $60,000 more of gold and gold certificates from the teller, and gave in 
 return a check for $75,000, drawn by Mellen, Ward, & Co., on the State Bank, 
 payable to " gold or bearer." Like the two previous cliecks, it was certified 
 " Good. C. II. Smith, cashier." This arrangement was in pursuance of the 
 same agreement as that under which the gold certificates were delivered in 
 the earlier part of the day. Both transactions were alike within its scope. 
 
 On the first of INIarch, Havens, the president of the Merchants'' Bank, called 
 at the State Bank and complained that Smith had not paid the checks. Smith 
 said he was going out to get the money. Havens inquired, " Didn't you have 
 the money, — the gold ? Were not gold certificates delivered to you ? " He an- 
 swered, " Yes ; I had them here, but they are not here now. I am going out to 
 get it, and will come in and attend to it." Subsequently, in the same conversation, 
 he said, " You hold the State Bank." Later in the day Havens called upon 
 Stetson, the president of the State Bank. Stetson denied that Smith was 
 authorized to certify the checks, and appealed to a director who was present. 
 The director was silent. In an account which Fuller rendered to Mellen, Ward. 
 & Co., after their failure, showing the disposition of various collaterals which 
 Mellen, Ward, & Co. had deposited from time to time with the Merchants' 
 Bank, the amount paid for gold was put down as a loan, and interest was 
 charged ; but in his testimony before the jury he denied that the money was 
 loaned, and insisted that the gold was bought by the Merchants' Bank. The 
 agreement between Mellen, Ward, & Co. and the Merchants' Bank, rested 
 whollv in parol. No written voucher was given or received on either side touch- 
 ing any of the transactions between the parties. The record discloses nothing 
 else in this connection which it is material to consider. 
 
 The State Bank was organized under the act of Congress " to provide a 
 national currency," &c., of the third of June, 1864, 13 Stat. 99. The eighth 
 section of that act authorizes such associations, by their directors, to appoint a 
 cashier and other ollicers, and to exercise, " under this act, all such incidental 
 powers as shall be necessary to carry on the business of banking by discounting 
 and negotiating promissory notes, drafts, bills of exchange, and other evidences 
 of debt; by receiving deposits; by buying and selling exchange, coin, and
 
 742 CHECKS. 
 
 bullion; by loaning money on personal security; by obtaining, issuing, and 
 circulating notes, according to the provisions of this act," &c. It is further 
 provided that the directors may, by by-laws, regulate the manner in which its busi- 
 ness shall be conducted and its franchises enjoyed ; and that its general business 
 shall be transacted at an office " located in the place specified in its organization 
 certificate." 
 
 The fifth of the articles of association authorizes the board of directors to 
 appoint a cashier and such other officers as may be necessary, and to define their 
 duties. The seventh by-law declares that the cashier *' shall be responsible for 
 the moneys, funds, and other valuables of the bank, and shall give bonds," &c. 
 The seventeenth by-law requires that all "contracts, checks, drafts, receipts, 
 &c., shall be signed by the cashier or by the president, and that all indorsements 
 necessary to be made by the bank shall be under the hand of the cashier or 
 president," unless absent. 
 
 The by-laws contain nothing further upon this subject. The directors failed 
 to define more specifically the powers and duties of the cashier. 
 
 Smith, the defendant's cashier, exercised habitually very large powers without 
 any special delegation of authority. An account was kept on the books of the 
 ha.uk with him as cashier, which represented these transactions, and printed 
 blank checks were kept in the bank to facilitate them. The checks given by him 
 for the proceeds of bills discounted and for the purchase of exchange during the 
 five months preceding the twenty-third of February, 1867, amounted in the 
 aggregate to two and a half millions of dollars. This was exclusive of his clear- 
 ing-house checks. His checks for money borrowed of other banks during the 
 six months preceding the same twenty-third of February amounted to one mil- 
 lion five hundred and forty-seven thousand dollars. A^ large number of the 
 cashiers of other banks in Boston were examined, and testified that they exer- 
 cised the same powers under like circumstances. There is no proof that either 
 they or Smith ever certified checks. It is not shown what became of the gold. 
 Perhaps some light is thrown on the subject by the remark of the president of 
 the Merchants' Bank to the president of the State Bank, " that the latter had 
 better go to the sub-treasury, and that he would perhaps find his gold there." 
 We find no reason to doubt that both banks, as represented by their cashiers, 
 acted in entire good faith throughout the transactions until they were closed by 
 the delivery of the last of the certified checks. Neither could then have anti- 
 cipated the difficulties and the conflict which subsequently arose. 
 
 The first question presented for our consideration is : What was the title of 
 the plaintiff, and what were the rights of Mellen, Ward, & Co., in respect to the 
 gold certificates delivered by the Second National Bank to the Merchants' Bank ? 
 No very searching analysis of the facts disclosed is necessary to enable us to 
 find a satisfi.ictory answer to this inquiry. It does not appear that Mellen, Ward, 
 & Co., had any connection with the certificates received from the Second National 
 Bank until after the plaintiff took the action which they invoked, and came into 
 possession of the property. 
 
 The Merchants' Bank applied for them, bought them, paid for them, received 
 them, and deposited them with its other assets of like character. It does not 
 appear that any special mark was put upon them, or that a thing was done to 
 distinguish them from the other effects of the bank with which they were min-
 
 THE farmers' bank V. BUTCHERS' BANK. 743 
 
 glcd. Upon the face of the transaction it was a simple sale by the Scooml Na- 
 tional Bank, whereby the entire title and property became vested in the plain- 
 tiff. But gold was then at a premium of forty per cent in currency. The 
 Merchants' Bank paid but twenty-five, according to the contract between the 
 bank and ^Idlen, Ward, & Co. The latter were to pay, and it is presumed did 
 pay, the additional fifteen per cent. This was a part of the considtration upon 
 which the ^lerchants' Bank entered into the contract. It is evident that the 
 bank did not agree to deliver to Mellen, Ward, & Co., the identical gold certifi- 
 cates which were purchased, but gold, or its equivalent in certificates to the 
 same amount, and any gold, or any certificates would have satisfied the contract. 
 The bank cannot, therefore, be regarded as holding the certificates in pledge. 
 The want of the element, that the identical certificates were to be delivered, is 
 conclusive against that view of the subject. If Mellen, Ward, & Co. had ten- 
 dered performance and called for gold, and the bank had failed to respond, 
 Mellen, Ward, & Co. could have sustained an action for the breach of the con- 
 tract. But they could not have maintained detinue, trover, or replevin against 
 the bank. The real character of the transaction was, that the bank took the 
 title and entire property, but ^lellen. Ward, & Co. had the right to purchase 
 from the bank the like amount of gold, or its equivalent in certificates, accord- 
 ing to the terms of the contract, which were, that they should pay what the 
 bank paid, compensation for its trouble, and interest from the time the purchase 
 by the bank was made. 
 
 In respect to the $60,000 of gold and gold certificates delivered by the teller 
 in the absence of the cashier, and the excess of gold certificates over 8100,000 
 delivered by the cashier, the facts are substantially the same as those in regard 
 to the S'lOO.OOO, except that the excess of certificates, and what was delivered by 
 the teller, had reference to gold and gold certificates deposited in the bank by 
 Mellen, Ward, & Co. This difference is not material. With this qualification 
 the same remarks apply which have been made touching the $400,000 of certifi- 
 cates, and we are led to the same legal conclusions. 
 
 The transactions between the State Bank and the Merchants' Bank were ap- 
 parently of the same character as that between the Merchants' Bank and the 
 Second National Bank. What the understanding between Mellon, Ward, & Co. 
 and the defendant was is not disclosed in the evidence. But it is fairly to be 
 inferred that it was the same as that between them and the Merchants' Bank. 
 When the arrangement was proposed by Carter to Fuller, on the twenty-second 
 of February, Carter said that "when the gold was taken from the Merchants' 
 Bank he thought it would go through some other bank or banks." The assent 
 of Mellon, Ward, & Co., to the sale to the State Bank by the Merchants' Bank 
 extinguished their claim upon the latter. The Merchants' Bank certainly had a 
 title of some kind, and whatever it was it passed to the State Bank unless the 
 contract was void, because the State Bank had no corporate power, or its cash- 
 ier had no authority to make the purchase. The act of Congress expressly 
 authorizes the banks created under it to buy and sell coin. No question of 
 ultra vires is therefore involved. 
 
 If the Merchants' Bank held the certificates as a pledge, it had a special prop- 
 erty which might be sold and assigned. The assignee in such cases becomes 
 invested with all the legal rights which belonged to the assignor; Such is the
 
 744 CHECKS. 
 
 rule of the common law, and it has subsisted from an early period. ' Mores v. 
 Conham, Owen, 123; Anon., 2 Salk. 522; Coggs v. Bernard, 3 Salk. 268; 
 Whitakor v. Sumner, 20 Pick. 399 ; Thompson v. Patrick, 4 Watts, 414 ; Story, 
 Bailments, § 324. 
 
 But we are entirely satis6ed with the other view we have expressed upon the 
 subject. Modus et conventio vincunt legem. 
 
 It is insisted by the defendant's counsel that the transaction was a loan to 
 Mellen, Ward, & Co. As the bank parted with its title, if there were a loan in 
 the eye of the law, it would not in any wise affect the conclusions at which we 
 have arrived. 
 
 Recurring to the subject of the authority of the cashier of the State Bank to 
 make the purchase, and excluding from consideration for the present the certi- 
 fied checks, three views, we think, may be properly taken of the case in this as- 
 pect : — 
 
 1. If the certificates and the gold actually went into the State Bank, as was 
 admitted by Smith to Havens, then the bank was liable for money had and re- 
 ceived, whatever may have been the defect in the authority of the cashier to 
 make the purchase, and this question should have been submitted to the jury. 
 
 2. It should have been left to the jury to determine whether, from the evi- 
 dence as to the powers exercised by the cashier, with the knowledge and acqui- 
 escence of the directors, and the usage of other banks in the same city, it might 
 not be fairly inferred that Smith had authority to bind the defendant by the con- 
 tract which he made with the Merchants' Bank. 
 
 3. Where a party deals with a corporation in good faith, the transaction is 
 not ultra vires, and he is unaware of any defect of authority or other irregularity 
 on the part of those acting for the corporation, and there is nothing to excite 
 suspicion of such defect or irregularity, the corporation is bound by the contract, 
 although such defect or irregularity in fact exists. 
 
 If the contract can be valid under any circumstances, an innocent party in 
 such a case has a right to presume their existence, and the corporation is es- 
 topped to deny them. 
 
 The jury should have been instructed to apply this rule to the evidence be- 
 fore them. 
 
 The principle has become axiomatic in the law of corporations, and by no 
 tribunal has it been applied with more firmness and vigor than by this Court. 
 Supervisors v. Schenck, o Wall. 772, 784 ; Knox Co. v. Aspinwall, 21 How. 539 ; 
 Bissell V. Jeffersonville, 24 id. 288 ; Moran v. Miami Co., 2 Black, 722 ; Gelpcke 
 V. Dubuque, 1 Wall. 175, 203 ; Mercer Co. v. Hacket, ib. 83, 93 ; Mayor v. 
 Lord, 9 id. 409, 414 ; Royal British Bank v. Turquand, 6 Ellis & Bl. 327 ; The 
 Farmers' Loan and Trust Co. v. Curtis, 3 Seld. 466 ; Stoney v. American Life 
 Ins. Co., 11 Paige, 635; Society for Savings v. New London, 29 Conn. 174; 
 Commonwealth v. The City of Pittsburg, 34 Penn. 497; Commonwealth v. 
 Alleghany County, 37 id. 277. 
 
 Corporations are liable for every wrong of which they are guilty, and in such 
 cases the doctrine of idtra vires has no application. Philadelphia and Baltimore 
 R. Co. V. Quigley, 21 How. 202, 209 ; Green v. London Omnibus Co., 7 C. B. n. 
 s. 290; Life and Fire Ins. Co. v. Mechanics' Fire Ins. Co., 7 Wend. 31. 
 
 Corporations are liable for the acts of their servants while engaged in the
 
 THE farmers' bank V. BUTCHERS' BANK. 745 
 
 business of their einployment, in the same manner and to the same extent that 
 individuals arc liable under like circumstances. Ranger v. The (ireat Western 
 R. Co., 5 H. L. Cas. 80; Thayer r. Boston, 19 Pick. 511; Frankfort Bank r. 
 Johnson, 24 Me. 490; Aiifrell and Ames, Corporations, §§ 382, .388. 
 
 Estoppel in pnin presuj)p()ses an error or a fault, and implies an act in itself 
 invalid. The rule proceeds upon the consideration that the author of the mis- 
 fortune shall not himself escape the consequences, and cast the burden upon 
 another. Swan v. North British &c. Co., 7 Hurl. & N. 603; Hern v. 
 Nichols, 1 Salk. 289. Smith was the cashier of the State Bank. As such he 
 approached the Merchants' Bank. The bank did not approach him. Upon the 
 faith of his acts and declarations it parted with its property. The misfortune 
 occurred through him, and as the case appears in the record, upon the plainest 
 principles of justice the loss should fall upon the defendant. The ethics and the 
 law of the case alike require this result. Dezell v. Odell, 3 Hill, 21G. 
 
 Those who created the trust, appointed the trustee, and clothed him with the 
 powers that enabled him to mislead, — if there were any misleading, — ought to 
 suffer rather than the other party. Farmers' and Mechanics' Bank of Kent Co. 
 i\ Drover.s' and Butchers' Bank, 16 N. Y. 125, 133 ; Welland Canal Co. v. Hath- 
 away, 8 Wend. 480. 
 
 In the Bank of The United States v. Davis, 2 Hill, 451, 465, Nelson, C. J., 
 said: " Tiie i)lainti(fs appointed the director, and held him out to their customers 
 and the public as entitled to confidence. They placed him in a position where 
 he has been enabled to conunit this fraud." 
 
 The directors had fraudulently appropriated the proceeds of a bill discounted 
 for the drawer. It was held the drawer was not liable. 
 
 The reasoning of Justice Seldeii, in the Farmers' and Mechanics' Bank of 
 Kent V. The Butchers' and Drovers' Bank, supra, is also strikingly apposite in 
 the case before us. He said : " The bank selects its teller, and places him in a 
 position of great responsibility. Persons having no voice in his selection are 
 obliged to deal with the bank through him. If, therefore, while acting in the 
 business of the bank, and within the scope of his employment, so far as is known 
 or can be seen by the party dealing with him, he is guilty of misrepresentation, 
 ought not the bank to be responsible ? " 
 
 The same principle was applied in the New York and New Haven Railroad 
 Co. V. Schuyler, 38 Barb. Sup. Ct., 536 ; s. c. affirmed, 34 N. Y. 30. 
 
 It was explicitly laid down by Lord IIoU, in Hern r. Nichols, 1 Salk. 289. 
 He there said : " For seeing somebody must be a loser by this deceit, it is more 
 reason that he that employs and puts trust and confidence in the deceiver should 
 be a loser than a stranger," " and upon this the plaintiff had a verdict.'' 
 
 Smith, by his conduct, if not by his declarations, avowed his authority to buy 
 the certificates and gold in question, from the Merchants' Bank, and the bank, 
 under the circuinstauees, had a right to believe him. 
 
 We have thus (ar examined the testimony as if the certified checks were void, 
 or had not been given. It remains to consider that branch of the case. Bank- 
 checks are not inland l)ills of exchange, but have many of the properties of such 
 commercial paper ; and many of the rules of the law merchant are alike applicable 
 to both. Each is for a specific sum payable in money. In both cases there is a 
 drawer, a drawee, and a payee. Without acceptance, no action can be main-
 
 746 CHECKS. 
 
 tained by tlie bolder upon either against the drawer. The chief points of differ- 
 ence are that a check is always drawn on a bank or banker. No days of grace 
 are allowed. The drawer is not discharged by the laches of the holder in 
 presentment for payment, unless he can show that he has sustained some injury 
 by the default. It is not due until payment is demanded, and the statute of 
 limitations runs only from that time. It is by its face the appropriation of so 
 much money of the drawer in the hands of the drawee to the payment of an 
 admitted liability of the drawer. It is not necessary that the drawer of a bill 
 should have funds in the hands of the drawee. A check in such case would 
 be a fraud. Grant, Banking, 89, 90; Keene v. Beard, 8 Com. B. n. s. 372;* 
 Serle v. Norton, 2 Moody & R. 404, note ; Boehm v. Sterling, 7 T. R. 423,430 ; 
 Alexander v. Burchfield, 7 Man. & G. 1061. 
 
 All the authorities, both English and American, hold that a check may be 
 accepted, though acceptance is not usual. Robson v. Bennet, 2 Taunt. 388, 395 ; 
 Grant, Banking, 89; Chitty, Bills (10th ed.), 2G1 ; Boyd'?;. Emmerson, 2 Adol. 
 & Ellis, 184 ; Kilsby v. Williams, 5 Barn. & Aid. 816 ; Story, Promissory Notes, 
 §§ 489, 490. 
 
 By the law merchant of this country the certificate of the bank that a check 
 is good is equivalent to acceptance. It implies that the check is drawn upon 
 sufficient funds in the hands of the drawee, that they have been set apart for its 
 satisfaction, and that they shall be so applied whenever the check is presented 
 for payment. It is an undertaking that the check is good then, and shall continue 
 good ; and this agreement is as binding on the bank as its notes of circulation, 
 a certificate of deposit payable to the order of the depositor, or any other obli- 
 gation it can assume. The object of certifying a check, as regards both parties, 
 is to enable the holder to use it as money. The transferee takes it with the 
 same readiness and sense of security that he would take the notes of the bank. 
 It is available also to him for all the purposes of money. Thus it continues to 
 perform its important functions until, in the course of business, it goes back 
 to the bank for redemption, and is extinguished by payment. 
 
 It cannot be doubted that the certifying bank intended these consequences, 
 and it is liable accordingly. To hold otherwise would render these important 
 securities only a snare and delusion. 
 
 A bank, incurs no greater risk in certifying a check than in giving a certificate 
 of deposit. In well-regulated banks the practice Is at once to charge the check 
 to the account of the drawer, to credit it in "a certified check account," and 
 when the check is paid, to debit that account with the amount. Nothing can be 
 simpler or safer than this process. 
 
 The practice of certifying checks has grown out of the business needs of the 
 country. They enable the holder to keep or convey the amount specified with 
 safety. They enable persons not well acquainted to deal promptly with each 
 other, and they avoid the delay and risks of receiving, counting, and passing 
 from hand to hand large sums of money. 
 
 It is computed by a competent authority that the average daily amount of 
 such checks in use in the city of New York, throughout the year, is not less 
 than one hundred millions of dollars. 
 
 1 Ante, 718.
 
 THE farmers' bank V. BUTCHERS' BANK. 747 
 
 We could hardly inflict a severer Itlow upon the commerce and business of the 
 country than by throwing a doubt upon their validity. 
 
 Our conclusions as to their lej^al efT(!Ct are supported by authorities of great 
 weij^ht: Bicklord r. First National Bank. 42 111. "JliH ; Willets v. Plia-ni.\ Hank, 
 2 Duer, 121 ; Harnet v. Smith, 10 Foster (N. H.), 2.';(J ; Farmers' and^Ii-chanics' 
 Bank v. Butchers' and Drovers' Bank, 4 Duer, 219; 14 N. Y. 624; Meads ». 
 Merchants' Bank, 25 N. Y. 143; Brown v. Leckie d al., 43 111. 497; Girard 
 Bank v. Bank of Penn Township, 39 Penn. St. 92. 
 
 Congress has made them the subject of taxation by name. 13 St. 278. 
 
 But it is streruiously (k-nied that the cashier had authority to certify the checks 
 in question. To this there are two answers : — 
 
 1. In considering the (juestion of his authority to buy the gold, the evidence 
 that he had given his checks for loans to his bank, and for the proceeds of discounts, 
 was fully considered. Our reasoning and the authorities cited upon that subject 
 apply here with equal force. We need not go over the same ground again. 
 The questions whether the requisite authority was not inferable, and whether the 
 principle of estoppel in pais did not apply, should in this connection also have 
 been left to the jury. 
 
 2. As before remarked, the organic law expressly allowed the bank to buy 
 coin and bullion. We have also adverted to the provisions of the by-laws, that 
 the cashier shall be responsible " for the moneys, funds, and all other valuables 
 of the bank;" and that "all contracts, checks, drafts, receipts, &c., shall be 
 signed either by the cashier or president." The power of the bank to certify 
 checks has also been sufficiently examined. The question we are now consider- 
 ing is the authority of the cashier. It is his duty to receive all the funds which 
 come into the bank, and to enter them upon its books. The authority to receive 
 implies and carries with it authority to give certificates of deposit and other 
 proper vouchers. Where the money is in the bank he has the same authority to 
 certify a check to be good, charge the amount to the drawer, approi)riate it to 
 the pavment of the check, and make the proper entry on tiie books of the bank. 
 This he is authorized to do virtute officii. The power is inherent in the office. 
 Wild V. The Bank of Passamaquoddy, 3 Mason, 505; Burnham r. Webster, 19 
 Me. 232 ; Elliot v. Abbott, 12 N. Ilamp. 549, 556 ; Bank of Vergennes r. War- 
 ren, 7 Hill, 91 ; Lloyd v. The West Branch Bank, 15 Penn. St. 172; Badger v. 
 The Bank of Cumberland, 26 Me. 428; Bank of Kentucky i\ The Schuylkill 
 Bank, 1 Parsons Sel. Ca., 182; Fleckner r. Bank of United States, 8 Wheat. 
 338, 300. 
 
 The cashier is the executive officer, through whom the whole financial opera- 
 tions of the bank are conducted. He receives and pays out its moneys, collects 
 and pays its debts, and receives and transfers its commercial securities. Tellers 
 and other subordinate oflicers may be appointed, but they are under his direc- 
 tion, and are, as it were, the arms by which designated portions of his various 
 functions are discharged. A teller may be clothed with tiic power to certify 
 checks, but this in itself would not alfect the right of the cashier to do the same 
 thing. The directors may limit his authority as they deem proper, but this 
 would not alfect those to whom the limitation was unknown. Commercial Bank 
 of Lake Erie v. Xorton el al., 1 Hill, 501 ; Bank of Vergennes v. Warren, 7 
 Hill, 91 ; Beers v. The Phoenix Glass Co., 14 Barb. 358 ; Farmers' and Mechanics'
 
 748 CHECKS. 
 
 Bank v. Butchers' and Drovers' Bank, 14 N. Y. 624; North River Bank v. Ay- 
 mer, 3 Hill, 2G2, 2G8 ; Barnes v. Ontario Bank, 19 N. Y. 156, 166. 
 
 The foundation upon wliich this liability rests was considered in an earlier 
 part of this opinion. Those dealing with a bank in good fliith have a right to 
 presume iiSegrity on the pai't of its officers, when acting within the apparent 
 sphere of their duties, and the bank is bound accordingly. 
 
 In Barnes v. The Ontario Bank, 19 N. Y. 156, the cashier had issued a fiilse 
 certificate of deposit. In the Fanners' and Mechanics' Bank v. The Butchers' 
 and Drovers' Bank, 14 N. Y. 624; s. c, 16 N. Y. 133; and in Mead v. The 
 Merchants' Bank of Albany, 25 N. Y. 146, the teller bad fraudulently certified 
 a check to be good. In each case the bank was held liable to an innocent 
 holder. 
 
 It is objected that the checks were not certified by the cashier at his Banking- 
 house. The provision of the act of Congress as to the place of business of the 
 banks created under it must bo construed reasonably. The business of every 
 bank, away from its office — frequently large and important — is unavoidably 
 done at the proper place by the cashier in person, or by correspondents or other 
 agents. In the case before us, the gold must necessarily have been bought, if 
 at all, at the buying or the selling bank, or at some third locality. The power 
 to pay was vital to the power to buy, and inseparable from it. There is no 
 force in this objection. Bank of Augusta v. Earle, 13 Peters, 519; Pendleton 
 V. Bank of Kentucky, 1 T. B. Monroe, 182. 
 
 It is also objected that each of the checks, after being certified, required an 
 additional stamp. The act of Congress relating to the subject directs certified 
 checks to be included in the circulation of the bank for the purpose of taxation. 
 13 St. 278, c. 173, § 110. This is a conclusive answer to the objection. 
 
 In Brown v. London, 1 Levinz, 298, judgment in a suit upon two accepted 
 bills of exchange was arrested after verdict because "entire damages" were 
 given, and the count, upon one of the bills, failed to aver that by the custom of 
 merchants and others trading in England the acceptor was obliged to pay. This 
 was in 1671. Other decisions in this class of cases, not less remarkable, are 
 familiar to those versed in the learning of the elder reports. The law merchant 
 was not made. It grew. Time and experience, if slower, are wiser law-makers 
 than legislative bodies. Customs have sprung from the necessities and the con- 
 venience of business and prevailed in duration and extent until they acquired 
 the force of law. This mass of our jurisprudence has thus grown, and will con- 
 tinue to grow, by successive accretions. 
 
 We have disposed of this case as it is before us. Ilow.fiir it may be changed 
 in its essential character, if at all, by a full development of the evidence on 
 both sides in the further trial, which will doubtless take place, it is not for us 
 to anticipate. 
 
 The judgment below is reversed, and a venire de novo will be awarded. 
 
 Clifford and Davis, JJ., dissented. 
 
 See also Clark National Bank v. Bank of Albion, 52 Barb. .592 ; Irving Bank 
 V. Wetherald, 36 N. Y. 335.
 
 INDEX.
 
 INDEX. 
 
 ACCEPTAXCE, 
 
 agent's duty to present for, 26 et seq., 39 and n. 
 
 eirect of custom and usage, 'AO in n. 
 
 when notes and bills payable at or after sight to be presented for, 40 in n., 
 
 41 in n. 
 case of foreign Jaills, ib. 
 review of all the cases on the point, 41 in n. 
 what constitutes, 41 et seq. 
 verbal when sufficient, 42 in n. 
 when not necessary, 42, 43 in n. 
 promise to accept, effect of, 43 et seq., 49 in n. et seq. 
 parol promise to accept, 50 in n. et seq. 
 in promise to accept, bill must be pointed out, 52 et seq. 
 permission to draw, effect of, 5G in n. et seq. 
 what facts admitted by, 57 et seq., 59 in n. et seq. 
 effect of knowledge that signature is forged, 02 in n. 
 (See Forgery.) 
 
 admission of acceptance, 63 in n. 
 
 supra protest, 64 et seq. 
 
 when bound to make, ib. 
 
 what defences allowable against acceptor, supra protest, 87 in n. 
 
 acceptance after bill dishonored, ib. et seq. 
 
 rights of party paying for honor of other parties, 88 in n. ' 
 
 by the United States, 88 et seq. 
 
 conditional, (7;., 104, et seq., 108 in n. et seq. 
 
 " when in funds," 108 in n. 
 
 party not bound to receive conditional, 108 in n. 
 
 release of drawer will not discharge acceptor, 581 et seq., 696 in n. 
 ACCIDENT, 
 
 when sulHcient excuse. (See Dkmand and Notice.) 
 ACCOMMODATION PAPER. (See Holder for Value; Payment.) 
 ACTION, 
 
 who may sue on note or bill, 477, et seq., 478 in n. 
 
 when may be brought, 480 el seq., 490 in n. d seq., 492 in n., 493 et seq.
 
 752 INDEX. 
 
 ACTION — continued. 
 
 post-notes, 480 et seq., S. P. in n. 490. 
 
 on lost note or bill, 671 et seq. (See Lost Notes and Bills.) 
 ADMISSION. (»9ee Acceptance; Evidence.) 
 
 AGENT. (See Acceptance.) 
 
 AT SIGHT. (i'ee Acceptance.) 
 
 B. 
 BANKRUPTCY, 
 
 lohen jxirties discharged by. (See Indorsee.) 
 BILLS AND NOTES, 
 when not negotiable. 
 
 by reason of not being payable in money, 1. 
 payable in Canada money, 1 et seq. 
 payable in bank-notes, 6 in n., 7 in n. 
 New York statute in regard to negotiability, 6 in n. 
 negotiability not indispensable, ib. 
 payable in specific articles, 7 in n. 
 
 xohen not negrdiable, by reason of being payable on -contingency, 7 et seq. 
 payable out of particular fund, 7 et seq., 8 and n. 
 ■with specific directions, 8 et seq. 
 
 power to confess judgment, 9 and n. 
 when collateral security named in note, 9 in n. 
 other conditions, &c., 10 and n. 
 certainty as to time of payment and other particulars, 11 et seq., 12 et seq. 
 
 in n. 
 payable at particular place, 15 et seq. 
 
 when cut in halves, 699, 703 et seq. (See Lost Notes and Bills.) 
 BLANK. 
 
 effect of writings in, 215. (See Holder for Value.) 
 BROKEN BANK, 
 
 payment in bills of. (See Payment.) 
 
 CHECKS, 
 
 form of, days of grace, 716 et seq. 
 
 how differ from bills of exchange, ib., 718 in n. et seq. 
 
 effect of being certified by teller to' be " good," 721 et seq. 
 
 rule in Massachusetts, 721. 
 
 rule in New York, 727 et seq. 
 
 rule in the Supreme Court of United States, 740 et seq., in n. 
 CASHIER. (See Checks.) 
 
 CANADA MONEY. (See Money ; Bills and Notes.) 
 
 CERTAINTY, 
 
 when and what required in notes and bills, 11 et seq., 12, 13, 14 in notes. 
 (See Bills and Notes.)
 
 INDEX. 768 
 
 CERTIFICATE, 
 
 of teller or cashier, effect of, 740 et seq. {See Checks.) 
 COLLATERAL SECURITY. (See Holpkk fou Valuk.) 
 COMPETENX'Y. (See Evidence.) 
 
 COMl'OSrj ION-DEED, 
 
 ej/'ect of uj)on parties collaterally holden. (See Indorser.) 
 CONDITIONAL ACCEPTANCE. (See Acceptance.) 
 CONSIDERATION. (See Holder for Value.) 
 
 CONSTRUCTIVE NOTICE. (See Holder for Value.) 
 CONTINGENCY, 
 
 as ailecting negotiability of notes and bills, 7 et seq., 8 and n., 9 and n., 
 10 and n. 
 CONTRACT. (.S'ce Evidence; Indorser; Surety.) 
 
 CONTRIBUTION. (See Surety.) 
 
 CUSTOM AND USAGE. (See Acceptance ; Presentment.) 
 
 D. 
 
 DAYS OF GRACE, 
 
 ichen allowed. (See Presentment.) * 
 
 DEMxVND, 
 
 of payment. (See Presentment.) 
 
 DEMAND AND NOTICE, 
 
 JioiD excused: unavoidable accident, 414 et seq. 
 
 death of maker, indorser appointed administrator, 423 et seq. 
 question further discussed, 428 in n. 
 where bill drawn without funds, 430 et seq., 441 in n. 
 effect of war, ib. 
 DILIGENCE, 
 
 degree of. • (See Notice.) 
 
 when question of law, 410 el seq., 413 in n. 
 DOMICILE. (See Notice.) 
 
 DR.VWI^R. (See Indorsement ; Acceptance.) 
 
 DRAWN IN SETS, 
 
 which one required. (See Evidence.) 
 
 E. 
 
 EQUITABLE DEFENCES. (See Holder for Value.) 
 EQUITY. (See Lost Notes and Bills.) 
 
 ESTOPPEL. (Sec Evidence.) 
 
 EVIDENCE, 
 
 what sufficient to prove indorsement, 110 et seq. 
 (See Indorsement.) 
 
 how far force of arbitrary signs explainable by oral proof, ib. 
 
 presumptions as to time of indorsement, 213. 
 
 what required to impeach title of holder, ib. 
 
 of title to note or bill, 217, 220 et seq. 
 
 48
 
 754 INDEX. 
 
 EVIDENCE — continued. 
 
 effect of notice or knowledge, 225 in n., 258 et seq., 2G1 et seq. 
 
 sufficient to put party on inquiry, 235 et seq^. 
 
 what siiflicient to impeach title, 239 et seq. 
 
 how far production required, 498 et seq.., 601 in n. 
 
 bill drawn in sets, 498 et seq. 
 
 to vary liability of indorser, 5(1.') et seq. 
 
 competency of party to impeach bill or note by his own, 507 et seq. 
 
 when indorser competent to prove paymfint, 522 et seq., 527 in n. 
 
 amount of discussed, 528 et seq. 
 
 -when notice to be sent, 528 et seq. 
 
 wh(;n all the witnesses in a continued chain must be called, if). 
 
 discussion of the force of in a particular case, ib. 
 
 admissions, notice, contract, estoppel, 536 et seq., 540 in n. 
 
 of loss of bill or note, G74 et seq. (See Lost Notes and Bills.) 
 EXCUSES OF PRESENTMENT AND NOTICE. {See Demand and 
 Notice.) 
 
 F. 
 
 FOREIGN BILL. (See Acceptance.) 
 
 FORGERY, 
 
 money paid on forged indorsement when recoverable, 57 et seq., C43 et 
 
 seq. G48 in n. 
 timely notice required after discovery, ib. 
 ■where forged paper paid by maker, 650 et seq., 661-670. 
 FUNDS, 
 
 bill drawn without. (See Dejlind and Notice.) 
 
 G. 
 
 GIVING TIME, 
 
 effect of , upon other parties. (/See Indorser.) 
 GUARANTOR. (See Surety.) 
 
 GUARANTY. (See Indorsement.) 
 
 H. 
 
 HOLDER FOR VALUE, 
 
 note delivered as security for contingent debt, 165 et seq. 
 
 antecedent debt, 169 et seq. 
 comparative authority of national and State courts, 186 et seq. 
 eiFect of taking note or bill as payment of or in security for existing debt, 
 
 195 et seq. 
 question stated on principle, 195, 196. 
 English cases reviewed, 196-199. 
 American cases, 200-202. 
 
 review of later cases both English and American, 202-208. 
 cases brought down to present time, 208-213.
 
 INDEX. 755 
 
 HOLDER FOR VALUE — continued. 
 
 presumption as to time of" indorsement, '2l:^. 
 
 when presumed to be taken honajide, il>. 
 
 wliiit evidence rt'<|uired to impeach title of holder, ib. 
 
 when paper payiiljle on di-manil is overdue, 214. 
 
 when holder must pay value, ih. 
 
 extent of recovery, ih. 
 
 time of payment extended, 21o. 
 
 acceptance by procuration, U). 
 in blank, ih. 
 
 what shtdl put party upon iiupiirj', 210. 
 
 acconnnodatI(Tn paper, lMC), 217. 
 
 presumption of title, 217 et seq., 220 et seq. 
 
 equities, ib. 
 
 defence, by showing breach of executory agreement, 222. 
 
 what knowledge will defeat holder's title, 225 in n. 
 
 paper post-dated, 22o ct seq. 
 
 note void under statute, 22(1 et seq. 
 
 illegal consideration; burden of proof, 2.')0 et seq. 
 
 cases referred to. 2.')4, 2.")5 in n. 
 
 what shall put holder on inquiry, 23.5 et seq. 
 
 title only affected by bad faith, 239 et seq. 
 
 <"ases reviewed upon the point, 2.57 in n. et seq. 
 
 how far affected by notice of defects, 2.58 et seq. 
 
 indorsee with notice claiming under prior holder without, 261 et seq. 
 
 collection of cases upon point, 2(J2 in n. 
 
 of accommodation paper with notice, 263 et seq. 
 
 when its use is perverted, 264 et seq., 267 et seq., 209 et seq. 
 
 when taken overdue; right of set-off, 271 et seq., 275 in n. 
 
 when maker can set up usury as defence, 277 dt seq., 2S0 et seq., 287 
 et seq. 
 
 distinction between, and accommodation party, 581 et se/. 
 HOLIDAYS, 
 
 icJieji paper falls due upon. {See Presentmknt.) 
 HUSBAND AND WH^E. (,Sec Indorse.mkxt.) 
 
 I. 
 
 ILLEGALITY. (See Holder for Value.) 
 
 INDORSEMENT. (See Foisgery.) 
 
 form of, whether the u.sc of arl)itrary signs in pencil may lie explained 
 by oral proof, 110 et w/., //'. in n. et seq. 
 signing by initials. 111 in n. 
 effect of guaranty u ion note, /7>. 
 immaterial what part of note upon, 112 in n. 
 form of, not material, /7*. 
 b>/ one not a parti/, 112 et seq., 124 ct seq., 131 ef seq., 139 et .<!eq., 143 
 et seq., loU et seq.
 
 756 INDEX. 
 
 INDORSEMENT — continued. 
 
 cases in Massachusetts and other States, 131 in n. 
 New York and other States, 139 in n. 
 Ohio and other States, 150 in n. 
 summary upon the subject, 155 in n. et seq. 
 after viaturity, 156 et seq. 
 
 in case of the death of one partner, 160 in n. et seq. 
 by wife ivith consent of husband, 161 et seq. 
 cases in different States, 164 in n. 
 INDORSEE. {See Indorsement ; Evidence.) 
 
 how may be released, 
 
 additional security; delaying suit, 544 et seq., 546 in n., 547 et seq. 
 extension of time, 544 et seq., 547 et seq., 551 et seq., 554 in n., 558 
 et seq., 560 in n. 
 < bankruptcy, 558 et seq. 
 
 recovery against maker, 563 et seq. 
 release of first indorser, 568 et seq. 
 
 composition deed reserving right against, 569 et seq., 574 in n. 
 mortgage security sold without consent of, 577 et seq. 
 any departure from original contract, ib. 
 INSOLVENCY, 
 
 effect of. {See Presentment.) 
 
 J. 
 
 JUDGIVIENT, 
 
 effect of upon oilier parties. (See Indorser.) 
 
 L. 
 
 LAW OF PLACE. (See Lex Loci.) 
 
 LEX LOCI, 
 
 effect of. (See Presentment.) 
 
 bill drawn in one country and Indorsed in another, 709 et seq. 
 
 conflict of authoVities, 712 in n. et seq. 
 LOST NOTES AND BILLS, 
 
 wheti ovmer may recover, 671 et seq. 
 
 conflict of authority, 673 in n. 
 
 circumstantial proof of loss, &c., 674 et seq. 
 
 case of negotiable paper, 679, 680. 
 
 action at law lies in some States, 683 et seq., 686 in n. 
 
 remedy in equity, 688 et seq. 
 
 where note negotiable, but not negotiated, 691 in n. et seq. 
 
 action at law, indemnity, 694, 697, 698 in n. 
 
 where one-half the security is lost, 699 et seq., 703 et seq. in n.
 
 INDEX. 7'>7 
 
 M. 
 
 MATURITY. (See Indorsement; Pay.mknt.) 
 
 MONEY, 
 
 promissory note or 1)111 of e.xchaiij^e must be payable in, 1 et .sc(j, G in n., 
 7 in n. 
 
 N. 
 
 • 
 NATIONAL COURTS, 
 
 how far decisions of State courts regarded by, 18G et seq. 
 NEGLIGENCE, 
 
 e fleet of. (See Presentment.) 
 
 NEGOTIABLE PAPER. (See Holder for Value; Surety; Bills and 
 
 Notes ; Lo.st Notes and Bills.) 
 NON-PAYMENT, 
 
 ]>roceedin(js on account of . (See Notice; Payment.) 
 NOTICE. (See Presentment.) 
 
 form of, 358 et seq., 362 in n., 363 et seq., 371 in n. et seq. 
 
 mode of sending, 376, 377 in n. 
 
 when personal I'equired, 378 et seq., 381 in n. 
 
 by Avhom f^iven, 383 et seq., 384 in n. et seq. 
 
 the time when should be sent, 388 et seq. 
 
 where there are successive parties, 390 in n. 
 
 must be sent by mail of next day, 392 in n. 
 
 how this construed, 392, 393 in n. et seq. 
 
 where should be sent, 397 et seq., 404 et seq. 
 
 to place of domicile commonly siiiruient, ib. 
 
 how far place of domicile presumj)tively unchanged, 404 in n. 
 
 where different post-offic;es in same town, 409 in n. 
 
 where no post-ollice in town of domicile, ib. 
 
 where party receives mail at different places, 410 in n. 
 
 degree of diligence required, 391 in n., 410 et seq., 41.) in n. 
 
 when question one of law, il>. 
 
 reasonable diligence defined, ib. , 
 
 (Sec Presentment.) 
 
 where indorser has received collateral security, 463 in n. 
 
 waiver of same, 46o in n., 468 et seq., 469 in n. et seq. 
 
 when promise to pay amounts to waiver of, 473 et seq., 475 in n. 
 (Sec Evidence; FouciEUY.) 
 
 O. 
 
 OVERDUE. 
 
 efect upon riijhts of holler. . (See Holder for Value.)
 
 758- INDEX. 
 
 p. 
 
 PARTY, 
 
 . indorsement by one not. (*See Indorskment ; Evidence.) 
 PAYABLE, HOW. (See Bills and Notes.) 
 
 PAYMENT. (See Holder for Value.) 
 
 before maturity, or to one not authorized to receive payment, 331 et seq., 
 r 338 et seq. in n, 
 
 unaccepted paper discounted by drawee before maturity, 340 et seq., 343 
 
 in n. ■• 
 
 wrongful by principals, effect on surety, 343 et seq., 345 in n. et seq. 
 where parties sign for accommodation, 351 in n. 
 when formal protest required on non-payment, 355 el seq. 
 form of notice on non-payment, 358 etseq., 362 in n., 363 et seq., 371 in n, 
 
 et seq. 
 payment in bills of broken bank, 617 et seq., 625 et seq., 634 in n. 
 paper of third party, 637 et seq., 642 in n. 
 PERSONAL NOTICE, 
 
 wJien required. (See Notice.) 
 
 PLACE, 
 
 where presentment to be made. (See Presentment.) 
 f LACE OF BUSINESS, 
 
 effect of being closed. (See Presentment.) 
 POST-DATED. (See Holder for Value.) 
 
 POST-OFFICE. (.See Notice.) 
 
 POST-NOTES. (See Action.) 
 
 PRESENTJVIENT. (See Notice.) 
 
 and demand of jxiyment, how far necessary, 290 et seq. 
 further discussion of same point, 296, 297 in n. 
 when demand to be made, 297 et seq. 
 effect of usage and custom, 306 et seq. in n. 
 days of grace when allowed, 307 in n. 
 whether on inland bills, &c., 308 in n. 
 how far affected by lex loci, 308 in n. 
 
 where paper falls due on Sunday or holiday when payable, 309 in n. 
 at what time in the day to be made, 310 et seq. 
 how far affected by usage or convenience, 311 in n. 
 effect of being too early or too late, 312 in n. 
 hour will vary according to circumstances, ib. 
 where to be made, 313 et seq. 
 effect of being in bank unknown to the same, through neglect of its 
 
 officers, 322 et seq. 
 where maker has removed, 326 in n. 
 effect of oral proof of agreement as to place of, when none named in 
 
 note or bill, ib. et seq. 
 where maker or acceptor has become insolvent and absconded, 329 
 in n., 450 et seq., 451, 452 in n.
 
 INDEX. *7o0 
 
 PRESENTMENT — continual. 
 
 or where lie has merely removed, o30 in n., 117 el seq., 449, 4.j0 
 
 in n., Aiy> et set/. 
 place of business closed, iiujuiry to Ije made, 4">8 in n. 
 mere insolvency or connected with assignment to indorsee, effect of, 
 4")8 et seq., 4f>l in n. et seq. 
 PRESUMPTIONS. (.See Evidknci;.) 
 
 PRINCIPAL AND SURETY, • 
 
 quest ions between. (>St'e Payment; Suukty.) 
 PROCURATION, 
 
 acceptance by. (See IIoldkh fou Valuk.) 
 
 PRODUCTION 
 
 of note or 1)111 when required. (.S'ee EvinEN'Ci;.) 
 PROMISE TO ACCEPT. (.See Acceptanck.) 
 PROTEST, 
 
 of jiromi^snr)j note unnccessarij, 35.5 et seq. 
 when and how far evidence, 290 el seq. 
 
 R. 
 
 RELEASE, 
 
 effect of upon other parties. (See Indokser.) 
 REMOVAL 
 
 of maker or acceptor. (See Presentment.) 
 
 S. 
 
 SALE 
 
 of collaterals, ejfcct on other parties. (Se^ Indorser.) 
 SECURITY, 
 
 effect of giving additional. (See Indorser.) 
 SET-OFF, 
 
 right of as to overdue paper, &c. (See Holder for Value.) 
 SUIT, 
 
 who may bring on note or bill, 477, 478. (.See Action.) 
 SUNDAY, 
 
 tohen paper falls due upon. (See Presentment.) 
 SUPRA PROTEST. (See Accei>tancr.) 
 
 SURETY, 
 
 when liable to contribution, 597 et .<>eq., 603-61C in n. 
 
 when holdon as guarantor merely, (7^ 
 
 difference between and guarantor, it). 
 
 how far affected by alteration of contract, (iO.'^-GKl in n. 
 
 difference in responsibility when paper negotiable, ib. 
 
 T. 
 TIME, 
 
 when presentment to be made. (See Presentment; Notice.)
 
 760 
 
 INDEX. 
 
 u. 
 
 USAGE. 
 USURY. 
 
 (See Acceptance; Presentiment.) 
 (See Holder for Value.) 
 
 V. 
 
 VALUE. (See Holder for Value.) 
 
 VOID UNDER STATUTE. (See Holder for Value.) 
 
 W. 
 
 WAIVER. 
 
 WAR, 
 
 effect of. 
 
 WHEN IN FUNDS. 
 
 WIFE. 
 
 WITNESS. 
 
 ((See Notice.) 
 
 (See Demand and Notice.) 
 
 (See Acceptance.) 
 
 (See Husband ^^d Wife.) 
 
 (See Evidence.) 
 
 Cambridge : Press of John Wilson & Son.
 
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