Case ID: mass_4/html/0301-01.html
Source: Caselaw Access Project
Author: {"author": "Sedgwick, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

* Samuel May versus Peter Coffin.
    An endorser of a bill of exchange is entitled to notice of the bill’s being dishon ored, notwithstanding the insolvency and absconding of the drawer.
    Case on a bill of exchange by the endorsee against the endorser. Upon trial at November term, 1806, in this county, before Parker, J., a verdict was found for the plaintiff for the amount of the bill, damages, and interest; to be set aside and a new trial granted, if the Court should be of opinion, upon the facts in the case, or they should be reported by the judge, that the plaintiff was not entitled to recover.
    Those facts were as follows: —On the 20th of February, 1804, Samuel Ham, of Portsmouth, in the state of New Hampshire, drew his bill of exchange for 500Z. sterling on Messrs. Thomas Dickason éf Co., in London, payable to the * defendant [ * 342 j or his order at sixty days’ sight. The defendant endorsed the bill to the plaintiff, who sent it to his correspondents, Messrs. Cotterells, in London, who, on the 28th of April following, presented it for acceptance, which was refused for want of effects, and the bill was duly protested for non-acceptance.
    On maturity of the bill, viz., June 30, 1804, it was presented for payment, and refused for the same cause which was assigned for not accepting it.
    On the 18th of August, the plaintiff received the protest for non acceptance in a letter dated at Birmingham, May 2d, and sent by the way of Philadelphia.
    
    * On the 3d of September, 1804, the plaintiff’s [ * 343 ] agent called on the defendant in Portsmouth for payment of the bill, &c., and presented the protest for non-payment only. The defendant observed to the agent that this was the first information he had received of the bill’s being protested ; that he had not been notified of its being protested for non-acceptance; that he was not prepared to meet the payment; but that in a few days he would look round, and make preparation for the settlement of it, and other expressions to the same purport. On the 7th of September, being again called on by the plaintiff’s agent, he said he had consulted counsel, and now considered himself exonerated from the demand, on account of his not having received notice of the protest for non-acceptance. These last facts were shown by the deposition of Benjamin Penhallow, the agent alluded to.
    
      Ham. the drawer, stopped payment between the 27th of February and the 8th of March, 1804, and on the 14th of April, following, left 
      PorUmouth, and had not returned at the time of the trial. On the 10th of June, 1804, his household furniture was attached, and after-wards sold upon execution. His farm and stock were attached on the 2d of March, and execution was afterwards levied thereon.
    Under these circumstances, it was contended for the plaintiff on the trial, that no damage happened to the defendant in consequence of the delay of notice to him of the non-acceptance or non-payment of the bill, and that his promise to the plaintiff’s agent to settle and pay the same was sufficient to entitle the plaintiff to recover.
    Upon these facts, the cause was argued at the last July adjourn ment, by Livermore and Sullivan for the defendant, and Dexter for the plaintiff.
    
      Sullivan
    
    contended, 1. That it appeared from the evidence that the defendant was discharged, by the plaintiff’s neglect of notice of the non-acceptance of the bill. 2. That there was nothing in the case to show that the defendant had waived his right to such notice.
    At the time when the bill was drawn and endorsed, the parties were in good credit, and it was a regular mercantile transaction, not an accommodation bill. When the defendant en- [ * 344 ] dorsed * it to the plaintiff, he became liable to pay the amount of it xvith damages, &c., only on condition that the holder presented it for acceptance in a reasonable time, and, in case of its being dishonored, gave due notice to the endorser. He was entitled to that notice as soon, at least, as it could have been given by the usual course of the post. Such notice can be dispensed with in no case, even to the drawer, unless the holder can make it appear that the drawer had no effects in the hands of the drawee. But in no case, and for no reason, can iiotice to the endorser be dispensed with, if the holder xvill resort to him. 
    
    It was argued at the trial, and probably may be urged to the Court here, that Ham, the drawer, having become insolvent, and having left the country soon after the bill was drawn, the defendant had not suffered from not having had notice, and that on this ground the defence ought not to avail him. It is not to be presumed, in favor of a negligent holder of a bill, that there were not means of obtaining payment within the power of the endorser, if he had been seasonably notified. Notwithstanding the drawer’s absconding and supposed insolvency, he might have placed funds to meet this bill, and might afterwards have otherwise applied them, on finding that the bill had not returned at the expiration of nearly six months from the date. In the case of De Berdt vs. Atkinson, 
       it is said by Lord C. J. Erye, that “if the drawer is not known to be insol vent, the fact of insolvency will not excuse the want of an early demand.” And in Nicholson vs. Gouthit, 
       the same judge says, “ It sounds harsh, that a known bankruptcy should not be equivalent to a demand or notice, but the rule is too strong to be dispensed with.”
    It was further argued at the trial, that if the plaintiff had been negligent, the defendant had waived all points of defence in this respect, by a subsequent promise to pay. A promise, to bind the party in such case, must have been made with a knowledge of all the facts, and of their legal consequences. * The case of Chat,field vs. Paxton Sf Co., cited in Chitty, [ * 345 ] 102, is a strong authority for the defendant on this point. The case of Good.all vs. Dolley, before cited, and that of Blesard vs. Hirst Sf Al.,  are also relied on as authorities to show that the conversation, stated to have taken place between the plaintiff’s agent and the defendant, does not amount to a promise or engagement oil the part of the latter, obligatory on him either in law or equity,
    
      Dexter, for the plaintiff,
    said he should not contend that it was not now held for law in Westminster Hall, that notice to an endorser was in all cases necessary. But the rule, to the extent to which it is now carried, is of modern date, and he submitted it to the Court, whether the law of our country was to change with the varying opinions of English judges.
    Where no damage could possibly have arisen from the neglect of notice to the party claiming it, it is not easily to be seen why notice should be necessary. Lord Mansfield said that insolvency will not excuse ; and it has been argued for the defendant that he might have means of securing himself, which afterwards failed him by reason of the plaintiff’s neglect. But in this case the plaintiff has shown that Ham was not only insolvent, but that all his property was gone from him, and that even his body was not within reach of legal process. Of what conceivable use, then, could notice have been ? Certainly not to enable the defendant to secure himself. 
    
    But if the defendant was entitled to notice, he might waive his right, and the Court will be satisfied with probable evidence of the fact of such waiver, when it is first shown that notice could be of ¡ o possible benefit to him.
    
      Against a presumption of the waiver in this case, it was said the defendant was ignorant of the facts, and of their legal operation. That he knew all the facts, is very clear ; and his ignorance of the law cannot avail him. 
    
    
      Livermore, in reply,
    commented on the cases cited in the opening, and urged their application to the case at bar.
    [ * 346 J * The authorities cited for the plaintiff apply only to the cases of accommodation notes, and where the drawee had no effects of the drawer in his hands.
    As to the defendant’s subsequent promise, which is relied on by the plaintiff, it is not denied that there are one or two authorities which go to support it; but the general current of the casés and opinions are contrary. It may naturally enough be thought that the defendant might believe that regular notice had been forwarded to him by the mail, and that a letter containing it had miscarried, or failed of arriving at the proper post-office — a case which too often happens. But the promise, being grounded on a mistake both of the fact and the law, w'as void, and if the defendant had paid the money under such a mistake, he might recover it back.
    If authorities differ, and the Court have to settle the point between contradictory opinions, the public convenience, which is in favor of requiring notice in every case, will have weight in forming the decision. This rule, once established, will put an end to litigation on a question which has been heretofore much vexed.
    
      
      
        Goodstrey vs. Mead, Bull. N P. 271. — Chitty on Bills, 96,97, 99 — Peake's N P. 202. — Goodall & Al. vs. Dolley, 1 Term Rep. 712. — Orr & Al vs. Maginnis 7 East s Rep. 359.
    
    
      
       2 H. Black. 337.
    
    
      
      
        Ibid. 612.
    
    
      
       5 Burr. 2670
    
    
      
      
         See Kyd on Exchange, 129,130. —1 Bos. Pull. 652. —2 Esp. Rep. 515.
    
    
      
      
        Hopes vs. Alder, 6 East’s Rep. 16, in notis.
    
   The action stood continued for advisement, and at this term, the opinion of the Court (except the Chief Justice, who did not sit in the cause) was delivered by

Sedgwick, J.

[After reciting the facts.] As the plaintiff had notice in Boston of the protest for non-acceptance sixteen days before it was communicated to the defendant in Portsmouth, there is evidence of loches, which, if not satisfactorily accounted for, are sufficient to preclude the plaintiff from a right to recover in this action. This the plaintiff says he has done by the evidence that Ham, the drawer, before the bill came back protested, had failed ; that between the 20th of February and the 8th of March, 1804, he stopped payment; that on the 14th of April following, he left the country, and has not since returned ; that on the 10th of June following, his household furniture was attached, and afterwards sold at auction ; and that on the 2d of March in the same year, his farm, and stock were attached, and afterwards taken in execution.

[ * 347 ] * Whatever effect this evidence might have, if the action was between the payee and drawer of a bill of exchange, we all think that it cannot avail in this case between the endorsee and endorser of a foreign bill.

The drawer of a bill ought to know his relation to the drawee; and when he draws, he undertakes that the drawee shall duly honor the bill. But in the case of an endorser, he does not know, and cannot know, the relation between the drawer and the drawee; and the substance of the obligation he assumes is, that if the endorsee shall use due diligence to obtain the money from the drawee, and is not able to do it, and shall also use due diligence in giving notice thereof to the endorser, that he will pay the amount of the bill and damages. And we can find no case, in which loches, in either respect, have not been adjudged to discharge the endorser. And the reason, as I conceive, is, because, by the legal construction of the contract, an endorsee does not undertake to pay, but upon there having been due diligence used in the application to the drawee, and in giving notice of his failure to honor the bill.

But it is said that there is evidence in this case sufficient, if the jury believed it, to establish the facts, that the defendant had waived an objection, which he might otherwise have had, to the plaintiff’s right to recover, and had promised to pay the money.

What a man says under the surprise of a sudden and unexpected demand for money ought tobe construed with a good deal of strictness. And in this case we are all satisfied that what the defendant said of paying money, from the payment of which he was discharged by law, ought not to bind him. There was, in fact, no good consideration for the promise.

We are all of opinion that there must he a new trial.