Case ID: mass_19/html/0134-01.html
Source: Caselaw Access Project
Author: {"author": "Parker C. J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The President &c., of the New England Bank versus Winslow Lewis et al.
    
    In an action by an indorsee of a note against the indorser, both of whom had their places of business in the same town, the writ was served on the day when the note became due, before notice to the indorser, which was however duly given by a no tary public on the same day. Held, that the action was prematurely brought 3 and that it was an immaterial circumstance, that the notice had been put into the hands of the notary before the writ was in the hands of the officer.
    Assumpsit upon a promissory note, against the defendants as second indorsers.
    At the trial, before Parker C. J., it was given in evidence, that on the last day of grace, William Stevenson, a notary public, by order of the plaintiffs, called at a place appointed by the promisor to demand payment, and that finding neither the promisor nor his attorney, he left there a written demand ; and that on the same day, but after this suit was commenced, he gave notice to the defendants of the dishonor of the note, by leaving a written notice at their usual place of business. The bank and the defendants’ place of business were both in Boston.
    The chief justice instructed the jury, that if the action was commenced before legal notice was given to the indorsers, it could not be sustained. The jury returned a general verdict for the defendants, finding specially, that the defendants were seasonably notified by Stevenson, and that the suit was com menced before such notice was given.
    
      Shaw now moved for a general verdict to be entered for the plaintiffs, and contended, that if due diligence is used to give notice, it is immaterial whether the notice reaches the indorser (or his place of business) before the suit is commenced, or afterwards. The right of action accrues on the dishonor of the note, defeasible by a neglect to give notice. Macarty v. Barrow, 2 Str. 949, and 3 Wils. 16. The giving notice is not a condition precedent, for the drawing of a bill is evidence of a loan, and on this ground the bill may be given in evidence on the money counts; certainly as between privies ; and every indorsement is like drawing a new bill.
      Kessebower v. Tims, 
      Bayley on Bills, (4th ed.) 288, note ; ibid. 285, note ; State Bank v. Hurd, 12 Mass. R. 172. In Stanton v. Blossom, 14 Mass. R. 120, where the action was commenced before the notice was put into the post-office, Putnam J. says, the holder “ is not bound to wait until notice has been received, before he is permitted by law to take measures for his security. In the case at bar, therefore, the notice seems to have been given m a reasonable time.” If that had been the only point in the case cbed, it would have been decisive of the present case. In the more recent case of Shed v. Brett, 1 Pick. 401, the point came directly before the Court. There the writ was served before the notice, which was put into the post-office, could possibly be received by the course of the mail, and the action was sustained. As to putting a letter into the post-office, in a reasonable sense it is not notice until the letter has time to reach the party; and so it was held in Smith v. Bank of Washington, 5 Serg. & Rawle, 318 ; but that case was not recognised as law by this Court, in the case of Shed v. Brett; which case shows that notice is not a condition precedent, and that it is not the object of notice to prevent costs to the indorser.
    The service of the writ itself, containing, according to our practice, the declaration, was the best notice that could be given. It may be objected that the writ sets forth a notice ; that it alleges something to have been already done ; but so it does in the licet sœpius requisitus; which is an allegation that is never traversed. Where several acts are done simultaneously, as in the case of several conveyances, the law will presume them to have been done in such order as will give effect to them. So the notice alleged shall be taken to have been given before the service of the writ. It is indeed a hard case, that an indorser should be subjected to costs, when by possibility he could not find out the holder of the note ; and the same remark may be applied to the maker ; but the law deems it most for practical utility that it should be so. Otherwise, a demand of payment would be in many instances a signal to the debtor to secrete his property.
    
      A. Townsend, contrà
    
    An indorse* is a condvional surety, and the due diligence to give him notice should be used before the commencement of the action. Sandford v. Dillaway, 10 Mass. R. 52 ; Barton v. Baker, 1 Serg. & Rawle, 334 ; Buck v. Cotton, 2 Connect. R. 126. The service of the writ is a sufficient demand on the maker, but even in that case it is a hardship that he should be liable to costs, without any default ; Chitty on Bills, (5th ed.) 420 ; but if it should be allowed to operate as notice to the indorser, in the manner contended for by the plaintiffs’ counsel, it would produce a revolution in the law of bills of exchange and promissory notes. It is true that an action for money had and received will lie by an indorsee against an indorser, but there must be the same evidence of notice as upon a count on the note.
    
      Shaw, in reply to the remark about a change in the law, said that an action would be brought on the day when the note becomes due, only in extraordinary cases, where there is danger of the indorser’s failing, and that such a course would be attended with no mischievous consequences.
    
      
       See Wagstaffe v. Boardman, 9 Dowl. & Ryl. 248.
    
    
      
       The undertaking of the indorser is to pay the note upon default of the maker, on the condition, that it is demanded of the latter at maturity, and reasonable notice of refusal is given to him. Mechanics’ Bank of N. Y. v. Griswold, 7 Wendell, 168.
      Where the declaration contains an averment of due notice of the dishonor of a bill, legal notice must be proved. Hill v Varrell, 3 Greenl. 233.
    
   Parker C. J.,

in giving the opinion of the Court, said in substance, that the notice was not sufficient for the purposes of this action, because it was not given until after the action was commenced. There must be a right of action by a notice of the dishonor of the note, or by due diligence used, before the action is brought; and in the present case we think due diligence was not used.

This case has been compared to that of a debt payable on demand, where a service of the writ is a sufficient demand ; but there is an important difference between them. The promise of an indorser is only conditional in the first' place ; there must be an existing absolute liability, in order to support an action against him. The plaintiff alleges a demand on the maker, and a notice to the indorser that the, note has been dishonored ; and this is a material allegation as it respects the indorser.

A case nearly like this, and which may not be distinguished by every one, is, where putting a notice into the post-office is sufficient, although it cannot reach the indorser before the action is brought. And in Stanton v. Blossom, 14 Mass. R. 116, it was not considered as an objection to the action, that it was commenced before the notice was put into the post-office ; but the case did not turn on that point. Where the indorser lives in a different town from the hold er, the law considers putting a letter seasonably into the post-office as using due diligence, or as a constructive notice ; and it is for the convenience of trade that it should be so considered. Here all the parties lived in the same town and proper notice might have been given by a minute’s walk, and to commence the action before giving such notice was not using due diligence. It is important to indorsers, that they should have an opportunity to pay without being put to the expenses of a lawsuit; and though when they live in a different town from the holder, they cannot always have such opportunity, and though the officer may go with a notice in one hand and a writ in the other, yet where it can be done, notice ought to be given previously to the bringing of the action. If a writ may be sued out before notice to the indorser, I see not why it may not before a demand on the maker.

Shaw. If it will make any difference, we can show that the notice was in the hands of the notary before the writ was in the hands of the officer.

Parker C. J. That question was put in our discussions, and it was thought that it would make no difference.

Judgment according to the verdict. 
      
       See Osborn v. Moncure, 3 Wendell, 170.