#### *Elizabeth Oliver*vs. *Brown et al., Administrators of McDonald.*

Indorser of a promissory note bound by bis promise to pay it, notwithstanding no demand had been made on the maker, if he knew at the time that no such demand had been made.

On a bill filed to 'marshal the assets of the estate of the defendant’s intestate, to which his creditors yrere made parties, the complainant, on a reference before the Commissioner, exhibited, as a demand against the estate, a promissory note, drawn by one Elijah Perry, payable to the intestate,, for $300. The intestate. had indorsed the note to one C. Morgan, before it became due, who transferred it to one Cloud, and he to the complainant, by delivery after it became due. No demand had been made on Perry, the maker, who was in doubtful circumstances ; but Cloud, in whose possession the complainant had left it for collection, mentioned to the intestate that it was in his-hands. Intestate said *“*that the note would be good, and that he would lift it and give his own in. the place of it at any time, and intimated that he could save himself out of the maker.” In consequence of this promise, no other steps were then taken, and intestate died shortly after, and never gave another note. _ ■ .

The- Commissioner rejected this demand, on the ground of the neglect to demand payment of the maker and give notice to the intestate, and an exception to. his report was dismissed by the Circuit Court, and from that judgment the complainant appealed, 'on the ' ground that the ■ intestate was bound by his promise to pay the note.

The opinion of the' Court was delivered by

JOHNSON, J.

In order to charge the indorser of a promissory note, at the suit of the indorsee, the latter is bound to demand payment of the maker, on its falling due, if it is within his power, and within a reasonable time, controlled in some degree. *63by circumstances, to give notice of the non-payment to the indorser. This obligation is not imposed by any express stipulation between the parties, but arises, by legal implication, out of the contract of indorsement. Hence it is clear that the parties may, by express contract, vary or dispense with it, as they think fit. Thus the indorser may stipulate that the indorsee shall not demand payment within a year after the note falls due, and that he will be bound, if notice is given him within a year thereafter. In short, he may prescribe to the .indorsee what degree of diligence shall be sufficient to charge himself, and it is only in the absence of any express agreement of this sort, that the law steps in to prescribe a rule of conduct. He may also, by agreement, waive the *laches*of the indorsee or holder. This id strongly exemplified in the case of *Hall*vs. *Freeman, 2*N. and McC., 479, which in other respects very much resembles the present. There no demand had been made on the maker, nor was the demand made on the indorser until the day after the note fell due ; but the defendant knew that the drawer was insolvent, and the Court held him bound by his subsequent promise to pay. The rule is broadly laid down in *Duryee*vs. *Dennison, 5*Johns. R., 249, that a subsequent promise, with a knowledge of the *laches*of the holder, is a waiver of the want of diligence, and will bind the indorser. Here it is uncertain whether the demand was made on the defendant’s intestate, the endorser, before or after the note fell due; nor is it very material. His promise to pay was unequivocal. It was that the note would be good, and he would *lift*it and give his own in the place of it at any time. The circumstances raise, too, in my mind, an irresistible presumption that McDonald knew that the demand had not been made on Perry the maker, and that he was in doubtful circumstances. Indeed, there is but little doubt that his proposition to substitute his own note was founded in the belief that his chances of indemnity from Perry would be increased by having the note under his own control and management; and according to the rule he must be bound.

*64It is, therefore, ordered and decreed, that the decree of the . Circuit Court be, and the same is, hereby reversed, and that the amount of the note, and the interest thereon, stand as a charge against the funds of the estate of the said McDonald. t,

O’Neall and Harper, JJ., concurred.

*Decree reversed.*