Case Name: Mathew Houston, vs. Isaac Frazier
Court: Constitutional Court of South Carolina
Jurisdiction: South Carolina
Decision Date: 1824-11
Citations: 1 Harp. 10
Docket Number: 
Parties: Mathew Houston, vs. Isaac Frazier.
Judges: 
Reporter: South Carolina Law Reports
Volume: 16
Pages: 10–17

Head Matter:
Mathew Houston, vs. Isaac Frazier.
Note of hand after due, endorsed 1st November, 1819. At the time of endorsement, endorser informed that immediate demand ■ would not be made of drawer; and promised himself to write to drawer and inf orm him. Demand made of drawer, residing in Georgia, about 10th December. Held that demand was made in sufficient time. Indulgence given to drawer after demand, on his promise to pay; and suit afterwards brought against him. Notice of non-payment given to endorser, March, 1820. Held that endorser was discharged on account of the credit given to drawer, and for laches in giving notice to endorser. No sufficient evidence of a promise to pay, after notice of dishonor; which must be explicit and clearly proved.
This was an action by the plaintiff, as survivor of the firm of Gillispie &c Houston, against the defendant as endorser of a note.
The note was drawn by Wilson Conner, on the 18th of October, 1816, in favor of Isaac Frazier, the defendant, or order, and payable on the 1st day of January, 1818. On the 1st day of November, 1919, Frazier endorsed the note, for value received, to Gillispie & Houston. The evidence produced on the trial of this case established the following facts:
Mathew C. Houston, examined under a commission for that purpose, deposed, “ That Wilson Conner, in the year 1819, resided in Montgomery county, in the state of Georgia, about two days rido from Milledgeville; that he, the witness, had been informed by Frazier, the defendant, that be was brother-in-law, or a relation by marriage, to Conner.
The witness believed he had seen the note in question, at or near the time of the endorsement. That Gillispie &t Houston gave for the note several mules and a horse. That in the month of December, near the tenth, the witness presented the note to Wilson'Conner, in Milledgeville, and demanded payment of the same. That Cornier did not. pay the note, but 5>aid that he had some cotton, unsold, at home, and that as soon as he returned, he would make the money out of it, and pay the note to any person that the icitness might appoint: for which purpose, the witness put the note in the hands of Thadeus G. Holt, and informed Mm of the samo. That in the month of March, 1820, in the town of, Columbia, S. C. the. witness informed the defendant of the demand, and .failure of payment,' and that he (the witness) had directed a suit to be brought at the next court; thatFrazier said it was right, and that he would see that his property brought the money.” The witness testified further, that he believed that a suit had been brought, at the next court after the demand made for payment, and as far as-he knew, all due exertions were used, On the question, whether Wilson Conner was insolvent in 1819? The witness answered — “ He did not know. Conner,” he said, “ was a member of the legislature, sitting at the time the demand was made, and witness was informed, that he had to take an. oath that he was Worth five hundred dollars, before he was entitled to a seat. That he, the witness, in his transactions respecting this note, acted as the agent of Gillispie & Houston. That Gil-lispie died in October, 1821. That the-reason why a demand was not sooner made was, that the business which he was on, called him to Charleston, and that Frazier said he would write to Conner, so that he might be ready to take up the note when the application should be made.” . .
On the cross-examination, the witness said, that the endorsement on the note was made at the time it bears date; that the length of time between the endorsement and the demand of payment, was from thirty to forty days, of which intended delay Frazier was informed at the time of the endorsement.
On being asked, what length of lime intervened between the demand of payment and the notice to Frazier of nonpayment, he answered that “ he did not know that Frazier had any certain: notice until March, 1820, about three or four months.” In addition to the foregoing testimony, was an ex- • emplification of a record, setting forth proceedings of a suit, in the Superior Court of Montgomery county, in the state of Georgia, upon the note no-w in question; wherein Isaac Frar.icr, who sued for the use of Gillispie & Houston, was plaintiff, and Wilson Conner, defendant. in Chat suit, the defendant confessed a judgment for five hundred and fifty dollars, with interest. The judgment was duly entered up; and a fi. fat issued, returnable on the third Monday of March, 1821.- On thisexecution a levy was marked, ashaving been made on the 15th and 18th January, 18-23. On the 21st March, 1821, there was paid to tile plaintiff’s attorney, by the sheriff, on this execution, twenty-eight dollars twelve and a half cents; and on the 19th of September following, the further sum of thirty-six dollars and fifty cents,making in all, sixty-four dollars sixty-two and a half cents; after which the sheriff returned nuila bona.
On the trial of this action, the defendant relied upon the laches of the plaintiff, in not having given due ^ notice of die nonpayment by the maker, and thereby exonerating the endorser from all liability.
The Jury were instructed, in the charge of the presiding Judge, upon the law in relation to the degree of diligence required on the part of the holder, where there had been a failure of payment; and he expressed a very clear and decided opinion that the notice furnished in this case, after a lapse of three months, would occasion the loss to devolve upon the holder; unless the jury might suppose from the evidence furnished, that Frazier had waived the necessity of notice at the time the note was endorsed, or that his conversation with Houston, the agent, at the time the notice was given, amounted to a waiver of this right, and a promise to pay the note himself. The jury found a verdict for the plaintiff for the amount of the note and interest, from which an appeal was claimed on the following grounds:
1st. Because the defendant had no notice of the non-payment of the note for upwards of three.months from the demand of payment and refusal to pay of the maker.
2d. Because it appears defendant had cotton in his hands, which might have' been obtained, if proper steps had been resorted to by the plaintiff, from whose neglect it is to be presumed indulgence was given to the maker of the note, which discharges the endorser.
A third ground was taken, but, in substance, the same aüs the first.

Opinion:
The opinion of the Court isas delivered hy
Mr. Justice 'Qantt.
No principle in the law is more clear or better settled, than that the endorsee of a note of hand, after demand of payment of the maker, who refuses or omits to pay the same, must, within a reasonable time, give notice of such refusal or neglect, otherwise the endorser will be discharged. I will not multiply authorities in support of a position which is so familiar with the profession; but advert to one case only, by way of illustration and analogy: I allude to the case of Anderson, vs. George, tried before Lord Mansfield, chief justice. The ac-» tion was against the defendant, as endorser of die note. George, the payee of the note, had endorsed it in payment to the plaintiff: it became due 2d May, and on the 5th May, the plaintiff's banker (after three days grace) demanded it of Hopley, the maker. Hopley desired t\£o gr three days to pay it in, and so from time to time, which >vere given him till 13th May, when lie told the banker he could not pay it. On the 14th, Hopley failed, and became a bankrupt. On plaintiff's applying to George for payment, George told liim he should have applied before, on Hopley's first refusal, and that he now did not think himself liable to pay it: whereupon the action was brought. Lord Mansfield — ! The question is, who is to bear the loss, as Hopley, the drawer has failed. The banker, wbo has. the note in his hands, and who in this case, being the plaintiff's agent, is to be considered as one and the same person with the plaintiff, comes on the 5th, and'demands payment: the banker gives Hopley indulgence to pay it from the 5th to the 13th, without giving any notice to tbe endorser; which if he had done, it would have urged the endorser to get Ms money, lierq is no neglect of application. The case is still stronger; here js an actual credit given for eight days, and the question ig who gaye the credit. The loss (though this is a hard case) ought to be borne by the person who gave the credit.*' Verdict was given for the defendant.
Apply the circumstances of the case quoted, to the one before us. Houston, the agent of the plaintiff, on the 10th December, 1819, presented the note to the drawer for payment; the note was not paid,. but Conner said, that he had at home unsold cotton, which on his return he would apply to the payment of the note, in the hands of. any one the agent might appoint. On this promise made by Conner, the agent placed the note in the hands of Thadeus G. Holt, and at the same time informed Holt of what Conner had promised. From that time till March, 1820, a period of three months and upwards, no notice is given to Frazier.
That the agent relied upon the assurance of payment given, by Conner, is evident, from the information which he gave to Holt, at the time the note was placed in his hands. His meaning fairly interpreted, is this, " I have demanded of Mr. Conner, payment of this note in Milledgeville, where he is attending as a member of the legislature. He was not then in a situation to pay it, but he has requested indulgence until his return home, where he has on hand a parcel of cotton. He has given me an assurance that he will pay the proceeds of the sale of this cotton into the hands of any person whom I rnay appoint, in discharge of the note; take his note therefore and collect in my behalf, the amount called for. by it on Conner's return home, and sale of the cotton." I think no other correct interpretation can he. given to this evidence; and it shews most evidently that the agent of the plaintiff did rely on Conner's promise; that he did indulge and trust him for the fulfilment of it, from the 10th Dee. 1819,. (the time when the demand of payment was made) up to the 10th February, 1820, when a suit was instituted against Conner, npon 'the note. The principle therefore, upon which the case of Anderson and George seems to have been settled, that when the holder gives a credit to the maker, the endorser is discharged, will apply with redoubled force in die present case, where the credit given by the holder to the maker, was extended to a period of time far beyond what was allowed in that case. Independently however, of the defendant's exonera- lion from liability, by reason of the credit given by the agent, it is equally clear that the degree of diligence which the law contemplates, in respect to notice of non-payment to the endorser, where he is intended to be made liable, has not been fulfilled on the part of the present plaintiff.
From the evidence disclosed by the trial, it was understood by the contracting parties that there would be a delay in the demand of payment, for the space which intervened between the time of malting the endorsement and the demand which was made; but the evidence discloses nothing which can be interpreted into an agreement on the part of Frazier, that he would dispense with notice of non-payment. The reason of the rule which requires this notice is obvious, that the person intended to be charged by the default made, may look after his interest and not have it compromitted by any neglect of the holder, whose business and duty it is to give the earliest notice of the. default. Insolvency itself, in the maker, will not supercede the necessity of notice of non-payment. It constitutes the condition, -sine qua non of recovery against the endorser; for in an action of this nature, it fs legally necessary that notice of default or refusal to pay, should be alleged to have been given to the endorser, in reasonable time, and must be proved on the trial. Where notice might have been given in four days and less, .a delay of three months and upwards, is such laches on the part of the holder, as would clearly fix him with the loss; unless indeed, the endorser has waived the necessity of notice: which brings me to that part of the evidence relied upon by the plaintiff, and noticed in the charge of the presiding Judge, to the Jury.
Houston, the witness, testified that when he gave notice to Frazier, in March, 1820, of the demand and failure to pay, and that he had directed a suit to be brought, &c. Frazier replied, that it was right, and that he would see that his property, (meaning, I suppose, Conner's, die maker,) brought the money.
In what light are we to view these expressions, on the part of Frazier? If they can be fairly construed into a promise to pay the note, or a guarantee that the note should be paid after a disclosure having been made by the agent of all that had taken place; or if indeed, this evidence, per se, is sufficient to shew that, at the time the note was endorsed, ' it ivas understood that Frazier was to dispense with the legal requisite of reasonable notice of non-payment, as well as that of demand on the maker* which last he certainly waived at the time of the endorsement, then his responsibility would be fixed, and the verdict of the jury correct.
I cannot, however, consistently with any correct rule of. construction, put so enlarged an interpretation upon these expressions. Another and far different one may be given to them, which I will explain thus: " you, as agent of the plaintiff, after relying upon a promise of payment, on the part of the maker, and after having given credit to, and indulged him for such a length of time as exonerates me from liability, have done right to bring suit upon the note against the maker, v.ho is alone legally bound to pay the amount: I will however, aid you with my endeavors, that his property shall bring the money." That these expressions on the part of Frazier, were no waiver of a right to notice of non payment, will be clearly seen by reference to the authorities quoted in. Chitty on Bills, 308-523. Chitty himself says, the waiver by an endorser, must he explicit and made out by the most'clear and unequivocal evidence. If an endorser, speaking of several bills, on different places, and under different circumstances, says, " he would take care of them," or " he would see them paid," this was held not sufficient evidence of a promise to pay one of the bills, on which no notice of non-acceptance had been given. Miller vs. Hackley, 5 John. Rep. 375. Griffin vs. Goff, 12 John. Rep. 423. Expressions of this kind are to be construed strictly, May vs. Coffin, 4 Mass. Rep. 341. In the last case, where there liad been promise to pay, where due notice had not been given, it was held not binding, as being wholly without consideration, and especially, as he had retracted his promise a few days afterwards. So too, if an endorser, under ignorance of the law, or through mistake of the law, promise to pay a dishonored bill or note, he is not bound by such promise. 7 Mass. Rep. 449. In the expressions used by'Frazier, there certainly was nothing like an express promise to pay, without which, it seems he could not legally be held liable. In the case before us, the note having been endorsed after 'it became duet Frazier's relationship with the drawer, Ms waiver •of diligence, in respect to demand of payment; his after declaration that Houston had done right in bringing the suit, aiid hiá saying that he would see that Conner's property' should bring the money. All thesé considerations, combined with the certainty that Frazier had received value for the note, together with the apparent injustice of applying a rigid technical rule to contracts not strictly of a mercantile character, may probably have produced this verdict. It is possible however, there may have been representations on the part of Frazier, in relation to this transaction, which may on a second trial produce the same result, of filling him with the payment of this debt. But from the best view which I have been able to take of the evidence furnished on the trial, and from the law arising thereon, I entertain no doubt but that a new trial should be granted; which is the unanimous opinion of the court.
Selwyn's N. Pri. 404.