Case Name: George W. Foster vs. Lemuel Barney
Court: Vermont Supreme Court
Jurisdiction: Vermont
Decision Date: 1830-01
Citations: 3 Vt. 60
Docket Number: 
Parties: George W. Foster vs. Lemuel Barney.
Judges: 
Reporter: Vermont Reports
Volume: 3
Pages: 60–65

Head Matter:
George W. Foster vs. Lemuel Barney.
Franklin,
January, 1830.
íf a notó payable on demand be sold, and endorsed in these words, “I warrant the within note due and collectable,” it will not be subject to the general rules of law which govern negotiable notes and bills of exchange when transferred and endorsed in the usual way, and the endorsee need not demand payment of the maker, nor give notice to the endorser of the non-payment, as in ordinary cases.
But the endorsee ought to make use of due diligence in proceeding against the maker, and not suffer the note to lie in his hands an unreasonable length of time without putting it in suit. In this case it was held that live or six days was not an unreasonable delay.
In such case the endorsee is not bound to attach the real estate of the maker, nor take it on the execution.
This was an action of assumpsit brought by the endorsee of a promissory note against the endorser. It was originally commenced before a justice of the peace,and came into the county court by appeal. The cause was submitted to that court, Royce, J„ presiding, on the following stated case, agreed to by the parties :
“ On the 3d day of January, 1827, one Aiken Lawrence executed his note to the defendant in the words following :
“ Due Lemuel Barney, or order, the sum of thirty two dollars “ and seventy two cents, with interest.
“ Signed, Aiken Lawrence.”
On the 26th day of January, 1827, the defendant sold and transferred said note to the plaintiff for a valuable consideration, and at the same time endorsed thereon the following words : ‘ I hereby warrant the within note to be due and collectable.'’ Within five or six days after the note was thus transferred to the plaintiff, it was sued, and judgement was rendered thereon against Lawrence on the 22d day of February, 1827, for $>'33,00 damages, and $1,39 cost of suit. Execution was issued, dated the same day, and Lawrence thereupon was committed to jail within sixty days from the date of said execution. Lawrence afterwards caused legal notice to be served on the defendant of his intention ;to swear out of jail, and he was accordingly admitted to the poor-debtor’s oath, and was discharged from prison. The committing fees were ‡2,98.
On the day on which judgement was rendered against Lawrence, the plaintiff’s attorney saw the defendant, and told him the note had been sued ; that Lawrence was poor, and might not be able to pay the debt, and suggested to him whether it was not advisable for him to interfere with the suit, and pay the amount of -the note to the holder. The defendant declined to interfere at-a-11 in the business. After Lawrence had sworn out of jail, and before this suit was commenced, the plaintiff’s attorney again saw the defendant, and told him that Lawrence had sworn out of jail, and requested him to pay the amount of the note and costs made thereon; which he declined doing.’
If the court should be of opinion, on the foregoing statement of facts, that the plaintiff ought to recover, then judgement is to be entered for the plaintiff j otherwise for the defendant.”
Aldis & Davis, for plaintiff.
Brown & Whittemore, for defendant.
On trial of the issue, joined to the court, the following evidence, in addition to the foregoing stated case, was introduced by consent of parties :
That at the time of executing said promissory note, and ever since, the said Lawrence resided upon a tract of land worth from two to three hundred dollars, of which he claimed to be the owner, until the 8th day of February, A. D. 1827, when he executed a deed of the same to one Meigs — That the plaintiff, the defendant, and Lawrence, all resided at the village of Swanton Falls, and were neighbours to each other.
Upon the case stated, and the additional facts aforesaid, the court decided the plaintiff was entitled to recover, and gave judgement accordingly.
The defendant excepted to the decision of thé court, and the cause was removed to the Supreme Court for a final decision on the questions of law arising on the foregoing facts.
Brown and Whittemore, for the defendant. — One of the reasons why the law requires notice to be given to the endorser of the non-payment of a note, is that the person intended to be made liable by such notice may have an opportunity of secur* ing the demand against the maker. Chit, on Bills, 93, 97,, The reason of the law applies as strongly to this case as to that of general endorsements. Before the court dispense with the evidence of notice, they must be satisfied that by the terms of the endorsement the defendant has waived the right. The defendant, having by the endorsement warranted the note due, has not waived that right. If he has done so, it must be from his having warranted the note collectable. The word collectable has no definite technical signification, and may he applied to any method of collection. It might imply as well that it would be paid when demanded of the maker, as that it would be paid after legal process. The warranty, then, was nothing more than an agreement on the part of the defendant, that the maker of the note was solvent and would pay it. This conclusion is the same that the law makes from a general endorsement, and, if correct, shows clearly that the defendant was entitled to notice.
The endorsement did not restrain the, negotiabi ityof the note, and the defendant would have been liable to any subsequent en-dorsee upon the endorsement made by him. Kyd on Bills, 232. —12 Mass. Rep. 14. The liability of the defendant, therefore, must arise from the operation of the law merchant as- applicable to negotiable instruments, and not from the special agreement of the defendant, as contained in the endorsement itself. If the liability of the defendant was by law transferable, it is difficult to see upon what grounds he is deprived of the benefit of the same law requiring notice of non-payment. There is but one general rule known in the courts of Great Britain with regard to negotiable notes. The endorser is in all cases entitled to notice of the failure of the maker to pay. The only exceptions known, where the plaintiff may prove an excuse for not giving notice, are, that the endorser gave no consideration for the note, and knew the maker to be insolvent; that the endorsee was ignorant Of the endorser’s place of abpde ; that the defendant afterwards promised to pay the bill; and a promise made to a subsequent endorsee is evidence for this purpose. 2 Stark. Ev. 256, 269. It should be upon strong reasons that the courts introduce a new rule of law, especially one that might be embarrassing in its effects. For if immediate notice is not necessary, then notice might be given of the failure of the maker any time before the statute of limitations had run, and then an endorsement might rise up to charge the endorser long after he had settled, and closed all dealings with the maker. The endorsement in the present case did not bind the endorser to pursue the maker. He might have pursued the defendant immediately on the failure of the maker to pay. But if it should be contended that the holder was bound to pursue the'maker, we say he did not use due diligence, inasmuch as six days elapsed before any suit was commenced, and no judgement obtained until the 22d day of February, 1827.
All the parties in this case lived within a small distance of each other : one day would have been a reasonable time. But no demand whatever was made by the holder, and no attempt to make a demand appears from the case. Should it be answered that by the terms of the endorsement the plaintiff was bound to pursue the maker before-recourse could be had to the endorser, and that the commencementofthe suit was a sufficient demand, then we say the law would require the same diligence in commencing and prosecuting the suit against the maker, as is required in the demand of payment from the maker, and notice to the endorser of nonpayment, in case of a general endorsement. If holding the note six days, in case of a general endorsement, without a demand on the maker for payment, would by construction of law have been giving credit to the maker, and the' commencement of the suit in this case is to be taken as an excuse for not making such demand, then a delay, for the same period, to sue, would, for the same reasons, be giving credit to the maker, and excuse the endorser. 2 Bos. and Pull. 61. — 3 do. 366. — 8 JEast. Rep. 676.
Aldis & Davis, for the plaintiff. — The general principles of law which require the endorsee to present the note, and give notice back to the endorser of the non-payment of the note, do not apply to a special endorsement like the one in question.
Where the endorser warrants the note due and collectable, as in this case, he is not liable until a failure has occurred of collecting the note of the maker by due course of law ; and hence therp is no necessity of making presentment and giving notice back of the non-payment, as in cases of endorsement in the common form.
The warranty of the goodness of the note is like a warranty of soundness of any other article sold. If the warranty fails, a liability accrues. If the note was not collectable, the warranty was not true, and the defendant is liablé.
It does not appear that the debt was lost by want of due diligence on the part of the plaintiff.

Opinion:
The opinion of the Court was pronounced by * ^ »
Paddock, J.
The general principles of law which govern negotiable notes and bills of exchange will not apply in this case. It's well understood that upon the presentment and refusal to pay a negotiated promissory note, where recourse may be had back, the endorsee has an immediate right of action against the endorser, upon giving notice of the non-payment: but it cannot be contended in this case that Barney was liable to Foster at the time he commenced the suit against Lawrence. It is apparent from the wording of the endorsement that Barney intended to guard himself against such liability; otherwise,he would have endorsed the note in the usual and ordinary words to effect atransfer. Instead of which we find him saying, " I hereby warrant the within note due and collectableleaving it implied with as much certainty as though expressed in terms, that he was not to be liable but in the event that the money could not be collected of Lawrence. What else can be understood from the word " collectable," but that Lawrence should be able to respond the judgement that might be recovered upon the note ? The term presupposes that a suit might be necessary ; and in order to determine whether collectable or not, it became the duty of Foster to pray out a writ, and, if the same was not returned non est inventus, to pursue the suit to final judgement and execution ; and nothing short of Lawrence remaining in jail, or taking the poor debtor's oath, would be a sufficient test. This being done, Foster had performed all that he was bound to do by the terms of the contract to entitle him to recover of Barney the amount of the note, interest and costs which had necessarily accrued in the suit and commitment, unless he had committed some laches.
It is contended by the defendant, there was an unreasonable delay on the part of Foster after receiving the note, before he commenced a suit upon it. The argument would have carried more weight with it, if there had been a time of payment appointed in the note, and that time had expired immediately after its transfer. Barney might then have said, and with more plausibility, that had the note been in his possession, he should not have waited five or six days without suing it. Yet the note being on demand,it seems, Barney had waited from the third to the 26th of January, when it was transferred ; and as it does not appear from the case that there was any time stipulated in which it should be sued, the court are of opinion there was no unreasonable delay. Nor does the circumstance that Lawrence had executed a deed of the land he occupied to Meigs, on the 8th day of February, alter the case $ for Foster was not bound to take real estate in satisfaction of the execution ; therefore, it was not his duty to baye attached it on m esne process.
Aldis & Davis, for plaintiff.
Brown & Whitiemore, for defendant.
The Court are of opinion that the judgement of the county court ought to be affirmed.
Judgement affirmed.