Case Name: President, Directors, &c. of the Lee Bank vs. Ambrose Spencer & another
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1843-09
Citations: 6 Met. 308
Docket Number: 
Parties: President, Directors, &c. of the Lee Bank vs. Ambrose Spencer & another.
Judges: 
Reporter: Massachusetts Reports
Volume: 47
Pages: 308–310

Head Matter:
President, Directors, &c. of the Lee Bank vs. Ambrose Spencer & another.
When a note, made payable at a bank, is not at the bank when it falls due, and no demand is then made on the maker, the indorsee cannot charge the indorser by giving him seasonable notice of non-payment, although the maker had previously told the indorsee that it would be useless to send the note to the bank, because he could not pay it.
Assumpsit by the indorsees against the indorsers of a prom» issory note, signed by Phelps & Field, dated February 12th 1840, and payable to the defendants, or their order, in 60 days, at the Phoenix Bank in New York.
At the trial in the court of common pleas, the plaintiffs ad mitted that the note was not at the Phoenix Bank at the time of its maturity, and that no demand upon the makers was made at that time ; but the plaintiffs introduced evidence tending to prove that Phelps & Field, at that time, had no funds in that bank, and that before the note fell due, Field, one of the prom-isors, called on the plaintiffs’ cashier, and told him it would be of no use to send the note to New York, as the makers could not pay it; and that the plaintiffs gave notice to the defendants, on the last day of grace, of the non-payment of the note. Whereupon the plaintiffs contended, that if the makers, after the note was given, and before it fell due, waived a demand on themselves at the place designated in the note, or at any other place, and, in consequence of such waiver, the plaintiffs had omitted to make such demand, the defendants, although not parties, nor assenting to such arrangement, were bound by it, and bound to the plaintiffs to the same extent as if the note had been sent to the Phosnix Bank, and there regularly protested for non-payment. But the court ruled otherwise, and a verdict was returned for the defendants. The plaintiffs alleged exceptions to this ruling.
Porter, for the plaintiffs,
admitted that the promisors’ waiver of presentment and demand does not bind the indorsers, if they do not receive notice of non-payment; but he submitted that it was otherwise when such notice is given to them. If a demand be such as binds the maker, it is of no importance to the indorser, whether it is or is not conformable to the general rules of law. And where no demand can be made, the indorser is nevertheless held to pay, on notice. The same reason would seem to apply to the case at bar. Chit, on Bills, (10th Am. ed.) 359, note (4.) Whitwell v. Johnson, 17 Mass. 449. Hale v. Burr, and State Bank v. Hurd, 12 Mass. 86, 172. Oriental Bank v. Blake, 22 Pick. 206. Bank of America v. Woodworth, 18 Johns. 315, and 19 Johns. 413. Herring v. Sanger, 3 Johns. Cas. 71. Saunderson v. Judge, 2 H. B. 509. Bayley on Bills, (2d. Amer. ed.) 208, 209.
Byington, for the defendants.

Opinion:
Shaw, C. J.
The court are of opinion that the direction of the court of common pleas was right, that the defendants were not liable as indorsers. The note was payable at the Phoenix Bank, and unless presentment and demand were made there, at the maturity of the note, the defendants, who were only conditionally liable, in case of its dishonor, were not bound. Woodbridge v. Brigham, 13 Mass. 556. This was admitted by the plaintiffs' counsel to be the general rule; but he relied upon an exception, arising from the fact, that one of the promisors had formally called on the plaintiffs, and informed them that it would be useless to present the note at the bank, as they could not pay it. However this might affect the rights of the promi-sors, we think it did not alter the conditional obligation of the .ndorsers, and make them responsible without any presentment whatever. The authority mainly relied on for the plaintiffs is that of Whitwell v. Johnson, 17 Mass. 449. That case decides nothing more than this; that when a note is not in terms made payable at any place, if the promisor appoint a place at which demand may be made, a demand at such place, and neglect of payment, is a dishonor, upon which the indorser, having due notice, will be liable. The court, in giving their opinion in that case, state in terms, that if there had been no demand, the in-dorser would not be liable. The declarations of one of the makers, that if the note were sent to the bank, they could not pay it, could be considered as nothing more than notice of the makers' insolvency, which might or might not be true. But it has often been held that proof of the actual and notorious insolvency of the makers is not sufficient to charge the indorsers, without proof of presentment and demand. Sandford v. Dillaway, 10 Mass. 52. Bayley on Bills, (2d Amer. ed.) 240.
Exceptions overruled
Dewey, J. did not sit in this case