Court Opinion

ID: 5514361
Source: CourtListenerOpinion
Date Created: 2022-01-10 04:27:54.180124+00
Date Added: 2024-06-11T08:34:15.056710
License: Public Domain

*442
By the Court,

Nelson J.
The only material question ari-s¡ng }n this case is, whether the steps necessary on the part of the holders of the bill of exchange in question, to subject the enc¡orsers upon default of the drawees to accept, must be determined by the French law, or the law of this state? If by our law, the plaintiffs below are entitled to retain the judgment ; if by the law of France, as set out and admitted in the pleadings, the judgment must be reversed.
We have not been referred to any case, nor have any been found in our researches, in which the point now presented has been examined or adjudged. But there are some familiar principles belonging to the law merchant, or applicable to bills of exchange and promissory notes, which we think are decisive of it. The persons in whose favor the bill was drawn were bound to present it for acceptance and for payment, according to the law of France, as it was drawn and payable in French territories; and if the rules of law governing them were applicable to the endorsers and endorsees in this case, the recovery below could not be sustained, because presentment for payment would have been essential even after pro*443test for non-acceptance. No principle, however, seems more fully settled, or better understood in commercial law, than that the contract of the endorser is a new and independent contract, and that the extent of his obligations is determined by it. The transfer by endorsement is equivalent in effect to the drawing of a bill, the endorser being in almost every respect considered as a new drawer. Chitty on Bills, 142. 3 East, 482. 2 Burr. 674, 5. 1 Str. 441. Selw. N. P. 256. On this ground, the rate of damages in an action against the endorser is governed by the law of the place where the endorsement is made, being regulated by the' lex loci contractus. 6 Cranch, 21. 2 Kent’s Comm. 460. 4 Johns. R. 119. That the nature and extent of the liabilities of the drawer or endorser are to be determined according to the law of the place where the bill is drawn or endorsement made, has been adjudged both here and in England. In Hix v. Brown, 12 Johns, R. 142, the bill was drawn by the defendant, at New-Orleans, in favor of the plaintiff, upon a house in Philadelphia ; it was protested for non-acceptance, and due notice given: the defendant obtained a discharge under the insolvent laws of New-Orleans after such notice, by which he was exonerated from all debts previously contracted, and in that state, of course from the bill in question. He pleaded his discharge here, and the court say, “ it seems to be well settled, both in our own and in the English courts, that the discharge is to operate according to the lex loci upon the contract where it was made or to be executed. The contract in this case originated in New-Orleans, and had it not been for the circumstance of the bill being drawn upon a person in another state, there could be no doubt but the discharge would reach this contract; and this circumstance can make no difference, as the demand is against the defendant as drawer of the bill, in consequence of the non-acceptance. The whole contract or responsibility of the drawer was entered into and incurred in New-Orleans. The case of Peters v. Brown, 5 East, 124, contains a similar principle. See also 3 Mass. R. 81 ; Van Raugh v. Van Arsdaln, 3 Caines, 154 ; 1 Cowen, 107; 6 Cranch, 221 ; 4 Cowen, 512, n.
*444The contract of endorsement was made in this case, and the execution of it contemplated by the parties in this state ; and it is therefore to be construed according to the laws of New-York. The' defendants below, by it, here engage that the drawees will accept and pay the bill on due presentment, or, in case of their default and notice, that they will pay it. All the cases which determino that the nature and extent of the obligation of the drawer are to be ascertained and settled according to the law of the place where the bill is drawn, are equally applicable to the endorser ; for, in respect to the holder, he is a drawer. Adopting this rule and construction, it follows that the law of New-York must settle the liability of the defendants below. The bill in this case is payable 24 days after sight, and must be presented for acceptance; and it is well settled by our law, that the holder may have immediate recourse against the endorser for the default of the drawee in this respect. 3 Johns. R. 202. Chitty on Bills, 231, and cases there cited.
Upon the principle that the rights and obligations of the parties are to be determined by the law of the place to which • they had reference in making the contract, there are some steps which the holder must take according to the law of the place on which the bill is drawn. It must be presented for payment when due, having regard to the number of days of grace there, as the drawee is under obligation to pay only according to such calculation ; and it is therefore to be presumed .that the parties had reference to it. So the protest must be according to the same law which is not only convenient, but grows out of the necessity of the case. The notice however must be given according to the law of the place where the contract of the drawer or endorser, as the cause may be> was made, such being an implied condition. Chitty on Bills, 266, 93, 217. Bayley, 28. Story’s Conflicts of Laws, 298.
The contract of the drawers in this case, according to the French law, was, that if the holder would present the bill for acceptance within one year from date, it being drawn in the West Indies, and it was not accepted, and was duly protested and notice given of the protest, he would give security to pay it, and pay the same if default was also made in the payment *445by the drawee after protest and notice. This is the contract of the drawers, according to this law, and the counsel for the plaintiffs in error insists that it is also the implied contract of the endorser in this state. But this cannot be, unless the endorsement is deemed an adoption of the original contract of the drawers, to be regulated by the law governing the drawers, without regard to the place where the endorsement is made. We have seen that this is not so; that notice must be given according to the law of the place of endorsement; and if, according to it, notice of non-payment is not required, none of course is necessary to charge the endorser. But if the above position of the plaintiffs in error be correct, notice could not then be dispensed with, the law of the drawer controling. The above position of the counsel would also be irreconcilea-ble with the principle, that the endorsement is equivalent to a new bill, drawn upon the same drawee ; for then the rights and liabilities of the endorser must be governed by the law of the place of the contract, in like manner as those of the drawer are to be governed by the laws of the place where his contract was made. Both stand upon the same footing in this respect, each to be charged according to the laws of the country in which they were at the time of entering into their respective obligations.
I am aware that this conclusion may operate harshly upon the endorsers in this case, as they may not be enabled to have recourse over on the drawers. But this grows out of the peculiarity of the commercial code which France has seen fit to adopt for herself, materially differing from that known to the law merchant. We cannot break in upon the settled principles of our commercial law, to accommodate them to those of France or any other country. It would involve them in great confusion. The endorser, however, can always protect himself by special endorsement, requiring the holder to take the steps necessary according to the French law, to charge the drawer. Ii is the business of the holder, without such an endorsement, only to take such measures as are necessary to charge those to whom he intends to look for payment.
Judgment affirmed.