Court Opinion

ID: 3667392
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:17:01.212351+00
Date Added: 2024-06-11T14:08:46.618402
License: Public Domain

The plaintiff declared on the following promissory note, viz:
"Elizabeth City, Sept. 9, 1852.
"Four months after date I promise to pay James Nichols or "order, for value received, one hundred and thirteen dollars "and ninety-six cents, negotiable and payable at the Branch "Bank of the State of North Carolina, at this place." Signed by the defendant.
The note was endorsed to McGruder  Clark, and by them endorsed in blank. It was sent by McGruder  Clark to the bank for collection; and on the 11th of January, the plaintiff called at the bank, paid the amount due on the note to the bank, and took it away with him. It was not at the bank on the 12th of January nor afterwards. The defendant did not call to pay the note in question before the plaintiff came and paid it, nor did he call for it afterwards: He had no funds in the bank at the time the note came to maturity nor afterwards. After paying the note, before this suit was brought, the plaintiff informed the defendant that he had done so, and requested him to pay the same to him, which he refused to do.
Upon the question of lunacy, the defendant offered in evidence a record from the County Court of Pasquotank, of an inquisition and finding of a jury, that the defendant was a *Page 24 
lunatic, and the appointment of a guardian. The date of this proceeding was after the writ in the case was issued, but before it was executed. The Court rejected this evidence; for which the defendant excepted. The defendant's counsel contended, and asked his Honor to instruct the jury, that the holder of the note ought to aver and prove that he had the note at the bank after 11th of January: that defendant was entitled to the days of grace, and the payee having taken it away before that time had elapsed, he was not entitled to recover. The Court refused so to instruct the jury, but told them that the plaintiff was not bound to make such averment and proof, and that his taking away the note on the 11th of January, did not hinder him from recovering. For this the defendant's counsel further excepted.
It was contended further on behalf of the defendant, that the payee of the note having endorsed it, became the surety to the same, and that afterwards having paid it to the endorsee, such payment discharged the note, and that this action could not be maintained upon it: but the Court held the contrary, and for this the defendant further excepted.
Verdict for the plaintiff.
Rule for a venire de novo for the causes of exception above set forth. Rule discharged: Judgment and appeal to the Supreme Court.
A promissory note is drawn four months after date "payable at the branch of the bank of the State of North Carolina, at Elizabeth City." To entitle the payee to recover of the maker, must he allege and prove that the note was presented for payment, at the bank in Elizabeth City, on the day it fell due?
The point has never been decided by our Court, and it is now presented as an open question upon "the reason of the thing" and the cases in the books.
A note, payable on a given day at the Cape Fear Bank, *Page 25 
must be presented for payment at the bank on the day it falls due, in order to render the endorser liable, Sullivan v. Mitchell, 1 Car. L.R. 482;Smith v. McLean, N.C. Tr. Rep. 72. These cases settle the law in regard to the liability of endorsers, but they are clearly distinguishable from our case, (which is an action against the maker) and are expressly put on the ground that an endorser does not owe the debt, and is not liable except upon a condition precedent, for "the nature of an endorser's engagement is, that he will pay the amount of the note, provided the holder cannot, after using due diligence, obtain payment from the maker, and reasonable notice of this fact be given to the endorser"; and it is held, that when a note is payable at a bank, due diligence requires that payment should be demanded at the bank, and as against an endorser, this demand must be made, even although the maker dispenses with it; "for" (Ruffin Judge) "how can he say that the maker would not have found means to discharge the note at any sacrifice, rather than suffer a public dishonor of his note by a protest at bank?"
The maker of a promissory note, payable on demand at a particular place, is not bound to pay it until payment is demanded at the place. Bank of theState v. Prest. c., of Bank of Cape Fear, 13 Ire. 75. This case is put on the ground that "until a demand at the place, the debtor is not in default, and so there is no cause of action." It is expressly distinguished from our case. RUFFIN, C. J., after some general remarks as to the law in respect to notes payable at a certain day as well as place, says it is not material, "since no one, either in England or here, has supposed that presentment of a promissory note was not indispensable when, in the body, it is payable on demand at a particular place."
The maker of a note owes the debt without any conditions about it. Why should the creditor agree to abridge his rights and have a condition precedent imposed on him, by force of which, he will loose the entire debt, if he fails to demand it at a particular time and place? Upon what ground could a debtor ask, or a creditor submit to have any such restriction? *Page 26 
If such is the intention of the parties, it ought to be expressed in unequivocal words, as "I promise to pay, c., provided, or upon condition, or if this note is presented for payment at the bank in Elizabeth City, on the day it falls due": because the relation of creditor and debtor forbids the idea that the parties intend to make a condition precedent, whereby the debt will be lost unless demanded at a given time and place; consequently, a construction, by which the words "payable at, c.," are by implication made to have this effect, and are converted into a condition precedent, is against the reason of the thing. The more reasonable construction is, that they were used to convey the idea that the parties had made an arrangement suggested by considerations of convenience on both sides, according to which, the money is to be paid at a particular place, on a given day: or in other words, it is an assurance given by the debtor, and accepted by the creditor, that the money will be then and there paid. This arrangement is convenient to the creditor, because he is informed where he will find his debtor, and be able to get his money; and it is convenient to the debtor, because it relieves him from the necessity of seeking the creditor, wherever he may be, in order to make a tender. Considered in this sense, the effect is, that the creditor does not lose his debt by failing to apply for it at the precise time and place, but may afterwards recover it: While on the other hand, the debtor may, if in fact, he had the money at the time and place, use that fact as a defence, and defeat the action by bringing the money into Court: or if he deposited it, and it was lost by the failure of the bank, he can put the loss on the creditor, because of his laches in not calling to get it. This, as it seems to us, is the proper construction according to the reason of the thing. Nor is it opposed by our decisions in regard to an endorser: He does not owe the debt: His liability depends upon a condition precedent, and as to him the words "payable at, c.," may well receive the construction of defining and making particular the condition which would otherwise be general. Nor is it opposed by our decision, that a note payable on demand, must be presented at the place specified before an *Page 27 
action can be maintained against the maker: In that case a demand must be made before the debtor is in default: This is a condition precedent to the right of action, and it follows that the demand must be made at the place agreed on. This is a reasonable construction, and is not forbid by the considerations stated above, in regard to a note which is to be due at a given time. The creditor does not lose his debt by failing to demand it at a particular time, but may demand it at any time, and thereby acquire a cause of action. The debtor being, by express agreement, relieved from the necessity of seeking the creditor, may reasonably insist that the demand must be made at the place agreed on: and inasmuch as the ground of defense, applicable to notes, when the time of payment is fixed, is not available when the time of payment is uncertain, because the debtor cannot make a tender, although he keep the money always at the place, until such time as the creditor may choose to call for it, the only way in which effect can be given to the intention of the parties, is to consider the demand at the place, as a condition precedent to the cause of action, so that no action can be maintained until it is made: which is altogether a different thing from a condition precedent by which the debt will be lost, unless a demand is made at the place on a given day.
The English cases afford no aid. The question was repeatedly before their Courts, but by reason of dissenting opinions and conflicting decisions, it became involved in such utter confusion, that it was found necessary to pass an act of Parliament, in order to clear away the difficulties, 1 and 2 G. 4 ch. 78: which provides that the acceptance of a bill, payable at a particular place, shall be deemed and taken to be a general acceptance, "unless the acceptor shall in his acceptance, express that he accepts the bill payable at a banking house, or other place only, and not otherwise orelsewhere." The substance of this Statute is, that the words "payable at,c." shall not by construction be converted into a condition precedent: and if the parties intend that a demand, at a particular place, shall be a condition precedent, they must say so in express *Page 28 
terms. So it is clear that the opinion of the British Parliament concurs with our opinion, in regard to the construction of a note or acceptance payable at a given time and place.
The cases in this country, so far as they have fallen under our observation, all show a uniform course of adjudication, and concur with our conclusion, "that in actions against the maker of a promissory note, or the acceptor of a bill of exchange, if the note be payable at a specified time and place, it is not necessary to aver in the declaration, or prove on the trial, that a demand of payment was made, in order to maintain the action. But if the maker or acceptor was at the place at the time designated, and was ready to pay the money, it is matter of defense to be pleaded and proved on his part," Wallace v. McConnell, 13 Peters, 137. Many decisions in our sister States are referred to, which settle the law in the same way,Faden  Slater v. Sharp, 4 John. Rep. 183, and many other cases in New York; Watkins v. Cornish, 5 Leigh 522, Virginia; Bowie v. Duvall, 1 Gil. and John. 175, Maryland; Ruggles v. Patterson, 8 Mass. Rep. 480; and also cases in New Jersey, Tennessee and Alabama. So that the question is settled in England by an act of Parliament, and in this country, by a uniform course of adjudications.
It is clear, therefore, that the defendant had no right to complain of the charge.
2nd. It was conceded in the argument, that at common law an endorser, who paid off a note, might strike out the endorsement and recover upon it in his own name; but it was insisted that, as by the act of 1827, Rev. Stat. ch. 13, Sec. 11, an endorser is made liable as surety, when he makes the payment the note is extinguished, and he must sue in Assumpsit for money paid.
The Statute provides that an endorser shall be liable "as surety to anyholder of a note, and no demand on the maker shall be necessary previous to an action against the endorser." The object of the Statute was, to dispense with the necessity of a demand and notice in order to enable the holder to recover from an endorser, but it does not at all affect the relation *Page 29 
of the endorser to the maker: as between themselves their rights remain as they were before the passage of the act.
3rd. Upon the question of capacity, the defendant offered to read in evidence, a record of the County Court, showing an inquisition and a finding, that the defendant was a lunatic, and the appointment of a guardian: which proceeding was had after the writ in this case issued, but before it was executed. This evidence was rejected: For this the defendant excepts. There is no error.
Admit, for the sake of argument, that the proceeding upon an inquisition of lunacy is a matter in rem, and is prima facie evidence of the truth of the facts found, and that its admissibility is not affected by its beingpost litem motam, it is not stated at what time the jury find the defendant to have been a lunatic, and we are to take it, upon this exception, that the time fixed on was the date of the inquisition; and the question is, whether the fact, that a man is a lunatic to-day, is relevant to show that he was a lunatic six months ago? A fair statement of the point, is sufficient to show that the evidence was irrelevant.
PER CURIAM.                                  Judgment affirmed.