ment, and gave the requisite notice of non-payment to the defendants. The facts are as follows: The note in question matured on the 4th day of July, 1861, and was payable at the banking house of F. and G. Willins, in the city of St. Paul, Minnesota. Some time in April, 1861, the plaintiffs delivered the same to the bank of Cooperstown, at Cooperstown, New York, for collection. At that time a letter, in due course of mail, would reach St. Paul from Cooperstown in about six days. The cashier of the bank of Cooperstown sent the note by mail to its regular correspondent, the Bank of St. Paul, in the city of St. Paul, for collection, in ample time, as the cashier stated, for it to reach its destination by ordinary course of mail, before the maturity of the note. When the letter reached St. Paul, the Bank of St. Paul had made an assignment, and the envelope having printed on it the words "From the Bank of Cooperstown," the postmaster at once returned it to the Bank of Cooperstown, with the indorsement "bank failed." The letter was received by the Cooperstown Bank in the original envelope, unopened, on the 9th day of July, 1861, and on the same day the note was returned by mail to St. Paul in a letter directed to F. & G. Willins, who caused it to be presented and protested on the 15th day of July, 1861, the day on which it was received.

The defendants contend that there was a want of diligence in not sending the note in time to guard against such contingencies as the evidence discloses, and that the action of the postmaster in the premises is no sufficient excuse for the failure to present for payment on the day of the maturity of the note. Professor Parsons, in his treatise on Notes and Bills, says: "Ordinarily any failure to present a note at the proper time, by reason of the negligence of an agent, would discharge an indorser, but where the holder makes use of the public mail for the purpose of transmitting the note to the proper place in season to have a legal demand made, and without any negligence on his part, we should say that he would not lose his remedy on an indorser, if through any accident or disorder, or the negligence or mistake of the postoffice clerks, the note does not reach the destined place in season to make demand on the very day of maturity." (Vol. 1, p. 461.) In support of his text he cites the case of Windham Bank v. Norton (22 Conn. 213).

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We have been referred by defendants' counsel to the case of Schofield v. Bayard (3 Wend. 488), as being in direct conflict with the case just cited from Connecticut; but a careful examination of the facts in Schofield v. Bayard will show that there is no conflict whatever between the two cases. * * * It will be seen that the court places its judgment expressly upon the ground that the holder was guilty of negligence in sending the bill to Liverpool, and this fault of his produced the impossibility by virtue of which he claimed to be discharged. In the present case the letter containing the note was not

misdirected; it was properly directed; it actually reached St. Paul in time, and but for its unauthorized return by the postmaster, the probabilities are that some agent or representative of the suspended bank would have received it in time to make due presentment, as the testimony tends to show that the representatives of the bank continued to receive letters addressed to it, after its suspension. The holders therefore exercised due diligence in sending the note when they did; its arrival in time demonstrates that fact; and they were not required to make provision in advance for a possible, but unanticipated suspension of the Bank of St. Paul before arrival of their letter, or for an unwarrantable interference with the same by the public officer in charge of the mails, after its arrival. We are of the opinion, therefore, that under the circumstances of this case, the demand was seasonably made.

[The court then decides that a notarial certificate stating that the notices were "put into the postoffice at St. Paul directed as follows," is sufficient without a statement that the postage was prepaid.]

6

Reversed."

IV. When presentment dispensed with.

§ 139

1. WHEN NO RIGHT TO REQUIRE OR EXPECT IT.

BEAUREGARD v. KNOWLTON.

156 MASSACHUSETTS, 395. — 1892.

JUDGMENT for plaintiff. Defendant excepts.

66

BARKER, J. The action is upon checks which have never been presented to the bank upon which they were drawn. The only question argued is as to the correctness of the ruling that, if the facts were as testified to by the president of the bank, the plaintiff was excused from presenting them. The checks were dated on December 16, 1889, -one for the sum of $250, bearing a pencil memorandum, "Draw Dec. 19th;" one for $125, bearing a similar memorandum, "Draw Dec. 26th; and one for $125, with a memorandum, Draw Dec. 28th." They were signed by the defendant with the name of J. G. Knowlton & Co., which was the style under which he did business. The president of the bank testified that on December 16, 1889, and during the remainder of that month and the following January, J. G. Knowlton & Co. had no funds in the bank, but that one M. E. Knowlton had an account at the bank, and the bank had written authority from him to pay checks signed by J. G. Knowlton & Co.,

See Neg. Inst. L., § 176.-H.

7 See also Schofield v. Bayard, 3 Wend. (N. Y.) 488, post, p. 704; 1 Daniel, § 478.-H.

charging the same to the account of M. E. Knowlton, and that acting upon this authority the bank had been in the habit of so doing, and that on December 16, 1889, the deposit of M. E. Knowlton was $51.15; on December 19th, $117.28; on December 26th, $61.13; and on December 28th, $8.18.

We assume that under ordinary circumstances the drawer of a check is not liable to a suit upon it without presentment to the bank, and dishonor. Kelley v. Brown, 5 Gray, 108; Tassell v. Lewis, 1 Ld. Raym. 743; Cruger v. Armstrong, 3 Johns. Cas. 5; Conroy v. Warren, 3 Johns. Cas. 259; Murray v. Judah, 6 Cow. 484, 490; Little v. Bank, 2 Hill, (N. Y.) 425; Case v. Morris, 31 Pa. St. 100, 104; Purcell v. Allemong, 22 Grat. 739; Woodruff v. Plant, 41 Conn. 344, 347; Foster v. Paulk, 41 Me. 425. But the cases cited, and many others, hold that a check is in the nature of a bill of exchange, payable on demand, and that many of the same rules apply to both. Barnet v. Smith, 30 N. H. 256, 264; Bickerdike v. Bollman, 1 Term R. 405; Boehm v. Sterling, 7 Term R. 423, 426. The drawer of a bill of exchange is liable without presentment, if he has no effects in the hands of the drawee, unless the drawee has something equivalent to effects, or has agreed to accept and pay, or the drawer has some ground for a reasonable expectation that the bill will be accepted and paid. Kinsley v. Robinson, 21 Pick. 327, 328, and cases cited; Bank v. Hughes, 17 Wend. 94, 97. The same general principles are applied to checks, and presentment is excused where the making of the check was a fraud upon the part of the drawer; he having no funds in the bank, and no ground for a reasonable expectation that it would be paid. Byles, Bills, (11th Ed.) 216; Chit. Bills, (Amer. Ed. 1836,) 423; Franklin v. Vanderpool, 1 Hall, 78; Harker v. Anderson, 21 Wend. 372, 375; Case v. Morris, 31 Pa. St. 100, 104; Sterrett v. Rosencranz, 3 Phila. 54; Hoyt v. Seeley, 18 Conn. 352, 360; True v. Thomas, 16 Me. 36; Foster v. Paulk, 41 Me. 425, 428; Terey v. Parker, 6 Adol. & E. 502; Wirth v. Austin, L. R. 10 C. P. 689. In this case the drawer had no funds in the bank, and no authority from the bank to draw upon it. One M. E. Knowlton had a deposit account with the bank, and had given it authority to pay and charge to his account checks signed by J. G. Knowlton & Co., and the bank had been in the habit of so doing. But the deposit of M. E. Knowlton was never sufficient to pay any one of the checks in suit, and the bank had no authority to allow the account of M. E. Knowlton to be overdrawn by such checks, and there was no evidence that it had ever pursued such a course. So that the defendant could have had no ground for a reasonable expectation that the checks would be honored by the bank. When the defendant made them, he knew they would not be paid if presented, as well as though there had been no arrangement as to his checks between the bank and M. E. Knowlton. Notice of non-payment would have given him no new knowledge. The presentment of either of the checks would not

have entitled the plaintiff to demand from the bank the actual balance to the credit of M. E. Knowlton. Dana v. Bank, 13 Allen, 445. So that the facts testified to show affirmatively that no loss happened to the defendant by the omission of presentment.

Exceptions overruled.

$139

CATHELL v. GOODWIN.

[Reported herein at p. 576.]9

s" It is next argued that the court should have directed a verdict for the plaintiff, and that in refusing to do so there was reversible error. This contention is grounded, first, upon the proposition that no presentment of the check or draft to Gilman, Son & Co. for payment has been shown; and, if such presentment is an indispensable condition of the drawer's liability to the payee, the point is well taken, for such proof is evidently lacking. By section 3060a79 [N. Y., § 139] of the Code Supplement of 1902 it is provided that presentment for payment is not required to charge the drawer, where he has no right to expect or require the drawee to pay the instrument. The appellee invokes the benefit of this provision. It is alleged, as we have seen, that appellant knew Gilman, Son & Co. to be in a failing condition when it sold the draft to appellee. In support of this claim there was evidence of admis sions by the cashier to the effect that he had for some time been doubtful of the financial soundness of said firm; that the bank had suspected the stability of said firm, but had continued to use it as correspondent because of the habit or custom arising from a long business acquaintance; and that the bank guarded itself against great risk by keeping a small balance only in the hands of its correspondent. These admissions, some of which were shown to have been made prior to the date of this transaction, were testified to without objection by three or more different witnesses. It was shown, also, that, taking into account drafts in transit, the appellant's balance with its correspondent was frequently overdrawn, or reduced to a comparatively trifling sum, and that on October 13, 1902, the day on which appellant claims the demand for payment should have been made, its actual balance with said correspondent was insufficient to pay the draft in controversy. While this showing was not a strong one, yet we think it sufficient to carry the case to the jury upon the question whether, in view of all the facts, the managing officers of the bank in the issuance of said draft had any right as reasonable men to rely upon or expect Gilman, Son & Co. to honor said draft by payment, if presented within a reasonable time for that purpose." WEAVER, C. J., in West Branch State Bank v. Haines, 135 Iowa, 313.- C.

See also § 185, 186; Cashman v. Harrison, 90 Calif. 297.

Mere want of funds in drawee's hands not enough to excuse presentment. Knickerbocker Life Ins. Co. v. Pendleton, 112 U. S. 696, 708; Welch v. Mfg. Co., 82 Ill. 579.

If drawer or indorser has received funds or assets from the acceptor or maker under an agreement to pay the bill or note, he has no right to expect or require demand and notice. Wright v. Andrews, 70 Me. 86. Query, When he has received security but with no agreement to pay. 2 Daniel on Neg. Inst., §§ 1129-1143; 4 Am. & Eng. Enc, Law (2d ed.), 447-448. — H.

2. ACCOMMODATION INDORSERS.

§ 140 MORRIS v. BIRMINGHAM NATIONAL BANK.

93 ALABAMA, 511.1890.

ACTION on a promissory note. Judgment for plaintiff and defendant appeals. CLOPTON, J. The note sued upon was made by John W. Read, payable to B. C. Scott, defendant's intestate, at the Birmingham National Bank, and by him indorsed to the bank. It being admitted that payment of the note was not demanded of the maker, and that due and legal notice of its dishonor was not given, so as to charge the indorser, it devolved on plaintiff to show a sufficient excuse for failure to give the notice. For this purpose the depositions of Read, the maker, were introduced to prove that the note was made for the accommodation of Scott, the indorser.

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The material question is, whether the indorser of a note, made for his accommodation, is discharged from liability on his indorsement by the failure of the holder to demand payment of the maker, and to give the indorser notice of the non-payment of the note. To this question a negative answer must be given, on principle and authority. To the general rule, requiring such notice, there are well recognized exceptions. In its application to bills of exchange, the failure to give notice will be excused as to the drawer, where he has no funds in the hands of the drawee, and no reasonable ground to expect that his bill will be honored. The reason on which this exception rests, exists where a note is made for the accommodation of the indorser, for the purpose of raising money for his benefit, by discount or otherwise, he being the real debtor, and primarily bound for its ultimate payment. In such case, notice can amount to nothing, there being no party against whom he can have recourse upon paying the note, and no possibility that he can be injured by the failure to give notice. He, like the drawer of a bill in such case, is without funds, and has no right to expect the maker to pay the note. French v. Bank of Columbia, 4 Cr. 141; Keys v. Winter, 54 Me. 399; 2 Dan. on Neg. Inst., § 1085; Tied. on Com. Paper, § 355. It being shown by the testimony of Read, without contradiction, that the note sued on was made for the accommodation of Scott, notice of its dishonor was not requisite to charge the indorser.

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Judgment affirmed.1

1 See also McVeigh v. Bank of Old Dominion, 26 Gratt. (Va.) 785; Turner v. Sampson, 2 Q. B. Div. 23; Witherow v. Slayback, 158 N. Y. 649; Am. Nat. Bank v. Junk Bros., 94 Tenn. 624, post, p. 579, — C,