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holder, in order to recover of the drawers or indorsers, “must prove a demand of, or due diligence to get the money from, the acceptor”;() and in all actions upon promissory notes by ar. indorsee against the indorser, the plaintiff must prove a demand of, or due diligence to get the money from, the maker of the note.(a)
The question of excuse, then, will depend upon the fact whether due diligence has been used to find the maker or acceptor, and presents the ordinary inquiry as to negligence. That question may, and often does, depend on such a variety of circumstances, that it is very difficult, if not impossible, to reduce them to any fixed or invariable rule.(6) When there is no dis
b pute about the facts, due diligence is a question of law for the court to determine; (c) and where the facts are controverted, or the proof equivocal or contradictory, it would seem to be a mixed question of law and fact.(a)
The principal excuses resolve themselves into two classes : First, the impossibility of demand. Second, the acts, words, or position of a party, proving that he had no right, or waived all right, to the demand, of the want of which he would avail himself.
1. Where the Demand for Payment cannot be made. That impossibility should excuse non-demand is obvious; for the law compels no one to do what he cannot perform. But it must be actual, and not merely hypothetical; and though it need not be absolute, no slight difficulty will have this effect.
We have already considered the law of demand with reference to the person by whom it is to be made, of whom it is to be made, and as regards the method, time, and place of making it. We will now consider the impossibility of presentment with reference to the same points, and afterwards with respect to other circumstances.
(z) Lord Mansfield, C. J., Heylyn v. Adamson, 2 Burr. 669, 678; Kent, J., Munroe v. Easton, 2 Johns. Cas. 75.
(a) Lord Mansfield, C. J., Heylyn v. Adamson, 2 Burr. 669, 678. (6) Storrs, J., Windham Bank v. Norton, 22 Conn. 213, 221.
(c) Wheeler 0. Field, 6 Met 290, where the notary testified that he had used due diligence, and the jury, in reply to a question by the court, stated that they had found that due diligence was used; but the court set aside their verdict in favor of the plaintiff, and ordered a new trial. See Orear v. McDonald, 9 Gill, 350 ; Cathell v. Goodwin, I Harris & G. 468.
(d) See Orear v. McDonald, 9 Gill, 350; Cathell 0. Goodwin, 1 Harris & G. 468.
If at the time a note or bill matures the holder is dead, and no executor or administrator is appointed, it is clear that no demand can be made at that time, and consequently this fact operates as an excuse, but not in general for an entire want of demand, but for a presentment at what would otherwise be the time required by law. The executor or administrator has a reasonable time after appointment in such cases within which to present the note or bill.(e) So where an agent with whom a note had been left for collection died four days before maturity, after an illness of more than a month, and about three weeks afterwards his executrix discovered the note locked up in his desk, where it had remained unknown to her, and caused it to be immediately presented, the indorser was charged. (f)
Where there is no person upon whom it is possible to make a demand, the indorser must of course be liable without one. As where a note was signed by an agent having authority so to do, and the note was subsequently indorsed, the principal being dead at the time the note was made and delivered, no demand was held necessary() And the same would probably be held where the apparent maker was living, but the note was void against him,() on account of usury,(i) illegal consideration, or forgery; or where the maker was a married woman; or perhaps a minor, both at the time of making and of maturity; though some doubt might be entertained in the last case. (;) But cases may be im
(e) White v. Stoddard, 11 Gray, (f) Duygan v. King, Rice, 239.
(9) Burrill v. Smith, 7 Piek. 291, where Parker, C. J. said : “In this case, one of the strong points of the argument for the defendant is, that there being in fact no promisor, the indorser, if compelled to pay, will have none to call upon to reimburse him. Also, that the common requisites of an action against indorsers cannot be complied with, for there can be no demand upon the promisor. But this will affect only the forin of the declaration. The same difficulty – if it is one — will occur in the cases of void or voidable notes above mentioned ; for a demand in such cases would be merely formal. The adıninistrator of a decensed person, whose name appears to a note, may as well be called upon, in order to give an action against an indorser, as the person whose name is forged. An averment that, the time of writing the ote by the ato ney for the principal, the principal was dead, would be sufficient to entitle the plaintiff to recover.”
(h) Chandler o. Mason, 2 Vt. 193.
(i) Copp v. M'Dugall, 9 Mass. 1, where the evidence of the note being void was considered an admission or recognition of the illegality of the note by the indorser.
(j) See the remarks of Parker, C. J., supra, note g. The void or voidable notes just mentioned are notes void between promisors and payee, on account of usrsy
agined under almost any of the circumstances above mentioned, in which the maker has intimated a purpose of waiving such defence; and if so, it might be thought that a demand should be made of him. And if this be so, should not a demand be made, on the ground that, as the defence might be waived, the indorser had a right to insist that a proper effort should be made to ascertain whether the maker intended to make such waiver or avail himself of the defence? The authorities do not aid us much in
? answering all these hypothetical questions. But the nature and purpose of negotiable bills and notes, and the decisions, as far as they go, would lead us to lay down the rule, as at least generally applicable, that, wherever the maker has an unquestionable and certain defence in law, it will be the presumption of law that he will make this defence, and therefore there need be no demand of him. Nor is the indorser injured by this rule; for if the liability of the maker is wholly at his own option, he will be at liberty to pay the debt to relieve or indemnify the indorser, as for the immediate benefit of the holder, and so the indirect benefit of the indorser.
We have already seen, that, where the maker dies before the note matures, the general rule is, that demand should be made of his personal representatives ; (k) consequently the death of the maker or acceptor is no excuse for non-presentment. And this is so even when the indorser whom it is sought to charge has been appointed administrator of the maker's estate.(I) But where there are no personal representatives, of course no demand can be made. Thus, where the maker and his whole family were drowned two days before the note matured, there being no will, and no administration having been taken out on the estate, it was held that no demand was necessary.(m)
or other illegal consideration. So if the indorsement is made of a note made by a minor or of a feme corert, and even if the name of the promisor is forged. As regards voidable notes, a distinction might be made on the ground that the makers might pay, although they are not obliged so to do; and it might be said, that, in order to consti. tute due diligence on the part of the holder, he should make a presentment, to see if they would not honor the notes. The necessity of demand would, it is conceived, be still stronger where the maker has come of age before the note has matured; as circum. stances might have happened amounting to a ratification.
(k) Supra, p. 364, note r. (l) Magruder v. Union Bank, 3 Pet. 87 ; Juniata Bank o. Hale, 16 S & R. 157. (m) Haslett v. Kunhardt, Rice, 189, Richardson, J. dissenting. VOL. I.
But where an administrator has been appointed, and by law is entitled to a certain time within which to settle up the estate of the deceased, prior to the expiration of which he is not liable to be sued by any creditor of the estate, a demand upon him has been held to be excused, provided the note fall due within the time limited, but not otherwise.(n)
Where neither the maker nor his last and usual place of business or residence can be found, no demand need be made, but the holder must prove that he used due diligence to find them, and that his efforts proved unavailing.(o)
2. Of Insolvency. As between the holder of negotiable paper and the prior parties thereto, the insolvency or bankruptcy of the maker or acceptor will constitute no excuse for want of demand.(p) The rule is the same whether the payor becomes insolvent between the time of indorsing the note and its maturity,(9) or is insolvent before and at the time of the indorsement, and his insolvency is known to the indorser when he puts his name upon the note.(r)
(n) Supra, p. 364, notes y (0) Infra, p. 448, note d.
(p) In Russel v. Langstaffe, 2 Doug. 514,515, it was said by counsel in argument, that, as to the bankruptcy, it had been frequently ruled by Lord Mansfield at Guildhall, that it is not an excuse for not making a demand on a note or bill, or for not giving notice of non-payment, that the drawer or acceptor had become a bankrupt; as many means may remain of obtaining payment, by the assistance of friends or otherwise.” But the case itself turned on another point. This statement, however, was recognized as law by Lord Ellenborough, in Warrington v. Furbor, 8 East, 242; and in Esdaile o. Sowerhy, 11 id. 114, he said : “ It is too late now (1809) to contend that the insolvency of the drawer or acceptor dispenses with the necessity of a demand of payment or of notice of the dishonor.” So, in Nicholson v. Gouthit, 2 H. Bl 609, Eyre, C. J. said : “ It sounds harsh that a known bankruptcy should not be equivalent to a demand or notice; but the rule is too strong to be dispensed with.” See Bowes v. Howe, 5 Taunt. 30, 16 East, 112; Sands v. Clarke, 8 C. B. 751. So also Parsons, C. J., Bond v. Farnham, 5 Mass. 170; Shaw v. Reed, 12 Pick. 132; Granite Bank o. Ayers, 16 id. 392; Mead ". Small, 2 Greenl. 207; Greely v. Hunt, 21 Maine, 455 ; Hunt v. Wadleigh, 26 id. 271; Orear o. McDonald, 9 Gill, 350; Armstrong v. Thruston, 11 Md. 148, where insolvency was held to be no excuse for non-demand of the maker himself, and a demand on the assignee was held insufficient. See also Benedict v. Caffe, 5 Ducr, 226. Sed quære. Ellwards v. Thayer, 2 Bay, 217; Bruce v. Lytle, 13 Barb. 163, where a demand was made but five days after maturity, and the indorser was discharged.
(9) Crossen v. Hutchinson, 9 Mass. 205.
(r) Sandford o. Dillaway, 10 Mass. 52; Farnum v. Fowle, 12 id. 89; Jervey v. Wilbur, 1 Bailey, 453 ; Allwood v. Haseldon, 2 id. 457, where the same rule was applied to a note indorsed after maturity ; Hightower o. Ivy, 2 Port. Ala. 308. Contra,
The reason is to be found in the stringency of the rule requiring demand, coupled with the fact that it is possible that the note may still be paid by the assistance of friends, or otherwise.
As between third parties, whether a presentment to the maker may not be dispensed with, has been treated as a distinct question from that of the necessity of presentment as against the maker or indorser of a note.(s) This question has arisen where a note is received in payment, both parties being ignorant of the insolvency of the maker; and the point is, wliether the person who takes the note may not recover of the party from whom he receives it, without any presentment to the maker. For a consideration of this subject reference may be had to the chapter on Payment.(t) As neither death alone, nor insolvency alone, will excuse a want of demand, so the death of the maker leaving his estate insolvent will be insufficient.(u)
Insolvency also comes into consideration as an excuse, where it is connected with other circumstances. Thus, where the drawer had become bankrupt, and the acceptor unable to pay ; the latter, in the presence of both holder and drawer, declared that he should not pay the bill when presented ; a demand upon him at maturity was held to be still necessary in order to entitle the holder to prove the debt against the drawer's estate.(v) A similar question also arises where the maker becomes insolvent, and absconds; this point will be treated subsequently,(w) as
De Berdt v. Atkinson, 2 H. Bl. 336. This case will be further considered in the next chapter. In Clark o. Minton, cited 2 Const. R. 680, 682, the recorded insolvency of the maker at maturity was held an excuse for want of demand. This case is r'e. ported in 2 Brev. 185. See also Kiddell o. Peronneau, cited 2 Brev. 188.
(s) Maule, J., Sands o. Clarke, 8 C. B. 751, 761.
(t) Infra, Vol. II. ch. 7. The cases on the subject of payment will be seen to be in I state of conflict, and the law on the point under consideration would probably depend upon the view entertained by the courts of any particular State on the general subject of payment.
(u) Gower v. Moore, 25 Maine, 16 ; Lawrence v. Langley, 14 N. H. 70, an action against the indorser of a joint note, one of the makers of which had died insolvent and the other had failed ; Johnson v. Harth, 1 Bailey, 482. In Davis o. Francisco, 11 Misso. 572, where it appeared that the indorser, when he indorsed the note, which was done after maturity, knew the fact of the maker's death, a demand was held unniecessary, Scott, J. dissenting. The fact of knowledge, it is conceived, could hardly make any difference in the law.
(v) Ex parte Bignold, 2 Mont. & A. 633, 1 Deac. 712. How far declarations of the parties may affect the question of excuse will be considered infra.
(w) Infra, p. 449 et seq.