Beck v. Thompson & Maris

4 H. & J. 531

• Court: Court of Appeals of Maryland
• Decided: December 15, 1819
• Status: Published

Opinion

At this Term the Judges delivered their opinions seriatim»

Martin, J.

This was an action on the case instituted by Edwat d Thompson and Richard Maris, in Prince-George’s county court, to recover the amount due on a promissory Jiote passed by Samuel W. Beck to James Beck, and endorsed by James Beck to the plaintiffs. The note was dated the 14th of March 1810, and was made payable 21 months after date. At the trial of the cause the plaintiffs offered evidence to prove the hand-writing of Samuel JV. Beck, the drawer, and James Beck, the endorser, and that some days after the note became due, James S. Morsell, the agent.of the plaintiff's, called on James Beck for pay-ment of the same; that James Beck then informed theagent, he (Beck,) knew notice of nonpayment had not been properly given, that it had not been given for several days after the note became due, and that no demand had been made on Samuel IP. Beck, the drawer; but that it was his intention to pay the note; that he was bound to pay his son’s debts, but wanted time. That it was then agreed betweemthe said agent, and James Beck, that Beck should give a deed of trust on his land as security for the payment of the money due on the note, and that further time should be given him for the payment. The deed of trust, however, was never executed; and no other evidence was offered by the plaintiff's relative to the demand of the amount of the note of the drawer, or of notice of nonpayment to the defendant. The counsel for the defendant prayed the instruction of the court to the jury, that the testimony in the cause was not sufficient to entitle the plaintiffs to a verdict;which instruction the court refused to give, being of opinion, and so directing the jury, that if they should find from the evidence that the note was endorsed by the defendant, and that he, having a knowledge that the drawer of the note had not been duly called on for payment, and that notice of the nonpayment had not in due time been communicated to the defendant, who in consequence thereof knew that in point of law he was not answerable for the note; yet if with this knowledge, they should find that he'promised to pay the same as set forth, that .the want of notice of the nonpayment by the drawer did not release him from the claim, and the same can be recovered in this action. It is now for the consideration of this court, whether the opinion and direction thu3 given to the jury were erroneous. The declaration in this case contains two counts, the first on the promissory note, the second for money lent and advanced. The ñrst count is certainly erroneous, and the plaintiffs can take nothing under it. It states the de-Bsand to have been made on the drawer for payment on the 14th day of December 1811, three days before the note be-«ame due, according to the established rules of law. -It only remains to be considered if they were entitled to recover under the second count.

To make the endorser ot a promissory note answerable to the holder, it is generally necessary that there should be a demand on the drawer, after tho note becomes due, for payment, and a notice of nonpayment by him should be regularly given in due time to the endorser. But this is a privilege to the endorser. It is for his benefit alone, and he may either avail himself of this privilege, or waive it at his pleasure. If with a knowledge of the facts that no demand has been made on the drawer, and that notice of nonpayment has not been regularly given to him, he still acknowledges the note to be due, and promises to pay it, he waives the privilege given by law for his benefit, and is quo ad hoc, in the same situation as if the demand and notice had been regularly proved. If then the first count in the declaration had been correct, and the jury were satisfied from the evidence that the defendant did promise to pay the amount of the note, having at. that time a knowledge of the facts that no legal demand had been made on the drawer for payment, or legal notice of his nonpayment given to the endorser, the plaintiffs might have recovered on that count, although no proof was offered of a demand on the drawer, or legal notice of his nonpayment to the endorser. If then the finding of these facts by the jury would have authorised a verdict .in favour of the plaintiffs, on the first count, had it been correctly drawn, I think the authorities will justify the court in considering them sufficient to sustain the action on the second count. It is laid down by Chitty on Bills of Exchange, and the position supported by many other authorities, that it is not necessary to declare on a promissory note between the original parties to it, but that in an action for money lent, the same may be given in evidence; as in an action at the suit of a payee of a bill against the drawer, and in an action at the suit of a payee of a note against the maker, they being evidence of money lent by the payee to the drawer of the one, and the maker of the other. It is also proper in an action at the suit of the endorsee against his immediate endorser, and for this plain and evident reason, that in point of law the endorser of a promissory note, is to his immediate endor-see considered as the maker of a new note for a valuable consideration. I think the court did right in submitting the evidence to the. jury, for them to ascertain if the defendant had made a promise to pay the note with a knowledge of the facts, that a legal demand had not been made on the drawer, and that notice of nonpayment had not been regularly given to him, and in their direction, to find a verdict for the plaintiffs, if these facts were proved to their satisfaction. I am therefore of opinion that the judgment of the court below be affirmed.

Dorses', J,

The declaration in this case contains two counts, in the first it is averred that Samuel ft. Beck, on tfie 14th of March 1810, made his promissory note .in favour of the defendant, or order, for 81569 27, payable twenty-one months after date, and that the defendant endorsed the said note to the plaintiffs, who after the end and expiration of the said 21 months, that is to say, on the 14t!i of December 1811, shewed and presented the said note, with the endorsement thereon, to the said >Samuel TV. Beck, and requested payment thereof, but that he refused to pay the same, of which the defendant afterwards, to wit, on the day and year aforesaid, liad notice. The second count is for money lent and advanced by the plaintiffs to the defendant, It appears by the bill of exceptions, among other things, that the plaintiffs never did demand of the maker the payment of the money due oh the note, and the defendant, in a conversation with the plaintiffs’ agent, after admitting this fact, and that notice of nonpayment had not beefi duly communicated to him, declared his intention to pay the amount of the note. The court below instructed the jury that they ought to find a verdict for the plaintiffs, if they should believe that the defendant promised to pay the amount of the note, under a knowledge of the following circumstances: First, that the maker was not in due time called on for payment. Secondly, that due notice of nonpayment was not given to the defendant; and Thirdly, that the laches of the plaintiffs had extinguished their claim against the defendant. To this opinion the counsel for the defendant excepted.

I am of opinion that the first count in the declaration is erroneous, and of course no recovery can be had theréon. The note stated in the record was not payable before the 17th of December 18U; until that time'no demand of payment could be made; and as the demand of payment, and notice to the defendant of the nonpayment, are averred to have taken place at a time when the amount of the note was not demandable, the plaintiffs have failed to show any legal claim against the defendant. The authority of Rushton vs. Aspinall, Douglass, 679, is decisive on this point»

Let us examine the opinión of the court with reference to the second count. It has been established by a series of authorities, that it is not necessary to declare on a promissory note, but that the same may be given in evidence oil a, count for money lent and advanced;, the statute of 3 and 4 Anne, eh. 9, which enables the holder to declare on the note, having befen construed as conferring only an additional or cumulative remedy. But this doctrine does not apply to cases where there is no privity between the plaintiff- and defendaht, as between eudorsee and drawer. Chitty on Bills, 376. Buller’s N. P. 137. Story vs. Atkins, 2 Strange, 719. As there is a privity in this case between the plaintiffs, who are the endorsees, and the defendant, their immediate endorser, the former are entitled to recover under the money count, unless they have lost their remedy by their laches.

It cannot be questioned that it is the duty of the holder of the note, if he wishes to have recourse to the endorser, to demand payment of the note when it becomes due, and to give notice of the nonpayment to the endorser. The law casts this obligation on the holder in order that the endorser may take the necessary measures to secure himself against loss; if the holder neglects to do this, the law presumes that the endorser is thereby prejudiced. The rule was adopted for the benefit and security of the endorser, and he may of course, if he thinks fit, waive the consequences of the holder’s neglect; and it lias been often decided that if an endorser, with the knowledge that the holder has not used due diligence in demanding payment of the maker, promise to pay the amount of the note, such promise shall amount to a waiver of the holder’s irregularity. Chitty on Bills, 250. Lundie vs. Robertson, 7 East, 231.

This view of the case is not inconsistent with the doctrine established by the case of Rushton vs. Aspinall, reported in Douglass. That case proceeds on the ground that a plaintiff must in all cases slate a sufficient cause of action in the declaration; and therefore, when the holder declares on a note in a suit against the endorser, he must state a regular demand on the maker for payment, and notice of the nonpayment to the endorser. But what shall be deemed sufficient evidence of those circumstances, or how far the endorser has dispensed with the necessity of their being proved, or has estopped himself from controverting the truth of those averments, are considerations entirely distinct from all questions of pleading.

I must dissent from so much of the opinion of the court below as declares that the promise of the defendant was not obligatory, unless he knew at the time that, he was discharged from ail liability by the laches of the plaintiffs. It is an established maxim in our law, equally applicable to civil and criminal cases, that ignorantia legis non cxcusat. A different principle would be intrcductive of much confusion and uncertainty. Bilbie vs. Lumley, 2 East. 471. Doctor & Student, 97, 79, 251. Stevens vs. Lynch, 12 East, 38. Lundie vs. Robertson, 7 East, 231. But as this part of the opinion, though erroneous, operated to the prejudice of the plaintiffs oniy, by increasing the burden of proof on their part, there can be no leason for reversing the judgment on an exception tendered by the defendant.

I am of opinion that the judgment of the county court ought to be affirmed.

Chase, Ch. J.

In considering this case certain principles have been adverted to. The law is established, that to sustain a suit on a promissory note by the endorsee against the endorser, it is incumbent on the plaintiff to prove a demand by the endorsee of the maker of the note when due, and if not paid, notice of nonpayment to the endorser in due time.* The judgment of the court below is grounded on theadmisf Shin that such demand was not made, and that such notice was not given; the court being of opinion, that the want of notice of nonpayment was supplied or waived by the promise of the defendant, if he had knowledge that such de-wan'd was not made nor notice given, and that he knew he Was not answerable in point of law in consequence thereof; and if the juiy should find such facts, that the action can be sustained,

The liability of the endorser of a promissory note is qualified or conditional, his engagement being to pay the money if the maker did not, and the endorser cannot be resorted to unless such demand is alleged and proved. The liability of the endorser to pay the money rests on proof of demand, and notice of nonpayment in due time, and his promise cannot amount to a waiver of proof of demand; because, not being legally liable to pay the money when the promise was made, his promise was máde without consideration, and a nudum pactum, on which no action can be supported.

Upon recurrence to the proof in the case, it appears there was no evidence given which was legally sufficienfc to warrant the jury in finding a promise made by the defendant to pay the money to the plaintiffs, nor is there any evidence that he knew the legal consequences of the laches. It is only proof of a proposition for a compromise which was not effected. The defendant’s saying that it was his intention to pay the note, and that he was bound to pay his son’s . debts, could not amount to a promise, nor create any obligation on the defendant to pay the money due on the note in question. Whatever might be the intention of the defendant, he was certainly mistaken in supposing he was bound to pay his son’s debts. His intention to pay arose on his supposed liability to pay his son’s debts.

Every endorsement is in the nature of a new bill of exchange for some purpose. There must be a demand on the person who undertakes to pay, and notice of nonpayment in due time; and between the. endorsee, and his immediate, endorser, there may be an inquiry into the consideration.

■Admitting, for the sake of argument only, that on the common law count for money lent in this case the endorsement is prima facie evidence of money lent by the endor-see to the endorser, yet such presumption may be repelled and avoided by proof. The evidence adduced in this case shews that there wa3 not any money lent. The common law count can derive no aid from the promissory note as a negotiable instrument, but the proof, which is applicable to it, must be such as will support it as an independent count. In this case there is no evidence to prove that there had been any money lent or any assumption, and if there was any assumption, it must have been for the debtof another — » a debt due.from his son to the plaintiffs — and not being in writing, is not binding on the defendant. At common law, and before the statute of Anne, a promissory note was a chose in action, and not assignable so as to enable the as-signee to bring a suit in his own name; and the suit, in this case cannot be supported without evidence of money lent by the endorsee to the endorser.

I am of opinion that the judgment of the court below i erroneous and ought to be reversed.

JUDGMENT AFFIRMED.