Lockwood v. Crawford

18 Conn. 361

• Court: Supreme Court of Connecticut
• Decided: July 15, 1847
• Status: Published

Opinion

Church, Ch. J.

The record shows this to have been a New-York transaction. The note in question was executed and indorsed in the city of New-York, by residents there ; and our decision of some, if not of all the questions involved, must have respect to the laws of the state of New-York. Those laws we presume to be the common law, as understood in England and in this state, unless we find a different rule has been adopted, either by statute or judicial decision. A preliminary question suggests itself here. How are we to treat the laws of that state, since the enactment of our statute of 1840 on this subject l

On some of the questions reserved and discussed, it is claimed, that those laws are at variance with the common law. and the court below was referred to the judicial decisions of the state of New-York in support of this claim. If these decisions are only evidence of the fact that such laws exist there, and this fact was to be determined as such, by the jury, from this evidence, then it would seem, that the parties, as well as the judge who tried the cause, had mistaken the proper ground of review; and that this motion should have been as for a verdict against evidence in this respect, rather than one founded upon a misdirection on a point of law.

The rule of the common law undoubtedly is, that the laws of other states and nations are to be proved here, by documentary evidence or the testimony of witnesses ; in which case, the jury are the judges of the proofs, as in other questions of fact. But our statute has provided an additional and convenient rule of evidence in this matter, and has enacted, “ That the reports of the judicial decisions of other states and countries may be judicially noticed, by the courts of this state, as evidence of the common law of such states or countries, and of the judicial construction of the statutes or other laws thereof.” We suppose the legislature intended by this law, that the judicial decisions of other states, should not only be received as evidence of the laws of such states, but that they should be considered by our courts judicially, in the same manner as we consider the decisions of our own courts and of the common law courts of England, as furnishing the evidence of our own common law.

If this be so, then it is the province of the court, and not of the jury, from such evidence, to determine, especially when it is the only evidence offered, what is the law of the foreign state. 1 Bla. Com. 69. Owings v. Hull, 9 Peters 607. Brackett v. Norton, 4 Conn. R. 517.

The note in question was made on the 25th July 1839, payable on demand, and interest, to the defendant, or his order; and was by him indorsed to the plaintiff.

The most material questions in the case arise from the admission of the plaintiff’s evidence regarding the demand of payment, and the notice of non-payment. The evidence thus admitted by the court and to which exception is taken, was, that when the note was executed, it was the agreement or understanding of the parties, and of the indorser also, that the note was to lie unpaid until the payee should leave the city for his residence at the South, which, it was supposed, would be about the 1st of October following, and that the indorsor should remain as continuing surety until that time.

This note is negotiable paper, and subject to the general laws governing such instruments, except so far as it appears that the parties intended to place themselves under different obligations.

By the law, as understood by our courts, as between the maker and payee of a promissory note payable on demand, an immediate demand of payment may be made, and even a suit commenced forthwith, without special demand; and parol proof that the note was payable at some future day, would not be admitted. Such perhaps is the law of New-Yorlt. But no question of this sort arises here. What are the rights of an indorser of such a note, and when, as to him, is it to be considered and treated as dishonoured, is the question involved.

{i We can see, without the aid of Lockwood’s deposition, or other extrinsic evidence, from the tenor of this note, that, neither the parties to it nor the indorsor, contemplated an immediate demand, but all looked to the real time of payment as intended to be future, and to the indorsement of the defendant as a continuing guaranty. Whether this is legally in-ferable from the facts that the note was payable on demand, fand indorsed at the time of its execution, we need not say; but the additional and important fact in connexion, that it was made payable with interest, rendersAhis construction reasonable.!/ Interest could accrue only from forbearance of payment. Barough v. White, 4 B. & Cres. 325. (10 E. C. L. 345.) Wethey v. Andrews, 3 Hill 582. Vreeland v. Hyde, 2 Hall 429.

Although the parties contemplated forbearance and a future time of payment, yet they did not intend that this should be controuled by the convenience or wishes of the immediate parties to the note. The law, in such case, not only in the state of New-York, but every where, requires that a demand of payment shall be made within a reasonable time, or the indorser will stand discharged. And what shall be deemed reasonable time, must, to some extent, be determined, by the peculiar circumstances of each case. In the present case, sixty days had not elapsed before demand was made ; and aside from the facts disclosed by Lockwood’s deposition, we cannot say, that the time was unreasonable. But to place this beyond doubt, the deposition of Lockwood was offered and admitted; and for this purpose was properly admitted. By this it appeared, that the defendant himself, as well as the parties to the note, assented to a future day of payment, about the 1st of October, succeeding the execution and indorsement of the paper. If then the demand of payment was not delayed beyond that time, the defendant cannot say it was delayed unreasonably. This forbearance was probably the very motive which induced the defendant to indorse the note. The facts sworn to by Lockwood, were material to determine the question of reasonable time, and not to contro^l the terms or tenor of the note, as between the immediate parties to it. Freeman v. Hawkins, 2 Caines 369. Cruger v. Armstrong, 3 Johns. Cas. 5. Conroy v. Warner, Id. 359. Losee v. Duncan, 7 Johns. R. 70. Murray v. Judah, 6 Cowen 484. Sice v. Cunningham, 1 Cowen 397. Bank of Utica v. Smedes, 3 Id. 662. Mohawk Bank v. Broderick & al. 10 Wend. 304. Seaver v. Lincoln, 21 Pick. 267.

But it is still claimed, that no sufficient presentment or demand of payment of the makers of the note, was ever made; and that B. TV. Lockwood’s deposition does not conduce to prove any. We think otherwise. It is true, that it does not directly appear, that the deponent, who was the payee, presented the note in form, and demanded payment; but as he had not, at that time, transferred it, the makers might well presume it continued in his possession, ready to be delivered up upon payment. When called upon for the balance, they did not enquire for it, nor refuse to pay, because the note was not shown to them; on the contrary, they said, that they could not conveniently pay any more then, and requested the payee to draw upon them at a future time ; thereby waiving, as they had right to do, a more formal demand.

We are satisfied, therefore, that the demand of payment was legal ; and that, at the time mentioned by B. W. Lockwood, the note in question, by reason of the neglect and refusal of the makers to pay it, then became dishonoured; and the remaining question is, whether it appears, that the defendant, as indorser, has been so charged with notice of nonpayment, as by the laws of the state of New-York to subject him to the payment of the note ?

It no where appears when notice of non-payment was given to the defendant. It seems, that, after the demand of pay" ment was made, the payee was an inmate, as a relative, for several days, of the family of the defendant; and that probably, during this time, he informed the defendant in relation to the non-payment of the note. This is all we know on this subject.

As these parties, then, were all residents of the city of New-York, not only the general mercantile law, but the law of the state of New-York, constituting, as it does, a prominent portion of that law, required, that notice should be given of the non-payment, on or before the next day after the dishonour of the note; unless the present furnishes an instance of an excepted case. 3 Kent’s Com. 73. Chitty on Bills, 314.

Furthermore, it is a principle received every where, that it is incumbent on the holder of a note or bill to show affirmatively, that notice of non-payment was given in due time : it is a condition precedent to a right to recover, in ordinary cases, against an indorser; and the onus of proving it lies upon the plaintiff, and he must not leave it uncertain whether bis notice was in time or not.' Chitt. on Bills 314. Lawson v. Sherwood, 1 Stark. Ca. 314.

This being the general principle, the plaintiff’s recovery here will be defeated by it, unless the tenor of this note be such as that the strict notice of dishonour required by the laws of negotiable paper, was not in this case necessary. As we have already said, this note must be governed by these laws, except so far as it appears that the parties intended to dispense with them. A party entitled to notice may dispense with it — he may waive it; but in the case of indorsers especially, a waiver will not be presumed, without the most satisfactory proof. Indeed, we hardly know of a case, in which an indorser, who has not expressly waived notice of non-payment, is not entitled to it, except where it has become his own duty to pay the note; as where it was made for his own accommodation, or he had assumed its payment, upon good consideration, before its dishonour, or upon full knowledge of the facts. Pierpont v. White, 1 Johns. Cas. 99. Agan v. McManus, 11 Johns. R. 180. Trimble v. Thom, 16 Johns. R. 154. Griffin v. Goff, 12 Johns. R. 424. Miller v. Hackley, 5 Johns. R. 585. Jones v. Savage, 6 Wend. 658. Leonard v. Gary, 10 Wend. 504. Mechanics Bank v. Griswold, 7 Wend. 165. Backus v. Shepard, 11 Wend. 629. Holland v. Turner, 10 Conn. R. 308. Thornton v. Wynn, 12 Wheat. 183.

The fact that this note was not made payable on a fixed day, but could run until payment was demanded within a reasonable time, certainly could not dispense with the necessity of notice of its dishonour. There is nothing on the face of the note or dehors, intimating that the indorser did not suppose the note would be paid, when demanded ; or that he intended to forego a notice, if payment was then refused. In this respect, he stood in the same situation as other indorsers, and for the same reasons. Free v. Hawkins, 8 Taun. 92.

Such we believe, from the cases decided by the highest and most respectable courts in the state of New-York, to be the law of that state, as well as of other states, as applicable to the note under consideration.

The plaintiff, on this point, however, relies upon the case of Van Hoesen v. Van Alstyne, 3 Wend. 75. as evidence ot the law of the state of New-York, and as conclusively applicable to the facts of this case; showing that no notice of nonpayment was necessary. If we so believed, we should be gov-. erned by that decision, whatever might be our opinion of the doctrine supposed to be established by it. The report of that case is not very satisfactory to us, as decisive of grave questions ; but we are under no necessity of pronouncing against it, as being the law of that special case ; and the court evidently did not intend to extend it further.

That was not an action against the defendant as an indor-ser, in which the preliminary question of demand and notice was considered. It was rather thrown collaterally into the case ; and it does not appear even, that the note there in question, was negotiable paper. But be this as it may, it was a note transferred long after it became due, and under the peculiar circumstances alluded to by the court, as governing its decision. The holder of the note, within two or three weeks after its transfer, made demand of payment; and this may have been within reasonable and legal time; but he delayed, without any known cause, to give notice of non-payment to the indorser, for two or three months afterwards, although the parties resided within seven miles of each other. If that was a negotiable note, and subject to the laws of such paper, we can only say, that we know of no other case where a demand and notice were necessary at all, in which a delay of two or three months’ notice, after payment had been actually refused, and the note by such refusal dishonoured, has been considered excusable. We think that the whole spirit of the law of negotiable paper, in the state of New-York and elsewhere, is the other way. But we repeat, that the point relied upon by the plaintiff, in that case and this, was decided in his favour, as we think, on the ground that from the conduct and declarations of the defendant, he did not expect, and in fact had waived, a demand and notice; as well, perhaps, as upon what the court considered the strong equities of the case ; for they say, “Justice in this case seems to have been done, and it is to be regretted that it was not done secun dum artem.” But in the case we are considering, there are no such circumstances — nothing to persuade us, that the defendant here did not intend to insist upon his rights and privileges as an indorser of the note. The case upon which the plaintiff relies, even if sound law, is not applicable to this. We are, therefore, of opinion, that there is no proof, that legal notice of non-payment was given to the defendant; and that, for this cause ¡alone, a new trial should be granted.

Another question upon the defendants claim, was suggested, and which, by reason of the opinion just expressed, it is not necessary for us to determine, for the purposes of this trial ; but as a new trial is advised, and the same question may again arise, we think proper to dispose of it. It was claimed, that the plaintiff, or the former holder of this note, had so conducted with it, as to give time to the makers, and thereby to discharge the indorser. A mere indulgence given to the maker of a note, by the holder, will not discharge indorsers. To do this, there must be some obligatory contract, by which the holder is precluded from proceeding to enforce his remedies against prior parties, and thus affecting the legal or equitable rights of the surety or indorser. But this has not here been done, nor attempted. No arrangement has been made with the makers of this note, since the defendant has been attempted to be charged as indorser ; and if there was any before, the defendant was a party to it. No action has been prosecuted against the makers, to be sure ; not by reason of any agreement, however, but only because the holders of the note had no hope of enforcing collection from them. Nothing has been done, in any way/ to change, modify, or affect, any of the rights or remedies of the defendant as indorser: all these are as perfect now as ever. McLemore v. Powell, 12 Wheat. 554. Philpot v. Briant, 4 Bing. 717. (15 E. C. L. 126.) Bank of Utica v. Ives, 17 Wend. 501.

A new trial is advised, for the reason before suggested.

In this opinion the other judges concurred.

New trial te be granted.