Oxnard v. Varnum

111 Pa. 193, 1886 Pa. LEXIS 498

Opinion

Mr. Justice Clark

delivered the opinion of the court, January 4th, 1886.

It is undoubtedly true, in general, that to hold the indorsers, a promissory note must at the proper time be presented and payment demanded; if the place of payment be specified, at that place, if not, then at the place where the maker resides, or at his usual and ordinary place of business, and notice of non-payment must be promptly given.

The note in suit was not payable at any particular place ; it was made and dated at Pittsburgh, but the maker neither lived nor had any place of business there. There is some evidence to show that his residence and place of business at the time of the making of the note was at Wheeling, in the state of West Virginia, and of this fact De Camp and Varnum would both appear to have been informed, at the time of the transfer of the note by the former to the latter. Mr. Varnum testifies that he then inquired of De Camp as to the residence of the parties, and that De Camp said Oxnard lived in Pittsburgh and Scranage in West Virginia, and his impression was that he said in Wheeling. At the maturity of the note, however, it would appear that Scranage was in Greenbrier county, or in Kanawha county, in that state, looking after some matters connected with a purchase of lands he had made from De Camp, the payee of the note ; but whether or not Wheeling continued to be his residence or place of business is not shown.

Under these circumstances the learned judge seemsto have supposed that because the note was dated at Pittsburgh, the holder was not obliged to send it to Wheeling or elsewhere in West Virginia; that the holder or his notary was bound only to use due diligence at the place where the note was made. It is very well settled that the making and dating of a note at a particular place is not equivalent to making it payable there, nor does it supersede the necessity for presentment and demand at the residence or place of business of the maker in order to charge the indorsers; it may have the .effect of leading the holder, who has no knowledge of the proper place for presentment, to suppose that he might be there found: Duuean v. McCullough, 4 S.. & R. 480, and where no residence or place of business can be found, an inquiry at the place of the date of the note might perhaps be regarded as essential to the exercise of due diligence. This subject was fully considered in Lightner v. Will, 2 W. & S. 140 ; the note, upon which suit was brought in that case, was dated at Pittsburgh, and no place of payment was specified, the question being upon the liability of the indorsers. The court said: “ It has been argued, however, that dating the notes at Pittsburgh is equivalent to making them payable there, and that it was therefore unnecessary, in order to make the indorsers liable, to go bejmnd the precincts of the city of Pittsburgh to demand payment of the drawers. And indeed it would seem that a notion of this sort prevailed to a certain extent in the city of Pittsburgh, but certainly it is an erroneous one. The circumstance of the notes being dated at Pittsburgh might be considered, by those who knew nothing to' the contrary, some indication that the drawers resided there; but by no reasonable interpretation can it be regarded as being intended to make the notes payable there. The contrary, indeed, has been adjudged: Anderson v. Drake, 14 Johns. Rep. 114. It is prefixed or subjoined merely to show the place at which the note is drawn, in like manner and for the like purpose as it is done in writing a letter, but never done in either case with a view to show that the drawer of a note, or the writer of the letter, resides at the place ; it at most only goes to show that the drawer of the note, or the writer of the letter, was there at the time of drawing the note or writing the letter.” In Parsons on Notes and Bills, 458, it is said : “Where the maker, at the time of signing the note, lives in another state from the one in which the note is dated and delivered, and in which the holder lives, a different question is presented. Where the party who receives a note under such circumstances knows when he takes it where the maker lives, and has sufficient time before its maturity within which to cause a proper demand to be made upon the maker, it would seem to follow that he should be considered as taking the risk of a proper presentment in the state where the promisor resides.” We may also refer to Spies v. Gilmore, 1 Comstock, 321, and to Taylor v. Snyder, 3 Denio, 151, where the same doctrine is declared. This statement of the law, it is true, has not been universally adopted, perhaps, but it would appear to be the view generally accepted ; it is' certainty in accord with the peculiar nature of the contract of indorsement, and is, we think, in harmony with the commercial usages of the country.

Whether or not due diligence is used in making inquiry for the residence or place of business of the maker or indorser is, in most cases, a mixed question of law and fact; the court must state the law to the jury, according to the circumstances as they appear, but the jury must determine the fact: Stuck ert v. Anderson, 8 Whart. 116. What will constitute due diligence to find either will in each case necessarily depend upon its peculiar facts ; no fixed rule can be prescribed which will apply under all circumstances, but the fact that the note is dated at a particular place is doubtless proper to be considered in the determination of that question.

In the case at bar, however, Varnum, the holder, knew that the residence or place of business of Scranage, the maker, was not in Pittsburgh, although the note was made and dated there, he knew, for De Camp told him that Scranage lived in West Virginia, and he says himself that he is under the impression that De Camp told him, that he lived in the city of Wheeling. If Scranage had resided in Pittsburgh when the note was given, and had afterwards removed from the state, a different question would be presented, but as his residence in Wheeling was known to De Camp at the time the note was made, and to Varnum, when by the indorsement of De Camp it was transferred to him, they must, iu each case, be supposed to have taken the risk of a proper presentment at the place where the promisor resided. A person who takes a promissory note by indorsement, if he proposes to hold the indorser, takes it with the knowledge that at its maturity a proper demand must be made upon the maker for payment, and he is under obligations, at the time he receives it, or in due time afterwards, to know, or at least to inquire, where the maker lives ; if he does not, and refrains from all inquiry, he should suffer the consequences of not being able to make a regular demand. In view of the peculiarities of the contract of indorsement and of the rights and responsibilities resulting therefrom, the holder of a promissory note should certainly be held to the exercise of such diligence in this respect as ordinary foresight and prudence would suggest; and in the absence of any effort he should, we think, be held to be affected with knowledge of that which by reasonable diligence he could have readily ascertained. As the maker’s known residence and place of business, at the making of the note, was in the city of Wheeling, where he was the proprietor of the St. James Hotel, and not in the city of Pittsburgh, and as it did not appear that afterwards he had any other, it would seem that Wheeling was the place where inquiry should have been made. For if Scranage was at the time in Greenbrier or Kanawha county, looking after his lands, he may have left behind him some provision for the note; indeed, although absent, for anything that appears, his errand may have been of a merely transient or temporary character, his residence and place of business remaining in Wheeling. That portion of the charge of the learned court, therefore, in which the jury was instructed that as the note was dated in Pittsburgh it was sufficient to present it for payment there to bind the indorsers, under the special facts of the case is clearly erroneous.

Thus far we have considered the case apart from, and altogether independent of, the alleged promise of Oxnard to pay the note when it was presented to him by Mr. Hughes after protest. As to the circumstances under which that promise was made, much depends upon the testimony of Hughes, who says that he exhibited to Oxnard not only the note but the protest of it. If this be so, and Oxnard does not positively deny it, the latter had an opportunity to know with certainty the degree of diligence actually exercised by the holder in the presentment. He would in the formal certificate see that there was no presentment of the note at the place of the maker’s residence, or to the maker in person; that the note was in the hand of a notary at Pittsburgh, and that inquiry was made for the maker at that place only. If, with a knowledge of these facts before him, the defendant, upon his promise to pay the note, obtained forbearance and the indulgence of the plaintiff, he cannot now repudiate his promise — he must pay as he agreed. Such a promise was a clear waiver of the laches of the plaintiff, and neither presentment, demand, protest nor notice need be shown. The general principle seems now to be settled in this country that where no demand has been made or notice given a promise to pay after maturity, with a full knowledge of the laches, is binding: Parsons on Notes, etc., 595-601. Byles, in his Treatise on Bills, 237, lays down the rule thus: A promise to pay will entirely dispense with proof of presentment or notice, and will throw on the defendant the double burden of proving laches, and that he was ignorant of it. (See also 3 Kent’s Com. 113 ; Chitty on Bills, 539; and Parsons on Notes, etc., 595, and cases there cited.)

In our own state the law would seem to be as well settled on this point as elsewhere. “ That a subsequent promise to pay the note by an indorser who has full knowledge of all the facts amounts to a complete waiver of the want of due notice,” says Mr. Justice Strong in Sherer v. Bank of Easton, 9 Casey 134, “ is settled, and settled as a matter of law; so does a part payment. Some of the cases assert that it is evidence from which a jury may infer that demand was duly made and notice given, but many others declare it to be a waiver of notice itself. Levy v. Peters, 9 S. & R. 125, seems to assert that it is both. Tilghman, C. J., said that an acknowledgment of liability (to which he held a partial payment to be equivalent), carries with it internal evidence that the drawer knew that due diligence had been used by the holder, or even if it had not that still the drawer confessed that he was under an obligation to pay. In Duryee v. Dennison, 5 Johns. 248, where it distinctly appeared affirmatively that there was no proper demand and notice, the indorser was held liable, on the ground that he subsequently agreed to consider the demand and no-lice as made in due time and himself liable as indorser, and this without any new consideration for the agreement. The subsequent promise was held to be, not evidence of due demand and notice (for confessedly there had been none such), but a waiver of any demand or notice at all.”

So, in Loose v. Loose, 12 Casey 538, where the authorities are collected and the whole subject discussed, it was distinctly held that a promise to pay by the indorser, after default of payment by the maker, not only dispenses with proof of presentment and notice, but throws on the defendant the burden of proving the laches of the holder, and that the defendant was ignorant of the facts at the making of the promise. “ Regarding it as a waiver,” saj^s the court in the case cited, “ it, of course, must be essential that the party making it knew the laches which he is alleged to have excused, for waiver is not without intention. There is, however, very great harmony in the decisions, in holding that a promise or acknowledgment itself raises a presumption that the drawer of the bill or the indorser of the note was acquainted with the laches of the holder, which his promise is alleged to have waived. I know of but one case in which the opposite doctrine has been distinctly asserted. That is the case of Trimble v. Thorne, 16 Johns. 152, and it has often been spoken of with disapprobation by other courts: Breed v. Hillhouse, 7 Conn. 523; Kernan v. McRea, 7 Porter (Ala.) 184; and it was finally overruled in New York in Tebbetts v. Dowd, 23 Wend. 379).” The same principle is recognized in the recent case of Moyer’s Appeal, 6 Norris 129.

The question on this branch of the case was therefore one for the determination of the jury, but we cannot distinguish in the verdict as to the effect of that portion of the charge relating to the presentment and demand at Pittsburgh, and the case must be reversed.

Judgment reversed, and venire facias de novo awarded.