President of the Bank of North America v. M'Knight

1 Yeates 145

• Court: Supreme Court of Pennsylvania
• Decided: April 15, 1792
• Status: Published

Opinion

*M’Kean C. J.

I sit single in the determination ot ' *1471 this cause, my brethren declining to take any part in the decision, as being stockholders in the bank of North America. The present case seems to differ from ordinary notes, by reason of the special undertaking of the defendant. In this business, notice was given to the indorser, the second day after the note became due, allowing for the usual days of grace. A single day has only intervened.

What is reasonable time for notice, in such cases, where the parties live in the same city, or near to each other, is now settled to be matter of law, in order to preserve an uniformity of decision. Great strictness is required as to this point in England, and it is right that it should be so, when so large a paper credit is in circulation, and where so many purchases are made in the national funds. The rule then is, that notice should be given to the indorser when the bill or note is dis-honoured, the day after the expiration of the days of grace, where the parties live in the same city or town; and by the next post, where they live at a distance from each other. This strictness has not obtained amongst us. Before the late revolution, no protests were made on promissory notes, nor is it now usual, except in this city, in the transactions of the bank; nor is it absolutely necessary. Vide i Espin. 36. It has not been the custom, nor has it been the general prevailing idea that there existed any necessity, to call on the drawer on the very day the note became demandable, or to give the indorser immediate notice. No period has been fixed for such notice by any judicial determinations amongst us, that I know of. It seems to have rested on the general observation made by Judge Shippen, (Dali. 255) that if the holder of a note, without.giving notice of its being dishonoured, retains it so long in his hands after the day of payment, as to create a presumption that he means to take upon himself to give a new credit to the drawer, the want of notice will operate as a discharge. And in the succeeding page, he declares, if the holder of the note retains it two or three months, or any other unreasonable time, without giving notice to the indorser, he ought certainly to bear the loss.

As no precise rule has yet been fixed, neither will I, circumstanced as the court is, lay one down in this case, but will submit it to the jury, whether, taking into consideration the general custom which has hitherto prevailed, and also the special undertaking of the defendants, there has been notice given to the indorser in reasonable and convenient-time. It will soon become necessary for the court to adopt some fixed rule as to future cases, where the holders of the bill and in-*1481 Corners Eve *n the *same city or town. The business -J of banking has greatly increased of late, and circumstances exist amongst us at present, which make a greater degree of strictness, as to notice to indorsers necessary, than has formerly obtained.

Cited in i Rawle, 340, in support of the proposition that verbal notice of non-payment to the endorser by the drawer is sufficient. Cited in 7 S. & R., 326, as a ground for submitting to a jury the question of reasonableness of a notice of non-payment to an indorser. Referred to in 67 Pa., 64, as illustrating the early history of the lawof promissory notes in America.

Verdict for the plaintiffs, on both notes.