Pyle v. M'monagle

2 Del. 468

• Court: Superior Court of Delaware
• Decided: July 5, 1838
• Status: Published

Opinion

By the Court.

J. M. Clayton, Chief Justice:

In cases of mere indorsement, no doubt the rule is, that bills, notes and checks, payable on demand, must be presented for payment within a reasonable time. Yet even in an action against an indorser , of such a note, bill or check, the question whether the holder presented it for payment within a reasonable time, is a question of law for the court to decide. Byles on Bills, 123. I B. $ C. 46S.

A man making such an assignment as this, does not assume all the responsibilities of an indorser of a note. His liability cannot be fixed by a mere demand of payment, and a refusal by the drawer and a notice to him. His contract is of a different character. By settled legal construction h'is contract involves accountability no further than this — that the maker is solvent; and to fix him in action for the money advanced by the assignee, it is indispensable to prove satisfactorily that the maker was insolvent at the time of the transfer, so that a suit w'ould have been utterly unavailing; or that he has prosecuted a suit against the maker with legal diligence and could not recover the money; thus establishing the insolvency by legal proceeding. And for this reason, the omission to hold Crawford to bail was not a discharge of M'Monagle. The insolvency of Crawford is fully proved, and the holding him to bail would be of no use. Even the suit was unnecessary, except as a means of ascertaining the insolvency. By accepting common appearance, the plaintiff obtained judgment much sooner than if he had required bail above to be entered, and gone on with the suit.

As to the time of legal diligence, it has been established by repeated decisions in our courts (some of them more than forty years ago,) that the assignor uses due diligence, if he bring suit against the maker of a note or obligor of a bond, to the first term after the assignment, and prosecute such suit diligently.

The same decisions have fully settled the law, that an action for money had and received, is the proper action by the assignee against the assignor or guarantor. We are precluded by these decisions from controverting the propriety of the form of action, or the original soundness of the position upon which they rested, to wit: that the plaintiff had a right to proceed for the money advanced on the special guaranty as for money paid, where the consideration had failed, or money had and received by the assignor for the use of the assignee.

Our act of assembly regulating the assignment of bills and specialties, applies in terms to prommissory notes. The same construction, therefore, may be made of assignments on all these instruments. Digest, 42.

In New York, it has been decided that a guarantor cannot object laches in the holder of a prommissory note for not seeking satisfaction from the principal debtor, if suit be commenced within three months after the debt falls due. Lamorieux vs. Hewitt, 5 Wendall, 307. Also, that where the payment of a note is guarantied by the indorser, it dispenses with the necessity of a demand and notice, Campston vs. M‘Nair, 1 Wend. 457.

W. H. Rogers, for plaintiff. J. A. Bayard, for defendant.