Smith v. Dunlavy

31 Tex. 693
CourtTexas Supreme Court
DecidedJanuary 15, 1869
StatusPublished
Cited by7 cases

This text of 31 Tex. 693 (Smith v. Dunlavy) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Smith v. Dunlavy, 31 Tex. 693 (Tex. 1869).

Opinion

Morrill, O. J.

—The legislature of 1840 passed an act repealing all laws in force prior to 1st September, 1836, [697]*697with certain exceptions therein mentioned, and on the same day declared the common law of England to he the rule of decision. ■ What is meant by “the rule of decision,” we do not pretend to say, and we have cited the act (Arts. 804, 978) for the purpose of calling attention to the fact, that in the._adjudication of causes the ante-statute law of England forms the substratum, and the constitution and laws..of the United States', together with the constitution. and laws of this state, the superstructure, of our system of jurisprudence. The laws, statutes, and customs of any country, state, or nation, with the above exception, can have no force or validity as such. The laws, rules, or regulations relative to bills of exchange, promissory notes, &e., in force in this state, are our own statutes on this subject, inasmuch as by the common law of England a chose in action was not assignable. (Story on Bills, § 17.) What is known as the mercantile law, and which accompanied the emigrants of Europe to this continent as a part of their inheritance, and which is now acted upon and received with the same binding force as a statute in most of the United States, has no validity or force in this state, except so far as it has become statute law, because it was so declared by the thorough-sweeping act above recited. (Art. 804.)

The two principal acts on the subject of bills of exchange and promissory notes are the acts of 1840 and 1848. (Paschal’s Dig., Arts. 220, 226, 229, 235.)

The 1st section of the act of 1840 contained certain provisions that are repealed by the 7th section of the act of 1848, (Art. 235,) and which are not re-enacted, and of course not in force since the repeal.

The repealed section is as follows:

“It shall not be necessary for the owner or holder of a bill of exchange, promissory note, check, draft, or other mercantile negotiable instrument, to have any of those instruments protested for non-acceptance or non[698]*698payment; nor shall it be necessary to give notice of sneh dishonor to any drawer, indorser, or assignor of the same, and every such party shall, without any protest or notice whatever, be held responsible as security for the final payment of every such instrument: Provided, however, That in all cases in which either a protest or a notice-was "hitherto necessary, the party that would have been released from responsibility by a failure to make such protest, or to give such notice, shall hereafter be released from all responsibility, unless the owner or holder of such instrument shall use due diligence to collect the same, and every holder or owner shall be adjudged not to have used due diligence who shall" not have instituted a suit against the drawer or maker of such instrument before the first term of the district court after the right of action accrued, or shall not institute such suit before the second term of said court, and also show good cause why he did not institute his suit before the first term.” (Paschal’s Dig., Art; 220.)

The act of 1848 was entitled “An act prescribing the mode of establishing the liabilities of drawers and indorsers of bills of exchange and promissory notes,” "and, as has already been said, with some alterations, which will be noticed, contains the law that now governs us.

The 1st section (Paschal’s Dig., Art. 229) is as follows:

“ Tile holder of any bill of exchange or promissory note, assignable or negotiable by law, may secure and fix the liabilities of any drawer or indorser of such bill of exchange, and every indorser of such promissory note, without protest or notice, by instituting suit against the acceptor of such bill of exchange, or against the maker of such promissory note, before the first term of the district court to which suit can be br,ought after the right of action shall accrue, or by instituting suit before the second term of said court after the right of action shall accrue, and showing good cause why suit was not instituted before the first term next after the right of action accrued.”

[699]*699The 4th section of the same act provides that “The holder of any such bill of exchange or promissory note may also secure and fix the liability of any drawer or indorser of such hill of exchange or promissory note for the payment thereof, without suit against the acceptor, drawer, or maker, by procuring such bill or note to be regularly protested by some notary public of any county for nonacceptance or non-payment, and giving notice of such protest to such drawer or indorser, according to the usage and custom of merchants.” [Paschal’s Dig., Art., 232, Note 293.]

The 6th section of the act extended the provisions of the 4th section to contracts between merchant and merchant, their factors and agents, only.

On comparing the 1st section of the act of 1840 (repealed by the 7th section of the act of 1848) with the 1st and 4th sections of [the act of] 1848 on the same subject, it will be seen that the act of 1840 expressly provided, that “ every such party (indorser) shall, without any protest or notice whatever, be held responsible, as security, for the final payment of every such instrument;” while the act of 1848 does not admit that the indorser is security, hut provides the two methods, in which the “holder may secure and fix the liabilities of the indorser,” and virtually providing that, unless the liabilities of the indorser are “ secured and fixed,” as provided, he is released. To say that the indorser is liable, unless “ fixed,” as provided, would be equivalent to denying that the 1st section of the act of 1840 was repealed.

This act of 1848 continued uninterrupted till the 7th December, 1861, when an act was passed suspending the collection of debts and liabilities on bills of exchange and promissory notes till 1st January, 1864, or six months after the close of the war. (Paschal’s Dig., Art. 5125.)

One of the consequences of the passage of this act was the prohibition of holders of promissory notes, which were not made by merchant to merchant, to fix an indorser, and

[700]*700unless the liabilities of the indorser should be fixed, he would be released. Consequently, at the same session of the legislature, on the 1st January, 1862, the 6th section of the act of 1848, (Art. 234,) was so changed that the 4th section was made applicable to bills of exchange and promissory notes of all kinds. After the 11th January, 1862, and until the courts were opened, in 1865, the only way of fixing an indorser was by procuring the indorsed note “to be regularly protested by some notary public of any county for non-payment, and giving notice of such protest to the indorser.” [Paschal’s Dig., Art. 232.]

The appellee insists that, because the note fell due on the 1st January, 1862, and at a time when the laws then in force did not authorize the holder of a note to fix the liability of an indorser in any way, therefore the indorser was liable to pay the note. This would be plausible if the act of 1840, making the indorser responsible as security, had not been repealed, as hereinbefore stated. And, besides, if the holder had used due diligence in having the note protested as soon as he was able, he could have fixed the liability of the indorser. The maxim that the law favors the vigilant properly applies in this case.

We cannot see that this case differs in any material point from Smith v.

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Bluebook (online)
31 Tex. 693, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-v-dunlavy-tex-1869.