Prentiss v. Danielson

Hosmer, Ch. J. An indorsement of a note not negotiable contains a warranty, by the indorser, that the maker is of ability to pay it, and that it is collectible, by the use of due diligence. Swift’s Ev. 342. Bradley & al. v. Phelps, 2 Root 325. Huntington v. Harvey, 4 Conn. Rep. 124, Welton v. Scott, 4 Conn. Rep. 527. The terms due diligence, as applicable to this subject, have often been defined, and have an established signification. They import, unless when the note arrives at maturity, the maker is utterly insolvent, so that process against him must be unavailable, that the indorsee must put it in suit, by an attachment, and pursue the most rigorous measures for the collection of the debt. [180] or the indorser is exonerated front ids contract. Swift's Ev. 347. Huntington v. Harvey, 4 Conn. Rep. 124. Welton v. Scott, 4 Conn. Rep. 527, Undoubtedly, the indorser, in any explicit manner, may waive the bringing of suit upon the note, and take the responsibility on himself; but the waiver is founded on a manifested intention to relinquish, and must be clear and satisfactory. In Bond & al. v. Farnham, 5 Mass. Rep. 370. it was decided, and, in my opinion, correctly, that if the maker of a promissory note, before it becomes due, assigns all his property to his indorser the latter is considered as waiving demand and notice. So, if an indorser receives security to meet a particular indorsement, he waives a demand and notice, in respect of that indorsement, but not as to any other. Vid. the case above cited, and Corney v, Mendez Da Costa, 1 Esp. Rep. 302. Tower v. Durrell, 9 Mass. Rep. 332, 4. Barton v. Baker, 1 Serg. & Ramie’s Rep. 334. But, as was said in Timer v. Dwell, “ it would be going too far, to say, that an indorser, who, supposing a regular demand and notice to have been made and given,” (that is, who considers his responsibility to be fixed,) “ and believing himself chargeable, takes measures for his indemnity against his supposed liability, becomes thereby chargeable." In the case before us, Parish was found not to be such a bankrupt, as to excuse the plaintiff from due diligence, by legal process. From the lapse of time subsequent to the period, when the guaranty expired, before the commencement of an action against the maker, the indorser became exonerated from his responsibility, unless there was, on his part, a waiver of suit. An endeavour has been made to change the well established principle on this subject, by obliging the defendant to show, that he has been subjected to damage, by reason of the plaintiff’omission to sue. The law always implies damage, from the breach of an obligation, arising out of contract; and neither justice nor convenience will admit of an enquiry, whether actual damage was sustained, It was formerly held, that it was incumbent on the person insisting on toe want of notice, or other omission, to prove, that he had really sustained damage, by the laches of the holder; but it has been settled, by later decisions, that such damage is to be presumed, and that the only excuse for the omission, is the proof of the want of effects in the hands of the drawer of a bill of exchange. Chitt Bills, 358. Phil. ed. of 1821. Upon the same principle, the only excuse for the omission of suit, is the utter insolvency of the maker of a [181] promissory note, or a satisfactory waiver, by the indorser. This rule presents a land-mark, to test the obligation of an indorser, while the other principle would produce utter uncertainly, and endless controversy. A waiver by the defendant, has been supposed to arise from the omission, with his approbation, to imprison the debtor, and from the indemnity, obtained by him, against certain specified claims. As to the first, the imprisonment of Parish, if the indorser was exonerated from responsibility, would not have availed the plaintiff; and this was the precise fact. Now, the omission to do that, with the defendant’s assent, which, if it had been done, would not have rendered him responsible, can have no effect in the case. From the indemnity, supposed to be acquired, no intention to relinquish any measure requisite to onerate the indorser, can rationally be inferred. If the defendant believed himself chargeable, and took measures for his indemnity against a supposed liability, this did not resuscitate an extinguished right, nor revive a contract, that had expired. The fact, in my opinion, is not supported, that the defendant received a conveyance of property, to indemnify himself from the indorsement of the note in suit, but from other liabilities only. This point, however, is not worth insisting on, as the transaction, if the note in suit was the object of the indemnity acquired, was founded in mistake, or resorted to, from abundant caution; and never was designed to give life to a demand, which had no existence. The other Judges were of the same opinion. New trial not to be granted.