National Bank v. Lewis

The opinion of the court was delivered by Royce, J. The only question presented for decision is as to the liability of the indorser, H. W. Lewis, upon the facts stated in the exceptions. H. W. Lewis was an accommodation indorser, and, as bearing upon the question of his legal liability, it is pertinent to consider what obligation he assumed as between himself and the holder of the note by such an indorsement. Hosmer, J., in speaking of such an indorsement in Buck v. Colton, 3 Conn. 129, says, that the contract of the indorser is not absolute but conditional. It is merely this; “If you use due diligence in demanding the money, and the maker refuses to pay it, and you will give me reasonable notice of this, I will pay you.” This rule is substantially the one laid down by the text-books upon bills of exchange and promissory notes, and in the reported cases as defining the nature and legal effect of the contract of indorsement by an accommodation indorser. And upon the question as to who must give the notice, it was held in Harris v. Robinson, 4 How. S. C. 336, that it would be sufficient if given by any person duly authorized by the holder. It is not claimed that any notice was in fact given of the non-payment of the note by the plaintiff or by Copeland, who was the owner and holder of the note. But it is claimed that the letter that the indorser wrote to the plaintiff, and which was received by it the day the note became due, was, in legal effect, a waiver of notice. It is to be borne in mind that at the time that letter was written and received, the bank had no interest in the note, and it was not [625] in its possession nor under its control. It is claimed that the waiver of protest evidenced by the letter, would take effect and bind the defendant as a similar promise would made to a stranger in respect to a debt affected by the Statute of Limitations. In Mountstephen v. Brooke, 3 B. & Ald. 141, it is said that the Statute of Limitations was passed to protect the persons who were supposed to have paid the debt but to have lost the evidence of such payment, and hence, evidence of an acknowledgment of the existence of the debt, even though made to a stranger, was receivable, to rebut the presumption of payment. The evidence was admissible against the party originally liable, in aid of the party to whom he owed a debt or duty, but who had been deprived of his remedy by mere lapse of time. But here, as we have seen, the indorser is not the party originally liable — his contract is only conditional. The letter was not used as evidence to rebut a presumption, but to fix the indorser with a legal liability. It was not addressed to the party who had the custody or control of the note; and this case differs materially from those that have been referred to by the counsel. In those cases, the agreement, promise, or admission relied upon as a waiver of notice, was made to the party having a legal interest in the demand; here, as we have seen, the agreement was with an entire stranger. To hold that such a notice is sufficient to charge an indorser, would be contrary to the principles of the mercantile law as we understand them. Judgment affirmed.