Worden v. Mitchell

By the Court, Cole, J. Upon the trial of this cause the county court gave the jury the following instruction, which was excepted to by the appellant. “That if in this instance they- should find that the defendant assented to a postponement of the time in which the notes were to be presented as alleged in the complaint, it would amount to a waiver of presentment and nodce, at the time when such presentment and notice would otherwise have been necessary and would bind the defendant to a waiver, but would not bind the plaintiff to perform his part of the agreement and he would not be bound [165] to give notice at the time when by the parol agreement the notes were to be presented.” In the complaint the respondent in effect alleged that at the time of the indorsement and transfer of the notes upon which the action was brought, it was stipulated and agreed by and between the endorser, Worden and the Fifth Ward Gas Light Company, one of the notes at the time being overdue and unpaid, that payment should not be demanded of the maker, Da-7 vid G. Power, until the 1st day of July, 1857, and that notice of non-payment would not be served until the said 1st day of July, upon the appellant, and that the notes were sold with that express stipulation and reservation, and were transferred by the gas light company to the respondent with the like reservation and agreement. The appellant in his answer substantially alleges that the company voluntarily extended the time of payment of the note to the 1st oí July, by agreement with Power, and without consultation with him, and denies that it was stipulated and agreed between him and the company that payment should not be demanded until that time or any other time, but states that it was understood by him that he was in no case responsible for the payment of the note or any part thereof. The indorsement of a note in contemplation of law amounts to a contract on the part of the indorser to the effect, among other things, that when duly presented, if it is not paid by the maker; he, the indorser, will, upon due and reasonable notice given him of the dishonor, pay the same to the holder. Coddington vs. Davis, 3 Denio 16; Story on Prom. Notes, § 135. But there are numerous authorities to show that an indorsee may waive, demand and notice, either during the currency, or after the maturity of the note. (See Edwards on Bills and Promissory Notes, pp. 633, 4, 5 ; Story on Bills of Exchange pp. 360, 438, §§ 317, 371. Burgh vs. Legge, [166] 4 M. & W. 418. Burce vs. Lyttle, 13 Barb. S. C. R. 163,) and such we suppose is the law upon this subject. Although there was considerable conflict of testimony upon the point, yet we shall assume that the evidence in the case did clearly show that the allegation of the complaint was fully sustained, and that the appellant indorsed the note to the Gas Light Company with the distinct understanding and agreement that payment thereof should not be demanded of the maker until the first day of July following; still, in view oí the authorities and according to our construction of the effect of the agreement, we think the instruction of the court above cited, erroneous. The instruction proceeds upon the assumption that if there was a waiver by the appellant, of demand and notice at the time when a demand and notice would otherwise have been necessary it was not incumbent on the respondent to show that the note was actually presented for payment on the 1st day of July, and notice of dishonor then duly given to the appellant. The appellant having consented that payment should not be demanded until the 1st of July, was most unquestionably estopped from objecting that demand and notice were not made when the note fell due. The holder of the note might well have acted upon the understanding that the note was not to be presented when due but upon the 1st day of July, thereafter. And it would therefore be most unjust in the face of this understanding to permit the appellant to insist that he cannot be charged as indorser on account of the omission of the holder to demand payment of the maker when due, and for want of proper notice of non-payment. It was insisted by the counsel for the appellant, that the agreement to waive demand and notice was within the statute of frauds and that the contract, as well as the consideration for such waiver, must be in writing. We do not, however, take' that view of the matter. A waiver of demand and notice made [167] by an indorser, is not, in our opinion, a new contract, but only a waiver absolutely or in part of a condition precedent to his liability. (Taunton Bank vs. Richardson, 5 Pick., 436; Barclay vs. Weaver, 19 Penn. State R. 396.) If the indorser consents that demand shall not be made when the note falls due, he certainly by every principle of law and common justice, ought to be estopped from taking advantage of an omission to present it for payment at that time. In the case at bar we do not understand that the appellant waived absolutely demand of the maker and notice of dishonor, but that payment should not be demanded until the 1st day of July, and that notice of non-payment (should then be given. It will not be pretended that there was any proper notice given the appellant of the presentation and dishonor of the note on the 1st day of July. It appears that payment was demanded of the maker upon the 1st day of July, and that the note was presented by a notary (public) on that day. The notice of demand and dishonor was however sent to the appellant through the post office, instead of being personally served as required by section 61, chap 9, R. S., when the notary resides within two miles of the residence of the indorser. The notice was clearly insufficient to charge the appellant. We think he was entitled to have payment demanded of the maker on the 1st day of July, and to a legal and proper notice of the non-payment. The county court charged that it was not necessary for the respondent to show that he gave notice at the time when, by the parol agreement, the notes were to be presented for payment In this we think there was error. The judgment of the county court must be reversed and a new trial ordered.