Carter v. Burley

Parker, C. J. The original instrument, which has occasioned the existence of this action, is a promissory note. — 564 — made by Carr & Lunt, of Philadelphia, and payable to Gordon Burley. But the suit itself is founded upon an indorsement of this note, afterwards made by Burley, to the plaintiff. This indorsement authorized the plaintiff to demand the money, mentioned in the note, of Carr &o Lunt, at the time when it became payable, and, upon non-payment by them, to resort to the defendant for the amount, upon giving him due notice of the dishonor. The indorsement, therefore, thus made upon the note, is an engagement of the same nature, and operates, as between these parties, as an indorsement of an accepted bill of exchange. Carr & Lunt, by means of their promise to pay, are the acceptors, and the defendant, who held and undertook to transfer their promise by means of his indorsement, stands in the same situation as the in-dorser of a bill in the usual form. 4 D. & E. 152, Brown vs. Harraden; 1 Wendell 522, Leonard vs. Mason; 2 N. H. R. 159, Dwight vs. Emerson; Chitty on Bills 180; 6 Wheaton 574, Union Bank vs. Hyde. It is said that every indorsement of a bill may be considered as a new bill, drawn by the indorser on the acceptor. 4 Mass. R. 258, Van-Staphorst vs. Pearce ; 2 Burr. 674, 676, Heylin vs. Adamson ; Story’s Conflict of Laws 261, 262 note, 298. An accepted bill of exchange is in theory an assignment to the payee of a debt due from the drawee to the drawer. 5 Wheaton 286, Mandeville vs. Welch. And the indorsement of a promissory note is an assignment of a debt due from the maker to the indorser. Such being the similarity of operation between the in-dorsement of promissory notes and the drawing and indorsement of bills of exchange, there would seem to be no sound objection to treating the indorsement of the former as if it was in fact drawn out in form as a bill. An indorsement on a bond, ordering the contents to be paid to a third person, may be so treated. 1 Bay’s R. 66, Bay vs. Freazer. The statute of Ann provided that actions might be maintained upon promissory notes against the makers or indors565 ess, in like manner as in cases of inland bills of exchange ; but that provision was enacted principally to enable the holders of such notes to sustain actions upon the instruments themselves, and not to regulate the proof as between the parties. The indorsement of a note might, therefore, well have the character of an inland bill, and be treated as one, if the maker and indorser reside within the same government ; or as a foreign bill, in ease they are citizens of different governments; in like manner, and under the same circumstances, that a bill in form would be denominated inland or foreign; and, aside from any established rules upon the subject, might be considered as a foreign or inland bill, so far as regards the demand and notice, and the evidence required to sustain an action against the indorser, upon the default of payment by the maker. Mr. Justice Buller says of certain cases cited in Heylin vs. Adamson, 4 D. & E. 154, “ they show that the courts of Westminster have thought the analogy between bills of exchange and promissory notes so strong that the rules established with respect to one ought also to prevail as to the other.” In this case the makers or acceptors resided in Pennsylvania, and the defendant, who is promisee and indorser, in this state. Treating it as a bill, it is one drawn by a citizen of one of the United States upon citizens of another state in the Union ; and a question has been suggested, whether bills so drawn are to be regarded as foreign or inland. If inland, the evidence of a presentment for payment, and a neglect by Carr & Lunt, it is admitted would be insufficient, a protest being incompetent for that purpose. 1 Salk. 131; 6 Wheat. 572; ditto 146, Young vs. Bryan ; 2 Barn. Ald. 696, 700, Windle ws. Andrews. For certain purposes, all the states in the Union form but one government. That government, in its operation, embraces all the states. Its laws, constitutionally enacted, are in force through the whole extent of their territory; and its tribunals of justice exercise a jurisdiction throughout the — 566 — limits of the whole Union. It is apparent, therefore, that for most, if not all, the purposes for which that government ' was formed, and in the exercise of its functions, the United States are properly to be regarded as an entire nation. Within the immediate scope of its action, the states cannot be regarded as foreign to each other. Those purposes, however, are of a limited character, and beyond them the states conduct their internal affairs as independent communities. The promotion of their commercial prosperity was undoubtedly one of the objects which led to the adoption of the constitution of the United States ; but regulations respecting the drawing, negotiation, and presentment of bills of exchange, seem not to be within the purview of that constitution, and these matters have been left to the legislation and regulation of the several states, as if they were in all respects independent governments. Under such circumstances the states may well be regarded, in the consideration of matters of that character, as foreign to each other; and they have been so considered in several cases adjudicated in the courts of the United States, and of individual states. 2 Peters’ Sup. C. R. 170, Townsley vs. Sumrall; ditto 586, Buckner vs. Finley; and opinion of Mr. Justice Washington, in Lonsdale vs. Brown, ditto 688, Appendix No. II. ; 12 Pick. R. 483, Phœnix Bank vs. Hussey. See, also, 15 Wendell 527, Wells vs. Whitehead. The indorsement which forms the immediate subject matter of this action, if it was regarded as a bill, would be a foreign bill. In that character a protest by a notary public at the place of payment, if duly authenticated, has long been settled to be the regular evidence of dishonor. 4 D. & E. 175 ; 5 D. & E. 239, Gale vs. Walsh; 2 Bay’s R. 376, Payne vs. Winn; 6 Wheat. 574 ; 12 Pick. 484 ; 3 Wend. 173. But it has been held by high authority that “ no demand of payment or notice of non-payment, by a notary public, is necessary in the case of promissory notes,” and that “a pro — 567 — test is, (strictly speaking) evidence in the case of foreign bills of exchange only.” 8 Wheaton 326, Nicholls vs. Webb. This perhaps does not necessarily conflict with the view already taken of the subject, where a note is indorsed so that it can be regarded as a foreign bill; and the reasoning in that case, admitting the protest, in connexion with the other evidence, as secondary evidence of the demand, shows that unless the rules of the commercial law forbid the reception of the protest, as evidence of the dishonor, in such case, it may certainly be very convenient to consider the indorsement as a bill, either foreign or domestic, according to the circumstances ; and on that ground to admit the protest as competent evidence where it can be regarded as a foreign bill. In Nicholls vs. Webb the residence of the parties is not adverted to. In City Bank vs. Cutter, 3 Pick. 414, also, it is held that “no protest is necessary upon the dishonor of a promissory note, and notarial fees cannot be recovered of the in-dorser.” But in that case the parties, it would seem probable, were all residents in Massachusetts. It is not necessary, however, to settle this question for the purpose of disposing of this case, as there is another point upon which the case must be sent to a new trial; and as a farther examination of the authorities is desirable, we waive any decision upon it at this time. It is denied that the protest offered in this case is so authenticated that it can be received, even if a protest is competent evidence. The case finds nothing on this subject; but it is understood from the argument that the protest bears the signature of a person assuming to act as a notary, with the impress of a notarial seal upon the paper, but without any wafer or wax. This it is said cannot be regarded as a seal in our courts. If the protest is made up according to the laws of Pennsylvania, for that purpose, at the time when the demand should have been made, and the seal can be regarded as a — 568 — notarial seal, that must be held sufficient. It cannot be required that it should then have been authenticated with reference to any forms that might be required in making up a protest here. The protest is supposed to be made out at the time of the demand and refusal. If in point of fact it is made after, it is done as if it had been made at the time, and the act is completed as of that time. Bull. N. P. 272 ; 4 Esp. N. P. R. 48, Chaters vs. Bell; Bayley on Bills (Phillips’ & Sewall’s ed.) 170, note. But at that time neither the holder or the notary might have any information respecting the residence of prior parties, nor could they know in what court it might be necessary afterwards to bring an action. Nor is there any authority found requiring the notary to make out'and authenticate several protests, according to the laws of different states of which different prior parties are inhabitants. Still less can the holder be required to provide an authentication according to the laws of all the governments in which he may possibly have occasion to bring an action afterwards. The protest must be made in the manner, and by the person, prescribed in the place where the bill is payable. Story’s Conflict of Laws 298. But the protest itself is evidence. The production of the instrument is sufficient evidence of a protest. Bayley on Bills 332 ; Bull. N. P. 170; 4 D. & E. 175 ; 8 Wheaton, 333; 2 Peters 179. Even the memoranda of the notary may be admitted after his decease. 20 John. R. 168 ; 8 Wheaton 326 ; 2 Wend. 369; ditto 513. For these reasons we are of opinion that the act of the notary, or other officer; in making a protest, is regularly to be authenticated according to the forms of the place where the demand is made, at the time of making it. But it is proper to make a distinction in admitting the proof. If the protest is by a notary, and under seal, the notarial seal will furnish prima facie evidence that it was duly made according to the laws of the place, and be sufficient to admit the protest in proof; but if not made by a notary, or not under — 569 — seal, there must be evidence of the official character of the officer, and of the laws of the state or country where it was made, showing that it was duly made according to the laws there existing. 3 Wendell 173, Chanoine vs. Fowler. In this case the protest is by a notary, under what purports to be an official seal. It is not a mere scrawl, but a distinct impression upon the paper of the protest, showing the character of the notarial seal. Nothing would have been added to its character by wafer or wax ; and as this is not an uncommon mode of affixing official seals,, we are of opinion that it is sufficient. It is to be presumed, from the production of the instrument itself, that it was duly affixed, according to the laws of Pennsylvania, until there is something to impeach it. The notarial seal gives the protest faith and credit as prima fade evidence, without other proof. Whether a mere scrawl could be regarded here as a sufficient seal to authenticate a protest, without evidence of the official character of the notary, and evidence of the laws of the state, may perhaps be doubted. But it does not appear in this case that the defendant was duly notified of the dishonor of the note, although it is not improbable he may have been. Upon this subject the authorities have not been entirely uniform. It has in some instances been submitted to a jury to say whether the notice of dishonor had been given in a reasonable time. 1 Camp. 246, Scott vs. Lifford; 9 East 347, C.; 1 N. H. R. 142, Haddock vs. Murray. But the inconvenient uncertainty which this introduces” has led commercial men and courts to attempt the establishment of a more definite rule. 1 N. H. R. 142; 1 D. & E. 168 ; 1 Peters’ S. C. R. 583. In laying down a general rule, where the parties reside in different places, it has been said, that notice should be given as soon “ as can conveniently be done,” or “ as soon as communication is usually had between the places where the respective parties reside,” (1 N. H. R. — 570 — 140, 142)—As soon as the party himself receives notice. (3 Johns. Cas. 89, Morgan vs. Woodworth)—By the first postor convenient opportunity—(1 Bay's R. 178, Scarborough vs. Harris)—By the next post, (1 D. & E. 168)— By the next post or mail after intelligence of the dishonor, if there is reasonable time to prepare the notice, &c. (5 Cowen 303, 308, Mead vs. Engs ; 3 Wendell 277, Sewall vs. Russell)—Meaning “the next convenient, the next practicable post,1’ (6 East 9, Darbishire vs. Parker)—And that the law does not exact of the holder that he shall give the earliest possible notice. It requires of him only an ordinary and reasonable diligence. 18 John. R. 240, Bank of Utica vs. Smith; 5 Cowen 305; 3 Wend. 277. It is settled in England that it is not required that notice should be forwarded by the next practicable post, but by the post of the next day. 2 Barn. & Ald. 500, Williams vs. Smith ; ditto 501, Wright vs. Shawcross, in note ; 1 M. & M. 61, Geill vs. Jeremy; 15 East 291, Langdale vs. Trimmer ; 15 Mau. & Sel. 68, Bray vs. Hadwen. And there seems to be quite a sufficient weight of authority to establish the true rule to be, that notice to a prior party, where the parties live in different places, is sufficient if forwarded by the mail of the day following the dishonor, or that on which an indorser receives due intelligence of it. 2 Wheaton’s R. 373, Lenox vs. Roberts; 9 Peters’ R. 45, Bank of Alexandria vs. Swann ; 2 Caines’ R. 344, Jackson vs. Richards; 20 John. R. 146, Robinson vs. Ames ; 8 Pick. R. 54, Talbot vs. Clark; 3 Conn. R. 495, Hartford, Bank vs. Stedman. This rule, however, must be qualified by the authorities before cited, so far that if the party receiving a notice can not, by the exercise of reasonable diligence, forward notice to a prior party, by the mail of the day following, it will be sufficient if sent by the next. 4 Bingham 715, Hawkes vs. Salter. In this country, where many of the mails go out at an early hour of the morning, and are sometimes closed at — 571 — an early hour of the evening before, it would be impracticable, in some instances, and nearly so in many more, to prepare and forward a notice by the mail of the next day, where notice was received late in the afternoon or in the evening. It has been further held, that where there are two mails on the same day, if the party put the notice into the post-office in season for either, that is sufficient. 17 Mans. R. 454, Whitwell vs. Johnson; and see 2 Camp. 208, Smith vs. Mullet. But in 1 Pick. 405, it is said it is not necessary that notice should be given until “the next mail after the day on which the demand is made.” It is probably not important in this case to express any opinion upon this last point. If each party through whose hands notice was forwarded to the defendant, availed himself of his right to give notice by the mail of the next day after the dishonor, or after he himself received notice, it is not improbable that the notice was duly transmitted. But neither the holder, or any prior party receiving notice, is required to omit forwarding notice until the mail of the next day; but the holder may, at his pleasure, forward a notice on the day of the dishonor, if the course of the mail will admit of it; and an indorser may in like manner forward a notice on the same day he receives one. 3 Camp. 193, Burbridge vs. Manners; 1 Pick. 401, Shedd vs. Brett; 1 John. Cas. 328, Corp vs. McComb ; 6 Wheat. 104, Lindenberger vs. Beall. And should any party do so, this will not enlarge the time allowed to any other party, nor relieve him from the operation of the rule requiring notice to be sent by the mail of the next day after receiving one. 2 Camp. 208; 4 Barn. & Ald. 451, Turner vs. Leech. There is no evidence in this case of the course of the mails, nor does it appear whether there was a party at Philadelphia, nor at what time, or in what manner notice was sent from that place, nor when it was received by Hutchinson, in New-York. The objection on this part of the case — 572 — is well taken, and for this reason the case must be sent to a new trial. If due measures have not been taken to charge the defendant as indorser, the action cannot be sustained. There is here no sufficient evidence to charge the defendant, on the ground that he waived his rights by a subsequent promise. It does not appear that he had any knowledge of laches, if there had been any. 2 N. H. R. 340, Ladd vs. Kinney; 3 N. H. R. 346, Otis vs. Hussey ; 7 N. H. R. 271, Farrington vs. Brown. Under certain circumstances a promise to pay has been held to be prima facie evidence of demand and notice. 7 East 231, Lundie vs. Robertson; 8 Pick. 1, Martin vs. Ingersoll; 3 John. R. 71, Piersons vs. Hooker. But see 11 John. R. 180, Agan vs. McManus ; 16 John. 152, Trimble vs. Thorne. That principle, however, if correct, cannot avail to sustain this action, on the evidence before us. The defendant agreed to put into the hands of Gray a quantity of hammers, as collateral security for his responsibility as indorser ; but this is not a promise to pay ; and if he had performed that agreement, he would still have been at liberty to contest his liability. It must be construed, therefore, as no more than an agreement to give security for any liability legally resting upon him as indorser, and this is not sufficient. 6 Wend. 661, Jones vs. Savage, and cases cited. Furthermore, Gray does not appear to have been the agent of the plaintiff. He was the agent of Hutchinson ; and a promise to pay, made to him, would have been a promise to Hutchinson, and not to the plaintiff. This might perhaps be urged as an additional reason why the plaintiff is not entitled to treat what was said to Gray, as a waiver, by the defendant, of any right to require proof in an action in favor of the plaintiff. New trial granted.