Leonard v. Gary

Headnote

Where an endorser, on being called on for the payment of a note, avowed himself legally exonerated from its payment, but declared that he did not wish to take advantage of such exoneration, and promised to pay the note, it was held, that the promise was valid, without further proof of the endorser’s knowledge that he had not been regularly charged.

It seems, that in such a case the endorser will be allowed to shew that no demand had in fact been made of the maker., and that consequently the promise was made under a misapprehension of facts; but where, as in this case, sufficient time had elapsed for the demand, and the avowal of exoneration was distinctly made, including in it as well an admission of a demand as a want of notice, the defendant will be held to strict proof.

Where a note was payable after ten days notice, and notice was given, and before the expiration of the ten days the endorser of the note promised to pay it, telling the holder to give himself no uneasiness about it, as he would see him paid, it was held, that the endorser was estopped from alleging want of demand and notice of non-payment.

This was an action of assumpsit, tried at the Rensselaer circuit in September, 1831, before the Hon. James Vanderfoel, one of the circuit judges.

The suit was against the defendant, as the endorser of a promissory note for $1200, made by C. S. Tewksbury, bearing date 14th May, 1829, payable to the defendant at ten days notice. The signatures of the maker and endorser were admitted. On the note was an endorsement of $175, as paid by the maker, on the 30tli July, 1829, which payment it was admitted was made by the maker. There was a further endorsement or memorandum on the note, in the hand writing of the maker, in these words: “ It is understood that the above is to be called for, when the Merchants’ and Mechanics’ Bank of Troy require their payment on stock.” On the 12th December, 1829, an agent of the plaintiff called on the defendant to make an arrangement for payment of the note; the defendant said he considered himself legally exonerated or discharged as endorser from the payment of the note; that he did not wish to take any advantage whatever; that when he endorsed paper, he endorsed it to pay, and that he would see the plaintiff paid, if every cent of it came out of his own pocket. The agent told

the defendant that the maker had in July preceding paid $175 on account, which was endorsed on the note; the defendant said that he was aware of it, and wished it had been more; that be hoped the plaintiff would give him time, and show him all the indulgence he could. In the same conversation the defendant offered to give his own note to the plaintiff for the amount of his demand, payable in one year; and said, whether he would or not, the plaintiff should be paid; that he hoped the plaintiff would give him time, whether he took the note or not, and wished the agent to tell the plaintiff not to give himself any uneasiness, he would see him paid, if he should pay it out of his own pocket. The agent, on his cross-examination, stated that he did not recollect that he had the note in question with him at the time of this interview; that he did not state to the defendant that any demand of payment had been made of the maker in his life time, or of his administrator since his death; nor did he inform the defendant of the memorandum subjoined to the note. The books of subscription of the Merchants’ and Mechanics’ Bank of Troy were opened about the 1st June, 1829, and that the first call on the stockholders was made on the 10th December, 1829. Tewksbury, the maker of the note, died on the 25th October, 1829, and on the 7th December, 1829, demand of payment of the note was made by the plaintiff of the administrator of Tewksbury, which was the only demand ever made of the administrator. The jury, under the direction of the judge, found a verdict for the plaintiff, which the defendant moves to set aside.

There was no evidence of demand of payment, and notice of non-payment, so as to charge the defendant as endorser of the note declared on. The note, by its terms, was not payable until ten days after üotice that payment would be required. Conceding that the demand made of the administrator on the seventh of December may be considered such notice, it was still incumbent on the holder ten days thereafter, to wit, on the seventeenth of December, to make a formal demand of payment, (for until then the

note was not due,) and if payment was not made, to give notice thereof to the endorser. That such demand was made is not pretended, and the contingency upon which the liability of the endorser depended never happened. Where a demand has been made of the drawer, and the endorser, with a full knowledge of the fact that notice of non-payment has not been given, promises to pay, he is bound, 6 Wendell, 658; but a promise to pay, when the event has not happened, upon which his liability depends, is void, for the want of consideration. If what transpired on the twelfth of December may be construed into an agreement to waive notice, it cannot be considered an agreement to waive demand of payment; a waiver of notice is not a waiver of demand. 6 Mass. R. 524 . A demand of the maker, previous to his death, is not to be inferred from the declaration of the defendant, that he considered himself exonerated, because nothing is to be taken by implication against an endorser. 7 Mass. R. 449 , 483. 4 id. 341. 6 Wendell, 658. The fair presumption is that the defendant acted under a misapprehension of his liability.

The promise of the defendant being absolute and unconditional, and made with a full knowledge of his legal exoneration as endorser is binding, and renders him liable to the payment of the note. In Lundie v. Robertson, 7 East, 231, which was an action by the endorsee against the endorser of a bill, there was no evidence of presentment or notice, but upon being called upon some months after the bill was due, the defendant promised to pay it, although he said that he had not regular notice. The court held that it was to be presumed prima facie from the promise to pay, that the bill had been presented in time, and that due notice had been given ; that the promise superseded the necessity of the ordinary proof, and that the observation that he had not had notice did not vary the case, as he waived that objection. So in Gibbon v. Coggon, 2 Campb. 188, where the drawer promised to pay a bill, the jury were directed to presume that it had been duly protested. See also Tayler v. Jones, 2 Campb. 105. It is conceded that this court has introduced a modification of the rule on the subject of proof in these cases as it prevails in Eng

land: see 16 Johns. R. 152, and 6 Wendell, 658; but even within those decisions it is contended that the defendant should be held liable. When the promise was made, more than four months had elapsed after a payment of $175 by the maker. The fair presumption is that payment of the note had been demanded of the maker previous to such money being paid; the defendant knew of the payment, and expressed his regret that a larger sum had not been paid. He also knew that notice had not been given to him, and with a full knowledge that he was exonerated, for he said he was exonerated, he promised to pay. This case, therefore, is within the principle established by the court in the cases above referred to. But admitting that no demand had been made of the maker, or of his representative since his death, it is submitted that the defendant should be held bound, upon the principle that he agreed to waive the necessity of a demand and notice, and acknowledged his liability to pay. The maker had died in October, and probably knowing the situation in which he had left his affairs, and feeling the force of the obligation he was under to the plaintiff, the defendant sent word to the plaintiff not to give himself any uneasiness about the debt, for he would see him paid, if every cent of it came out of his own pocket, and offered to give his own note for the debt. This case, in this particular, is like Leffingwell v. White, 1 Johns. Cas. 99 , where, during a negotiation between the endorsee and endorser as to the payment of a note before it fell due, the time of payment elapsed and no demand was made of the maker, or notice given, it was held that the ordinary proof might be dispensed with, and that the endorser should be bound.