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N. Y. Supreme Court.-Dole v. Gold.

tice only states that the note had become due and had been returned unpaid. I think, therefore, that the notice is insufficient, and that this rule must be made absolute." Park, Bosanquet, and Coltman, Justices, expressly concurred on the authority of Hartly v. Case, and Solarte v. Palmer, 3 Bing. N. C. 683; 32 Eng. Com. Law Rep. 283. In the case of Phillips v. Gould, Patteson, J., at the sittings in London, in 1838, ruled that notice from the holder to the endorser of a bill of exchange, stating that a bill of exchange (describing it) lies at my office due and unpaid, was not a good notice of the dishonor of the bill, and referred to the case of Solarte v. Palmer, as decided by the House of Lords, 8 Carrington & Payne, 335; 34 Eng. Com. Law Rep. 425.

In the case of Strange v. Price, decided in the Common Pleas, in 1839, that court, on the authority of Hartly v. Case and Solarte v. Palmer, decided that a notice in substance as follows: "Messrs. S. & Co. inform Mr. P. that Mr. B.'s acceptance, £57 5s. 5d., is not paid. As endorser Mr. P. is called upon to pay the money, which will be expected immediately," was insufficient. Denman, C. J., Littledale, Patteson, and Coleridge, Justices, concurring. 10 Ad. & Ellis, 125; 37 Eng. Com. Law Rep. 71.

In the case of Messenger v. Southey, decided in the Common Pleas, in 1840, the question of the requisites of a notice to an endorser of a bill of exchange again came before the court for consideration. The notice was in this form: "Sir; This is to inform you that the bill I took you, £15 2s. 6d., is not took up, and 4s. 6d. expenses, and the money I must have immediately. My son will be in London on Friday morning"-was within the previous decisions insufficient. Tindale, J., delivering the opinion of the court. Manning & Granger's Rep. 7639; Eng. Com. Law Rep. 360.


The last English case to which I am able to refer, is that of Furse v. Sharwood, decided in the King's Bench, in 1841, in which, after a review of all the previous cases, it was determined in substance that the notice of the dishonor of a bill, by whatever party given, is insufficient if it merely state that the bill has not been paid when due. 2 Ad. & Ellis Rep. N. S. 338; 42 Eng. Com. Law Rep. 726. after a kind of judicial obstinacy on the part of some of the judges of the common pleas, for about sixteen years, it is finally settled by all the courts, with the express concurrence of the ablest judges of one of the most commercial nations on earth, that when there is no dispute about the facts, the sufficiency of notice to an endorser of a bill or note is a question of law, and that the notice must, by its language, directly or by reasonable implication, inform the endorser that the paper has been dishonored, or the court will declare it insufficient. The same principle was adopted by the Supreme Judicial Court of Massachusetts, in 1842, in the case of Gilbert v. Dennis, 3 Met. Rep. 495, and adhered to by the same court in 1845, in the case of Pinkham v. Macy, 9 Met. Rep. 174. In this last case, Shaw, C. J., reasserts the rule that the "notice must be such as to inform the endorser, either in terms or by reasonable implication, that the note is dishonored, that

N. Y. Supreme Court.-Dole v. Gold.

is, that it has been presented for payment and payment refused, or other acts done which is deemed equivalent."

It appears by the digests that the same rule is adopted in several of the other States, but I have not time to refer to the decisions.

In 1845, after these repeated and almost annual adjudications of the English, and some of the highest American courts, for twenty years, the same learned jurist, who delivered the opinion in the case of Mills v. The Bank of the United States, in his Commentaries on Promissory Notes, not only states the "indispensable requisites" of the notice to an endorser, as above quoted from sec. 348, but in sec. 350, as to the statement in the notice, that the note has been duly presented and dishonored, says "This statement is essential to establish the claim or right of the holder, or other party giving notice, for otherwise he will not be entitled to any payment from the endorser. It will be sufficient, indeed, if the notice sent, necessarily, or even fairly, implies by its terms that there has been a due presentment and dishonor at the maturity of the note, but mere notice of the fact that the note has not been paid, affords no proof whatever that it has been presented in due season, or even that it has been presented at all." And in sec. 354, the same learned author, after remarking that the rule adopted in the American courts upon the subject, is far more liberal than that generally maintained in the English courts, says"If, however, there be no statement of the dishonor of the note, nor any thing from which it can fairly be implied, that due presentment has been made, the notice would seem to be fatally defective." This rule requires only that the endorser should have notice of the dishonor of the note. Whatever will show the dishonor is sufficient, where a note is made payable at a bank, or other particular place, it is the business of the maker to have funds there at the time to take it up, and if he neglect to do so he dishonors his note, and it is sufficient to inform the endorser of that fact. No personal demand of the maker is necessary. But the maker of a negotiable promissory note, payable at large, which may be transferred ad infinitum, without his knowledge, does not dishonor his note until upon due presentment and demand he refuses or neglects to pay it. In such case, the holder must make a personal demand, or what is equivalent to a personal demand, of the maker, before he can claim as against the endorser, that the note is dishonored. Taylor v. Snyder, 3 Denio, 145; Gilmore v. Speis, 1 Barb. S. C. Rep. 158. I confess I am unable to perceive upon what ground this rule can be called illiberal. It prescribes no particular form of notice, which business men must go to a law book to learn, and which must be adhered to even at the expense of substance. It simply requires the holder, in such language as he may choose to adopt, to inform the endorser of the fact that the maker, on being called upon, has neglected to pay the note. That the contingency upon which the endorser's promise to pay the note depended, has happened, and that his liability has become absolute, or in other words, to do what he agreed to do, as the condition of having the endorser's security. This is a condition of the contract important to

N. Y. Supreme Court.-Dole v. Gold.

the endorser, whose rights are as worthy of protection as those of the holder, and I do not see upon what principle the courts can deprive him of its benefits. It is no answer to say that the holder cannot recover in an action against the endorser, without proving the dishonor of the paper by the party primarily liable. The endorser is not bound by his contract to incur the trouble, expense and business discredit of a lawsuit to find out his liability. He contracted for a cheaper, fairer, and more business-like mode of information, and he has a right to it, and by the rules of fair dealing he has a right to rely on it. And I have no doubt that if an endorser has been induced to pay the paper endorsed by him, by a false notice of its dishonor, he may recover back the money from the party who has thus fraudulently obtained it.

It was suggested on the argument, that the rule contended for is too inflexible and unvarying for practical business purposes; that the activity of commercial pursuits could not safely be cramped by fixed rules on this subject. If it is necessary that this subject should be regulated by law, it is highly proper that that law, however liberal and expanded it may be, should be fixed and invariable. That this subject should be governed by law, is a conclusion not only of reason but of experience. Commercial business dreads nothing so much as uncertainty; it can adapt itself to almost any fixed system, but cannot endure change and mutability in a system by which it is to be governed. Uncertainty destroys business confidence and discourages enterprise. What man would deal in commercial paper, which in some form or other must in all commercial countries be to a great extent the medium of exchange and business, if the liabilitiy of the parties to it was from time to time, and again and again, to be left to the verdict of a jury, who, with the purest motives and highest intelligence, have, from their organization, no power to produce uniformity of decision. The necessity of fixed rules on the subject of notice to endorsers was strongly advocated by Lord Mansfield, and the evils of judicial hesitancy to declare such questions to be questions of law and not of fact, noticed by Buller, J., in the case of Tindall v. Brown, above referred to. In alluding to the course of English decisions on this subject at that time, the last mentioned honest and learned judge remarked that "The numerous cases on this subject reflect great discredit on the Courts of Westminster. They do infinite mischief in the mercantile world, and this evil can only be remedied by doing what the court wished to do in the case of Metcalf v. Hale, by considering the reasonableness of time a question of law and not of fact. This evil, which would be as great now as it was then, has been remedied by the adoption of the rule proposed, and the measure has received the approbation of the business experience and the judicial wisdom of three generations, and I have no doubt that it ought to be sustained, for its conformity to the contract between the parties, for its own intrinsic reasonableness, and for its fitness to promote the safety and prosperity of commercial transactions. After having examined this question more with reference to the importance of the

N. Y. Court of Common Pleas.-Sisson v. Stevenson.

principle involved in it, than the amount in controversy between the parties, I have come to the conclusion that the sufficiency of the notice under consideration was a question of law, that the notice was clearly defective, that the Justice and the Recorder's Court erred in sustaining it, and that for this reason the judgment of the Recorder's Court, and that of the Justice, must be reversed.

HOYT, Presiding Judge, and Justices SILL and MARVIN, concurred.

Conrt of Common Pleas.

Before the Honorable M. ULSHOEFFER and Judges INGRAHAM and DALY.


Covenant on a bill of sale of a steamboat which was sold free from incumbrances. It appeared that after the sale several bills for wharfage, &c. were presented to plaintiff, and that under a threat of seizure, the plaintiff paid $114 13. The complainant set out the agreement and facts, and alleged that the bills for wharfage were liens by which the vessel could be seized by attachment or by warrant of distress. Demurrer on the ground that no breaches of covenant had been assigned, and that by the law of this state a distress could only be levied on goods, &c.

Held, that the complainant showed a good cause of action; that any claim for which the vessel might be seized, might be treated as a cause of damage. That the plaintiff using the phraseology "warrant of distress," was immaterial, and might be treated as surplusage. Judgment for plaintiff, with costs.

THIS was an action brought to recover damages for breach of covenant contained in a bill of sale, given by defendant to the plaintiff, of the steamboat James Madison.

The covenant for the breach of which the action was brought, was in these words:

"And I, the said Evan Stevenson, have, and by these presents do promise, covenant, and agree, for myself, and my heirs, executors and administrators, to and with the said Lemuel Sisson, his heirs, executors, administrators and assigns, to warrant and defend the said steamboat James Madison, vessel, and all the other before mentioned appurtenances, against all and every person and persons whomsoever."

The complainant alleged as breach of the covenant, that after the sale three several bills for wharfage, which had accumulated against the vessel before the sale, two of which were for wharfage in NewYork and the other at Albany, were presented, and threats of seizure of the vessel and appurtenances were made, under which the plaintiff was compelled to pay the same to avoid a seizure of the vessel and appurtenances, to his damage of $114 43.

The complainant also set up that it was understood and agreed at the time of the delivery of the bill of sale, the vessel was free and

N. Y. Court of Common Pleas.-Sisson v. Stevenson.

clear of all incumbrances and liens whatsoever, and then alleged that the said bills for wharfage were liens by which the vessel could be seized by attachment or by warrant of distress.

The defendant demurred thereto. The following were the grounds of demurrer :

1. That the complaint did not set forth any breach of the covenant in the bill of sale to warrant and defend the title of the vessel.

2. That the complaint did not set forth that the vessel had lain at any wharf twenty-four hours, nor that the master and owner of the vessel had refused or neglected to pay the wharfage named in the complaint, or to give satisfactory security for the payment of the same, after having been required by the owner or wharfinger, by notice in writing to pay such wharfage, or to give such security, left on board with the mate or one of the hands belonging to the vessel.

3. That the complaint did not set out any claim or claims against the said vessel and her appurtenances, for which the said vessel could have been seized and detained by warrant of distress.

4. That the complainant did not show how or in what manner the plaintiff was compelled to pay $114 43, or any part thereof, to save the vessel from seizure.

And in the March special term the case came on before his honor Justice Ingraham for argument as an issue of law.

Jesse C. Smith, for defendant, made the following points in support of the demurrer :

First. The complaint shows that the only covenant in the bill of sale was a warranty of title. But the breaches set out are of an agreement that the vessel was free and clear of incumbrances.

Second. The complaint alleges that there were certain claims and liens upon the vessel at the time of the sale for wharfage, for each of which said vessel was liable to be seized and detained by warrant of distress.

The statute giving power to distrain for wharfage in the city of New-York, gives no right to distrain on the vessel, but upon property on board the vessel, and that for each twenty-four hours, and after demand and written notice to pay such wharfage, or give security for the same, left on board with the mate or one of the hands belonging to the vessel, none of which are alleged to have been complied with. Rev. Laws, 1813, vol. 2, p. 430, 431, sec. 217.

Besides this there is no statute giving a right to distrain for wharfage in Albany.

Third. The complaint does not then show how or in what manner the plaintiff was compelled to pay $114 43, or any part thereof, to relieve the said vessel from seizure.

D. McMahon, Jr., in reply, made the following points for the plaintiff.

First. The covenant to warrant and defend the vessel and the appurtenances against any and all persons whomsoever," is broken,

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