* * 265 book or vouchers, with a view to the detection of forgeries of his name. (g) But the loser by forged paper can recover it back only by showing proper diligence in detecting the forgery and in giving notice to those who might be affected by it. (h) It has been held that a note made by a corporation in violation of a statute, is void in the hands of an innocent holder. (2) And this has been held also, where the signature of the promisor was obtained by fraud. (j) But where one whose name was forged took security for the note, it was held to be a ratification by him. (k)1 And it is also held that mere illegality of consideration - if the note be not declared void by statute- - will not affect the rights of one who holds it for value and in good faith. () Whether payment of a debt in bills of an insolvent bank, both parties being ignorant of the fact, is payment, seems not to be quite settled. It must depend upon the question (which in each case may be affected by its peculiar circumstances), whether the payee takes the bills as absolute payment at his own risk, or takes them only as conditional payment, he to be bound only to use due diligence in collecting the bills, and if he fails, the payment to be null. Perhaps the weight of authority, as well as of reason, is in favor of this last view predominating where there is no sufficient evidence of a contrary intention. (m) How far a bill or note received by a creditor is considered in law as a payment of the debt, will be treated hereafter. (n) The liability of an indorser may be considered, first as depending on the demand of payment, and then as to notice of non (g) Weisser v. Denison, 10 N. Y. 68; Manufacturers Bank v Barnes, 65 Ill. 69. (h) Gloucester Bank v. Salem Bank, 17 Mass. 33; Canal Bank v. Bank of Albany, 1 Hill (N. Y.), 287; Pope v. Nance, 1 Minor (Ala.), 299; Schroeder v. Harvey, 75 Ill. 638. (i) Root v. Godard, 3 McLean, 102. (j) Dunn v. Smith, 12 Sm. & M. 602. (k) Fitzpatrick v. S. Commissioners, 7 Humph. 224. () Norris v. Langley, 19 N. H. 423; Johnson v. Meeker, 1 Wis. 436. (m) Ellis v Wild, 6 Mass. 321; Ontario Bank v. Lightbody, 11 Wend. 9, 13 Wend. 101; Wainwright v. Webster, 11 Vt. 576; Gilman v. Peck, id. 516; Fogg v. Sawyer, 9 N. H. 365; Frontier Bank v. Morse, 22 Me. 88 Timmis v. Gibbins, 14 E. L. & E. 64, n. Contra, Lowrey v. Durrell, 2 Port. (Ala.) 280; Scruggs v. Gass, 8 Yerg 175; Bayard v. Shunk, 1 W. & S. 92. See p. 257, note 1, ante. (n) Post, Chap. on Defences. 1 One who, knowing the signature to a promissory note to be forged, and intending to be bound by it, acknowledges it as his own, assumes the note as his own, and is bound by it just as if it had been originally signed by his authority. Wellington v. Jackson, 121 Mass. 157. But Shisler v. Vandike, 92 Penn. St. 447, declared that where a fraud is of such a character as the forged indorsement of a note, its ratification by the person whose name is forged is opposed to public policy, and cannot be permitted.-K. CH. XVI.] * NOTES AND BILLS. * payment, and the proceedings necessary thereon. But bills of exchange must also, in some instances, be presented for acceptance, when they are made payable at a certain 266 time after sight, in order to fix the day of their maturity. But If payable in so many days after date this is not necessary. the holder may present any bill for acceptance at any time, even the last day before it is due; and if not accepted may sue the It is prudent and usual to present a bill drawer and indorser. for acceptance soon after it is received, as the holder thereby acquires the security of the acceptor. (0) SECTION VIII. OF PRESENTMENT FOR ACCEPTANCE. Presentment for acceptance should be made by the holder or his authorized agent to the drawee or his authorized agent, (p) during the usual hours of business. (g) And the drawee has until the next day to determine whether he will accept, but may answer at once. (r) A bill may be in some sort accepted before it is drawn, for a written promise to accept a certain bill hereafter to be made (0) Muilman v. D'Equino, 2 H. Bl. 565. It was here held that there is no fixed time within which a bill payable at sight, or a certain time after, shall be presented to the drawee. It must be a reasonable time; and that is a question for the jury to decide from the circumstances of each case. See also Fry v. Hill, 7 Taunt. 397; Mullick v. Radakissen, 28 E. L. & E. 86; No Montelius v. Charles, 76 Ill. 303. cause of action arises upon a bill payable at sight, until it is presented. Holmes v. Kerrison, 2 Taunt. 323; Thorpe v. Booth, Ry. & M. 388. (p) Cheek v. Roper, 5 Esp. 175. It is not sufficient to call at the residence of the drawee and present the bill to some person, who is unknown to the party calling. Id. (g) Elford v. Teed, 1 M. & Sel. 28; cock, 1 Stark. 475. A presentment, how- 19 (r) Montgomery County Bank v. Albany City Bank, 8 Barb. 399. 289 *267 is construed as an acceptance, if precisely that bill is drawn within a reasonable time after such promise. (s) But a bill payable so many days after sight, cannot have its day of payment fixed, except by presentment; and it has therefore been said, that an acceptance by previous promise does not apply except to bills payable on demand, or at so many days after date. (t) It does not seem quite clear, however, why the acceptance by such promise might not be held valid to bind the acceptor, leaving the day of payment to be fixed by presentment. That is, if a bill payable at sixty days after sight were presented and acceptance refused, and the protest fixed the day of presentment and therefore the day when it should be paid, it is not clear why the acceptor might not be held on his promise to accept that very bill when it should be made and presented. An acceptance must be absolute, and not differ in any respect from the terms of the bill. If any other be given, the holder may assent and so bind the acceptor, but must give notice, as in case of non-acceptance, to other parties, in order to bind them; (u) and the acceptor is held only so far as he promises by his acceptance. (v) The usual way of accepting is by writing the word accepted" on the face of the bill, and signing the acceptor's name; but there is no precise formula or method which is necessary to constitute a good acceptance. It seems to be enough if it is substantially a distinct promise to pay the bill according to its terms, whether it be in writing upon the bill or upon a separate paper, or by parol. (w) 1 And a written promise to pay a bill, (s) Pillans v. Van Mierop, 3 Burr, 1670; Coolidge v. Payson, 2 Wheat. 66; Wilson v. Clements, 3 Mass. 1; Goodrich v. Gordon, 15 Johns. 6; Parker v. Greele, 2 Wend. 545; Kendrick v. Campbell, 1 Bailey, 522; Carnegie v. Morrison, 2 Met. 381; Storer v. Logan, 9 Mass. 55; McEvers v. Mason, 10 Johns. 207; Schimmelpennich v. Bayard, 1 Pet. 264; Boyce v. Edwards, 4 Pet. 121; Williams v. Winans, 2 Green (N. J.), 339; Bayard v. Lathy, 2 McLean, 462; Vance v. Ward, 2 Dana, 95; Reed v. Marsh, 5 B. Mon. 8; Howland v. Carson, 15 Penn. St. 453; Beach v. State Bank, 2 Cart. (Ind.) 488; Cassell v. Dows, 2 Blatch. 335; Lewis v. Kramer, 3 Md. 275; Naglee v. Lyman, 14 Cal. 450. See also Exchange Bank v. Rice, 98 Mass. 288; Central Bank v. Richards, 109 Mass. 413. (t) Story on Bills of Exch. § 249; Wildes v. Savage, 1 Story, 22; Russell v. Wiggin, 2 Story, 213; Franklin Bank v. Lynch, 52 Md. 270. Contra is Ulster Bank v. McFarlan, 3 Den. 553. (u) Walker v. Bank of State of New York, 13 Barb. 636; Lyon v. Sundius, 1 Camp. 423; Russell v. Phillips, 14 Q. B. 891. And see Niagara Bank v. Fairman, &c. Manufacturing Co. 31 Barb. 403; Taylor v. Newman, 77 Mo. 257; Gibson v Smith, 75 Ga. 33. (v) Sallery v. Prindle, 14 Barb. 186. See, however, Clarke v. Gordon, 3 Rich. L. 311. (w) Edson v. Fuller, 2 Foster (N. H.), 183; Barnet v. Smith, 10 Foster (N. H.), 256; Wynne v. Raikes, 5 East, 514: Fairlee v. Herring, 3 Bing. 625. In this case, 1 Retention or destruction of a bill by the drawee is not equivalent to an acceptance. Jeune v. Ward, 2 B. & Ald. 653; Colorado Bank v. Boettcher, 5 Col. 185, 15 Col. 16; Holbrook v. Payne, 151 Mass. 383; Overman v. Hoboken Bank, 30 N. J. 61, 31 N. J. 563. operates as an acceptance of the bill when drawn; but it should be sufficiently precise to identify the bill as that authorized. (ww) In many of our States there are statutes * 268 respecting acceptance of bills. (x) An acceptance can be made only by a drawee, or by one for honor; but an acceptance by one of many drawees binds the acceptor. (y) SECTION IX. OF PRESENTMENT FOR PAYMENT. A bill or note must be presented for payment at its maturity, or the indorsers are not held. They guarantee its payment, not by express words, but by operation of law. And for their protection the law annexes to their liability, as a condition, that reasonable efforts shall be made to procure the payment from those bound to pay before them, and also that they shall have reasonable notice of a refusal to pay, that they may have an opportunity to indemnify themselves. The justice of this is obvious. A holder of a note, with a good indorser, might be very indifferent as to the payment by the promisor or an earlier indorser, if he knew that he could certainly collect the amount from the indorser on whom he relied; therefore the very liability of this indorser is made to rest upon the efforts of the holder to obtain the money bills having been drawn on the defendants by their agent, and with their authority, in respect to a mine which they after wards transferred to A, they requested A to place funds in their hands to meet the bills when due, saying, "it would be unpleasant to have bills drawn on them paid by another party." A placed funds accordingly; but when the bills were left with the defendants for acceptance, no acceptance was written on them. A's agent having complained to one of the defendants on the subject, he said: What, not accepted? We have had the money, and they ought to be paid, but I do not interfere in this business, you should see my partner." And it was held that all this amounted to a parol acceptance of the bills on which the defendants were liable to an indorsee, between whom and A there was no privity, and that the indorsee was not precluded from suing, by having made a protest in ignorance of this acceptance. - In Ward v. Allen, 2 Met. 53, a bill was read to the drawee, who said it was correct and should be paid; and this was treated as a sufficient acceptance. See Parkhurst v. Dickerson, 21 Pick. 307; Pierce v. Kittredge, 115 Mass. 374; Luff ". Pope, 5 Hill (N. Y.), 413; Walker v. Lide, 1 Rich. L. 249; Walker v. Bank of State of New York, 13 Barb. 636; Lewis v. Kramer, 3 Md. 265; Orear v. McDonald, 9 Gill, 350. (ww) Plummer v. Lyman, 49 Me. 229, Burns v. Rowland, 40 Barb. 368. (x) In New York, Missouri, and California, the acceptance must be in writing; and may be by promise before the bill is drawn. And a drawee holding and refusing to return a bill to a holder for twentyfour hours, is to be held as accepting it. (y) Owen v. Van Uster, 1 É. L. & E. 396; s. c. 10 C. B 318. * from the prior parties. Again; each indorser transfers by *269 indorsement a debt due to himself, and if by the guaranty which springs from his indorsement he has to pay this debt to another, he is entitled to all such prompt knowledge of the failure of the party whom he guarantees, and of his own consequent liability, as will enable him to secure a payment of this debt to himself, if that be possible. The rules, and the exceptions to the rules, in relation to demand of payment and notice of nonpayment, will be found to rest upon these principles. Generally the question of reasonable time, reasonable diligence, and reasonable notice, is open to the circumstances of every case, and is determined by a reference to them. (z) But in regard to bills and notes the law merchant has defined all of these with great exactness. The general rule may be said to be, that the drawer and indorsers of a bill and the indorsers of a note are discharged from their liability, unless payment of the bill or note be demanded from the party previously bound to pay it, on the day on which it falls due. (a) And if the holder neglects to make such demand, he not only loses the guaranty of subsequent parties, but all right to recover for the consideration or debt for which the bill or note was given. (b) 1 (z) Goodwin v. Davenport, 47 Me. 112. (a) Field v. Nickerson, 13 Mass. 131; Martin v. Winslow, 2 Mason, 241; Sice v. Cunningham, 1 Cowen, 397; Montgomery County Bank v. Albany City Bank, 8 Barb. 396; Holbrook v. Allen, 4 Fla. 87; Robinson v. Blen, 20 Me. 109; Magruder v. Union Bank, 3 Pet. 87; Juniati Bank v. Hale, 16 S. & R. 157. If the bill or note is payable at a time certain, it must be presented on the last day of grace; and a demand either before or after that day is insufficient to charge the indorser. Id.; Howe v. Bradley, 19 Me. 31; Leavitt v. Simes, 3 N. H. 14; Farmers' Bank v. Luvall, 7 G. & J. 78; Piatt v. Eads, 1 Blackf. 81; Etting v. Schuylkill Bank, 2 Barr, 355. (b) Bridges v. Berry, 3 Taunt. 130; Camidge v. Allenby, 6 B. & C. 373. This was an action for the price of goods. It appeared that the same were sold at York on Saturday, December 10th, 1825, and on the same day, at three o'clock in the afternoon, the vendee delivered to the vendor, as, and for a payment of the price, certain promissory notes of the Bank of D. & Co. at Huddersfield, payable on demand to bearer. D. & Co. stopped payment on the same day at eleven o'clock in the morning, and never afterwards resumed their payments; but neither of the parties knew of the stoppage, or of the insolvency of D. & Co. The vendor never circulated the notes, or presented them to the bankers for payment; but on Saturday, the 17th, he required the vendee to take back the notes, and to pay him the amount, which the latter refused. Held, under these circumstances, that the vendor of the goods was guilty of laches, and had thereby made the notes his own, and, consequently, that they operated as a satisfaction of the debt. In Hare v. Henty, 100 Eng. C. L. 65, it is held that a banker receiving a check upon another banker, not resident in the same town, is not bound to transmit it for presentment, by the post of the day on which he receives it, but he has until post time of the next day for so doing. See also 2 Pars. Notes & Bills, 72. 1 It was decided in German Nat. Bank v. Foreman, 138 Pa. 474, that the plaintiff bank had discharged the indorser of a note which it held by allowing the maker to withdraw a deposit after the maturity of the note. |