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default. So it has been decided in New York, Berry v. Robinson, 9 Johns. 121; in South Carolina, Course &c. v. Shackleford's adm'xr, 2 Nott & M. 283; Poole v. Totteson, 1 McCord 199; Stockman v. Riley, 2 Id. 398; Allwood v. Haseldon, 2 Bailey 458; Connecticut, Bishop v. Dexter, 2 Conn. 419; and Massachusetts, Colt &c. v. Barnard, 18 Pick. 260. "If," says Shaw, C. J., "it be asked at what time payment of the note shall be demanded, the day originally named for payment having passed, the answer is obvious. As between maker and promisee, a note is payable on demand at any time after it becomes due. When it is endorsed after due, it is in legal effect a note on demand, and is to be so understood by the parties as if written on demand.' In that case the law is well settled: the demand must be made within reasonable time, and if not paid immediate notice of non-payment must be given to the endorser." See ante, p. 174.
In Pennsylvania, the case of the Bank of North America v. Barriere, 1 Yeates 360, was regarded by Duncan, J. as decided on its own particular circumstances. McKinney v. Crawford, 8 S. & R. 35. But the general rule laid down in the case of the Bank of North America v. Barriere, was followed in Leidy v. Tammany, 9 Watts 358. The observation made by Duncan, J. on McKinney v. Crawford, Coulter, J. thought would not be sustained by a careful inspection of the case. Jordan v. Hurst, 2 Jones 273. Lewis, J. thinks differently. He approves the decision in McKinney v. Crawford, and considers the case of Leidy v. Tammany like that in 1 Yeates 360, to have been decided on its special circumstances. Patterson v. Todd &c. 6 Harris 432, 3. He thinks the observations of Coulter, J. had a tendency to mislead the judge who decided this cause in the court below. In Pennsylvania, a note over-due and a note payable on demand are now regarded as on the same footing; proof of demand on the maker and notice to the endorser is as necessary in the one case as the other. The interrogatories of Duncan, J. in McKinney v. Crawford, Lewis, J. remarks, have never been satisfactorily answered by those who desire to convert an endorsement into an absolute and unconditional engagement to pay the amount. "If it was a contract of absolute and immediate liability why endorse ?" "Why not give his own note?" 8 S. & R. 353, 6 Harris 433.
10. Where a negotiable instrument is taken up by the payee, and afterwards assigned by him, who may sue on it.
Upon the authority of Beck v. Robley, 1 H. Bl. 89, note, it
was decided in Massachusetts, that when a negotiable instrument had been paid and taken up by any party to it, it ceased to be negotiable. Blake v. Sewell, 3 Mass. 556; Boylston v. Greene, 8 Id. 465. The effect was to require the action to be brought in the name of the party paying the note;-to require it to be brought in his name for the benefit of his assignee. Those Massachusetts decisions have been since revised; and the court has taken a view of Beck v. Robley consistent with Gomez Serra v. Berkley, 1 Wils. 46, and Callon v. Lawrence, 3 M. & S. 95. "There is no doubt," says Parker, C. J., "that in England at this day the proposition which has been received here without qualification, that a negotiable note, once paid, cannot afterwards be transferred, is restrained to cases, where, by such transfer, some party to the bill or note might be prejudiced, or troubled with a suit, who ought to be discharged. As for instance, if there be several endorsers, none shall be allowed to transfer it but the last: because if the note is taken up by any prior endorser, and again put in circulation by him, the subsequent endorsers may be exposed to a suit by the new assignee. But where no such consequence will follow, an assignment by the party taking up the bill is lawful, and the assignee may maintain an action upon it in his own name." Guild v. Eager &c. 17 Mass. 620. The law as stated in Bayley on Bills 66, is approved, the cases of Blake v. Sewell and Boylston v. Greene are overruled, and the right of action is sustained in the name of the assignee of the payee who took up the note; there being on the note no endorsement but that of the payee. S. C. The same rule is established in New York, Havens v. Huntington, 1 Cow. 392; and is now acted on in England. Hubbard v. Jackson, 1 Mo. & P. 11, 4 Bingh. 390, 15 Eng. Com. Law Rep. 12; Purssord v. Peck, 9 M. & W. 196. Though the very holder who was paid by the drawer should be the plaintiff in the action against the acceptor, this will not always be a valid objection. The drawer, who is also payee, paying the bill, with an understanding that it should not be extinguished, but that his remedy should be preserved, may sue on it in his own name, or employ his endorsee to do so. Williams &c. v. James, 15 Adol. & El. N. S. 498, 69 Eng. Com. Law Rep. 498. The case is different when the bill is payable, not to the drawer's order but to a third person. After such a bill has been paid by the drawers, they cannot put it in circulation again; no action can be maintained on it by a person claiming under their endorsement. Price v. Sharp, 2 Iredell 417.
11. Holder has a right of action against any of the prior parties. Whether the measure of recovery will be the amount of the bill or note, where the action is against an endorser who has received from the plaintiff less than the amount, or is by an endorser who has been subjected to costs.
The holder has his remedy against all the parties on a bill; he may sue the acceptor, or the drawer, or any endorser, till the debt is satisfied. Notwithstanding the acceptor or one endorser be charged in execution, an action may be maintained against another endorser. Haylings v. Mullhall, 2 W. Bl. 1236; Macdonald v. Bovington, 4 T. R. 825. The acceptor may have been discharged under what in England is termed the lords act; and yet if the bill be recovered from the drawer, he may, notwithstanding the acceptor has been thus discharged for the very debt, still sue him and charge him in execution. It is considered that by the drawer's payment a new cause of action arose, which may be enforced without regard to what passed in the former action. S. C.
In Pennsylvania, and perhaps most of the other states, it is common to sue the respective parties to a bill in different actions, though there can be but one satisfaction. A suit and a judgment against a person as one of the acceptors of a bill, will not prevent a suit against the drawers, though the drawers be a firm, of which the defendant in the former suit is a member. Allen v. Union Bank, 5 Whart. 424; Wise &c. v. Prowze, 9 Price 393.
If the holder sue the endorsers, it will be of no avail for them to shew that they served a written notice on the holder, requiring suit to be brought against the maker, and that he is in good circumstances and able to pay the money. If they wish recourse to be had to the maker or acceptor, they can take up the paper and sue for themselves. Beebe v. West Branch Bank, 7 W. & S. 375; Day v. Ridgway &c. 5 Harris 309; Skinn. 343.
The whole money due upon a bill may be paid by an endorser, without satisfying the bill as it regards acceptor or drawer. It is every day's practice for a dishonoured bill to be thrown back upon the first endorser: each endorser taking back from his immediate endorser what he has paid on account of the bill, and at the same time delivering up the bill to him; and the latter again throwing it back on his immediate endorser, till it at last arrives at the first endorser. 1 Bos. & Pul. 657, 8.
Generally an endorser should not delay taking up the paper until he is prosecuted to judgment and execution, and thereby subjected to costs. The courts of Pennsylvania have sometimes, on the ground of an implied promise, allowed an endorser to recover legal costs in addition to the money paid and interest. 5 Rawle 109. But in New York and Massachusetts it is considered that such costs accrued by his own default; that there is no implied promise on the part of the maker to save him harmless therefrom; and that he cannot resort to the maker for indemnity against them, unless there be a special promise to save him harmless. Simpson v. Griffin, 9 Johns. 131; Copp v. McDugall, 9 Mass. 6. In general, the holder of an endorsed note will be entitled to recover the whole amount on the face of the note, because the presumption of fact, in the absence of counter-proof, is that he gave the full value for it, or that he took it from some other holder for value, to collect the amount, receive a certain part to his own use, and account to the party from whom he took it for the surplus. Shaw, C. J., in Stoddard &c. v. Kimball, 6 Cush. 471.
But where the counter-proof shews that the bill is an accommodation one, and that known to the endorsee, and he pays but part of the amount, he can only recover the sum he has actually paid. Wisson v. Roberts, 1 Esp. 262; Brown v. Mott, 7 Johns. 361. In an action against the endorser of a note for $343 25, he was allowed to prove that it was purchased for $90 under the face of it. Braman v. Hess, 13 Johns. 52.
If the endorsee has taken the paper to secure a pre-existing debt of less amount, then he is a holder for value in his own right only to the amount of the debt due him, and will have judgment against the endorser only for that amount. Stoddard &c. v. Kimball, 4 Cush. 604; S. C. 6 Id. 470.
12. How far endorsee's right of action is affected by partpayment.
An endorsee's receiving part from an endorser, will not prevent his recovering the whole bill against the drawer. Johnson v. Kennion, 2 Wils. 262. He has no reason to complain, since he only pays what he owes. Walwyn v. St. Quintin, 1 Bos. & Pul. 658. And though the endorser may have a demand for what he paid, yet he could not sue for that part on the bill or note; for there cannot be two actions on one note. The plaintiff who recovers the whole will be a trustee for the endorser as to that part. Reid v. Furnival, 1 C. & M. 538.
But an endorsee has been prevented from recovering from the acceptor, where the drawer had paid part and the acceptor paid the residue to the plaintiff. Though he desired to be a trustee for the drawer, he was not allowed to recover again from the acceptor that which the drawer had paid. Bacon v. Searles, 1 H. Bl. 88.
It was indeed formerly laid down that if the endorsee accept but two pence from the acceptor, he can never after resort to the drawer, Tassell &c. v. Lewis, 1 Ld. Raym. 744; and that where the endorsee of a note received part of the maker, that it was a taking upon himself to give the whole credit to the drawer, and absolutely discharged the endorser. Kellock v. Robinson, 2 Str. 745. There ought certainly to be a deduction of so much as is received from the acceptor. Pierson v. Dunlop, Cowp. 574, 5. That much being satisfied, only the residue should be recovered. 1 Bos. & Pul. 658. But there must be a right of action to recover that residue from a drawer or endorser to whom due notice has been given of dishonour, unless something else has been done to discharge him besides the mere receipt of part of the money. James v. Badger &c. 1 Johns. Cas. 131; Gould &c. v. Robson &c. 8 East 576.
13. How right of action against an endorser or other surety may be defeated by discharging, or giving time to, prinWho is or is not regarded as principal; who as
The acceptor of a bill or the maker of a note being considered as principal debtor, and the other parties as sureties only, if the holder should discharge the acceptor or maker, without the consent of the endorser or his assignees, he will thereby discharge the endorser's estate. Ex parte Smith, 3 Brown's C. R. 1; Ex parte Wilson, 11 Ves. 410; Lynch v. Reynolds, 16 Johns. 41; Chambre, J. 3 Bos. & Pul. 366.
The holder has it not in his power to give time to a party on the bill first liable and afterwards proceed against another. The holder may give time to his immediate endorser; he may discharge him and proceed against a prior endorser to him or against the drawer or acceptor. Bayley, J. in Claridge v. Dalton, 4 M. & S. 233. But he cannot give time to or discharge the drawer or acceptor and afterwards proceed against that endorser; for if that endorser has to pay the money, he ought to have a right to resort immediately to those before him. English v. Darley, 3 Esp. 49, 2 Bos. & Pul. 61. When, however, the giving time to the party first liable is