delivered the opinion of the court.
The instrument upon which this suit was instituted in the Circuit Court, was, as the aforegoing statement evinces, in form simply a common promissory note, signed by Benjamin R. Smith, made payable to William E. Haskell, endorsed by Haskell to Robert Barnwell Smith alias Robert Barnwell Rhett, and 'by this last individual to Robert F. Poe, cashier of the Bank of Augusta, the plaintiff in the action. Such being the nature of the instrument, and it appearing that the formalities of demand at its maturity, and notice to the endorsers have been regularly fulfilled by the holder, a question as to the justice of a recovery by the.latter could scarcely be suggested, if the rights and obligations of the several parties shall be viewed as dependent upon- their relation to the note itself considered as a distinct and separate transaction. Such, however, is not precisely the attitude of the parties to this controversy. It is in proоf that there was held by the plaintiff below, beside this note, a draft for $8000 drawn by Timberlake on the 6th of May,j 1837, at sixty days, in favour of the. plaintiff) on Benjamin R. Smith, and' accepted by Smith;, and farther, that upon the note was written by the plaintiff’s agent, a memorandum in the following words: “ This note is collateral'security for the payment'of the annexed draft of D. Timberlake on B. R. Smith of $8000.” Upon the effect of both these instruments, as constituting .parts of one transaction, the questions propounded to the Circuit Court and brought hither for review have *479 arisen. The farther proofs contained in this record will be adverted to in the progress of this opinion, as notice of them shall become necessary to explain the instructions prayed for, and those given by the Circuit Court on the trial of this cause. The second series of instructions, embracing a more extended and .varied survey of thе evidence than is contained in that preceding it, will be first considered. It is to the first, second, third, and fifth instructions of this second series that exceptions are taken. To the first proposition affirmed by the court in this first instruction, it is difficult to imagine any just ground of objection on the part of the defendant below, as that proposition concedes almost in terms the prayer of that defendant. To the second branch of this instruction it is nоt perceived that any valid objection can be sustained; for, although it might have been true that at the date of acceptance of Timberlake’s draft on Smith for $8000, the latter had been in possession of $10,000 placed in his hands by Timberlake, it would not follow under the circumstances proved, or under those assumed in the instruction, that Timberlake as the drawer of that draft was entitled to notice. If, as the instruction supposеs, the acceptances for $21,500, which Smith had come under for Timber-lake, were drawn for the accommodation of the latter, upon the faith of funds to be furnished by him for their payment; that the $10,000 had been furnished by Timberlake in part for that purpose, but had been withdrawn by him for his own uses prior to the maturity of the drafffor $8000 — that he should have intercepted before the maturity of the draft all the funds against which he knew the acceptаnces of Smith were drawn, and that he the drawer, and Smith the acceptor, had, before such maturity, become notoriously insolvent, under such a predicament the law would not impose the requirement of notice to the drawer upon the holder. No useful or reasonable end could be answered by such a requisition. Where a drawer has no right to expect the payment of a bill by'the- acceptor, he has nо claim to notice of non-payment. This is ruled in the following cases: Sharp v. Baily, 9 Barn. and Cress. 44; 4 Mann, and Ryl. 18; Bickerdike v. Bollman, 1 T. Rep. 405; Brown v. Meffey, 15 East, 221; Goodall v. Dolly, 1 T. Rep. 712; Legge v. Thorpe, 12 East, 171. If the $1000 said to have been in the hands of Smith were by the agreement or understanding between Smith and Timberlake • to be applied in payment of joint claims against them, and falling due before the draft for $8000, and had been so applied,, it had answered the sole object for which it had been raised, and could not in the *480 apprehension of these parties constitute a fund against which the draft of $8000 subsequently to become due was drawn. Those $10,000 were gone, were appropriated by these parties themselves. Then if, after this appropriation, there was, as this instruction assumes, an arrangement between Timberlake and Smith in respect to the hills drawn by Timberlake to the amount of $21,500, that he was to put Smith in funds sufficient to pay $13,500 of the amount just mentioned, which were to become payable before the $8000 draft, and that on Timberlake’s supplying those funds Smith was to pay the $8000 draft, and Timberlake failed to put Smith in funds to take up the $13,500^ and that the drafts for the same were protested, of which Timberlake had notice, he, Timberlake, could have no claim to notice of non-payment of the draft for $8000. There could be no reason for such a notice frоm the holder of the draft. Timberlake could have had no right to calculate on the payment of this draft; on the contrary, he was bound' to infer its dishonour. He knew that payment of the draft for $8000 was dependent upon a condition to be performed by himself, and he was obliged to know from the notice of the dishonour of all his bills, that he had not performed that condition, and had thereby intercepted the very funds from which the acceptances by Smith were to be met. He therefore quoad this draft had never any funds in the. hands of Smith, and consequently, never had any. claim to notice of non-payment from the holder.
The case of Claridge
v.
Dalton, in 4 Maule and Selw., is strongly illustrative of the principle here laid dowm. That was a case in which the drawer'had supplied the drawee with goods which were still not paid for. To this extent, then, the former- unquestionably had funds in the hands of the latter; but on the day of payment of the bill the credit upon which the goods were sold had not expired, and the court thereupon unanimously ruled that
quoad
the obligations of the parties arising upon these transactions, the drawer must be understood as having no effects in- the hands of the. drawee, and therefore, not entitled to notice. - The second instruction affirms in the first place, what must be admitted by all, and .what is not understood to be matter of contest here, viz.: that whenever a party to a bill or note is entitled to notice, such notice, if not given him in person, must be by a timely effort to convey it through the regular or usual and recognised channels of communication with the party, or his agent, or with his known residence or place of business. It is to so much of this instruction .a^ is applicable to What may amount to
*481
a dispensation from the regular or ordinary modes of аffecting parties with notice, that objection is made; to that portion in which the court charged the jury, that if they believed from the evidence that although Timberlake may have resided in New York, that he had since the autumn of 1834 or 1835 made Augusta his residence, and that he Had removed from Augusta, and out of the state of Georgia after the bill for $8000 was drawn and before its maturity, that then due diligence had been used to give him notice оf the dishonour of the bill. It is not considered by this court that this charge in any correct acceptation of it trenches upon the legitimate province of the jury, or transcends the just limits of the authority of the court, or contravenes any established doctrine of the law. ’Tis a doctrine generally received, one which is recognised by this court in the case of the Bank of Columbia
v.
Lawrence,
Next and last in the order of exception, is the fifth instruction. . The first position in this is given almost,literally in the terms of the prayer. The court proceeds further to charge, that if the insolvency of the drawer and acceptor were known to each other, and that this bill was "'drawn to pay for purchases on joint account, or a transaction in which they were partners, and the property so purchased had been diverted by'the drawer to his own use, and that the payment of the bills had’ been the subject of private arrangement between the acceptor and. drawer-, that then the holder was excused from giving notice of the
*483
non-payment оf the bill for $8000. With respect to the exception taken to this instruction, all that seefhs requisite to dispose of it, is the remark, that if the drawer of the bill was in truth the partner of the acceptor, either generally, or in the single adventure in which the bill made a part, in that event notice of dishonour of the bill by the holder to the drawer need not have been given. The knowledge of the one partner was the knowledge of the оther, and notice to the one notice to the other.. Authorities upon this point need not be accumulated; we cite upon it Porthouse
v.
Parker, 1 Campb. 82, where Lord Ellenhorough remarks, speaking of the dishonour of the bill in that case. “as this must necessarily have been known to one of them, the knowledge of one was the knowledge of all also, Bignold
v.
Waterhouse, 1 Maule and Selw. 259; Whitney
v.
Sterling, 14 Johns. Rep. 215; Gowan
v.
Jackson,
1st. That the guarantor of a promissory note, whose name does not appear upon the note, is bound without notice, where the maker of thé note was insolvent.at its maturity, unless he can show that he has sustained some prejudice by want of notice of a demand on the maker, and of notice of non-payment:
2d, If the guarantor can prove he has suffered damage by the. neglect to make the demand on the maker, and to give notice, he can be discharged only to the extent of the damage sustained. Tried by the principles ruled in the authorities' above cited, and especially by that from this court, in 12 Peters, it would seem that'this case should admit of neither doubt nor hesitancy. • -The note on which the action was brought was given as a guarantee.for the payment of the bill for $8000, as is proved and indeed admitted on all hands. ' It is the distinct and substantive agreement by which the guarantee of the bill Was undertaken. It is established by various and uncontradicted facts and circumstances in the cause, and finally by the solemn admissions of Timberlake the. drawer and Smith the acceptor of the bill, both of whom have-testified in the cause, that at the maturity of the *486 bill they werp.both utterly insolvent; that Timberlake was probably so before the commencement of these trаnsactions, and that Smith before the.maturity of the bill had made an assignment of every thing he had claim to, for the benefit of others, and, amongst the creditors named in that assignment, providing for the plaintiff in error as ranking high amongst the preferred class.
Under such circumstances to have required-notice of the dishonour of the bill would have been a vain and unreasonable act, such as the law cannot be presumed to exact of any person. Upon a review of the whole case, we think thát the judgment of the Circuit Court should be affirmed.
order.
This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the district of South Carolina, and was argued by counsel. On consideration whereof, It is nowhere ordered and adjudged by this court, that the judgment of the said Circuit Court in this cause be, and the same is hereby affirmed with costs and damages at the rate of six per centum. per annum.