19 Johns. 391 | N.Y. Sup. Ct. | 1821
The facts in this case are few, and simple.
On the 17th of April, 1817, James Kane made a note, payable in sixty days, to the order of John Woodworth, for $2,500. The note was dated at Albany, where the maker then, and hath ever since, resided. It Was an accommodation note, being made and endorsed entirely for the benefit of the maker. It was endorsed, in blank, by Mr. Woodworth, without any explanation where it was going ; but the note was intended by the maker as a renewal of another note held by the Bank of America, and endorsed by the same endorser, who had not any knowledge that any of the former notes had been made payable at, or discounted at any bank in New-Yorlc. After the note was so endorsed, it was returned to the maker, who then wrote a memorandum in the margin of it, in these words, “payable at the Bank of America,” and subscribed his name to it; and this was done without the knowledge or assent of the endorser. The maker then procured another, or Second endorser, and offered the note for discount at the
When the note fell due, payment was demanded at the Bank of America, and refused, and notice thereof was regularly given to the endorser, by the first mail thereafter.
The endorser being sued upon his endorsement, objected to pay. on the ground that there had not been a demand of payment of the maker, made either upon him personally, or at his place of residence, in Albany, and that a demand at the place designated for payment by the memorandum of the maker in the margin of the note, was not sufficient.
The case, upon that objection, appears to have been elaborately argued in the Supreme Court, and the Ch. J. delivered the unanimous opinion of that Court, (with the ex péption of the plaintiff in error, who did not sit in the cause,) that the demand at the bank in New-York was sufficient to charge the endorser.
The question now is, whether the demand at the place designated by the maker was sufficient; and this question is to be decided according to the usages and maxims of the Law Merchant, which is a part of the law of the land.
. The Ch. J., in the able and learned opinion which he read in his place in this Court, observed, that when the note was endorsed by the then defendant, it was not payable at any place; and that if the memorandum had not afterwards been made, and the residence of the maker had continued to be in Albany, and he had remained in Albany when the note fell due, the demand, in order to charge the endorser, must have been made upon him, either personally, or at his place of business in Albany. But the Ch. J. also observed, that if the maker had changed his residence before the note fell due, or if he had been met with in New-York, or elsewhere when the note fell-due, a personal demand upon him would have been regular, and sufficient to fix the endorser, and that it could not then be said, that it was .any part of the contract that demand should be made of the maker only in Albany, or that the note was endorsed under the belief of any such necessity. If the note be silent as to the place of payment, why, he asked, is it not competent to the maker to designate a place where payment should be made ? It is a
This is the substance of the opinion of the Supreme Court, and the reasonableness of that opinion is well calculated to make an impression upon every impartial and enlightened mind.
The note in question was intended as a renewal of a former note held by the Bank of America, and endorsed by the same endorser. The special verdict further adds, that the defendant had not any knowledge that “ any of the former notes” had been made payable at, or discounted at any bank in New-York. From these expressions, “ any of the former notes,” it would appear that the now plaintiff in error had been in the habit of . endorsing notes for Mr. Kane, and he must be considered as having entertained a very unlimited confidence in the maker, in continuing to endorse for him, without any inquiry where the former notes had been discounted, and where the present note was to go to meet the call on the former one. it must have been a matter of perfect indifference to the endorser, or he would have made some inquiry. It is very possible that the former note which this was intended to "take up, had the same direction
The endorser, then, in this case, by endorsing a note in blank when the note itself had not designated any place of payment, and the note was intended, as he well knew, to meet and take up a former note which he had endorsed for the same maker, and by abstaining from all inquiry where the note was going, or where the former note had been dis
I shall, presently, pay attention to this technical objection ; but it will be proper and useful, in the first place, to examine a little into the doctrine of commercial law, on the subject of blank endorsements, and of the very extensive responsibility of an endorser, where a bona fide holder of negotiable paper for a valuable consideration is concerned. The conclusion from that doctrine appears to be, that the endorser in this case is as much bound by the ■memorandum, to the bona fide holder of the note, as if he had expressly assented to it when he endorsed his name.
I shall first look at a few cases, to extract the principle, arid shall then make an application of it to the case before us.
In Lambert v. Oakes, (1 Lord Raym. 443. 1 Salk. 127.) Lord Holt laid down the following rules, relative to negotiable notes: 1. That in an action against the endorser, it was not necessary to prove the hand of the maker, for though the note be forged, the endorser is liable to a bona fide endorsee. 2. That if the endorsement be in blank, the endorser puts it in the power of the holder to overwrite what he pleases, and he may use it as an acquittance or an assignment. Afterwards, in Swellwood v. Vernon, (1 Str. 478.) decided in 1721, the K. B. declared that every endorsement was the same as making a new note j so that if the
So stood the law a century ago; and to come down to the time of Lord Mansfield, who has been styled the founder of the English commercial law, it was admitted by the K. B. in Archer v. The Bank of England, (Doug. 637.) that the negotiability of a bill might be restrained, and the responsibility of the endorser limited, by a special endorsement. The same doctrine was held by the Supreme Court of Massachusetts, in Rice v. Stearns, (3 Tyng, 225.) On the other hand, if the endorsement be written on a blank note or check, it will bind the endorser to any sum, and time of payment, which the person to whom he entrusts the note chooses to insert. Such an endorsement on a blank note was, as Lord Mansfield said, a letter of credit for an indefinite sum. (Russel v. Langstaffe, Doug. 514.) So, again, in Peacocke v. Rhodes, (Doug. 6 3.) decided by the K. B., in 1781, an inland bill of exchange, with a blank endorsement had been stolen, and then negotiated by the thief to a third person, in the ordinary course of business, and he was allowed to recover against the drawer. It was in that case that Lord Mansfield declared, with the approbation of the whole Court, that the law was settled, that a holder, coming fairly by a bill or note, had nothing to do with the transactions between the original parties, for if he had, it would stop the currency of those bills. There is no difference between a note endorsed in blank, and one payable to bearer : They both go by delivery, and possession proves property in both cases.
We have a series of American decisions to the same effect.
Thus, in Josselyn v. Ames, (3 Tyng, 274.) the defendant endorsed a note in blank, and gave it to the plaintiff who wrote over the endorsement, a guaranty of the payment of the contents of the note on demand. No demand on the maker was proved, and the note was not negotiable. The Court decided that the plaintiff could not recover in the form of action then adopted; but they said he might cancel what he had written over the blank endorsement, and fill it up
These observations of the Massachusetts Court, in several material respects, apply to the very case before us; and it is to be recollected, that they are the remarks of Ch. J. Parsons, who was greatly, and justly, eulogized by one of the counsel on the part of the plaintiff in error.
Afterwards, in Thurston v. M‘Kown, (6 Tyng, 428.) in the same Court, it was held, that where a note was obtained by unfair means, the maker was still liable to an innocent and bona fide endorsee. The question, said Ch. J. Parsons, was, whether the loss should fall on the bona fide purchaser of the note, or on the maker, who was defrauded; and it is settled law, that of the two innocent parties, in a case like this, the loss shall fall on the maker. The endorsee gave credit to his name, and on this credit he gave a valuable consideration. The maker suffered himself to be overreached, ■and by his inattention, or negligence, or undue confidence in the payee, the note has been negotiated, and has honestly :and fairly come in the possession of the plaintiff) to whom no fault or indiscretion can be imputed.
The same principle was declared in the Supreme Court of
The Federal Courts have adopted the same rules on the subject of negotiable paper.
Thus, in Codwise v. Gleason, (3 Day’s Rep. 12.) decided before Mr. Justice Livingston, in the Circuit Court of the United States, for the district of Connecticut, it appeared that the defendant was an endorsee of a note given by the maker, on a consideration which was fraudulent and void. The endorsement was merely for the accommodation of the maker, who was sued upon the note, and who successfully defended himself on account of fraud in the contract for which the note was given. The endorser was then sued, and it was contended for him, that as the note was void as against the maker, it was, of course, void as against the endorser, for the endorsement was in the nature of security, and the endorser was to be regarded as a surety for the maker. On the part of the plaintiff, it was urged, that the contract of the endorser was, in every case, that the sum contained in the note should be paid when due, and that it made no difference whether the note was not paid by the maker, because he was unable, or because the instrument was void. Let the cause of failure be what it may, the endorser is liable. If the note be forged, the- endorser, is, nevertheless, holden upon his endorsement, for it was his duty to know the makers hand, and not suffer an innocent purchaser of the note to be deceived under the sanction of his name. The learned judge admitted, that if the note was forged, the endorsement would bind the man who made it, and that the endorser who gave the weight of his name to the world, must be responsible to every man who trusts to the note, relying on his credit, as every subsequent endorsee must be supposed to do; and upon his opinion the plaintiff recovered. I have now finished the re
If this note had passed out of the hands of the maker to the endorser, for a valuable consideration, such a memorandum, after endorsement, never could or would have been made. The maker, in such a case, would not come into the possession of the note after it was endorsed, until he had taken it up. It is only in these cases of accommodation notes, where the endorser hands the note back again to the maker, to be used by him according to his own convenience, that such a memorandum, after endorsement, will ever appear. By this very confidential communication between maker and endorser, the former is enabled to make the memorandum, and designate the place of payment. Every act of the maker in such a case, that is consistent with the two essential ingredients of the note, viz. the amount, and the time of payment, is to be regarded by the holder as the act of both parties, for the note is put in circulation as their joint act. In this case, it was also put in circulation for theiryowii benefit, because it was given in renewal of a former note drawn by the one, and endorsed by the other. The proposition strikes my mind as quite unreasonable that the en»
I conclude, therefore, with the most entire conviction, that the endorser is not at liberty to object to the memorandum, or to the validity of the demand of payment, which was made in pursuance of it.
2. We will, in the next place, proceed to consider, how far there is any real intrinsic weight in the objection, that demand of payment was not made at the proper place, even according to those precise technical rules which have been createdby the law merchant, and applied to negotiable paper.
I am much mistaken, if the rule is not attempted to be pushed, in this instance, far beyond the reason of the thing and the usages of law.
\ The question turns, in most cases, upon what is to be ' deemed reasonable diligence, in making a demand upon the maker. The general rule is, that the bill or note must ' be presented at the place where it is payable, and a presentment or demand at such place is sufficient; but if no , place of payment be prescribed, or designated by the maker or acceptor, as the case may be, then the demand must be ! upon the party personally, or at his place of residence if ' known and accessible.)
But if a place of payment be specified, by the maker of ( the note, or acceptor of the bill, then the demand is to be
A great many cases were cited, and a good déal said, upon, the argument, relative to the analogy between, bills of exchange and promissory notes. The Supreme Court alluded to that analogy in the opinion delivered by the Chief Justice, and it was very justly observed, that “ the maker of a note is to be regarded in the same light as the acceptor Of a bill, and that nothing was more common among merchants in England, than for the acceptor of a bill, payable in a given number of days, to accept the bill payable at the banker’s, the bill itself being silent as to the place of payment. And it has uniformly been held, that a presentment of the bill at the place appointed by the acceptor for payment is sufficient, and dispenses with the necessity of a personal demand.”
I think there is a strong argutiient in favour of the memorandum, in the present case, to be drawn from this usage of merchants, in respect to bills of exchange; but I do not mean to >go at large into this part of the subject, but merely to touch upon it just enough to enable us to perceive and clearly understand, the force and application of the analogy.
We have a statute upon this subject, taken from the 3 and 4 Anne ; and which was revised and re-enacted the 21st of March, 1801. It declares, that the endorsers of negotiable promissory notes shall be liable, in like manner, as in cases of inland bills of exchange, according to the custom of merchants. I do not know in how many of the other States-this statute of Queen Anne has been re-enacted, but this I have observed, that the law merchant on this head is" the same throughout the Union, and that endorsed promissory notes, and bills of exchange, are governed by the same rules, and the same usage of merchants. Thus, it was decided by the Supreme Court of South Carolina, in 1799, (2 Bay, 217.) that as long as a note of hand remains unendorsed, it has no similitude to a bill of exchange, but when it is endorsed the resemblance begins, and it is governed by the same rules. The maker -of the note is in,
So, also, the Chief Justice of the Superior Court of Connecticut, in -i< livering the opinion of the Court, in Dwight v. Scovel, (2 Day’s, Conn. Rep. 654.) observed, that in all cases of accepted bills, and endorsed notes, it is necessary for the holder of the bill or note to present the same, the one to the acceptor, and the other to the maker, when they fall due, and demand payment. So again, in the Supreme Court of the United States, in French v. The Bank of Columbia, (4 Cranch, 141.) the same law was admitted and declared. The counsel, Mr. Harper, observed, that when a negotiable promissory note is endorsed, it is in truth an inland bill of exchange, drawn by the payee or endorser, in favour of the endorsee upon the maker, and by him accepted. Hence, says he, the law with respect to both kinds of paper is the same. The contract of the first endorser of a promissory note was the same as that of the drawer of a bill of exchange, and the forms of that contract were well known by a reference to the law merchant. The Chief Justice of the United States, in delivering the opinion of the Court, traces, through a variety of cases, the reasoning and the rule, relative to bills of exchange, and then applies them to an endorsed promissory note in the case before him. He says that the endorser of the note is to be considered as the drawer of a bill, and the maker of a note, as the acceptor of a bill.
If, according to our statute, and according to universal usage, wherever the law merchant prevails, the endorser of a note is liable in like manner as in cases of inland bills of exchange, then we are only to inquire what demand of payment upon the acceptor of a bill will be stiffi
So, Saunderson v. Bowes, 14 East, 500. Trecothick v. Edwin, 1 Starkie's N. P. 468. Dickinson v. Bowes,
A bill of exchange, when presented to the drawer for acceptance, is just as perfect, and no more perfect, than an accommodation note endorsed and returned to the maker. It then becomes, to use the language of the South Carolina judges, in a case already cited, an order by the endorser on the maker of the note, to pay the contents to the endorsee. And when the maker puts such a note in circulation, or hands it to a bank for discount for his own use, the wit of man cannot invent a reason why the maker should not have as good a right to direct the endorsee where to look for payment, as the acceptor of a bill to direct the payee where to call for payment. It is impossible to create a distinction, and, therefore, the rule must be the same in both cases. It is, then, settled, without contradiction, that the acceptor of a bill may make a special memorandum, or intimation, under his acceptance, where the holder is to call for payment, and
In my opinion, no two cases more entirely analogous, in the reason and in the law of them, can be presented tolhe human understanding.
It was said, lately, in the English House of Lords, in the case of Benson v. White, (4 Dow. 338.) that the practice of accepting bills payable at the banking house, or at some particular place, or by some person other than the acceptor himself, has, of late years, become universal. The practice was a great convenience to both holder and acceptor : To the holder, because, by having a bill payable at a house of business, he is certain of finding some person who will give him an answer, whether the bill is to be paid or not: To the acceptor, because, it facilitates the keeping accounts, and enables him to pay, where he has the means ; and if he should have occasion to leave his residence, his acceptance may he paid in his absence. Lord Ellenborough, also, in the case of Fenton v. Goundry, dwelt much upon the convenience and utility of this mercantile usage of pointing out by a memorandum at the time of acceptance of a bill, where the holder might call for payment. Acceptors, says he, may change their residence while the bill is running, or they may dwell at one place, and carry on business at another. Many persons during the hours when payments are usually made, are often occupied elsewhere than at their own houses, and therefore, his lordship observes, if has become a frequent practice, in order to avoid inconvenience to the holder, for the acceptor to intimate or point out his bank of deposit, or some other place, as his house of residence, if he may so express it, for that purpose.
This practice, like most other mercantile usages, has been dictated by convenience, and has grown out of the mutual
But without dwelling longer on the analogy between this case and that of accepted bills, I shall now attempt to show that the question before us has been settled by cases in point, both ,n England and in this country.
Thi- first easel shall refer to,is that of Saunderson v. Judge, (2. H Black. 509.) decided in the English Court of Common Pleas, in the year 1795, That was an action on a promissory note by the holder against the endorser. At the foot of the note there was a memorandum made by the maker, that he would pay it at the house of Saunderson Co. with whom he had a cash account. The note had been negotiated through several hands, and came to the same house of Saunderson & Co. who were bankers, and holders of the note when it became due, and plaintiffs in the suit. The maker had absconded before the note fell due, and no demand was made upon him, or at his usual place of abode. The question raised, on behalf of the endorser, was, whether it was not incumbent on the plaintiffs to prove a demand on the maker. The court decided that the place of payment was no part of the contract in that case, and that the maker had merely appointed the house of his banker as the place where he was to be called upon for payment, and where it would be paid. It was not necessary, they observed, that a demand should be personal; it was sufficient if it be made at the house of the maker of the note and it is the same thing, in effect, if it be made at the place where he appoints it to be made: and as they at whose house it was to be paid, were themselves the holders of it, it was a sufficient demand for them to turn to their books, and see the maker’s account with them, and a sufficient refusal, to find that he had no effects in their hands.
This decision was unanimous, and it has stood for upwards of twenty-five years uncontradicted and unquestioned, and it has been uniformly received since, both in Eng
The case before us cannot be distinguished from that in any material degree, or so as to divert or weaken the force and application of its authority. The memorandum of the maker at the foot of the note in Saunderson v. Judge, was made, no doubt, before it passed out of his hands to the original payee. It could not have been made afterwards, because, when a promissory note is given, (as that appears to have been) for a valuable consideration, it becomes instantly the property of the payee, and cannot return to the maker until paid. The maker can never write a memorandum on the note after endorsement, except in the case of an accommodation note endorsed in blank, and returned to the maker, to be used by him at his pleasure, and on his own account. Ho may then give the direction as to the place of payment, by a memorandum on the note, with per-feet safety and propriety; for as the Court said in Saunderson v. Judge, the memorandum forms no part of the contract, and therefore the endorser, who lent his name for ^accommodation, has no right to complain. He has no concern with that direction. It is a business entirely between the maker and the party who receives the note for discount, and it is for their mutual accommodation, as we have already seen, that a place of payment should be pointed out. The case of Saunderson v. Judge is, therefore, a most decided, and most respectable authority on the point before us; and it completely overthrows all the pretensions that where no place of payment is fixed in the body of the note, a demand must be made either on the maker personally, or at his usual place of abode. These memoranda at the bottom or in the margi^of a note are quite common, and they are understood as a mere indication of the place of application for payment, and a mere direction for the convenience of the maker and holder. They constitute no part of the note. The contract is complete and perfect "without them. So it has been ruled repeatedly in the Eng
The next case which I shall mention as being perfectly in point, is that of the State Bank v. Hurd, (12 Tyng’s Mass. Rep. 172.) decided in the Supreme Court of Massachusetts, in 1815- That was a suit by the State Bank as holder, against the endorser of a promissory note. The note was made payable at the State Bank, but as the counsel and the Court seemed equally to have assumed that a demand upon the maker was necessary in order to charge the endorser, the question arose as to what was a sufficient demand, and the opinion of the Court on that question goes the whole length of the English doctrine. The case states that bank notices were left for the maker, and for the defendant as endorser, at one Metcalf’s shop, in Cornhill, Boston, “ by direction of the said Larkin and Hurd, (the maker and endorser) respectively.” The reporter has not stated this matter of fact with sufficient explanation, and the want of precision in the sentence led the counsel in the case before this Court, to assume that the place of payment had been designated by the joint act of maker and endorser. Bul I think this could not possibly have been the fact, and the words do not necessarily warrant that construction ; and it is evident, that neither the reporter nor the Court under»
But the respectable reporter, Mr. Tyng, must have known, better than any other person, what was intended by this statement of the case ; and we have, in the marginal note, his commentary on his own text. He gives the substance of the authority in these words : “ Where a pro-miser appointed a place to notify him of his note falling due, a notice duly left at such place was holden sufficient to charge the endorser.” And the decision of the Court takes no notice of any consent to the place, or appointment of such place, by the endorser who was the defendant in the suit; but they put their opinion exclusively and entirely upon the fact, that the maker of the note had designated, in a way distinct from the note itself, the place where he was to be called upon for payment. The Court say, that “ the agreement of the promiser, that notice left for him at a certain shop in.Boston should be equivalent to a formal demand upon him, removed the necessity of resorting to his house,
This case, then, like the one in the C. B., is entirely applicable, and it comes to us xvith the xveight of authority. We have the same decision on the same point, by txvo Courts of the first character on both sides of the Atlantic. And it is xvorthy of notice, that the Courts were unanimous, and treat the question as one perfectly plain and easy of solution. I should then, certainly think that I was bound to apologize to this Court, for having dwelt so long upon the case, if f had not found a sufficient excuse in the exalted station of the individual who raises the objection, and in the distinguished rank of the counsel xvhom he has employed to support,it.
The doctrine laid down in the English case of Saunderson v. Judge, has not only been adopted in Massachusetts, in the case just cited, but it has been received and recognized as sound law in the Courts of other States. Judge Southard of New-Jersey, (1 Southard, Rep. 25.) in one of his judicial decisions refers to it as his authority, when he is speaking of a demand upon the maker sufficient to fix the endorser. Mr. Justice Livingston, also, in delivering the opinion of our Supreme Court, in 1804, in the case of Stewart v. Eden, (2 Caines, 121.) and laying down the rule as to the sufficiency of a demand upon the maker, cites and adopts that very authority. So, Chief Justice Thompson, in delivering the opinion of the Supreme Court, in the case of Anderson v. Drake, (14 Johns. Rep. 114.) declares the settled law to be, that a demand of payment at the place where the note was payable, is enough to charge the endorser, and he also refers as his authority to this very case of Saunderson v. Judge. He says, that where no particular place is appointed for payment, the holder must find the maker: These words he úses on citing the case of Saunderson v. Judge; and it shows evidently, -that he had the doctrine of that case in his mind, and
The law merchant relative to bills of exchange and endorsed notes, and commercial paper generally, is not the law of this Stale only, but of all the States of the Union, and of all the commercial nations of Europe. The maker and endorser of a note, and the drawer and acceptor of a bill, are subject, substantially, to the same rules and conditions in one country as in another. The law merchant says Malynes, in the time of King James, is “ a customary law, approved by the authority of all kingdoms and commonwealths, and not a law established by the sovereignty of any one Prince.’’ It is the most rational and the most liberal of all codes, and prevails every where within the region of commerce. 1 may refer, as an example, to the new commercial code of France, which was only a digest of the former law of France on the subject, and which establishes, with much minute precision, the same rules which prevail
The court will perceive that the French law is precisely the same as the English on this subject, and where the place of payment is not fixed in the contract itself, it is no part of the contract. The maker or the acceptor, who has at all times a perfect right to shift his domicil, or place of residence, as often as he pleases, may, as a matter of course, and to suit his convenience, or to suit the convenience of the holder, point out the place where he will be, or where he will provide funds to meet the payment, and such place becomes, in respect to that contract, his place of residence, and a demand upon him there is sufficient.
To conclude, then, I think that the following propositions are, well founded.
1 That the bank had a right to presume that the memorandum in the margin of the note was made with the knowledge and consent of the endorser, inasmuch as it was an ac~
2. That the note when endorsed became, by the words of our statute, and by the general Law Merchant, likened to an inland bill of exchange, and the parties were rendered liable in like manner. It followed, therefore, that the maker of the note, after it was endorsed in blank, and returned to him for his use, stood in the character of an acceptor of a bill with equal rights and responsibilities, and he had authojrity to designate the place of payment, as none was mentioned in the note. That the acceptor of a bill has such a right is every where, and by every person, admitted.
3. That such a memorandum made out of the body of the note, and being a mere intimation of the place of payment, was no part of the contract; but it was sufficient to justify the holder to call at such a place for payment, and being refused, he,had a right to look to the endorser. This is a clear settled rule in England, and it has been repeatedly recognized in this country, and in this state.
Nothing, in my humble judgment, can be more reasonable, nothing clearer, nothing better established, than these rules ; and I am accordingly of opinion, that on either of these grounds the judgment of the Supreme Court was correct, and that it ought to be affirmed.
Adams, Barstow, Forward, Frothingham, Hart, Miles, M’Martin, Paine, and Rosencrants, Senators, were of the same opinion.
R. Skinner, Senator. In determining this cause, we are to take into consideration the situation of the parties at the ma*
At the making of the note, both the drawer and endorser resided in Albany, (where they still reside,) and as the note specified no place of payment, the law imposed upon the holder the necessity of demanding it of the maker personally, or at his residence.
The endorser’s contract, then, was to pay to the holder the amount of the note, in case of default on the part of the maker, provided payment should, in due time, be demanded of the maker personally, or at his residence, and provided notice of nonpayment should be duly transmitted to the endorser.
The memorandum, made by James Kane transferred the place of payment to the Bank of America, and, in my opinion, was a material alteration of the endorser’s contract. It was contended, on the argument of this cause, and has been so decided by the Supreme Court, that the place of payment is no part of the contract, and, therefore, that the memorandum did not alter the contract as between the immediate parties to the note. I cannot assent to this proposition. On the contrary, it appears to me, that theplace of payment, next to the sum payable, is the most essential part of the contract, for on its proximity or remoteness must depend, in point of time, the endorser’s knowledge of nonpayment, which in most cases must to him be a matter of great importance. And I apprehend that a merchant of this city, when about to endorse negotiable paper, would deem the contract into which he was entering, as materially diff rent, whether the note was made payable at Albany, or at NezuOrleans. He would, undoubtedly, take into consideration, in estimating the responsibility he was to incur, that in the one case he would receive notice of his liability, in case of dishonour, the same day, but in the other, not until twenty or thirty days after he became charged with the amount.
On a careful examination, it will be found, that the authorities cited by the Supreme Court do not warrant the doc
The case of Trapp v. Speerman, (3 Esp. Rep. 57.) is not only a nisiprius decision, but is wholly done away by the case of Saunderson v. Bowes. The case of Price v. Mitchell, (4 Camp. 200.) is unlike the present, inasmuch as the memorandum in the margin was not signed, and did not profess to designate the place of payment, but only to point out the maker’s residence; and even in that case, Gibbs, Chief Justice, in delivering the opinion of the court, observed, that if the words had been inserted in the body of the note they would have formed part of the contract. Nor is the doctrine supported by the case of Wolcott v. Vansantwood, (17 Johns. Rep. 248.) which has been cited. , The Chief Justice, in his opinion in that case, which was concurred in by a majority of the court, does, indeed, say, “ that the time and place of payment are merely modal, forming no essential part of the contract ;” but he must be understood as speaking with reference to the maker, or acceptor; for in the language of Van Ness, Justice, in the same case, “it is acceded on all hands, and the position is too plain to be denied, that in order to charge the endorser, a demand at the place of pay
But even if it was not altered, it would be equally fatal to defendants : for if the original contract was untouched by the memorandum, then the demand of payment ought to have been made of the maker personally, or at his residence, which was not done; and on that ground, the endorser was not charged. The endorser’s contract having been thus altered in anwterial part, without his knowledge or assent, he was thereby discharged from all further responsibility. The rule, that a man is not to be held to a contract which has been varied, without his assent, is perfectly well settled; and if an instance can occur where it ought to be applied with peculiar strictness, it is that of a surety, in which favourable light the plaintiff in error is entitled to be viewed. (Clason v. Morris, 10 Johns. Rep. 538.) And in my view, it is wholly immaterial whether the endorser has been prejudiced by the alteration or not. The case of Ludlow v. Simond, in this court, (2 Caine's Cases in Error,) confirms this position ; and is not less conformable to strict justice, than to the rules of law. It was there held, by the unanimous opinion of this court, that a surety was not bound beyond the strict terms of his contract; and although in that case the deviation from those terms was not shown to be injurious, but, on the contrary, was probably beneficial to the surety, yet he was discharged by it. We are not to abandon those great principles of natural justice which are engrafted in the law, because the application may in particular cases be deemed rigorous ; but whenever they apply, they must, for the sake of uniformity and certainty, be rigidly adhered to.
If the view I have taken of this subject be correct, it is unnecessary to examine the other points made in the argument. But as it has been held by the Supreme Court, and contended here, that the maker was authorized, without consulting the endorser, to appoint the place of payment at the Bank of America, and that a demand atthat place is sufficient to charge the endorser, I shall briefly advert to the grounds
The Supreme Court, aware of this objection, and perceiving the great evils which might result from allowing this authority to the maker, have intimated “ that if he should appoint a place of payment so remote as to impose an unreasonable risk oa the endorser, it might be considered a fraud upon him.” But the uncertainty of such a rule which would refer the decision of each case to its particular circumstances, and to the discretion of the Courts, would afford but a slight remedy to the anticipated abuses. I greatly prefer the simple and reasonable maxim, that every alteration of the, endorser’s contract in a part which, in any event, may become material, without his approbation, shall discharge his liability. This rule is definite and certain; and, in my judgment, is not only founded on sound principles of law, but absolutely essential to the security of endorsers and sureties. No injury can result from it; for its only effect will be, to apprize the endorser of the proceedings of the maker, and to require his assent to every part of a contract by which his rights and liabilities arc to be tested, and which may eventually have an important bearing upon his property and credit. I am, accordingly, of opinion, that the judgment of the Supreme Court is erroneous, and ought to be reversed.
Austin, Barnum, Boucic, Bowne, Dudley, Evans, Lefferts, Livingston, Lounsbury, Lynde, Miller,
This being the opinion of a majority of the Court,
Judgment of reversal.
For affirming, 10; for reversing, 18.