Pons's executors v. Kelly, 3 N.C. 45, 2 Hayw. 45 (1798)

April 1798 · North Carolina Superior Court

3 N.C. 45, 2 Hayw. 45

Pons's executors vs. Kelly.

was an action to recover a sum of money, due as a ba- •*- lance for the sale of a house in Halifax. The declaration also stated another count, for a sum of money contained in a note of hand for the same amount as that balance was of, which Kelly had endorsed to Pons upon one Cox of Edenton, which Pons could not procure payment of from Cox. The house was sold in April, 1793, and for the balance remaining unpaid, which was four hundred and fourteen and an half dollars, the note was endorsed. In about three weeks afterwards, Pons, by his agent, Mr. Porrie, applied to Cox for payment, who informed him he was not able to pay it. In the fall of that year, Porrie, who before that time had returned the note to Pons, accidentally saw Kelly and told him he had applied to Cox for payment in behalf of Pons, and that Cox said he was unable to pay it; and added, Pons will look to you for the money: Kelly replied, he has made the note his own by keeping it so long. In the fall of 1794-, Kel-Iy on bis way ter Edunton, called at Pons’s and enejuired /or the note, saying he would take it and try te get it passed off to Blanchard. Some time after this the present action was brought.— It was however further proven, that Cox was insolvent when the note was endorsed, and when Porrie applied for payment.

The jury found a verdict for the plaintiff, and a new trial being moved for, and a rule to shew cause given,

Baker for the plaintiff,

ou the day appointed for shewing, cause,, contended — As to the first count for the balance due on the sale of the house, that the plaintiff was entitled to recover on that, for a bill of exchange or promisory note, though endorsed to the creditor, does not go in discharge of a precedent debt unless-it be agreed expressly to be soand he cited B-ulL N. P. 186,. Salk. 124. Secondly', he insisted that Pons had not made the note his own, for if notice was necessary', that notice had been given by Porrie, and the circumstance of Kelly calling for the-note in 1794, is evidence that he had notice. Thirdly,, that in the case of a promisory note endorsed, the endorsee was not obliged to give notice : Promisory' notes are put upon the same footing as. inland bills of exchange, and those need not be protested ; the plaintiff, if any loss accrues for want of a protest, shall bear that loss, and if it be to the amount of that bill, it will discharge the defendant, but'if no loss happens for want of a protest the plaintiff'shall sustain his action, and nothing shall be deducted for want of notice from his demand; aud he cited-S Ba. Ab. 613. Fourthly, he argued that if notice was necessary in general, yet it was not here, for Cox was insolvent and Bad notice been given to Kelly of non-payment it would not have, been of any service to him ; he could not have got the money of Cox, and if he has sustainad no loss for want of notice, he should not be permitted to urge the want of it as a screen from this action. Fifthly', he argued that if notice were necessary, yet the jury were judges of the time to be allowed in which it was reasonable that notice should be given: The court cannot judge of it, and here they have thought the time elapsed before bringing the action was not too long a time, and surely' the commencement of the action was sufii.'ieni notice. <

Bavi¿\ e contra.

As to the count lor the balance, a bill of exchange or negotiable paper endorsed to the creditor is not in-i,la,iter a discharge of a precedent debt; it is not any discharge if the holder or endorsee applies in a reasonable time lor payment ; and in case of non-pay ment gives notice thereof to him from whom he received the bill or note, but if he does not do this he snakes the paper his own, and the pawy from whom he received it is discharged. The case cited for the plaintiff’ say's it is fit to be left to the jury where the party has kept the paper an t-xseasonable time in ¡¡is possession,” and surely' if upon those eL'er:.rr.s:auccs the law determines that the holder has made it hit? own bv bis laches ; a jury in such case should say it operates a discharge of the precedent debt ; it would be very unreasonable to say the paper should be his own, and that still he should recover the precedent debt; as to the notice given by Porris, it was of no avail; notice should come from the indorsee, anti it should import, not singly that the money is not paid, but ako that the holder does not intend to look «> the drawee of the bilí or maker of the note, but to the endorsers, 1 Term, 160, Kidd 79, SO; here Porrie had no directions nor authority from Pons to give notice ; what he relates was mere occasional conversation : The endorsee of a promisory note is equally bound to gb’~ notice as the endorsee of a bill of exchange, 1 Burr. 6/8. The authority cited from Bacon’s Abridgment docs not prove that the endorsee can maintain an action against the endorser v about notice; it seems to intimate that when notice is omited to be given, the payee must bear the loss occasioned thereby, and latter determinations shew that the distinction is not a good one; the want of notice is not excused by the insolvency of Cox: Want of notice can be excused but in one case, and that is where the drawee who will not accept has no tffects of the drawer in his bands. If the maker of a note has become insolvent, notice thereof must be given by the endorsee, Kidd 79, 2 Bl. Re. 747; ■this plainly contradicts the idea that insolvency will excuse the not giving of notice. As to the reasonableness of notice and what shall be deemed reasonable time, it must in some measure be left to the jury, but if they allow what is plainly and evidently a longer time than, is necessary or reasonable, the court may controul them.

Per curiam.

If an indorsee keeps the paper so long in his hands as to make it his own, ex necessitate, it must be a discharge of the precedent debt, though not so originally. It would be absurd to say he could keep the note, and also recover for the precedent debt; the case cited admits it may become ec* -ex post facto. It means that a note endorsed is not a discharge of a precedent debt unless agreed to be so, except in the case where the holder keeps it an unreasonable time in his possession , and then it may; and that this is fit to be left to the jury. — Iu ■order therefore, to determine whether the note in question be s discharge or not, we must resort to the indorsement and to the law upon it, and draw conclusions from them. The indorsee ■of a bill of exchange undertakes in reasonable time to preseas the bill for acceptance, and then for payment; and in case of nonacceptance or non-payment, to give notice thereof in reasonable time t*> the indorser. The indorser can never support an action unless he performs all parts of this undertaking ; he must prove, the giving of notice, or in case of the non-acceptance of a bill., prove that there were no effects of the drawer’s in the drawee’s hands ; that is to say, if he or the payee means to resort to the drawer: But this proof in excuse of not giving notice, only can apply to the case of a bill of exchange not accepted : for if it he accepted, that is full proof that the drawer has effects in the hands of the drawee, or that he has credit upon hisn ; but such proof in excuse of want of notice, can never be given in case of anote endorsed, for there the maker has accepted at the time of drawing or making the note, and the indorsee cannot say he had no effects of the drawer in his hands. As to the point, whether notice is necessary ia case of a promisory" note, every reason which requires it in the case of a bill, holds equally strong in the case of a note. The case of Tindal and Brown is a case upon a note, so was that of Russell and-, reported by Douglass in the case cited from Kidd. 79. It is expressly stated, that notice in case of a note is necessary to entitle the holder to- his action : these cases which state the law to be otherwise, are old cases decided before the law respecting bills and notes had advanced to its present degree of perfection. As to what shall be deemed notice sufficient, the indorser must have notice thereby from the indorsee, that he cannot obtain payment, and that he the indorsee looks to the indorser for payment. The argument that the insolvency of the maker of the-note would be an excuse to the indorsee for not giving notice, seemed to be of some weight when first offered, but upon consideration, it has none : The indorsee ought to give notice, for perhaps the indorser may procure payment by the help of friends, or by some means unknown to the indorsee, and not within his power. Kidd. 79, abridging the cases in the books, says, if the maker of the note be insolvent, the indorsee must give notice to the indorser; the same is laid down in Bl. Re. 747. And Lee, in arguing the case of Russel & Langstaff, said, that Lord Mansfield had non-suited many plaintiffs at nisiprhis for want of notice, although it were proved that the maker of the note or drawee of the bill was insolvent; and in the case of Goodall and others vs. Dolley, 1 Term, 712, where the drawee and drawer were both insolvent, and the counsel to excuse the want of notice insisted upon that circumstance, it was answered to be perfectly elear, that the law was otherwise ; and that answer prevailed sofarboth with the counsel and the bench, that the paint was instantly abandoned, and no more notice taken of it. With respect to what shall be reasonable, it must be laid down in general, that the party shall give notice as soon as he conveniently may, all circumstances considered, but the court will say what time is reasonable ; and if the jury allow beyond that time, the court will set asidetheir verdict; otherwise one jury might think onetime reasonable, knother another, and so on, ad infinitum, so that there would be not the least certainty.

Verdict set aside, and a new trial ordered.