UNITED STATES SUPREME COURT DECISIONS ON-LINE

In this action the Plaintiffs declared, as Indorsees, upon a promissory note, against the Defendant as Indorsor, both the parties residing in the city of Philadelphia. It appeared, on the trial, that the note was drawn on the 10th April, 1786, and that it was protested for non payment on the 12th June, 1786; but on the 5th of July and on the 23rd of August following, the Plaintiffs received several partial payments from the drawer, without attempting to give notice of the protest to the indorsor, till after the last of those payments, when the drawer had become greatly embarrassed in his circumstances. Nor was there, indeed, any other evidence of notice, previously to the commencement of the action, to March term 1787, than that the Plaintiff's clerk had frequently called at the Defendant's store, but was not certain that he had ever seen him, or left a note of his business.

Ingersol moved for a non-suit on two grounds; 1st, Because the receipt of a part of the money from the drawer, is a discharge of the indorsor for the whole; and 2ndly, Because the Plaintiff's did not give reasonable notice of the protest to the Defendant. [252-Continued.]

1St. On the first point he contended, that the indorsor of a promissory note, is only a warrantor that he will pay the money, it the drawer does not; and that if the indorsee receives a part, he takes upon himself to give credit to the drawer, and discharges the indorsor. 1 Wills. 46, Hall v. Pitfield. 2 Stra. 745. Kellock v. Robinson. S.P.

2nd. With respect to the second point he cited Term Rep.167. Easter. 27.Geo. 3.Tindal et al. v. Brown, where it is said, that when a note is not discharged by the drawer, the holder must give reasonable notice to the indorsor; that this means something more than making it known; for it is not enough that he says the drawer has not paid, but he must declare that he does not mean to give credit; and, therefore, when the circumstances are ascertained, what is reasonable notice is a question of law and not of fact. As to the giving time, the holder does it at his peril, for it has never been determined that the indorsor is liable, where the holder has given credit to the drawer; so that the want of notice is tantamount to payment. Id. 712.

Sergeant and Earton, for the Plaintiff, argued, 1st, That the acceptance of a part shall not prejudice the holder of a bill or note. Marus 6. 8. 9. 86. 87; and, as upon the authority of this book, the Court had determined a former question,* they said it could not be shaken, in the present instance, by Wils. 46, which was not a decision in the principal case, but an obiler dictum, referring to a preceding determination for an argument a sortiori; nor by 2 Stra. 745, which was a short Nisi Prius note. Besides, these reports give no reason for their decisions, but Marius assigns a very satisfactory one for his doctrine; to wit, that it is beneficial to the indorsor that the

Page 1 U.S. 252, 253

holder should receive as much of the money as he can from the drawer, since thereby so much is saved to him. There is a material difference, however, between the principles and usage in London and Amsterdam, and the custom of Philadelphia upon this, as well as the point of notice; for long indulgence and the course of business, have not yet brought us to the precise and strict practice of those capitals.

2ndly. With respect to the second objection, they said, that the Plaintiff's clerk went repeatedly in pursuit of the Defendant; and proof of making enquiry after him is sufficient to excuse giving notice, unless he shows that he might have been found. L. N. P. 273. 274. But, at all events, they insisted that what was reasonable notice was a matter of fact, and not of law; 1 Stra. 508. 2 Stra. 829. 1175. 1 Black Rep. 1. For, though it is true, that there are many facts upon which, if the Jury proceed contrary to the opinion of the Court, a rehearing will be granted; yet they must, at last, be determined by a verdict: In Trover, for instance, the Conversion can only be found by a Jury, it cannot be found by the Court. That reasonable notice is a fact of the same kind, was conceded by very eminent council,* in opposition to the interest of his client. Doug 496. 7. The propriety of the rule is abundantly more striking here than in England; and as a Jury alone can decide upon the circumstances of the country, and the relative situation of the parties, it ought to be left to them to ascertain the reasonableness of the notice.

Ingersol, in reply, said, that the case was of great importance to the mercantile interest; and that the mischief would be fatally extensive, if the adverse arguments prevailed. He contended, however, that in whatever form the Plaintiffs choose to proceed, they must fail in their action. For, if they bring their suit at common-law, then it cannot be maintained at all; since, at common-law, a chose in action is not assignable; nor is an assignor responsible unless he expresly warrants; and, if they bring it upon the custom of Merchants, then, in order to recover, they must show that they have, on their part, complied with the custom, which required that reasonable notice of the non-payment, should have been given to the Defendant. But, as the common-law is not applicable, and the Act of Assembly does not meddle with the case of Indorsors and Indorsees, the declaration must undoubtedly be founded upon the statute of Anne and the custom of merchants; and if the Plaintiffs are allowed to take advantage of these to maintain his action (waving the question whether the statute extends to this country) the Defendant cannot be precluded from taking advantage of them, likewise, to support his defence. Upon this ground the usage must be universal: For, the statute of Anne places promissory notes on the same footing with inland bills of exchange, and inland bills of exchange, in the preceding reign of W. 3. had been placed on the same footing, with foreign bills so that any distinction, between the cities of American and London, and [1 U.S. 252, 254]

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