UNITED STATES SUPREME COURT DECISIONS ON-LINE

THIS was an action brought by the indorsee, against the indorser, of a promissory note for 5000 dollars, drawn by Samuel Emory, on the 26th of December 1795, and payable 65 days after sight. The drawer, failing to pay the note, it was regularly protested, on the 3d of March 1796; and the only question agitated upon the trial, was, whether reasonable notice of the non-payment was given to the indorser, or due diligence employed to give it?

The material facts were these: Emory and Dennison had purchased from the managers of the Schuykill canal lottery a number of tickets, for which a note was given to the president, the plaintiff in this action. The purchasers settled their accounts of the speculation, before the note became due, in consequence of which Emory was bound to pay the note; but when it became due, Dennison agreed to continue his indorsement for the accommodation of Emory, though the joint interest had ceased; and the plaintiff, by way of renewal, at the instance of Emory, took the note, on which the present action was instituted. Dennison was not a permanent inhabitant of Philadelphia; but was domiciled at Havre de Grace, in Maryland. He had, however, an agent in Philadelphia, to whom the banks, in consequence of written instructions, delivered the notices of his paper engagements payable there, on which he was drawer (not indorser) during the years 1795, and 1796; and who constantly, for that period, made the necessary payments; nor would he have hesitated (he declared) to pay the present note, if he had been informed by the default of the drawer. It appeared, likewise, that Dennison was, occasionally, in the city of Philadelphia, in the months of February, March, April, May, June, August, and September 1796; and,

Page 4 U.S. 163, 164

in the month of May, Emmory informed him of the protest; but, at the same time, declared that he had made preparation to discharge the note. On the other hand, it was proved, that after the default of the drawer, particular and repeated inquiry was made for the indorser by the notary, as well from Emmory as others; that the indorser was not then in Philadelphia, and the notary did not himself know that he had an agent here, for such purposes, though he knew there were transactions of business between him and the person, who is said to have been his agent; that the notary heard Dennison lived at Havre de Grace, but, at the same time, was told, he had gone to the eastward; that as soon as the plaintiff understood that Dennison was in the city (about six weeks, or two months, after the protest) the plaintiff's clerk called on Dennison, mentioned the facts, and demanded payment; when Dennison said, that he had received no part of the proceeds of the lottery tickets; but that he would urge Emmory to discharge the note.

The defendant's counsel contended, on these facts, that there was not reasonable notice of the protest of the note, nor due diligence to give it: that, under the circumstances of the case, the defendant was not under a moral obligation to pay the note, and might fairly take advantage of the strict rule of law, according to 1 Dall. Rep. 234. 252. 270. 2 Dall. Rep. 158. 192.: that no notice was given to the indorser till May 1796, though he was occasionally here, before that time, and subsequent to the protest; though he had an agent here; and though he lived in a neighbouring state, to which the post would have carried notice, in the course of a few days: and that actual knowledge of non-payment, is not sufficient to charge an indorser, unless the information is received promptly from the holder, with notice that he looked to the indorser for payment: Kyd on Bills. 79. 1 T. Rep. 167. 5 Burr. 2670. 1 T. Rep. 712.

The plaintiff's counsel insisted, that as the private arrangement between Dennison and Emmory, was unknown to the plaintiff, his claim upon the defendant in morality, as well as law, could not be impaired by it; that the law was not controverted, on the authority of the cases cited; but still it left the matter of fact to be ascertained, what was reasonable notice of protest, under all the circumstances of the case? that the first important feature of the case, exhibits the defendant as a non-resident of Philadelphia, a mere transient visitor: that notice sent south to Havre de Grace, when it was known he had gone north, would have been useless and idle: that the notary did not know, and the evidence is, otherwise, uncertain in the instance of the defendant's begin an indorser, that he had any agent in Philadelphia: and that due and diligent inquiry was made for the indorser in Philadelphia, where the consideration arose, and the note was given. [4 U.S. 163, 165]

Full Text of Opinion