to the case in which the body of the instrument is left blank. If negotiable paper, regularly filled up, be indorsed in blank, the indorser is holden only in the character of indorser, and according to the terms and legal operation of the instrument. (d). In the case of blank indorsements, possession is evidence of title; but if the indorsements be all filled up, the first indorsee cannot sue without showing that he had taken up the bill or note. (e) The acceptor or maker is liable only to the last indorsee. The prior indorsers have parted with their interest in the paper, and are presumed to have received a valuable consideration for it. But if the last indorsee protests the bill for nonpayment, and it be paid by a prior indorser, the latter ac- *91 quires, by such payment, a new title to the instrument. (a) Though the holder of paper fairly negotiated be entitled to recover, and to shut out almost every equitable defence, yet the rule applies only to the case of negotiable paper, taken bona fide in the course of business before it falls due. If taken after it is due and payable, the presumption is against the validity of the demand, and the purchaser takes it as a dishonored bill, at 438; Woolley v. Constant, 4 Johns. 60; Ex parte Kerwin, 8 Cowen, 118. The ancient cases were otherwise, and so are some of the modern American cases; as, see 1 Yerger, 69, 149; 2 Dev. (N. C.) 379; 3 Bibb, 361; 1 Hill (S. C.), 267; United States v. Nelson, 2 Brock. 64; Williams v. Crutcher, 5 How. (Miss.) 71. In Indiana, the indorser of a note is understood to warrant two things: 1. That the note is valid, and the maker liable to pay it; 2. That the maker is solvent, and able to pay it. Howell v. Wilson, 2 Blackf. 418. (d) See Jackson v. Richards, 2 Caines, 343. In Beckwith v. Angell, 6 Conn. 315, it was held, that if a promissory note be indorsed in blank, under a parol promise to guarantee the payment, the holder may fill up the blank, pursuant to the special agreement, and prove that agreement by parol. The indorser will be liable, under such circumstances, without proof of the demand and notice requisite in other cases. There have been decisions to the same effect, in Josselyn v. Ames, 3 Mass. 274; Ulen v. Kittredge, 7 id. 233; Moies v. Bird, 11 id. 436; Upham v. Prince, 12 id. 14. See, also, Story on Bills, [§ 215;] Nelson v. Dubois, 13 Johns. 175; Campbell v. Butler, 14 id. 349. But the indorser of a negotiable note cannot be treated as a guarantor, provided he could, by the holder, have been charged as indorser. The prior cases in Johnson are considered as erroneous on this point. Seabury v. Hungerford, 2 Hill, 84; Hall v. Newcomb, 3 id. 233. In Parker v. Riddle, 11 Ohio, 102, it was held, that if a note not negotiable be indorsed, it is a collateral undertaking, and payment must be demanded, and notice given to the indorser, as upon negotiable paper. (e) The rule now is, that the holder of a negotiable note by a blank indorser may sue upon it without filling up the blank. Chitty on Bills, ed. 1839, 255; 2 La. 192; Chewning v. Gatewood, 5 How. (Miss.) 552. The presumption of title in the holder is good until the contrary be established. (a) Mendez r. Carreroon, 1 Ld. Raym. 742; Gorgerat v. M'Carty, 2 Dallas, 144. his peril, and subject to every defence existing against it before it was negotiated. (b) But it has been a question, when a note 1 (b) Brown v. Davies, 3 T. R. 80; Lee v. Zagury, 8 Taunt. 114; Tinson v. Francis, 1 Camp. 19; Sargent v. Southgate, 5 Pick. 312, 317, 319; Andrews v. Pond, 13 Peters, 65. A stricter course is observed in the case of bills and notes than in that of checks; and a party taking a check overdue does not necessarily take it subject to all the infirmities of the previous title, provided he exercises a reasonable caution in taking it; and that is a question of fact for a jury. Rothschild v. Corney, 1 Danson & LI. 825; Mohawk Bank v. Broderick, 13 Wend. 133. A bill may be indorsed after it is due, for it continues negotiable ad infinitum until paid or discharged, provided the subsequent circulation does not prejudice any of the indorsers. Bayley on Bills, 5th ed. 156, 158; Hubbard v. Jackson, 4 Bing. 390; Callow v. Lawrence, 3 M & S. 95. In Burrough v. Moss, 10 B. & C. 558, and in Hughes v. Large, 2 Barr [2 Penn. St.] 103, the rule in the text was restricted to all equities arising out of the note transaction itself; and it was held not to extend to protect a set-off, in respect of a debt due from the indorser to the maker, arising out of collateral matters. It extends only to matters of set-off existing at the time of the indorsement. Baxter v. Little, 6 Met. 7. 1 Overdue Paper. The text is confirmed by Foley v. Smith, 6 Wall. 492; Kellogg v Barton, 12 Allen, 527; Vinton v. King, 4 Allen, 562. See especially Texas v. White, 7 Wall. 700, 735; s. c. sub nom. Texas v. Hardenberg, 10 Wall. 68, 90. This principle has been applied when the defence was that the defendant became a party to the instrument for the accommodation of the person who transferred it after maturity to the plaintiff. Bower v. Hastings, 36 Penn. St. 285; Chester v. Dorr, 41 N. Y. 279. See Jewell . Parr, 16 C. B. 684. But see Charles v. Marsden, 1 Taunt. 224; Stein v. Yglesias, 1 Cr., M. & R. 565; Sturtevant v. Ford, 4 Man. & G. 101; Carruthers v. West, 11 Q. B. 143; Ex parte Swan, L. R. 6 Eq. 344, 358. Even if a note is taken innocently before maturity, but by mistake the indorsement is omitted until the note becomes overdue, and the indorsee has received notice of facts making it invalid in the hands of the indorser, it has been held that the indorsement will not relate back so as to cut out the defence. Lancaster National Bank v. Taylor, 100 Mass. 18; Clark v. Whitaker, 50 N. H. 474; Haskell v. Mitchell, 53 Me. 468; Whistler v. Forster, 14 C. B. N. s. 248. See, further, as to relation, Ex parte Hayward, L. R. 6 Ch. 546, 549. But as mentioned at the end of Notes payable on Demand. -The prin ciple of Wethey v. Andrews, inf., n. (c), was approved on different reasoning in Merritt v. Todd, 23 N. Y. 28, and such a note was thought to be a continuing security on which the indorser remains liable until actual demand, and on which demand need not be made within any particular time. (But see Goodwin v. Davenport, 47 Me. 112.) And it is intimated that if it is otherwise when interest is not payable, the time within which demand must be made in order to charge collateral parties is the same as in the case of checks. 35; ante, 88, n. 1. See Lockwood v. Crawford, 18 Conn. 361, 372. It was said, however, in Merritt v. Todd, at p. 35, that lapse of time or nonpayment of interest may perhaps be sufficient to put the purchaser on inquiry, or to justify a Ib. payable upon demand is to be deemed a note out of time, so as to subject the indorsee, upon a subsequent negotiation of it, to the operation of the rule. When the facts and circumstances are ascertained, the reasonableness of time is a matter of law, and every case will depend upon its special circumstances. Eighteen months, eight months, seven months, five months, even two months and a half, have been held, when unexplained by circumstances, an unreasonable delay; and if the demand be not made in a reasonable time by the holder, the indorser is discharged. (c) On the other hand, in Thurston v. (c) Furman v. Haskin, 2 Caines, 369; Losee v. Dunkin, 7 Johns. 70; Field v. Nickerson, 13 Mass. 131; Sice v. Cunningham, 1 Cowen, 397; Martin v. Winslow, 2 Mason, 241. In Brooks v. Mitchell, 9 M. & W. 15, a note payable on demand, with interest, and indorsed a number of years after its date, was held, under circumstances, not to be overdue, so as to affect the indorsee with the equities; the court say it is intended to be a continuing security. This appears to be rather an extravagant indulgence of delay. But in Wethey v. Andrews, 3 Hill, 582, it was held, that presumption that the instrument was dishonored before transfer, so as to allow the maker to introduce a defence existing against the first holder; and this is so held in Herrick v. Woolverton, 41 N. Y. 581, where the note was payable on demand with interest, and some dissatisfaction with the other case is shown. Morey v. Wakefield, 41 Vt. 24; Arents v. Commonwealth, 18 Gratt. 750, 782. An action against the maker of a note payable on demand with interest is barred in six years. Wheeler v. Warner, 47 N. Y. 519. But in Chartered Mercantile Bank of India, London, and China v. Dickson, L. R. 3 P. C. 574, a reasonable time with reference to the circumstances of the case was allowed, as against the indorser, for presentment of a note payable on demand without (?) interest. The result of the later New York cases, Goodwin v. Davenport, sup., and Chartered Bank of India v. Dickson, sup., seems to be that the principle of Merritt v. Todd, if law, is not to be extended. Some cases as to the reasonableness of particular times will be found post, 102. The lapse of time which would have the effect of letting the maker in to his de fences, as in Herrick v. Woolverton, would probably have to be greater than that which would discharge the indorser under the rule in Merritt v. Todd. Thus the holder of a check who takes it in good faith and for value several days after it is drawn, receives it without being subject to defences on the part of the maker, of which he has no notice before or at the time his title accrues. Ames v. Meriam, 98 Mass. 294. See Lancaster Bank v. Woodward, 18 Penn. St. 357; Serrell v. Derbyshire R. Co., 9 C. B. 811; Poorman v. Mills, 39 Cal. 345; sup. n. (b). It has been held that a note payable on a certain day is overdue on the last day of grace, so that if transferred then it is taken subject to defences available against it in the hands of the payee, by an extension of the doctrine, to which additional cases are cited, post, 102, n. (b). Pine v. Smith, 11 Gray, 38. (But it is to be observed that in this case no demand appears to have been made, and that therefore, even by the Massachusetts doctrine, the maker was not suable at the time of transfer. Estes v. Tower, 102 Mass. 65.) Contra, Crosby v. Grant, 38 N. H. 273. M'Kown, (d) a note payable on demand, and indorsed within seven days after it was made, was held to be indorsed in sea92 son to close all inquiry into the origin of the note. And when a note is negotiated in season, it may afterwards pass from one indorsee to another, after it is due, and the holder will be equally with the first indorsee protected in his title. (a) There is no certain time in which a bill or note, payable at sight, or a given time thereafter, or on demand, must be presented for acceptance. It must not be locked up for any considerable time; it must be presented for payment within a reasonable time; but if put into circulation, the courts are very cautious in laying down any rule as to the time in which it must be presented; and, in one case, it was allowed to be kept in circulation, without acceptance, so long as the convenience of the successive holders might require. (b) That was the case of a foreign bill; and an inland bill may also be put in circulation before acceptance, and it may be kept a reasonable time before acceptance; but what would be a reasonable time cannot be precisely defined, and depends upon the particular circumstances of each case. (c) If a bill or note be absolutely assigned, so as to pass the whole instrument to the indorsee, its negotiable quality would pass with it; and the better opinion would seem to be, that its negotiability could not be impeded by any restriction contained in the indorsement. (d) But where the indorsement is a mere authority to receive the money for the use, or according to the directions of the indorser, it would be evidence that the indorsee did not give a valuable consideration, and was not the absolute owner. (e) A negotiable instrument may be indorsed with a restriction, qualification, or condition. It may be indorsed so as to exempt the indorser from liability, as if the indorser should add, at his own risk, or without recourse. In that case, the maker or acceptor, and prior indorsers, and *93 subsequent indorsers, would be holden, according to the rules and usages of commercial paper, but the immediate a note payable on demand, with interest, was not out of time four or five weeks after its date, but would have been if not on interest. (d) 6 Mass. 428. (b) Goupy v. Harden, 7 Taunt. 159. (a) Chalmers v. Lanion, 1 Camp. 383. (c) Fry v. Hill, 7 Taunt. 396; Muilman v. D'Eguino, 2 H. Bl. 565. (d) Parsons, C. J., 3 Mass. 228. (e) Sigourney v. Lloyd, 8 B. & C. 622; 1 Danson & Lloyd, 132, s. c.; 1 Atk. 249; 2 Burr. 1229, 8. P. indorser would be exempted from responsibility by the special contract. (a) 1 If the bill or note be negotiated after it is due, and be thereby opened to every equitable defence, yet a demand must be made upon the drawee or maker within a reasonable time, and notice given to the indorser, in order to charge him, equally as if it had been a paper payable at sight, or negotiated before it was due. (b) 6. Of the Demand and Protest. The demand of acceptance of a foreign bill is usually made by a notary, and in case of nonacceptance he protests it, and this notarial protest receives credit in all courts and places by the law and usage of merchants, without any auxiliary evidence; and it is a requisite step, by the custom of merchants, in the case of the non-acceptance or nonpayment of a foreign bill, and must be made promptly upon refusal. It must be made at the time, in the manner, and by the persons prescribed, in the place where the bill was payable. (c) It is sufficient, however, to note the protest on the day of the demand, and it may be drawn up in form at a future period. The protest is necessary for the purpose of prosecution, and it must be stated and proved in a suit on the bill. (d) On (a) Dallas, J., in Goupy v. Harden, 7 Taunt. 163; Rice v. Stearns, 3 Mass. 225, Welch v. Lindo, 7 Cranch, 159; Ersk. Inst. of the Scotch Law, ii. 468; Bell's Comm. on the Scotch Law, i. 402; Story on Bills, [§§ 214–216.] (b) M'Kinney v. Crawford, 8 Serg. & R. 351; Berry v. Robinson, 9 Johns. 121; Bishop v. Dexter, 2 Conn. 419; Dwight v. Emerson, 2 N. H. 159; Rugely v. Davidson, Const. (S. C.) 33; Allwood v. Haseldon, 3 Bailey (S. C.) 457. [Patterson v. Todd, 18 Penn. St. 426; Tyler v. Young, 30 Penn. St. 143; Levy v. Drew, 14 Ark. 334.] (c) Gale v. Walsh, 5 T. R. 239; Story on Bills, [§§ 176, 273.] It is held that a notarial certificate is good without a seal, though it be the usual practice to affix one. Lambeth v. Caldwell, 1 Rob. (La.) 61. In Kentucky, by statute, in 1798, protested foreign bills are accounted, after the death of the drawer or indorser, of equal dignity with a judgment; and executors and administrators of every such drawer or indorser are compelled to suffer judgment to pass against them, before any bond, bill, or other debt of equal or inferior dignity. In France, a protest, though usual, is not necessary to enable the holder of a note to sue the maker. The law was satisfactorily shown to be so by proof, in Trimbey v. Vignier, 6 Carr. & P. 25. The duty of the notary in making the demand for acceptance or payment is personal, and cannot be performed by his clerk or a third person, and his notarial certificate must show it. Onondaga County Bank v. Bates, 3 Hill, 53; Chitty on Bills, 8th ed. 217, 493. (d) Tassel v. Lewis, 1 Ld. Raym. 743; 1 He would not, however, be exempted from his liability as vendor, explained Rogers v. Stevens, 2 T. R. 713; Buller, ante, 88, n. 2. Dumont v. Williamson, 18 Ohio St. 515. |