Annville Nat. Bank v. Kettering.

• Decision Date: 19 May 1884
• Parties: Annville National Bank <I>versus</I> Kettering.
• Court: Pennsylvania Supreme Court

106 Pa. 531

Annville National Bank versus Kettering.

Supreme Court of Pennsylvania.

May 8, 1884.

May 19, 1884.

May 8, 1884.

Before MERCUR, C. J., GORDON, PAXSON, TRUNKEY, STERRETT, GREEN and CLARK, JJ.

ERROR to the Court of Common Pleas of Lebanon county: Of July Term, 1883, No. 160.

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Josiah Funck & Son, for plaintiff in error.—A waiver of protest has always been understood to mean a waiver of all steps necessary to charge the indorser, and, consequently, a waiver of demand and notice: Huckenstein v. Hermann, 34 Leg. Int., 232; Coddington v. Davis, 1 Comstock, 190.

The words "waiver of protest" have also long since acquired the above meaning in the business community, and to proclaim a new and different construction would be productive of great hardship and inconvenience.

W. M. Derr, for defendant in error.—Waiver of protest before maturity of the note only waived the official act of the notary and the notice of non-payment. Notice can be given to the indorser of the non-payment of the note by another not a notary: Falk v. Lee, 8 W. N. C., 345. Waiving the protest puts the parties in the same condition as if the protest had been made and given in evidence, being only prima facie, and in the absence of contradictory testimony is conclusive proof of notice to the maker: Scott v. Greer, 10 Barr, 103; Day v. Ridgway & Budd, 5 Harris, 308. In the case of Huckenstein v. Herman (supra) it seems that the contention was not in regard to the demand, but to that of notice to the indorser, for in the opinion the demand and notice of its results are coupled without any intention of separating the one from the other. The expression in Huckenstein v. Hermann, relied upon by the plaintiff in error to overthrow the cases of Scott v. Greer and Day v. Ridgway, is the following in a per curiam opinion: "To waive the mere act of the notary, and yet to suffer the duty of making demand and giving notice to remain, would scarcely be thought of by business men."

Mr. Justice STERRETT delivered the opinion of the court, May 19, 1884.

No principle of the law merchant is better settled than that demand and notice of the non-payment of a negotiable note may be waived by the indorser, either orally or in writing, or by acts clearly calculated to mislead the holder and prevent him from treating the note as he otherwise would, but there is some diversity of opinion as to what constitutes a waiver of these necessary prerequisites to charge the indorser. When a written waiver of "demand and notice" accompanies the indorsement, or is given by the indorser before maturity of the note, there can be no question as to its legal effect; nor can there be any doubt when the language employed clearly imports or implies the same thing. It has been doubted, however, whether the words "protest waived," written on a note by the indorser, or his separate request in writing not to protest it, is a waiver of both demand and notice, and in some cases these words have been considered insufficient to dispense with either; but the weight of both reason and authority is that they do constitute a waiver of both. Strictly speaking, the term "protest" applies only to foreign bills, but the custom to treat inland bills and notes in the same manner as foreign bills has become so well-nigh universal that, in common parlance, the term means the taking of such steps as are required to charge the indorser. For the same reason, the word "protested," sometimes employed in giving notice of dishonor to indorsers of inland bills and notes, clearly implies demand, non-payment, and consequent dishonor of the bill or note in all cases where protest is necessary: 1 Pars. Bills & Notes, 471, 575, 579, 582, and authorities there cited.

It is not essential that the waiver should be in writing. When the fact is established by competent evidence, a parol waiver is as valid and binding as a written one. The only difference is in the character of the proof: Barclay v. Weaver, 7 Harris, 396. It was there held that a verbal agreement between the holder and indorser to renew a note at maturity, might be shown by oral testimony, and that demand and notice were thereby dispensed with. The general principle underlying nearly all cases of waiver is that the indorser has by word or deed done something calculated to mislead the holder and induce him to forego the usual steps to fix the liability of the former.

It is unnecessary to refer specially to several well-considered cases in other states, holding that a waiver of protest,...