Another v. Gascoigne
| Decision Date | 01 January 1854 |
| Parties | SYDNOR AND ANOTHER v. GASCOIGNE. |
| Court | Texas Supreme Court |
The statute (Hart. Dig., Art. 2528) which dispenses with protest and notice, in order to fix the liability of indorsers, etc., of bills of exchange and promissory notes, and substitutes, instead thereof, the bringing of suit within a certain time, or to the first term of the Court, etc., also dispenses with a demand. (Note 67.)
The rule of stare decisis, so far as it applies to the decisions of our Court, should not be disregarded, but on the fullest conviction that the law had been settled wrong; and even then, etc.
Where the indorser “waived protest,” and suit was not brought to first Term, etc., and the transaction was between merchants, the Court held that a demand was not necessary; and the plaintiff recovered upon proof of the note and indorsements, and the fact as to the parties being merchants alone.
Appeal from Galveston. This was a suit to the Fall Term, 1851, by appellee against Tryon & Towsey, as makers, and appellants, as indorsers, of a promissory note of which the following is a copy:
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¦“$622 19-100.¦GALVESTON, May 1st, 1850.¦
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Sixty days after date we promise to pay to the order of Sydnor & Bone, six hundred and twenty-two 19-100 dollars for value received, with interest at twelve per cent. per annum from date; payable in Galveston.
“Pay to J. W. Gascoigne.
GEORGE BUTLER & BROTHER.”
The petition stated the making and indorsing of the note, but did not aver presentment to the makers for payment, their refusal to pay, and notice of non-payment to the indorsers. Appellants excepted the petition as insufficient in law to support the action against them as indorsers; and, in an amended answer, alleged that the note had never been presented to the makers for payment, and notice of non-payment given to appellants, and the suit had not been brought to the first term of the Court; insisting that, by reason of such failure of demand and notice, and to bring suit against the makers, they were discharged from all liability as indorsers. Plaintiff demurred to the amended answer, or so much of it as set up the above defense, as being immaterial and insufficient in law. He amended by alleging that the appellants being indebted to the plaintiff, on the 9th of December, 1850, after the note sued on had become due, in discharge of said indebtedness indorsed said note to Butler & Brother, who indorsed it to the plaintiff. But there was no proof of this fact. Judgment by default was taken against Tryon & Towsey. Appellants' demurrer to the petition was overruled, and plaintiff's demurrer to the amended answer sustained. A jury was waived, the case submitted to the Court, and judgment given against appellants. There was a statement of facts which showed that the only facts in evidence were the note sued on, and the admissions of the appellants' counsel that the note and its transfers were between merchant and merchant.
Motions for a new trial and in arrest of judgment were overruled, and defendants Sydnor & Bone appealed.
Sherwood & Goddard, for appellants. It is respectfully submitted that the Court below erred in overruling the demurrer to the petition, and in sustaining the demurrer to the amended answer; also in refusing a new trial, and overruling the motion in arrest.
Appellants were sought to be charged as indorsers. Their liability, in that character, was collateral and conditional. The contract of an indorser is, “that if the note, when duly presented at its maturity, is not paid by the maker, he, the indorser, will, upon due and reasonable notice given him of the dishonor, pay the sum to the indorsee or other holder.” (Story on Prom. Notes, Sec. 135; Story on Bills, Sec. 320.) Two separate and distinct acts are required of the holder, in order to charge the indorser, viz.: presentment of the note to the maker for payment, and notice of the dishonor to the indorsee. These conditions being imposed for the benefit of the indorser, he may waive them, either or both, if he sees fit; but such waiver must be unequivocal, as the law will not infer it by mere implication. (Story on Prom. Notes, Sec. 365; Story on Bills, Sec. 371.) Demand and notice being essentially distinct, waiver of one is not waiver of the other: and hence we find it expressly held that waiver of notice is not waiver of due presentment to the maker. .)
In this case the indorsers waived protest. It is submitted that this was not a waiver of demand upon the makers; that such demand should, consequently, have been made, and alleged in the petition, and proved on the trial, in order to entitle the plaintiff to recover from the indorsers; and that it was competent for the indorsers to insist upon the failure of the holder to demand payment of the makers, as a discharge of their liability. Waiver of protest cannot be equivalent to waiver of demand, unless protest and demand are one and the same thing, or unless the former includes the latter. But a protest is not a demand: it is merely “a step towards the legal notice of dishonor.” Nor does the former include the latter: for the demand is the act of the holder, while the protest is a notarial act subsequent to demand and dishonor, and belongs to the notice to be given, not to the demand to be made. In the words of Mr. Justice Story, “a protest is, properly speaking, a solemn declaration on behalf of the holder, against any loss to be sustained by the non-acceptance, or non-payment, of the bill, as the case may be.” (Story on Bills, Sec. 276.) That demand and protest are entirely distinct and independent is conclusively shown by the fact, that, while both are required by the law merchant in cases of foreign bills of exchange, protest is, by that law, dispensed with, in cases of inland bills and promissory notes, though demand is as essential in the latter cases as in the former, in order to charge indorsers. A waiver of protest, then, is nothing more than a waiver of the notarial act which the law requires in certain cases, as one of the steps necessary to secure the liability of the indorser. It is not, necessarily, a waiver of notice of non-payment. Its only effect is expressed by Mr. Justice Story, in speaking of the exceptions to the general rule requiring a protest. One of these exceptions is, he says, “where the drawer or indorser has agreed or re quested, that, in case of dishonor, the bill should be returned without protest, in order to save expenses.” (Story on Bills, Sec. 275.) This is the only effect of such a waiver, and its obvious design to save expenses, and not to substitute a primary and unconditional liability for a collateral and conditional one. The indorser's liability remains as it was, collateral. He is still a surety for the payment of the bill by the drawer, upon presentment to the latter within a reasonable time after its maturity. His liability does not accrue, until payment is refused by the drawer; for he has undertaken to pay only on condition that the drawer does not: and if the holder should agree to give the drawer further time, the indorser who has waived protest would be released from all liability on the bill, precisely as any other indorser would be.
It is respectfully insisted that the same principle holds good, and the same consequences ensue, where there has been default on the part of the holder in demanding payment of the drawer. In this case, the record shows default, if the allegations in the amended answer are true: for more than a year had intervened between the maturity of the note and the institution of the suit, during all which time...
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