The President, Directors and Company, of the Bank of the United States Smith

• Decision Date: 13 February 1826
• Parties: THE PRESIDENT, DIRECTORS, AND COMPANY, OF THE BANK OF THE UNITED STATES against SMITH
• Court: U.S. Supreme Court

24 U.S. 171

6 L.Ed. 443

11 Wheat. 171

THE PRESIDENT, DIRECTORS, AND COMPANY, OF THE BANK OF

THE UNITED STATES against SMITH.

February 13, 1826

ERROR to the Circuit Court for the District of Columbia.

Feb. 7th.

This cause was argued by Mr. Lear, for the plaintiffs,^a and by Mr. Taylor, for the defendants.^b

Feb. 13th.

Mr. Justice THOMPSON delivered the judgment of the Court.

This case comes before the Court on a writ of error to the Circuit Court for the District of Columbia, and the questions presented for consideration grow out of a demurrer to the evidence, and out of exceptions taken to the declaration.

The action is by the plaintiffs, as endorsees against the defendant, as endorser of a promissory note drawn by William Young. The note is made payable at the office of discount and deposit of the Bank of the United States, in the city of Washington. And the questions which have been raised and argued, relate, in the first place, to the sufficiency of the averement in the declaration of a demand of payment of the drawer of the note; and, secondly, to the sufficiency of the evidence to sustain the plaintiffs' right of recovery. It is alleged, however, on the part of the plaintiffs, that this Court cannot look beyond the demurrer, to the evidence, and inquire into defects in the declaration. This position cannot be sustained. The doctrine of the King's Bench, in England, in the case of Court v. Birkbeck, (Dougl. Rep. 208.) that, upon a demurrer to evidence, the party cannot take advantage of any objections of the pleadings, does not apply. By a demurrer to the evidence, the Court in which the cause is tried is substituted in the place of the jury. And the only question is, whether the evidence is sufficient to maintain the issue. And the judgment of the Court upon such evidence, will stand in the place of the verdict of the jury. And, after that, the defendant may take advantage of defects in the declaration, by motion in arrest of judgment, or by writ of error. But, the present case being brought here on writ of error, the whole record is under the consideration of the Court; and the defendant, having the judgment of the Court below in his favour, may avail himself of all defects in the declaration that are not deemed to be cured by the verdict.

The objection to the declaration is, that it does not contain an averment, that a demand of payment of the maker of the note, was made at the place where it was made payable.

It is a general rule in pleading, that where any fact is necessary to be proved on the trial, in order to sustain the plaintiffs' right of recovery, the declaration must contain an averment substantially of such fact, in order to let in the proof. But the declaration need not contain any averment which it is not necessary to prove. For the purpose, therefore, of determining whether the declaration in this case is substantially defective, for want of an express averment that demand of payment of the maker was made at the office of discount and deposit of the Bank of the United States, in the city of Washington, it is proper to inquire whether proof of that fact was indispensably necessary to entitle the plaintiffs to recover.

Whether, where the suit is against the maker of a promissory note, or the acceptor of a bill of exchange, payable at a particular place, it is necessary to aver a demand of payment at such place, and, upon the trial, to prove such demand, is a question upon which conflicting opinions have been entertained in the Courts in Westminster Hall. But, that question may, perhaps, be considered at rest in England, by the decision in the late case of Rowe v. Young, (2 Brod. & Bingh. 165.) in the House of Lords. It was there held, that if a bill of exchange be accepted payable at a particular place, the declaration in an action on such bill against the acceptor, must aver presentment at that place, and the averment must be proved. A contrary opinion has been entertained by Courts in this country, that a demand on the maker of a note, or the acceptor of a bill payable at a specific place, need not be averred in the declaration, or proved on the trial. That it is not a condition precedent to the plaintiffs' right of recovery. As matter of practice, application will generally be made at the place appointed, if it is believed that funds have been there placed to meet the note or bill. But, if the maker or acceptor has sustained any loss by the omission of the holder to make such application for payment at the place appointed, it is matter of defence to be set up by plea, and proof. (4 Johns. Rep. 183. 17 Johns. Rep. 248.)

This question, however, does not necessarily arise in the case now before the Court, and we do not mean to be understood as expressing any decided opinion upon it, although we are strongly inclined to think, that, as against the maker or acceptor of such a note or bill, no averment, or proof of demand of payment at the place designated, would be necessary.

But, when recourse is had to the endorser of a promissory note, as in the present case, very different considerations arise. He is not the original and real debtor, but only surety. His undertaking is not general, like that of the maker, but conditional, that if, upon due diligence having been used against the maker, payment is not received, then the endorser becomes liable to pay. This due diligence is a condition precedent, and an indispensable part of the plaintiffs' title, and right of recovery, against the endorser. And when, in the body of the note, a place of payment is designated, the endorser has a right to presume, that the maker has provided funds at such place to pay the note, and has a right to require of the holder to apply for payment at such place. And whenever a note is made payable at a bank, and the bank itself is not the holder, an averment, and proof of the demand at the place appointed in the note, are indispensable. In the present case, the bank at which the note is made payable is the holder, and the question arises, whether, in such case, an averment and proof of a formal demand are necessary. If no such proof could be required, the averment would be immaterial, and the want of it could not be taken advantage of upon a writ of error.

In the case of Saunderson and Others v. Judge, (2 H. Bl. Rep. 509.) the plaintiffs, at whose house the note was made payable, being themselves the holders of the note, it was held to be a sufficient demand for them to turn to their books, and see the maker's account with them, and it was deemed a sufficient refusal, to find that the maker had no effects in their hands. So, in the case of the Berkshire Bank v. Jone, (6 Mass. Rep. 524.) decided in the Supreme Judicial Court of Massachusetts, Chief Justice Parsons in delivering the opinion of the Court, said, that, 'the plaintiffs being the holders of the note, we must presume it was in their bank, and there it was made payable. They were not bound to look up the maker, or to demand payment of him at any other place. The defendant, by his endorsement, guarantied, that on the day of payment the maker would be at the bank and pay the note, and if he did not pay it there, he agreed he would be answerable for it without previous notice of the default of the maker.' The rule here laid down has received the sanction of that Court in subsequent cases, (12 Mass. Rep. 404. 14 Mass. Rep. 556.) and is founded in good sense and practical convenience, without in any manner prejudicing the rights of the maker, or the endorser of the note. The endorser, knowing that the maker has bound himself to pay the note at a place appointed, has a right to expect that he will provide funds at that place to take up the note; and he will be more likely to be exonerated from his liability, by having the demand made there, than upon the maker personally. But, if the bank where the note is made payable is the holder, and the maker neglects to...