This casue was argued by Mr. C. C. Lee for the plaintiff in error,*fn1 a and by Mr. Worthington for the defendant in error.*fn2 b
The opinion of the court was delivered by: Mr. Justice Washington delivered the opinion of the Court.
This was an action brought by the defendant in error against the plaintiff in error, in the Circuit Court for the District of Columbia and county of Washington, upon a promissory note given by one Miller to Thornton, and by him endorsed to Wynn. The declaration contains a count upon the note, and also the common counts for money laid out and expended, and for money had and received.
At the trial of the cause upon the general issue, the defendant below took two exceptions to the opinion of the Court, which are to the following effect. The first states, that the plaintiff gave in evidence the note and endorsement mentioned in the declaration, and in order to dispense with the proof of the ordinary steps of diligence in presenting and demanding the note of the drawer, and giving notice to the endorser, the plaintiff offered evidence to prove, hat, a few weeks before the institution of this suit, the note in question was presented to the defendant, who, being informed that Miller, the drawer, had not paid the note, said, 'he knew Miller had not, and that Miller was not to pay it; that it was the concern of the defendant alone, and Miller had nothing to do with it; that the note had been given for part of the purchase money of a certain race horse called Ratler, and that the defendant offered to take up the said note if the plaintiff's agent would give time, and receive other notes mentioned in payment:' to the admission and competency of which evidence the defendant objected; but the Court overruled the objection, and admitted the evidence as competent to support this action, without any further proof of demand upon the drawer or notice to the endorser.
That the said evidence being so admitted by the Court, the defendant offered evidence to prove that the said note was given for part of the purchase money of the said race horse, then celebrated for his performances on the turf, sold by the plaintiff to the defendant, and the said Miller, the drawer of the note, for 3,000 dollars, of which 2,000 dollars had been paid; that the plaintiff, at the time of so selling this horse, warranted him sound, and declared him capable of beating any horse in the United States, and recommended the purchasers to match him against a celebrated race horse in New-York called Eclipse; that he also gave a representation of his pedigree, which he described as unexceptionable, and promised to procure his pedigree and send it to the defendant. And the defendant then offered evidence to prove that the said horse, at the time of the said sale, was utterly unsound, and broken down, and had been broken down whilst in the plaintiff's possession, and was reputed and proven by persons in the neighbourhood of the plaintiff, who afterwards communicated the same to the purchaser; and was wholly unfit for, and incapable of, the action and fatigue necessary to a race horse; and that the plaintiff had wholly failed to procure and furnish the pedigree of the horse as he had agreed, and that a pedigree was an essential term in the purchase of the horse, or ordinarily is so in the purchase of such horses, without which this horse was worth nothing; and that the said Miller, as soon as it had been ascertained by repeated trials that the horse was incurably unsound, offered to return him to the plaintiff, who refused to take him back, although the former offered to lose what he had already paid for the horse, which offer was made after the note fell due. Whereupon the Court instructed the jury, at the prayer of the plaintiff, that if they should be of opinion, from the said evidence, that the said horse was, at the time of the said sale, utterly unsound and broken down, and had been broken down whilst in the plaintiff's possession, and was wholly unfit for, and incapable of, the action and fatigue necessary to a race horse, but that the said facts were not known to the plaintiff at the time of the said sale, the said facts are not a sufficient defence in this action to prevent the plaintiff from recovering.
Upon these instructions of the Court, the jury found a verdict for the plaintiff, and the cause now comes before this Court upon a writ of error.
This bill of exceptions presents two questions for the decision of this Court. The first is, whether the evidence offered by the plaintiff, and admitted by the Court dispensed with the necessity of proving a demand of payment of the maker of the note, and due notice to Thornton of nonpayment; and, secondly, whether the Court below erred or not, in stating to the jury that the alleged breach of the warranty of the horse, if proved to their satisfaction, was not a sufficient defence in this action to prevent the plaintiff from recovering, unless the facts stated in the bill of exceptions were known to the plaintiff at the time of the sale.
In the argument of the first question, the counsel on both sides considered the evidence offered by the plaintiff as presenting a double aspect. 1st. As authorizing a conclusion, in point of fact, that the note of hand on which the suit is brought, was made and passed to Thornton without consideration, and merely for his accommodation; and, 2d. As amounting to a promise to pay the note, or at least to an admission by Thornton of his liability to pay it, and of the right of the plaintiff to resort to him, whether it was made solely for his accommodation, or was given for value in the ordinary course of trade.
As to the first, the counsel treated the note throughout as an accommodation note, and submitted to the decision of this Court the question, whether the endorser of such a note was entitled to call for proof of a demand of payment of the maker, and notice to himself?
Whether this question was ever raised in the Court below, or in what manner it was there treated, does not appear from the bill of exceptions. It is possible that that Court may have intended nothing more by their direction to the jury, than to sanction the admissibility of the evidence, and its sufficiency to authorize a verdict for the plaintiff. without other proof of demand and notice, provided the jury should be of opinion that it warranted the conclusion that the note was given without consideration. But such is not the language of the Court as stated in the bill of exceptions. The jury were informed that the evidence was competent to support the action without such further proof of demand and notice, without leaving the inference of fact that the note was given without consideration to be drawn by the jury. Had the Court distinctly stated to the jury that this was such a note, and, therefore, that further proof of demand and notice was unnecessary, the incorrectness of the direction could have been doubted by no person, since the Court would, in that case, have inferred a fact from the evidence, which it was competent to the jury alone to do. And yet it seems difficult to distinguish the supposed case from the one really presented by the bill of exceptions, upon the hypothesis that the Court below decided any thing as to the particular character of this note, since it is very obvious, that no question of fact was submitted to the consideration of the jury. It is, therefore, due from this Court to the one whose decision we are revising, to conclude, that that decision did not proceed upon the assumption that this was a note drawn for the accommodation of the endorser.
It remains to be considered, whether the direction was correct upon the other aspect of the evidence.
It is now well settled as a principle of the law merchant, that an unconditional promise by the drawer or endorser of a bill, to pay it, after full knowledge of all the circumstances necessary to apprize him of his discharge from his responsibility by the laches of the holder, amounts to an implied waiver of due notice of a demand of the drawer or acceptor, and dispenses with the necessity of proving it. Such are the cases of Borrodaile v. Lowe, (4 Taunt. 93.) Donaldson v. Mears, (4 Dall. 109.) and others which need not be cited. So if, with the knowledge of these circumstances, he answer, that the bill 'must be paid,' 'that when he comes to town he would set the matter right,' 'that his affairs were then deranged, but that he would be glad to pay it as soon as his accounts with his agents was settled,' or 'that he would see it paid,' or if he pay a part of the bill; in all these cases it has been decided that proof of regular notice is dispensed with. (2 Term Rep. 713. Bull. N. P. 276. 2 Campb. 188. 6 East, 16. 2 Stra. 1246.)
The principle upon which these decisions proceed is explained in many of the above cases, and particularly in that of Rogers v. Stephens, (2 Term Rep. 713.) It is this, that these declarations and acts amount to an admission of the party that the holder has a right to resort to him on the bill, and that he had received no damage for want of notice. See also Stark. Evid. 272.
The same principle applies with equal force to promissory notes, which, after endorsement, partake of the character of bills of exchange, the endorser being likened to the drawer, and the maker to the acceptor of a bill. The case of Leffingwell & Pearpoint v. White, (Johns. Cas. 99.) is that of a promissory note, where the endorser, before it became due, stated that the maker had absconded, and that, being secured, he would give a new note, and requested time. The Court say, that the defendant had admitted his responsibility, treated the note as his own, and negotiated for further time for payment, by which conduct he had waived the necessity of demand of the maker, and notice to himself. (Taylor v. Jones, 2 Campb. 105. Vaughan v. Fuller, 2 Stra. 1246. and Aman v. Bailey, Bull. N. P. 276.) were all cases of actions on promissory notes against the endorser. In this case, the defendant below, upon being informed that Miller, the maker of the note, had not paid it, observed, that he knew he had not, and that he was not to pay it; that it was the concern of the defendant alone, and that Miller had nothing to do with it, it having been given for part of the purchase money of a horse. These declarations amounted to an unequivocal admission of the original liability of the defendant to pay the note, and nothing more. It does not necessarily admit the right of the holder to resort to him on the note, and that he had received no damage from the want of notice, unless the jury, to whom the conclusion of the fact from the evidence ought to have been submitted, were satisfied that the defendant was also apprized of the laches of the holder in not making a regular demand of payment of the note, by which he was discharged from his responsibility to pay it. The knowledge of this fact formed an indispensable part of the plaintiff's case, since without it it cannot fairly be inferred that the defendant intended to admit the right of the plaintiff to resort to him, if, in point of fact, he had been guilty of such ...