An action was brought by the Union Bank of Georgetown against
George B. Magruder, as endorser of a promissory note drawn by
George Magruder. The maker of the note died before it became
payable, and letters of administration to his estate were taken out
by the endorser. No notice of the nonpayment of the note was given
to the endorser or any demand of payment made until the institution
of this suit.
Held that the endorser was discharged, and
his having become the administrator of the drawer does not relieve
the holder from the obligation to demand payment of the note, and
to give notice thereof to the endorser.
The general rule that payment must be demanded from the maker of
a note and notice of nonpayment forwarded to the endorser within
due time in order to render him liable is so firmly settled that no
authority need be cited to support it. Due diligence to obtain
payment from the maker is a condition precedent on which the
liability of the endorser depends.
In the Circuit Court of the District of Columbia for the County
of Washington, the defendants in error instituted a suit against
George B. Magruder, the plaintiff in error, upon a promissory note
drawn by George Magruder in favor of and endorsed by the plaintiff
in error, dated Washington, November 8, 1817, for $643.21, payable
seven years after date. After the making of the note, the drawer,
George Magruder, died, and on 18 November, 1822, administration of
his effects was granted to George B. Magruder, the plaintiff in
error. The note having been due on 11 November, 1824, was not
paid.
Upon the trial of the cause, the plaintiff, in support of the
issue joined, offered in evidence to the jury the promissory note,
issued 18 November, 1823, the handwriting of the maker, and the
endorsement by the defendant having been admitted, and further
proved that the defendant had, previous to the note's falling due,
taken out letters of administration in the County of Montgomery in
the State of Maryland upon the personal estate of George Magruder,
the maker of the said note, on 18 November, 1823, the
Page 28 U. S. 88
said George Magruder having previously departed this life. It
was admitted that the note in question had never been protested,
nor had any notice been given to this defendant that the note was
not paid. Upon these circumstances the counsel for the defendant
moved the court to instruct the jury that before the plaintiff can
recover in this action, it is essential for him to prove demand and
notice to the endorser, of the nonpayment, which not being done,
the verdict should be for the defendant. But the court refused to
give the instruction prayed for as aforesaid and charged the jury
that no demand of notice of nonpayment was necessary. To this
refusal and instruction the counsel for the defendant excepted, and
the court sealed a bill of exceptions, and this writ of error was
prosecuted.
Page 28 U. S. 89
MR. CHIEF JUSTICE MARSHALL delivered the opinion of the
Court.
This action was brought by the Union bank of Georgetown against
George B. Magruder as endorser of a promissory note made by George
Magruder. The maker of the note died before it became payable, and
letters of administration on his estate were taken out by the
endorser. When the note became payable, suit was commenced against
the endorser
Page 28 U. S. 90
without any demand of payment other than the suit itself,
without any protest for nonpayment, and without any notice that the
note was not paid and that the holder looked to him as endorser for
payment. Upon these circumstances the counsel for the defendant
moved the court to instruct the jury that before the plaintiff can
recover in this action, it is essential for him to prove demand and
notice to the endorser of the nonpayment, which not being done, the
verdict should be for the defendant. But the court refused to give
this instruction, and charged the jury that no demand or notice of
nonpayment was necessary. To this opinion the counsel for the
defendant in the circuit court excepted, and has brought the cause
to this Court by writ of error.
The general rule that payment must be demanded from the maker of
a note, and notice of its nonpayment forwarded to the endorser
within due time, in order to render him liable is so firmly settled
that no authority need be cited in support of it. The defendant in
error does not controvert this rule, but insists that this case
does not come within it, because demand of payment and notice of
nonpayment are totally useless, since the endorser has become the
personal representative of the maker. He has not, however, cited
any case in support of this opinion, nor has he shown that the
principle has been ever laid down in any treatise on promissory
notes and bills. The court ought to be well satisfied of the
correctness of the principle before it sanctions so essential a
departure from established commercial usage.
This suit is not brought against George B. Magruder as
administrator of George Magruder, the maker of the note, but
against him as endorser. These two characters are as entirely
distinct as if the persons had been different. A recovery against
George B. Magruder as endorser will not affect the assets in his
hands as administrator. It is not a judgment against the maker, but
against the endorser of the note. The fact that the endorser is the
representative of the maker does not oppose any obstacle to
proceeding in the regular course. The regular demand of payment may
be made, and the note protested for nonpayment, of which notice may
be given to him as endorser with as much facility as if the
endorser had
Page 28 U. S. 91
not been the administrator. It is not alleged that any
difficulty existed in proceeding regularly; the allegation is that
it was totally useless.
The note became payable on 8 November, 1824. The writ was taken
out against the endorser on 26 April, 1825. If this unusual mode of
proceeding can be sustained, it must be on the principle that, as
the endorser must have known that he had not paid the note, as the
representative of the maker, notice to him was useless. Could this
be admitted; does it dispense with the necessity of demanding
payment? It is possible that assets which might have been applied
in satisfaction of this debt had payment been demanded may have
received a different direction. It is possible that the note may
have been paid by the maker before it fell due. Be this as it may,
no principle is better settled in commercial transactions than that
the undertaking of the endorser is conditional. If due diligence be
used to obtain payment from the maker without success and notice of
nonpayment be given to him in time, his undertaking becomes
absolute; not otherwise. Due diligence to obtain payment from the
maker is a condition precedent on which the liability of the
endorser depends. As no attempt to obtain payment from the maker
was made in this case and no notice of nonpayment was given to the
endorser, we think the circuit court ought to have given the
instruction prayed for by the defendant in that court.
The judgment is reversed and the cause remanded with
directions to award a venire facias de novo.
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the District of
Columbia holden in and for the County of Washington and was argued
by counsel, on consideration whereof it is ordered and adjudged by
this Court that the judgment of the said circuit court in this
cause be and the same is hereby reversed, and that the said cause
be and the same is hereby remanded to the said circuit court with
directions to award a
venire facias de novo in said
cause.
