Supreme Court of United States.
Sergeant and Bradford for the Plaintiffs.
*254 SHIPPEN, President, delivered the opinion of the Court to the following effect.
This is a motion for a nonsuit upon two grounds; first that the Plaintiff by an acceptance of part of the money from the drawer of the note in question, has discharged the indorsor; and, secondly, that he is also discharged, because due notice of the non-payment of the note was not given to him. It is to be observed, that with regard to discharging the parties to bills of exchange, the law makes a material difference; for, some of them can only be discharged by an express, but others may be discharged by an implied exoneration. Thus, the acceptor of the bill cannot be discharged by any construction in law; and though the holder proceeds against the indorsor, and receives part of the money from him, this will not prevent his afterwards resorting to the acceptor for payment of the balance. Dougl. 235. In the instance of a promissory note the drawer stands in the place of an acceptor. 2 Wils. 263. But an indorsor is only a security that *255 the acceptor of the bill, or the drawer of the note, shall pay the money; and, therefore, if the holder is guilty of any neglect in endeavouring to recover it, that will certainly be an implied discharge of the indorsor. If, for instance, the holder takes upon himself to give further time for payment, or, receives a part of the money, and gives time for the rest, the nature of the transaction is essentially changed, and the indorsor is no longer responsible. The same principle applies to the second point; for, if the holder of a note, without giving notice to the indorsor of its being dishonored, retains it so long in his hands, after the day of payment, as to create a presumption that he means to take upon himself to give a new credit to the drawer, the want of notice in this case, will likewise operate as a discharge.
This, however, cannot be determined in the same manner here, that it is in England. In that country, regular posts are established, the correspondence between the great commercial towns punctually maintained; and the communication, throughout the kingdom, is commodious, certain, and uninterrupted. These circumstances, therefore, render it easy to make a general rule; of which the case cited for the Defendant from Term Reports, expressly speaks. But in Pennsylvania there are some roads which the posts never travels, and some seasons in which the communication, between the different parts of the State, is exceedingly difficult and precarious: How then can a general rule be made, so as to ascertain every where, and at all times, the reasonable time of the notice? The attempt, if not totally impracticable, would, in its consequences, be dangerous and inconvenient.
But, with regard to the particular case before us, there can be no doubt, that the right of Indorsees to call upon the Indorsors, must be founded upon the Custom of Merchants: for, the indorsement, considered at common law, amounts only to an assignment of all the property in the bill, or note, without making the assignor responsible in the event of a non-payment. How far, however, promissory notes are in this State upon the same footing with bills of exchange, is a question sub judice in the Supreme Court; and, therefore, it would be going out of our duty to give a decision upon it at this time.[*] Yet, it must be observed, that the statute of Anne has, in some respects been extended to this country. For, the uniform practice has been to bring actions upon promissory notes, as such; and not actions of Indebitatus assumpsit, which was the proper action, according to the opinion of HOLT, Chief Justice, before the passing of that statute. The Legislature, likewise, when regulating the assignment of bonds and notes, though they did not expressly put them on the same footing with bills of exchange, must, from the terms of the act, have taken it for granted, that an action might be brought upon a promissory note, considered as an instrument. 'Till, therefore, a contrary decision is pronounced, we must proceed as in the case of a bill of exchange, under the statute of Anne; and there it appears, that a very trifling negligence, on the part of the holder, *256 will operate as a discharge of the indorsor. This rule, we admit, is just and proper, when the course of trade is regular, and the communication by post is uniform and free. For, as it is usual among merchants to lend their names to one another, all faith and credit would be at an end, if the holder of a note, instead of attempting to procure the payment from the person who ought really to pay it, might, tacitly, keep it in his possession, 'till the insolvency of the drawer, had deprived the indorsor of his only remedy. If, therefore, he retains it two or three months, or any other unreasonable period, he ought certainly to bear the loss; and, accordingly, the law deems this the giving of a new credit to the drawer, and discharges the indorsor.
Upon the whole, the facts in the present case, are strong in favor of the Defendant; but still we should be sorry to take it from the determination of the Jury, upon a question respecting the reasonableness of the notice: For, as it has been already said, it is impossible to establish a general rule, alike applicable to all the parts of the State; and until such a rule can be established, every case, upon its own circumstances, must be left to the Jury, as a question of fact, and not of law.
The Jury afterwards gave a verdict for the Defendant.
[*] In the case of McCollough vs. Houston.
