fied, presentment for payment may be made to any one of them, "even though there has been a dissolution of the firm." 51 The rule as declared in the statute is that which obtains at common law and is in conformity with the further rule that presentment for payment, to be sufficient, must be made to the person liable on the instrument.52 b. General rule.- Where a partnership is the maker of a note or the acceptor of a bill of exchange, a presentment of payment to one member of the partnership is sufficient to charge the indorser.53 The rule as to negotiable instruments executed by partners is different from that in a case where several persons who are not partners are primarily liable on such instruments, as will appear in the next section. The general rule is that where the acceptance of a bill of exchange is by partners, then the presentment for payment should be made at their place of business, or at the dwelling-house of either of them.54 The rule applies where the partnership is dissolved. The reason for this exists in the fact that after the dissolution of a partnership there continues that common interest in past transactions, so that a joint power and authority in relation thereto continues, and while, after dissolution, no member of the late firm can by his act create a new liability against his former copartners or bind them to an alleged liability, or revive an extinguished one, yet he may do some acts which shall affect and be binding upon them, when such acts are confined to matters in which they all still have a common interest and are under a common liability.55 51. Neg. Inst. L. (N. Y.), § 137. For the same section in statutes of other States see Appendix. 52. Neg. Inst. L. (N. Y.), § 132 (4). 53. Presentment to member of firm. - In the case of Gates v. Beecher, 60 N. Y. 518, 19 Am. Rep. 207, the court said: "No place of payment was named in the note. In such case, demand of payment at the usual place of business of the maker, though he be absent, is sufficient; or at his residence; or to him in person. And where such a note is made by a partnership, a demand of one of the members in person, or a demand at the usual place of business of the partnership, is sufficient." And in the case of Erwin v. Downs, 15 N. Y. 375, it was held that presentment to one of two persons, who by the signature to a promissory note purport to constitute a partnership firm, is sufficient to charge the indorser, although such person and her presumptive partner are married women. See also Fourth Nat. Bank v. Heuschen, 52 Mo. 207; Hunter v. Hempstead, 1 Mo. 67, 13 Am. Dec. 468; Shed v. Brett, 1 Pick. (Mass.) 401, 11 Am. Dec. 209; Crowley v. Barry, 4 Gill (Md.), 194; Mount Pleasant Branch of State Bank v. McLeran, 26 Iowa, 306. 54. Otsego County Bank v. Warren, 18 Barb. (N. Y.) 290. 55. Gates v. Beecher, 60 N. Y. 518, 19 Am. Rep. 207. See also Brown v. Turner, 15 Ala. 832; Barry v. Crowley, 4 Gill (Md.), 194; Greatrake v. Brown, Fed. Cas. No. 5,743, 2 Cranch (U. S.), 541. In the case of Fourth Nat. Bank v. Where one member of a partnership dies prior to the time of payment of a bill or note, presentment for payment to the surviving partner is sufficient." 56 § 98. Presentment to joint debtors. a. Statutory provision.— The Negotiable Instruments Law provides that: "Where there are several persons, not partners, "primarily liable on the instrument, and no place of payment "is specified, presentment must be made to them all." 57 This is the general rule, although there have been cases to the effect that to charge an indorser of the note of joint makers, who are not partners, demand made on one of them would be sufficient.58 There is, however, no doubt but that the weight of authority supports the rule as declared in the statute.59 Heuschen, 52 Mo. 207, it was held that a partnership, though dissolved, is still in existence so far as the question of demand and protest of their negotiable paper and notice thereof is concerned; and a demand made on one of the partners, or made at a place which one of the partners said was their place of business, is good. 56. Cayuga County Bank v. Hunt, 2 Hill (N. Y.), 635. 57. Neg. Inst. L. (N. Y.), § 138. For the same section in statutes of other States see Appendix. 58. Harris v. Clark, 10 Ohio, 5. This case was limited to a certain extent by the case of Greenough v. Smead, 3 Ohio St. 415, 422. In the case of Shed V. Brett, 1 Pick. (Mass.) 401, 11 Am. Dec. 209, it appeared that a demand was made upon one of the several makers of a negotiable promissory note. This was held sufficient, but the question as to the sufficiency of the presentment upon one of the makers was not considered. The question arose as to the authority of the person making the demand. It would seem, therefore, that the statement of the court as to the presentment upon one of the several makers was outside of the case. 59. Tayloe v. Davidson, Fed. Cas. No. 13,769, 2 Cranch (U. S.), 434; Bank of Red Oak v. Orvis, 40 Iowa, 332; Blake v. McMillen, 22 Iowa, 358; Union Bank v. Willia, 8 Metc. (Mass.) 504, 41 Am. Dec. 541; Arnold v. Dres ser, 8 Allen (Mass.), 435; Britt v. Lewson, 15 Hun (N. Y.), 123; Shutts v. Fingar, 100 N. Y. 539; Benedict v. Shomieg, 13 Wash. 476, 43 Pac. 374. In the case of McClellan v. Bishop, 42 Ohio St. 113, it appeared that a husband and wife had executed their joint note, but before maturity the husband had deserted the wife and his whereabouts could not be ascertained. It was held that a demand on the wife was sufficient to charge an indorser. Distinction between partnership and joint makers. In the case of Gates v. Beecher, 60 N. Y. 518, 19 Am. Rep. 207, Judge Folger said: "It is seen, therefore, that there is a distinction between the case of a note of joint makers who are not partners, and a note of persons who are still partners at the maturity of the note. That distinction rests upon the fact that partners are but one person in legal contemplation; that each partner, acting in such capacity, is not only capable of performing what all can do, and of receiving and paying out that which belongs to all, but by such acts neces sarily binds them all; that, as incident to such joint relations, all of the partners are affected by the knowledge of one. These things do not pertain to the relation of joint makers who are not partners. Hence, while a demand of one partner is equivalent to a demand of all, a demand of one of joint makers not partners is not. And so a demand upon one partner is sufficient, because he represents the firm, and a § 99. When presentment not required to charge drawer or indorser. a. When not required to charge drawer; statutory provision.The Negotiable Instruments Law provides that: "Presentment "for payment is not required in order to charge the drawer "where he has no right to expect or require that the drawee or acceptor will pay the instrument." 60 Under the English Bills of Exchange Act, presentment for payment is dispensed with as regards the drawer, where the drawee or acceptor is not bound as between himself and the drawer to accept and pay the bill, and the drawer has no reason to believe that the bill would be paid if presented.o1 It is a well-established rule that where the drawer of a bill has no funds in the hands of the drawee, or any reasonable expectation of having any, presentment for payment to the drawee is not necessary to charge the drawer.62 There are some exceptions to the general rule that demand is not necessary where it is shown that the drawer did not have sufficient funds in the hands of the drawee with which to meet the bill. If the drawer has any funds or property in the hands of the drawee, or there is a fluctuating balance between them in the dishonor by one is a dishonor by all, and each is presumed to have authority to act for the others; while in the case of a note of joint makers not partners, the indorser has a right to rely upon the responsibility of all and each, and may insist upon a dishonor by each." 60. Neg. Inst. L. (N. Y.), § 139. For the same section in statutes of other States see Appendix. 61. English Bills of Exchange Act, 1882, § 46 (2) (c). 62. Presentment where drawer has no funds in hands of drawee.- See the following cases: United States.- Dickins v. Beal, 10 v. Desha, 11 Maryland.- Orear v. McDonald, 9 Gill, 350, 52 Am. D、c. 703. Massachusetts.- Beauregard v. Knowlton, 156 Mass. 395, 31 N. E. 389; Savage v. Merle, 5 Pick. 83. Missouri.- Merchants' Bank v. Easley, 44 Mo. 286, 100 Am. Dec. 287. New York. Dollfus v. Frosch, 1 Den. 367; Nobley v. Clark, 28 Barb. 390; Healey v. Gilman, 1 Bosw. 235; Fitch v. Redding, 4 Sandf. 130; Mohawk Bank v. Broderick, 10 Wend. 304. Ohio.- Miser v. Trovinger, 7 Ohio St. 281. Pennsylvania.- Callen v. Fawcett, 58 Pa. St. 113; Case v. Morris, 31 Pa. Ala. 844. Illinois.- Walker v. Rogers, 40 Ill. Indiana.- Culver v. Marks, 122 Ind. 554, 23 N. W. 1086, 17 Am. St. Rep. 377, 7 L. R. A. 489; Fletcher v. Pierson, 69 Ind. 281. Iowa.- Kimball v. Bryan, 56 Iowa, 632, 10 N. W. 18. Rhode Island.-Arborn v. Bosworth, 1 R. I. 401. South Carolina.-Hubble v. Fogartie, 3 Rice, 413, 45 Am. Dec. 775. Tennessee. Golladay v. Bank of the Union, 2 Head, 57; Oliver v. Bank of Tennessee, 11 Humph. 74. Texas.- Lewis v. Parker, 33 Tex. 121; Kottwitz v. Alexander, 34 Tex. 689. Wisconsin.- Mehlberg v. Tisher, 24 Wis. 607. course of their transactions, or a reasonable expectation that the bill would be paid; or if the drawee has been in the habit of accepting the bills of the drawer without regard to the state of their accounts; or if there was a running account between them, then there must be a presentment of the bill, and the drawer is entitled to notice of dishonor.63 The fact that the drawer of a bill had no funds in the hands of an acceptor does not excuse a presentment of the bill at maturity, where it appears that the acceptor is indebted to the drawer; such an indebtedness constitutes a fund against which the drawer had a right to draw.65 63. Reasonable ground to believe that bill will be accepted.-In Dickens v. Beal, 10 Pet. (U. S.) 572, 577, 9 L. Ed. 538, the court says: "In all such cases the drawer is considered as justified in drawing; as so far having a right to draw that the transaction cannot be denominated a fraud; for in such a case it is a fair commercial transaction, in which the drawer has a reasonable expectation that his bill will be honored; and he is entitled to the same notice as a drawer with funds, or authority to draw without funds.' But unless he draws under some such circumstances, his drawing without funds, property, or authority, puts the transaction out of the pale of commercial usage and law; and as he can in no wise suffer by the want of notice of the dishonor of his drafts, that is deemed an useless form. In a case where he has no fair pretense for drawing there is no person on whom he can have a legal or equitable demand, in consequence of the nonpayment or nonacceptance of the bill." See also, as to reasonable expectation that the bill will be paid. Orear v. McDonald, 9 Gill (Md.), 350, 52 Am. Dec. 703. De mand must be made if any funds had been in hands of drawer from the time of making the bill until it becomes due. Richie v. McCoy, 21 Miss. 541. Fluctuating balance in the hands of drawee makes necessary a demand. Commercial Bank v. Barksdale, 36 Mo. 563. A charge to a jury that if there was an agreement between a drawer and the drawees that they would accept his drafts, or a course of dealing between them in which the drawees were accustomed to accept his drafts * * * 64 without reference to the state of their mutual accounts, he was entitled to a demand and notice, was held no error. Knickerbocker Life Ins. Co. v. Pendleton, 112 U. S. 696, 5 Sup. Ct. 314, 28 L. Ed. 866, And as to what constitutes reasonable ground to believe that a bill will be accepted, see the following additional cases: United States.- French v. Bank of Columbia, 4 Cranch, 141, 2 L. Ed. 576; Olshausen v. Lewis, Fed. Cas. No. 10,507, 1 Biss. 419; In re Brown, Fed. Cas. No. 1,985, 2 Story, 502. Alabama.- Hill v. Norris, 2 Stew. & P. 114. Florida.- Joseph v. Salomon, 19 Fla. 623. Illinois.- Welch v. Taylor, 82 III. 579; Walker v. Rogers, 40 Ill. 278, 89 Am. Dec. 348; Krupfer v. Galena Bank, 34 Ill. 328, 85 Am. Dec. 309. Iowa.- Kimball v. Bryan, 56 Iowa, 632, 10 N. W. 218. Kentucky. Clark v. Castleman, 1 J. J. Marsh. 69. Maryland.- Orear v. McDonald, 9 Gill, 350, 52 Am. Dec. 703. 8 Massachusetts.-Grosvenor v. Stone, Pick. 79; Stanton v. Blossom, 14 Mass. 116, 7 Am. Dec. 198. New York.- Robinson v. Ames, 20 Johns. 146, 11 Am. Dec. 259; Cruger v. Armstrong, 3 Johns. Cas. 5. North Carolina.- Austin v. Rodman, 8 N. C. 195, 9 Am. Dec. 630. Texas.- Cole v. Wintercost, 12 Tex. 118; Durrum v. Hendrick, 4 Tex. 495. 64. Walker v. Rogers, 40 Ill. 278, 89 Am. Dec. 348. 65. Thackray v. Blackett, 3 Campb. (Eng.) 164. The rule does not apply in an action by a holder against the indorser of a bill; in such case a demand of payment from the drawee must be proved, although the drawer had no funds in the hands of the drawee and no expectation that the bill would be paid. 68 b. When not required to charge indorser.- The Negotiable Instruments Law provides that: "Presentment for payment is not "required in order to charge an indorser where the instrument "was made or accepted for his accommodation, and he has no reason to expect that the instrument will be paid if pre"sented." 67 A similar provision is contained in the English Bills of Exchange Act.68 This is declaratory of the common law. It is a well-established rule, independent of the provision of the statute, that an indorser for whose benefit an accommodation note was made, being bound to provide funds to meet it at maturity, is not released by lack of presentment, protest, or notice.69 Where the indorser was the payee for whose benefit the note was made, demand on the accommodation maker is unnecessary to charge such indorser.70 Accommodation makers of a note signed jointly with the principal maker are not discharged for a failure to demand payment of the principal maker."1 66. Slack v. Longshaw, 8 Ky. L. Rep. 166; Mohawk Bank v. Broderick, 10 Wend. (N. Y.) 304; Denny v. Palmer, 27 N. C. 610; Harwood v. Jarvis, 5 Sneed (Tenn.), 375. 67. Neg. Inst. L. (N. Y.), § 140. For the same section in statutes of other States see Appendix. 68. English Bills of Exchange Act, 1882, § 46 (2) (d), which provides that "Presentment for payment is dispensed with (d) as regards an indorser, where the bill was accepted or made for the accommodation of that indorser, and he had no reason to expect that the bill would be paid if presented." obligation to take up the bill, and has no remedy on so doing against any other party. See also Sale v. Branch Bank of Decatur, 1 Ala. 425; Holman v. Whiting, 19 Ala. 703; First Nat. Bank v. Ryerson, 23 Iowa, 508; Black v. Fizer, 10 Heisk. (Tenn.) 48; Furth v. Baxter, 24 Wash. 608, 64 Pac. 798. 70. Torrey v. Foss, 40 Me. 74; Blenderman v. Price, 50 N. J. L. 296, 12 Atl. 775. Nor is an accommodation maker discharged for want of demand for payment of the payee, for whose benefit the note was made, when it appears that it was indorsed without any disclosure of the fact. Bank 69. Presentment not required where of Montgomery v. Walker, Serg. & indorser is party accommodated. R. (Pa.) 229, 11 Am. Dec. 709. But American Nat. Bank v. Junk Bros. if the holder had notice that it was an Lumber, etc., Co., 94 Tenn. 624, accommodation note of the maker for 30 S. W. 753, 28 L. R. A. 492. And in the case of Risk v. Bridgeford, 15 Ky. L. Rep. 206, it was held that, although due notice of dishonor is ordinarily a condition precedent to the liability of an indorser, if the indorser is himself the accommodated instead of the accommodating party, he is not entitled to notice because he is under the benefit of the payee, the maker is entitled to notice of nonpayment. Connerly v. Planters & Merchants' Bank, 66 Ala. 432. This latter case is in conflict with the earlier Virginia case of Hansborough v. Gray, 3 Gratt. (Va.) 356. 71. Marion Nat. Bank v. Phillips. (Ky. 1896), 35 S. W. 910. |