NEGOTIABLE INSTRUMENTS.

BOOK IV.

PROTESTS AND NOTICE; AND EXCUSES FOR WANT OF PRESENTMENT, PROTEST, AND NOTICE.

CHAPTER XXVIII.

THE PROTEST OF BILLS AND NOTES.

SECTION I.

THE NATURE AND NECESSITY OF PROTEST.

§ 926. First, as to what instruments must or may be protested.— When a foreign bill of exchange is presented for acceptance or payment, and acceptance or payment is refused, the holder must take what is called a protest, in order to charge the drawer or any indorser. According to the law of most foreign nations, a protest is essential in the case of the dishonor of any bill; but by the custom of merchants in England, and wherever the law merchant prevails in the United States, the protest is only necessary in the case of foreign bills; though by statute in most of

1. Thompson on Bills (Wilson's ed.), 307; Hoffman v. Hollingsworth, 10 Ind. App. 353, 37 N. E. 960, citing text.

2. Orr v. Maginnis, 7 East, 359; Gale v. Walsh, 5 T. R. 239; Leftly v. Mills, 4 T. R. 170; Borough v. Perkins, 1 Salk. 131; Chitty on Bills (13th Am. ed.) [*332], 372; Byles on Bills (Sharswood's ed. [*249], 394.

3. Burke v. McKay, 2 How. 66; Young v. Bryan, 6 Wheat. 146; Union Bank v. Hyde, 6 Wheat. 372; Bailey v. Dozier, 6 How. 23; Bank of the United States v. Leathers, 10 B. Mon. 64; Hubbard v. Troy, 2 Ired. 134; McMarchey v. Robinson, 10 Ohio St. 496; Smith v. Curlee, 59 Ill. 221; Green v. Louthain,

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the States inland bills and promissory notes may be protested in like manner. So indispensable is the protest of a foreign bill in case of its dishonor, that no other evidence will supply the place of it, and no part of the facts requisite to the protest can be proved by extraneous testimony, and it has been said, that it is a part of the constitution of a foreign bill. But, while the practice is usually followed to protest inland bills and notes, under the permissive statutes, it is not a practice which makes it incumbent to protest them; and the holder may waive the privilege if he choose to do so, and produce other evidence of dishonor."

§ 927. The requisition of a protest in the case of foreign bills was in order to afford authentic and satisfactory evidence of due dishonor to the drawer, who, from his residence abroad, would experience a difficulty in making proper inquiries on the subject, and be compelled to rely on the representations of the holder. "It also," observes a distinguished author, "furnishes an indorsee with the best evidence to charge an antecedent party abroad; for foreign courts give credit to the acts of a public functionary in the same manner as a protest under the seal of a foreign notary is evidence in our courts of the dishonor of a bill payable

49 Ind. 139; Ocean Nat. Bank v. Williams, 102 Mass. 141; Phoenix Bank v. Hussey, 12 Pick. 483; Gilman v. First Nat. Bank of New York, 63 Hun, 480, 18 N. Y. Supp. 495, citing text; Citizens' Sav. Bank v. Hays, 96 Ky. 365, 29 S. W. 20; Wood River Bank v. First Nat. Bank, 36 Nebr. 744, 55 N. W. 239. 4. See Virginia Code of 1873, chap. 141, p. 987, §§ 7, 8, wherein it is provided: "§ 7. Every promissory note, or check for money payable in this State, at a particular bank, or at a particular office thereof, for discount or deposit, or at the place of business of a savings institution or savings bank, or at the place of business of a licensed broker, and every inland bill of exchange, payable in this State, shall be deemed negotiable, and may, upon being dishonored for nonacceptance or nonpayment, be protested, and the protest be in such case evidence of dishonor, in like manner as in the case of a foreign bill of exchange. "§ 8. The protest, both in the case of a foreign bill and in the other cases mentioned in the preceding section, shall be prima facie evidence of what is stated therein, or at the foot, or on the back thereof, in relation to presentment, dishonor, and notice thereof." Ashe v. Beasley & Co., 6 N. Dak. 192, 69 N. W. 188.

5. Union Bank v. Hyde, 6 Wheat. 572; Carter v. Union Bank, 7 Humphr. 548.

6. Borough v. Perkins, 1 Salk. 121, 2 Ld. Raym. 992; Chitty on Bills (13th Am. ed.) [*333], 373; Edwards on Bills, 581.

7. Bailey v. Dozier, 6 How. 23; Wanger v. Tupper, 8 How. 234; 2 Rob. Pr. (new ed.) 121; Hoffman v. Hollingsworth, 10 Ind. App. 353, 37 N. E. 960, citing text.

abroad." 8 Such was the convenience of evidence in this form, obviating the necessity of the attendance of witnesses, and preserving their testimony where otherwise it might be lost by death or removal, that it became common to protest inland bills, and promissory notes as well; and the holder was often disappointed in finding that such protest was not evidence of dishonor. This led to a very general enactment of statutes authorizing protests in such cases; and giving them the like effect as in cases of foreign bills.

The law merchant requires a protest and notice only in cases of bills negotiable by the custom of merchants.10 Bills pay

able in currency," or any other medium than legal money, are not of this character, and therefore no protest is necessary, nor is it, unless by statute, evidence of any fact therein stated.11

§ 928. Foreign promissory notes. In the case of promissory notes executed in one State or country, and payable in another, no notice, of course, is necessary to charge the maker; and if there be no indorser there can be no analogy between the note and a bill. But as soon as a promissory note is indorsed it becomes closely assimilated to a bill, the maker being primarily liable, like the acceptor, and the indorser, secondarily, like the drawer. It is often said that every indorser is a new drawer, and, in fact, the indorser's obligation is precisely like that of the drawer on an accepted bill. Therefore, when an indorsed note is payable in a State or country different from the one where it is drawnperhaps more especially when the indorser is not of the State or country where it is payable, though no distinguishing difference, it seems to us, exists almost every consideration of convenience which would make a protest necessary and competent evidence of presentment and notice, in case of a foreign bill, would recognize it as equally competent in respect to the indorser of the note. It has been well said that "the similarity between the indorsement of notes, and the drawing and indorsement of bills of exchange is so great, that there can be no sound reason given for establishing or preserving a distinction between them, and re

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8. Byles on Bills (Sharswood's ed.) [*249], 395; Ashe v. Beasley & Co., 6 N. Dak. 192, 69 N. W. 188, citing text.

9. 2 Rob. Pr. (new ed.) 181.

10. Kampmann v. Williams, 70 Tex. 571.

11. Bank of Mobile v. Brown, 42 Ala. 108; Ford v. Mitchell, 15 Wis. 304.

quiring a different character of evidence to prove the same facts with regard to two instruments, which, though different in some respects as to their phraseology, are so essentially similar in their nature and operations." 12 And there are well-considered cases sustaining it.13 This view has been taken in Kentucky, respecting an indorsed certificate of deposit.14

There are cases in which the converse view has been taken, it being considered that the certificate of protest of a promissory note is a document unknown to the law; and although the note be payable in a foreign place, is inadmissible;15 and although the argument ab inconveniente is strong against this rejection of such testimony, in strict law, it seems to us, it must be excluded." A general usage would probably be controlling.17

16

§ 929. As to the meaning of protest, the term includes, in a popular sense, all the steps taken to fix the liability of a drawer or indorser, upon the dishonor of commercial paper to which he is a party.18 More accurately speaking, it is the solemn declaration on the part of the holder against any loss to be sustained by him by reason of the nonacceptance, or even nonpayment, as the case may be, of the bill in question; and a calling of the notary to witness that due steps have been taken to prevent it.19 The word protest" signifies to testify before; and the testimony before

12. Parker, C. J., in Williams v. Putnam, 14 N. H. 540; Carter v. Burley, 9 N. H. 558; Smith v. Little, 10 N. H. 526; Edwards on Bills, 584; Brown v. Wilson, 45 S. C. 519, 23 S. E. 630, 55 Am. St. Rep. 779, citing text.

13. Ticonic Bank v. Stackpole, 41 Me. 302, held admissible at common law. 14. Piner v. Clary, 17 B. Mon. 645.

15. Kirtland v. Wanzer, 2 Duer, 278.

16. In Corbin v. Planters' Nat. Bank, 87 Va. 664, 13 S. E. 98, 24 Am. St. Rep. 673, Lewis, P., citing text, said: "The rule does not extend to promissory notes and inland bills. As to these the protest is not regarded as an official act and accordingly, in the absence of statute, is not receivable as evidence of dishonor; and where a State statute makes the certificate of protest when executed by a notary of that State evidence of dishonor in such cases, it does not authorize the notary to act beyond its notarial limits or accord the same effect to his account when beyond them." § 959; 96 Am. Dec. 608.

17. See Burke v. McKay, 2 How. 66.

18. Townsend v. Lorain Bank, 2 Ohio St. 345; Coddington v. Davis, 1 N. Y. 186; Wolford v. Andrews, 29 Minn. 251, citing the text; Ocoee Bank v. Hughes, 2 Coldw. 52; The Johnson, etc., Bank v. Lowe, 47 Mo. App. 151, citing text. 19. Walker v. Turner, 2 Gratt. 536; Chitty on Bills (13th Am. ed.) [*458], 516; Swayne v. Britton, 17 Kan. 629.