expectation or knowledge of the drawer or indorser that the bill or note will not be paid are not excuses, for knowledge is not notice.17

The bankruptcy and insolvency of the drawer or indorser is no excuse for want of notice to him; it should be given to his assignee.18 In case of assignment, notice to an insolvent alone has been held sufficient.19

SECTION III.

THE LOSS OR MISLAYING OF THE BILL OR NOTE.

§ 1173. In the third place. The loss or mislaying or destruction of a bill or note payable on a day certain, so that, at its maturity, the holder is not able to deliver it up to the acceptor or maker, upon its being paid, is, as a general rule, no excuse for want of a demand of payment of acceptor or maker, or of due notice to drawer or indorser.20 Due demand should be made, accompanied by a tender of indemnity to maker or acceptor, and then should he refuse, due protest should be made (where requisite) and due notice given. But the acceptor or maker is not bound under such circumstances to pay the amount due by the bill or note, if lost or mislaid, although he may at his election do so; the bill became due; yet the court held that this did not dispense with the necessity of giving such indorser regular notice of the dishonor of the bill. The case of Staples v. O'Kines, 1 Esp. 332, seems directly in point to the present case. In an action against the drawer of a bill, the defense was want of notice; the plaintiff called the acceptor, who proved that, when the bill was drawn, he was indebted to the defendant in more than the amount, but that he then represented to the defendant that it would not be in his power to provide for the bill when it should become due, and that it was, therefore, then understood between them that the drawer should provide for it; and it was contended that this superseded the necessity of giving the drawer notice, but Lord Kenyon held that it did not, and nonsuited the plaintiff. There are many more cases to the same point. The authority of these adjudications, and the reason on which they are founded, satisfy me that the drawer, in the case before us, was entitled to regular notice of the nonpayment of the bill." Farnum v. Fowle, 12 Mass. 89; Sandford v. Dillaway, 10 Mass. 52; Allwood v. Hasledon, 2 Bail. 457; Phipps v. Harding, 17 C. C. A. 203, 70 Fed. 468.

17. Cases ante, § 1164; Citizens' Nat. Bank, etc. v. Third Nat. Bank, etc., 19 Ind. App. 69, 49 N. E. 171, citing text.

18. Ex parte Johnson, 1 Mont. & A. 622; Citizens' Nat. Bank, etc. v. Third

Nat. Bank, etc., 19 Ind. App. 69, 49 N. E. 171, citing text.

19. Donnell v. Savings Bank, 80 Mo. 171. See ante, § 1002.

20. Story on Notes, 290; Story on Bills, § 348.

for he is entitled in all cases to have the bill or note delivered up to him as a voucher upon payment thereof." The proper remedy for the holder in case of a refusal to pay is in equity.22 If the instrument be destroyed, however, he may recover at law, and there are some other exceptional circumstances under which he may do so, elsewhere considered.23

In respect to a bill drawn at sight, and which must be presented within a reasonable time, the loss thereof will excuse a reasonable delay; and if, upon its loss, a second one be given by the drawer, necessary delay in presenting that will be excused.25 But where the word "duplicate" was written on the second draft, it was deemed, in view of extrinsic facts, to import that it was made as a substitute for, and to take the place of, the original; and the defendant having been discharged from liability upon the original, by laches as to presentment, the plaintiff could not recover on the duplicate.20

§ 1174. Story, upon the authority of Pothier, lays down the doctrine, that if the holder has lost or misplaced the bill before acceptance, he should still apply for acceptance thereof, and upon refusal protest the bill.27 We know of no other authority for this doctrine.

SECTION IV.

THE APPOINTMENT OF DRAWER OR INDORSER AS EXECUTOR OR ADMINISTRATOR OF MAKER OR ACCEPTOR.

§ 1175. In the fourth place, it is well settled that the appointment of the drawer or indorser as executor or administrator of the maker or acceptor does not excuse the holder from making a demand upon him as personal representative,28 or from giving him

21. See chapter XLVI, on Lost Bills and Notes, and chapter XXXVIII, on Payment; Thompson on Bills, 204; Story on Bills, § 348; Edwards on Bills, 508; Lane v. Bank of West Tennessee, 435.

22. See chapter XLVI, on Lost Bills and Notes.

23. See chapter XLVI, on Lost Bills and Notes.

24. Aborn v. Bosworth, 1 R. I. 403.

25. Benton v. Martin, 31 N. Y. 382 (1865).

26. Benton v. Martin, 40 N. Y. 346 (1869), 51 N. Y. 572 (1873); Angaletos

V. The Meridian Nat. Bank of Indiana, Ind. App. 573, 31 N. E. 368.

27. Story on Bills, § 279; Pothier De Change, note 145.

28. Magruder v. Union Bank, 3 Pet. 87, 7 Pet. 287; Juniata Bank v. Hale, 16 Serg. & R. 157; Carolina Nat. Bank v. Wallace, 13 S. C. 347; Story on Bills,

376.

notice that he is looked to personally for payment.29 Demand is indispensable in order to fix the liability of drawer or indorser; and then, it is said, notice to the indorser is necessary in order that he may be informed that the holder does not mean to resort solely to the estate of which he is personal representative, but to him also in his individual character as indorser; and that, if he received no notice, he would have a right to conclude that the holder intended to look to the estate only.30 But when demand for payment is made to the representative of the maker or acceptor, who is also his indorser, such person would be bound to make the payment primarily for his principal, and it might be reasonably inferred that in the event of his refusal to do so in that character, the like demand applied to him in his individual character. And it would seem to be superfluous to add to it a new and formal notification that he is looked to as indorser for payment.31 Indeed, knowledge of dishonor obtained by communication from the holder amounts to notice, though knowledge derived from a stranger does not;32 and it has been held in England, that where a demand was made at the house of the acceptor, and it was answered by the drawer that the acceptor was dead, and that he was his executor, and requesting that the bill might be allowed to stand over for a few days, and he would see it paid that this was sufficient notice of dishonor.33

It has been observed that the case cited "does not decide that where the party sought to be charged has become executor of the payor, notice is dispensed with, but that the circumstance in that particular case constituted notice." 34 But it seems to have been considered by the court that information of dishonor derived in such a manner from the holder necessarily constituted notice.

If the maker die, leaving his estate insolvent, neither demand35 nor notice will be excused.

29. Ibid.

30. Juniata Bank v. Hale, 16 Serg. & R. 157.

31. 1 Parsons on Notes and Bills, 526.

32. Miers v. Brown, 11 M. & W. 372; Tindal v. Brown, 1 T. R. 167. 33. Caunt v. Thompson, 7 C. B. 400. Creswell, J., after quoting cases cited in preceding note, says: "In substance, these cases seem to establish, that in order to hold a prior holder responsible, he must derive from some person entitled to call for payment information that the bill has been dishonored, and that the party is in condition to sue him; from which he may infer that he will be held responsible."

34. Redf. & Big. Lead. Cas. 428.

35. Gower v. Moore, 25 Me. 16; Johnson v. Haith, 1 Bail. 482.

36. Lawrence v. Langley, 14 N. H. 70.

SECTION V.

THE TRANSFER OF THE BILL OR NOTE AS COLLATERAL SECURITY.

§ 1176. In the fifth place, if the bill or note has been transferred to the holder by mere delivery without indorsement, as collateral security, the transferrer is not entitled to insist on a strict presentment at maturity to the maker or acceptor; nor will he be released from the debt for which the bill or note is delivered as collateral security, unless he can show that he has actually sustained damage or prejudice by such nonpresentment.37 And to the same extent only can he claim exoneration by failure to give him due notice.38

This circumstance of transfer without indorsement as collateral security is generally enumerated amongst the cases in which presentment and notice are dispensed with or excused; but really it is simply a case in which the transferrer does not come at all within the rule entitling him to notice.39 It is true that Mr. Chitty has several times in his treatise declared that a transferrer by delivery of a note or bill payable to bearer is ordinarily entitled to regular notice as a party to the bill;40 but this is incorrect. Declining to indorse, he declines to become a party to the bill, and the only liability which he incurs is for the consideration given, which, if the instrument be forged or illegal (and in England if it be worthless by reason of insolvency of the parties), may be received back." He is in no sense a party, and not entitled to strict demand and notice.42

SECTION VI.

THE DEATH OF THE MAKER OR ACCEPTOR.

1177. In the sixth place. The death of the maker of a note, or acceptor of a bill, is no excuse for want of presentment for payment. In such a case, the holder should make presentment to executor or administrator of the deceased, if one has been ap

37. Van Wart v. Woolley, 3 B. & C. 439; Swinyard v. Bowes, 5 Maule & S. 62; Story on Notes, § 284; Story on Bills, § 372.

38. Ibid.

39. Story on Bills, § 372.

40. Chitty on Bills (13th Am. ed.) [*443], 479.

41. See ante, §§ 732 et seq., vol. I.

42. 1 Parsons on Notes and Bills, 503; Story on Bills, § 372.

45

44

pointed, and his whereabouts can be ascertained; or if there be no personal representative, the presentment should be made at the house of the deceased, unless, indeed, the instrument be payable at a particular place, in which case presentment there is always sufficient. Nor is this circumstance an excuse for want of notice to drawer and indorser.46 It may be all the more needful, and should be immediately given. It has been held, however, that the indorser who knew of the maker's death when he indorsed is not entitled to notice;47 but this distinction rests on no sound principle.

In like manner, the death of the drawer or indorser is no excuse for want of notice, which should be given to his personal representative. 48

§ 1178. Effect of drawee's death before presentment for acceptance. When the drawee dies before the bill is presented for acceptance, it is generally stated that it will not operate as an excuse for nonpresentment for acceptance.49 But this may be doubted. The acceptance of the personal representative, to whom it is said the bill should be presented for acceptance, would not be according to the tenor of the bill, whether he bound himself personally, or bound himself to pay out of the decedent's assets; and as the holder would not be bound (as we think) to take such an acceptance, there is no reason why he should be required to present the bill for such acceptance.50 There is an obvious difference between this, and the presentment to the personal representa

43. Story on Notes, § 241; Chitty on Bills [*356], 399; Story on Bills, § 318; White v. Stoddard, 11 Gray, 528; Landry v. Stansbury, 10 La. 484; Frayzer v. Dameron, 6 Mo. App. 153. See chapter XX, on Presentment for Payment, § 591, vol. 1, and chapter XVII, on Presentment for Acceptance, § 458, vol. I.

44. Juniata Bank v. Hale, 16 Serg. & R. 157; Magruder v. Bank of Georgetown, 3 Pet. 87; Story on Notes, § 241; Chitty on Bills [*356], 398; Story on Bills, 346.

45. Chitty on Bills [*356–357], 399; Story on Notes, § 253.

46. 1 Parsons on Notes and Bills, 525; Edwards on Bills, 454. See ante,

§ 1000 et seq.; 2 Ames on Bills and Notes, 510; Lane v. Bank, 9 Heisk. 219. 47. Davis v. Francisco, 11 Mo. 572; Edwards on Bills, 489; Picker v. Harlan, 75 Mo. 678.

48. See chapter XXIX, on Notice, section IV; Oriental Bank v. Blake, 22 Pick. 206.

49. Story on Bills, § 230.

50. See chapter XVII, on Presentment for Acceptance, § 458, vol. I. See also Smith v. Bank, L. R., 4 P. C. 194; 2 Ames on Bills and Notes, 510.