Stothart and Bell v. Parker

Counsel

DICKINSON, for the plaintiffs. — When a note is assigned after falling due, it stands of course dishonored, and in such cases there was not any necessity for notice to the indorser. Chitty, 87, 103. In England if a note is protested for non-payment, it is evidence of the insolvency of the person to whom presented. At all events, if the drawer is insolvent at the time of indorsement there is no necessity of notice to the indorser. 1 Salk. 132. We admit, if notice were necessary, it was not given. STUART, for the defendant. — Demand must in every ease be made of the drawer, and notice to the indorser, Esp. N. P. 57, and within a reasonable time. Where a note had been kept without notice two months, the indorsee lost the money by his own laches; Esp. N. P. 36. It is not contended that it was necessary to bring suit against the drawer, before you can resort to the indorser. But a demand is necessary, and notice of non-payment, before recourse can be had to the indorser. Notice has not been attempted to be proved in this case; besides, Hickman was here three months after the note was indorsed, and surely some attempt ought to have been made to get the money of him during that time before recurring to the indorser. Both the plaintiffs and defendant knew the situation of Hickman at the time of indorsement; all parties knew that he was insolvent if such were the fact, but that is not admitted. Notice is necessary in all cases unless there has been fraud, and that cannot be alleged here, because the plaintiffs knew the situation of Hickman as well as the defendant. WHITESIDE, on the same side. — If an indorser knew the drawer of a promissory note to be insolvent when he indorsed it he was not entitled to notice, but this does not show that it is not necessary to apply to the drawer in some reasonable time. GRUNDY, also for the defendant, insisted that want of notice cannot be excused on account of the defendant knowing of the insolvency of the drawer. Such a case as this would be a fraud, and it were necessary to have a declaration stating such fraud or deceit. DICKINSON, in reply. — It is admitted to be a general principle that no subsequent occurrence shall dispense with notice. The general rule is that there must be notice, but this, like other general rules, has exceptions: one is, that if the indorser knew of the insolvency of the drawer at the time of indorsement notice is not necessary. No case can be found in the books but of indorsements before notes are payable. Notice is not necessary where a bill of exchange has been protested before indorsement, or the time of payment is past. If a promissory note is assigned after being due there is no necessity for notice according to the law of bills of exchange.