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viously dishonored, it is plainly premature.16 And in many states an action cannot be brought against the maker of a note at any hour on the last day of grace. And, if it is payable one day after date, suit cannot be brought on the day after it is made.18 In states where an action cannot be brought on a note on the day it falls due, the defect will not be cured by a judgment taken in such action by default. On the other hand, where a note is payable on demand and due at once, it has been held that a suit may be brought on it at any time.20 And, where it is payable "on or before" a given day, suit may be brought without proving a previous demand.21

Action against Indorser.

$1587. The indorser's liability, being conditioned by the law merchant on notice of dishonor properly given, has been said not to commence until such notice is given, where there is no excuse or waiver to dispense with it. But action may be begun against an indorser immediately after mailing the notice of dishonor to him,22 on the very day the note becomes due and is dishonored.2 23 It has been held, how

16 Church v. Clark, 21 Pick. (Mass.) 310. So, a demand at 8 a. m. will not sustain an action immediately afterwards, on the day of maturity. Lunt V. Adams, 17 Me. 230.

17 Osborn v. Moncure, 3 Wend. (N. Y.) 170; Bell v. Sackett, 38 Cal. 407; Benson v. Adams, 69 Ind. 353; Wiggle v. Thomason, 11 Smedes & M. (Miss.) 452. And an attorney cannot, therefore, recover costs from his client on discontinuing such suit. Hopping v. Quin, 12 Wend. (N. Y.) 517. So, it has been held that an indorser cannot be sued on the last day of grace. Bevan v. Eldridge, 2 Miles (Pa.) 353.

18 Davis v. Eppinger, 18 Cal. 378; Taylor v. Jacoby, 2 Pa. St. 495; Moore V. Hollaman, 25 Tex. Supp. 81.

19 Randolph v. Cook, 2 Port. (Ala.) 286.

20 Hill v. Henry, 17 Ohio, 9. So, where there is an indefinite agreement for forbearance, suit may be brought at any time without previous demand. Finch v. Skilton, 79 Hun, 531, 29 N. Y. Supp. 925.

21 Dunkle v. Nichols, 101 Ind. 473; but not until after the day named, Moore v. Horsley, 42 Ark. 163.

222 Daniel, Neg. Inst. 243; 2 Pars. Notes & B. 462; Coleman v. Ewing, 4 Humph. (Tenn.) 241. And the indorser cannot plead that the action was begun before a reasonable time had elapsed after notice of dishonor sent him. Siggers v. Lewis, 1 Cromp., M. & R. 370, 4 Tyrw. 847.

23 Greeley V. Thurston, 4 Me. 479; Crenshaw v. McKiernan, Minor (Ala.)

295.

ever, and seems to be the rule, in England, that no action can be begun against the indorser until a reasonable time has passed for him to receive the notice; 24 and that it is too soon to bring suit on the day the note falls due, after protesting it and sending notice to him by mail.25 Where the notice was sent on the last day of grace, and suit begun on the next day, before the notice could be received, it has been held not to be premature; 26 although in the same state the contrary was held, where the suit was begun on the day of maturity, and the notice given to the notary before, but served on the indorser personally afterwards.27 But if the writ is delivered to the officer before the notice is sent, to be served afterwards, it will be sufficient.28

Action on Nonacceptance.

§ 1588. Where a bill is dishonored by the drawee's refusal to accept it, an action lies on it at once, without waiting for the day named in it for payment, against the drawer 29 or indorser.30

31

But where the indorser promises "to pay within two years," an action will not lie against him before the end of such time.3: The time for payment of a note is not, however, extended by a stipulation for interest to begin at a day named, after maturity of the note; and an action will lie meanwhile on dishonor of the note at maturity, such interest not being included in the judgment.32 If a note is payable

24 Castrique v. Bernabo, 6 Q. B. 498; Smith v. Bank, 5 Serg. & R. (Pa.) 318. 25 Manchester Bank v. Fellows, 28 N. H. 302.

20 Shed v. Brett, 1 Pick. (Mass.) 401; Flint v. Rogers, 15 Me. 67. .

27 New England Bank v. Lewis, 2 Pick. (Mass.) 125.

28 Seaver v. Lincoln, 21 Pick. (Mass.) 267.

Rev.

29 Benj. Chalm. Dig. art. 48; 2 Daniel, Neg. Inst. 244; Milford v. Mayor, 1 Doug. 55; Bright v. Purrier, 3 Burrows, 1687; Watson v. Tarpley, 18 How. 517; Sterry v. Robinson, 1 Day (Conn.) 11; Roosevelt v. Woodhull, Anth. N. P. (N. Y.) 50; Watson v. Loring, 3 Mass. 557; Weldon v. Buck, 4 Johns. (N. Y.) 144; Winthrop v. Pepoon, 1 Bay (S. C.) 468. So, by statute in Texas. St. art. 264. And see § 1136, supra. But this suit cannot be brought on presentment and protest for better security. § 1147, supra. Taan v. Le Gaux, 1 Yeates (Pa.) 2014. But in such case interest and damages are not recoverable. 30 Ballingalls v. Gloster, 3 East, 481; Watson v. Loring, 3 Mass. 557; Lenox v. Cook, 8 Mass. 460; Morgan v. Towles, 8 Mart. O. S. (La.) 730.

31 Koutz v. Van Clief, 55 Cal. 345.

32 Billingsley's Adm'r v. Billingsley, 34 Ala. 518.

conditionally, an action will not lie until the happening of the event named. And, in general, no action can be brought upon a bill or note until it becomes due by its terms, except in the case of nonacceptance.

33

34

Maturity of Installments-Interest.

§ 1589. Where a note or bill is payable in installments, an action will lie upon each installment as it becomes due.3 35 And, if it is secured by a collateral mortgage, the mortgagee will be entitled to possession of the land on default of an installment.3 36 So, a mortgage securing several notes may be foreclosed when the first falls due, and the decree may cover others which have matured after the commencement of the action.37

Where the interest on a note is made payable annually, an action may be brought to recover it before the principal is due.38 And a subsequent action for the principal will not be barred by a judgment already recovered for such interest.39 But if the interest is payable annually, with an option to the maker to make it part of the principal in case of default, no action can be brought for it until the principal becomes due. If the principal itself becomes due at the holder's

40

33 Grimison v. Russell, 20 Neb. 337, 30 N. W. 249.

34 Although it is accompanied by a warrant of attorney to confess judg ment at any time. Spier v. Corll, 33 Ohio St. 236.

35 2 Daniel, Neg. Inst. 244. And see § 1047, supra. Several actions lie, a fortiori, on distinct notes, Nickerson v. Rockwell, 90 Ill. 460; but, as to a demand note securing several installments, see Siddall v. Rawcliff, 1 Moody & R. 263, 1 Cromp. & M. 487.

30 Estabrook v. Moulton, 9 Mass. 258.

37 Hanford v. Robertson, 47 Mich. 100, 10 N. W. 125.

38 Greenleaf v. Kellogg, 2 Mass. 568; Cook v. Wiles, 42 Mich. 439, 4 N. W. 169; Bannister v. Roberts, 35 Me. 75; Walker v. Kimball, 22 111. 537; Ray v. Pease, 97 Ga. 618, 25 S. E. 360; Catlin v. Lyman, 16 Vt. 44; Howes v. Bennett (Me.) 3 Atl. 661. And see § 1048, supra. So, as to interest coupons, before other coupons become due. Boyer v. Chandler, 160 Ill. 394, 43 N. E.

803.

39 Sparhawk v. Wills, 6 Gray (Mass.) 163; Kurz v. Suppiger, 18 Ill. App. 630; Dulaney v. Payne, 101 Ill. 325.

40 Wood v. Whisler, 67 Iowa, 676, 25 N. W. 817.

option, on default in the interest, the holder may bring an action for principal and interest, after notice that he has exercised the option.*1

Action against Principal Debtor.

§ 1590. In some states an indorser or surety cannot be sued until an action is first brought against the maker or principal. But such an action has been held not to be necessary, where the maker is known to be insolvent.42 So, a delay for more than a year in suit against the maker has been held to be excused by the indorser's request and promise to "stand good for the amount.” 43 In Texas, the statute requires that suit be brought against the maker or acceptor at the next term of the court, in order to charge indorsers and drawer. Such suit is not necessary, however, in order to charge the acceptor himself.45 Where an action is brought by a surety against his principal, or by an indorser against the maker, he must, in general, have first paid the note himself. But where the indorser has agreed with the maker, for a valuable consideration, to pay his note, and is afterwards released by the holder, and a new debtor accepted in his stead, the original maker may bring an action against the new debtor for nonperformance of his agreement, without first paying the note himself.**

46

So, where the maker gives a collateral mortgage to indemnify an indorser, such mortgage may be foreclosed before the note is paid by the indorser.48 And suit may be brought on a collateral note held by

41 Dean v. Applegarth, 65 Cal. 391, 4 Pac. 375. And see § 1047, supra, and § 1604, infra.

42 Clark v. Young, 1 Cranch, 181, in Virginia. So, in Indiana. Bank, 64 Ind. 92. And see § 931 et seq., supra.

43 Davis v. Leitzman, 70 Ind. 275.

Couch v.

44 Smith v. Harbert's Adm'r, 30 Tex. 669; Rev. St. art. 262. But the maker or acceptor must be sued at the first or (if good cause for delay is shown) at the second term of court, in order to fix the liability of other parties. Id. And in ALABAMA there is a similar requirement as to nonnegotiable instruments (Code, §§ 1778-1782); but this is not a statute of limitation, McClelland's Adm'r v. Slauter, 30 Tex. 497. And see § 935, supra.

45 But an accommodation acceptor may require the holder to sue at once on maturity. Van Alstyne v. Sorley, 32 Tex. 518.

46 Borum v. Reed, 73 Mo. 461.

47 Sapp v. Faircloth, 70 Ga. 690.

48 Hapgood v. Wellington, 136 Mass. 217. As to suits on collateral, see § 1677, infra.

a creditor, when it matures, without first resorting to the original debtor for payment. So, an agreement in a collateral mortgage, postponing its foreclosure, will not suspend the holder's right to sue on the note secured as soon as it becomes due.50

49

Statute of Limitations-Fraud.

§ 1591. The statute, limiting the time within which actions upon personal contract and for personal property may be brought, dates in Great Britain from the year 1623.51 This statute does not destroy the debt, but simply bars the remedy after the time limited.52 And, independent of the statute, a note will be presumed to be paid after a lapse of 20 years.53 The statute of limitations is available in answer

to a proof of debt under a petition in bankruptcy.54 And, although not strictly applicable to proceedings in equity, it is adopted there also as a general rule of procedure.55 And where equity and law procedures are blended, as in Mississippi, it may be set up by demurrer to a bill in equity.56 So, where a creditors' bill is filed to enforce an implied trust in the proceeds of a note held by a surety for his indemnity, and transferred by him to the defendant, the remedy will be barred by the statute, unless fraud is alleged, although the complain

49 Lishy v. O'Brien, 4 Watts (Pa.) 141.

50 Sweeney v. Bixler, 69 Ala. 539.

1 Byles, Bills, 343; Chit. Bills, 683; 21 Jac. I. c. 16; 3 & 4 Wm. IV. c. 42. 52 Byles, Bills, 344; 2 Edw. Bills & N. § 957; 2 Pars. Notes & B. 631; Quantock v. England, 5 Burrows, 2628, 2 W. Bl. 703; Williams v. Jones, 13 East, 450; Chapple v. Durston, 1 Cromp. & J. 1; Mavor v. Pyne, 2 Car. & P. 91. And collateral afterwards given for "subsisting" debts would include a note that was barred, but still unpaid. Townsend v. Tyndale, 165 Mass. 293, 43

N. E. 107.

53 Byles, Bills, 364; Duffield v. Creed, 5 Esp. 52; although the maker is a nonresident, Sanderson v. Olmsted, 2 Pin. (Wis.) 224; but the presumption of payment may be rebutted by death of the drawer in the midst of war and by other circumstances, Hopkirk v. Page, 2 Brock. 20, Fed. Cas. No. 6,697. 54 Ex parte Dewdney, 15 Ves. 479; although the objection could not be taken by a stranger, Swayne v. Wallinger, 2 Strange, 746.

55 Johnson v. Smith, 2 Burrows, 961; Prince v. Heylin, 1 Atk. 493; in analogous cases, at least, Stackhouse v. Barnston, 10 Ves. 466.

McNair v. Stanton, 57 Miss. 298.

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