Magruder v. Union Bank of Georgetown

IN the circuit court of the district of Columbia, for the county of Washington, the defendants in error instituted a suit against George B. Magruder, the plaintiff in error, upon a promissory note drawn by George Magruder in favour of and indorsed by the plaintiff in error, dated Washington, November 8th, 1817, for six hundred and forty-three dollars twenty-one cents, payable seven years after date. After the making of the note, the drawer, George Magruder, died, and on the 18th of November 1822, administration of his effects was granted to George B. Magruder, the plaintiff in error. The note having been due on the 11th of November 1824, was not paid.

Upon the trial of the cause, the plaintiff, in support of the issue joined, offered in evidence to the jury the promissory note, issued the 18th of November 1823, the hand writing of the maker, and the indorsement by the defendant having been admitted; and further proved that the defendant had, previous to the note falling due, taken out letters of administration in the county of Montgomery, in the state of Maryland, upon the personal estate of George Magruder, the maker of the said note, on the 18th of November 1823; the said George Magruder having previously departed this life. It was admitted that the note in question had never been protested, nor had any notice been given to this defendant that the note was not paid. Upon these circumstances, the counsel for the defendant moved the court to instruct the jury, that before the plaintiff can recover in this action, it is essential for him to prove demand and notice to the indorser, of the non-payment; which not being done, the verdict should be for the defendant. But the court refused to give the instruction prayed for as aforesaid, and charged the jury, that no demand of notice of non-payment was necessary. To this refusal and instruction the counsel for the defendant excepted, and the court sealed a bill of exceptions, and this writ of error was prosecuted.

The case was argued by Mr. Coxe for the plaintiff in error, and by Mr Dunlop and Mr Key for the defendant.

Mr Coxe contended, that the fact that the indorser of the note had become the administrator of the drawer, did not release the holders of the note from any of the duties and legal obligations they were under, to give notice to the indorser of the non-payment of the note, and that payment was expected from him. The letters of administration were granted out of the district of Columbia; but if they had been issued within the district, the law would have been the same.

As a general rule, notice was necessary, and notice must come from the holder of the note, to apprise the party that he is looked to for payment. Chitty, 292.

The mere fact that the indorser had been the representative of the drawer, did not imply a knowledge of the non-payment of the note; and if it did, notice of its non-payment was not thereby dispensed with. Chitty, 293. 1 T. Rep. 167. 2 Con. Rep. 654. The legal obligations of an indorser become complete on notice, and are not such until notice.

The obligation to give notice has been declared to exist in a case in which, if it ever could be excused, it would have been waived under its circumstances. Where one person was a member of two partnerships, one of which signed, and the other of which indorsed, it was held, that presentment for payment was necessary to charge the indorser. Bayley on Bills, 159.

Mr Dunlop and Mr Key, for the defendant, admitted the general rule to be as stated by the counsel for the plaintiff in error; but exceptions had been allowed to the rule, and on the same principles, the present was entitled to exemption from its stricter application.

In the Bank of Columbia vs. French, 4 Cranch, 161, when this note was drawn for the use of the indorser, notice was not required. His knowledge that the obligation to pay was upon him, made the notice unnecessary.

The plaintiff in error, as administrator of the drawer, became the payer of the note, and as such was bound to do so without demand; no demand on him being required, it was useless to give him notice that he had not done what he well knew he had omitted.

The purpose of the rule as to notice did not exist here: if notice was required to enable the indorser to secure himself by calling on the drawer, this could not be done; and as he had the estate of the drawer in his hands for his indemnity, no demand of the indorser was necessary. Bank of the United States vs. Corneal, 2 Peters, 552.

The law never requires that to be done which is useless; and therefore the defendant in error, who could not by the notice or by its omission have affected the rights of the indorser, or his means of protecting himself from loss, was not required to give it.

Mr Chief Justice MARSHALL delivered the opinion of the Court.