Murray v. Judah , 6 Cow. 484 ( 1826 )

Curia, per

Sutherland, J.

The first point, made Rn the part of the defendant is, that the motion for a nonsuit ought to have been granted ; no demand of payment of the check at the bank having been then proved.

It is a sufficient answer to this point, that a demand was subsequently proved. That such demand was necessary to entitle the plaintiffs to recover from the drawer, is well established. A check is, in form and effect, a bill of exchange. It is not a direct promise by the drawer to pay money ; but it is an undertaking on his part, that the drawT-ee shall accept and pay ; and the drawer is answerable, only in the event of the failure of the drawee to pay. As a general rule, therefore, a check is not due from the drawer, until pay ment has been demanded from the draw-ee, and refused by him. As between the holder of a check, and an endorser, or third person, payment must be demanded within a reasonable time. But as between the holder, and the maker or drawer, a demand at any time before suit brought is sufficient, unless it appear that the: drawee has failed, or the drawer has, in some other man-/j ner, sustained injury by the delay. These principles arj f recognized and established by this court, in Cruger v. Armstrong, (3 John. Cas. 5,) and Conroy v. Warren, (id. 259.)

2. Foote was a competent wdtness. The regularity and Validity of his discharge as an insolvent, were not questioned. That discharge took place in 1821, and he passed the check in question to the plaintiffs in 1819. The objection seems to be, that Foote was responsible upon the implied warranty of the genuineness of the check, and of his own title to it ; which, it has repeatedly been held, accompanies the transfer of all negotiable paper. (Herrick v. Whitney, 15 John. 240. Shaver v. Ehle, 16 John. 201. 6 John. 5.) But I am inclined to think, that any cause of action arising from the forgery of the check, if it should ¡Trove to be forged, must be considered as having accrued to the plaintiffs at the time when they received the check, and not when the forgery might be detected. ( Utica Bank v. Childs, 6 Cowen, 238.) If this is so, then the discharge terminated all interest on the part of Foote.

But it is to be remarked, that Foote was not called to prove the execution of the note. That had been previously established ; and, in this respect, the case is distinguishable from those of Herrick v. Whitney, and Shaver v. Ehle; where the-wdtnesses were called to prove the execution of the instruments which they had transferred, and, by implication of law, warranted. The principle itself is a strictly technical one, and not to be extended to causes which do not fall within the reason on which it has been adopted. I am aware of the general rule, that where a wdtness has a direct interest in the event of a cause, he cannot be admitted to testify as to any matter on which the jury are to pass, in favor of such interest. (Butler v. Warren, 11 John. 57.) But it appears tome to be worthy of consideration, w hether the class of cases which we are now considering, ought not to be considered an exception to this rule ; and whether a party who has transferred a negotia--ble instrument, after its execution and genuineness have been established, and there is no pretence that he had not a right to transfer it, ought not be considered a competent witness for every other purpose. (Williams v. Matthews, 3 Cowen, 252.) I do not, however, intend to put the competency of the witness on that ground ; but on the ground that his discharge terminated his interest.

3. It is contended, that Foote knew this to be an accommodation check when he took it ; that the defendant, therefore, stands in the light of a surety, and is discharged by the extension of credit given to Weston ; and by the arrangement of the 29th of February, 1820, made between him and Foote. The judge decided that it was immaterial whether Foote knew7 it to be an accommodation check, or not. If he did, it would not entitle Judah to the privileges of a surety.

The acceptor of a bill of exchange, ⅛ undoubtedly the principal debtor, and the drawer the surety, though it be accepted without consideration, and for the sole accommodation of the draw7er ; and nothing will discharge the acceptor but payment or a release. Lord Ellenborough certainly fell into an error, when he held a contrary doctrine in Laxton v. Peat, (2 Campb. 185,) and Collott v. Haigh, (3 Campb. 281.) These cases were subsequently overruled by Gibbs, J. in Kerrison v. Cooke, (3 Campb. 362,) and by Mansfield, Ch. J. in Fentum v. Pocock, (5 Taunt. 192,) and Carstairs v. Rolleston, (5 Taunt. 551.)

But here the drawer complains that time was given, not to the drawee, but to Weston, the payee of the bill. Now, that w7as an act by which the defendant could not possibly be injured ; for he could never have a right of action upon this chock against Weston. I know no case in which it has ever been held, that giving time to the payee or endorser, even of an accommodation bill, will discharge the í drawer. As between the drawer, the payee and the holder, the draw7er is unquestionably the principal, and the payee the surety. (Claridge v. Dalton, 4 M. & S. 226, 232, 3, per Bayley, J. And see Seymour v. Minturn, 17 John. 169.) The opinion of the judge, therefore, upon this point, was correct.

4. The judge was correct in holding that the possession of the check by the plaintiffs, was evidence that Thomas had transferred to them whatever interest he had in it. The cheek was also evidence of money had ahd received by the drawer to the use of the holder, and of money paid by the holder to the use of the maker. Both these points are fully considered and settled in Pierce v. Crafts, (12 John. 90.)

5. The award as to the value of the check between the plaintiffs and Foote, did not affect their right to recover against the defendant. It was merely a mode of ascertaining its value, for the purpose of enabling the plaintiffs to become petitioners for Foote, for the balance. It was a transaction with which the defendant has no concern. It was not an agreement on the part of the plaintiffs to collect no more than the amount at which the check was appraised, from Judah. It was merely evidence satisfactory for the object in view ; that that was the whole amount w'hich probably could be collected.

From the amount of the verdict, I presume the plaintiffs recovered upon the basis that, by the arrangement of the 29th of February, 1820, $2,500 of the check were absolutely paid. It is unnecessary, therefore, to consider whether the parol evidence in relation to that settlement was properly admitted, as the defendant has had the benefit of it, and the plaintiffs do not ask for a new trial.

On the whole, I think the motion for a new trial must be denied.

New trial denied.