U.S. Supreme Court Magruder v. Union Bank of Georgetown, 28 U.S. 3 Pet. 87 87 (1830)
Magruder v. Union Bank of Georgetown
28 U.S. (3 Pet.) 87
ERROR TO THE CIRCUIT COURT OF THE DISTRICT
OF COLUMBIA FOR THE COUNTY OF WASHINGTON
An action was brought by the Union Bank of Georgetown against George B. Magruder, as endorser of a promissory note drawn by George Magruder. The maker of the note died before it became payable, and letters of administration to his estate were taken out by the endorser. No notice of the nonpayment of the note was given to the endorser or any demand of payment made until the institution of this suit. Held that the endorser was discharged, and his having become the administrator of the drawer does not relieve the holder from the obligation to demand payment of the note, and to give notice thereof to the endorser.
The general rule that payment must be demanded from the maker of a note and notice of nonpayment forwarded to the endorser within due time in order to render him liable is so firmly settled that no authority need be cited to support it. Due diligence to obtain payment from the maker is a condition precedent on which the liability of the endorser depends.
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 favor of and endorsed by the plaintiff in error, dated Washington, November 8, 1817, for $643.21, payable seven years after date. After the making of the note, the drawer, George Magruder, died, and on 18 November, 1822, administration of his effects was granted to George B. Magruder, the plaintiff in error. The note having been due on 11 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 18 November, 1823, the handwriting of the maker, and the endorsement by the defendant having been admitted, and further proved that the defendant had, previous to the note's 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 18 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 endorser, of the nonpayment, 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 nonpayment 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.
MR. CHIEF JUSTICE MARSHALL delivered the opinion of the Court.
This action was brought by the Union bank of Georgetown against George B. Magruder as endorser of a promissory note made by George Magruder. The maker of the note died before it became payable, and letters of administration on his estate were taken out by the endorser. When the note became payable, suit was commenced against the endorser
without any demand of payment other than the suit itself, without any protest for nonpayment, and without any notice that the note was not paid and that the holder looked to him as endorser for payment. 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 endorser of the nonpayment, which not being done, the verdict should be for the defendant. But the court refused to give this instruction, and charged the jury that no demand or notice of nonpayment was necessary. To this opinion the counsel for the defendant in the circuit court excepted, and has brought the cause to this Court by writ of error.
The general rule that payment must be demanded from the maker of a note, and notice of its nonpayment forwarded to the endorser within due time, in order to render him liable is so firmly settled that no authority need be cited in support of it. The defendant in error does not controvert this rule, but insists that this case does not come within it, because demand of payment and notice of nonpayment are totally useless, since the endorser has become the personal representative of the maker. He has not, however, cited any case in support of this opinion, nor has he shown that the principle has been ever laid down in any treatise on promissory notes and bills. The court ought to be well satisfied of the correctness of the principle before it sanctions so essential a departure from established commercial usage.
This suit is not brought against George B. Magruder as administrator of George Magruder, the maker of the note, but against him as endorser. These two characters are as entirely distinct as if the persons had been different. A recovery against George B. Magruder as endorser will not affect the assets in his hands as administrator. It is not a judgment against the maker, but against the endorser of the note. The fact that the endorser is the representative of the maker does not oppose any obstacle to proceeding in the regular course. The regular demand of payment may be made, and the note protested for nonpayment, of which notice may be given to him as endorser with as much facility as if the endorser had
not been the administrator. It is not alleged that any difficulty existed in proceeding regularly; the allegation is that it was totally useless.
The note became payable on 8 November, 1824. The writ was taken out against the endorser on 26 April, 1825. If this unusual mode of proceeding can be sustained, it must be on the principle that, as the endorser must have known that he had not paid the note, as the representative of the maker, notice to him was useless. Could this be admitted; does it dispense with the necessity of demanding payment? It is possible that assets which might have been applied in satisfaction of this debt had payment been demanded may have received a different direction. It is possible that the note may have been paid by the maker before it fell due. Be this as it may, no principle is better settled in commercial transactions than that the undertaking of the endorser is conditional. If due diligence be used to obtain payment from the maker without success and notice of nonpayment be given to him in time, his undertaking becomes absolute; not otherwise. Due diligence to obtain payment from the maker is a condition precedent on which the liability of the endorser depends. As no attempt to obtain payment from the maker was made in this case and no notice of nonpayment was given to the endorser, we think the circuit court ought to have given the instruction prayed for by the defendant in that court.
The judgment is reversed and the cause remanded with directions to award a venire facias de novo.
This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the District of Columbia holden in and for the County of Washington and was argued by counsel, on consideration whereof it is ordered and adjudged by this Court that the judgment of the said circuit court in this cause be and the same is hereby reversed, and that the said cause be and the same is hereby remanded to the said circuit court with directions to award a
venire facias de novo
in said cause.