supposed hostility of the earlier decisions in New York and of decisions in Tennessee, to some of the cases cited in note 3, p. 422, it is believed that an examination of the adjudged cases will show that the principle and distinction above mentioned, express the established law of both of those States; [and since the case of Youngs v. Lee, 18 Barbour, 192, of New York particularly;] the real difference relating only to the question, what renders the receipt of a negotiable note an extinguishment or discharge of a debt; the point of the New York cases being, that accepting a note nominally in payment, is, if the note be not paid, no discharge of the debt, but leaves the creditor's rights and remedies undisturbed.(1) That the satisfaction and discharge of a debt is a valuable consideration for the receipt of a note, is expressly decided in Bank of St. Albans v. Gilliland, 23 Wendell, 311; Montross v. Clark, 2 Sandford, 115; and is admitted in Small v. Smith, 1 Denio, 583; see, also, Bank of Salina v. Babcock, 21 Wendell, 499; and though the assistant vice chancellor in Clark v. Ely & others, 2 Sanford, 166, 171, declared that the Bank of St. Albans v. Gilliland is not law in New York, yet there is no judicial decision overruling it, or conflicting with it. To say, as the New York judges do, that giving up a security for a debt is a consideration, and yet to hold that giving up the debt

tional security itself. "The case,"
" he says,

"does not show that a single word was said between the creditor and the principal debtor in respect to giving time on the antecedent debt." And in a suit where the question came up on a case stating barely that after the maturity of one note, the defendant accepted another note “having four months to run, as collateral security," &c., it would have been difficult to say that it meant anything but mere or simple collateral security. The chief justice accordingly distinguishes this last ease from cases where the creditor accepts the new bill or note for or on account of the antecedent debt, and it takes the place and represents, for the time being at least, the original debt. Such a case he would doubtless have considered, like Poirier v. Morris, 2 Ellis & Black. 89; where the collateral-a bill which had some days to run-was placed by the recipient "to the credit" of the original debtor; though not meant to be entered as a payment. Placing the bill to the debtor's credit necessarily implied a suspension of remedy till it was seen what the collateral produced, and whether anything. The result of the whole would seem to be that if there be any facts from which a court can reasonably infer that time was meant to be granted, it will give effect to a presumption so very consistent with the transfer of an instrument having yet time to run, as a security for a debt over-due, but that it will not make this inference from the mere transfer of a security on time, though for an over-due debt. In other words, the presumption must be drawn from facts attending the transfer; and will not spring from the simple transfer, itself unattended with any history of the agreement under which it was made, and as a presumption of law merely. And this conclusion the Supreme Court of Vermont in the carefully considered case of Austin v. Curtis, above cited, regarded as warranted by the cases which it cites of Gahn v. Niemcewiez, 11 Wendell, 312; Burke v. Conger, 8 Texas, 66; Wade v. Stanton, 5 Howard's Mississippi, 631.]

(1) See Stalker v. McDonald, 6 Hill's N. Y. 93; Williams v. Smith, 2 Id. 301; and Youngs v. Lee, 18 Barbour, 192, already cited; Mohawk Bank v. Corey, 1 Id. 513; White v. The Springfield Bank, 1 Barbour's S. Ct. 225; Spear v. Myers, 6 Id. 445; Nichol v. Bate, 10 Yerger, 429; Wormley v. Lowry, 1 Humphreys, 468; Van Wyck v. Norvell et al., 2 Id. 192; Ingham v. Vaden et als., 3 Id. 51; Ingram v. Morgan, Garrett et al., 4 Id. 66.

itself, and all right of action upon it, is not a consideration, would be absurd. The only question that the subject admits of, is whether the agreement of parties was such, that by the acceptance of the note, the debt was satisfied, discharged, released, or whether the right of action upon it remained unextinguished. See the distinctions on this subject in the American note to Cumber v. Wayne, 1 Smith's Leading Cases, 5th Am. ed., 446. In Fenby v. Pritchard, 2 Sandford, 152, it was held that if the giving of notes as collateral security *was one of the condi*336] tions of a sale, the vendor was a holder for value, discharged from equities.

But unless a note is taken in good faith, for a valuable consideration, and without notice, the holder is considered as being in privity with his endorser.

There are several circumstances which create this privity. One is where the endorsement is colorable ;(1) another is where it is without consideration.(2) A third is where the endorsee takes the instrument with actual notice; (3) and this distinction has been taken, that where the action is brought by an endorsee, or other third person, who is not named in the note, it will be presumed till the contrary is shown, that he took it in the regular course of negotiating commercial paper, and as a general rule, the maker cannot set up any equities existing between himself and the payee, until he has given evidence to impeach the plaintiff's title; but when the action is brought by the payee named in the note, although it may appear that in point of fact, he was not a party to the transaction upon which the note was made, there is no such presumption in his favor; in other words, being payee is a presumption of notice.(4) Another case in which the endorsee is affected by the equities which existed against his endorser, is where the instrument is taken under suspicious circumstances, such as ought to have put him on his guard, and would have alarmed a man of ordinary prudence ;(5) or where there is enough on the face of the instrument to create a suspicion that it is issued against law.(6) The rule is the same where a bill, upon its face, has been dishonered by nonacceptance or non-payment;(7) or where a note or bill is negotiated

(1) Ayer v. Hutchins et al., 4 Massachusetts, 370, 373; Henderson & Dial v. Irdy, 1 Spears, 43, 47.

(2) Lawrence v. Stonington Bank, 6 Connecticut, 521; Munson v. Cheesborough, 6 Blackford, 17.

(3) See Small v. Smith, 1 Denio, 583.

(4) Nelson v. Cowing, 6 Hill's N. Y. 337.

(5) Beltzhoover v. Blackstock, 3 Watts, 20, 25; Cone v. Baldwin, 12 Pickering, 545; Hall v. Hale, 8 Connecticut, 337; Hunt v. Sandford, 6 Yerger, 387.

(6) Safford v. Wyckoff, 4 Hill's N. Y. 442; Smith v. Strong, 2 Id. 241; Thompson v. Hale, 6 Pickering, 259.

(7) Andrews v. Pond et al., 13 Peters, 66, 79; Fowler v. Brantly et al., 14 Id. 318, 321.

over-due, for in that case, it is considered as discredited upon its face. If it be payable at a time certain, it is of course over-due after the last day of grace is expired, and the endorsee after that time takes it subject to equities.(1) A note which is payable on demand, or without fixed time, is considered as payable within a reasonable time, and if endorsed after a reasonable time, passes subject to equities, and reasonable time is a question of law.(2) No fixed measure of reasonable time has yet been determined; two days, and even one month, have been held to be within the limit; (3) and eight months, and even two months, beyond *it.(4) In Wethey v. Andrews, 3 Hill's N. Y. 582, a distinction [*337 was declared to exist, as to the length of time that will be reasonable, between a note payable on demand with interest, and one payable without interest, being longer in the former case, as it is to be understood that when a note is payable with interest, it would be contrary to the usual course of business to demand payment short of some proper point for computing interest, such as a quarter, or half a year, or a year; and it was decided that four or five weeks was not too long upon a note carrying interest, though it would have been if the note had been without interest.(5) In a suit by the endorsee against the maker, when part of the defence is, that the note was endorsed over-due, the burden of proving the time of the endorsement is on the defendant; an endorsement, in the absence of any evidence to the contrary, being always presumed to have been made at or about the date of the note;(6) but this presumption of fairness is a slight one, and easily countervailed by suspicious circumstances.(7) The principle, that a note payable on demand may become discredited by mere lapse of time, is not recognized in England.(8) And in this country the principle is not considered applicable to bank notes or bank post notes;(9) nor appar

(1) Mackay v. Holland, 4 Metcalf, 69; Howard v. Ames, 3 Id. 308; Potter v. Tyler and another, 2 Id. 58; De Mott v. Starkey, 3 Barbour's Chancery, 403; McNeill v. McDonald, 1 Hill's So. Car. 1.

(2) Sylvester v. Crapo, 15 Pickering, 92; Knowles v. Parker, 7 Metcalf, 31; Tucker . Smith, 4 Greenleaf, 415.

(3) Dennett v. Wyman et al., 13 Vermont, 485; Dennen v. Haskell, 45 Maine, 430; Ranger v. Cary and others, 1 Metcalf, 369, 374.

(4) American Bank v. Jenness and others, 2 Metcalf, 288; Nevins v. Townsend, 6 Connecticut, 5; Camp v. Clark, Trustee, 14 Vermont, 387.

(5) See Thompson v. Hale, 6 Pickering, 259.

(6) Burnham v. Wood, 8 New Hampshire, 334, 336; Burnham v. Webster, 19 Maine, 232; Ranger v. Carey and others, 1 Metcalf, 369, 373; Cain v. Spann, 1 McMullan, 258; White v. Camp, 1 Florida, 94, 101; Hutchins v. Flintge et al., 2 Texas, 473.

94.

(7) Snyder v. Riley, 6 Barr, 165, 168.

(8) Brooks v. Mitchell, 9 Meeson & Welsby, 15; Sylvester v. Crapo, 15 Pickering, 92,

(9) The Fulton Bank v. The Phoenix Bank, 1 Hall, 562, 577; see Key v. Knott and Wife, 9 Gill & Johnson, 342, 364.

ently to checks marked "good."(1) An endorsement without recourse, or an assignment of the note on the back of it, without recourse, is not enough to make a holder for value, subject to the equities previously existing.(2)

In the case of an ordinary assignment of a chose in action, where the suit must be brought in the name of the assignor, the assignee is usually, under statutes of set-off, subject to all set-offs existing between the parties, till the time of the assignment and notice; but in the case of an endorsement of a note, under circumstances to leave the endorsee in privity with his endorser, it is now settled in England, and in most courts in this country, that the endorsee is affected only by those defences that are connected with the note itself, and not by antagonist claims, or set-offs, that are wholly independent of the note.(3) [And the endorsee of a note will consequently be entitled to recover against the maker even where he has full notice or knowledge that the endorsement is made for the purpose of defeating a set-off held by the latter against the endorser.(4)] In Massachusetts, however, general *338] set-offs are admissible;(5) up to the time of the transfer of the title, but not till notice of it to the maker.(6) The decisions in Massachusetts have been followed in Maine.(7) In New York the point was considered doubtful in Minon v. Hoyt, 4 Hill's N. Y. 193, 197. In South Carolina, all set-offs between the original parties to the note existing at the time of the transfer, appear to be admitted in case of a note endorsed over-due.(8) In Alabama, under a statute rendering notes assignable, it has been decided that set-offs between the maker and intermediate endorsees are not admissible.(9) In Maine, it has been decided that if a note is negotiated before it is due to one who thereby acquires a perfect title, his endorsing it after it is due will not revive

(1) Willits v. The Phoenix Bank, 2 Duer, 121.

(2) Epler v. Funk, 8 Barr, 468; Bisbing v. Graham, 2 Harris, 14.

(3) Burrough v. Moss, 10 Barnewall & Cresswell, 558; Whitehead v. Walker, 10 Meeson & Welsby, 696; Hughes v. Large, 2 Barr, 103; Cumberland Bank v. Hann, 3 Harrison, 223; Gullett v. Hoy, 15 Missouri, 399; Hankins v. Shoup, 2 Carter, 342; Chandler v. Drew, 6 New Hampshire, 469; Robinson v. Lyman, 10 Connecticut, 31; Stedman v. Jillson, Id. 56; Britton v. Bishop et al., 11 Vermont, 70; Robertson v. Breedlove, 7 Porter, 541; Tuscumbia, &c., R. R. Co. et al. v. Rhodes, 8 Alabama, 206, 224; Tinsley v. Beall, 2 Kelly, 134; Renwick v. Williams, 2 Maryland, 356. (4) Oulds v. Harrison, 10 Exchequer, 572.

(5) Sargent et al. v. Southgate, 5 Pickering, 312.

(6) Ranger v. Cary and others, 1 Metcalf, 369, 376; Baxter v. Little & Harris, 6 Id. 7, 11.

(7) Burnham v. Tucker, 18 Maine, 179; Wood v. Warren, 19 Id. 23; Bartlett v. Pearson, 29 Id. 9, 15.

(8) Nixon v. English, 3 McCord, 549; Perry v. Mays, 2 Bailey, 354; Cain v. Spann, 1 McMullan, 258.

(9) Stocking v. Toulmin, 3 Stewart & Porter, 35; Kennedy v. Manship and others, 1 Alabama, 43; Pitts v. Shortridge's Adm'r, 7 Id. 494.

against the endorsee equities which could not have been enforced against the endorser.(1) It is hardly necessary to add that primá facie the cashier of a bank or the treasurer of a corporation possesses the power to endorse its negotiable securities. (2)]

*OF THE PRESENTMENT OF A BILL OR NOTE AT THE TIME OF PAYMENT, IN ORDER TO CHARGE THE ENDORSER.

[*339

GEORGE McGRUDER, PLAINTIFF IN ERROR V. THE PRESIDENT, DIRECTORS, AND COMPANY OF THE BANK OF WASHINGTON,

DEFENDANTS IN ERROR.

In the Supreme Court of the United States.

MARCH TERM, 1824.

[REPORTED FROM 9 WHEATON, 598-602.]

Where the maker of a note has removed into another State, or another jurisdiction, subsequent to the making of the note, a personal demand upon him is not necessary to charge the endorser.

Such a removal is an excuse from actual demand.

THIS case came up on a writ of error upon a case stated from the Circuit Court of the District of Columbia, in which a suit had been instituted against the plaintiff here (George McGruder), as endorser of a promissory note drawn by one Patrick McGruder. Judgment was given below for the plaintiff's in the action.

At the time of drawing the note, and until within ten days of its falling due, the maker was a housekeeper in the District of Columbia. But he then removed to the State of Maryland, to a place within about nine miles of the District. The case admitted that neither the holder of the note, nor the notary knew of his removal or place of residence; but the circumstances of his removal had nothing in them to sanction its being construed into an act of absconding. The words of the admission to this point are, that he "went to the house where the said Patrick had

(1) Smith v. Hiscock, 14 Maine, 449.

(2) Maxwell v. Planter's Bank, 10 Humphreys, 507.