§ 2. PERMANENT EXCUSE OF BOTH PRESENTMENT AND NOTICE. The most common cases are waivers. A waiver is an aban What is meant donment or surrender of a known right, like gifts, requiring no consideration, and may be express or implied. 1 There is nothing to prevent the waiver by an by waiver: examples. indorser of all the conditions upon which his undertaking otherwise would depend. Thus he may write, in connection with his indorsement, the words 'waiving demand and notice,' or he may orally 2 waive demand and notice, or the instrument itself may be executed with such a waiver written in the body of it. Such act will make it unnecessary for the holder to take any of the steps ordinarily required for fixing liability, the word 'demand' being understood to include presentment. An unconditional promise to pay, or assurance of payment, made by the indorser, would have a like effect; it would be equivalent to an express waiver of the taking of Promise to pay, any steps. For example: The defendant is in- and the like. dorser and the plaintiff holder of a promissory note. The defendant being indebted to the plaintiff has given to him the note, indorsing it as security for the debt. The maker dies before the note matures, and afterwards before its maturity the plaintiff intrusts it to A for collection. A calls upon the defendant and asks him if he (A) should have the note protested against the maker's estate. The defendant replies that he need not do so, and says that the note shall be paid at maturity. A puts the note away in his portfolio, where it remains until after maturity, no steps being taken for fixing the defendant's liability. The taking of such steps is unnecessary. 1 Compare renunciation of rights. The holder may expressly renounce his rights against any party to the instrument before, at, or after maturity.' N. I. L. § 129. E. g. by striking out an indorsement. 2 An indorser may estop himself from setting up the benefit of a statute requiring waivers to be in writing. Hallowell Bank v. Marston, 85 Maine, 488 8 Phillips v. Dippa, 93 Iowa, 35. ♦ Glidden v. Chamberlin, 167 Mass. 486. Sigerson v. Mathews, 20 How. 496. Indeed, when an indorser says to the holder that an arrangement for payment of the paper is about to be made, and either in direct terms or by reasonable implication requests the holder to wait or to give time, that amounts to an assurance that the paper will be paid either by the promisor or by the indorser; and hence it is a waiver of presentment and notice. For it tends to put the holder off his guard and to induce him to forego the ordinary steps, so that it would be unjust to urge the omission of those steps thereafter. But it must be reasonably clear that the indorser's promise or assurance is to pay; words on occasions of the kind are not to be taken very strongly against the indorser. Thus for the indorser to say that he would 'stand good' for payment is not to say that he will pay, and is no waiver of steps.2 test: inland bills, etc. In the case of inland bills, promissory notes, and cheques, it seems that a waiver of protest' will have the like effect; Waiver of pro- clearly it will where the parties have already given that interpretation to such words in their previous recent dealings. For example: The defendant is indorser and the plaintiff holder of a promissory note. The defendant sends to the plaintiff a writing in the following words: 'I do request that hereafter any notes that may fall due in the Union Bank [the plaintiff], on which I am or may be indorser, shall not be protested, as I will consider myself bound in the same manner as if the said notes had been or should be legally protested.' The plaintiff and defendant have had a course of dealings founded upon interpretation of the writing as a waiver of all steps. No steps to fix the defendant's liability are necessary. 1 Gove v. Vining, 7 Met. 212; Bryant v. Wilcox, 49 Cal. 47; Moyer's Appeal, 87 Penn. St. 129. 2 Freeman v. O'Brien, 38 Iowa, 406. But this case appears to have leaned too far in favor of the indorser, in view of other facts which appear in it. An indorsement with the words 'eventually accountable' would waive presentment and notice. McDonald v. Bailey, 14 Maine, 101. So would writing the word 'Holden.' Bean v. Arnold, 16 Maine, 251. 3 Townsend v. Lorain Bank, 2 Ohio St. 345. 4 Union Bank v. Hyde, 6 Wheat. 572. See also Duvall v. Farmers' Bank, But the term 'protest,' in its legal sense, is naturally unsuited to any step required in the law of inland bills, promissory notes, and cheques. Still it is plain that the intention in a waiver of protest in such cases is something more than the idle one of waiving what is unnecessary; and hence a case for interpretation is raised. That may have been attended to by the parties, as we have seen; if the action of the parties has not furnished an interpretation, the court must do the best it can. In the authority from which the last example is taken, it was intimated that mere naked waiver of protest would not excuse the requirement of demand and notice (and it would not, in the case of a foreign bill); but it has been decided in other cases that such a waiver would be prima facie evidence of intention to waive demand and notice, since otherwise it would have to be treated as having no effect at all. And the same has been held of the anomalous expression, 'I waive demand of protest.'' This view has been adopted by the Statute. Waivers may be made not only before maturity, but afterwards as well, after the time for taking the steps has passed and the indorser has ceased to be under any liability. Waiver after It is a peculiarity of certain waivers, of which this maturity. one is an example, that their validity does not depend upon consideration or the doing or omitting to do anything in reliance upon them. Still when made after maturity, the supposed waiver must have been made with full knowledge that the indorser was discharged, in order to avail. And if the indorser 7 Gill & J. 44; s. c. 9 Gill & J. 31; Bird v. Le Blanc, 6 La. An. 470; Scott v. Greer, 10 Barr, 103. 1 Coddington v. Davis, 1 Comst. 186; Carpenter v. Reynolds, 42 Miss. 807; Townsend v. Lorain Bank, 2 Ohio St. 345; Brown v. Hull, 33 Gratt. 233. 2 Porter v. Kemball, 53 Barb. 467. 8 N. I. L. § 118: 'A waiver of protest, whether in the case of a foreign bill of exchange or other negotiable instrument, is deemed to be a waiver not only of a formal protest but also of presentment and notice of dishonor.' N. I. L. § 116; Sigerson v. Mathews, 20 How. 496; Rindge v. Kimball, 124 Mass. 209; Matthews v. Allen, 16 Gray, 594; Lewis v. Brehme, 33 Md. 412; Freeman v. O'Brien, 38 Iowa, 406. Ross v. Hurd, 71 N. Y. 14; Freeman v. O'Brien, supra; Glidden v. Chamberlin, 167 Mass. 486; Third Nat. Bank v. Ashworth, 105 Mass. 503; should actually make payment, supposing that his liability had been fixed when it had not, he could recover the money back.' If, however, the facts in the matter were known to the indorser when he made the promise to pay, or other waiver, that would be enough; that he did not know the legal effect of them would not, it is held, help him." Other excuses: transfer of funds. Next of excuse not by way of waiver. A common case of the kind arises where the maker or acceptor, or other party primarily liable (for the maker or acceptor may have signed for accommodation), places an available fund in the hands of the indorser with which to indemnify him if called upon to pay, the fund being sufficient for the purpose. Presentment and notice are deemed unnecessary in such a case; 3 the indorser takes the place of the one primarily liable. There may be ground for doubting whether the steps could be omitted where the fund was insufficient to indemnify the indorser; though it seems that the steps may be omitted where the entire estate of the maker or acceptor is put into the indorser's hands to indemnify him on his indorsement, for in such a case too the indorser virtually takes the place of the principal debtor. 5 Clearly, however, where the fund in question is put into the indorser's hand to satisfy demands which he is or may become absolutely bound to pay, the steps are not made unnecessary. For example: The defendant is indorser and the plaintiff holder of a promissory note. The maker has before maturity made an Sheridan v. Carpenter, 61 Maine, 83; Walker v. Rogers, 40 Ill. 278; Dey v. Martin, 78 Va. 7. 1 Sheridan v. Carpenter, supra. 2 Rindskopf v. Doman, 28 Ohio St. 516; Cheshire v. Taylor, 29 Iowa, 492; Glidden v. Chamberlin, 167 Mass. 486, 495; Third National Bank v. Ashworth, 105 Mass. 503; Matthews v. Allen, 16 Gray, 594; Givens v. Merchants' Bank, 85 Ill. 442, 444. 3 Beard v. Westerman, 32 Ohio St. 29; Develing v. Ferris, 18 Ohio, 170; Coddington v. Davis, 3 Denio, 16; s. c. 1 Comst. 186; Kramer v. Sandford, 4 Watts & S. 328; Perry v. Green, 4 Harrison, 61; Andrews v. Boyd, 3 Met. 434; Marshall v. Mitchell, 34 Maine, 227. But see 2 Daniel, Neg. Inst. 1125, 1143. See Watkins v. Crouch, 5 Leigh, 522. assignment of his property to the indorser in trust for the benefit of his creditors, among them the indorser, to secure them against all debts due them from the maker. The steps for fixing liability are omitted. The defendant is discharged; the proper interpretation of the assignment being deemed to be that it was intended as an indemnity against absolute liabilities only. Hence the assignment did not make the steps unnecessary.1 It may be too that to excuse the steps, the fund placed in the indorser's hands should be property, or securities available immediately, such as bonds payable on demand. It has been held that the putting into an indorser's hands ordinary choses in action as collateral security, by which is probably meant choses not at once available, will not excuse the steps. So if the funds in the indorser's hands have arisen from business in which the indorser is a partner with the maker or acceptor, there is no sufficient reason for omitting the steps, especially where such funds can be used only for the payment of paper at maturity. So also where the funds are held by the indorser as executor or administrator of the estate of the maker or acceptor, they cannot be considered as immediately available to indemnify him; they are not put there for that purpose, and the executor or administrator cannot prefer himself.* In case the indorser should prove to be the primary debtor at the outset, the maker or the acceptor having acted merely for his accommodation, he would not be entitled to Indorser being presentment and notice any more than if he had primary debtor. appeared upon the paper in his true character. He cannot suffer prejudice by the omission, because there is no one, party to the paper, bound to indemnify him, or if there be one liable 1 Creamer v. Perry, 17 Pick. 332. 5 2 Kramer v. Sandford, 4 Watts & S. 328; Seacord v. Miller, 3 Kern. 55; Otsego Bank v. Warren, 18 Barb. 290. 3 Ray v. Smith, 17 Wall. 411. Juniata Bank v. Hale, 16 Serg. & R. 157; Magruder v. Union Bank, 3 Peters, 87; s. c. 7 Peters, 287. • Bank of Old Dominion v. McVeigh, 26 Gratt. 785; Witherow v. Slayback, 158 N. Y. 649, 660; N. I. L. § 87, which adds, if the indorser 'has no reason to expect that the instrument will be paid if presented.' |