FIRST NATIONAL BANK OF DAVENPORT, Appellee, vs. PRICE & SANFORD, Appellants.

Filed December 9, 1879.

A draft drawn without specifying time for payment is payable on demand, and not entitled to grace. Chapter 81, Laws Sixteenth General Assembly, does not change this rule. A draft mentioned no time for payment, but provided for interest at 10 per cent. per annum after maturity. Held, not to show that it was not to be presented at once for payment. A draft specifying no time of payment was forwarded to defendants for collection. They presented it for acceptance the day after its receipt. The day following notified indorser of its receipt, requesting telegraph instructions if protest was desired. Indorser telegraphed to protest, on receipt of which defendants demanded payment, which being refused, the draft was protested, the indorser (plaintiff) subsequently remitting defendant the protest fees. Held, that instructions to protest, and payment of fees therefor, was no ratification of defendant's presentment for acceptance and failure to present for payment within a proper time.—[ED.

Appeal from Clinton district court.

The plaintiff filed a petition claiming of the defendants $170.56, and for cause thereof alleging "that the defendants are copartners and bankers in DeWitt, Clinton county, Iowa, and act as agents for collection of such bills and notes as may be transmitted to them for that purpose; that on the eighteenth day of June, 1877, Dow, Gilman & Hancock, a firm doing business under that name, executed and delivered to the plaintiff a certain bill of exchange or draft, as follows:

"167.40.

66

DAVENPORT, June 18, 1877. 'Pay to the order of the First National Bank of Davenport, Iowa, $167.40, with 10 per cent. interest after maturity, value received, and charge the same to account of, with exchange. To J. G. Pearse, DeWitt, Iowa.

"Dew, GILMAN & HANCOCK.' -"That on the same day, to-wit, June 18, 1877, the plaintiff caused the said draft or bill of exchange to be indorsed as follows, by L. G. Gage, its cashier:

'Pay to Price and Sanford, or order, for collection, account of First National Bank of Davenport, Iowa.

L. G. GAGE, C.'

"And forwarded the same to the said defendants to be collected of the said J. G. Pearse, at De Witt, Iowa, where both the said Pearse and the defendants reside, and the same was received by the said Price and Sanford on the same day, or the day following; that it was the duty of defendants to have presented said draft to said J. G. Pearse, and have demanded payment thereof without delay, and to notify the parties

interested if payment had been refused; that defendants had opportunity to present said draft to said Pearse, and demand payment thereof on nineteenth of June, 1877, the day after the date thereof, but instead of demanding payment of the said draft or bill of exchange on the nineteenth day of June, 1877, they presented the same to the said J. G. Pearse, and demanded acceptance thereof only, and the said draft was then and there accepted by the said J. G. Pearse by writing on the face of said draft as follows: Accepted, June 19. 'J. G. PEARSE.'

"No presentment of said draft was necessary for any purpose except for payment; that the same was payable upon demand, and that demand for payment thereof should have been made by defendants at or before the time the same was accepted by said J. G. Pearse, on the nineteenth day of June, 1877, and notice given to the payee and drawers of said bill if payment thereof had been refused. But defendants did not demand payment of said draft or bill of exchange until the twenty-second day of June, 1877, when payment thereof was refused by the said J. G. Pearse, of which plaintiff received notice on the twenty-third day of June, 1877; that in consequence of the failure of the said defendants to present the said draft or bill of exchange for payment without delay, as they ought to have done, and to notify the payee and drawers of the non-payment thereof if payment had been refused, the drawers of said bill of exchange became and are released from all liability thereon, and refuse to pay same, whereby the defendants became liable to plaintiff for the damage it has thereby suffered; and plaintiff has been damaged to the full amount of said bill of exchange, and $3.16 protest fees. A copy of the bill of exchange and the certificate of the protest thereof is attached to the petition, and shows, in addition to the facts set forth in the petition, that the bill of exchange was presented to J. G. Pearse for payment on the twenty-second day of June, 1877, and on the same day was presented for non-payment, and due notice thereof given to the plaintiff and Dow, Gilman & Hancock." The defendants filed their answer, alleging

"1. That they did present said bill of exchange to said J. G. Pearse, and demanded payment thereof, and gave notice of its non-payment to the drawees and indorser thereof, within a reasonable time after they received the same, as required by law.

"2. That said Dow, Gilman & Hancock only drew said

bill of exchange in favor of plaintiff for the purpose of collection.

"3. That said draft was by them received after banking hours on the eighteenth day of June, 1877, and was by them presented for acceptance on the nineteenth day of June, 1877, and the same accepted by J. G. Pearse.

"That on the twentieth day of June, 1877, said defendants wrote to said plaintiff acknowledging receipt of said draft and the letter accompanying the same, and requesting plaintiff to telegraph to said defendants if they wished said draft protested, which said letter was received by plaintiff in the usual course of the mail on the twentieth or twenty-first day of June, 1877. That said plaintiff, after receipt of said letter from said defendants, and well knowing that said draft had not been presented for payment, and payment demanded on the twenty-second day of June, 1877, in answer to plaintiff's said letter, telegraphed to said defendants to protest said draft, which telegram was received by said defendants on the twenty-second day of June, 1877, and thereupon the defendants did cause demand of payment of said draft to be made of said Pearse, which was refused, whereupon the same was duly protested, and notice giving to the drawers and indorser of said draft, as directed by said plaintiff in said telegram. That on the twenty-fifth day of June, 1877, said defendants returned by mail to said plaintiff said draft, and the certificate of protest of the same, which were received by said plaintiff on the twenty-fifth or twenty-sixth day of June, 1877.

"That said plaintiff, with full knowledge that defendants had presented said draft to said Pearse for acceptance on the nineteenth day of June, 1877, and that said Pearse had on said day accepted the same, and that said defendants had presented the said draft to said Pearse for payment on June 22, 1877, and not before that date, and that payment was refused, and the said draft protested on said twenty-second day of June, and notice given to the drawers and indorsers of said draft on said day, and knowing fully all the facts in relation to what defendants had done with the draft, approved the acts of said defendants in relation thereto, and on the twenty-sixth day of June, 1877, knowing all of said facts as aforesaid, said plaintiff, approving of the acts of said defendants in reference to said draft, and accepting the same, remitted to defendants $3.16, being in full payment of their services in making demand of payment, protesting and giving v3-41 (no. vi) (641)

notice of demand and non-payment of said draft; that said plaintiff approved the acts of said defendants in relation to said draft, and continued to so approve and adopt the same till the sixth day of July, 1877, when, learning that said Pearse was entirely insolvent and about to petition to be adjudged a bankrupt, the plaintiff claimed that defendants had failed to exercise due diligence in presenting said draft for payment."

The plaintiff demurred to the first and third counts of the defendants' answer. The demurrer was sustained. The defendants excepted, and elected to stand by the defences set forth in these counts of their answer. Trial was had to the court on the issue raised by the second count of the answer, and the court found thereon for the plaintiff, and rendered judgment against the defendants for $187.03. The defendants appeal, and assign as error the sustaining of the demurrer, and rendering judgment for the plaintiff.

Merrell & Howat, for appellants.

Cook & Richman, for appellee.

DAY. J. 1. It is urged by the appellants that the draft in question is entitled to grace, and that, therefore, the presentation for payment was made in due time.

In 1 Parsons on Notes and Bills, 381, it is said: "A note or bill in which no time of payment is mentioned is equivalent to a note on demand;" and on page 407 it is said: "Grace has never been extended to notes and bills on demand." It seems to be conceded by counsel for the appellants that, according to the rules of the law merchant the draft in question is payable on demand, and is not entitled to grace. It is claimed, however, that chapter 81, Laws of Sixteenth General Assembly, changes the rule of the law merchant upon this subject. This chapter provides "that all bills of exchange, drafts and orders payable within this state, except those drawn payable on demand, shall be entitled to grace." It is claimed that, under this statute, all bills of exchange, drafts or orders are entitled to grace, unless it is expressly stated upon their face that they are payable upon demand. This construction of the statute, we think, is not correct. It is not the purpose of the statute to effect any change upon the character of the instruments which shall be regarded as payable on demand.

The statute has reference to the existing rules of the commercial law upon that subject. A draft or bill on which no time for payment is mentioned, is, under the statute, drawn

payable on demand just as effectually as though the words "payable on demand" had been incorporated into it.

2. It is urged, however, that the fact that the draft is drawn with ten per cent. interest after maturity shows that it was intended to have been presented for acceptance, and not at once for payment. In support of this position, 1 Parsons on Notes and Bills, 379, is cited. The weight of authority does not support this position. See Parsons on Notes and Bills, 379, note z.

3. The facts alleged in the third count of the defendants' answer constitute no defence. These facts are, in substance, that the plaintiff, upon being advised of the presentation of the draft for acceptance, directed the defendants by telegram to protest the draft, and afterwards remitted to the defendants $3.16 in full payment for their services in making demand of payment, protesting and giving notice of demand and nonpayment. These facts constitute no ratification of the act of the defendants in presenting the draft for acceptance, and in neglecting to present it for payment in proper time after it was received. The demurrer to this count of the answer was properly sustained.

Affirmed.

ANTHONY BURDICK, Guardian, vs. C. H. KENT and others.

Filed December 10, 1879.

A surviving husband or wife is entitled to occupy the homestead until his or her distributive share of the estate is set off; and where a surviving husband elected to take his distributive share, in lieu of a right to occupy the homestead, which share had not been fully admeasured and set off at the time of his death, the only real estate being a homestead: Held, that he had no property therein that could be subjected to the payment of his debts, and that the order of the court adjudging him entitled to a distributive share, and ordering a sale of the property for the purpose of setting it off, was, after his death, properly vacated, and the sale restrained. -[ED.

Appeal from Scott circuit court.

Action to set aside an order or judgment of the circuit court. There was a decree for the plaintiff, and the intervenor, Thompson, appeals.

Charles Whitaker, L. M. Fisher and D. B. Nash, for appellant.

Clark & Heywood, for appellee.

SEEVERS, J. Rosalie Campbell was the owner of the real estate in controversy, and at the time of her death it was occupied by her and William P. Campbell, her husband, as