holder on the half of a bank note that has been severed for safe transmission by mail from one place to another; for here the owner of the bill has no right of action upon the instrument itself, and is not entitled to recover the face of the note until he has shown himself the owner, and accounted for the lost or absent half. And if he neglects to do this before bringing his action, it has been heid that he cannot recover either interest or costs of suit.' $666. When property is given in pledge or as collateral security for the payment of a promissory note, a demand of payment must be made before the pledgee can proceed to sell the security deposited with him. And the rule is the same, although the debt is payable presently and without demand, and notwithstanding, by the terms of the pledge, the creditor may sell at public or private sale, without giving notice to the debtor. The object here is to give the owner an opportunity to redeem the pledge.* So where a draft on a third person is given in settlement of an antecedent debt, it is the duty of the holder to present it, and give notice of its dishonor if not paid, and a failure to do so will discharge the debt. So where a note shows on its face that collaterals have been deposited with the payee as security for its payment, a demand of payment without producing the collaterals or having them in readiness to surrender on payment of the note, will not be sufficient to charge the indorser." 667. Although a presentment for payment is not *483 Hinsdale v. The Bank of Orange, 6 Wend., 378; Com. Bank v. Benedict, 18 B. Mon., 307, 506. * Bank of Virginia v. Ward, 6 Munf., 166; Farmers' Bank v. Reynolds, 4 Rand., 186. 34 Rand., 186. In Kentucky it is necessary to show on the trial a presentment of notes made payable at a bank, for payment, but it is not necesaver a demand in the complaint. Bank of K. v. Hickey, 4 Litt., sary to 225. Edwards on Bailm., 250. The pledgee has no right to sell negotiable paper, unless the right be specially given him by the terms of the pledge; 3 6 Mauney v. Coit, 80 N. C., 300. necessary for the purpose of perfecting or completing the liability of the acceptor of a bill or of the maker of a note, it is a condition precedent to the liability of the drawer and in, dorser.' And where the note is payable on demand there must be a presentment and notice within a reasonable time to charge the indorser. The holder is required to perform two distinct acts in order to charge these parties, or, what is the same thing, in order to convert the conditional contract made by them into an absolute undertaking. And hence a waiver of notice of non-payment by an indorser does not, according to the law merchant, dispense with the demand itself. But a waiver of protest, where the term is evidently used in its popular acceptation, is a waiver of both demand and notice.* In one of the earlier cases the duty of the holder in presenting for payment is stated by Lord MANSFIELD in these words: "We are all of opinion that in actions upon inland bills of exchange, by an indorsee against an indorser, the plaint iff must prove a demand of or due diligence to get the money from the drawee (or acceptor), but need not prove any demand of the drawer: and that in actions upon promissory notes, by an indorsee against the indorser, the plaintiff must prove a demand of or due diligence to get the money from the maker of the note." The same rule applies with equal force to foreign as well as inland bills; and includes within itself an exception in favor of those cases in which the holder is unable to make a demand, with the exercise of due diligence." Mr. Justice KENT states the rule with the same qualification: "I have always understood the law to be well settled that 484 the drawer of a bill is only responsible after a default on the part of the acceptor; and that the holder must first 1 Cuyler v. Stevens, 4 Wend., 566; Cayuga Co. Bank v. Warden, 1 Comst. R., 413. Notice of non-payment to the drawer or indorser is also a condition precedent. Lawrence v. Dabyns, 30 Mo., 196. 2 Salmon v. Grosvenor, 66 Barb., 160; Strong v. Duke, 5 Alb. L. J., 350. 3 Berkshire Bank v. Jones, 6 Mass. R., 524; Backus v. Shipherd, 11 Wend., 629. 4 Coddington v. Davis, 1 Comst. R., 186. 5 Heylyn v. Adamson, 2 Burr., 669. This case shows that from inaccuracy in the previous reports, it had been inferred that a demand of payment was also necessary to be made upon the drawer. demand payment or use diligence to demand it of the acceptor, before he can resort to the drawer." And the indorser, being a new drawer, is responsible on the same terms, whether his indorsement was made before or after the bill became due.' When the holder of a note that is overdue, transfers it by indorsement, it is to be considered as a note payable on demand, and the demand and notice must be made within a reasonable time. 668. What will excuse non-presentment for payment.Where the maker of a note or the acceptor of a bill has absconded, or cannot be found with the use of due diligence, a personal demand is out of the question; and, in such cases, the former practice was to aver presentment and notice, as if the same had been made and given in the ordinary manner; and it was held that evidence of due diligence in the holder, to obtain payment, without an actual demand, would support the averment, and be received as equivalent to an actual presentation of it to the maker or acceptor. But it has been suggested, with great propriety, that the averment should correspond with the fact-a suggestion that has the force of law in 1 Munroe v. Easton, 2 John. Cas., 75. 2 Berry v. Robinson, 9 John. R., 121. "The plaintiff was properly nonsuited, for not proving demand of payment of the maker, and notice of his default to the indorser. Though the note was indorsed long after it was due, yet the indorsee took it subject to this condition. The indorsement, in every case where a drawer really exists, is a conditional contract to pay in the event of a demand, or due diligence to make a demand on the maker, and his default. It was equivalent, in this case, to an order on the drawer to pay the amount." 3 Van Hoesen v. Van Alstyne, 3 Wend., 75. This case seems to assume that the holder of such a note is not bound, as in other cases, to give immediate notice of dishonor. See 1 Cowen, 387; 3 id., 252; 3 Comst., 494. 4 Stewart v. Eden, 2 Caines, 127; Williams v. Matthews, 3 Cowen, 262; Saunderson v. Gist v. Sy brand. 3 Ohio, 307; Putnam v. Sullivan, 4 Mass., 45; 6 id., 449; 3 Met., 495; Duncan v. McCullough, 4 Serg. & R., 480; 4 Leigh, 114. When the notary makes inquiry for the makers of a note at their last place of business, and diligently follows up the inquiry from the person to whom he is there referred as the agent of the makers, demanding payment of such supposed agent, and being by him informed that the makers c supposed to be out West, he uses due diligence. Adams v. Leland, 5 Judge, 1 H. Bl., 510; Ogden v. Cowley, 2 John. R., 274; Bosw., 411. those states where it is appropriate or necessary that the pleadings should be verified.' 669. The fact that the maker of a note has absconded, does not at all affect the contract of the indorser; it oper485 ates only upon the question of diligence, in respect to the proper steps to be taken by the holder in order to charge him. Thus, where the objection was made by the defendants, who were sued as indorsers, that no demand had been made on the promisor, when the note became payable, Chief Justice PARSONS, pronouncing the opinion of the court, says: "As to this objection, the facts are, that on the first day of grace, which was the last day of February, notice was left at the lodgings of the promisor, that the note would be due on the last day of grace, with a request to pay it then; but it also appears that before that time it was known to the parties that he had absconded, and, when the note was payable, he was not to be found. The condition on which an indorser of a note is holden, is, that the indorsee shall present the note to the promisor, when due, and demand payınent of it, if it can be done by using due diligence. Now, it appears that when the note, in this case, was due, it could not be presented to the promisor for payment, and that there was no neglect in the indorsees. We are all, therefore, satisfied that the indorsers are holden on the indorsement in this case, notwithstanding there was no demand on the promisor." So, where the maker has removed from the state, or gone out of the country, after having made the note, the holder is excused from demanding payment of him personally. The diligence demanded by the law does not require the holder to hunt up an abscounding debtor, or to follow one who removes from the state or country, in order to present his note for payBut where there has been no removal after the making of the note, the holder must present it for payment to the maker personally or at his residence or place of business, no 1 Blakely v. Grant, 6 Mass., 386; see chap. vi., title II. Code of Civil Procedure. 99. 2 Putnam v. Sullivan, 4 Mass., 53; Leffingwell v. White, 1 John. Cas., 3 Widgery v. Munroe, 6 Mass., 449; Anderson v. Drake, 14 John. R., 114. As to effect of debtor's removal on contract of guaranty, see ante, 236. 4 Galpin v. Hard. 3 McCord, 394; 14 John. R., 114; see ante, 159. $ matter whether that be in the state where the note was made or in a foreign country.' The exceptions to the general rule requiring demand and notice are: where the *maker has absconded; when *486 the maker is a seaman on a voyage, having no domicil in the state; when he has no known residence or place of business at which the note can be presented for payment; when the bill is drawn without funds in the hands of the drawer and in bad faith,' death of the drawer," illness, or other reasonable cause or accident; breaking out of war, blocking up the channels of communication; prevalence of epidemics; inevitable accident, have been treated of in a former part of this work, and when the maker of a note removes from the state, and takes up a permanence residence elsewhere, before it becomes payable, the holder is not bound to follow and search him out, for the purpose of making the usual demand of payment." It would be unreasonable to compel the holder to find an absconding debtor, at the peril of losing his recourse to the indorsers; or to follow a sailor on his voyage, or to seek out a person who has no fixed residence or place of business; or to follow a person who resides and makes a note here, into another state or foreign country, in order to present the same for payment. Neither the payee nor the indorsee of a note could have anticipated the absconding, absence or removal of the maker; and 1 Gilmore v. Spies, 1 Barb. R., 158; S. C., 1 Comst. R., 321; Gillespie v. Hannahan, 4 McCord, 503; Bruce v. Lytle, 13 Barb., 163; Hunt v. Maybee, 7 N. Y., 266; Wolfe v. Jewett, 10 La. Ann., 383; Hale v. Burr, 12 Mass., 89; but see Grafton Bk. v. Cox, 13 Gray, 503. 1 Lord Raym., 443, 742; Putnam v. Sullivan, 4 Mass. R., 53; Lechman V. Jones, 1 Watts & Serg., 126; Ratcliff v. Planters' Bank, 2 Sneed, 425, 555; ante, 159, 399. 456. 3 Barnett v. Willes, 4 Leigh, 114. 'Dennie v. Walker, 7 N. Hamp., 199; Whittier v. Graffam, 3 Greenl., & 82. If the party have a residence here, a demand must be made at his residence. Putnam v. Sullivan, supra; Duncan v. McCullough, 4 S. & R., 480. 'Ante, 449. 6 * Ante, 454. 'Ante, 458. Ante, 459. 'McGruder v. Bank of Washington, 9 Wheat., 588; Anderson v. Drake, 14 John. R., 114; Gillespie v. Hanahan, 4 McCord R., 503; Reid v. Morrison, 2 Watts & Serg., 401; Wheeler v. Field, 6 Metcalf, 200; 3 Ohio R., 307; Louisiana State Ins. Co. v. Shamburgh, 14 Martin R., 511; Central Bank v. Allen, 16 Maine R., 41; Taylor v. Snyder, 3 Denio, 151; Grafton Bk.v. Cox, 13 Gray, 503; Herrick v. Baldwin, 17 Min., 209. |