The acceptance and note bore date the same | copartnership funds which ought to have been day, and became due the same day; and the applied to the payment of this draft. He got whole case turns upon the steps taken to demand $8,000 in first class, and full indemnity in the payment, and give notice of nonpayment of next, and no account of the proceeds of the this draft.

cotton.

7. That Timberlake knew that the acceptor had assigned all the funds of the copartnership prior to the maturity of the draft, and so *knew it could not be paid; and Mr. [*474 Rhett was the assignee, and has received the fund.

Mr. Rhett contends that the note on which he was indorser was only a collateral security; and if the holder, by any laches, has made the draft his own by discharging any of the parties, he is paid, and the collateral note is discharged; and he charges that D. Timberlake was discharged, as drawer of the bill, by neglect to give him notice of its nonpayment. That, as sureties, the parties to the note are entitled to their remedy over against Timberlake, the drawer; and it was the duty of the holder to give him due notice, in order to fix his liability; and having neglected to do so, the note is not oblig-quire the court to state the law on any supposed atory.

To this defense, the defendant in error an

swers:

1. That the note and draft were contempora473*] neous securities for *the payment of one sum of $8,000 on the 11th July, and that the failure of the acceptor of the bill to pay it at maturity, instantly rendered all the parties to the note liable; and having received due notice of the nonpayment of the draft, by being notified as indorsers of the note, they are bound as of 11th July, 1837; and if they desired to make use of the bill, they were bound to pursue their remedy by paying the note and receiving the draft. No obligation attached to the holder to do more than demand payment, and on its refusal, to resort to his other security for the debt. The note was not an ultimate security dependent upon exhausting the remedies upon the bill, but a concurrent one, and was perfected by the mere dishonor of the draft by the accept

or.

2. That as far as relates to the plaintiff in error, even if it had a right to require the holder to give notice to Timberlake, and had a right to the draft, he has sustained no damage, as the said Timberlake was wholly insolvent at the time it became due; and even as surety he can only claim to the extent of the loss proved. 3. That, in fact, the holder did use due diligence to fix the drawer, by using the ordinary means to give him notice.

That the drawer left the State where he transacted business, and had his domicile when the draft was negotiated, and without giving any notice to the holder where notice would reach him; and so, being out of the realm, he was not entitled to notice.

And so the defendants in error will contend that R. Barnwell Rhett was bound, as indorser, to pay the said note of $8,000, and that the instructions by the court contain the true legal positions arising out of the cause; and they deny that the plaintiff in error was authorized to re

case, or any imperfect statement of this case. It is enough if the court state the rules of law correctly, and leave the jury to apply them.

That if the court think that there was no other connection between the note sued upen and the draft of $8,000 than this; that the holder was to demand payment of the draft at maturity, and in default of payment, was authorized to resort to the note immediately—and did so-and gave due notice to the parties on the note-and was not bound to do more-then the instructions were immaterial, and the necessity of any notice, and the fact of due diligence as to the bill did not arise in the case.

1st Point. The note, even if collateral, was a security that the bill was good and would be paid at maturity, and the moment it was dis honored the note became absolute and the right of action accrued, and there is no dispute that the parties to the note were duly notified.

The holder of the bill was not obliged to notify the drawer; the notice to the indorser of the note was sufficient, and they were bound to look to the parties to the bill and fix them.

The note was a security that the bill would be paid at maturity. (See Trimble v. Thorne, 16 Johns. Rep., 152.) The parties to the note were bound to pay it at maturity in the order of notice.

If so, then has Poe lost his claim; the neglect to notify is by way of discount. It is a demand independent of the note. Rhett was no party to the bill.

Suppose Rhett had paid the note, could he then recover against Poe for neglect? What sort of contract? Was he agent? The delivery of the note with no condition was absolute: the memorandum in pencil does not alter the contract.

4. That said Timberlake and Benjamin R. Smith were copartners in relation to the said The party who receives a guaranty is not draft, and were equally bound to have pro- bound to give notice; the guarantor must look vided funds for its payment; and a notice and de-out for his own safety. (2 H. Black., 616.) mand upon one copartner was a notice to both, and so said Timberlake is responsible, being a copartner, as acceptor of the bill as well as drawer.

5. The said Timberlake was not entitled to notice, and was liable on said draft without notice, because he had intercepted and used the copartnership funds, which ought to have been applied to the payment of that draft.

6. The defendent in error also contends, that Mr. Rhett cannot complain of any want of notice, inasmuch as he has received, as a preferred creditor of the acceptor, the identical

The guarantor is bound without notice where the drawer is insolvent, unless he proves that some special damage accrued from the #failure to give notice. A distinction [*475 is recognized between parties to a bill and guarantors. (2 Peters, 497.)

The same strictness of proof is not necessary to charge the guarantor as in an action on the bill itself. (8 East, 245.)

In 6 Vesey, 734, Lord Ellenborough says there is no obligation of active diligence on the part of the creditor, as far as the surety is con cerned. The law merchant is confined t

But this court have said that absconding means quitting his house in a secret manner. The case quoted from 2 Peters decides this. But the northern merchants come to the south to buy cotton and go away when the season is over. These men cannot be outlawed. The evidence 478*] shows that Timberlake resided in New York. [Mr. Legaré referred to the evidence.] The case in 2 Peters, 96, only says that where parties live in the same town, notice must be left at the residence; but if he absconds, due diligence only need be used.

As to absconding, see 9 Wheat.,598; 3 Taunt., 130; Chitty on Bills, 401; 1 Lord Raymond, 743, a leading case, where a house was shut up, which is an act of bankruptcy in England. (9 Serg. & Rawle, 201; Chitty, 486.) Chitty says (486) if there is no residence, due diligence must be used. Has it been used in this case?

[Mr. Legaré remarked upon the evidence.] It is said that there was a partnership. If Timberlake and Smith were partners, all who draw and redraw are so. They agreed to purchase stocks, but did not buy them; and took back the money. Afterwards Timberlake bought stocks on his own account, and permitted Smith to come in.

Mr. Justice DANIEL delivered the opinion of the court:

ond, third, and fifth instructions of this second series that exceptions are taken. To the first proposition affirmed by the court in this first instruction, it is difficult to imagine any just ground of objection on the part of the defendant below, as that proposition concedes almost in terms the prayer of that defendant. To the second branch of this instruction, it is not perceived that any valid objection can be sustained; for, although it might have been true that at the date of acceptance of Timberlake's draft on Smith for $8,000, the latter had been in possession of $10,000 placed in his hands by Timberlake, it would not follow under the circum stances proved, or under those assumed in the instruction, that Timberlake as the drawer of that draft was entitled to notice. If, as the instruction supposes, the acceptances for $21,500, which Smith had come under for Timberlake, were drawn for the accommodation of the latter, upon the faith of funds to be furnished by him for their payment; that the $10,000 had been furnished by Timberlake in part for that purpose, but had been withdrawn by him for his own uses prior to the maturity of the draft for $8,000-that he should have intercepted before the maturity of the draft all the funds against which he knew the acceptances of Smith were drawn, and that he, the drawer, and Smith, the acceptor, had, before such maturity, become The instrument upon which this suit was in- notoriously insolvent, under such a predicament stituted in the Circuit Court was, as the afore the law would not impose the requirement of going statement evinces, in form simply a com- notice to the drawer upon the holder. No mon promissory note, signed by Benjamin R. useful or reasonable end could be answered by Smith, made payable to William E. Haskell, such a requisition. Where a drawer has no indorsed by Haskell to Robert Barnwell Smith, right to expect the payment of a bill by the acalias Robert Barnwell Rhett, and by this last ceptor, he has no claim to notice of nonpayment. individual to Robert F. Poe, cashier of the This is ruled in the following cases: "Sharp v. Bank of Augusta, the plaintiff in the action. Baily (9 Barn. & Cress., 44), 4 Mann. & Ryl., Such being the nature of the instrument, and it 18; Bickerdike v. Bollman (1 T. Rep., 405), appearing that the formalities of demand at its Brown v. Meffey (15 East, 221), Goodall v. maturity, and notice to the indorsers have been Dolly (1 T. Rep., 712), Legge v. Thorpe (12 regularly fulfilled by the holder, a question as East, 171). If the $1,000 said to have been in to the justice of a recovery by the latter could the hands of Smith were by the agreement or scarcely be suggested, if the rights and obliga- understanding between Smith and Timbertions of the several parties shall be viewed as lake to be applied in payment of joint claims dependent upon their relation to the note itself against them, and falling due before the draft considered as a distinct and separate transac for $8,000, and had been so applied, it had an tion. Such, however, is not precisely the at- swered the sole object for which it had been titude of the parties to this controversy. It is raised, and could not in the apprehension of in proof that there was held by the plaintiff be- *these parties constitute a fund against [*480 low, beside this note, a draft for $8,000 drawn which the draft of $8,000 subsequently to beby Timberlake on the 6th of May, 1837, at come due was drawn. Those $10,000 were sixty days, in favor of the plaintiff, on Benja- gone, were appropriated by these parties them min R. Smith, and accepted by Smith; and selves. Then if, after this appropriation, there further, that upon the note was written by the was, as this instruction assumes, an arrangement plaintiff's agent, a memorandum in the follow-between Timberlake and Smith in respect to ing words: This note is collateral security for the payment of the annexed draft of D. Timberlake on B. R. Smith of $8,000." Upon the effect of both these instruments, as constituting parts of one transaction, the questions propounded to the Circuit Court and brought hith479*] er for review have arisen. The further proofs contained in this record will be adverted to in the progress of this opinion, as notice of them shall become necessary to explain the instructions prayed for, and those given by the Circuit Court on the trial of this cause. The second series of instructions, embracing a more extended and varied survey of the evidence than is contained in that preceding it, will be first considered. It is to the first, sec

64

the bills drawn by Timberlake to the amount of $21,500, that he was to put Smith in funds sufficient to pay $13,500 of the amount just mentioned, which were to become payable be fore the $8,000 draft, and that on Timberlake's supplying those funds Smith was to pay the $8,000 draft, and Timberlake failed to put Smith in funds to take up the $13,500, and that the drafts for the same were protested, of which Timberlake had notice, he, Timberlake, could have no claim to notice of nonpayment of the draft for $8,000. There could be no reason for such a notice from the holder of the draft. Timberlake could have had no right to calculate on the payment of this draft: on the contrary. he was bound to infer its dishonor. He knew

that payment of the draft for $8,000 was dependent upon a condition to be performed by himself, and he was obliged to know from the notice of the dishonor of all his bills, that he had not performed that condition, and had thereby intercepted the very funds from which the acceptances by Smith were to be met. He therefore quoad this draft had never any funds in the hands of Smith, and consequently, never had any claim to notice of nonpayment from the holder.

with reference to the testimony which is shown to have preceded it, upon which, in truth, it was prayed; with reference, also, to the reasonable conclusions which that testimony tended obviously to establish. Interpreted by this rule, it amounts to this, and this only, a declaration to the jury that if the evidence satisfied them of the residence of Timberlake in Augusta at the time of drawing the draft, of the certainty and notoriety of his having abandoned that residence and the entire State before its maturity, The case of Claridge v. Dalton, in 4 Maule & leaving behind him no knowledge of any place, Selw., is strongly illustrative of the principle either of his residence or for the transaction of bere laid down. That was a case in which the his business, satisfied them also of the real but drawer had supplied the drawee with goods unavailing effort of the notary who protested which were still not paid for. To this extent, the draft to discover his whereabouts, they then, the former unquestionably had funds in ought to infer that due diligence had been the hands of the latter; but on the day of pay-practiced by the holder of the draft. In the ment of the bill the credit upon which the case of an indorser, with respect to whom goods were sold had not expired, and the court greatest strictness is always exacted, it has been thereupon unanimously ruled that quoad the ruled that the holder of a bill is excused for obligations of the parties arising upon these not giving regular notice of dishonor *to [*482 transactions, the drawer must be understood as the indorser, of whose place of residence he is having no effects in the hands of the drawee, ignorant, if he use reasonable diligence to disand therefore not entitled to notice. The sec- cover where the indorser may be found. Thus, ond instruction affirms in the first place, what Lord Ellenborough, in Bateman v. Joseph (2 must be admitted by all, and what is not under- Campb., 462) remarks: When the holder of stood to be matter of contest here, viz. that a bill of exchange does not know where the inwhenever a party to a bill or note is entitled to dorser is to be found, it would be very hard if notice, such notice, if not given him in person, he lost his remedy by not communicating immust be by a timely effort to convey it through mediate notice of the dishonor of the bill; and the regular or usual and recognized channels I think the law lays down no such rigid rule. of communication with the party or his agent, The holder must not allow himself to remain in or with his known residence or place of busi- a state of passive ignorance, but if he uses ness. It is to so much of this instruction as is reasonable diligence to discover the residence 481*] applicable to what may amount to *a of the indorser, I conceive that notice given as dispensation from the regular or ordinary soon as this is discovered is due notice within modes of affecting parties with notice, that ob- the custom of merchants." See to the same jection is made; to that portion in which the effect 12 East, 433; Baldwin v. Richardson et al. court charged the jury that if they believed (1 Barn. & Cress., 245), Bereridge v. Burgis (3 from the evidence that although Timberlake Campb., 262). It has been held in Massachumay have resided in New York that he had setts that where the maker of a promissory since the autumn of 1834 or 1835 made Augusta note had absconded before the day of payment, his residence, and that he had removed from presentment and demand could not be required Angusta, and out of the State of Georgia after of the holder in order to charge the indorser, the bill for $8,000 was drawn and before its (Opinion of Parsons, Chief Justice, in Putnam v. maturity, that then due diligence had been Sulliran, 4 Mass. Rep., 53). In Duncan v. Mcused to give him notice of the dishonor of the Cullough (4 Serg. & Rawle, 480), it was ruled bill. It is not considered by this court that that if the maker of a promissory note is not to this charge in any correct acceptation of it be found when the note becomes due, demand trenches upon the legitimate province of the on him for payment is not necessary to charge jury, or transcends the just limits of the au the indorser, if due diligence is shown in enthority of the court, or contravenes any estab- deavoring to make a demand. Hartford Bank lished doctrine of the law. 'Tis a doctrine gen- v. Stedman (3 Conn. Rep., 487), where the erally received, one which is recognized by this holder of a bill who was ignorant of the incourt in the case of The Bank of Columbia v. dorser's residence, sent the notice to A, who Lawrence (1 Peters, 578), that whenever the was acquainted with it, requesting him to add facts upon which the question of due diligence to the direction the indorser's residence, it was arises are ascertained and undisputed, due dil- held that reasonable diligence had been used. igence becomes a question of law; see, also, The The measures adopted in this case by the holdBank of Utica v. Bender (21 Wendell, 643). In er of Timberlake's draft, when viewed in conthe case before us every fact and circumstance nection with the condition and conduct of the in the evidence which was to determine the res- drawer himself, appear to come fully up to the idence of the drawer in Augusta, or his aban- requirement of the authorities above cited; and, donment of that residence, or his removal from therefore, in the judgment of this court, affect the State of Georgia: the unsettled and vagrant him with all the consequences of notice, supcharacter of his after-life, the fruitless inquiries posing this now to be a substantial proceeding by the notary to find out his residence, the no- upon the draft itself. toriety of his having neither domicile nor place of business in Georgia, the effort to follow him with notice of dishonor of his draft, were all submitted to the jury to be weighed by them. The charge of the court should be interpreted

Next and last in the order of exception is the fifth instruction. The first position in this is given almost literally in the terms of the prayer. The court proceeds further to charge, that if the insolvency of the drawer and ac