
    Smith and others vs. W. & J. J. Rockwell.
    In order to charge the endorser of a lost negotiable promissory note, the holder must tender an indemnity both to him and the maker at the time of demand and notice ; and should the endorser sustain any injury by reason of the holder’s neglect in this particular, it will be a good defence at the trial.
    The statute, (2 R. S. 327, §§ 95, 6, 2d ed.) providing for a recovery at law upon lost negotiable notes and bills of exchange, applies only to the remedy, and does not affect any rights or liabilities of the parties arising out of the proceedings to charge the drawers or endorsers.
    Where, however, a suit was commenced against the maker and endorser of a negotiable note by declaration, and a copy of the note was served therewith ; it appearing that at the time of demand and notice the note was lost, but that neither of the defendants then objected on account of its non-production, and after the commencement of the suit it was found and produced at the trial: Held, that the case did not fall within either the rule requiring an indemnity at the time of demand and notice, or the statute in relation to lost notes, and that the plaintiff was entitled to recover; especially as the rights of the defendants did not seem to have been at all affected by reason of the temporary loss of the note.
    Error to the New-York common pleas. The action in the court below was by the defendants in error against the plaintiffs in error, as makers and endorser of a promissory note. To the declaration, which, contained the common money counts, was annexed a copy of the note, preceded by a notice in these words: “ Sir :• Take notice that on the trial of this cause, a note, of which the following is substantially a copy, will be given in evidence under the money counts—which note is now lost, or supposed to be lost—in pursuance of the 94th, 95th and 96th sections of the third part of the revised statutes.” On the trial it appeared that before the note became due, it was lost or mislaid by the plaintiffs; but that demand was made, and notice of nonpayment given, without any objection being interposed by any of the parties on account of the absence of the note. No bond of indemnity was offered to or requested by the makers or endorsers; and it did not appear that either knew of the loss, till the suit was commenced. The note was found a few weeks before the trial, and after being produced and proved as in ordinary cases, the defendants’ counsel moved for a nonsuit, on the ground: 1. That no bond of indemnity was tendered to the defendants when the note was protested for non-payment; 2. That the plaintiffs were bound to prove, preliminarily, that indemnity had been tendered to the defendants before suit brought. The judge refused to grant a nonsuit, and the defendants excepted. Verdict and judgment for the plaintiffs. The defendants sued out a writ of error.
    
      E. C. West, for the plaintiffs in error.
    
      J M. Bixley, for the defendants in error.
   By the Court,

Nelson, Ch. J.

If the makers had offered to pay the note in question, but declined on finding that it was lost, or if the endorser had proposed to take it up on receiving notice of protest, with a view of calling upon his principals, the question would have been different from the one now presented. The note being negotiable, neither was bound to make payment without receiving it as their voucher; or upon tender of ample indemnity against any future liability. This has been deliberately settled, and for the most satisfactory reasons. (Hansard v. Robinson, 7 Barn. Cress. 90; Rowley v. Ball, 3 Cowen, 303; Chitty on Bills, 423; Chitty, Jun. 53.) An indemnity may be required in such cases, with a view to proceedings in a court of equity to compel payment notwithstanding the loss.

Tender of indemnity should be made to both maker and endorser at the time of demand and notice; because, as the former is not bound to make payment without the production of the note, or indemnity in case of loss, for that very reason payment ought not to be required of the latter till the proper steps have been taken to secure his immediate recourse against his principal. Besides, the endorser’s own liability upon the paper demands indemnity to himself, which should be given without delay, so that he may be in a situation to pay the demand at any time after notice, and look to the maker. Any prejudice he might suffer by reason of neglect on the part of the holder to give the necessary indemnity in either case, would, ° no doubt, afford ground for refusing to enforce payment against him on application to a court of equity for that purpose. The holder, therefore, should take the necessary steps with all reasonable diligence to secure a speedy resort to that court in behalf of the surety; as the consequences of delay would justly fall upon the holder, so far as the endorser or any other party standing in that relation upon the paper is. concerned.

The statute, (2 R. S. 327, § 95, 96, 2d ed.) allows a remedy at law upon a lost negotiable note and bill of exchange, upon giving a bond to the adverse party in a penalty of double the amount of the note or bill, with two sureties to be approved by the court in which the action is pending, conditioned to indemnify him, his heirs and personal representatives against all claims on account of the same, and against all costs and expenses by reason thereof. This statute, however, only applies to the remedy, and in no way affects the rights or liabilities of the parties arising out of the proceedings to charge the drawer or endorser. These stand upon the principles of commercial law, the same as before the enactment; and any defence that might before have been available at law, if the note had not been lost, or in equity, if lost, must be equally so since the statute.

But the note in question does not fall either under the doctrine that calls for indemnity with a view to proceedings in equity, or under the above provisions of the statute. It is not a lost note, nor can it be so regarded by either maker or endorser. A copy was duly served with the declaration according to the statute, and the original • produced on the trial; and though it was supposed to have been lost by the holder at the time it fell due, still it was duly protested and notice given in the ordinary way, without any exception being then taken by either party on account of the non-production at the time. Nor have their rights been at all affected one way or the other by the temporary loss.of it. I am of opinion, therefore, that the judgment is right, and ought to be affirmed.

Judgment affirmed. -  