
    The Ohio Life Insurance and Trust Company v. Thomas McCague.
    Where a bill of exchange was protested for non-payment in New York, and the agent of the holder by the next mail sent notice of protest to the drawer, who resided at Ripley, Ohio, under cover to the holder at Cincinnati, who sent the notice to the drawer by the next mail; Held, that the notice waa sufficient to charge the drawer.
    The words “ bonds, bills and notes,” in the act for the relief of sureties and bail in certain cases, includes bills of exchange.
    When the holder of a protested bill of exchange refuses, upon notice given under the statute by an accommodation drawer, to commence suit against the acceptor by the next term of the court after such notice, the drawer is discharged.
    This is a writ of error to the Court of Common Pleas of Brown county.
    The facts, as they appear from the pleadings, and the bill of exceptions, are substantially as follows: On the 25th day of October, 1847, the Ohio Life Insurance and Trust Company instituted the present action against Thomas McCague as drawer and indorser of a bill of exchange for six thousand dollars, drawn upon and accepted by Eli Collins, and protested for nonpayment. The plea of the defendant was the general issue, to which he attached a notice of special matter, which he should offer in evidence, and which consisted of the following facts, viz: That he was only surety for Collins upon said bill, of which the plaintiff had notice ; and that on the 19th day of March, 1847, the defendant, in pursuance of the statute, notified the plaintiff in writing, that he was apprehensive said Collins was or would become insolvent, so that it would be extremely difficult, if not impossible, to recover the amount of said bill from Collins, in case the defendant should be compelled to pay the same, and required the plaintiff to put it in suit forthwith ; and that the plaintiff did not, within a reasonable time thereafter, commence an action against Collins, nor proceed by due course of law to collect the amount thereof from him: whereby his right to collect the same from the defendant became forfeited.
    
      On the trial, the plaintiff moved to strike out this notice, but the motion was overruled, to which ruling an exception was taken. The plaintiff then gave in evidence the following bill of exchange:
    “ Exchange for $6,000.
    “ Cincinnati, February 16, 1846.
    “ Four months after date of this first of exchange (second of same tenor and date unpaid), pay to the order of Thomas McCague, at the office of the Ohio Life Insurance and Trust Company in New York, six thousand dollars, value received, and charge the same to the account of
    “ Your ob’t serv’t, THOMAS McCAGUE.
    “ To Mr. Eli Collins, New York.”
    Across the face of the bill was written, “ Accepted. Eli Collins;” and it was indorsed as follows : “ Pay the Ohio Life Insurance and Trust Company. Thomas McCague.
    “ Pay W. M. Yermilye, or order. S. P. Bishop.”
    The genuineness of the signatures was admitted, and the plaintiff then proved that the bill was discounted by them, indorsed by Mr. Bishop, the assistant cashier, and sent to Mr. Yermilye, the cashier, at the office of the company in New York city, who procured it to be re-discounted, and at the time of its maturity it was in other hands. It was protested for non-payment on the 19th of June, 1846, and a notice forwarded by Mr. Yermilye, the next day, by mail, directed to McCague, under cover to Mr. Bishop, at the office in Cincinnati, by whom it was re-mailed on June 25, the day it was received, to the defendant at Ripley, where both Collins and McCague resided.
    The defendant then proved that he was merely an accommodation drawer and indorser, at the request and for the benefit of Collins, who intended to use, and afterwards actually did use, the proceeds of the bill to pay for pork he had purchased from J. R. Baldridge, one of the trustees of the Trust Company, in whose handwriting was the filling up of the bill, and that these facts were well known to the plaintiff, and that the bill was accepted by Collins, at the time' it was discounted. He also proved that on the 19th day of March, 1847, he notified the plaintiff by a written notice served on the president of the company, Mr. Stetson, that he was apprehensive Collins was or would become insolvent, and that it would be extremely difficult, if not impossible, to recover the amount of said bill from Collins, in case he (MeCague) should be compelled to pay it, and required them to put it in suit forthwith. He also proved that at the time said notice was served, and until the winter of 1847 — 8, said Collins was solvent; and if suit had been commenced, so that process could have been returned served, at the April or August term, 1847, of the Brown common pleas, so that a judgment for the amount of said bill could have been rendered at the August or October term, 1847, that said bill could have been collected. Suit was commenced against Collins and MeCague on the same day, (October 25th, 1847,) and a judgment rendered against Collins at the April term, 1848, before which time he had become insolvent by transactions in pork, and the high water in the winter of 1847-8. Between the 19th of March and the 25th of October of that year, there were three terms of the court of common pleas — in April, August, and October.
    The defendant also proved that the mail came from New York city to Ripley, in June, 1846, by way of Wheeling, Chillicothe and Maysville, and that the time it usually occupied was five days.
    Upon this state of pleadings and facts, the court, to whom the premises had been submitted, without the intervention of a jury, gave judgment for the defendant, MeCague. The plaintiff then moved for a new trial, but the motion was overruled ; to which action of the court the plaintiff excepted, and now seeks a reversal thereof.
    The errors assigned are,
    1. That the finding of the court was against the law.
    2. That the finding of the court was against the evidence.
    3. That the court refused to strike out the special notice attached to the defendant’s plea of the general issue.
    
      4. That the court erred in overruling the motion for a new trial.
    5. The general error.
    
      0. Baird, and O. F. Campbell, for plaintiff in error.
    The errors assigned present, in fact, but two points. The first point, and in which we apprehend there can little if any difficulty arise, is as to the sufficiency of the notice to the defendant.
    The following authorities are referred to, as establishing “ that when a bill passes through the hands of an agent, he, in giving notice, will be treated as a holder; and notice by his principal to the other parties on the next day after he has received notice, will be sufficient.” '
    Story on Bills, sec. 292, 388; 3 Kent’s Com. 108; 1 Hill’s Rep. 263; 5 Mason 366; 9 Pickering 549; 15 Eng. Com. Law 242; 2 Littell 13.
    Many other authorities tending to establish the same proposition, could be produced, but as this point in the court below was scarcely seriously contested, it is thought unnecessary to cite further authorities.
    The main question to be decided in this ease is, whether the *{ act for the relief of sureties and bail in certain cases,” Swan’s Stat. 877, was intended to include, and apply to drawers, acceptors, and indorsers of bills of exchange. We main tain that said act was not so intended, and should not be so construed and applied.
    The language of that act is, “ that when any person or persons shall hereafter become bound as surety or sureties, by bond, bill, or note,” etc.
    This leads us to inquire into the legal lefinition of bonds, bills and notes.
    
    1st. What is the legal definition of a bond?
    
    11A bond is an obligation under seal, single, for the payment of a sum certain ; or conditional under a penalty.”
    
      8 Bacon’s Abridg. 690 ; 1 Shop. Touch. 867.
    2d. A bill is a single bond, without a condition or penalty.
    Wood. Inst. 277; 3 Bac. Abridg. 690; 5 Com. Digest 126; 2 Coke Lit. 566; 2 Black. Com. 340; 1 Swift’s Dig. 126; Croke Eliz. 548, 613; 1 Jac. Law Dic. 312.
    3d. “ A note is a promise in writing, to pay money, not • under seal.” Walker’s Intd. 397.
    “ A written engagement by one person to pay another person therein named, absolutely and unconditionally, a certain sum of money, at a time specified therein.” Story on Prom. Notes, sec. 1. “ A written promise for the payment of money at all events.” Bayley on Bills, c. 1, page 1.
    4th. “ A bill of exchange is an open letter of request from one man to another, desiring him to pay a sum therein named, to a third person on his account.” 2 Black. 466.
    “ A bill of exchange is a written order for payment of money.” Walk. Intd. 397.
    “ A bill of exchange is a written order or request, by one person to another, for the payment of money, absolutely, and at all events.” 3 Kent’s Com.,Lee. 44, page 74, (4th ed.)
    
      “ A bill of exchange is an open letter of request, addressed by one person to a second, desiring him to pay a sum of money to a third, or to any other, to whom that third person shall order it to be paid: or it may be payable to bearer.” 2 Kyd. on Bills 3, (3d ed.)
    “ A bill of exchange in most, if not in all commercial countries, possesses some peculiar advantages and privileges, over common contracts. These * * are allowed in order to give them a ready circulation and extensive credit.” Story on Bills 16, 17, sec. 14.
    “ At common law, although a bill of exchange is not a specialty, for no contract is by that law, a specialty, unless it is a matter of record, or under seal; yet in many respects a bill of exchange enjoys as high an importance, and imports as absolute a verity.” Story on Bills, sec. 16.
    
      “ By the commercial law, hills of exchange were alone negotiable and assignable, when made payable to the order of a party, or to the bearer, so as to allow the holder or assignee, to sue in his own name.” Story on Bills, sec. 17. Chitty on Bills 7, .10. “ Bills of exchange, by the common law, are of as absolute a verity as a specialty.” Chitty on Bills 11.
    “ At common law, bills of exchange were the only negotiable contracts; by the statute of Anne, promissory notes were placed on the same footing.” Walker’s Intd. 397.
    “ Bills of exchange were used and adopted by the necessities of commerce, at a very early period, and have, for many practical purposes, become an equivalent to, and a representative of, money ; and they circulate through the commercial world as an evidence of valuable property, of which any person, lawfully in possession, may avail himself to make purchases, to pay debts, and to pledge as a security or indemnity for advances.” Story on Bills, secs. 14, 17 ; Chitty on Bills 13,14.
    “ The jurisprudence which regulates bills of exchange, can hardly be deemed to consist of the mere municipal regulations of any one country. It may with far more propriety be deemed to be founded upon, and embody the usages of merchants in different commercial countries; and the general principles, ex cequo et bono, as to the rights, duties and obligations of the parties, deducible from these usages, and from the principles of natural law applicable thereto.” Story on Bills, see. 20.
    “ In the law of real property, each state has its local rules, and our courts are competent to maintain and establish them. But in the law of contracts, especially mercantile contracts, the principles are nearly uniform throughout the civilized world: they are established by a wider experience, and are maintained in a greater uniformity, in consequence of the great number of tribunals through whom they are expressed. Our state has become, and is becoming, the scene of large commercial operar tions, and it is of much moment that the principles on which justice is administered, should be made to conform as far as possible, to the law merchant.” * * * “ The introduction of bills as a basis of bank accommodation, has taken place long since the decision of Douglas v. Waddle. They are of mercantile origin, and the law merchant should govern their use.” Micajah T. Williams v. Bosson & Brothers, 11 Ohio Rep. 62.
    This important distinction between bills of exchange and other paper, has been made by the Supreme Court in our own state. In the case of Douglas v. Waddle, (1 O. R. cond. 182; Ham. 413,) the court decide that “ indorsers of accommodation notes are co-securities for each other. In the case of Williams v. Bosson & Brothers, (11 O. R. 62,) the court decide that “ the indorsers of an accommodation bill of exchange are not joint securities for each other.”
    In 10 O. R. 180, it is decided that “ every indorsement on a bill of exchange is a new contract, and each indorser becomes, to a subsequent holder, a new drawer.” The drawing, indorsing and accepting bills of exchange, are all independent contracts, and not collateral to each other: every indorsement being treated as a new and substantial contract.
    
    We insist that if the “ act for the relief of sureties and bail in certain cases,” was intended to include bills of exchange, the term, “ bill of exchange,” would have been used.
    The legislature, when acting upon bills of exchange, have in every instance so treated them.
    1 Chase 221, act of Nov. 15,1799; 1 do. 448, act of Feb. 21, 1805 : 1 do. 656, act of Jan. 25,1810 ; 1 do. 660, act of Jan. 31,1810 ; 2 do. 1137 ; 2 do. 1138 ; 2 do. 1139 ; Stat. vol. 41, 587, act of Feb. 25,1820 ; Stat. vol. 41, 589, act of Feb. 15, 1831; Stat. vol. 42, secs. 1 and 5.
    By the act of Nov. 15, 1799, “ notes in writing,” and “ inland bills of exchange,” -were made negotiable. Inland bills of exchange were declared to he so, to settle a doubt as to the effect of the law merchant in the territory at that time.
    By the law of 1805, “ all promissory notes without seal, and bills of exchange, foreign and inland,” are declared to be negotiable.
    
      By the acts of 1810 and 1820, “ all bonds, promissory notes, bills of exchange, foreign and inland,” were declared to be negotiable.
    As bonds are negotiable by the statute only, a note under seal or bond was not assignable until the law of 1810, (15 0. R. 543.) Under the acts of 1810 and 1820, bills, or as they are termed in the tax law of 1831, (Stat. 909, sec. 12,) single bills, are negotiable undnr the denomination of bonds, and not bills of exchange. “ A bill is a single bond without a condition on penalty.” See authorities cited supra.
    
    The term “ bill,” in the act in relation to “ sureties,” etc., can have its proper and full force without construing it so as to include “ bills of exchange.” There is nothing in that act requiring it to he so construed. The law of Kentucky in relation to the assignment of bonds, bills and promissory notes, never applied to bills of exchange. 1 Ky. Stat. 150; 1 do. 250; 1 Bibb. 233; 2 do. 240.
    Again. The court will not construe the statutes in such a manner as to innovate upon the “ law merchant,” unless it is clear from the terms of the statute, that such was the intention of the legislature. 6 O. R. 25; 11 O. R. 62, 192.
    It is but a reasonable presumption that, if the legislature intended to change the rights of holders, and the responsibilities of indorsers of bills of exchange, they would, as they have done in laws embracing that kind of paper, used the term, “ bills of exchange.”
    
      Chase, Ball JSoadly, for defendant.
    1. When the Trust Company undertake to serve a notice of protest from their New York office, on a drawer or indorser, it is their duty to send it direct, and not through the office in Cincinnati.
    2. The act for the relief of sureties is imperative, and the creditor, after receiving notice to put his claim in suit, has no discretion, but must institute an action in time tc recover at the first term of the court thereafter. Swan’s Stat. 877; Starling, Ex’r of McDowell, v. Buttles, 2 Ohio Rep. 303; Wright's Adm'r v. Stockton, 5 Leigh’s Rep. 153; Reid v. Cox, 5 Blackf. Rep. 313; Hogan v. Vance, 2 Bibb’s Rep. 34; McGinnis v. Benton, 3 Bibb’s Rep. 6; Markley v. Withers, 4 B. Monroe’s Rep. 15; Hume v. Brown, 3 Dana’s Rep. 450; Perrin v. Broadwell, Ibid. 397; McMurry v. Wood, 9 Dana’s Rep. 47; Marr v. Smith, 7 B. Monroe’s Rep. 192; Passmore v. Prother, 9 Dana’s Rep. 57; Simpson v. Daniel, 1 B. Monroe’s Rep. 250; McFadden v. Finnel, 3 B. Monroe’s Rep. 122; Leeman v. Neete, Ibid. 155; Clark v. Prentice et al., Ib. 584; Whaley v. Van Hook, 4 B. Monroe’s Rep. 271; Hamett v. McGarry et al., Ibid.; Graham et al. v. Chataque Bank, 5 B. Monroe’s Rep. 49; Morrison v. Glass, Ibid. 240; Levi v. Evans, 9 B. Monroe’s Rep. 115.
    3. At all events, proof that the principal debtor was solvent at the time of notice, and subsequently, at a period when, had suit been brought upon receiving notice, the judgment would have been in force and collectable, and of his insolvency when judgment was actually recovered, will exonerate the surety. Hancock v. Bryant, 2 Yerg. Rep. 476; Warner v. Beardsley, 8 Wend. Rep. 198; Valentine v. Farrington, 2 Edward’s V. C. Rep. 53; 17 Johns. Ch. Rep. 384; Simmons v. Tongue, 3 Bland. 341; Pain v. Packard, 13 Johns. Rep. 174; Albany Dutch Ch. v. Vedder et al., 14 Wend. Rep. 165; Herrick v. Borst et al., 4 Hill’s Rep. 650; Dehuff v. Turbitt’s Ex'rs, 3 Yeate’s Rep. 157; Cope v. Smith's Ex'rs, 8 Serg. & Rawle’s Rep. 110; Gardner's Adm'r v. Ferree, 15 Serg. & Rawle’s Rep. 28; Greenawalt v. Kreider, 3 Barr’s Rep. 364; Strader v. Houghton, 9 Porter’s Rep. 334; Towns v. Riddle, 2 Ala. Rep. 694.
    4. Banks, as well as individuals, are embraced within the provisions of the act for the relief of sureties, and parol proof may be given of the suretyship, where the party does not stand in that position, eo nomine. Reid v. Cox, 5 Blackf. Rep. 313; 
      Smith v. Bing, 3 Ohio Rep. 33; Reddish’s Ex’rs v. Pentheuse et al., Wright’s Rep. 538.
    5. The act for the relief of sureties, and the act regulating judicial proceedings where banks and bankers are parties, ex tend to bills of exchange, as well as other securities for the payment of money.
   Spaldins, J.

There are really but two questions presented in this case for our consideration:

First. Was the notice of protest for non-payment transmitted with sufficient diligence and directness to the defendant ?

The bill matured and went to protest on the 19th of June, 1846. It was then in the hands of an agent of the plaintiff in the city of New York. Admit that agent to have been the actual cashier of the “ Trust Company.” He was then attending to an agency in the city of New York, and, so far as it concerned the bill in question, which was discounted at the bank in Cincinnati and sent to him in New York for collection, he may as well he called an agent as any indifferent person. Thi3 agent, on the very next day after the protest in New York, sent the notice by mail to his principal in Cincinnati, where it arrived on' the 25th of June, and on the same day -was again placed in the mail, directed to the defendant at Ripley. The most stringent rules of the law merchant will require no more than this. The whole objection of counsel is based upon the fanciful idea that the Ohio Life Insurance and Trust Company at Cincinnati, was embodied in the person of its cashier, Wm. M. Yermilye, in the city of New York; and that it was sending the notice of protest from itself in New York to itself in Cincinnati. We are not inclined to indulge in subtleties of this sort, and hold that Mr. Yermilye in New York, whether he be called agent or cashier, was employed by the holder of the bill in Cincinnati to present the same for payment; and, on pay ment being refused, to return it in due time, with the ordinary notice of protest, to his employer in Cincinnati, whose duty it would be to communicate with the other parties to the bill.

Second. Is the “ act for the relief of sureties and bail in certain cases ” (Swan’s Stat. 877) intended to include drawers, acceptors and indorsers of bills of exchange?

The first section of the act is in the following words :

That when any person or persons shall hereafter become bound as surety or sureties, by bond, bill or note, for the payment of money or other valuable thing, and shall apprehend that his or their principal debtor or debtors is or are likely to become insolvent, or remove from the county or state, without previously discharging such bond, bill or note, so that it will be impossible or extremely difficult for such surety or sureties, after being compelled to pay the amount of the money or other valuable thing which may be due by such bond, bill or note, to recover the same back from such principal debtor or debtors, it shall and may be lawful for such surety or sureties, in every such case, provided a right of action shall have accrued on such bond, bill or note, to require, by notice in writing, his or their creditor or creditors, forthwith to put such bond, bill or note, by which he or they may be bound as surety or sureties as aforesaid, in suit. And unless the creditor or creditors, so required to put such bond, bill or note in suit, shall in a reasonable time commence an action on such bond, bill or note, and proceed, with due diligence, in the ordinary course of law, to recover a judgment for, and by execution, to make the amount of the money or other article of value due by such bond, bill or note, the creditor or creditors, or the assignee or assignees of such bond, bill or note, so failing to comply with the requisitions of such surety or sureties, shall thereby forfeit the right, which he or they would otherwise have, to demand and receive of such surety or sureties the amount which may be due by such bond, bill or note.” In great commercial countries it is imperatively necessary that, in their multiplied business transactions, men shall lend to one another their credit and responsibility. It is therefore expedient that such rules shall be applied to the system of securityship, in all its various ramifications, as that the least possible burthen may be thrown upon those who are willing and able to incur liabilities for others.

Hence it has always been the policy of our law to extend to-sureties all the indulgence consistent with an exact observance1 of the rights of creditors.

The statute which we are required to interpret, has its foundation in the best of ethical philosophy: “ Whatsoever ye would that men should do unto you, do ye even so unto them.”

There can be nothing wrong in requiring that, after debts become due, their collection shall be enforced against those for whose benefit they have been contracted.

At common law, the surety who doubted the continued responsibility of his principal, was compelled, unless at the option-of the creditor, to pay the debt himself before he could enforce1 collection at the hands of the debtor.

In the language of the judge who pronounced the opinion in Ex’r of McDowell v. Buttles, 2 Ohio Rep. 303, “ the object of this act is plainly to enable sureties to compel a creditor, where-his debt is due, to pursue the principal debtor by a suit, or exonerate the surety. It was intended to relieve sureties when the creditor felt safe in the responsibility of the surety, and took no-steps to collect his debt; and it contemplates extending this relief, in a different form from that of compelling the surety to pay the debt himself, and thus become the creditor and bring suit.”

And the law will apply to every class of securities that may be brought by liberal intendment within its meaning. There can be no substantial reason why the person who signs a note alone as drawer or maker for the accommodation of the payee, may not be entitled to the benefit of this act as well as he who signs below the principal with the word “ surety ” appended to his name. It can only be necessary, in any event, that the holder of the paper shall be made acquainted with the fact that the party seeking relief is a surety.

It is claimed, however, that bills of exchange do not come within the purview of the act; that the phrase “ bonds, bills and notes,” does not mean obligations under seal for the pay ment of money; written orders for the-payment of money, and promises in writing for the payment of money; but that it means bonds, single bonds and notes.”

In other words, it is insisted that the word “ bills,” in this connection, means “ single bonds,” in contradistinction to bills ■of exchange. We can adopt no such forced construction.

The legislature, doubtless, intended to embrace in the act for the benefit of sureties, the three great classes of written contracts for the payment of money; specialties, bills of exchange and promissory notes. And we are of opinion that, whatever be the nature of the paper, and whatever the position •of the surety therein, whether primarily or collaterally liable, if he be in fact a surety, and known to the creditor as such, he can claim the benefit of this act.

In the case before the court, the defendant was known to be the accommodation drawer of the bill — a mere surety for Collins, the acceptor. On the 19th of March the plaintiff was notified that Collins was in doubtful circumstances, and that it was requisite, in order to insure the safety of defendant, that suit should be instituted forthwith against the acceptor. Tho April and August terms of court were suffered to pass by. At the October term suit was commenced; but, before the term came on at which judgment could be taken, the debtor was insolvent. We are of opinion that the plaintiff, under the notice from defendant, was bound to institute suit at the April term. If' this had been done, the proof shows the debt might have been saved. The loss must now fall on the plaintiff.

Judgment affirmed,.  