
    John Page, vs. John Loud.
    
      The insolvency of the maker of a promissory note, does not dispense with the necessity of giving notice if his default, in order to charge the endorser.
    
    This was an action by the endorsee of a promissory note against the endorser. The defence was a want of notice of the maker’s default. The plaintiff proved that the drawer of the note was notoriously insolvent at the time of endorsement, and contended that from .the circumstances it appeared that defendant could not be ignorant of the fact, and that such insolvency dispensed with the necessity of notice. The Recorder decided that notice was necessary, and non-suited the plaintiff. A motion is now made to reverse the decision of the Recorder, and to grant a new trial.
    
      Gadsden, for the motion.
    A promissory note, after endorsement, is entirely analagous to a bill of exchange. If the drawee neglects to pay a bill, it is necessary to give notice to the drawer, in order to charge lnm; but that the drawer had no funds in the hands of the drawee, has been always held to dispense with the necessity of notice. 1 M. M. 434; Chit, on Bills, 163; 1, Caines, 157; Chit. 152.
    The endorser of a note, knowing the insolvency of the' maker, has no right to insist on notice. Bebsrdf vs. .Atkinson/,, 
      2. Hy. Bl. 336. Under the circumstances in that case, it was, decided that notice was unnecessary. The case in 2 Ht¡. Blv 609, went off oil a different ground, in the case oí Jac son-vs. Richards, 2 Gaines, 343, there was no evidence that the' insolvency of the maker was known to the endorser, at the timd of his endorsement. In the case of Kiddell and Ioíd, 2 Tread* way, 67S, it was only decided by the Constitutional Court, that the reputation of insolvency does not dispense with tne necessity of notice. Judge Brevard, in that case, refers to the case of Clariie &f Minton, decided in this court in 1807, in which it is said to have been decided that the insolvency of the maker dispenses with the necessity of notice to the endorser.
    • It is used as an argument against the analogy on which we rely, that the endorser of a note is not supposed to have funds dn the hands of the maker, and that the necessity of notice cannot depend on that circumstance: but endorsing the note of a maker whom the endorser ' nows to be insolvent, seems to he precisely e uivalent to drawing on one who has no funds.
    
      Jl.ccson, contra.
    Every contractor is bound by the terms of his contract. The contract of the endorser of a note is, I will pay if the maker does not, and due notice be given me of his default. He makes it a condition of his liability, and whether it be of advantage to him or no, it must he performed. The drawer of a bill contracts that he has funds in the. hands" ;of the drawee, and it is a fraud if he have not.
    The case of Nicholson a d Goulhitt, 2 Hy. Bl. 609, over-"• rules the case of De Berdt Ss Atkinson. In that case, the endorser knew of the insolvency, the Chief Justice said he sustained no injury from the neglect to give notice, it was a hard case’ and the justice was with the plaintiffs; yet it was held that the new céssity for demand and notice was imperative. Judge Kent gives an.opinion, 2 Caines, 343, that the case of Nicholson and, Gonthitt over-rules that of De Berdt and Atkinson, and was' decided on better reasoning. Chitty on bills, 214, refers to De Berdt and Atkinson, and questions its authority. In 4 Cranch,-163, Judge Marshall says, if any thing can dispense with the ecqssity .of notice, it is the endorser’s knowledge of the malser’S' insolvency. Neither death nor insolvency, nor the drawee’s •having- informed the holder that the bill would not be paid, re» moves the necessity of demand and notice. •Chitty on bills, 223, 4, 5; American note -and authorities there cited; 4 Taunt} •47 i.
    
      Gadsden, in reply.
    The reason of the law requiring notice to the drawer of a bill, is that he may withdraw his funds and secure himself. If he have no funds in the drawers hands, notice is unnecessary. Lord Mansfield says that after a note is endorsed, it does not differ from a bilL ' The' drawer of a bill, "without funds in the hands of lie dravee, does not expect it to be paid; notice can do him no good, and he has no right to require it. What possible advantage can the endorser, who. knows the maker of the note to be insolvent, derive from notice? It is said that the contract is conditional; to pay if maker does not and ■notice be giveu: but when he knows, at the time of making his endorsement, that the maker will not pay and that he will be reported to, it becomes unconditional. The note circulates oil his credit, and he knows that he must provide for its payment.
    The -uestion of the endorser’s knowledge of the insolvency did not arise in the case of Nicholson and Gouthitt; and the circumstances of the case excluded the supposition that there could have been such knowledge. The variiouscases cited were determined on their peculiar circumstances; none, of them go •the length of determining that the endorser who knows the maker’s insolvency, at the time of his endorsement, is entitled to notice. Were further cited: 1 JEsp. Rep. 302; Bail, on Bills, 81; 11 John. Rep. 182.
   The opinion of the court was delivered by

Mr'. Justice Huger.

As soon as a note is endorsed it is assimilated to a bill of exchange. The endorser becomes the drawer; the maker the acceptor and the endorsee, the payee, and the law relative to bills becomes applicable to it. The note in question then was a bill drawn on Cook, by defendant, and payable to the plaintiff. The law implies a promise on the part of the drawer to pay the bill if the acceptor does not; provided notice of default on the; part of the acceptor be given to the drawer in a reasonable timé by the payee. Notice is an important part of the contract, and is as binding, though implied, as if expressed. If the drawer has funds in the hands of the drawee, it enables him to take steps for their security; and if he has not, he is afforded an opportunity of making arrangements to pay the bill, and it may prevent a different appropriation of his funds. Were it therefore res integra, I should be opposed to the exception, now too well established by authority to be shaken, that a want of funds in the hands of the drawee dispenses with the necessity of notice to the drawer. I am not satisfied to rest this exception on the ground of fraud. Bills may. frequently be drawn' by one who has no funds in the hands of the drawee, without the smallest imputation of fraud. If fraud does exist, it must vitiate this, as it does all contracts, m toto.

It has been contended at the bar, that insolvency comes within the reason of the exception already noticed, and the case of De Berdt, vs. Atkinson, (2 H. Blackstone, 338,) is relied upon as authority. In that case however, Mr. Justice Buller boít°ms his opinion upon the fact that it was an accommodation note, arid that no value had been given by the payee for the note. Xntibjs case, there is no such pretence. The case however of De Beroí and Atkinson has since been impeached and overruled. Mr. Bay’Jqy (-3 Edn. 136,) in his treatise on bills, observes that the court appear to have proceeded on a misapplication of the rule which obtains as to accommodation acceptances: in those cases the drawee, being himself the real debtor, acquires no right of action against the acceptor by paying the bill and suffers no injury from the want of notice. But in the case of De Berdt and Atkinson, the drawer was not the real debtor; he was only security and was therefore entitled to notice. The case of Sisson and Tomlinson (see 15 East. 222) was decided by Lord Ellenborough on the authority of De Berdt and Atkinson; but in Smith Beckett, (13 East. 189,) the court, with Lord Ellenborough, held-that notice was necessary, in a case of known bankruptcy. In the case of Kiddell and Ford, (Treadway, 678,) this question was considered but not decided, The application there was for a new trial, on behalf of the defendant, against whom a verdict had gone, when no notice of default had been given. The plaintiff had contended with success, in the circuit court, that the reputation of insolvency dispensed with notice. The constitutional court decided that it did not, and ordered a new trial. Mr. Justice Brevard, in his opinion, refers to two cases which have not been reported, (Clark, vs. Adm'r. Minton, and Kiddell, vs. Peroneau,) in which he states that it had been held that bankruptcy dispensed with notice. The first was tried before him and decided upon the peculiar circumstances of the case, as he states, all of which are not enumerated. It does appear however that notorious insolvency and absence from the state were proved. These are strong indications of fraud, and unless explained, are sufficient to vitiate the whole contract. I presume therefore, the plaintiff succeeded in that case, on the ground of fraud. The other case, Kiddell and Peroneau, was not tried. before Mr. Justice Brevard, nor was he present when it was argued before the constitutional court; it does not appear that he was then on the bench. The accuracy of his report under such circumstances may very well be doubted. Had the whole case been fully reported, it is not improbable that it would appear to have been decided as the first was, on its peculiar circumstances; a phrase too frequently substituted for fraud. I can, therefore, attach no conseqence to these cases and feel myself at liberty to decide the question untrammelled by authority.

Gadsden, for'the motion.

Axson, contra.

The motion must be dismissed.

Bay, JYott, Gantt, Johnson, and Colcock, Justices, con* curred.  