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Action to recover the amount of four checks protested for non payment. The action was against the defendant as indorser, The checks had been drawn on a Milwaukee bank, indorsed to the defendant, and by him indorsed to the plaintiff. They were delivered to the plaintiff's agent at Dousman on July 17th, who at once mailed them to the plaintiff at New Richmond. They were received on July 18th, and at once delivered to a local bank for collection. That bank had no correspondent in Milwaukee, and immediately mailed the checks to its correspondent in Chicago. From the last-named city they were forwarded to Milwaukee, but were not presented for payment until July 21st. The bank upon which the checks were drawn had failed and closed its doors at the usual hour on July 20th. If the checks had been sent directly to Milwaukee from New Richmond they would have arrived in time for presentation on July 20th, and would have been paid, if then presented, while the bank was honoring its checks. The trial court held that sending the checks by way of Chicago for collection was not the use of reasonable diligence in presenting them for payment, and directed a verdict for the defendant, and from the judgment rendered thereon the plaintiff appealed.

Ryan & Merton, for the appellant.
Warham Parks, for the respondent.

540 PINNEY,J. The same rules which exist in relation to the necessity of presentment and notice, in order to charge the indorser of bills of exchange in general, apply as well to an indorser of a check. A check on a bank is presumed to be drawn against deposited funds, and, unlike a bill of ex. change, which need not be drawn on a deposit, is generally designed for immediate payment, and not for circulation. For this reason it is of greater importance than in the case of a bill that a check shall be promptly presented, and the drawer notified of nonpayment, so that he may speedily inquire into the cause of refusal, and take prompt measures to secure his funds deposited in the bank. The indorsers of bills and of checks stand on the same footing in reference to the effect of delay or failure in making presentment or giving notice of nonpayment, and are absolutely and entirely 541 discharged if presentment be not made within a

reasonable time, and this rule applies as between an indorser and indorsee, as in the present case.

It is plain from the facts that, if the bank at New Richmond had forwarded the checks direct to Milwaukee for collection, they would have been received, at the furthest, in time for presentation and payment on the 20th of July, and while the bank on which they were drawn was transacting its usual business; and it appears that it had ample funds of the drawer with which to have paid them. The period of reasonable time for presentation, as between the plaintiff and the defendant as indorser, undoubtedly began when the checks were delivered to the plaintiff's father for him, at Dousman, Waukesha county, Wisconsin, on the 17th of July: Daniell on Negotiable Instruments, secs. 1586, 1587, and cases in notes. The drawer of a check cannot rightfully withdraw his funds necessary for the payment of it upon proper presentation, and it would be unjust to hold that, however long the holder might permit the fund to remain, it should be at the drawer's risk. Hence, the check must be presented within a reasonable tinie or the indorser will be discharged, and the fund is at the risk of the holder if he permits the deposit to remain. No transfer, or series of transfers, can prolong the risk of the drawer or indorser beyond this period, though each party is allowed the same period, as between himself and his immediate predecessor, that the payee had as between himself and the drawer; for no transferee can stand on any better footing than his transferor in respect to the time within which the check must be presented in order to render the drawer's or previous indorser's liability absolute in the event of the failure of the bank. Daniell on Negotiable Instruments, sec. 1595, and cases in note.

The rule of diligence as between indorsee and indorser is the same as between payee and drawer: This requires, in general, that, where the payee receives the check from the drawer in a place distant from the place where the 542 bank on which it is drawn is located, it will be sufficient for him to forward it by post to some person at the latter place on the next secular day after it is received, and then it will be sufficient for the person to whom it is thus forwarded to present it for payment on the day after it has reached him by due course of mail. When the defendant delivered the checks, properly indorsed, at Dousman, Wisconsin, on the 17th of July, he had a right to assume and expect

that the plaintiff or his father would present them for pay. ment within a reasonable time, and they took the risk of making such presentment. Instead, they were sent several hundred miles to the northwest of Milwaukee, to New Richmond, and then back through Milwaukee to Chicago, and were then returned to Milwaukee for payment co the 21st, as before stated. It is clear that they were not presented for payment within a reasonable time after indorsement and de livery by the defendant, and the judgment of the county court was therefore correct: First Nat. Bank v. Miller, 37 Neb. 500; 40 Am. St. Rep. 499, and cases cited.

By the Court. The judgment of the county court is affirined.

CHECKS—DILIGENCE REQUIRED IN PRESENTMENT OF.—To charge an ise dorser of a check it must be presented by the indorsee within a reasonable time. Such time depends upon the facts and circumstances of each partie alar case: First National Bank v. Miller, 37 Neb. 500; 40 Am. St. Rep. 499, and note; monographic note to Holmes v. Briggs, 17 Am. St. Rep. 808. If the holder of the check and the banker on whom it is drawn reside in dif. ferent places the check must, in the absence of special circumstances, be forwarded by mail for presentment on the day, or on the next secular day after, it is received, and the agent or person to whom it is forwarded must, in like manner, present or forward it on the day or day after he receives it, in due course of mail, otherwise the drawer or indorser will be released: See monographic note to Holmes v. Briggs, 17 Am. St. Rep. 809, discussing checks and the duty of the holder thereof in order to make the drawer or indorser liable thereon.

ANSORGE v. BARTH.

(88 WISCONSIN, 553.) INSOLVENT DEBTOR - DISPOSITION OF EXEMPT PROPERTY. As against

creditors, an insolvent debtor has a right to give his exempt property to his son as well as his time in carrying on and managing his son's

business. FRAUD AGAINST CREDITORS-CONCEALMENT OF PROPERTY UNDER COVER

OF AGENCY.-An insolvent debtor cannot accumulate property under cover of another's name, acting ostensibly as the latter's agent. I such a claim is made, it is always a question of fact whether the basiness actually belongs to such other person or to the ostensible agent and debtor, and whether the alleged agency is a mere scheme and do vice to conceal and keep the property used in, or gained by, it from his

creditors. FRAUDULENT CONVEYANCE-EVIDENCECONCEALMENT OF BUSINESS CAB

RIED ON IN Son's NAME. -In an action to subject land purchased in the name of the wife of an iusolvent debtor, and paid for out of the

proceeds of a business carried on by him in the name of his son, ovi dence that the wife had no separate estate, that the son had made no other contribution to the business than the use of his name, that he had paid no attention to the purchase of the real estate, which was made by his father, and not showing that the son had ever received any of the proceeds of the business, or that they have erer had an ac. counting with reference thereto, sustains findings that the debtor was the real owner of the business, and carried it on in the son's name for the purpose of fraudulently concealing it and its profits from his credito ors, that the real estate was purchased with such profits, and conveyed to the wife, and accepted by her with like fraudulent intent, and that it should be conveyed by her to her husband's assignee for the benefit of creditors. ACTION by the plaintiff, as assignee of the defendant Barth, for the benefit of his creditors, under an assignment made July 31, 1889, against the assignor and Anna Barth, his wife, to reach and subject to the payment of the debts of the assignor three certain parcels of real estate purchased, and conveyed to the defendant, Anna Barth, the value of the same aggregating about five thousand six hundred dollars. It was charged that the land was purchased with the money and funds of her husband, derived from a business carried on nominally in the name of his son, Alois Barth, but really and in fact by the father, and for the latter's sole benefit; and that the father caused the parties from whom he purchased the land to convey the title to his wife, for the purpose and with the intent of defrauding his creditors. There was a judgment for plaintiff, decreeing that Anna Barth should convey and assign the property to the plaintiff, to be disposed of by him in payment of the husband's debts, etc., and defendants appealed.

Wigman & Martin and Joshua Stark, for the appellants. Ellis, Greene & Merrill, for the respondent.

856 PINNEY, J. It appears that the assignor, Barth, in 1874, was engaged with others in the wholesale liquor business, and they failed. All the assignor's property not exempt from execution was taken on execution and sold. With his exemptions, amounting to two hundred dollars, he started a saloon, and continued in that business until May, 1881, but without much success, for it is conceded that he was still insolvent, and owned no property not exempt. He had a family of eight children, six of whom lived with him. His oldest son, Alois, was, and for some years had been, engaged in car

AX, ST, REP., VOL. XLIII.- 59

rying on successfully the business of manufacturing and selling cigars upon premises adjoining the building in wbich the assignor, Barth, had his salooon. The appellants claimed that in May, 1881, the assignor, Barth, sold and transferred his saloon business and the exempt property he owned connected therewith to his son, Alois, and that thereafter the business was carried on by and in the name of the son, by whom the license fees and special taxes on the business were paid; that the assignor, A. Joseph Barth, was employed as manager of the business, at a salary of sixty dollars a month during the first two years, and thereafter of seventy dollars; two other sons were also employed upon various salaries in the said business; that, shortly after purchasing the saloon, Alois borrowed four hundred dollars, and started in a small way a wholesale liquor business upon the same premises. It appeared 557 that the special taxes to the United States for the liquor business had been charged to Alois, the son, each year, from May 7, 1884, to July, 1892, and receipts given therefor were in his name, and that licenses were issued for the same business by the city of Green Bay to him from May, 1887, to May, 1892; that Alois Barth did not actively participate in the management of the saloon or the liquor business, but they were entirely conducted by his father. It seems to be a fair conclusion, from the evidence, that the proceeds of the cigar business were not used in any way for the saloon or liquor business, but that each business was managed and conducted entirely separate from the other; and the question presented was whether the title and ownership of the son to the saloon and liquor business and its proceeds were real and bona fide, or whether they were merely simulated, and a sham and cover to protect and keep the property from his father's creditors, and enable him to enjoy and dispose of it at his pleasure.

There was some evidence tending to show that on a few occasions the father had spoken and acted in reference to the business as his own, but it was all transacted in the name of the son. It was shown beyond dispute that the property in question was purchased and paid for, and some of it considerably improved, from the proceeds of the liquor business. The assignor, Barth, was, during all these years, insolvent, and there was a judgment over him, upon whicb there was due over ten thousand dollars, besides interest; and this fact shows a strong wotive why a mau uot more

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