exhausted before that of the security is made turity, without any proof that it was then unliable, which was held to apply as between paid; because there was no proof of the nondrawers and indorsers on accommodation notes. payment of the note in the case, and besides, 2. The bill of exceptions distinctly raises proof ought not to be required of a negative, the question, whether the statutes of Ohio reg- that the note was unpaid. Indeed, it is imposulating the State practice, are obligatory, visible to give positive proof of non-payment. In propria, on the United States courts. There is this case, as in all other cases whatsoever, the no evidence in the record, that the State prac jury must be satisfied that the note was untice was ever adopted by the court, and the paid, when it came to maturity, or render a note was permitted to be read in evidence, un verdict for the defendant. Of this they would der the act of Ohio." (See Wayman et al. v. be satisfied, without positive proof. Non-paySouthard et al., 10 Wheat., 1.) Admitting the ment is presumed until payment is proven. If, Circuit Court might, under the authority to therefore, the jury were satisfied the note was establish its practice, adopt by written rules, in bank, unpaid, when it came to maturity, a or otherwise, the practice in existence at the verdict should not have been passed for the time of the act of adoption in the State Courts, plaintiffs, unless they were also satisfied a dethe court was not empowered to incorporate mand had been made or excused, or dispensed into its practice by one act of prospective reg with. The non-payment might have grown ulation, whatever might be the future practice out of the absence of the holder, at the time of the State courts. This would be not to ex- and place limited for the payment. To charge ercise the judicial functions intrusted to the an indorser, affirmative *proof must be [*609 court, but to transfer them to the State author- exhibited of a demand, or of facts sufficient to ities. An Act of Congress adopting the State excuse or dispense with it. All the books say practice, in existence at the time of its passage, this, and none assert that proof of a note's being is valid; but an act prescribing such rules of in bank, and unpaid at its maturity, is such practice as the State Legislatures might in excuse or dispensation; much less that the prefuture enact, would be unconstitutional, as it sumption of non-payment, from the absence of would transfer to the States the powers vested proof of payment, supersedes its necessity, and by the Constitution in Congress. If, then, the supplies its place. The doctrine of the charge, court could not, in the active exercise of its when analyzed to its last result, and applied to 608*] powers, establish the future *State prac- the evidence in the case, is, that proof the note tice, much less could the passive acquiescence was in bank when it came to maturity will of the court, in laws and rules of prac- charge the indorser; and this without a demand, tice enacted from time to time by the State, or the evidence of any facts supplying or exestablish it as a fundamental and constitutional cusing its want. rule that future State regulations should thereby become a part of the Circuit Court practice. In the present instance, the statute had never received the express sanction of the court, was introduced and followed up by the United States Bank alone, had never been contested, and always used sub silentio.

The act of Ohio was not passed until after the note was discounted. The act established a rule of property, construction or evidence, rather than a rule of practice, and therefore could not be applied to a contract entered into before its passage. It was such a rule as is referred to in 34 sect. Jud. Act United States, chap. 20.

The jury should have been instructed, they must be satisfied by affirmative proof the notice was put in the postoffice, on the day after the demand, in season to go by the mail next succeeding the day of demand. Proof barely that it was put in the postoffice on that day, without affirmative proof it was there in season to go by the next post, was insufficient. (Lenox v. Roberts, 2 Wheat., 373.) In Darbyshire v. Parker (6 East, 3), Lord Ellenborough says the rule as laid down originally in Marius, is, the notice must be sent by the next post. In one word, it is the next post, and not the next day. Due diligence consists in placing the notice in the office before the post next after the last day of grace leaves town, and not in placing it there on the day next after the last day of grace. This, although on the next day, might not be in time for the next mail; and due diligence must be proven, affirmatively, by the plaintiffs. The record shows the plaintiffs did prove the notice was put in the office on the next day, but not whether in season for the next mail; the record likewise shows they did not attempt to prove this, as it professes to contain all the evidence exhibited on the trial.

In general, a demand is necessary on the drawer to charge the indorser. It may be dispensed with when the note is payable at the holders, and its place supplied by proof, that the holder was present, ready to receive payment, and the account of the drawer inspected, and no credit found in his favor. (United States Bank v. Smith, and the cases their cited; 11 Wheat., 171.) This is the English rule (2 H. Black., 509), and this court has strongly intimated an opinion in favor of its correctness. No case-not the cases in Mass. Rep., cited 11 Wheat., 171, go the length to waive proof that the holder was present at the time and place ready to receive payment. The charge of the court did not come up to the rule. "If the jury were satisfied, from the evidence, the note was in bank, and not paid when it came to maturity," the record purports to contain all For the defendants in error, it was argued by the evidence in the case, and none was exhibit- Mr. Sergeant, upon the first bill of exceptions, ed of the non-payment of the note. Agreeably that the provision of the act of the State of to the charge, it would be sufficient for the Ohio must be regarded either as a law of the plaintiffs to prove the note in bank, at its ma-State," furnishing a "rule of decision" under

He then went into a minute examination of the instructions asked, and charge given, comparing them with the testimony, to show the court erred in the instructions refused, and those given, relative to the discount of the note, and the application of its proceeds, if a discount was made.

In order to understand the bearing which the instruction moved for has upon the cause, it is necessary to remark, that the State of Ohio was not received into the Union until 1802; so that the Process Act of 1792, which is expressly confined in its operation to the day of its passage, in adopting the practice of the State courts into the courts of the United States, could have no operation in that State. But the District Court of the United States, established in the State in 1803, was vested with all the powers and jurisdiction of the District Court of Kentucky, which exercised full Circuit Court jurisdiction, with power to create a practice for its own govern-line between the remedy and the right, where

and Cook's note of the preceding date was charged to Fullerton's account without his check; thus balancing the credit which the discounting of the last renewal gave to Fullerton on the books of the bank. The note so charged was of course not protested, and thus Fullerton and his co-indorsers escaped payment of that note; and now they propose to escape the payment of this, by insisting that without a check from Fullerton, authorizing the application of the the previous note, the bank is still indebted to him to that amount. This is an ungracious defense, and one which no court of justice can feel disposed to sustain. To repel it, the plaintiffs introduced witnesses to prove that this note was expressly discounted in order *that [*616 the proceeds might be applied to the previous note, and would not have been discounted otherwise; and contend that the bank, having the fund in hand to pay itself, had a right so to apply it without a check, upon the ground of implied assent. With a view to that question, the defendants below have introduced thirteen out of sixteen of their prayers. They all go to maintain the single proposition, that Fullerton, as last indorser, was entitled to credit for the proceeds of this note, and is still entitled, if they have not been legally applied to the payment of the note which preceded it.

The remaining three prayers, to wit, the 13th, 14th, and 15th, raise a question on the sufficiency of the demand on the drawer, and of the notice of non-payment to the indorser, and the proof introduced to establish both facts.

in the spirit of moderation and comity. In the conflicts of power and opinion, inseperable from our very peculiar relations, cases may occur in which the maintenance of principle, and the administration of justice according to its innate and inseparable attributes, may require a different course; and when such cases do occur, our courts must do their duty; but until then, it is administering justice in the true spirit of the Constitution and laws of the United States to conform, as nearly as practicable, to the admin-proceeds as credited to him to the payment of istration of justice in the courts of the State. In the present instance, the act was conceiv ed in the true spirit of distributive justice; violated no principle; was easily introduced into the practice of the courts of the United States; has been there acted upon through a period of eight years; and has been properly treated as a part of the law of that court. But, it is contended that it was improperly applied to the present case, because the note bears date prior to the passage of the law; and this certainly presents a question which is always to be ap proached with due precaution, to wit, the extent of legislative power over existing contracts. But what right is violated, what hardship or 615*] injury produced, *by the operation of this act? It was passed for the relief of the defendant, and is effectual in relieving him from a weight of costs, since it gives to the plaintiff no more than the costs of a single suit if he should elect to bring several actions against drawer and indorser. Nor does it subject the defendants to any inconvenience, from a joint action, since it secures to each defendant every privilege of pleading and defense The entry in the record on the subject of the of which he could avail himself if severally charge to the jury, is in these terms: "But sued. The Circuit Court has incorporated the the court, instead of the foregoing instructions action with all its incidents into its course of as asked, charged and instructed the jury that, practice; and having full power by law to to enable the plaintiffs to recover, the jury adopt it, we see no legal objection to its doing ought to be satisfied from the evidence that the so, in the prosecution of that system, upon note had been discounted by and become the which it has always acted. It cannot be con property of the bank; that it was in the bank tended that the liabilities of the defendants and not paid when it came to maturity; that under their contract have been increased, or due notice of the protest and non-payment had even varied; and as to change in the mere form been given to the parties, and that such notice of the remedy, the doctrine cannot be main had been put into the postoffice the day after tained that this is forbidden to the legislative the last day of grace in time to go by the sucpower or to the tribunal itself, when vested ceeding mail; that every note discounted in with full power to regulate its own practice. bank was prima facie to be regarded as a busiThe next bill of exceptions has relation ex-ness note, and that when such notes were disclusively to the discount. It sets out a great deal of evidence, and sixteen specifications, if they may be so called, of the prayers asked of the court by the defendant's counsel; the whole making out this case. It appears that in December, 1817, Isaac Cook's note, with these indorsers upon it, was discounted at the Bank of Cincinnati, and renewed every sixty days down to February 1st, 1820. It commenced at $6,000, and in September, 1818, was reduced to $4,000, for which amount it was renewed uniformly down to the last date. In its origin, one M'Laughlin's name was also on the paper. and sometimes he, and sometimes Cook, was the last indorser, until March, 1819, when Cook was uniformly the last indorser down to the date of the present note. The proceeds of the successive renewals were of course credited to him, and passed to the payment of the preceding note.

But on this note Fullerton stands as the last indorser, and the proceeds were credited to him,

counted, generally and regularly, the proceeds of the note should be carried to the credit of the last indorser, and paid to his check; that the printed and published rules of the bank ought, in the absence of other testimony, to be considered as regulating the course of business of the bank; but that if the jury were satisfied from the evidence that a practice and course of business in the office of discount and deposit in Cincinnati had prevailed and was known to defendants, and that the note in question had been discounted and treated in all respects according to such practice and course of business, but not according to the printed rules, the plaintiffs had a right to recover. That the bank had not a right to apply the proceeds of the note contrary to the understanding and directions of the last indorser, or to any other use than the use of the last indorser, without his consent; but that if the jury were satisfied from the evidence that according to the custom and practice of the bank in the case when a

new note was put into the bank for the purpose | part of the instruction, insisted much on the of renewing and continuing a former loan or obligation on the plaintiff to establish definidiscount, the check of the last indorser was tively and positively, that the notice given was sometimes required and sometimes dispensed in time to go by the next mail; but has not advertwith, and that in the latter case it was the ed to his own omission, in not putting into the practice to file away the old note as a check; case evidence that there was a mail established and that if the note sued upon had been dis from Cincinnati to the place of the defendant's 617*] counted *and treated in the latter man-residence. Yet, if the jury might be left on ner, with the consent of the parties to it, the this point, to take that fact upon notoriety, or plaintiffs had a right to recover, and that such personal knowledge, it would be difficult to consent may be inferred and found by the jury maintain that they might not, on the same from the facts and circumstances given in evi- grounds, find the minor fact, that the notice dence, without direct or positive proof, if in deposited in any part of the business hours of the opinion of the jury the facts and circum- that day, would be in time for the mail ensuing stances proved warrant such inference. That the third day of grace. It is argued that the if the jury find the note was not discounted, language used by the court on this point is the plaintiff cannot recover; or if they find equivocal, and may have led the jury to supthat it was discounted but the proceeds remain pose, that sending the notice by the mail which in the bank carried to the credit of the last in- succeeded the day after the last day of grace, dorser, and not drawn or applied with his con- was sufficient. But we think the construction sent to any other purpose, the money may and is forced. The words are, "the day after the ought to be set off against the note; but if they last day of grace, in time to go by the succeeding find that the note sued on was put into the mail.' Succeeding what? Obviously the last bank for the purpose of renewing a former day of grace, otherwise there might be no note or loan, and for no other purpose, and necessity for putting it in the office until the with the understanding of all the parties that, second day after the last day of grace, whereif discounted, the proceeds could and would, as the necessity of putting it in on the first day by the course of business in the bank, be ap- after, is expressed in the charge. plied solely to the discharge of the former note, and that they had been so applied, and the old note retained and written off as a check by the bank, that the plaintiffs ought to recover.

The exception taken is to refusing to give the instructions as asked, and to giving them in the form in which they were propounded to the jury. And the question is, whether the instruction given covered the whole ground of the instructions prayed for, and were legally correct, in the form in which they were rendered.

We are of opinion they cover the whole ground taken by the defendants, or at least as far as they had a right to require. This will be obvious from a simple analysis of the charge. The propositions which it imports will be examined in their order. The first is upon the sufficiency of the demand, and the law laid down on this point is, "that on a note made payable at a particular bank, it is sufficient to show that the note had been discounted and become the property of the bank, and that it was in the bank, not paid at maturity."

With this signification it was rather more favorable than need be given, since the mail of the next day may have gone out before early business hours, or no mail may have gone out for several days.

The residue of the charge relates to the application of the proceeds of this note, to the previous note without the check of the last indorser; and this also, we think, embraces all the defendants asked, and is as favorable as the law would sanction. It admits, that this should be regarded as a business note, that the proceeds should have been passed to the credit of the last indorser, and should not have been applied otherwise than by his assent; but it then goes on to assert, what surely could not be controverted, that with the assent of the last indorser, the money, instead of being passed to his credit might be otherwise applied; that with his consent it might be applied to the satisfaction of another note, for which he was indorser, without his checking for the amount; and that his consent may be implied from circumstances, as all other facts may be.

The jury have found, then, that with his consent it was so applied, and the evidence fully bore them out in their finding; if competent, it was all the law requires.

Nothing more than this could have been re quired of the court; for the positive proof that the bill was not paid, will certainly imply that there were no funds of the drawer there to pay it. The fact could not have been made more It may be proper to observe that every dispositive by inspection of the books. The count is in the nature of a cross action, and if charge is perhaps too favorable to the defend the discount filed in this case were thrown into ants, since modern decisions go to establish*the form of an action, it would be for [*619 that if the note be at the place on the day it is payable, this throws the onus of proof of payment upon the defendant. (4 Johns., 188.) This is more reasonable than to require of the plaintiff the proof of a negative, and comports better with the general law of contracts.

The next instruction is, in the language of the court, that notice of the non-payment and protests should have been given to the indorser through the medium of the post office, the day 618*] *after the last day of grace, in time to go by the succeeding mail.'

The defendant's counsel, in arguing on this

money had and received to defendant's use.

The merits of this defense need only be tested by the law which governs that action, to make it clear that the evidence would not sustain it. It goes in fact to show, that in what are called renewals of bank loans, the lending is qualified and not absolute; that when credit is given and money advanced upon a note of that description, it is not an advance on general account, but only for the purpose of a specific application. Any act done by the bank, therefore, whatever be the mere form, if it have for its end the carrying of the contract into effect, in its true spirit