March Term. V. the place of business of a savings institution or savings 1880. bank. Code of 1873, chap. 141, sec. 7. The Freemans Bank v. Ruckman, 16 Gratt., 126. The point, therefore, to be determined is with respect to the operation Broun and effect of an endorsement of an over-due note pay- Hull, surable at a bank which had ceased to exist more than vivor, &c. five years before the endorsement was made. For although the name of Broun & Co. was placed on the note before its maturity, the evidence shows it was merely for the purpose of collection. They were at that time the holders and payees of the note. They must of course have put their names on the note as authority to the bank to collect. Such an endorsement does not pass the title or render the party making it liable as endorser. It is plain, therefore, that the endorsement to the plaintiffs must be regarded as made at the time of the transfer to them in 1868. Indeed, this has not been controverted by any one. So treating it, let us consider the principles controlling the case. According to a well settled rule of commercial law, an unqualified endorsement of a negotiable note operates as a transfer and assignment of the paper to the endorsee, and an executory contract by which the endorser agrees upon certain conditions to pay the note to the endorsee. In legal effect, the endorser guarantees that the note will be paid according to its tenor, provided it is presented to the maker at maturity, and if not so paid, he, the endorser, upon due notice, will pay it. Edwards on Bills, 284; 1 Daniel on Neg. In., sec. 669, ed. 1879. The endorsement operates as a new and substantive contract, embodying all the terms of the instrument endorsed. 1 Daniel on Neg. In., sec. 669. Presentment and demand of payment, and notice of non-payment, are conditions precedent, upon the performance of which the liability of the endorser depends. Watkins v. Crouch, 5 Leigh, 1880. March V. 522. And when, in the body of the note, a place of Term. payment is designated, the endorser has a right to presume that the maker has provided funds at such place Broun to pay the note, and a right to require of the holder to apply for payment at such place. If the note is payable at a bank, and the bank is not the holder, an averment and proof of demand at the place appointed in the note are indispensable. The Bank of the United States v. Smith, 11 Wheat. R., 171, 183. Hull, sur vivor, &c. These principles apply to an endorsement during the currency of the note before its maturity. After the dishonor of the note, different considerations, to some extent, govern. The mere fact that the note is overdue does not destroy its negotiability. It still retains its negotiable quality, and may be negotiated as freely as during its currency. But the rights, duties, and obligations of the parties are by no means the same. If, by the terms of the note, a day is named for payment, and that day has passed when the endorsement is made, it becomes, according to legal effect, a note payable on demand, so far as the endorser is concerned. In that case, presentment and demand upon the maker must be made within a reasonable time at the place specified in the note, and due notice of the dishonor given to the endorser. Although (says Edwards) a note remains negotiable after it has been dishonored, still, in one sense, the endorsement and transfer of a note over-due is a renewal of the instrument, which is then declared by law payable within a reasonable time upon demand, and the endorser is bound only upon the same conditions of demand upon the drawer, and notice of non-payment, as any other endorser. Edwards on Bills and Promissory Notes, 261. It has been repeatedly held that the endorsement of an over-due note is equivalent to the drawing of a March bill of exchange payable at sight, the endorser being 1880. the drawer, the maker being the acceptor, and the endorsee the payee. Term. Broun V. The endorsement of a bill or note is not merely a transfer thereof, but it is a fresh and substantive Hull, survivor, &c. undertaking, embodying all the terms of the instrument endorsed in itself. 1 Daniel on Negotiable Instruments. In Brown v. Davis, 3 Term. R., 80, Buller J. said, when a note is endorsed after it becomes due, he considered it as a note newly drawn by the person endorsing it. Story on Promissory Notes, sec. 129; Young v. Bryan, 6 Wheat. R., 146; 2 Rob. Prac., 239. See especially Leidy v. Tammany, 9 Watts., 353. So entirely distinct and independent is the contract of the endorser from that of the maker, that at common law, a separate action against each was indispensable. Patterson v. Todd, 18 Penn. St. R., 426. It follows as a necessary consequence, and, indeed, is well settled, that the endorsement must also be negotiable in order to create the rights and obligations between the endorser and endorsee according to the law merchant. It may be conceded, that as a general rule, an endorsement of a note during its currency adheres to the instrument and partakes of its nature. So that if the note be negotiable, so will the endorsement. The reason has been already stated. The endorsement is equivalent to a new note, embodying in itself all the terms of the note endorsed. But there are many cases in which a person endorsing a negotiable note is held not to be an endorser in the commercial sense of the term, but an assignor, guarantor or promissor, as the case may be. An endorsement may be restricted or conditional-it may amount to nothing more than a guaranty-it may be made in a State where the note itself, if originally drawn, would not be negotiable. A note made and endorsed in a March V. vivor, &c. 1880 country by whose laws it is negotiable, would be recognized as negotiable anywhere. But if the endorsement be made in a country by whose laws a transfer Broun by endorsement is not allowed, the endorsement would Hull, sur- not be negotiable, although the note itself might be. And so I take it if under the laws or usages of a particular country, a fact or state of things essential to the negotiability of the note has ceased to exist when the endorsement is made the endorsement as between the immediate parties, does not confer the rights or impose the duties resulting from an endorsement, according to the law merchant. The endorsement of an over-due note cannot relate back to the date of the note. As a new and independent contract, it only takes effect from the time it is made, and must be determined by the laws then in force, and the circumstances then existing. Inasmuch as under the Virginia law a note is not negotiable unless payable at a bank, it would seem to follow that if at the time the endorsement is made, the note is over-due, and the bank has ceased to exist, the endorsement itself as a new and substantive contract, creates no other duties and obligations than those resulting from an ordinary assignment. In the case before us, the endorsement written out in full is, in effect, an order by the defendant, Broun, as endorser or payee upon the maker, as acceptor to pay to the plaintiffs as endorsee on demand, the sum of eighteen hundred and sixty-five dollars, negotiable and payable at the Exchange bank, Alexandria, with an implied guaranty that the money would be paid at the bank named upon demand and notice within a reasonable time. When the endorsement was made, the bank had ceased to exist more than five years.. It would seem a legal impossibility to predicate negotiability of such a transaction. 1880. March Term. V. It now remains to inquire whether the addition of. the words "protest waived" has had the effect either Broun to change the character of the endorsement, or in Hull, survivor, &c. some way to alter the position of the parties. In the case of a foreign bill of exchange, the word "protest" means the taking of all the steps necessary to fix the liability of the drawer or endorser upon the dishonor of the paper. Daniel on Neg. In., secs. 929, 1095. The "waiver of protest" in such case must, therefore, be ordinarily construed as a waiver of the steps necessary for that purpose. But in the case of a negotiable note, a protest is unnecessary. Under our statute the note may be protested and a joint action of debt be maintained thereon against all the parties, maker and endorsers; but the protest is not. at all essential to a right of recovery. All that is incumbent upon the holder to sustain an action against the endorser, is to prove demand and notice. Upon this point as to the necessity of protesting or not protesting a negotiable note, some of the judges do not desire to be understood as expressing any opinion. As applied to a negotiable note, the words "protest waived," according to their literal acceptation must, therefore, be a mere nullity. By a sort of general usage they seem, however, to have a more extensive significance when applied to ordinary commercial paper. The authorities, however, are not entirely agreed as to their precise meaning. By some of them it is held they amount merely to a waiver of demand upon the maker. By others they include a waiver of both demand and notice; and this is the more general and better received opinion. 2 Daniel on Neg. In., sec. 1095, and cases there cited; 1 Parsons on Bills and |