1880. Notes, 376; 2 Parsons, 240-5; 1 Parsons' Mer. Law, March V. 118. In the case of Union Bank v. Hyde, 6 Wheat. R. 572, Broun Mr. Justice Johnson strongly intimated that the words Hull, sur- "protest waived" of themselves could not be convivor, &c. strued as dispensing with demand and notice in the case of a negotiable note. He was of opinion, however, that the words were ambiguous, and might be explained by parol testimony. In the present case, no evidence has been offered tending to show the meaning the parties themselves attached to the "waiver of protest." It may be that both of them were satisfied of the solvency of the makers; both knew or believed the note would not be paid upon presentment and demand, and without understanding the precise nature and legal effect of the transaction, they intended to provide against any future difficulty growing out of the failure to make demand and give notice, according to the law merchant. There is one fact tending, however, to show that the plaintiffs certainly did not consider the endorsement as creating the peculiar rights and obligations incident to an endorsement of negotiable paper. It appears that not long after they received the note, they instituted thereon an action at law against the maker in the name of the defendant, Broun, as payee, for their own benefit; and this action was prosecuted to judgment and execution. If, according to the present contention, the plaintiffs were endorsees of the paper in the commercial sense of the law, they were clothed with the legal title, and the suit must have been brought in their own names. A suit in the name of the payees, though by no means conclusive, would seem to indicate, in some measure, the light in which the transaction was regarded, both by counsel and by the parties at the time. Be that as it may, if the endorsement was not in fact March of a negotiable character, neither the opinion nor the 1880. intention of the parties would make it so. In the case of Freemans Bank v. Ruckman, 16 Gratt. 126, the parties believed the instrument negotiable, and so treated it; this court held, however, that the note was not Hull, surnegotiable. It has been supposed, however, that the case of Woodward & Bro. v. Gunn, 2 Va. Law Journal 243, asserts a different doctrine; that this court had there decided that as the parties intended to execute negotiable paper, and thought the notes were negotiable, they must be so held, although not in fact so. This is an entire misapprehension, as a careful examination of the case will show. In the opinion of the President, much stress was, of course, laid upon the supposed intention of the parties, because the intention was an important element with respect to the authority of the holder to fill the blanks in the notes. These blanks had been so left on purpose, because it was not known at which of the banks the loan could be obtained. It was proved to be a frequent custom in the city of Richmond, as it is elsewhere, for notes endorsed for accommodation to be left blank as to the place where payable, in order that the blank might be filled by the holder, and it was further proved that express authority had been given to fill the blanks, and that the parties throughout treated the notes as though they were negotiable. This court was of opinion that although the blanks had not been actually filled with the name of the bank, they might have been so filled at the time or afterwards, or even at any time before judgment. Whether the decision be right or wrong, it was not, as will be seen, placed upon any such ground as that mere intention can make a non-negotiable note negotiable. If authority is needed in support of the decision, it may be found in 2 Parsons on Notes and Bills 563; 1 Daniel on Neg. VOL. XXXIII-5 Broun V. vivor, &c. March In., § 145, § 90; Orrick v. Colston, 7 Gratt. 189; GilTerm. laspie v. Kelley, 41 Ind. R. 158; Spiller v James, 32 Ind. R. 203. V. Broun I take it, therefore, to be perfectly clear, that if both Hull, sur- parties thought the paper negotiable, and under that vivor, &c. error the defendant agreed to waive demand and notice, still, if as a matter of law, demand and notice were unnecessary, the waiver was a mere nullity, and did not change the real nature of the contract. It can hardly be supposed that the defendant in waiving protest intended thereby to waive any other legal right; that he was willing to remain indefinitely bound for the amount of the debt whenever called upon, although the plaintiffs may have been guilty of the grossest laches with respect to the maker. It has been said, however, that the plaintiffs may have been misled by the waiver of protest. Supposing they were endorsees, they may have failed to take such active steps against the maker as they would have taken if they had considered themselves mere assignees. If this be so-if the plaintiffs have been misled to their prejudice by the conduct of the defendant, it is a matter for the jury to determine upon all the evidence before it. The court cannot undertake to say in advance that there is any ground of estoppel. It would, however, be very difficult to found an estoppel upon the mere misconception of the nature and legal effect of an instrument of writing. The plaintiffs were in possession of the note, and must be presumed to know and understand at their peril their rights and obligations under it. My opinion, therefore is, that the "waiver of protest" does not at all change the legal operation and effect of the endorsement. As assignees, the plaintiffs were under no obligations to make any demand upon the maker, and give notice to the defendant of non 1880. March Term. Broun V. payment, but they were bound to exercise due diligence in suing the maker, obtaining judgment and execution, as a condition precedent to their right of recourse upon the defendant, unless, indeed, the makers were notoriously insolvent. The defendants offered to show that Hull, survivor, &c. the plaintiffs had not exercised due diligence in this particular; that they might have collected the money from the makers, if they had not been guilty of gross negligence; but the circuit court rejected the evidence; and in this I think it erred. The defendant also offered to prove that the plaintiffs had instituted a chancery suit against the makers, but had conducted it so negligently and improperly as to result in the loss of the debt. I think the court, for the same reason, erred in rejecting this testimony. It also erred for a like reason, in not permitting the defendant to show that the bank had ceased to exist at the time the endorsement was made. The same questions are substantially involved in all the bills of exception. I am therefore of opinion, that the judgment of the circuit court must be reversed, and the cause remanded for a new trial in conformity with the views herein expressed. In conclusion I will say, that while the questions here involved are not free from difficulty, the result attains the justice of the case. The other judges concurred in the opinion of Staples, J. The judgment was as follows: The court is of opinion, for reasons stated in writing and filed with the record, that the circuit court erred in rejecting the evidence set out in the first, second, and third bills of exceptions of the plaintiff in error. Wherefore for the errors aforesaid it is considered by the court that the judgment of the circuit court be March V. do 1880. reversed and annulled, and that the defendants in error pay to the plaintiff in error, his costs by him expended in the prosecution of his writ of error and Broun supersedeas aforesaid here. And this court proceeding Hull, sur- to render such judgment as the said circuit court ought vivor, &c. to have rendered, it is considered that the verdict of the jury be set aside and a new trial awarded the plaintiff in error. Upon which new trial the said circuit court is instructed to admit the evidence set out in said first, second, and third bills of exception, if the same shall again be offered by the plaintiff in error. JUDGMENT REVERSED. |