Lyman G. Camp v. Jacob Scott, principal debtor, and William Clark, trustee, 14 Vt. 387

The opinion of the court was delivered by Redejeld, J. The only question made in the present case, in regard to the liability of the trustee, is in reference to the note made payable to Edwards. This note seems to have been made payable to him without his concurrence or knowledge, and for the purpose avowed, by Scott, of putting it beyond the reach of the trustee process. We could not feel justified to allow so obvious a subterfuge to interpose any obstacle in the way of this process.

If Edwards or Aikin is now the bona fide holder of this note, and received it in the due course of business, while it was still current, the interest, thus acquired, cannot be defeated by this process, although pending at the time the holder acquired a title to it. But if the holder took the note when overdue, he took it subject to all the defences which existed while the note was in the hands of Scott. Among such defences may be reckoned attachment by this process.

The note was payable on demand, and there is no testimony in the case tending to show that it came into the hands of Edwards until about two months after its date. The rule, at present, in regard to the time when such note or accepted bill should be presented for payment is ‘within a reasonable time,’ and that question,where there is no controversy in regard to the facts, is now considered purely one of law. It is not required that the note or bill, even when the parties reside in the same town or village, should be presented on the same day, but in such cases it should be presented on the next day.

And, ordinarily, I apprehend, unless so presented, the indorsers are exonerated. And, as a general rule, a note or bill may be said to be ‘overdue’ when the period has elapsed in which it should have been presented. If the parties reside in different towns, the note should be presented for payment in the due course of the mail, which would not commonly require above one or two weeks, at most. Unless some such rule is adopted it must lead to a very embarrassing uncertainty.

We are all satisfied that, in the present case, two months having elapsed, the note must be considered as ‘ overdue,’ and the trustee is liable. The present state of the law upon this subject is as well shown by the following, from 3 Kent’s Com. 91, fourth edition, as any where perhaps. ‘ But it has been a question ‘ when a note, payable upon demand, is to be deemed a note ‘ out of time. Eighteen months, eight months, seven months, ‘ five months, even two months and a half, have been held, ‘ when unexplained by circumstances, an unreasonable delay. ‘ On the other hand, in Thurston v. McKown, 6 Mass.

R. ‘ 428, a note payable on demand, and indorsed within seven ‘ days of the time it was made, was held to be indorsed in ‘season to close all inquiry into the origin of the note. Losee v. Dunkin, 6 Johns. R. 70, decides that two months and a half is such a delay as to subject the holder of the note to such defences as exist between the original parties. Another case referred to by the learned Chancellor, Field v. Nickerson, 13 Mass.

R. 131, decides only that a note, payable on demand, and indorsed blank at date, must be demanded of the maker, and notice given to the indorser in less than eight months, in order to charge him. The time within which such a note shall be considered overdue is, I had supposed, totally another matter from that within which demand and notice is to be made in order to charge an indorser, although, as I have stated above, perhaps both should depend upon the same reasons, and the time would thus coincide.

In the extract made above, and from its connection, and the cases cited, it would seem that the learned commentator considers the time the same in both cases. If so, it is not, I apprehend, at this day, a matter of much doubt. If such note be negotiated, demand and notice are to be made immediately, in order to charge the indorser. I do not pretend to say the same strictness would be required in order to exclude all inquiry into the origin of the note. Judgment affirmed.