Bills and Notes, Demand note, Presentment. Words, "Reasonable time."
At the trial of an action by the payee of a demand note, a bank, against an indorser, the wife of the maker, there was undisputed evidence that previous notes of the husband to the same bank, indorsed by the defendant, had been time notes and had been paid or renewed at maturity; that the defendant knew nothing of the business dealings of her husband or that he had paid interest on the note; that she never had been in the bank's place of business; that the maker's place of business was within three hundred feet of the bank; that almost eight months after the date of the note he had made an assignment for the benefit of his creditors, and that the bank made no demand for payment of the note until a year and two months after its date. There was no evidence of a usage of trade or business as to what was a reasonable time within which demand should have been made. Held, following Merritt v. Jackson, 181 Mass. 69, that there could be no recovery against the indorser because on the undisputed evidence demand for payment of the note was not made within a reasonable time, namely, within sixty days of its date.
De COURCY, J.
The main question raised by the exceptions is whether the demand note in suit was presented for payment "within a reasonable time after its issue," as required by the negotiable instruments law. R. L. c. 73, § 88. The note was made by Maurice A. Scanlan, dated November 29, 1910, payable to the order of the plaintiff, and indorsed by the defendant Ellen J. Scanlan, the wife of the maker. On January 29, 1912, it was presented at the trust company for payment, and notice of dishonor was duly sent to the indorser.
The statute expressly provides (§ 209): "In determining what is a 'reasonable time' or an 'unreasonable time' regard is to be had to the nature of the instrument, the usage of trade or business, if any, with respect to such instruments, and the facts of the particular case." It was decided in Merritt v. Jackson, 181 Mass. 69, under this statute, that in the absence of any evidence to show a usage of trade or business to the contrary, or of facts in the particular case to bring it within § 209, a demand note must be presented within sixty days in order to hold the indorser. That case is decisive of the present one. The plaintiff has failed to show that any usage with respect to demand notes has grown up different from that which had the force of law in this Commonwealth for nearly sixty years before the enactment of the negotiable instruments law. Nor were any facts in evidence which render this customary standard inapplicable. The defendant, who indorsed the note for the accommodation of her husband, had no knowledge of his business dealings or of the fact that he had paid interest on this note. She never was in the plaintiff's place of business, where the note was payable. The earlier notes indorsed by her were time notes and were paid or renewed at maturity. And while the maker of the note made an assignment for the benefit of creditors July 13, 1911, the demand for payment of this note was not made on him until January 29, 1912, although his place of business was on Main Street in Brockton within two or three hundred feet of the trust company.
In some circumstances it may be a difficult question to determine what shall be deemed a reasonable time within which to demand payment of the maker, in order to charge the indorser. Seaver v. Lincoln, 21 Pick. 267. We are of opinion, however, that on the undisputed facts in the present case a demand made fourteen months after the issue of the note was not made "within a reasonable time;" and that the judge should have ruled as requested by the defendant. Merritt v. Jackson, ubi supra. Commercial National Bank of Syracuse v. Zimmerman, 185 N.Y. 210. Anderson v. First National Bank of Chariton, 144 Iowa, 251. Frazee v. Phoenix National Bank, 161 Ky. 175. See Toole v. Crafts, 196 Mass. 397, 401.
The conclusion reached on the main question makes it unnecessary to consider the defendant's exception to the admission of the letter from the attorneys of the maker of the note.
In accordance with the report, a verdict for the defendant shall be entered in accordance with R. L. c. 173, § 120, as amended by St. 1915, c. 185, § 1.
Ordered accordingly.