Story Case

The following instrument was issued to the Metropolitan Trust Company in payment for the rent of a building which it held as trustee:

"425. June 30,1915.

We do hereby promise to pay to bearer four hundred and twenty-five dollars, on demand, without interest. A. Halloway & Son, (Signed) Private Bankers, Halloway Building.

Arthur Halloway William Halloway." The Metropolitan Trust Company made no demand, but after about ten days, brought suit on the note. A. Halloway & Son admitted the execution of the note and offered to pay it, but the Metropolitan Trust Company insisted that the judgment include the costs of suit and serving process. What should be recovered?

Ruling Court Case. Greeley Vs. Whitehead, Volume 35 Florida Reports, Page 523; Volume 48 American State Reports, Page 258

Whitehead made his note, payable one year after date, at a certain bank, particularly named. Greeley became the owner of this note. When it matured, Greeley brought suit without having presented it to Whitehead for payment.

Whitehead insisted that he was not liable, unless it was shown that the note was presented for payment at the time and place designated.

Decision: The maker of a note payable at a particular time and place is liable thereon, although it is not presented at the time and place named; but he may avoid the payment of future interest, damages, and costs by showing a readiness and ability to pay at the time and place designated, and since that time until the action was brought, and that he brings the money into court for that purpose.

Mr. Chief Justice Mory said: "It is now the accepted doctrine in the United States that in a suit against a maker of a promissory note, payable at a particular time and place, it is not necessary to allege in the declaration a presentation for payment at the place named, or to prove such presentation at the trial, in order to entitle the plaintiff to recover upon such note. The theory of the American courts is that the maker of the note, being the principal debtor, is still liable to pay, though the note is not presented at the time and place designated for payment, and that it devolves upon him to show as a matter of defense a readiness with the money to meet the note at the time and place." Judgment was therefore given for Greeley.

Ruling Law. Story Case Answer

The maker of a note is not discharged of his liability thereon by reason of the fact that it is not presented to him for payment. He is the principal debtor; he is under an obligation to pay the note under all circumstances; and the mere fact that suit is begun against him without a previous demand for payment does not relieve him of the duty to pay it. But if he is able to show that he was ready and willing to pay the instrument at all times during the day on which payment was due, this will relieve him of the duty of paying the costs of litigation, and interest, and he may be allowed such damages as he may have suffered by reason of the failure of the holder to present the instrument for payment.

Lack of demand is no defense to A. Halloway & Son as to the principal of the note. If the Metropolitan Trust Company, for reasons of its own, desires that its debt be made a judgment of record, it is entitled to have it. But it is not entitled to have the debtor pay the costs of the suit, nor can it needlessly require him to go to the expense of defending. If the defendant, A. Halloway & Son, were required to pay an appearance fee, that should be charged against the Metropolitan Trust Company. Since this note was not due until a demand was made and bore no interest before maturity, it has never carried interest and that question is not here raised. The judgment should be for the plaintiff, for the amount of the note, $425, without costs, with a deduction for the defendants costs.