
118 U.S. 152 (1886)
PAINE
v.
CENTRAL VERMONT RAILROAD COMPANY.
Supreme Court of United States.
Argued April 8, 1886.
Decided May 10, 1886.
ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF VERMONT.
*156 Mr. George F. Edmunds and Mr. Guy C. Noble for defendant in error. Mr. Daniel Roberts and Mr. E.C. Smith were with them on the brief.
*158 MR. JUSTICE GRAY, after stating the case as above reported, delivered the opinion of the court.
This case was not submitted to the decision of the court without a jury, pursuant to the Revised Statutes of the United States, §§ 649, 700; but to the decision of the judge as referee, in accordance with the statutes and practice of Vermont. Gen. Stat. 1862, ch. 30, § 52; Rev. Laws 1880, § 985; White v. White, 21 Vt. 250; Melendy v. Spaulding, 54 Vt. 517. The only question presented by the writ of error, therefore, is whether there is any error of law in the judgment rendered by the court upon the facts found by the referee. See Bond v. Dustin, 112 U.S. 604, 606, 607, and cases there cited.
The report of the referee, although a little obscure in parts, sufficiently shows that the material facts were as follows: Subscriptions *159 were made to the capital stock of the defendant corporation to the amount of two millions of dollars (of which Hoyt subscribed $50,000), with the expectation that the defendant, when organized as a corporation, should be appointed, pursuant to its charter, receiver of two other railroad corporations, and should assume the obligations of the former receivers. Those receivers were short of money, and by arrangement with them one of the subscribers, in behalf of all, advanced as a temporary loan to the receivers $200,000 (ten per cent. of the whole subscription), and a note for that amount was made to him, with the understanding that the note should be paid if the defendant did not come into possession of the roads and assume the obligations of the receivers, and should "stand against the subscriptions for stock if it did." After the defendant had been organized and been appointed receiver, and had assumed the obligations of the former receivers, the note of $200,000 was given up, and instead thereof the defendant gave new notes to each subscriber separately for ten per cent. of the amount of his subscription, and each of the other subscribers paid his proportion of the sum of $200,000 to the one who had advanced that sum. Hoyt paid him $5000, and received the note in suit, which was made and dated at Boston, July 10, 1873, and was payable on demand, with interest. The assessments laid on the subscriptions for stock amounted to fifty per cent., of which five per cent. was paid at the time of subscribing; thirty per cent. was laid June 24, which is stated to have been "paid by the subscribers respectively, including Hoyt;" ten per cent. was laid August 13, and five per cent. laid October 24 and payable December 1, 1873, both of which Hoyt paid. This part of the report of the referee, after stating the above facts, concludes thus: "The assessments paid amounted to fifty per cent of the subscriptions. Hoyt paid, as stated, fifty per cent., and no more, of his subscription. There was no other consideration for this note; and by the understanding of the parties it was to be delivered up, with the collateral bonds, on delivery to him of stock certificates for his stock."
It is evident that the ten per cent. on Hoyt's stock, which had been included in the sum of $200,000 stated to have been *160 originally advanced by the lender "in behalf of all the subscribers," and which was repaid to him by Hoyt when the notes to the several subscribers were substituted for the single note for the whole original advance, is to be considered as part of the fifty per cent. paid by Hoyt towards his subscription, and that he paid directly to the defendant only forty per cent. The difference in form of the statements, that "the assessment of June 24 was paid by the subscribers respectively, including Hoyt," but that "Hoyt paid" the two later assessments, is, to say the least, quite consistent with this view. And any other is wholly inconsistent with the ultimate facts expressly found, that "Hoyt paid, as stated, fifty per cent., and no more, of his subscription," and that "there was no other consideration for this note."
The effect of the agreement between the defendant corporation and Hoyt was that the assessments to be laid upon his stock in the corporation should, when payable, be not only set off against, but considered as payments upon, the note for $5000 from the corporation to him, now in suit. When Hoyt delivered this note to the plaintiff, on November 1, 1873, the assessments already due and payable upon his stock amounted to much more. As between the defendant and Hoyt, therefore, as well as against any one who took this note from Hoyt, when overdue, the note had been paid. American Bank v. Jenness, 2 Met. 288; Gilson v. Gilson, 16 Vt. 464.
In this country, a promissory note payable on demand has always been held to be overdue, so as to subject any one taking it to all defences to which it would be open in the hands of the payee, unless transferred within a reasonable time after its date; and what is reasonable time is a question of law, depending upon all the circumstances of the particular case. Morgan v. United States, 113 U.S. 476, 501; Losee v. Dunkin, 7 Johns. 70; Sylvester v. Crapo, 15 Pick. 92; Dennett v. Leland, 13 Vt. 485; Camp v. Clark, 14 Vt. 387. See also Chartered Mercantile Bank v. Dickson, L.R. 3 P.C. 574, 579.
The difficulties of applying this test, and the convenience of a more definite rule, have led the legislatures of many States to regulate the matter by statute; and before the making *161 of the note in suit the statutes both of Massachusetts and of Vermont had defined reasonable time for this purpose to be sixty days from the date of the note. Mass. Gen. Stat. 1860, ch. 53, §§ 8, 10; Pub. Stat. 1882, ch. 77, §§ 12, 14; Vermont Stat. 1870, ch. 70; Rev. Laws 1880, § 2013. The power of the State legislatures to establish such a rule prospectively, with regard to promissory notes made and payable within their respective jurisdictions, has not been and cannot be doubted.
The note in suit was endorsed to the plaintiff more than sixty days after its date. It was made in Massachusetts, and, if not payable there, was payable in Vermont, where the defendant was incorporated. The construction and effect of the contract must be governed by the law of the one or the other of those States; and it is superfluous to consider by which, because by the law of either the note was overdue when the plaintiff took it, and therefore he cannot recover upon it.
As to the evidence, stated in the report of the referee, upon which the plaintiff relies as tending to prove a promise to himself by the defendant to pay the note, it is sufficient to say that, it not being shown that the plaintiff, in consideration of or reliance upon such a promise, either agreed to forbear or actually forbore to sue, there was no consideration for the promise, and no ground for giving it effect as an estoppel.
Judgment affirmed.
