Farmers' Bank of Bridgeport v. Vail

Farmers' Bank of Bridgeport v. Vail. Promissory Note.—Notice of Nonpayment. If a note be dishonored on Saturday, and the bank where it is made payable, and to which it has been forwarded for collection, with an indorsement in blank, not being able to ascertain the indorser’s residence, mail notice to its principal, the bank which is the holder thereof, on the following Monday, and the latter bank (which had not indorsed the note to the former), on the next day after receiving such notice, mail it to the indorser, the latter is duly charged. Appeal from the general term of the Supreme Court, in the first district, where judgment in favor of the plaintiff, entered upon the report of a referee, had been affirmed. This was an action upon a promissory note, by indorsee against indorser,. The note was dated the 24th October 1854, and the maker thereby promised to pay to the. order of the defendant, three months after date, the sum of $1300, at the Broadway Bank. The note, with the defendant’s indorsement in blank, was forwarded by the Farmers’ Bank of Bridgeport, which was the holder thereof, to the Broadway Bank, for collection, without the indorsement of such holder. The note matured on Saturday, the 27th January 1855, *an<^ no* having been paid, the notary who presented it for payment, on the following Monday, not having been able to ascertain the indorser’s residence (in point of fact, he was president of a bank in Sing Sing), mailed a notice of non-payment, addressed to him, under cover to the plaintiff, at Bridgeport, and also mailed another notice to the defendant, at New York. The plaintiff received the notice of non-payment, by due course of mail on Tuesday, 30th January, and immediately placed it in the post-office at Bridgeport, properly directed to the defendant, by whom it was duly received. The referee held the notice of non-payment sufficient to charge the defendant, and directed judgment in favor of the plaintiff, which having been affirmed at general term,- the defendant took this appeal. Cobb, for the appellant. Lyon & Porter, for the respondent. [MAJORITY — Wright, J. Denio, J.] Wright, J. There is but a single question attempted to be raised in the case, viz., whether reasonable diligence was used in notifying the defendant of the nonpayment of the note. I have intentionally used the expression, attempted to be raised, for it is to be doubted, as the case and exceptions are presented, whether the question of diligence can or should be considered. The question is one of law, Avhen there is no dispute as to the facts; there Avas no dispute in this case, but instead of presenting the question to the referee, on a motion for a *nonsuit, or in some other Avay, it seems not to have been distinctly or definitely raised. After evidence had been given by the plaintiffs, tending to shoAV a demand, protest and notice of- non-payment, the note Avas offered in evidence, the defendant objecting, on the ground, that the proper proof of demand and notice of protest had not been made. The referee did not then pass upon the objection, but subsequently, and after evidence had been given as to demand -and protest, the note and certificate of protest was received in eAridence, the defendant’s counsel only interposing a general objection. There was no objection, that the note ought not to be read in evidence, on the ground of want of diligence in giving notice of dishonor to the indorser, nor was the referee requested, in any stage of the trial, to pass upon that question as one of law; he has decided it as one of fact against the defendant. But if the question of diligence is open, and to be considered as one of law, I see. no difficulty in sustaining the judgment of the referee. When the note fell due, it was in the Broadway Bank, the place where payment was to be demanded. It is to be inferred, that, it was indorsed, by the plaintiffs, to the Broadway Bank, for collection; the latter bank was certainly their agent for that purpose. The Broadway Bank employed their notary to demand payment, and, in the event of refusal, to protest the note and give notice of its dishonor. The plaintiffs are to be regarded as a party to the paper, for all the purposes of receiving and giving notice to charge the prior parties. (Edwards on Bills 622; Bank of the United States v. Davis, 2 Hill 451; Clode v. Bayley, 12 Mees. & W. 51.) The note was protested, after banking-hours, on the 27th of January, which was Saturday. The notary had until the next day, that is, the next business day, which ivas Monday, the 29th, to give notice of non-payment. When the third day of grace falls on Saturday, the notice of non-payment need not be given until the next Monday. (Williams v. Matthews, 3 Cow. 252.) The defendant appears to me to have been regularly notified. Due diligence, within legal rules, was used. *When an indorser intends charging previous indorsers by consecutive notices, and they reside in different places, due diligence Avill have been used, Avhen notice is sent the day folloAving that on which it is received. The rule is the same, though the paper is indorsed from one to another agent, for collection merely; each of such indorsers is to. be regarded as a party, for all the purposes of charging prior parties. In Scott v. Lifford, (9 East 347), the plaintiff having become the holder of a bill of exchange, had placed it in the hands of his bankers; on the 4th June, Avhen the bill became due, a clerk of the bankers presented it for payment, and it was dishonored; on the 5th, they returned it to the plaintiff, who, by letter put into the two-penny post on the 6th, gave notice to the defendant (the drawer), of the dishonor; the plaintiff living in London, and the defendant at Shadwell; it was held, that reasonable diligence had been used. But, even if the principle of charging prior parties by consecutive notices, from one to the other, did not apply, and the plaintiffs are to be regarded as the holders of the note, and not the Broadway Bank, when it became due, and the notary acted as the agent of the plaintiff, and not of the latter bank, in giving notice of the dishonor, I think, there was no want of reasonable diligence. The note purported to have been made at New York, and was payable at a bank in that city; the notary was ignorant of the place of residence of the defendant, and the latter had not left any notice or memoranda with any one to indicate it. The referee finds that the notary made inquiries for the defendant’s place of residence, but was not able to ascertain where it was; whereupon he deposited in the post-office, at New York, a notice directed to him at New York, and mailed another notice, directed to him, under an inclosure to the cashier-of the plaintiffs’bank at Bridgeport. This amounted to due diligence, unless we are to assume that the plaintiffs well knew where the defendant resided, when the paper was about to mature, and, in anticipation of default in payment by the maker, on presentation, were bound to communicate *such knowledge to their collecting agent or the notary in New York. I am of the opinion, that the judgment of the supreme court should be affirmed. Denio, J. The case of Howard v. Ives (1 Hill 263) is precisely in point against the defendant, unless the distinction insisted on by his counsel is a substantial one. In that case, the holder, residing at Troy, indorsed the paper to the Union Bank of New York for collection; while, in the present case, it was forwarded to" a bank in that city, under the blank indorsement of the defendant. The point of the defendant’s counsel is, that the case does not apply, because the plaintiff here did not indorse the note to the Broadway Bank; but I am of opinion, that the difference is not material. Whether the note was forwarded under the indorsement of the plaintiff, or that of the defendant, the transaction, when explained, amounts only to the creation of an agency for the purpose of collecting the note. In both cases, the indorsement clothed the collecting agent with an apparent title to the note. The case cited establishes, first, that the holder’s agent, at the place of payment, may forward the notice to his principal in the interior, and if the latter forward it seasonably to the party to be charged, he will be fixed, though more time is consumed than there would have been, if the agent had sent it directly to the party to whom the ultimate notice was to be given; secondly, that where the note matures on Saturday, the notice need not be mailed until Monday; and thirdly, that in the case of a circuitous notice, it will be in time, if the intermediate, party forwards it the next day after he receives it. This covers all the questions which can arise in this case; and the consequence is, that the defendant was duly charged, and that the judgment of the supreme court must be affirmed. Judgment affirmed.