Bank of Utica v. Smith

| N.Y. Sup. Ct. | Aug 15, 1820

Lead Opinion

Spencer. Ch. J.

delivered the opinion of the Court.— The defendant is sued as first endorser of a note for 10,000 debars, drawn by Soulden & Smith and Jl. Van Santvoord, to the defendant or order, dated July 20, 1818, and payable sis months from the date, at the Mechanics' Bank of New-York. Over the name of Peter Smith there was written, when the note was presented at the Mechanics' Bank, “ pay to the order of W. Fish, Esq. Cashier, &c." This endorsensent was thus filled up for the safety of transmission, by the plaintiffs’ direction, who were the owners of the note, Fish never having had any interest in it. The endorsment was afterwards erased, and the note directed to be paid to the plaintiffs. This gives rise to the first question : whether the plaintiffs had a right to erase the endorsement to Fish, and to fill it up to themselves ? It appears clearly that Fish never had any interest in the note. It was sent to him merely to collect, and not being paid, he sent it back. He was the mere servant or agent of the plaintiffs ; and it is, I think, clearly settled, that in such a case the plaintiffs had a right to strike out the transfer, and make the bill payable to themselves. (3 Wheat. Rep. 182. 1 Dall. Rep. 193. 2 Dall. 147. 15 Mass. Rep. 436. 1 Show. Rep. 164.)

2. The bill was properly presented at the bank for pay-merit; and although it was a quarter of an hour after the usual time for closing the bank, as to other business, it was yet within bank hours ; for it appears that these 15 minutes, according to the general course of doing business at this bank, was the usual and accustomed time for such presentments ; and of the course of doing business there, the dant ought to have informed himself. (7 East Rep. 385. 1 Maule & Selw. Rep. 28. 3 Bos. & Pul. 599.) If the defendant had been at the bank, and offered payment, or made inquiries for his note, it was for him to have shown it; but' It was his duty, also, to have waited until the usual time.

3. Notice of protest and non-payment was given by J. T. Irving, notary public, to the defendant, with notice that the holder looked to him for payment.

It is objected, that Fish only could make demand or give notice.

The note was in the possession of the notary when .pay» ment was demanded. He received it from Fish, who bad fui] j)0Wer to deliver it to him for that purpose. ¡; A demand of payment by an agent having any parol authority, or the mere possession of the paper, is sufficient. (7 Mass. Rep. 486. 9 Mass. Rep 423. 427.) It is true, that where it is necessary tor the party paying to have evidence of the authority of the person demanding payment, to justify him in making (he payment, then the authority ought to be in writing, and properly authenticated ; but where the possession of the evidence of the debt denotes the authority, and is ready to be surrendered on payment, it is not necessary' to have any special authority. Besides, although the law does not require the intervention of a notary to make a demand of payment, or to give notice of the non-payment of anote, yet these officers, are in the practice of doing so ; and being commissioned by the government, their official acts are of a more solemn nature than those of individuals: For the same reasons, a notice of non-payment by a notary is, also, available; and it is the constant and uniform course, sanctioned by a long and continued usage.

4. The last point is equally untenable. The transmission of the notice to the defendant at Peterborough, by the way of Utica, under cover to Hunt, cashier of the bank of Utica, was sufficient. It is in proof that letters sent to the defendant went through the post office in Utica. It appears that letters for the defendant from New-York, are sent both by the way of Utica and by the way of Cherry-Valley, indiscriminately, and that in point of fact, the notice was not delayed by being put under cover to Mr. Hunt. This presents a question of due diligence ; and even if it be admitted that the notice would have reached the defendants day or two sooner, had it been sent by the way of Cherry Valley, it does not prove that there was laches, or unreasonable delay in giving notice.

I consider the mode adopted in this case, in the same light as if the notary had sent a notice directed to the defendant, via Utica ; in which case, I can conceive no possible objection to the notice, for it is expressly in proof, that it was as usual to send letters to the defendant by the way of Utica, as by the other route. The law does not exact of the holder of a note or bill, that he shall give the earliest possible notice of its dishonour. It requires of him only an ordinary and reasonable diligence. Suppose notice is tobe sent from London to an endorser of a bill in Mem-York, of its dishonour, and that two vessels set sail on the same day, one of which sails faster than the other, would not a notice sent by the slowest sailer be well sent ? Yet the probability that it would arrive sooner, had it been transmitted by the other vessel, would be quite as strong as that this notice would have reached the defendant sooner, had it been sent by Cherry Valley. It would be alarmingly critical to hold the party bound to give notice to such rigid rules; and I am not apprized of any case in which the Courts have adopted them. We require, when notice is sent by post, that it he sent to the post office in the town where the party resides ; but where he is nearer to a post office in an adjoining town, and more frequently resorts there to transact his business, we have said, that notice was well directed to such post office. The endorser must have the chance of receiving notice in a usual and customary manner, and here he had that chance.

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Concurrence Opinion

Woodworth, J.

concurred on all the points raised in this cause, excepting on the question of notice, which he considered defective. Smith resided at Peterborough, in Madison County ; it was competent for the holder to send notice through the post office, directed to the post office nearest to the defendant, according to 16 Johns. Rep. 221. Therewere two routes from Mem-York to .Peterborough, one by the way of Cherry Valley, the other by the way of Utica; and although it appears the defendant received letters from Mem-York byboth routes, it is in proof, that the distance by the way of Cherry Valley is considerably less than by the vyay of Utica, and that letters coming from Mem- York by the Cherry Valley route, reach Peterborough as soon as by the way of Utica, even if they do not lay over at Utica. In the present case, if the notice forwarded to the cashier at Utica had not lain over one mail at that place, (as it did by reason of the lateness of its arrival,) it would have arrived at Peterborough on Friday, but it did not arrive until Tuesday following. The evidence of Bunco shpws, that had the notice been sent by Cherry Valley, it would have arrived as early as Friday, and thereby apprised the defendant of his liability, three dayssooner. If theholderseeks tocharge the endorser, by notice through the post office, and there are two routes, he cannot arbitrarily, or for his own convenience, designate a particular route by which the mail is conveyed, unless he can show that the notice arrived as soon as if sent by the other: he has not only failed to do this, but it expressly appears, that had the notice been directed to the defendant at Peterborough, it might have been received at an earlier day. He considered it no answer to say, that the defendant received letters by both routes. The forwarding of letters from the post office at Albany, sometimes by Utica, and sometimes by Cherry Valley, could not vary the duty of the holder at New-York; his course was distinctly marked and defined. Had the notice sent been directed to Peterborough, it is at least equally probable it would have been forwarded by Cherry Valley. The holder, by his act, deprived the defendant of the chance of receiving the earliest information, and he cannot complain, if for this cause, his notice is considered bad. It is not the application of a new and rigorous rule ; but requiring the observance of a rule well established ; and as the holder by his own act has chosen to depart from' it, he has thereby discharged the endorser.

Judgment for the plaintiffs.