14 Conn. 362 | Conn. | 1841
It is admitted, that the indorsement, by the defendants, of the instrument in question, imposed on them a liability to pay to the plaintiffs the sum therein mentioned, provided a legal demand of payment was made, when due, and payment refused, and legal notice of such non-payment given to the defendants : and it is upon the legality of the demand and notice that the various questions arise in this case. The defendants claim, that the demand of payment was not made of the proper persons, nor at the proper time ; and that the notice of non-payment was not given to the proper persons, nor at the proper time, nor in legal form. If the demand was legally made, there is no objection to the notice, except to its form.
The instrument in question is conceded, by the counsel for the defendants, to be a promissory note ; but the result to which the court has come would be the same, whether it is to be considered as a note, or, in connexion with the defendants’ indorsement, an accepted draft or order, or, as it is otherwise termed, a certified check; provided it is a note of the bank, in the one case, or a draft or check on the bank, in the other. The defendants insist, that the bank is neither the maker nor the drawer. If this be so, it results, that the demand was improperly made, since it was made upon the bank alone.
That the instrument, on its face, imports to be made by the bank, there can be no doubt. It is dated at the bank ; it is signed by Wheeler, officially, as president of the bank ; and it states the deposit of the sum mentioned in it, and which is to be repaid, to have been made in the bank. If, therefore, there is no want of authority to execute the instrument on behalf of the bank, it is binding upon it, and is to be deemed its obligation. A deposit, merely, in the bank, without any certificate, Would raise an implied promise by the bank to repay. An express promise to that effect, whether verbal or written, by any person authorized in fact or law to make it, is, of course, obligatory. And the indorsement oil the back of this instrument imports an order or draft, by the defendants, on the maker, and is a direction to such maker to pay the contents to the indorsees, which constitutes it a bill of exchange, and imposes on the parties the ordinary liabilities attached to that kind of paper.
It is, however, claimed, by the defendants, that this instrument, not being signed by the cashier, as well as the president, of the Chelsea banking company, is not obligatory upon that institution, since it is not in conformity with the law of the state of New-York, under which it went into operation, the 21st section of which provides, that “ contracts made by any such [banking] association, and all notes and bills by them issued and put into circulation as money, shall be signed by
It is our prevailing opinion, that, by the true construction of this provision, it applies only to such contracts, notes and bills, as are made and intended to be used as a currency. It is susceptible of that meaning fairly, and without doing any violence to the language used or its grammatical connexion ; while to hold that it embraces also every express contract, of whatever description, or for whatever purpose, which these banking associations might, in the course of their business, have occasion to make, would constantly be productive of the most serious inconvenience and embarrassment: and the operation of it must be thus unlimited, unless it is confined to paper put into circulation as money. With regard to such paper, the requisition of the signatures of the two principal officers of the institution might have been, and probably was, considered as a necessary, or at least a proper, security to the public, as well as the stockholders. But we can conceive of no possible utility in extending it to all the other bargains and arrangements, including even the most unimportant, which these companies, from time to time, and perhaps daily, might find it necessary to make. And it is at least as consonant with the very language used thus to restrict it to a particular species of contracts, as to extend it to those of every description.
It is not, however, necessary to settle the construction of this part of the New-Yorh banking law. If the claim of the defendants respecting it is correct, it will not relieve them.
In the first place, if that provision of the law is to be deemed applicable to the paper in question, it is well settled in the cases of Bulkley & al. and of Witte v. The Derby Fishing Company, 2 Conn. Rep. 252. 260., that, however it might be, when a bank, or other corporation of a similar nature, authorized by their act of incorporation to contract in a particular mode, was endeavouring to enforce a claim founded on an instrument not executed in that mode ; yet, that they may, by a course of practice, render themselves liable on such instruments. The first of those cases was an action on a policy of insurance, and the other on a bill of exchange. By the act of incorporation, it was required, that the first should
Secondly, this paper does not shew, that it was executed by a bank organized under the act of New-Hork, which has been produced: and therefore, no defect is apparent on its face. The law is indeed a public act, but the organization of the institutions under it, is not public ; and it is only to a particular kind of banks in that state, that the act is applicable.
The instrument, therefore, was not necessarily unavailing against the bank, but might be valid, consistently with what appeared on its face.
But, in the last place, it is not competent for the defendants, in this action, to set up the invalidity of the instrument on account of the incapacity of the bank to make the contract embraced in it. By their indorsement of that instrument, they must be held to have warranted not only its genuineness, but its validity. Such indorsement constituted a draft on the bank, in favour of the plaintiffs ; and to permit the defendants now to raise this defence, would be opposed, as well to the whole current of legal authorities, as to good faith, and the policy upon which the principles established with regard to the negotiation of such paper is founded. As between the indorser and holder of negotiable notes, the former is not allowed to avail himself of the infancy or coverture of the maker, nor the forgery of his name, nor his incapacity to contract. Holy v. Lane, 1 Atk. 181. Taylor v. Croker, 4 Esp. Rep. 188. Codwise & al. v. Gleason & al., 3 Day 12. Smith v. Chester, 1 Term Rep. 654. Price v. Neal, 3 Burr. 1354. Smith & al. v. Mercer & al. 6 Taun. 76. The State Bank v. Fearing, 16 Pick. 533. Free & al. v. Hawkins, Holt's N. P. Ca. 550. Chitt. Bills 377. Bayl. 219. Chitty, in his treatise on Bills, (p. 106.) says, “the act of drawing a bill implies an undertaking from the drawer to the payee, and to every subsequent holder, fairly entitled to the possession, that the person on whom he draws, is capable of binding himself by his acceptance, and that he will pay it, when it becomes due, if presented in proper time for that purpose.”
The counsel for the defendants have endeavoured to assimilate this, to those cases where the accommodation maker, acceptor or indorser has been permitted to defend against an indorsee taking negotiable paper, not hona fide, nor in the course of mercantile business. There is, however, no analogy between those cases and the present. The connexion between the defendants and the Chelsea Bank would, of itself, render the principle of those cases wholly inapplicable. As stockholders of that bank, the defendants received the benefit of the consideration for the indorsement in question. They were part owners of the property which was bought on the strength of the indorsement; and it was made for the very purpose of such purchase. There is no principle of law or justice, by which, under such circumstances, the defendants
The demand, therefore, was properly made on the Chelsea Bank.
The next enquiry relates to the time when the paper in question became due, and therefore when payment of it should have been demanded.
The court was correct in informing the jury, that the case was to be governed by the law of the state of New-York, and in submitting to them on the evidence the question what that law was.
This paper fell due, by its terms, on the 1st day of December, which happened to be Sunday ; and one of the questions between the parties was, whether, by the general law of the state of New-York, it was payable on the preceding Saturday, or subsequent Monday. To prove such general law on this point, the evidence consisted of two decisions in the state of New-York; one by the superior court of the city of New-York, having a local jurisdiction in said city, and the other by the supreme court of that state, a court of general jurisdiction throughout the state, and although not the court of the last resort, yet having jurisdiction to revise and correct the decis. ions of said superior court, together with a decision in our own supreme court, referred to, in the case last-mentioned. The defendants insisted, that the decision of the supreme court of the state of New-York was to be deemed conclusive evidence of the law of that state. The court, however, did not so charge the jury; but stated to them, that it was higher evidence, and entitled to greater weight, than that of the su. perior court. This is the most that the defendants had a right to claim. The decisions, introduced for the purpose of proving the law of New-York, had no artificial or arbitrary force or effect attached to them. It has been truly said, that precedents are not the law itself, but only evidence of the law; and such precedents, when introduced as mere evidence of law, are to be weighed like other evidence. The record of a judgment is indeed conclusive evidence of the facts on which it is founded; but the idea that the decision by any court, however respectable, on a question of law, is not to be re-examined or questioned, is entirely novel. And there is nothing in the relative situation of these two courts, whose-.
The defendants, claiming to have proved, that, by the general law of New-York, paper of the description of that in question was entitled to the usual allowance of grace, and that, when happening to fall due by its terms on a Sunday, it became payable on the Monday succeeding, except to the admission by the court below of evidence offered by the plaintiffs to shew, that, by the usage and custom prevailing in the city of New-York, such paper was not entitled to grace, and that when so falling due on Sunday, it became payable on the preceding Saturday.
The question, how far evidence of usage is admissible to shew, that, as to a particular species of negotiable paper, it is entitled, not to the usual number of days of grace allowed by the general law, but to a greater or less number, has received the most deliberate consideration of our courts of the highest authority, especially on commercial questions, and is most explicitly and decisively settled. In Renner v. The Bank of Columbia, 9 Wheat. 582. which was a suit against an in-dorser of a promissory note negotiated in the bank of Columbia, where payment was demanded and the note protested, on the fourth day after that mentioned in the note as the day on which it was payable, evidence was offered and admitted to shew, that this was in conformity with the custom of the bank, although it was admitted, that, by the general law, negotiable paper was entitled to only three days of grace ; and, upon exception taken to this decision, it was, on great deliberation, affirmed. In this case, the custom was known to the parties to the note. The same point arose afterwards, in the case of Mills v. The Bank of the United States, 11 Wheat. 430. where the custom was not known to the parties ; and there also it was held, that proof of such custom was admissible. The court say, that “ when a note is made payable and negotiable at a bank, whose invariable usage is, to demand payment and give notice on the fourth day of grace, the parties are bound by that usage, whether they have a personal knowledge of it or not. In the case of such a note, the parties are presumed, by implication, to
It is admissible also, upon the principles on which courts generally admit evidence of this description. The object of allowing evidence of local usage or custom, is, usually, to as
We think also, that evidence was admissible, to shew, that the paper in question, by the usage and custom prevailing where it was payable, became due on the Saturday preceding the day, when by its terms it was made payable, that day being Sunday. Payment could not be exacted or tendered on the day, when by its terms it was made payable, since that day is not recognized by the law as one on which a contract can be performed ; and it must therefore be made, either on the day preceding or subsequent. The terms of the contract, therefore, in this case, as to the time of its performance, are wholly indeterminate ; and the case falls within the class of cases in which evidence of usage is deemed peculiarly proper, in order to ascertain the meaning of the parties. Such evidence does not contradict the sense of the instrument, as ap
The only remaining exception to the proceedings below relates to the charge on the subject of the form of the notice of non-payment. This objection has not been strongly pressed; and we think that the subject was placed on the correct ground. The rule given to the jury, was just, reasonable and intelligible ; and is fully sustained, by the authorities. Reedy v. Seixas, 2 Johns. Ca. 337. Mills v. The Bank of the United States, 11 Wheat. 431. Bank of Rochester v. Gould, 9 Wend. 270. Chitt. Bills, 365. Byles, 156.
A new trial, therefore, should not be granted.
New trial not to be granted.