Hitchcock v. Bank of Suspension Bridge

Adams, P. J.: There can be no question, we think, but that the defendant, by reason of its omission to have the notes in question properly protested, became liable to the owner thereof for whatever damage . resulted from such omission. It is well settled in this State that a bank receiving a promissory note, for collection, whether the same be payable at its counter or elsewhere, is liable for any neglect of duty in its collection by which any of the parties are discharged, and the indorsement and delivery of such note to a bank for collection is a sufficient consideration for the undertaking on the part of the bank to charge the indorser by a regular notice of non-payment. (Bank of Utica v. Smedes, 3 Cow. 662; Montgomery County Bank [460] • v. Albany City Bank, 7N. Y. 459; Ayrault v. Pacific Bank, 47 id. 570; Pointer v. Holland, 51 id. 416.) Inasmuch as -it is conceded that the maker of these notes was insolvent, the plaintiff’s sole recourse was to the only indorser who- ■ was solvent, and as he was released from his contract of indorsement by the failure on the. part of the bank to properly protest the notes, it follows that the measure of the plaintiff’s damage was, the principal of the notes and interest due thereon, together with the necessary fees of protest. We think, however, that this was the limit of the defendant’s liability. The plaintiff was not obliged to bring suit against the indorsers before seeking redress of the bank, for when the fact was brought to his knowledge that the bank had failed, to take the necessary steps to charge the indorsers, his right of action against it was complete and he might have resorted to such right in the first instance. This, however, he failed to do, preferring for some unexplained reason to test the question of the indorsers’ liability. ■ He was not asked to dp this by the bank, nor was he induced, to do so by any misrepresentation upon the part of any of its officers. We consequently see no propriety in charging the bank with the-costs of that unsuccessful action, especially as the only authorities- . we are able to find upon the subject establish a rule quite contrary to the plaintiff’s contention. (Downer v. Madison County Bank 6 Hill, 648; Ayrault v. Pacific Bank, 1 Abb. Pr. [N. S.] 381.) Our conclusion, therefore, is that the judgment appealed from should be modified by striking therefrom the costs of the former action, together with the interest thereon, and as thus modified, affirmed, without costs of this action to- either party. All concurred. Judgment modified by striking therefrom the costs of the former action and interest thereon, and as thus modified, affirmed, without • costs of this appeal to either party.