Smith v. Aylesworth

By the Court, Johnson, J. The action is brought by the payee, against the maker, of the note in question. Of course no demand was necessary in order to charge the defendant. The only question in the case is whether the action, having been commenced after banking hours at the bank where the note was payable, on the last day of grace, is not prematurely brought. This precise question was decided in Osborn v. Moncure, (3 Wend. 170,) upon full argument and mature deliberation. That case, like this, was an action between payee and makers, and the action was brought before three [112] o’clock in the afternoon of the last day of grace, but after demand of payment and refusal. The court unanimously held that the makers had the whole of the third day of grace in which to make payment, and that an action commenced upon the third day, though after demand, was brought prematurely and could not be maintained. Sutherland, J. who delivered the opinion of the court, says: “ It is undoubtedly true in relation to other contracts, that the party has until the last instant of the day to make payment; and I perceive no reason for making negotiable paper an exception to the general rule.” It would be difficult to assign any valid reason for any distinction. Negotiable paper, by law, becomes due on the third day of grace, precisely as other contracts do on the day when the term of'credit expires according to their date, and not otherwise in any respect, that I am able to perceive. That is the law in regard to such paper, and it is part and parcel of the obligation, precisely as much as though it were written in the note. The only difference between the two cases is, that in this case the note was payable at a bank, while'in that case it was payable generally, at no particular place. But in that case demand was actually made before action brought, and no question raised that the demand was insufficient, or in any respect improper. There is no essential difference, therefore, in the two cases. I am aware that the rule is laid down differently in Chitty on Bills, which the court notice in the case referred to. Parsons, in his recent work on notes and bills, also lays down the rule as follows: “We are however of opinion that after demand and refusal on that day an action may be at once maintained.” He also says: “ But without such prior demand and refusal, an action commenced on the day of maturity is premature, unless the note is payable at a bank, when it seems that a suit may be commenced after bank or business hours.” (2 Pars. on Notes and Bills, 461, 462.) Several cases are cited, decided in other states, to sustain the [113] rule as laid down in the text, though the author admits that the rule may not he positively determined by authority. If it be true, as our supreme court has decided, that the maker has up to the last instant of the last day of grace in which to make payment, as part of his contract, I do not see how a demand before that time, or the expiration of the business hours at a bank where the note is payable, can alter the time of the note becoming due and payable. Generally the law does not notice the fractions of a day, and it is difficult to see how the act of a payee or holder, in making demand of payment at any particular hour in the day, or the custom of a bank in closing its doors at a particular hour, is to work a severance of time, so that a note payable on a particular day, and not at any specified hour of such day, shall be both due, and not due, on the same day. Certainly there is nothing in the contract, nor, so far as I am advised, in the mercantile custom, by which a payee by his own voluntary act can shorten the day or the hour of payment. It seems to me our rule is the only safe and consistent one, and that it ought to he followed, especially by this court. All that is decided in the Bank of Syracuse v. Hollister, (17 N. Y. Rep. 46,) is that a presentment of a note and demand of payment by a notary, of himself, at the bank door after banking hours and after the bank was closed, was a sufficient presentment to charge an indorser. This only relates to the "rule between holder and indorser, and is to the effect that a holder is not confined to banking hours in making his demand, but may make it at any time in the day, afterwards, provided he can find a proper person at the place, to answer. If this decision has any bearing upon the present case, it is rather against the plaintiff than in his favor. It necessarily holds that the demand was made before the time for the payment of the note had expired. Otherwise the demand could not have been held sufficient to charge the indorser. On the whole I am of the opinion that the action was pre [114] maturely brought, and that the nonsuit should have been granted. [Monroe General Term, September 7, 1863. The judgment must therefore be reversed, and a new trial ordered, with costs to abide the event. Welles, E. Darwin Smith and Johnson, Justices.]