Oothout v. Ballard

By the Court, Mason, J. The only question presented in this case is whether a suit can be maintained against the indorsers of a note payable at a bank, and which has been duly protested, where the suit is commenced on the day of the protest, or the third day of grace. The rule in England, as understood by Chitty, is that the suit on the third day of grace is premature. (See Chitty on Bills, 406, 407, 409, 8th Lond. ed.) And such I understand to be the rule held in Westminster Hall. (Castrique v. Bernabo, 6 Queen’s B. R. 498. Lifferty v. Mills, 4 T. R. 170.) The rule is so understood by Byles. (See his late work on Bills, p. 181.) In this country there is certainly considerable conflict of authority over the question, in the courts of the different states. The courts of Maine, Hew Hampshire, Massachusetts, South Carolina and some others have held that the suit could be commenced on the third day of grace, at any time after the close of banking hours and proper protesting of the note. (1 Pick. 401. 21 id. 310. 8 id. 414. 1 Metcalf, 43, 48. 4 Greenl. Rep. 479. 7 N. Hamp. Rep. 199. 8 Foster, 302. 4 Humph. 241. 5 Shep. 230. 31 Maine Rep. 580. 40 id. 62. 15 id. 67. Wilson v. Williamson, 1 Nott & McCord, 440.) While on the other hand the courts of Pennsylvania, Ohio, Illinois, Mississippi, Alabama and some others have held the suit prematurely brought if commenced on the third day of grace. (Thomas v. Shoemaker, 6 Watts & Serg. 179. Walter v. Kirk, 14 Illinois Rep. 55. Wiggle v. Thomason, 11 Smedes & Marsh. 452. Beavan v. Eldridge, 2 Miles, 353. Randolph v. Cook, 2 Porter, 286. 5 Serg. & R. 318.) The rule in this state has long been regarded as settled that the suit commenced on the third day of grace was prematurely brought. The question came before the supreme court in Hogan v. Cuyler, (8 Cowen’s Rep. 203,) when it was held to be premature to commence the suit on the third day of grace. The question was distinctly presented again in Osborn v. Moncure, (3 Wend. 170,) when it was distinctly held the suit could not be maintained, when commenced on [42] the third day of grace. Chief Justice Savage regarded the rule so well settled with us, in this state, that he held in Hopping v. Quin, (12 Wend. 517,) that where an attorney' commenced a suit upon a note on the third day of grace and was beaten and then brought suit against his client to recover for his services, he was not entitled to recover; and in speaking upon this question he says: “ it was the duty of the plaintiff to have known that a suit could not he brought on the last day of grace; and his bringing such a suit must be imputed either to negligence or ignorance. In either case it lays no foundation for an action against his Client, who has been the sufferer.” There is no case in the courts of this state to the contrary of these cases, while all the elementary books have treated our law in this state as settled in conformity to these cases. Judge Cowen so regarded it when he wrote his treatise. (1 Cowen’s Tr. 220, ed. 1844,) where he lays down the doctrine distinctly, that the suit cannot be maintained if commenced on the last day of grace. And so Hdwards regards it in his treatise on Bills and Notes, (see pages 525, 526, 527;) and the rule in this state is so regarded by Parsons in his treatise. (See vol. 1, page 440, and also note i.) Chief Justice Shaw regards our rule in this state as different from theirs. (1 Metcalf, 54.) The rule in England seems to have conformed to a general practice—-the practice to postpone notice of the dishonor and other proceedings, till the day following—so that it has been regarded amongst merchants as a right to have all of the last day of grace in which to pay. In Hartley’s case, (1 Carr. & P. 555,) Abbott, Ch. J. on a motion to show cause, said, “I think the notice of dishonor given on the day on which the bill is payable, will be good or bad as the acceptor may or not afterwards pay the bill. If he does not afterwards pay, on that day the notice is good, and if he does it of course comes to nothing.” And Byles, in his late valuable treatise on Bills, page 131, says : “ The acceptor of a bill whether inland or foreign, or the maker of a note, should pay [43] it on demand made at any time within business hours on the day it falls due, and if it be not paid on such demand the holder may instantly treat it as dishonored. But,” he adds, “the acceptor has the whole of that day within which to make payment, and though he should in the course of the day refuse payment, which entitles the holder to give notice of dishonor, yet if he subsequently on the same day makes payment it is good, and the notice of dishonor becomes of no avail.” This is precisely as I understand the rule with us. How if we admit that the courts of Massachusetts, Maine, Hew Hampshire, &c. have the better reason for their decisions, there is no such great principle involved in the case as would justify us in overruling our own cases and following theirs; especially so where we are supported by equal weight of authority on our side; and Parsons, who is an earnest advocate on the other side, admits that “there is strong reason for holding that a party bound to pay has the whole of the day of maturity.” (Parsons on Notes and Bills, vol. 2, p. 460.) And our rule has certainly one advantage ; it tends to uniformity in the law by conforming to the general rule with reference to all other contracts, which holds that when a day is appointed for the payment of money the payer has the whole of the day, down to the last moment, in which to tender the money. It is proper to remark that none of the cases make any difference or distinction between the case of the maker or indorser. Hone can be made. As regards this question of the right to bring the suit, there is not and ought not to be any distinction between a note payable at bank and one payable at large, or at the counting house of the merchant; and none seems to have been recognized in this state. (2 Cowen, 766.) I know the general rule has been held, in regard to paper payable at bank, that it must be presented and a demand made within the business hours of the bank. This arises from the necessity of the case, as banks are generally shut after that hour and there is consequently an impossibil [44] ity of making the presentment and demand after that, and yet it is expressly held that a presentment after business hours, even in the evening, if there be any officer of the bank there to answer,- is good. (Garnett v. Woodcock, 1 Stark. R. 475. Bayl. on Bills, 212, Am. ed. Chitty on Bills, 278. Henry v. Lee, 2 Chitty, 124.) And it was held by the court of dernier resort in this state, in the case .of the Bank of Syracuse v. Hollister, (17 N. Y. Rep. 46,) that where a note payable at the Bank of Utica, where the maker had no funds and which was delivered after business hours on the last day of grace to the teller, who was also a notary, at his dwelling, for the purpose of demanding payment, and he went to the bank and being unable to obtain entrance demanded payment at the bank door, it was sufficient demand to charge the indorser. The rule therefore, in regard to paper payable at bank is that the holder must make the presentment during business hours unless he can obtain admission afterwards and find a person, authorized to answer, or in some other way can get a satisfactory answer from an officer authorized, as was done in the.case of the Bank of Syracuse v. Hollister. Now as to the notice of the default of the maker which is required to be given to the indorser, there is certainly no reason in the world why any different rule should be applied to the case of notes or bills payable at bank than in the case of those which are payable at large, or at the place of business of the merchant. The same rule applies in regard to the service of the notice in either case, and the holder is under no obligation to serve the notice any earlier in the one case than in the other. And if he has a right to make an earlier service in the one case than in the other it should not deprive the maker of his day to seek the holder of the note, and by tendering payment save a suit. Now if no demand is made, all the cases hold that the maker has the whole day in which to pay. (31 Maine R. 580. 2 Parsons on Notes and Bills, 461, note 2.) And as there is no necessity or good reason for having one rule applicable to one class of paper and [45] another applicable to another, I am for adhering to the rule as heretofore held in this state; and I fully agree with what was held by that learned and very able jurist, C. J. Gibson, in Taylor v. Jacoby, (2 Barr's Penn. R. 495,) that a note is not due, for the purpose of commencing a suit, until after the termination of the day of payment, although by commercial usage it may be demanded at a reasonable time of that day ; that it falls under the general and well settled rule of law which rejects fractions of a day and which views the day as an indivisible point, and which gives to the maker the day and not a fraction of it. ' I am, for these reasons, in favor of granting a new trial; costs to abide the event. [Broome General Term, January 26, 1864. New trial granted. Campbell, Parker and Mason, Justices.]