Citizens Bank v. John A. Howell & Bros.

Eccleston, J., delivered the opinion of this court. The counsel for the appellant insist, that the record presents for our consideration, not only the inquiry whether the court was right in the instructions given to the jury, but also, whether there was not error in refusing to grant the prayers of the appellant; whilst the appellees contend that no exception was taken to the rejection of the prayers but only to the instructions by the court. We are inclined to think the latter is the correct view, but the point need not be decided, because, confining ourselves to the instructions, we find such error in them as to require a reversal of the judgment. The following is the language of the court: “If the jury believe from the evidence in the cause, that the note offered in evidence was drawn by Wesley F. Walter and indorsed by Edmond T. H. Walter, and that the said indorser and drawer both resided in the city of Baltimore at the time of maturity, and that the note was held by the bank at said time, in said city, for collection on account of the plaintiffs, and shall believe they were then and still are the owners of the same; and if they shall further believe that the said note was not paid at maturity, and that said indorser had no notice of the non-payment thereof, on the day of its maturity or the next day thereafter, and that no notice thereof was left by the plaintiffs or their agent at the residence or place of business of said indorser, then the indorser is not responsible for the payment of said note by reason of bis indorsement, although they should believe that the plaintiffs, or their agent duly authorized thereto, as well as other persons in the city of Baltimore, misdirected the notary as to the actual residence of the said indorser, unless they should believe, fhat upon proper and reasonable diligence it was not. in the power of the notary to have pro [546] cured better and correct information as to the residence or place of business of the said indorser. “ If the jury believe the facts stated above as to said note, that the contract and undertaking of the bank with the plaintiffs is to be found by the jury from all the evidence in the cause; and if they shall find from such evidence that the bank undertook, on receiving this note for collection, only to employ a competent and proper person to demand payment of said note at maturity, and give the proper notices of its nonpayment, and that they did employ such competent and proper person, and placed the note in his hands in time to have said demand made on the day of the maturity of the note, and such notices given, then the bank is not responsible, although they should believe, that by the negligence or other fault of such person so employed, the note has become lost to the said plaintiffs. But if the jury should believe from the evidence in the cause,, that the undertaking of the bank in their receiving said note for collection was, that they would do all that was proper and necessary to be done by the plaintiffs themselves, in order to the security of the interests of the plaintiffs, so far forth as the responsibility of the drawer and indorser was concerned, then the defendant is answerable to the plaintiffs for whatever loss they may find the plaintiffs to have in-curred by reason of such negligence, and insufficient action of the bank or the person employed by it as aforesaid.” In the latter part of the opinion and direction thus given by the court, the jury are told, if they believe from the evidence, that in receiving the note for collection the bank undertook to do all that was proper and necessary to be done by the plaintiffs themselves, in order to secure the interests of the plaintiffs so far as the responsibility of the drawer and indorser was concerned, then the bank is answerable to the plaintiffs for any loss they had incurred by reason of negligence and insufficient action of the bank or the person employed by it. “ The person employed,” here spoken of, means, of course, the notaryÜ But we see no evidence tending to prove any undertaking or agreement whatever, on the part of the bank, which can render it responsible to the plaintiffs for the alleged negligence [547] of the notary, or for his insufficient action in die premises, and for want of proof to sustain such responsibility we think there was error in giving the instruction. The act of 1837, ch. 233, makes protests of inland bills of exchange and promissory notes prima facie evidence} and for the purpose of securing the benefit of this law to the owners of such instruments, it is the duty of the banks receiving them for collection to place them in the hands of a notary that they may be protested in due time, when necessary. And we think, that in this State, when, in the ordinary course of business, without any special agreement on the subject, a note or bill is received by a bank for collection, which is in due time delivered by it to the notary usually employed in such matters by the bank, so that the necessary demand, protest and notices may be made and given by him, the bank will not be answerable in case of loss resulting from a failure of the notary to perform his duty. The responsibility of banks receiving notes for collection, where they have employed other banks or agents, lias been carried further in New York than in some other States of the Union. But eyen there, in Smedes vs. Utica Bank, 20 Johns. Rep., 384, where the bank was held answerable on account of having employed a person to malee demand and give the notice, who was not a competent agent, the court say: “If the note had been delivered to a notary it would present a different case. Notaries are officers appointed by ille State; confidence is placed in them by the government. This may be evidence sufficient to justify an agent in committing to them business relating to their offices, although in point of fact it might subsequently appear, they did not possess the necessary qualifications. ” See also Story on Agency, sec. 201. Pawson vs. Donnell, 1 G. & J., 147. Jackson vs. Union Bank, 6 H. & J., 150. Fabens vs. The Mercantile Bank, 23 Pick., 330. Dorchester Bank vs. New England Bank, 1 Cush., 177, 188. East Haddam Bank vs. Scovil, 12 Conn., 303. Bellemire vs. Bank of the United States. 4 Wharton, 105, and 1 Miles, 173. Baldwin vs. Bank of Louisiana, 1 Louisiana Annual Rep., 13. Hyde & Goodrich vs. Planters [548] Bank of Miss., 17 Louisiana, Rep., 560. Tiernan & others, vs. Commercial Bank of Natchez, 7 How. Miss. Rep., 648. Angel & Ames on Corp., 186. Judgment reversed and procedendo ordered.