First National Bank of Manning v. Farneman

Granger, C. J. Counsel agree that the only question Before the .court is whether or'not the notice given was sufficient to charge defendant as an indorser. After a refusal to pay the draft by the bank, immediate notice was essential to charge the endorser. Coal Co. v. Bowman, 69 Iowa, 150, 28 N. W. Rep. 496. The’ notice might have been given by being deposited in the postoffice to the address of the defendant. This was not done. Had it been done, the notice would have been given on the day of the dishonor, for the defendant’s postoffice address was at the place where presentment was made. The excuse for sending the notice to the bank at Des Moines is that the notary did not know the address of the defendant. To excuse a want of notice or delay in such a case, diligence should be exercised to learn the address of the indorser. Daniel, Neg. Inst, section 1.116. In this ease the record shows affirmatively that no effort was made to learn the address of the defendant An inquiry at the bank where the draft was presented for payment by the notary would, with little doubt, have disclosed the address of defendant, for the draft itself indicated business relations between them. Such an inquiry would naturally be suggested from the nature of the transaction in the exercise of diligence. In the section cited in Daniels on Negotiable Instruments it is said that “the holder will always be presumed to know the residence or place of business of his immediate indorser.” Lawrence v. Miller, 16 N. Y. 235. In the same section from Mr. Daniel’s work it is said: “'The holder should not fail to communicate any knowledge he may have as to- the residence or place of business of 164 the party to whom the notary is to make presentment or give notice; and, if he does not do so, he will be bound by any consequent mistake made by the notary, and the drawer or indorser will be discharged.” A number of authorities are cited in support of the rule. That the officers of the plaintiff bank knew the address of the defendant is quite certain; and had the bank, in sending the draft for collection, observed the rule above given, the delay would have been avoided. It i/seems that neither the plaintiff bunk nor the notary observed the requirements of the law as to diligence. Appellant relies, mainly, in argument, on a rule that the holder need only notify, his immediate indorser, and this indorser the next, and so on, and then claims that the German Bank did notify the Valley Bank. How such a rule might affect the rights of parties were the German Bank seeking to recover, it is not for us to say. Defendant is the immediate indorser of the plaintiff bank, and, • because of the erasures, there are no other indorsers; and the rule cited, if a correct one, is without force. It is to be kept in mind that, as to the indorsers other than the defendant, they were such for collection only, and the indorse-ments were erased. We treat the case on the theory of but a single indorser, and that one the defendant. The judgment is affirmed.