M'Cullock v. Commercial Bank

Garland, J., delivered the opinion of the court. On the 24th September, 1839, J. Peebles gave Geo. Sargent, his note for three hundred and ten dollars, payable sixty days after date, who transferred it to plaintiff by endorsement, he transferred it to one Edmund Harding, who deposited it in the Commercial Bank for collection. The note not being paid at maturity, was handed to the notary of the bank to be protested. He protested it, and gave notice to some of the endorsers, but not to Sargent, who preceded the plaintiff on the paper. The plaintiff who is the second endorser, paid the note to Harding, who was the real owner, and brought suit against Sargent, in which action he was defeated, because Sargent had not received legal notice of non-payment, and protest. He now sues the bank, alleging the notary employed by it, did not do his duty, and omitted to notify Sargent., whereby he lost his recourse against him. The suit is substantially, to recover damages on a contract of agency. The defendants aver, they were never the agents of the plaintiff, and that there is no privity of contract between them. It is clear the note was deposited by Harding, the last endorser. By that deposite the bank became his mandatories; with him the contract was made, and he does not complain of the conduct of his agents. There was no stipulation pour auirui in the contract, and the plaintiff and the bank are strangers. 6 Martin, N. S., 152. The plaintiff seems to have anticipated some objection of I this kind, and has carefully omitted setting forth in his petition, by whom the note was deposited in bank for collecSo, where a note is deposited for collection, and the notary of the bank fails to give notice of protest to the first endorser, who is thereby discharged; the second endorser ■who takes it up, has no recourse against the bank. him notice of ■nrofpfif and for this purpose the unTiiS\he next day to notify his pnor endorser. A second endorser wishing to hold the first responsible to him, should give tion, but the evidence discloses that fact most clearly. .It is not alleged or pretended, that Harding when he deposited the note for collection made any stipulation in favor of the plaintiff, or subrogated him to any of his rights against the bank. In fact he had no rights t,o transfer. The contract on the part of the bank was fulfilled in such a manner as to enable him to get his money, and that is all they undertook to procure for him. In all the cases referred to by plaintiff’s counsel the plaintiffs were the depositors of the notes, and the bank contracted directly with them. 1 Martin, N. S., 365 ; 3 Idem., 344; 7 Idem., 583. The defendants further contend, they are protected by a principle which is applicable to promissory notes and bills of exchange, and recognized by commercial lawyers; which is, that it is the duty of a party who receives notice of protest, to give notice to whomsoever he may wish to hold responsible on the paper. The plaintiff paid the note to Harding after protest, hence we are to presume he was duly notified of such protest. If then, it was his wish to hold a prior endorser liable, it was his duty to see if the notary had notified him, if not he should have notified that endorser himself. For this purpose, the law gives him until the next day after he receives notice, to notify his prior endorser. Chitty on bills, p. 315,316; 4 Martin, N. S., 226. The plaintiff had it ¡n his power to control the liability of his prior endorser an(j having failed todo so, he must abide the eonseqtiences. It is, perhaps, the practice in this city, to rely very much on banks and notaries when a note is put into their possession for collection, to notify all the endorsers on the note, but if they do not, their responsibility is only to those who employ them. Every endorser must take care of himself, and take the necessary steps to hold his pedecessor liable. Such is the law and the uniform decision of this court. It is, therefore, ordered, that the judgment of the Cornmercial Court be affirmed, with costs.