President of the Peoples' Bank v. Keech

Bartol, J., delivered the opinion of this Court. The promissory note sued on this case was drawn by Hall & Anderson, payable to the order of O. S. Keech and E. D. Hall, and by them endorsed; the note afterwards, by successive endorsements, came to the possession of the appellant, who held it at its maturity, and the note being dishonored, brought this suit against the endorsers, Keech and Hall; during the progress of the cause, Hall, one of the defendants, died, and the suit was continued against the survivor, the present appellee. The questions before us arise upon two hills of exceptions taken at the trial, and these resolve themselves into the single inquiry, whether the notice of the demand and non — 530 — payment of the note was sufficient to bind the defendant»,, Keech and Hall, or either of them. We lay out of view all consideration of the record offer-, ed in evidence in the second exception, showing that in a suit upon the note instituted by the appellants against the administrators of Richard D. Hall, deceased, (one of the joint endorsers,) the plaintiff suffered judgment of non pros., because such a judgment could not conclude the rights of the parties or operate in law to discharge the appellee. Nor can there he any question upon the hills of exceptions as to the sufficiency of the demand of payment. The note was on its face payable “at People’s Bank of Baltimore,”1 in express terms, and a demand at the hank was therefore sufficient j such is the legal construction of the writing, and no-parol evidence of any custom at the hank, giving the note a different construction, could b& allowed to alter the contract. The evidence in the first hill- of exceptions shows, that the proper post office of R. D. Hall was Beltsville, and that of O. S. Keech was Upper Marlborough,; the notarial certificate shows, that the notice to both the endorsers was-sent to Upper Marlborough. According to all the authorities, that was not legal notice to Hall, and would not bind him, unless it can he held, that being joint payees and endorsers, notice to one is sufficient. Unquestionably such would be its effect if they were partners ; upon that point the authorities all agree, it has been so held in Maryland. See Baugher vs. Duphorn, 9 Gill, 315. In a case of partnership, one partner is- the general agent of the firm and may bind his co-partners in any matter within the general scope of the partnership. It is upon, this ground the principle of law has been established, that notice to one member of the firm, of the dishonor of a note endorsed by the firm, will hind all the partners. In this case, Keech and Hall were not partners, they — 531 — ■were simply joint payees and endorsers, and the question arises whether the same rule applies as in the case of partners, or whether each must have notice. This question does not appear, from, any reported case, to have been decided in Maryland. It arose before the King’s Bench in Cawick vs. Vickery, 2 Doug., 653, note, in which the precise question was as to the validity of an endorsement of a note by one of two joint payees who were not partners. The judges expressed the opinion that the joint payees must be considered as partners quoad the particular transaction. But afterwards, at the trial of the same case before Lord Mameteld, when evidence was offered to prove “that by the universal usage and understanding of all the bankers and merchants in London, the endorsement was had, because not signed by both payees” his Lordship, whose opinion upon a question like this is entitled to very great weight, said, “he did not think the question was so decided as to preclude the evidence offered.” And upon the usage which appeared to be so well known to all the jury that they required no evidence to support it, thé verdict was given for the defendant. The question does not appear to have arisen afterwards in England, and if may he inferred that the rule of commercial law, in conformity with the usage settled by the verdict in that -case, has remained there undisturbed. It will be observed, that the precise point settled in Ca-wick vs. Vickery is not identical with the one now presented ; there the question was ás to the sufficiency of an endorsement by one, here the question is as to the effect of a notice of the dishonor of the note given to one of the endorsers only. But it is obvious, that the questions depend upon the.same principles, and must be decided in the same way. There is some conflict in the decisions on this point by &he Courts of this country. • But the weight of authority. — 532 — as well as of reason, appears to us to be in accordance with the judgment finally pronounced in Cawick vs. Vickery, and the established commercial usage in England. The cases in which the contrary doctrine has been decided or intimated by the Courts in this country, are Dodge & Others vs. Bank of Kentucky, 2 Marsh., 615. Higgins vs. Morrison’s Ex’cr, 4 Dana, 105 ; and Goddard vs. Lyman, 16 Pick., 269, 270. (The cases of Cocke vs. Bank of Tennessee, 6 Hump., 51, and Harris vs. Clarke, 10 Ohio, 5, cited by appellees’ counsel on this point, we have not had an opportunity to examine.) The cases in Kentucky, above referred to, appear to have been decided without much consideration of this point; in the opinions pronounced, the question is not discussed nor are any authorities cited, t'he Court simply declaring that joint payees of a note are to be considered as partners quoad hoc„ In Goddard vs. Lyman, 14 Pick. Rep., 268, the note which was sued on, was drawn by the defendant payable to E. Warren, J. J. Cutler aná A. Fleming, ( who were not partners,) two of them endorsed it to E. Warren and H. A. Green, a stranger; afterwards E„ Warren endorsed it as follows i “I order the contents of this note, so far as I am interested therein, to be paid to H. A. Green, or order, — E. Warren,” then H. A. Green endorsed it to the plaintiff; and the question was whether these endorsements were sufficient to vest the title in the plaintiff, and enable him to sue thereon. The Court held that the endorsement of two of the joint payees to the other payee and a stranger, was a legal transfer of the note ; or if this be doubtful, the further endorsement by the third payee to the stranger would pass the property upon the plain principle that “by such endorsements the assent of all the payees to the transfer is manifested,” — 533 — In pronouncing the opinion of the Court iu that case, Mr. Justice Wilde states, that joint payees of a note, though not general partners, make themselves partners as to the transaction, and refers to Cawick vs. Vickery, in support of the proposition. So far as this expression is concerned, the opinion of the learned judge was clearly obiter, that point not being involved in the case. This question arose in Shepard vs. Hawley & Loomis, 1 Con. Rep., 367. State Bank vs. Slaughter, 7 Blackf. Rep., 133. Sayer vs. Frick, 7 Watts & Sergt. Rep., 383, and Willis vs. Green, 5 Hill, (N. Y.,) Rep., 232 ; and in all of them it was held that cases of partners and those of mere joint payees stand upon different principles. In the former the firm is bound by notice to one of the co-partners ; because each represents the firm and is general agent of all; but in the latter, the rights and interests of the parties are distinct; though jointly entitled, they are mere tenants in common, neither can legally represent the other without . being specially authorized, and therefore notice to one is not sufficient to hind the other. Without quoting at length from the cases above cited, we refer to the very full ‘ and elaborate opinions of Swift, C. J., and Goddard, J., in Shepard vs. Hawley ; of Chief Justice Gibson, in Sayer vs. Frick; and of Nelson, C. J., in Willis vs. Green, which we think place the question upon correct principles. See, also, Story on Bills, sec. 299. Chitty en Bills, 496, m. 4 Cowen, 126. 12 Barbour, 251. It follows from what has been said that notice of the dishonor of the note in this case, not having been given to Hall, he could not be held liable as endorser, and as a necessary legal consequence, Keech, the appellee, cannot remain bound; because their engagement being joint, if one is discharged by the act or default of the appellant, it operates to discharge the other also. This principle is — 534 — w-ell settled. See the cases before cited, also Yates vs. Donaldson, 5 Md. Rep., 389. ( Decided March 12th, 1867.) Judgment affirmed.