Merchants State Bank v. State Bank

ETewhah, J. Three questions are presented on this appeal: (1) "Were the indorsers discharged of liability by the iailure of the defendant to notify them of the dishonor of the notes?- (2) "Was the failure of the defendant to notify the indorsers negligent under the circumstances? and (3) Was the plaintiff entitled to recover the whole amount of the notes? It is certainly the law that, in general, notice [446] of the nonpayment of negotiable paper at maturity must be given not later than on the next day after its dishonor. 2 Am. & Eng. Ency. of Law, 414; Daniel, Neg. Inst. (4th ed.), §§ 1038, 1039. Longer delay in giving the notice can be excused only when prevented by overwhelming calamity or unavoidable accident. Daniel, Neg. Inst. §§ 1067, 1068. It is evident that no such cause prevented the defendant from giving such notice. The calamity which struck the defendant and the city of Phillips had nothing to do, apparently, with its failure to notify the indorsers. That was the work of a few minutes only, and directly in the line of the business which it had re-established after the fire. The indorsers were released by the failure to notify them of the dishonor of the notes. Probably it was within the defendant’s option, under the circumstances, whether it should undertake or reject the office of collecting these notes. Rut, having elected to undertake it, it was bound to the exercise of reasonable diligence in its performance-. This it failed to do. This was negligence. The plaintiff is entitled to recover such sum as it has lost by reason of the defendant’s negligence. That sum is, jprima facie, the amount of the notes. Daniel, Neg. Inst. (4th ed.), § 329. There-was no evidence to mitigate damages. The indorsers were solvent; the maker is insolvent. It does not appear whether the maker’s estate, now in the hands of a receiver, will pay any part of the notes, nor how much it will pay. Perhaps it should have gone in-mitigation, if it had been shown how much the dividends properly applicable thereto wouldTpay. Rut no such proof was attempted. The plaintiff deposited the notes in court for the benefit of the defendant, so that it may be reimbursed so far as the proper dividends may go. The defendant was not prejudiced by the^ailure of the plaintiff to proceed promptly against the maker. It. does not appear that there was ground for an attachment by which advantage could be gained; and the time was too447 short to gain a preference by judgment and execution. Mo error is discovered. By the Gourt. — The judgment of the circuit court is affirmed.