Commercial & Railroad Bank v. Hamer

Mr. Chief Justice Sharkey stated the case, and delivered the opinion of the court. As a legal proposition, it is undeniably true that a bank which receives a note or bill for collection, is bound to use due and proper diligence in making demand and giving notice, so as to hold all parties liable; and in default of such diligence, the bank itself becomes responsible to the party who deposited the note. This principle has been acknowledged as the true one by an unbroken train of adjudications, and the principle being admitted, the true and only question in all such cases is, what constitutes a diligence that will be sufficient to exonerate the bank from'its responsibility. We are not called on to determine whether the bare delivery of the note in due time to a competent notary is of itself such an act as will discharge the bank. Surely if the bank placed the note in the hands of a notary, who presented it in due time, and demanded payment, and gave the requisite notices, then the bank must be discharged; and thinking this to be the case in the present instance, our inquiry is necessarily narrowed down to this single point, was the presentment-made at a proper time? As a general rule, it is undoubtedly true that where a note or bill is made payable, either in its terms or by acceptance, at a bank or banker’s, it must be presented and payment demanded within the business hours of such bank or banker. This is laid down as the rule in Chitty on Bills, 8 Am. ed. 421. It was so held in the case of the Bank of Alexandria v. Swann, 9 Peters, 33; in Elford et al. v. Tud, 1 M. & S. 28; and in Parker v. Gordon, 7 East, [452] 385. But the rule is subject to an exception, and the case at bar falls within that exception. Thus in the case of Garrett v. Woodcock, 6 M. & S. 44, the court said, “though the presentment was out of banking hoursj there was a person stationed for returning an answer, and an answer was returned the same as would have been if the presentment had been made within the hours of business. The answer was not that the party came too late, but that there were no orders. The object of the presentment was completed,” &c. So in Henry v. Lee, 2 Chitty’s Rep. 124, Lord Ellenborough held that presentment out of business hours, the note being payable at a banker’s, was not in general sufficient, and would not do if nobody is there of whom demand could be made; but, said his lordship, if somebody is there, and the person presenting gets an answer, it is sufficient. The case before . us is even stronger for the plaintiffs in error than either of those referred to. The business hours of the bank closed at 2 o’clock; the presentment was made by the notary between 2 and 4 o’clock P. M. on the third day of grace, at the bank, and demand made of the teller, who was found there. He was a proper officer of the bank to return an answer, and his answer was, that there were not then funds in bank to pay the note, nor had there been any during the day. The same answer was received which would have been given within business hours, and by the same officer, and this we think brings the case within the exception stated. He did not-say that the presentment was too late, but that there were no funds. An additional circumstance is stated in the agreed case, which if the case were doubtful in its character, would be entitled to great weight. It appears that the plaintiffs below sued the makers and indorsers of the note, and were non-suited. It is probable that the presentment and demand were held insufficient to charge the indorsers, and that the non-suit was the consequence. If so, we can only say that the parties rested with too much confidence on the correctness of that decision. The judgment must be reversed, the cause remanded, and a venire de novo awarded.