Bowling v. Arthur

Handy, J., delivered the opinion of the court. This was an action of assumpsit, brought by the plaintiff in error, against the defendant in error, to recover damages for a failure of duty on the part of the defendant, in giving notice of the nonpayment of a promissory note, placed in his hands for the purpose of demanding payment and giving notice of non-payment to an — 50 — indorser upon the paper, in consequence of which, that indorser was discharged, and the plaintiff lost his debt. The material facts appear to be, that the plaintiff was the holder of the note in question, which was made by one Creath, and payable two years after its date, at the office of the Planters’ Bank, at Vicksburg, to the order of one Pinkard, who indorsed it to Pink-ard and Payne, who indorsed it to J. P. Harrisson, who indorsed it to the plaintiff. Before the maturity of the note, it was indorsed by the plaintiff, and delivered to the Bank of the Metropolis, in the District of Columbia, as his agent for collection — the plaintiff residing in the State of Maryland — and that bank indorsed and transmitted it to the Planters’ Bank, of the State of Mississippi, at Natchez, for collection, by whom it was also indorsed, and transmitted to the branch of that bank at Vicksburg, where it was payable, for collection. There was upon the note a written memorandum, in the handwriting of the indorser, J. P. Harrisson, as follows: “ 3d indorser, J. P. Harrisson, lives at Vicksburg.” At its maturity, on the 29th November, 1838, it was placed by the branch bank, at Vicksburg, in the hands of the defendant, then a notary public of this State, appointed upon the nomination of that bank, under a statute authorizing such nomination by the bank, for the purpose of having demand of payment made; and on the same day he made due demand of payment at the bank, and payment was refused; and thereupon he protested the note on that day, and on the same day gave notice to the indorser, J. P. Harrisson, of its dishonor, by a written notice, addressed to him, and deposited in the post-office at Vicksburg, in which town said Harrisson resided at the time. He also gave notice of its non-payment, by the post-office, on the same day, to the cashier of the Planters’ Bank of Natchez, and returned the note, with a protest attached,'to the bank at Vicksburg, who also returned the same to the bank at Natchez, in due course of mail, and the same were returned by that bank to the Bank of the Metropolis, who paid the fees, for protest and notice, charged by the notary for his services. After-wards, a suit was brought in the Circuit Court of the United States, in this State, by the plaintiff, against the indorser, Harrisson, upon the note, and in that action a judgment was rendered for the defendant, on the ground that it appeared that the notice given by — 51 — the notary to that indorser, through the post-office, was insufficient— he being then a resident of the town of Yicksburg — which judgment was affirmed by the Supreme Court of the United States. It appears that the notary was examined as a witness in that action: that for several years prior to the maturity of the note, it had been the usage of the Planters’ Bank of Yicksburg to have notices served personally upon the indorsers resident in that town, unless there was a memorandum upon the note, appointing some place at which notice would be received; that he gave notice to Harrisson through the post-office, because he supposed the memorandum above mentioned and signed by him, to be an agreement to receive notice in that way, and that he gave him no other notice. It further appeared that the defendant had his office in the bank at Yicksburg, and performed notarial business for that bank; that he charged fees as upon a protest, and for notices to all the indorsers upon the note, and that it was the practice of the bank to pay the fees, upon such paper received by her for collection, for protest and notices. The case was first tried at November term, 1852, and a verdict returned for the plaintiff; which, upon motion of the defendant, was set aside, and a new trial awarded. To this the plaintiff took his bill of exceptions, setting out all the evidence and rulings of the court upon the trial. A new trial was had, at the May term, 1854, which resulted in a verdict for the defendant. The plaintiff moved for a new trial, which was denied, and to which he excepted, setting forth all the evidence and proceedings upon the trial; and now brings the case here by writ of error. Numerous instructions were given and refused at the instance of both parties on each of the trials. These instructions present the-points of controversy; and, although they are numerous and much in detail with reference to the facts and different aspects of the case, the questions upon which the case depends are few, and involved in but little difficulty. We will, therefore, without examining-the instructions in detail, consider such points arising in the case as are decisive of its merits. In doing this, it will only be necessary to consider the case as it is presented, upon the exception taken to the action of the court in setting aside the first verdict and awarding a new trial, the instructions granted and refused, being; the same presented to the court on both trials. — 52 — It is conceded that, if it was the duty either of the Planters’ Bank at Vicksburg, or of the defendant, to give notice of the nonpayment of the note to Harrisson, the notice which was given to him through the post-office at Vicksburg, he being a resident of that town at the time, was not sufficient in law to charge him. The first question, then, which arises is, whether the plaintiff’s remedy was against the bank, and not against the defendant. It appears that the bank received the note as agent for the plaintiff for collection, it being payable at the bank; and, it not being paid at maturity, it was then placed in the hands of the defendant by the bank, for the purpose of demanding payment and of giving notice of its dishonor. It is now insisted that it was the duty of the bank, as agent for collection, to give the notices required by law; and, for failure to perform that duty, that she is liable to the plaintiff; and, if there is any liability on the part of the defendant, that it is to the bank, and not to the plaintiff. But this is not an open question in this court. It is settled that a bank receiving commercial paper, as agent for collection, properly discharges its duty, in case of non-payment, by placing the paper in the hands of a notary public, to be proceeded with in such manner as to charge the parties to it, and secure the rights of the real owner; and that the bank is not liable in such case for the failure of the notary to perform his duty. Tiernan v. Commercial Bank of Natchez, 7 How. Miss. 648; Commercial Bank of Manchester v. Agricultural Bank, 7 S. & M. 592. These cases hold that the notary is the sub-agent of the holder, through the bank, and as such is liable to the holder; and we are satisfied that the rule declared in those cases is correct. The next question is, whether it was the duty of the defendant to give notice to Harrisson of the non-payment of the note, or whether he was bound to give notice to any party; and, if he was, whether that duty was not properly performed by giving notice to the bank at Vicksburg, from whence he had received it, or the Planters’ Bank at Natchez, the last indorser. It is admitted, on the part of the defendant, and the evidence fully shows, that the note was placed in his hands as a notary public, and that he undertook to act in that capacity in the matter. And it is insisted, that the giving of notice to any of the parties was no part of his official — 53 — duty as notary, because, by the rules of the commercial law, a promissory note is not protestable paper, and, even if it was, that it was not the duty of the notary, protesting paper, to give notice of dishonor to any party, except the one from whom he received it. This position is, no doubt, under the general rule of the commercial law, correct. But the duties of these officers are materially altered and enlarged by our statute law in relation to them, and the practice and usage which have grown up under it, and have received the sanction of our courts. The Act of 1833, Hutch. Code, 868, plainly recognizes the power of notaries public to make protest of promissory notes, as well as of bills of exchange; and makes it the duty of such officer, when he shall protest any such instrument, “ to make and certify, on oath, a full and true record of what shall have been done thereon by him in relation thereto, according to the facts, by noting thereon whether demand for the sum of money mentioned in the same was made, of whom, and where; when the requisite notice, or notices, were served, and on whom; where the same were mailed, if such be the case, when mailed, to whom, and where directed; and every other fact, in any manner touching the same, shall be distinctly and plainly set forth in his notarial record; and, when so made out and certified, it shall have the same validity, force, and effect, in all courts of record within this State, as if the said notary were personally present and interrogated in court.” And he is made liable to a prosecution for perjury for making a false record in any such case. It is too clear to admit of controversy, that under the provisions of this statute, notaries were empowered to demand payment of promissory notes, and to give the requisite notices, to charge parties sought to be rendered liable, as official acts. The want of such power under the rules of the commercial law proceeded entirely from general commercial usage, and because the practice had not been adapted, as a part of that usage, to employ notaries to make protests and to give notices in cases of non-payment of promissory notes. For purposes of commercial convenience, and in order to secure the rights of holders of such paper, by providing a durable and available mode of proof of facts necessary to establish the liability of parties entitled to notice, before they — 54 — could be charged, the legislature thought fit to authorize notaries to perform such acts, and to make a record thereof for the benefit of the parties interested, thereby both enlarging their powers and creating a new mode of proof. Nor will it do to confine the power thus conferred to the duty of giving notice to the last indorser. There is nothing in the language to justify this restricted interpretation. The notary is authorized to give the “ requisite notice or notices,” upon protest of promissory notes. This is a new power given to him, as we have above seen, giving rise to a new duty; and, therefore, the term “ requisite” cannot be understood to refer to any notice which it was his duty to give under the old rule. It must refer, then, to something further which was required to be done by him; and it appears to be clear that the objects of the statute, as above stated, show that he was authorized and required to give such notice or notices, as should be necessary to charge all the parties who were sought to he made liable upon the paper, and whose liability was dependent upon notice. This construction appears to be well sustained by the general language of the statute, and has been sanctioned by this court in Tiernan v. Commercial Banlc of Natchez, and we think by very general, if not universal, usage under it; and we are satisfied, after much consideration, that this is the correct view of the statute. It establishes a rule of practice which, while it is highly beneficial and convenient to holders of commercial paper, in providing a means of giving notice to parties sought to be charged thereon, and a ready mode of proof necessary to that end, is beneficial to indorsers and parties secondarily liable by giving them immediate notice of the dishonor of the paper, and enabling them to protect themselves by early recourse upon prior parties. But if we give a more restricted interpretation to the statute, and say that by the term “requisite” the power was merely conferred to give notices, to such person or persons as he should be thereto required by the holder or his agent, the result will be the same as to the delinquency of the defendant in this case, under any just view of the evidence. It appears that he was in intimate connection with the bank from whom he received the note, and the agent of the plaintiff, and that he undertook to give notice to Harrisson, and received fees for the service. Even if it was not his duty, — 55 — without being required, to do so, clearly he had the power to do the act if required; and it is therefore but a just and reasonable presumption, that he was required to do so by the bank. Under such circumstances, he could not be heard to say that the notice was not “requisite.” Having, therefore, the power to do the act, be.ing required to do it, and having undertaken to do it, and received compensation for it, the plaintiff had the right to rely upon its being rightly done, and the defendant would be liable for his delinquency whether the duty was imposed upon him by the statute, or arose from his undertaking to give the notice as required by the plaintiff or his agent. For he unquestionably had the power to give the notice. And it appears that the plaintiff did rely upon the notice given by the defendant ; for he sued Harrisson in faith of that notice, and failed. It appears by the evidence that the other parties to the note were insolvent, and that by reason of the failure of the defendant to give due and legal notice to Harrisson, he was discharged from liability, and thereby the plaintiff has lost his debt. The instructions given by the court to the jury upon the first trial were substantially in accordance with the views which we have above stated, and the evidence was fully sufficient to sustain the verdict. If there be errors in the instructions, they are not to the prejudice of the defendant; and we are therefore of opinion that the court erred in setting aside that verdict and in granting the new trial. That judgment, as well as the final judgment in the case, must be reversed, and a judgment on the first verdict be rendered for the plaintiff in this court. Messrs. Yerger and Anderson filed a petition for a re-argument, upon the point that it did not appear that due and legal notice had not been given to the indorser Harrisson. They admitted that it was settled, that where all the parties or indorsers reside in the same city, or town, where the note is made payable, and where the holder resides, that personal notice is necessary; and, in such a case, notice through the post-office is not good. But they insisted that, where all the parties do not reside in the same city, or town, and where a notice, by mail, to one of the indorsers, who resides at a different place, would be good; and where notice from him, by — 56 — mail, back to the place, or post-office, where the note was protested, and the prior indorser resides, would be good to charge such in-dorser ; in that case, notice directly to such indorser, through the same post-office, at as early a day, or earlier than the notice would arrive at the same post-office, if sent by an indorser residing at a different place, would be good. For, as they insisted, notice through the post-office, in such a case, being good when received circuitously through an indorser residing at a different place, it would be absurd to hold that an earlier notice, directly through the same office, by a person who, in giving the notice, necessarily acted as agent for all the indorsers, would be bad. Sed vide Bowling v. Harrisson, 6 How. U. S. R. 248. The court refused the application.