Case ID: la_17/html/0338-01.html
Source: Caselaw Access Project
Author: {"author": "Moeptot, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Hyde & Goodrich v. Planters’ Bank of Mississippi.
    A bank, employing their notary to protest a note deposited with them for collection, is not liable for the official misconduct or failure of the notary to give notice to the indorser.
    So, whevc the defendants put a note, deposited by the plaintiffs for collection, in the hands of the notary of the bank, who failed to make a record of his protest and notice to the indorser, by which the latter was discharged: — held, that the notary and his sureties, and not the bank, are liable.— 7 M. 460; 11 N. S. 214, 865; 6 N. S. 456; 7 N. S. 491, 585; 2 L. 415, and cases there noted. Ante, 886.
    Appeal from the court of the first judicial district.
    This is an action to render the defendants liable for the amount of a promissory note for $662, signed by B. Williams, and indorsed by R. J. Walker, negotiable and payable at the Planters’ Bank at Natchez, in the State of Mississippi, and placed in said hank for collection. Recourse against the indorser was lost by the neglect of the notary to make a record of his protest and notice to the indoi’ser.
    The defendants pleaded the general issue, and specially denied any liability on account of said note.
    The evidence shows, that the note in question was deposited in bank for collection, and at maturity was handed to their notary to he protested. The notary failed to make any record of his protest and notice to the indorser, and died soon after; in consequence of which, no proof could he made of any [561] notice having been given to the indorser, and he was thereby discharged on being sued in Mississippi.
    The question is, whether the hank should he made liable for the acts and misconduct of the notary ?
    There was judgment for the plaintiffs, and the defendants appealed.
    
      I. W. Smith for the plaintiffs and appellees.
    1. The hank is responsible for the neglect of its notary. In Crawford v. Louisiana State Bank, 1 Mart. N. S. 216, the court, by Judge Mathews, say, “ the counsel for the plaintiff prayed the judge below to direct the jury that the .holder of a bill for collection, and having no other interest in the hill than as agent for the purpose of presenting said hill for acceptance and payment, is bound to use the same diligence in giving notice of non-aeeeptam.ee, as is required of a holder who has discounted or purchased a hill.” This principle “ depends much for its validity on the doctrines of agency, and seems -to us to recognize a fundamental rule on that subject, which requires oi'dinary care and diligence on the part of a mandatary, or such as men of common prudence bestow on their own affairs. We have no doubt of its correctness taken abstractedly.”
    
      In Montillet y. Bank of the United States, 1 Mart. N. S. 367, the court, by Judge Martin, say: “ Banks hold themselves out as the agents of owners of notes or negotiable paper: they find their interest in acting as such. But even if they derived no advantage from it, they would be bound to act correctly in the performance of the assumed duty. No one is bound to attend to the concerns of another, even when a compensation for the trouble attends it, yet he who undertakes it, even gratuitously, is bound to indemnify the person whose business is undertaken, from the consequence of his agent’s negligence.” * * “ The banks are responsible for the conduct of the person they employ. The notary in undertaking to give notice, did so as a private individual. It is no part of his official duties.” They affirm the [562] doctrine of Crawford v. The Louisiana State Bank. ,
    In Canonge v. Louisiana State Bank, 3 Mart. N. S. 344, and in Pritchard, et al. v. Louisiana State Bank, 2 La. Bep. 415, this court takes the same view of the bank’s liability for the omission of the notary to notify the indorser.
    In Miranda v. City Bank of 2L&m Orleans, 6 La. Bep. 743, the court, by Judge Bullard, says, “ The principles upon which this case must be decided were recognized and settled by this court many years since, in the case of Crawford v. The Louisiana State Bank, and of Montillet v. The Bank of the United States, 1 Mart. N. S. 214, 365. It was held that an agent who receives a bill for collection is bound to use the same diligence in giving notice as the holder; that the bank was responsible for the acts of the notary, and that the onus was on the agent to show that the holder of the bill sustained no damage by the neglect of the agent to make proper demand, and to give due notice to the other parties to the bill.”
    In Cotton v. Union Bank of Louisiana, 15 La. Bep. 370, the principle is admitted by the bank itself.
    The principle has been recognized in other cases by this court, but it is presumed that six decisions on this point are sufficient to prove the assertion at the bar that the question is no longer open for discussion in this court.
    2. The counsel for the bank maintains that the law is different at Natchez, where the note was deposited. He cites Smedes v. Utica Bank, 20 Johnson’s Bep. 383, where the bank was held responsible because their clerk had failed to give the proper notice. The question in this case was not before that court, and their obiter dicta are based on “ the course of practice to charge an indorser in New-York.
    He also cites Bellemire v. Bank of the United States, where the district court of Philadelphia decides “ that banks in the city at least, universally employ notaries to perform the duties in question, compensate them for their trouble, and charge the amount paid to the holder of the note; that the [563] custom of the banks is presumed to be known to the holder, and therefore the agency- — the collection — is undertaken in reference to the custom, which forms a pa/rt of the contract between the pm'tñesf But what is the “ custom ” at Natchez ? None is proved. Then our own customs are presumed to prevail there.
    There is little doubt that the supreme court of Pennsylvania would reverse the decision of the district court of Philadelphia. Por the supreme court of that State in the Machamic's Baml v. Ban’p, 4 Rawle, p. 303, says, “ If the undertaking of the bank was to collect, and not merely to fransmii, they would be responsible for their Virginia respondent.”
    In Van Won't v. Wooley, 3 Barnewall & Oresswell, 439, the court of King’s Bench considered, “ that the defendants, who cannot be distinguished from, but are answerable .for, their London correspondents, Sir John Lublenck & Co., have been guilty of a neglect of the duty which they owed to the plaintiff, their employer.”
    We submit to the court, that the authorities adduced entirely fail to show that at Natchez, in the State of Mississippi, the decision would have been different from that rendered by the inferior court in this case — but that the authorities are adverse to the bank, depending, as they do, in each instance, on peculiar local customs.
    
    
      Tho. Slidell, for the defendant and appellant,
    insisted on the reversal of the judgment.
   Moeptot, J.

delivered the opinion of the court.

The petitioners allege that they deposited with the defendants at Natchez, in the State of Mississippi, a promissory note for collection; that defendants undertook and bound themselves to use all care and diligence in collecting said note, and in case of non-payment to cause good and legal notice thereof [564] to be given to the indorser, Robert J. Walker. That at the maturity of said note, defendants caused the same to be placed in the hands of T. Red-man, a notary public, .residing at Natchez, and qualified according to law to demand payment thereof, and to notify in a legal manner the said indorser; that it was the duty of the said Redman not only to notify said Walker of the non-payment of the note, but also to make and keep a fair registry of all his official acts in the premises, and to state the manner in which said notice was forwarded; that said note was protested for non-payment by the said notary, who omitted to notify said Walker, and also to keep any register relating to such service, by which fault and negligence the said indorser was released from all liability; that on an action being brought by them against said Walker before the circuit court, in and for the county of Adams, in Mississippi, a verdict was rendered against them because no proof could be furnished that said indorser had been duly notified of the protest, and that no such proof existed in consequence of the fault and negligence of the notary, in omitting to make a full aud true record of the service of the notice, as required by law, whereby the petitioners aver that the defendants havo become responsible unto them for the amount of such note with interest, and the expenses of the suit against the indorser.

The general issue was pleaded. There was judgment below for plaintiffs, and the defendants appealed.

The plaintiffs introduced in evidence the record of the suit in which Walker was discharged. It clearly appears from the evidence as well as from their own averments that rheir failure to recover in that suit was entirely owing to the neglect and omission of the notary, Redman, to make a proper and sufficient record of the manner in which he had served notice on this indorser; the notary having died befoi’e the trial, and his record being so deficient as to make no legal proof of such notice, the plaintiffs remained without any evidence whatever to establish this material fact, and a verdict was rendered against them.

The question is whether this neglect of duty on the part of the no- [565] tary is chargeable to the defendants; or whether the notary, being an independent sworn officer, acting under the authority of the State of Mississippi, was not, as such, the agent of the plaintiffs, as much as the defendant, and liable directly to thems ? The solution of this question, in our opinion, depends on the character of the acts he- omitted to do or performed in an illegal or inefficient manner. By reference to the . statute law of Mississippi, which has been given in evidence, it is provided “ that notaries public, not to exceed three in number in each county, shall be appointed and commissioned by the. governor upon the recommendation of the county court of the several counties; and that before entering upon the duties of their office they shall take and subscribe an oath, and shall give bond with two good and sufficient sureties in the penalty of §2000, conditioned for the faithful performance of the duties of their office; which bond shall be recorded with the clerk of the county court of the county where they reside, and may be sued on by any party or parties injured, in like manner and with like effect as bonds given by sheriffs and coroners for the faithful execution of their respective offices.” It is further provided, “ that when any notary public shall protest any promissory note, bill of exchange, or other instrument of writing, he shall make and certify on oath a full and true record of what shall have been done therein by him in relation thereto according to the facts by noting therein whether demand for the sum of money mentioned in the same was made, of whom, and where the requisite notice or notices were served and on whom, when the same were mailed (if such be the case), 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 the State as if the said notary were personally present and interrogated in open court,” &e. From these enactments it was clearly a part of the official duties of the notary to have kept a full and [566] fair record of the manner in which he had served the notice of protest on "Walker. The testimony shows that if this had been done, plaintiffs would have had no difficulty in recovering of the indorser; the notary had thus made himself and his sureties liable on his official bond to any person'injured by his neglect and failure to comply with this duty imposed upon him by law. Qan the defendants then be held responsible for his default ? We think not. They used that care, attention and diligence which men of common prudence bestow on their own affairs. They did for plaintiffs all that the latter would have done themselves had they returned the note in their possession. When the holder of a note wishes to possess evidence of the service of a notice on an indorser, he must of necessity substitute another person to perform the service; from the corporate character of defendants it was known that it could be performed by them in no other way than by substitution. In this necessary selection, of a sub-agent, common prudence suggested to defendants the propriety of employing one not only competent in every respect to do the particular act of giving notice to the indorser, but whose official duty it was to make out a record, which in case of his death would preserve for plaintiffs, legal evidence of the service he had performed. But the notary, in making out the record required by law, neglected in this case to mention the place to which the notice of protest had been sent to the indorser, and the testimony shows, that he being dead at the time of the trial, no proof of such notice could be made, either by his record or otherwise. To make defendants responsible for this neglect of official duty on the part of the notary, would be rendering them the sureties of that officer ; it would be changing the ground upon which alone they can be held liable, to wit, that of negligence in the discharge of their duty to their principals. It is in evidence that T. Redman was the notary of defendants, and did all their business of the same descrip[567] tion. If, instead of employing him, defendants had given the notice to' one of their clerks, or any other individual however competent, and after performing the service, the latter had died, plaintiffs would have had just cause to complain that a course was pursued for them different from that which defendants had found proper and beneficial for themselves. But by acting as they did, it appears to us, that their undertaking was fully satisfied. If, by the fault or neglect of the notary they employed for plaintiffs, the latter have suffered any injury, they must look to the sureties on his official bond, because such fault or neglect was a breach of his official duties. Motillet v. Bank of the United States, 1 Martin, N. S. 368 ; Story on Agency, 189, sect. 201 ; La. Code, arts. 2977, 2978 ; Smedes v. Utica Bank, 20 Johnson, 377.

It is therefore ordered that the judgment of the district court he reversed, and that ours be for the defendants with costs in both courts.