Case ID: mass_5/html/0126-01.html
Source: Caselaw Access Project
Author: {"author": "Parsons, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

* James Colt and Others versus Habijah W. Noble.
    A citizen of the United States, being in the East Indies, endorses to merchants living in Madras, a bill of exchange, payable in London, and returns to the United States: the endorsees forward it to their agent in London, by whom it is presented and protested for non-acceptance and non-payment; and thereupon he returns it to his principals, the endorsees, in Madras, who, within a reasonable time afterwards, send notice to the endorser, then in the United States. This notice was held sufficient to charge the endorser.
    This was assumpsit against the defendant as endorser of a bill of exchange drawn at New South Wales, by W. Cox, on Cox &f Greenwood, in London, for 695L sterling, payable to the defendant or his order, sixty days after sight; and the declaration states an endorsement by the defendant to the plaintiffs, the usual protests for nonacceptance and non-payment, and notice thereof to the defendant.
    The cause was tried on the general issue before Parker, J., at the last November term, and a verdict found for the plaintiffs by consent of the parties, subject to the opinion of the Court, upon the following facts agreed.
    After the plaintiffs had purchased the bill of the defendant, then master of an American ship at Madras, and bound to Portsmouth in New Hampshire, where the defendant then had and still has his home, they seasonably sent it to their agents, Lubbock, Colt fy Co., merchants in London, to obtain payment, of Cox fy Greenwood, the drawees. The agents, in due time, on the 10th of May, 1804, caused the bill to be protested for non-payment, it having been before duly protested for non-acceptance. They, also, in a reasonable time, returned the bill with the protests to the plaintiffs, their principals, then living in Madras.
    
    It was also agreed, that the agents might have sent notice to the domicil of the defendant of the non payment and of the protests in three months after the same, and that no notice thereof was at any time so sent by the agents or given to the defendant; but that due notice was given him by the plaintiffs from Madras in July, 1805, which notice was in a reasonable time after the return of the bill and protests from London to Madras.
    
    If the Court should be of opinion that the defendant had reasonable notice of the non-payment and protests of the [*168] bill, so as to make him liable for the payment to * the plaintiffs, it was agreed that the verdict should stand, and judgment be entered upon it; otherwise the verdict was to be set aside, and a general verdict entered for the defendant, and judgment accordingly.
    And now at this term,
    
      Jackson, for the defendant
    contended that the plaintiffs were bound to give notice to the defendant of the bills being dishonored in due season; and for this purpose that they ought to have advised their agents in London of the place of the defendant’s domicil. The principals being bound, their agents were bound also; otherwise the holder of a bill, by putting it into the hands of an agent, discharges himself of the obligations which the law has imposed on him. And inasmuch as seasonable notice in this case had not been given to the defendant, he contended that the plaintiffs’ remedy against him was gone.
    
      Dexter, for the plaintiffs
    insisted that by the custom of merchants, all that was required of the holders of the bill in London, was to return it, with notice of its dishonor, to the persons from whom they had received it. This had been done in the present case. This bill having been endorsed by an American master in the East Indies, it could not be known to the agents of the plaintiffs in London, where he was resident at the time the bill was dishonored. If inconvenience arises to the defendant from the circuitous route in which the notice passed to him, it is owing to the circumstances of the original transaction, and in no degree to the loches of the plaintiffs or their agents.
    
      Otis
    
    in reply, agreed the doctrine to be as stated by Dexter where a bill was remitted in payment. But it was different, where sent to an agent or correspondent for collection only. In such case, the agent was held to do every thing which his principal was bound to perform. To enable the agents to do this in the present case, the plaintiffs should have informed them of the defendant’s place of residence, to enable them to give him * the re- [ * 169 ] quisite notice. If Noble had been living in London at the time the bill was protested, would it have been sufficient to send the notice to Madras ?
   The opinion of the Court was afterwards delivered to the following effect by

Parsons, C. J.

The point in this cause substantially submitted to the decision of the Court is, whether the agents in London of the holders of the bill in Madras were bound to give notice of the protest to the defendant, the endorser, or only to return the bill with the protests to their principals, who were seasonably to give notice.

We do not find this question expressly settled by any decision in point. It is stated in Kyd on Exchange [page 118.], that when a bill is remitted to a factor to procure acceptance, it is the duty of the factor to use due diligence to have it accepted, and to give advice to his principal of the event, that in case of non-acceptance he may take the proper steps. And if the holder present the bill, and it be dishonored, he is bound to give notice to all the preceding parties, to whom he intends to resort. And this course of conducting the business, we are satisfied, is agreeable to tire law on this subject.

A person appointed a factor to cause a bill to be presented, is intrusted with no other powers, and it is his duty to notify his principal. The factor may not know to which of the prior parties to the bill the principal intends to resort, and if he does, he may not know their domicils, as he has no interest in the bill, or privity with the parties.

But it is argued that this information the principal is bound to give his factor. We know of no such obligation on the principal; and if there were, it might injure the negotiability of bills. For a factor, who might be willing to deliver a bill to a notary, and advise his principal of the result, might refuse to receive the bill, if he was to be responsible when dishonored for the notice [*170] * given to the drawer and endorsers. For if it is his duty to give such notice, he must be answerable to his principal for the consequences of his own neglect.

It is admitted by the defendant’s counsel, that if a bill be remitted in payment, the correspondent may return it to the principa when dishonored, and is not bound to give notice to any of the prior parties to the bill. This is true; but the reason is, that he considers himself a mere factor until the bill be honored. Then, as holder, he receives the money to his own use, crediting the principa with the payment. There is, therefore, no difference between the cases of a bill sent to a factor to procure acceptance, and of a bil. remitted to a correspondent in payment, if the bill be dishonored.

The objection of the inconvenience to the endorser, resulting from this rule, arises from the negotiability of bills of exchange, of which the endorser must take the consequence. In the present case, he sold a bill at Madras, payable in London. He must, therefore, presume that the bill might be holden by the endorsees at Madras, and sent to London for payment; and that if it was, and was dishonored, notice to him would come from Madras. He cannot, therefore, complain of the legal consequences of his own conduct.

We are of opinion that the verdict is right, and that judgment must be entered upon it.