Case ID: mass_17/html/0364-01.html
Source: Caselaw Access Project
Author: {"author": "Parker, C J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

* Samuel Whitwell and Others versus Eleazer Johnson, Jun.
    If the demand made on the maker of a promissory note be such as he is bound by, the endorser cannot object that it was not made according to legal forms. Notice to the endorser of a promissory note, of non-payment by the maker, is sufficient, if put into the post-office at any time during the day succeeding the day the same is payable.
    Assumpsit on a promissory note made by E. &f M. Top-pan, on the 11th of October, 1819, for 300 dollars, 21 cents, payable to the defendant or order, by him endorsed to Jacob Gerrish, and by said Gerrish to the plaintiffs; payable in four months, with grace.
    The action was tried on the general issue, before the chief justice, April term, 1820, at Ipswich. The questions were, whether a legal demand had been made on the makers, and seasonable notice of non-payment to the defendant.
    The note was lodged by the plaintiffs in the Massachusetts bank for collection, and the makers were merchants transacting business m Boston. When the note became due, excluding the days of grace, J. Willard, messenger of the bank, left a printed notice in common form at a room, where one of the makers had desired it might be left. On the 14th of February, 1820, which was the day when the grace expired, Willard, in the afternoon of that day, and after the bank was closed, delivered another notification or request to one of the makers personally; but the note was not presented to the makers. The messenger also carried two notifications for the endorsers (directed to them, but without any directions to Newburyport, the town in which they lived) to the store of the plaintiffs; and there was evidence tending to show that those notifications, after being directed for Newburyport, were put into the Boston post-office the same afternoon. That directed to the defendant was produced, and the post-mark upon it was of the 15th of February. The post-officer at Newburyport testified that it did not arrive at his office until the morning of the 16th; and an officer belonging to the post-office in Boston, testified that if the note had been put into the office on the 14th, before eight o’clock in the evening, it would have been stamped 14th; [*450] *and if received after that hour, it would have been stamped 15th, and would have gone into the morning’s mail of that day, which arrives at Newburyport about noon
    It was in evidence that the mode adopted in this case for the demand upon the makers, was conformable to the usage of the bank; and there was testimony tending to show that the makers of the note were conusant of that usage. It was also proved that the mode of notifying the endorsers, when they lived out of Boston, was to deliver the notices to the persons depositing the notes, leaving it to them to transmit them. There was no evidence that the defendant had any knowledge of the usage of the bank, in making demands upon the promisors upon notes left there for collection .
    The jury were instructed that the demand made on the promisors, as testified by the messenger of the bank, was sufficient; provided they were satisfied, from the evidence, that the promisors had knowledge of the usage of the bank; and that, if they were satisfied from a comparison of the evidence, that the notice to the defendant as endorser, was put into the post-office on the 14th of February, before eight o’clock in the evening, the defendant was liable; notwithstanding he might have been ignorant of the manner in which the demand was made on the promisors, and of the practice of the bank in that respect.
    A verdict was returned for the plaintiffs; and the defendant moved for a new trial, on account of the said directions to the jury.
    After the trial, the defendant presented a petition to the Court, stating, as an additional ground for a new trial, his discovery of the fact that a notification to Gerrish, the second endorser of the note, was sent by the mail, bearing the Boston post-mark of the 15th of February, and arrived at Newburyport in the regular mail of the 16th; that the same had remained in the post-master’s custody until the date of the petition; because one of the makers of the * note, without the knowledge of Gerrish, informed [ * 451 the post-master that Gerrish did not wish to take the letter ; upon which the post-master had laid it aside, and marked it as refused.
    
    
      Saltonstall and Gerrish, for the defendant.
    The first demand on the makers was nugatory, being three days before the maturity of the note; and the second was insufficient, in that it was not accompanied with the note itself. The note being left at a bank for collection makes no difference as to these points; unless knowledge of the usage of the bank can be brought home to the endorser, or he had waived his legal rights. The second demand was unavailing also, in that it was not made until the bank was closed for the day, and it had become impossible for the promisors to pay the note. The notification to the endorser was premature, since payment had not been legally demanded of the makers . The usage of banks cannot control the common law, but in relation to their customers  ; for as to no others can there be a presumption of knowledge. The defendant knew nothing, either of the usage of the Massachusetts bank, or even the fact that the note was lodged there for collection.
    
      Mosely, for the plaintiff.
    It was regularly the duty of the bank to retain the note through the day on which it fell due; and this is one of the exceptions allowedly the Court in the case of Freeman & Al. vs. Parker 
      , where the rule is laid down, that the person making the demand, should have with him the evidence of the debt. This, also, does away another objection suggested for the defendant. There would be the greatest inconvenience and manifest insecurity to creditors, if notes or other securities were required to be carried from the banks by their messengers. The case of the State Bank vs. Hurd 
       is decisive of the objection to the demand on the promisors. It was there decided that a demand, left at a place appointed by the maker of a note, was sufficient to charge the endorser. [*452] * Saltonstall. In the case last cited, the note was made payable at the bank; and, therefore, a demand and notice were not required.
    
      
       [How could this usage in any way affect the dr rendant, when he made ne contract with the bank ?—Ed.]
    
    
      
       4 Mass. Rep. 245.-7 Mass. Rep. 483.-7 East, 385.—14 Afoss. Rep. 303.—9 Mass. Rep. 155.—13 Mass. Rep. 85, 87, note.
    
    
      
       1 Maulé Selw. 28.
    
    
      
       7 Mass. Rep. 486.
    
    
      
       12 Mass. Rep. 172.
    
   Parker, C J.,

delivered the opinion of the Court.

The demand upon the promisors, in this case, being made without any presentment of the note to them, would have been wholly nugatory, but for the usage of the bank, in which the note was placed for collection, to make demands in this form, and the consent of the promisors to have the demand so made upon them; which is a legal inference from their knowledge of the usage, as found by the jury . It can make no difference that the note was not made payable at the bank, since the custom is so prevalent, in commercial towns where there are banks, to lodge notes in them for collection, that any man in business must be supposed to know that such course would be adopted; and in the case before us, the consent to the form of demand usual at banks, implies a knowledge that the note would be left there. The demand then was a legal demand upon the promisors ; and they were bound, according to the usage, to go to the bank and discharge the note, within the hours of business on the day it became due.

But there is no evidence, that the endorser was privy to this usage, or that he consented to any demand, different from that which the law requires; and it is insisted that for the want of the ordinary legal demand, he is discharged from his responsibility.

Certainly an endorser is not bound to pay, without evidence of a legal demand upon the maker; but when such demand has been made, his liability occurs. Now, if the endorser has seasonable notice of the fact of non-payment, when the note is due, it must be immaterial to him, in what form the demand upon the maker was made. If there had been no demand, he would not be liable; because it does not appear but that the note would have been paid, if demanded ; and it is within the terms of the stipulation, that such demand shall be made. But if there *has [*453 ] been such a demand as the maker was bound by, so that he had no right to refuse payment, it is not easy to see how it concerns the endorser, whether the legal forms had been complied with, or waived by the promisor. The case of The State Bank vs Hurd was decided upon this principle; and the only difference between that case and this under consideration is, that in that tne note was payable at the bank, and in this it was not. But the circumstance was not essential; as it would not follow that Hurd, the endorser, was conusant of the usage of the bank, merely because he endorsed a note payable there.

Supposing, then, the demand to have been sufficient to charge the endorser, the question remaining is, whether seasonable notice was given to him of non-payment. The note became due on the 14th ; and, according to the finding of the jury, the point is settled against the defendant.

But on the supposition that it was necessary, that the notice should have been put into the post-office on the day when the note became due, a petition has been presented for new trial, on the ground that evidence, since the trial, has been discovered, which has a bearing on that point.

As the evidence at the trial was by no means of a conclusive nature, it would be proper to have a further inquiry, if the point to be established was essential to the decision of the cause. After some doubts, and looking into the authorities, we are satisfied that it was not necessary for the plaintiff to show that notice to the endorser was put into the mail on the same day the note became due. What is seasonable notice is a question of law, upon the facts proved. It cannot be requisite, and we do not find that it has ever been required, to give notice to an endorser, living in another town, by the very next mail after the dishonor of the note, or on the same day. This would be an unreasonable hardship on holders of notes; especially as the maker may, before the day [ * 454 ] expires, take * the note up. It is not to be expected that merchants will leave every thing else, to attend to this one subject, on the very day the note is dishonored. The next day is early enough; and if there should be two mails a day, whether the notice goes by the first or the second of those mails, we think is immaterial; provided it was put into the post-office early enough to go by a mail of that day.

We understand, from good authority, that the Supreme Court of the United States have adopted the same rule; and it is desirable that the same law should prevail on commercial subjects in all the states.

Judgment on the verdict 
      
       [How could they be bound by the usage, when they never agreed that it should be negotiated to or left at this bank in particular, for collection ? Pray, does the note or contract, or the obligation of the maker or endorser, assume one shape in the hands of one person or corporation, and another, and quite different shape, in the hands of adifferent person or corporation ? If so, how can the maker or endorser know, at the timé of signing his name to the instrument, into what contract he is entering ? Qua tena it mutantem Protewm. nodo ?—En.]