Case ID: la_16/html/0566-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Garland, J.,\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

M'CULLOCK vs. COMMERCIAL BANK.
    APPEAL FROM THE COMMERCIAL COURT OF NEW ORLEANS.
    A bank taking a note for collection, becomes the mandatory or agent of the holder or depositor, only ; there is no privity between it and any of the endorsers, or other parties to the note. Its responsibility is only to those who employ it.
    So, where a note is deposited for collection, and the notary of the bank fails to give notice of protest to the first endorser, who is thereby discharged ; the second endorser who takes it up, has no recourse against the bank.
    A second endorser wishing to hold the first responsible to him, should give him notice of protest; and for this purpose the law gives him until the next day to notify his prior endorser.
    This is an action by the second endorser of a note against the Commercial Bank, to make it liable for failing to have notice of protest given to the first endorser, who was thereby discharged.
    The plaintiff alleges that a note for three hundred and ten dollars signed by J. Peebles, payable to the order of Geo. Sargent, who endorsedit in blank, as also Robert M'Cullock the plaintiff himself. It was likewise endorsed by Edmund Harding who was the holder, and deposited in the Commercial Bank for collection. On being protested at maturity for non-payment, the notary failed to give notice to Sargent the first endorser. M'Cullock the present plaintiff, paid the note to Harding and sued Sargent as first endorser. He was released for want of notice. He now sues the bank to make it liable for the omission of its notary to give this endorser notice, and prays judgment for the amount of the note and interest, with all the costs of protest, and the suit against Sargent, &c.
    The defendants pleaded a general denial; and denied specially that they were the agents of the plaintiff; or in any way responsible for the acts or omission of the notary, or that he was guilty of any omission of duty. Upon these pleadings and issues, the cause was tried. The record and judgment of the suit against Sargent, in which he was released as endorser, was produced in evidence. The facts of the case were all made to appear nearly as alleged.
    a bank taking anoteforeoiiecmandatory or df^OTdepm^tor pri^jy'^eoleen n and any of the otherSparties to responsibility1^ on]y 10 -who employ it.
    There was a judgment of non-suit and the plaintiff appealed. ,
    
      Mitchell, for the plaintiff and appellant.
    C. M. and F. B. Conrad, for the defendant.
   Garland, J.,

delivered the opinion of the court.

On the 24th September, 1839, J. Peebles gave Geo. Sargent, his note for three hundred and ten dollars, payable sixty days after date, who transferred it to plaintiff by endorsement, he transferred it to one Edmund Harding, who deposited it in the Commercial Bank for collection. The note not being paid at maturity, was handed to the notary of the bank to be protested. He protested it, and gave notice to some of the endorsers, but not to Sargent, who preceded the plaintiff on the paper. The plaintiff who is the second endorser, paid the note to Harding, who was the real owner, and brought suit against Sargent, in which action he was defeated, because Sargent had not received legal notice of non-payment, and protest. He now sues the bank, alleging the notary employed by it, did not do his duty, and omitted to notify Sargent., whereby he lost his recourse against him.

The suit is substantially, to recover damages on a contract of agency. The defendants aver, they were never the agents of the plaintiff, and that there is no privity of contract between them. It is clear the note was deposited by Harding, the last endorser. By that deposite the bank became his mandatories; with him the contract was made, and he does not complain of the conduct of his agents. There was no stipulation pour auirui in the contract, and the plaintiff and the bank are strangers. 6 Martin, N. S., 152.

The plaintiff seems to have anticipated some objection of I this kind, and has carefully omitted setting forth in his petition, by whom the note was deposited in bank for collec-

So, where a note is deposited for collection, and the notary of the bank fails to give notice of protest to the first endorser, who is thereby discharged; the second endorser ■who takes it up, has no recourse against the bank.

him notice of ■nrofpfif and for this purpose the unTiiS\he next day to notify his pnor endorser. A second endorser wishing to hold the first responsible to him, should give

tion, but the evidence discloses that fact most clearly. .It is not alleged or pretended, that Harding when he deposited the note for collection made any stipulation in favor of the plaintiff, or subrogated him to any of his rights against the bank. In fact he had no rights t,o transfer. The contract on the part of the bank was fulfilled in such a manner as to enable him to get his money, and that is all they undertook to procure for him. In all the cases referred to by plaintiff’s counsel the plaintiffs were the depositors of the notes, and the bank contracted directly with them. 1 Martin, N. S., 365 ; 3 Idem., 344; 7 Idem., 583.

The defendants further contend, they are protected by a principle which is applicable to promissory notes and bills of exchange, and recognized by commercial lawyers; which is, that it is the duty of a party who receives notice of protest, to give notice to whomsoever he may wish to hold responsible on the paper. The plaintiff paid the note to Harding after protest, hence we are to presume he was duly notified of such protest. If then, it was his wish to hold a prior endorser liable, it was his duty to see if the notary had notified him, if not he should have notified that endorser himself. For this purpose, the law gives him until the next day after he receives notice, to notify his prior endorser. Chitty on bills, p. 315,316; 4 Martin, N. S., 226. The plaintiff had it ¡n his power to control the liability of his prior endorser an(j having failed todo so, he must abide the eonseqtiences.

It is, perhaps, the practice in this city, to rely very much on banks and notaries when a note is put into their possession for collection, to notify all the endorsers on the note, but if they do not, their responsibility is only to those who employ them. Every endorser must take care of himself, and take the necessary steps to hold his pedecessor liable. Such is the law and the uniform decision of this court.

It is, therefore, ordered, that the judgment of the Cornmercial Court be affirmed, with costs.