#### Maurice Brill and Others, Copartners, Doing Business under the Firm Name of Brill Brothers, Respondents, *v.*The Jefferson Bank, Appellant.

First Department,

December 5, 1913.

Bills and notes — deposit of note for collection — notice of dishonor — failure to notify indorser whose address is not known — notice of dishonor to subsequent indorser sufficient.

Where the plaintiffs, indorsers of promissory notes, deposited the same with the defendant bank for collection, and the bank on the dishonor of the notes, not knowing the address of a prior indorser, gave due notice of dishonor to the plaintiffs and inclosed with the notice to them a notice of dishonor addressed in blank .to the indorser and bearing a two-cent postage stamp, which latter notice the plaintiffs did not forward to the indorser, as they were entitled to do under sections 165 and 178 of the Negotiable Instruments Law, the bank is not liable for negligence in failing to hold the prior indorser. As the bank did what the law required, the failure of the plaintiffs to collect from the prior indorser was due to them own negligence.

Appeal by the defendant, The Jefferson Bank, from an " order and determination of the Appellate Term of the Supreme Court, entered in the office of the clerk of the county of New York on the lYth day of June, 1913, affirming a judgment of the City Court of the City of New York in plaintiffs’ favor, and an order denying defendant’s motion for a new trial.

*M. L. Schallek*of counsel *[Strasbourger, Eschwege & Schallek,*attorneys], for the appellant.

*Herbert H. Maass*of counsel *[Feiner & Maass,*attorneys], for the respondents.

Clarke, J.:

The plaintiffs were depositors in the defendant bank and deposited therein two promissory notes, each for $600, payable in four months, drawn by “Henry C. Squires’ Sons, G. Harry Squires,” and indorsed “Grace H. Squires, Brill Brothers.” Mrs. Squires was the wife of G. Harry Squires. The notes were not paid when due and were protested. This action *462against the hank is based upon allegations of the complaint setting forth that the defendant presented said notes at maturity, the same were not paid, and that defendant did not give due notice thereof to said indorsee, Grace H. Squires, but negligently omitted so to do, by reason whereof the notes have not been paid and the said indorsee thereon has been discharged of her liability; that the maker of said notes is insolvent, and that collection thereof cannot be made from the maker, and that by reason of the premises plaintiffs have lost the moneys due on said notes. The notary did not know the address of Mrs. Squires. He sent one notice to her care of Henry C. Squires’ Sons, 30 Church street, the maker. It is conceded that this would not constitute “due notice” to the indorsee or “due diligence” to satisfy the obligation of the bank. He also sent a notice addressed to Mrs. Squires, with the address blank, and with a two-cent postage stamp attached thereto, inclosed in the envelope addressed to Brill Brothers, 41 Cortlandt street, which contained' the notice of protest addressed to them.

At the close of the evidence defendant moved to dismiss the complaint upon the ground that plaintiffs had failed to make out a cause of action showing negligence on the part of the defendant or its notary. This was denied, and defendant excepted. The learned court left the question of negligence to the jury. It charged at plaintiffs’request “that sending a notice to Grace H. Squires directed to Grace H. Sqñires in Brill Brothers envelope was insufficient to charge Brill Bros, with the duty of forwarding the notice of protest,” and “that there was no duty on Brill Bros, to forward it to the endorser,” to which the defendant excepted. The jury entered a verdict for the plaintiffs for $1,284.08. From the judgment entered thereon and the order denying a new trial the defendant appealed to the Appellate Term where said judgment and order were affirmed. From said determination this appeal is taken by leave.

It is conceded that the defendant was the agent of the plaintiffs for the purpose of collecting the notes so deposited with it. The notes were dishonored in its hands. Section 165 of the negotiable Instruments Law (Consol. Laws, chap. 38; Laws of *4631909, chap. 43) provides that “Where the instrument has been dishonored in the hands of an agent, he. may either himself give notice to the parties liable thereon, or he may give notice to his principal. If he give notice to his principal, he must do so within the same time as if he were the holder, and the principal upon the receipt of such notice has himself the same time for giving notice as if the agent had been an independent holder.”

And section 178 provides that “Where a party receives notice of dishonor, he has, after the receipt of such notice, the same time for giving notice to antecedent parties that the holder has after the dishonor.” •

The notary, that is, the bank whose agent he was, not knowing Mrs.' Squires’ address when he gave notice of dishonor to plaintiffs, subsequent indorsers, inclosed to them, and they duly received, the notice for Mrs. Squires with postage stamps attached. They had the same time within which to give notice to the antecedent indorser that the holder had after the dishonor. They failed to forward the notice sent to their prior indorser. It is conceded in the record that Mrs. Squires did not reside or have a place of business in the city of New York. The notary does not appear to have been negligent. He did what the law required, that is, sent a copy of the notice addressed to Mrs. Squires to the plaintiffs.

In *Metropolitan Bank*v. *Engel*(66 App. Div. 273) the court said: “The notary * * * did not know the residence or place of business of any of the indorsers except the Metropolitan Bank, the last indorser, and he forwarded all the notices to that bank in strict compliance with section 175 of the Negotiable Instruments Law (Chap. 612 of the Laws of 1897) * "x" *. The plaintiff being the last indorser on the note, and the notary not knowing the address of any of the other indorsers, very properly mailed all the notices to the plaintiff, thus shouldering the responsibility upon the bank to protect itself by sending manifests of protest to the prior indorsers * *

It seems to us that if the plaintiffs have been unable to collect from the indorser by reason of negligence in notifying her of the dishonor, it was their negligence and not that of the *464bank which' promptly did what the law required, and so no cause of action was established.

The determination of the Appellate Term and the judgment and order of the City' Court should be reversed, and, as the motion was made to dismiss the complaint, that motion should now be granted, with costs to the appellant in all courts.

Ingraham, P. J., Scott, Dowling and Hotchkiss, JJ., concurred.

Determination of Appellate Term, judgment and order of City Court reversed, motion to dismiss complaint granted, with costs to appellants in all courts. Order to be settled on notice.