#### Louis Casper, Respondent, *v.*Percival Kuhne, Max Hessberg, Max Hesslein, Wilhelm Knauth, Frederick Nachod and Max Jaffe, Appellants.

(Supreme Court, Appellate Term, First Department,

February, 1913.)

Negotiable instruments — foreign check — protest — failure of holder to protest check.

The provision of section 260 of the Negotiable Instruments Law, which requires protest and due notice as a condition of the liability of both the drawer and indorsers of a foreign bill of exchange, applies to a check drawn and given in the state of New York on a bank in Austria, and the failure of the holder to protest the check discharges the drawer.

Appeal from a judgment of the City Court of the city of Mew York, entered upon a verdict for the plaintiff directed by the court, each party having moved for the direction of a verdict.

Briesen & Knauth (Antonio Knauth and George T. Hogg, of counsel), for appellants.

Thompson & Fuller (John A. Thompson and Seymour K. Fuller, of counsel), for respondent.

Page, J.

The defendants are bankers in the city of Mew York. The action was brought to recover upon an instrument in writing -of which the following is a translated copy:

> “ Check Mo. 02331

> K 2250

> “ Pay you against this check out of our deposits (in case the first check remains unpaid) to Mrs. E. Utassy or order two thousand two hundred and fifty Krones.

> “Mew York, *December*llik, 1905.

> “Knauth, Machod & Kuhne.

> “ To The Wiener Bank Verein, in Vienna.”

*412The plaintiff paid the defendant $458.44 and received the above in a set of two, one marked with the figure 1, in identical terms as that set forth above except that it provided for payment in case the second check remained unpaid. Ho instructions were given the .plaintiff by the defendants. The first instrument of the set was mailed on December 11, 1905, carefully addressed to the payee at Prague, Austria, but it is claimed was never received by her. The second was mailed a few days later and received by the payee. Upon presentation of the second to the Wiener Bank Herein, payment was refused upon the ground that the first had been paid. It appears that the “ first ” had been presented by a stranger who wrote on the back thereof “ Received on December 21st 1905 E. Utassy manu propria.”

At the close of the plaintiff’s case the defendants moved for a dismissal on the ground that the plaintiff had failed to prove protest or notice of protest to the drawer. There was some evidence that under the Austrian law a check need not be protested in order to charge the drawer. This was immaterial since the law of Hew York where the contract was made governs the original obligations of the parties. The contract was to. be performed in Austria and Austrian law controls the manner of its performance. Accordingly the formality necessary to constitute a protest would be determined by the law where the protest was to be made but the question of the necessity of protest in some form, and whether due notice of protest was a condition of the drawer’s original agreement to be bound, is one which must be decided according to the law of Hew York where the contract was made. Amsinck v. Rogers, 189 N. Y. 252.

The question to be determined is whether the instrument upon which the plaintiff sues is a foreign bill of exchange within the meaning of section 260 of the Hew York negotiable Instruments Law, which requires protest and due notice as a condition of the liability of both drawer and indorsers of a foreign bill of exchange. The instrument is clearly a check, but by section 321 of the Hegotiable Instruments Law “A check is a bill of exchange drawn on a bank, payable on demand. Except as herein otherwise provided, the *413provisions of this chapter applicable to a bill of exchange payable on demand apply to a check.” There is nothing in the wording of the statutes to exempt a foreign check from the general class of foreign bills of exchange and it would seem, therefore, that every foreign check is a species of foreign bill of exchange which by statute must be protested in order to charge the drawer.

While the law is well settled that an inland check like any other inland bill of exchange need not be protested in order to charge the drawer, the reports and digests are singularly lacking in precedents upon the necessity of protest in case of a foreign check. This is perhaps due to the almost universal custom of protesting such checks for nonpayment.

Various attempts have been made to exclude checks from the general class of bills of exchange and cases are cited broadly for the proposition that a foreign check is not a bill of exchange. There are even *dicta*to the effect that a foreign check is an inland bill of exchange; but a careful analysis of each case fails to support the proposition for which it is cited. For example, in the case of Merchants National Bank v. Ritzenger, 118 Ill. 484, the question before the court was whether a check, drawn in a set, upon a bank in another state retained its character as a check so as to permit the holder to sue the drawer before acceptance. The digest of the ease and the statement preceding the opinion declare that the instrument was not a bill of exchange, but nothing of the kind appears in the opinion. The court merely held that the draft retained its character as a check, which was true in spite of the fact that it was also a bill of exchange. Again in the ease of Roberts v. Austin Corbin & Co., 26 Iowa, 315, which is cited as holding that a foreign check is not a foreign bill of exchange, the only ruling made upon the subject is as follows: “As to the character of the instruments under which the intervenors claim, that is whether they are foreign hills of exchange or merely bankers’ checks the counsel do not differ but agree in treating them as the latter * * * There is no assignment of error upon the point that the court found that said instru*414ments were simply bankers’ checks. This may therefore be taken for granted.” The question before the court was whether the holder of a check may sue the drawee without acceptance.

There are many cases in this and other jurisdictions which point out the various characteristics of a check as distinguished from other forms of bills of exchange. All of these recognize the check as a species of bill, and governed by the same general rules, and in no case is any distinction drawn in the matter of presentment and protest. Chapman v. White, 6 N. Y. 412; Hibernia National Bank v. Lacombe, 84 id. 367; Risley v. Phenix Bank, 83 id. 318; Moses v. Franklin Bank, 34 Md. 574; Eyre v. Waller, 5 Hurls. & Nor. 459; Rogers v. Durant, 140 Fed. Rep. 298; Harker v. Anderson, 21 Wend. 375. In Harker v. Anderson, supra, Cowen, J., after citing and explaining the many authorities holding that a check is a species of a bill of exchange, says, at page 374: “Checks are also inaccurately called inland bills. A check drawn at New York or Philadelphia is none the less so, for being a foreign bill, requiring the protest of a notary, in order to charge collateral parties.”

Daniel on Negotiable Instruments says (5th ed. vol. II, § 1600) : “ While checks have not all the incidents of bills of exchange, they may be yet included in that term when applied to the steps to be taken in case of dishonor. The same reasons that would authorize the protest of an inland bill of exchange for non-payment, would authorize the protest of a check, the payment of which had been' refused on presentment. * * * And if drawn in one State upon another, a protest would doubtless be necessary in order to charge an endorser, the check being in that event a species of foreign ■bill.” ' '

Edwards on Bills & Notes, in discussing the attributes 'of checks and bills of exchange says, at section 550: “A check drawn on a foreign bank is a foreign bill.”

The reason for the requirement of the common law that a foreign bill of exchange must' be protested in order to charge the drawer and indorsers is clearly stated in Daniel on Negotiable Instruments (5th ed., § 927) as follows: “The *415requisition of a protest in the case of foreign bills was in order to afford authentic and satisfactory evidence of due dishonor to the drawer, who, from his residence abroad, would experience a difficulty in making proper inquiries on the subject, and be compelled to rely on the representations of the holder.” This reason, which also underlies the present New York statute, applies with equal force to a foreign check as to any other foreign bill.

In view of the foregoing we are constrained to hold that section 260 of the Negotiable Instruments Law applies equally to a foreign check. As the liability of these defendants as drawer was discharged by failure of the holder to protest the check, the direction of the trial court was erroneous.

The judgment appealed from must be reversed, with costs, and judgment directed for the defendants dismissing the complaint on the merits.

Seabuby and Lehman, JJ., concur.

Judgment reversed, with costs, and judgment directed for defendants dismissing complaint on the merits.