Bank of Owego v. Babcock — 5 Hill & Den. 152

Majority

p. 152

The Bank of Owego vs. Babcock.

Headnote

The owner of a note which had been deposited with a bank for collection, obtained judgment against the bank by reason of then- having omitted to give due notice of protest to the endorser; and the bank, after paying the judgment, brought an action against their cashier, alleging that the damages to which they had been subjected were owing to his neglect. Held, that the judgment could not be used to affect the cashier on the question of negligence, though he had notice of the suit in which it was obtained and might have defended.

The judgment, however, is proper evidence in such case for the purpose of showing a recovery against the bank, and what amount of damages they have been compelled to pay. Per Bronson, J.

Action on the case, tried before Monell, C. Judge, at the Tioga circuit, in January, 1041. The plaintiffs sought to charge the defendant for negligence in the discharge of his duty as cashier of the bank in relation to a certain note,"by which the plaintiffs had sustained damages. In June, 1837, a note of $50, at ninety days, dated April 22, 1837, made by Ashbel Lewis and endorsed by E. G. Reed, payable at the plaintiffs’ bank, was received there through the Canal Bank at Albany for collection. The defendant, as cashier, kept one of the books of the bank called a tickler, in which was entered the day when all notes became payable, and by the entries in which book the bank officers were usually governed as to the time for protesting notes. The defendant entered this note in the tickler as falling due on the 27th day of June, when in fact the last day of grace was the 24th of that month. The note was protested and notice given to the endorser on the 27th, and not before— the defendant at that time being absent from the bank. As Reed, the endorser, was discharged for the want of due notice, G. <fc S. Sheldon, who owned the note, sued the plaintiffs and recovered against them. The judgment was given in evidence, with proof that the plaintiffs had paid the amount. Notice of that suit was given to the defendant, and he was told that the bank intended to hold him responsible. He was offered the defence of the suit, but did not accept the offer. The judge.

p. 153

after remarking that a recovery had been had against the plaintiffs in consequence of the error of the defendant in entering the note in the tickler, instructed the jury that whenever a bank is held liable for the negligence of its officer, that officer must be held responsible to the bank which is thus made liable; and if in this case the plaintiffs had been made liable for the defendant’s negligence, the defendant must be held liable to them. Verdict for the plaintiffs $270,23, which the defendant now moved to set aside on a case.

I. Harris, for the defendant.

J. A. Collier, for the plaintiffs.

When the owners of the note sued the bank, it was enough for them to prove that they had sustained damage by the neglect of the hank to give notice to the endorser in proper time, without proving that the fault was chargeable upon any particular officer of the bank; and the judgment which was given in evidence, even as between the parties to it, did not establish the fact that the defendant was chargeable with negligence. The judgment was properly received in evidence for the purpose of showing that there had been a recovery against the plaintiffs, and what amount of damages they had been compelled to pay. But it was not evidence against the defendant for any other purpose. This was not a case where a recovery over had either been given by law, or provided for by the contract of the parties. Whether the plaintiffs could charge the loss upon the defendant or not, depended upon the question whether they could show that it happened in consequence of his culpable negligence. That question should have been left to the jury, with the instruction that in deciding it they should lay out of view the fact that a judgment had been recovered against the plaintiffs. The charge was, I think, calculated to mislead the jury, and on that ground the verdipt must be set aside.

New trial granted.