Cayuga County Bank v. Dill — 5 Hill & Den. 403

Majority

p. 403

The Cayuga County Bank vs. Dill.

Headnote

Though an endorser of a promissory note may waive demand and notice, it must be done understandingly, or his acts must be such as to mislead the holder by inducing him to believe that a waiver is intended. Per Nelson, Ch. J.

On the day that a note which was payable at a bank fell due, the last endorser called upon the cashier, and, after remarking that the note had “ come round,” proposed to pay it in part and renew it for the balance as soon as the maker returned, he being then absent; whereupon the cashier expressed a willingness to comply with these terms. By reason of a mistake of one of the clerks m the bank as to the time the note fell due, it was not then protested, but the protest

p. 404

was made the third" day afterwards. On the morning of that, day the endorser called at the bank, and, upon enquiring why the note had not been protested, was told it would be done in the afternoon, to which he replied it was too late, and refused to endorse a renewal note. Held, that the circumstances were not sufficient to make out a waiver of demand and notice. Cowen, J, dissented.

; Assumpsit, by the endorsees against the last endorser.of a promissory note, tried at the Cayuga circuit, in October, 1842, before Moseley, C. Judge. The defence was, that there had not been a demand and notice; to which the plaintiffs answered that both had been waived by the defendant. The facts relied on to establish the waiver were as follows: On the 3Qth óf March, 1842, the day on which the note fell due, the defendant called at the plaintiffs’ bank, and, after observing to the cashier that the note had “ come round,” asked him if it could not be renewed on paying $100 and discount. He said the maker was absent and the note would have to lie over till his return, which would be in a few days. The cashier expressed a willingness to renew the note upon the terms proposed, if the defendant could do no better. On leaving the bank, the defendant met Mr. Beardsley, one of the directors, to whom he repeated what he had said to the cashier, adding, that on the maker’s return $100 should be paid and the note renewed. Beardsley assented to the renewal and told the cashier to let the note lie. On the morning of the 2d of April following, the defendant again called upon the cashier and asked why the note had not been protested. The cashier replied that he intended to do it in the afternoon. ' The defendant said it was too late, that the note fell due on the 30th of March, and that he so informed the cashier at their previous conversation. On examining the note, it was ascertained that the defendant was right. He was thereupon requested to endorse a renewal note, but refused. Afterwards, on the same day, the@note was protested for non-payment, but no notice was sent to the defendant. The mistake in relation to .the day of payment was made by one of the clerks in the bank, who endorsed the note as falling due on the 2d of April, instead of the true time.

The defendant’s counsel moved for a nonsuit, on the ground

p. 405

that the plaintiffs had not proved enough to fix a liability upon the defendant as endorser. The circuit judge denied the motion, and the defendant’s counsel excepted. The judge charged the jury, that the defendant’s request to let the note lie over, upon the assurance that it should be renewed, dispensed with the necessity of a demand and notice of non-payment; and that the plaintiffs were therefore entitled to recover. The defendant’s counsel again excepted. The jury rendered a verdict for the plaintiffs, and the defendant now moved for a new trial on a bill of exceptions.

W. T. Worden, for the defendant.

J. Porter, for the plaintiffs.

I think the learned judge erred. It cannot he pretended that the omission to charge the defendant as endorser, was at all attributable to what he said to the officers of the bank in relation to renewing the note. On the contrary, it is clear that the omission occurred in consequence of the mistake of the clerk in respect to the day on which the note fell due. The same course would have been pursued by the bank though no communication had been held between its officers and the defendant. . It is apparent, also, from the whole case, that the cashier did not regard the conversation as dispensing or as intended to dispense with demand and notice; and this ,ls at least some evidence that no such effect was designed.

One of the great excellencies of the species of commercial paper now in question, and one also which the courts labor to preserve, is the precision and accuracy with which the rights and obligations of all parties are defined. The least informed person cannot well mistake the one or the other. To allow casual and loose conversations, not amounting to any definite arrangement or determination, to supersede the duties and obligations enjoined by law, would lead to confusion and the most mischievous consequences. • An endorser may undoubtedly waive the condition of his liability; but it should be done un

Dissent

p. 406

derstandingly, or his acts must be such as fairly to mislead the holder by inducing him to believe that such waiver is intended.

In Prideaux v. Collier, (2 Stark. Rep. 57,) the defendant, the drawer of a bill, said to the plaintiff, on the day it became due, that he understood the plaintiff was the holder of the bill, which he hoped would be paid, and that he would endeavor to provide effects. The bill was not presented to the drawees in time, and an attempt was made to excuse the neglect on the above ground; but the court held that the drawer was discharged.

In the case of Leffingwell v. White, (1 John. Cas. 99,) which was principally relied on by the counsel for the plaintiffs, the holder was misled by the pending negotiation for a further time of payment, which was set on foot by the endorser. That is not this case.

Were it at all important to consider the consequences to the present defendant of the neglect to give him notice, it is easy to see how he may have been prejudiced. The prior endorsers are confessedly discharged ; but if the note had been duly protested, their liability would have continued for the benefit of the defendant, or, if he had received notice, he would have been interested in seeing that they also were properly charged. As it is, he has lost all remedy against them. I am of opinion that a new trial should be granted.

Bronson, J. concurred.

I think the reason for requiring notice to an endorser fails altogether in its application to Dill, the defendant. He knew that the note must lie over, and, on the day of presentment, told the cashier that the maker was gone and it would not be paid. On the same day he stated this to Beardsley, adding that on the maker’s return a hundred dollars should be paid and the note renewed. After this, I think it not only unreasonable, but most ungracious to raise the objection that he had not notice of presentment and non-payment. He does not pretend that he even made a mistake. He was

p. 407

master of the whole ground, and knew all that a presentment and notice could have communicated. The only reason for notice is, that the endorser may provide for his indemnity. He may waive notice; and this takes nothing from his remedy. Leffingwell v. White, (1 John. Cas. 99,) is in point. The court there said : “ The defendant was fully apprized of his situation before and at the time the note fell due. One of the makers was absent from the state, and the other had absconded. A formal demand and notice under such circumstances, could answer no valuable purpose. The, defendant, sensible of this, by his own acts admitted his responsibility, treated the note as his own, and negotiated for a further time of payment.” That is the present case in totidem verbis. The case of Prideaux v. Collier, (2 Stark. Rep. 57,) if it were the other way, is a men nisi prius decision: but I do not see any difference between that and the case decided by this court. The drawer told the holder he hoped the bill would be paid, and he would endeavor to provide effects and would see the holder again. Lord Ellenborough, C. J. said, all this imported no more than that the drawees would probably not accept the bill; but it was possible they might change their minds. He required a presentment, therefore, as evidence that there was a default of the drawees. Here we have the positive assurance of Dill that the note would not be paid; an assurance given on the very day it fell due, and accompanied by the reason, viz. that the maker was absent from the country, which was true. The argument of Mr. Justice Nelson, in Mech. Bank of N. Y. v. Griswold, ( 7 Wend. 168 ,) applies, viz. “ Upon the maxim that when the reason for the rule of law does not exist, it ought not to be applied, it has frequently been decided, that in cases where the non-payment by the maker and failure of notice to the endorser cannot possibly operate to the injury of the endorser, the omission will not discharge him.” I know it is said in one case that notice and knowledge are different. (Picken v. Graham, 1 Crompt. & Mees. 725, 727.) That is certainly not so un der our rule, even if it will bear the test of common sense. The complaint of the present defendant is shortly this: “ You failed

p. 408

to give me notice of what I knew all about, and informed' you of myself; inconsequence of which I have been kept in the dark, delayed, and finally lost my remedy over against my principal.” He may have lost his remedy; perhaps he never had an effectual one; but it seems, with great deference, to be a departure from every principle on which this defence rests, if we allow it to prevail. Indeed, its interposition by the defendant strikes me as requiring an unusual power of face. I.cannot doubt that the circuit judge was right in disregarding it, and charging as he did in favor of the plaintiffs. I am opposed to a new trial.

New trial granted.