Cayuga County Bank v. Warden

— When this cause was first before us, we held, in substance, that enough *- 4 appeared upon the face of the notice, to justify the application of the extrinsic evidence by which the note

Remer v. Downer ( 23 Wend. 626 ), which the counsel for the defendant supposes this court to have overruled, is in conformity with the principles above suggested.In that case, the note was made by one Young, and Berner, who was sought to be charged, was second indorser. The notice, upon its face, was addressed to “ N. Williams, cashier,” and informed that person, that' “James Young’s note indorsed by you,” was protested, &c. The letter containing the notice was, upon the outside, addressed to Berner, at his place of residence. The court of errors assumed that the notice was not addressed to the indorser, but to Williams. The chancellor accordingly remarks, “that Bemer could not have sup

The difference between the courts was one of construction; the supreme court, acting upon the verdict, which found that the indorser was not misled, adopted the address upon the back of the letter as a part of the notice; the court of errors, I think, correctly construed the notice as it read upon its face, without reference to the outside direction. Had the notice, in the body of it, been addressed to Berner, instead of Williams, it would have been in substance this case; and the notice, hence, would have been held sufficient, as is manifest from the reasoning of the chancellor; there is not an intimation in the opinion to the contrary.

Again, it was objected upon the trial, that the first count of the declaration was bad, as containing a cause of action not authorized by the plaintiffs’ charter, and that the amendment allowed upon the trial was without terms, and not within the spirit of the 149th section of the Code of 1848. The judge directed that the objectionable parts of the count should be stricken out, without costs to either party; this was the effect of the

— The facts of this case in regard to the notice to the indorsers, of the dishonor of the note in question, are substantially the same as they appeared on the first trial of the cause. The decision of this court, therefore (reported in 1 N. Y. 413 ), pronounced on the former appeal, puts at rest the questions as to the sufficiency of the notice to the indorsers, of the nonpayment of the note, on its presentment to the maker. This court, on the former appeal, held that the written notice of the dishonor of the note, in connection with the accessory fact that this was the only note in the bank, drawn by S. Warden and indorsed by the defendants, was sufficient to convey information to the indorsers of the identity of the note, and that payment of it had, on due presentment, been neglected or refused by the maker. It was also, on that occasion, held by the court, that the notice was not defective, because it described the indorsement of the note, as an individual, instead of a joint indorsement, nor because it did not expressly state that payment of the note had been demanded or refused. It was held, that the statement in the notice that the note had been protested for nonpayment, necessarily implied that payment of the note had been demanded and refused.

It is now regarded as definitely settled, that the

The only new question presented. on this appeal is, whether the note was admissible in evidence, under the money counts. In Hughes v. Wheeler (8 Cowen 77), a majority of the supreme court decided, that a promissory note was conclusive evidence. of money had and received by the maker to the use of the payee. In ^ Smith v. Van Loan ( 16 Wend. 659 ), which *was a . . -* suit by the transferree of" a note against the maker, the court held, that the note could be read in evidence, under the money counts, and that proof that the note was' not, in fact, given for money, but for work and labor, could not change the form of the remedy. The same rule was again laid, down by Oh. J. Bronson, in Butler v. Rawson ( 1 Den. 107 ). Upon the authority of these cases, the note in question must be regarded as conclusive evidence of money lent and advanced to the defendants by the plaintiffs; and proof that the defendants were mere accommodation indorsers, and that, in fact, no money was received by them, cannot alter the form .of the remedy. The defendants, by their indorsement, acknowledged that they have in their hands, money lent and advanced to them by the plaintiffs, and they, by such indorsement, undertake to repay it to the plaintiffs, or to any other party to whom the note may be transferred. The statute makes the indorsement evidence per se of money lent to the defendants. ( 12 Johns. 93 -4; 1 R S. 768, § 1; 10 Wend. 344 -5; 3 Hill 54 ; 6 Barb. 446 .) The question is a mere question of pleading, and the defendants ought not to be allowed, by showing that no money was in fact lent and advanced to them, to change the form of the remedy .on the note against them. The case of Page’s Administrators v. Bank

I am also inclined to believe, that the objection, that the note was not admissible in evidence under the money counts, was not properly taken on the trial. The objection was, that the note could not be read in evidence, under the first count, as amended. This objection does not state why it could not be read in evidence; whether on the ground that the notice to the indorsers was defective, or on the ground of some other defect in the evidence, or on the ground that the declaration was not adapted to the cause of action. If the defendants had specifically objected that, under the testimony, the note was not evidence of money lent and advanced to the defendants by the plaintiffs, and was, therefore, not admissible under the money counts, the court and ^opposite counsel would have understood the ^ precise question intended to be raised, and the *- latter might, perhaps, have obviated the objection, by further proof, or he might have applied for an amendment of the declaration. ( 2 Hill 603 -4; 7 Id. 355; s. o. •7 Barb. 13.)

I am of opinion, that the judgment of the supreme court ought to be affirmed.

(Dissenting.) — When this cause was before the court on the former occasion, the sufficiency of the notice of protest was passed upon, and is not now an open question ; still, as the counsel for the appellant, on the present argument, reviewed, with great zeal, ability and learning, the reasoning of the learned judge who delivered the opinion of the court on that occasion, it may be useful to mention my understanding of the true grounds of that decision. Assuming, as the learned judge rightly does, that it is the duty of the court, when the facts are undisputed, to determine the sufficiency of the notice, he proceeds to examine it, in connection with certain

There is another question in this case, which has not been decided by this court. The action is assumpsit, by indorsee against indorsers, and the declaration contains the common money counts. The proof is full and clear, that the appellants never received from the' respondents any money for or by reason of the note in suit; and the presumption pf law arising from the note is fully rebutted. There has been some slight diversity of views respecting the rule, that the note is only primd facie evidence of money lent, or had and received, and may be

McCoun, J., also dissented.

Judgment affirmed.

The following is the dissenting opinion of Judge Gray from the former judgment of this court, in 1 N. Y. 413 . It is here presented, as a powerful argument on the other side of a question which must frequently be mooted.

{Dissenting) — This is not the case of separate and successive indorsers; the note in question having been drawn payable to the defendants, jointly, as payees, and having been indorsed by both, their indorsement, by legal operation, became joint also. The notice of protest should, therefore, have been directed to both, or the indorsement should have been referred to, as their joint indorsement. The notice served, in this case, being addressed to them, severally, by name, by legal as well as grammatical construction, refers to a separate and individual indorsement of the party addressed, and is, for that reason, insufficient.

The notice, in order to have made it sufficient, in this respect, shou.ld have described it as the note indorsed by the defendants jointly. The notice directed to E.

But besides this defect for misdirection, which I deem important, the notice was still more clearly and unquestionably defective, in misstating, in the body of the notice, the amount of the note. The amount given in figures, at the head or margin of the notice, formed no essential part of the notice, and, in determining its sufficiency, is entitled to no consideration. Although usual, as a convenient reference to the amount, to prefix or affix to a note the sum in figures, yet, it forms no part, or, at all events, no controlling part, of the instrument. In Sanderson v. Piper (5 Bing. N. C. 425) and Bacon’s Law Tracts, pp. 99 and 100, cited in note 1, Greenleaf’s ed., vol. 1, p. 432 (3d ed.), where a bill was drawn expressing 2001 in the body, in words, but 2451 in figures in the margin, it was held, that the words in the body must be taken as the true amount to be paid, and that the ambiguity created by the figures in the margin was patent, and could not be explained by paroi.

In no case that I can conceive, can the insertion in the notice of protest, of the figures prefixed to a note, be useful, except in the case where the notice has the note incorporated in it, and it is referred to as a copy» of the

The notice given in this case does not, in fact, nor does it pretend to, give a copy of the note, and the prefix thereto of the amount in figures is, consequently, of no importance, nor is it at all serviceable to convey to the defendants that information which it was the office of the notice, and the duty of the bank, to communicate. The amount given in the body of the notice governs, and is the legally controlling, and was, indeed, the only effectual, designation of.the amount of the note. An omission to give the amount of the note altogether, would, under the circumstances of this case, certainly, have been less objectionable, than the insertion of a mistaken sum; yet, no one will pretend, that such an omission would not have been fatal to the notice, in this instance.

The question is not, whether the defendants, by this notice, were or were not misled, but were they so notified thereby, as to become fixed as indorsers. They, doubtless, well knew, in the receipt of these notices, that they had indorsed for S. Warden no such note as the one referred to in the notice; and they were, therefore, not called upon, or at all liable, to take any steps to the security either of the bank, or of themselves. They

The true inquiry is, did the notice, in itself, communicate to the defendants the information which the law holds indispensable to fix them as indorsers? Were they duly advised, by the notice, that the note of $600, indorsed by them, jointly, for S. Warden, had been protested for non-payment ? It is entirely clear, that the notice, in itself, conveyed no such information, and the introduction by the plaintiffs of evidence aliunde, to show knowledge in the defendants, is a virtual concession of the insufficiency of their notice. Besides fixing the liability of the indorsers, the office and object of the notice, is, to give the indorsers an opportunity to provide for their indemnity. The notice in this case was entirely insufficient for that purpose, nor was it sufficient to put the defendants on inquiry; they well knew, that no such note as the one described in the notice had ever been indorsed by them, and until they were .duly notified of the demand and non-payment of the note they had actually indorsed, they were under no obligation to make inquiry or payment. It was not their business, to call on the bank for information on the subject; but it was the business of the bank, to give to the defendants all the information required by law to fix them as indorsers; and having, by a mistake in the notice, failed to do so, the consequences are with the bank, and the defendants are exonerated from the payment of the note.

To be effectual, the notice, must be sufficient in itself;

But allowing that this evidence was properly admitted, even then, it does not aid the notice, or render it sufficient. By the introduction of this evidence, the plaintiffs, as we have already seen, substantially admit the insufficiency of the notice; and the question then is, does this evidence correct the mistake, and supply the deficiency of the notice ? Or, does it establish the position, that by the notice and the existing facts proved, the defendants were duly apprised that their jointly indorsed note for S. Warden, for $600, was protested foi non-payment ? I am of opinion, that it does not.

The effect of the proof, as I view it, was only to show more clearly the insufficiency of the notice. If it provéd anything, it proved that no such note as the one given in the notice was held by the bank, and that, consequently, the defendants were, by the notice, subjected to no duty or liability whatever. To hold that a notice of protest of a note for $300, which the bank did not hold, was a good notice of a note for $600, which it did hold, would be a conclusion inconsistent alike with sound law and sound logic. It would be preposterous to hold, that because the bank held no other note indorsed by the defendants, than the one for $600, therefore the defendants were bound to know, that it was their note for $600 which was referred to in the notice.

But the rule, as I understand it, does not admit paroi proof of facts extrinsic of the notice; or, if such is not the clearly-settled rule, it is important, that it should be so settled; a contrary rule would be alike unsound and. unsafe. Indorsers, under a contrary rule, inasmuch as they would be unapprised of the facts which, on the trial, they would have to meet, would, consequently, be unprepared, and would thus be liable, at all times, to surprise and imposition. The evidence in this case, extrinsic of the notice, was inadmissible, and should have been excluded; but giving to it full effect, in either event, the defendants had not notice or knowledge sufficient, to fix them as indorsers. The judgment of the supreme court should be affirmed.