Gilpin v. Savage

This action is brought against the indorser of a promissory note made by his son, Walter Savage, and by its terms made payable at the residence of the maker, No. 507 Prospect avenue, in the city of Buffalo, N. Y. The note is held by the indorsee of the original payee, and was forwarded by him for collection to the Columbia National Bank of Buffalo. On the day of the maturity of the note a clerk in the employ of the bank called up the maker on the telephone. The maker responded to the call at his house. The clerk then stated to the maker that the bank held the note for collection, described it,, and asked the maker what he proposed doing with it. The maker-replied, in substance, that he could not pay it; that he had an under

The defendant contends that the necessary steps were not taken to charge him as indorser and that the failure to present the note at its place of payment discharged him from liability. The question is, therefore, fairly presented for determination whether the demand' over the telephone was a sufficient presentation, and whether the bank was relieved of the obligation, under the facts, of actually going to the maker’s house and making a further presentation and demand there. The researches of counsel and court are unable to discover any de- ' cided case directly in point. The case is novel in its features, and its decision of importance both to the parties and to the banking community. As suggested, two lines of inquiry present themselves: First, was there a presentation at No. 507 Prospect avenue; and, if not, was its presentation excused, so as to still charge the indorser? Section 132 of the negotiable instruments law (Laws 1897, p. 736, c. 612) provides that:

“Presentment for payment, to be sufficient, must be made: * * * (3) At a proper place as herein defined; (4) to the person primarily liable on the instrument, or, if he is absent or inaccessible, to any person found at the place where the presentment is made.”

Section 133 provides that:

“Presentment for payment is made at the proper place: (1) Where a place of payment is specified in the instrument and it is there presented.”

Section 134 provides:

“The instrument must be exhibited to the person from whom payment is demanded, and when it is paid must be delivered up to the party paying it.”

'Section 142 provides that:

“Presentment for payment is dispensed with: * * * By waiver of presentment, express or implied.”

Section 144 provides that:

“Subject to the provisions of this act, when the instrument is dishonored by nonpayment, an immediate right of recourse to all parties secondarily liable thereon, accrues to the holder.”

It was the evident purpose and intent of the framers of the statute to incorporate into the statute the provisions of the common law, although there follows the usual embarrassment which all codifiers encounter in framing a statute to meet all possible cases. Was the note in this case presented at No. 507 Prospect avenue, the place of payment named in the note, within the reasonable meaning of the stat

It seems to the court that all the essentials of a good presentation were met. It was made on the day of the maturity of the note. The note was described to the maker, in a conversation with the maker at the place of payment.. Payment was asked and declined. So far as the maker was concerned, all that he required was done. The- indorser could not well demand more for his own actual protection. All that remains to the indorser is the purely technical ground of a failure to produce the note itself at the house, 507 Prospect avenue, which would have resulted in the same refusal of payment made over the telephone. The use of the modern invention of the telephone is recognized by the courts. Commercial transactions and conversations had over the telephone have been recognized as of the same binding force as where the parties talked face to face. Globe Printing Co. v. Stahl, 23 Mo. App. 451 , 458; Wolfe v. Mo. Pacific R. R. Co., 97 Mo. 473 , 11 S. W. 49 , 3 L. R. A. 539 , 10 Am. St. Rep. 331 ; Rock Island & P. R. Co. v. Potter, 36 Ill. App. 590 ; Guest v. Hannibal & St. J. R. R. Co., 77 Mo. App. 258 ; Thompson & W. Co. v. Appleby, 5 Kan. App. 680 , 48 Pac. 933 ; Murphy v. Jack, 142 N. Y. 215 , 36 N. E. 882 , 40 Am. St. Rep. 590 ; Deering & Co. v. Shumpik, 67 Minn. 348 , 69 N. W. 1088 . The telephone is simply an instrument by which two persons may talk directly to each other. Suppose the holder of a note should call to the maker from across a street, as the maker stood in his doorway, and notify him that he had his note and ask payment. Would not such a demand be deemed in law a proper presentment, although the street separated the person holding the note and the actual place of payment ? Can it make any substantial difference because the person holding the note happens to be some blocks away, provided he is able to reach the maker over the'telephone and talk directly to him in that way? The law simply requires substantial compliance in refer

Actual and formal presentation of notes has been held unnecessary to charge the indorser under many varying circumstances, as where the maker dies before the maturity of the note and no representative of his estate has been appointed. (Daniel on Commercial Instruments, § 1111), or where the maker has absconded (Id. § 1125), or where the maker has removed from the state and taken up his domicile in another state or country (Id. § 1145; Foster v. Julien, 24 N. Y. 28 , 80 Am. Dec. 320 ; Eaton v. McMahon, 42 Wis. 487 ; Whitely v. Allen, 56 Iowa, 224 , 9 N. W. 190 , 41 Am. Rep. 99 ; McGruder v. Bank of Washington, 9 Wheat, 598 , 6 L. Ed. 170 . It has been held a sufficient demand and refusal, to constitute a dishonor of a note, if the maker, on the. day it is due, calls on the holder where the note is and declares his inability to pay, and desires the holder to give notice to the indorser. Gilbert v. Dennis, 3 Metc. (Mass.) 495, 38 Am. Dec. 329 . So, too, in an action against an indorser, it appeared the holder met the maker of a note on the street, and was refused payment, making no objection to the place of demand, and the court said:

“If demand be made upon the maker elsewhere than the place appointed, and no objection be made at the time, it will be deemed a waiver of any future demand.” King v. Crowell, 61 Me. 244 , 14 Am. Rep. 560 .

In the case of Tredick v. Wendell, 1 N. H. 80 , the note was at the bank. The maker lived within a few rods of the bank, and a letter was sent him, stating the note was at the bank and requesting payment. Held a sufficient demand to charge the indorser. The weight of authority, therefore, seems to be that the law is not overexacting as to the mode or method of presentation, so' long as an opportunity is given the maker .to pay the note or refuse its payment. For these reasons,' we think the presentation made in this case, although over the telephone, met the substantial requirements of the law.

It is contended by counsel for the defendant that the plaintiff in this case is not a bona fide holder for value; that the evidence discloses the note was transferred to him for a past indebtedness, and therefore he cannot recover. We see no force in that contention. The answer admits the making of the note, and that the defendant indorsed the paper for the accommodation of the maker. The remainder of the answer is in effect a general d.enial of all the other allegations of the complaint. Upon the trial, the note was produced and put in evidence. The instrument itself was prima .facie evidence of consideration sufficient to sustain the plaintiff’s case. Carnwright v. Gray, 127 N. Y. 92 , 27 N. E. 835 , 12 L. R. A. 845 , 24 Am. St. Rep. 424 . Any failure to pay a note at maturity; and its production by the holder, raises a presumption of continuous nonpayment, and the burden is on the defendant to overcome it. Dresser v. Mercantile Trust Co., 124 App. Div. 891 , 108 N. Y. Supp. 577 . The payee, under such circumstances, would have the right to recover, and the plaintiff, his indorsee, has exactly the same right. It is not necessary for the plain

We therefore conclude the plaintiff is entitled to judgment. So ordered.