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Cook v. Litchfield

7 N.Y. Super. Ct. 330 5 Sandf. 330 Court N.Y. Super. Ct. Decision date 1851-12-29 English

Delivered by Duer, J.

Contents

Majority

p. 330
Cook v. Litchfield.

Headnote

The liability of an endorser of a promissory note, or bill of exchange, is governed in all cases, by the law of the place where the endorsement is made; and by the endorsement) we are to understand the contract itself, not the mere act of writing the name upon the back of the instrument. It matters not, when or where this may have taken place, since there is no endorsement, binding as a contract, until the note or bill is transferred to a third person, with the intent of enabling him to enforce its payment. The place of this effectual transfer, is, therefore, the place of the contract, and the law which there prevails, governs its construction.
Where the defendant, being a resident of the State of Michigan, endorsed certain promissory notes, for the accommodation of the maker, who was also a resident of that state, and the notes so endorsed, were sent by the maker to his agent in Hew York, to be delivered to a creditor of the maker, residing in said state, as ■ satisfaction of his debt. Held, that the endorsement, as a contract, was made in Hew York,' as certainly" as if the transfer, wliich-gave a title, had been made by the endorser in person; the agent of the maker being, to all intents, the agent also, of the endorser, for the purpose of a transfer and delivery.
By the laws of Hew York, a notice to an endorser is sufficient, which, expressly, or by a reasonable intendment, conveys to his mind all the information that he is entitled to have. It must contain such a description of the note, as may enable the endorser to ascertain its identity, and must also communicate the fact of its dishonor.
Where no doubts are raised by extrinsic facts, the question of the sufficiency of a notice of protest, is to be determined by the court.
The omission to staf e in a notice of protest, the time when, and the place where, a note became payable, is immaterial, if the facts which are stated, are suffi- . cient to convey all necessary information.
If the endorser has endorsed other notes of a like tenor, and an uncertainty in the application of a notice may thus have arisen, the onus is upon him, of showing it.
A notice which states that the note “was, on the day the same became due, duly protested for non-payment,” communicates, by necessary implication, the factSj that a demand of payment was made on the proper day, and at the proper place, and was refused, and is therefore a valid notice.
The same construction is applicable to the notices of the protests of promissory notes, as of bills of exchange.
The pendency of a prior suit in the courts of the United States, or the courts of a sister state, is no defence to an action, and the code has not changed the rule in this respect.
(Before Duer, Campbell & Paine, J. J.).
Dec. 1, 2, 29, 1851.
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This was an action brought against the defendant, as the endorser of four promissory notes, made by Joshua L. Carew, dated April 2d, 1849, payable to the order of the defendant, with interest from date, and payable, severally, nine, ten,-eleven, and twelve months after date. The notes were made payable at the bank of New York. •'
The complaint averred the making of the notes, their endorsement by the defendant to one Ryckman, and by him to the plaintiff, and presentment, and demand of payment of the notes at maturity, non-payment and notice to the defendant.
The answer denied the presentment, demand, and notice, the receipt of proper notices, and all indebtedness of the defendant upon the notes. The answer also averred, that prior to commencement of this suit, separate actions upon the several notes, in favor of the plaintiff, against the defendant, had been commenced in the circuit court of the United States, for the district of Michigan, which actions were pending and undetermined ; and that at the commencement of such suits, the plaintiff was a resident of the state of New York, and the defendant of the state of Michigan, and that said circuit court had full jurisdiction of the actions so commenced,
The reply stated, that since the commencement of the present action, the suits in the circuit court of Michigan, were duly discontinued and dismissed, and were no longer pending.
The cause came on for trial before Mr. Justice Paine, and a jury, on the 23d and 24th days of June, 1851.
Upon the trial, the plaintiff produced and read in evidence, the notes mentioned in the complaint. The plaintiff then proved, by the testimony of a notary public, that each of the notes, on the day when it became payable, (being severally the 5th day of January, February, March, and April, 1850), were presented at the bank of New York, in the city of New York, and payment thereof demanded, of the teller, which was refused, and that on the following morning, (except the first case, when the following day was Sunday, and then on Monday morning next after-wards,) a notice signed by the notary public, was deposited in the New York post-office, addressed to the defendant at Detroit, Michigan. The notice in the case of the first note was as follows:—
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“ New York, Jan. 5th, 1850
“ $740, and interest.
“ Please to take notice that a promissory note, made by J. L. Carew, for $740, with interest, dated April 2d, 1849, endorsed by you, was on the day that the same became due, duly protested for non-payment, and that the holders look to you for the payment thereof. “Your obedient servant,
“ John T. Irving,
“Notary Public, Mechanics Bank,
“ Attorney & Counsellor,
“No. 7 Nassau street.
“ W. L. Litchfield,
“Detroit, Michigan.
“Post mark, New York, 7th Jan., 10 cents.
(“ Superscription,) Mr. E. C. Litchfield,
“ Detroit, Michigan.”
Similar notices were sent on the protests of the other notes.
It was admitted that the defendant resided in Detroit, Michigan, at the date and endorsing of the notes, and until the time of the last notice ; and that the general residence of the maker of the notes was there during the same period.
It further appeared in evidence, on the part of the plaintiff, that the notes in question, endorsed by defendant, were received in the month of April, 1849, in a letter from the maker, by a merchant residing in this city, with instructions to hand them over to Mr. Ryckman, upon his giving a receipt in full for the same, which was accordingly done, at the office of Ryckman, in New York ; that Ryckman resided in the city at that time, and transacted business in Pearl street.
The plaintiff then called Alexander W. Buel, Esq., a counsellor at law, of the state of Michigan, for the purpose of showing that one or two recent decisions of the state courts of that state, as to what was required in a notice of protest in order to make it a sufficient notice of dishonor, were not followed in the federal court in Michigan. This evidence was objected to, and taken subject to objection.
Mr. Buel testified that the decisions in the state courts referred to, and which were relied on by defendant, were not followed
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in their full extent, by the federal court, but that the latter held that it was not necessary to state, in the notice, that the holder looked to the party for satisfaction—that he had no recollection, however, of any interpretation being given by the circuit court to the words in a notice, which state that the note was protested. Mr. Buel further stated that the decision in the state court was founded on general commercial law, not on any statute or usage.
After proof of the discontinuance of the suits in the circuit court, the plaintiff rested. The defendant then introduced in evidence, the reports of two cases adjudged in the supreme court of Michigan, to wit, the case of Platt v. Drake, decided January term, 1844, and reported in 1 Douglass’s Reports, 296, in which it was held, that notice to an endorser of a promissory note; that the note “ has been protested for non-payment, and that the holders look to him for payment of the same,” is not a sufficient notice of dishonor. Such notice must contain words, directly or by necessary construction, showing that the note has been presented for payment, and payment refused.
“ A protest is a formal instrument, made by a notary public, alleging the due presentment and dishonor of a bill, and declaring that the notary protests the same for non-acceptance, or non-payment, as the case may be ; and the statement that a bill or note has been protested, refers rather to the making, by a notary, of the instrument denominated a protest, than to the act which might authorize such protest to be made.”
“ No protest of a promissory note is necessary.”
“ The sufficiency itself, of a written notice of dishonor, is to be determined by the court as matter of law.”
Also the case of Spies v. Newberry, decided January term, 1847, and reported in 2 Douglass’s Reports, 425, in which it was held that “ notice to the endorser of a foreign bill of exchange, that the bill, describing it, has been protested for nonpayment, and that the holder looks to him for payment thereof, is a sufficient notice of dishonor ; the term protested, when thus used, implying that payment had been demanded and refused.” No other evidence was offered by either party.
The defendant’s counsel then moved that the complaint be dismissed, on the ground that no sufficient notices of present
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ment, demand, and dishonor of the notes, to charge the defendant as endorser, had been proved. That the notices did not set forth, nor describe the notes with certainty, nor distinguish between the different notes, nor show where the presentment or demand was made, nor that the same was made at all, and that the endorser was not charged because the notices were insufficient, by the laws of the state of Michigan, as well as because they were not sufficient, by the laws of New York. The court refused to non-suit, and directed the jury to find a general verdict for the plaintiff, for the amount of the four notes.
A verdict was accordingly entered for the plaintiff for three thousand four hundred and twenty-one dollars and fifty-nine cents, being the amount of the notes and interest.
Charles Tracy, for the appellant, argued the following points:
I. The notices sent to the defendant were insufficient to charge him as endorser, according to the laws of the State of New York. (1.) They do not describe the respective notes with certainty, nor distinguish between the four notes of different periods, and maturing at different times (1 Comstock, 413, Cayuga Co. Bank v. Warden. (2.) They do not state when or where the presentment or demand took place ( 4 Denio, 163 , Wynn v. Alden). (3.) It is the province of the court to determine the question of the sufficiency of the notice on its face (23 Wendell, 620, Remer v. Downer, p. 626; 2 Hill, 587 , Ransom v. Mack, p. 595; 5 Barbour, 490, Dole v. Gold).
These notices, being mere notices ‘of protest, were for 'that additional reason insufficient to charge the endorser according to the laws of the state of Michigan. (1.) Such is the adjudged law in that state (1 Douglass, 296, Platt v. Drake; 2 Douglass, 425, Spies v. Newberry ; Code of Procedure, § 426). (2.) The decisions of the federal court, sitting in Michigan, do not depart from the rule of the state courts, in respect to the point here involved. (3.) Nor would the dissent of the federal court from a rule of law settled by the supreme court of law of. the state, be any evidence that the law of the state was other than what the state courts had so determined.
III. The contract of endorsement was made in Michigan,
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and must be interpreted and performed according to the law prevailing there. (1.) The notes were endorsed at Detroit. This appears from the evidence: the notes were dated there, the maker and endorser resided there at the time, the notes were put in the mail at thát place, in a letter written there, and the receipt for the notes was returned to the same place ( 8 Wend. 600 , Pinkerton v. Bailey). (2.) Notwithstanding that the notes were made payable in the city of New York, the contract of the endorser was made at Detroit, and is governed by the laws of Michigan (12 J. R. 142, Hicks v. Brown; 12 Wendell, 439, Aymar v. Shelden, pp. 443, 444; 22 Wendell, 215, Allen v. Merchants’ Bank, pp. 222, 225, 239; 2 Hill, 227 , Bank of Rochester v. Grey; Story on Prom. Notes, 404, § 339, Nt. 3, p. 406; 7 Alabama, 120, Lowry’s Adm. v. Western Bank of Georgia; 1 Alabama, 527, Dunn v. Adams; 2 Kelly, 158, Cox v. Adams; 3 McLean, 397 , Dundas v. Bowler, p. 390; 4 Devereux, 122, Hatcher v. Marine; 12 New Hampshire, 49 Dow v. Russell; 5 Blackford, 240, Yeatman v. Cullen; 2 Scammon, 465, Holbrook v. Vibbard; 2 Sandf. S. C. R. 171, Carroll v. Upton; 4 Cowen, 508, Andrews v. Herriot; 13 Com. 249, Loan Co. v. Towner; 2 Beavan, 282, Cooper v. Earl of Waldegrave; 1 Barn. and Adol. 284, De la Vega v. Vianna; 1 Bing. N. C. 151, Trimbey v. Vignier; 2 Mylne and Kean, 513, Anstruther v. Adair; 1 Penn. St. Rep. 381, Watson v. Brewster; 6 Cranch, 221 , Slocum v. Pomery; Chitty on Bills, 507 (Marg. Ed. 1836, by Beebe). (3.) The contract of the endorser not being written out, is to be supplied and expressed according to the lex loci contractus.
An endorsement in Michigan, therefore, is to be filled up with a promise by the endorser to pay the note, on condition that it is duly presented at maturity, and payment demanded, and is then dishonored by the maker, and that a notice describing the note, and stating that such presentment and demand have been made at the proper time and place, and the note was dishonored by the maker, is sent to the endorser. It cannot be filled up with a condition that the notice, inside, instead of stating such facts, may merely state that the note was “ duly protested for non-payment ” ( 7 Hill, 416 , Hall v. Newcomb; 2 Hill, 80 , Seabury v. Hungerford).
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IV. The prior suits in the U. S. circuit court in Michigan, are a defence in this action. (1.) The code of procedure (§ 144, sub. 3, and § 147), makes no distinction between the courts of this state and those of other states or the United States. The terms used indicate an intention to do away the old rule, by which the pendency of a prior suit in the U. S. circuit court was not pleadable (12 Johnson, 99, Walsh v. Durkin). (2.) The plaintiff, having placed the issue on a discontinuance of the former suits after the bringing of this action, was bound to establish his reply. '(3.) The defendant’s mere declarations were inadmissible to prove the discontinuance of those suits (p. 16, f. 44), and no other evidence on that point having been given, the reply was not sustained (6 Johnson, 9, Jenner v. Joliffe; 10 Johnson, 248, Hasbrouck v. Baker; 8 Wendell, 480, Welland Canal Co. v. Hathaway).
William Curtis Noyes, for respondent, argued the following points:
I. There is no objection to the judgment on account of the pendency of the suit in the U. S. circuit court, for Michigan (Code, §§ 144, 147). (1.) The pendency of another action in such court is no objection to this action in our own court, even if the foreign action had not been discontinued (Mitchell v. Bunch, 2 Paige, 620; Burrows v. Miller & Miller, 5 Pr. Rep. 51; Browne v. Joy, 9 Johns. 221 ; Walch v. Durkin, 12 Johns. 99 ). (2.) The discontinuance of that action before trial in this, (if properly proved,) removes all question. (3.) The discontinuance of that action was properly proven by parol (Foster v. Trull, 12 Johns. 456 ; Cow. & Hill’s notes, 1074, 1076).
II. The nqtices of dishonor were sufficient by the law of New York. (1.) It was enough to state that the notes were protested (Coddington v. Davis, 3 Denio, 25 ; Cayuga Co. Bank v. Warden, 1 Cornst. 414). (2.) There was no misdescription, and there was a sufficient description to identify each note as it became due. (3.) The sufficiency of the notices upon their face is a question of law, Ransom & Ransom v. Mack, 2 Hill, 587 ; Dole v. Gold, 5 Barb. 490 ; McKnight v. Lewis, 5 Barb. 685 ; Wynn v. Alden, 4 Denio, 164 ; Cayuga Co. Bank v. Warden, 1 Comst. 414).
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III. The decisions in New York should control as to the sufficiency of the notice, because, (1.) There is no decision nor principle requiring that the form of the notice to charge an endorser is to be governed by the law of the place where the endorsement was consummated (Story on Bills, § 391,156-157,176-177, and note, Carroll v. Upton, 2d Sand. Sup. Ct. 172). (2.) This was in truth a Mew York contract, because, 1st. The contract on which the notes were to be delivered was made and to be performed here, and was actually performed here. 2d. The endorsement was delivered here, and never became effective as an endorsement until such delivery. 3d. The money was payable and the endorsed contract was to be performed here. 4th. So the condition, upon performing which the endorser became bound, viz. the use of due diligence to give him notice of the dishonor of the notes, was to be performed here by the holder (Pothier on Obli., Pt, 1., Ch. 1. § 1. Art. 2; Grotius lib. 2. Ch. 2; Chitty on Contr. 12 (5 Am., from 3d Lon. Ed.); Rutledge v. Grant, 15 E. C. L. R. 99; Mactier v. Frith, 6 Wend. 103 , 113, 114, 139; Cox v. Tracy, 7 E. C. L. R. 163; Cox v. The United States, 6 Peters, 171; Adams v. Jones, 40 E. C. L. R. 189; Duncan v. United States, 7 Peters, 448, 449; Bank of Augusta v. Earle, 13 Id. 532, per Sargeant arguendo.
IV. If this contract be viewed as made in Michigan, and if the law of Michigan is to govern it, then it is insisted that the decision of Platt v. Drake, is not a sound and reliable exposition of the true rule of commercial law. (1.) It does not rest upon statute. (2.) It was an innovation upon the former course of decisions, and is even now anomalous. (3.) It is unreasonable in itself.

By the Court.

—It is not necessary to deny that the liability of an endorser is governed, in all cases, by the law of the place where the endorsement is made, provided we understand by endorsement, the contract itself, not the mere act of writing the name upon the back of the instrument; and such, we cannot doubt, is the meaning of the rule. The liability of an endorser arises solely from his contract, and it is his contract that the local law defines, and controls. It matters not, when or where his name may have been endorsed, literally speaking, since there is no endorsement, binding him as a con

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tract, of the promissory note, or bill of exchange, on which his name appears, until it is transferred to a third person, with the intent of enabling him to enforce its payment. The place of this effectual transfer, is, therefore, the place of the contract, and the law which there prevails, that which governs its construction. In this case, there Avas no transfer of the promissory notes upon which the action is founded, at Detroit; so long as they remained there, there Avas no contract creating any liability on the part of the defendant. There was no transfer of the notes, until they arrived in this city ; no contract, until they were accepted here by Ryckman, the first endorser, in satisfaction of a debt. It is plain that the defendant was an accommodation endorser’, and when he returned the notes, Avith his name, to the maker, as no restriction was imposed, he gave him an unlimited authority to use them for any purpose that his convenience and interest might require. In judgment of law, therefore, it Avas by the authority, and with the consent of the defendant, that the notes Avere passed into the hands of Ryckman, and the agent Avho made the transfer Avas his agent, as avcII as of the maker. As qui facit per alium facit per se, the endorsement, as a contract, Avas just as certainly made in this city, as if the transfer Avhich gave a title, had been made here, by the defendant in person. Hence, it is needless to inquire, whether the notices sent to the defendant, Avere sufficient to charge him as an endorser, according to the laAV of Michigan, as lately expounded by its supreme court, since the law of this state, not that of Michigan, is the “ lex loci contractusthat we are bound to follow.

Adopting then our own law, as the rule of decision, it seems to us, that the right of the plaintiff, to maintain this action, cannot reasonably be doubted. We deem it quite unnecessary to cite authorities, to prove that, in this state, the laAV is settled, that every notice to an endorser must be deemed sufficient, which expressly, or by a reasonable intendment, conveys to his mind all the information that he is entitled to have; and that where no doubts are raised by extrinsic facts, the question of its sufficiency is to be determined exclusively by the court. Where there are no disputed facts, it is purely a question of law.

• The information, which, in an action against the endorser, it

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must be proved, was given, is that of the dishonor of the particular note upon which the action is founded. The notice of protest must therefore contain such a description of the note, as might have enabled the endorser to ascertain its identity, and must also communicate the fact of its dishonor ; that is, that on the day when it fell due, payment was demanded and refused.

We are to inquire then, whether these requisites are found in the notices that were given in evidence upon the trial; and for the present, we coniine our remarks to the notice relating to the first of the four notes that fell due—that payable nine months after date. The description of the note, it must be admitted, is not complete, since it omitted to state the time when, and the place where, it was payable; but these omissions are quite immaterial, if the facts, which are stated, are alone sufficient, to convey all the necessary information. It is not to a stranger, it must be remembered, that the notice is addressed, but to a person, whom the law presumes to have had a distinct recollection of the tenor of every note, then outstanding, which he had endorsed, and the question is, whether, with this knowledge, he could have experienced any difficulty in referring the notice to the particular note that was intended. The notice states, expressly, the date of the note, the name of the maker, the sum for which it was given, and that it bore interest, and by implication, that it was payable in this city, since it was from this city that the notice of its protest was sent; and in all these particulars, the notice corresponds exactly with the note in evidence, and which the defendant knew he had endorsed. Hence, unless the defendant had endorsed other notes, one or more dated on the same day, for the same maker, for the same sum, payable with interest, in this city, and at the same time, it is impossible, that even a momentary doubt could have been entertained by him, as to the particular note that the notice described. He knew, at once, that it was the note in suit, if there was no other to which this description could possibly apply.

These observations are not answered by saying, that the defendants muy have endorsed other notes of the like tenor, and that an uncertainty in the application of the notice, may thus have arisen. We have no right to act upon such a presumption. If such was the fact, it was in the power of the defendant to-

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prove it, and it was upon Mm that the law cast the burden of proof. As the proof has not been given, the maxim applies that “ de non apparentibus et non existentibus, eadem est ratio.”

In the case of Shelton v. Braithwaite (7 Mees. & Wels. 436), the notice of the dishonor of an inland bill of exchange, given by the holder to the drawer, contained no other description of the ■bill, than this, “your draft on A. B.'is dishonored,” yet-the judges of the exchequer were unanimously of opinion, that the notice, taking into consideration the previous knowledge of the defendant, was sufficient to charge him. . The ground of the decision was, that when an uncertainty in the application of a notice, arising from extrinsic facts, is alleged to exist, the burden of proof lies upon the defendant; the existence of such facts will never be presumed. In the particular case, it was said by Baron Alderson, and similar remarks were made by the other judges, that if the defendant had drawn any other bill upon A. B., which was then outstanding, the fact and the means of proving it, were peculiarly within his knowledge, and it was by him that the proof ought to have been given. In the absence of contradictory proof, it was a reasonable inference that there was no other bill, than that declared on, to which the description in the notice, could apply. This decision was followed in the same court, in Stockman v. Parr (11 Mees & Wels. p. —), and both these cases are cited with approbation, by Mr. Justice Jewett, in delivering the judgment of the court of appeals, in the case of the Cayuga Bank v. Worden, (1 Comst. 414.)

The other objections to the sufficiency of the notice, that it states neither the day, nor the place, of a demand of payment, nor indeed, that such a demand was made at all, will be disposed of in few words. As the defendant must have known that the notice related to the first of these notes that fell due, we are bound to say, that he also knew on what day and at what place it was payable ; and an express communication of' these fa.cts, was, therefore, useless. And that a demand of payment was made on the proper day, and at the proper place, and was refused, are facts, which by a necessary implication, were communicated by the declaration, that the note “ was, on the day that the same became due, duly protested for non-payment.” It

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is true, that a protest of a promissory note, is not, like that of a foreign bill of exchange, necessary to be made, in order to charge an endorser ; but it is equally so, that in all cases, where it is made, it not merely implies, but asserts, the existence of the facts, up on which alone it can properly be founded. A protest is a declaration in writing, made by a public officer, under his oath of office, that the bill or note to which it relates, was, on the day it became due, duly presented for payment, and that payment was refused ; and a notice of such protest, is not merely a notice that this declaration was made, but that the facts, so declared, had really occurred.

That such is the construction of the .no lice, when it relates to the protest of a bill of exchange, is not denied, and we own, that we are at a loss to understand, why the same construction should not be given to it, when it relates to the protest of a promissory note. That in the last case, a protest is unnecessary, neither alters the nature of the act performed, nor the intent and object of its communication to an endorser. When he is told that the note is protested, he is told, in language which he is bound to understand, that it is dishonored, for it is this sense that the usage of all' engaged in commerce has stamped upon the words. The decision of the supreme court of Michigan, in Platt v. Drake, ( 1 Doug. 296 ,) which we have been urged to follow, is directly opposed to that of the supreme court of the United States, in Mills v. Bank of the United States ( 11 Wheat. 431 ), and in our own courts, the language of judges, we believe, has uniformly been, that notice of the protest of a promissory note, is equivalent to notice of its dishonor. At any rate, it is this construction, that we consider as established beyond the reach of further question, by recent decisions in the court of appeals. (Coddington v. Davis, 1 Comst. 36; Cayuga Bank v. Worden, id. 414.)

The observations that have been made to prove the sufficiency of the first notice, apply with equal force to each that follows. They are all expressed in the same words, and each of them bears date on the day when the note to which it refers became due ; nor can we doubt that, in each case, the note, thus arrived at maturity, was understood by the defendant to be the note dis

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honored. That he was, in fact, misled, is most improbable that he ought not to have been misled, is quite certain.

The last objection to the plaintiff's recovery, the pendency of a prior suit for the saíne cause of action, in the circuit court of the United States in Michigan, we should not have hesitated to overrule, even had no evidence been given of the discontinuance of the suit. The provisions of the codp have not altered the rule of law that the pending of such a suit in a court of the United States, or of a sister state, is no defence. (Brown v. Jay, 9 John. 221 ; Walch v. Durkin, 12 John. 99 .) Those provisions relate only to the mode of stating the pendency of a prior action, in those cases in which the defence may be legally admitted. The design of the code was to change the rules and forms of pleading, not the rules of law, or evidence ; nor should a construction, by which a change of this character may be effected, ever be given to its provisions, unless, where the language is so explicit, as to admit no other interpretation. The same question arose, and was decided as we now decide it, in the case of Burrows v. Miller (5 How. Pr. R. 51), and the reasoning of the learned judge who made that decision, commands our entire assent.

The judgment of the special term is affirmed with costs.

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