Bank of Alexandria v. Swann
34 U.S. 33 (1835)

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U.S. Supreme Court

Bank of Alexandria v. Swann, 34 U.S. 9 Pet. 33 33 (1835)

Bank of Alexandria v. Swann

34 U.S. (9 Pet.) 33

ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR

THE COUNTY OF ALEXANDRIA IN THE DISTRICT OF COLUMBIA

Syllabus

Promissory Notes. The general rule, as laid down by this Court in Lenox v. Roberts, 2 Wheat. 373, 4 Cond. 162, is that the demand of payment of a promissory note should be made on the last day of grace, and notice of the default of the maker be put into the post office early enough to be sent by the mail of the succeeding day.

The note on which the action in this case was brought, having become due at the Bank of Alexandria, where it was made payable, payment of the same was demanded at the bank before three o'clock on that day. Notice of nonpayment was put into the post office on the following day, directed to the endorser, the defendant in error, who resided in Washington. According to the course of the mail from Alexandria to the City of Washington, all letters put into the mail before half-past six o'clock P.M., at Alexandria, would leave there some time during the night, and would be deliverable at Washing ton the next day at any time after half-past eight o'clock. The defendant in error contended that as demand of payment was made before three o'clock P.M., notice of the nonpayment of the note should have been put into the post office on the same day it was dishonored, early enough to have gone with the mail of that evening. The court held that the law does not require the utmost possible diligence in the holder in giving notice of the dishonor of the note; all that is required is ordinary reasonable diligence, and what shall constitute reasonable diligence ought to be regulated with a view to practical convenience, and the usual course of business.

The law, generally speaking, does not regard the fractions of a day, and although the demand of payment at the bank was required to be made during banking hours, it would be unreasonable, and against what the special verdict finds to have been the usage of the bank at that time, to require notice of nonpayment to be sent to the endorser on the same day. This usage of the bank corresponds with the rule of law on the subject.

If the time of sending notice is limited to fractions of a day, it will always come in question how swiftly notice could be conveyed. The notice sent by the mail, the next day after the dishonor of the note, was in due time.

The law has prescribed no particular form for such notice. The object of it is merely to inform the endorser of the nonpayment by the maker, and that he is held liable for the payment thereof.

The note on which the suit was brought was for one thousand four hundred dollars, drawn by H.P. in favor of the defendant in error, and the notice describes it as for the sum of one thousand four hundred and fifty-seven dollars. In the margin of the note is set down in figures one thousand four hundred and fifty-seven dollars, and the special verdict found that the note was discounted at the bank, as for a note of one thousand four hundred and fifty-seven dollars. The defendant in error was not an endorser on any other note drawn by H.P. and discounted at the bank, or placed there for collection. By the court:

"This case falls within the rule laid down by this Court in the case of Mills v. Bank of the United States, 11 Wheat. 431, 6 Cond. 373, that every variance, however immaterial, is not fatal to the notice. It must be such a variance as conveys no sufficient

Page 34 U. S. 34

knowledge to the party of the particular note which has been dishonored. If it does not mislead him, if it conveys to him the real fact without any doubt, the variance cannot be material, either to guard his rights or avoid his responsibility. In that case, as in the one now before the Court, it appeared that there was no other note in the bank endorsed by Mills, and this the court considered a controlling fact, to show that the endorser could not have been misled by the variance in the date of the note, which was the misdescription complained of."

Where it did not appear on the record that a bond had been given to the clerk of the circuit court to prosecute the writ of error, the court continued the case to the subsequent day of the term to ascertain whether a bond had been given.

This was an action in the Circuit Court of the County of Alexandria, instituted by the plaintiffs in error against the defendant on a promissory note drawn by H. Peake and endorsed by the defendant, payable and negotiable at the Bank of Alexandria.

The first count in the declaration sets forth the liability of the defendant on a note for $1,400, dated 23 June, 1829, and payable in sixty days from the date thereof. The declaration states that after the time limited in the note for the payment thereof, viz. on 25 August, 1829, the note was shown and presented to the drawer at the bank, and payment requested of the same, which was refused, of which notice was afterwards, on the said 25 August, given to the defendant. The second count was for the sum of $1,500, money laid out and expended. The defendant pleaded nonassumpsit, and on the trial of the issue the jury found the following special verdict.

"We of the jury find that one Humphrey Peake, on 14 March, 1826, obtained for his own accommodation a discount at the bank of the plaintiffs for the sum of $1,457.60 on his note for that amount, endorsed by defendant on the day and year aforesaid, payable sixty days after date; that the said discount was regularly continued from that time until 5 February, 1828, by new notes of the said Humphrey Peake for this same sum, endorsed by the defendant, and discounted at the said bank, to take up the preceding notes, the sums discounted on which new notes were regularly so applied; that on the said 5 February, 1828, a note of the said Humphrey Peake for $1,457 of that date, payable sixty days after date to the defendant, and

Page 34 U. S. 35

by him endorsed, negotiable and payable at the said bank, was there discounted towards taking up a note of the said Humphrey, endorsed by defendant, and discounted as aforesaid, for the sum of $1,457.60, which became due on the said 5 February, 1828, and that the discount so made on the said note of $1,457, on the said 5 February, was regularly continued by a series of notes of the said Humphrey, endorsed by the defendant for the said last mentioned sum, negotiable and payable at said bank, until 23 June, 1829, all which discounts so made were applied regularly towards the discharge of the notes before discounted as aforesaid at the said bank. We find that on 23 June, 1829, a note of the said Humphrey Peake for the sum of $1,457, endorsed and discounted as aforesaid, became due and payable at the said bank, and that on said 23 June, 1829, the note in the declaration mentioned was, at the instance of the said Humphrey, discounted at the said bank as and for a note of $1,457 for the purpose of taking up the note of the said Humphrey, endorsed and discounted as aforesaid, which became due on the said 23 June, and that the sum of $1,441.45, the discount so made, was applied towards that purpose; that when the said discount was made, the said note was, from reference to the figures in the margin only, mistaken as a note for $1,457."

"We find that the body and signature of the said note, dated 23 June, including the date and figures in the margin, are wholly in the handwriting of the said Humphrey, and were written by him; and that the endorsement of the name of the defendant thereon, is in the handwriting of the defendant, and was made by him for the purpose of having the said note discounted at the said bank for the object before expressed; and we find that the said note and endorsement are in the words and figures following: "

"Alexandria, June 23, 1829"

" $1,457"

" Sixty days after date, I promise to pay to Thomas Swann, Esq., or order, for value received, fourteen hundred dollars payable and negotiable at the Bank of Alexandria."

"HUMPH. PEAKE"

" Endorsed -- Tho. Swann "

Page 34 U. S. 36

"We find that during the whole period of time before mentioned, that is to say, from 5 February, 1828, and from thence to this day, there was no other note of the said Humphrey, endorsed by the said defendant, discounted by the said bank, or in the said bank for collection or otherwise. We find that the business of the said bank always has been, and yet is transacted at their banking house, in the Town of Alexandria, and that the defendant, on 25 August, 1829, for a long time before, and ever since, was, and ever has continued to be an inhabitant and resident of the City of Washington, in the District of Columbia, distant about seven miles from Alexandria. We find that during the whole month of August in the year 1829, the mail from Alexandria to the said City of Washington, and to other towns on the main northern route, was made up once a day; that it closed at nine o'clock P.M. on each day, and that letters for Washington and for the north, put in after half an hour after eight o'clock P.M. were not, in the general course of proceedings in the post office at Alexandria, sent by the mail which closed on that day, but were postmarked on the succeeding, and sent by the mail made up on such succeeding day, and that all letters for Washington and the north, put into the post office at Alexandria before half past eight o'clock P.M. were postmarked on the day they were so put in, and sent by the mail which closed at nine o'clock P.M., as before stated; that the mail for Washington and other northern towns, which was closed at Alexandria, as aforesaid, at nine o'clock P.M. was sent off from Alexandria between twelve o'clock at night of the same day, and two o'clock in the morning of the succeeding day, sometimes, but very rarely, leaving Alexandria before twelve o'clock at night, as aforesaid, and generally leaving that place about two o'clock in the morning of the day succeeding the making up and closing of the mail at Alexandria, as aforesaid."

"We find that letters from Alexandria to Washington, sent by mail, were, during the period aforesaid, delivered out at Washington at any hour after eight o'clock A.M. on the day succeeding that on which the mail was closed at Alexandria for that place. We find that the hours of business at the said Bank of Alexandria, during the winter, have always been from ten o'clock A.M. to three o'clock P.M., and during the summer

Page 34 U. S. 37

from nine o'clock A.M. to three o'clock P.M., after which latter hour the clerks and officers left the bank and attended no more to banking business during the day."

"We find that it is, and for a long time past, including the year 1829, has been the usage of the Bank of Alexandria and other banks in the town to deliver out to the notary, on each day at three o'clock, all notes and bills discounted by or to be paid at such banks, which have become due on such day, for demand and protest, and for the notary to return such notes, with the protest for nonpayment to the said bank, on the morning of the succeeding day, soon after the bank opened. We find that on 25 August, being the third day of grace on the note in the declaration mentioned, it was, by Benjamin C. Ashton, teller of the said bank, and during bank hours of that day, presented at said bank to James L. McKenna, cashier of the said bank, for payment; that the said McKenna examined the books of the said bank, and found that the said Humphrey Peake had no money or funds there, and stated that fact to the said teller; that neither the said Peake nor any other person appeared for him at the said bank to pay the said note, and that before 28 August, 1829, the said Peake had failed, and had left the Town of Alexandria, where he had before that time resided."

"We find that the said note having remained unpaid on the said 25 August, 1829, it was, on the closing of the bank on that day, taken out by the said Benjamin C. Ashton, who was also a notary public, for protest, and was, on the morning of 26 August, 1829, returned to the said bank with the protest, which was drawn up on the said 26 August, 1829, and that the said note, in the said declaration mentioned, remained in the said bank as its property, from the said 23 June, 1829, until about 30 October in the same year, when it was delivered to their attorney for suit, with the exception only of the time it was in the hands of the said Benjamin C. Ashton as notary, as aforesaid."

"We find that on 26 August, 1829, and long before the closing of the mail of that day at Alexandria, that Benjamin C. Ashton, on behalf of the said bank, put into the post office at Alexandria a letter written by him, addressed to the defendant at Washington, intending by the said letter to

Page 34 U. S. 38

give him notice of the nonpayment of the said note, which letter was postmarked at the post office in Alexandria, 'Alexandria, D.C., August 26,' and is in the words and figures following: "

"Alexandria, August 26, 1829"

" Sir: A note drawn by Humphrey Peake for $1,457, dated Alexandria, 23 June, 1829, payable to you, or your order, at the Bank of Alexandria, sixty days after its date, by you endorsed, and for the payment of which you are held liable, is protested for non payment, at the request of the President, Directors & Co. of the said bank."

" Respectfully, your obedient servant,"

"BENJ. C. ASHTON, Not.Pub."

" Thomas Swann, Esq., Washington City"

"Which letter was received by the defendant in due course of mail, on 27 August, 1829. We find the protest, before referred to, in the words and figures following: "

"Alexandria, June 23, 1829"

" $1457"

" Sixty days after date, I promise to pay to Thomas Swann, Esq., or order, for value received, fourteen hundred dollars, payable and negotiable at the Bank of Alexandria."

"HUMPH. PEAKE"

" Endorsed -- Tho. Swann"

" United States of America, District of Columbia, County of Alexandria, to-wit: "

" On 25 August in the year of our Lord 1829, at the request of the President, Directors and Company of the Bank of Alexandria, I, Benjamin C. Ashton, a public notary in and for the County of Alexandria, by lawful authority duly appointed and qualified, dwelling in Alexandria in the county and district aforesaid, demanded payment of a note, of which the above is a copy, of the cashier of the Bank of Alexandria, at the said bank, and he answered that no funds were there for its payment, and on the 26th day of the same month, I

Page 34 U. S. 39

gave notice to the endorser, by mail, that the drawer of the said note had failed to pay it."

" Whereupon, I, the said notary, at the request aforesaid, did protest, and by these presents do publicly and solemnly protest as well against the drawer and endorser of the said note as against all others whom it doth or may concern, for exchange, reexchange, and all costs, charges and interest already incurred or to be hereafter incurred, for the want of payment thereof."

" In testimony whereof, I have hereunto set my hand, and affixed my seal notarial, the day and year aforesaid."

" [L.S.] BENJ. C. ASHTON, Notary Public"

" Protesting $1.75"

"We find that no part of the said sum of $1,400, of the note in the declaration mentioned, has been paid."

"We find that the said Bank of Alexandria kept a book called an offering book, in which the different sums and notes offered for discount were entered, and that this book was always laid before the board of directors on the discount days in the bank, and the discounts agreed to be made by the board regularly entered in the said discount book."

"We find that 23 June, 1829, was one of the regular discount days in the said bank, and on that day the said book was laid before the board of directors, and, among the other entries made for discount on that day, was one in the following words and figures: "

" Humphrey Peake, Thomas Swann, Humph. Peake"

" June 23, August 22, 1457, 1554, 1441, 46"

"We find that the said entry was intended to mean that the said Humphrey Peake had offered for discount his note for $1,457, endorsed by the said defendant, and payable sixty days thereafter. We find that no note for $1,457 drawn by the said Humphrey Peake, and endorsed by the said defendant, had been offered for discount to the said bank on the said 23 June, 1829; but that the note in the declaration mentioned, was on that day offered to the said bank for discount, and for the purpose of renewing for that amount the note of $1,457, then due at the said bank. We find that no note for $1,400, drawn by the said H. Peake, and endorsed

Page 34 U. S. 40

by the said defendant, was ever entered on the books of the said bank for discount; nor is there any entry made upon the books of the said bank, that any such note had ever been discounted by the said bank."

"We find that upon the offering for $1,457 before stated, the board of directors agreed to make a discount for that sum, and the same was entered in the discount book as discounted, and the proceeds carried to the credit of the said Humphrey Peake. We find that the said discount was intended by the board as a renewal of the note of $1,457 then due to the said bank, and that the note in the declaration mentioned, was intended to be designated in the offering book, by the said description of a note drawn by the said Peake, and endorsed by the defendant as a note for $1,457."

"If, on the whole matter aforesaid, the law be for the plaintiffs, then we find for the plaintiffs, and assess their damages to the sum of $1,400, being the principal sum due, to bear interest from 26 August, 1829, till paid, and if the law be for the defendant, then we find for the defendant."

Upon this verdict, the circuit court gave judgment for the defendant, and the plaintiffs prosecuted a writ of error to this Court.

Page 34 U. S. 45

MR. JUSTICE THOMPSON delivered the opinion of the Court.

This suit was brought in the Circuit Court of the District of Columbia, for the County of Alexandria, upon a promissory note made by Humphrey Peake, and endorsed by the defendant in error. Upon the trial the jury found a special verdict, upon which the court gave judgment for the defendant, and the case comes here upon a writ of error.

The points upon which the decision of the case turns, resolve themselves into two questions.

1. Whether notice of the dishonor of the note was given to the endorser in due time?

2. Whether such notice contained the requisite certainty in the description of the note?

The note bears date on 23 June, 1829, and is for the sum of $1,400, payable sixty days after date at the Bank of Alexandria. The last day of grace expired on 25 August, and on that day the note was duly presented, and demand of payment made at the bank, and protested for non payment; and on the next day notice thereof was sent by mail to the endorser, who resided in the City of Washington.

The general rule, as laid down by this Court in Lenox v. Roberts, 2 Wheat. 373, 4 Cond. 163, is that the demand of payment should be made on the last day of grace, and notice of the default of the maker be put into the post office early enough to be sent by the mail of the succeeding day. The special verdict in the present case finds, that according to the course of the mail from Alexandria to the City of Washington, all letters put into the mail before half past eight o'clock P.M. at Alexandria, would leave there some time during that night, and would be deliverable at Washington the next day, at any time after eight o'clock, A.M., and it is argued on the part of the defendant in error, that as demand of payment was made before three o'clock P.M., notice of the non payment of the note should have been put into the post office on the same day it was dishonored,

Page 34 U. S. 46

early enough to have gone with the mail of that evening. The law does not require the utmost possible diligence in the holder in giving notice of the dishonor of the note; all that is required is ordinary reasonable diligence, and what shall constitute reasonable diligence ought to be regulated with a view to practical convenience, and the usual course of business. In the case of Bank of Columbia v. Lawrence, 1 Pet. 583, it is said by this Court to be well settled at this day, that when the facts are ascertained, and are undisputed, what shall constituted due diligence is a question of law; that this is best calculated for the establishment of fixed and uniform rules on the subject, and is highly important for the safety of holders of commercial paper. The law, generally speaking, does not regard the fractions of a day, and although the demand of payment at the bank was required to be made during banking hours, it would be unreasonable, and against what the special verdict finds to have been the usage of the bank at that time, to require notice of nonpayment to be sent to the endorser on the same day. This usage of the bank corresponds with the rule of law on the subject. If the time of sending the notice is limited to a fractional part of a day, it is well observed by Chief Justice Hosmer, in the case of the Hartford Bank v. Stedman & Gordon, 3 Conn. 495, that it will always come to a question, how swiftly the notice can be conveyed. We think, therefore, that the notice sent by the mail, the next day after the dishonor of the note, was in due time.

The next question is whether, in the notice sent to the endorser, the dishonored note is described with sufficient certainty.

The law has prescribed no particular form for such notice. The object of it is merely to inform the endorser of the non payment by the maker, and that he is held liable for the payment thereof.

The misdescription complained of in this case, is in the amount of the note. The note is for $1,400, and the notice describes it as for the sum of $1,457. In all other respects the description is correct: and in the margin of the note is set down in figures 1,457, and the special verdict finds that the note in question was discounted at the bank, as and for a note of $1,457, and the question is whether this

Page 34 U. S. 47

was such a variance or misdescription as might reasonably mislead the endorser as to the note for payment of which he was held responsible. If the defendant had been an endorser of a number of notes for Humphrey Peake, there might be some plausible grounds for contending that this variance was calculated to mislead him. But the special verdict finds that from 5 February, 1828 (the date of a note for which the one now in question was a renewal) down to the day of the trial of this cause, there was no other note of the said Humphrey Peake endorsed by the defendant, discounted by the bank, or placed in the bank for collection or otherwise. There was therefore no room for any mistake by the endorser as to the identity of the note. The case falls within the rule laid down by this Court in the case of Mills v. Bank of the United States, 11 Wheat. 376, that every variance, however immaterial, is not fatal to the notice. It must be such a variance as conveys no sufficient knowledge to the party of the particular note which has been dishonored. If it does not mislead him, if it conveys to him the real fact without any doubt, the variance cannot be material either to guard his rights or avoid his responsibility. In that case, as in the one now before the Court, it appeared that there was no other note in the bank endorsed by Mills, and this the Court considered a controlling fact to show that the endorser could not have been misled by the variance in the date of the note, which was the misdescription then complained of.

The judgment of the circuit court is accordingly

Reversed and the cause sent back with directions to enter judgment for the plaintiffs upon the special verdict found by the jury.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the District of Columbia holden in and for the County of Alexandria and was argued by counsel, on consideration whereof it is ordered and adjudged by this Court that the judgment of the said circuit court in this cause be and the same is hereby reversed, and that this cause be and the same is hereby sent back to the said circuit court with directions to that court to enter judgment for the plaintiffs upon the special verdict found by the jury.

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