Cookendorfer v. Preston - 45 U.S. 317 (1846)
U.S. Supreme Court
Cookendorfer v. Preston, 45 U.S. 4 How. 317 317 (1846)
Cookendorfer v. Preston
45 U.S. (4 How.) 317
ERROR TO THE CIRCUIT COURT OF THE UNITED
STATES FOR THE DISTRICT OF COLUMBIA
In an action brought by the endorsee against the endorser of a promissory note which had been deposited in a bank for collection, the notary public who made the protest is a competent witness, although he has given bond to the bank for the faithful performance of his duty.
He is also competent to testify as to his usual practice.
At the time when these decisions were made, it was the usage in the City of Washington to allow four days of grace upon notes discounted by banks, and also upon notes merely deposited for collection.
But since then, the usage has been changed as to notes deposited for collection, and been made to conform to the general law merchant, which allows only three days of grace.
Although evidence is not admissible to show that usage was in fact different from that which it was established to be by judicial decisions, yet it may be shown that it was subsequently changed.
The case was this.
On 17 May, 1839, E. T. Arguelles gave the following note.
"$300 Washington, May 17, 1839"
"On the first day of February next, I promise to pay to Thomas Cookendorfer or order three hundred dollars for value received, negotiable and payable at the Bank of Washington."
"[Signed] E. T. ARGUELLES"
"[Endorsed] THOS. COOKENDORFER"
This note was deposited in the Bank of Washington, for collection. Not being paid at maturity by the drawer, it was protested
under the circumstances and in the manner stated in the bill of exceptions.
In February, 1842, a suit was brought by Preston, the endorsee, against Cookendorfer, the endorser, which resulted in a verdict and judgment for the plaintiff.
The following bill of exceptions shows the points of law which were raised and ruled at the trial.
"Memorandum. Before the jurors aforesaid retired from the bar of the court here, the said defendant, by his attorney aforesaid, filed in court here the following bill of exceptions, to-wit:"
"Defendant's Bill of Exceptions"
"ANTHONY PRESTON v. THOMAS COOKENDORFER"
"On the trial of this cause, the handwriting of the maker and endorser of the note in the declaration mentioned was admitted, and the plaintiff, to maintain the issue on his part joined, offered George Sweeny, who was admitted to be a notary public for the County of Washington, District of Columbia, lawfully commissioned and sworn, and by him they offered to prove that he, as such notary, was required by the Bank of Washington (who then held the said note for collection) to demand payment of the note mentioned in the declaration, and the said note was delivered to him by the said bank, and he did thereupon, on 4 February, 1840, present the said note at the said bank and did demand payment thereof at the said bank, and he was answered by the proper officer of the bank 'that there were no funds there for it'; that he, the said notary, did, on the next day, to-wit, 5 February, 1840, deliver to the defendant a notice in writing, which notice being now produced to the witness by the defendant, is in the words and figures following:"
"Notice of 5 February, 1840"
"Washington, February 5, 1840"
" SIR: A note drawn by E. T. Arguelles, dated the 17 May, 1839, for three hundred dollars, payable at 1-4 February, 1840, due, and by you endorsed, and for which you are accountable to the President and Directors of the Bank of Washington, has been this day protested for nonpayment."
"Your obedient servant,"
"GEORGE SWEENEY, Notary Public"
"THOS. COOKENDORFER, Esq."
"And he did, also, on the 5 February, 1840, extend and record in his notarial register the protest of the said note, which is in the words and figures following: "
"$300 WASHINGTON, May 17, 1839"
" On the first day of February next I promise to pay to Thomas Cookendorfer or order three hundred dollars for value received, negotiable and payable at the Bank of Washington."
" [Signed] E. T. ARGUELLES"
" [Endorsed] THOS. COOKENDORFER"
" ANTHONY PRESTON"
"DISTRICT OF COLUMBIA, Washington County, sct."
" Be it known that on 4 February, 1840, I, George Sweeny, notary public, by lawful authority duly commissioned and sworn, dwelling in the county and district aforesaid, at the request of the president and directors of the Bank of Washington, presented at the said bank the original note, whereof the above is a true copy, and demanded there payment of the sum of money in the said note specified, whereunto I was answered -- 'There are no funds here for it.'"
" Therefore I, the said notary, at the request aforesaid, have protested and by these presents do solemnly protest against the drawer and endorser of the said note and all others whom it doth or may concern for all costs, exchange, reexchange, charges, damages, and interests suffered and to be suffered for want of payment thereof."
" In testimony whereof I have hereunto set my hand and affixed my seal notarial, this 5 February, 1840."
"GEORGE SWEENY, Notary Public"
" Protesting, $1.75"
" Recorded in protest book G.S. No. 3, page ___ ."
"And the said witness further testified that he copied the form of the said notice from a form used by Michael Nourse, one of the oldest notaries in the city and largely employed as notary, and that he made the demand and gave the notice in this case according to his usual practice, and that his said practice conformed, so far as he knows and believes, to the practice of the other notaries in the City of Washington."
"And the plaintiff offered further evidence tending to prove the said practice of said notaries to be according to the statement made by Mr. Sweeny, and that the usual practice was, when a notice was to be sent abroad, to put it into the post office, and date it on the third or last day of grace, but when the notices were to be delivered in the City of Washington, a latitude was allowed to the notary either to deliver the notice on the third or last day of grace or the day after the last day, and in all cases to date the notice on the day of its delivery, and the usage is to extend the protest on the day on which the notice is given, as in this case, stating the demand
to have been made on the last day of grace, and the protest to be dated the same day on which the notice is dated."
"And the said George Sweeny, on cross-examination, testified that he usually acted on behalf of the said Bank of Washington, at its request, as the notary in regard to notes and bills in said bank, and that he had given a bond, with security, to said bank, in the penal sum of $10,000, for the faithful performance of his duty as notary public in regard to said business, and that the note in controversy had been deposited by plaintiff in said bank for collection."
"And the counsel for the defendant objected to the admissibility and competency of said George Sweeny as a witness, and the court overruled the said objection and permitted the said Sweeny to be sworn and to testify as aforesaid to the jury, to which the defendant, by his counsel, excepted and prayed the court to seal this bill of exceptions, which is done accordingly."
"And the said counsel for the defendant further objected to the admissibility and competency of the said testimony upon the subject of the practice and usage spoken of by the witness, but the court overruled the objection and suffered the said testimony to go to the jury, whereupon the said counsel excepted."
"And the said counsel for the defendant thereupon moved the court to instruct the jury that the said evidence was not sufficient, if believed to be true, to show that payment of said note had been duly demanded and refused and that due notice of such dishonor had been given to defendant so as to bind him."
"But the court refused to give such instruction."
"To each of which rulings of the court, in permitting the evidence as aforesaid to go to the jury, in refusing the instruction as prayed, the defendant, by his counsel, excepts and prays the court to seal this bill of exceptions, which is accordingly done this 7 April, 1843."
"W. CRANCH [SEAL]"
"JAMES S. MORSELL [SEAL]"
MR. JUSTICE McLEAN delivered the opinion of the Court.
The questions in this case arise on the rulings of the court, to which, at the trial, exceptions were taken.
Preston, the defendant, as the endorsee of a promissory note, brought an action against the plaintiff in error, the endorser. The signatures of the maker and endorser were admitted. These grounds of error are assigned:
1. That the court erred in admitting the testimony of the notary public.
2. In refusing the instructions asked by the defendant's counsel.
3. The declaration is defective.
George Sweeny, the notary who protested the note, testified that it was delivered to him by the Bank of Washington, who held it for collection, to demand payment, and that he did thereupon, 4 February, 1840, present the note to the bank, and demanded payment, but was informed by the proper officer that there were no funds to pay it, on which he protested the same for nonpayment; and on the next day, 5 February, he delivered to Cookendorfer, the plaintiff in error, the following notice, in writing:
"Washington, February 5, 1840"
"Sir -- A note drawn by E. T. Arguslles, dated 17 May, 1839, for three hundred dollars, payable 1-4 February, 1840, due, and by you endorsed, and for which you are accountable to the president and directors of the Bank of Washington, has been this day protested for nonpayment."
And the witness stated "that he made the demand and gave the notice according to his usual practice" and "that said practice conformed, as far as he knows and believes, to the practice of the other notaries in the City of Washington."
And other evidence was given conducing to show that the usual practice in such cases was
"when a notice was to be sent abroad, to put it into the post office, and date it on the third or last day of grace; but when the notice was to be delivered in the City of Washington, a latitude was allowed to the notary either to deliver the notice on the third or last day of grace, or the day after the last day, and in all cases to date the notice on the day of its delivery, and the usage is to extend the protest on the day on which the notice is given, as in this case, stating the demand to have been made on the last day of grace, and the protest to be dated the same day on which the notice is dated."
It is insisted that the notary, by reason of his interest in this suit, is an incompetent witness.
In the case of Smedes v. Utica Bank, 20 Johns. 372, it was held that a bank which receives a promissory note for collection, to charge the endorser, by a regular notice, is liable for neglect, but this is not the case where the bank delivers the note to a notary, who is a sworn public officer and whose duty it is to make the demand and give the notice. The same doctrine is laid down in 3 Cowen 662. From this it is argued that the notary is liable directly to the holder of the paper for neglect as a public officer, and not to the bank as its private agent. That in the latter case he would not be liable to the holder of the paper, but might be called on to indemnify the bank which had suffered on account of his laches.
A notary is a competent witness on the same ground that other agents are admissible. They are always responsible to their principals for gross negligence, and yet, from the necessity of the case, they are competent witnesses to prove what they have done in the name of their principals.
It appears that the witness, who generally acted as notary for the Bank of Washington, had given a bond, with security in the sum of ten thousand dollars, for the faithful performance of his duty as notary public, in the business of the bank committed to him. But this, it would seem, does not render him incompetent.
"The cashier or teller of a bank is a competent witness for the bank, to charge the defendant on a promissory note, or for money lent or overpaid, or obtained from the officer without the security which he should have received; and even though the officer has given bond to the bank for his official conduct."
Greenleaf's Ev. 485; Franklin Bank v. Freeman, 16 Pick. 535; United States Bank v. Stearns, 15 Wendell 314.
It is further insisted that if the notary was competent to state his own acts, he could not prove the usage under which he acted. He stated that in making the protest and giving notice, he pursued "his usual practice," "and, so far as he knew, the practice of the other notaries in the city." Now it would be an exceedingly technical rule which would permit a notary to say what he had done in a particular case but prohibit him from stating that he acted in such case according to his usual practice. And this was all the witness did say, for although he spoke of his belief as to the practice of other notaries in the city, he does not state that he had a knowledge of their practice.
The instruction prayed by the defendant's counsel, and the refusal of which is the second ground of error assigned, was
"that the said evidence was not sufficient, if believed to be true, to show that payment of said note had been duly demanded and refused and that due notice of such dishonor had been given to defendant, so as to bind him."
In the case of Renner v. Bank of Columbia, 9 Wheat.
582, a suit was brought against the endorser of a note which had been negotiated in the Bank of Columbia. Payment was demanded, and the note protested on the fourth day after that mentioned in the note as the day on which it became payable. This was proved to be the usage of the bank, and this Court held the demand was made at the proper time. In Mills v. Bank of the United States, 11 Wheat. 430, this Court held that
"when a note is made payable or negotiable at a bank, whose invariable usage it is to demand payment and give notice on the fourth day of grace, the parties are bound by that usage, whether they have a personal knowledge of it or not."
In the Bank of Washington v. Triplett and Neale, 1 Pet. 25, this Court sanction the usage to make the demand of payment of a note which was left in the bank for collection on the day after the last day of grace, placing such notes, in this respect, on the same footing as notes discounted by the bank. And that such was the usage in 1817, when payment on the note or bill in question was demanded, was proved in that case. But it was also proved, as appears from the record, that the usage was changed in 1818 by all the banks of Washington and Georgetown, "so as to conform to the general commercial usage of demanding payment on the last day of grace." This referred to notes or bills sent to the banks for collection, and of course embraces all notes not negotiated in bank.
Where a usage is sanctioned by judicial decisions, it becomes the law of the place, and no further proof is necessary to establish it; and it is said, that no evidence is admissible to controvert the fact, as laid down by the court. Edie v. East India Co., 2 Burr. 1221.
Now if the usage, as sanctioned in the cases above cited, governs this case, it is clear that such diligence has not been used as to charge the endorser. For under that usage, the demand should have been made on the day after the third day of grace, when it was in fact made on the third day of grace.
This objection is met by the defendant in error by the proof of the usage as stated; which he insists governs all notes not discounted by the banks of the district. The note in question was not discounted by the Bank of Washington, it being merely left there for collection. But it is insisted that this usage cannot be shown to overthrow that which has been sanctioned by judicial decisions. A local usage may be changed in the same mode by which it was established. But parol evidence is not admissible to show that the usage was different, at the time, from what the courts have solemnly adjudged it to be. The law merchant is founded upon custom, and every modification of it by local usage shows that, like other laws, it may be changed.
The usage proved in this case, except in Bank of Washington v.
Triplett and Neale, and that is explained by the evidence cited, does not conflict with that decided by this Court, if the latter be limited to notes discounted by the banks, and the former applies to all other notes payable in the district. In other words, that the law merchant should be modified by the usage only as to demand and notice on notes discounted by the banks. And it would seem from the decisions above cited, the usage to demand payment the day after the third day of grace had its origin with the banks, and has not been extended since 1818 to paper not discounted by them. On all other paper, a demand is made on the third day of grace, and the
"usage is to extend the protest on the day on which the notice is given, stating the demand to have been made on the last day of grace and the protest to be dated the same day on which the notice is dated."
Now a demand and protest on the last day of grace and a notice on the following day come strictly within the law merchant. And this was the diligence used in the present case, except the formal date of the protest on the day of the notice. No confusion can therefore, arise from this general commercial usage, as it conforms to the established law. No inconvenience has arisen, it is supposed, from the bank usage in the district which has been so long and so firmly established.
No defects in the declaration are perceived, and none has been pointed out to us which are not cured by the verdict.
Upon the whole, we
Affirm the judgment of the circuit court with costs.