Where the holder of a protested note and the party entitled to
notice reside in the same city or town, nonce should be given to
the party entitled to it, either verbally or in writing, or a
written notice must be left at his dwelling house or place of
business.
The term "holder" includes the bank at which the note is
payable, and the notary who may hold the note as the agent of the
owner for the purpose of making demand and protest.
A memorandum upon the note, that the "third endorser, J. P.
Harrison, lives at Vicksburg," was not sufficient to go to the jury
as evidence of an agreement upon his part to receive notice through
the post office.
It was a suit by the endorsee of a promissory note against the
endorser. Bowling, the endorsee, lived in Maryland, and Harrison,
the endorser, in Mississippi.
The note was as follows:
"$5,800
Vicksburg, November, 26, 1836"
"Two years after date I promise to pay to the order of W. M.
Pinckard five thousand eight hundred dollars for value received,
negotiable and payable at the office Planters' Bank,
Vicksburg."
"[Signed] A. G. CREATH"
Page 47 U. S. 249
Endorsed: "Pay Pinckard and Payne or order. W. M. Pinckard."
"Pay J. P. Harrison, or order. Pinckard and Payne." "Pay John D.
Bowling, or order. J. P. Harrison."
At the foot of said note and on the face thereof was the
following memorandum: "Third endorser, J. P. Harrison, lives at
Vicksburg."
At May term, 1840, suit was commenced by Bowling against
Harrison, and the cause came on for trial at May term, 1842. The
jury, under the instructions of the court, found a verdict for the
defendant, when the following bill of exceptions was taken by the
counsel for the plaintiff.
"
Bill of Exceptions"
"The plaintiff proved, by Alexander H. Arthur, a witness, who
was sworn, that said memorandum was in the hand writing of the
defendant, J. P. Harrison, and thereupon said memorandum was read
to the jury. The plaintiff then proved by said Arthur that said
note was deposited in the office of the Planters' Bank at
Vicksburg, Mississippi, on 29 November, 1838, for collection, and
that on that day, 29 November, 1838, he demanded payment thereof of
the teller of said bank, who refused to pay the same; that on the
same day he deposited in the post office at Vicksburg a written
notice of the nonpayment of said note, directed to said defendant,
Jilson P. Harrison, informing him of the nonpayment of said note.
The said witness further stated that he acted as the agent of the
Planters' Bank in making demand of payment, and giving notice of
nonpayment of said note. Said witness further stated, that Jilson
P. Harrison, the defendant, lived in the Town of Vicksburg, in
which is and was the office of the Planters' Bank, when the note
sued on was payable at the date of the maturity of said note. That
for several years prior to the maturity of said note, it had been
the usage of the Planters' Bank of Vicksburg to have notice served
personally upon the endorsers resident in Vicksburg unless there
was a memorandum on the note appointing some place at which notice
would be received, and if there was a memorandum on the note
designating a place where notice was to be served, then the notice
was left at such place. That this usage applied to notes discounted
or deposited in bank for collection. That the language of these
agreements was generally as follows: 'Endorser will receive notice
at Vicksburg post office,' &c., though sometimes they were in
the language of the one attached to the note sued on; that seeing
the defendant's name written at the foot of this note sued on, he
supposed it to be an undertaking on his part to receive notice
through the Vicksburg
Page 47 U. S. 250
post office according to the usage of the bank, and accordingly
gave him notice of the nonpayment of the note by depositing the
same in the Vicksburg post office addressed to him at Vicksburg,
and that he gave no other notice of the nonpayment of the note to
defendant. This being all the evidence in the cause, the court
instructed the jury that to charge an endorser, if he lived in the
town in which the note was made payable, the notice must be
personal, unless he had agreed to receive it elsewhere or unless,
by the custom and usage of the bank at which the note is made
payable, notice of nonpayment was left at the post office. That the
memorandum attached to the note sued on was not a sufficient
agreement to receive notice at the post office, and dispense with
personal service on the endorser. The court further instructed the
jury, that the custom and usage of the bank, as proved in this case
by the witness, Arthur, was not sufficient to dispense with
personal notice. To which opinion of the court, the plaintiff, by
his attorney, excepted before the jury retired from the box, and
presented this his bill of exceptions, and prays that the same be
signed, sealed, enrolled, and made a part of the record in this
cause, which is done accordingly."
"J. McKINLEY [SEAL]"
Upon this exception the case came up to this Court.
Page 47 U. S. 256
MR. JUSTICE GRIER delivered the opinion of the Court.
The first assignment of error in this case is to the
instruction
Page 47 U. S. 257
given by the court to the jury
"That to charge an endorser if he lived in the town in which the
note was made payable, the notice must be personal unless he had
agreed to receive it elsewhere or unless, by custom and usage of
the bank at which the note is payable, the notice of nonpayment was
left at the post office."
As the only question on the trial of the cause was the
sufficiency of notice left at the post office at Vicksburg to
charge an endorser residing there, and not whether a copy left at
his dwelling house or place of business would be proper, the phrase
"personal notice" was evidently intended and understood to include
the latter in opposition to the former. This instruction is
therefore not objected to on the ground of any inaccuracy of
expression on that point. But the complaint is that the rule of law
on this subject was erroneously enunciated by the court in stating
the conditions under which a personal service of notice on an
endorser is required to be
"residence in the town where the
note was made payable."
It is true the terms in which the rule of law on that subject is
usually stated differ from those used by the court on this
occasion. In
Williams v. United States
Bank, 2 Pet. 101, it is thus stated by this
Court:
"If the parties reside in the same city or town, the endorser
must be personally noticed of the dishonor of the bill or note,
either verbally or in writing, or a written notice must be left at
his dwelling house or place of business."
Mr. Justice Story (Story on Bills, ยง 312) states the rule in
these words:
"Where the
party entitled to notice and the holder
reside in the same town or city, the general rule is that the
notice should be given to the party entitled to it, either
personally, or at his domicile or place of business."
The endorsee or owner of the note in this case resided in
Maryland, and the endorser in Vicksburg, and it is contended that,
as they are the only parties, and do not reside in the same place,
the rule is inapplicable to the case.
But we are of opinion that whether we regard the reasons upon
which this rule is founded or a correct construction of the terms
in which it is usually stated, the instruction given by the court
below was correct, and not such as to mislead the jury in the
application of the law to the circumstances of the case before
them.
The best evidence of notice is proof of personal service on the
party to be affected by it or by leaving a copy at his dwelling.
Depositing a notice in the post office affords but presumptive
evidence of its reception, and is permitted to be substituted for
the former only where the latter would be too
Page 47 U. S. 258
inconvenient or expensive. Hence, when the convenience of the
public post is not needed for the purpose of transmission or
conveyance, there is no reason for its use, or for waiving the more
stringent and certain evidence of notice, and therefore, in the
practical application of the rule, the relative position of the
person giving the notice and the party receiving it forms
the only criterion of the necessity for relaxing it.
A very large portion of the commercial paper used in this
country is similar to that which is the subject of the present
suit. They are notes made payable at a certain bank. The last
endorsee or owner transmits it to that bank for collection; if
funds are not deposited there to meet it when due, it is handed to
a notary or agent of the bank, who makes demand and protest and
gives notice of its dishonor to the endorsers; if they live in the
same town or city where the bank is situated and the demand made,
and
"where the note was payable," he serves it personally,
or at their residence or place of business; if they live at a
distance, so that such a service would be inconvenient and
expensive, he sends the notice by mail to the nearest post office,
or such other place as may have been designated by the party on
whom it is to be served. This is and has been the daily practice
and construction of the rule in question over the whole country,
and the only one consonant with reason.
This practical application of the rule is correctly stated by
the court in their instruction to the jury as connected with the
circumstances of the case before them, and also within its terms as
it is usually stated in the books. The term "holder" is properly
applied to the person having possession of the paper and making the
demand, whether in his own right or as agent for another. The
Planters' Bank of Vicksburg were the "holders" of this note for
collection, and were bound to give notice to all the endorsers.
Smedes v. Utica Bank, 20 Johns. 372. The notary also, who
held the note as agent of the owner for the purpose of making
demand and protest, may be properly considered as the "holder"
within the letter and spirit of this rule. On a careful examination
of the very numerous cases in the books in which the rule under
consideration has been enunciated in the terms above stated, they
will be found not essentially to differ from the present in their
circumstances. In some instances also the rule has been stated in
the terms used by the court below.
See Bayley on
Bills.
An exception is taken also to the instruction of the court
"That the memorandum attached to the note in this case was not a
sufficient agreement to receive notice at the post office,
Page 47 U. S. 259
and to dispense with personal notice on the endorser, and that
the custom and usage of the bank, as proved in this case, were not
sufficient to dispense with personal notice."
The memorandum is in the following words: "Third endorser, J. P.
Harrison, lives at Vicksburg." The only direct evidence of usage
was
"that for several years prior to the maturity of said note, it
had been the usage of the Planters' Bank of Vicksburg to have
notice served personally upon the endorsers resident in Vicksburg,
unless there was a memorandum on the note designating a place where
notice was to be served; then the notice was left at such
place."
This is in fact no usage peculiar to Vicksburg, but the general
rule of commercial law. The notary appears to have mistaken this
memorandum for an agreement to receive notice at the Vicksburg post
office, and, however willing to excuse himself, he has not ventured
to swear directly that there was any known usage to justify this
construction, or rather misconstruction, of this memorandum. The
counsel for plaintiff in error complain that the court did not
submit it to the jury to say whether an inference might not be
drawn, from some equivocal or obscure expressions of the witness,
that there was such a usage.
It is true the jury are the proper judges of the credibility and
weight of testimony, but the court should not instruct them to
presume or infer important facts, unless there be testimony which,
if believed, would justify such a conclusion.
It is of the utmost importance to commercial transactions, that
the rules of law on the subject of notice which is to charge an
endorser be stable and certain, and not suffered to fluctuate and
vary with the notions or caprice of banking corporations or village
notaries. A usage, to be binding, should be definite, uniform, and
well known. It should be established by clear and satisfactory
evidence, so that it may be justly presumed that the parties had
reference to it in making their contract. Every day's experience
shows that notaries, in many places, fall into loose ways of
performing their duties, either through negligence or ignorance,
and courts should be cautious how they encourage juries to presume
usages and customs contrary to the settled rules of law, in order
to sanction the mistakes or misconceptions of careless or
incompetent officers. It was as easy to have written the memorandum
on this note, "The endorser, J. P. Harrison, agrees to receive
notice at the Vicksburg post office," as to write it in its present
form; and one can hardly conceive of the possibility of a well
known and established usage, that a written memorandum should be
construed without any regard to its terms or plain meaning. Those
who affirm the existence of such a strange usage should be held
to
Page 47 U. S. 260
strict proof of it, and the court were right in not submitting
it to the jury to infer such an improbable and unreasonable custom,
by forced or astute construction of equivocal expressions from a
willing witness.
Let the judgment be affirmed.
Order
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the Southern
District of Mississippi and was argued by counsel. On consideration
whereof it is now here ordered and adjudged by this Court that the
judgment of the said circuit court in this cause be and the same is
hereby affirmed with costs.
