Gleason v. Thayer , 87 Conn. 248 ( 1913 )

The defendant objects to the finding, in terms or effect, that the Whaling and Park banks were holders of this note, and to the refusal to find that they were agents.

These banks received the note for collection; from that relation they became, in law, agents of the owner and holders of the note. The finding that they were holders is a necessary inference from the facts proven, and their agency for the owner is a necessary conclusion of law, and whether it is in the finding or not is immaterial. "Such agents are recognized in the law as `holders for collection.'" Bartlett v. Isbell, 31 Conn. 296, 299.

The fact that the indorsement of the Whaling Bank now appears to be erased on the note is unimportant, and furnishes no ground for adding this fact to the finding.

Another assignment of error is the rendition of judgment against the defendant indorser, based upon the giving of the notice of dishonor, when no such allegation is found in the complaint. The defendant is mistaken in his assumption that the giving of notice of dishonor is not alleged in the complaint. It is alleged that the note "was duly protested for the nonpayment thereof." Presentment for payment, protest, and notice of dishonor are terms of the law, each having a different meaning and comprising independent acts. In its popular significance "protest" includes all the steps necessary to establish the liability of an indorser upon a dishonored note. Therefore, when it is alleged that due protest was made, it will ordinarily be understood that presentment, protest, and notice have been had, since the contract of the indorser under the law merchant depends upon presentment and refusal to pay and due notice to the indorser. The law merchant and the banking business have adopted in ordinary use the popular sense of this term. City Savings Bank v. Hopson,53 Conn. 453, 455, 5 A. 601; Coddington v. Davis, 3 Denio (N. Y.) 16, 25; Townsend v. Lorain Bank,2 Ohio St. 345, 353; Wolford v. Andrews, 29 Minn. 250,251, 13 N.W. 167; Wood River Bank v. First Nat. Bank,36 Neb. 744, 747, 55 N.W. 239; 2 Daniels on Negotiable Instruments (5th Ed.) § 929; Norton on Bills Notes (3d Ed.) § 144, p. 361.

The defendant's second defense was that no notice of dishonor as required by law was given him. The trial court's conclusion upon the facts that the notice was adequate is assigned as error. Since the place of payment was New York, the law of that jurisdiction governs as to the giving of the notice. Guernsey v.Imperial Bank, 188 F. 300, 110 C.C.A. 278.

The Negotiable Instruments Act is a part of the law of New York, of which we take judicial notice. General Statutes, § 697.

The National Park Bank might have given notice to the parties liable upon the note, or to its own principal. 3 Consolidated Laws of New York, p. 3675, § 165 of the Negotiable Instruments Law. It, through the notary, on the day of presentment, gave notice to the Whaling Bank, from whom it received the note, by mailing two notices of protest to it. On the next day, upon receipt of the notices, the Whaling Bank forwarded them to the defendant at his proper address by mail, thus complying with the Negotiable Instruments Law. 3 Consolidated Laws of New York, p. 3678, § 178. So that the requirements of this law were fully met. This law in these particulars reaffirms the law merchant, and conforms to the universal custom of banks, from which custom the law grew.

A bank holding an indorsed note for collection is only required to give notice of dishonor to its principal from whom it received the note, and its principal in turn notifies its principal or antecedent indorser, and so down the line. Mead v. Engs, 5 Cow. (N. Y.) 303;Stafford v. Yates, 18 Johns. Rep. (N. Y.) 327; Spencer v. Ballou, 18 N.Y. 327; Phipps v. Millbury Bank, 49 Mass. (8 Met.) 79; United States Bank v. Goddard, 5 Mason (U.S.C. C.) 366; Norton on Bills Notes (3d Ed.) pp. 381, 382; 1 Morse on Banks Banking (4th Ed.) § 232; East Haddam Bank v. Scovil, 12 Conn. 303, 311.

Both the Park Bank and the Whaling Bank used due diligence, and the defendant received all the notice of dishonor he was entitled to, either under the Negotiable Instruments Act, or under the common law of New York, which, so far as the giving of notice of dishonor is concerned, does not differ from our own common law. As this notice was sufficient, we need not inquire as to the sufficiency of the notice directed to the defendant at New London.

There is no error.

In this opinion the other judges concurred.