CHAPTER SECOND. The following pages are designed to illustrate more fully the ques tions and points discussed in the early editions of the "Manual for Notaries Public," and to suggest additional topics of inquiry to those who wish to make themselves familiar with the law and practice in reference to negotiable paper. Should any points of inquiry be omitted in the volume, on which notaries would wish to be informed, the editor will take occasion to add these to a future edition. There are no more important questions to the banker and the notary than those in reference to the LAW OF AGENCY, (in the collection of paper,) and that in reference to forged signatures, forged bills and forged bank notes. These topics are fully discussed in this appendix. No. 38. THE LIABILITY OF AGENTS. 39. CAN A DEMAND BE MADE LEGALLY BY A NOTARY'S CLERK. 40. FORM OF NOTICE. 41. USE OF PRINTED SIGNATURES. 42. EXCUSES FOR WANT OF PRESENTMENT. 43. WAIVER OF NOTICE. 44. GUARANTY OF BILLS. 45. LOST BILLS. 46. FORGED BILLS AND NOTES. 47. DAYS OF GRACE ON CHECKS. 38. The Liability of Agents THE liability of a bank to its customers for bills and notes collected, or sent for collection, through agents, has been fully established in New York, by the case of Allen vs. Merchants' Bank, (Wend. N. Y. Rep., vol. 22, p. 215,) and in the case of Commercial Bank of Pennsylvania vs. Union Bank of New York, (see Kern. N. Y. Rep., vol. 1, p. 203,) alluded to in the preceding chapter. The same doctrine has been established by the English courts, in the case of Van Wart vs.Wooley, (3 Barn. & Cres. p. 439.) A., residing in New York, employed B., residing at Birmingham, to purchase and ship goods to A. For such purchases bills were remitted to B., drawn by C. upon D., but not endorsed by A. B. employed his bankers to present the drafts for acceptance, they charging, as usual, a commission for their agency. These bankers forwarded the bill to their correspondents in London. D. refused to accept, but of this the bankers of B. did not give notice until the day of payment, when it was again presented and dishonored. In an action brought by B. against his bankers for neglecting to give him notice of the non-acceptance of the bill, it was said: "Upon this state of facts it is evident that the defendants, (who cannot be distinguished from, but are answerable for, their London correspondents, Sir John Lubbock & Co.,) have been guilty of a neglect of the duty which they owed to the plaintiff, their employer, and from whom they received a pecuniary reward for their services. The plaintiff is, therefore, entitled to maintain his action against them, to the extent of any damages he may have sustained by their neglect." The doctrine thus established in New York and in England, as will be seen from the text, is not the law of Massachusetts. It may be well to observe that the criticism in the case of Warren Bark vs. Suffolk Bank, upon the law as it exists in New York, does not seem to be well founded. It is not admitted by the courts of New York, that the collecting bank would not be chargeable for the default of a sub-agent, if there had been any understanding or agreement, express or implied, that the note was to be transmitted to a sub-agent for collection. Both in the case of Allen vs. Merchants' Bank, and of Commercial Bank vs. Union Bank, there was an implied agreement that the collecting bank should employ a sub-agent, yet the collecting bank was held liable. The doctrine obtaining in Massachusetts, viz., “That where the nature of the business requires the employment of a sub-agent, the bank with which a bill or note is left for collection is not responsible for the neglect or default of such agent, also obtains in Connecticut. (East Haddam Bank vs. Scovill, 12 Conn. 303,) and perhaps, also, in the United States. (Bank of Washington vs. Triplett, 1 Peters, 25. See pp. 84 and 85 of Manual.) 39. Presentment by Notary himself when necessary, and the Construction of the Notarial Certificate in New York. 1. Revised Statutes of New York, (Vol. II. p. 382. See page 133 of the text,) "declare that in all actions at law, the certificate of the notary, under his hand and seal of office, of the presentment by him of any promissory note or bill of exchange for acceptance or payment, and of any protest of such bill or note for non-acceptance or non-payment, and of the service of notice thereof on any or all of the parties to such bill or note, &c., shall be presumptive evidence of the facts contained in such certificate." The construction put upon this statute in the text has been followed in several late cases. In Hunt vs. Maybee, 3 Seld. 267, the certificate of the notary stated that a notice of protest was served, &c., (without stating by whom it was served.) The court said: "The certificates of the notary in this case are void, as the presentment was not made by him, but his clerk. This cannot be delegated to a third person, as is settled in the case of the Onondaga County Bank vs. Bate. (See also, Cole vs. Jessup, 10 How. Prac. Rep. 519.) In the further construction of this statute, the case of Ketchum vs. Barber (4 Hill, 235) deserves notice. Here the certificates stated that "notice of protest was served on A., by putting the same into the postoffice, directed to him;" and the objection being taken that the certificates did not state that the notices were put into the post-office by the notary, the court, by Justice Cowen, held: "The Revised Statutes simply require a certificate of the service of notice. It is a sufficient compliance with the statute to say positively that the service was made, specifying the mode; such language imports that the notary made the service himself, or knew it was made. He need not state by whom the business was done." A certificate which states that the notary gave notice of the non-payment of the said bill of exchange to the drawer and endorser as follows, showing a due service by mail, it will be under stood to mean that the notice was of non-payment on due presentment of the bill for payment. (Burbank vs. Beach, 15 Barb. 326.) 2. In those cases in which a notary, in his official character as such, has a duty to perform, as in the protesting of foreign bills of exchange, he cannot employ a clerk to perform that duty. (See the extract from the Treatise of Kyd on Bills, at p. 69 of the text.) But where a notary is called upon to do what any private person may do with equal validity, he may employ a clerk to act for him as his agent. Thus he may employ his clerk to demand payment of a bill or note, unless some statute (as in New York, in certain cases) requires the demand to be made by him. (See p. 86 of the Manual.) 40. Form of Notice. To the cases cited in the text we would add the following recently decided: 1. As to the demand of payment. The notice need not state that the endorser is looked to for payment, but must show on its face, either expressly or by fair inference, that the bill has been duly presented and dishonored. (Townsend vs. Lorain Bank, 2 Ohio, New Series, 345.) The protest of a note stated that the notary, "at the request of the holders, presented at the Bank of the Metropolis (the drawer having removed from Washington, and having been previously informed at his late place of business that he had not left any funds or made any provision for his notes) the original note, and demanded payment thereof, which could not be obtained, as the drawer had not any money to his credit," &c.; and it being conceded that the demand at the bank was insufficient, the protest was held to be insufficient, also, because, 1. The court cannot infer that a demand was made from what the notary says was the information he received at the drawer's late place of business, whether he had the note there or had it with him, does not appear. 2. The word "previously" does not necessarily imply that it was made on the same day-plain and satisfactory proof of the time is necessary. The evidence must point not to a demand at some time, but must show that it was made on the day prescribed by law. (Nailor vs. Bowie, 3 Md. 251.) A notice addressed to an endorser, informing him that the note in question had not been paid by the drawer, and that he, the endorser, would be held responsible for its payment, was held in Maryland insufficient, because it did not inform the endorser of a demand and refusal. (Nailor vs. Bowie, 3 Md. 251.) In England the following has been held a good notice: "We beg to acquaint you with the non-payment of M.'s acceptance of L.'s draft of the 29th of December last at four months, amounting, with expenses, to £51, which remit us in course of post, without fail." (Everard vs. Watson, 18 Eng. Law and Eq. Rep. 104.) In New York the following decisions have been recently rendered. A notice of protest in these words has been held good: "Take notice, that a promissory note made by A. for $800, endorsed by you, was this day protested for non-payment, and that the holders look to you for the payment thereof." (. 18 Id. 189. Same case, 2 Kernan, 551. Youngs vs. Lee, Cook vs. Litchfield, 5 Sand. 320. Same case, Selden's Notes of Cases in Court of Appeals, December, 1853.) It is also held in these cases that the word "protest," when used in reference to commercial paper, imports a demand and refusal of payment. 2. Description of the bill or note. In the cases we have just cited, it was determined that a description of a bill or note, in a notice of protest, is sufficiently definite which gives the amount, maker and endorser, even although it does not state the time of the maturity of the bill or note. But where there are several bills or notes to which a similar notice would apply, the notice is not sufficient. (See Housatonic Bank vs. Laflin, 5 Cush. 546.) A mistake in describing the note in a notice of protest, (as where the note was for $200, but described as for $175 and interest,) does not necessarily vitiate the notice; the question in such cases being whether the endorser was misled by the mistake. (Snow vs. Perkins, 2 Mich., Gibbs, 238.) A notice sent by the endorser of a bill to the drawer, stating the amount of the bill correctly, but erroneously describing it as drawn by the acceptor and accepted by the drawer, was held in England a sufficient notice of dishonor. (Mellersh vs. Rippen, 11 Eng. Law and Eq. Rep. 599. See page 87 of Manual.) The case of Cook vs. Litchfield, is reported in 5 Sand. 320. (See preceding note, and page 93 of Manual.) 41. Use of Printed Signatures by Notaries. It is the practice of some notaries to have their names printed at the bottom of the notices of non-payment they are in the habit of sending to endorsers. This is not a safe course to pursue, as a question might be raised by an endorser as to the sufficiency of such a notice. It is true that no valid objection seems to exist to this mode of giving notice, but a notary should always act upon the safe side. (See page 87 of Manual.) 42. Excuses for want of Presentment, Protest or Notice of Dishonor. A bill of exchange was deposited by the holder in the post-office, in season to reach the place where it was payable before it fell due, by the regular course of the next mail, and there was no reason to believe that it would not be there duly delivered. It was actually sent by that mail, but by mistake of the postmaster, where it was mailed, the package containing it was misdirected, and in consequence thereof was carried beyond its place of destination. The mistake being discovered, the bill was returned, and reached the place where it was payable on the day after it fell due, which was Sunday. On the morning of the following day the bill was delivered from the post-office to the agent of the holder and payment demanded of the acceptor. It was held that the holder was not chargeable with a want of reasonable diligence, and could therefore recover against the endorser. (Windham Bank vs. Norton, 22 Conn. 213.) In case of the prevalence of a malignant fever or epidemic, the authorities in the United States differ whether the holder may defer demand of payment or notice of dishonor, until the disease subsides. (Story, Bills, § 308, no. 1.) In New York, however, the question has been settled by an act of the legislature, for the provisions of which, see pages 130 and 131 of the text. (See Manual, page 95.) 43. Waiver of Notice. 1. The endorser of a bill or note may agree to dispense with demand of payment and notice of non-payment, and the agreement will be binding upon him. Thus, an agreement with the maker by the payee of a note, after the former had negotiated it, that he would pay it and take it up, amounts to a waiver of demand and notice, and such agreement enures to the benefit of the endorsee. (Marshall vs. Mitchell, 35 Maine, 5 Red. 221.) One who endorses a promissory note, inserting over his signature a waiver of demand and notice, is not entitled to any demand and notice on its non-payment by the maker. (Woodman vs. Thurston, 8 Cush. 151.) A notice being endorsed before maturity, the attorney of the endorsee reminded the endorser that it would soon be due, and that the maker had left the place; the endorser replied that he owed the note; that it was all right; that he had endorsed it to pay it, and that if he was not there to pay it when it became due, his agent, who had notes and accounts in his hands for collection, would do so. The court held this was sufficient evidence of waiver. (Long vs. Young, 8 Eng., 13 Ark. 401.) 2. The endorser may waive demand and notice by taking security from the maker. A mortgage was given by the maker of a promissory note to the endorser, conditioned, that if the note was paid at maturity, the mortgage should be void. It did not appear whether the property so mortgaged was of sufficient value to afford an indemnity. The court held the taking of the mortgage no waiver of demand and notice. "The mere precaution," it was said, "by an endorser, of taking security from his principal, has never been held to dispense with demand and notice. There must be something more, such as the taking into his possession the funds or property of the principal, sufficient for the purpose of meeting the payment of the note, or he must have an assignment of all the property, real and personal, of the maker for that purpose." (Seacord vs. Miller, 3 Kernan, 58.) This doctrine obtains very generally in the United States. 3. If the endorser of a bill or note, after its maturity, with the knowledge that demand of payment has not been duly made, or notice of non-payment duly given, promise to pay it, he waives thereby the want of such demand or of such notice. The rule formerly was, that the clearest evidence of knowledge on the part of the endorser was necessary to sustain the waiver. But the rule is now otherwise. The knowledge may be inferred as a fact, from the circumstances attending the promise, without the need of clear and affirmative proof of knowledge. (De Wolf vs. Murray, 2 Sand. 166. See page 97 of Manual.) |