The evidence in the case was that the day when the note became
due, the bank being the holder thereof, and it being payable there,
after the usual banking hours were over it was delivered to a
notary by the officers of the bank, they informing him at the time
that there were no funds there for the payment of the note. This
was a sufficient proof of due demand of payment.
When a note is payable at a bank, it is not necessary to make
any personal demand upon the maker elsewhere. It is his duty to be
at the bank within the usual hours of business to pay the same, and
if he omits so to do and a demand is there made of payment by the
holder within those hours, and it is refused or neglected to be
made, the holder is entitled to maintain his action for such
dishonor.
It is difficult to lay down any universal rule as to what is due
diligence in respect to notice to endorsers. Many cases must be
decided upon their own particular circumstances, however desirable
it may be, when practicable, to lay down a general rule.
When notice is sent by the mail, it is sufficient to direct it
to the town where the party resides if it is a post town; if it is
not, then to the post office or post town nearest to his residence,
if known. But the rule, as to the nearest post office, is not of
universal application, for if the party is in the habit of
receiving his letters at a more distant post office, or through a
more circuitous route, and the fact is known to the person sending
notice, notice sent by the latter mode will be good. And where the
party is in the habit of receiving his letters at various post
offices to suit his own convenience or business, it may be
sufficient to send it to either.
A suggestion was made at the bar that the letter to the endorser
stating the demand and dishonor of the note is not sufficient
unless the party sending it also informs the endorser that he is
looked to for payment. But where such notice is sent by the holder
or by his holder, it necessarily implies such a responsibility
over.
This suit was originally brought against William Steele, William
Lytle, and Thomas D. Carneal. The plaintiffs counted in assumpsit
for money lent and advanced under a provision of the statute of the
State of Ohio authorizing a joint suit against all the parties to a
promissory note.
The original process was served upon William Steele and William
Lytle. As to Thomas D. Carneal, the Marshal of
Page 27 U. S. 544
the District of Ohio returned "not found," and this return being
suggested of record, the plaintiffs, at the September term of the
circuit court for the year 1823, proceeded to judgment against
Steele and Lytle.
In May, 1824, the plaintiffs, in pursuance of another statute of
the State of Ohio, sued out of the clerk's office of the circuit
court a writ of
scire facias against Thomas D. Carneal (as
to whom the marshal of the district had previously returned "not
found"), the object of which writ was to call upon him to show
cause why he should not be made a party to the judgment against
Steele and Lytle, and why execution should not issue against him
agreeably to the provisions of the statute.
This writ having been served upon the defendant, a rule was
taken against him for a plea. At the September rules, 1824, the
defendant's default was entered and judgment
"nisi." At
the January term, 1825, this default was set aside and the
defendant filed the plea of
nonassumpsit, upon which issue
was joined.
The cause was regularly continued upon the docket until the July
term, 1827, at which term the defendant's attorney filed a further
plea.
"And the said Thomas D. Carneal, by the leave of the court,
first had and obtained for further plea in this behalf, defends the
wrong and injury, when &c., and says that the said promise in
the said declaration, in the original cause supposed, was made by
the said Carneal as co-endorser with William Lytle, upon a
promissory note, made and executed by the said William Steele, the
said Carneal and Lytle being endorsers, as securities for the said
William Steele, and, after the making of the said promise,
and
after the commencement of this suit, to-wit, on 17 December,
1824, in consideration that the said Lytle had transferred to the
plaintiffs a large amount of real estate, in payment and
satisfaction of the debts of the said William Lytle to the said
plaintiffs, including the debt due the plaintiffs upon the
endorsement aforesaid, and had given his notes for the payment of a
large sum of money, to-wit, the sum of $40,000, upon account of and
in satisfaction of his said
Page 27 U. S. 545
liabilities to the plaintiffs, including the endorsement
aforesaid; the said plaintiffs agreed with the said William Lytle
that they would accept and receive the real estate so conveyed and
the notes so made and delivered in satisfaction of the said debt
due from the said William Steele, upon which the said Carneal, with
the said William Lytle, were endorsers and securities as aforesaid,
and did then and there accept and receive the same in satisfaction
of said debt, and this the said Carneal is ready to verify,
wherefore he prays judgment if the said plaintiffs their action
ought further to have or maintain against him."
At the December term 1827, the plaintiffs filed their
replication to the above plea, in the following words:
"And the said plaintiffs, by Daniel J. Caswell, their attorney,
as to the plea of the defendant, by him last pleaded,
to the
further maintenance of the said action, say that for anything
in the said plea set forth, they ought not to be barred
from
further having and maintaining their said action, because,
protesting that the said William Lytle did not transfer to the said
plaintiffs the real estate in the said plea set forth, nor give his
notes for the sum of money in the said plea set forth; for
replication to the said plea, they say
that the said plaintiffs
did not accept the same in satisfaction of the sum of money due the
said plaintiffs, as set forth in their said declaration; and
this they pray may be inquired of by the country, and the defendant
doth the like,"
&c.
The cause was tried at the July term, 1828, and a verdict and
judgment rendered for the defendant.
The counsel for the plaintiffs tendered their bill of exceptions
and prosecuted this writ of error.
The bill of exceptions sent up with the record, contains the
whole of the testimony given on the trial. The facts of the case,
as they were understood and considered by the Court, are stated in
the opinion of the Court delivered by MR. JUSTICE STORY.
On the trial in the circuit Court of Ohio, after the evidence
was closed, the defendant's counsel moved the court to instruct the
jury as in case of a nonsuit
"upon the ground that the evidence adduced by the plaintiffs was
not sufficient in
Page 27 U. S. 546
law to charge the defendant as endorser of the note aforesaid,
and the court, upon the motion aforesaid, decided that the evidence
in writing adduced by the plaintiffs was insufficient in law to
charge the defendant and render him liable as endorser of the note
aforesaid, and so charged the jury, to which opinion of the court
and charge to the jury the plaintiffs by their counsel except and
pray the court that this, their bill of exceptions, may be signed,
sealed, and made a part of the record, which is hereby
ordered."
The plaintiffs, by their counsel, moved the court to charge the
jury that, under the present state of the pleadings in the cause,
it was not necessary for the plaintiffs to prove that they gave
notice to the defendant of the nonpayment of the said note at the
time the same became due and payable in order to charge the said
defendant, which instruction the court refused to give the said
jury, and on the contrary charged the said jury that it was
incumbent upon the plaintiffs to prove such notice. To which
opinion and charge of the court, the plaintiffs by their counsel
excepted and prayed that this, their bill of exceptions may also be
signed, sealed, and made a part of the record. All which was
ordered by the court.
Page 27 U. S. 547
MR. JUSTICE STORY delivered the opinion of the Court.
The Bank of the United States brought a joint action against
William Steele, William Lytle, and Thomas D. Carneal (the defendant
in error) upon a promissory note dated at Cincinnati on 22 August,
1820, whereby Steele promised to pay Carneal or order, at the
office of discount and deposit of the Bank of the United States at
Cincinnati, the sum of $11,563 in sixty days after date, which note
was afterwards successively endorsed by Carneal and Lytle and was
discounted by the bank and dishonored at its maturity.
The declaration is for money lent and advanced, and the suit is
authorized to be brought in this form jointly against all the
parties to the note, by a statute of Ohio. The process was served
upon Steele and Lytle, but returned "not served" upon Carneal.
Judgment was afterwards duly obtained against Steele and Lytle, and
a
scire facias issued according to another statute of Ohio
against Carneal, to which he appeared and pleaded the general issue
of
nonassumpsit at the January term of the court in 1825.
The cause was then regularly continued until July term, 1827, when
by leave of the court he pleaded as a further plea the receipt of
certain real estate of Lytle by the bank, after the commencement of
the suit, in satisfaction of the debt due upon the note, and prayed
judgment if the plaintiffs their action ought further to have or
maintain against him. To this plea there was a replication and
issue to the
Page 27 U. S. 548
country, and at June term, 1828, the cause was tried and a
verdict was found, and judgment thereupon entered for the
defendant. A bill of exceptions was taken at the trial, upon which
the questions arose which have been discussed at the bar, and upon
which the opinion of the Court is now to be delivered.
The first question is whether the plea of satisfaction, so as
above pleaded, is a substitution for the former plea of
nonassumpserunt so as to displace it entirely, or whether
it is an auxiliary plea, so that both issues were properly before
the jury at the trial upon which they might pronounce their
verdict. The latter is contended for by the defendant in error, and
was supported by the judgment of the circuit court.
It is admitted that a plea
puis darrien continuance is
always pleaded by way of substitution for the former plea, on which
no proceeding is afterwards had. The present plea was in fact
pleaded after the last continuance, although it is not so stated in
the plea. It differs from a technical plea of
puis darrien
continuance only in this circumstance, that the satisfaction
is alleged to have been
after the commencement of the
suit, instead of
after the last continuance of the
suit. In principle, however, they do not differ, since each of them
requires the same commencement and conclusion -- that is, instead
of
actio non generally, each must be pleaded with the
prayer of
actio non ulterius habere, &c., and the
judgment must follow the prayer, and is repugnant to and
incompatible with that of a general judgment upon matters before
the suit brought. As therefore the same judgment cannot be rendered
upon the general issue, and upon such a plea of matters arising
after the suit brought, it is difficult to perceive how they can be
united. But it is the less necessary to rest any absolute decision
upon this point because we are all of opinion that the judgment
below ought to be reversed upon the exceptions taken to the
merits.
The court below ruled that the evidence adduced at the
Page 27 U. S. 549
trial was not sufficient in law to charge the defendant as
endorser. That evidence was supposed to be deficient in two
respects -- 1st, that there was not a proper demand of payment of
the note of the maker, at the time when it became due, and 2d, that
due notice was not given of the nonpayment to the defendant as
endorser.
Upon the first point, the evidence is that on the day when the
note became due, the note was in the bank at Cincinnati, the bank
being the holder thereof, and it being payable there, and that
after the usual banking hours were over, it was delivered to a
notary by the officers of the bank for protest, they informing him
at the time that there were no funds there for the payment of the
note. We are all of opinion that this was a sufficient proof of a
due demand of payment. Where a note is payable at a bank, it is not
necessary to make any personal demand upon the maker elsewhere. It
is his duty to be at the bank within the usual hours of business to
pay the same, and if he omits so to do, and a demand is there made
of payment by the holder within those hours, and it is refused or
neglected to be made, the holder is entitled to maintain his action
for such dishonor. But where the bank is itself the holder of the
note so payable, no formal demand is necessary to be made of
payment. The maker has the whole period of the usual banking hours
to pay it, and if he does not pay it within those hours, it is
equivalent to a demand and refusal of payment on his part, and the
note ought not to be delivered out for protest until after those
hours are passed. If the bank has funds of the maker in its hands,
that might furnish a defense to a suit brought for nonpayment. But
this is properly matter of defense to be shown by the party sued,
like any other payment, and not matter to be disproved by the bank
by negative evidence. This doctrine was recognized by this Court in
Fullerton v. Bank of the
United States, at the last term. 1 Pet. 604,
26 U. S.
617.
Then as to the other point of notice, the facts are that the
defendant, Carneal, resides in Campbell County in the State of
Kentucky. The note became due on 24 October, 1820, and on the next
day the notary put a sealed
Page 27 U. S. 550
notice of the protest and nonpayment into the post office in
Cincinnati, directed "To Thomas D. Carneal, Campbell County,
Kentucky," the postage on which was not paid. At that time,
Carneal's residence in Campbell County was without the limits of
any post town, and about two miles from Cincinnati, across the
River Ohio, and his residence was well known to the officers of the
bank, as well as the postmaster at Cincinnati. The county seat of
Campbell County is Newport, where there is a post office, about
three miles distance from Carneal's residence, the River Licking
being between them, and there is also another post office at
Covington, below the River Licking, about two miles distance from
his residence. In October, 1820, the mails from Cincinnati passed
once a week only through Covington, and three times a week through
Newport. Carneal was in the habit of receiving letters at the
Newport office as well as at the offices in Covington and
Cincinnati. He was in the habit of receiving all the letters
directed to him at Cincinnati at the office in that place, and had
given orders to the postmasters to detain all such letters there
until he called for them. He visited Cincinnati very frequently and
almost daily, having business and being a director of a bank
located at that place. The postmaster was in the habit of sending
letters directed to him in Campbell County, by the Covington mail,
whenever he observed the address, unless, as was sometimes the
case, he called for letters at the office before the Covington mail
was sent. But other letters, directed generally to Campbell County,
when the place of residence of the party was unknown, were sent by
the postmaster to Newport. The notary himself, when he put the
present notice into the post office at Cincinnati, supposed that
Carneal received all his letters at that office. The first mail
which left Cincinnati for Newport, after the deposit of this
notice, was on 26 October, and the first which left for Covington
was on the 28th of the same month. There is no evidence in the case
that the letter in question went either by the mail of the 26th to
Newport, or by that of the 28th to Covington. The defendant Carneal
has not produced the letter, if it was ever
Page 27 U. S. 551
received by him, and the circumstances afford a strong
presumption that it might have been received at Cincinnati.
Such is a summary of the material facts upon which this Court is
called to pronounce whether there was due diligence in the
transmission of the notice to the defendant. The latter having
asked the court below to instruct the jury as in case of a nonsuit,
and the court having acceded to his request, that instruction can
be maintained only upon the supposition that there was no
contrariety of evidence as to the facts which ought to have been
left to the jury, and consequently every inference fairly deducible
from the facts which afforded a presumption of due notice ought to
be made in favor of the plaintiffs.
It is difficult to lay down any universal rule as to what is due
diligence in respect to notice to endorsers. Many cases must be
decided upon their own particular circumstances, however desirable
it may be, when practicable, to lay down a general rule. When
notice is sent by the mail, it is sufficient to direct it to the
town where the party resides if it is a post town. If it is not,
then to the post office or post town nearest to his residence, if
known. But the rule as to the nearest post office is not of
universal application, for if the party is in the habit of
receiving his letters at a more distant post office or through a
more circuitous route, and that fact is known to the person sending
notice, notice sent by the latter mode will be good. And where the
party is in the habit of receiving his letters at various post
offices, to suit his own convenience or business, it may be
sufficient to send it to either. The object of the law in all these
cases is to enforce the transmission of the notice by such a route
as that it may reach the party in a reasonable time. This doctrine
is fully recognized by this Court in the case of
Bank of
Columbia v. Lawrence, decided at the last term. 1
Pet. 578.
It has been objected that the direction of this letter to
Campbell County generally was not sufficient, but that it ought to
have been directed to the nearest office, for otherwise it might
happen that it would be sent to a post office, which, though the
county seat, might be very distant from
Page 27 U. S. 552
the residence of the party. Whether a mere direction to the
county without further specification, where the party does not
reside in any town therein, would be sufficient in all cases and
under all circumstances, we do not think it necessary to decide.
That question may well be left until it is necessary in judgment.
But where the description is general, if it is in fact sent to the
proper post office, or if, after due inquiry it is the only
description within the reach of the person sending the notice, we
think it may be safely declared to be sufficiently certain, and
that a different doctrine would materially clog the circulation of
negotiable paper. We think the description in the present case was
in every view sufficient. There was no misdirection, for Carneal
did live in Campbell County. His actual residence was well known to
the postmaster at Cincinnati, and the description did not and could
not mislead him. If the direction was observed, it would be sent to
Covington, or would be delivered at Cincinnati. If not, it would be
sent at farthest to Newport.
Then was the notice in fact duly given or duly sent through the
proper post office? We are all of opinion that it was. The post
office at Cincinnati was almost as near to the party's residence as
that at Covington. The difference is too trifling to afford any
just ground of preference, and Cincinnati was the place where he
was most likely to receive the letter promptly, since it was the
place of his business and of his habitual and almost daily resort.
If it had never been transmitted from that office at all, we are
not prepared to say that under such circumstances the notice left
there was not of itself sufficient, since the party was known there
and his description unequivocal. It does not appear in point of
fact that it ever left that place for any other post office. If it
did not, the strong presumption is that it was there delivered to
the party. But if it was sent to Newport, how can the court say
that it was mis-sent? The party was in the habit of receiving
letters there; it was the county seat, and the mail by that route
was three times a week, and that by Covington only once a week. The
probabilities, therefore, in favor of an early receipt of the
letter
Page 27 U. S. 553
from this circumstance might fairly balance any in the opposing
scale, from the increase of distance and the intervention of the
River Licking. And in fact the letter would at that time have
reached Newport, two days earlier than it would have reached
Covington. We think it would be inconvenient and dangerous to lay
down any rule that the person sending a notice ought under such
circumstances to direct the letter to the nearest post office. We
think that the notice would have been good by either route, indeed,
good if left at the post office at Cincinnati.
A suggestion has been made at the bar that a letter to the
endorser stating the demand and dishonor of the note is not
sufficient unless the party sending it also informs the endorser
that he is looked to for payment. But when such notice is sent by
the holder or by his order, it necessarily implies such a
responsibility over. For what other purpose could it be sent? We
know of no rule that requires any formal declaration to be made to
this effect. It is sufficient if it may be reasonably inferred from
the nature of the notice.
For these reasons, we are all of opinion that the judgment of
the circuit court ought to be
Reversed, and the cause remanded with directions to award a
venire facias de novo.
