Catskill Bank v. Stall

By the Court,

Nelson, J.

There is nothing in the testimony or upon the face of the note, disclosing to the plaintiffs that the endorsement of the firm of which the defendants are members, was made for the accommodation of the maker. On the contrary, the note being made payable to the firm, the fair inference is that it passed out of their hands in the usual course of business. The plaintiffs are bona fide holders for full value, according to the proof; and the firm is therefore liable, though its name was used out of the partnership dealings, and without the knowledge or assent of one of its members. 7 Wend. 158. id. 309. 14 id. 133. Chitty on Bills, 30. 7 East, 210.

The only question of any doubt in the case is, as to the sufficiency of the notice of the dishonor of the note. We have seen that we must consider and decide this case as if the endorsement of the firm had been made in pursuance of proper authority, and that the defendants are legally liable upon due notice, the same as if the note had been made in the regular business of the concern; and in such case, upon *367general principles, as well as upon adjudged cases on the point, notice given to one of the partners is sufficient. Chitty on Bills, 230. 1 Maule Sel. 259. 12 East, 317. 1 Campb. 82. The holders must us.e ordinary diligence in ascertaining the place of residence, or of business of the endorsers and in giving notice of the dishonor of the note, eithér personally, or by due course of mail. Any laches in this respect will discharge the endorséis. The question of diligence is a mixed one of law and fact, and should be submitted to the jury. 8 Johns. R. 177. When there is no dispute about the facts, it is a question of law. 11 id. 187. In the case of the Bank of Utica v. Davidson, 5 Wend. 587, the notice was directed to the defendant, at Bainbridge, Chenango county, and sent per mail; it turned out that he had removed some few months before to Masonville, Delaware county. The agent of the maker, who presented the note to the bank for discount, informed a clerk that the defendant lived in Bainbridge, and the clerk made a memorandum of it, according to custom. There was a post-office near the residence of the defendant, and the one in Bainbridge where the notice was directed, was 12 or 14 miles distant. This court adjudged the notice to be sufficient, and considerable stress was laid upon the information given by the agent, on the ground that his relation to the parties to the note authorized a reasonable confidence in his representations. There were other considerations referred to and relied upon, but this was the leading one. The case under review is much stronger on this point. Reynolds was sent to the Bank by Traver, one of the defendants, who had some interest in the note; at least, he told him he wanted part of the money, and afterwards received $200 of it, though it was subsequently repaid to the maker. Under these circumstances, we are of opinion it was proper for the judge to advise the jury, that if Reynolds gave direction concerning the place where letters should be sent to reach the endorsers, in the shortest time, that the bank were justified in trusting to the information, and directing them accordingly. Clearly, Traver himself ought not to be 'permitted to set up that the messenger whom he had sent to the plaintiffs to get the note discounted had misled them. The cashier had made full and particular enquiries *368him, and the weight of the evidence is with the verdict of the jury, that he was advised to send to Red Hook, as letters would be most speedily received by the defendants from that place. We do not intend to say that the information derived from the agent of the makers, who presents the note for discount, is, alone, sufficient diligence on the part of the bank in ascertaining the residence of the endorsers ; application may undoubtedly very properly be made to him for such information ; but here the messenger was sent by one of the defendants, and as to all the information reasonably and customarily sought for by the bank, in such a transaction, may be looked upon as standing in his place. If Traver. himself had given it, there would have been an end of the question.

The case operates harshly upon Stall,- as he had no knowledge of, nor his house any benefit from the note ; both his partners, however, were privy to it; one endorsed, a,nd the other procured the discount, and they are clearly responsible to him for the amount of this recovery, together with costs and charges.