i. Notice to persons jointly liable; statutory provision.— The Negotiable Instruments Law also provides that: "Notice to joint "parties, who are not partners, must be given to each of them, "unless one of them has authority to receive such notice for the "others." This same provision is found in the English Bills of Exchange Act. There has never been any English decision to this effect, and the rule of the English statute seems to have been based upon the rule as laid down in American courts. The rule is well established in this country that notice to one of two or more joint indorsers or drawers, who are not partners, is not sufficient to charge all of them. But in Kentucky it has been held that notice to one joint indorser is sufficient to bind the other indorser. If one of two payees, who have indorsed a note payable to their order, dies before the maturity of the note, no recovery can be had against the survivor unless it is shown that the estate of his coindorser was duly charged with notice.? was stated by Chancellor Kent in Griswold v. Waddington, 16 Johns. (N. Y.) 438: "A dissolution of a partnership only has respect to the future. The parties remain bound by all antecedent engagements. The partnership may be said to continue as to everything that is past and until all pre-existing matters are wound up and settled. See also Brown v. Turner, 15 Ala. 832; Coster v. Thomason, 19 Ala. 717. 2. Neg. Inst. L. (N. Y.), § 171. For same section in statutes of other States see Appendix. 3. English Bills of Exchange Act, 1882, § 49 (11). 4. Chalmers on Bills of Exchange, p. 160. 5. The leading American case to this effect seems to be that of Willis v. Green, 5 Hill (N. Y.), 232, 40 Am. Dec. 351. The court in this case said: "It has been the settled commercial rule that copayees, not partners, must each indorse in order to negotiate the paper. It would seem consistently, if not necessarily to follow from this doctrine, that their interests, though joint as to the remedies against them on the paper, are so far distinct and separate as it respects each other, that notice of default of the maker should be given to both. In the ordinary case of a partnership the interest is 5 not only joint, but each member is a general agent of the concern; and hence notice to one is notice to all. But here no such agency exists, as is sufficiently shown from the fact that each party must act for himself in the negotiation of the note." See also Shepherd v. Hawley, 1 Conn. 367, 6 Am. Dec. 244; State Bank V. Slaughter, 7 Blackf. (Ind.) 133; People's Bank v. Keech, 26 Md. 521, 90 Am. Dec. 118; Miser v. Trovinger, 7 Ohio St. 281; Sayre v. Frick, 7 Watts & S. (Pa.) 383; Boyd v. Orton, 16 Wis. 495. 6. Higgins v. Morrison, 4 Dana (Ky.), 100. And in Tennessee, under a statute regulating the liability of joint obligors, it has been held that one of two joint indorsers of a note is bound by notice of nonpayment given to himself alone. Jarnagin v. Stratton, 95 Tenn. 619, 32 S. W. 625. 7. Willis v. Green, 5 Hill (N. Y.). 252, 40 Am. Dec. 351. It was further held in this case, where it appeared. after the note fell due, the surviving indorser took from the maker a bond and warrant of attorney to secure the payment of the note, and that he had collected thereon nearly the whole of the amount thereof, that this constituted an admission by him that the proper steps had been taken to charge both indorsers. 46 8 It j. Notice to bankrupt or insolvent; statutory provision.— The Negotiable Instruments Law provides that: "Where a party has "been adjudged a bankrupt or an insolvent, or has made an assignment for the benefit of creditors, notice may be given either "to the party himself or to his trustee or assignee." This is also the rule of the English Bills of Exchange Act. It was a general rule, in force in England prior to the statute, that a notice to a bankrupt is sufficient if his bankruptcy was not known to the holder;10 and it has also been there held that notice to the one indorser is sufficient to bind his estate, even after he had been adjudicated a bankrupt and a trustee had been appointed.' was declared in an Ohio case, but by a divided court, that where an assignment is made by an indorser for the benefit of all his creditors, before the maturity of the note, notice of nonpayment should be given to the indorser, and that notice to his assignee is not sufficient to fix his liability.12 But this is not the rule as supported by the weight of authority. The better doctrine is, that when a general assignment has been made as contemplated by law, notice to the assignee of the dishonor of paper indorsed by the assignor will bind the estate of the assignor. 13 The statute has disposed of this difficulty by expressly declaring that in case of an assignment for the benefit of creditors notice may be given to either the assignor or assignee. § 109. By whom notice to be given. a. Statutory provision.- The Negotiable Instruments Law contains the following provision: "The notice may be given by or "on behalf of the holder, or by or on behalf of any party to the "instrument who might be compelled to pay it to the holder, and "who, upon taking it up, would have a right to reimbursement "from the party to whom the notice is given.' The English Bills of Exchange Act requires the notice to be given by or on 8. Neg. Inst. L. (N. Y.), § 172. For same section in statutes of other States see Appendix. 9. English Bills of Exchange Act, 1882, 49(10). 10. Chitty on Bills, p. 380; Rohde v. Proctor, 4 B. & C. (Eng.) 517; Camidge v. Allerby, 6 B. & C. (Eng.) 373. 11. Ex parte Baker, 4 Ch. D. (Eng.) 795. 12. House v. Vinton Nat. Bank, 43 99 14 Ohio St. 346, 1 N. E. 129, 54 Am. Rep. 813. 13. Callahan v. Bank of Kentucky, 82 Ky. 231; Donnell v. Lewis County Sav. Bank, 80 Mo. 165; American Nat. Bank v. Junk Bros. Lumber & Mfg. Co., 94 Tenn. 624, 30 S. W. 753, 28 L. R. A. 492. 14. Neg. Inst. L. (N. Y.), § 161. For same section in statutes of other States see Appendix. behalf of the holder, or by or on behalf of an indorser who, at the time of giving it, is himself liable on the bill.15 66 b. General rule.- Story says: The notice must also, in general, come from the holder, or his agent (for notice by an agent is equivalent to notice by the principal); and it will not be sufficient, that it comes from a mere stranger to the bill, however early or regular in other respects it may be." 16 The rule, as thus stated, is qualified so that notice will be sufficient," although not given by the holder, or his agent, if it comes from some person who holds the bill when it is dishonored, or who is a party to the bill, or who would, on the same being returned to him, and after paying it, be entitled to require reimbursement thereof, for, under such circumstances, the notice will, in general, inure to the benefit of all the other parties to the bill, whether they are antecedent or subsequent parties thereon, to the party who gives the notice." 17 It will thus be noticed that the rule of the statute is in substance that derived by Judge Story from the authorities in existence at the time he wrote.18 It has been said that the meaning of the rule that the holder must give notice is, not that he may not do it by an agent, as any other commercial act, but that it shall not be given by some other party on the bill, not standing in the relation in which the holder does, and who has no right to give it and try to make the indorser responsible, when the holder may be willing to waive a resort to him.19 The statute authorizes a notice " by or on behalf" of the person permitted to give it; it should not, probably, be construed to permit a notice to be given in behalf of such person 15. English Bills of Exchange Act, 1882, § 49(1). 16. Story on Bills of Exchange, $303. 17. Story on Bills of Exchange, $304. sufficient; but that might, perhaps, have been on the ground that the acceptor wrote for the plaintiff, and as his agent. A notice from the holder, or any other party, will inure to the benefit of every other party who 18. Notice from holder or person stands between the person giving the entitled to reimbursement.- Bank of notice, and the person to whom it is Utica v. Smith, 18 Johns. (N. Y.) given. Therefore, a notice from the 230; Smedes V. Utica Bank, 20 last indorsee to the drawer will Johns. (N. Y.) 372; Safford v. operate as a notice from each indorser. Wyckoff, 1 Hill (N. Y.), 11; Chitty It is nevertheless prudent in each on Bills, chap. 10, pp. 524, 527; party who receives a notice, to give Bayley on Bills, chap. 7, 82, pp. immediate notice to those parties 254-256. Mr. Bayley says: "The no- against whom he may have a right to tice must come from the holder, or claim; for the holder may have from some party entitled to call for payment or reimbursement. It has indeed been held that notice from the acceptor to the drawer, that he had not been able to pay it, and that it was then in plaintiff's hands, was omitted notice to some of them, and that will be no protection; or there may be difficulties in proving such notice." 19. Harris v. Robinson, 4 How. (U. S.) 336, 346, 11 L. Ed. 1000. without his consent or authority. Such a notice may be given by the holder or other party who may be compelled to pay the instrument, by a notary, or by any other person acting as agent of the holder, or such other party; this is the general rule, sustained by all the authorities, without regard to the rule as declared in the statute.20 § 110. Notice by agent. a. Authority of agent; statutory provision.- The Negotiable Instruments Law provides that: "Notice of dishonor may be "given by an agent either in his own name or in the name of any party entitled to give notice, whether that party be his principal or not." 21 This is also the rule as contained in the English Bills of Exchange Act.22 The statutory rule is the same as that at common law. A notary public, in giving notice of dishonor, acts as an agent of the person who employs him, and not as a public officer.23 And it has been held that if the holder of a note sends it to an agent for collection, it is sufficient to hold a prior indorser, if the agent give notice of the dishonor, in due time, to his principal, and if the latter without delay transmits notice to such prior indorser.24 But, as a rule, one who receives a note for collection 20. Notice to be given by agent or other party acting under authority of holder, see the following cases: United States.- Austin v. Miller, Fed. Cas. No. 661, 5 McLean, 153, affd. in 13 How. 218, 14 L. Ed. 119; Bank of United States v. Goddard. Fed. Cas. No. 917, 5 Mason, 366; Burke v. McKay, 2 How. 66, 11 L. Ed. 181. Alabama.- Todd v. Neal, 49 Ala. 266; Foster v. McDonald, 3 Ala. 34. Delaware.- Standard Sewing Mach. Co. v. Smith, 1 Marv. 330, 40 Atl. 1117. Iowa.- Mt. Pleasant Branch of State Bank v. McLeran, 26 Iowa, 306. Kansas.- Bank of Lindsborg v. Ober, 31 Kan. 599, 3 Pac. 324. Kentucky. Stivers v. Prentice, 3 B. Mon. 461. Maryland.- Brailsford v. Williams, 15 Md. 150, 74 Am. Dec. 559. Massachusetts.- Stanton V. Blossom, 14 Mass. 116, 7 Am. Dec. 198. Michigan.- Cromer V. Platt, 37 Mich. 132, 26 Am. Rep. 503. New York.- Cole v. Jessup, 10 N. Y. 96, affg. 9 Barb. 395; Van Hoesen v. Van Alstyne, 3 Wend. 75; Mead v. Engs, 5 Cow. 303; Tunno v. South Carolina.- Haslett v. Poultney, 1 Nott & McC. 466. Texas.- Beal v. Alexander, 6 Tex. 531. 21. Neg. Inst. L. (N. Y.), § 162. For same section in statutes of other States see Appendix. 22. English Bills of Exchange Act, 1882, 49 (2). 23. Bank of Lindsborg v. Ober, 31 Kan. 599, 3 Pac. 324. Duty of notary public.-It is no part of the official duty of a notary public, by the general law merchant or State statute, to give notice of the protest or dishonor of a bill or note; and though it is usual and convenient for the notary to give the notice in such case, he is the mere agent of the holder or party authorized to give the notice. Swayze v. Britton, 17 Kan. 625. is deemed the holder thereof for the purpose of giving notice of dishonor;25 although he would himself be protected if he only gives such notice to his principal.26 It has been held that the bank at which a note is made payable, or that has the note for collection, and a notary having it, as agent for the owner, for the purpose of making demand and protest, are to be regarded as holders within the meaning of the rule prescribing the manner in which notice is to be given to indorsers upon nonpayment. The notice may be 27 Monday to his principal, and the principal, on the next day after receiving it, mails notice to the indorser. It is immaterial whether or not the holder of the note appears upon it as indorser. 27. Manchester Bank v. Fellows, 28 N. H. 302. 25. Notice by holders for collection. duly charged where the agent for its When a bill is left at a bank for collection, not being able to ascertain collection, although the bank has no the indorser's residence, mails notice interest in it, yet for the purposes of its nonpayment on the following of receiving and transmitting notices, it is to be considered as the real holder. Warren v. Gilman, 17 Me. 360; Freeman's Bank v. Perkins, 18 Me. 292; Burnham v. Webster, 19 Me. 232; Mead v. Engs, 5 Cow. (N. Y.) 303; West River Bank v. Taylor, 34 N. Y. 128; Powell v. State Bank, 1 Disn. (Ohio) 269; Blakeslee V. Notice by notaries as agents.-A Hewett, 76 Wis. 341, 44 N. W. 1105. notary who presents and protests a 26. Notice to antecedent indorser bill of exchange is authorized by his is sufficient to bind such indorser character and employment to give noeven if other parties are not notified. tice to the various parties to the bill. It follows that if a bank holding a Greene v. Farley, 20 Ala. 322; Renick note for collection gives notice of dis- v. Robbins, 28 Mo. 339. The authority honor to the principal who indorsed of a notary to give a notice of disit, it will be sufficient to bind the honor is to be inferred from the fact principal. Griffith v. Assmann, 48 that the bill was in his possession. Mo. 66. In the case of Wamesit Bank Burbank v. Beach, 15 Barb. (N. Y.) v. Buttrick, 11 Gray (Mass.), 387, 326. Where it appears that a notary the court said: "The facts show that had his place of business in the office due diligence was used in giving no- of the plaintiff's attorney, and that tice of the dishonor of the note to the the husband of the plaintiff came in defendant. Notices in due form, di- with the note and told the notary rected to all the indorsers, of the non- of the presentment, and that subsepayment of the note were seasonably quently the attorney came in, and he put into the post-office in New York and the notary talked the matter over, under cover to the last indorser. This and it was then decided to send the was according to the usage and prac- notice of nonpayment, it is sufficient tice of merchants and bankers, and to show the authority of the notary shows a sufficient compliance with the to act. It is not essential that the rule of law requiring notice to indorsers of the dishonor of a note or bill of exchange. It is immaterial that the holder or last indorser held the note for collection only, and was not an indorser for a valuable consideration." See also Eagle Bank v. Hathaway, 5 Metc. (Mass.) 212: Church v. Barlow, 9 Pick. (Mass.) 547. In the case of Farmers' Bank of Bridgeport v. Vail, 21 N. Y. 485, it was held that the indorser of a promissory note dishonored on Sunday is notary who signed the notice should have had personal knowledge of the making of the demand for payment, where the notary did not act in his official capacity, nor certify to the protest of the note, but simply gave notice to the indorser that the note had been presented for payment, and that payment had been refused. Meise v. Newman, 78 Hun (N. Y.), 428, 29 N. Y. Supp. 201. See also Harris v. Robinson, 4 How. (U. S.) 336; Swayze v. Britton, 17 Kan. 625; Cowperthwaite v. Sheffield, 1 Sandf. (N. Y.) 416. |