T.I Art. VII. Notice of Dishonor.
T.I Art. VII. Notice of Dishonor.
T.I Art. VII. Notice of Dishonor.
149
1-This section follows the Bills Ins. Co. v. McCague, 18 Ohio 54;
of Exchange Act, sec. 49 (13), Farmers' Bank v. Vail, 21 N. Y.
and is declaratory of the common 485; Firth v. Thrush, 8 B. & C.
law. 387.
An agent to whom a negotiable The rule applies to the several
instrument is intrusted for col branches of the same bank. For
lection, whether by indorsement the purpose of giving notice of
or mere delivery, may give notice dishonor each of the branch banks
of dishonor direct to secondary is considered as an independent
parties thereto, but he is under indorsee. For example, a bill of
no obligation so to do. His ob exchange was indorsed by plain
ligation is to his principal alone tiffs to the Portmadoc Branch of
and that obligation as a matter the National Provincial Bank
of law does not in any case re from whence it was sent to the
quire him to give notice to any Pwllheli Branch of the same bank,
one except his principal. Such an by Whom it was indorsed to the
agent is treated in the matter of head establishment of the bank
giving notice of non-payment as in London. The bill was duly
an indorsee of the note and the presented and dishonored. It was
reason of this is, that the agent then returned With notice of its
may not know which of the prior dishonor by that day's post from
parties the principal may desire the bank in London to the branch
to hold or where they may be bank at Pwllheli; from thence to
found. The agent is entitled to the branch bank at Portmadoc
the usual time to notify his prin and from the Portmadoc bank to
cipal of non-payment and the the plaintiffs, who gave notice to
principal to the usual time there the defendant indorser. The no
after to notify antecedent indors tice was sufficient. Clode v. Bay
ers. But if the agent fails to ley, 12 M. & W. 51; Bray v. Had
give notice to his principal in wen, 5 M. & S. 68; Fielding &
due time, the principal is cut off Co. v. Corry [1898] 1 Q. B. 268
notwithstanding he may thereafter (a case under corresponding pro
use due diligence in giving notice vision of the Bills of Exchange
to antecedent parties. Rosson V. Act).
Carroll, 90 Tenn. 90; Ohio Life
A misdescription
of the instrument does not vitiate the
notice unless the party to whom the notice is given is in
fact misled thereby."
1-In connection with the cor tice should describe the dishonor
responding provision of the Bills ed paper with such particularity
of Exchange Act there is added: as will apprise the person to
“The return of a dishonored bill whom the notice is given of the
to the drawer or an indorser is, instrument in question. Dodson
in point of form, deemed a suffi V. Taylor, 56 N. J. L. 19. A mis
cient notice of dishonour.” (Sec. description which does not mis
49 (6). Concerning this added lead is immaterial.
provision Mr. Chalmers says: Misdescription as to amount:
“This subsection approves a com A note of $200 described as note
mon practice of collecting bank of $175 with interest, not mis
ers which was previously of leading. Snow V. Perkins, 2
doubtful validity.” The practice Mich. 238. A note of $1,400 er
is peculiar to England. roneously described as a note of
According to the law merchant $1,457, but correctly described in
of
notice be sent the last residence
to
56
N. 11; Bank Darling Sonal representative by his name,
L.
J.
91
Cayuga “Ex
as
if
above
is
v.
ings Institution, 28 Pa. St. 459; (N. Y.), 121; Goodnow War
v.
v.
v.
effect: Lawson v. Farmers' Bank, ship bound for the port where
1 Ohio St. 206; Western Wheeled the indorser resides. Fleming v.
Scraper Co. v. Sadilek, 50 Neb. McClure, 1 Brevard (S. C.) 428.
105; Corbin V. Planters’ Nat. Indorser resided in Charleston, S.
Bank, 87 Va. 666; Brown v. C. Holder, in England, waited for
Jones, 125 Ind. 375; Hawkes V. ship sailing for Charleston, S. C.,
Salter, 4 Bing. 715. by which he sent notice. In the
Stainback V. Bank, 11 Gratt. meantime there were Several Sail
260. This was an action against ings of mail ships for other
the indorser of a bill drawn on a ports of the United States. Held:
drawee in London, and protested notice not seasonably sent.
for non-acceptance April 5th. No Fielding & Co. v. Corry [1898]
tice was sent in a mail leaving 1 Q. B. 268 (a case under corre
Liverpool, April 19, by a Cunard sponding provision of the Bills of
steamship, that being the first Exchange Act), Mohlman V. Mc
Steamship leaving England for Kane, 60 App. Div. 546, 69 N. Y.
the United States after the dis Supp. 1046 (a case under this sec
honor of the bill. But between tion).
the 5th and the 19th several Sail 2—The holder need not send
ing packets left England for the the notice by mail. He may send
United States. It was the usage it by special messenger, and if
of the London post-office to for he does So it is Sufficient if it be
ward all mail by the Cunard line Served Within the time it would
unless specially directed to be have been received in due course
forwarded by other vessels. The by mail as provided in subsection
indorser defended on the ground “first.” It has been held that al
that the notice should have been though the notice by messenger
sent by one of the sailing pack reaches the party after the time
ets departing from England on an it would have been received in
earlier day than the steamship. due course it is nevertheless Suffi
The sending of the notice by the cient if Served Within business
first steamship that left England hours. Bancroft v. Hall, Holt.
for the United States after the 476, 3 E. C. L. 190; Corbin V.
dishonor of the bill was held to Planters' Bank, 87 Va. 666.
be within the stringent rule re The Statute would seem to be
quiring that notice be sent by the mandatory in requiring notice
first mail. “given otherwise than through the
Notice must be sent by the post office” to be served within
first ship bound to any port of the time it would have been re
the United States, and it is not ceived in due course of mail.
sufficient to send it by the first
is
able efforts, made in good faith, reasonable diligence must be de
to give it. And if sufficient in termined With reference to what
quiries have been made, and in would have suggested itself as
formation received upon which the necessary, under the existing cir
holder has a right to rely, a mis cumstances, the man of ordi
to
take as to the nearest post office nary prudence and intelligence.”
or usual post office does not de The Section referred to in Fon
is
prive him of his remedy. He has Hartman, 84 N. Y. Supp.
v.
seca
done all that the law requires, 131. See Studdy Beesty, 60
L.
v.
and the notice thus sent fixes the T. (n. S.), 647 (a case under the
liability of the indorser as effect corresponding provision of the
ually as if he had actually re Bills of Exchange Act).
Ghiselin, Merely consulting directories
it.
Lambert
V.
is
ceived
9
How. (U. S.) 552. not reasonable diligence in mak
The meaning of reasonable dili ing inquiry. The information they
gence as used this section afford may be misleading. Their
in
is
thus interpreted by the Supreme help may be invoked, but their
Court of New York in Brewster V. error, though may excuse the
it
Schrader, 26 Misc. 480, 57 N. Y. notary, will not charge the in
Supp. 606: “The reasonable dili dorser. Bacon Hanna, 137 N.
V.
gence required by the statute in Y. 379.
giving notice, depends upon the
Sec. 115.
giving notice excused when the delay
in
of
dishonor
is
is
caused by circumstances beyond the control
of
the holder
and not imputable his default, misconduct negli
or
to
1—Thus delay caused by war 487. This section deals with what
whereby communication was cut known as temporary excuse for
is
off so that notice could not be taking given step fixing the
in
a
the
v.
Sec.
given
be
Notice dishonor
to
to
the
is
drawer either
NEGOTIABLE INSTRUMENTS IN GENERAL. 169
First, where the drawer and drawee are the same per
son;"
Second, Where the drawee is a fictitious person or a
person not having capacity to contract;”
Third, Where the drawer is the person to whom the
instrument is presented for payment;”
Fourth, Where the drawer has no right to expect or
require that the drawee or acceptor will honor the instru
ment; or
Fifth, Where the drawer has countermanded
paym:
1—Where the drawer and drawee in such a case amounts to notice.
are the same person the bill is in Caunt v. Thompson, 7 C. B. 400,
legal effect a promissory note and 62 E. C. L. 399; Groth v. Gyger,
no notice to the drawer is neces 31 Pa. St. 271; Magruder v.
sary. Planters' Bank V. Evans, Union Bank, 3 Pet. 87.
36 Tex. 592. Where a bill of ex 4—Where the drawer has no
change is drawn by one partner right to expect that the acceptor
ship on another and the two have will pay the bill, as where it is
a common partner, notice of the an accommodation bill, So that he
dishonor of the bill is not neces could not be damnified by want
sary to charge the drawers. New of notice, notice is not necessary.
York, etc. Co. v. Selma Sav. Bank, Sharp v. Bailey, 9 B. & C. 44;
51 Ala. 305; Gowan V. Jackson, Knickerbocker Life Ins. CO. V.
20 Johns. 176. Pendleton, 112 U. S. 696; French
2—Smith v. Bellamy, 2 Starkie, V. Bank of Columbia, 4 Cranch,
223; Wyman v. Adams, 12 Cush. 141.
210. The mere fact that the drawee
3—This subdivision applies to has no funds of the drawer in his
the case of a drawer who has hands will not dispense with due
been appointed executor or trustee presentment and notice. All
of the drawee's estate. Present that is required is that the drawer
ment for payment having been have reasonable grounds to expect
made to him in his representative that his draft Will be honored.
capacity he gets actual knowledge Cathell V. Goodwin, Har. & Gill
of the dishonor of the paper. (Md.) 468.
Further notice would be superflu 5–Sutcliffe v. M'Dowell, 2 Nott.
OuS. KnOWledge of the dishonor & McC. 251.
170 THE NEGOTLABLE INSTRUMENTS LAW.