Williams v. Bank of the United States/Opinion of the Court

This was an action of assumpsit, brought in the circuit court of Ohio by the president, directors, and company of the Bank of the United States, against J. Embree the maker, and D. Embree and M. T. Williams, the indorsers of two several promissory notes. The only count in the declaration is for money lent and advanced by the plaintiffs to the defendants.

Upon the plea of the general issue, the case, at the trial, was, by consent of the parties, submitted to the court; and the above notes were given in evidence by the plaintiffs, in support of the action. The court gave judgment against the defendants, and ordered it to be certified, in pursuance of the statute of Ohio, that it appeared to the satisfaction of the court, that J. Embree had signed the notes on which the suit was brought as principal, and D. Embree and M. T. Williams as sureties.

At the trial of the cause thus submitted to the court, the plaintiffs having proved the demand, and the hand writing of the indorsers of the notes, offered the following evidence of the notice to the defendant Williams, viz. 'that the notary public, after the protest of the notes, and the expiration of the usual days of grace, called at the house of the defendant Williams, who resided in the city of Cincinnati, which he found shut up, and the door locked, and on inquiry of the nearest resident, he was informed that the said Williams and family had left town on a visit, whether for a day, week, or month, he did not know, nor did he inquire. He made use of no further diligence to ascertain where Mr Williams had gone, or whether he had left any person in town to attend to his business. The witness left a notice at the house of a person adjoining, with a request to hand it to the defendant when he should return.'

The court being of opinion that this evidence was conclusive of legal notice to charge Williams, his counsel took a bill of exceptions, and the cause is now for judgment before this Court upon a writ of error.

The only question which this bill of exception presents is, whether due diligence was used by the defendants in error, to give notice to the indorser of the non-payment of these notes by the maker of them?

The general rule of law applicable to the subject has long been settled; that, to enable the holder of a bill of exchange, or promissory note to charge the indorser, it is incumbent on him to prove that timely notice of the dishonour of the bill, or of the non-payment of the note was given to the indorser, or if this could not be done, he must excuse the omission by showing that due diligence had been used to give such notice.

If the parties reside in the same city or town, the indorser must be personally noticed of the dishonor of the bill or note, either verbally or in writing; or a written notice must be left at his dwelling house or place of business. Either mode is sufficient, but one or the other must be observed unless it is prevented by the act of the party entitled to the notice.

In the case now under consideration, the banking-house of the defendants in error, and the dwelling house of the plaintiff were located in the same city. The notary called at the plaintiff's house, which he found shut up, and the door locked. Upon inquiry of the nearest resident, he was informed that the defendant with his family had left town on a visit, but for how long a period was unknown to this person; no further attempt was made to ascertain where the plaintiff in error was gone, or whether he had left any person in town to attend to his business. The question to be decided is, whether under these circumstances the defendants are excused for not having given the notice which the law requires?

In the case of Goldsmith and Bland, Bayley on Bills, 224, note, it was decided that it was sufficient to send a verbal notice to the defendant's counting house, and if no person be there in the ordinary hours of business to receive it, it is not necessary to leave or send a written one. The principle of this decision is, that the counting house of the defendant is the place in which the holder was entitled, during the regular hours of business, to look for the person for whom the notice was intended, or for some person authorised by him to receive it; and that the omission to give it, was occasioned, not by the want of due diligence in the holder, but by the fault of the party who claimed a right to receive it.

The principle here stated in not peculiar to this class of contracts. If a party to a contract who is entitled to the benefit of a condition, upon the performance of which his responsibility is to arise, dispense with, or by any act of his own prevent the performance, the opposite party is excused from proving a strict compliance with the condition.

Thus, if the precedent act is to be performed at a certain time or place, and a strict performance of it is prevented by the absence of the party who has a right to claim it; the law will not permit him to set up the non-performance of the condition as a bar to the responsibility which his part of the contract had imposed upon him.

The application of this general principle of law to the subject before us, may be illustrated by other cases than the one immediately under consideration. The holder of a bill or promissory note, in order to entitle himself to call upon the drawer or indorser, must give notice of its dishonour to to the party whom he means to charge. But if, when the notice should be given, the party entitled to it be absent from the state, and has left no known agent to receive it; if he abscond, or has no place of residence which reasonable diligence used by the holder can enable him to discover; the law dispenses with the necessity of giving regular notice.

So where the parties, as in this case, reside in the same city or town, the notice should be given at the dwelling house or place of business, of the party entitled to claim it; and the duty of the holder does not require of him to give the notice at any other place. If the giving of the notice at either of these places be prevented by the act of the party entitled to receive it, the performance of the condition is excused.

In this case, the notary called at the dwelling house of the indorser, at the regular time, and at a seasonable hour, for aught that appears, to serve the notice, and found the house shut up, the doors locked, and the family absent from town upon a visit of unknown duration to the agent of the bank, or to his informer. What was he to do? He was not bound to call a second time, nor was he under any obligation to leave a written notice; even if he could have found an entrance into the house.

But it is insisted that the defendants in error were bound under the circumstances of this case, to give notice to the plaintiff through the channel of the post office; and the case of Ogden vs. Cowley, 2 ''Johns. Rep.'' 274, is relied upon in support of this position.

In that case, the notary called at the houses of the indorser, and of his deceased partner, for the purpose of giving them notice of the non-payment of the note, but found their house locked up, and on inquiring at the next door, was told that they were gone out of town. On the same day, the notary put a letter into the post office in the city of New York, addressed to the defendant and his partner, informing them of the non-payment of the note, and that they were looked to for payment. It appeared that at that time the yellow fever prevailed in the city. The court decided that all proper steps were taken to communicate the requisite notice to the indorser, and that the notice was, of course, sufficient.

It may be remarked upon this case, that the absence of the indorsers from their houses was probably the consequence of a temporary removal from the city, on account of the prevailing sickness, and that the case does not inform us whether the place to which they had removed was known to the notary. We are not prepared to say, that in such a case, the parties entitled to notice were bound to be at their dwelling houses, or to have any person there at the time the notary called to receive notice, and consequently that their absence, and the closing of their houses ought to have excused the holder from taking other steps to communicate notice to them. But laying these circumstances out of the case, the court decided no more than that the steps taken to give notice, were sufficient in point of law for that purpose; and it is not to be doubted but that they were so. They do not decide that, in a case freed from the circumstances before noticed, it was necessary that notice to the indorsers should have been given through the post office.

In the case of Crosse vs. Smith, 1 Maule & Selw. 545, the cashier called at the counting-house of the drawer, for the purpose of giving him notice of the dishonour of the bill. He found the outward door open, but the inner locked. The cashier knocked, and made noise enough to have been heard, if any body had been within. After waiting a few minutes, and no person appearing, he left the house, and took no further legal step to give the notice. It was insisted, in opposition to the sufficiency of the notice, that a notice in writing, left at the counting-house, or put into the post office was necessary. The answer given by the court was, that the law did not require either mode to be pursued. 'Putting a letter in the post,' says lord Ellenborough, 'is only one mode of giving notice; but where both parties are residing in the same post town, sending a clerk is a more regular and less exceptionable mode.' The decision in this case, as to the sufficiency of the notice, was the same as that given in the case of Goldsmith vs. Bland, before referred to.

The case of Ireland vs. Kip, 10 ''Johns. Rep.'' 490. and 11 Johns. 231, was much pressed upon the Court in the argument of the present cause, by the counsel for the plaintiff in error. We have examined that case with great attention and respect, but have not been able to view it in the same light as it seemed to have struck the learned counsel. The place of residence of the defendant, the indorser, was three and a half miles from the post office, within the limits of the city of New York, but without the compact part of the city, and without the district of any letter carrier. The case does not state that the indorser had any counting-house, or place of business in the city, at which the notice could have been left. The only notice given to the defendant was a written one, put into the post office in the city of New York, directed to the defendant, and stating that the note had not been paid. The place of the defendant's residence was known to the clerk of the notary, who put the written notice to the defendant into the post office. The only question decided by the court was, that under the circumstances of that case, the holder of the note was bound to give personal notice to the defendant, or to see that the notice reached his dwelling house; and that merely putting the notice into the post office was not sufficient.

Upon a second trial of the cause, it appeared in evidence, that the defendant had given directions to the letter carriers of the post office, to leave all letters that came to the post office for him, at a house in Frankfort street, in the city of New York; that the letter carriers called at the post office three or four times every day, and took out and delivered all letters left there; and that the defendant usually called or sent every day for his letters to the house in Frankfort street.

The learned judge who delivered the opinion of the court stated; that, admitting a service of the notice at the house in Frankfort street would have been good and equivalent to a service at the defendant's dwelling or counting-house; still, the delivery of the notice at the post office, unaccompanied with proof that it was actually delivered at the house, was not notice. He adds, that 'the invariable rule with us is, that when the parties reside in the same city or place, notice of the dishonour of bills or notes must be personal, or something tantamount: such as leaving it at the dwelling house or place of business of the party, if absent.' Now it is apparent, that the question which arises in the case under consideration, was not, and could not be decided in the case just referred to. The objection to the notice in the latter case was, that it ought to have been given at the dwelling house of the defendant, and could not be given through the post office, unless it also appeared that the notice so given reached the dwelling house, or the house in Frankfort street. No attempt was made to give the notice in the former mode, as was done in this case; and the latter mode, so far from being considered as tantamount to the former, or as being necessary in order to excuse the want of personal notice, is declared throughout to be insufficient without further proof.

The opinion of this Court is, that the defendants in error were, under the circumstances of this case, excused from taking any other steps than they did, to give notice to the plaintiff of the non-payment of these notes; and that the judgment of the court below ought to be affirmed with costs.

[The counsel for the plaintiff in error stated another point, which he admitted had been settled by this Court, in the case of Fullerton et al. vs. the Bank of the United States, 1 Peters, 612; but requested permission to re-argue the point, in case the Court should decide the first point against him. I am directed by the Court to say, that the case referred to was well considered by the Court; that we are entirely satisfied with the decision made in it, and see no cause to call for a re-argument of the principle there decided.]

This cause came on to be heard on the transcript of the record from the circuit court of the United States for the district of Ohio, and was argued by counsel; in consideration whereof, it is ordered and adjudged by this Court, that the judgment of the said circuit court in this cause be, and the same is hereby affirmed with costs.