Harris v. Robinson/Dissent McLean
Mr. Justice McLEAN.
I dissent from the opinion of the court in this case with regret.
The Circuit Court instructed the jury, 'that if they believed that the notary made the inquiries stated in his deposition, and sent notice to the defendant, as therein stated, he being ignorant of his place of residence, that the notice was sufficient to charge the defendant; and that under the circumstances of the case, as proved, it was not necessary to make inquiry of the holder of the note as to the residence of the indorser.'
The note was given by John P. Burks & Co. to Matth. Burks, for sixteen hundred dollars, in eight months from its date, payable and negotiable at the Planters' Bank of the State of Tennessee, at Nashville. It was indorsed by Matth. Burks, Beniamin D. Harris, the defendant below, and also by J. Robinson, the plaintiff. The note does not appear to have been negotiated at the bank. A. Kingsley, the notary, made a demand of payment at the bank when the note become due, but it does not appear who delivered it to him. Notices of non-payment were directed by the notary to Matth. Burks and Benjamin D. Harris, the two first indorsers, to Madison county, Alabama.
He did not know where these indorsers resided, but Hobson, the cashier of the bank, to whom he applied for information as to their place of residence, informed him that they lived in the above county and State. Similar information was communicated to him by Joseph Estell, but neither of these individuals knew the postoffices nearest to the respective indorsers.
Bradley, a witness, stated, that, previous to the maturity of the note, Robinson directed to him, at Huntsville, Madison county, Alabama, notices to all the parties to the note, requesting him to hand them to Harris and the other parties, stating the time when it would become due. And that witness directed the notices to the respective post-offices of the parties. To Harris, he directed the notice to the post-office at 'Cross Roads,' Madison county, Alabama.
On this state of facts, the court instructed the jury, 'that the notary was not bound to inquire of the holder as to the residence of the indorsers.'
The notary did not act for himself, but as agent of the holder; and it was proved that Robinson, who appears to have been the holder, resided in the same town with the notary, and knew the proper direction for the notices. Now the holder is bound to give the notice himself, or through his agent; and can he evade the law by employing an agent who is ignorant of the residence of the indorser, which is known to himself. He knows where the indorser resides; is he not then bound to direct the notice as the law requires? It is a new principle in the law of agency, that the knowledge of the principal shall not affect him, provided he can employ an agent who has no knowledge on the subject. The holder is bound to communicate to the notary all the knowledge he has, so that the notice may be properly directed. And if this be not done, and the notice is improperly directed, the holder loses his recourse against the indorser. This seems to me to be clear of all doubt.
In the case of Preston v. Daysson et al., 7 Louisiana Rep. 7, it was held, 'that the holder of a bill or note ought not to avail himself of the ignorance of the notary as to the residence of the indorsers in giving them notice of protest; if he knows, he must disclose their residence, or it seems that his neglect will discharge the indorsers.' And this is the case now before the court.
There was no proof that the notary knew where Robinson, the plaintiff below, resided; but it is proved that he lived in the same town, his name being on the note, and from the fact that the notary gave no notice to him, as indorser, it is clear that he knew he was the holder. In Hill v. Varrell, 3 Greenl. 233, it was held, 'that where the residence of the drawer of a bill is unknown to the holder, he ought to inquire of the other parties to the bill if their residence is known to him.' And in Hartford Bank v. Stedman, 3 Conn, Rep. 489, 'where the holder, who was ignorant of the indorser's residence, sent the notice to A., who was acquainted with it, requesting him to add to the direction the indorser's place of residence, it was held sufficient.'
'If the holder of a bill uses reasonable diligence to discover the residence of an indorser, notice given as soon as this is discovered is sufficient.' Preston v. Daysson et al., 7 Louisiana Rep. 7. In Beveridge v. Burgis, 3 Camp. 262, Lord Ellenborough said,-'Ignorance of the indorser's residence may excuse the want of due notice, but the party must show that he has used reasonable diligence to find it out. Has he done so here? How should it be expected that the requisite information should be obtained where the bill was payable? Inquiries might have been made of the other persons whose names appeared upon the bill,' &c. In Bateman v. Joseph, 12 East, 433, 'in an action by an indorsee against the payees and first indorser of a bill, it appeared the plaintiff received notice of its dishonor on the 30th of September, in time to give notice to the defendant on that day; he gave no notice, however, until the 4th of October; to excuse which, his clerk proved that the plaintiff did not know the defendant's residence until that day. Lord Ellenborough left it to the jury, whether the plaintiff had used due diligence to find the defendant's residence.'
In Story on Promissory Notes, 370, note 1, it is laid down, 'That merely inquiring at the house where a bill is payable is not due diligence for finding out an indorser. Inquiry should be made of some of the other parties to the bill or note, and of persons of the same name.' And again, in page 368, note,-'To excuse the not giving regular notice of the dishonor of a bill to an indorser, it is not enough to show that the holder, being ignorant of his residence, made inquiries upon the subject at the place where the bill was payable; he should have inquired of every other party to the bill.'
There is no pretence that the bank was the holder of this bill. For the evidence showed that the notary did inquire of the cashier of the bank where the indorsers resided. But the court charged, that, under the circumstances, it was not necessary for the notary 'to make inquiry of the holder of the note as to the residence of the indorser'; the court, therefore, referred to Robinson as the holder, and not to the bank. This charge is wholly inconsistent with the supposition that the note was discounted by the bank, for then it would have been the holder, and the proper inquiry, as to the residence of the indorsers, was made of it. The note bears no marks of its having been discounted. That Robinson was the holder appears from the notice he gave to the parties when the note would become due, from the fact that he was not notified as an indorser, and also that he commenced suit as the holder, after the dishonor of the note.
The turning point in the case is, whether the holder, in failing to give the proper direction to the notices by this agent, the notary, is not answerable for the knowledge he possessed of the residences of the indorsers, which he failed to communicate to the notary. I care not whether or not Robinson knew the post-offices of the indorsers. He had communicated with them through Bradley, the witness, and if the notices had been thus sent, the law required nothing more.
It will be observed, that the cases cited show the duty of the holder as to giving notice. And it is believed no case has been reported, except the one cited from Louisiana Reports, where it has been supposed that a principal having knowledge of the residence of the indorsers could excuse himself from giving notice to them by a want of such knowledge in his agent. That the notary knew Robinson was the holder is conclusively shown, as before remarked, by not treating him as an indorser. His name was upon the note as an in dorser, and he must have understood the purpose for which the indorsement by him was made.
All the authorities say the holder is bound to use reasonable diligence to ascertain the residence of the indorser; and when he attains that knowledge, is he not governed by it? And if so, is he not equally bound to communicate it to his agent whom he may employ to give the notice? A denial of this principle will overthrow the doctrine of notice, as established for more than half a century.
I think the judgment should be reversed, and the cause remanded for a venire de novo, in the Circuit Court.
Mr. Justice McKINLEY dissented also.