
    Planters’ Bank v. Markham et al.
    
    Where a note is made payable at a banking house, the usage and custom of the bank constitute a part of the contract.
    Where, by the usage of the bank, all persons having notes payable there are allowed until the expiration of banking hours for payment, a demand of payment at the bank before that time is insufficient, unless the note is permitted to remain in bank until the close of banking hours.
    IN ERROR from the circuit court of the county of Yazoo.
    This was an action of assumpsit, founded on defendant’s promissory note, for the sum of four thousand dollars, in favor of James C. Harley, and payable at the Commercial Bank of Natchez, and endorsed to plaintiffs in error.
    The testimony of the Notary was, that on the day of its maturity he called at the bank during business hours, which commenced at 10 o’clock, A. M. and ended at 3 o’clock, P. M., and demanded payment of the teller, which was refused. He did not recollect Kow long before the termination of the business hours of the bank he left, and as he believed carried the note with him which was protested. It was in proof that all persons having notes payable at this bank were allowed until 3 o’clock, P. M. of the day they became due to pay them, according to the established usage of the bank. Upon this proof the court was requested by defendants in the court below to instruct the jury, “that the plaintiffs, in order to recover in this action against the endorsers, must prove a legal presentment for payment of said note at the Commercial Bank of Manchester, on the day it fell due, and that to constitute such legal presentment the plaintiffs must prove that the note was not merely presented for payment during banking hours of that day, but also that it remained at the bank until 3 o’clock, and that no provision was made for its payment.” The court was further asked to instruct the jury that “the custom and usage of the bank constitute a part of all notes or contracts made payable at the same, and if from the evidence the jury believed it was the custom of the bank to keep its doors open for business until 3 o’clock, until which time all persons having notes payable there had time to pay, that then said note was not legally due until 3 o’clock, and that a demand before that, time, without leaving the note, was not sufficient to charge the endorsers.” The court refused to give these instructions, but stated to the jury that a presentment at any time during business hours, between 10 and '3 o’clock, was sufficient.
    G. S. Yerger, for plaintiff in error.
    1. The charge of the court was clearly erroneous and in hostility to the settled law, as declared by this court.
    When a note is made payable at a bank, or the contract is made with the bank, the usage of the bank forms and constitutes apart of the contract, as much as if it were expressly inserted therein. Mills v. Bank of the United States, 9 Wheaton, 581. 9 Pickering, 430. 11 Wheaton, 431. 3 Howard, 373, and cases cited.
    3. Where a note is payable at a particular bank, which has customary hours of doing business, and closes at a particular hour, the note is not due until the last minute, and to constitute a legal presentment, the note must be presented at that time, or left in bank. 13 Mass. 558. 9 Pick. Rep. 431. 31 Ditto, 310.
    When a note is payable at a bank, it is not legally due until the bank closes — the party may, if he thinks proper, pay it before. So in an ordinary contract, payable at a future day, with the privilege of paying it before, demand before the day will not charge the endorser.
    Wilkinson, for defendant in error.
    The error principally insisted on by the counsel for the appellants is the refusal of the court to give the second charge asked for.
    The principle that the usage of banks is to control the law of a contract payable there, has been frequently applied in order to fix the liability of the makers, acceptors, and endorsers of negotiable paper, but never in a single instance to invalidate the instrument, or to impair or destroy the rights of the holder. On the contrary, the practice seems to have been adopted with a view to the advancement of this branch of trade, or rather to render more stable and secure this chief instrument of all trade, negotiable paper. With this view of encouraging the negotiability of paper by enhancing its security in the hands of the holder, the courts have pushed the doctrine to the utmost extent compatible with the undoubted rights of the parties to the paper, and even farther perhaps than the law warranted. In coming to this conclusion, they remark, that as the right of a party to negotiable paper to due presentment and notice is a privilege which he may waive by express contract, so he may waive it by implication, and that bank customs controlling this privilege do, when proved, furnish evidence of this implied waiver. Now this reasoning shows that the courts did not intend to embrace the holder of such paper within the rule they were establishing, because the holder has no such privilege to waive. This court is now required to go a step further and to say that persons receiving such paper by transfer or endorsement are presumed to be cognizant of the usages of the bank where it is payable, and to agree to be governed by such usages in regard to presentment and notice. Now this may or may not be true, provided the bank where the paper is payable is the holder. In such a case there would seem to be much reason in applying the rule to the holder. But a distinction has been taken by high authority, (Bank of United States v. Carneal, 2 Peters,) between a bank holder and an individual holder, and it is believed to be a sound one.
    But it is respectfully contended that the idea that a bank may by its usage vary the law of the contract, is untenable as a proposition of law, without regard to what party to the contract it may be attempted to apply.it; whether to the holder, the maker, or the endorser. It is admitted that if the instrument be made payable at any place except a bank, that then the general rule of the law merchant is not varied, but that presentment at any time within business hours of the third day of grace is sufficient. Now what is there in a bank which confers on it in this respect powers more plenary than those of a natural person? It cannot be its charter of incorporation. This may be truly said to restrict, but never to enlarge the powers of the persons who compose the corporation, unless the power be expressly conferred by law; for here the full force of the maxim is felt: “ expressio unius exclusio est cilterius.” Is it because the transactions of banks are more extensive, and therefore their usages more likely to be known? No. For there are in every city of America, and especially in the great emporium of the South, merchants whose business transactions are ten-fold more extensive as well as more salutary to the community than a large majority of the banks, at least of our state.
    If we may be permitted to indulge in conjectures on the subject, we would say that we suspect the doctrine to have been the result of a temporary and pressing expediency; and that a rule of law which had been upheld for ages by the most illustrious names that have adorned the profession, was thus made to bend to the necessities of an hour. The Banks of Massachusetts, and of the District of Columbia, from a misunderstanding of the law, or from the negligence of then officers, committed blunders which rendered insecure the larger portion of their assets.— This must have been so, as a moment’s reflection will render evident, for custom presupposes a course of conduct for some time persevered in, and uniformly practised. It was to prevent the consequences which must have followed by adhering to the law, that the rule we are controverting was adopted. Now all such customs, we contend, are void. See authorities cited at the end of this argument. How can there be in the same state two, nay an hundred different and contradictory rules of law1 on the same subject ? If one bank can change a rule of law by its usage all others may, and there would be one law at one place, another at another place. “Mia lex Romse, alia AthenisAs many conflicting and contradictory rules, in short, as there are counties, towns, or banks in the state.
    This view of the law has been uniformly and perseveringly held in England, from the time of Lord Holt down. The only admitted exceptions being those of special customs technically so called, and which date all of them as far back at least as the reign of Richard I. for which reason they obviously cannot exist here, as has been repeatedly held. It is true, that the whole doctrine of lex mercatoria is founded on the usage of trade; evidence is admitted to establish the usage; and then the usage so established forms the law ; but this law when so established is general, cannot be varied or contradicted afterwards by the contradictory usage of a particular place or person. The general usage forms the best evidence of general convenience, and this in its turn the very best reason for the establishment of any and all rules of law. It is both the reason and the sanction for all human law. When so settled it may be changed, but it cannot stand and be contradicted at the same time.
    This, as a general proposition, is undeniable, and it has the sanction of such names as Holt and Mansfield in England, and in America of Kent and Story.
    The first time that this question came up for decision in the Sirpreme Court of the United States, reported in 9 Wheaton, Story dissented from the judgment of the court, and Marshall and Washington did not sit: and it is a curious and, for that court, a most extraordinary fact, that the English cases referred to do not support the decision of the court. There are but two cases referred to by the court, — -'Cutter v. Powell, in 6 Term Reports, and Noble v. Kenneway, in Douglass. The decision in the first case did not turn on a question of usage, and in the last case the usage which was proved was not introduced to contradict the contract of the parties, (a policy of insurance,) but only to explain it, by proving what was accounted due diligence in unloading a ship at the port of discharge. As for the first case decided in Massachusetts, 4 Mass. Rep. the court adduces for its decision no authority whatever; and these are the two leading cases upon which all the others upon this subject depend; and whoever will carefully review them all and notice the steady and continued progress they have made, and the evident tendency they yet have towards the utmost uncertainty and confusion in this branch of the law, must rise from his researches with astonishment that the doctrine has yet received so little check. To the credit of our court in the last resort, in the only opportunity it has had, it has evidently foreborne to recognize the doctrine. In the case in 3 Howard, the Chief Justice well remarks, that “the courts have certainly gone far enough in substituting the custom of the banks for the law of the contract.” No language could have better characterized the doctrine. It is undoubtedly a substitution of bank usage for a cherished principle of the law. Again, the same judge says, in the great case of the Planters’ Bank v. Snodgrass, «in the absence of law, custom may serve to establish a rule which will be binding.” “ But where there is a positive prohibitory enactment, any custom in conflict with its provisions can have no weight or force whatever.” Is it not equally as reasonable to add, that where there is a settled and well understood rule of law, any custom in conflict with it can have no weight or force whatever ? or are the repeated declarations of the courts of less weight or validity than an act of the legislature ?
    In the case of 2 Howard, I consider that an evident and decided blow has been aimed at this doctrine: for the court there refuses to recognize the custom of notaries, who are as much officers and servants of the bank, in presenting and protesting its paper, as messengers of a bank are; and yet the Massachusetts courts have literally built up this doctrine upon the usages of the messengers of banks. This case, in Howard, we regard as the entering wedge to the destruction of the system; and the court, it is confidently believed, will persevere until it shall have destroyed this whole family of scions, which, now flourish with a luxuriance so rank, and multiply with a rapidity so startling as to threaten soon to overshadow and destroy the^trunk which nourishes them.
    It will be discovered by a perusal of the cases referred to, that the weight of authority, even in America, is against the principle contended for by the appellants, and if it be not, the weight of reason appears to us clearly to be so. But supposing the doctrine affirmed in the United States and this court should not deem it unreasonable, which rule in such conjuncture is this court to be governed by, the American or English? Or is it free from all rule, except such as the legislature may prescribe ? In other words, are the English decisions made prior to our Revolution, authoritative here, or persuasive merely ? We simply suggest the question, and will forbear all argument upon it. If the English law does govern,vthe case of Edie v. East India Insurance Company, 2 Burrow’s Rep. is conclusive on the question.
    So much for the second charge asked of the court.
    The instruction which was first asked for, was also properly refused. It will not be denied, that if the note had been made payable at any other place but a bank — or at no specified place— that then a demand at any time within business hours of the third day of grace, would have been sufficient. Now, we contend that if the note being made. payable at a bank varies the rule, it can only be in consequence of bank usage; for the law of the contract can only be varied by consent, which consent if not express must be implied. Now in this case the consent is not expressed, and the only evidence of an implied waiver which was given to the jury was this usage of the bank. This being so, the last objection runs into the other; in other words, both the instructions which were asked, were in effect the same. The authorities cited by appellant’s counsel on this branch of the case, attentively considered, clearly show, that it is only with a view to this doctrine of the usage of banks, that those cases were so decided. In all but one of them the usage was proved and relied upon before the jury, as furnishing evidence of the contract of the parties, and in that one, (31st Pickering,) the court noticed officially and withoutj proof, the custom of all banks to give the parties until the close on business hours of the third day of grace, which is carrying the* doctrine far beyond all the previous decisions on the subject, and shews the tendency of the courts to the condition of affairs commented on in the first part of our argument. It will appear, therefore, that our argument ,on the second instruction of the court applies with equal force to the first; if it is good as to one, it is good as to both. We would here also remark, that it is not proved in this case how long this usage has existed; how many years, months, or days. The bank itself has existed but for a period extremely brief, as the court are supposed to know from the public act creating it. Can any presumption arise from usage, without proof that this usage has existed a reasonable time; for such a length of time as to afford a fair presumption that it was generally known, and for this reason, that the parties contracted with reference to it — that this is the true test of a commercial usage. See Johnson’s Cases; also, Trott et al. v. Wood, 1 Gal-lis, 443.
    There is another view in which the question may be considered, and it is this. It is admitted that these bank usages afford but presumptions that those dealing with such banks modify their' contracts so as to conform to the usage; but surely it is competent for them to rebut this presumption by counter proofs. If so, the instructions as asked for, the court could not have given. ■ The instructions should have been asked in a qualified form, so as to have left any rebutting testimony which may haye been offered or intended to have been offered, to have its full weight upon the jury. 7 Peters, 2S7. In concluding this branch of the argument, the court is requested carefully to consider the progress of the doctrine we have attempted to counteract from its inception to the present time, and to notice how rapidly this chasm which has been made in the law is deepening and widening. The decision in 9 Wheaton, confined it to parties who had actual knowledge of the custom — then came the doctrine of implied notice of the custom — and in the case reported in 11 Wheaton, it was said that becoming a party to paper payable in bank was of itself notice by implication of the customs of the bank. Then came the cases in 1st and 14th Peters, which show but too plainly the dangers of encouraging the lust of innovation upon the settled maxims of the haw. Lastly comes the case in 21st Pickering, taking notice of the customs of banks without their being proved, and thus fixing them as law, just in the way that every other maxim of the law merchant has been settled, by proving the usage at first, and then afterwards not suffering to be denied, but noticing it officially. Now all this we would respectfully insist the courts of Mississippi should repudiate and discard. We will now briefly notice some other matters in the bill of exceptions.
    It is very uncertain from the proof, whether the notary did or did not remain at the bank until after the expiration of business hours on the day he made the demand.
    It is also plain that this note, in the language of the bill of exceptions, “ was not made on purpose to be discounted at the bank.” This evidence it is true contradicts the face of the note; nevertheless it was competent to contradict by written evidence, and it cannot be said this evidence w;as not written, the presumption being in favor of the action of the court in admitting it; besides the evidence was not objected to. Upon this state of the case the maker was not bound by the custom of the bank, and that the endorsers stand in the same situation as the maker. See Bailey and Chitty on Bills, passim.
    
    As' to the defence of usury, which was attempted to be set up on the trial, we understood it as waived by Mr. Yerger in his argument before this court, and very properly; for this branch of the case is completely covered by the decision of the Supreme Court of the United States, in the case of Bank United States v. Owens, 9 Peters. We have never noticed two cases embracing so many points more strikingly analagous. See also, Planters’ Bank v. Snodgrass, 4 Howard.
    The objection that Barksdale derived his authority as notary, by appointment of the Planters’ Bank, is too obviously futile to merit a moment’s consideration. The court need not be reminded that any person may, as the agent of the holder, present a promissory note for payment, and give notice of its dishonor, whether he be a notary or a private individual.
    For these reasons we think there was no error in the court in refusing the instructions asked for, and to grant another trial of the cause.
    Miles, on the same side.
   Opinion of the court by

Mr. Justice Teotteíi:

The opinion of the court below as expressed was certainly erroneous. The law upon this subject is well settled by numerous1 and repeated decisions of the most respectable courts in this country; that where a contract is made with a banking corporation, or a note is made payable there, the usage and custom of the bank constitute a part of the contract, and the parties so contracting are bound by it; not upon the ground that this usage changes the general rules of law, but that by so contracting they have impliedly consented to be bound by it, and to substitute it for the general law. This is the principle of the decision in the case of Jones v. Fail, 4 Mass. Rep. 251; and also of that in 1 Peters, 33. When the custom of the bank is known to the contracting parties, it therefore constitutes a part of the contract, and they can receive no prejudice by being held to it. And though an express knowledge of this usage be not shown, it may be implied from circumstances, and they are equally bound or equally exonerated. In the case of Mills v. The Bank of the United States, 11 Wheat. 130, the court say: “ That when a note is payable or negotiable at a bank whose invariable usage is to demand payment and give notice on the .fourth day of grace, the parties are bound by it whether they have a personal knowledge of it or not. In the case of such note the parties are. presumed by implication to agree to be governed by the usage of the bank at which they have chosen to make their securities negotiable.” It follows as a necessary consequence of this doctrine, that, a note or other security thus payable at a bank cannot be considered as due until the expiration of the hour allowed for payment by the invariable usage of the bank, and that it must be left at the bank until the completion of the allotted period. The case of the Boston Bank v. Hodge et al. 9 Pick. Rep. 420, decides the very question now before the court. In that case the distinction is taken between a personal demand of payment of the maker, which may be made at any time during business hours of the day the note falls due, and a demand at the bank when the note is made payable there, which must conform to the usage which prevails. That case decides this. For as the note, according to the custom of the bank, was not due until the expiration of the business hours of that institution, to demand payment before that time without leaving the note in bank, was prpma,tm-e and not sufficient to charge .the endorséis. .

The judgment must therefore be reversed and a venire de novQ ¿warded.  