
    Richard S. Gilpin, Respondent, v. Columbia National Bank, Appellant.
    Fourth Department,
    March 26, 1915.
    Bills and notes — action for negligence in failing to properly present note for payment — evidence — admissibility of judgment roll in prior action against indorser — evidence — circumstances attending presentation of note—financial responsibility of indorser — costs against plaintiff in prior action — action against indorser not condition precedent.
    In an action against a bank which was acting as the agent for the plaintiff for negligence in failing to properly present a note to the maker for payment, it is error to admit as conclusive evidence of defendant’s negligence the judgment roll in a prior action against an indorser in which the sole question involved was as to whether the note had been duly presented as required by statute.
    It was also error to refuse to permit the defendant to prove upon the issue of its negligence the circumstances attending the presentation of the note to the maker by telephone, what occurred at its banking office between its teller and the maker of the note, and the custom among banks in relation to the presentation of notes to makers at the banking office, although payable elsewhere, where the maker comes to the bank and waives presentation at the place where payable.
    As a basis for the damages claimed the burden was not upon the plaintiff to show the financial responsibility of the indorser. Insolvency of the indorser would be a matter of defense.
    
      The costs awarded against the plaintiff in his action against the indorser were improperly included in the recovery in this action.
    If the defendant was negligent, it was not necessary as a condition precedent to sue the indorser.
    Appeal by the defendant, Columbia National Bank, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Erie on the 21st day of July, 1914, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 18th day of July, 1914, denying defendant’s motion for a new trial made upon the minutes.
    
      James McCormick Mitchell [John M. Hull, attorney], for the appellant.
    
      Frank C. Ferguson [Aaron Fybush, attorney], for the respondent.
   Merrell, J.:

We are of the opinion that there was sufficient evidence presented upon the trial to justify the jury in finding that the defendant bank was the agent of the plaintiff and answerable to him for any negligence of which said defendant may have been guilty in the due presentation of the note in suit to the maker for payment. The conversation between the plaintiff and defendant’s cashier, together with the correspondence between the defendant and the Sovereign Bank of Canada, from which it received the note for collection, furnishes ample testimony from which the court might properly find that the relation of principal and agent existed.

However, upon the issue of defendant’s negligence we think the learned trial court committed errors which must result in a reversal of the judgment rendered. In our opinion the judgment roll in the action against the indorser was improperly received as conclusive evidence of defendant’s negligence. While it may be that upon the issue of due presentation of the note to charge the indorser, the judgment bound the defendant in this action, the question of defendant’s negligence was not then in issue, the sole question involved in the action against the indorser being as to the sufficiency of the presentation and demand for payment by telephone. In that action the trial court held that such presentation was good, and was sufficient to charge the indorser. (Gilpin v. Savage, 60 Misc. Rep. 605.) Four justices of the Appellate Division concurred in such decision, and the judgment of the trial court was affirmed. (132 App: Div. 948.) Finally, the Court of Appeals held that the note was not properly presented for payment, and reversed the judgments of the lower courts. (Gilpin v. Savage, 201 N. Y. 167.)

The issue as to the due presentation must, therefore, be regarded as finally determined, and the defendant bank, having participated in the prosecution of said action, may be said to be bound by the judgment therein rendered, so far as the issues involved in said action are concerned.

In the action at bar quite a different issue is presented. In the action against the indorser it was a matter of no moment whether the defendant acted as would an ordinarily prudent person. The sole question there was as to whether the note had been duly presented as required by statute in order that the indorser might be charged. Here the issue is as to the defendant’s negligence. A recovery has been had upon the theory that the defendant was negligent, in that it failed to exercise reasonable care and diligence, and such as an ordinarily prudent person under the circumstances was bound to exercise in the presentation of said note to the maker for payment. We do not think the judgment in the action against the indorser was conclusive evidence of such negligence. Undoubtedly the judgment roll was properly received as proof of the fact that the indorser was not charged, and as to the event of the action to recover of the indorser, and as to all issues therein involved, but it was not conclusive upon this defendant upon the issue of defendant’s negligence.

We think the learned trial court erred in refusing to permit defendant to prove, upon the issue of its negligence, the circumstances attending the presentation of the note to the maker by telephone; that it erred in refusing to permit defendant to show what occurred at the banking office of the defendant between its teller, Voltz, and the maker of the note; and that said trial court erred in refusing to permit the defendant to show the custom among Buffalo banks in relation to the presentation of notes to makers at the banking office, although payable elsewhere, where the maker comes to the bank and waives presentation at the place where payable. (Mechanics’ Bank at Baltimore v. Merchants’ Bank at Boston, 47 Mass. 13. See opinion by Shaw, C. J., at pp. 30, 31, 32.)

We think such matters relevant upon the issue of defendant’s failure to exercise reasonable care in the presentation of the note. What occurred at the bank between the maker and Voltz did not appear upon the trial of the action against the indorser, nor was the custom as to waiver of presentation above referred to shown upon said trial. While it may now be easy to say, in the light of the event of a litigation running through several years, that due presentation and demand for payment was not made by the defendant bank, it can hardly be said as matter of law that the judgment roll in the áction which finally determined such fact is conclusive evidence that the defendant failed to exercise that degree of care which it should have exercised in presenting the note for payment. As bearing upon the question of defendant’s exercise of reasonable care, the defendant was entitled to prove the facts and circumstances to which we have referred.

We are unable to agree with the contention of the appellant that, as a basis for the damages claimed, the burden was upon plaintiff to show the financial responsibility of the indorser. Insolvency of the indorser would be a matter of defense to be proven upon the question of damages alleged to have resulted through the agent’s failure to properly present the note for payment. (3 Sedg. Dam. [9th ed.] § 819.)

"The costs awarded against the plaintiff in his action against the indorser, we think, were improperly included in the recovery herein.

If the defendant was negligent it was not necessary, as a condition precedent, to sue the indorser, Savage, and plaintiff’s cause of action was complete, aside from the unsuccessful attempt to collect from the indorser. (Downer v. Madison County Bank, 6 Hill, 648; Hitchcock v. Bank of Suspension Bridge, 57 App. Div. 458, 460.)

The judgment appealed from should he reversed and a new trial granted, with costs to appellant to abide the event.

All concurred.

Judgment and order reversed and new trial granted, with costs to the appellant to abide event.  