
    The West River Bank, Plaintiff and Respondent v. James B. Taylor, Defendant and Appellant.
    1. Where a bill of exchange has been negotiated by the indorsement of several parties, the holder has the next day after receiving notice of dishonor, to notify any prior indorser whom he desires to charge; and each successive indorser who receives notice, has at least .one day thereafter to give notice to any antecedent indorser.
    2. This rule is not confined to holders for value. An agent or banker entrusted with a bill to obtain acceptance or payment, is entitled0 to the same time to give notice to his principal, and the principal is entitled after such notice, to the like time to notify any prior indorser as if he had received notice from the true owner, instead of his banker or agent.
    3. Where the party thus giving the notice, and the party to whom it is given, do not reside in the same town, the notice may be sent by mail.
    4. There is no rule requiring that an indorser residing in the same town as the acceptor, shall be personally notified the next day after presentment; where 'the banker, at whose instance the bill is protested, and to whom notices of protest are sent, does not reside in that town.
    6. The fact that the true owner knows that the indorser resides in the same place as the acceptor, does not, in such a case, entitle the indorser to notice on the day next after the presentment and protest.
    6. It is enough to charge him, that the true owner mails notice to him by the first mail of the day next after that on which he, in due course, receives notice of dishonor, such owner and indorser residing in different towns.-
    (Before Bosworth, Ch. J., and Woodruff and White, J. J.)
    Heard November 7,
    decided December 29, 1860.
    Appeal by the defendant, James B. Taylor, from a judgment recovered against him as the indorser, and Charles St. John, as the acceptor of a bill of exchange, which, with its indorsements,.is as follows, viz:
    $2,643.13 Robbins fy Lawrence Co'.
    
    Winbsor, Vt., June 21, 1856. Six months after date pay to the order of S. G. De Blois, Treasurer, twenty-six hundred and forty-three 13-100 dollars, value received, and charge to. account of the Robbins fy Lawrence Co.
    
    W. CURRIER, President.
    
    
      To Charles St. John, Esq., 142 Water st., New York.
    Written across the face, “ Accepted, Charles St. John."
    
    Endorsed, S. G. BeBlois, Treasurer.
    
      James B. Taylor.
    
    Pay R. L. Bay, Esq., Cashier, or order.
    J. E.-BUTLER, Cashier.
    
    The action, being at issue, was referred to the Hon. Benjamin W. Bonney, to be determined by him, as referee, who" found and reported, as matters of fact, as follows, viz :
    1. That, at the times in the complaint mentioned, the plaintiff was, and now is, a corporation, created and existing under and pursuant to the laws of the State of Vermont, situated and transacting business in the town of Jamaica, in the county of Windham, and State of Vermont.
    2. That the bill of exchange, in the complaint mentioned and described, and upon which this action is brought, was, at or about the day of its date, and at the city of New York, in the State of New York, accepted by the defendant, Charles St. John, and indorsed by the defendant, James B. Taylor, without consideration, and for the accommodation of the drawer thereof, or some person connected with said drawer.
    3. That the said bill of exchange,' so accepted by the defendant, St. John, and indorsed by the defendant, Taylor, was, soon after such acceptance and indorsement, and long before it became due, delivered by the drawer thereof, at said town of Jamaica, in Vermont, to the plaintiff, for full and valuable consideration then given and paid by the plaintiff therefor, and the plaintiff thereupon became, and ever since has been, the owner of said bill of exchange.
    4. That before said bill of exchange became due and payable, the plaintiff indorsed and delivered the same for collection, to the Eliot Bank, situated and doing business in the city of Boston, in the State of Massachusetts, and said Eliot Bank indorsed and delivered said bill to the Nassau Bank, situated and doing business in said city of New York, in the State of New York.
    5. That at the time of said acceptance and indorsement of said bill of exchange, and also when the same became due and payable, and before and afterward, both the defendant, Charles St. John, and the defendant, James B. Taylor, resided and kept, and had their respective places of business in the said city of New York, and the plaintiff, before and at the time when said bill of exchange was so indorsed and delivered to the Eliot Bank, had notice thereof.
    6. That on the twenty-fourth day of December, 1856, (when said bill of exchange became due and payable,) it' was presented by the notary public of said Nassau Bank, then the holder thereof, for collection as aforesaid, at the office or place of business in said city of New York, of the defendant, Charles St. John, in his absence from said office, and payment thereof was then and there demanded, which was refused, and said bill was thereupon protested by said notary public for non-payment.
    1. That the twenty-fifth day of December, 1856, was, by the law of the State of New York, a legal holiday, and for all purposes of protesting and giving notice of the dishonor of bills of exchange, treated, and considered as the first day of the week, commonly called Sunday.
    8. That notices of such presentment, and demand and refusal of payment of said bill of exchange, and of the protest thereof, for the Eliot Bank, and for the plaintiff and the defendant, Taylor, were by said notary of said Nassau Bank, sent by mail on the twenty-sixth day of December, 1856, from said city of New York to said Eliot Bank; and were by said Eliot Bank received at said city of Boston, on the twenty-seventh day of December, 1856.
    9. That said notices of such presentment, and demand and refusal of payment and protest of said bill of exchange for the plaintiff and for the defendant, James B. Taylor, were, by said Eliot Bank, sent by mail on said, twenty-seventh day of December, 1856, from said city of Boston to said plaintiff, at said town of Jamaica, in Vermont, and were by said plaintiff received, on or about the 29th day of December, 1856.
    
      IQ. That the plaintiff, by its cashier, inclosed said notice of demand and refusal of payment, and of protest of said bill of exchange, for the defendant, James B. Taylor, in a sealed envelope, addressed to said defendant Taylor, at said city of New York, and deposited the same in the United States post-office in said town of Jamaica, for transmission to the city of New York, and paid the postage thereon, before the departure of the next mail for said city of New York, after such notice was received by the plaintiff, as aforesaid.
    11. That the interest on the amount of said bill of exchange, ($2,643.13,) from the twenty-fourth day of December, 1856, when the same became due and payable to the date of this report, (24th December, 1859,) (three years,) is five hundred and fifty-five dollars and five cents, ($555.05) and the whole amount of principal and interest due upon said bill at the date of this report, together with seventy-five cents for expense of protest thereof, is three thousand one hundred and ninety-eight dollars and ninety-three cents, ($3,198.93.)
    Upon the pleadings in this action, and the facts found and above reported, the referee decided, determined and reported as conclusions of law, that the plaintiff is entitled to recover against the said defendants, and each of them, in this action, the said sum of three thousand one hundred and ninety-eight dollars and ninety-three cents, and that on filing this report, judgment be entered in favor of the plaintiff against the defendants, for said last mentioned sum, and the costs of this action.
    Judgment having been entered on the report, the defendant, James B. Taylor, appealed from it to the general term.
    
      E. W. Stoughton, for Appellant.
    I. When the plaintiffs sent the draft to New York for collection, they knew that Taylor resided there; and it was, therefore, their duty, upon non-payment, to have caused." notice thereof to be served upon him, either personally, or by leaving the same at his residence or place of business; and this notice should have been so served as early as the 26th of December. By reason of their failure to do this, the liability of the defendant Taylor, was discharged. (Lawrence v. Miller, 16 N. Y. R. 235 ; Cuyler v. Stevens, 4 Wend. 566 ; U. S. Bank v. Barker, 12 Wheaton, 559, 60, 61; Spencer v. Bank of Salina, 3 Hill, 520.)
    II. The only service of notice which it is claimed was ' made upon Taylor, was by mailing the same, at Jamaica, in the State of Vermont, directed to him at the city of New York, several days after the 2l7th of December. The old rule was that service, to fix the indorser, must in all cases be personal, or by leaving the same at his residence or place of business. And this is still the rule where the party to be charged resides at the place where the paper is to be presented for payment. (Ransom v. Mack, 2 Hill, 590.)
    If, therefore, the plaintiffs had been unacquainted with the residence of Taylor at the time they forwarded the bill for collection, it would have been the duty of the notary, if ignorant thereof, to have made diligent inquiry for the purpose of serving upon him, if possible; and his failure to exercise such diligence, would have made him responsible in damages to the holder for such loss as he should sustain thereby. (Ransom v. Mack, 2 Hill, 590, and cases there cited; Smedes v. Bank of Utica, 20 Johns. R. 312.)
    
      A. R. Dyett, for Respondent.
    I. For the purpose of demand and notice to drawer and indorsers, the Eliot Bank and Nassau Bank were hoi ders of the bill subsequent to the plaintiffs, and were only bound to notify their prior indorsers, id est—the Nassau Bank to notify the Eliot. The Eliot to notify the plaintiffs—the plaintiffs Taylor.
    And each had a day, after receiving notice, to give notice to the other in this order. This was done.
    The notary was not the plaintiff’s’ agent, but if of anybody, of the Nassau Bank, who was the holder, and for whom he was notary, and his only duty was to notify the Eliot Bank, which was the last indorser prior to the holder. This he did do by sending notice by mail to R. S. Day, Esq., cashier of that bank at Boston, and that holder notified its prior indorser, the plaintiffs, which in return notified Taylor.
    The case in 16 N. Y. Reports cited by the defendant, was entirely different from this one.
    1st. There the notary assumed to give the notice which was defective. Here he did not undertake to give notice to Taylor at all.
    2d. There the notary did not serve the notice upon the indorser at all.
    3d. The indorser in that case never got the notice. Here he did, (for Taylor does not in his answer or his evidence deny the actual receipt of the notice at some time or other).
    4th. The notary there was entrusted to give notice without any information or direction where to serve it. Here the notary was only employed to, and did merely present the bill and protest it, .handing back the bill and protest to the holder, and sending notices to the last indorser prior to the holder, leaving the latter to give notices to prior indorsers.
    5th. There the holder, having given no notice except through the notary, was compelled to adopt the act as his own, burdened with the negligence, and the court presumed the indorser had transferred the note to him, and ■that consequently he knew his residence. Thus the case stood as one where the holder, knowing the residence of the indorser, wilfully served it on another person, and the indorser never got notice.,
    Here Taylor was not our immediate indorser, and no such presumption arises. On the contrary, we prove that we received the bill from the Robbins & Lawrence Company, for which Taylor indorsed it, and we only knew that Taylor lived in New York, and nothing further, and we mailed it to New York, and Taylor got it.
    The holder may, after he gets notice of dishonor, notify the parties whom he intends to hold. (Story on bills, § 292; U. S. Bank v. Goddard, 5 Mason.)
    The rule is, that where the party entitled and required to give the notice, resides in a different place from the party sought to he charged, notice maybe by mail; the manner of service, whether by mail or personally, depending on the residence respectively of the party giving, and the party receiving the notice.
    He cited, and commented on Louisiana State Bank v. Rowel, (6 Mar. Louis. R. 506;) 2 Hill, 587 ; 20 J. R. 372; 10 J. R. 490; 5 Martin’s Rep. N. S. 359 ; Clay v. Oakley, (Id. 137;) 1 Conn. 329 ; 3 Id. 489; 1 Peters, 579; Cayuga Co. Bank v. Bennett, (5 Hill, 241 ;) Sheldon v. Benham, (4 Id. 129 ;) 2 Hill, 457; Mead v. Engs (5 Cow. 303 ;) Spencer v. Ballou, (18 N. Y. R. 327 ;) Edw. on Prom. Notes, 618, 629; Lowery v. Scott, (24 Wend. 358 ;) 13 J. R. 432 ; 5 Binney, 431 ; 3 Greenf. 233 ; 6 Metcalf, 491; and insisted that the rule stated in Mead v. Engs, ( supra,) is the true one, is established law, and applicable to the facts of this case, and that the judgment should be affirmed.
   By the Court. Woodruff, J.

—The only point presented by the counsel for the appellant is, that due notice was not given to the defendant of the dishonor of the bill of exchange indorsed by him; all other exceptions taken at the trial were waived on the argument by the appellant; and the argument is, that inasmuch as the indorser resided in the same place in which the acceptor lived, and where the bill was presented for payment, and this fact was known to the plaintiffs, who were the actual or beneficial owners of the bill, notice should have been served on the indorser personally, or by leaving it at his residence or place of business in the city of New York, as early as the second day after the presentment, (the holiday being thus duly allowed,) and that the circuitous transmission of the notice to the defendant through the bunk .at Boston, and through the plaintiffs.at Jamaica, Vermont, was not in due season to charge the defendant as indorser; and that if the plaintiffs had not known the defendant’s residence, it was, nevertheless, the duty of the notary to make diligent inquiry in New York for the purpose of serving the notice on the defendant, and the neglect of the notary to do so would have discharged the defendant, and would have made the notary responsible to the plaintiffs.

The general rule that where a bill of exchange has been negotiated by the indorsement of several parties, the holder has the next day within which to give notice of dishonor to any prior indorser whom he desires to look to for payment, and that each successive indorser who receives notice of the dishonor, has at least one day thereafter to give notice to any antecedent indorser whom he may desire to charge with the payment, is not controverted. Nor does the appellant question the rule that in such case if the party giving the notice, and the indorser whom he seeks to charge, reside in different towns, the former may send the notice by the first convenient mail of the day next after the receipt of the notice by himself.

But it is claimed that as to indorsers residing in the same town with the acceptor an exception arises, and they must be notified the next day (holiday excluded) after presentment; or at all events if the actual owner has knowledge of such residence, he cannot charge them without giving them such notice within the period last named; and that notices transmitted successively through holders for collection only, will not be in due season to charge such indorsers.

Mr. Justice Story, in his treatise on bills of exchange, having stated the general rules above referred to, says, (§ 292,) “ The benefit of this rule is not confined to holders for value—but if the bill has been transmitted to an agent or banker for the purpose of procuring the acceptance or payment of the bill, he will be entitled to the same time to give notice to his principal or customer, and to the other parties to the bill, as if he were himself the real holder, and his principal or customer were the party next entitled to notice; and the principal or customer will be entitled after such notice to the like time to communicate notice to the antecedent parties as if he received the notice from the real holder, and not from his banker or agent. In short, in all such cases the banker or agent is treated as a distinct holder.”

Mr. Chitty states thé same rule, and that it has been frequently so decided. (Chitty on Bills, 521, 522.)

Chancellor Kent, in his Commentaries, (§ 44, vol. 3 page 108,) says:—“It is sufficient for an agent to give notice to his principal of the dishonor of a bill, and he is not bound to give notice to all the prior parties; and it then becomes necessary for the principal to give the requisite notice, with due diligence, to the parties to be fixed.”

Numerous .cases may be cit.ed to the like purport. In Scott v. Lifford, (9 East. R. 347,) a bill was deposited by the owner with his bankers for collection; it was dishonored on the 4th, the bankers notified the owner on the 5th, and he notified the indorser on the 6th, and the notice was held sufficient. So in Langdale v. Trimmer, (15 East. R. 291,) the indorsee of a bill deposited it for collection with his bankers in London; it was dishonored on the 25th ; on the 26th they returned it to the owner; ’on the 27th, he put into the post a letter to his indorsee, who lived out of town. The notice was held sufficient. In Bray v. Hadwen, (5 M. & S. R. 68,) the plaintiffs, residing in the country, owning a bill payable in London, deposited it for collection with their country bankers at another place. They forwarded it to London for collection; it was dishonored at London on the 14th, and notice was "sent to the country bankers by mail, and received on the 17th. They sent notice by the post on the 18th, to the owners, (the plaintiffs.) The latter received the notice on the 20th, and they afterward forwarded notice, which, through another indorser, reached the defendant. Held sufficient notice; In Rolson v. Bennett, (2 Taunt. R. 388,) it was held that the holder of a check does not lose recourse to the drawer by depositing it with his bankers for collection, although the banker has' one day after dishonor to notify the owner, and he has another in which to notify the drawer, and so notice to the latter is postponed one day by such deposit. In Daly v. Slater, (4 Carr, & P. R. Rep. 200,) the drawer of a bill payable in London, resided at Oxford, England. The plaintiffs discounted the bill in Paris, and sent it to London to their correspondents, for collection. It was dishonored on the 6th, and the bill, on the next post day, the 8th, returned to the plaintiffs in Paris, by the London bankers, • and was received by the plaintiffs ; one of the ■ plaintiffs being in London on the 16th, instead of sending notice to the drawer at Oxford, returned the bill to the London bankers, and they sent the bill by the post of the l7th,to Oxford, where, on the morning of the 18th, the drawers were notified of the non-payment, &c. Lord Tenter den held, that - the course of sending the notices to Paris was proper, and the only doubt he expressed was, whether the plaintiffs should not, upon the receipt of notice, have, themselves, given the notice to the drawers by the post of the 16th, instead of returning the bill to their bankers, by means of which the notice was delayed one day.

In Colt v. Noble, (5 Mass. R. 167,) the plaintiffs, owners of a bill payable in London, resided at Madras—their indorser resided in the United States. The plaintiffs sent the bill to London to their agents there for collection; it was protested, and the agents returned it with notice to their principals, the plaintiffs, who, within a reasonable time after they received notice, forwarded notice to the indorser in the United S,tates. It appeared, that had the agents sent him notice from London, it would have reached his residence within three months after the protest; but,' by the circuitous mode adopted, the notice from Madras did not reach him until more than a year after - such protest, and yet ■ the notice was held sufficient to charge him in favor of the plaintiffs. The reasoning of Chief Justice Parsons is apt to the present case:

The case last cited is distinctly approved in Mead v. Engs, (5 Cowen R. 308,) where it is declared that banks who have no interest in the bill, but are mere agents to collect it, are yet, for the purpose of receiving and transmitting notices of dishonor, to be considered the real holders. It was there insisted, as it is'in this case, that the notary who protested the bill at Providence, where the acceptor resided, should have sent a notice directly to the drawer at New York, where the bill was drawn and dated. But the court held that a transmission of the notices by mail to several banks in succession, through whom it was transmitted for collection, was proper, although the notice did not reach the drawer so soon as it would had it been sent to him directly from Providence to New York. This case is binding upon us, even if the other authorities were not controlling upon this point; and this decision is reaffirmed in Howard v. Ives, (1 Hill R. 264.)

It is, therefore, to be deemed settled, that the course pursued in this case by transmitting the notices of protest to the Eliot Bank of Boston, and by that bank to the plaintiffs, and by them to the defendant, is in conformity with the general rule, and that the circumstance that the plaintiffs knew where the defendant resided when they delivered the bill for collection made no difference; for in many of the cases above cited, the owner of the bill , had the same knowledge.

Does the circumstance that the indorser (the defendant) resided in the 'city of New York, where the acceptor resided, create an exception?

If it does, then it must be upon some principle applicable to the subject, and none can be suggested unless it be that, living here, he would have received notice directly from the notary much sooner than he did receive it from the plaintiffs by mail. But, according to all the above cases, he is not discharged on that ground, for the same was true in the cases referred to.

Those cases hold that where he resides in another post-town he is not discharged, though a notice sent directly from the place of the protest would have reached him much earlier; and we can see no reason whatever for holding that if he' had lived in Brooklyn, a notice sent from "V"ermont to Brooklyn would have been sufficient; but because he lived in New York, a notice sent to New York, is not. Nor have we been able to find any case in which the place of the indorser’s residence is held material in this respect. Nor any in which just such a notice as was given in the present case has been held insufficient.

It being once established or conceded that the several banks through whom a bill is in due course of business forwarded for collection are to be regarded, for all the purposes of receiving and transmitting notices, as if they were holders for value, then they are bound to notify the antecedent indorser, to whom they respectively look for payment, and are not bound to notify any other; and each of such antecedent indorsers in his turn may notify his precedent indorser, and charge him thereby.

A case may be supposed in which the holder of a bill, in bad faith, or out of the usual course of business, may send a bill to a distance, and through a useless circuit, in such a manner as unnecessarily to delay the notice to drawer or indorser ; and in such case the useless delay voluntarily caused may perhaps discharge the indorser; as if a holder in New York of a bill payable in Newark, under pretence of forwarding it for collection, sends it to a bank in New Orleans, by whom, through various intermediate banks, it is forwarded to Newark, and the notices, by returning through the same banks to New Orleans, and thence coming to the owner in New York, are delayed some weeks or months, it may be that an indorser in New York would be held discharged by the laches or fault of the owner; but if so, the concession would have no just application to a case like the one before us, where the holder in good faith, and in due course of business, forwards the bill in accustomed channels to the place of payment.

The question whether the indorser is to be personally served with the notice, or may be served through the mail, is not determined by the fact that he resides in the place where presentment is made, but is to be tested by the inquiry, whether the party who seeks to charge him by notice, resides in the same town with the indorser; and the question within what time after presentment, must the notice be given, depends on the question, when did the party seeking to charge him, receive notice of dishonor— allowing to each intermediate holder one day, or till the next mail after receiving notice, to give it to the next preceding party.

The case of Smedes v. The Utica Bank, (20 J. R. 372,) does not conflict with these views. There, the plaintiffs in New York had sent a note to the defendants for collection. It was proved, and, in the opinion of the court, fully proved, that it was the established custom and general understanding between banks and their customers, at the place where the note was payable, for the bank to notify all the parties to the note, and the court held that the plaintiffs had a right to rely on that usage and custom, so that, as between the plaintiffs and the defendants, it was. the duty and undertaking of the latter to give notice to the indorsers; and the defendants' having neglected to give proper notice to an indorser living in the same place with the maker, were liable for such neglect. (See, Bank of Rochester v. Gray, 2 Hill R. 227 ; Spencer v. Ballou, 18 N, Y. R. 327.) There is no intimation that the rule would not have been the same in that respect, had such indorser lived in any other town. Nor was it held that, if the plaintiffs themselves, so soon as they received notice of the dishonor, had sent a notice to the indorser, he would not have been duly charged in their favor. The point was, that, having a right to rely on the giving of such notice by the defendants, and having, in that reliance, omitted themselves to notify the indorser, they had been damnified; the defendants had failed in the performance of their undertaking, and were liable.

What is said in relation to the giving of personal notice Avhen the indorser resides in the place where the demand is made, must be understood as said with reference to the already assumed or established fact, that the party whose duty it was in that case to give the notice, and who attempted to do so, resided there also; and to the other fact, that the proof left it in doubt whether the notice he served was not put into the post-office, instead of being served on the indorser at his residence or place of business.

Like observations are applicable to the case of Ransom v. Mack, (2 Hill R. 587). Bronson, Justice, undoubtedly says that the rule still prevails that, where the party sought to be charged resides in' the same place where the presentment or demand is made, the notice must be served personally, or be left at' his dwelling or place of business.. But that is said in reference to a case in which the holder at that place made the attempt to charge the indorser; and the question was, whether the notice was properly given. The question whether a distant indorser, who was duly charged by notice, might not charge such resident indorser by a notice given with due diligence through the .mail, after such distant indorser received notice, did not arise, and was not considered.

The same learned justice afterward, in Sheldon v. Benham, (4 Hill R. 129,) recognizes the rule that, where the indorser and the party seeking to charge him reside in different places, the indorser may be charged through the mail; and also that notice being sent by the bank who holds a note for collection to the last indorser, he has the same day he receives the notice, and the day next ensuing, in which to notify prior indorsers; and in the case of the Cayuga County Bankv. Bennett, (5 Hill R. 241,) only states, when considered in reference to the circumstances of that case, that a holder, seeking to charge, in his own favor, an indorser residing in the same town with himself, cannot give notice by depositing in the post-office.

The case .of Lawrence v. Miller (16 N. Y. R. 235) did not raise any such question as is now under consideration. The plaintiff there was the holder of the note at its maturity, and employed a notary to demand payment and give notice of dishonor. The only notice given was not properly served, and the court held that, on the question of due diligence, the notary was the mere servant of the holder, and the question was the same as it would have been had the holder in person, with all the information and means of knowledge he possessed, given the notice.

The authorities referred to seem to us to establish conclusively, and without any conflict of opinion, the sufficiency of the notice given in this case, to charge the defendant as indorser; and, as there is no exception relied upon but that which raised the question we have considered, we have no alternative but to affirm the judgment. The decision of the referee was not erroneous.

Judgment affirmed, with costs.  