
    Isbell & Co. v. Lewis & Co.
    
      Action on Negotiable Promissory Note, against Endorser.
    
    1. Notice, of protest in towns of less than ten thousand population. — The statute, of Alabama (Code, § 1777) has no application to places of less than ten thousand inhabitants, where the general law merchant obtains as to notice of protest, which requires notice of dishonor to endorser, when living in same place with holder, to be personal.
    2. Notice to endorser; how given. — If the endorser oí a protested note or bill have a place of business, notice of protest may be left there, with any person found in charge of the place, whether such person be the agent of the endorser or not; and if he have a residence in the town notice may be left there with any person found on the premises, belonging there, and with capacity to transmit the notice.
    3. Absence of family as affecting fact of residence. — The fact that the family of a party, to whom'noticé of protest is sought to be given, is temporarily absent, while the party himself had his residence there, and lived in it, would afford no ground of inference for a jury that his residence was not there. And though he might himself be temporarily absent, it would still remain his residence for all purposes of service of notices of dishonor required by the law merchant.
    4. Proof of custom of other banks than where note was payable not permissible. — Proof of a custom prevailing with other banks in the town, than the bank at which the protested paper was payable, would not avail to show the custom at the latter bank.
    5. Waiver of want of notice and subsequent promise to pay. — Where the endorser, or other party entitled to notice, has been discharged by failure of legal notice of protest, to waive such defense by subsequent promise to pay, the promise must be unconditional, or if conditional, it must be accepted on the conditions stipulated.
    ArPEAL from Talladega Circuit Court.
    Tried before tbe Hon. LeBoy F. Box.
    Tbe facts fully appear in tbe opinion of tbe court.
    Bishop & Whitson, for appellants.
    1. Tbe court, in its oral charge, assumed that McElderry bad a place of business in Talladega, while tbe record shows that there was evidence tending to show that be bad none; that be merely made tbe office of tbe Talladega Mercantile Company bis “headquarters.” Under that phase of tbe evidence the notice of protest sent through tbe mail was sufficient. — Morse on Banks, vol. 1, § 233; 1 Peters, 578; 1 Brick. Dig., p. 264, § 182; 3 Ban. Com. Pap., § 1276. 2. Tbe place of business of tbe endorser is tbe place “in which tbe bolder is entitled to look for tbe person for whom tbe notice is intended, or for some person authorized by him to receive it.” — Williams v. Bank of U. 8., 2 Pet. 101; Bayley on Bills, 224. 3. The usage or custom of a bank to deposit notice in tbe post-office instead of serving tbe same personally, though tbe party lives in tbe same place, is binding upon tbe endorser and a party dealing with the bank. — Morse on Banks, vol. 1, § 233-9, and note; Ginclrat v. Merchants Bank, 7 Ala. 333; 2 Am. & Eng. Enc. of Law, 107, and note; 2 Daniel Neg. Ins., § 1013. 4. Where a note is made payable at a bank, the endorser of a note is bound by a notice conformable to tbe established usage of that bank, whether he has personal knowledge of such usage or not.—Chicopee Bank v. Eager, 9 Metcalf, 583; Mills v. Bank of U. S., 11 Wheaton, 431. The usage should apply to a place rather than a particular bank.—Adams v. Otter-back, 15 Howard, 539; Benner v. Bank of Columbia, 9 Wheaton, 581. 5. As to promise of McElderry to pay, after failure to get due notice of protest.—Bolling & Son v. McKenzie, 89 Ala. 470; 2 Daniel Neg. Ins., § 1147; Thornton v. Wynn, 12 Wheaton, 184; Kennon v. McBea, 7 Port. 175.
    H. L. McElderry and Cecil Bbowne, for appellee.
    1. Where the holder and endorser of a bill reside in the same town, to fix the liability of the endorser the notice must be personal.—Johns v. City Nat. Bank, 57 Ala. 98; 3 Nan. Com. Paper, 351. The burden of proof rests on the holder to show notice, or an excuse for not giving it.—Johns v. City Nat. Bank, supra; 3 Nan. Com. Pap. 360. It is not sufficient to give notice to the brother of the endorser who said he would give it to him.—3 Nan. Com. Paper, 278. 2. The court did not err in refusing to allow evidence of the general custom of the banks of Talladega, and in confining the evidence on custom to the bank of Isbell & Co., 57 Ala. 98. 3. The court did not err in charges given on the question of subsequent promises to pay by the endorsers. Crawford v. Childress, 1 Ala. 489; Oswego Bank v. Knoives, Hill & Denio, 122; May v. Coffin, 4 Mass. 341. 4. Before an endorser is bound by a subsequent promise to pay, after his discharge by want of notice of protest, he must have knowledge that the several steps of demand, protest and notice have not been duly taken, and such promise must have been after dishonor and before suit brought.—Bolling & Son v. McKenzie, 89 Ala. 474; 10 Cush. 159; 17 Pick. 332.
   McCLELLAN, J.

This is an action by Isbell & Co. against D. L. Lewis and George T. McElderry, composing the partnership of D. L. Lewis & Co., on a promissory note executed by D. W. Bodgers & Co. to said Lewis & Co., and by the latter endorsed to plaintiffs before maturity for value. Isbell <& Co. is a partnership engaged in the business of banking in the city of Talladega. At the time of the maturity and dishonor of the note that place was the domicile— permanent residence—of McElderry, but Lewis, who also resided there when the note was. made and endorsed, had removed to Birmingham. The note was executed in Talla-dega and payable at plaintiff’s bank. It was protested for non-payment at maturity. The pleas and replications were in short by consent, as follows: “Defendants plead payment; failure to give notice [of dishonor], and all other special matters of defense.” Plaintiffs joined issue as to payment, and for the rest replied: “1st. That there was a good and sufficient excuse for a failure to give personal notice of the dishonor of the note. 2d. That it was the custom and usage of the bank and banking house of Isbell & Oo., and of the banks of Talladega, to give notice of dishonor of notes and bills and notice of protest through the mails where both maker and endorser resided in Talladega. 3d. That defendants, with knowledge of the want of notice, acknowledged and recognized their liability on the note subsequent to the 12th day of May, 1891 [when the paper went to protest], and also that defendants subsequently promised to pay the same.” By agreement both plaintiffs and defendants had leave “to introduce all special matters of defense and in replication as though pleaded in full.” There were, however, no matters of defense or replication involved on the trial beyond those indicated above. Of these we shall first consider the defense of want of notice and the sufficiency of the excuse offered by plaintiffs for their failure in that regard, assuming for ti.e moment that they did so fail. Talladega, the evidence shows, has less than ten thousand inhabitants, and it does not appear that it has a free mail delivery. Hence the questions we are now to consider are to be determined on the law merchant and without reference to our statute. — Code, § 1777. By that law, it is confessed, personal notice of dishonor must be given to an endorser when the holder and endorser live in the same town; notice by mail will not suffice. Here personal notice was not given and the notice which was mailed to McElderry did not reach him, if it can be said it reached him at all, until three or four days after the last day for his notification. Two reasons are advanced for the pre-termission of the requisite personal notice. The first is that upon diligent effort and inquiry he could not be found in the city, and it was impracticable to give him notice. It is manifest when this excuse is considered with reference to the evidence that it is rested on the theory that the requisite notice must be given to the party sought to be charged in person; that is, that the notification must pass directly and presently from the holder or his agent to the endorser or his agent. This is not the law. If the endorser have a place of business, the notice may be left there with any person found in charge of the place, whether such person be the agent of the endorser or not, and if he has a residence in the town, tbe notice may be left with any person found on the premises and belonging there in any capacity, and apiparently capable of transmitting the notice in the form in which it is given to the person for whom it is intended.—1 Brick. Dig. p. 262, §§ 150, 151-2, 154, 156; Rives v. Parmley, 18 Ala. 256; Stanley v. Bank of Mobile, 23 Ala. 652; 3 Rand. Com. Paper, §§ 1248, 1273, 1296, and authorities there cited; 2 Dan. Neg. Inst. § 1017, and authorities. And it has been held by this court that notice intended for an attorney who was absent from his place of business and had no clerk, might be efficaciously served by leaving the original, or a copy in his office.—Stanley v. Bank of Mobile, 23 Ala. 652.

Therefore, if the office of the Talladega Mercantile Company was the place of business of George T. McElderry, the law required Boynton, the agent of the bank, to leave a notice of dishonor with J. B. Little, who was in charge of the place, and this, though, in point of fact, Little was not the agent of McElderry at all. Ifj on the other hand, the office of the Mercantile Company was not McElderry’s place of business, then it was Boynton’s duty to leave the notice at McElderry’s residence, if he had a residence in the city of Talladega. And if he had such residence on May 12, 1891, it is. wholly immaterial to inquire whether he also had a place of business at the office of the Mercantile Company or not, since upon any conclusion as to that the bank failed of its duty, either in respect of service at that place or in respect of service at the residence, it being entirely uncontro-verted that no service was made any where. We are of the opinion that the evidence, without any conflict or adverse inference which the law regards as at all material, establishes that McElderry did have a residence in Talladega at the time in question. This evidence was that McElderry’s permanent residence was in the town, and its location was perfectly well known to Boynton, who lived in the same neig-borhood and passed the house daily in going to and from his own place of business, and that McElderry himself then occupied the house and resided there. To this extent there was no controversy whatever, either in testimony which was allowed to go to the jury, or in any that was offered by plaintiffs and excluded. There was a conflict upon a point beyond this, namely, whether prior to May 12, McElderry’s family “had moved temporarily to the country.” The bill of exceptions sets forth that there was evidence tending to show such removal of his family, and it also appears that the court declined to allow plaintiffs to prove that on the day named their agent, Boynton, had been informed “that said McElderry’s family were out of town, and in tbe country.” And, to tbe contrary, McElderry bimself testified that be bad a residence in Talladega at tbe time, known to Boynton, and that bis family were at his said residence “during tbe month of May, 1891, and on tbe 12tb of May, 1891, and that be resided there during sucb month, and that bis family did not remove to tbe country until tbe early par.t of June, 1891.” This presented an immaterial conflict. We may concede the truth in this connection to be in line with the tendencies of plaintiffs’ testimony, that defendant’s family bad removed temporarily to tbe country prior to May 12th, 1891, and this is tbe utmost that plaintiffs contend for, without at all conceding that defendant’s residence for all the purposes of notice was not still in tbe city of Talladega. Indeed, tbe fullest proof of sucb temporary removal of defendant’s family taken with tbe undisputed evidence that be bimself still resided in tbe town — bad a residence there and lived in it — would afford no ground for an inference on.tbe part of tbe jury that bis residence was not in tbe city. It may well have been, as is not infrequently tbe case, that McElderry bad sent bis family away temporarily — for the summer months even — and yet continued to keep up and personally occupy bis bouse in town as a residence, and if this were not true in this instance, it was on tbe plaintiffs, especially in view of defendant’s own testimony, to prove that it was not so. But our conclusion on this part of tbe case need not be rested on these considerations. The authorities sustain us in tbe further position that where one has a permanent residence and temporarily removes from it, bimself and family, it is yet after sucb removal and pending sucb temporary absence and residence elsewhere, bis residence for all the purposes of service there of notices of dishonor required by tbe law merchant. — 2 Am. & Eng. Ency. of Law, p. 415, and note ; 3 Band. Com. Paper, §§ 1283-4-5. And, therefore, conceding, that McElderry and. bis family bad taken up their temporary residence without tbe limits of tbe city of Talladega, it was still tbe duty of tbe plaintiffs to leave a notice for him at bis town residence, or to show other facts which justified them in ■ omitting to do so. It might, probably would, be a good excuse that tbe bouse was closed and there was no person on tbe premises to whom notice could be given or with whom it could be left. But no sucb showing is made in this case. Indeed no showing at all in this connection is even attempted. No agent of tbe bank made any inquiries at tbe bouse, or attempted to do so, or went to the bouse, or even near tbe bouse for tbe purpose of giving notice to McElderry. All that appears in this connection is that Boynton in casually passing by the house, and within about one hundred and fifty feet of it, going to or returning from his own home, at six o’clock in the afternoon of May 12th, having at the time no purpose, so far as the evidence discloses, of making inquiry lor McElderry, or of serving notice on him, or upon anybody at the residence for him, “looked at the house and saw no lights appearing in the doors or windows of the house, and saw no one there, but did not stop or leave any notice at such residence.” It was scarcely to be expected that Boynton would have seen lights in the house at six o’clock in the afternoon of May 12th, even though McElderry and all his family and servants had been within. The fact that a casual and purposeless glance at the building did not disclose the presence of persons on the inside of it, certainly was no evidence that there were not persons within. Eor all that this evidence shows or tends to show, it may be that McElderry and his entire household were in the residence at that moment of time. Most manifestly this evidence utterly fails to show the diligence which the law required of Boynton in respect of leaving a notice at McElderry’s residence, if indeed he had any desire or intention so to do, which is not made to appear. He should, at least, have made some effort to ascertain whether there was any person there with whom the notice could be left, with a view to its service on McElderry. The excuse is wholly insufficient, on the aspects of the evidence most favorable to the plaintiffs, for Boynton’s failure to leave a notice at McElderry’s residence; and so far as the absence of notice is sought to be justified on the ground that the exercise of that diligence which the law required to give notice to McElderry was abortive because of the impracticability of finding liim or any person with whom notice for him could be left is concerned, the general affirmative charge might well have been given for the defendants.

The custom pleaded as justifying and authorizing notice of dishonor to be given by the bank to McElderry through the mail was not proved nor would any testimony offered and excluded by the court have legitimately tended to prove it. The evidence, all of which was given by plaintiffs’ witnesses, in this connection not only had no tendency to prove the custom relied on as existing at the time of the dishonor of the note in suit, but to the contrary, was direct and positive to the point that while the custom pleaded had obtained in the business of this bank up to January 1st, 1891, since that time and covering the time when notice should have been, given tbe defendants, an entirely different custom bad prevailed in tbis respect, and that since tbe first of tbe year 1891 tbe -usage of tbe bank bad been to give tbe personal notice required by law, and wbicb confessedly was not given in tbis case. Proof that tbe other banks in Talladega continued tbe practice wbicb bad formerly obtained in tbis bank of giving sucb notices where tbe parties resided in tbe city only by mail would neither have availed tbe plaintiffs abstractly speaking, since tbe custom did not prevail with them, nor have supported their replication upon wbicb issue, it is to be assumed, was joined, since tbe custom therein set up was a general one alleged to obtain in all tbe banks of Talladega; and hence tbe plaintiffs could not possibly have been injured b‘y tbe exclusion of testimony tending to prove tbe alleged usage in other banks.

As to tbe replication that defendants with knowledge of plaintiffs’ laches acknowledged and recognized their liability on tbe note and promised to pay tbe same, tbe evidence supposed to sustain tbis position is that of B. L. Ivey, a partner in and tbe cashier of Isbell & Co., as follows: “A few days after tbe note sued on was protested (some three or four days) said Geo. T. McElderry and D. W. Bodgers (one of tbe firm of D. W. Bodgers &' Co. tbe makers of tbe note) called to see him at tbe bank (Isbell & Co’s). That when they came in McElderry said to him (Ivey) T have brought Mr. Bodgers in to see if be can not make an arrangement to pay that note’ (tbe note sued on). That McElderry stated that if be, Ivey, would allow certain money wbicb had been paid into tbe bank by or for D. W. Bodgers & Co. to tbe extent of one-balf tbe note, to be placed as a credit on tbe note, be, McElderry, would individually endorse D. W. Bodgers & Co’s, note at 30 or 60 days for the balance. Said D. W. Bodgers offered to give sucb note at 30 or 60 days in renewal of one-balf tbe note sued on, tbis proposition tbe witness declined. That said McElderry then stated that be allowed tbe note to go to protest so as to bind D. L. Lewis, that it was not bis desire to avoid liability on it himself but that if D. L. Lewis got a chance be would ‘get out’ and leave all tbe liability on him. Said McElderry also proposed to witness to pay one-balf tbe amount of sucb note if plaintiffs would release him individually from further liability on the note. Tbis tbe witness acting for plaintiffs refused to do. Tbis evidence of Ivey taken in connection with tbe uncon-troverted testimony of McElderry himself to tbe effect that on tbe occasion referred to by Ivey and again about that time in a conversation with Isbell, another member of tbe firm of Isbell & Co., he stated that he, witness, “did not desire to shirk or avoid any liability either legal or moral, but his, McElderry’s, attorney had advised him that neither he nor D. L. Lewis was liable on the note and he disclaimed liability on it,” fully presented the case made under the replication we are considering. Taking all of it which is supposed to be favorable to the plaintiffs, whether controverted or not, as true and all of it which is favorable to the defendants as true, because not controverted, it fails to show, or to afford any ground for a jury to conclude inferentially, that McElderry either promised to pay the note or any part of it or acknowledged and recognized his liability in whole or to any less extent upon it. It is elementary law that to amount to a waiver of the defense of want of notice in such case and to entitle the holder to recover notwithstanding the requisite notice has not been given, the promise to pay must be unequivocal and unconditional, or if conditional it must be accepted on the conditions and in the terms which it involves. And so with an admission or acknowledgment of continued liability; it must appear that the admission or acknowledgment was without equivocation and unclogged by reservations. As was said by Judge Story: “The promise must be unequivocal, and amount to an admission of the right of the holder; or the act done must be of a nature clearly importing a like admission of the right. If it be defective in either respect, or if it be a conditional offer of payment unaccepted, then, and in such a case, the holder has no right to insist upon it as a waiver. So if the promise be qualified, it must be received with its qualification, and can not be insisted upon as an absolute waiver.”—Story on Bills, § 321. To the same effect is the text of Daniel on Negotiable Instruments: “If the promise is conditional, the acceptance of it must be proved in order to make it binding. And where it appeared that the indorser offered to give his own note, which was not accepted, it was held no waiver. [Sice v. Cunningham, 1 Cow. 397; Agan v. McManus, 11 Johns. 180]. So an offer to pay part cash and give his note for the balance, [Barkalow v. Johnson, 1 How. 397]; or to procure a renewal, [Laparte v. Landy, 17 Mort. (La.) 359]; or to pay in depreciated bank bills, [Newberry v. Trowbridge, 13 Mich. 637], or in Confederate currency, [Tordy v. Boyd, 26 Gratt. 637].” Daniel Neg. Inst. § 1163. See also 3 Rand. Com. Paper, §§ 1374 et sag.; Kennon v. McRea, 7 Port. 175. Here the defendant, McElderry, for himself and his co-defendant expressly disclaimed any liability on the note. While he said he had no desire to avoid liability either legal or moral, he at the same time gaye tbe plaintiffs to understand tbat be bad been advised by bis attorney tbat he was under no legal liability whatever, and asserted tbat be was not. It is manifest, and must have been so to plaintiffs, tbat McElderry did not want or intend to pay tbe note unless be was legally or morally bound to do so. He was not legally bound and be knew it, and relied pro tanto so to speak upon bis absolution from ali liability tbat could be enforced in tbe courts. It is equally manifest tbat be considered be was under a moral obligation to pay one-half tbe note, that Lewis should pay tbe other half upon like obligation, and that every thing be said and every proposition be made had reference to this moral liability. He nowhere admitted tbat in point of legal fact be owed tbe debt or any part of it, but always asserted to tbe contrary. Moved by bis considerations of morality be did offer to give or endorse a note for one-half of the note and, we may concede for tbe purposes of this discussion, be also offered to pay one-balf of it. But both propositions were expressly conditional; tbe first upon tbe bank’s entering a credit on tbe note to the sum of the other half, and tbe other upon tbe bank’s releasing him from all further liability on the paper having in view, it is fair to assume, tbe avoidance of a necessity to make tbe defense be was advised and asserted be bad in tbe courts. And both these propositions were expressly declined. Guided by authority and reason we can not hesitate to declare tbat the waiver of notice by promise to pay or admission of liability set up in tbe replication finds no lodgment in tbe evidence or any inference which tbe jury could properly draw from tbe evidence. Our conclusion therefore is that tbe court was authorized to instruct tbe jury upon tbe hypothesis of their belief of the evidence. (1) tbat the notice of dishonor required by law was not given to tbe defendants, (2) tbat no custom of tbe bank justifying its pretermission was shown, and (3) tbat defendants bad not waived tbe failure to give notice by any subsequent promise to pay, or acknowledgment of their liability on tbe note; or, in short, tbat tbe defendants were entitled on this question of notice alone to tbe general affirmative charge with hypothesis. Tbe status of the case on tbe evidence justifying this charge would not be altered by thé admission of all plaintiff’s testimony which was excluded on defendant’s motion or tbe exclusion of all defendant’s evidence which was admitted over tbe objection of plaintiffs, and it is therefore immaterial to inquire whether there was error in any of these rulings of tbe court or in its action on special instructions requested. Whether erroneous or not these rulings could not have prejudiced the plaintiffs.

The judgment is affirmed.  