
    University Press, John Wilson & Son, Incorporated Respondent, v. George B. Williams, Appellant.
    
      Notice of protest — diligent inquiry as to the residence of an indorser — time extended therefor — its reasonableness is a question for the court — submission of a, question to the court.
    
    A junior indorser of a dishonored promissory note who is entitled to reimbursement from a prior indorser, of whose address he is ignorant, is bound when giving the latter notice of "dishonor to exercise reasonable diligence to ascertain such address; he cannot, without making any effort to secure the necessary information, mail a notice to /the prior indorser at haphazard and trust to chance that it will be received by him.
    
      Semble, that the junior indorser’s time to give the notice is extended while he ig. exercising reasonable diligence to procure the necessary information.
    Where. the facts relative to the j unior indorser’s efforts to ascertain the address of the prior indorser are undisputed, the question whether he exercised reasonable diligence is a question of law.
    A note made by a New York corporation, payable in the city of New York, being-unpaid and protested at maturity, the notary sent a notice of protest to a Massachusetts corporation -which had indorsed the note.
    The latter’s treasurer, who resided in Cambridge, Mass., and who testified that he understood that it was the prior indorser's custom to stay with the president of the maker of the note when he was in New York city, mailed a similar notice to the" prior indorser, whose residence or business address he did not know, in the care of the maker, at the latter’s business address in the city of New York, without making any previous inquiry concerning the prior indorser’s address from the latter’s attorney in the city of New York, whom he knew, or from the maker.
    The prior indorser did hot reside nor have a place of business in the city of New York, but resided in Washington, D. 0., occasionally coming to New York, where he stayed at various hotels. Except when he was staying at a hotel he had no place in the city of New York at which he received mail matter, and he never j in fact, received the notice of dishonor.
    
      Held, that the junior indorser had not used reasonable diligence to ascertain the residence of the prior indorser, a,nd that the notice of dishonor mailed to the latter was insufficient to charge him with liability.
    What colloquy between the court and counsel is sufficient to show that the question whether the prior indorser had waived notice of dishonor, was submitted to the court for its decision, considered.
    O’Brien" and Ingraham, JJ., dissented.
    Appeal by the defendant, George B. .'Williams, from a judgment of the Supreme Oourt in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 7th day of July, 1899, upon the verdict of" a jury rendered by direction of the court, and also from an order bearing date the 30th day of June, 1899, and entered in said clerk’s office denying the defendant’s motion for a new trial made upon the minutes.
    The facts are stated in the dissenting opinion of Ingraham, J.
    
      William Cowper Prime, for the appellant.
    
      Lloyd McK. Garrison, for the respondent.
   Barrett, J. :

The action is brought upon two promissory notes, made by Stone & Kimball, a domestic corporation, to its own order, and indorsed by it and by the defendant. When the note matured, it was held by a New York bank whose notary protested it and sent notice of dishonor to the plaintiff, who was a subsequent indorser. The latter’s treasurer, White, who resided at Cambridge, Massachusetts, then mailed a similar notice to the defendant in the care of Stone & Kimball, at the latter’s business address in the city of New York. The defendant, however, neither resided, in the city of New York, nor had a place of business there. He resided in Washington, D. C.; and has resided there since 1881, with the exception of the years 1892 and 1893, when he resided in England. He came to New York occasionally, stopping at various hotels, but had no place here where he received mail matter, except when he was stopping at a hotel. He never in fact received any notice of dishonor.

The question is, was there due diligence to ascertain the defendant’s residence ? Upon undisputed facts, this is a question of law. The notary who protested the note also mailed notices of dishonor to the defendant at “New York, N. Y..,” and “Boston, Mass.,” but he made no inquiry and did nothing whatever to ascertain the defendant’s residence or place of business. He simply mailed notices of dishonor to him at haphazard; and neither of these notices was, as we have seen, addressed to his residence or place of business. The notice- given to the plaintiff by the notary was, however, sufficient; and upon its receipt the plaintiff was entitled to the same time to notify the defendant as the bank had had to notify it. It was not- necessary that the notice should come to the defendant from the bank; and the notary’s insufficient notice to the defendant would have been harmless had the plaintiff’s notice to him been sufficient. The rule is that the notice suffices if it be given, after the dishonor, by one who is, on its payment and return to him, entitled to reimbursement from the preceding indorser. (Chit. Bills, 494.) There is the further rule that where, at the time of the dishonor, the holder is ignorant of the proper address of the party to be notified, it will be sufficient if the notice is given on the day succeeding that on which such holder, after exercising reasonable diligence', is in a position to give notice. (4 Am. & Eng. Ency. of Law [2d ed.], 436, and cases there cited.) This further rule is equally applicable to one who, upon taking the note up, becdmes entitled to reimbursement from the preceding indorser.

The difficulty here is, that the' plaintiff used no greater diligence to ascertain the defendant’s residence or place of business than did the notary. Like the latter, it trusted to chance. Being ignorant of the defendant’s proper address, its officers were bound to make reasonable inquiries in endeavoring to ascertain it. They could not allow themselves to remain “ in a state of passive and contented ignorance.” (Chit. Bills, 492, 493, quoting an observation of Lord Ellenborough in Bateman v. Joseph, 2 Camapb. 461.) Their duty was, at least, immediately to apply to the other parties to the note for information. (Id.) Mr. Daniels (citing numerous cases) says that “ in seeking to ascertain the whereabouts of the indorser or drawer, in Order to communicate notice, inquiry should be made of the-maker or acceptor ” (2 Daniels Neg. Inst. [4th ed.] § 1116); and he adds: It is desirable that this rule should be strictly observed, as well for the sake of uniformity as for the reason that it secures diligence.” An exception to the rule is where, ‘Mrom previous answers of parties likely to know, the holder had received any information sufficiently reliable.” (Id. § 1117.)

Mr. White concedes that he had here no definite or reliable information. This is his testimony upon the subject: “ I understood that General Williams was more or less coming and going. He was in Washington at times and in New York at various different times, and he was abroad a great deal, and at this particular time £ think he was staying at a place called Hartsdale with Mr. H. I. Kimball, the president of the Stone & Kimball Co. It was either at Hartsdale or at the Albermarle in New York. I understood it was his ,custom to stop with Mr. Kimball when he was in New York. And I mailed it to him at 139 Fifth Avenue.”

A note to Mr. Kimball, or to the Stone & Kimball Company, asking the required information, would have been a reasonable inquiry. It would have been as easy to write such a note to that company as to send such a notice to the defendant in its care. Mr. White could also have written the defendant’s attorney, a Mr. Whitford. He knew that the latter was the defendant’s attorney in New York city, for he testified to a conversation with the defendant and this attorney, upon the subject of these notes, prior to their maturity.

His own and his company’s non-residence did not absolve him from making these inquiries. Inquiry cannot well be called reasonable which is limited to the residence of the foreign holder. It is surely not due diligence to inquire outside the pale of possible information. Nor can the probable futility of inquiry at the holder’s residence absolve him from any inquiry at all. It cannot even inconvenience him to make inquiries by letter of an accessible maker or of other accessible persons who, from their connection with the transaction or parties, are likely to be informed. (Daniels Neg. Inst. § 1115.) As already suggested, too, the law extends the holder’s time to give the indorser notice while he is making such inquires and exercising reasonable diligence to procure the proper information. As no inquiry was here made or diligence shown, it is clear that the plaintiff must fail on this branch of the case.

It is, however, contended- that there was a waiver of the notice. But that question is not in the case. The plaintiff relied upon demand and notice of non-payment. That is what it pleaded and what it attempted to prove. The case was tried upon the issue of diligence raised by the defendant’s denial of notice; and the proof on both sides related solely to that issue. It was only after the defendant had rested that the plaintiff in rebuttal introduced the testimony upon which it now claims waiver. This testimony fob-lowed its rebutting evidence on the question of diligence. Indeed, it seems- to have got into the case merely as a part of the conversation relating to this actual issue. When both sides had rested the learned trial justice at once observed: “ If you will both make a motion for a direction, I will look at the question of notice.” The counsel assented, each saying: “ I make such motion.” The justice then said : “ Both sides make the motion and both sides may hand me in anything on the subject and I will look at the matter.” Clearly the subject and matter referred was the question of notice,” which the- learned justice had just said he would look at.. This could not well have been otherwise, for if the plaintiff had relied upon thé ■ waiver there was'a question of fact for the jury. The defendant upon his original cross-examination had denied any promise to pay, made before maturity. The learned justice did not ask the counsel to move for a direction in order that he might solve.the question of of fact as to whether such a promise was so made. There was no question of fact upon the issue of diligence, as the evidence on that subject was undisputed. Had the learned justice suggested that both sides should move for a direction, and that he would then look at the questions of notice and waiver, the.defendant’s counsel could have objected, first, that the question of waiver was not in the case; and, second, that if it were deemed in the case, he had a right to go to the jury upon it.

It is entirely obvious, therefore, that no such question was presented to the learned justice, and that his record direction was simply a ruling that, as matter of law, diligence had been made out. His opinion is not part of the record;. and, if it were, it is open to the criticism, not only that it discusses, a question .which was not submitted to him by the motion for a direction which he himself had invited and limited, but that it entirely overlooked the defendant’s contradiction of the testimony upon which the opinion as to waiver was expressed. . The learned justice discusses the question of diligence and notice and then says: It also appears in the case without contradiction, * * * that Mr. White, the treasurer of the plaintiff, had a conversation with the defendant and Mr. Whitford, his attorney, in reference to said notes at the office of the Stone & Kim-ball Co., and that both then and there assured Mr. White that he need not be worried about the failure (of the company) as these notes would be paid by Mr. Williams, * * * who was abundantly able to meet them.” Mr. White’s precise testimony was this: “ I think they both (defendant and Whitford) assured me that these notes would be paid by General Williams, and I had no cause to worry or get. excited.” Mr. Williams’ testimony was: “ It is not the fact that I saw him (White) before the notes were protested. * * * Q. Didn’t you at that time tell Mr. White before the notes became due that the notes would be paid by you ? A. No.”

It is, therefore, impossible to sustain this direction. It was erroneous upon the question of diligence and notice ; and no other question was pleaded, presented for decision, or^so far as appears on the record — decided.

The judgment and order must be reversed, and a new trial ordered, with costs to the appellant to abide the event.

Van Brunt, P. J., and Rumsey, J., concurred; O’Brien and Ingraham, JJ., dissented.

Ingraham, J. (dissenting):

I cannot agree with Mr. Justice Barrett in his conclusion, as I think . the notice of protest given to the defendant by the plaintiff was sufficient to charge the defendant. At the close of the case both parties made a motion for a direction of a verdict. There was. no request to submit any question to the jury, and the learned judge having directed a verdict for the plaintiff, it must be considered that all questions of fact as well as law were submitted to him. If, therefore, the facts would justify a verdict, the judgment should not be disturbed. The action was brought against the defendant as an indorser upon two promissory notes. These notes were dated New York, were made payable four months after date at 139 Fifth avenue, New York city", and were indorsed by the defendant, the plaintiff being a subsequent indorser. The notes Were duly presented for payment and payment was refused, and the notes were duly protested by the holder, and notice of protest was given to the plaintiff as an indorser, it being a Massachusetts corporation with its place of business in Cambridge, Massachusetts, and having no place of business in the State of New York. The plaintiff received notice of protest of the notes on the day after they were protested and at once mailed notices of protest to the defendant in care of" Stone & Kim-ball, 139 Fifth avenue, New York city, that being the office of the maker of the notes and where the same were payable. Mr. White, treasurer of the plaintiff, who had charge of its business and who received and mailed these notices of protest, testified that this address was the only address of the defendant that he knew of. He knew the defendant was in Washington at times and in New York at various times, and was abroad a great deal of the time, and that at this particular time he was staying at a place called Harts- ' dale with Mr. Kimball, the president of the company, the maker of the notes. ' The witness had had a conversation with the defendant in August at the office of Stone & Kimball, 139 Fifth avenue, ■ New York, just before the notes became due, when he was asked not to sue on the notes and was assured by the defendant that the notes would be paid by him, and that he “had nó cause to worry or get excited.” It is admitted that this defendant did not reside in the State of Massachusetts, had no„ office or place of business there, and it is not claimed that there was any one there with whom the plaintiff was acquainted who could have given any information to the plaintiff as to the defendant’s residence, or where notice of protest was likely to reach him.

The plaintiff being a subsequent indorser, notice of protest by it to the defendant was sufficient to charge him as indorser, and the only question presented is whether or not this plaintiff exércised reasonable diligence to discover the address of the defendant, and whether it sent the notice of protest to the defendant, according to the best information that it could obtain. It is a general rule that it Is sufficient if notice is sent to the' indorser to the place where the information received reasonably required the holder to send it. The holder is not bound or presumed to know where the indorser lives, but it is enough if the agent of the indorsee or holder make due inquiry and direct the notices to the places indb cated by the information, though wrong. This was so held in Harris v. Robinson (4 How. [U. S.] 336).

The question is, what is due diligence ? In Chapman v, Lipscombe & Powel (1 Johns. 294) the defendants, who were merchants residing at Petersburg!!, Virginia, drew the note in question at six months’ sight on Messrs. Hackley & Grisliar, by whom it was accepted, and the note was protested on October 18, 1803. The notary put two notices in the post office; one directed to the defendants at Norfolk, Virginia, and the other to New York, informing them of the protest for non-payment. The clerk testified that he made diligent inquiry after the defendants, at the banks in New York and elsewhere, and the information was that they resided at Norfolk. It was claimed that this was not sufficient; that as the holder of the note was not asked where the defendants resided and the only inquiry was made of banks, he should not have relied upon such information, but if he had inquired of the acceptors, the persons to whom he presented the bill for payment, he would have learned the real place of their residence. It was held, however, that this was due diligence; that" there was no evidence that the plaintiff knew that the defendants resided at Petersburgh; that he sent the notice by post to them, and another addressed to them at New York; that this was sufficient and all that should have been required of him. In Catskill Bank v. Stall (15 Wend. 367) the rule is stated by Judge Nelson as follows: “ The holders must use ordinary diligence in ascertaining the place of residence, or of business of the endorsers, and in giving notice of the dishonor of the note, either personally, or by due course of mail.” In Harris v. Robinson (supra) these cases were cited with approval, as was the statement in 3 Kent’s Commentaries, 107, “ that notice need not always be sent to the post office nearest to the indorser’s residence. It suffices, if sent to the nearest which can he ascertained on due inquiry;” and the general result of the authorities in that case is that where reasonable inquiry was made as to the residence of the' indorser and notice promptly dispatched by a proper agent in conformity with the information received, the notice was sufficient. In Daniels on Negotiable Instruments (Vol. 2, § 1116) it is said : “ In seeking the acceptor or maker to make presentment of the bill or note, due diligence would necessitate an inquiry of the indorser or other party to the instrument, when such party can be conveniently found, before dishonoring it by protest for non-payment, it being presumed from the relations of the parties that they would be likely to know the whereabouts of each other. And for the same reasons, in seeking to ascertain the whereabouts of the indorser or drawer in order to communicate notice, inquiries should be made of the maker or acceptor.” By section 1117 it is said : “ There may be exceptions to the rule, however, as for instance, when the maker or acceptor has left the state ; and it would not, we think, be necessary to pursue the inquiry of the maker, indorser, or other party, if, from previous answers of parties likely to know, the holder had received any information sufficiently reliable.” In Grafton Bank v. Cox (13 Gray, 505) it is said: “ If the maker had at the maturity of the note resided in Boston, or in the State, or at any place to which the holder would-have been bound to resort to demand payment of him, and there was reason to suppose that the indorser liad knowledge of such residence, the omission to inquire of him concerning it would have been a failure to use due diligence ■ and would have had the effect to discharge the indorser from his liability.” In The Farmers' Bank of Bridgeport v. Vail (21 N. Y. 485) it was held that the holder’s, agent, at the place of payment, may forward the notice to his principal in the interior, and if the latter forward it seasonably to the party to be charged he will be charged, though more time is consumed than there would have been if the agent- had sent it directly to the.party to whom the ultimate notice, was to be given. In West River Bank v. Taylor (34 N. Y. 136) it was held that there the holders’ whole duty was discharged when they duly transmitted the notice of protest to the Eliot Bank of Boston ; and that when that bank duly and seasonably transmitted the notice to the plaintiff, its immediate indorser, and the plaintiff did not. duly and seasonably, upon its receipt, transmit the same to the prior indorser, that notice of the protest was sufficient. In Requa v. Collins (51 N. Y. 147) the rule is stated as follows: “ But in- case the holder does not actually know the indorser’s place of residence, the notice may be addressed to. the place where, after diligent inquiry, he is informed and believes he resides. What is due diligence in such a case, the facts being undisputed or ascertained, is a question of law.” In all the cases in which the subject is discussed as to the duty to make inquiry, such inquiry seems to be limited to those persons residing within a reasonable distance of the person bound to give notice; and where there is an obligation to inquire of the maker, or at the place where the note is payable,, it is only where such maker or payee is accessible, oiffiias resided in the same city or State, that such inquiries are necessary. No case has been cited where it was held that a person is bound to resort to those in a foreign State or country for information as to the residence of an indorser ; and to allow such a delay as would be necessary for such inquiry would fail to accomplish the very purpose for which notice of protest is required. If a note were indorsed, by a person in New York, payable in Europe or Asia, and was there protested for non-payment and returned to the indorser in New York, with notice of protest to be served upon a prior indorser, it would be unreasonable to say that it would be necessary to make inquiry of the maker or at the place of payment, where such inquiry would require weeks or months before an answer would be received. I apprehend that due diligence only requires the holder of.the note to inquire among those who are accessible to him at his residence; 'and when he makes all inquiries which, from the facts within his knowledge, would tend to give him information as to the maker’s residence, and applies the information thus obtained with such information as he before had as to such residence, and sends the notice to the. place where, from such information it is likely to reach the indorser, he complies with his duty, and the indorser is bound.

In this casé the officer of the plaintiff, upon whom the duty to give notice devolved, resided at Cambridge, Massachusetts; he knew of the relations which existed between the defendant, the indorser, and the makers of the note; had had interviews with the indorser at the office of the maker, in the city of New York, where the note was payable; had no knowledge of the defendant’s residence or business address; could not inquire of the makers as to the indorser’s residence, because he was in Cambridge, Massachusetts, and they in another State; and, acting upon the knowledge acquired, he sent the notice .where it appeared that the defendant would receive it. I do not think any rule of active diligence required that he should inquire in another State for the address of the indorser. From his knowledge of the relation of the parties, he assumed that a notice sent to the indorser in care of the maker in New York would reach the indorser, and the evidence is that this is all the information that he had; and there is no evidence that there was anyone in the State of Massachusetts who could give any other or better information, or of whom he should have, in the exercise of reasonable diligence, inquired. I think that, from the information which plaintiff’s representative had, or from which, in the exercise of ordinary diligence, lie-could have obtained, the address to which he sent the notice was that best calculated to give the defendant notice of the protest.

I think the judgment should be affirmed.

O’Brien, J., concurred.

Judgment and order reversed, new trial ordered, costs to appellant to abide event.  