Sebree Deposit Bank v. Moreland, &C.
| Decision Date | 17 November 1894 |
| Citation | 96 Ky. 150 |
| Parties | Sebree Deposit Bank v. Moreland, &c. |
| Court | Kentucky Court of Appeals |
APPEAL FROM DAVEISS CIRCUIT COURT.
REUBEN A. MILLER AND YEAMAN & LOCKETT FOR APPELLANT.
C. S. WALKER FOR APPELLEE.
JUDGE PRYOR DELIVERED THE OPINION OF THE COURT.
This case went off on the pleadings, the court below sustaining a demurrer to the reply of the plaintiff, and the latter failing to amend or plead further, a judgment was rendered for the defendants.
The action is based on a negotiable note for four thousand dollars, drawn by the appellee J. P. Moreland on S. P. Walden, in favor of J. H. Hickman (another appellee), and made payable at the Sebree Deposit Bank. The paper was indorsed by Hickman and discounted by the bank, and the proceeds placed to the credit of the acceptor, Walden, the paper having been made, as is alleged, for his benefit. The note was protested for non-payment, and the defense made by Moreland, the drawer, and Hickman, the indorser, is the failure of the bank (the holder) to give them notice of the paper's dishonor, and other defenses not necessary to be considered.
It is insisted by counsel for the bank that the averments of the answer made on information and belief, of facts that must, if they exist, be within the personal knowledge of the defendants, is bad pleading, and the demurrer to the reply should have been carried back to the answer and sustained to that pleading. There was no demurrer to the answer, and the reply of the plaintiff placed directly in issue the fact of the want of notice to the defendants of the dishonor of the paper, and cured the defect, if any existed.
It is alleged in the reply that the notary, in behalf of the holder (the bank), "mailed notices of the nonpayment and protest of the bill to each of the defendants on the twelfth of July, 1892 — to the acceptor, drawer and indorser of the bill, in an envelope addressed to S. P. Walden, at Owensboro, Kentucky, which was his post-office, and believes and charges that the said Walden at once duly notified said drawer and indorser, Moreland and Hickman, of the dishonor of the bill, and that the defendants knew before the maturity of the paper it would not be paid, and knew that it had not been paid, and with full knowledge of these facts, did repeatedly promise to pay the bill, and relying on these promises forbore to sue for several months."
It appears from this pleading the party not entitled to the notice of dishonor, and without a request even to do so, had been intrusted with the duty of giving this notice to the drawer and indorser, so as to continue their liability, and with that view it is alleged in the reply that when notices of the protest were received by the acceptor, he at once delivered them to the drawer and indorser. When the notice of protest was received by Walden is not alleged, and while it must be inferred as a matter of law that he received the notices in due time, as the notice was placed in the post-office as soon as it could be done, if it had been necessary to hold him bound, no such inference will be indulged as to the drawer and indorser of the paper. As they were each entitled to notice, and the time it was received by the acceptor as well as the time it was handed them by him, should have been distinctly alleged, and the averments that it was received in due time by the acceptor and at once delivered to the drawer and indorser by him, are mere conclusions of the pleader, and will not authorize the court to say that such diligence had been exercised by the holder of the paper so as to continue the liability of the drawer and indorser.
It was a matter of doubt for a long time whether the acceptor of a bill, who had permitted his paper to go to protest, could give a valid notice, but Mr. Daniel, in his treatise on Negotiable Instruments, says it is now "a principle of the law merchant, however unphilosophical it may seem." (2 Daniel, sec. 990.)
When a notice is delivered by a special messenger other than through the regular mail, it must distinctly appear when it was delivered, so as to enable the court to say that it was delivered as soon as it could have reached the party sought to be charged, by due course of mail. In this case the bank made the acceptor its agent to deliver the notice of protest, and inclosed the notices to the acceptor by mail. They were not sent directly to either the indorser or drawer, and it is, therefore, manifest the averments of the reply should present a state of fact showing that the appellees received this notice as soon as it could have reached them by the regular mail. That they were sent by due course of mail to the payor, and when received delivered at once to the drawer and indorser, are not such facts as would authorize the inference that due diligence had been exercised by the holder, or that the drawer and indorser received the notices as soon as they would have received them if the notices had been deposited in the regular mail in due time, addressed to each of the appellees.
The envelope in which the notices were inclosed, addressed to the acceptor, might have remained in the post-office for days before its reception by him; and while the personal service or delivery of the notice by the acceptor to the appellees would have been good if delivered in due time, it must appear when the post-office may be used as a means of giving the notice, that a deposit of the notice in the office within due time was made, addressed to the party affected by the dishonor of the paper, or that notice was given by the holder or his agent to the party sought to be made liable, by a delivery made as soon as it could have been received by due course of mail.
There is no pretense that any notice was inclosed to the address of these parties and sent by mail, and no state of fact alleged showing that diligence on the part of the holder, so as to hold these appellees liable on the paper, unless it arises from the promise to pay alleged to have been made after they had known of the protest, and the failure of the acceptor to pay, and his inability, long before the note matured, to make payment.
It is insisted by counsel for the bank that the promises to pay by the drawer and indorser amounted to such an acknowledgment of continued liability by the drawer and indorser as absolutely fixed their liability. That the promises were made with a full knowledge of all the facts, and the purpose of the notice to the parties to the bill being to prevent any loss by those who are not...
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