Simon v. Peoples Bank & Trust Co. of Passaic
| Decision Date | 14 May 1936 |
| Docket Number | No. 57.,57. |
| Citation | 184 A. 793 |
| Parties | SIMON v. PEOPLES BANK & TRUST CO. OF PASSAIC et al. |
| Court | New Jersey Supreme Court |
Syllabus by the Court.
1. A bank receiving a note for collection, in the absence of special contract, is an agent merely bound in the event of nonpayment to notify its principal of default in accordance with the terms of the statute.
2. An agent for collection in whose hands a note is dishonored may either give notice to the parties liable thereon, or to its principal.
3. If a subagent be necessary and it gives notice of dishonor to its principal, the principal has the same time to give notice to its principal as it would have had had it been an independent holder.
4. A party to a dishonored note, after receipt of notice, has the same time for giving notice to antecedent parties as the holder has after dishonor.
5. Where the notice of dishonor is duly addressed and deposited in the post office, or in any letter box under the control of the post office department, the sender is deemed to have given due notice, notwithstanding any miscarriage in the mails.
The CHIEF JUSTICE and Judge WOLFSKEIL dissenting in part.
Appeal from Supreme Court.
Action by Ruth Simon against the Peoples Bank & Trust Company of Passaic, New Jersey, and others. From a judgment of the Supreme Court (115 N.J.Law, 521, 180 A. 682) reversing a judgment for defendants, defendants appeal.
Reversed.
William N. Gurtman, of Passaic, for appellant Peoples Bank & Trust Co. of Passaic and J. Vincent McGuire.
Albert Comstock, of Paterson, for Hamilton Trust Co.
Koch & Simon and Paul Rittenberg, all of Paterson, for appellee.
The plaintiff was the holder of the note of Robert H. Simon indorsed by I. Frucht, payable at the Peoples Bank & Trust Company of Passaic. Before maturity, she left the note with the Hamilton Trust Company of Paterson for collection. The proofs reveal no special contract. In the usual course of business, it sent the note to the Federal Reserve Bank, which forwarded it to the Passaic bank. The note was duly presented for payment by that bank, and notice of dishonor was mailed, addressed to each party liable thereon, in care of the Hamilton Trust Company. These notices were received by that company the next day. Thereupon all the notices were mailed to the plaintiff, who, having failed to collect by suit against the maker and indorser, brought this action against the Peoples Bank & Trust Company of Passaic, its cashier, and the Hamilton Trust Company alleging negligence. The defendants had judgment in the district court. On appeal, the Supreme Court reversed the judgment. 115 N.J.Law, 521, 180 A. 682. In this there was error.
Banks are constantly sending bills and notes from one part of the country to another for collection. The Passaic bank was a mere agent of the Paterson bank for effecting the collection. It was bound to make a legal demand upon the promisor for payment, and upon nonpayment to give due notice of the dishonor to the Paterson bank. To hold the Passaic bank to a greater duty would be most unreasonable. It had not discounted the paper and presumably knew nothing concerning the indorsers or their residences. Had the plaintiff desired that the Passaic bank notify the indorser, she could have given specific instructions. Phipps v. Millbury Bank, 8 Mete. (49 Mass.) 79.
The next question arises as to the duty of the Paterson bank. It also took the note only for collection. It was a mere agent for the plaintiff—and like its subagent presumably knew nothing concerning the indorsers or their residences— and as to her its duty was fully performed when it gave timely notice of the dishonor of the note so that she could notify, if she desired, the prior parties to be charged. It is of no significance that a notice placed in the mail was not received. Sections 105 and 106 of the Negotiable...
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Commercial Union Ins. Co. of New York v. Burt Thomas-Aitken Const. Co.
...(Sup.Ct.1880); Simon v. Peoples Bank & Trust Co., 115 N.J.L. 521, 525, 180 A. 682 (Sup.Ct.1935), reversed on other grounds, 116 N.J.L. 390, 184 A. 793 (E. & A.1936). One who requires the official act of a notary public ordinarily looks to the notary alone, and although we speak of a notary'......
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...Bank, 35 N.J.L. 588 (1871); Simon v. People's Bank & Trust Co., 115 N.J.L. 521, 180 A. 682 (1935), reversed on other grounds, 116 N.J.L. 390, 184 A. 793 (1936). A decision which is relied upon heavily by the defendant in this regard is Commercial Union Ins. Co. v. Burt Thomas-Aitken Constr.......
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...is identical with Section 94 of the Uniform Negotiable Instruments Act 5 U.L.A. See in this connection: Simon v. Peoples Bank & Trust Co. of Passaic, 1936, 116 N.J.L. 390, 184 A. 793, reversing 115 N.J.L. 521, 180 A. 682; Gleason v. Thayer, 1913, 87 Conn. 248, 87 A. 790, Ann.Cas.1915B, 1069......
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