The Bank of Columbia, Use of the Bank of the United States v. John Lawrence

• Decision Date: 01 January 1828
• Citation: 1 Pet. 578,7 L.Ed. 269,26 U.S. 578
• Parties: THE BANK OF COLUMBIA, USE OF THE BANK OF THE UNITED STATES, v. JOHN LAWRENCE
• Court: U.S. Supreme Court

26 U.S. 578

1 Pet. 578

7 L.Ed. 269

THE BANK OF COLUMBIA, USE OF THE BANK OF THE

UNITED STATES,

v. JOHN LAWRENCE.

January Term, 1828

ERROR to the Circuit Court of the United States for the county of Washington.

The plaintiffs in error instituted a suit on a promissory note against the defendant in error, who was the endorser thereon, and which was discounted at the Bank of Columbia, and protested for non-payment. The note was dated at Georgetown, where the banking house of the plaintiff at that time was located, and was payable at the Bank of Columbia. The evidence on the part of the plaintiffs established all the facts relative to the note, which were proper to be proved, except the notice of non-payment to the defendant, the endorser; and the bill of exceptions tendered by the plaintiffs, presented the evidence at length, upon which the question arose, whether due notice of the dishonour of the note had been given, and due diligence had been used by the plaintiffs to convey such notice to the defendants.

The opinion of the Court as delivered by Mr. Justice Thompson, contains a full exhibition of all the evidence, from which the conclusions of the County were drawn.

The case was argued by Mr. Key and Mr. Dunlop, for the plaintiffs, and by Mr. Jones and Mr. Taylor, for the defendant.

For the plaintiffs it was urged, that the distance of the actual residence of the defendant from Georgetown created a difficulty in giving him a personal notice; and it is not incumbent on the holder of a note to follow the endorser, or to resort to other than the ordinary modes of conveyance; the post-office has always been deemed this mode, and it was the usage of this bank, as well as of all other banks in the District of Columbia to proceed in this manner. It was claimed that the defendant knew of this usage. This usage, therefore, became a part of the contract; and that an agreement to comply with the usage is binding, has been decided at the present session of this Court, in Brent's Executors vs. The Bank of the Metropolis, (ante p. 89.) Benner vs. The Bank of Columbia, 9 Wheat. 590. Mills vs. The Bank of the United States, 11 Wheat. 431. These cases show that a departure from the general law relative to a demand of payment, when according to established custom, was sustained.

The evidence showing that the defendant transacted business at his former residence in Washington, does not establish that as his established place of business, and if it did, the bank was not obliged to give a notice there, as it was not in the place where the note was dated, and where the note was payable. Objections of equal, perhaps of greater validity, would have been made had any other mode been employed; and therefore the notice through the post-office, which gave the opportunity to find it where the defendant was accustomed to receive his letters, was the most proper. The reasonableness of notice is a question to be decided by the Court—the time of giving notice and the place where, are questions of law. Tindall vs. Brown, 1 T. R. 167. Chitty on Bills, 292. Where the holder and endorser reside in the same town, the rule is, that the notice must be personal, or left at the endorser's residence, or place of business. When the endorser's residence or place of business is in a different town, the holder is not bound to follow him there, but may give notice through the post-office. Chitty on Bills, 288. Ireland vs. Kipp, 10 John. Rep. 490. Same vs. Same, 11 John. 231.

What constitutes a place of business is a question of law, although the facts in reference thereto may be for the decision of the Jury, and in this case, the Court below had the right to say, and should have said the evidence was not sufficient, supposing it uncontradicted, to make the house of the former residence of the defendant his place of business. Cited Chitty on Bills, 285-6. Bank of Utica vs. Smith, 18 John. 230. 16 John. Rep. 218. Reed vs. Payne.

Mr. Jones and Mr. Taylor, for the defendant.

The claim to maintain the rights of the plaintiffs, by showing a usage relative to notice of the dishonour of notes or bills may, if it shall be admitted, establish a principle of great danger in reference to the subject matter. The usage will operate in favour of an endorser, who by residence or other circumstances, may be supposed to be acquainted with it, and another, a distant endorser, will not be within its influence. A waiver of the regular mode of giving notice of the dishonour of a bill cannot be implied, it must be proved to have been expressly declared. Chitty, 308.

2. The notice should have been sent to the place of the defendant's business, and this was in Washington; and the holder of a bill, must adopt the usual means to convey or give the notice. 11 John. 490. The nearest post-office may not always be the proper post-office; as cases may exist in which, for convenience, a party is in the practiee of going to and using a more distant post-office. 10 John. 411. Nor is a post-office the proper place to leave a notice not intended to be conveyed from it; as post-offices are places from which letters are to be forwarded, and it is not their duty to receive, or are they responsible for letters which are to be left in them.

The expense of sending a special messenger is to be paid by the party to whom he is sent, and as the defendant was not a resident of Georgetown, such a messenger should have been employed to give the notice. Chitty on Bills, 276, 278.

Mr. Justice THOMPSON delivered the opinion of the Court.——

This case comes before the Court upon a writ of error to the Circuit Court of the District of Columbia.

The defendant was sued as endorser of a promissory note for $5000, made by Joseph Mulligan, bearing date the 15th of July 1819, and payable sixty days after date, at the Bank of Columbia. The making and endorsing the note, and the demand of payment, were duly proved; and the only question upon the trial was touching the manner in which notice of non-payment was given to the endorser; no objection being made to the sufficiency of the notice in point of time.

The material facts before the Court upon this part of the case, as shown by the bill of exceptions were; that the banking-house of the plaintiffs was in Georgetown, at which place the note appears to be dated. That some time before the note fell due, the defendant had lived in the city of Washington, and carried on the business of a morocco leather dresser, keeping a shop and living in a house of his own, in the said city. That about the year 1818, he sold his shop and stock in trade and relinquished his business, and removed with his family to a farm, in Alexandria county, within the District of Columbia, and about two or three miles from Georgetown. That the Georgetown post-office, was the nearest post-office to his place of residence, and the one at which he usually received his letters.

The notice of non-payment was put into the post-office, at Georgetown, addressed to the defendant at that place. It was proved, on the part of the defendant, that at the time of his removal into the country, and from that time until after the note in question fell due, he continued to be the owner of the house in Washington where he formerly lived; and which was occupied by his sister-in-law Mrs. Harbaugh. That he came frequently and regularly every week, and as often as two or three times a week, to...