The Bank of Gilby v. Farnsworth
| Decision Date | 21 October 1897 |
| Court | North Dakota Supreme Court |
Appeal from District Court, Grand Forks County; Fisk, J.
Action by the Bank of Gilby against S. L. Farnsworth. Judgment for defendant. Plaintiff appeals.
Affirmed.
J. B Wineman and Charles F. Templeton, for appellant.
The failure of plaintiff to present the original bill was caused by circumstances over which it had no control, and his failure to present it is thereby excused. Section 4944, Rev Codes; Windham Bank v. Norton, 22 Conn. 213; Pier v. Heinrichsoffen, 67 Mo. 163; Brown v Olmstead, 50 Cal. 162. The drawing of the duplicate draft and delivery of it to plaintiff, was a waiver by defendant of the defense of laches. Leonard v Hastings, 9 Cal. 236; Martin v. Lennon, 19 Minn. 74. The duplicate draft constituted a promise by defendant to pay the amount specified therein. An admission of liability or promise to pay after notice of facts constituting a release waives the defense of laches. Thornton v. Wynn, 12 Wheat. 183; Sigerson v. Matthews, 20 How. 496; Yeager v. Farwell, 13 Wall. 6; Parsons v. Dickinson, 23 Mich. 56; Ladd v. Kenny, 9 Am. Dec. 77; Meyer v. Hibsher, 47 N.Y. 265; Ross v. Hurd, 71 N.Y. 14; Cady v. Bradshaw, 116 N.Y. 188; Tibbetts v. Dowd, 23 Wend. 379; Third Nat. Bank v. Ashworth, 105 Mass. 503; Rudge v. Kimball, 124 Mass. 209; Hobbs v. Straine, 149 Mass. 212; Mayers Appeal, 87 Pa.St. 129; Oxnard v. Varnum, 111 Pa.St. 193; First Nat. Bank v. Bonner, 27 S.W. 699; State Bank v. Bartlett, 21 S.W. 816; Curtis v. Sprague, 51 Cal. 239; Knapp v. Runals, 37 Wis. 135; Daniels Neg. Inst. § 1147. No new consideration was necessary to support the waiver. Sheldon v. Horton, 43 N.Y. 93; Matthews v. Allen, 16 Gray 594; Lockwood v. Bock, 50 Minn. 142. All evidence relating to a conditional delivery of this new draft for showing prior or contemporaneous stipulations was incompetent. Cowel v. Anderson, 33 Minn. 374; Harrison v. Morrison, 39 Minn. 319; Farwell v. St. Paul Trust Co., 45 Minn. 495; Youngberg v. Nelson, 51 Minn. 172; Burke v. Ward, 32 S.W. 1047; National Ger. Am. Bank v. Lang, 2 N.D. 66; Kulenkamp v. Groff, 40 N.W. 57; Thompson v. McKee, 37 N.W. 367; § 3888, Rev. Codes; Brown v. Spafford, 5 Otto, 374; Martin v. Cole, 14 Otto, 30. Notwithstanding the opinion in Garr, Scott & Co. v. Green, 6 N.D. 48; A written instrument cannot be conditionally delivered. Sections 3889, 3890 and 3517, Rev. Codes. The cashier of plaintiff could not bind it by any stipulation that defendant should not be held according to the legal effect of the writing. Thompson v. McKee, 5 Dak. 172.
Cochrane & Feetham, for respondent.
The loss of a bill or note is no excuse for want of demand, protest, or notice, because it does not change the contract of the parties. The drawer and indorsers are at once discharged if there is a failure in respect to either demand, protest or notice. Daniels on Neg. Insts. 1464. The duplicate was not an original contract. It was made as a substitute for and to take the place of the original, and no new liability of the defendant was thereby created. Benton v. Martin, 50 N.Y. 347. There was no consideration for the new or duplicate draft. Rand Com. Paper, 1693. The evidence of statements made at the time of delivering the duplicate draft, and explaining the delivery was competent. Warroll v. Munn, 5 N.Y. 229; Braman v. Bingham, 26 N.Y. 483.
The plaintiff by this action is seeking to hold the defendant liable as drawer of a draft. The plaintiff is the payee named in such draft, and it was drawn on J. M. Gagen & Co., of Grand Forks City, the defendant being a resident of Gilby N.D. Defendant had been engaged in buying wheat for J. M. Gagen & Co., for some time previous to the day when this draft was drawn. It was his custom to advance the money with which to make all purchases of wheat for his principal, and at the close of the day to draw upon them a draft through the plaintiff, a state bank at Gilby, to reimburse him for such advances. On the 26th of September, 1895, the moneys he had that day expended in buying wheat for his principal amounted at the close thereof to the sum of $ 612, and on that day he drew upon them, through the Gilby Bank, for that amount; that bank cashing the draft, as was its custom. The draft was lost in transmission by mail from Gilby to Grand Forks, it being forwarded by plaintiff to the First National Bank of Grand Forks for collection. The fact of such loss was not discovered by plaintiff until the latter part of March, 1896, or nearly, if not quite, six months afterwards. As soon as plaintiff learned that the draft had not been received by its agent, the First National Bank of Grand Forks, it notified the defendant, and requested him to give a duplicate thereof. Defendant refused so to do until he had ascertained whether the draft had in fact not been paid. Subsequently he signed and delivered to plaintiff an exact duplicate of the lost draft, it being dated as of the 26th of September, 1895, the same as the original. Written upon the draft in two places was the word "Duplicate." Defendant testified, and his evidence was confirmed by that of his son, that he distinctly informed the plaintiff that he knew that he had been discharged from liability on the lost draft by reason of the negligence of the plaintiff, and that he did not intend, by the giving of the duplicate, to reinstate such liability. The evidence on this point is somewhat conflicting, but the learned trial judge, having all except one of the witnesses before him, found in favor of the defendant on this point. In a case where the evidence is so evenly balanced, we should not overthrow a finding of fact which necessarily rests in part upon a knowledge of the demeanor and appearance of witnesses which we do not and cannot possess. That the defendant was discharged from liability as drawer does not admit of doubt. Under the statute it was the duty of the plaintiff to present the bill for payment within 10 days after the time in which it could, with reasonable diligence, forward it to Grand Forks for such presentation. The draft was payable on demand, and did not draw interest. Our statute declares that, "if a bill of exchange payable at sight or on demand without interest is not duly presented for payment within ten days after the time in which it could with reasonable diligence be transmitted to the proper place for such presentment, the drawer and endorsers are exonerated, unless such presentment is excused." Rev. Codes, § 4941. Nor does the loss of the paper exonerate the plaintiff from the performance of this duty, which it owed the defendant, 2 Daniel, Neg. Inst. § 1464. It is possible that the time during which plaintiff remained in ignorance of the fact of such loss, without being chargeable with negligence, was not a part of the time mentioned in the statute. Probably § 4909, Rev. Codes, covers such a case. This section reads: "Delay in presentment or in giving notice of dishonor is excused when caused by circumstances which the party delaying could not have avoided by the exercise of reasonable care and diligence." It may be that the holder of a draft is not responsible for the carelessness of public servants in the carrying of the mails, and therefore that he does not take the risk of such carelessness. But the moment the exercise of reasonable diligence requires him to know the fact that the paper has been lost, he must then proceed under the statute to make the demand of payment, and give notice of dishonor. This duty the section referred to clearly recognizes. It is only when the delay is caused by circumstances which the party delaying could not have avoided by the exercise of reasonable care and diligence that he is excused. It is a mild form of expression to speak of the negligence of the plaintiff in failing to discover for six months the fact that this draft had never been paid, and had not even reached its correspondent and agent, the First National Bank of Grand Forks. Nearly six months intervened between the mailing of the draft and the discovery of its loss, during about five months of which time plaintiff's cashier admits that there was in his possession a statement from the First National Bank which would have disclosed the fact that that bank had never received the paper. From the standpoint of the defendant's rights and interests, the plaintiff was guilty of gross and inexcusable negligence; and defendant was thereby discharged from all liability on the paper. But it is urged that to allow the defendant to prove the oral understanding between him and the plaintiff's cashier at the time of the delivery of the duplicate draft is to contradict by parol evidence the terms of a written instrument. This contention must find support, if at all, in the postulate that the duplicate draft was an independent contract, creating an additional liability. This position is not tenable. All the evidence in the case, the duplicate itself, and the plaintiff's own pleading, speak but one language regarding the paper. It is not a new agreement, but merely a written evidence of the lost instrument executed to take its place. After a contract is duly entered into the making of a duplicate adds nothing to the liability of any of the parties to...
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