838
-FEDERAL REPORTER.
the county treasury of Cape Girardeau county, collected for the purpose of paying the coupons sued on, and asks for a mandamus directed to the county court of Cape Girardeau county and to the justices thereof, commanding them to pay the plaintiff, or his attorney of record, the said sum to the credit of said judgment, or as much of said sum as remains in the treasury; and if any balance remain due and unpaid on said judgment, interest, and costs, after the payment of said sum, he asks that the court be ordered to levy a tax for the purpose of paying such balance. The amount alleged to be in the treasury by this information differs from the amount mentioned by the previous information. The respondents objected to an alternative writ being granted, on the ground that all further proceedings had been stayed by said appeal and supersedeas. J. B. Henderson and James M. Lewis, for relator. Henry Cunningham; for respondent: TREAT, J. If the information had stated fully what the records of the court show, the question to be determined could have been raised on demurrer. True, the court is supposed to know by its record what has been done in a case before it, wherein supplemental or 1Lncillary proceedings are sought; yet no intelligent review of its action could be had, if its judgment were based on records not brought forward or referred to in the ancillary pleadings. It is important that the grave propositions underlying the motion for this alternative writ should be .clearly disclosed, and to do so an answer is needed. When the answer appears, it may be that this court, if it feels at liberty to pass upon the questions de novo, will have to review the whole subject involved. It is not proper, at this stage of the inquiry, to discuss those questions. The alternative writ is allowed, in order that the whole subject, in its legal aspect, may be fairly before the cOllrt in a way for the final review, if desil'ed, by the United States supreme court. Let the writ go.
RIGGS
v. HATCH and another. May 8, 1883.
(Circuit Court,8. D. New York. 1.
PnOUISSORY NOTE-NOTICE OF DISlIONOTt-PLEADING.
Where 1he indorser of a promissory note in her answer denies that she" received due notice of non-payment" and knowledge of protest, this is a sufficient denial of the constructive notice arising from the due sendir!g, as well as the actual notice arising from the receipt, of a noticu.
RIGGS V. HATeR. 2. SAME-DILIGENCE-NoTICE OF PROTEST.
839
Where a man;jed woman indorses her hushand's note iIi a form that would indicate she was his wife, and there are three persons of the same name as her husband, whose names and appear in the city directory, and her own name is not in the directory, a notice of the protest of such note by mail, simply addressed to her by her name at the city where her husband is engaged in business, without any inquiry being made to ascertain her residence, is not sufficient to charge her as au indorser. 3. SAME-PUHCHABER FOR VALuE· WITHOUT N OTrcE OF DEFECTS. Where a party having no notice that a negotiable promissory note is without· consideration, takes it in good faith before it is due, in payment of two notes against members of a firm of which he had it, and gives his own negotiahle note, payable on time, but long overdue and unpaid at the time of trial, for the balance, without· a showing the part of defendant that his note had not been negotiated, but remained where he could set up the infirmitv.of the note he bought as a defense, he is entitled to.be considered a holder for full value, and he will be entitled to recover the full amount of the note purchased.
on
4. PRACTICE-VERDICT AGAINST Two DEFENDANTB:-NEW TRIAL-DISCONTINUANCE.
Where a verdict against two defendants should be set aside as to On& of them, it must be set aside as to hoth,and a new trial will be grant.ed as to both" unless the plaintiff discontinue as to the one entitled to a new trial, and leaves the verdict to stand as to the other.
At Law. Lindsay if Flammer, (Gratz Nathan, of counsel,) for plaintiff. Turner, Lee if McClure, for defendants. WHEELER, J. This is an action upon a promissory note for $2,000, made by Asa L. Hatch at New dated there, payable at a bank there, to his own order, 12 months after date, indorsed by him, and by Elizabeth R. Hatch, who is his wife, with the words, "I hereby intend to charge' my separate estate with the payment of the within note," and delivered to Stonl:l & Co., from whom the plaintiff procured it. The cause has been tried by jury, to whom a question of fact as to an alleged alteration of note was submitted, and has now, after verdict for the plaintiff, been heard upon a motion for a new tri'al founded upon questions of law reserved. One question made by Elizabeth R. Hatch is whether her liability as indorser was duly fixed by protest and notice. On the hearing of this motion the point is made that this qnestion was not properly raised by the pleadings. In her answer she denies that she "received due notice of non-payment," and knowledge of the protest. It is urged that this is not a denial that notice was drily sent, and raises no question but that it was so sent as to be sufficient. to charge her, although not received. The denial is quite meager, but still it is a full denial of due notice, whIch might; without violence, be consid-
840
FEDERAL REPORTEr..
'
ered a denial of the constructive notice arising from the due sending as well as ,of the actual notice arising from the receipt of a notice, and be held sufficient. And, whether it would be or not, as the evidence was all received without objection on this account, it is too late to raise the question on this motion. The defendants reside together at Astoria, and he had a place of business ir. New York. His name as A. L. Hatch was in the directoryof New York. with his place of business, and there were in the directory the names of two other persons as A. L. Hatch, with their residences or places of business. Her name was not in the directory and did not belong there. There was nothing on the note to indicate the residence or address of any of the parties to it, except what might be inferred from the place of date and of payment, and the notary had no knowledge on the subject except that derivable from the note. He looked in the directory for Asa L. Hatch and Elizabeth R. Hatch, found the three names of A. L. Hatch, mailed a no_ice to Asa L. Hatch at the street and number given with the first A. L. Hatch, and to New York, and to Elizabeth R. Hatch at New York, and did nothing more about giving notice. He received his she offered to notice; it was not shown that she received hers, show that she did not receive it. The law of the state of New York (Laws 1857, c. 416) required "diligent inquiry," and the law-merchant would require due' diligence, to ascertain her whereabouts or true address, before notice directed to any other address, and not shown to have been received, would be sufficient to charge her. There is no real difference in the meaning of these expressions. Each would seem to require such efforts as a. prudent man, interested to give her notice of any fact, would make to find her or her address in order to accomplish that object. Had her name, by reason of former residence or otherwise, been found in the directory with an address, it would seem that a notice mailed to her at that address, without further inquiry, would not have been sufficient. Greenwich, Bank v. De Groot, 7 Hun, 210; Baer v. Leppert, 12 Hun, 516. Her name might be that of another person of the same name, or, if that of the right person, the address might not be the present address. Inquiry at the place might remove these chances for mistake. Here the form of her indorsement would indicate that she was a married woman, and the becoming a party to his note, that he was her husso treated by counsel on each side in argument. band. This Either one of the three persons put down in the directory as A. L. :'{atch might be her husband; and where the residence was given it
RIGGS V. HATCH.
841
might be her residence, and where the place of businells without residence was given it would indicate that that A. L. Hatch did not reside in the city, and if he was her husband that she did not. A prudent man sincerely desirous of finding her or her address would have inquired at these places for the' right A. L. Hatch, and, if found, of him in regard to her. Such inquiry would probably have re- ' sulted in finding her true address. Not only was all such inquiry omitted, but no notice was sent to her at what was assumed to be the address of her husband. None of the cases cited for the plain-. tiff, nor any of several others which have been examined, come up to the point of holding that what was done in this case would amount to diligent inquiry or due diligence; and it cannot, in the light of the views now entertained, be held to be such. As the case stands, this note was without consideration as between Asa L. Hatch and Stone & Co. The plaintiff had no knowledge of this infirmity and took it in good faith, before it was due, in pay"' ment of two notes against members of that firm, amounting to about $1,200, and gave his own negotiable note payable on time, but long! overdue and unpaid at the time of trial, for the. balance. Upon this state of facts he was a holder for value. Railroad Co. v. National Bank, 102 U. S. 14; Swift v. Smith, ld. 442. Still, there is a question whether he is entitled to recover the whole amount of the note, as against the maker, or only the amount he actually paid by giving up the two notes. The language of the court in the cases just cited, as well as in many others, seems to indicate that the becoming a bonafide holder for value cuts off all equities .of makers and prior indorsers, and leaves the holder entitled to recover the full amount, without gard to the precise amount paid. Some cases seem to hold that as he can only recover because he has paid, he can only recover what he has paid. Williams v. Smith, 2 Hill, 301; Youngs v. Lee, 18 Barb. 189; 12 N. Y. 551; Oardwell v. Hicks, 37 Barb. 458; Hl1fJ v. Wagner, 63 Barb. 215. In this case, however, the plaintiff's own negotiable note is still outstanding. It was not shown whether it remained where he could defend on account of the infirmity of the note he bought, or whether it had been {legotiated so as to cut off such defense, He may be compelled to pay it, and without a showing on the part ot the defendants that it was so situated that he could not be, it would seem that he is entitled to stand as a holder for full value. There is no other question about the liability of Asa L. Hatch, fO! he was not only the maker of the note, but he received notice, amI his liability as indorser was duly fixed. He is not entitled to a
842
FEDERAL REPORTER.
trial; but as the verdict is against both, if the verdict is set aside and a new trial granted as to her, there will be no verdict against him and there must be a new trial as to both. The plaintiff may, however, prefer, to discontinue as to her and retain the verdict as to bim; and, if be does, that will save all the rights of the defendants. Opportunity will therefore be given to the plaintiff for the space of 15 days for that purpose. Unless the plaintiff does, within 1.5 days after the filing of this decision and notice thereof. to his attorneys" discontinue the suit as to Elizabeth R. Hatch, the verdict is to be set aside and a new trial granted; if he does so discontinue, the motion of Asa L. Hatch for a new trial is overruled, and the stay of proceedings vacated. SERVIOE OF NOTICE OF DISHONOR BY MAIL. The law requires the bolder of a bill or note to use reasonable diligence in giving notice of its dishonor to an indorser whom he wishes to charge; and the rules as to the time and,manner of givjng the notice have been adopted onl)' in view of this requirement. It was early recognized by the courts that reasonable diligence did not reqUire the holder to employ a special messenger to deliver the notice to an indorser residing in a distant place, but that the requirement was satisfied by the deposit -of a letter containing the notice in the post-office, duly addressed to the indorser; and this rule has receiv·ed a liberal application. "Courts are and should be extremely cautious in admitting or l'ecognizing any changes which trench upon these established regulations" as to the mallner of transmitting notice." Still, inasmnch as they are founded upon gelleral interest and convenience, and grow mainly out of the custom of merchants, it is obvious that they must, from time to time, admit of modifications to suit them to the actual condition and businei:\s of man. ·They must pand according to the exigencies of society.' "(*) WHEN ALLOWED. Where the party giVing the notice and the party notified reside in different places, between which there is regular communication by mail,(a) mailing notice uy letter duly addressed is not only prima facie proof of notice,(b) but is conclusive of the fact, and is sufficient, though. by the miscarriage of the mail, neVer received.( e) 011 the other hand, if .the parties reside in the same place. the mail cannot be used with this effect.( d) This is so, although the indorser has a' place of business elsewhere; this does not gi ve the holder the right to resort to the mail for service of the notice. When the mail )s not used,notice may be served as well at the hldorser's place of business as at his residence, and when the parties reside in different places, notice by mail may he addressed indifferently to the indorser's resi-
C·) Bondurant v. Everett, 1 Mete. (I!1.) 658. (a) See Lapeyre v. RohertRon, 2U La. J\.nn. 399; Citizens' Bank v. Pugh. 19 La, Ann. 43; Tyson v. OUver,43 Ala.. 455; Farmers' Bank v· G!'lnuell's Adm'x. Grnt. 131. (b) MUlln v. BaldWlu,6 Mass. 316.
(c) Shedd v· Brett, 1 Pick. 401; Knott v. Vena. ble,42 Ala. 186; Bllssard v. Levering. 6 102; Muckey v.Judkins. 1 Fost. & F. 211A, Cd) Pierce v. Pandar. 5 Metc.352; Farm"l·.'.10 Mech. Bank v. Battle, 4 Humph. 86.
,
RIGGS V. HATOH.
<lence or place of busIness. But" the law is not indifferent as to the modebf service. It does not say that tha holder may elect between personal and mail service, because there happens to be a place of business to which the m'ail goes, so long as there is also a place of residence at which service call1lOtbe made through the post-office, but must be made personally."(e) Hence, also, where a firm are indorsers, and have no place of business at the maturity of the paper, and one of the partners resides at the place of payment and another resides elsewhere, the holder cannot omit personal notice to the resident indorser, and charge the firm by notice by mail to the other.(/) Under a statute providing that whenever the indorser's residence or place of business was in the place of payment, notice might be served by depositing it in the post-office of the place of payment, directed to the indorser at such place, it was held that service of notice by depositing it in the post-office of, the place where the indorser resided and had his place of business, addressed to him there, was sufficient, although the note was payable at anothE\rplace, upon proof that such mailing of the notice was more favorable to the indorser in respect to the time of delivery than mailing it at the place of payment would have been.(g) Under a statute merely prOViding that notice must be given" either personally or by post," it was held that a deposit of the notice in the office of the place where the bill was payable, and where both parties resided, was good service, "whatever may have been the rule preVious to the act of congress requiring all drop-letters to bear a postage stamp."(h) Although the parties reside in the same place, service by .mail is allowable if there are two or more post-offices therein, with regUlar mail commrinication between them, and the parties are in the habit of resorting to different offices for their mail. .. Whether mail service is good or not does not depend upon the inquiry, whether the person to be charged resides within the same legal district, but upon the question whether the notice may be transmitted .by mail from the place of presentment or demand to another post-olIice where the drawer or indorser nsnally receives his letters and papers."(i) The same rule applies where the indorser resides in the sam'e town or city, but receives his mail at a post-office itl an adjoining town to which notice is sent.(j) In Chicopee Bank v. Eager,(k) where the parties used different post-offices in the same town, service by mail of notice of dishonor of a note payable at, a bank therein was held good, on the ground of an established usage of the bank to serve notice in this manner. \ If the parties reside in the same town, but the system of delivery of letters by carriers prevails there, it is probable that service by mail would be suffi" cient.(l) According to many authorities, the post-office cannot be used as a place of deposit merely, but only as a means of transmitting the notice to another office. And, hence, in this view, it is immaterial that the party to be notified (.) Van Vechten v. Pruyn. 13N. V. 649. if) Hume v, Watt, 6 Kan. 34. (8) Price v. McGoldrick. 2 Abb. N.C. 69; (h) McNatt v. Joneo, 62 Ga. 473. (I) R"n$Om v. Mack, 2 'Hlll. 587; Shaylor v.
Mix,4 Allen, 361; Paton v. Lent, 4 Duer, 231;
Cabot Ba"Ji: Russell, 4 Gray, 167. But Bee Mlllen·. Whltlleld, 16 La. Ann, 10. (j) Id. (k) 9 Mete. 683. (I) Compnre 8hoem.ker v. Meehaillco' l!nnk, G9 Pe. 8t.19; LOlli_alln v, Rowel. 6 MaH, (N. S.) Ge6; Waller. v. Brown, 16 Md;
v.
84:4:
does not reside within the corporate limits of the town or city where the paper is payable, but resides some distance outside, resorting to the post-office in the town for his mail. Leaving the notice in the post-office, to be called for by the indorser, does not constitute due service.(m) It is said in Ireland v. Ki.p( n) that" it would be extremely embarrassing to suffer the rule to fluctuate by making exceptions which would lead to ullcertainty." But the contrary doctrine is maintained upon reasons quite as satisfactory.(o) "The post-office is an interdicted medium of commllllication" with an indorser residing in the same town as the holder, "not because it is essentially an active agent of transmission, but because the use of it is permitted not only where it is sure in its results, but also a convenience to the holder. It is permitted, not as a medium of notice prOVided by the governll:ent, but as an indulgence consisting with safety to all parties; it is intenlicted when there is nothing to be gained by indulgence, and where it is just as convenient and safe for the holder to leave the notice at the indorser's dwelling or counting-house. * * * To affect the indorser with it by a transit, and not by a deposit, would be an arbitrary regulation, and a distinction without a difference." Per GIBSON, C. J., in Jiffl.es v. Lewis.(p) It is generally held that the relative position of the person giving the notice and the person receiving it forms the only criterion of the necessity for allowing notice by ·mail. It is immaterial that the legal holder of the paper and the indorser reside in the same place. If the place of payment is elsewhere, tb,e notary who gives the notice of dishonor may send it by mail.(q) The notary is to be deemed for this purpose the holder of the paper. Hence, when the indorser resides at the place of payment, the notary is not justified in depositing notice in the post-office at ·that place, although the legal holder of the paper resides in a different place.(T) But it is held otherwise in some states,(s) and that proof of deposit of notice in the post-office, at the place of plyment by the notary, is sufficient, in the absence of proof that the holder also resided there.(t) If the holder sends by several notices under one cover to an indorser residing elsewhere, the latter may remail notice to a prior indorser residing ,i'l 14e same place, since thenotice is regarded as given by the holder, .and the ,receiving indorser as acting only as his agent, as ,. a mere conduit of conveywhoJll the notice emanates.(u) But to make ance," and not as the party service by mail good in such case, it is necessary that the notice be deposited in the post-office so that it lllay be relleived by the indorser as early ¥l he (m) Ireland v. Kip, 10 Johns. 490; 11 Johns. 232; Palrlek v. Beazley. 6 How. (D. S.) 609; Barker " v. Hull. Martin & Y. 183; Davis v. Bank of Tenn. 4 Snee,l, 390; l<'orbes v. Omaha Nat. Bank, 10, .'Ieb. 33S; Louisiana Bank v. Rowel, 6 Mart. (N. S.) 506. ' (n) 11 Johns. 232. (0) Jone8 v. Lewis, 8 Watts &< 8.14; Woods v. "'eeld, 44 Pa. St. 8&; llarrett v. Evans,28 Mo. 331; Carson v. State Bank, 4 Ala.H8; Hume v. Watt,;' Kan. 34; Tlmmsv. Delisle. 5 Blaekf. 447; Bell v. Slute Bank. 7 B1aekt·. 456; PondDl'ant v. F:verelt. 11 Mete. (Ky.) 6f>8. overruling Farmers' Hank v. BuUer, :I Littell, 498; Spalding v.
Krulz. 1 Dillon, 414. Compare Bank, of U. S. v. Norwood. I Harr. & J. 4.3, (usage.) 0» 8 Wlltt. & S. 14; (q) Greene v. Farley, 20 Ala. 322. See Wynen v. Schappert, 6 Daly, 56S· (1') Bowling V. Harrison, 6 Ho"'. (U. S.) 248. (8) Philine v. Haberlee. 45 Ala. 597; GiuotT"t v. Mech. Bank, 7 Ala. 324. (I) SheltoH v, Carpenter, 60 Ala 201. (u) Manehe.ter Bank v, Fellow·. 28 N. H. (8 Fast.) 302; Eagle Bank v. Hathaway, 6 Mete. 212; Warren v. Gilman, 17 Me. 360; Van Bruul v. Vaughn, 47 Iowa.
have received it in due course of mail if it had been sent by the holder directly to him.(v) Says the court in the case last cited: "We do not find that any case has gone so far as to decide that notice through the post-office may be given in the same manner, and with the same allowance of time, where both parties reside in one town or resort to the same post-office. as where they reside in different towns, communicating with each other by regular mails. There may be very little practical difference in this respect between letters left for deposit and those left for transmission; but we do not feel at liberty for such considerations to disregard well-established distinctions, even though they may appear somewhat arbitrary; or to attempt to improve rules that have become settled by judicial decisions and the usages of business." In Sheldon v. Berham,(w) remailing notice WilS held insufficient to charge a resident indorser, en the ground that the post-office was not a place of deposit for notices to indorser, except where they were to be transmitted to another office. But the point that the indorser merely forwarded the not10e as an agent of the holder was not taken. Again, notice by mail to an indorser residing In the place of payment is sufficient when he has agreed that it may be so given. He is deemed to have done so by indorsing a note payable at a bank whose established custom is to use the mail for the purpose ;(x) or by adding his address under his indorsement; as, for example, .. Trenton, Tenn. ;"(y) "Auburn P. O. ;"(z) or "lIlemphis."(*) But a memorandum on the face ofa note, at its foot, in these words, "Third indorser, J. P. Harrison, lives at Vicksburg," was held insufficient to justify a finding of an agreement to receive notice of dishonor by mail.(t) Summarizing the foregoing, the general rule may be stated to be, that, where the person giving notice and the party to whom' notice is to be given reside, at the time of dishonor, in different post-office deliveries, or (probably) in the same delivery, but where the carrier system prevails, or (according to some authorities) where 'the party notified resides, outside of the corporate limits of the city or town, due notIce of dishonor is deemed to have been given-though by the default olthemail never received-if it is shown that a letter containing the notice was duly addressed'and posted.(!) . WUERE NOTICE SHOULD BE SENT.-If the holder knows to which office the indorser is in the habit of resorting for his letters, notice should be addressed to that office, (a) although it is not at his place of residence,(b) or is not his nearest post-office.(c) If the indorser is in the habit of resorting indifferently to two post-Dffices, the notice may be sent to Where (v) Shelburne Falls Nat. Bank v. Townsley. IOJ Mass. 177.
(t) Compare Chnlmer's Digest of Bills, (Amer. E,!.) 182, and caRes cited. (lL) Cabot Bonk v.· Russell, 4 Oroy. 161; WOQus v. Neeld. 44 Po. St. 86. . (b) Morrio v. Husson,4Sanl!f.ll3jRllld v.Payne, 16 J olmo. 18. (c) Bank of Geneva v. Howlett. 4 Wend. 328;
v. Hewett, 62 Me. 61; ChiMpee Bank v. Eager, 9 Metc. &l3; Grlnman v. Walker, 9 JOWII, 426 j Benedict v. Rose, 16 S. O. 629. " . (y) Davi. v. Bau.k of Tenn. 4 Sneell, 390. (z)
(tD) 4 Hill, 129. (z) .Llme Rock Bank
Baker v. MorrIS, 25 Barb. 138. (.) Tomeny v. German Nat. Bank, 9 Helsk.
493.
(D Bowllng v. garrison, 6 How. (U. S.) 248,
Mercer v. LanCAster. 6 Pa. St. 160; .Bonk,of lJ. S. v. Carneal, 2 Pet. 043; Bank of Louloiana V. TourJIllion, 9 La, Ann. 132. (d) Shelbnrne )'.l1. Bank v. T.ownsle.y.l' \l M"ss. 177 j MOlltgom ry Bank v. Manh, 7 N. Y. 41.
846
there are two post-omcas in. the town where the indorser resides, it is sufficient to address the notice to the town generally,(e) unless the holder knew,(f) 01' might have ascertained by reasonable inquiry, the particular office nearest to or used by the indorser.(g) It seems,. however, that when the holder has learned the name of the town at which the indorser resides, he is not bound to make further inquiry as to the particular office used by him.(h) If an indorser wishes the notice to be directed to him at any particular place other than the post-office bearing tbe name of the town or incorporated village in which he resides, he should. add a direction to that effect in his indorsement.'/< Inthe absence of information as to the indorser's usual post-office, the notice should be directed to his nearest office, if it can be ascertained on proper inquiry.(i) If a bill has been given or indorsed in the way of business, it is enough if the holder addresses the notice to the inrlorser's place of business ;(j) and it is, perhaps, in the holder's option, in any case, to give notice at .either the indorser's residence or place of business.(k) Notice mailed to the indorser's residence is sufficient, unless the holder knew that the indorser was in the habit of using the post-office of an adjoining town; he is not bound to make further inquiry, but may presume that the indorser receives his mail at the post-office <If his residence.(l) If the indorser does not reside within the limits of any post-town, it seems that the notice may be sent to the nearest post-office.(m) Where the indorser has no fixed place of residence, but resides at two places. alternately, going back and forth frequently, notice directed to either is sumcient.(n) . And where the indorser was a sea captain, it was held that the proper place to direct notice was the place where his family resided.(o) The place to which notice should be sent depends milch less on the place of the indorser's Ejxact legal domicile than upon the locality of the post-otfice at which he usually .receives his letters.(p) " The fact of domicile is one circumstance only in determilling where notice should be given."(q) Where t.heindorser was at Washington when the note fell due, attending to hi.8 duties as a member of congress, it was held that notice addressed to him there was sUflicient. although his legal domicile was in Boston, and he had an agent there to attend to his business affairs, the holder having no knowledge of this fact.(I') But notice sent to the indorser's residence at a time when he was absent as a member of congress, has been held sufficient.(s) A temporary stay at a place(') Cabot Bank v. Rossell, 4 Gray, 161; Reiner v.Downer, 23 Wend. 620; Bank of MIlnchester v. Sla80n, 13 Vt. 334. . (j') Roherts v. Taft, 120 Mas·. 169. (,") Mortoo v. Westcott, 6 Cosh. 425; Bur. ]jnllame v.Foster, 12S Mass. 126. (h) Remer v. Downer, 23 Wend. 62(); Bank of Manchester v. 81ason. 13 Vt.334. But compare Morton v. Westcott, 8 Cush. 426. . (*) Remer v. Downer. 23 Wend. 620. (I) Cabot Bank v. Russell, 4 GrHy. 161; Woods v. Neeld,44 Pa. St; 86; Farmers' Bank v. Bltttle, 4 Humph.&;; Moorev. Hardcalitle, 11 Md. 486. (J) Ferrldge v. Fltzj!:erald, L. R 4 Q. B639. (k) Van Vechten v. Pmyn.la N. Y. 549; Bliss , Nicholo, 12 Allen. 443. (I) Seneca County Bank v. Neass, 3 N. Y. 442. (m) Shedd v. Breit, 1 Pick. 401; Bank of U. S. V. CarneHI, 12 Pet. 643; Umon Bank v. Sloker, 1 La. Ann. 269. (n) Exchange" Banking Co. v. Boyce, 3 Rob.
(La.p07. . (0) Fisher v. Evans. 6 Blnn. 611. tOmpHTe Hodges v. Galt, 8 Pick. 2p1. . 0» She:bnrne FlIlls Blink v. Towllsley, IJ:< Mass. 177. (q) Chouteau v. WebBter, 6 Mete. 1. (I') ld. See. "Is'!. Gruh"m v. S"n&:<ton. ) Md. 69. Compare, to the contrary, Wlliker v. Tun.stall 3 How. (Mis9 259; 2 Sm." M. 638. (,) MIlrl' V. Johnsoll; 9 Ye1'l(. 1. Compare Bay. ley's Adm'.' v.lhu"b, 16 Grat. 284.
BIGGS V. HATCH.
847
on business for a few weeks,does not make such 'place the indorser/s residence to which notice may be addressed.(t) DUE INQUIRY. If the holder exercises d.ue, that' is, reasonable, diligence in ascertaining the indorser's address, notice sent to a wrong address will be sufficient·· In Bank of Utica v. Bender(a) his duty in this'respect is succinctly stated as follows: "It is enough that the holder of a bill makes diligent inquiry for the indorser, and acts upon the best information he is able to procure. If, after doing so, the notice faile to reach the indorser, the misfortune falls on him, not on the holder. There must be ordinary or reasonable diligence, such as men of business usually exercise when their interest depends upon obtaining correct information. The holder must act in good faith, and not give credit to doubtful intelligence when better could have been obtained," What constitutes due diligence depends upon the peCUliar and circumstances of each case, but there are certain rules which seem to be well settled. The holder is not justified in assuming without inquiry that the place where the bill is dated is the place where the drawer resides, and notice addressed to: the place of date will not charge the drawer if he resides elsewhere.(b) But' in Pierce v. Struthers(c) the court say that the law presumes the residence of the drawer from the date, and therefore notice sent to the place of date is suffi, cient; and, under the English authorities, it is sufficient in all cases to address notice to the drawer according to the date of the bill.(d) Notica addressed to the drawer at "London," simply, as the bi'll 'was dated, was held sufficient; the court saying that "if the party chooses to draw a' bill and date it so generally, it itnplies that a letter sent tll the post-office and so directed-will find him/'(e) Clearly, the place of date is no evidence of the indorser's residence, and notice sent there will be insufficient if he resides elsewhere.(f) . The inquiries of the holder, or his liotary, shonld be among those likely to know the indorser's residence. Prior holders of· the paper ate proper sources of informatipn, since a party 'through .whose hands the paper has passed .. is presumed to know the residence of tile patty frOm whom he received it, and the prior parties. They are, therefore, proper sources to' which to apply for information, and when applied to and assuming to know,infor. mation given by them may be safely acted upon."(g)· Where the holder inquired of the maker, for whose accommodation the nottl was' indorsed by' the party notified, it was held due diligence to act upon hi's information without further inqniry.(h) So held, also, where the holder of Ii. bill inquired or'the drawee as to the drawer's residence,(i) and where the holder inquired of the indorser of the party notified.(j) But wheretlie notary inqUired of the (I) Walker v. Stetson, 14 Ohio st. 89. (a) 21 Wend. 643. (b) Lowery v. Scott, 24 Wend. 358; FiRber v. Evans. 5 Blnn. 611; Carroll v. Upton,3 N. Y. 272; Barnwellv. Mitchell, 3Conn. 101; Foard v. Johnson, 12 Ala. 665, overrnllngRoblnson v. HRmllton. 4 Stew. & 91 ; TyRon v. Oliver. 43' AI". 455; 8prRgue v. Tyson, 44 Ala. 338; Hill v. VarreJl, 3 Green]. 233. (c) Z1 Pl'. St. 249. (d)Bnrmester v. Barron, 17 Q. B. 82"1 CIRrke , v. Sharpe, 3 M & W. 166; Ex parte )laker, L. R. 4 Ch. DIT. 795, 799; Mann V Moon, Ry. & 249; Renwick v; Tlglie, 8 W.ltep. '391. (.) Clarke v. Shu'pe, 3 M.& W.·l66. (f) Lawrence v. MlIler, 16 N. Y. 235; Branch Bank v. Pierce, 3 Ala. 321. Blitsee Sa.scer V. Whitely, 10 Md. 98. . (8') BeRlev. ParlRh, 2() N. Y. 401. (h) GaWtry '1'. DORne, 51N. Y. 81., Compare' Wilson v. Senler, 14 Wis. 380. (i) Lowery v: Scott, 24 Wend. 358. '(i)·Beaie· .... PRrIRb, 20N."Y.4117; Brownlna:v KlnneRr.l Gow,81. Compare v. Durgin.' 15 Gray, 2(;4.
M.
848
'FEDERAL REPORTER.
officers of the bank where the note was payable, and of an indorser, and examined the directory, without obtaining the desired information, it was held that he had not used due diligence, there being other parties to the paper residing in the place of payment of whom he might have inquired.(k) He is not, however, bound to go abroad to inquire of other parties to the paper as to the indorser's residence. Due diligence only requires inquiry of parties living in the same place and accessible to the holder.(l) If there are no parties to the paper accessible,the holder should inquire of other persons likely to know the indorser's residence-such as the officers of the bank-where the paper is payable. (m) Due diliKence only requires that the inquiry shall be pursued until it is satisfactorilyanswered.(n) If, upon inquiry of a person likely to know,such an answer is received as leaves no reasonable doubt upon,the mind of the inquirer that the indorser's is ascertained, no further inquiry is necessary. The inquiries should be pursued until all sources of information are exhausted, unless a satisfactory answer is sooner received; and then the inquiries may stop.(0) On the other hand, for example, if the inquiries made leave it uncertain whether the indorser has removed from the place of payment to another place, it is the holder's duty to go to the fortner residence of the if he knows it, and learn the fact.(p) Where the second indorser told the holder, on inquiry, that the first indorser lived at one of two places named, but was not certain which, and the holder sent notices to both places, this was held sufficient, thongh the information was erroneous.(q) Merely looking into the directory of a large city, and finding what appears to be the indorser's name and address, was held not to be due diligence on the part of the notary, where there were parties to the paper of whom he might have inquired; the court remarking that "the statement fonnd in the directory afforded the opportu. nityof further inquiry, and suggested its propriety, and the notary could not act without making it unless he acted at hisperil."(r) If the holder knows an indorser's residence at the time he receives the paper, and nothing occurs to suggest to him the idea of a change, he is entitled to presume that his residence remains unchanged, and notice sent to the indorser's former resilIence in good faith and in ignorance of his removal, though without further inquiry at the time of the dishonor, will be sufficient.(s) Where, upon discounting a note for the maker, the holder was told where the aceommodation indorser resided, it was held sufficient to send notice to that address without inquiry, although the indorser had removed just before maturity. the court: .. The plaintiff having ascertained the truth as it was at the time of the purchase might well rest upon that, and Johns. 18; Lamhert v. Ghlselin, 9 How (U. S.) (k) Gilchrist v. Donnell, 53 Mo. 691; WaIf v. 552; Spencer v. Bank of Salina, 3 Hili, 520. Burgess,69 Mo. 583. See Beveridge v. Burgis, 3 (11) Hume v. Wlltl, 5 Kan. 34. Camp 262. (q) Beale v. Parish, 2,) N. Y. 407. (I) ,Branch Bank V. Pierce, 3 Ala. 321; Harger (r) Greenwich Bunk v. De Groot, 7 Hun, 210. v. Bemis, 1 Sup'm. Ct. (T. & C.) 460. (m) Barr v. Mllr.h, 9 Verg. 2,';3; Herbert T. , Compare Baer v. Slppert, 12 Hun, 616. (0) Requa v. CoJllns, 51 N. Y. 144; Ward v. ServlD. 41 N. J. L. 22£0; Branch Bank v. Pierce, 3 Perrln,54 Barb. 89; Bank of ULica v. Phillips, 3 Ala. 321. Wend. 408; Hal'ris v. Memphis Bank. 4 Humph. (n) Bank of Utica v. Bender, 21 Wend. 643. 519; Saco Nut. Bank v. Sanborn, 63 Me. 340: (Q) Saco Nat. Bank V. Sanhorn, 63.Me. 340; Peters v. Hobbs, 25 Ark. 67. Harger v. Bemis, 1 Sup. Ct. (T. & C.) 460; Ran. 80m v Mack, 2 Hill, 687; Reid v. Payuo, 16
849 '
'was not thereafter called to make any inquiry into the matter until some nformation came to him which made it his duty to do so. The holders of notes and bills are not bound to a continual watch over the moveTIlents of indorsers, unless for good cause; the question of reasonable diligence arises only when there is reason for action/'(t) Where the indorser holds himself out after his removal as still a resident, and misleads the holder into believing that he still resides at the place where he did when the paper was taken, notice to his former residence is good.( u) The holder is not to bepr<:lsumed to know of an indorser's removal from the mere proximity of their places of this is a question for the jury.(v) But where the indorser's removal was under circumstances of unusual publieity, notice addressed to his' former residence was held insufficient.(w) It seems that if the holder knows of the indorser's removal, but is unable on due inquiry to learn bis new residence, he should send notice to bis former residence.(x) If, after diligent inquiry, notice is sent.to the wrong place, the holder's right of action is complete, and subseqnent information of the indorser's true resi. dence does not impose upon him the duty of sending a sccond notice.(y) Just as the indorser is bound by notice sent in accordance with his directions, so the holder is likewise bound to send notice to an address addell bv the indorser to his signature.(z) Where an added to his 'name" 214 E. 18th street," that being his business address in New York city, it was heW insufficient to address notice to him at .. N. Y. City" simply. ADDRESS. Where the letter containing notice was addressed simply to" Mr. Haynes, Bristol," it was held that the direction was too general to raise a presumption that the letter reached the particular individual intended.(a) But notice addressed to "Mrs. Susan Collins, Boston;" has been held sufficient, though the street and number might have boon learned from the directory.(b) Where the notice was addressed to "The legal representative of" the indorser, he having died and no administrator having been appointed, this was held sUfficient.(o) Notice directed to a town, without naming the state, is not duly addressed where there are towns of that name in different states.(d) Where the indorser resided at Walnut Bottom, but there was no post-ottice there, the nearest being at Carlisle, the county seat, notice was held duly addressed to the indorser, "Walnut Bottom, near Carlisle."(e) A mistake in the name of the post-office to which the notice is sent, does not render the notice inoperative, where it appears that the post-office is as well known by OIle name as the other. A notice addressed to "Geddesburgh," when the name of the office was" Geddes," was accordingly held sutlieiellt.(f) (t) Rowland v. Rowe, 48 Conn. 432. (u) LeWiston Fan. Bank v. Leonard, 43 Me. 14!. (v) & Mech. BAnk v, Harris, 2 Humph. 3U; McVeie;n v. Allen, Grat. 588. ('0) Planters' Bank v Br,,<lford,4 Humph. 39. (x) WUsonv. SCnler, 14 Wis, (y) Lambert v. GhiRelin, 9 How. (U. S.) 6521 Bank v. Birch, 17 Johns. 25. Contra dictum, Beale v. Parish, ,,0 N. Y. 407. (*) Bartlett v. Rollinson, N. Y. 1871 Peters
v.16,Do.8-54
v. Hobbs. 25 Ark. 611 & Mech, Bank T. Battle. 4 Hlimph. 86. (a) Walter v. Haynes, Ry. & M. 149·. But ..e Mallll v. Moors. ld, 249. True v. Collins, 3 Allen. 438. (c) ,Hoyd's Adm'r v. City Savings Bank,!5 Grat. 501. (II) Beckwith v. Smith, 22 Me. 12&. (c) Weakly v. Bell. 9 Watts, 413. See Dank of tJ. S. v. Carneal, 2 Pet. 643; Batemlln v. ioseph, I! East, 433. (I) Bank of Geneva v. a_wlett, 4 Wend, 328.
850
SERVICE BY MAIL ts COMPLETE when a letter containing the notice, duly addressed and stamped, is deposited in the post-office, or delivered to a letter-carrier on his routei(a) or deposited in a postal box attached to a lamppost.(b) WAYLAND E. BENJAML.'O. New York Oitg. (4) Wynen v. Schappert. 6 Daly, .sq. , Compare Skilbeck v. Garbett, 14 L. J. Q. B.338; 1 Q. B.ll4ti. (b) Mechanic.' &: T. Bank v. Crow, 6 Dal,. 191; GreenWich Balik v. De Groot, 1 Hun, 210.
STINSON
HAWKINS.·
(Oirouit Court, E. D. MislJ()uri.
June 15, 1888.)
FUUD-CoNVEYANOE TO RumER AND DELAY CUEDITORS.
A mortgage executed to' hinder and delay the mortgagor's creditors, and which purposely exaggerates the mortgagee's demand, and the object of which is known to the m,ortgagt6atthe time of its execution, is void as against such ' creditors.
Motion for a New Trial For a full statement of facts, and a report of the first trial, see 13 FED. REP. 833. The was tried before a jury. The charge of the' court was as follows: TREAT, J., (orally.) Gentlem.en of the Jury : The case that is before' yon for consideration is one, the like of which often occurs in the administration of justice. It seems that Mr. Hawkins, the ant, of which there is nO doubt,caused an attachment to be issued and levied on the supposed property of Mr. King, his debtor, which, of course,in law, he had a perfect right to do; btit; on the other hand, it is asserted by the plaintiff that it was Mr. Stinson's property. It was Mr. Stinson's if the mortgage, of which you have heard so mnch, was a valid mortgage. Now, if that mortgage was a validone, Mr. Stinson, the plaintiff in this case, who was the mortgagee, has the right to recover from this defendant for the value of the property taken away and lost. As possibly there might be Bome confusion with regard to the items, I have requested counsel to reduce those itoms to a short statement here for your guidance; in other words, tile chattel mortgage from Mr. King to Mr. Stinson included a grea.t many matters. The attachment issued at the instance 'ilfdefendant, Hawkins, did not cover all the mortgaged property. *Heported by B. F. Rex, Esq., of the St. Louis bar,