The presentment and demand of commercial paper having days of grace, must be made within reasonable hours on the last day of grace. For the purpose of fixing the liability of endorsers, the note or bill is payable on demand at any time within those hours.
What are reasonable hours, will depend on the question, whether or not the bill or note is payable at a bank, or place where, by the established usage of trade, business transactions are limited to certain stated hours.
If there are such stated hours, where the note or bill is payable, the presentment and demand must be made within those hours. But if there are no stated hours, and no place of payment is designated in the note or bill, the presentment and demand may be made either at the place of business or residence of the maker or acceptor.
If at his place of business, it must be within the usual business-hours of the city or town; if at his residence, then within those hours when the maker or acceptor may be presumed to be in a condition to attend to business.
ITotiee may be given to the endorser, or other parties entitled to notice, immediately after presentment to the maker or acceptor, and refusal by him to pay, although it is not necessary that notice should be given until the following day.
After due presentment and demand, the liability of the parties becomes fixed. If, however, the maker of the note chooses after this to seek out the holder, and pay his note, he can do so, and thus save himself from the liability to suit on the following day.
For the purpose of fixing the liability of an endorser, the note is payable on demand at any time, during reasonable hours, on the last day of grace; but, for the purpose of sustaining an action, the holder must wait until the following day, as the maker has the whole day to make payment.
A notarial certificate of presentment and demand, and of protest for non-payment of a promissory note, taken from the record of the notary, is admissible, and is prima facie evidence of the facts contained therein, in like manner as the original protest.
It is not necessary that the certificate should state the form of notice given; any notice is sufficient if it inform the party to whom it was given, either in express terms or by necessary implication, that the note has been duly presented at its maturity, and dishonored.
There is no necessity for protesting a promissory note; a demand for payment, and, upon neglect or refusal to pay, notice to the endorser, are all that is required.
Field, J., after stating the facts, delivered the opinion of the Court—Terry, C. J., and Burnett, J., concurring. In support of the position, that the demand and notice were premature, the defendant’s counsel cites the case of Toothacre v. Cornwall, 4 Cal., 28. In the opinion delivered in that case, [631]the Court say, that when a note is payable in bank, notice of non-payment may be given to an endorser on the evening of the day on which the note is payable after the close of banking-hours ; and when the note is not payable in bank, notice may be given on the evening of the day it is payable at the close of the usual hours of commercial business; and in places where there are no regular hours of business, the notice may be given after sunset. There is ho doubt that notices may be given at the times mentioned, if presentment and demand have been made, but the inference from the language of the opinion is, that notices given at an earlier period of the day, would be premature; and this is what.the Court intended to decide, for in that case, notice given at from four to four-and-a-half o’clock, p. m., of the day on which the note was payable, was held insufficient, not on the ground urged by counsel, that there had been no demand and refusal, but on the ground that the record did not disclose that the time was after the expiration of the usual hours of business, and the Court necessarily knew that in midsummer, the hour was far from sunset.
The rule thus laid down, would be conclusive of the present appeal, if that case were held binding upon us. We would not disregard a decision 'of this Court, deliberately made, unless satisfied that it was clearly erroneous. But the highest regard for the doctrine of stare decisis does not require its observance when a plain rule of law has been violated. The decision in Toothacre v. Cornwall is in direct conflict with the law, as to presentation and notice, as settled by all the authorities, both of England and the United States. And besides, the rule, as laid down in that case, is one of great inconvenience to holders of commercial paper, and of no possible benefit.
The general rule as to the presentment and demand of commercial paper having'days of grace, is this: the presentment and demand must be made within reasonable hours during the last day of grace. For the purpose of fixing the liability of endorsers, the note or bill is payable on demand at any time during those hours. What are reasonable hours, will depend upon the question, whether or not the note or bill is payable at a place or bank, where, by the established usage of trade, business transactions are limited to certain stated hours. If there are such stated hours, where the note or bill is payable, the presentment and demand must be ma.de within those hours; but if there are no stated hours, and no place of payment is designated in the note or bill, the presentment and demand may be made either at the place of business, or residence of the maker or acceptor ; if at his place of business, it must be within the usual business-hours of the city or town; if at his residence, then, within those hours when the maker or acceptor may be presumed
to be in a condition to attend to business. Story in his Treatise on Promissory Motes, section 226, says:
“ Having thus ascertained the time when a promissory note becomes due, and payable, * * * Ictus now pass to the consideration of the time and mode in which payment is to be demanded on the day of the maturity of the note, and in the first place, within what hours of the day the presentment for payment is proper and allowable. The general answer to be given to such an inquiry is, that it must be within reasonable hours, during the day * * *. If there is a known custom or usage of trade in the town or city, that will furnish the proper rule to govern the holder, for then the presentment must be within the hours limited by such custom or usage * * *.”
In Packor v. Gordon, 7 East, 385, an inland bill was accepted, payable at a banker’s in London. On its maturity, it was presented at the banker’s, after the usual banking-hours, when the bank was closed, and it was held that the presentation was too late. Lawrence, J., said : “ But where a bill is accepted in this manner, it must be'understood by all parties concerned that it is to be presented for payment at the banker’s within the usual hours of business; and not having been so presented in this case, there was no evidence of the dishonor of it in order to charge the drawer.” In Elford v. Teed, 1 Maulé & Selwyn, 28, a similar decision was made, and Lord Ellenborough, C. J., said : “ There was not any text-writer upon whose authority a presentment of a bill by a notary at a house of business after it was'closed, could be sustained. It is laid down in Marius, 2 Eldw., 187, that it must be made during times of business, at such reasonable hours as a man is bound to attend, by analogy to the horce juridicce of the Courts of Justice.”
In Staples v. Franklin Bank, 1 Metcalf, 43, the note was presented and payment demanded before eleven o’clock in the forenoon of the last day of grace, and upon a refusal of payment, suit was immediately commenced, and ^he Court held that the maker of the note was bound to pay it upon demand, at any reasonable hour of the last day of grace, and may be sued immediately after default. The doctrine, so far as authorizing a suit on the last day of grace, is not uniform in the different States; but on the point that a presentment and demand may be made at any reasonable hour on the last day of grace, there is no conflict of authorities. In the case cited, Chief Justice Shaw says: “ Indeed, the rule seems to be settled by all the authorities, English and American, that a demand must be made on the maker, or acceptor, within reasonable hours on the day of maturity, and when the bill, or note, is in bank, which has certain fixed and known hours for being open for business, those will be construed to be reasonable hours.”
If the presentment be made at unreasonable hours, too early or [633]too late, it will be insufficient and unavailing. In Barclay v. Bailey, 2 Campbell, 527, the presentment was made at the drawer’s residence at eight in the evening, and it was argued that being so late it was insufficient to charge the drawer, but Lord Ellenborough said: “I think this presentment sufficient. A common trader is different from bankers, and has not any peculiar hours for paying or receiving money. If the presentment had been during the hours of rest, it would have been altogether unavailing, but eight in the evening cannot be considered an unreasonable hour for demanding payment at the house of a private merchant who has accepted a bill.”
In Wilkins v. Jardis, 2 Barn. & Ald., 188, Lord Tenterden said : “As to bankers, it is established with reference to a well known rule of trade, that a presentment out of the hours.ot business is not sufficient; but in other eases the rule of law is, that the bill must be presented at a reasonable hour. A presentment at twelve o’clock at night, when a person has retired to rest, would be unreasonable; but I cannot say that a presentment between seven and eight in the evening is not a present-’ ment at a reasonable time.”
In Lunt v. Adams, 17 Maine, 230, the presentment was made and payment demanded at eight o’clock in the morning of the last day of grace, and they were held to have been made at an unreasonable hour. In Dana v. Sawyer, 22 Maine, 244, the presentment and demand were m4de a few minutes before twelve at night, after the maker had retired .to rest, and they were also held to have been made at an unreasonable hour, and therefore insufficient and unavailing.
And notice may be given to the endorser, or other parties entitled to notice, immediately after presentment of the note or bill is made to.the maker, and payment refused, although it is not necessary that such notice should be given until the following day. In Burbridge v. Manners, 3 Campbell, 103, the note was presented for payment in the forenoon of the day it became due, and, in the afternoon of the same day, the plaintiff caused notice of its dishonor to be sent to the defendant. It was urged, on the trial, that this notice was premature, that the maker of the note had the whole of the day it became due to pay it, and till the last minute of that day, it could not be considered as dishonored. But Lord Ellenborough said, “ I think the note was dishonored as soon as the maker had refused payment on the day when it became due, and the notice sent to the defendant must have answered all the purposes for which notice in such cases is required. The holder of a bill or note gives notice of its dishonor in a reasonable time, the day after it is due; but he may give such notice as soon as it has been dishonored the day it becomes due, and the other party cannot complain of the extraordinary diligence used to give him information.” See Chitty [634]on Bills, 387; Moline, ex parte, 19 Vesey, 216; Corp v. McComb, 1 Johnson’s Cases, 329; Bussard v. Levering, 6 Wheaton, 102; Lindenberger v. Beall, ib., 104; Farmers’ Bank of Maryland v. Duvall, 7 Grill, and Johns., 79; Smith v. Little, 10 N. H., 526; Coleman v. Carpenter, 9 Barr, 178; King v. Holmes, 1 Jones, 457; Shed v. Brett, 1 Pick., 401.
In this last case, Chief Justice Barker says, “ The principle adopted in England and in this commonwealth, in relation to negotiable securities, is, that after refusal to pay on demand, made on the day when the money is due according to the contract, the note or bill is dishonored, and notice may be immediately given to the drawer or endorser; though it is tiot necessary it should be given until the day after, or, if the endorser is in another town, by the next mail after the day on which the demand is, made. The earliest possible notice of the fact which renders the endorser liable, is the most advantageous to him, as the object of the notice is to enable him to secure himself.”
But it is urged by the defendants’ counsel that Carpenter had the entire day in which to pay the note, and, therefore, any demand previous to sunset was premature, and he cites Wilcombe v. Dodge, 3 Cal., 260. This case only decides that the maker of a note has the entire day on which it falls due, within which to pay it, and that a suit brought on the last day of grace is prema-ture; there is nothing in this decision in conflict with the views expressed in this opinion. For the purpose of fixing the liability of an endorser, or other party entitled to notice, the holder of a note must see that a due presentment and demand of payment are made of the maker, and notice thereof given to the endorser. When this is done, the liability of the parties become fixed. The holder can then remain passive. If, however, the maker chooses after this to seek out the holder and pay his note, he can do so, and thus save himself from the liability to suit on the following day. The rule is, that for the purpose of fixing the liabilities of an endorser, the note is payable, on demand, at any time during reasonable hours on the last day of grace; but, for the purpose of sustaining an action, the holder must wait until the following day, as the maker has the whole day to make payment. In Osborn v. Moncare et al., 3 Wendell, 170, Mr. Justice Sunderland says : “Notice to the endorser, on the third day of grace, after a demand upon the maker, and his default of payment, is good, although it need not be given until the following day. It being earlier than is required, cannot form any objection on the-part of the endorser. The demand upon the maker should be made on the third day of grace, and within a reasonable time before the expiration of the day, and if he then refuses payment, the holder has done all that is incumbent upon him to do, and may treat it as a dishonored bill, so far as immediately to give notice [635]to the endorser; but still I apprehend the maker has the whole day to pay it, if he thinks proper to seek the holder.”
In Coleman v. Carpenter, 9 Barr, 179, Chief Justice Gilson says : “ The contract of the acceptor is to pay on demand, and that it is broken if the bill be not paid the instant it is presented; from which it results that notice may be given the same day. True, an action cannot be brought till the next day, from the anomalous reason that the acceptor may pay after refusal, if he take the trouble to seek the holder. A better one would be, that as there are no fractions of a day but such as are made by statute, or the custom of merchants, the impetration of a writ is an act which covers the whole day.”
The notarial certificate was admissible. Section four of the act concerning notaries public, passed in 1853, authorizes notaries public to demand acceptance of and payment of foreign bills, and to protest the same for non-acceptance Or non-payment. Section five of the same act authorizes them to demand acceptance of inland bills, and payment thereof, and of promissory notes, and to protest the same for non-acceptance, or nonpayment, as the case may require. Section seven requires them to keep a record of their official acts, with certain exceptions, specified in section six, and to give a certified copy of any record in his office, to any person, upon the payment of the fees thereof; and by section ten, the original protest, under the seal of the notary, stating the presentment of the bill, or note, for acceptance, or payment, and the non-acceptance, or non-payment, and the service of notice on any or all of the parties, to such bill or note, specifying the mode of giving such notice, and the reputed place of residence of the party to whom given, etc., is prima facie evidence of the facts contained therein; and a certificate of the notary, drawn from his record, stating the protest and the facts therein contained, is made evidence of those facts, in like manner as the original protest. It is evident that the tenth section contemplates an insertion in the protest of the notary, of the fact of service of notice, with specifications of mode, manner and place, and that both the original protest and a certificate from the record of the notary, shall be held equally admissible in evidence. - The whole object of the record was to preserve in a permanent form the evidence of the protest, and notice by which the liabilities of parties had become fixed; and it could never have been intended that a certified copy of one-half of the record should be evidence, and not of the other half.
But it is urged that, if the certificate of the notary, from his record, was admissible, it did not show the service of any notice sufficient to charge the defendant Pico. The objection is that the certificate does not disclose the form of the notice given, but simply states that notice of protest was served upon Pico by letter, addressed to him at his residence, and delivered to a person [636]there in charge, of proper age and capacity, Pico being at the time absent. Ho precise form of words is necessary to constitute the notice. It will be sufficient if it inform the party to whom it is given, either in express terms or necessary implication, that the note has been duly presented at its maturity, and dishonored. It was at oye time held essential, that the notice should also state that the holder looked to the party notified for payment, but this is no longer requisite, the liability being a legal consequence of the dishonor, which the party must be aware of, from the fact of receiving the notice. Story, § 353; Solarte v. Palmer, 8 Bligh N. S., 874; Furse v. Sherwood, 2 Adol. & Ellis, N. S., 388.
The statute of 1853 provides that a certificate from the notary’s record shall be prima facie evidence of the facts therein contained. The certificate shows that “notice of protest" was given to Pico. What, then, is-the import of the words “ notice of protest ?” Of what facts are they prima facie evidence ?”.
There is no necessity for protesting a promissory note; a demand of payment, and upon neglect or refusal, notice to the endorser, is all that is requisite. yA formal protest is only necessary with foreign bills of exchange, but in practice, which is sanctioned by the statute, it is customary for notaries to formally protest notes upon a demand of the maker and his refusal of payment; and the idea conveyed by the word protest, both in the mercantile community, and among gentlemen of the legal profession, is not merely that a formal instrument has been drawn up by a notary public, but that the paper in question has been dishonored upon due presentation and demand. • The merchant who states that he has received notice of protest of certain paper, and the lawyer who offers to prove that notice of protest has been given to the endorser of the paper in suit, both mean the same thing, that the necessary steps have been taken to fix the liability of the endorser—namely, presentment, refusal of payment, and notice given, v
The same view is taken of the meaning of the term “protest” by the Supreme Court of Hew York, in Code ington v. Davis. In this case, Mr. Justice Jewett says : “ I think that in meic.tntile, as well.as in legal language, the term (protest,’ used in connection with a promissory note endorsed, as the defendant used it, is understood to mean the taking of such steps as by law are required to charge an endorser—that is, demand and notice.” 3 Denio, 25. In the Cayuga County Bank v. Hunt, 2 Hill, 635, the notarial certificate, which was drawn up nearly two years after the presentment and protest, stated that “ notice of protest” of the bill in question (which was an inland bill) was duly given to the defendants on the third day of grace, and it was objected that it did not state the presentment was made during offieehours, to which the Court said, Mr. Justice Cowen delivering [637]the opinion: “We think, therefore, that the certificate, in fair construction, imports a presentment during the proper hours of business. These, except when the paper is due from a bank, range through the whole day down to bed-time, in the evening. It would be quite a forced presumption on the words of an officer, saying he presented on such a day, to fix the hour either before or after that when business is usually transacted.” In Platt v. Drake, 1 Douglass, 296, a notice that a note had been protested for non-payment was held insufficient to charge an endorser, on the ground that no protest was necessary to a promissory note, and that the term, therefore, referred only to the instrument drawn up by the notary, but in Spies v. Newberry, 2 Douglass, 428, the same Court held that notice to the endorser of a foreign bill of exchange that the bill had been protested for non-payment was a sufficient notice of dishonor, and that the term protested, when thus used, implied that payment had been demanded, and refused.
In this last case, the Court say: “ A protest is a constituent part of a bill of exchange, indispensably necessary to be made, to entitle the holder to recover the amount from the other parties to the bill; and is, by law, made evidence of presentment and dishonor. The words, protested for non-payment, in this way, have come to have a technical meaning in matters of this nature. In them is included, not only the idea that the bill is past due, but that payment of it has been demanded, and not being paid, it is, therefore, dishonored..^ They mean, that the process necessary to dishonor the bill: to wit, demand, refusal of payment, and the drawing up of a formal protest, has been gone through with. All this is included in and meant by the term protested. The meaning of this word, as applied to bills of exchange, is well known, well understood, and as the main object of the notice is to put the party upon inquiry, upon his guard, it seems to me this is all that is necessary for that purpose.”
In this State, the statute provides for the protest of foreign bills of exchange, inland bills, and promissory notes. It requires the same record in all cases, and gives to the certificate of protest of a promissory note, the same effect as to the certificate of a protest of a foreign bill, and if in one case such certificate would, by necessary implication, import a demand of payment and refusal, so it will in all cases.- We hold, therefore, that the 'certificate that notice of protest has been given by fair intendment, imports a notice of such facts as are sufficient in law to charge an endorser. The certificate states all the facts required by the statute, and to it we must give the effect, also prescribed by statute, of prima facie evidence of the facts stated. In the present case, there was no opposing evidence, and the prima facie evidence thus became conclusive, so far as fixing the liability of Pico.
[638]We have intentionally avoided noticing the position taken hy the plaintiff’s counsel, and urged with great force of argument, that no demand or notice were necessary to fix the liability of the defendant, Pico, as its consideration was not essential to the determination of the case.
Judgment affirmed.
AI Brief
AI-generated · verify before citing
Holding. A promissory note must be presented for payment at a reasonable hour on the last day of grace to charge an endorser, and a notarial certificate stating that 'notice of protest' was given is prima facie evidence that all necessary steps, including demand and refusal, were taken.
Issues
Whether a demand for payment on a promissory note made during reasonable business hours on the last day of grace is sufficient to charge an endorser.
Whether a notarial certificate stating 'notice of protest' was given is sufficient evidence to establish the liability of an endorser.
Disposition. affirmed
Quotations verified verbatim against the opinion
“The rule is, that for the purpose of fixing the liabilities of an endorser, the note is payable, on demand, at any time during reasonable hours on the last day of grace”