Bank of Columbia v. Magruder's Adm'x

At this term the opinion of the court was delivered by

There were two bills of exceptions signed in the trial of this case, which from the record appears to be, a suit brought by The President, Directors and Company of the Bank of Columbia, as endorsees of a promissory note, against the administratrix of Thomas C. Magruder, the first endorser. The note was drawn by George Ma-grader, on the 2d of February 1815, and made payable to the appellee’s intestate, sixty days after date; and payment of it is stated in the declaration to have been demanded on the 7th of April 1815, which is the day after the usual days of grace.

The plaintiffs produced George Magruder, and offered to prove by him that the note was discounted at bank, to raise money for Thomas C. Magruder, alleging that he was in truth the drawer, and not entitled to notice. He was objected to on the score of interest, and rejected as an incompetent witnes3 to prove the facts for which he *178was produced; and from the rejection has arisen the onlj question this court has to decide on the first bill of excepbons. George Magruder, on the voir dire, expressed his doubts óf his interest in the event of the cause, and represented it to depend upon the solution of a question; which was not solved by the óourt, and which perhaps from his statements they could not ailswer, if it had been their province to decide it. We do not then consider him & witness, declaring himsélf on oath to be interested, nor as a witness, believing himself to be so, in neither of which lights has he been contemplated by Us in the opinion wd have Formed on this subject:

Independent of the views he has himself taken of his situation, the true question is, lías he in fact such a direct interest in the event as ought to exclude him from giving testimony on behalf of the appellants? If he has such an interest, this court has been unable to discover it. A recovery against the administratrix of theendorsor, will put nothing- into his pocket; and as a judgment hás already been obtained against him as the drawer of the note, it will not screen him from an execution, which the bank may at any moment issue against him.

Should the case be established on his testimony against the administratrix, and the principal, interest and costs, recovered of her, she will have her remedy against him as drawer; and it is not easy to perceive how the evidence given by him; or the verdict founded on it, could any way benefit him in the defence he may please to set up to her action. If the account he has spoken of is used in bar of her suit, it must be supported by competent testimony, wholly unconnected, with his narrative concerning the original negotiation between him and the'endorsor; and he can have no advantages in such defence which lie would not have in an action instituted against the administrabas on the same account. A recovery in this cause against the administratrix will carry the costs, and as far ás they go, will augment her demand against George Magruder; and in this view he may be said to be a witness swearing against his interest. Deeming him every way a competent witness, we think lie ought not to have been prevented from-giving testimony .for the plaintiffs.

. The second bill of exceptions embodies all the testimony in this cause. The appellants, who were the plaintiffs ia *179the court below, having by competent testimony offered to prove, among other things, that it had been the uniform and unvaried practice andyuslom, from Ihe.year 1792 to the year 1818, of the Bank of Columbia, and of all the ether banks of Washington and George Town, to demand payment of promissory notes, of the drawers thereof, on the day after the last day of grace, and in default of payment, to give notice on the same day to theendorsorg: and having offered, to prove that the endorsar, Thomas C. Magrmler, had a knowledge of this custom, and the universality of it, by showing that in the year 1813 he received an accommodation in the Union Bank of George-Town, on a note drawn, by himself for a considerable sum of money, which was,, continued in that bank; aud having also offered to prove, by the testimony of the clerk of the notary public, that he demanded payment of the note of the drawer, George Metgnnler, on tire seventh day of April 1815, which was refused, and that oa the same day he gave potice of the demaud and refusal to the endorsor, Thomas C. Magruder, in a latter put into the post office in George Town, addressed to him as residing near that place, being previously instructed, by the best information he could get, that he resided near George Toum, and that it was usual to forward notices or letters to. him through the medium of the George Tam post office, addressed to him near George Town, prayed the court to instruct the jury, that if they believed, from the evidence the custom to have been as stated, and to have been known to the defeuilaKf’s intestate at the time he endorsed the note, then it was competent to the jury to presume that the intestate consented to the said custom, and agreed that the demand and npt\ce.shoul4,be conformable to the said custom; and that if the jury believed, from the evidence, that the notary public used due diligence to ascertain where the intestate lived, and where to address the notice to him, and did address the same to him accordingly, then the said notice is sufficient; and if the demand gud notice was made and given according to the aforesaid custom of the banks, then the plaintiffs are entitled to recover. '£his instruction was refused, and the refusal has given rise to the discussion of several points in this court, two 4tf which we shall proceed briefly to examine. One relates to the time of demand of payment of the drawer of the note, and the other to the legal sufficiency of the. ixotief? given to the endorser.

*180The demand was made on the day after the three days 0f grace, and cannot create a responsibility on the endor- . sor, unless it was made in conformity to the established practice and custom of the bank, whic'h were well known and understood by him. Had the prayer been gratified by the court, these facts would have been investigated by the jury, and if established against the endorsor, they would inevitably have led to the conclusion, that he was liable to the plaintiff’s action. A custom like this, brought home to the knowledge of the party dealing with the bank, enters into the essence of the contract, becomes a constituent part of it, apd must have its due weight in the exposition of it.

The allowance of three days of grace, in the payment of negotiable paper, from long and universal usage, has become’the general law of such, contracts, but it is not such an inflexible rule as admits of no innovations upon it.

It may be altered and controled by the agreement oí; the parties, and what is tantamount, it may be changed by' the usage and custom of dealing perfectly known to the parties,' and to which they will be supposed to have had special reference in making their contract. If it was an established and unvaried usage of the Bank of Columbia to exceed the three days óf gracé, and to demand payment on the fourth day, and this was well known to Thomas C. Magruder at the time of the endorsement', he is to be supposed to have assented 'to it; and this depárture from the general, rule will be sanctioned, to give eificacy to the contract, and to establish his liability to pay the money. It gives us pleasure to know, that we'are supported in those ideas by the supreme court of the United States. In their late decision of the cáse of Renner vs. The Bank of Columbia, 9 Wheat. Rep. 581, they have fully recognized them. The opinion of the court, delivered by Judge Thompson, is an able exposition of the law of commercial contracts, and "of the" legal influence the custom and usage of particular banks may have upon them, aiid will unquestionably'be regarded by all as a commanding authority on such- subjects. We close this part of the case with a single remark, in answer to the objection taken on the argument to the declaration in the cause. It is this, that however faulty it may be, in stating the demand on the fourth day , br in omitting to, state *181the custom and the endorser's knowledge oí. d, upon neither of which points do we now undertake to decide — the objection cannot at this’time be supported, if there is any thing in the allegation, advantage ought to have been taken of it on demurrer, or perhaps cn the trial, by way of exception to the admissibility of the evidence, and in neither of these forms can it at present be considered.

With regard to ihe notice to the endorser oi the demand on, and refusal of p»,} ment by the drawer, it too would have been examined by the jury, if the instructions asked for on this head had been given by the court. If it had been ascertained by the jury, that the clerk of the notary public had demanded payment of the note of the drawer on the seventh day of April 1815, according to the nsage and custom of the bank before alluded to, and that on the same day he gave notice of the demand and refusal to the endorser, in a letter pat into the post office in George Town, addressed to him as residing near that place, having been previously instructed, by ’the best information he could get, that the endorser resided near Georgs Town, and that it was usual to forward notices or letters to him through the medium of the George Tovjn post office, addressed to him near George Town, we can have no doubt that’this would have been sufficient notice to charge the endorser. When the parly to bo nf-. fected'by the notice resides in a different place from the holder, the rule is, that the notice may be sent through the post office to the post office nearest to the party entitled to Such notice. Ireland vs. Kip, 11 Johns. Rep. 231. Freeman vs. Boynton, 7 Mass. Rep. 483. Here the rule we think has teen complied with, considering, as vve must do, the post office at George Town to be the post office nearest to the endorsor, in the absence of all proof that there was a post office nearer to his residence. ■

We therefore dissent from the opinions expressed by the uourt below in both of the bills of exceptions.

JUDGMENT EEVEESEDj ASM rEOUEDESDO AWAEDm,