PRICE v. McGOLDRICK.
City Court of Brooklyn; General Term,
April, 1876.
Promissory Note.—Indorser.—Notice.
When one indorses a note in order to enable the maker of it to obtain credit, he is not a mere accommodation indorser, but a surety.
The indorsee and the notary both lived in Brooklyn, and the notary had his office in New York, where the note was payable. Held,.
*70that service of notice of dishonor, by mailing it in Brooklyn, addressed to the indorser at his place of business there, was sufficient, there being proof that he would receive it sooner in ordinary course, if thus mailed, than if mailed in New York.
Prom proof merely of the deposit of a notice of the non-payment of a promissory note, by a notary in the post-office,- directed to an indorser at his place of business, and postage pre-paid, it must be regarded as having been delivered.
Appeal by defendant from a judgment on a verdict, and from an order denying a new trial.
This action was brought by Christopher Price, against Wm. O’Toole, as maker, and Neal McGoldrick, *71as the indorser of a promissory note. Under the direction of the court the plaintiff had a verdict.
It was claimed that the defendant was an accommodation indorser, and that he was not duly charged as such on the non-payment of the note.
It appeared on the trial, that William O’Toole, the maker of the note, purchased from the plaintiff and one Patrick J. Gorman certain property. In speaking of the negotiation and purchase, the defendant, examined as a witness in his own behalf, says, “O’Toole paid $150 cash down, and was to give his notes to Price and Gorman for the balance, and [the witness] was to indorse them.” This note was one of those then given and indorsed.
It was drawn, however, to his order, and payable in the city of New York, and after some objection by him to indorsing it in that form, and not according to the previous agreement, he did so, and it was delivered to Gorman. On this point defendant testified: “I objected to indorsing the notes in the way they were drawn out. I said to Gorman, ‘Mr. O’Toole owes me no money; he had no right to give me a note ; and I owe you no money; and I have no right to transfer these notes to you, therefore it seems an illegal transaction ; the arrangement was that O’Toole should make the notes to you, and that I should then indorse them, which I was satisfied to do.’ He said his lawyer told them it was easier to negotiate them in this way, and to have them drawn up this way. In this way he persuaded me to indorse the notes, as the one in this action is indorsed.” At the time of its dishonor, all the parties lived in Brooklyn. It was given to one Nichols, unindorsed by the holder, to collect, who gave it to one Bouton, who made the demand, and then gave it to a notary to notify the indorsers.
The notary to whom it was given had his office in New York, but resided in Brooklyn. He deposited a *72letter containing the notice to the defendant in the Brooklyn post-office, directed to his place of business in Brooklyn, and pre-paid the postage thereon. Defendant swore he never received it. It also appeared by the evidence, that by mailing the notice in Brooklyn, the defendant would, in ordinary course of mail, receive it sooner than if mailed in New York.
The coii/rl held, as a matter of law, that the deposit in the post-office in Brooklyn was a sufficient service; that the meaning of the indorsement was, that the defendant should become security, and that contract would be completely nullified if the fact that he was an accommodation indorser was allowed as a defense in this case. He accordingly refused to charge that defendant was not liable if he indorsed for the benefit and accommodation of Price and Gorman, as well as of O’ Toole. He then, under the exceptions of defendant, directed a verdict for the plaintiff, and defendant appealed from the judgment entered thereon.
William, Sullivan, for appellant.
I. Defendant was not charged with due notice of the dishonor of the note. It should have been served on him personally or left at his residence or place of business, as the act of 1857 does not apply (Ireland v. Kip, 11 Johns. 231; cited in 16 Id. 221 ; Sheldon v. Benham, 4 Hill. 129; Cayuga Co. Bank v. Bennett, 5 Id. 236 ; Van Vechten v. Pruyn, 9 How. Pr. 223 ; West River B’k v. Taylor, 7 Bosw. 466 ; affi’d 34 N. Y. 128; Bartlett v. Robinson, 39 Id. 191; Bowling v. Harrison, 6 How. U. S. 248; Redfield & Bigelow on Bills, 378 ; L. 1857, c. 416 ; 4 R. S. [Edm. Ed.] 458). Nichols had no right to delegate any part of his duty to another, for his whole duty involved an exercise of judgment, and was a personal trust (Chanoine v. Fowler, 3 Wend. 173; Walmsley v. Acton, 44 Barb. 312; Lewis v. Ingersoll, 3 Abb. Ct. App. Dec. 55; Commercial B’k of Lake Erie v. *73Norton, 1 Hill, 501). The possession of an unindorsed note did not authorize payment to him (Doubleday v. Kress, 50 N. Y. 411; Wardrop v. Dunlap, 1 Hun, 325).
II. The question as to whether notice of the dishonor of the note was deposited in the post-office should have been submitted to the jury (Johnson v. Williams, 39 Super. Ct. [7 J. & S.] 547).
III. The circumstances of the indorsement of the note should have been submitted to the jury, for an indorser without value is only liable in certain cases. (Moore v. Cross, 19 N. Y. 227 ; Small v. Smith, 1 Den. 583 ; Cole v. Saulpaugh, 48 Barb. 104; Schepp v. Carpenter, 51 N. Y. 602).
IV. If notes were indorsed as collateral security for antecedent debt of maker, the defendant is not liable (Bay v. Coddington, 5 Johns. Ch. 54; Stalker v. McDonald, 6 Hill, 93; Traders’ Bank of Rochester v. Bradner, 43 Barb. 379; Weaver v. Barden, 49 N. Y. 294; Turner v. Treadway, 53 Id. 650; Merchants’ Nat. Bank of Syracuse v. Comstock, 55 Id. 27; McQuade v. Irwin, 39 Super. Ct. [7 J. & S.] 396).
V. That if the note had been made as first proposed, and then indorsed by the defendant, at the request of Gorman, for the purpose of enabling him to the more readily negotiate it, and for the mutual benefit of - the maker and Price and Gorman, defendant was not liable (Lester v. Paine, 39 Barb. 616; Hull v. Marvin, 2 Sup'm Ct. [T. & C.] 420 ; Woodruff v. Leonard, 1 Hun, 632; Bacon v. Burnham, 37 N. Y. 614 ; Meyer v. Hibsher, 47 Id. 265 ; Phelps v. Vischer, 50 Id. 69 ; Farrar v. Gregg, 1 Richardson, 378 ; Byles on Bills [6 Am. Ed.) 209, note 1; Chester v. Dorr, 41 N. Y. 279; Braman v. Hess, 13 Johns. 52; Cram v. Hendricks, 7 Wend. 569).
William W. Pearson, for respondent.
I. The ser*74vice of notice of protest was sufficient to charge the defendant (Van Vechten v. Pruyn, 13 N. Y. 551; Ransom v. Mack, 2 Hill, 587; 1 L. 1857, p. 838, c. 416 ; Bartlett v. Robinson, 39 N. Y. 191).
II. Even previous to the act of 1857 it would have been sufficient (Bank of Columbia v. Lawrence, 1 Pet. U. S. 578 ; 3 Kent Com. 106; Chitty on Bills, 504; Story on Promis. Notes, § 323 ; Shoemaker v. Mechanics’ B’k, 59 Penn. St. 79, 82 ; Walters v. Brown, 15 Md. 287; Curtis v. State B’k, 6 Blackf. [Ind.] 312; Blunt’s Com. Dig. 284 ; Brindley v. Barr, 3 Harrington [Del.] 419).
III. Notices sent through post-office are sufficient, and need not be served by a notary (Jones v. Lewis, 8 Watts & S. 14 ; Stamps v. Brown, Walker [Miss.] 526 ; Shoemaker v. Mechanics’ B’k, supra).
IV. Notice deposited in post-office in time for any mail of next day after demand is sufficient (3 Kent Com. 106; Howard v. Ives, 1 Hill, 263).
V. Service by the notary in person is not essential. (Bank of Kentucky v. Varnum, 49 N. Y. 269).
By the Court.—Neilson, J.
[After stating facts. ] —The discussion had when the notes were given, as to their form, is not material. The vital thing is that he was to indorse,—was to be surety to enable the maker of the note to make the purchase, and in part on credit.
If this note had been made payable to bearer, and the defendant had put his name on the back of it, his relation would have been that of guarantor ; and the undertaking could have b.een written over his name, or the obligation might have been regarded as if thus actually expressed in the terms of the arrangement.
The defendant was not, therefore, a mere accommodation indorser.
The payment of the note was duly demanded. The notice of -non-payment was given by mail, put by the *75notary in the post-office in this city, directed to him at his place, corner of Flushing-avenue and Óxford-street, where his letters were regularly taken and left. It further appears, that the mailing of the notice in Brooklyn, instead of in the city of New York, was favorable to the defendant in respect to the time of delivery. The same sanctity and certainty applied to the former as to the latter method. In no point of view would the defendant have been benefited by the deposit in the New York city office.
Assuming that the notice might have been given by mad from either point, how has the defendant Suffered ? Have not his rights been substantially respected? From the moment of such deposit the notice was in charge of a department to which we intrust our letters, however important, and must be regarded as having been delivered; the official transmission is at the risk of the person to whom the letter was sent. The rule is not more hard than that which obtains where a contract is made by written correspondence ; the contract is perfected when the letter accepting the offer in the terms proposed is mailed, whether the other party receives it or not.
We think that in its spirit the act of 1857 applies ; and that, in view of the facts before us, the judgment and order should be affirmed.
McCue, J., concurred.