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principal is entitled to a further like period to give notice of dishonor.
For the purpose of estimating the time at which notice of dishonor should be given, branch banks are in principle and fact agencies of one principal banking corporation or firm, and are for that purpose to be regarded as distinct, and the bill should be sent successively to the branch banks through which it has come to the principal bank, before giving the notice.' When a person who signed as agent to the defendant as indorser, on being applied to by the holder of a bill of exchange, for information as to the residence of his principal, refused to give it, and the plaintiff (the holder) up to the date of dishonor, could not obtain more information, than that the defendant, lived at a place called Frome, and on the day after the dishonor (5th August) despatched through his solicitor, a notice of dishonor to that address, but it was returned through the post office as the defendant could not be found, on the 24th September. The holder then instructed his solicitor, to use his utmost diligence to discover the defendant's residence, which resulted on the 16th October in his ascertaining it. On the 17th he communicated with the plaintiff (the holder,) and on the 18th despatched a notice of dishonor to the defendant's real address. It was held, that the notice was sufficient, inasmuch as it was given as soon as it could reasonably be, that the solicitor was the agent for the holder, that he was entitled to a day to communicate with his principal, and as his principal gave notice on the next day there were no laches on his part.2
97. When the party to whom notice of dishonor is despatched is dead, but the party despatching the notice is ignorant of his death, the notice is sufficient. As to where the death is known, see Sec. 94.
Prince v. Oriental Bank, 3 App. Cas. (P. C.) 325; Clode v. Bayley, 12 M. & W. 51.
When notice of dishonor is un
98. No notice of dishonor is necessary— (a) when it is dispensed with by the party entitled necessary. thereto;
2 Firth v. Thrush, 8 B. & C. 387; S. C. 2 Man. & R. 259.
When party to given is dead.
(b) in order to charge the drawer, when he has countermanded payment;
(c) when the party charged could not suffer damage for want of notice;
(d) when the party entitled to notice cannot after due search be found; or the party bound to give notice is, for any other reason, unable without any fault of his own to give it;
(e) to charge the drawers, when the acceptor is also a drawer;
(f) in the case of a promissory note which is not negotiable;
(g) when the party entitled to notice, knowing the facts, promises unconditionally to pay the amount due on the instrument.
(a.) One mode of dispensing with notice of dishonor is by a facultative indorsement, which consists in the addition of words to the indorsement, for instance, "notice of dishonor waived." Where the drawer of a bill, shortly before it became due, told the holder, he would call and see if it had been paid by the acceptor, it was held he had dispensed with his right to notice of dishonor.2
(b.) There are two English cases establishing this rule.3
(c.) The leading case on this rule is Bickerdike v. Bollman,♦ where it was held that a drawer who had no effects in the hands of the acceptor, could not be injured for want of notice and therefore not entitled to notice, the principle established here has however been much limited by subsequent decisions. Thus it has been held that if the bill were drawn for the accommodation of the acceptor, the drawer is entitled to notice, or if for the
benefit of an indorsee. Where though at the time of drawing the bill, the drawer has no effects in the acceptor's hands, there were goods on their way to him, he is entitled to notice? A late case on the subject is Carew v. Duckworth3 from which I quote a portion of the judgment of Bramwell, B., he says, "The "true rule should be, that no notice of dishonor is required, “where it would convey no information, that is, when the party “knew beforehand that the bill would not be paid; but that "where he did not know, it is right that he should be informed "of the non-payment. It is idle to say, that knowing that there "will be no funds at any time when the bill or cheque can be "presented, I am entitled to notice of dishonor and again, "but if there are sufficient funds in the Banker's hands to meet "the cheque, the drawer is entitled, though he knew the bank would not honor the cheque, for he would be entitled to say, "they were bound to honor it, even though they had told him "they would not.5
The test seems to be, whether the party has a remedy over against any one, and if he has, he will be entitled to notice, even though he has knowledge that default will be made." As a general rule this principle only extends to the drawer or maker of a negotiable instrument, for it was said by Lord Kenyon, "It 66 is no excuse for neglect of giving notice to an indorser, that the "drawer had no effects in the acceptor's hands, that circumstance “will not avail the plaintiff, the rule extends only to actions 'brought against the drawer; the indorser is in all cases entitled "to notice, for he has no concern with the accounts between the "drawer and the acceptor.' Where the drawer has no effects in the hands of the acceptor, except goods which he has sold upon credit, which will not expire till after the maturity of the bill, he is not entitled to notice of dishonor. But he will be, where there is a fluctuating account.9
Cory v. Scott, 3 B. & Ad. 619; Norton v. Pickering, 8 B. & C. 610. 2 Rucker v. Hill, 3 Camp. 217; S. C. 16 East, 43.
3 L. R. 4 Exch., 313; see Orr Magennis, 7 East, 359; S. C. 2 Sm. 328.
4 lb., at p. 316. 5 Ib., at p. 319.
6 Byles on Bills, 13th ed., p. 298.
7 Wilks v. Jack, Peake, 202; Foster v. Parker, 2 C. P. D. 18.
8 Claridge v. Dalton, 4 M. & S. 226.
9 Orr v. Magennis, 7 East, 359; S. C. 2 Sm. 328.
Where a drawer makes a bill payable at his own house, it is evidence, that it is a bill drawn for his accommodation, "I cannot" says Lord Tenterden, "understand why the drawer "should with his own hand make the bill payable at his own house, unless he was to provide payment of it, when at "maturity."
Two Indian cases have been found bearing on this point, one where it was held, that a drawer of a bill of exchange, could not plead discharge by the acceptor and want of notice of dishonor, where the goods on the faith of which the bill was accepted, were attached and sold, with the drawer's consent in payment of a debt due by him to a third party. The other, where it was held that formal written notice of dishonor of a hundi, was not necessary before suit, unless it could be shown, that the parties charged had been prejudiced by the omission.3
(d.) This clause must be read with Sec. 106 and it is submitted that due search, as used here would mean such search or enquiry, as would enable the holder to give notice in the time mentioned in Sec. 106, and that search for a longer time is not necessary. Search would seem to include, making enquiries of the parties' whereabouts. Lord Ellenborough says, "It would "be very hard, when the holder of a bill does not know where "the indorser is to be found, if he lost his remedy by not communicating immediate notice of the dishonor of the bill, "and I think the law lays down no such rigid rule." Byles sums up the rule in the last portion of the clauses "Nemo ad "impossibile tenetur; and therefore, it should seem, on general principles, that the death or dangerous illness of the holder or "his agent, or other accident not attributable to the holder's "negligence, may excuse it."
(e.) The reason of this, is that the acceptor being one of the drawers himself, must be taken to have knowledge of his own default, and the knowledge of one is the knowledge of all."
(f.) We have seen that the maker of a promissory note is in
1 Sharp v. Bailey, 9 B. & C. 44; S. C. 4 Moo. & R. 4.
2 Pigou v. Ramkishen, 2 Suth. W. R. 301.
3 Gobind Ram v. Mathoora Sabooya, I. L. R. 3 Cal. 339.
• Bateman v. Joseph, 2 Camp. 461; S. C. 12 East, 433.
Byles on Bills, 13th ed., p. 303.
Chitty on Bills, 11th ed., by Russell, p. 337; Byles on Bills, 13th ed., p. 303.
the same position as the acceptor of a bill of exchange and this is the reason of the rule.
(g.) The promise to pay must be unconditional, and to pay the whole amount of the bill, in this latter respect, the rule here laid down differs from that of the English law, for it has been held that a promise to pay a part of the amount of a bill, was good to that extent. 1 The promise must also be made with knowledge of the facts, and if made under a misapprehension of, or in ignorance of them it will not be a waiver; a subsequent promise to pay made by an indorser of a bill, who had no notice of dishonor, is evidence of waiver of the right to notice. A promise to pay endorsed upon a hundi, after it has been dishonored, though it does not amount to waiver of notice, is good and sufficient evidence of the receipt of notice that the hundi had been dishonored.^
The above rules of course apply only to the parties referred to themselves individually, and it is presumed their duly authorized agents, for it has been held that though a party may waive the consequences of laches in respect of himself, he cannot do so, in respect of antecedent parties."
1 Fletcher v. Froggatt, 2 C. & P. 569.
Goodall v. Dolley, 1 T. R.
3 Woods v. Dean, 3 B. & S. 101; S. C. 32 L. J. (Q. B.) I;
Cordery v. Colville, 14 C. B. N.
5 Roscoe v. Hardy, 12 East, 434; Turner v. Leach, 4 B. & Ald., 451.