Louisiana State Insurance Co. v. Louisiana State Bank

3 Mart. (N.S.) 610

• Court: Supreme Court of Louisiana
• Decided: May 15, 1825
• Status: Published

Opinion

* Mathews, J.

delivered the opinion of the court. This is an action commenced by the Insurance Company against the Bank, in which damages are claimed from the latter as a remuneration for a loss occasioned to the former, by negligence and misfeasance of the officers of the bank, in the collection of certain notes which were placed in their hands by the insurance company, and which they undertook to collect. Judgment was rendered for the plaintiffs in the court below, from which the defendants appealed.

This case is similar in principle to that of Montillet vs. U. S. Bank, and Crawford vs. State bank, vol. 1, 214, 368, 708.

East'n. District. May 1825.

The correctness of those decisions was admitted in argument by the counsel for the appellants, who contends that there is one fact in the present case, which distinguishes it from those cited, and ought by its operation to release his clients from all responsibility, which might otherwise have arisen from negligence and mismanagement in the undertaking. This is the change of domicil of the maker of the notes fromN. Orleans before they became due. This suit is a sequel of that brought by the same plaintiffs vs. Shamburg, decided as shewn by the report in vol. 2, 511. In that case they failed to recover from Shamburg, the endorser of the notes in question, on account of the negligence of the agents of the bank in not making a demand of payment from the maker, in the manner required by law. It is contended in favor of the bank, that its officers are justifiable towards the plaintiffs in not having made this demand, in consequence of the removal of the maker of the notes from the city before they fell due. In support of this justification, it is alleged that the bank never undertakes to collect money on notes or bills, when the collection requires operations out of the city of New-Orleans, and that the implied contract and consequent obligation to collect ceased, on the removal of the maker of the notes, especially as this fact was known to the owners. In answer to these arguments, it is said by the counsel for the appellees, that the bank could have released themselves from this obligation, to collect, under the implied contract, only by returning the notes to the owners, after the fact of the maker's removal became known to them. Further, that they were led into error by the protest made by the notary who acted for the bank, because that instrument declared that a legal demand was made, and notice had been regularly given.

That the officers of the bank knew of the change of domicil by the maker of the notes before they became due, the evidence of the case abundantly shews. The knowledge of this fact is not so clearly brought home to the appellees; and even if it were, it ought not to change the situation of the parties, so as to release the defendants from their obligation to take all legal steps to collect the notes which they had undertaken. Their duties as agents, could have ceased in no other way, than by a return of the notes to the owners, or an explicit declaration that they would no longer act for them.

The erroneous conduct of the notary,in making a mistaken or false protest, certainly had a tendency to injure the plaintiffs: by it, it seemed that every thing had been regularly and legally done, which was necessary to charge the endorsers. They were thus lulled into security, and of course took no means to do that which they supposed had already been well done by their agents. Admitting this to be true; it is contended by the defendants that they ought not to be made responsible for the misconduct of the notary:being a public officer, he ought to answer directly for his conduct, that a protest could only be made by a notary' and when the bank placed the notes into his hands, its officers had fully and faithfully executed their trust.

In the case of a foreign bill of exchange, the dishonor of which can only be evidenced by protest, this argument would be entitled to great weight. But inland bills and promissory notes do not necessarily require protests by notaries: a demand of payment, refusal and notice to drawers and endorsers may be proven by any competent witness. In the present case we deem it proper to consider the notary the agent of the bank, because they did by him, that which they might have done themselves.

The appellees claim interest on the amount of the notes from the date of the demand of payment and protest, now no demand was made. The present action sounds solely in damages for negligence and misfeasance in the officers of the bank; it is perhaps true that a fair criterion to ascertain the amount of damages, is the loss of the plaintiffs, occasioned by the misconduct of the defendants which is alleged, to be the sums, specified in the notes with legal interest from the day, on which they ought, regularly, to have been protested. If it had been so adjudged in the court below, we would perhaps not have disturbed the judgment. The contest may, as the cause now stands on an appeal, and being a suit for damages, be considered as among those little things which the law does not regard; de minimis non cural lex.

However fair and legal the judgment may be it is a hard case on the defendants.

It is therefore ordered, adjudged and decreed, that the judgment of the district court be affirmed with costs.

Duncan for the plaintiffs, Grymes for the defendants.

Judge Porter took no part in this opinion, being a stockholder the bank.