U.S. Supreme Court
Fowler v. Brantly, 39 U.S. 14 Pet. 318 318 (1840)
Fowler v. Brantly
39 U.S. (14 Pet.) 318
Action on a promissory note for two thousand dollars, drawn for the purpose of being discounted at the Branch Bank at Mobile, payable to the cashier of the bank or bearer, and upon which was written an order to credit the person to whom the note was sent, to be by him offered for discount to the bank for the use of the drawers, the order being signed by all the makers of the note. The bank refused to discount the note, and it was marked with a pencil mark, in the manner in which notes are marked by the bank which are offered for discount. The agent of the drawers, to whom the note was entrusted to be offered for discount, put it into circulation after endorsing it, having disposed of it for one thousand two hundred dollars for his own benefit, without the knowledge of the drawers, and communicated to the purchaser of the note that it had been offered for discount and rejected by the bank. The note was afterwards given to other persons in part payment of a previous debt, and credit for the amount was given in the account with their debtors. The form of the note was that required by the bank when notes are discounted, and had not been used before it had been so required by the bank. The circuit court instructed the jury that the plaintiff was not entitled to recover from the drawers of the note. Held that the instruction was correct.
The known custom of the bank and its ordinary modes of transacting business, including the prescribed forms of notes offered for discount, entered into the contract of those giving notes for the purpose of having them discounted at the bank, and the parties to the note must be understood as having agreed to govern themselves by such customs and modes of doing business, and this whether they had actual knowledge of them or not, and it was the especial duty of all those dealing with the note to ascertain them, if unknown. This is the established doctrine of the Supreme Court as laid down in Renner v. Bank of Columbia, 9 Wheat. 581; in Mills v. Bank of the United States, 11 Wheat., and in Bank of Washington v. Triplett and Neale, 1 Pet. 32.
A note overdue or a bill dishonored is a circumstance of suspicion to put those dealing for it afterwards on their guard, and in whose hands it is open to the same defenses it was in the hands of the holder when it fell due. After maturity, such paper cannot be negotiated.
In the Circuit Court of Alabama an action was instituted on a promissory note by the plaintiff in error against the defendants, and a verdict and judgment were entered for the defendants. The plaintiff took exception to the charge of the court and prosecuted this writ of error.
The facts of the case, and the matters which were the subjects of the exceptions taken to the rulings of the court, are fully stated in the opinion of the Court.