McRae v. Rhodes

22 Ark. 315

• Court: Supreme Court of Arkansas
• Decided: October 15, 1860
• Status: Published

Opinion

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Tim wTioot English caro or: this srffoeik Bikcvdlks i:s. Boll-,t?iv:í, f .? th. 1/ 1'nsl 1i/5 ; in that ca/o it a;as otras v!, that if it be rami by tbe holder:! Lb;. “íbera tbe time tbe bib v/cv, drawn till fra f we it became dee, ihc drawee never baa aay check of tbe fra,. ;.v in bis hand:?,” notketo ihc drawer k not neueraaw; and tbo mvw-on Resigned k, that under ouch circumstances t : hnf e to draw, c/ud crifd rot be injured by not receiving Tistb . 1/ course ofiir/o, however, it was found necessary to ley A raw tbe rule thus en/Iy cimiressed, with grcrler ereoicioa m:u ■■■ . mmey. Co, in frame vs. Thorps, IS Ih.-zc 111, after s.t/.f pAaciylc ;j do ran in Blkcrdiks vs. Bollmun, it was rami, ‘ ei the court in be:'; eme, looking to tbo reracm for wdw ' ids was required V; bo given, laid (loan the rule, sot y- ' / .’.•'.tbai where fra civ raer bad::;) effects in the heads w'f ’■ ■ race at tbe tine, (which porbrpn might inns cut to be lira co o t'.pc.s a iutare aetth 'sent of accounts between íbera.) ns ■ .fra ef dishonor else aid ira given: bat that it need not be riravo where the drawer ra.raf have known, at the time, that he bad v, : bbctc to anav/cr tb.e bill, and could have no reason to emwmf that hie bill would be honored.” Asid in YVcL-oi/.i vs. El. Crara.’bv, I Tos. & Pul. Aid, if was said: “ But it maybe proper to era:/'ran bill-holders net to rely on. it as a gsvra.al rule, Ami ra the drawer lias ro effects in the acceptor’s hands, u slice ra not necessary. The cases of acecuteweer on tbe f:ratli:f ccurngTiments irem the drawer net come to hand., ant i‘m casos of acceptances on the ground of fair mer-cerf m agreements, may be stated era exceptions •_. .•;! there may ye -nbly be many others.” In Brown at al. vs. B.dajfc'j, 1L .< Aw S13, Lord Ello:;¡¡oneucn said: “Tbe doctrino of dis-pon/ -/g with notice of the dishonor of a bill has grown almost entirely out of the case of Biksrdihe vs. Hollinan. That decision dispensed with the notice to the drawer, where he knew beforehand that he had no effects in the hands of the drawee, and had no reason to expect that the bill would be paid when it became due.” But this, he said, must be understood with some restrictions, “ as where the drawer, though he might not have effects at the time of the drawing of the bill, in the drawee’s hands, has a running account with him, and there is a fluctuating balance between them, and the drawer has reasonable ground to expect that he shall have effects in the drawee’s hands when the bill becomes due.”

In Claridge vs. Dalton, 4 Maule & Selwyn 226, the drawer had no effects in the hands of the drawee, except that he had supplied him with goods on credit, and the credit did not expire until after the bills would become due, and it was held that the drawer was not entitled to notice ; in that case, Lord Ellen-borough said : “ 1 accede to the proposition, that where there are any funds in the hands of the drawee, so that the drawer has a right to expect, or even where there are not any funds, if the bill be drawn under such circumstances as may induce Ihe drawer to entertain a reasonable expectation, that the bill will be accepted and paid, the person so drawing it, is entitled to notice. The question therefore is, whether in this instance there were any funds in hand at the time of drawing applicable to the bill, or a ground of reasonable expectation that when the bill became due the drawee would come forward and pay it. As to funds, though there were goods of the defendant in the drawee’s hands at the time of the drawing, yet they were not such as could be properly set against the drawing. And as to any reasonable expectation that the bill would be paid, it was neither accepted, nor had the defendant any claim upon the drawer to have it honored, according to the due course of credit between them, until the end of the year.” * * *. “ If there never was any drawing between the parties but at the end of the year, or accepting of bills, how shall we say that the defendant was authorized to entertain a reasonable expectation that his bill would be honored? And if not, this falls within the rule laid down in Bikerdike vs. Bollman, and notice was not necessary.” See, also, Blackhan vs. Doven, 2 Campb. 503 ; Rucker et al. vs. Hiller, 16 East 43.

In French vs. The Bank of Columbia, 4 Cranch 141-2, it was said by the Supreme Court of the United States, “ to be the fair construction of the English cases, that a person having a right to draw in consequence of engagements between himself and the drawee, or from any other cause, ought to be considered as drawing upon funds in the hands of the drawee, and, therefore as not coming within the exception to the general rule.”

In all of these cases it will be observed, that in the absence of funds actually in the hands of the drawee, the bill must be drawn under circumstances justifying a reasonable expectation on the part of the drawer that his bill will be honored. This principle seems to be recognized in all the cases we have met with, which modify the rule in Bikerdike vs. Bollman; but the chief difficulty in (he case we are considering, as in most other cases of this character, is found in applying the principle to the particular state of facts presented.

In Hopkirk vs. Pago, 2 Brock. 20, the drawer had 16 s. 11 d. in the hands of the drawees to whom he had made shipments of tobacco, being a balance growing out of their mutual dealings: The bill was drawn for £246, 3 s. 7 d., and the question was whether notice of dishonor was necessary. It was urged in argument, that the drawer should have had notice, because of the balance in his favor in the hands of the drawees; it was insisted, that if notice might be dispensed with when a small sum was in the hands of the drawee, it might also be dispensed with when a large sum was in his hands, provided that sum should be one cent less than the bill was drawn for. In reply, Chief Justice Maeshall said: “1 am aware of this argument, but think it more perplexing than convincing. There are many questions in which no precise line can be marked, which must depend on sound legal discretion, and where the case itself must be decided by a jury or by the court, acting on the principles which should regulate a jury. The sound sense and justice of the exception is, that where a drawer knows he has no right to draw and linn -ho sti digest reason to believe, his bill will not bo paid, the nnbivoo for requiring notice «.file dishonor do not e;:I:-fc nod Lio cano comeo within the cancón oí the exception. Y.HiíTe :.!i ti'nnsf.oíionn between the parties La ye ceased, and there i¡* noí.h-mg to justify a draft but a balance of one penny, it would e sporting with our understanding.j to toll us, that a creditor for IhJ-i Lab hoc, "aho should draw for a thousand pounds, vwwid be in a situation subsíaniiaUy different from what be would be in, were he debtor in the samo sima.”

bYo will now proceed to test the bills drawn by Mrs. I'Tc-Kac by am application of ill,3 principles to which we have 10-forroih

'i'he drawees were her commissl'm merchants in New Or--wrms, wish v.'hora ¡-ho t.-.w --.clTh Liml.ws:: for two years. iwo eomhpwd io them for calc Lor «rep of cotton grown in I'NO. the ■-!' >■ proceed,--; of which amounted to íiKb‘70 14; also, the er-'¡p s-f KIN, whieh-netted jNfll SS ; those sums tvero paid to her at sundry times and in email amounts, usual!j in the, --ww oi ncs-v. ary plantation mmolies, and though the drawees accepted several drafts for Lor between the I3th' March, UNO and the ICih of Noreadier next folio .ring, without fund,.- in hand, they wove trilling; in amount; and the general course dunlin,'; sec as to hnvo been m-t to accept for 7.1 rs. MeNae, 'sinless there we.; a balance oirnding to her credit, ncr to r_:r..V' advaiKsem.oute upon her cotton until it veas received, except, lb: plañir»*;.on supplies, and thru in a w,'ranis always less than Cm probable rmraceds of the forth-comic:; crop.

Yt the Mee, tne bill of Sbo Kith MbiroL, 1033, was draws, rh had. no ee.cats in the Land: of the drawees, and vrau tol 1 bp' twin accountant, who was f:.ir<ili.;? with her pecuniary Mi’.!’ ; that the bill would cot sc awt ptsd. LYem a statement of 1m. account with the drawees, it r; pears that at.the maturity c; this Led;, fhwo was a balaceo. to her credit, net exceeding Y'Kj which, w tiro usual course of dealing between the parties, vra, corsa tRo.rcuitor paid out by ¡ho (haveeufor plantation parpe, cr, upon email drafts previously drawn Ly Mrs. Mellas, leaning, her in debt to the drawees .in the sum of $27 78. Thus, no provision was made for payment of the bill of 16th March, 1853, at its maturity.

When the bill of 27th May, 1854, was drawn, Mrs. McRae had no funds in the hands of the drawees, she having ceased to do business with them, nor had she any there at its maturity ; nor, according to the testimony of the witness, Thompson, who acted as the agent of Rhodes in procuring this bill, was it contemplated, either by himself or Mrs. McRae, that the bill should be presented for acceptance. Several witnesses testified, that they had known Mrs. McRae since 1851, and had always regarded her as solvent for $5000. It sufficiently appears in evidence, however, that she was laboring under pecuniary embarrassment, and had reason to believe that the drawees knew the fact.

Can it be said, under these circumstances, that at the time these bills were drawn, Mrs. McRae could indulge a reasonable expectation that they would be paid a,t maturity ? We think not. There was nothing in the previous transactions between the parties that would warrant such an expectation; on the contrary, there was much to forbid it. The bills being for the payment of a pre-existing debt, and being for an amount greatly exceeding the value of any annual consignment she would probably be able to make, the drawing of them could but be regarded as outside of the ordinary course of dealing between her and the drawees, (Claridge vs. Dalton, supra) ; and when it is considered, in connection with this, that she did not contemplate that one of the bills should be accepted, and was told that the other would not be ; that she was embarrassed, and solvent for but little more than- tlje amount of the bills, and had reason to know that the. drawees would be so advised — it would seem to be morally certain that she could have no reasonable expectation that the bills would be paid ; and it was not, therefore, necessary to present them for payment. Story on Bills, Section 367.

The objection to the competency of the witness, Thompson, is not well taken. The objection is, that the bill sued on was placed in his hands for collection, and that in not presenting it for payment, he was guilty of such negligence as would make him liable to the plaintiff, if the plaintiff should be defeated in this action. Without deciding whether he was competent upon any other ground, it is sufficient to say,-that he was interrogated by the counsel for the defendant below, with the view of testing his competency, and though he answered that he had the bill for collection, he at the same time removed his incompetency by stating facts which showed it to have been unnecessary to present the bill for payment; and the rule is, that where the objection to the competency of the witness arises from his own examination, he may be further interrogated to facts tending to remove the objection, though the testimony might on other grounds be inadmissible. Brittin & Andrews vs. Crabtree, 20 Ark. 309.

Being of the opinion that if a new trial were granted in this case, the jury could not, upon the evidence, find otherwise than for the plaintiff, we will not discuss the instructions given them by the Circuit Judge, but will affirm the judgment as being right upon the whole record.