Sherrod v. Rhodes

5 Ala. 683
CourtSupreme Court of Alabama
DecidedJune 15, 1843
StatusPublished
Cited by11 cases

This text of 5 Ala. 683 (Sherrod v. Rhodes) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sherrod v. Rhodes, 5 Ala. 683 (Ala. 1843).

Opinion

ORMOND, J.

Tf¡e questions of law presented on the record are, 1. Was the defendant entitled to notice of the dishonor of the bill drawn by him. It is argued that he was not entitled to notice, because he had no funds in the hands of the drawee, and therefore could not be prejudiced by the omission to give him notice that the bill was not paid. The rule here relied on, applies only where the consideration for which the bill is drawn passes to the drawer; in such a case, he is the real debtor, and cannot allege the want of notice; but in this case, the bill was drawn by the defendant for the accommodation of the acceptor, by whom the proceeds arising from its sale was received. He therefore stood in the relation of surety to the acceptor, and was doubtless entitled to notice, as was held by this court in Shirley v. Fellows, Wadsworth & Co. [9 Porter, 300,] and again in Foard v. Wo-mack, [2 Ala. Rep. 368.]

Nor does the fact that the defendant was indebted to the Rail Road Company for the use of which the bill was drawn, in a sum equal to the amount of the bill vary the case in the slightest degree. It does not appear that the bill was drawn in payment of the debt due the company, or that it was contemplated that the defendant should pay it at maturity, but the contrary is most conclusively shewn by the proof. It appears that this bill, with others, was made to raise funds for the Rail Road Company; that the company had been obtaining money in this way for some years previously, and that when the bills fell due, they were paid by the treasurer of the company, if he had the means, if not, other bills were drawn in the same way to take up the old ones. The indebtedness therefore of the defendant to the company, was an immaterial circumstance, which did not affect the defendant’s right to notice of the dishonor of the bill.

2. Does the correspondence between Mr. Deshler, the treasu[689]*689rer of the company and the defendant, establish, a liability on the part of the defendant, or show a waiver of notice.

Mr. Deshler, in his letter -to the defendant, informs him that the bills are still unpaid; 'that he had received a letter from the holders who were becoming impatient, and that he feared they would sue unless.some satisfactory arrangement could be made. He proceeds to inform the defendant, that the holders would take good bills on New Orleans, and that he had written to them promising to procure such. He then reminds the defendant of his debt due the company, and 'tells him that he calculates on being aided by him, and another gentleman, who is named, and concludes by proposing that he should draw a bill on Mobile or New Orleans for seven thousand dollars.

The defendant, in answer says, it is impracticable to draw the bill, as he would not have the means of paying it, and proceeds to state the amount he has to pay during the winter and ensuing spring, and concludes by saying, “ it would afford me great pleasure to do what you wish, but I think from the above expose, you will agree with me that it would be improper to do it.”

It is certainly true that a promise by a drawer or endorser to pay a dishonored bill with knowledge of the facts, will be a waiver of the laches of the holder, in omitting to make demand or give notice. But we do not think any such promise was madein this case. Mr. Deshler does not intimate in his letter to the defendant that he was under any obligation to pay the dishonored bill, or even that the defendant knew that the bill was still. unpaid; but after informing him that such was the fact, state's that an arrangement can be made with the holders, by drawing another bill, which he urges the defendant to do, not because it was his duty to pay the dishonored bill, but because he was indebted to the company who had the bill to pay. It was then simply a request to the defendant to pay his debt to the company, and the fact of the dishonored bill is stated to show the urgency of the case, and as a reason why the debt due the company should be paid by the defendant. In this light it was considered by the defendant, who does not attempt to excuse himself for not paying the dishonored bill, but goes into a detail to show his inability then to pay his debt due the company.

The case of Gibbon v. Coggin, [2 Campbell, 188,] relied on by the plaintiff’s counsel is entirely unlike this case. In that case, [690]*690the drawer of a-dishonored bill of exchange was told it was dishonored and called on for payment; he answered, “ that his affairs were at that moment deranged, but that he would be glad to pay it as soon as his accounts with his agent were cleared.” Lord Ellenborough held, that by this promise, he admitted his liability. In this case, the promise was made in reference to the dishonored till, but in the case at bar, not only was there no promise to pay, but the refusal was not in reference to the dishonored bill, which if was not pretended the defendant was under any obligation to pay, but respected another bill which the defendant was requested to draw, for a reason having no relation whatever to his liability on the dishonored bill. It is therefore very clear that no promise to pay the dishonored bill or waiver of the laches of the holder, can be collected from this correspondence.

3. It is further insisted that as the holders knew nothing of the circumstances under which the bills were drawn, defendant, as to them, was not entitled to notice, and that as the plaintiff has been compelled by suit, to pay the holders, he occupies the same condition they were in.

It has already .been shown that an accommodation drawer is entitled to notice of the dishonor of the bill, and the circumstance that the holder was ignorant of the fact, that the drawer was a mere surety, will not vary the case. If he omits to give notice, he does so at his peril, and assumes the burden of proving that notice was unnecessary. The remaining part of the charge assumes that the holder may, on giving notice to the last endorser sue any prior party on the bill, but the law is clearly otherwise. If the holder intend to sue the drawer and endorsers of a foreign bill, he must give notice to each direct, and in due time. [Chitty on Bills, 9th Am. ed. 367, and cases there cited.] If the plaintiff when he received notice of the dishonor of the bill, had notified the drawer, that would have charged him, and would have enured to the benefit of the holder as well as the last endorser. [Byles on Bills 164, Hilton v. Shepherd, 6 East. 14. See also 2 Camp. 208, 210, 273.] The defendant not having notice of the dishonor of the bill, either from the holder or the plaintiff, as la^t endorser, is discharged from liability.

4. The remaining question arises under the last charge of the court. The charge moved for was, that if the jury believed that these bills were drawn and endorsed by members of the rail road [691]*691company, to be accepted by the company, and sold to raise funds for the benefit of the company, and were in fact so sold and permitted to be dishonered by the company, and that afterwards the plaintiff, as last endorser, was compelled by the holder to pay the bills, that the drawers and endorsers as between each other, were to be considered as sureties for the company, and that the plaintiff was therefore entitled to recover from the defendant, one third part as contribution. This charge the court refused to give, unless the plaintiff would withdraw his claim to a recovery for the whole amount against the defendant as drawer and endorser of the bills paid by him.

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Bluebook (online)
5 Ala. 683, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sherrod-v-rhodes-ala-1843.