Wallace v. Agry

29 F. Cas. 67, 4 Mason C.C. 336

• Court: U.S. Circuit Court for the District of Maine
• Decided: May 15, 1827
• Status: Published

Opinion

STORY, Circuit Justice,

in summing up the facts to the jury, said:

Some of the questions of law, in this case, are of considerable importance, and require from the court an explicit opinion. The first objection to the plaintiff’s right of recovery is, that no presentment for payment, or protest for non-payment, or due notice thereof to the defendants, is proved according to the allegations of the declaration. I agree, that, under the circumstances of this case, the defendants stand in the same situation as if they were the drawers of the bill. They have adopted the acts of the master, and ratified the draft on Williams; and the plaintiff is therefore at liberty to consider them as subject to the same responsibility as if the bill were drawn by them, and no more. See Van Reimsdyk v. Kane [Case No. 16,872]; Id., 9 Cranch [13 U. S.] 155. But if they were drawers of the bill there would be no necessity of proving the averments in the declaration of presentment for payment and protest, and notice for nonpayment. The declaration contains a prior averment of a presentment and protest for nonacceptance. and due notice thereof to the defendants. The cause of action of the plaintiff was complete by such non-acceptance and notice, and it was wholly unnecessary afterwards to make any presentment for payment. The other averments, therefore, of presentment for payment, &c. are wholly immaterial, and may be rejected as surplusage. They constitute no part of the averments entitling the plaintiff to recover. The case is not like that of a material averment, more special than the law requires; there the whole must be proved as laid. But, here, the averments are distinct, of matters foreign to the right of the recovery, and may be rejected without prej-. udicing the plaintiff’s right. “Utile per in-utile non vitiatur.” Such, upon principle, I take the law to be; and the authorities conform to it. Chit. Bills, 300; 1 Starkie, 7; Mason v. Franklin, 3 Johns. 202.

Then it is said, that there can be no recovery upon the money counts in this ease, because the taking of the bill of exchange was a satisfaction, and consequently an extinguishment of the original contract for advances to purchase the sugars. And in corroboration of this position it is argued, that, by the law of Massachusetts and Maine, the taking of a negotiable security for a debt amounts to an absolute, and not merely to a conditional payment. The rule is certainly so in these states, with this limitation, that the taking of such security is only prima facie evidence of being an absolute payment, but the fact is open to explanation, and is not conclusive where the other circumstances qualify or repel the presumption. Thacher v. Dinsmore, 5 Mass. 299; Maneely v. M’Gee, 6 Mass. 143; Goodenow v. Tyler. 7 Mass. 36: Johnson v. Johnson, 11 Mass. 359; Chapman v. Durant. 10 Mass. 47; Varner v. Nobleborough, 2 Greenl. 121; Greenwood v. Curtis, 4 Mass. 93. Even with this limitation, however, the rule differs from that of the common law, which is adopted in many of the commercial states in the union. By the common law, a negotiable promissory note, given by a debtor to his creditor for a subsisting debt, is not a discharge of the debt. It is not, in a legal sense, a security of a higher nature. Roades v. Barnes, 1 Burrows, 9. But if it be negotiated and outstanding in the hands of a third person, at the time of a suit brought for the original debt, it may be pleaded in bar of the action. See Kearslake v. Morgan, 5 Term R. 513; Rex v. Dawson, Wight. 32. A note or draft of a third person may indeed, by express agreement of the parties, be taken as payment, and thereby operate as a discharge of the debt; but unless there be such an agreement, or the creditor has been guilty of laches, if the note or draft be dishonored, the creditor may resort to his original debt. Puckford v. Maxwell, 6 Term R. 52; Owenson v. Morse, 7 Term R. 64. And this doctrine of the common law I take to be extensively adopted in our own commercial states. Tobey v. Barber. 5 Johns. 68; Schemerhorn v. Loines. 7 Johns. 311: Putnam v. Lewis, 8 Johns. 389; Johnson v. Weed, 9 Johns. 310; Pintard v. Tackington, 10 Johns. 104; Holmes v. De Camp. 1 Johns. 34: Burdick v. Green, 15 Johns. 247; Sheehy v. Mandeville, 6 Cranch [10 U. S.] 253. But if the doctrine of the Massachusetts and Maine courts were admitted to govern in this case, the circumstances are such as would repel any presumption, that the bill was received as absolute payment, so as to discharge the owners from personal responsibility in case of its dishonor. On the contrary, the bill seems to have been relied on as collateral security, and intended to discharge the debt only upon payment out of the funds which were to be remitted from Bremen. If those funds were not remitted by the master, or the bill were not paid at maturity, it can scarcely be believed, that the plaintiff meant to rely exclusively on the credit of the drawer of the bill. The ease, however, does not call for any decision on this point; because it is not to be governed by the law of Massachusetts or Maine.

It is a transaction originating in, and consummated at Cuba, and is to be governed by the law of Spain, and not by the law of America, applicable to this subject. What is the law of Spain. I have no accurate means of knowing; and it is the duty of the party, who sets up the defence, to establish it in evidence by competent proofs. If he fails so to do, the court can take no legal notice of the point. There is, however, much reason to believe, that the civil law, which is the law of Spain, does not make a bill of exchange an extinguishment of a prior debt, unless the parties expressly so stipulated. See Poth. Obl. pt. 3, c. 2, art. 4; 1 Domat, bk. 4, tit. 3, p. 491. § 1.

Another objection is, that the protest of nonacceptance did not accompany the notice to the defendants, and it is strenuously contended, that by our law the notice, without such accompanying protest, or a copy, is a mere nullity. The case of Blakely v. Grant, 6 Mass. 386, contains a remark, which certainly countenances the suggestion; but it was wholly gratuitous in that case, not being called for by any argument urged at the bar, or by any facts in controversy. It is indeed somewhat questionable, whether the remark itself attracted the close observation of the court. I can only say, that, as at present advised, I think that the dictum is not law; and I have no reason to suppose, that it has been actually conformed to in practice. See Stanton v. Blossom, 14 Mass. 116. The English rule, as to foreign bills, is directly the other way. It is the clear result of decisions in England, purporting to be founded on the general law merchant, that the notice is sufficient, though a copy of the protest is not sent. Chit. Bills (5th Ed.) 282; Robins v. Gibson, 3 Camp. 334, 1 Maule & S. 288; Cromwell v. Hynson, 2 Esp. 511; Chaters v. Bell, 4 Esp. 48. But this bill, being drawn in a foreign country, is, strictly speaking, to be governed on this point by the law of that country, as to notice and protest. And in the absence of any other proof the court might well presume, that the law of Spain does not differ from that acted upon in England. If it did, the learned counsel for the defendants would doubtless have established it by some competent evidence. See Poth. Traite de Change, pt. 1, c. 5, arts. 149, 150.

But the principal objection is, that there has been gross negligence in the remittance of the bill, and that this, at all events, would discharge the drawer, and by consequence the present defendants. There is a difference between the case of a bill of exchange, drawn payable at so many days after date, and one drawn payable at so many days after sight. In the former case, the bill must be presented by the period of its maturity; in the latter, it is sufficient if it be presented in a reasonable time. What that reasonable time is, depends upon the circumstances of each particular case, and no definite rule has as yet been laid down, or indeed can be laid down to govern all cases. The question is a question of fact for the jury, and not of law for the abstract decision of the court. Such, as I take it, is the doctrine of the authorities. There is one other limitation, or rather illustration, of the principle, which is very material. It is this, that the holder is not at liberty to lock up the bill for any length of time in his own possession; but he may put it into circulation, and though it may remain a considerable time in circulation, if there be no unreasonable delay in any of the successive holders, the delay of presentment for acceptance is not fatal to the party in case of a dishonor. Muilman v. D’Eguino, 2 H. Bl. 565; Goupy v. Harden, 7 Taunt. 159; Fry v. Hill. Id. 397; Field v. Nickerson. 13 Mass. 131; Kyd, Bills, 117; Bayley, Bills & N. (2d Ed.) 60; Chit. Bills, (5th Ed.) 208. In the present case the bill was not pul into circulation, but was locked up in the hands of the agent of the plaintiff at Boston, from the 6th of July to the 29th of September. It has been said, that the plaintiff was bound to send it direct from Havana to England by some regular conveyance, and had no right to remit it to Boston for sale. I am of a different opinion. The party, who receives a negotiable bill, payable after sight, has a right to sell it in the market, where he resides, or to send it to any other place for sale. He is not bound personally to make a remittance of it. or to send it directly to the country on which it is drawn. He is at full liberty to put it in circulation, or to send it to any other place for sale or remittance; and the only limitation upon this right is, that he shall have it presented within a reasonable time, be the conveyance direct or indirect. To be sure, the usage of trade is to be consulted on this as on other occasions. The holder of such a bill is not at liberty to send it to very remote places, wholly out of the course of trade, if there be unreasonable delay thereby in the presentment for acceptance, and thus to fix the drawer with an indefinite responsibility. But on the other hand, the transmission in a direct trade is not necessary. No one can doubt, that, by the course of trade, many bills of exchange, drawn in the Havana on England, are sent to the United States for remittance or sale. The very testimony in this case establishes this fact. It would be a most inconvenient rule to hold, that such a negotiation of bills was at the sole peril of the holder. I know of no rule of law reaching to such extent. In my judgment, the remittance of the bill to Boston for sale was not a discharge of the defendants.

Then as to the delay. The jury must, independent of the asserted agreement, look to all the circumstances. If the bill had been pre-' sented before the 19th of August, when the funds reached Williams, it would have been protested for non-acceptance. That it was in the contemplation of all the parties, that the bill should or might be retarded, so as not to reach the drawee before the fund, is most manifest from all the circumstances of the case. The whole arrangement proceeded upon this as an implied basis; for otherwise, in case the bill were sold, it would be returned by the holder, with heavy damages against the prior parties, since his right of action would be complete by the dishonour, and he would not be obliged to wait for the funds. Now the bill itself would not have been paid, if ’t had been presented later than the 21st of August. for it would not have arrived at maturity, if presented at a later period, before Williams’s failure, which was on the 24th of October. In reality, then, there were but two days for the presentment of the bill, in which acceptance and payment would have followed each other. The loss, therefore, which has been sustained, cannot have arisen from any want of due presentment, unless there was an unreasonable delay in not remitting the bill before the 21st of August. The evidence establishes the usual average time of remitting bills from Havana to London, by common conveyances, to be about fifty days; and calculating this to be the earliest period for remittance, where there is no delay, the bill, if sent on its passage on the 20th of June would not have reached London sooner than the 10th of August; and supposing the remittance 1o Boston justifiable, not until the 25th of August. In this view there can scarcely arise the least doubt, that there was no delay in not remitting the bill until after the funds reached London. The plaintiff, having sent the bill to Boston for sale, had a right to some time to look out for a purchaser; and in the uncertainty of the time when the funds might be expected to reach London, lie ought to be allowed, for the benefit of all concerned, a liberal indulgence as to his calculations of time. The only real difficulty is, whether the subsequent delay to the 29th of September was not an unreasonable time, not because it actually occasioned the loss, but because it was a giving credit to the drawee, and thereby putting the bill at the risk of the plaintiff, as to the solvency of the drawee. In coming to a conclusion upon this point, the jury will weigh the whole evidence, and take into consideration the course of trade, and the understanding of the parties in this particular case. If there has been any act of the defendants, or their agent, adopting the delay, or recognizing their responsibility with full knowledge of the delay, that would be decisive of itself. But in the absence of such evidence, it will still be for them to say, whether the delay be, upon all the circumstances, unreasonable.

Hitherto I have considered the case as if it were governed by the rules of the common law; but as I have before observed, the case arose in Cuba, and in this, as in other respects, it must be governed by the Spanish law. .It has been treated, however, as a question not varied by any thing peculiar to the law of Spain, and therefore the eonrt has given its opinion' accordingly. It is most prohable, that the Spanish law is quite as indulgent, if not more so than ours, to the rights of the holder. See Poth. Traite du Contract de Change, pt. 1, art. 143, c. 0, § 2; Locré’s Esprit du Code de Commerce, tom. 2, p. 242; Code de Commerce, lib. 1, tit. 8, § 11, art. 160, &c.

[Subsequently the cause was again tried by the jury, with additional evidence. The verdict was rendered in favor of the plaintiff. See Case No. 17,097.]

If there was any special agreement in the case, beyond what the other facts would naturally imply, it will, of course, be conclusive upon the point now under consideration. The testimony is in conflict, and it will be for the jury to decide upon the credit to which it is entitled. (Here the judge summed the facts, as to the agreement, at large; and left them to the jury.)

The jury disagreed on the question of facts, and by consent were discharged.