Case ID: mass_25/html/0082-01.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Lewis Grosvenor versus Jonas E. Stone.
    The defendant, a merchant in this country, directs the plaintiff, his correspondent iti England, to purchase goods and to draw for the price on a banker in London ; who also authorizes the plaintiff to draw. Tile plaintiff, having similar orders from oilier persons, purchases goods in his own name for them and for the defendant indiscriminately. On the 30th of July he draws a bill in his own name at three months, payable on account of the defendant. The bill is drawn on account generally, in payment for several parcels of goods, and not in payment fur goods purchased for the defendant; tile defendant however being indebted to the plaintiff to the amount of the bill for goods already sent to him. The banker accepts the bill, having then in his hands only a small balance due to the defendant, but in September he receives funds beyond the amount of the bill. A few days before the 2d of November, when the bill falls due, the acceptor becomes a bankrupt. On the 26th of November a stranger, through mistake, pays the bill for the honor of a person not a party, claiming however to hold the plaintiff and all the other par. ties, but no notice of the dishonor is given to the plaintiff. Afterwards the person who paid the bill recovers judgment against the plaintiff upon a default by consent. In an action by the plaintiff against the defendant to recover the price of the goods, it was held, that the plaintiff, having had reason to expect that the bill would be paid by the drawee, was entitled to notice of its dishonor j that he could not waive notice to the prejudice of the defendant; and that the action could not be maintained.
    Assumpsit against the surviving partner of the house of Stone & Kent, for goods sold and delivered, money had and received, and money paid.
    At the trial, before Wilde J., the plaintiff proved, that in 1825 he was a commission merchant residing at Manches^ r, England, and that his business consisted principally in executing orders sent to him from .the United States, for British manufactures. Those orders he executed by purchasing goods "n his own name, and upon his own credit, or from goods already on hand, purchased by him as bargains offered in the market, and charging the same to the persons who had sent the orders, at the cost together with a commission and interest. The parties whose orders were thus executed, placed their funds in the hands of some banker in London ; the plaintiff drew for his re-imbursement, in his own name, and at three months from date, bills upon the bankers, payable out of the funds of such parties.
    In 1824 and 1825 the house of Stone & Kent transmitted various orders for goods to the plaintiff, with authority to draw on Samuel Williams of London for the amount, and the plaintiff purchased, made up and transmitted the amount of goods ordered, in the manner before stated, and drew bills on Williams for nearly the whole amount so purchased for the defendant and of the commissions thereon ; it being expressed in the bills, that they were drawn on account of Stone & Kent. One of the bills thus drawn, dated July 30, 1825, payable to Broadhurst, Hanson & Co. of Manchester, in three months, on account of Stone & Kent, was accepted by Williams on the 2d of August, but before the 2d of November, when it became due, Williams had become a bankrupt, viz. on the 25th of October, and it was protested for non-payment.
    At the time when this bill was drawn, Stone & Kent had a balance of about 50Z. in the hands of Williams, and Williams had likewise placed to their credit a remittance of a bill for 1500Z., which became due and was paid to Williams on the 17th of September, 1825 ; and in a letter from Williams to Stone & Kent, dated August 5, 1825, he says he had authorized Grosvenor to draw on him previous to the receipt of the above 1500Z.
    On the 13th of October a balance of 463Z. then due from Williams to Stone & Kent, beyond the amount of his acceptances, was transferred to the credit of Draper & Stone.
    On the 26th of November the bill drawn by Grosvenor was paid by Timothy Wiggin of London, and on the 9th of June following, Wiggin declared before the notary who made the protest, that on the 26th of November he paid the bill for the honor of Draper & Stone, under a belief that they had assumed the business and concerns of Stone & Kent; holding nevertheless Draper & Stone, and Stone & Kent, together with the drawer and acceptor of the bill and all others concerned, obliged to him for his re-imbursement. The plaintiff proved that the bill was drawn by him in part-payment for several parcels of goods, namely, on account generally, and not in payment for goods purchased by him for Stone & Kent. It appeared however, that the plaintiff had a claim against Stone & Kent to more than the amount of the bill, for goods which he had already sent to them.
    The only notice of the non-payment and protest was contained in the deposition of Broadhurst,, who testified that he and his partners gave notice to Stone & Kent, of the non payment of the bill, by a letter dated Manchester, Novemher 12, 1825, which was in the case.
    
      March 13ih.
    
    The plaintiff gave in evidence also a judgment recovered by Wiggin, at the October term of the Common Pleas in this county, in 1827, against him (Grosvenor) as principal defendant, and Stone as his trustee. The defendant proved that this judgment was procured by the assent of Grosvenor ; that a writ of scire facias upon the judgment was pending against Stone, as trustee, in which he denies that he is a trustee ; that Wiggin procured Grosvenor to assign to him his claims against Stone & Kent, and to permit any suits to be brought against him on the bill and against Stone & Kent as his trustees, and in such suits not to require of Wiggin any formal proofs of his demand ; and that thereupon Wiggin covenanted not to levy any judgment obtained in such suits, upon the person or property of Grosvenor, and to hold him harmless therefrom, and from or on account of the bill.
    The plaintiff then proved that he became insolvent in August, 1825, and that two bills drawn by him after the bill in question, in the same manner, upon Williams, payable out of Stone & Kent’s funds, which bills were protested for nonpayment by Williams, were, after the statement of an account on March 9, 1826, between Williams and Stone & Kent, taken up and settled by Stone & Kent.
    Upon this evidence a nonsuit wras directed, subject to the opinion of the whole Court.
    
      Shaw and Bartlett, for the plaintiff.
    The bill of exchange is signed by Grosvenor for himself, and not as agent of Stone & Kent; so that Wiggin cannot resort to the defendant except indirectly. Leadhitter v. Farrow, 5 Maule & Selw. 345. Stone & Kent have received the goods without paying foi them ; the plaintiff is the vendor, and is entitled to demand payment in this action. Feise v. Wray, 3 East, 93; Ilsley v. Stubbs 9 Mass. R. 65. It will be said that the plaintiff negotiated the bill, and that it has been paid. That does not concern the defendant, who has not paid for the goods ; and Wiggin has recovered a judgment against the plaintiff for the amount of the bill. The plaintiff submitted to a default; which is evidence that the dishonor of the bill was duly notified to him ; or he might waive the want of notice. Further, he was not entitled to notice, having no funds in the hands of the drawee ; he drew on the faith of funds of Stone & Kent which had been withdrawn. Clarke v. Noel, 3 Campb. 411; Owenson v. Morse, 7 T. R. 64.
    
      March 23d
    
      Fletcher, for the defendant.
   Per Curiam.

The real question in this case is, who shall bear the loss of the 5001. in consequence of the bankruptcy of Williams. Wiggin, upon looking into the books of Williams and finding a balance in favor of Draper & Stone, who were not parties to the bill, pays the bill for their honor, probably mistaking them for Stone & Kent. Wiggin thus became the holder. It was incumbent on him to see that the proper notices were given to the parties against whom he intended to claim. No notice of the dishonor was ever given to Grosvenor the drawer ; and Wiggin, finding that he made a mistake in regard to Draper & Stone, brings this action in the name of Grosvenor, in order to recover of the defendant, who, it is said, has received the goods, but has not paid for them.* I

As Grosvenor had no notice, Wiggin could have no remedy against him on the bill. If Grosvenor was acting on his own account, he might waive the want of notice so far as regards himself, but not as regards the defendant; but if he was the agent of the defendant in drawing the bill, the case should be considered the same as if the defendant had actually drawn it and the holder had given him no notice of its" dishonor. It would be the common case where a party is discharged by the loches of the holder. The letter of November 12, 1825, to Stone & Kent, would not excuse the want of notice to the drawer.

It is said that Grosvenor drew the bill when he had no funds in the hands of Williams, and so was not entitled to notice. But this principle does not apply. He had good reason to expect that Stone & Kent would have funds there subject to his order; and further, Williams had agreed to honor his drafts ; he was therefore entitled to notice. French v. Bank f Columbia, 4 Cranch, 141.

Grosvenor’s agreement with Wiggin is not to prejudice the defendant. He has no right to call on the defendant, if .he has waived any defence which the defendant, if he had been the drawer, might have made.

Nonsuit made absolute. 
      
       See Martin v. Jngersoll, ante, 1.
     
      
       See Wallace v. Agrij, 4 Mason, 336.
     
      
       See Bayley on Bills, (2d Am. edit.) 306; Austin v. Rodman, I Hawks 195 ; Campbell v. Pettengill, 7 Greenleaf, 126 ; Hill v. Norris, 2 Stewart & Porter, 114. The burden of proof is on the holder of a bill, to show that the drawer had no funds in the drawee’s hands, in order to excuse want of notice. Baxter v Graves, 2 A. K. Marshall, (Ken.) 152; Ralston v. Bullits, 3 Bibb, 261