Case ID: ohio-st_11/html/0029-01.html
Source: Caselaw Access Project
Author: {"author": "Gholson, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

George Myers, John C. Fall and John A. Collins v. Needham M. Standart, Samuel A. Wheeler, Philo Chamberlin, and Silas S. Stone.
    1. Under the averment, in a declaration, of due demand and notice of the dishonor of a bill of exchange, the declarations of the defendant showing an acknowledgment of liability upon, and a promise to pay the amount of the bill, are admissible in evidence.
    2. A bill of exchange addressed, generally, to the drawee, in a city, may be accepted payable at a particular bank in the same city, and a presentment for payment may be made at the counter of such bank, without a previous notice to, or the assent of the drawer.
    3. The drawers of a bill, being partners, dissolved their partnership after the maturity and protest of the bill, but gave no notice thereof to the payees of the bill. Some time after the dissolution the agent of the payees called on one of the partners for settlement of the bill, who referred him to another,.. and by him declarations were made that, although there had been a defect in the mode of giving notice, which discharged the drawers, they would not take advantage of it, but would settle when .they were satisfied nothing could be made from the acceptors. The acceptors were wholly insolvent, and the action was not brought on the bill until after a considerable lapse of time. On the trial the other partners objected to the admission in evidence of the declarations. Held, that they were properly admitted in evidence, as showing that there had been due notice of dishonor of the bill, and charging all the partners with liability thereon.
    Motion for a new trial, reserved in tbe district court of' Cuyaboga county.
    This was an action of assumpsit on a bill of exchange. Two of the defendants, Philo Chamberlin and Silas S. Stone,. severally pleaded the general issue. Needham M. Standart was discharged upon his plea of bankruptcy, and Samuel A. Wheeler died after the institution of the suit. The case was tried before a jury upon the pleas of Chamberlin and Stone,.. and a verdict rendered for the plaintiffs. After the verdict, a motion was made for a new trial, by Chamberlin and Stone, on the grounds of the improper admission of evidence, of the misdirection of the court to the jury, that the verdict was contrary to law, and against the evidence. This motion was reserved, for decision, to this court.
    The testimony in the case, and the exceptions to testimony and to the charges of the court, are set forth in a statement agreed to by the parties. Prom this statement, it substantially appears that the defendants were partners under tho style of Standart, Chamberlin & Co., which partnership waa formed in the year 1838, and expired by limitation on tho 1st of January, 1841. That the following bill of exchange was drawn by the firm :
    “ $1000. Akron, 0., April 10, 1839.
    Pour months after date, pay to the order of Messrs. Myers, Pall & Collins, One Thousand Dollars, and charge to acct. of “ Your obt. servants,
    “ Standart, Chamberlin & Co.”
    
      (Addressed to) Messrs. Griffith, Rolfe & Co., New York.
    The bill was indorsed by Myers, Pall & Collins to R. Buchanan or order,, who was the holder when it matured, but who indorsed it to C. McAlister, in Philadelphia, for collection, and by him it was sent to parties in New York. The bill was presented for acceptance, and on the face of the bill was. written, “ At Union Bank, Griffith, Rolfe & Co.”
    When the bill matured it was presented by a notary to the paying teller of the Union Bank in the city of New York, who refused payment for want of funds. The bill was then protested, and notices sent to C. McAlister, by him to R. Buchanan, by him to the plaintiffs, and by them to the drawers. These parties, in proving the forwarding of the notices, do not recollect the particular day, but say that, from their course of business and knowledge of the mode of doing such business, they were forwarded the day after their reception, by the usual course of mail.
    The plaintiffs offered in evidence a conversation between .their clerk and S. A. Wheeler, one of the partners of Stand-art, Chamberlin & Co. The statement shows that, at a time ■“ not remembered definitely, but believed to be in the month of August, 1840, he (the clerk) made a trip to Akron to endeavor to make an amicable settlement of this draft with the drawers; that he called upon Mr. Chamberlin, who referred him to Mr. S. A. Wheeler; that he had an interview with Mr. S. A. Wheeler, from whom it is believed that the said Myers, Fall & Collins had originally received the draft, who stated to deponent that they, Standart, Chamberlin & Co., were released from all legal responsibility of payment of said draft, in consequence of some defect in the protest, or notices of protest, or something of the kind, but that they did not intend to take any advantage of the same, as they were justly bound to see them, the said Myers, Fall & Collins, paid, and would do so when they, Standart, Chamberlin & Co., were fully satisfied that nothing could be made out of the said Griffith, Rolfe & Co., the acceptors in the city of New York, and asked that the settlement of the same might be delayed until that was finally ascertained, and urged renewed efforts to make the money in New York.” On a further examination, the witness stated that the defect in giving notice, as well as he recollected, which was claimed as discharging Standart, Chamberlin & Co., was that the notices did not come to them by the nearest post route, but went to Cincinnati, thence to Lancaster, and from there to Akron. He was cross-examined as to the date of the conversation, and said, “ I now can not recall the time, other than it was prior to 1841, but most probably in 1840.” He further said, that he thought it was in the fall of 1840, after the draft had been protested and suit brought against the acceptors, and before the separation between Myers, Fall & Collins, which was in 1842. He did not pretend to fix the date. The statement shows that at the time the draft matured, the drawers had funds to meet it, in the hands of the acceptors, who failed, and became wholly insolvent, the efforts to recover anything by suit proving entirely fruitless.
    The evidence to which objection was taken, was that before stated, of the declaration of one of the partners, as to-the notice of the dishonor of the draft, to the effect that they would pay the draft, notwithstanding they had been discharged by notice not having been given; and the ground of the objection stated is, that strict notice only was averred in the declaration, and required strict proof.
    It was claimed that the court misdirected the jury, by instructing them that a draft drawn payable generally, may bu accepted by the drawee, payable at a particular bank in the» city of his residence, and that without notice to the drawer, or first obtaining their consent, said draft at maturity may bi presented by the holder at the counter of said bank for payment, and protested for nonpayment, so as to bind the drawer, without any presentation or demand of payment at the usual-residence or place of business of said drawee, and without a, demand of the drawee in person.
    It was also claimed that the court misdirected the jury by instructing them that, although the declaration of a partner made after the dissolution of a partnership can not be received in evidence to charge his former copartner-upon a liability that had become extinct by reason of laches in a third person; yet, that such declaration may be received for that purpose, unless it is made to appear that notice was given of the dissolution of the partnership, or unless from lapse of time, or some other circumstances, the jury find that the dissolution was known to the party who is to be benefited by such declarations.
    
      It. P. Spalding, for defendant Chamberlin, in support of the motion for a new trial, submitted the following points and authorities :
    1. Strict notice being averred in the declaration, it was improper to allow the plaintiffs to introduce evidence to show a waiver of notice by one of the defendants, after protest for nonpayment. Corey v. Scott, 3 Barn. & Ald. 624; Curtis v. The State Bank, 6 Blackf. 312; Blackly v. Grant, 6 Mass. 386; Law. Pl. in Ass. 363; Baily on Bills, ch. 9, p. 406, 5th ed., 1830; Byles on Bills, marg. p. 238; Hill v. Varrett, 3 Greenlf. Rep. 233.
    2. The court misdirected the jury by telling them that a draft made payable generally could be accepted by the drawee payable at a particular place in the city of New York, without notice to the drawer, and that a presentation at the place of payment, would be sufficient to bind the drawer without a demand at the hands of the acceptor at his residence or place of business. Story on Bills of Exchange, p. 281, sec. 239 and note 3, sec. 240; Chitty on Bills, p. 300, 303; Cowie et al. v. Halsall, 4 Barn. & Ald. 197. See remarks of Bailey, J., in Sebag v. Abitvol, 4 Maule & Selw. 466, and of Abbot, C.J., in Rowe v. Young, 2 Brod. & Bing. 276; 6 Eng. Com. Law, 109. See Lewis v. Planter’s Bank, 3 How. (Miss.) Rep. 267; 3 Kent Com., 9th ed., pp. 110, 133; 16 M. & W. 751; Townsend’s adm’r v. Lorain Bank of Elyria, 2 Ohio St. Rep. 360; Miser v. Trovinger’s exr’s, 7 Ohio St. Rep. 285; Pierce v. Struthers, 27 Penn. St. Rep. 254; Waterman v. Vose et al., 43 Maine Rep. 511; Walker v. The Bank of the State of New York, 13 Barb. 638; 1 Strange’s Rep. 214.
    3. The court erred in its instructions to the jury, that after the dissolution of a partnership, one of the former partners could bind his copartner, and attach to him a liability that had become extinct for want of regular notice, by his own declarations, unless the dissolution of the copartnership was known to the person to be benefited by such declarations. Story on Bills of Exchange, sec. 320; 3 Kent Com., 9th ed., p. 72; Hackley v. Patrick et al., 3. Johns. 536; Palmer v. Bodge, 4 Ohio St. Rep. 21; Bell v. Morrison et ál., 1 Peters, 351.
    The fact that notice of the dissolution of the partnership of Standart, Chamberlin & Co. had not reached Myers, Eall & Collins, at the time of the alleged waiver by Wheeler, will have no weight in the consideration of the question whether Wheeler had power to bind his former copartners by such waiver. Myers, Eall & Collins parted with no property, nor yet were they subjected to any prejudice by reason of the supposition that the firm of Standart, Chamberlin & Co-, contimied to exist. And in such cases only is a notice of dissolution material to the defense of the partner who claims exemption from liability. Story on Part., 4th ed., p. 277, sec, 162.
    The drawers of the bill had, by the acceptance, become, in effect, sureties for the payment, and nothing more. Payment was not cluly demanded, and if it was, notice of nonpayment was not regularly given to the drawers. They had become exhonerated from all legal liability during the life of the co-partnership. Could that liability be restored, after dissolution, by the declarations of an individual, so as to bind the whole as effectually as if the firm had continued to exist? See Le Roy, Bayard & Co. v. Johnson, 2 Peters, 186; Yandes et al. v. Lefavour et al., 2 Blackf. 371.
    It is insisted, on the part of defendants, that Wheeler, in waiving a defect in the notice of nonpayment, was in the execution of a power, so far as it concerned his copartners, that appertained to him only so long as the partnership existed. After dissolution'his waiver could bind no one but himself. The fact that no notice of the dissolution had been given can not affect this question of power.
    4. A general acceptance of a draft imposes on the holder the duty of presenting it for payment to the acceptor in person, or at his house or place of business. An acceptance to pay at a particular place, imposed no other duty on the holder than to have the draft at that place for payment. The drawer had a right to expect that demand of payment would be made of the acceptor in person, or at his domicile or place of business. The requisitions of the law have been changed without his consent.
    That inserting “ place of payment,” is deemed a material alteration of the contract — See Sturges & Hale v. Williams, 9 Ohio St. Rep. 443; Southwark Bank v. Gross et al., 35 Penn. St. Rep. 80.
    
      H. Griswold, for plaintiffs.
    1. As to the first point made by defendant, I cite the following .authorities.: Byles on Bills, 308. 347, 350, 347, 409, 470; 7 East, 231; 5 Pick. 444; Chitty on Bills, 163; 16 Johns. 152; 12 East, 38; 1 Taunt. 12, 712; 4 id. 93; 5 Johns. 375; 3 Penn. Rep. 419, 425; 13 East, 417; 7 Conn. 526; 12 Wheat. 183; 12 Mass. 52; 6 East, 16; 2 Camp. 188, 232; 3 Barn. & Ald. 622; 16 M. & W. 749; 2 Stark. Ev. 274.
    We offered the evidence as evidence of notice satisfactory to the defendants. This distinction is clearly recognized in the authorites cited. That a demand was made is not disputed; and the objection under this point, has reference only to the notice.
    2. As to the second point, I cite these authorities: Troy City Bank v. Lanman, 19 N. Y. Rep. 477, recognized as good law in 31 Barb. 403. This bill was payable in New York, and is governed by the law of New York. This decision is evidence of what the law of that State was.
    3. As to the third point, I cite the following authorities: Darling v. March, 22 Maine Rep. 184; 7 Wend. 441; 11 Pick. 408; 8 Shepl. 433; 6 Johns. 267; 1 Taunt. 103; Collyer on Part. 497; Story on Part. 107.
    There is no new liability created. Wheeler did nothing more than what fell within the legitimate scope of his duties as a member of a dissolved firm, in settling up its business, .liquidating accounts and agreeing upon balances. Demand had been made ; notice of some sort had been given; and it was right that he should say whether he was satisfied with it.
    Suppose, under these circumstances, Wheeler had paid the bill when demand was made of him; is there any doubt but that he could have charged the amount over to the firm ?
    We are not seeking to charge the defendants upon a promise made by one of the partners. Wheeler and Chamberlin were the Akron partners, and chargeable with the adjustment of this business, and Chamberlin referred the plaintiff’s clerk to Wheeler. This binds the whole to whatever Wheeler did.
    4. The fourth point, made by the defendants, is the same, in substance, as their second.
    5. However the court may hold on the third point, I ir.sist that all the defendants are bound by the acknowledgment and promise of Wheeler, in the absence of evidence that they had given notice of dissolution, or that the plaintiffs had actual notice of it in some other way. On this point, I cite Story on Part. 334^5-6; Collyer on Part., p. 484.
    The rule is general and universal. It is immaterial what he engagement may be which th.e partner makes. It is not essential that any actual consideration should pass at that time. If the transaction is such as would bind the firm, were the partnership then in existence, it will bind all the members, though it be dissolved
   Gholson, J.

The first reason assigned for a new trial is the admission of evidence tending to show what is said to be a waiver, by one of the defendants, of laches in giving notice, tñe averment in the declaration, undei which the proof was offered, being of demand and notice in the usual form. Whether under such an averment, a dispensation or excuse for not giving notice, or, in a case where there has been no attempt to give notice, a subsequent waiver of any notice might be properly shown, we need not decide. The evidence offered and received, we think, tended to show that notice had actually been received, in the language of one of the authorities, that the preliminaries essential to the maintenance of the action had been satisfied. Byles on Bills, 337. In this view, the authorities clearly show that it was admissible.

It was held in the case of Campbell v. Webster, 2 M. G. & S. 258, “ that any acknowledgment by the drawer of a bill, of his liability to pay, or any promise to pay the amount, though conditional as to the mode of payment, is evidence to be left to the jury, of due notice of dishonor, and in ease of a foreign bill, of its having been duly protested.”

The evidence in this case not only showed that notice had been received, but the informality alleged to have operated as a discharge, when stated, it does not appear would have had that effect, though such was the opinion of the party. He claimed that notice should have been sent directly from New York, and not by way of Cincinnati and Lancaster, through the successive-holders of the bill. But the law clearly authorized the course which was taken. Lawson v. Farmer’s Bank of Salem, 1 Ohio St. Rep. 206. And the whole statement taken together, showed that there was in fact no laches in giving notice, but that the course properly adopted for the purpose had been effectual. '

It is also urged as a reason for a new trial, that there was a misdirection to the jury, in saying that a draft drawn pay able generally, may be accepted by the drawee, payable at a particular bank in the city of his residence, and that, without a previous notice to, or the assent of, the drawer, a presentment for payment may be properly made at the counter of such bank

The precise question here presented has been recently considered in the court of appeals in New York; and it was held that such an acceptance did not discharge the drawer. “No possible injury,” says the judge who delivered the opinion, “ can result to the drawer or indorser by making a bill of exchange, directed to the drawee in a city generally, payable at some particular place in the same city. It becomes pro Jiae vice the place of business of such drawee. The cases differ as to whether the holder may not, nevertheless, present the bill for payment at the ordinary place of business, or if he has none, the residence of the drawee; but I have seen none which decides that he is bound to do so. I am confident that the practice pursued in this instance corresponds with commercial usage, and think it should be sustained.” Troy City Bank v. Lanman, 19 N. Y. Rep. 477-480. We feel the propriety of a uniformity of decisions upon commercial questions between the courts of this State and those of New York; and even if we had grave doubts of the correctness of a decision of the highest court of New York, we should be inclined to follow it, in the absence of any settled rule in this State. But upon principle, we see no good reason to doubt the correctness of that decision.

The distinction, between the contract of the drawer and payee and that of the payee and acceptor, should not be confounded. The mere drawing a bill is no contract with the acceptor. His contract has yet to be made, and, it may be admitted, should not be made so as to affect the contract between the drawer and payee evidenced by the bill. The acceptance must be obtained and acted on substantially as that contract requires, or the drawer can not be charged. That contract in the present case contemplated that the acceptor should become bound generally, and not conditionally, for the amount of the bill to the payee.

It is well known that the effect on the contract of the maker of a note or acceptor of a bill, of the note or bill being made payable at a particular place, was the subject of much discussion among the judges in England, and that a difference of opinion existed. Some contended that, as against the maker or acceptor, a demand at the place was necessary, others that it was not. The controversy was settled by the house of lords in favor of the former opinion. Rowe v. Young, 2 Bro. & Bing. 164. This led to an act of parliament providing that such effect should not be given to the bill or note, unless the words “ not otherwise or elsewhere ” were added to the designation of the place of payment. The decisions of the courts in this country have been contrary to that of the house of lords, and in accordance with the opinion of the minority of the judges in the case of Rowe v. Young; and the only effect given to such designation of the place of payment in behalf of a maker or an acceptor, has been to relieve him from a ' claim for interest, if he was present at the place designated and ready to pay, but unable to do so for the want of a demand. In this view, as between payee and maker or acceptor, the designation of a place of payment has been held material.

Such being the only view in which the liability of the acceptor is qualified by designating a place of payment, it is clear that the contingency in which he might avail himself of such qualification could not affect the drawer, for it presupposes that to have occurred which in itself discharged the drawer, the failure to make a demand for the payment of the bill.

It will be observed that the rule applies to cases where the bill is addressed to a drawee in a city generally, and accepted payable at some particular place in the same city. It would not apply when the bill was accepted payable at some other city or place. This might injuriously affect the.drawer in the time and mode of forwarding funds to meet the bill, and of receiving notice of dishonor. But where in the same city, a particular location or agency is designated for the coming together of the parties, to pay and receive, it is difficult to perceive how any injury therefrom can result to the drawer. In a large city, in many cases, such an arrangement would be very convenient, and we see no reason why it should not be allowed.

After what has been stated, it is scarcely necessary to say that the eases, as to the alteration of a promissory note or an accepted bill, by inserting or striking out words designating a place of payment, do not apply to this case. We have here no change of contract, but a question whether the contract of the acceptor was so made as to affect the rights of the drawer under his contract with the payee. The very distinction we have taken appears to have been suggested in one of the cases cited. Sturges & Hale v. Williams, 9 Ohio St. Rep. 443-451.

In another particular a misdirection to the jury is alleged to have occurred. The charge to the jury proceeds on the assumption that they might have found from the evidence that at the time the declarations of the partner as to receiving notiee of the dishonor of the bill were made, the partnership had ceased to exist. We think it quite doubtful whether any view of the evidence would warrant such a finding, and if not, the charge was an abstract proposition which could not prejudice the defendants. But the counsel on both sides have argued the case, as if such an assumption might properly be made, and we therefore proceed to examine the correctness of the charge, as bearing on such a view of the evidence.

The charge, as shown by the statement presented, is somewhat loosely drawn, in referring to the liability of the defendants as having become extinct by the laches of a third person. But we think the effect of the charge must be considered in connection with the issue and evidence in the case, and incorrect language, unless it may have misled the jury, ought not to be regarded. We have before stated that the declarations of the partner were properly admitted as showing that notice of the dishonor of the bill had been received. If they were properly admissible in evidence, and their effect, if believed by the jury, was to charge the defendants with liability, the language used in instructing the jury to find upon such evidence, can not be material.

The question to be really met, and it is one of some difficulty, is, whether, assuming the partnership to have been dissolved, though the fact was unknown to the plaintiffs, such declarations of one partner were properly admissible against the others ? There has been much discussion and conflict of opinion as to the authority of one partner after a dissolution of the partnership, to bind other partners by a promise or admission of liability, and particularly in reference to a debt barred by the statute of limitations. It would be difficult to deduce from the authorities any clear and definite rule which would show whether a particular declaration might be received. Partners in reference to their contracts occupy the position of other joint contractors, and are also regarded each as the agent of the others. But this agency, either before or after dissolution, must be limited to the ordinary scope of the business of the partnership. After the dissolution, the agency is limited to the winding up and adjusting the business. But persons who have had previous dealings with the partnership, and have no notice of its dissolution, may deal with the partners as if the partnership still continued. Such dealing, however, must be limited to matters within the scope of the authority of the partners to bind each other, and in the usual and ordinary course of the partnership business. If credit be given in the usual course of business on the faith of the existence of the partnership, there could be no doubt of the liability of the firm for the debt contracted. Whether the making a promise or admission to revive a debt barred by the statute of limitations, or a promise or admission of a like character, considered either as a continuance of a liability, or as a new con tract, may be regarded as a matter in the usual and ordinary course of business, is doubtful. But we are not prepared to limit the dealings of persons having no notice of dissolution of a partnership, strictly, to new contracts upon an entirely new consideration. We think that partners who, after disso lution, by a failure to give notice to those with whom thej have had previous dealings, or have entered into previous en gagements, hold out each other as competent to make negotiations and arrangements in the same manner as if the partnership existed, may well be bound by declarations and admissions made by one partner, in the course of the negotiation or arrangement of a subject matter originating during the existence of the partnership. They may thus, though passively, give a right to evidence of a title to a claim or to property, which it would be unjust to permit them afterward to dispute. Nor do we think that it can be generally necessary in such cases, that the party should have parted with something, or have changed his position; it would suffice if it appeared from the circumstances that, on the faith of the declarations made, he forbore to act in the prosecution of his claim.

In this case the holders of a protested bill call on the drawers, who were partners when the bill was drawn, and after it matured, for settlement. One partner refers them to another as having charge of such business. Neither says anything of a change of authority to act or speak. The partner referred to enters into the negotiation for the settlement of the bill. He alleges that there had been a defect in giving notice of dishonor, which had discharged the drawers, but the matter relied upon, when stated, proves to be no defect, and then gives distinct and positive assurances that notwithstanding the supposed defect the matter will be settled, urging, however, continued efforts to recover the amount from the acceptors. A considerable time elapses, the acceptors are •wholly insolvent, a demand by action is made on the drawers, and the right to use such declarations as evidence of demand and notice is contested by the other partners. We do not think we are required by any rule of law, and certainly by no principle of justice, to exclude such evidence.

The ground that the verdict was against the weight of evidence, has not been pressed in the argument, and requires no consideration. The motion for a new trial will be overruled; and judgment entered on the verdict.

Brinkerhoff, C.J., and Scott, Sutliff and Peck, JJ., concurred.