Case ID: ky_38/html/0133-01.html
Source: Caselaw Access Project
Author: {"author": "Chief Justice Robertson", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Rice vs. Hogan & Thompson.
    Pét. & Sum.
    [Mr. Pirtle for appellant: Mr. Owsley and Messrs. Loughborough and Hag-gin for appellees.]
    From; the Circuit Court for Jefferson County.
    
      April 16.
    The petition and summons.
   Chief Justice Robertson

delivered the Opinion of the Court.

This is a petition and summons, brought by Hogan and Thompson against Rice, on the following writing, as a bill of exchange:

“ Philadelphia, April 15th, 1837.”
“ Eight months after date, pay to the order of Hogan « and Thompson, five hundred and twenty dollars, value “ received, and charge the same to account.”
For Mr. James Rice, “ Louisville, Kentucky”)
Hogan 8f Thompson.”

The petition avers that, in due time, the bill was presented to the drawee for acceptance, and that he, thereupon, did accept the same, by endorsing thereon “ acceptedf that, afterwards and before the day of payment, the drawers made an endorsement on the bill, directing the payment thereof to P. S. Loughborough, of which the acceptor had due notice; that said Loughborough was only the agent of the drawers, merely for collection, and without any beneficial interest: and that the acceptor had nevertheless failed to pay the amount of the bill to the said Loughborough, either on the day of payment or at any time since, and that the said debt still remains unpaid.

Points made in the case.

Ageneral request pay the drawer’s own or 3 Dill exchange, which the drawer may make payable to doreement, & notice to the accep tor, before it due.

A bill drawn in one if another is & foreign bill,

The Circuit Judge, to whom both the law and the facts were submitted, rendered a judgment against Rice, for five hundred and twenty dollars with interest; and, in the revision of that judgment, the following points are presented for consideration:—

1. Is the writing sued on, a bill of exchange?

2. If it be such a bill, is it foreign or domestic?

3. If it be a foreign bill of exchange, does the statute of 1837, (Session Jlcts, 41,) authorizing the “ holder of any protested bill of exchange” to sue, by a petition and summons, the drawer, endorser, or acceptor, either jointly or severally, authorize such a suit by the drawers, in this case, against the acceptor1'

4. If the statute constructively authorizes the suit, is the judgment sustained by the facts exhibited in the record?

First. We have no doubt that the writing is a bill of exchange. There may be but two parties to a bill. A written request to pay money to the order of the drawer, and upon his general credit, is a bill of exchange and upon a general acceptance, the acceptor may be required to pay to the drawers themselves, if, by endorsement and notice in due time before the day of payment, they make the bill payable to themselves.

Second. Nor have we any doubt that, as the bill was drawn in Philadelphia on the drawee in Louisville, which places are in two different States of this confederacy, it should be deemed, nothing appearing to the contrary, to be a foreign bill.

The act of 1837, authorizing suits by petition and summons, upon bills of exchange, is aremedial stat ute,which sh ould be construed liberally — and as au thorizing the suit by a drawer, being'the holder,’ against an acceptor; the term ‘pro tested’ used in the first sec. as descriptive ofthe bills upon which petitions may be maintained,is synonimous with dishonored ; and under that see. a petition & summons may be maintained in any case where as sumpsit will lie on the same bill, between thesame parties.

Third. It does not appear that the bill was protested; nor was a protest necessary as between the drawers and the acceptor. The first section of the act of 1837 applies literally to only protested bills; and another section (the 6th) applies to domestic bills, upon which a protest is not material as between any of the parties to them. If the first section does not embrace this case, the suit, as brought, is not authorized by the act of 1837.

The phraseology of the entire enactment, and especially that of the first section, is peculiarly ambiguous; and the form prescribed in the first section is not appropriate to more than one of several classes of cases evidently embraced by that section. Such a remedial statute should be liberally construed. A suit by a drawer against an acceptor is obviously comprehended by the object of the enactment. The form of the petition, as prescribed by the first section, applies literally to bills of exchange, whether protested or not; and there could have been no motive for restricting the new remedy upon foreign bills to such as shall have been protested — a protest being immaterial to the form of remedy; and the sixth section showing, as it does indisputably, that it was the right of action, and not the mode of acquiring or proving it, that was alone considered by the Legislature.

Considering the character and policy of the enactment of 1837, we feel authorized to conclude that “protested’’ in the first section should be deemed synonymous with dishonored; and that the Legislature intended to allow the more summary and simple remedy by petition, on any bill of exchange whenever an action of assumpsit could be maintained on the same bill, and between the same parties.

“ The holder” of a bill is he who is in possession of the bill, and is legally entitled to the benefit of it; and therefore the drawer, as well as any other party, may become “ the holder.”

The first section of the act of 1837 was, in our opinion, intended to apply to every “ holder” of a bill of exchange wherever, as such, he shall have a right to sue thereon.

[By Mr. Pirtle.]

In a suit against an acceptor, upon a general acceptance, it is not necessary to aver a formal demand, or presentation for payment. And— Where a suit is brought by petition, under the act of’37, by the drawer of a bill, as the holder, against the acceptor, the indorsements on the bill may be disregard ed.

Where a bill is payable to the drawer’s order, and indorsed to his agent, the indorsement is virtually to himself, and no averment of his having paid it, is necessary.

An averment that the plt£ (drawer) is the holder of the bill, is prima facie evidence of his right to sue.

Fourth. The petition neither averred a presentation of the bill for payment, nor transcribed the endorsement to Loughborough; nor was there, on the issue, upon the plea of nihil debit, any proof of either a re-indorsement by Loughborough to the drawers, or of an erasure of the endorsement by them to him. But these omissions ai’e not, in our judgment, material.

It seems to be well settled by adjudged cases, that, in a suit against an acceptor, for non-payment, according to a general and unqualified acceptance, it is not necessary to aver a formal demand or a presentation of the bill for payment. Chitty on Bills, 249. And had Loughborough been beneficially interested as endorsee, still, as the suit was brought, not by him, but by the drawers, the statute of 1837 did not require a transcription of the endorsement into the petition, and the acceptance and plea waived all proof of the averment of such endorsement. But the averment that Loughborough was a mere agent of the drawers, and therefore only a nominal endorsee, showed that, virtually, the bill was made payable to the drawers themselves, and that, therefore, an averment of payment by them to him, or of any formal re-endorsement to them, or of any actual erasure of the endorsement to him, was not necessary to their right of action against the acceptor. And moreover, the mere fact that the drawers have become the holders of the bill, was prima facie evidence that they had acquired it rightfully, and were entitled to the exclusive benefit of it. Bell vs. Morehead, 2 Marshall, 161-2.

Wherefore, it is considered that there is no available error in the judgment, and that it be therefore affirmed.

%* There were two other similar cases decided at the same time.

April 27.

Petition for a re-hearing.

The counsel for the appellant most respectfully asks the Court to grant a re-hearing in these cases.

The first section of the statute referred to in the opinion, is to some extent ambiguous, it must be acknowlodged; but he humbly conceives, there is no ambiguity, or any thing left for inference, in regard to'the character of the bill upon which this kind of action is given.

The bill must be protested; not to give a right of action, but to give this action.

The Legislature has said, in express arid clear language, which conveys one distinct meaning, and not a cloudy, double, doubtful meaning, “ That it.shall be lawful for the holder of any protested' bill of exchánge to fill up the assignment, and file a joint or several petition, in any Circuit Court having jurisdiction, against the drawers, endorsers and acceptors; or a joint petition against any two or more, of the drawers and acceptors, if the b'ill be accepted.” Then follows the. fo.rm.

The form is not appropriate to the suit of the drawer against the acceptor; nor is it applicable tó the suit by the payee against the- acceptor; nor the payee-against the drawer. The section is ambiguous, because it does not indicate^ certainly, whether the new'mode of suit shall be only between those who are not original parties to the bill, or not. But it seems to the counsel, that its ambiguity is only in.this; and that,-to give it such a construction as would confine, the remedy to the action of the indorsee against the original parties, or, at any rate, to that of the payee against the.other parties, would give to every word in the first clause its plain meaning and effect, and do no violence to the form as set out.- This, he would infer, was the motive of the Legislature, for then, sureties on bills, and persons who had advanced money on them, would have that brisk remedy which they deserve.

The second section.of the act, in reference to promissory notes, points directly to this interpretation, shows the intention of the Legislature and removes the arhbiguity.

That the holder is “ to fill up the assignment” — and that the form says,-“ on which are the following-endorsements, by which the plaintiff hath become the ^proprietor thereof,” would seem tp exclude the idea of a suit by the drawer against the acceptor,.notwithstanding some ambiguous expressions, as the language could apply fairly and naturally in all instances, except in suits between the original parties to the bill.

But, whatever may be the proper construction of the statute in these - respects, the counsel respectfully contends, that the remedy cannot be given by the Court to any one but the holder of a protested bill, whether he be drawer, payee or indorser. These are no doubtful words.; there is no ambiguity'to be,met with, on this part of the subject. It is not made lawful for any holder of any and-every bill, to institute.'this action; more is required. The drawer is truly .the holder'of a bill, when it is in his hands, and belongs to him; and, unless the remedy were intended to be given only to sureties and persons' who had advanced money on bills, the counsel does not see that there could have been any reasonable motive for excluding the drawer from the new remedy, whether the bill were- protested or not, or whether it were to be deemed an -inland bill, or a foreign bill. But, if the Legislature had said, “foreign bill,” the Court -could not give the, remedy on a “domestic bill,” because there might be no sufficient imaginable, motive for excluding it. So, here, the Legislature has said, “ it shall ’be lawful-for the holder of a protested bill;” but the drawer in this instance,-.though a ‘holder,’ is not the holder of a ‘ protested bill;’ and it is not made lawful for him to sue. That it might well have been made lawful, has not made it lawful. The, Legislature might have made it lawful for the holder of any bill written in l’ed ink, to bring this suit; and none could see why the holder •of a bill written in black ink, should not have the same remedy; but he- would not therefore have the remedy.

Ml protested bills are. dishonored 'bills, but all dishonored bills'are not protested bilis, any more than a protested bill is, for that cause, a foreign bill, or an inland bill, ‘ Dishonored’ does not mean * protested;’ and therefore, it is respectfully urged thaf the Court is not- at liberty to adopt this word in place of the other, which the proper department of the government hasArsed.

The.Legislature may have had allusion to bills drawn in one State, payable in another State, and to bills drawn out of the United States, payable in the United States. Heretofore, the former class had not been adjudged to be foreign bills by this Court, and various decisions in reference to them, had obtained' in the different States — some holding them to be foreign bills, and others, inland bills, in distinction to domestic bills, upon which a protest was not deemed necessary, any more than on domestic bills, to maintain the action of assumpsit against any defaulting party. And the inference is not clear, and he thinks is not deducible at all, that the Legislature intended to give the action of petition on such bills as these in suit, in all instances where the action of assumpsit would lie.

[By the Chief Justice.]

A protest and notice are required in the first section, and these requirements are taken notice of in the sixth section giving the petition on domestic bills' &c. “ as authorized in cases of protested bills, except that the petition need not allege a protest and notice thereof, unless the protest and notice shall have been made.” This seems to fortify both positions taken on behalf of the appellant.

Henry Pirtle.

Response to the Petition.

May 7.

After, full consideration of the petition, our opinion is unchanged.

We still think that — when all the provisions of the act of 1837 are duly considered and harmonized — “ the holder of any protested bill of exchange” in the first section was intended to embrace the holders of all bills of exchange, whether foreign or domestic, which, in the substantial and popular sense had been protested; that is, which the drawee had refused to accept or the acceptor had refused to pay; and this deduction is, in our judgment, confirmed by a proviso in the sixth section which applies to the first as well as other sections, and which proviso is in these words: — “nor shall the statement of “ protest and notice in the petition, make it necessary to “ prove such protest and notice, when the law does not make u ii necessary, to charge the defendants

This clearly implies that a petition may be maintained on a bill never, in form, protested — whenever a protest is not necessary to give a right of action; and that, of course, it is not necessary to the maintenance of a petition, unless it be indispensable to the holder’s right of action.

Wherefore the petition for a re-hearing is overruled.