Case ID: mart-os_9/html/0326-01.html
Source: Caselaw Access Project
Author: {"author": "Mathews, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

BOLTON & AL. v. HARROD & AL.
    The holder of a bill payable several days after sight, drawn in New-Orleans on Liverpool, is not guilty of laches, in not forwarding it directly for acceptance, but sending it to New-York for sale.
    Appeal from the court of the first district. The
    Hennen, for the plaintiffs.
    This is an action on a bill of exchange for £2500, drawn in New-Orleans, on the 23d of March, 1819, by J. Bailey, in favour of the defendant, directed to Messrs. Barclay, Salkeld & Co., of Liverpool; payable thirty days after sight,in London. The bill was indorsed in blank, by the defendants, and having been negotiated in New-Orleans, was forwarded, in about a week after its date, by mail, to the present holders; the plaintiffs residing in New-York, where it was received on the 1st of May, 1819, and immediately transmitted to Liverpool. On the 10th of June, the bill was presented in Liverpool, to the drawees for acceptance; which being refused; it was, on the same day, duly protested for non-acceptance, by a notary public. Notice of the protest for non-acceptance was sent to New-York, and from thence to New-Orleans, where it was given to the defendants, on the 26th of August, 1819. On the 12th of August, 1819, the same bill was protested in London, by a notary public, for non-payment, and notice thereof transmitted, in the same way, and given on the 27th of October, 1819, in New-Orleans, to the defendants.
    East’n District.
    March, 1821.
    The defendants contend, that they have been discharged from any liability as indorsers, from the laches of the holder, whose duty, they contend it was, to transmit one set of the bills by the first ship from New-Orleans to Liverpool, for acceptance, and not by the circuitous rout of New-York. Furthermore, the defendants put the plaintiffs to the full proof of all the allegations contained in their petition.
    The execution of the bill by the drawer and the first indorsers, the defendants, has been fully established in evidence. The bill was purchased in New-Orleans, some time between the 23d of March and the 1st of April, 1819, by H. Cliffe, and by him transmitted to New-York, to the present holders, by mail. The exact day when H. Cliffe purchased the bill, does not appear; but it was sent from New-Orleans on the 1st of April. The protests for non-acceptance and non-payment are on file, and form part of the record. The notices thereof were given without delay to the defendants.
    The defendants’ counsel contends, that the exhibition of the protests for non-acceptance and non-payment, with the seals of the notaries who made them, is not sufficient proof of the protests; and has taken a bill of exceptions to the opinion of the judge a quo, who allowed the protests to be read as evidence, without any proof of the signatures of the notaries, or of their seals. Such has been the established practice of all courts, both in England and the United States, as well as in Louisiana, as is fully settled by the following authorities. Kyd on Bills of Exchange, (3 London ed.) 270. Gilbert's Law of Evidence, 118, 19. Swift's Bills of Exchange, 281. Bayley on Bills, (London edit. 1799) 119. Chitty on Bills, (edit. 1817) 408. Cunningham on Bills, 105. 12 Mod. Rep. 345. Maxwell on Bills, 167, 8. 4 Martin, 81. Caune vs. Sagory. The counsel for the defendants objects to the notice sent of the protest for non-acceptance and non-payment; and maintains, that a copy of the protests should have been sent with the notices; and, that they should have been sent directly from England to New-Orleans. That his positions on this subject are untenable ; and that the regular and legal course was adopted by the plaintiffs, will amply appear from the following authorities. Maxwell's Bills. 169. 1 Espin. Cases, 511, 12. 1 Johns. Rep. 294. 5 Johns. Rep. 375. Chitty, 236, (edit. 1817.) 5 Mass. 167. 2 Johns. Cas. 1. The manner of protesting the bill for non-payment, in London, the counsel for the defendants conceives to be irregular. The agents for the holders presented the bill to a notary public, who declares in his protest, that inasmuch as no particular place in London is pointed out where the bill is to be paid; and, as the agents of the holders declare, they have received no funds for the payment of it, therefore he protests, &c. What more could have been done to any purpose, it is not easy to conceive. In the first place, no protest for non-payment, after a protest for non-acceptance, was necessary. The liability of the 
      defendants was complete on the protest, for non-acceptance; the protest for nonpayment was altogether a work of supererrogation. For the correctness of these positions, I refer to the following authorities. Chitty, 373 & 244, 5. 3 Johns. Rep. 202, 208. 8 Martin, 730.
    But the principal difficulty, raised by the counsel of the defendants, is the laches, which they attribute to the holders of the bill, in sending it by the way of New-York to Liverpool, for acceptance; and they insist, that it should have been sent directly to Liverpool, by the first vessel sailing for that port, from New-Orleans. In answer to this, we have shewn, by the testimony of several merchants, that the usual way, of transmitting bills from New-Orleans to Liverpool, is by the Atlantic states, whither they are generally sent from this place for negotiation.
    But it is always optional with the holder of a bill, payable a certain number of days after sight, to put it in circulation, without sending it on to the drawee for acceptance; and in this way, the bill may be kept in circulation for a year, before presentment for acceptance. Nor would such delay be considered as laches. Bayley on Bills (Lond. ed. 1799.) 60, 1. Chitty, 
      (ed. 1817) 178. Swift on Bills, 268. 2 Hen. Blackstone, 565, (Muilman vs. D'Eguino.) 1 Morre's Index, 181, sec. 9, n. 6. 2 Marshall's Rep. 454, (Goupy vs. Harden.) 6 Taunt. 305. 7 Taunt. 159. Goupy vs. Harden. 10. Sirey, 151. The two above quoted cases, Muilman vs. D'Eguino, 2 Hen. Black. 565. Goupy vs. Harden, 2 Marsh. 454. 7 Taunt. 159, are so exactly similar, in the important point decided therein, to the present suit, that if they are considered as correctly decided, there can be no hesitation in the mind of the court in giving judgment for the plaintiffs.
    The counsel for the defendants, aware of this, will attempt to shew that the court is to take another rule for their decision, founded on the Ordinance of Bilboa, chap. 13, n. 24. To this I reply, in the first place, that as far as the article of the ordinance applies to this case, it has not been violated by the holders of this bill. But, secondly, these ordinances have never been considered as giving rules for the decisions of our courts. Many parts of them have never been received in this state, as law; and our commercial usages are in direct opposition to many of their provisions. 2 Martin, 328. 4 Martin, 93, 4. 241, 2. And in 8 Martin, 426, the provisions of these ordinances were invoked, but the court disregarded them. Moreover, the lex mercatoria forms a part of the law of nations, in which they all agree, and which is taken notice of by all. 1 Black. Comm. 273. 4 Black. Comm. 67. Heineccii Elementa Jur. Camb. cap. 1, sec. 14. And the attempt which the counsel for the defendants has made to prove, by witnesses, the law; and that the plaintiffs have been guilty of laches, is equally unavailing. For certainly the court will not hear witnesses to prove the lex mercatoria, 3 Burr. 1669. “ The right mean of judging of bills of exchange, is purely by the laudable custom often reiterated over and over, by which mean, the same hath obtained the force of law, and not the bare and single opinion of some half-fledged merchants; for bills of exchange are things of great moment, as to commerce, and are neither to be strained so high, as that a man should not cast his eye on them, but the same shall be taken to be an acceptance; nor, on the other hand, having duly accepted them, they should be rashly and unadvisedly avoided, by the shallow fancy of such nimble-pated shufflers; but they are soberly judged and 
      governed, as the same hath generally been approved of, and adjudged of in former ages." Molloy on Bills of Exchange, 278. It has been shewn above, by the consentaneous decisions of the highest tribunals in England, France, and the United States, what is considered the rule for presenting bills, payable a certain number of days after sight; and that the holders of the bill, in this case, have used all the diligence that could be required, to charge the indorsers, in default, of non-acceptance. The plaintiffs, therefore, look for a confirmation of the judgment of the court below, for the amount of the bill, with damages, at the rate of twenty per cent, on the amount, and interest from the day of the judicial demand, Bayley, 91.
    One of the bills of exceptions taken by the defendants, remains to be noticed; that of the counsel to the admissibility of the plaintiffs’ agent, as a witness, who conceived himself bound, though not surety on record, to pay the costs of the suit, in case it should be lost. Agents have been always admitted as good witnesses, though interested for their commissions; and this is every day’s practice. Phillips’ Evid. 94, 5. 6. Swift's Evid. 74, 5. 4 Mart. 
      81. And where a witness conceives himself under an obligation, when in fact he is not to pay costs, such impression will not invalidate his testimony: he is still a competent witness. Randal's Peake's Evid. 163.
    Livingston, for the defendants.
    The plaintiffs ought not to recover in this cause.
    1. Because, they are not the owners of the bill. This appears from the testimony of Oldham, who says, that Hughes, Duncan & Co. (or Cliffe, their agent, who remitted the bill to the plaintiffs) were not credited with the bill, or if they were, they were debited with it on its return. Therefore, it is still the property of Hughes, Duncan & Co. The suit ought to have been brought in their name. We may have off-sets against them, which we have had no opportunity of shewing, as this fact was only declared to us on the trial. No man can bring a suit when he has no interest, if that want of interest appears by his own shewing.
    2. Because, we have lost the amount by the neglect of the holders. This bill was drawn and endorsed on the 23d day of March; instead of being sent direct to Liverpool for acceptance, it was remitted to New-York, and from thence sent to its destination. Bills drawn in April, by the same person, on the same house, were sent direct, were accepted and paid, and the drawer, who was examined here, shews, that if the bill in question had been presented before the others, it would, undoubtedly, have been paid. Here then is evidence of laches, because, the bill not only might have arrived, in the direct course, sooner than it did, but bills dated fifteen days after it, did actually arrive before; and instead of presumption of loss, we have actual evidence of it. On the enquiry, within what time bills payable, so many days after sight, ought to be presented, we have this authority, Kyd, 118. "All that has been said, on the presentment of bills and notes payable on demand, seems exactly to apply here; that,which might be called an unnecessary delay in the one case, having evidently the same tendency to produce inconvenience or loss to the preceding parties, in the other."
    The rule thus referred to is at page 46, and the case on which it is founded, in the four preceding pages. "The best rule, in these cases, seems to be, that drafts payable on demand ought to be carried for payment on the very day on which they are received, if from the distance and situation of the parties, that may be conveniently done.”
    The same rule is laid down in Chitty, 132, 133, 134, (Philadelphia edition, 1809.) And, indeed, every reason which requires diligence in giving notice of the dishonour of a bill, applies to the presenting of it for acceptance.
    The inconvenience resulting from this obligation, in the course of bills of exchange, which are frequently purchased here, for the purpose of negotiation elsewhere, before acceptance, has been relied on by some of the witnesses, and by the counsel in argument; but there is an easy way of avoiding this, mentioned, I believe, by Mr. Salkeld, on his examination: it is, to remit one of the set of bills immediately after the purchase for acceptance, for the account of the holders of the others of the set, in case they should be negotiated. Whatever may be the opinions of witnesses here, or of the courts in England, France, and some of the other states, on this subject, our law is positive on this point, and express.
    By the Ordinance of Bilboa, p. 98, art. 24, this practice is sanctioned in strong terms, and as it not only accords with convenience, but is analogous to received practice on another branch of the law of bills of exchange, I should presume the court must consider itself bound by this provision; it has been neglected, in this instance, by the holder of the bill, the consequence has been the dishonour of the bill, and the endorser of course ought to be discharged.
    3. Because, there was no demand of acceptance. The testimony on this point is, that the notary presented the bill, not to Barclay, Salkeld & Co. upon whom it was drawn, but to Salkeld & Co. who have nothing to do with it.
    4. Because, there was no demand for payment.
    There is nothing in the bill which indicates, that it is payable in London, but an abbreviation of those words after the direction.
    Now, if Barclay, Salkeld & Co. who reside at Liverpool, but have an agent for the payment of their bills which they engage to pay in London, if they had accepted the bill, it would have been reasonable to expect, that they would have paid it in London, agreeable to this direction; but as they did not accept, it was the duty of the holders to present it at Liverpool for payment. But this is not all, supposing London the proper place for the demand, some demand ought to have been made there on the drawees.
    By the testimony of Pritchard, it appears they had an agent there. And from the same testimony, it may be inferred, that the agent of the holders knew this fact. Yet the notary goes no where to present; he makes no enquiry; he receives the assertion of the agent, that the drawees had no compting-house in London, for truth, asserts it in his protest, and completes the whole business without stirring from his compting-house.
    Chaplin, in reply.
    The plaintiffs ought to recover.
    1. Because they are the owners of the bill. This appears from the evidence of Oldham, who says, that if the amount of the bill in question, be recovered, it will be for account of the plaintiffs, to whom Hughes, Duncan & Co. are indebted in a balance of account, arising from this and other transactions: it follows, therefore, that if the amount of the bill be recovered by the plaintiffs, for their own use, and not for the use of Hughes, Duncan & Co., the bill belongs to them.
    2. Because there was no neglect on the part of the holders of the bill. It is not necessary to send bills payable a certain number of days after sight, to the place of their destination, until the holder find it convenient. The case of Muilman vs. D’Eguino, 2 H. Black. 565, is conclusive on this point, and the same doctrine was recognized and confirmed in the case of Goupy & al. vs. Harden & al., 6 Taunt. 305. The French law is still more decisive on this point: In Sirey, Decis, de la Cour de Cafation, 10, 151, it was decided by the court, that a bill payable days after sight, might be kept in circulation during five years, without any demand of acceptance on the drawee; see also, Pothier, Contr. de Change, pl. 128, Chitty on Bills, 178, et seq. Maxwell on Bills, title Delay, Bayley on Bills, 59, Kyd on Bills of Exchange; “ it does not appear, however, that any precise time, within which this presentment must be made, has in any case been ascertained.” It did not; but the case of Muilman vs. D’Eguino, and which was published after Kyd's Treatise, expressly shows, that the rule laid down by Kyd, and relied on by the defendants, for the presentation of bills, payable on demand, does not apply to bills payable after sight.
    Were the holder obliged to send it on immediately to the drawee, he would lose his opportunity of having it negotiated here; and the fact of other bills having been paid, this remaining unpaid, proves that the drawer, had, either by neglect or fraud, overdrawn upon the drawees, nor ought the holders suffer for the neglect, much less for the fraud of another. The holder of a bill of exchange, payable days after sight, is never obliged to present it to the drawee for acceptance, except when it is the interest of the drawer that it should be done. The drawer, here, had no interest in getting the bill accepted, because he would not have been liberated by the acceptation, but was always bound until final payment.
    3. Because, there was a demand for acceptance. The defendants say the demand was made upon Salkeld & Co. and not on Barclay, Salkeld & Co. By reference to the original protest, we find that the clerk has made an error in transcribing. The original says, the demand was made on Messrs. Barclay, Salkeld & Co., and the record has been corrected agreeably to this, nor is this correction too late, as it may be made any time pendente lite, or even alter judgment. But the witness, Mr. George Salkeld, admits, that the bill was presented for acceptance, ten days after, as he thinks, the two others mentioned in his answer.
    4. The defendants say, there was no demand made for payment on the drawees. The bill is expressly made payable in London, without designating any house, or any place in London, where it was payable, and where a demand could have been made. If then, there was no place specified but London, which is a very indefinite direction, how could the notary make a demand? On whom could he make it ? On Barclay, Salkeld & Co. of Liverpool ? No, for the bill was payable in London, and Messrs. Barclay, Salkeld & Co., of Liverpool, would have told them so. On their agent in London? He knew nothing of him, nor was the bill directed to him. Therefore, the notary was not obliged to make the demand, was not obliged to ask any man who the agent was, as i00t was not made payable at any agent’s.
    
      Livingston, contra.
    The defendants’ counsel does not think he has a right to reply to any of the argument or authorities which were contained in the plaintiffs' first address, because, to those he had an opportunity of answering before. But the plaintiffs’ has fallen into some inaccuracy of statement, in answer to the 4th objection of the defendants, which he deems it his duty to rectify. He says, to excuse the want of presentation for payment in London, that the holder could not know to whom to present it, that he knew nothing of his agent in London, &c. But by a reference to the testimony of Mr. Pritchard, it will appear that the principal establishment of Messrs. Barclay, Salkeld & Co. was in London, under the firm of Thomas & George Barclay & Co., and that Thomas Wilson & Co. the holders of the bill, well knew the fact.
    Chaplin, in reply.
    In answer to the observations of the defendant, it will only be necessary to observe that Messrs. T. Wilson & Co. of London, who, as merchants in London, were certainly better acquainted with the city than Mr. R. O. Pritchard of New-Orleans, and who would have known the house in London, had there been any, as Mr. Pritchard declares that Messrs. T. Wilson & Co. had many commercial transactions with the house of T. & G. Barclay & Co. in holding their acceptances. But they declared to the notary, that they requested the protest, because there was no place designated for the payment of the bill. As agents for the plaintiffs, they would have left no means untried to get payment for the bill in question; they would have gone to the house in London, had the bill been made payable there : but from all the circumstances of the transaction, we must conclude, that neither the agents or the notary knew of any house in London, where the bill was made payable; or even suppose they did, they were not bound to present the bill, as the house was not designated. It is not necessary at all to protest it for non-payment, but if it was protested, it was done so duly, as in the case mentioned in 3 Johnson, 202, 208.
   Mathews, J.

delivered the opinion of the court. The defendants and appellants are sued as endorsers of a foreign bill of exchange, which was returned from England, protested for non-acceptance, and non-payment.

They resist the claim on several grounds.

1. That the plaintiffs are not the owners of the bill.

2. That they have been guilty of laches, or culpable of negligence, in having it presented too late to the drawee for acceptance.

3. That they made no demand of payment.

I. The first objection to a recovery, by the plaintiffs and appellees, we are of opinion, is not supported by the evidence in the cause. They are (as nothing appears to the contrary) the holders of the bill under regular endorsements, and must be presumed to be the owners of the bill. The circumstance disclosed by the testimony of Oldham, does not destroy this presumption. Whether they have credited their immediate endorsers, on their books, for its amount, ought not to alter the nature and effect of the right, which they acquired by the written contract of endorsements, established by the custom of merchants, that is to recover the amount of the bill, from the drawers or endorsers, if they have used due diligence.

A recovery against the defendants, in the present suit, will clearly bar any action brought by Duncan & Co., and the disposition of the proceeds of the bill, when recovered, is not a matter which concerns the defendants.

II. In support of their next objection, the counsel of the defendants and appellants, relies much on the testimony of Salkeld, one of the partners of the commercial house on which the bill was drawn. It is true, that this testimony established the fact, that bills drawn on them, posterior to the one on which the present suit is brought, by the same drawers, were accepted and paid. But it does not follow, as a necessary consequence, that, because the holders of these bills have been more diligent than the plaintiffs and appellees, the latter have been guilty of such laches, as must, according to the custom of merchants, exonerate the drawers from their liability.

On the subject of presenting bills for acceptance, whether payable at sight, or in any other manner, it would seem that there is a general rule, viz. that due diligence must be used. What course of conduct by the holder will constitute this species of diligence, perhaps, is not reducible to the government of any precise or invariable rule, and was formerly eld to be a matter of fact, to be determined by the jury in every case, and is now established to be a question of law. Yet, by this change, little additional certainty is gained, as the precise time, within which a demand must be made for acceptance, is as undetermined as before. According to the opinion of Buller, J., in the case of Muilman vs. D'Eguino, 2 H. Bl. 525, the only certain rule that can be laid down, with regard to bills at sight, or a certain time after, is, that they ought to be put in circulation. If this be done, as was the case with the one on which the present suit is brought, it appears that the time between the periods of drawing and presenting for acceptance, may be very considerable, without any charge of negligence against the holder.

It appears in evidence, in this case, that the most usual course, which bills drawn in New-Orleans on England, take, is to be negotiated in some city of the Atlantic states, and from thence to their final destination. This course of trade does not appear to us, to have any thing unreasonable or unjust, in relation to any party to a bill, and the precaution, which one of the witnesses states, that he generally take of transmitting one of the set directly to its place of destination tor acceptance, may be useful by increasing the credit of the bill, but argues nothing against the propriety of the steps which are generally taken by holders of such bills.

Upon the whole, we are of opinion, that no laches are attributable to the plaintiffs, in relation to the demand of acceptance on the drawee.

The holder of a bill of exchange, having a right to resort to the drawer and endorsers, immediately on the protest for non-acceptance, and, as it is believed, that this right is not invalidated, by retaining the bill till its maturity, and then demanding payment, we deem it unnecessary to examine the third objection.

As to the bill of exceptions to the admission of the notarial protest, the decision of the court, a quo, is clearly correct.

We find on the record, an exception to the competency of the testimony of Dorsey, one of the witnesses introduced by the plaintiffs and appellees, to prove notice to the defendants of the dishonour of the bill, but as this is sufficiently proven by other witnesses, it is thought unnecessary to decide on the bill of exceptions taken thereupon.

Hennen for the plaintiffs, Livingston for the defendants.

It is therefore ordered, adjudged, and decreed, that the judgment of the district court be affirmed with costs.