Case Name: Fleming, v. A. & J. M'Clure
Court: Constitutional Court of South Carolina
Jurisdiction: South Carolina
Decision Date: 1804-05
Citations: 1 Brev. 428
Docket Number: 
Parties: Fleming, v. A. & J. M’Clure.
Judges: Present, Grimke, Watiis, Trezkvant, and Brevard, Justices*;
Reporter: South Carolina Law Reports
Volume: 3
Pages: 428–436

Head Matter:
CONSTITUTIONAL COURT,
CHARLESTON,
MAY, 1804.
Fleming, v. A. & J. M’Clure.
The custom of merchants recognized by law in this State, in relation to protests, and notices of non-acceptance, and non-payment of bills of exchange, is the same which exists in England; and evidence to establish a different usage in this State is inadmissible.
A protest, whether for non-acceptance, or for non-payment, is essential in the case of a foreign bill of exchange, in order to charge the drawer, or indorser; and where a bill was dishonored on presentment for acceptance, it is not sufficient to protest it for non-payment when at maturity.
Where a bill drawn in this country on Europe has been dishonored, notice must be sent by the first ship bound to any part of the United States; and it is not sufficient to send it by the first ship for the port where the drawer and indorser reside.
Where more than four months elapsed, after a bill was dishonored in London, before notice was given to the drawer arid indorser in Charleston, held, that the jury were authorized to presume, unless the contrary was made to appear, that the holder had not used due diligence. in giving as early notice as the circumstances of the case would admit.
A promise, by an indorser, to pay a dishonored bill, is no waiver of the want of seasonable notice, if made in ignorance of the legal effect of the holder’s laches.
The bankruptcy of the drawer dispenses with the necessity of notice to the indorser, of non-aceeptance of a bill of exchange.
Motion on behalf of the plaintiff for a new trial. This was an action on a bill of exchange, and Was tried in Charleston, before Trezevant,J. The case, was this. J Black* agent of the plaintiff, Fleming, a merchant in London, purchased for him a bill of ex. change, drawn by Nathaniel Douglas, in favor of the defendants, which was indorsed by them. The bill was dated 1st October, 1801, and made payable sixty days after sight. It was presented on the 14th November, 1801, to the drawee, M’Kensie, in London, who refused to accept it; and afterwards when the bill became payable, refused to pay it. The bill was protested for non* acceptance, and for non-payment.
A letter from Fleming to Black, was produced in evidence, dated 1st January, 1802, which was received in March, 1802, wherein he informs Black of his having inclosed the protest for non-payment ; and that as no opportunity had before offered of sending the protest for non-acceptance, he considered it would not be necessary to send it at all. Before the receipt of this letter, Douglas, the drawer, was declared a bankrupt in Charleston, where he resided. A notice of the protest for non-payment was served on the assignee of Douglas, the next day after the receipt of the letter by Black, by-one of his clerks, and also on the defendants, of whom payment was demanded. The defendants answered to the demand of payment, that they would make arrangements to pay the bill, and offered cotton in payment. It did not clearly appear, from any positive evidence, that any opportunity of sending a letter direct from London to Charleston had offered, after the refusal to accept, and before that opportunity by which the letter was sent from Fleming to Black. The defence was, that the defendants ought to have had regular and seasonable notice of the protest for non-acceptance ; which not having been given, they were exonerated from all liability as indorsers. On their behalf evidence was adduced to prove, that about the middle of November, 1801, one Lee had received a bill of Exchange, from England, for £ 1000, drawn by the said Doug. Jas in favor of the same drawee, M’Kensie, of London, which was sent back protested for non-acceptánce ; which protest was sent to an agent, and property of Douglas attached, viz. 4000 lbs, of flour, and other property in New- Providence.
The plaintiff insisted at the trial, 1. That by the custom of merchants in the United States, a protest, for non-acceptance of a bill of exchange, has never been regarded as an essential requisite, in order to charge the indorser ; but only a protest for non-payment. 8. That under the particular circumstances of this casé, protest land nptice of nqn-acceptatiGe were not necessary, whatever might be the general rule on that subject. 3. That at all events the defendants were bound to pay the bill, on the ground of then-express promise.
The plaintiff offered, in support of the first ground, to go into evidence of the custom among merchants in this Country, but was not allowed by the court to go into such evidence ; Treze. VaííT, J. being of opinion, that if any such legal custom did exist, it would be known to the court as the law of the land, and was not to be evinced by evidence. Exception was taken to this decision of the judge, and also to his charge to the jury, in which he said that it would be doing violence to presumption, to suppose that Fleming had not an earlier opportunity of writing to Black, than the one by which he sent the protest for non-payment: and that he ought to have written by the earliest opportunity to the United States, in order that the letter might go by the course of the mail to his correspondent, and not to have waited for an opportunity direct to Charleston ; and not having availed himself of some earlier oppor. tunity of writing by the way of New York, Iioston, or some other place in the United States, whence, in all probability, his letter w ould find a ready and speedy transmission by post to Charleston, he had neglected to use that diligence which was requisite on his part. Another exception to the judge’s charge was, that he had laid it down, that a protest for non-acceptance was absolutely requisite, in order to render the indorsers responsible ; and that with regard to the subsequent assumption of the defendants, if the same was made under an ignorance of their rights, they were not bound by it.. The jury found for the defendants. This motion was for a new trial.
William Drayton, for the plaintiff,
cited the 5th section of the act of 1712, P. L. 99, which enacts, that the common law of England Shall be of force here, &e.: and argued, that although the mercantile law of England, founded upon custom, is also the law here, yet in many points we have deviated from the law of England ; as in the case of distress for rent, negroes on the premises, not belongi g to the tenant, cannot be distrained. So a livery stable keeper may retain. A mortgagee may sell, &c. That in the different States of America, different departures from the rules of the common law have been made, as reason and convenience have pointed out their propriety. That with regard to the non-acceptance of bills of exchange, a different practice prevails in the United Stales, from that which has been established in E ¡gland. In Con. necticut, it has not been deemed necessary .10 give notice of the non-acceptance of a bill: and in Pennsylvania, it has been resolved by the supreme court, in the case of Morris v. Foreman, that a protest for non-payment, must appear under a notarial seal; but it i' not necessary that the no-i-acceptance should be certified in the protest, for that mat be sufficiently established by other evidence. 1 Dallas. 193. And in the case of Brown v Barry, 3 Dallas, 365, in the supreme court of the United States, it has been adjudged, upon a writ of error to the circuit court of Virginia, on an exception taken in the circuit court in arrest of judgment, that the decía., ration did not charge that the bill was protested for non-acceptance, that it was immaterial tor the plaintiff to shew that the bill was not accepted ; and that his right of action could in no measure depend on that fact, as the action was for non-payment. That in the case of bills drawn in the United States, payable in Europe, the custom of merchants in this country does not require, to recover on a pro-Jest for non-payment, that a protest for non-acceptance should bQ produced, although the bills were not accepted. In the case of Clarke v. Russell, 3 Dallas, 415, 424, in the supreme court of the United States, on error to the circuit court ol the district of Rhode Island, the exception stated was, that bills of exchange which had been non-accepted, and protested for non-payment, were admitted in evidence unaccompanied by protests for non-acceptance; and it was adjudged,-that this exception would not hold. In the case of Cromwell, et al. v. HynSon, “2 Esp. Rep. 511, it was objected at nisiprius before Lord Kenyon, to a bill drawn in Jamatea, that notice to the indorser should have been sent to Jamaica, although he was then in England, and the notice was given to his wife, &c., and that such demand made on the wife, and notice to her, was not sufficient; and also, that where notice is given of the non-acceptance, or non-payment of a bill, it should always be accompanied with a copy of the protest. But Lord Kenyon overruled all the objections. In the case of Kufh et al. v. Weston, 3 Esp. Rep. 54, it was ruled, that notice of the non-acceptance or non-payment of a bill of exchange, is sufficiently given, by- proving that a letter was regularly put into the post office, informing the party of the fact. In Fotheringham v. Price, 1 bay. 2U1, a promise made by an indorser of a bill of exchange to take i< up, under an ignorance of the circumstances of a want of due diligence on the part of the holder, was held not to bind the party making it. In that case, the bill was presented, and noted for non-acceptance, but was not protested for non-payment until upwards of a year after-wards. The indorser was iguorant of the advantage he might take of this neglect of the holder, at the time of the promise, being ignorant of the facts ; here, he knew the facts. In this case, the drawer, Douglas, became insolvent, and was declared a bankrupt, before notice could be given to the indorser; and notice to the indorser, under such circumstances, could answer no end. He, Douglas, had no effects, which could be secured by the defendants, the indorsers, if they had had the earliest notice possible : and therefore, notice was immaterial. 5 Bur. ‘2070. 1 T. 11. 408. Bankruptcy is prima facte evidence of insolvency, and is good evidence until the contrary be shewn. ‘2 Bur. 1218, Douglas being de. dared a bankrupt, and all his property assigned, his creditors in this country were bound by the assignment, although his foreign creditors were not. 4T R. 182, 192. 1 East, 6. And therefore the defendant could not have gained any advantage by the earliest notice the plaintiff could have given. It was uot incumbent on the plaintiff to transmit uotice by an indirect tipportunity, Muilraan v. D-e=i&^j»v, 2 li. Bl. 508 — 70; but by the- regular and ordinary course of conveyance. The promise hert was not through ignorance of facts and circumstances, but igtio* ranee-of law, which excusstk not. The case cited from 1 Bay3 was on a promise made under an ignorance of facts* and of the r 0 law arising thefoon. Here, there was no ignorance of the circumstances. IT. R. 712. Doug 467. 2 i’. R 713..
Cheves, contra.
A good custom must be general, .and notorious, and therefore cannot require to be ase--Named by evidence given to a jury. The custom of merchants, if good and legal, is the law of the land, and'known to the court. The evidence offered to prove what the usage of merchants is, was, therefore, inadmissible, and properly rejected. 2 Bur. 1222. .The judge, at the trial, did not say that it was necessary to serve the party with a copy of the .protest for non-acceptance; but only that he should have had notice that the bill was protested for non-acceptance. Kyd on Bills, 136. 5 T. R. 239. Evans on Bills, 56, 90, 94. In foreign bills, a protest must be made, and- notice given ; hut the-.protest, or a copy thereof, need not be sent. Ib. Notice ought to have been given as soon as the circumstances of the case would admit. 2 H. Bl. 509. -Chitty, 95. Notice by the first English ships from India* sufficient. Evans, 56. But it should be sent by the first regular ships to the country generally, not to a particular place. To England, or the United States, not to a particular port: because after the letter reaches England, or the United States, it may be conveyed by port to the particular place to which it is directed. As to the bankruptcy of Douglas, that was not a sufficient cause to.dispense with notice, for he might have funds notwithstanding, which the defendants might have secured, if they had had seasonable notice. It is not like a total insolvency. Chitty, 87. Notice ought to have -been given to the indorser, whether it should appear that Douglas had effects in his hands, or not; for they were not supposed cognizant of the accounts between the drawer and drawee. Chitiy, 98, 99. If a party makes a promise from ignorance of his rights, whether it bo an ignorance of facts, or an ignorance of the law arising from the facts, the promise cannot bind -him, if when he comes to a knowledge of his rights, he dissents to the promise so made. Kyd, 119. 5 Bur. 2607. Evans, on the action for money had and received, &c. ch. 1. Id. on Bills, 80. -Chitty, 102. 2 BI. Rep. 125. Peake, 202,

Opinion:
By tiie court.
The law merchant, as it obtains in England, is, generally speaking, the law of this country. Some exceptions have been made, and some; more may be made, which convenience and necessity have directed, and mav hereatter suggest. The cus. tom among merchants with us, in regard to bills of exchange, is the 'Same which exists in England, as to protests, and notices of nonacceptance, and non-payment, and must be governed by the same rules.. The judge, at the trial, was therefore right, in rejecting evidence to prove a different usage from that which obtains in En. gland. In the case of foreign bills, a protest is universally neces» sary, whether for non-acceptance, or non payment. It is an essential part of the custom of merchants, and is requisite not mere-, iy on account of the damages and interest, but also on account of the principal sum; In respect to inland bills, a protest is only necessary on account of damages and interest, and is founded upon the statutes 9 and 10 W. 3, c. 17, and 3 and 4 Ann, c. 9, P. L. 93. A. A. 1786, P. L. 408. Evans on Bills, 91. See 8 Johns. 202. 5 Johns. 375. The cases cited, adjudged in the courts of the United States, do not shew a different custom, nor do they in any respect contradict this doctrine, but confirm it. They only go to show what evidence will be received ; and that the protest, or a copy of it, is not necessary to be produced. Notice of such protest, must be given to the party meant to be resorted to; but such notice need not be accompanied with the protest, or a copy thereof. Evans on Bills, 56. This notice ought to be given, as soon as the circumstances of the case will admit. Where there is a communication by post, it should be sent by the first post; but putting a letter into the post office seems to be sufficient, although it may miscarry. 2 II. Bl. 509. Chitty, 95.
Respecting bills sent to Europe, notice should be sent by the first-ship bound for the United States, according to the rule of the English courts respecting -bills sent to India. 2 H. Bl. 509. The judge did right, therefore, in charging the jury, to lay it down, that notice should be sent by the first opportunity that occurred, which the plaintiff might have known of, to the United States, whether it were direct to Charleston, or to some other port of the United Stales. And he did right, under the circumstances of the case, to leave it to the jury to presume, that an opportunity of sending notice sooner, than that by which the notice of non-payment was sent,.did occur, by which the plaintiff might have sent'notice to the indorsers, the defendants, of the non-acceptance, and which he neglected to embrace. The bill was presented for acceptance in the middle of November, 1801; and the defendants had no notice thereof, until gome time ip the latter end of March, following, inore than four months, after. The probability is, that by the use of due diligence, notice might have been transmitted sooner, by some vessel, or ves* sels> fr0ln England to the United States. This natural and reasonable presumption, has not been rebutted by any evidence to the contrary< The lac}ies 0f the plaintiff, in neglecting to exercise reasonable diligence, to give timely notice to the indorser, of the nonacceptance of the drawee, might be considered as an extinguish* meat of the debt, as to the defendants ; and as discharging them from all responsibility on the footing of their indorsement. 1 T. R. 405. Ib. 167. 5 Bur. 2670. 1 T. R. 107. Chitty, 98. Bayley, 83. Evans, 57. See 6 East, 3, 14, 110.
But it has been insisted, on behalf of the plaintiff, that it was not necessary for him to give the deiendants notice of the non acceptanee of the bill in this case, because the drawer had become a bankrupt, before any notice of the non-acceptance could have been transifaitted to the defendants; and they could not have derived any advantage from the earliest notice that could have been sent to them, nor suffer any prejudice from the want of such notice. It seems to- be agreed, that the bankruptcy, or known insolvency, of the drawee, is no excuse for the want of notice. Evans, 59. But notice may be dispensed with, if the drawer have no effects in the hands of the drawee ; for in such case,, the drawer had no right to draw, and cannot be injured by want of notice. 1 T. R. 405, 410* To say that effects may come in after, before the bill is due, is not sufficient. But will this doctrine apply in the case of an indorser, where the drawer is insolvent? See 1 T. R. 712. Where the indorser himself has become bankrupt, notice to his assignees, or to himself, cannot be necessary, for they cannot take up the bill; and the doctrine does not hold, as between bankrupt estates. 3 Bro. C. C. 1. In an action against the drawer, who became a bankrupt, it was held, that notice to the drawer was not necessary, because it appeared that lie bad no effects in the hands of the drawee; although the indorser had effects in the drawee's hands, and the bill was drawn for accommodation to the indorser. Notice to the drawer would have been of no use. 1 Bos. & Pul. 652. Where the payee sued the drawer for non-acceptance, and it appeared (hat the drawee had no effects in his hands of the drawer, the court ihought notice was unnecessary. 2 T. R. 713. 1 lb. 405 It is laid down by Evans, see Essay on Bills, 62, " That according to the French ordinance, notice of non-acceptance was not necessary to the indorsers, if neithei ihemselves, or the drawer, had effects in, the hands of the drawee: but the English courts, have adopt ed a contrary rule, more correct; that the indorsers are not bound to make themselves acquainted with the transactions between the drawer and drawee, and are warranted in acting upon the supposition, that the bill was drawn by a person having sufficient authority for the purpose." Where the drawer, or indorser, is a bankrupt, at the time of the acceptance or payment refused, it is unnecessary, as Chitty states-, to give notice to him, or his assignee. In remarking on this passage, and the case of Exparte Smith, 3 Bro. C. C. 1. Mr. Evans, page 63, says, "There does not appear to be any sufficient reason, for dispensing with notice to the drawer who is a bankrupt, or to his assignees, if the drawee is solvent, and still less for dispensing with such notice to the bankrupt indorser, or his assignees, where the drawer remains solvent; because in these eases, their right to recover against the solvent parties may be prejudiced by the want of notice. Where all the parties are bankrupts, no such prejudice can arise." There is no case like the present, where the action is against the indorsers, who are solvent, and the objection is the want of notice to them, of the non-acceptance of the drawee, where the drawer has become a bankrupt. The insolvency or bankruptcy of the drawer, being admitted, we cannot see what advantage the indorser could derive from notice of non-acceptance of the drawee. In this case, resort has not been had to the drawer; and therefore, whether as to him, or his assignees, notice was necessary, need not be decided. As to the indorsers, the question is, was it necessary to give them timely notice of the non-acceptance of the drawee? The reason which runs through all the cases on this subject, must be adverted to, and considered, namely, the prejudice which the party resorted to is liable to sustain, in consequence of the Want of notice. If the indorsers had been apprized, as early as possible, of the non-acceptance of the bill, how could they have benefited themselves by that notice 1 Their recourse must have been to the drawer who had become a bankrupt, and consequently was insolvent. Nothing could have been obtained from him, but what might be obtained from his assigneés, without notice. We are therefore of opiuion, that it was not necessary in this case for the plaintiff, the immediate indorsee, to have given notice to the indorsers, the immediate and only indorsers, of the non-acceptance of the bill. 1 Esp.Rep. 302.
Another argument for the plaintiff is, that at all events, the ob jection of want of notice was waived by a subsequent promise to Pay- I*1 answer to this, the defendants say, such promise, or offer to pay, cannot be obligatory on them, seeing that it was made under a mistake, and through their ignorance of the law, relative to the subject matter of their promise. Cases have been referred to, wherein indorsers, having made such promises, without notice of the facts or circumstances of the case, to which their promises related, were exonerated. 5 Bur. 2670. T. R. 712. And it has been urged, that no solid distinction exists between mistakes in matters of fact, and mistakes, or ignorance, in matters of law. In the case of Archer v. the Bank of England, Doug. 638, this question arose, but was not decided. In Bize v. Dickason, 1 T. R. 285, it was touched on, but no express reference was made to a mistake in point of law merely. In a late case, see Chitty on Bills, 102, and Evans, on money had and received, &c. 24, it was laid down, that if a party does not know the legal consequences of all the facts within his knowledge, and pays money in conseqúence of such ignorance, and under an idea that he might be compelled to pay it, he shall be intitled to recover it back. We are of opinion, that under the circumstances attending this' case, the promise, or offer, of the defendants, to pay the bill, did not amount te a waiver of the want of notice ; for although they might have been cognizant of all the material facts, yet it appears they were ignorant of the legal consequences of their not having had notice : and made the promise, or offer, under a mistaken idea of legal obligation. See Peake, 202.
Upon the whole, we are of opinion, that a new trial ought to be-granted : on the ground, that notice was not necessary to be given to the defendants, of the non-acceptance of the bill, as they cannot,, by want of such notice, suffer any prejudice ; nor if seasonable notice had been given thereof, could they have obtained any ad. Vantage.
New trial granted.
Present, Grimke, Watiis, Trezkvant, and Brevard, Justices*;
Qu. If notice to the indorser might not avail him, since ho could give no. tics to. the. drawer, and he might proceed, or his assignees, against die drawee,