Court Opinion

ID: 3605877
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:51:21.310342+00
Date Added: 2024-06-11T14:07:28.261135
License: Public Domain

[EDITORS' NOTE:  THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 260 
It is questionable whether there is a sufficient exception in the case. The judge, after finding certain facts, *Page 261 
stated his conclusions of law, and gave judgment for the defendant, dismissing the plaintiff's complaint. The case states that "the plaintiff excepted to the said decision, and to each and every the reasons assigned therefor." Such an exception can hardly raise the question whether, upon the facts found, the plaintiff had any right of recovery. Being of the opinion, however, that no such right existed, and that the case was properly disposed of by the judge, it is unnecessary to press the technical objection.
Now what was the case? The plaintiff's assignors, Caffe 
Cutter, were importing merchants in the city of New York, of millinery goods, and the defendant was a manufacturer at Basle, Switzerland. The firm were purchasers of goods from the defendant, and arranged to make payment for them in this way: the defendant was to sell goods to them, who were to establish a credit with Coates  Co., bankers of London. Coates  Co. were to accept the drafts of the defendant for the amount of their purchases, and draw upon them, in New York, in order to cover their acceptances. In August, 1847, the defendant drew two drafts, at 120 days' sight, upon Coates  Co., for £ 133 12s.,
being the amount of two invoices of goods. These drafts were duly accepted, but before the maturity of either of them, Coates  Co. failed in business and were declared bankrupts. On the 1st December, 1847, the plaintiff's assignors, by letter, informed the defendant of the failure of Coates  Co. and directed him to draw upon one of their firm (Smith Cutter, Jr.) then in Paris, for the amount of the acceptances of Coates  Co.; and also directed the defendant, upon the collection of the draft so to be drawn on Cutter, to remit to him, at Paris, Coates  Co.'s acceptances. These acceptances had been left by the defendant with his agent in London, to be attended to. On the 10th January, 1848, the defendant, as directed, drew upon Smith Cutter, Jr., at Paris, for 3,437.39 francs; and it was then agreed, that upon payment of this draft, the defendant should return to the plaintiff's assignors the acceptances of Coates  Co. The draft upon Cutter was accepted; fell due in March, *Page 262 
1848, and was not paid. On the 30th June, 1848 (some four months after the latter draft became due), the agent of the defendant in London had the two acceptances of Coates  Co. proved in the bankrupt proceeding, against that firm, and subsequently received upon them a dividend of one shilling upon the pound from the bankrupt estate. In November, 1848, Caffe  Cutter, the plaintiff's assignors at the city of New York, took up the acceptance of Smith Cutter, Jr., by giving two notes of the firm, one for $341.03, and the other for $341.75, which were delivered to the agent of the defendant at New York, the agent stating at the time that he had not possession of Coates  Co.'s acceptances but would obtain them. These notes were paid at maturity, and sometime after such payment, the agent of the defendant, at New York, returned to Caffe  Cutter the acceptances of Coates  Co., and it was then discovered by that firm that such acceptances had been proved in the proceedings in bankruptcy, and that the dividend had been paid upon them. The defendant, before suit brought, tendered to the plaintiff the amount, and interest, received by him from the bankrupt estate, which tender was refused. Upon this state of facts, the plaintiff, as the assignor of Caffe  Cutter, seeks to recover back the money paid by them in liquidation and discharge of the two promissory notes given to take up the protested acceptance of Smith Cutter, Jr., and, in fact, the acceptance of the firm, to meet its own indebtedness.
Upon what principle such an action can be maintained, I am at a loss to perceive. The plaintiff's assignors discharge a debt contracted by themselves which they were legally and morally bound to pay, and then ask that the whole money shall be paid back to them, under the pretext of having discovered subsequently to the payment that a part of the debt had been collected from another source. This is the case which the facts really establish. Caffe  Cutter (the New York firm), purchased goods from the defendant, a European manufacturer, and who was to be paid for the same in London, upon his giving a credit of four months on the respective purchases. The arrangement was, as each bill of goods was *Page 263 
ordered, the defendant was to draw for the amount of the invoice on Coates  Co., bankers at London, at one hundred and twenty days' sight, Caffe  Cutter having made a separate arrangement with their bankers to draw upon them at ninety days' sight. It was neither agreed, nor was that the legal effect of the arrangement, that the defendant took the acceptances of Coates 
Co. in absolute payment for the goods, discharging the purchasers from all liability. Caffe  Cutter were the purchasers, and primarily liable as such, and their direction to the defendant to draw on Coates  Co. for the amount of their indebtedness (for that was the substance of the arrangement), did not operate to release them from liability as principal debtors for the value of the goods. No one will pretend that if Coates  Co. (not having been kept in funds by Caffe  Cutter, or the contract between them for reimbursement having been broken up), had refused to accept, that Caffe  Cutter could have insisted that the indebtedness was discharged. The latter were, then, the principal debtors, liable at all times for the value of the two invoices of goods in question, and so they regarded themselves; for upon Coates  Co. becoming bankrupts, they directed the defendant to draw upon a member of their firm, then in Paris, for the amount of the purchases. The defendant did draw as directed, and the draft was duly accepted, but at maturity was protested for non-payment. This dishonor of the acceptances of Smith Cutter, Jr. (or rather of Caffe  Cutter), was in March, 1848, and it was nearly four months afterwards (no attention being paid to the claim) that the defendant caused the acceptances of Coates  Co. to be proved in the proceeding in bankruptcy, and in September following (Caffe  Cutter still giving no attention to their protested acceptances), received a dividend of one shilling upon the pound from the bankrupt estate. After this, and in November, 1848, at the city of New York, Caffe  Cutter gave their notes for their protested acceptances (then having been dishonored for over nine months), payable respectively at 75 and 90 days, pay them at maturity, and then ask to recover back the amount of such payment. *Page 264 
A bare statement of the case is enough to show that the judge was quite right in the judgment pronounced by him at the circuit.
On the trial, the ground assumed by the plaintiff was, that the defendant having proved the acceptances of Coates  Co. in bankruptcy, and received a dividend upon them, discharged Caffe 
Cutter from all liability to him, and that as Caffe  Cutter, in ignorance of those facts, paid the notes, their assignee could recover back the amount of such payment. Such a position is palpably untenable, and seems to have been abandoned on the argument at bar. The acceptances of Coates  Co. were collateral security for the payment of the debt due by Caffe  Cutter to the defendant; and the latter had the right to use the ordinary and legal means to collect the collaterals. The bills were not proved in bankruptcy, nor the dividend accepted, until after the maturity and protest of the acceptance of Smith Cutter, Jr., "when," to use the language of the learned judge at the circuit, "the defendant had a legal right to apprehend that all he ever could recover upon his claim would be what he could scrape together from two bankrupt estates." But why the proof of the bills, and the acceptance of a dividend from the bankrupt estate, though the facts were unknown to Caffe  Cutter at the time they paid these notes, should entitle them to recover back the amount of such payment, is not perceived. Caffe  Cutter simply paid their own debt on paying the notes; and no right of theirs was impaired by accepting the dividend, but on the contrary, the act was advantageous to them.
The argument at bar has no foundation in the facts, but is wholly fanciful. Caffe  Cutter were the principal debtors, acknowledging themselves to be so by giving their acceptance, and subsequently their notes, for the amount of the debt, and there is no ground for pretending that there was any valid contract between them and the defendant for the purchase of the acceptances of Coates  Co., the consideration of which had wholly failed, and entitling them, on that ground, to reclaim the money paid under it. All the defendant ever agreed to do was, in case the draft on Smith Cutter, *Page 265 
Jr., accepted at Paris, was paid, to return to them Coates 
Co.'s acceptances. The draft was not paid, nor was the debt discharged until long afterwards, and when discharged, the acceptances were returned to them.
The judgment should be affirmed.