Court Opinion

ID: 6642646
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:46:58.497101+00
Date Added: 2024-06-11T15:59:18.202359
License: Public Domain

Lake, J.
The action in the court below was brought on a draft drawn by William C. Lincoln and indorsed by the firm of Lowrey, Lincoln & Co., of which the said Lincoln and Lowrey w¿re members. Thereupon the draft was discounted by the State National Bank — the plaintiff below — and afterwards forwarded to Trego & Smith, the drawees, by whom it was duly accepted.
The action was against the individual members of the respective firms by which the draft was indorsed, and accepted, and, with the exception of Lincoln, they were all served with summons, and answered the petition. The plaintiffs in error admitted all the material allegations of the petition, but, as against their co-defendants, Lowrey and Lincoln, alleged that their acceptance was as an accommodation merely, for which they had received no valuable consideration whatever, and prayed that, in the judgment to be rendered, Lowrey and Lincoln be held as principals, and they as *243sureties merely. Lowrey in his answer denied the authority of Lincoln, by whom the indorsement of the draft was made, to use the firm name for that purpose.
But, notwithstanding Lowrey had thus denied the authority of his co-partners to so use the firm name, when the case was called for trial he conceded his liability under it to the bank, and stipulated for judgment against himself according to the prayer of the petition. This done, the only remaining question in issue was that of principal and surety between Trego and Smith and Lowrey, Lincoln & Co.; in other words, whether Trego & Smith accepted the draft without consideration, and as an accpmmodation simply to Lowrey, Lincoln & Co.
Owing to the indefiniteness of assignment, the only. one of the alleged errors to be considered is that which alleges the verdict to be against the evidence and the law of the case. Although there was but this single and very simple question to be settled, the trial was allowed to take a very wide range indeed, resulting,in a most voluminous record of evidence, the greater part of which is entirely immaterial.
The legal presumption arising from the unexplained acceptance of a draft doubtless is, that the acceptor has funds of the drawer with which to pay it at maturity. But, as between the acceptor and the drawer and indorsers for whose accommodation the acceptance was given, this presumption may be rebutted, and the exact relation of the parties to each other shown. Mr. Story, in his work on Bills of Exchange, sec. 253, 3d Ed., says: “So where a'bill is accepted for the mere accommodation of the drawer or other holder it is obvious that such person can have no claim upon the acceptor under the acceptance; for as between them no value exists, or has passed.”
Now the record shows very clearly that the accept*244anee in question was for the benefit of Lowrey and Lincoln, and for which Trego and Smith received no value whatever. Both Trego and Smith, as well as Lincoln, the drawer of the draft, swear positively and unequivocally, that the acceptance was given merely as an accommodation, and in pursuance of an arrangement made a few days before, whereby they had agreed to aid Lowrey and Lincoln in certain wheat transactions by accepting drafts for them, for from two to six thousand dollars, on sixty days time, and for which Lowrey and Lincoln were to provide means of payment. Indeed, it is conceded that this draft was discounted by the bank on the indorsement of Lowrey and Lincoln, and the proceeds placed to their credit, before it was forwarded to Trego & Smith for their acceptance.
And as to the fact that Lowrey and Lincoln furnished no means to Trego and Smith with which to pay the draft there is no dispute. Trego, Smith and Lincoln all swear that not a dollar was furnished for that purpose. And even Lowrey himself, in his oral examination on the witness stand, substantially admitted this to be so by conceding that Trego & Smith had no money then in their hands belonging to Lowrey and Lincoln, and that all transactions between the two firms had been settled.
The verdict, so far as it relates to the question of principal and surety — the only matter in dispute — is clearly against the evidence, and for that reason alone must be set aside, and a new trial awarded.
Reversed and remanded.
Cobb, J. did not sit in this case, having been of counsel.