Court Opinion

ID: 5459466
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:30:17.316228+00
Date Added: 2024-06-11T08:32:48.929581
License: Public Domain

By the Court, Welles, J.
The general principle of law, that the acceptor of a bill of exchange stands in the same relation to the drawer that the maker of a promissory note does to the payee and indorser, is too well settled to require any authority to prove it. The acceptance is prima facie evidence of funds in the hands of the drawee, and payment by him discharges the obligation and cancels the security. It is equally well settled that where the drawee accepts and pays without funds of the drawer in his hands, although an action may not be maintained directly upon the bill, yet the drawer is liable to the acceptor as for money paid for him at his request. The bill in such case is not the foundation of the action, but is good evidence that the money was paid at the request of the drawer. So far, I believe, the cases all substantially agree.
In the case of Griffith and others v. Reed and Dixson, (21 Wend. 502,) this doctrine of the liability of the drawer, in case of acceptance and payment by the drawee without funds, was held by the supreme court not to apply to a person who signed the bill as surety for the principal drawer, and that such surety for the drawer entered into no obligation whatever to the aceeptor ; that his liability was confined to the payee, indorsee or holder, and that when the bill was accepted and paid, his liability was at an end. whether the acceptor paid pith or without funds. The case of Griffith v. Reed and Dix-*478son was soon followed by that of Suydam and others v. Westfall, (4 Hill, 211,) where the same doctrine was held by the supreme court in discharge of a surety drawer. According to these cases, the defendant, in the present case, under the facts admitted, would be exonerated. In both the cases referred to, the drawees had accepted and paid the bills without funds, and it was held by the supreme court that such payment by the drawees discharged the surety drawers from all the liability which they incurred by signing the bills, solely on the ground of their having signed them as surety for the principal drawers, with the knowledge of the drawees at the time they accepted the bills. According to the principles enunciated in these cases, this defendant, under the facts admitted, would be released. His character as surety for the principal drawer appeared on the face of the bill at the time of its acceptance by the drawee. And as the plaintiff stood in the same light and his character of surety was equally apparent, the payment by him to the drawees was voluntary and the defendant is not affected by it.
But the case last referred to, of Suydam v. Westfall, was afterwards taken to the court for the correction of errors, where the judgment was reversed, (2 Denio, 205,) that court holding, in substance, that a surety drawer occupied the same relation and was under the same liabilities in all respects to the acceptor, and all other parties to the bill as the principal drawer sustained; and that where the acceptor pays without funds, the surety, as well as the principal drawer, is liable to him to refund, on the ground that the payment was at the request of the drawers, sureties as well as principals; and that the law implies a promise by them all, in such case, to indemnify the acceptor. This decision of the court of last resort is in point" in the present case, and settles the liability of the surety drawers of the bill in question. We are not at liberty to disregard its authority, but are bound to receive it as the law governing the principal question before us.
The plaintiff and defendant thus being each liable to Hicks *479& Hathaway for the amount of the draft, the plaintiff has paid them a certain amount to take it up, and has canceled the liability of all the drawers to the acceptor; and as his liability was that of surety for the defendant he has the right to call on him to refund what he has thus paid. The fact that the plaintiff put his name to the bill as surety for the defendant without the request or knowledge of the latter, can make no difference. He was nevertheless liable to the acceptor; and a compulsory payment, or a payment without action, of a legal liability is equivalent to a payment by request, in a case where a request by the person to be benefited by the payment, or who is legally discharged from an obligation by such payment, is necessary to render the person thus benefited or discharged liable to an action for the amount paid. Upon payment of the draft by the acceptor, in this case, the defendant was absolutely liable to him for the amount of the bill, with the right to look at once to the principal drawer for the amount paid by him in discharge of his obligation to the acceptor; but with no right over against the plaintiff. So the plaintiff was in like manner liable to the acceptor upon payment of the bill by the latter, with the right to call on the defendant for whatever he has paid in discharge of his liability to the acceptor. Hence it is laid down that where one is compelled to do for another what that other should do and was compellable to do, the law implies not only a previous request that the thing should be done, but a promise to compensate for doing it. (1 Parsons on Contracts, 392.)
[Cayuga General Term,
June 7, 1858.
Welles, Smith and Johnson, Justices.]
We are of the opinion, therefore, that there was no error committed at the circuit, and that the judgment should be affirmed.