Court Opinion

ID: 7207896
Source: CourtListenerOpinion
Date Created: 2022-07-24 17:17:32.110185+00
Date Added: 2024-06-11T16:16:44.104589
License: Public Domain

Garland, J.,
dissenting. A. L. Gaines & Brother, held an accepted bill of the plaintiffs. Sometime before its maturity, the holders endorsed it, and had it discounted in the Union Bank of Louisiana. About a month before the bill was due, the Bank having then suspended specie payments, and their notes being at *415a heavy discount, the endorsers went to the Bank, and took up the bill with its depreciated notes, and then placed it in the hands of the defendants, as their agents, who deposited it in the Bank of Louisiana, where specie was demanded for it. The clerk to whom the noce was paid says, it was understood, “ that the payment was made by, or for account of the acceptors, though no inquiry was made on the part of the Bank.*’ He further says, that the bill could not have been obtained except by a payment, as the Bank never transferred or negotiated the notes or bills it held.
The plaintiffs contend, that this was a payment made for their benefit, and that the bill has been discharged, and they sue to have it surrendered to them. The defendants deny, that the payment was for the use of the plaintiffs, and by a demand in reconvention, claim judgment for the amount of the bill. The defendants had a judgment on their demand in reconvention, and the plaintiffs have appealed. Thp reason given by Gaines & Brother, for taking up the draft was, that they were about to leave the city for the summer, and did not wish to have their endorsements out in their absence, and that it was not to speculate by paying the draft in depreciated notes, that they paid it. They have not shown, that the credit of the plaintiffs was at all doubtful, or that there was the slightest probability of the bill’s being dishonored ; on the contrary, they placed it in the hands of their agents, relying upon its payment to meet engagements of their own.
When I first examined this case, I thought it a stronger one for the plaintiffs, than that of Holland v. Peirce, 2 Mart. N. S. 499. Subsequent reflection has satisfied me of the correctness of my first impressions. In that case, which was a payment made by an endorser before maturity, but within the last hour previous to a protest, the court said, that the payment enured to the benefit of the maker, and that no matter from what motives it was made, the note could not afterwards be protested. In that case it was held, that the plaintiff could not recover, and in this, I do not see how the plaintiffs in reconvention can be entitled to a judgment, unless the decision in Holland v. Peirce, be overruled. The most favorable point of view in which I can put this *416case for Gaines & Brother, is, that they, in taking up the bill at the Bank, acted as the agents of the plaintiffs, and that they are entitled to indemnity from them, that is, for the value of what they paid. But if they contend, that they paid the bill, in my opinion they cannot recover at all. The simple inquiry is, was the bill paid, or was it purchased. That it was not purchased, is clearly established by the evidence of the Clerk of the Union Bank, who says, that it was not the intention to negotiate or transfer the bill, and that had he not supposed the payment was made for, and on account of the acceptors, it would not have been given up. Had it been intended to sell the bill, the assent of the Bank was necessary, and that assent could not be given by the Clerk who received the payment. I, therefore, take it for granted that it was a payment, and being so, the obligation was discharged: what obligation the payment created between the parlies after-wards, is another question.
Chitty tells us, that payment may be made by any one for the honor of the drawer, or any of the endorsers ; but that it is always made after protest, and that no person should pay in honor of another, before the bill has been protested. The simple reason is, that neither the credit nor honor of any person is at stake, until there is a protest. Pothier, Traité du Contrat 'de Change, No. 114, says : “ Celui qui acquitte une lettre de change pour Vhonneur du tireur, ou de quelqiVun des endosseurs, doit, pour obliger envers lui, actione negotiorum gestorum, celui pour Vhonneur de qui il Vacquitte, la laisser protester par le porteur avant que de la payer" These principles are, I believe, recognized by every writer on bills of exchange.
I am perfectly aware, that there are a great variety of obligations, in which parties may be bound in different modes; but I do not understand the responsibility of an endorser, previous to protest, as being similar to that of a co-obligor or security. The latter are directly bound ; the former only contingently ; and he may never be, if he lets the acceptor of a bill or the drawer of the note alone to pay it. A security has no right to recover from his principal more than he pays, nor can he make the obligation more onerous than it was in the hands of the creditor. Such, I understand, to be the law, as relates to co-obligors also.
*417The 2130th article, of the Civil Code, says, that “ an obligation may be discharged by any person connected in it, such as a coobligor or a security.” At the time when the payment was made in this case, what interest or concern had Gaines & Brother in the bill ? They had parted with their ownership of it by having it discounted. Their names were on it to be sure; but they were not bound for its amount in any way, until after maturity and protest, and this last event might never occur.
The plaintiffs in reconvention contend, that under article 2157, of the Civil Code, they are subrogated, of right, to all the rights of the Union Bank against Wiggin & Davenport. That article says, that “ subrogation takes place of right for the benefit of him who, being bound with others, or for others, for the payment of the debt, had an interest in discharging it.” The mere fact of the name of Gaines & Brother being on the bill, did not, in my opinion, create an interest previous to maturity. They were in no manner responsible. They could not be sued, or called on to give security for the amount of the bill; nor had the Bank a right to take any step towards them. If there was any other interest, than that arising from the endorsement, it ought to have been shown by testimony, which has not been offered. I give no credit to the reason stated for paying the bill. I have no doubt it was a speculation, and being such, I cannot give it my assent. This court have said, that an accommodation endorser cannot recover more of the drawer than he actually pays. He is entitled to indemnity only. 7 Mart. N. S. 12, 499. I now ask, what would be said of such an endorser, who, if the note his name was on was held by one of those banks whose notes are at a heavy discount, should go into the market, and purchase them, and a day or two before the maturity of the note pay it, and then claim the full amount from his principal ? I do not believe any court would give him a judgment under such circumstances ; yet the accommodation endorser has as much interest in discharging the note as any other endorser, and towards the Bank, or the holder of the note or bill, stands precisely in the same situation.
The most equitable and lenient view I can take of this case is, that the judgment should be reversed, and the case remanded, for the purpose of ascertaining what was the actual depreciation of *418the notes in which the bill was paid, and of allowing the reconvenors the value of them.

Judgment affirmed.