Court Opinion

ID: 5182177
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:43:37.243735+00
Date Added: 2024-06-11T08:26:36.625398
License: Public Domain

Goodrich, P. J. (dissenting):
On October 2, 1893, the defendant wrote the plaintiffs the following letter : “ Mr. E. P. Jones, of the Gold. Bullion Mining Co., Clifton, Arizona, will send you an order for goods he requires, & is authorized to draw on me in your favor for the amount of your bill at 30 days sight.” There had been several previous sales of goods by the plaintiffs to the company, payment for which had been made by drafts of the former manager on the defendant.
On March 8, 1894, the plaintiffs sold to the company goods amounting to $900.95, and on March twenty-Hurd another bill of $173.80, amounting in all to $1,074.75. On March 24,1894, Jones sent to the plaintiffs a draft on the defendant for $500, which the defendant accepted and paid. On May 30, 1895, the plaintiffs wrote the defendant, demanding the payment of the balance, $574.75, with interest, and on November 2, 1895, drew their own draft upon the defendant for that amount, and caused the same to be presented for acceptance. ■ This draft was not paid.
. The plaintiffs claim that the letter constituted an original undertaking by the defendant to be responsible for goods sold to Jones and was not a guaranty, and that they had the right not only to collect a part of the amount with' Jones’ draft for $500, but also to take another draft for the balance, or, in case of the failure of Jones to draw such a draft, to compel the payment of the amount by the defendant upon their own draft, or even without draft. •
The answer, while admitting the sale of the goods and the amount and value thereof, alleges that the defendant refused to pay che draft “ because the said Gold Bullion Mining Company had no funds to its deposit with the defendant, and for no other reason.” It also denies any indebtedness whatever. The defendant claims that the letter limited his obligation to the payment of the bill of goods and one draft, and that draft was to be drawn by Jones alone.
The defendant moved for a nonsuit and the plaintiffs moved for the direction of a verdict, and there was no request on the part of the defendant to submit to the jury any question of fact. The direction of a verdict was proper, therefore, if there was any evidence to. sustain it.
It appears that shortly after the first draft was drawn by Jones he was discharged from the employment of the bullion company, which *123fact the plaintiffs offer as the reason why the second draft was not drawn by him. The defendant testifies that when the draft of Jones was presented he had in his hands funds of the company sufficient to pay the full amount of the goods purchased for the bullion company ; that if a draft for the full amount had been presented it would have been paid, and that no demand was made upon him for the payment of the amount of the second draft until a year after the transaction.
■ There was evidence that one of the reasons for the delay in drawing the second draft was the fact that the plaintiffs had seen the defendant two or three times in the interval, the first time in May, 1894, when they urged him to pay, but were put off with the statement that he would probably have to pay the draft, but desired to secure from the bullion company the amount necessary therefor.
We think that the letter in the present action is to be construed in the light of the attendant circumstances. Major Griswold had previously been manager of the company, and had been in the habit of purchasing goods of the plaintiffs, which had been paid for with the draft of the then manager on the defendant. Adolph Krakauer, one of the plaintiffs, on cross-examination, was asked : “ Don’t you know that this letter of Mr. Chapman’s, dated October 2d, 1893, was to notify you that Mr: Jones has succeeded Capt. Griswold, and that he alone was authorized, and not Capt. Gris-wold, to draw the draft ? ” and answered “ I admit that.”
It does not appear that the defendant knew what was the amount of the goods purchased, but he testified that at the time the first draft was drawn he had in his hands énough of the funds of the company to pay the whole bill, and that if the plaintiffs had presented him a draft for the full amount it would have been paid. He did not know of the full amount till some time afterward. When asked if he had any reason to suppose that the bill ordered was more than the $500, objection was made and the answer was excluded.
At common law, in order that a written promise to accept a non-existing bill should amount to an acceptance,, there are two indispensable requisites: Fwst, that the bill be drawn within a reasonable time, and, second, that the 'promise so describe the bill that there can be no doubt of its application to it. (1 Daniel’s Neg. *124Inst. § 560; Greele v. Parker, 5 Wend. 414; First Natl. Bank v. Bensley, 2 Fed. Rep. 609; Coolidge v. Payson, 2 Wheat. 66.)
So by the statute (1 R. S. 768, § 8) it is provided that “An unconditional promise in writing to accept a bill before it is drawn shall be deemed an actual acceptance in favor of every person who upon the faith thereof shall have received thé bill for a valuable consideration.”
I have no doubt that the draft was properly identified, but there is a grave question whether it was drawn within a reasonable time, and also whether the drawing of one draft did not exhaust the promise of the defendant. The authorities recognize very clearly the necessity of compliance by the plaintiff with the terms of the pro'mise, where the case falls within the category of “virtual acceptance,” and for the reason that the promisor may know the extent of his liability and thus protect himself against loss.
In Union Bank v. Coster’s Exrs. (3 N. Y. 203, 213) the court recognizes the principle that notice to a guarantor of non-payment of the bills referred to in the guaranty is necessary where loss is shown to have resulted from the failure of the notice.
We do not consider the letter in this action to be a guaranty, but the reason for the rule requiring notice of .non-payment to a guarantor would seem to have a decided bearing upon the' case at bar, as, in any event, the draft referred to in. the letter should have been drawn within a reasonable time after the purchase of the goods. There was evidently considerable delay, and such delay has resulted in this controversy.
It appeared that the letter upon which the plaintiffs rely was written in October, 18.93 ; that the goods were purchased in March, 1894, when á draft was drawn in pursuance of the letter which says that Jones was “authorized to draw on me in your favor for the amount of your bill at 30. days sight;” that one draft was drawn for $500, and that it was presented to the defendant and paid at a time when he had in his hands enough funds of the company to have paid the entire bill, and that he was not then, noi’ until two months afterward, notified that the goods ordered exceeded the amount of the draft. It does not appear that he had any of the funds of the company in his hands' when the plaintiffs first notified him that there • was any part of the bill unpaid.
*125These circumstances, I think, worked a:i estoppel as they seem to embrace the elementary definition of estoppel laid down in Trustees, etc., v. Smith (118 N. Y. 634, 641), that “ when a party, either by his declarations or conduct, lias induced a third person to act in a particular manner, he- will not afterwards be permitted to deny the truth of the admission if the consequence would be to work an injury to such third person.”
For the reasons thus stated, I think the judgment should be reversed and a new trial granted.