Perry v. Crammond , 1 Wash. C. C. 100 ( 1804 )

WASHINGTON, Circuit Justice

(charging jury). These have been called accommodation bills, and, in one sense of the term, they may be so considered; but it does not follow, that an endorsee of them, for a valu-' able consideration, though with full notice ■of every circumstance attending them, may not recover. If they were deposited with Hadfield for the accommodation of the drawers, to enable him to raise money for their use, or for his own indemnification; they were given for a consideration, and would give a right of recovery to any person who might choose to purchase, and pay a full consideration of them. Nay, if they had been drawn for the accommodation of Hadfield. and with a view to enable him to raise money upon the credit of the drawers; they, after thus lending their names, could not resist payment to a bona fide purchaser of them, though notice was given at the time of transfer, of the purpose for which they were drawn. Wherever a bill is drawn for a consideration which is illegal, or which happens to fail, neither the payee, nor any subsequent endorsee, with notice, can recover; but that is quite a different case from the present.

The nature of this transaction, the purpose for which these bills Were drawn and remitted. and the double character in which Hadfield stood as drawer and agent; furnish answers to most of the objections against the plaintiffs’ right of recovery. The bills were sent over with blank endorsements, and were to be used as occasion might require, for supporting the credit of Clow A Cay. No doubt the plan contemplated by Clow & Cay, and also by Hadfield, was to dispose of as many of these bills at a time, as would raise money to enable Had-field to take up such bills as were becoming due; and in case remittances should arrive in time, again to take up such of these bills, as had been negotiated, and were becoming due, by a negotiation of more of them; so as to postpone the protest of any of them, until remittances should arrive. If Hadfield should be able, from his own funds, or from the aid of friends, to raise money for the above purposes; he was authorized, by Clow & Cay, as he expressly swears in his answer to the defendant’s bill in England, to hold or use those bills for his indemnification and repayment; or he might at any time have delivered them over to any person, advancing money for the use of Clow & Cay; and therefore, if he had delivered these bills to Muilman & Company, as they made their advances, or even if the advances had been made upon the security of these bills, and under a promise to deliver them when called for; in the former case, no doubt could exist of the plaintiffs’ right to recover; and even in the latter case, I should incline to think that the delivery, after the death of Clow & Cay, might not be open to the objections which have been made. But, as it appears, obviously, that the advances made by Muilman & Co., were upon the credit of Hadfield, backed by the guarantee of Clow & Cay; Hadfield could not, merely upon the ground of those advances, transfer these bills, after the death of Clow & Cay, for the purpose, as Hadfield declares, of giving Nantes a better security. The intention of sending him the bills, having been, to enable him, on the credit of them, to raise money; not to protest them, with a view to securing prior advances, made upon another account. This however, is of very little consequence in the present case; because, if Hadfield has, from his own funds, or from those of Muilman & Co., advanced for Clow & Cay, a sum equal to the amount of the bills in suit, he thereby became a creditor of Clow & Cay, to that amount; no matter from whom he obtained the money; and in the latter ease, being to that amount the creditor of Clow & Cay, and the debtor of Muilman & Co., he had a right, at any time, to pass away these bills, for the purpose of repaying or indemnifying himself; and this brings us to the great question, whether he was a creditor of Clow & Cay, to this or any other amount, at the time he delivered over the bills to Nantes. It must be admitted, that advances, to a larger amount than these bills, were made by Muilman & Co. to Hadfield, for the use of Clow & Cay; but the question is, whether they were not discharged by remittances made by Clow & Cay to Hadfield. In the account stated by the master in England, we find very large sums of money paid by Had-field for the use of Clow & Cay, leaving at the end of every month, from February to August, large balances due from the latter to the former. But from that period, remittances came to hand in sufficient abundance to turn the balance in favour of Clow & Cay; and this ultimately settled down to more than £SOOO. Now, if the advances made by Hadfield during that period, were out of the moneys procured by him from Muilman & Co., and there is not the slightest ground for supposing that they were excluded from the account; then it is plain, that they were ultimately discharged; and as to this question, it is of no consequence whether Had-field appropriated the remittances to his own use, or paid them over to Muilman & Co.; because, as the plaintiffs' right of recovery can stand only upon the claim of Hadfield to indemnity, if he has been paid, he has been indemnified, and the ground of action is taken away. It is to be remarked, that no accounts were kept between Muil-man & Co. and Clow & Cay, but between Muilman & Co. and Hadfield, and between Hadfield and Clow & Cay. If, then, as Had-field received money from Muilman & Co., he paid it away for the use of Clow & Cay, and charged them with it, as an advance from himself; so soon as he received remittances, they were of course entered to the credit of Clow & Cay; and as far as they extended, discharged those advances. Indeed, it appears from the correspondence between Hadfield and Clow & Cay, that most of the remittances went into the hands of Muilman & Co. That Hadfield is indebted to Muilman & Co. upwards of £19,000, appears by the award made in favour of the latter, and it is as clear that Muilman & Co., at" different times, made advances to Hadfield, to an amount exceeding that sum more than five times. These advances, no doubt, enabled Hadfield to support the credit of his different correspondents, as well as his own. But upon what principle, is it to be said, that the balance found due from Hadfield to Muilman & Co. shall be fixed upon the shoulders of Clow & Cay? It is not in proof, that all the advances for Clow & Cay have not been paid to Hadfield, by the remittances made him by Clow & Cay; and if he has failed to pay them over, Muil-man & Co. must look to Hadfield for indemnification. It is, certainly, if not a suspicious circumstance, at least one much to be wondered at, that in no part of Hadfield’s deposition or answer, does he state that the advances made by Muilman & Co., and applied to the use of Clow & Cay, were not debited in his account with the latter; and in his deposition he states, that'the amount of the bills delivered to Nantes, was to be carried to the credit of him, Hadfield, on account of advances by Muilman & Co. to him, for the use of Clow & Cay, and otherwise. so that it is left to conjecture, from this impression, which sum remained unpaid of the advances made by Muilman & Co., and what portion of these bills were to be applied to the credit of other accounts.

[For an action by the same plaintiffs against other defendants, see Perry v. Barry, Case No. 11,000.]

As to the objection, on the ground of the acceptance being antedated, as well as other irregularities attending the negotiation of the bills, I will not say that they would be fatal in a transaction so peculiar in its nature as the present, if Nantes appeared to have been a fair bona fide purchaser, upon the ground of a debt due from Hadfield to him for money advanced to him for Clow & Cay, and from them to Hadfield. still remaining unpaid; because from the nature of the trust reposed in Hadfield, he could not easily negotiate them in the ordinary way, to answer, the purposes for which they were deposited' with him. The question then, for the jury, will'be, whether Hadfield was a creditor of Clow & Cay, for advances to the amount of the bills in question; so as to authorize him or his endorsee to recover upon the ground of indemnity. If not, the verdict ought to be for the defendant; if otherwise, for the plaintiff.

Verdict for the defendant.