Brown v. Jackson , 1 Wash. C. C. 512 ( 1806 )

WASHINGTON, Circuit Justice,

asked the counsel for the defendant, if the plaintiff coufd, in a separate action, recover on this* bill, against the defendant, could he recover in this action?

Mr. Ingersoll admitted that he could; except that in this action the declaration! averred notice of non-acceptance, which was. not proven. The plaintiff therefore could! not recover, in consequence of his negligence in not giving notice of non-acceptance. It is necessary to protest for non-acceptance, and to give notice. 2 Term R. 717, 718. If the agent retains the bill, it is so much money in his hands, and is a payment of so much.

WASHINGTON, Circuit Justice. What circumstance is it, which constitutes this SO' much money in the' hands of the agent?' And is he further or otherwise liable, tham for neglect in not returning the bill?

Ingersoll. The negotiating the bill produces this effect.

Levy and Dallas, for plaintiff, insisted,, that the plaintiff was not an agent of the' defendant, but had an interest in the bill, and was entitled to claim against the drawer and endorser. That nothing done by him, made this bill a payment of the original debt; but that if it did, still the plaintiff might recover on the count on the bill. That notice of non-acceptance was not necessary. Brown v. Barry, 3 Dall. [3 U. S. 365]. And as to the notice laid in the declaration, it was mere surplusage, and need not be proved.

[NOTE. On the new trial the jury found for nln in tiff for the principal and interest of the bill.]

WASHINGTON, Circuit Justice, charged the jury. It is difficult to perceive, upon what principle of law or justice, it can be contended, that the defendant is neither liable on the ground of the original debt, nor on the bill. The defendant was once indebted in this sum to the plaintiff, and remitted this bill for the purpose of paying it when collected. The bill has been duly presented, protested, and a demand of payment made in proper time. Neither the original debt nor the bill has been paid by the defendant, and it seems strange to say, that the defendant is altogether discharged. Independent of the glaring injustice, at first view, of this doctrine, it would be mischievous in the highest degree, if it be founded; since no creditor would accept a bill of this kind from his debtor, but would either demand payment at once, or insist upon a bill which should entitle him, in case it was dis-honoured, to claim as well damages as the principal.

What is the nature of such a special endorsement as the present? It prevents the negotiability of the bill, and amounts to a declaration, that in case the bill is protested, no damages are to be recovered. The money is to be received for the use of the endorser; but how it is to be applied, is a matter between the endorser and the endorsee. If the endorsee be not a creditor, then he is to receive the money and remit it; or if the bill be dishonoured,. he is to return it. If he be a creditor, then of course he is to apply the money to the credit of the endorser. The latter was this case, and is proved, not only by the letter which accompanied the bill, but from the conduct of James Jackson, who never objected to the liability of the endorser to pay the bill; refusing only to pay the damages.

But suppose the plaintiff was a mere agent. If he negotiated the bill, supposing it had been endorsed generally, then I admit he was a receiver of so much money to the use of the endorser. But on the protest of the bill, he was obliged to repay the money, and consequently, was placed exactly in his original situation; and though he might be responsible for neglect, in not returning the bill in time, yet he could not be said to be a receiver of so much money, to the use of the defendant. But this bill not being negotiable, his endorsee can only be •considered as his agent to receive the money from the drawee. ' If he is to be considered as having made the bill his own, then he has all the rights of an endorsee, unless he has forfeited all recourse against the drawer and endorser, by neglecting to give notice of the non-acceptance; and he is entitled to recover on the bill.

But the fact is, the bill was remitted by a debtor to his creditor, and so as to be considered as a payment when it was paid. If not paid, he was entitled to look to every person liable on the bill, as drawer and endorser, In the same manner as if he had paid so much money for it. If he takes the bill as payment, or by his conduct is considered as having so taken it, as if he retains it an unreasonable time, or negotiates it and receives the amount of it, as in Harris v. Johnston [3 Cranch (7 U. S.) 311], in the supreme court; then he cannot sue for the original debt, but he may sue the drawer, and all the endorsers on the bill. His authority is to receive payment of the bill. From whom? From all who are liable to pay it. Who are they? The drawee if he accepts, or the drawer or endorsers, who impliedly agree to pay if the drawee do not. The conduct, therefore, of the plaintiff, in demanding the amount of this bill from the drawer, and from the defendant, was within his authority; and consequently, it did not compel him to take the bill as payment. The bill was merely a collateral security, and so would have been a promissory note, if, on demanding payment from the plaintiff, he had given one. Neither would have been considered as a payment. But it is immaterial to consider, whether the bill was a payment or not. If a payment, then the plaintiff may recover on the count on the bill; if not a payment, then he may recover on the count for goods sold and delivered. But, as it is made a point, that the defendant is discharged, by the neglect of the plaintiff to give notice of the non-acceptance, which may be an important question; and also, that notice being averred and not proved, a recovery cannot be had on the count on the bill; the jury must find for the plaintiff on the first count, the amount of the first shipment, which is not disputed; and on the second, the amount of the bill, subject to the opinion of the court on these points.

The jury found for the plaintiff, who, supposing he could prove notice, consented to a new trial, as to the amount of the bill, the defendant agreeing he might aver his declaration.