Dunbar v. Tyler , 44 Miss. 1 ( 1870 )

SlMRALL, J.:

This suit was brought by Albert G. Tyler, as the endorsee of a bill of exchange against Albert W. Dunbar, as drawer. The bill was dated, Natchez, April 7th, 1862, payable six months after date, to the order of W. A. Britton & Co., and. addressed to R,. Nugent & Co., New Orleans, La., and by them accepted. The city of New Orleans was captured by the United States forces, May 1st, 1862. No demand of payment was made at maturity, nor was any made after the close of- the war. The questions arise on the liability of Dunbar, as drawer of the bill. The contract of- the drawer is conditional. It is that the drawee shall accept the bill, and also* that the 'acceptor shall pay it 'on due presentment; and if, on presentment for acceptance or for payment, the bill is not duly honored, then, on notice thereof, the drawer will pay it. The liability of the drawer is dependant on the compliance, upon the part of the holder, with these terms. If a bill is due on a day certain, demand for payment must be made on that day. If payable at a particular place, the demand must be .made at the place. The acceptor is like the maker of a promissory note, liable absolutely; and no special demand need be made of him before suit brought. Dunbar was entitled to a fulfillment of these conditions, in order to hold him to responsibility as drawer, unless there are some special facts which withdraw him from the operation of the general rule. It is said that he was not entitled to notice of demand and non-payment, because the paper was accepted for his accommodation, and he had no funds in the hands of the acceptor, and no right to draw the bill, or to expect its payment, and therefore, could sustain no damage by not receiving notice; the object of prompt notice being to enable him, immediately to withdraw his funds from the acceptor, and close his dealings with him.

The law enjoins upon the holder of negotiable paper, promptness and diligence with respect to it. If it is payable at sight or on demand, it must shortly be put in circulation or presented to the drawee. If held up by the payee an unreasonable time, the party from whom he took it, will be discharged. The theory of a bill of exchange originally was an appropriation of the funds of the drawer in the hands of the drawee, to' the payee, or his order; and he should be entitled, therefore, to prompt and strict notice, if the fund is not paid over, so that he may take measures to protect himself from loss. If the bill is payable at a particular time, it must be presented to the acceptor for payment, when due. It is absolutely incumbent on the holder to do this, if he expects to look to the drawer, in the event of dishonor. ' If he has made every effort, and used proper diligence to make the demand, but has been hindered and disappointed by impediments not referable to himself or his laches, he will be excused; provided, he gives notice of his efforts in this behalf to the drawer ; for these shall be accounted to him of equal worth with an actual demand. If by imperative circumstances above his control, he has been delayed in the demand, so that he could not make it when the bill was due, he will also be excused ; provided, he perseveres in his diligence, and calls upon the acceptor as soon as he reasonably can ; and of all this give prompt advise to the drawer. The duty to make demand for payment on the day of the maturity of the bill is peremptory; that hardly anything short of inevitable, necessity will excuse the omission. The bankruptcy, insolvency, absconding, or death of the acceptor, before or at the time of -its falling due, does not absolve from the duty. Story on Bills, §§ 326-346. In case of the death of the acceptor, presentment should be made to his executor or administrator, if he or his residence can, on inquiry, be found. If the legal representative cannot be found, then presentment should be made at the domicile of the deceased. The loss of the paper does not discharge the holder from this duty; the demand should be made of the acceptor, with a tender of indemnify, and if he refuse, protest should be made, and notice should Be given. Story on Bills, § 348.

Failure to present may be excused on account of the political condition of the country where the bill is drawn or, where payable, rendering it impracticable, or by any other reasonable cause, not referable to the negligence of the holder. Story on Bills, 234; Martin v. Ingersoll, 8 Pick., R., 1; Schofield v. Bayard, 3 Wend., 488; Hopkin v. Page, 2 Brock., 20; Story, §279. So, also, will the prevalence of a malignant disease, as yellow fever, or cholera, the sudden illness or death of the holder, the stoppage of the mail, by ice or snow, war, or other circumstances interrupting intercourse, or other accident or inevitable casualty. Story on Bills, § 308. But in all such cases, the presentment must be made within a reasonable time after the obstruction or hindering cause is removed. Want of funds, and the absence of reasonable expectation of the pajnment of the bill, or of its acceptance, or of a right to draw, may release the holder from the necessity of giving notice of non-payment to the drawer. But we find in the authorities no excuse for non-presentment, to the acceptor, except some inevitable cause or casualty, over which he had no control. The dispensation, with notice for any reason, is of modern origin. Blackstone laid down the rule to be general, and makes no exception to it. 2 Comm., 469. The first departure from the general rule was in the case of Bickerdike v Bollman, 1 Durn. & East, 405, and was laid down in these terms : “ If found by the holder that, from the time the bill was drawn till the time it became due, the drawer never had any effects of the drawer in his hands.” The x-eason assigned was, that the drawee had no “ right ” to draw, and could not be injured. In the course of business and commercial transactions, persons might draw bills, with the best reason for expecting acceptance and payment, although they might have no funds, at the time, in the hands of the drawee and acceptor to meet it. In such condition of the dealings of parties, the reason for giving notice would apply.

In the case of Blackhan v. Doren, 3 Camp., 503, Lord Ellenboróugh said: “ If a man draw upon a house with whom he has had no dealings and no account, he knows the bill will not be honored; he can suffer no injury for want of notice; and therefore is entitled to. no notice. But the case is otherwise where the drawer has a fluctuating balance in the hands of the drawee.”

In the later case of Bucher v. Hiller, 16 East, 43, the same learned judge declared that: “ Where the drawer draws his bill on the tona ficle expectation of assets in the hands of the drawee to answer it, it would be carrying the case of Bickerdike v. Bollman further than has ever been done, if he were not, at all events, entitled to notice of the dishonor. The case is very different when the party knows he has no right to draw the bill. A tona fide reasonable expectation of assets with the drawee, has several times been held sufficient to entitle the drawer to notice.”

' Beviewing the English cases, it was said by the supreme court, in the case of Bank of Columbia at the suit of French, 4 Cranch, 141, “ to be the fair construction, that a person having a right to draw in consequence of engagements between himself and drawee, or in consequence of consignments made to the drawee, or from any other cause, ought to be considered as drawing upon funds in the hands of the drawee, and entitled to notice.”

In Dickens v. Beal, 10 Peters, 572, referring -to the previous adjudication as correctly expounding the principle, the court add: “ But unless he draws under some such circumstances, his drawing without funds, property, or authority, puts the transaction out of the pale of commercial usage; and, as he can in nowise suffer, is not entitled to notice.”

The rule recognized in this court, in Ritchie v. McCoy, 13 S. & M., 543, is, in order to dispense with notice,<{ it must be shown that the drawer, from the time of making the bill to the time when it was due, had no property or effects in the hands of drawee or acceptor, and no right on other grounds to expect that it would be paid.” It was further said that the single fact of want of funds at the maturity, did not dispense with notice. The testimony was that Dunbar was a cotton planter, and a customer of the acceptors of his bill, who were his factors; that the proceeds of his crops were at his disposal; that he, as other customers, had implied authority to draw for the needful advances, etc. The course of the dealings tended to show, at least, an implied authority to draw, and the funds might reasonably be expected to be in the hands of Nugent & Oo., in the fall and winter, in the shape of consignments of cotton to meet the paper. These dealings had extended through several years prior to the date of this transaction. The bill was drawn on shipments of cotton expected to be made — th-e produce of the year’s crop; and there might have, therefore, been a reasonable expectation, that the bill would be honored. It was not the case of drawing upon a house with which the drawer had no account, and, therefore, no just ground of expecting payment. But it was a bill made upon his factors with whom he had dealt for several years, and may, from the course of the business, have well expected that the paper would be honored. We do not think that the interests of commerce, or the credit of negotiable securities would be subserved by relaxing the general rule, except when the-reasons for the exceptions fully apply. Presentment for ’ payment could not be made, because the city of ■ New Orleans was, at that time, in the military possession of the United States forces, and the holder of the bill was at Natchez, in this State. A state of war (civil war) existed between the people of the states of Mississippi and Louisiana and- the United States. Although it was a domestic and civil war, it brought along with it all the consequences and disabilities oí foreign war. Among these, were the interdict, as unlawful, of all intercourse and business. When New Orleans, fell into tbe hands of the United States forces, intercourse and business between its inhabitants and those of Natchez, in this state, became unlawful; and such we understand to he tbe decisions of the supreme court of the United States, on these subjects.

This condition of things, therefore, relieved the holder from the obligation to demand payment of the bill fromR. Nugent & Co., at New Orleans, at its maturity. But so soon as intercourse and business was re-established, after the close of the war,, as it was, by the proclamation of the President, in July, 1865, it became incumbent on the holder, within a reasonable time, to make the demand. The insolvency of.the acceptors is no sufficient reason for not doing so, nor is the failure of the drawer to make provision for the bill. As a precedent condition to hold the drawer, this demand must have then been made, if, upon inquiry, the acceptors could have been found. The holder is under a perpetual duty to diligence with respect to the paper, if he proposes to hold the drawer. The suspension of intercourse, during the war, made a demand, at maturity, impracticable; but so soon as' the obstructing cause is put out of his way, he must instantly persevere in his.diligence. It was his own laches that he did not make this demand. The views of the law, given and withheld from the jury, by the circuit court, do not concur with the principles we have expressed, without special comment on each prayer, as given and refused, there can be no difficulty in charging the jury in agreement with our views.

There was error on the part of the court, and the verdict is without evidence of any presentment for payment, after the close of the war.

Let the judgment be reversed, and venire facias de novo awarded.