Hoffman v. Smith — 1 Cai. 157

Majority

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Hoffman and Seton against Smith.

Headnote

Want of funds belonging to the drawer excuses notice of non-payment, as well when the bill is accepted, as when not. A professional man, not employed by a party, is a good witness against him. If a defendant read part of an answer of the plaintiff to a bill of discovery, quc&re, whether the whole is made evidence ?

This was an action by the second endorsee against 'the marker of a promissory note, dated the 11th June, 1795, payable one year after date.

The facts were briefly these: the note was originally payable to one Thomas Cooper, who endorsed it to Nicholas Hoffman. When it fell due, Smith, the maker, being unable to take it up, gave N. Hoffman a bill of exchange on William W. Burrows, of Philadelphia, for the amount, which, when paid, was to be in satisfaction. In the mean time, it was agreed by all parties, that the note should be left in the hands of N. Hoffman, Cooper consenting to remain liable, if the bill of exchange was not paid. After these transactions, N. Hoffman being largely indebted to the plaintiffs, endorsed the note over to them on account. The bill of exchange was presented, and accepted, but not paid, upon which the plaintiffs commenced the present action. * The defendant pleaded the general issue, payment, and gave notice of special matter

At the trial, the hand-writing of the different parties being admitted, the plaintiffs there rested their cause. .

The defendant then read in evidence a copy of a bill in chancery, filed by himself against the plaintiffs, for a discovery and injunction, setting forth the preceding facts, and charging a want of notice of the non-payment of the bill of exchange, in consequence of which he became discharged, and N. Hoffman responsible to him for the amount, which he was entitled to set off against the note; for being endorsed after due, it was liable to all the equi<

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ties of the maker against the endorser.^[2] The defendant also read in evidence such part of the answer of the plaintiffs to the *above bill, as confessed the [*158] facts above stated, and the want of notice; on which he rested his cause, and moved for a nonsuit, the plaintiffs not having proved notice to him of the non payment of the bill.

The plaintiffs’ counsel then proposed reading the residue of the answer, which, on the part of the defendant, was objected to, but overruled. On its being read, it appeared that Burrows had no funds in his hands at the time this bill, with many others, was drawn, but that he had accepted them to support the credit of the defendant, on his engaging to provide for their due payment. That the defendant had confessed this, and acknowledged he knew the bill was dishonored, as he had been unable to furnish the means he had promised. The answer further stated, that Burrows paid his acceptances, lent to the defendant till he was totally ruined, in consequence of which he became and continues wholly insolvent, having, however, large demands against the defendant still unpaid. The plaintiffs proved also, by the evidence of Mr. Troup, who had been professionally employed by Burrows against the defendant, that the debt due from the defendant to Burrows now exceeded 20,000 dollars.

The judge charged, that the acceptance of the bill was prima facie evidence of funds in the hands of the acceptor, and made it incumbent on the plaintiffs to show the want of them, which, in his opinion, had been done. That if the jury should concur with him, they ought to find for the plaintiffs, but if they thought the want of funds not sufficiently established, they should find for the defc ndant.

The jury brought in their verdict for the plaintiffs.

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It was now submitted to the court, without argument, whether the defendant was not entitled to a new trial on the following grounds:

1. That after acceptance of a bill of exchange, notice of non-payment is always necessary, and the want of it .discharges the drawer.

2. That the want of funds could not, after acceptance, excuse the not giving notice of non-payment ;^[2] [*159] and that *such want of funds was not sufficiently proved in this case, as the testimony of Mr. Troup, and that part of the answer in chancery which related to the deficiency of funds, were improperly received, and ought to have been excluded.^[3]

delivered the opinion of the [*160] court. *The notice to the drawer of non-payment, although in general requisite, was not necessary in this case, because the drawer had no effects in the hands of the drawee, and, therefore, could receive no injury from the want of it. The reason for notice failing, the necessity of giving it is superseded. The acceptance by the drawer made no alteration in the rule. Notice of nonpayment was not necessary because of no use to the drawer. Walwyn v. St. Quintin, 1 B. & P. 652. The proof of the

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want of funds was conclusive; it arose from the repeated confession of the defendant himself. Hor was there anj weight in the objection to the competency of Mr. Troup’s testimony, his information being received in the character of a friend, and not in that of counsel. The want of funds in the hands of Mr. Burrows was sufficiently proved, independent of any facts contained in the plaintiffs’ answer- to the defendant’s bill in chancery. Wilson v. Rastall, 4 D. & E. 759.

It is, therefore, unnecessary to say, whether the whole answer ought to have been received as evidence or not.^[1]

Motion denied.

(a) (a) The rule dispensing with notice where there are no funds, was introduced for the purpose of defeating speculations on the chance of an exoneration in law, from the want of notice, by a set of men who drew bills without having any funds to answer them in the hands of the drawee. That it was ever adopted has been a source of frequent regret, though it has, by successive decisions, been fully established. But any effects in the hands of the drawee, at the time of drawing, entitle to notice, Orr v. M'Ginnis,7 East, 359, though the drawer be indebted to him more than the amount o! the bill. Blackhan v. Doren, 2 Camp. 503. See Rogers v. Stephens, 2 D. & E. 713. Wilkes v. Jacks, Peake, 202. De Berdt.v. Atkinson, 2 II. Black. 336. Corney v. Da Costa, 1 Esp. Rep. 302. Nicholson v. Gouthit, 2 H. Black. 609. Staples v. Okines, 1 Esp. Rep. 332. Dennis v. Morris, 3 Esp. Rep. 158. Legge v. Thorpe, 2 Camp. 310. S. C. 12 East, 171. Robinson v. Ames, 20 J. R. 146. Agon v. McManus, 11 Id. 180. Cruger v. Armstrong 3 J. C. 5. Anth. N. P. 55, n, [a].