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Lienan v. Dinsmore

3 Daly (N.Y.) 365 Court N.Y.C.P. English

Delivered by Loew, J.

Contents

Majority

p. 365
Michael Lienan and Others v. William Dinsmore, President of the Adam's Express Company.

Headnote

It is the duty of one who undertakes for hire to present a draft for acceptance and • collection, to give notice to the party from whom it is received, of its dishonor, and for failure to do so, he is liable for the damages sustained by the neglect.
The defendant, an Express Company, received from the plaintiffs a sight draft drawn by the latter upon their debtor in Memphis, Tenn., for presentation and collection. The draft was presented to the drawee, but was not paid. ÍTotice of the non-payment was not given to the plaintiffs until some months after-wards, and in the meantime the drawee had failed. Held, in an action against the Express Company for negligence in delaying to give notice of the dishonor of the draft, that to entitle the plaintiffs to recover more than nominal damages, they were bound to show that they could in all probability have collected the
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amount of the draft or some part thereof from the drawee, if they had received the notice of dishonor, which the defendant was required to give.
And there being nothing to show that payment of the draft, or any part thereof, could have been obtained by legal proceedings or otherwise, between the date of the presentment and the date of the notification to plaintiff of the dishonor of the draft, He Id, that a judgment for the amount of the draft in the plaintiffs’ favor was erroneous.
The obligation of the Express Company, in reference to the collection of the draft in question, was not that of a common carrier of goods, but of a bailee for hire; and the receipt given by the Company, by which its liability was sought to be limited, was not subject to the application of the decisions of the courts, made in jealousy of the attempts of common carriers in such receipts to repudiate or restrict their common law liabilities. (Per Robinson, J.)
Appeal by the defendants from a judgment entered on the verdict of a jury at trial term.
The action was brought. to recover damages sustained by reason' of the defendants’ negligence in the collection of a sight draft, intrusted to it for that purpose by the plaintiffs.
On the trial, it appeared that the plaintiffs had sold goods to one Wolff, of Memphis, Tennessee, amounting to $1037.56, and on the 26th day of December, 1866, they drew a draft for that amount on Wolff, payable at sight, to the order of Adams Express Company, and on the sam°e day delivered the draft to the company for collection. The route of the defendants’ company extended to Bowling Green, Kentucky, at which place they delivered the draft to the Southern Express Company for collection.
The receipt given by the defendants to the plaintiffs on taking the draft contained several stipulations or conditions, one of which read as follows: “ And if the said paper or proceeds is entrusted or delivered to any other express company or agent (which said Adam’s Express Company are hereby authorized to do), such company or person so selected shall be regarded exclusively as the agent of the depositor, and as such alone liable, and the Adam’s Express Company shall not be in any event responsible for the negligence or non-performance of any such company or person.”
On the 27th of February, 1867, the plaintiffs wrote to the defendants to the effect, that they had not received the proceeds
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of the draft, and that, if they suffered any loss by reason of the negligence of the defendants or their agents, they would hold them responsible.
On the 9th day of March, 1867, the original draft was returned to the plaintiffs by thd defendants, with a note written by the agent of the Southern Express Company, which read as follows:
“D. Wolff has been sick for sometime; draft presented a number of times; promised to pay ‘ soon.’ On last presentation Mr. Wolff was found to have failed in business and says, it is impossible for him to pay. M. L. Doherty, Agent.”
On the trial, a clerk of the plaintiffs’ testified that between the time when he left the draft with the defendants and the time when the same was returned to the plaintiffs, he called a number of times at the office of the defendants, and inquired about the draft or the money, but was always informed, that they had not heard from it, and that they would write to their agents in Memphis.
This was contradicted by the evidence of a clerk in defendants’ employ.
The court instructed the jury, that if they believed the testimony of plaintiffs’ clerk, the plaintiffs would be entitled to recover the full amount of the draft.
To this charge defendants’ counsel excepted, as also to the refusal of the court to charge that upon the evidence the plaintiffs were entitled to recover only nominal damages.
The jury found a verdict for the plaintiffs for the full amount of the draft with interest from its date.
The defendants appealed.
Blatchford, Seward & Da Costa, for appellants.
I. The receipt executed by the defendants and received and accepted by the plaintiffs without objection, at the time of the delivery of the draft for collection, was the evidence of the contract entered into between them, and the defendants must be regarded as undertaking and the plaintiffs as agreeing that the draft was to be forwarded for collection upon the terms and
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conditions therein expressed. The receipt was the only contract between the parties, and could not be varied or explained by parol evidence. (Bostwick v. Baltimore & Ohio R. R. Co. 55 Barb. 137 .) The plaintiffs are equally bound by the receipt, whether they ever read it or not. (Rice v. Dwight Manufacturing Co. 2 Cush. 89 ; Grace v. Adam’s Express Co., 100 Mass. 505 . Hopkins v. Westcott’s Express Co., 6 Blatchf. 64 .)
II. While the rule of damages for negligence in not protesting a draft, where the result of such negligence is the discharge of any of the parties to the draft, is well settled to be the face of the draft with interest; yet; where the draft is merely drawn for the purpose of the collection, of a debt that is due and the debtor is not discharged from the original debt, but the debt remains, no such rule exists. There is no evidence that the drawee was able to pay the draft and the presumption is the reverse.
The defendants acted simply as collecting agents, and if by their alleged negligence the plaintiffs have sustained any damage, they can only recover “ their real loss or actual damage,” viz. the difference between what they could have, collected, if they had tried, from the drawee after the advice of non-payment and return of the draft and the amount of the debt, and there being no evidence in that regard, plaintiffs wnre entitled at best to only nominal damages. (Story on Agency, § 217c, 222, Mayne on Damages, 309; Van Wart v. Wooley, 5 Dowl. and Ryl. 374; Hamilton v. Cunningham, 2 Brock. 350 ; Allen v. Suydam, 20 Wend. 321 .)
R. P. Lee and T. S. Alexander, for respondents.
I. The measure of damages for the default of the defendants in their duty of collection will prima facie be the sum secured or required to be paid by the face of the paper. (Allen v. Suydam, 17 Wend. 370 ; S. C. 20 Wend. 321 ; Hoard v. Garner, 3 Sandf. 179 ; Bridge v. Mason, 45 Barb. 37 .) In these cases it is declared that the onus rests on the defendant to show insolvency or other circumstances in mitigation of damages.
II. Mere notice is not sufficient to limit the responsibility
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of the carrier. (Prentice v. Decker, 49 Barb. 21 ; Limburger v. Westcott, ib. 283.)
There must be an assent to this notice by the other party, something which partakes of the nature of a contract. (Muschamp v. Lancaster R. Co. 8 M. & W. 421; Crouch v. London & N. W. R. Co. 14 C. B. 255 ; Weed v. Saratoga & Schenectady R. Co. 19 Wend. 534 ; St. John v. Van Santvoord, 25 Wend. 660 .)

Express companies may be deemed common carriers, and like the latter, may restrict or limit their liability by express contract; but it may well be doubted, whether they can do so by a mere notice, or condition printed on the receipt, which the party sending goods by or otherwise employing them, may or may not have seen. (Dorr v. N. J. Steam Navigation Co. 11 N. Y. 485 ; Bissell v. N. Y. Central R. R. Co. 25, N. Y. 445; Bilger v. Dinsmore, 34 How. Pr. 421 .)

Assuming, but without deciding, that the defendants in this action could not thus limit their responsibility, or if they could, that the plaintiffs are correct in their views, and that the defendants by their subsequent acts must be deemed to have waived the condition in the receipt, which they claim exempts them from all liability for the negligence of the Southern Express Company, to which they transferred the draft, and that they are estopped from saying that they passed the same over to said company—still I do not see how this judgment can be .sustained.

It was admitted by the plaintiffs in their complaint, and also by a certain stipulation signed by their attorney and read on the trial, that within a few days after the delivery of the draft to the defendants, and as soon as the same could be transmitted to Memphis to wit; on or about the 31st day of December; 1866, and repeatedly thereafter, the agent of the Southern Express Company presented the draft for payment to the drawee; that payment thereof was repeatedly demanded, and that the said drawee neglected and refused to pay, although he repeatedly promised to do so.

p. 370
It thus appears to be conceded by the plaintiffs themselves that the defendants did all that could possibly be asked or required of them in regard to transmitting the draft to Memphis, and presenting the same to, and demanding payment thereof from, the drawee.

The evidence on the part of the plaintiffs shows that they never requested the defendants to return the draft, nor did they surrender the receipt and pay the charges, all of which was necessary, according to the terms of one of the clauses on the receipt, before the defendants could be required to return the draft, and it may, therefore, be questionable, whether they were bound to do so or not. (Newstadt v. Adams, 5 Duer, 43 ; Manhattan Oil Co. v. Camden R. R. 5 Abb. N. S. 289; Bostwick v. Baltimore & Ohio R. R. Co., 55 Barb. 137 .)

However that may be, for, as already intimated, there are also authorities to the contrary, it is quite clear that the defendants should at least have given due notice to the plaintiffs of the non-payment of the draft, and not having done so, they must be held liable to the plaintiffs for all the damage sustained by them, by reason of their negligence.

But it seems to me that before the plaintiffs can recover more than mere nominal damages, they must show that they could in all probability have collected the amount of the draft or some part thereof from the drawee, if they had received the notice of non-payment, which the defendants’ duty in the premises required them to give. (Allen v. Suydam, 20 Wend, 327 .)

The defendants having used due diligence in endeavoring to ‘ obtain payment of the draft, and having failed, the plaintiffs must show that they would have done better and that there was at least a reasonable probability that they could have collected the amount of the draft, if they had been properly notified that the same was not paid, before they are entitled to recover the full amount thereof.

But having done that, 1 think they would be prima faoi& entitled to a verdict or judgment for that amount, and the onus, would then be upon the defendants, to prove that the real' loss ■ or damage sustained by the plaintiffs, in consequence of the

p. 371
negligence imputed to them, was not the whole amount of the draft.

There is not a particle of evidence in the case to show that payment of this draft or any part thereof could have been obtained by legal proceedings or otherwise, between the time when it was first presented to the drawee for payment, and the time when the plaintiffs were notified of its non-payment.

From the facts and circumstances of the case the probabilities seem to me to be all the other way.

In my opinion the jury should have been charged, as the chancellor thought they should have been instructed in Allen v. Suydarn (siigpra;), that upon the evidence, the plaintiffs were only entitled to nominal damages, or, at least, they should have been told, to find only such damages as they should from the evidence believe it probable, that the plaintiffs might have sustained by reason of the delay of the defendants in notifying them of the non-payment of the draft.

The judgment should be reversed and a new trial ordered, costs to abide the event.

Labbemoke, J., concurred.

Robinson, J. I am of the opinion:

1st. That the obligation of the Adam’s Express Company in reference to the collection of the draft, drawn by plaintiffs on D. Wolff, of Memphis, was not that of common carriers of goods, but that of bailees for hire.

2d. That the receipt they gave the plaintiffs on the delivery of the draft for that purpose, and which was accepted as expressive of their obligations, embodied the contract they made in respect thereto, and that none of the decisions of the courts, made in jealousy of the attempts of common carriers in such receipts to repudiate or restrict their common law liabilities, are applicable thereto.

3d. That by entrusting the draft to the Southern Express Company, which transacted such business, either as another express company or as agent (south of Bowling Creen, Kentucky), they within the terms of their contract divested them

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selves from responsibility for any acts of omission by that company, but if otherwise,—

4th. That there was no proof of any such change in the pecuniary condition of D. Wolff in the interval between the presentation of the draft and the notice to the plaintiffs of its non-payment, as to lead to the inference that in consequence of its intermediate failure, or from any other circumstance connected with their relations as creditors and debtor, the plaintiffs had sustained any such pecuniary damages, resulting from such want of notice of .non-payment as the loss of the entire amount of the draft, and as the certain or probable consequence of the mere omission to advise them of its non-payment on presentation. It was not shown that their chance of collecting their debt from Wolff had been materially impaired by any such delay, or in fact, that they, beyond mere nominal damages, had suffered from the delay in notifying them of the non-payment of the draft on presentation. No protest was required or necessary, and the mere neglect of the agent to give notice to his principal of non-payment of a sight draft, made by him upon his debtor, does not in its legal consequence necessarily present any case of actual loss or damage. I concur in the conclusion arrived to by Judge Loew, that the judgment should be reversed, and a new trial ordered, with costs to abide the event. '

Judgment reversed.

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