Wing v. Terry — 5 Hill & Den. 160

Majority

p. 160

Wing vs. Terry and others.

Headnote

A bill of exchange never imports an obligation on the part of the drawer to pay tire amount to the drawee. Per Bronson, J.

If, however, the drawee pay the bill without having funds of the drawer in his hands, the law will raise an implied promise by the latter to repay the amount. Per Bronson, J,

But where in such case there were three drawers, two of whom signed merely as sureties for tire other, and the drawee accepted and paid with fiill knowledge of this fact; held, that he could not resort to the sureties for" repayment, but only to the principal.

So, even though the bill was signed under an express oral agreement on the part of the sureties that they were to be responsible to the drawee; for such agreement is void within the statute of frauds.

The above rule in respect to surety drawers is the same, although the special character in which they signed does not appear on the face of the bill, provided the fact was known to the drawee when he accepted and paid.

Assumpsit, tried before Cushman, C. Judge, at the Albany circuit, in July, 1842. The plaintiff gave in evidence a bill of exchange drawn on him by the defendants, as follows:

11 Palmyra, Oct. 25th, 1841.

Seventy-five days after date please pay our own order one thousand dollars, value received, and charge the same to the account of your humble servants.

Terry & Post,

To J. K. Wing, Albany.

T. W. Gurney,

Jotham Post.”

The bill was endorsed by the defendants. The plaintiff proved that he accepted the bill for the accommodation of the drawers, and that he paid it at maturity, having then no funds

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of the drawers in his hands. It further appeared that the defendants, Terry and Lyman W. Post, who composed the firm of Terry & Post, were engaged in the manufacture of flour at Palmyra, which they sent to the plaintiff in Albany to be sold on commission. The plaintiff accepted and paid the drafts of Terry & Post from time to time, and charged them with the moneys paid. He also gave them credit from time to time with the proceeds of the flour sold. At the time the draft in question was drawn, the plaintiff was unwilling to accept further for Terry & Post, unless they would get sureties. Application was then made to Gurney and Jotham Post, two of the defendants, to become sureties for Terry & Post, by uniting with them in making a draft on the plaintiff, and thereupon the draft in question was made; the defendants Gurney and Jotham Post having no concern with the business of Terry <fc Post, and having no dealings with the plaintiff, but signing the draft for the purpose of becoming sureties to the plaintiff for Terry & Post. All these facts were fully known to the plaintiff at the time. When the draft came to maturity, the plaintiff paid it, and charged the amount in his account against Terry & Post. The judge charged the jury that if they believed the plaintiff had no funds of the defendants in his hands at the time the draft was paid, the plaintiff was entitled to a verdict. Verdict in favor of the plaintiff for the amount of the draft and interest. The defendants now moved for a new trial on a case.

A. Taber, for the defendants.

S. Stevens, for the plaintiff.

The drawer of a bill of exchange agrees with every one who may become the holder, that he will pay the bill, if it shall not be accepted and paid by the drawee, and due notice shall be given of that fact. But the bill never imports an obligation on the part of the drawer to pay the amount to the drawee. If the drawee pays the bill without having funds of the drawer in his hands, the law will raise an

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implied promise by the latter to refund the money. But in such a case, if there be two drawers, one of whom appears on the face of the bill to be a surety for the other, the law will only raise an implied promise by the principal, and not by the surety, to refund the amount to the drawee. (Griffith v. Reed, 21 Wend. 502 .) And the rule is the same, although it does not appear on the face of the bill that one of the drawers was a surety for the other, provided the fact that he was such surety was known to the drawee at the time when he accepted and paid. (Suydam v. Westfall, 4 Hill, 211 , 218.) Here, the defendants Gurney and J. Post became parties to the bill as sureties for Terry & Post, having no other connection with their business, and no dealings with the plaintiff; and these facts were known to the plaintiff. There were dealings between the plaintiff and Terry & Post, and he paid the bill and charged the amount to them. On this state of facts it has already been settled that there was no implied promise by the sureties to refund the money to the plaintiff. He must look to Terry & Post.

But there is another fact which is supposed to distinguish this case from those already cited. Gurney and J. Post put their names to the bill for the purpose of becoming sureties to the plaintiff for Terry & Post. But the difficulty is, that signing the bill did not accomplish the proposed end. The bill does not speak the language of contract as between the drawers and the drawee. (Griffith v. Reed, 21 Wend. 502 .) The intention of Gurney arid J. Post to become sureties to the plaintiff, did not make them so, because that is not, and cannot, upon any possible construction, be the legal effect of the writing which they signed. The parties have mistaken the law, and the sureties would not be bound even in a court of equity. Phelps v. Garrow, (8 Paige, 322,) is a parallel case.

The most that can be made of the matter is this:—Gurney and J. Post agreed by parol, that if the plaintiff would pay the money for Terry & Post, they would be sureties for its repayment. That was clearly a collateral undertaking for the debt or default of Terry & Post, and void within the statute of

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frauds for the want of a writing. (2 R. S. 135, § 2; and see Suydam v. Westfall, and Phelps v. Garrow, supra.) The verdict must be set aside.

New trial granted.

Cases cited

Griffith v. Reed 21 Wend. 502 N.Y. Sup. Ct. p. 162