Amsinck v. Rogers

Appellants brought this action as holders of a certain instrument for the payment of money drawn by the respondents to their own order upon parties in Austria, and then indorsed and delivered for value to the appellants. The bill of exchange, as we shall for the present denominate it, was not paid by the drawees, and thus far recovery against the drawers has been refused upon the ground that there was no proper protest and notice of protest.

The material facts are not disputed, and the only questions • presented for our consideration upon this appeal arise in connection with the rejection by the trial court of certain evidence of Austrian laws and usages offered for the purpose of excusing protest and notice thereof.

“Sew York, Jem. 8,1901.

“ Exchange for £2,058 6/8

“ On demand of this original cheque (duplicate unpaid) pay to the order of Rogers, Brown & Company, Twenty-two hundred and fifty eight pounds 6/8, payable at rate for bankers cheques ou London value received and charge the same to account of pig-iron per S.S. Quarnero.

“ ROGERS, BROWN & CO.

“ To Mess. A. ILerm. Eraenckl Soehne,

“ Ruepgasse, Vienna,

“ Austria.

“ No. 75.”

This bill was drawn and indorsed and transferred to appellants in New York. There was delay in the shipment of the iron, so that when the consignees and drawees of the bill were notified thereof they refused to carry out their purchase thereof unless an allowance was made, and this condition was complied with by respondents.

January 8, 1901, the hill was forwarded by the appellants to Vienna for collection where it was received January 22nd. It was presented to the drawees on the same day, but the collecting agent was requested by the latter not to present it at that time because there were certain differences then existing between them and the drawers concerning the iron in question which probably would be adjusted in a short time. The agent thereupon withdrew the bill and it was not protested and the respondents were not notified of the presentment and non-payment. January 28, 1901, the hill was again presented by the agent to the drawees and payment again demanded, when practically the same request was made that presentment be withdrawn and the same process repeated, there being no

As bearing upon the merits of respondents’ position, it appears that the steamer carrying the iron arrived at Genoa February 20th, and that at that time the iron in question could have been sold at that place by the respondents at the same price at which it had been sold to the purchasers in Vienna if the bill had been promptly protested. Upon arrival in Austria, the purchasers refused to accept the iron and it was sold for the sum of $5,738.38 for the benefit of whoever might be concerned, leaving an unpaid balance upon the bill of $4,364.45.

It is practically conceded by the learned counsel for the appellants that if the latter’s obligation to cause protest and notice of protest of this bill is to be measured by the laws of New York where it was drawn and transferred by respondents, there has been a failure of necessary steps which prevents a recovery. Recognizing this, he sought, as already suggested, to introduce evidence establishing a different and less rigorous obligation upon the part of the appellants. This evidence was to the general effect that in Austria, where the same was payable, the instrument involved was not a bill of excliange nor a check, but a “ commercial order ” for the

In connection witli the rejection of this testimony, which presents the only questions upon this appeal, appellants’ counsel has seemed to argue the proposition, broader than the evidence offered, that the rights of the drawer of a bill of exchange to protest and notice are governed by the laws of the place where the bill is payable, upon the assumption that in this case such view would excuse the omissions complained of by respondents.

We shall first discuss this general proposition so urged and, as we believe, shall demonstrate that the weight of authority is that the rights and obligations of the drawer of a bill of exchange are determined and fixed by the law of the place where he draws it, and as in this case transfers it, and that he is discharged by failure to protest the same in accordance with the laws of that place, such failure being due to different laws or customs prevailing in the country where the bill is payable.

It is familar law that the contracts of the different parties to a bill of exchange are independent and carry different obligations. The drawer of such a bill does not contract to pay the money in the foreign place on which it is drawn, but only guarantees its acceptance and jrayment in that place by the drawee, and agrees, in default of such payment, upon due notice, to reimburse the holder in principal and damages at the place where he entered into the contract.

His contract is regarded as made at the place where the bill is drawn, and as to its form and nature and the obligation and effect thereof is governed by the law of that place in regard to the - payee and any subsequent holder. (Story on Bills of Exchange, §§ 131, 154.) While as to certain details, such as the days of grace, the manner of making the protest and the person by whom protest shall be made, the law or custom of the place where it is payable will govern,

These principles have been affirmed and enunciated by so many decisions that it would be out of place to attempt a general review of the latter, and citation may be made simply of the following cases outside of this state. (Powers v. Lynch, 3 Mass. 77 , 80; Potter v. Brown, 5 East, 124; Price v. Page, 24 Mo. 65 ; Hunt v. Standart, 15 Ind. 33 , 38; Raymond v. Holmes, 11 Texas, 54, 59 ; Allen v. Kemble, 6 Moore’s Privy Council Cases, 314.)

Since, however, it is contended by the learned counsel for the appellants that the views expressed by Story are in direct opposition to the decisions in this state, a somewhat more extended reference will be made to the latter, and with the result, we apprehend, of quite conclusively demonstrating that the current of their authority has been misjudged.

In Aymar v. Sheldon ( 12 Wend. 439 ) a bill of exchange was drawn in the French West Indian islands on a mercantile house in Bordeaux, and was indorsed and transferred in the state of Mew York, action being" there brought upon the bill by the indorsees. The material question arising in the case was whether the steps necessary on the part of the holders of the bill to hold the indorsers upon default of the drawees to accept should be determined by the French law or the law of Mew York, where the indorsement was made, and it was held that while the payee,, of the bill was bound to present it for acceptance and payment according to the law of France, as it was drawn and payable in French territories, the indorsee stood upon a new and independent contract, the indorsement being equivalent in effect to the drawing of a bill, and that this indorsement having taken place in Mew York, the obligation of the indorser and the rights of the indorsee were to

Allen v. Merchants' Bank of New York ( 22 Wend. 215 ) was an action of assumpsit brought to recover the amount of a bill oE exchange drawn in blew York on a mercantile house in Philadelphia and deposited by the plaintiff with the defend

In Carroll v. Upton (2 Sandford’s Superior Court Reports, 171; affirmed, 3 N. Y. 272 ) it was held that in the case of a bill drawn at Washington on a house in Rew Orleans, the law of the place where the bill was drawn governed as to the notice of non-acceptance and of non-payment necessary to be given in order to charge the drawer, and that evidence of a different usage prevailing at the place where' the drawee resided and the bill was presented would not be admitted -to control the drawer’s liability.

The case of Artisan's Bank v. Park Bank ( 41 Barb. 599 ) was an action to recover from the defendants the amount of a promissory note deposited with them for collection, on the ground of a failure to protest and duly notify the indorsers of non-payment. The indorsement was made in Rew York. The note was payable in Alabama. When the same became payable it was presented for payment, which was refused, and the note was not protested and the indorser was not notified of its non-payment. It wTas claimed on the trial that the Alabama statute did not require the indorser of such a note to he notified of non-payment; also, that the note was not a negotiable promissory note, and, therefore, the indorsers were guarantors and not indorsers. The court ruled against these contentions, however, holding that the indorsement was a Rew York contract and governed by the laws of Rew

In Susquehanna Valley Bank v. Loomis ( 85 N. Y. 207 ), Judge Danforth, speaking of the obligations of an indorser of a draft which, as before stated, are regarded as equivalent to those of a drawer, says: “What then was his engagement? As indorser it was, in general terms, to pay the draft to any holder for value whose title was derived through the payee, provided it was duly presented to the drawee, payment refused by it and due notice of the non-payment given to him.”

Counsel for appellants especially relies upon two cases to sustain his proposition that the rules laid down by Story have not been adopted in this state.

The first of these cases is that of Everett v. Vendryes ( 19 N. Y. 436 ). This was an action by the indorsee against the drawer of a bill of exchange drawn in Rew Granada upon a corporation having its office in this state. It was payable to the order of one Jimines, indorsed by him at Cartagena, and was protested for non-acceptance. The answer denied the indorsement of Jimines in general terms. The plaintiffs claimed to be the indorsees according to the legal effect of the bill. The indorsement was not good.and sufficient according to the laws of Rew Granada, but was so according to those of Rew York. The question, therefore, was whether for the purpose of bringing an action against the drawer of the bill upon non-acceptance by the drawee in Rew York state the indorsement was to be tested by the laws of Rew Granada where it was made or by the laws of Rew York where the bill was payable. It was held that the laws of Rew York should govern, and Judge Denio, in writing for the court, said: “ I have not been able to find any authority for such a case, but I am of opinion that upon the reason of the thing the laws of this State should be held to control.

The case of Hibernia National Bank v. Lacombe ( 84

Our'attention is also called to the case of Union Nat. Bank of Chicago v. Chapman ( 169 N. Y. 538 ), but we do not think that what is there said conflicts with the views we have expressed. In speaking of the general rules governing the construction of a contract it is said : “ All matters connected with its performance including presentation, notice, demand, etc., are regulated by the law of the place where the contract by its terms is to be performed.”

In the first place, if we have correctly measured the weight of authority, it establishes the proposition that respondents’ contract as drawers was to be performed in Yew York, where the bill was drawn, and, therefore, the rule quoted, if applicable, would lead to the conclusion that demand and protest bo far as they were concerned would be governed by the laws of Yew York.

In the second place, the question involved in the Chapman case was not at all akin to that presented here, and we do not believe that the judge there writing intended to appz-ove the tule that as against drawers in Yew York of a bill of

In the latter case it is written : “ The rule is often laid down that the law of the place of performance governs the contract. * * * For the purposes of payment and the incidents of payment this is a sound proposition. Thus, the bill in question is * * * in law a sight draft. Whether a sight draft is payable immediately upon presentation or whether days of grace are allowed, and to what extent, is differently held in different states. The law of Missouri, where this draft is payable, determines that question in the present instance. The time, manner and circumstances of presentation for acceptance or protest, the rate of interest when this is not specified in the bill (citations), are points connected with the payment of the bill, and are also instances to illustrate the meaning of the rule, that the place of performance governs the bill.”

Thus far we have assumed that the instrument in suit was a bill of exchange, but we have also considered whether the drawer’s rights to protest and notice were governed by the laws of Austria as though such laws would govern such an instrument if otherwise applicable under the principles which have been discussed. As a matter of fact, however, the appellants would not be benefited if we should hold in this connection that the laws of Austria did control in certain cases, for no evidence was received or offered that the drawers of a bill of exchange would not be entitled to the same protest and notice under the laws of that country as under those of ¡New York.

Appellants’ only excuse for the omission of these steps

Therefore, on a close and final analysis of appellants’ argument, it is indispensable that they should convince us that their rejected evidence would have established that this was not to be regarded as a bill of exchange but as a commercial order. We shall assume that under the Austrian law it was a commercial order. On the other hand, there is no doubt, and in fact it is not denied by the learned counsel for the appellants, that it was a bill of exchange under the laws of the state of New York.

The Negotiable Instruments Law (L. 1897, cli. 612, as amended) provides as follows:

“ Section 210. Bill of exchange defined.— A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed determinable future time a sum certain in money to order or to bearer.”

“ Section 213. Inland and foreign bills of exchange.— An inland bill of exchange is a bill which is, or on its face purports to be, both drawn and payable within this state. Any other bill is a foreign bill. Unless the contrary appears on the face of the bill, the holder may treat it as an inland bill.”

“ Section 321. Check defined.— A check is a bill of exchange drawn on a bank payable on demand.”

It sufficiently appears that this bill was drawn upon a business house and was not a check. It was, therefore, a foreign bill of exchange according to the laws of New York.

And so again, we are confronted with the inquiry whether

Lastly, it is suggested that the decision which we are making will impose much trouble and responsibility upon those who are held for the proper demand and protest of paper in foreign countries where commercial laws and usages differ from our own. We do not see much balance of weight in favor of this argument even if it is to be considered. In a case like this there would be no great difficulty in forwarding with the bill instructions for its propér protest such as were finally given. Some such precautions would not be more'onerous than would those otherwise imposed upon a party to a New York bill of ascertaining the law of the foreign country where it was payable in order that he might learn in what manner the rights secured to him where his contract was made would be altered and perhaps materially impaired.

Therefore, we conclude that no error was committed to the prejudice of appellants and that the judgment appealed from should be affirmed, with costs.

Cullen, Oh. J., O’Brien, Edward T. Bartlett, Haight and Chase, JJ., concur ; Vann, J., dissents.

Judgment affirmed.