Blakiston v. Dudley — 12 N.Y. Super. Ct. 373

Majority

p. 373

John R. Blakiston and another v. John G. Dudley and others.

Headnote

The defendants, in consideration that the plaintiffs would furnish to one Ackley such coal as he might from time to time require, promised to accept the bills drawn upon them by Ackley, in favor of the plaintiffs, for the price of coal so delivered. A bill for’ $656.37 was drawn upon them by Ackley, for coal so furnished, which, upon its presentment by the plaintiffs, the defendants refused to accept.

Held, that the promise of the defendants, not being in writing, was void, under § 6 of the Rev. Statutes, relating to promissory notes and bills of exchange.

Held, that the plaintiffs were not within the exception created by § 10 of the Statutes, as they had neither drawn, nor negotiated, the bill in question.

Held,, that the exception only applies to those who, having transferred a bill for value, have, in consequence of its non-acceptance, been rendered liable as drawers or endorsers.

Complaint dismissed with costs.

(Before Oakley, Cil J„ Dube and Boswobth, J.J.)

February, 1856.

p. 374

The action was brought to recover damages for the wrongful refusal of the defendants to accept and pay a bill of exchange, drawn upon them by one Ackley, in favor of the plaintiffs.

The complaint averred, in substance, that the defendants, in consideration that the plaintiffs, who are coal dealers in Philadelphia, would furnish to Ackley all the coal that, from time to time, he might require, for the purposes of a manufactory carried on by bim-, promised and agreed that they would accept and pay the drafts of Ackley for such coal, to be drawn on them in favor of the plaintiffs, and payable four months from date.

That the plaintiffs, relying on this promise, had furnished Ackley, from time to time, with large quantities of coal, and that there being a balance due from him for coal so furnished, he, for the purpose of satisfying the same, drew and delivered to them the following draft upon the defendants:

“$656-ror. Hew York, August, 2d, 1854.

“ Four months after date, please pay to the order of Messrs. Blakiston & Cox six hundred and fifty-six fss dollars, value received, which place to account of

“ A. L. Ackley.

“To Messrs. Dudley, Jacobson & Churchill,

Ko. 47 Broadway, K. Y.”

That the plaintiffs endorsed this draft, and caused it to be presented to the defendants, who refused to accept the same, and that afterwards, on the 8th of December, 1854, when the draft matured, it was presented to the defendants for payment, and payment was refused. Judgment was demanded for the amount of the draft, with interest from its maturity.

The answer of the defendants takes issue on all the material allegations in the complaint.

The cause was tried before Oakley, Ch. J., and a jury, in May, 1855.

The following are the material facts of the case, as proved upon the trial.

The plaintiffs, in 1853, sold one Ackley divers cargoes of coal, for consumption at his factory at Sag Harbor, for which they were paid by his drafts on the firm of J. Gr. Dudley & Co., of Kew York,

p. 375

of whom, the defendants became the successors. Subsequently thereto Ackley made a contract with the plaintiffs to purchase of them three cargoes of coal for the price of $4.05 per ton, to be delivered before the first day of July, 1854, and to be paid for in cash in thirty days, “ or by draft, four months,” with interest at the rate of six per cent per annum.

The contract was put in writing, but, before its execution, was taken by Ackley and the plaintiffs’ agent to the defendants’ office: when it was exhibited to defendants, the price of the coal and its cheapness, the amount wanted by Ackley, and the other terms of the contract, were fully discussed, and finally one of the defendants being asked if he would accept Ackley’s drafts for coal, as they had the year before, replied that they would, whereupon the contract was forthwith executed between Ackley and the plaintiffs’ agent.

Subsequently, after some of the coal had been delivered, a delay took place in the delivery of the residue, owing to the plaintiffs’ giving a preference to other customers; whereupon Ackley went to Philadelphia, and not being able to induce plaintiffs to deliver the coal prior to July 1st, made a new arrangement with them, by which he agreed to pay thirty cents per ton more for the coal than the price stipulated in the original contract, and to accept a delivery of the same- after July 1st, whenever it should be convenient to the parties, and to pay for the same in cash. It did not appear that the defendants were ever cognizant of this alteration in the original contract, or that they ever assented thereto.

On the 2d August the coal was shipped, and was received soon after by Ackley, at Sag Harbor. About the last of September, Ackley failed. About the middle of November he drew the draft in the complaint set forth, for the amount of- the shipment of August 2d, (making up the amount by charging the coal at the enhanced price,) which, being soon after presented to defendants, was refused acceptance. It was also presented for payment, which was refused. When the testimony on the part of the plaintiffs was closed, the counsel for the defendants moved for a dismissal of the complaint, upon the following grounds:—

1st. That, as Ackley was the primary debtor, the promise of the defendants was collateral, and, not being in writing, was void under the statute of frauds, and

p. 376

2d. That the defendants were discharged by the alterations made in the contract, as to the price and time of performance.

The motion was denied, and the counsel excepted.

The jury, under the direction of the court, found a verdict for the plaintiffs for $670.42, the amount claimed, with interest, subject, however, to the opinion of the court, at General Term, upon all questions of law arising upon the facts in evidence.

P. T. Woodbury, for the defendants,

insisted that the verdict ought to be set aside and the complaint be dismissed, and, after arguing fully upon the grounds taken on the trial, he contended, that the promise of the defendants, to accept the bill in question, if all other objections failed, was certainly void under the provis ions of the Revised Statutes, in the statute relative to promissory notes and bills of exchange, (2 R. S. p. 763, § 608.)

13. S. Van Winlcle, for the plaintiffs,

claimed that they were entitled to judgment upon the verdict, and after arguing at length to show that the objections taken on the trial were "untenable, he insisted that the provisions in the Revised Statutes that had been referred to, ought to be liberally construed in favor of drawers and endorsers in joint faith, and that thus construed, the plaintiffs were brought, by the proof, within the exception contained in the 10th section of the statute. They had given value for the draft, and had endorsed it, and therefore had negotiated it.

We do not think it necessary to decide the questions to which the arguments of counsel, on the hearing before us, were chiefly directed, and which alone were raised upon the trial; namely, whether the promise of the defendants ought not to be regarded as collateral, and, therefore, void under the statute of frauds; and, whether, if the promise was valid, they were not discharged from its performance, by the alterations made, without their assent, in the terms of the contract between the plaintiffs and Ackley. In relation to these questions, we content ourselves with saying, that, in leaving them undetermined, we are not to be considered as intimating, that they are free from difficulty—neither of them is so.

The only objection to the recovery of the plaintiffs that we shall

p. 377

consider is that which was raised, for the first time, on the argument before us, but which, as properly arising upon the facts, we were bound to entertain; and to this we are forced to say that no answer, that we can deem satisfactory, has been given. The objection is, that even upon the supposition that the promise of the defendants, to accept the bill in suit, was valid at common law, and not void under the statute of frauds, and that they were not discharged from the obligation it created by the alleged change in the terms of the contract between the plaintiffs and Ackley, it is still certain, that the promise was rendered void by those provisions in the Revised Statutes to which we were referred, and which I shall now cite.

The sixth section of the title “ Of Promissory Notes and Bills of Exchange” declares, that “no person within this state shall be charged as an accceptor on a bill of exchange, unless his acceptance shall be in writing, signed by himself or his lawful agentand the eighth, that “ an unconditional promise, in writing, to accept a bill before it is drawn, shall be deemed an actual acceptance, in favor of every person who, upon the faith thereof, shall have received the.bill for a valuable consideration.”

The tenth section, however, of the same title, creates an important exception from these provisions, by declaring that “ they shall not be construed to impair the right of any person to whom a promise to accept a bill may have been made, and who, on the faith of such promise, shall have drawn or negotiated the bill, to recover damages of the party making such promise, on his refusal to accept such bill.”

It seems to us that these sections are, all of them, free from obscurity or ambiguity, and that it is scarcely possible to state a reasonable doubt as to their true meaning and construction.

The promise of the defendants, upon which this action is founded, if unconditional, which may be doubted, was not in writing, and hence, unless we can hold that the plaintiffs drew, or negotiated, the bill in suit, they cannot be entitled to recover. They were not the drawers of the bill, and we cannot say that it was negotiated by them, without giving a meaning to the word “negotiated” that we cannot believe it has ever borne, and are satisfied, it was not designed to bear in the statute.

We think, that to negotiate a bill can only mean to transfer it for

p. 378

value, and that it is a solecism, to say, that a bill has been negotiated by a payee, who has.never parted with its ownership and possession. The fact, that the plaintiffs had given value for the bill when they received it, only proves its negotiation by the drawer—its negotiation to, and not by them. As to the allegation that they endorsed the bill, as they never delivered the bill to any person, with the intent of rendering themselves liable as endorsers, it is certain that they never endorsed it, in the legal sense of the term. Their putting their names upon the back of the bill, was not an endorsement, but a mere authority, to the agent whom they employed, to demand its acceptance and payment.

The manifest intention of the legislature, in § 10, was to create an exception, in favor of those who, having transferred a bill for value, on the faith of the promise of the drawee to accept it, have, in consequence of his refusal to accept, been rendered liable, and been subjected to damages, as drawers or endorsers.

Thus construed, the exception is reasonable and just, but, upon the construction that we have been urged to adopt by the counsel for the plaintiffs, the exception would, in effect, supersede the rule, since it would be difficult to imagine a case that it would not be found to embrace; that is, difficult to imagine a case in which an oral promise to accept a bill would not be as binding, and create, substantially, the same liability, as a promise in writing. The salutary provisions in sections six and eight would thus be rendered nugatory.

The plaintiffs, here, have not been made liable as endorsers, and have done no act by which they could be rendered so.

The verdict-must, therefore, be set aside, and, as no purpose could be answered by a new trial, a judgment, dismissing the complaint, with costs, must be entered for the'defendants.

Judgment accordingly.