Harrison v. Smith — 32 N.Y. Super. Ct. 669

Majority

p. 669

WILLIAM T. HARRISON and Another, Plaintiffs, v. EDWARD H. SMITH, Defendant.

[Decided December 31, 1870.]

Headnote

Where a defendant agreed in writing to accept all drafts drawn upon him, with billa of lading of first cost on oysters and other produce in season—held, that the promise was not an unconditional one, so as to make it an acceptance under the statute.

If the promise to accept is conditional, the fact that the conditions were performed ia wholly unimportant.

Before Barbour, C.J., McCunn and Jones, JJ.

This case was tried before Mr. Justice Monell and a jury.

The action was brought to charge the defendant as the acceptor of two drafts drawn by one E. Kingsland.

The complaint alleged the making and delivery to the plaintiffs of two several bills of exchange, drawn by E. Kingsland upon the defendant, payable one day after sight, and accepted by the latter, but which he had failed to pay on presentation for that purpose. Upon the trial the plaintiffs proved that the drafts, which were dated, respectively, March 12 and 13, 1868, were delivered to them by the drawer for a full consideration; and, as evidence of the acceptance thereof by the defendant, read a letter, of which the following is a copy :

“Norfolk, Ya., March 3,1868.

“ Messrs. War. T. Harrison & Co.

“ Gentleaien—This letter is to certify that I, E. H. Smith, and E. Kingsland do agree to do business on joint account; I, E. H. Smith, in New York, and E. Kingsland to remain in Norfolk, Ya.

“ I, E. H. Smith, agree to accept all drafts with bills of lading

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of first cost on oysters and other produce, in season, drawn by E. Kingsland.

“ Edwabd H. Smith,

“ Hew York.”

They also proved that the draft was given to them by Kings-land as and for the cost price of certain oysters purchased by the latter, and that such oysters were shipped by him to the defendant, who received the same, together with the bill of lading thereof.

The court directed a verdict for the plaintiff, and ordered all further proceedings to be stayed until the decision at General Term upon the defendant’s exceptions. The principal exceptions are to the admission as evidence of the first clause of the above letter, to the refusal of the court to dismiss the complaint upon the closing of proofs, and to the directions given to the j™7-

Mr. A. G. Rice for defendant.

The agreement was conditional, and dependent upon the purchase at cost price, a/nd the shipment of oysters and produce.

The conditions were, 1st. That the drafts be accompanied with bills of lading of oysters and produce. 2d. That the bills be at first cost of the articles sent.

He would not have been bound to accept a draft drawn on a shipment of merchandise or articles other than “oysters and produce.”

The agreement to accept must be unconditional, or it will not bind the party making it (1 R. S., 768, §§ 6 to 9; 5 Duer, 574 ; Reed v. Wilkinson, 2 Wash. C. C. Rep., 514 ; Ontario Bank v. Worthington, 12 Wend., 593 ; Ulster Co. Bank v. McFarland, 3 Denio, 553 ; Lowrey v. Stewart, 5 Bosw., 505 ).

An acceptance, to be valid, must point out the particular bill, and identify and describe it in terms not to be mistaken.

The acceptance in this case was made before any bills were drawn, and does not describe any particular bill.

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In Ulster Co. Bank v. McFarland ( 3 Den., 553 ), and cases cited on p. 557, “ a promise to accept a bill thereafter to be drawn, specifying the amount and time of payment, so as to lea/oe no reasonable doubt as to the identity of the bill i/rvtended to be accepted, is, if shown to a third person who, on the faith of such a promise, takes the bill for value, in point of law, an acceptance binding the person who makes the promise.”

It is not shown that plaintiffs paid the money on the drafts on the faith of the defendant’s promise to accept, as required by sec. 8 of the statute.

It appears that plaintiffs paid under the arrangement stated i/n the letter. The “ arrangement ” may refer to the business relations of the parties; it does not necessarily imply that plaintiffs paid the money on the faith of defendant’s promise to accept; the meaning is obscure, whereas it should clearly and affirmatively appear as one of the main facts of plaintiffs’ case that they paid the money, not under any “ arrangement,” but on the faith of defendant's promise.

The law of Hew York governs, the case, as the contract was to be performed here ( 5 Duer, 574 ; 9 N. Y., 279 ; 19 N. Y., 436 ).

The plaintiffs counted on an acceptance of the drafts by defendant, and did not attempt to set out any other fact, or recover on any other theory ( 25 N. Y., 266 ; 36 N. Y., 395 ; 38 N. Y., 161 ).

Mr. George W. Cotterill for plaintiffs.

The admitted facts show that the plaintiffs advanced money for the benefit of the defendant, whereby oysters were purchased and shipped to him, with bills of lading which he received, that he sold the oysters and put the avails in his pocket. He agreed to accept two drafts in consideration of the plaintiffs so doing: he refused to accept the drafts, and claims that the plaintiffs have no remedy.

He is clearly liable on the common law doctrine that even a

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stranger to the consideration can sue on a contract for his benefit (Scott v. Pilkinton, 15 Abb. P. R., 284 ).

All the facts are admitted to establish the common law liability, and no objection was taken on the trial in any way that they were irrelevant under the pleadings.

The letter of the defendant does in its terms amount in law to an acceptance, after showing performance of the conditions.

Whether it does so amount or not is entirely immaterial.

The plaintiffs did prove the performance of the conditions, as are admitted in the case.

The evidence is conclusive that the plaintiffs did pay the money on the defendant’s promise to accept.

If the court should by any possibility hold that this is a suit as for the non-acceptance of two drafts, and that the defendant is at liberty to raise the objection that the promise was conditional, we answer:

First.—The statute does not apply, because the contract to accept was made in Virginia.

At common and commercial law, an agreement to accept is an acceptance, and is declared on as such ( 3 Denio, 553 , § 8 of the statute; Edwards on Bills, § 414).

The lex looi accordingly determines whether the contract is valid, it having been made in Virginia. The fact that payment might be made in New York has nothing to do with a contract already complete, made in Virginia.

Second.—But the acceptance is good under the statute. The section which applies is the 8th. It reads: “ 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.

Now, this section contains nothing new; such was always the law.

So it is conclusively shown in Edwards on Bills (p. 392, 2d ed., and authorities cited).

Now, there is no conditional promise here, but a conditional

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acceptance, and there is just the distinction. The defendant absolutely agrees to accept, but that acceptance is conditional. One may absolutely promise to accept upon conditions, viz.:

“ When goods conveyed to him are sold.”

“ When a navy bill is paid,” etc., etc. (Story on Bills, p. 287; Edwards on Bills).

By the Court:

Without expressing an opinion as to whether the facts proven upon the trial would or not have been sufficient to constitute a cause of action against the defendant, upon his promise in writing to the plaintiffs themselves to accept, and, therefore, to pay the bills in question, if all thbse facts had been set forth in the complaint (see 12 Wend. R., 598; 12 id., 513), it is enough to say that the plaintiffs have seen fit to set up, as a substantive cause of action, the ultimate fact, or conclusion of law, that the defendant accepted the bills; and, therefore, the main question for us to consider is, whether the letter written to the plaintiffs by the defendant constituted and was that act technically known in the law as an acceptance.

The letter, it will be observed, was written and delivered to the plaintiffs in Virginia, where, also, they received the bills of exchange. If the letter is to be considered as an acceptance of the bills to be drawn in accordance with its provisions, the acceptance of the bills in question was, therefore, completed in Virginia the moment they were delivered to the plaintiffs there.

The case does not show whether the bills were payable generally or in Kew York. Assuming, however, as perhaps we may, from the omission in the complaint to state where they were to be paid, that the bills were upon their face payable generally, and not at any particular place, the contract of acceptance must be governed by the law of Virginia, where such contract was made, unless it appears that it was the intention of the parties that the bills were to be presented and paid in Yew York (Story on Bills, §§ 146, 158 ; Story’s Conflict of laws, § 272;

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Sprowle v. Legge, 1 B. & Cressw., 16; Dow v. Lippman, 5 Cl. & Fin., 1).

But an acceptance is a contract to pay; and, where such contract is, either expressly or tacitly, to pay the bill which is accepted in any certain place, the general rule is that the contract, as to its validity, nature, and obligation, must be governed by the law of the place of performance (Story on Bills, § 147; Story on Conflict of Laws, § 280).

The letter which is relied upon as the acceptance of the bills declared and informed the plaintiffs, not only that the writer resided in Hew York, but that he was to remain there in the prosecution of the joint business of Kingsland and himself, and that bills of lading were to be sent to him, with the drafts. Upon the face of the contract, therefore, enough appeared to show that the parties must have contemplated and intended that the bills were to be presented and paid in Hew York; and it follows that the law of that place must govern in regard to the validity and legal effect of the letter as an acceptance of the bills which are the subject of this action.

The statute of this State upon the subject declares 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” (1 R. S., 768, § 8); and such statute has been held, in several cases, to be restrictive in its effect (Ulster Co. Bank v. McFarland, 3 Denio, 553 ; S. C., 5 Hill, 432 ; Lowrey v. Stewart, 3 Bosw., 505 ; Ontario Bank v. Worthington, 12 Wend., 593 ; Parker v. Grele, 2 id., 548; S. C., 5 id., 414; Bk. of Michigan v. Ely, 17 id., 508).

The question, then, is whether the promise to accept which is contained in the letter is unconditional. For if it was conditional, the fact that the conditions were performed was wholly unimportant (N. Y. and Virg. St. Bk. v. Gibson, 5 Duer, 574 ). It certainly is not a mere naked promise to accept drafts for a ■definite .amount, nor of a certain description, nor even all drafts .drawn upon the writer by Kingsland. But it appears to me to

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be a promise on the part of the defendant to accept drafts drawn upon him by Kingsland, provided the same shall have been given by the latter as and for the purchase price of oysters and other produce in season, or to raise money for such purchase, and also upon the further condition that the contemplated drafts, when presented, shall be accompanied with bills of lading of the oysters or produce purchased by means of the drafts; and that it is not an undertaking to pay any draft unless the same is accompanied with a bill of lading of the property purchased, nor unless such draft has been given for the first cost of oysters or produce. Indeed, the intention of the defendant to accept such bills only as Kingsland should draw upon him for the purchases in which they were jointly engaged, is so plainly expressed in his letter to the plaintiffs, that they could hardly have supposed that a bill, known by them to have been drawn for purposes other than those so mentioned, was intended by the defendant to be covered by the promise. In the other respect, the case of The N. Y. and Virg. Stock Bk. v. Gibson ( 5 Duer, 574 ) is very similar to this. The action there was based upon a letter alleged to have been written by the defendants, in which they stated that they would accept the drafts of a party to the extent of $20,000, upon his remitting to them, in currency, or bills of lading for hogs, the amount for which he drew; and the plaintiff claimed that such promise was an acceptance. But this court, at General Term, held that the promise was not unconditional, but was subject to the condition precedent of a timely remittance of bills of lading or currency, and, therefore, that such promise was not an acceptance (see further, as to conditional promises to accept, Mason v. Hunt, Doug. R., 296; McKim v. Smith, 1 Hall’s L. J., 485; Payson v. Coolidge, 2 Gall., 233 ; S. C., 2 Wheat., 66 and n. 75; Schimmelpennick v. Bayard, 1 Peters, 283; Mayhew v. Prince, 11 Mass. R., 54 ; and cases above cited).

The promise contained in the defendant’s letter, therefore, was not an unconditional one, so as to make it an acceptance of the bills in question; and for that reason, and because the plaintiffs had wholly failed to prove the acceptance of such bills by the

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defendant, when he closed his proofs, the motion to dismiss the complaint ought to have been granted.

The verdict should be set aside, and a judgment entered for the defendant, dismissing the complaint, with the costs of the action.