Boyce & Henry v. Edwards - 29 U.S. 111 (1830)
U.S. Supreme Court
Boyce & Henry v. Edwards, 29 U.S. 4 Pet. 111 111 (1830)
Boyce & Henry v. Edwards
29 U.S. (4 Pet.) 111
Action on two bills of exchange drawn by Hutchinson on B. and H. in favor of E. which the drawers, B. and H. refused to accept, and with the amount of which bills E. sought to charge the defendants as acceptors, by virtue of an alleged promise before the bills were drawn.
The rule on this subject is laid down with great precision by this Court in the case of Coolidge v. Payson, 2 Wheat. 75, after much consideration and a careful review of the authorities, that a letter written within a reasonable time before or after the date of a bill of exchange, describing it in terms not to be mistaken and promising to accept it, is, if shown to the person who afterwards takes the bill on the credit of the letter, a virtual acceptance, binding on the person who makes the promise.
Whenever the holder of a bill seeks to charge the drawee as acceptor upon some occasional or implied undertaking, he must bring himself within the spirit of the rule laid down in Coolidge v. Payson.
The rule laid down in Coolidge v. Payson requires the authority to be pointed at the specific bill or bills to which it is intended to be applied in order that the party who takes the bill upon the credit of such authority may not be mistaken in its application.
The distinction between an action on a bill as an accepted bill and one founded on a breach of promise to accept seems not to have been attended to. But, the evidence necessary to support the one or the other is materially different. To maintain the former, the promise must be applied to the particular bill alleged in the declaration to have been accepted. In the latter, the evidence, may be of a more general character, and the authority to draw may be collected from circumstances and extended to all bills coming fairly within the scope of the promise.
Courts have latterly leaned very much against extending the doctrine of implied acceptances, so as to sustain an action upon a bill. For all practical purposes in commercial transactions in bills of exchange, such collateral acceptances are extremely inconvenient and injurious to the credit of bills, and this has led judges frequently to express their dissatisfaction that the rule has been carried so far as it has, and their regret that any other act than a written acceptance on the bill, had ever been deemed an acceptance.
As it respects the rights and the remedy of the immediate parties to the promise to accept, and all others who may take bills upon the credit of such promise, they are equally secure and equally attainable by an action for the breach of the promise to accept as they would be try an action on the bill itself.
The contract to accept the bills, if made at all, was made in Charleston, South Carolina. The bills were drawn in Georgia on B. and H. in Charleston, and with a view to the State of South Carolina for the execution of the contract. The interest is to be charged at the rate of interest in South Carolina.
An action of assumpsit was brought in the Circuit Court of South Carolina by Timothy Edwards, a citizen of the State of Georgia, against Boyce & Henry, merchants of Charleston, upon two bills of exchange drawn by Adam Hutchinson at Augusta, Georgia, on the plaintiffs in error, dated 27 February, 1827, payable sixty days after sight, amounting together to $4,431. The bills were duly protested for nonacceptance and nonpayment.
The plaintiff in the circuit court gave in evidence a letter from Boyce, Johnson & Henry dated at Charleston, March 9, 1825.
"Mr. Edwards -- Mr. Adam Hutchinson of Augusta is authorized to draw on us for the amount of any lots of cotton he may buy and ship to us as soon after as opportunity will offer; such drafts will be duly honored."
He also gave in evidence the following notice, signed by Kerr, Boyce, and George Henry, which was published in the Charleston newspaper on 28 March, 1825.
"The co-partnership heretofore existing under the firm of Boyce, Johnson & Henry is this day dissolved by the death of Mr. Samuel Johnson, Jr. The business will be conducted in future by the subscribers under the firm of Boyce & Henry, who improve this opportunity of returning thanks to their friends for their liberal patronage, and hope by assiduity and attention to merit a continuance of their support."
The plaintiff also gave in evidence a letter from Boyce & Henry to Adam Hutchinson dated September 14, 1826, which contained these words. "But in the meantime, if you can buy cotton on good terms, you are at liberty to draw as before."
Also a letter from the same to the same, dated 16 September, 1826, advising him of the sale of a large parcel of cotton and saying, "we wrote you last mail with authority to draw on us as usual, if you could buy to make here at 8 to 9 cents."
Also another letter from the same to Adam Hutchinson
of January 4, 1827.
"Your favor of the 1st instant is received. You have entirely mistaken us as to our losing confidence in you; our idea is this -- we are unable to keep so large a sum beyond our control as the amount which is now standing on our books. For instance, should any accident happen to you, where would be the money to pay your drafts which are now on us and are accepted? Should you die, the cotton or money would of course be held by whoever manages your estate. But to come to the point, we feel every disposition to give you every facility in our power; you are therefore at liberty to draw on us when you send the bill of lading. We do not put you on the footing of other customers, for we do not allow them to draw for more than three-fourths in any instance. You may draw for the amount,"
Also a letter of February the 17, 1827, acknowledging the receipt of the bill of lading for 158 bales of cotton and stating as follows: "Your bills have been presented which you gave to Timothy Edwards, which we would have accepted had we heard from you concerning the first bill," &c.
The plaintiff then gave in evidence a letter from Adam Hutchinson of February 7, 1827, to Boyce & Henry saying
"The cotton by the Edgefield you will please have reweighed and put into store, as I do not wish it sold until the draft drawn against it becomes due. I am shipping by the Commerce one hundred and nineteen bales cotton; it cost $3,320,"
Also a letter of 9 February, 1827, from Adam Hutchinson to Boyce & Henry.
"After writing you by last mail, I bought thirty-nine bales of cotton more, and shipped it per the Commerce, &c.; the thirty-nine bales cost here $1,111. . . . I yesterday drew upon you two drafts for $2,331 and for $2,100 at sixty days in favor of Mr. T. Edwards, which please honor."
The defendants in the circuit court objected to the reading
in evidence the letters from Boyce, Johnson & Henry to Timothy Edwards in March, 1827; also to the letters from Boyce & Henry and from Adam Hutchinson to Boyce & Henry. But the objections were overruled by the court.
The court stated to the jury that the letter of Boyce, Johnson & Henry of 9 March, 1825, in connection with other evidence in the cause, was sufficient to charge the defendants in the circuit court as acceptors. The court relied principally on the fact that Boyce & Henry, on 12 April, 1825, a few days after they had announced the dissolution of the co-partnership of Boyce, Johnson & Henry, had credited themselves in the account current which accompanies the bill of exceptions, with the sum of $1,313.58 due by Adam Hutchinson to the late firm, thus identifying the firms and continuing the responsibility under the letter of guarantee to the plaintiff dated 9 March, 1825. The court also relied upon the continued acceptance and payment by the defendants of numerous bills between the date of that letter and 15 February, 1827, previous to which day, viz., on 12 February, 1827, they refused to accept the bills in question.
The court also charged the jury that unless from all the circumstances the jury should believe that the plaintiff knew of the letter from Boyce & Henry of 4 January, 1827, addressed to A. Hutchinson, and that he took the bills of 8 February, 1827 upon the faith of that letter, it would not legally bind them to accept the said bills, but that it was entirely a question for the jury whether the plaintiff had dealt with Hutchinson on the faith of that letter, and moreover whether he had or not was immaterial, because the previous letter, the notice, the accounts rendered, and the numerous bills drawn and accepted were ample authority for the plaintiff to take the bills in question. The court also instructed the jury that the true question was whether the plaintiff had dealt with Hutchinson on his credit or on the credit of Boyce & Henry. That the terms of the letter of 4 January having been complied with, the defendants were bound in good faith to accept the drafts of
8 February; that the money raised by the sale of the 158 bales of cotton must be regarded as the money of Edwards, and not of Hutchinson; that it was not material whether the letter was written before or after the bill was drawn, for in either case it was, according to law, an acceptance.
A verdict and judgment were entered for the plaintiff in the circuit court allowing the plaintiff interest according to the laws of Georgia, and the defendants, having moved for a new trial which was refused, brought this writ of error.
They contended that the charge of the court was erroneous and that the verdict of the jury was contrary to law.
1. Because the letter of credit from Boyce, Johnson & Henry to Timothy Edwards in favor of Adam Hutchinson in March, 1825, was inadmissible as evidence against Boyce & Henry, and at all events it gave no authority to Hutchinson to draw on Boyce & Henry.
2. Because the other circumstances relied upon by the court to identify the firms of Boyce, Johnson & Henry and Boyce & Henry so as to extend the obligations of the said letters from the former to the latter were wholly insufficient for that purpose or for making the defendants liable on other grounds.
3. Because the letters of Boyce & Henry to Adam Hutchinson and from Hutchinson to Boyce & Henry were inadmissible as evidence in this case, and even if they were not, they could create no right or obligation as between Edwards and Boyce & Henry, particularly as no proof was adduced to show that these letters were known to Edwards when he took the drafts.
4. Because the accounts current between Boyce & Henry and Hutchinson, produced by the plaintiff showed that at the time the drafts were drawn, Hutchinson was indebted to the defendants nearly $10,000, and the proceeds of the 158 bales of cotton were rightly applied to that balance.
5. Because Georgia interest ought not to have been allowed.
6. Because the charge of the judge and the finding of the
jury, were erroneous in the foregoing particulars, and in several others.