Evans v. Gee - 36 U.S. 80 (1837)
U.S. Supreme Court
Evans v. Gee, 36 U.S. 11 Pet. 80 80 (1837)
Evans v. Gee
36 U.S. (11 Pet.) 80
A bill of exchange was drawn in Alabama, by a citizen of that state, in favor of another citizen of Alabama, on a person at Mobile who was also a citizen of that state. It was, before presentation, endorsed in blank by the payee, and became, bona fide, by delivery to him, the property of a citizen of North Carolina, and by endorsement subsequently made upon it by the attorney of the endorsee, the blank endorsement was converted into a full endorsement by writing the words "pay to Sterling H. Gee," the plaintiff, over the endorser's
name. The bill was protested for nonacceptance, and a suit was instituted on it before the day of payment against the endorser in the District Court of the
United States for the District of Alabama. The district court rejected evidence offered by the defendant to show that the bill was given by him to the partner of the plaintiff, a resident in Alabama for property owned by him and the plaintiff, they being co-partners; that the endorsement, when given, was in blank, and that the drawer and drawee of the bill are also citizens of Alabama. The district court also rejected the evidence, instructing the jury that the endorsement in blank, authorized the plaintiff to fill it up as had been done, and that the plaintiff was, under the law of Alabama, entitled to recover ten percent damages, the bill not having been accepted. Held that there was no error in the instructions of the district court. Evidence to show that the original parties to the bill of exchange were citizens of the same state, if offered to affect the jurisdiction of the court, is inadmissible under the general issue; a plea to the jurisdiction should have been put in.
The rule was established by this Court in Young v. Bryan, 6 Wheat. 146, that the Circuit Court of the United States has jurisdiction of a suit brought by the endorsee of a promissory note, who was a citizen of one state, against the endorser, who was a citizen of a different state, whether a suit could be brought in that court by the endorsee against the maker, or not.
The bona fide holder of a bill of exchange has a right to write over a blank endorsement directing to whom the bill shall be paid, at any time before or after the institution of a suit. This is the settled doctrine in the English and American courts, and the holder, by writing such direction over a blank endorsement ordering the money to be paid to a particular person, does not become an endorser.
A suit may be brought against the drawer and endorser of a bill of exchange, on its nonacceptance. The undertaking of the drawer and endorser is that the drawee will accept and pay, and the liability of the drawer only attaches when the drawee refuses to accept or, having accepted, fails to pay. A refusal to accept is then a breach of the contract, upon the happening of which a right of action instantly accrues to the payee, to recover from the drawee the value expressed in the bill, that being the consideration the payee gave for it. Such also is the undertaking of an endorser before the bill has been presented for acceptance, he being in fact a new drawer of the same bill upon the terms expressed on the face of it.
It was urged that the transcript of the record from the district court showed that a general demurrer had been filed which had not been disposed of, that a nonsuit had been taken by the defendant in the district court, and that a motion to set it aside had been overruled; that the case had been submitted to the jury without an issue between the parties, and that the verdict had been returned by eleven, instead of twelve jurors. On these alleged grounds it was claimed that the judgment of the district court should be reversed. By the court:
"Whatever might have been the original imperfections, if not waived expressly, they were so by the defendant's going to trial upon the merits, and thus they cannot constitute an objection to the judgment on a writ of error."
The defendant in error, Sterling H. Gee, a citizen of the State of North Carolina, instituted an action of assumpsit in the district court against Thomas Evans, a citizen of the State of Georgia. The action was founded on a bill of exchange, drawn by Harris Smith in Wilcox County, in the State of Alabama, December 16, 1834, on George M. Rives, at twelve months after date, payable to the order of Thomas Evans, and by him endorsed in blank. The bill was regularly protested for nonacceptance, and the suit was brought without waiting for the arrival of the day of payment. The cause was tried at May term, 1836. The defendant excepted to the opinion of the court, and a verdict and judgment having been given for the plaintiff, the defendant prosecuted his writ of error.
The record showed that at May term, 1835, the defendant filed a demurrer to the plaintiff's declaration, which was in the common form, and that at the December term of the court following, "the plaintiff takes nonsuit," upon which the court entered a judgment of nonsuit and immediately after, on motion, the judgment of nonsuit was set aside. At the following May term, no other pleadings having been filed, the case was tried by a jury and a verdict, under the instructions of the court, was given in favor of the plaintiff for the whole amount claimed by him, on which the court entered a judgment according to the verdict.
The bill of exceptions stated that the bill being relied on by the plaintiff to sustain his action, together with proof of protest for nonacceptance, and notice to the drawer and endorser of the protest for nonacceptance, the defendant offered to prove by way of defense against the said evidence that the said bill was given by the said defendant to Charles J. Gee for property purchased by him; that
the property belonged jointly to Charles J. Gee and Sterling H. Gee, the plaintiff; that they then were, and continued to be, general co-partners; that when the endorsement was made on the bill, it was endorsed in blank, and that the said endorsement has been filed up by the plaintiff's counsel since this suit was commenced; that Charles J. Gee resided in this state and did when the suit was brought, and was a citizen of the State of Alabama, and that the defendant and H. S. Evans and George M. Rives were also citizens of this state. This evidence the court rejected on the ground that the endorsement having been made and given in blank, the plaintiff was authorized to fill it up, as above shown, and that the facts above set forth could constitute no defense, and were not proper evidence. The court further instructed the jury that the bill being drawn in this state, and on a person residing in this state, and made payable in this state upon nonacceptance and notice, the endorser was liable for ten percent damages on the amount of the bill for want of acceptance therefor.