A suit was instituted by the bank against Pearson, the drawer of
a bill of exchange endorsed by Hatch, which suit stood for trial at
an approaching term. The attorney and agent of the Bank agreed with
Pearson that the suit against him should be continued without
judgment until the term after that at which judgment would have
been entered if Pearson would permit a person in confinement under
an execution at his suit to attend a distant court as a witness for
the bank in a suit in which the bank was plaintiff. The witness was
permitted to attend the court, and the suit against Pearson was
continued agreeably to the said agreement.
By the court:
"This was an agreement for a valuable consideration, and not a
mere voluntary and discretionary exercise of authority on the part
of the agent of the bank. It was a virtual discharge of the
endorser of the bill."
The case of
McLemore v.
Powell, 12 Wheat, 584, cited and confirmed.
The notary public, on the nonpayment of a bill of exchange, left
a notice of the same for the endorser at a private boarding house,
where the endorser lodged. Calling at the boarding house and
inquiring for the endorser of a bill of a fellow boarder, he was
informed that he was not within, and he then left the notice with
the fellow boarder, requesting him to leave it with the endorser.
Held that this was sufficient notice to the endorser to
make him liable for the payment of the bill.
This action was brought by the plaintiffs in error, in the
Circuit Court of the United States for the District of Ohio,
against William S. Hatch, by
scire facias upon a judgment
obtained against Elijah Pearson, in a suit brought against him and
the said William S. Hatch, in which the marshal returned "not
found" as to William S. Hatch.
The action was upon a bill of exchange drawn by Elijah Pearson
and endorsed by William S. Hatch. The issue was joined upon the
plea of nonassumpsit.
At the trial, the defendant offered in evidence a deposition of
one John M. Ferry, to which the counsel of the plaintiffs objected
on the grounds stated in the opinion of the Court, which objection
was overruled by the court and the deposition read. To this opinion
of the court the plaintiffs' counsel excepted.
Page 31 U. S. 251
The jury found the following special verdict, to-wit:
"And afterwards, to-wit, at the December term of said court in
the year last aforesaid, came the parties, by their said attorneys,
and thereupon, for trying the issue joined, came a jury, which
found that E. Pearson made the bill of exchange, a copy of which is
attached to the declaration of the said plaintiffs in the original
suit against said Pearson, the drawer of said bill, and that the
said bill was regularly endorsed by the present defendant Hatch. It
also found that on 25 July in the year 1820, said bill of exchange
was duly protested for nonpayment, and that on said day last
mentioned and on the succeeding day, the said defendant Hatch was
boarding at the house of Henry Bainbridge in the City of
Cincinnati; that on 26 July in the year 1820, the notary public by
whom said bill was protested called at the house of said Bainbridge
and inquired for said Hatch, and was informed by a Mr. Young that
said Hatch was not within; the said notary then left a written
notice of said protest with said Young, who was at that time in the
house aforesaid, and requested him to deliver said notice to said
Hatch, and that in the summer of said year 1820, said Young was a
boarder at said house. It also finds that a suit was commenced
against said Pearson, the drawer, on said bill of exchange, which
suit stood for trial at the September term in the year 1822 of the
Circuit Court of the United States for the District of Ohio. It
also finds that, previous to the year 1822, one Griffin Yeatman was
confined on the jail limits of Hamilton County in said state on a
'
capias ad respondendum' issued at the instance of and on
a judgment in favor of said Pearson. That said Yeatman was a
material witness for the plaintiffs in a number of suits then
pending in said court; that one George W. Jones, who was the then
agent for plaintiffs, and one William M. Worthington, the then
attorney for the plaintiffs, agreed with the said Pearson that, in
consideration he, the said Pearson, would permit the said Yeatman
to leave the said jail limits and attend said court during the term
aforesaid, then the suit then pending in said court against said
Pearson on said bill of exchange should be continued without
judgment until the term of said court next ensuing said September
term, A.D. 1822. That in pursuance of this agreement, the said
Pearson permitted the
Page 31 U. S. 252
said Yeatman to leave said jail limits and attend said court,
and that said suit against said Pearson was continued agreeably to
said agreement. Now, therefore, if upon this finding the court
shall be of opinion that the plaintiff is entitled to judgment,
then the jury finds for the plaintiff to recover of the defendant
the amount of said bill, together with the interest thereon; but if
the court shall be of opinion upon the said finding that the
defendant is entitled to a judgment, then, and in that case, the
jury finds for the defendant."
Upon this special verdict, the court below gave judgment for the
defendant, and the plaintiffs below thereupon prosecuted this writ
of error.
Page 31 U. S. 254
MR. JUSTICE STORY delivered the opinion of the Court.
The Bank of the United States, as holders, brought an action
upon a bill of exchange, jointly against Elijah Pearson as drawer
and against William S. Hatch as endorser under a
Page 31 U. S. 255
statute of Ohio authorizing such a proceeding. The marshal
having returned the writ "not found" as to Hatch, the bank
proceeded to take judgment against Pearson alone. The present suit
is a
scire facias against Hatch to make him a party to the
same judgment, so that execution may also issue against him,
according to the provisions of the same statute. The declaration
and bill of exchange in the original proceedings have not been, as
they ought to have been, sent up in the record, as they constitute
a part of it, and for this imperfection a certiorari ought to have
been awarded if anything material in it were now controverted by
the parties. It appears from some exhibits in the proceedings that
the bill of exchange was dated at Cincinnati on 23 May, 1820, and
was as follows:
"Sixty days after date hereof, pay to the order of William S.
Hatch, at the office of discount and deposit of the Bank of the
United States at Cincinnati, $6,600, which charge to the account of
yours respectfully, E. Pearson."
Addressed, "Mr. Thomas Graham, Cincinnati, Ohio." It was
endorsed by Hatch, and accepted by Graham. Hatch pleaded the
general issue, nonassumpsit, and at the trial the jury found a
special verdict, as follows:
"And afterwards, to-wit at the December term of said court in
the year last aforesaid, came the parties by their said attorneys,
and thereupon, for trying the issue joined, came a jury, to-wit:
William B. Van Hook, David Todd, John Larwell, Randall Stiver,
Isaac N. Norton, A. R. Chase, Truman Beecher, J. R. Geddings,
William Rayne, William A. Needham, Ira Paige and William A. Johnson
who, being empanelled, elected, tried, sworn and affirmed to try
the issue between the parties, upon their oath do say, that E.
Pearson made the bill of exchange, a copy of which is attached to
the declaration of the said plaintiffs in the original suit against
said Pearson, the drawer of said bill, and that the said bill was
regularly endorsed by the present defendant Hatch. They also find
that on 25 July in the year 1820, said bill of exchange was duly
protested for nonpayment, and that on said day last mentioned and
on the succeeding day the said defendant Hatch was boarding at the
house of Henry Bainbridge, in the City of Cincinnati; that on the
26 July in the year 1820, the notary public
Page 31 U. S. 256
by whom said bill was protested called at the house of said
Bainbridge, and inquired for said Hatch, and was informed by a Mr.
Young that said Hatch was not within; the said notary then left a
written notice of said protest with said Young, who was at that
time in the house aforesaid, and requested him to deliver said
notice to said Hatch, and that in the summer of said year 1820,
said Young was a boarder at said house. They also find that a suit
was commenced against said Pearson, the drawer of said bill of
exchange, which suit stood for trial at the September term in the
year 1822 of the Circuit Court of the United States for the
District of Ohio. They also find that previous to the year 1822,
one Griffin Yeatman was confined on the jail limits of Hamilton
County in said state, on a
'ca. sa.' issued at the
instance of and on a judgment in favor of said Pearson. That said
Yeatman was a material witness for the plaintiff in a number of
suits then pending in said court; that one George W. Jones, who was
the then agent for plaintiffs, and one William M. Worthington, the
then attorney for the plaintiffs, agreed with the said Pearson that
in consideration, he, the said Pearson, would permit the said
Yeatman to leave the said jail limits and attend said court during
the term aforesaid, then the suit then pending in said court
against said Pearson on said bill of exchange should be continued
without judgment until the term of said court next ensuing said
September term, A.D. 1822. That in pursuance of this agreement, the
said Pearson permitted the said Yeatman to leave said jail limits
and attend said court, and that said suit against said Pearson was
continued agreeably to said agreement. Now, therefore, if upon this
finding the court shall be of opinion that the plaintiff is
entitled to judgment, then the jury finds for the plaintiff to
recover of the defendant the amount of said bill, together with the
interest thereon; but if the court shall be of opinion upon the
said finding that the defendant is entitled to a judgment, then and
in that case the jury finds for the defendant."
Upon this special verdict the court below gave judgment for the
defendant.
Two questions, arising out of the special verdict have been
argued at the bar. First, whether the notice to Hatch of the
dishonor of the bill was sufficient. Secondly, if it was,
Page 31 U. S. 257
whether the agreement between the bank and Pearson was a
discharge of the endorser.
Upon the first point, we are of opinion that the notice was
sufficient. In cases of this nature, the law does not require the
highest and strictest degree of diligence in giving notice, but
such a degree of reasonable diligence as will ordinarily bring home
notice to the party. It is a rule founded upon public convenience
and the general course of business, and only requires that in
common intendment and presumption the notice is by such means as
will be effectual. In the present case, the notice was left at a
private boarding house where Hatch lodged, which must be considered
to all intents and purposes his dwelling house. It was left, then,
at the proper place, and if the delivery had been to the master of
the house or to a servant of the house, there could be no doubt
that it would have been sufficient.
Stedman v. Gooch, 1
Esp. 4. The notary called at the house, and upon inquiry of a
fellow boarder and inmate of the house he was informed that Hatch
was not within; he then left the notice with the fellow boarder,
requesting him to deliver it to Hatch.
The latter must necessarily be understood, by receiving the
notice under such circumstances, impliedly to engage to make the
delivery. The question, then, is whether such a notice so delivered
does not afford as reasonable a presumption of its being received
as if delivered to a tenant of the house. This is not like the case
of a public inn and a delivery to a mere stranger who happens to be
there
in transitu, and cannot be presumed to have any
knowledge or intercourse with the party. Boarders at the same house
may be presumed to meet daily and to feel some interest in the
concerns of each other, and to perform punctually such common
duties of civility as this. In our large cities, many persons
engaged in business live at boarding houses in this manner. It is
not always easy to obtain access to the master of the house or to
servants who may be safely entrusted with the delivery of notices
of this sort. A person who resides in the house upon a footing of
equality with all the guests may well be supposed to feel a deeper
interest in such matters than a mere servant, whose occupations are
pressing and various, and whose pursuits do not lead him
Page 31 U. S. 258
to place so high a value upon a scrupulous discharge of duty. We
think that a stricter rule would be found inconvenient and tend to
subvert, rather than to subserve, the purposes of justice. No case
exactly in point has been cited at the bar. That of
Stedman v.
Gooch, 1 Esp. 4, approaches near to it, but there the notice
was left with the woman who kept the house at which the party was a
lodger. No stress, however, seems to have been laid upon this
circumstance to distinguish it from the case of a delivery to any
other inmate of the house, either servant or fellow boarder.
The other question is one of more nicety, and not less
important. It appears from the special verdict that the contract
with Pearson for the continuance of the suit on this very bill,
without judgment, until the next term of the circuit court was for
a valuable consideration, and not a mere voluntary and
discretionary exercise of authority on the part of the agents of
the bank. What, then, is to be deemed the true construction of it?
Did it amount to no more than an agreement that that particular
suit should stand continued, leaving the bank at full liberty to
discontinue that on the morrow, at its discretion, and to commence
a new suit and new proceedings for the same debt? Or was it
intended by the parties to suspend the enforcement of any remedy
for the debt for the stipulated period and rely solely on that suit
for a recovery? We are of opinion that the intention of the parties
apparent on the contract was to suspend the right to recover the
debt until the next term of the court. It is scarcely possible that
Pearson should have been willing to give a valuable consideration
for the delay of a term, and yet have intentionally left avenues
open to be harassed by a new suit in the interval. Indeed, no other
remedy, except in that particular suit, seems to have been within
the contemplation of either party. If the bank had engaged for a
like consideration not to sue Pearson on the bill for the same
period, there could have been no doubt that it would be a contract
suspending all remedy. What substantial difference is there between
such a contract and a contract to suspend a suit already commenced,
which is the only apparent remedy for the recovery of the bill
during the same period? Is it not the natural and necessary
intendment that the defendant shall have the full benefit of the
whole period
Page 31 U. S. 259
as a delay of payment of the debt? It is no answer that a new
suit would be attended with more delay. That might or might not be
the case, according to the different course of practice in
different states, and at all events it would harass the party with
new expenses of litigation. But the true inquiry is whether the
parties did or did not intend a surceasing of all legal proceedings
during the period. We think that the just and natural exposition of
the contract is that they did.
If this, then, be the correct exposition of the contract, the
case clearly falls within the principle laid down by this Court in
McLemore v.
Powell, 12 Wheat. 554. That was the case of a
voluntary agreement, without consideration, by the holder with the
drawer of the bill for delay after the parties had been fixed by
due notice of the dishonor of the bill. The Court held that the
agreement was not binding in point of law, and therefore it did not
exonerate the endorser. On that occasion the Court said
"We admit the doctrine that although the endorser has received
due notice of the dishonor of the bill, yet if the holder
afterwards enters into any new agreement with the drawer for delay,
in any manner changing the nature of the original contract or
affecting the rights of the endorser or to the prejudice of the
latter, it will discharge him. But in order to produce such a
result, the agreement must be one binding in law upon the parties,
and have a sufficient consideration to support it. . . . If the
holder enters into a valid contract for delay, he thereby suspends
his own remedy on the bill for the stipulated period, and if the
endorser were to pay the bill, he could only be subrogated to the
rights of the holder, and the drawer could or might have the same
equities against him, as against the holder himself. If, therefore,
such a contract be entered into without his assent, it is to his
prejudice, and discharges him."
The same reasoning applies with full force to the present case.
If the bank could not have any remedy on the bill to recover
payments, but was bound to wait until the next term of the circuit
court, the defendant Hatch, as endorser, could not, by paying the
bill place himself in a better situation. He would be liable to the
same equities, under the agreement suspending the remedy, as the
bank. The same principles which this Court adopted in the
Page 31 U. S. 260
case of
McLemore v.
Powell, 12 Wheat. 554, will be found illustrated
and confirmed in an able opinion of Mr. Chancellor Kent in
King
v. Baldwin, 2 Johns.Ch. 554, and applied to a case between
principal and surety. There are other authorities to the same
effect.
Gould v. Robson, 8 East 576;
Laxton v.
Peat, 2 Camp. 188;
Hubbly v. Brown, 16 Johns. 70;
Bayley on Bills 234.
There is a recent case in England which approaches very near to
the circumstances of the present case. We allude to
Lee v.
Levi, 1 Carr. & Payne 553. In that case, the holder, after
suit brought against the accepter and the endorser, had taken a
cognovit of the accepter for the amount of the bill, payable by
installments, and at the trial of the suit against the endorser,
Lord Chief Justice Abbott thought that this was a giving time which
discharged the endorser, and the jury found a verdict accordingly.
That case afterwards came before the whole court for revision, 6
Dowl. & Ry. C. 475, and was then decided upon a mere collateral
point,
viz., that the defense having arisen after suit
brought against the endorser, should have been taken advantage of
by special plea, and could not be given in evidence under the
general issue, so that the ruling of the Lord Chief Justice was not
brought directly into judgment. It was not, however, in any measure
overruled.
Upon the whole, we are of opinion, upon the ground of the
agreement stated in the special verdict being a virtual discharge
of the endorser, that the judgment of the circuit court ought to
be
Affirmed with costs.
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the District of
Ohio and was argued by counsel, on consideration whereof it is
ordered and adjudged by this Court that the judgment of the said
circuit court in this cause be and the same is hereby affirmed with
costs.
