Downes & Company v. Church, 38 U.S. 205 (1839)

U.S. Supreme Court

Downes & Company v. Church, 38 U.S. 13 Pet. 205 205 (1839) Downes & Company v. Church

38 U.S. (13 Pet.) 205

ON CERTIFICATE OF DIVISION FROM THE CIRCUIT COURT

OF THE UNITED STATES FOR THE DISTRICT OF MISSISSIPPI

Syllabus

The plaintiffs in an action on the second set of a foreign bills of exchange which was protested for nonacceptance, with the protests thereto attached, can recover without producing the first of the same set or accounting for its nonproduction.

This was an action of assumpsit founded on the second of a foreign bill of exchange by the endorsee against the endorser for nonacceptance. The plaintiffs declared upon the "second" of the set of exchange, which "second of the set" was protested for nonacceptance, and the same, with the protest thereto attached, was read in evidence to the jury. Whereupon a question arose whether the plaintiffs could recover upon the said second of exchange without producing the first of the same set or accounting for its nonproduction, upon which the judges were opposed in opinion. Whereupon the same was ordered to be certified to the Supreme Court of the United States.

Page 38 U. S. 206

MR. JUSTICE STORY delivered the opinion of the Court.

The action was assumpsit, founded on the second part of a foreign bill of exchange by the endorsee against the endorser for nonacceptance. The plaintiffs declared upon the second of the set of exchange, which second of the set was protested for nonacceptance, and the same, with the protest attached thereto, was read to the jury. Whereupon a question arose whether the plaintiffs could recover upon the said second of exchange without producing the first of the same set or accounting for its nonproduction, upon which question the judges were opposed in opinion. And the same has been accordingly certified to this Court under the act of Congress.

We are of opinion that the plaintiffs are entitled to recover upon the second of the set without producing the first or accounting for its nonproduction. No authority has been referred to which is

Page 38 U. S. 207

exactly in point, nor are we aware that the question has ever been judicially decided. Mr. Starkie, in his work on Evidence (part iv. 228, 1st edit.) has said, "In the case of a foreign bill drawn in sets, both the sets should be produced." But for this proposition he has cited no authority. The question must, then, be decided upon principle. The object of drawing a foreign bill in sets is for the convenience of the payee, or other holder, to enable him to forward the same for acceptance by different conveyances, and thus to guard against any loss, by accident or otherwise, which might occur if there were but a single bill. But from the very frame of the set, if one is paid or discharged by the acceptor or other party liable on it, he is ordinarily discharged from the others, since each part contains a condition that it shall be payable only when the others remain unpaid. Now when one of the set is protested for nonacceptance, and due notice is given to an endorser, and on the trial of an action brought against him by the endorsee, the same bill of the set on which the protest is made is produced, that is prima facie proof of his being responsible thereon. Either of the set may be presented for acceptance, and, if not accepted, a right of action presently arises upon due notice against all the antecedent parties to the bill, without any others of the set being presented, for it is by no means necessary that all the parts should be presented for acceptance before a right of action accrues to the holder. Under such circumstances it is properly a matter of defense on the other side to show either that some other bill of the set has been presented and accepted or paid or that it has been presented at an earlier time and dishonored, and due notice has not been given, or that another person is the proper holder and has given notice of his title to the party sued, or that some other ground of defense exists which displaces the prima facie title made out by the plaintiff. The law will not presume that the other bills of the set have been negotiated to other persons merely because they are not produced. And the endorser is not put to any hazard or peril by the nonproduction of them, since, like the acceptor, if he once pay the bill without notice of any superior adverse claim by a negotiation of another of the set to another party, he will be completely exonerated. On the other hand, great inconveniences might arise from compelling the plaintiff to produce the other parts of the set or to account for their nonproduction, as he might not be able satisfactorily to prove that they had not been negotiated or that they had been lost. In short, if the plaintiff, before he could recover, were required to produce or to account for all the parts of the set, he would be obliged, in every case where the bills had been transmitted by different conveyances abroad, to arm himself with proofs of every stage of their route and progress until they should come back again into his hands as preliminaries to his right to recover upon their being dishonored. Such a requirement would create most serious embarrassments in all commercial transactions of this sort, and instead of bills drawn in sets being a public convenience, they would be greatly obstructed

Page 38 U. S. 208

in their negotiability, since the rights and the remedies of the holder might be materially impaired thereby. We are therefore of opinion that the question upon which the judges of the circuit court were opposed ought to be answered in the affirmative, and we shall send a certificate to the court accordingly.

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 Mississippi, and on the point and question on which the judges of the said circuit were opposed in opinion and which was certified to this Court for its opinion agreeably to the acts of Congress in such case made and provided and was argued by counsel. On consideration whereof it is the opinion of this Court that the plaintiffs in this case could recover upon the second of a foreign bill of exchange, which was protested for nonacceptance with the protest thereto attached, without producing the first of the same set or accounting for its nonproduction. Whereupon it is ordered and adjudged by this Court that it be so certified to the said circuit court accordingly.