Camden v. Doremus, 44 U.S. 515 (1845)
U.S. Supreme CourtCamden v. Doremus, 44 U.S. 3 How. 515 515 (1845)
Camden v. Doremus
44 U.S. (3 How.) 515
Where a general objection is made in the court below to the reception of testimony, without stating the grounds of the objection, this Court considers it as vague and nugatory; nor ought it to have been tolerated in the court below.
Where at the time of the endorsement and transfer of a negotiable note, an agreement is made that the holder shall send it for collection to the bank at which it was on its face made payable, and in the event of its not being paid at maturity, should use reasonable and due diligence to collect it from the drawer and prior endorsers before resorting to the last endorser, the holder is bound to conditions beyond those which are implied in the ordinary transfer and receipt of commercial instruments.
Evidence of the general custom of banks to give previous notice to the payer of the time when notes will fall due was properly rejected unless the witness could testify as to the practice of the particular bank at which the note was made payable.
A presentment and demand of payment of the note at maturity, within banking hours, at the bank where the note was made payable was a sufficient compliance with the contract to send it to the bank for collection.
The record of a suit brought by the holder against the maker and prior endorsers was proper evidence of reasonable and due diligence to collect the amount of the note from them, and it was a proper instruction that if the jury believed that the prior endorsers had left the state and were insolvent, the holder of the note was not bound to send executions to the counties where these endorsers resided at the institution of the suit.
The diligent and honest prosecution of a suit to judgment with a return of nulla bona has always been regarded as one of the extreme tests of due diligence.
And the ascertainment, upon correct and sufficient proofs, of entire and notorious insolvency is recognized by the law as answering the demand of due diligence, and as dispensing with the more dilatory evidence of a suit.
If the holder cannot obtain a judgment against the maker for the whole amount of the note in consequence of the allowance of a setoff as between the maker and one of the prior endorsers, this is no bar to a full recovery against the last endorser, provided the holder has been guilty of no negligence.
The defendants in error were citizens of the State of New York and partners in trade under the name and style of Doremus, Suydams & Nixon. The plaintiff in error was the surviving partner of the mercantile house of John B. & Marbel Camden, which carried on business at St. Louis under the name and firm of J. B. & M. Camden. The plaintiff in error was sued in the court below as endorser of the following promissory note.
On 8 June, 1836, Ewing F. Calhoun executed this note, viz.:
"Twelve months after date, I promise to pay Judah Barrett, or order, four thousand two hundred and nineteen dollars and ninety cents, negotiable and payable at the Commercial Bank of Columbus, June 8, 1836."
"EWING F. CALHOUN"
"Mississippi + 1809 Columbus, Mississippi"
Which note was endorsed by Barrett to Sterling Tarpley, or order, by him to J. B. & M. Camden, or order, and by them to Doremus, Suydams, and Nixon, or order.
On 22 August, 1836, the plaintiffs and defendant entered into the following agreement:
"New York, August 22, 1836"
"Memorandum of an agreement and trade made by and between Doremus, Suydams & Nixon, of the City of New York, of the one part, and J. B. & M. Camden, of the City of St. Louis, of the other part, witnesseth:"
"Whereas the said Camdens have this day sold and assigned unto the said Doremus, Suydams & Nixon a note for four thousand two hundred and nineteen 90/100 dollars, payable twelve months after date, and dated the eighth day of June, 1836, and negotiable and payable at the Commercial Bank of Columbus, Miss., executed by Ewing F. Calhoun to Judah Barrett, and endorsed by the said Judah Barrett and Sterling Tarpley and J. B. & M. Camden, now it is expressly understood and agreed by the contracting parties that the said Doremus, Suydams & Nixon are to send the said note to the said Commercial Bank of Columbus, Mississippi, for collection, and in the event of its not being paid at maturity, they are to use reasonable and due diligence to collect it of the drawer and two endorsers before they call upon the said Camdens; but in the event of its not being made out of them, then the said Camdens bind and obligate themselves, so soon as informed of the fact, to pay the said Doremus, Suydams & Nixon, the principal of the said note, together with its interest and all legal costs they may have incurred in attempting its collection."
"J. B. & M. CAMDEN"
"DOREMUS, SUYDAMS & NIXON"
The note not being paid at maturity, suit was brought by the endorsers against the plaintiff in error as surviving partner of the endorsers J. B. & M. Camden.
Upon the trial of the cause, the plaintiff offered to read in evidence sundry depositions and also a voluminous record, which are all set forth in full in the first bill of exceptions but which it is impossible to insert here on account of their great length. They were,
1. The deposition of Thomas B. Winston, that he presented the note at the Commercial Bank of Columbus, and demanded payment thereof, which was refused; that payment was demanded on 10 June, 1837, because the day of payment fell on Sunday; that it was protested, and notices thereof sent to the first, second, and third endorsers.
2. The deposition of Ewing F. Calhoun, proving his own signature; the handwriting of the first and second endorsers; that he was sued at the first court after the note became due; that the suit was prosecuted as diligently as possible to a judgment and execution; that deponent continued to reside in Lowndes County, Mississippi, but that at the rendition of the judgment Barrett resided in South Carolina, and Tarpley in Texas; that Barrett and Tarpley were both insolvent, and had no property within the State of Mississippi, out of which to make the judgment, or any part thereof; that at the trial deponent was allowed a setoff against Tarpley, of about $1,500, which Tarpley owed deponent at the time of the commencement of the suit, and before he received notice of Tarpley's endorsement.
3. The deposition of Samuel F. Butterworth, that the suit was prosecuted as diligently as possible to judgment and execution; that at October term, 1838, a verdict was rendered for the plaintiffs, which was set aside; that in April, 1839, another verdict was rendered, which was also set aside; that in December, 1839, a verdict was rendered for only $3,498.46, upon which a fieri facias was issued, the statutes of the state not authorizing process against the person; that no property could be found out of which the execution or any part thereof could be made.
4. A document purporting to be a transcript of the record of the suit spoken of above, showing its progress up to the final return of the sheriff, which was as follows:
"The within named Ewing F. Calhoun, Judah Barrett, and Sterling O. Tarpley, have no goods or chattels, lands or tenements, within my county, whereof I can make the sums within mentioned, or any part thereof. March 28, 1842."
Each one of these papers was severally objected to by the defendant, but the court overruled the objection and permitted them to be read in evidence. The admission of these four papers constituted the ground of the first bill of exceptions.
Bill of exceptions No. 2.
"Be it remembered, that on the trial of this cause, the plaintiffs, in addition to the evidence in the former bill of exceptions in this case contained, examined Pardon D. Tiffany as a witness, who testified, that shortly before this suit was brought, as well as after, he had conversations with the defendant in relation to the claim of the plaintiffs against him, and the defendant told the witness that he had transferred the note in question in the present action to the plaintiffs, for goods purchased from them, and that at the time he transferred the note to the plaintiffs he was indifferent whether they took it or not, as he considered some of the parties thereto as good as George Collier (who is known to the court and jury as a very rich man). Witness did not know whether defendant saw the note or not. The witness received a copy of the record of the suit in Lowndes County, Mississippi, brought by the plaintiffs against Ewing F. Calhoun, the maker of the note, and Judah Barrett and Sterling Tarpley, the endorsers; but witness could not say whether he received the copy from Mr. Adams, the agent of the plaintiffs, or from the defendant, or from Mr. Gamber, the counsel of the defendant. The defendant in his conversation with witness was aware of the nature of the plaintiffs' claim against him, and objected to the claim, alleging that the plaintiffs had not used due diligence to collect the amount of the note; he did not say that if he were satisfied that diligence had been used he would pay the claim, but he did say, that he was not bound to pay, and would not pay the claim, but made no other objection to the claim but want of diligence."
The plaintiffs next gave in evidence an act of the Legislature of the State of Mississippi, entitled "an act to abolish imprisonment for debt," approved February 15, 1839, which act the parties here in open court agree may be read in any court in which this cause may be pending, from the printed statutes of the State of Mississippi.
The plaintiffs then proved the handwriting of the defendant to the following letter addressed to the plaintiffs, and read the same in evidence to the jury in the words following:
"Saint Louis, October 24, 1839"
"Messrs. DOREMUS, SUYDAMS & NIXON, New York: "
"GENTS: Your favor of the 11th inst. is received, and contents noted. It is quite out of our power to send you any New Orleans bills for your note on E. F. Calhoun. We trust you will before long receive a judgment for the entire debt, interest and cost, and that you will find by the virtue of an execution that 'insolvency has not passed upon them all.' Those who have gone to Texas may yet make a great rise in that fine country. We regret that the note has been so difficult of collection. We scarcely know which, you or we, made the worst trade; we have many of the goods on hand we got for it."
"J. B. & M. CAMDEN"
"Your message to Mr. Homans, cashier, has been attended to, and delivered."
It was admitted by defendant's counsel that the endorsements on the note given in evidence were filled up in the handwriting of Josiah Spalding, the counsel of the plaintiffs in this action, for the purposes of this suit. It was also admitted that the laws of the State of New York placed the liability of endorsers upon promissory notes on the same footing with the liability of endorsers upon inland bills of exchange under the general law merchant.
The plaintiffs having here closed their case, the defendant produced one William C. Anderson as a witness, who, being sworn, testified that he had been employed in several banks, and had conducted one in St. Louis himself; that the practice in banks in relation to notes deposited with them for collection, was to give notice to the payer of the note that it was in the bank, and when it would become due; that the effect on the credit of a payer, if a failure to pay the note when it became due, was different in eastern and western banks. In banks at the east, paper deposited for collection was considered almost as sacred as paper discounted by the banks, and a failure to pay would stop the accommodation of the payer at the bank; but in the western banks, the effect of permitting collection paper to lie over was not of much consequence to the credit of the payer. The defendant's counsel having asked the witness, whether a note presented at a bank for payment on the last day of grace, by a notary public, would be considered as having been sent to the bank for collection, within the meaning of the contract between plaintiffs and defendant, the question was objected to by the plaintiffs' counsel, and the court not only refused to allow the question to be answered, but rejected all testimony given by the witness, or which might be given, in relation to the practice of banks on notes deposited for collection, unless the witness could testify as to the practice or usage of the Commercial Bank of Columbus, mentioned in the note of Calhoun, to which opinion of the court the defendant, by his counsel, excepts.
Instructions asked by defendant.
"The defendant, by his counsel, moved the court to instruct the jury that the plaintiffs were bound to send the note of Ewing F. Calhoun, endorsed by Judah Barrett and Sterling Tarpley, to the Commercial Bank of Columbus, Mississippi, for collection, and that unless it is proved to the satisfaction of the jury that this was done by the plaintiffs, they must find for the defendant; which instruction was given to the jury by the court, with this explanation: that if the jury believes the note was presented at the bank, and had [?] there, by the agent of the plaintiffs, at the banking hours on the day it fell due, so as to be a valid demand on the maker, then it was duly at the bank, as required by the contract sued on. To which explanatory instruction the defendant by his counsel excepts. "
"The defendant, by his counsel, further moved the court to instruct the jury that the plaintiffs were bound to use diligence by suit against Calhoun, the maker of the note, and Barrett and Tarpley, the endorsers thereof, in order to collect the money, and that if the plaintiffs neglected to prosecute their action with diligence against either of said parties, the defendant is not responsible on his endorsement of the note in question, which instruction was given by the court."
"The defendant by his counsel then moved the court to instruct the jury that the record from the Circuit Court of Lowndes County, given in evidence, does not show due diligence by suit against Calhoun, the maker, and Barrett and Tarpley, the endorsers, of the note in question, which instruction the court refused to give and in lieu thereof instructed the jury that so far as the record goes, it does show due diligence on part of the plaintiffs, and if the jury believe from the evidence given in addition to the record that the two endorsers had left the State of Mississippi, and were insolvent, and had left no property in that state at the time the judgment was rendered, that the plaintiffs were not bound to cause executions to be sent to the counties where the endorsers respectively resided at the time they were sued. To which opinions of the court, in refusing the instruction asked by the defendant as last above mentioned, and in giving the instruction in lieu thereof which was given by the court, the defendant, by his counsel, excepts."
"The defendant by his counsel then moved the court to instruct the jury that the plaintiffs, under the law of Mississippi, were entitled to a judgment against Tarpley for the full amount of the note notwithstanding any payment or setoff between Calhoun, the maker of the note, and Tarpley, the endorser, and that if the plaintiffs have neglected to assert their right to such judgment and have suffered a judgment by their neglect to pass for a smaller amount, the defendant is discharged by such neglect for all accountability for the sum thus lost, which instructions the court refused to give because the record from Mississippi furnished all the evidence on the subject to which this instruction refers, and no negligence appears from said record in prosecuting the suit against Tarpley, to which opinion of the court the defendant by his counsel excepts. And the defendant by his counsel prays the court to sign and seal this his bill of exceptions, and that the same may be made part of the record, which is done."
"J. CATRON [L.S.]"
"R. W. WELLS [L.S.]"