Where the declaration, in an action of assumpsit, contained the
following counts, 1. on a promissory note; 2.
indebitatus
assumpsit for the hire of slaves; 3. an account stated; 4.
quantum valebat for the services of slaves; 5. work and
labor, goods sold and delivered and money lent and advanced; 6.
money had and received; 7. an account stated; 8. a special
agreement for the hire of slaves, and the defendant pleaded 1. the
general issue; 2. statute of limitations; 3. payment, and the jury
found a verdict for "the defendant upon the issue joined as to the
within note of four hundred and fifty-six dollars, and the within
account", this verdict, although informal, was sufficient to
authorize to enter a general judgment for the defendant.
An objection cannot be made in this Court to a release under
which a witness was sworn unless the objection was made in the
court below and an exception taken.
Where a certificate of deposit in a bank, payable at a future
day, was handed over by a debtor to his creditor, it was no payment
unless there was an express agreement on the part of the creditor
to receive it as such, and the question whether there was or was
not such an agreement was one of fact to be decided by the
jury.
The bank being insolvent when the certificate of deposit became
due, there was no ground for imputing negligence in the collection
of the debt by the holder, as no loss occurred to the original
debtor.
If the evidence showed that after the maturity of the
certificate, the original debtor admitted his liability to make it
good, the jury should have been instructed that this evidence
conduced to prove that the certificate was not taken in
payment.
MR. CHIEF JUSTICE TANEY did not sit in this cause.
There were three bills of exceptions taken upon the trial in the
circuit court, which extended over more than one hundred pages of
the printed record. The last one included the whole of the
evidence. The substance of the case is given in the opinion of the
Court, to which the reporter refers the reader.
MR. JUSTICE McLEAN delivered the opinion of the Court.
An action of assumpsit was commenced by the plaintiff, on a note
for four hundred and fifty-six dollars, and a large sum for the
hire of slaves.
The declaration contained ten counts, to which the defendant
pleaded
nonassumpsit, the statute of limitations, and
payment, on all of which issues were joined. The jury "found for
the defendant upon the issues joined as to the within note of four
hundred and fifty-six dollars, and the within account." This
finding, it is contended, is imperfect, irresponsive to the issues,
and does not dispose of the whole matter submitted by the
pleadings.
A verdict is bad if it varies from the issue in a substantial
matter, or if it finds only a part of that which is in issue, and
though the court may give form to a general finding so as to make
it harmonize with the issue, yet if it appears that the finding is
different from the issue or is confined to a part only of the
matter in issue, no judgment can be rendered upon the verdict.
Patterson v. United
States, 2 Wheat. 221. The verdict rendered was
informal, but there was sufficient to authorize the court to enter
it in form. The matter in controversy was the note stated and the
hire of the negroes, the amount claimed
Page 55 U. S. 247
for which was stated in an account, and on both these the jury
found for the defendant on the issues joined. We think this was
sufficient.
Andrew Arnold, a co-partner of the testator, was offered as a
witness, and being objected to on the ground of interest, a release
was given in evidence which on its face appeared to be duly
executed, on which the witness was sworn. Objection is made that
the execution of the release was not proved. The answer to this is
that there was no exception taken to the paper on that ground.
From the facts it appears that Joseph T. Hicks, now represented
by his executrix, was indebted to the plaintiff on the 10th
January, 1839, on a settlement, nine thousand seven hundred and
ninety-nine dollars and eighty nine cents, for the hire of negroes,
which John R. Hicks, the friend of Downey, received in a
certificate of deposit from the Mississippi Railroad Bank, situated
at Natchez, payable on the 1st of November ensuing, for which he
executed a receipt. He was not authorized to act as the agent of
Downey, but he acted as his friend in the business. Being assured
by his brother, Joseph T. Hicks, and others that the bank was good,
and as a reason for this opinion it was stated that wealthy men had
an interest in the bank, and as eight percent interest was paid for
deposits, the certificate was preferred, believing it would be
satisfactory to the plaintiff. At the time of this transaction, the
bank was indebted to Joseph T. Hicks and Arnold, for labor on the
railroad, a sum exceeding twenty thousand dollars. The mode of
payment was by drawing a check on the bank for several claims and
then crediting on the books of the bank as a deposit the sum due to
each claimant.
In February ensuing, when John R. Hicks returned to North
Carolina, where he and the plaintiff resided, he handed over to
Downey the certificate of deposit, who received it, saying he would
have preferred the gold and silver, but said nothing further in
repudiation or confirmation of the act of Hicks. In a letter dated
3 March, 1839, from J. T. Hicks and Arnold, to the bank, they
say,
"We have ever entertained the kindest feeling towards your
institution, and every disposition of indulgence to the utmost of
our ability. The time has now arrived when ruin awaits us, from a
total inability to use your post-notes to meet our
engagements,"
and they proposed to take some money and negroes for the money
due them from the bank, or to take the whole in negroes if the
money could not be paid.
For a short time after the date of the certificate of deposit,
the bank continued to pay small notes in specie, but evidence was
given conducing to show it was unable to meet its
Page 55 U. S. 248
engagements, and that in a short time it failed. Suit was
brought by Downey against the bank on the certificate of deposit in
the spring of 1840, and also for other sums, due him from Hicks
& Arnold, by arrangements with them. But nothing could be
recovered from the bank.
Evidence was offered with the view of showing that Downey
considered the certificate of deposit as good, and that he said he
could not complain of Hicks, in receiving the certificate, as he
had received a similar one on his own account.
Evidence was also given to show that on the eleventh of March,
1840, Joseph T. Hicks and Arnold, admitted the certificate of
deposit was given as collateral security, and that they considered
themselves bound to pay the debt due the plaintiff, including the
certificate of deposit and other demands. Evidence was also given
to explain this conversation as referring exclusively to other
demands, not including the certificate of deposit.
The testimony being closed, the plaintiff prayed the court to
instruct the jury
1. That the acceptance by the plaintiff of the certificate of
deposit for a precedent debt due him by Hicks or Hicks &
Arnold, was no payment or extinguishment of such debt unless there
was an express agreement to accept it as such payment and to take
the risk of the solvency of the bank.
2. That the certificate of a bank due at a future day, like the
note of any third person, if given for a preexisting debt, is not
payment and discharge thereof unless specially agreed to be so
taken, and if a receipt in full be given, it is still a question of
fact for the jury to decide whether there was such an agreement or
not, and that unless the certificate be afterwards paid by the
bank, it is
prima facie no satisfaction of the preexisting
debt.
3. That if the jury believe from the evidence that Hicks &
Arnold or Hicks, after the maturity of the certificate, admitted
their liability to make it good, such admission is evidence that
the certificate was not taken as payment absolutely, but as
conditional payment only, and that they had notice of all the facts
necessary to hold them responsible.
The court charged the jury that
"An agent is bound to act in accordance with his authority to
make his acts binding on his principal. If the agent exceeds his
authority, his principal is not bound by his act so exceeding his
authority unless the principal afterwards ratify his acts. If a
principal, after he is informed what his agent has done, ratify his
acts, he is bound by the acts of his agents although the agent may
not have had any authority to do the act so ratified at the time it
was done. An act done as an agent by one having no authority, it is
obligatory on his principal; if, in a reasonable time after, he is
fully
Page 55 U. S. 249
informed of what has been done, he does not object thereto, he
is presumed to ratify the acts, and is bound thereby."
That
"If Downey received the certificate, conditioned that he would
receive the money in discharge of the debt, if the bank should pay
it, then Downey was bound to use reasonable diligence to collect
the money due on the certificate. Reasonable diligence consists in
such exertions as a prudent man would use in his own case in the
collection of the certificate; and if Downey failed to use such
diligence to collect the money, the defendants are not liable, and
the jury should find for the defendant."
In ordinary transactions, a check on a specie-paying bank,
payable on demand, is payment. And, if the holder of the check
present it to the bank, and direct the amount to be placed to his
credit as a deposit, and the bank should fail, the loss would be
the depositor's. The deposit was at his option and for his benefit.
But the transaction of Downey and Hicks was not of this character.
Doctor Hicks, who acted for Downey, was not authorized to make the
arrangement; he acted, in his own language, "without authority, as
the friend of the plaintiff." There was no money, in fact,
deposited in the bank. It was indebted to J. T. Hicks and Arnold,
who were in partnership, in a large sum; and, to pay Downey, Hicks
drew a check for the amount, which was charged to his account in
bank, and a certificate of deposit for the same amount was given to
Downey. This arrangement was strongly recommended by the debtor,
Hicks, to his brother, the friend of Downey. Eight percent was
allowed on the certificate of deposit, which was payable in ten
months.
A note of the debtor himself, or of a third party, is never
considered as a payment of a precedent debt, unless there be a
special agreement to that effect. Had Downey received the
certificate of deposit himself, it could not have been considered a
payment unless it was so agreed. The transaction, in fact, was only
a dealing with credits. No money was drawn from the bank, or
deposited in it. By the certificate, the credit of the bank was
given in addition to the credit of the original debtor. Such a
transaction, without a special agreement to receive the certificate
in payment, would make it a collateral security only. A receipt for
the amount, executed at the time, would not affect the question. In
this view, it was error in the court not to give the first and
second instructions asked by the plaintiff, unless the charge given
substantially embraced the points stated.
In the charge given it is nowhere stated that, to make the
certificate of deposit a payment, there must be an agreement to
that effect. The jury are informed that where an agent exceeds
Page 55 U. S. 250
his authority, or acts without authority, the principal is not
bound, unless he ratify such acts. But the jury are not informed
what amounts to a ratification. They are told, where acts are done,
of which the principal is informed if he does not in a reasonable
time object thereto, he is presumed to ratify the acts, and is
bound thereby.
This, in all probability, misled the jury. Doctor Hicks, in
receiving the certificate of deposit, did not pretend that he was
authorized to receive it -- much less that he was authorized to
receive it as payment. The receipt of the certificate, under such
circumstances, by Downey, without any express agreement on the
subject, could not operate as payment. In this respect, therefore,
unless such an agreement was shown and connected with this part of
the charge, it was erroneous.
The jury were instructed that, if the certificate was received
on condition the deposit, if paid by the bank, should be applied as
payment, Downey was bound to use reasonable diligence. But the jury
were not informed what that kind of diligence was, except, "that it
consisted in such exertions as a prudent man would use in his own
case in the collection of the certificate." Where a note is
received as collateral security, and this certificate of deposit is
only the obligation of the bank, and does not, in principle, in
this respect, differ from a note, the holder is not bound to active
diligence. If the note have an endorser, and it matures in his
hands, he may be bound to take such steps as shall charge the
endorser as a bank is bound, where a note is sent to it for
collection. But he is not bound to bring suit. He is only
chargeable with a negligence, which shall operate to the injury of
the owner of the paper.
As, in less than three months from the date of the certificate
of deposit by the showing of the defendant, the post-notes of the
bank answered him no valuable purpose in satisfying the demands
against him, there is no ground to allege that the defendant
suffered by any want of diligence in the plaintiff. The bank was
insolvent, if not when the certificate was given, before it became
due. The above instruction was erroneous.
We think the court erred also in refusing to give the third
instruction, as prayed by the plaintiff. If the evidence showed,
after the maturity of the certificate, that Hicks & Arnold or
Hicks admitted their liability to make it good, the jury should
have been told by the court that if they believed such an admission
was made, it conduced to prove that the certificate was not taken
in payment.
For the above reasons, the judgment of the circuit court is
Reversed, and the cause is remanded for further
proceedings.
MR. JUSTICE DANIEL and MR. JUSTICE GRIER dissented.
Page 55 U. S. 251
MR. JUSTICE DANIEL (MR. JUSTICE GRIER concurring).
It is my opinion that the judgment of the circuit court in this
case should be affirmed upon the questions raised in the argument
1st, upon the sufficiency of the finding by the jury, as being
responsive to all the issues, or otherwise; 2dly, as to the
admissibility in evidence of the release to Arnold, in the absence
of the subscribing witness to that release, there is an entire
concurrence amongst the Judges. But with the views announced as
those of the court with respect to the authority and the acts of
Doctor Hicks, as the agent of Downey, and as to the consequences
deducible from those acts, I am constrained to disagree.
And here I must remark that, according to my apprehension of the
evidence upon the record, as to the authority vested in Doctor
Hicks, as agent, and his acts under that authority, and with
respect to the conduct of Downey, as principal, in confirmation of
those acts -- that evidence has not been accurately stated. It is
said by the court that Doctor Hicks did not act as the agent, but
merely as the friend of Downey. There seems to be some difficulty,
and even confusion, in this attempt to discriminate between these
two characters. True it is that the agent, however confided in,
does not always prove the best friend of his principal; but it is
equally true that the principal would rarely select as his agent
one whom he regarded in any other light than that of a friend. But
the record, according to my apprehension of the evidence, discloses
the most ample and explicit authority to Doctor Hicks, to settle
the claims of Downey upon the firm of Hicks & Arnold, and
exhibits instructions equally clear to Doctor Hicks, to transmit to
Downey the amount which this agent, upon the settlement made by
him, should ascertain to be owing from Hicks & Arnold to
Downey. The record discloses these further facts: 1. the settlement
made by Doctor Hicks with Hicks & Arnold; 2. the drawing of a
check by these persons in favor of Doctor Hicks, the agent, upon
the bank at Natchez, for the amount ascertained to be due to
Downey; 3. the presentation of that check by the agent, at the bank
at Natchez; 4. the proffer by the bank, of payment in specie of the
amount of the check; and the express agreement of the agent with
the bank, to commute that check and proffer of immediate payment in
money for a certificate of deposit, or post-note, payable at a
deferred period, bearing an interest of 8 percentum. So much, then,
for the acts of the agent in virtue of the authority originally
vested in him; and if there could arise a doubt as to their
validity, that doubt could apply only to the transmutation of the
demand for the money into a certificate of deposit, or deferred
payment, bearing interest. But, supposing
Page 55 U. S. 252
there had been room for doubt in this respect, on the ground
that the agent had transcended his power, that doubt must be
entirely dispelled when the conduct of the principal is considered.
Upon being informed, by the agent, of the measure he had taken, and
upon having the certificate transmitted to him, the principal said,
in reply, that although he would have preferred a payment down in
money, yet as the agent had acted for himself as he had done for
his principal, he could not find fault with the arrangement. He
expressed no apprehensions as to the prudence or safety of the
arrangement, but ratified it expressly; and in fact the proof is
clear, that at the time, and for some months after, the bank was
paying specie; and that its certificates, like the one in question,
commanded a premium in the market. In this mode was the entire
proceedings of the agent explicitly ratified.
If this apprehension of the testimony be correct, then it is
difficult to conceive how the jury could have been misled by the
instructions which were given them by the court. Indeed this Court,
so far as those instructions covered the relation of principal and
agent, have not questioned the correctness of those instructions.
But it is said, that the court erred in the opinion it expressed
upon the subject of the diligence requisite in the application for
payment of the certificate of deposit. Let it be conceded that this
opinion of the court upon the subject of reasonable diligence was
not the law; still it should not affect the decision in this case,
because that opinion had no connection with the true character of
the case, which depended upon a phase of the evidence to which that
instruction had no application, and could not influence. If the
agent of Downey was authorized to settle, and had settled with the
debtors of Downey, and the latter had accepted from his debtors
what he acknowledged was payment, at this point the transaction
closed, and unless the parties making payment could be affected by
showing fraud or bad faith, the whole matter was terminated by the
agreement between the parties. Downey had an indisputable right to
receive payment in any medium he might choose, and it is not in the
power of a court to control his first choice and give him the right
to a second, or to visit, upon those who have applied their means
to his satisfaction, and by so doing prevented them being available
to themselves to any other possible purpose, the mischiefs
resulting from his choice.
But it is said by the Court that Hicks & Arnold,
subsequently to the failure of the bank, admitted their liability
to Downey for this demand. Here, again, I conceive that the
evidence in this cause has been greatly misapprehended, and that a
correct understanding of the testimony will show that the
Page 55 U. S. 253
admission which has been brought to bear upon this transaction,
related to a posterior and wholly different liability of the same
parties to a transaction in which Hicks and Arnold had deposited a
certificate of deposit of this bank as collateral security for a
debt from Arnold, and that security turning out not to be
available, they held themselves bound to satisfy the demand it was
designed to secure. This subsequent transaction had no connection
whatever with that in which the check in question was given, and on
which payment in money was proffered, but for which the certificate
of deposit was, by express agreement of the agent, ratified by his
principal, taken in full satisfaction.
Order
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the Southern
District of Mississippi, and was argued by counsel. On
consideration whereof, it is now here ordered and adjudged, by this
Court, that the judgment of the said circuit court in this cause
be, and the same is hereby, reversed with costs, and that this
cause be, and the same is hereby, remanded to the said circuit
court, with directions to award a
venire facias de
novo.