Where a suit was brought upon a bill of exchange in one of the
state courts of Louisiana, and by that court was transferred to
another state court for the purpose of being connected with certain
proceedings in insolvency, and this transfer was pleaded in bar in
the circuit court of the United States to the prosecution of the
suit in that court upon the bill, the plea was not good.
The jurisdiction of the courts of the United States over
controversies between citizens of different states cannot be
impaired by the laws of the states which prescribe the modes of
redress in their own courts or which regulate the distribution of
their judicial power.
The insertion of the bill amongst the debts of the insolvent
upon his schedule is evidence of the fact of notice, and the
sufficiency of the evidence was a question for the jury, and is not
subject to review in this Court.
On the 2d of January, 1850, Stone, being then in New Orleans,
purchased from Hyde & Oglesby a bill of exchange, of which the
following is a copy, with the notarial protest thereof.
"$1,500 NEW ORLEANS, January 2d, 1850"
"Sixty days after sight of this second of exchange, first
unpaid, pay to the order of ourselves fifteen hundred dollars,
value received, which place to account W. Barton, as advised."
"HYDE & OGLESBY"
"
To P. Frothingham, Esq., Boston"
"Endorsed: Pay H.L. STONE"
"HYDE & OGLESBY"
"H.L. STONE"
"By H. W. HERBERT,
Att'y"
"[Acceptance on face:] January 15, 1850"
"PETER FROTHINGHAM"
"COMMONWEALTH OF MASSACHUSETTS"
"
Suffolk, City of Boston, ss:"
"On this nineteenth day of March, in the year of our Lord one
thousand eight hundred and fifty, I, Henry Clark, notary public, by
legal authority admitted and sworn, and dwelling in the City of
Boston, at the request of J. J. Loving, Esq., cashier North Bank of
Boston, went with the original bill of exchange, of which the
foregoing is a true copy, to the counting room, in this city, of
Peter Frothingham, the acceptor, and presenting said bill to him,
demanded payment thereof,
Page 61 U. S. 171
the time therein limited and grace having elapsed, to which he
answered, that said bill would not be paid."
"I sent notice of the nonpayment thereof to the drawers and
first endorsers, requiring payment of them, by mail, to New
Orleans."
"Wherefore I, the said notary, at the request aforesaid, have
protested, and by these presents do solemnly protest, against the
drawers of said bill, and endorsers, acceptor, and all others
concerned therein, for exchange, re-exchange, and all costs,
charges, damages, and interest, suffered and sustained, or to be
suffered and sustained, by reason or in consequence of the
nonpayment of said bill."
"Thus done and protested, in Boston aforesaid, and my notarial
seal affixed, the day and year last written."
"[Signed] HENRY CLARK [Seal]"
"
Notary Public"
Stone brought suit upon this bill in the Fifth District Court of
New Orleans in March, 1853, whereupon the defendants filed an
exception to the jurisdiction of the court upon the ground that
they had previously made a surrender of their property to their
creditors in the Third District Court of New Orleans, and that all
proceedings were stayed against them. The exception further stated
that the plaintiff was put upon their schedule as a creditor;
wherefore they prayed that the suit of plaintiff be transferred and
cumulated with the insolvency proceedings in the Third District
Court of New Orleans.
On the 31st of May, 1853, the Fifth District Court sustained the
exception and ordered the costs to be paid out of the mass of
property surrendered.
On the 1st of May, 1854, Stone brought his action in the circuit
court of the United States.
The defendants pleaded in abatement that Stone was a citizen of
Louisiana, and therefore incompetent to sue in the federal court,
and in bar that the question had become
res judicata by
the maintenance of the exception in the Fifth District Court. The
case went to trial upon an agreed statement of facts, whereof those
recited above are the most material, and at November term, 1855,
the court gave judgment for the plaintiff. The defendants brought
the case to this Court by a writ of error.
Page 61 U. S. 173
MR. JUSTICE CAMPBELL delivered the opinion of the Court.
The defendant in error instituted his suit in the circuit court
as the endorsee of a bill of exchange, payable in Boston, of which
the plaintiffs in error were drawers, payees, and endorsers and
which bears date at New Orleans.
The defendants answered the petition and averred that the
plaintiff was a citizen of Louisiana, and the said bill of exchange
a Louisiana contract, and governed by the law of that state. That
the plaintiff resided in Louisiana when the defendants surrendered
their property in insolvency in the Third District Court of New
Orleans, and to the proceedings therein the plaintiff became a
party. That subsequently thereto the said plaintiff instituted a
suit on the said bill of exchange in the Fifth District Court of
that city and, on an exception filed by the defendants informing
that court of those facts, the same was sustained and the said suit
was transferred to the Third District Court of New Orleans and made
part of the aforesaid insolvent proceedings therein, by which the
right of plaintiff to have and maintain this action in the circuit
court is barred, and the question has become
res
judicata.
With this exception to the jurisdiction of the court, the
defendants filed a general denial of their indebtedness to the
plaintiff. The cause was submitted to the circuit court upon
Page 61 U. S. 174
an agreed statement, and judgment was rendered for the plaintiff
without the intervention of a jury.
From that statement it appears that the bill was duly protested
for nonpayment; and that notary in Boston certifies, "I sent notice
of the nonpayment to the drawers and first endorsers, requiring
payment of them, by mail, to New Orleans, on the day of the
protest." That the plaintiff has always been a citizen of
Massachusetts; that his family resided there, and he had a
commercial establishment there; that he is a partner in a
commercial establishment at New Orleans, and generally spent a
portion of the winter months in that city, and then returned to
Massachusetts; and that this bill was purchased in the City of New
Orleans on his own account. It further appears that the plaintiff,
before the commencement of this suit, sued the defendant in the
Fifth District Court of New Orleans, on this bill; that the
defendant appeared and answered that the Fifth District Court had
no jurisdiction because the defendant had made a surrender of his
property to his creditors in the Third District Court of New
Orleans, which surrender had been accepted, and all proceedings
stayed against him, and that the plaintiff was put upon his
schedule as a creditor, and he prayed that the suit of the
plaintiff be transferred and cumulated with the insolvency
proceedings in the Third District Court in New Orleans; that
thereupon the Fifth District Court, before the commencement of the
present suit, decreed that the exception herein filed be maintained
and the costs paid out of the mass of the property surrendered. It
further appears that the plaintiff performed no act to make himself
a party to the proceedings in insolvency in the Third District
Court, and that no notice of those proceedings had ever been served
on him, but that the bill of exchange described in his petition was
enumerated among his debts, and the firm of H.L. Stone & Co.,
of New Orleans, which was supposed to be the holder of the bill,
was placed on the schedule among the other creditors of the
insolvents.
The question whether a foreign bill of exchange, sold by a
merchant in New Orleans to a person who has a commercial house
there, but whose domicil is at the place where the bill is payable,
and where he resided when the proceedings in insolvency were
instituted, is affected by them when he does not make himself a
party to those proceedings, is not involved in this case. The
defendant did not plead the pendency of those proceedings, or the
decree of the Third District Court, as a bar to the present suit,
or afford any proper description of them to raise that question.
The exception of the defendant is that certain proceedings pending
in the Third District Court were
Page 61 U. S. 175
successfully pleaded in the Fifth District Court of New Orleans,
as a cause for the removal of a suit commenced by the plaintiffs
against the defendants in that court to the other, and that the
decision of the Fifth District Court upon that plea ought to
preclude the plaintiff from maintaining this suit in the circuit
court of the United States. But this Court has repeatedly decided
that the jurisdiction of the courts of the United States over
controversies between citizens of different states cannot be
impaired by the laws of the states, which prescribe the modes of
redress in their courts, or which regulate the distribution of
their judicial power. In many cases, state laws form a rule of
decision for the courts of the United States, and the forms of
proceeding in these courts have been assimilated to those of the
states, either by legislative enactment or by their own rules. But
the courts of the United States are bound to proceed to judgment,
and to afford redress to suitors before them, in every case to
which their jurisdiction extends. They cannot abdicate their
authority or duty in any case in favor of another jurisdiction.
Suydam v.
Broadnax, 14 Pet. 67;
Union Bank
v. Jolly, Adm'r, 18 How. 503.
It follows, therefore, that the decision of the Fifth District
Court of New Orleans transferring the suit, commenced by the
plaintiff on his bill against the defendants, in that court, and
directing it to be cumulated with the proceedings in bankruptcy
which were pending in another court of the state, did not disable
the plaintiff from commencing a suit in the circuit court, nor can
it form a proper declinatory exception to its jurisdiction.
The plaintiffs in error object that the evidence before the
circuit court did not authorize the court to infer that they had
notice of the dishonor of their bill. The notary states that he
sent a notice to them at New Orleans on the day that the protest
was made. In addition to this evidence, it is shown that the bill,
after its maturity, was enumerated among the debts of the plaintiff
in error on the schedule that was returned to the Third District
Court, and that they successfully pleaded their return to the
prosecution of a suit by the defendant in error in another court. A
plaintiff may prove, by admissions of a defendant, that all the
steps necessary to charge him as an endorser or drawer of a bill of
exchange have been taken. Proof of a direct or conditional promise
to pay after a bill becomes due, or of a partial payment, or of an
offer of a composition, or of an acknowledgment of his liability to
pay the bill, has been held to be competent evidence to go to a
jury of a regular notice of the dishonor of a bill, and to warrant
a jury in presuming that a regular notice had been given.
Page 61 U. S. 176
Thornton v.
Wynn, 12 Wheat. 183;
Rogers v. Stevens, 2
T.R. 713;
Patterson v. Beecher, 6 J.B.Moore 319;
Campbell v. Webster, 2 M.G.Sc. 253;
Union Bank v.
Grimshaw, 15 La. 321; 3 Mort.N.S. 318. The effect of such
evidence in the particular case must be determined by the jury, and
their decision cannot be reviewed by an appellate court. In the
present case, the matter of fact was submitted to the circuit
court, and its determination on this subject cannot form the ground
of an exception here.
Judgment affirmed.
