46 Mo. 357 | Mo. | 1870
delivered the opinion of the court.
This suit was brought upon, an ordinary bill of exchange for $3,000, drawn by defendants, October 5, 1866, to the plaintiff’s order, at sight, upon E. Kelley & Co., of New-York city, and the plaintiff recovered judgment, which was affirmed by the District Court.
It appears that the defendant had no funds in the hands of the drawees, and had no credit with them except as follows: Arrangements had been made with the National Banking and Insurance Company, of St. Louis, to procure a credit with the drawees, and said company had agreed that if defendant would notify them of each draft as drawn, they would'at once procure its payment by Kelley & Co. ; and it appears that defendant had been in the habit of depositing with said insurance company, of drawing upon said Kelley & Co., and of notifying the company of each draft, and that.the latter company at once advised tho drawees to pay the same, which drafts were uniformly paid and charged, not to defendant, but to the insurance company. When the bill in suit was sold to plaintiff, defendant’s officers failed to notify the insurance company, and the result was that no credit was procured with the drawees ; they had no authority to pay it, and it wont to protest.
Several technical objections were raised at the trial to the proof of presentation, to the notice, etc. To these objections, oven if well taken, it might be sufficient to say that the request to again present the bill, and the promise that it should bo met, with knowledge of the facts as appearing both by the pleadings and evidence,
The general doctrine, that when the drawer of a bill has failed to provide funds to meet it, and has no reasonable expectation that it will be met, demand of payment and notice are unnecessary, is universally received, and we have only to consider whether, under the state of facts developed by the record, they were required in this case; and to arrive at a conclusion, we should first consider the grounds upon which the exception to the rule requiring demand and notice is based, and, second, the various recognized modifications of the exception.
The chief reason given for excusing demand and notice, where there is no fund to draw on, is the fact that the drawer is not prejudiced by their omission. Ordinarily he is supposed to have recourse upon the drawee, upon dishonor of the bill, for the reason that he is supposed to have placed funds in his hands to meet it; and reasonable presentation and demand and prompt notice are required in order to enable him at once to recover back the fund so placed. We must treat defendant’s St. Louis correspondent as its agent — though somewhat more than agent —¡for whoso acts no one else is responsible; and it can not be said that by making deposits with such agent, the bill had been provided for. No funds had been placed in the hands of the drawees, and no credit had been obtained for such a bill as this; and when it was returned, the defendant had no resource, and nothing was lost. In the language of Lord Denman, in Terry v. Parker, 6 Ad. & El. 502: “If the bill were presented and paid by the drawee, the drawer would become indebted 'to him in the amount, instead of being indebted to the holder of the bill, and would be in no way benefited by such presentment and payment.”
The modifications to the exception to the rule requiring demand
Tbe relations of the drawer and drawees of tbe bill in controversy do not come within either of those modifications, There was no account between them; tbe drawer had no such credit as could provide for tbe bill, and its officers knew it could have it only as procured through its St. Louis correspondent, upon notice; they could have no reasonable expectation that such credit would be procured without notice, and its omission was a negligence that operated -equally injuriously upon the plaintiff as though, in the sale of the bill, they bad committed an actual fraud. It is unnecessary to say what might have been tbe reasonable expectation of tbe drawer if its St. Louis correspondent were alone in fault. But tbe fault was that of tbe defendant, in failing to take tbe essential step provided for, for tbe St. Louis company could not act without tbe notice.
Tbe record further shows that after tbe protest and return of tbe bill defendant’s cashier expressed bis regret that it had not been provided for, and requested tbe holder’s agent to again send it forward, promising that funds should be provided to meet it when presented. It was, therefore, sent to tbe bolder in Ohio, and, through tbe channel in which it bad formerly passed, it was again presented to Kelly & Co., and again protested. In tbe meantime tho National Banking and Insurance Company, of St. Louis, had provided the fund to meet it, which remained a few
The other judges concurring, the judgment will be affirmed.