22 N.H. 283 | Superior Court of New Hampshire | 1851
The facts presented in this case raise several questions for our consideration. The amount claimed is $9,263.68, being the sum alleged to be due from the defendants to the plaintiffs, August 1st, 1848, the date of the plaintiffs’ writ. Of this sum, $6,369.11, were for drafts drawn by the defendants upon the plaintiffs and accepted by them; but
Bills of exchange, technically speaking, do not very generally enter into the business transactions of this State, and the particular liabilities of the parties to a draft or bill have not undergone very frequent discussions in our Courts. The principles, however, which govern this class of mercantile paper, appear to be well settled in those jurisdictions where the questions pertaining to it have come under consideration.
Ordinarily, a bill of exchange has, in the first instance, three parties to it, the drawer, the drawee, and the payee. It is not unusual, however, for the drawer to make the bill payable to his own order, and then indorse it and ¡rat it into circulation. The drafts in this case appear to have been drawn in that way. After the bill has passed by indorsement from the hands of the original parties to it, and becomes holden by those who are not privy to its inception and real consideration, the drawee, who is the acceptor, unless the bill shall have been dishonored by his refusal to accept it, is the party primarily holden; the drawer is the second who is liable, and the payee, who is the first indorser, is the third. Saxton v. Peat, 2 Camp. Rep. 155, note; Smith v. Knox, 3 Esp. Rep. 46. The contract of the acceptor, by his acceptance, is, that he will pay the bill, upon due presentment thereof, at its maturity, or its becoming due. The contract of the drawer, and of the indorsers, also, respectively is, not only that the bill shall be duly accepted, but that it shall be duly paid by the acceptor, upon due presentment for payment; and if not then paid, and due protest is made, and due notice of dishonor is given to them respectively, they will, upon demand, pay the bill, and also the damages and expenses accruing to the holder thereby. Story on Bills, § 323; Chitty on Bills, ch. 9, pp. 384, 385, 8th ed. While, then, ordinarily, the contract of the
So far as the holder of the bill is concerned, it is immaterial what may be the real and private relations existing between the drawer and acceptor in regard to it. He is to pursue the legal course to charge them, and has his remedy accordingly, regardless of their private undertakings to each other. But as between the drawer and drawee, their relations to each other may be materially changed, according to the character of the real transactions between them. Thus, where the drawer of the bill has, at the time of drawing it, funds in the hands of the drawee, upon the strength of which the draft is drawn and the acceptance made, the drawee occupies the position upon the bill that a maker does upon a note ; his liability is absolute ; and the drawer occupies the position of a surety. Clark et al. v. Delvin, 3 Bos. & Aul. 363, 366; Story on Bills, §§ 113, 119; Munroe v. Easton, 2 Johns. Cases, 75 ; Berry v. Robinson, 9 Johns. Rep. 121; May v. Coffin, 4 Mass. 341.
But where the drawee is a mere accommodation acceptor, and the drafts are drawn to facilitate the business transactions of the drawer, their'positions are changed. The drawer stands in the position of maker and the drawee in that of surety. Stedman v. Martinnant, 13 East’s Rep. 427; Collott et al. v. Haigh, 3 Camp. Rep. 281; Young & Gill v. Hockley, 3 Wils, 346; Bagnal et al. v. Andrews, 7 Bing. Rep. 217; Story on Bills, §,$ 113, 119 ; Whitwell v. Brigham, 19 Pick. 117.
But whether the drawee be an accommodation acceptor or not, he cannot maintain an action upon a draft until he has paid it or done some act equivalent to payment. Vanderheyden v. De Paiba, 3 Wilson, 528 ; 2 Wm. Black. 839; Young & Gill, v. Hockley, 3 Wilson, 346 ; Parker v. United States, 1 Peter’s C. C. Rep. 262; Greenleaf v. Maher et al. 2 Wash. C. C.
Neither are the plaintiffs aided by the transactions in regard to the assignment. The fact that the holders of the drafts signed a composition deed and agreed to discharge the acceptors upon certain terms, would have discharged the drawers from liability to them, if the drafts had been based upon funds in the hands of the drawees; because in such case the liability of the drawees would be antecedent to that of the drawers, and the contract of discharge would be prejudicial to the interests of the drawers.
But there is a further and complete answer to this position. These drafts having been drawn for the accommodation of the drawers, they are themselves principals on the bills. They occupy a position antecedent to that of the acceptors. The acceptors are the sureties, and any discharge of them by the holders cannot alter the liability of the principals. A discharge of a party to a bill does not affect the liability of those whose position is antecedent to the party discharged. It discharges only those who are subsequently liable. Sargent v. Appleton, 6 Mass. 85 ; English v. Dailey, 2 Bos. & Pul. 61; 3 Esp. Rep. 49 ; Mallet v. Thompson, 5 Esp. Rep. 178; Walwyn v. St. Quintin, 1 Bos. & Pul. 652.
In the discussion of this point, we have considered the drafts in question as accommodation paper. It is not so stated in the case in distinct terms, but they are so treated by the counsel on both sides, and such, we presume, was their intention the Court should understand them to be, by the facts in the case..
So far, then, as the drafts which were not due at the time of the commencement of the suit, and which the plaintiffs had not paid, are concerned, the action cannot be sustained. The suit ■ on them was prematurely brought. Striking out from the plaintiff’s claim the amount of these drafts, and there is left the sum of $2,894.17, being for balance due on account of acceptances paid for the defendants, and goods sold to them prior to the commencement of the suit. Can the plaintiffs have judgment for that sum ?
Had the unpaid drafts been specifically drawn upon those goods, the avails might perhaps have been appropriated to their ■liquidation; because a lien would thereby have been created upon the goods, and they could not afterwards be appropriated for any other purpose. McMenomy et al. v. Ferrers, 3 Johns. Rep. 71; Peyton v. Hallet, 1 Caines’ Rep. 363 ; Powell v. Gordon, 2 Esp. 735; Rowe v. Dawson, 1 Vez. 331; Yates v. Groves, 1 Vez. jr. 280. But the drafts were general. At the time of the acceptances the goods were not even credited to the defendants, and no authority existed in the plaintiffs to appropriate them to the payment of paper which was not due, and for which they had themselves made no advances. Nor, upon the facts presented at the time the drafts fell due, and situated as these parties then were, could the funds arising from the sale of these goods be appropriated to the payment of the drafts, but, so far as necessary, they should go to the payment of the oldest legal claims. When a debtor makes a payment, he has a right to direct to what debt it shall be applied. In case he gives no direction, the creditor may make the application to claims then due. But where no application is made by either, the law will make the application to the oldest legal claim then due, if there is no particular equity or reason for a different course. Caldwell v. Wentworth, 14 N. H. Rep. 431; Sawyer v. Tappan, 14 N. H. Rep. 352. When these funds were received neither party was in a situation to make any particular application of the same. The defendants had been sued and did not know till
The sales of the goods amounted to $5,245.85, which sum far exceeds the balance of $2,894.17; and although these funds cannot be treated as a set-off, nor as a full bar to the plaintiffs’ action under the present state of the pleadings, yet there is no objection to their consideration in the reduction of damages; and so much of the same as shall be necessary to pay the plaintiffs’ claim of $2,894.17, is properly to be applied for that purpose. Pemigewassett Bank v. Brackett, 4 N. H. Rep. 557; Wagner v. Wagner, 9 Barr. 214. The action therefore cannot be maintained for any sum in damages. The costs will be regulated by the Court below.