Susan Lawrence, Plaintiff In Error v. Robert Calmont, Hugh Calmont, and William Johnson Newell, Defendants

• Decision Date: 01 January 1844
• Citation: 2 How. 426,11 L.Ed. 326,43 U.S. 426
• Parties: SUSAN LAWRENCE, PLAINTIFF IN ERROR, v. ROBERT McCALMONT, HUGH McCALMONT, AND WILLIAM JOHNSON NEWELL, DEFENDANTS
• Court: U.S. Supreme Court

43 U.S. 426

2 How. 426

11 L.Ed. 326

SUSAN LAWRENCE, PLAINTIFF IN ERROR, v. ROBERT McCALMONT, HUGH McCALMONT, AND WILLIAM JOHNSON

NEWELL, DEFENDANTS.

January Term, 1844

THIS case was brought up by writ of error, from the Circuit Court of the United States for the southern district of New York.

The facts were these:

Robert McCalmont and the other defendant in error, were co-partners in trade, in London, trading under the name of McCalmont, Brothers and Company.

In the year 1838, J. and A. Lawrence were merchants who resided in Brooklyn, near New York, in the same house with their mother, Susan Lawrence the plaintiff in error. Their counting house was in the city. McCalmont, Brothers and Co. had agents, J. Gihon and Co., also residing in New York.

On the 21st of November, 1838, J. and A. Lawrence obtained from the agents at New York the following letter:

New York, 21st Nov. 1838.

Messrs. McCalmont Brothers and Co., London:

Gent.:—We have granted to Messrs. J. and A. Lawrence of this city, a credit with you of 10,000, say ten thousand pounds sterling, to be availed of within six months from this time, in such drafts as they may direct, at four months' date, against actual shipments of goods for their account, and coming to their address; said goods to be forwarded through you or your agents.

The above credit if granted under their engagement to cover your acceptances before maturity, by direct remittances from this country of approved sixty day bills—seconds of exchange to be handed to us for transmission to you. You are to charge one per cent. commission

on the amount accepted, and to keep the account at five per cent. interest per annum. We are, gents., your ob. st., JOHN GIHON and CO.

In the course of the trial, William Davidson being under examination, the plaintiff's counsel asked the witness whether the letter of credit, of 21st November, 1838, was delivered on an agreement for the guarantee. To this evidence the defendant's counsel objected, as irrelevant and inadmissible. The judge decided that it was admissible for the purpose of showing the nature and character of the plaintiff's claim on J. and A. Lawrence, but not to vary the construction of the guarantee, and admitted the evidence; to which the defendant's counsel excepted.

The witness then testified that the said letter of 21st November, 1838, was delivered on Mr. Lawrence's proposal of his mother's security for the credit, which will be presently mentioned.

On the 22d of November, 1838, this letter was transmitted to England with the following endorsement:

New York, Nov. 22, 1838.

Messrs. McCalmont, Bros. and Co.

Gent.:—You will please accept our, Mr. A. T. Lawrence's, dfts. for amount of within credit, in such amounts, and at such times, as he may draw. Your ob. st.,

J. and A. LAWRENCE.

On the 10th of December, 1838, Mr. A. T. Lawrence, being then in England, received the above letter, and forwarded it to London, accompanied by the following letter from himself:

Nottingham, Dec'r, 10th, 1838.

Messrs. McCalmont, Bros. and Co., London:

Gent.:—I now hand you enclosed, Messrs. J. Gihon and Co.'s letter of credit on you in favor of my house, J. and A. Lawrence, endorsed over to me for 10,000 sterling, and will you please write me, giving authority to draw for the amount? I observe that one of the conditions of the credit is, that goods to the amount of the same shall be shipped through your agents. Will you please inform me the names of the houses in Liverpool and London, though whom you would wish the shipments made? Please address me at this place. Respectfully, your obt. servt.,

A. T. LAWRENCE.

On the 11th of December, 1838, McCalmont, Brothers and Co., acknowledged the receipt of the above letter as follows:

London, 11th Dec. 1838.

A. T. Lawrence, Esq., Nottingham:

Sir:—We have to acknowledge receipt of yours of yesterday's date, covering the letter of credit in your house's favor, opened by our mutual friends, Messrs. John Gihon and Co., say to the extent of ten thousand pounds sterling, to be availed of by drafts on us at four months against actual shipments of goods for their account, and going to their address; said goods, if shipped from Liverpool, to be forwarded through our agent there, Nathan Cains, Esq., India Buildings, or from hence through us, or such shipping agent as you may appoint; but in that case, a copy of the bill of lading to be lodged with us prior to presentation of your drafts, and such drafts to appear within thirty days from date of shipment. This credit to be availed of within six months from the 21st ulto., and your house undertaking to comply with the other stipulations stated in it by Messrs. J. Gihon and Co., viz.: that they engage to cover our acceptances before maturity, by direct remittances from United States by approved bills of sixty days, the seconds to be forwarded to us through our agents, Messrs. John Gihon and Co., your house to pay us one per cent. Commission on the amount of our acceptances and disbursements; the account to be kept at five per cent. interest per annum, which credit we hereby confirm to you, trusting that in opening an account with your respectable firm it will lead to a mutually agreeable and profitable correspondence.

We remain, sir., your most obedt. servt.,

McCALMONT, BROS. and CO.

It is to be understood that the above credit is the only one you have in Europe.

McC., BROS. and CO.

On the 17th of December, 1838, Susan Lawrence, the plaintiff in error, wrote the following letter:

Messrs. McCalmont, Brothers and Co., London:

Gent.:—In consideration of Messrs. J. and A. Lawrence having a credit with you house, and in further consideration of one dollar paid me by yourselves, receipt of which I hereby acknowledge, I engage to you that they shall fulfil the engagements they have made and shall make with you, for meeting and reimbursing the payments which you may assume under such credit at their request: together with your charges, and I guaranty you from all payments and damages by reason of their default.

You are to consider this a standing and continuing guarantee without the necessity of your apprizing me, from time to time, of your engagements and advances for their house; and in case of a change of partners in your firm or theirs, the guarantee is to apply and continue to transactions afterwards between the firms as changed, until notified by me to the contrary. Yours, respectfully,

SUSAN LAWRENCE.

Under these documents, advances were made and settled; and for the transactions within the six months, from November 21, 1838, nothing was claimed.

At the expiration of the six months the credit was renewed by the following letter:

New York, June 12th, 1839.

Messrs. McCalmont, Brothers and Co., London:

Gent.:—With reference to our letter of 21st November last, opening a credit on your good selves, favor Messrs. J. and A. Lawrence for 10, 000, to be drawn within six months from that date, and which expired by limitation last month. We hereby renew the same for a like period from the date hereof, and under the same stipulations, with this proviso, that the bills be drawn by, or in favor of parties, permanently resident in Europe; and if made from the continent, they be made at the customary date, say three months.

We remain, &c.,

JOHN GIHON and CO.

In the course of the trial, William Davidson, again called by the plaintiff's counsel, was asked, whether at the time of the renewal of the credit in June, 1839, a conversation took place with Mr. Lawrence respecting the application of the guarantee to it; to which the defendant's counsel objected; but the judge admitted the same, to show the nature and character of the plaintiff's claim on J. and A. Lawrence, but not to affect the construction of the guarantee; to which the defendant's counsel excepted. The witness then testified that Mr. Lawrence, on that occasion, called on him, and asked if it was agreeable for witness' firm to continue the credit for 10,000. Witness replied, that he had no objection to continue it on the same terms as before; stating that it was to be on his mother's guarantee attached to the previous credit; he answered that he did not expect it on any other terms, or without the guarantee. Witness was in a hurry, and said that he should refer to it, to find out whether the guarantee was for a particular credit, or was a continuing guarantee.

Witness afterwards referred to the letter of guarantee, and subsequently drew up the letter continuing the credit, and delivered it to Mr. J. D. Lawrence, and exhibited to him his mother's letter; he read it.

The plaintiffs' counsel then offered to prove, that both the house of J. Gihon and Co., and J. and A. Lawrence acted upon the guarantee as a continuing guarantee. To this, the defendant's counsel objected; but the judge admitted the evidence, for the purpose of showing that both acted upon it as a continuing guarantee, but not to vary the construction of the guarantee itself; to which the defendant's counsel excepted. The witness then testified, that Mr. Lawrence and he both agreed that it was a continuing guarantee, and as such no new letter was needed.

Witness testified that their house received sundry bills, receivable, understood and represented to be business paper, not at maturity when received, to be collected and realized, as far as they could do it, and the proceeds to be remitted to the plaintiffs for the credit. It was a distinct understanding between witness' firm and J. and A. Lawrence, that they received this paper subject to its encashment, on being paid at maturity. Witness has had a statement made of the proceeds of the paper thus deposited. Witness' firm had realized from it, and remitted 1,309 16s. 6d. The amount due on the plaintiffs' said account with J. and A. Lawrence, crediting those remittances, and charging interest to the third day of May, instant, is 9,712 11s. 4d. amounting in...