Harness v. Davies Cnty. Sav. Ass'n

• Decision Date: 31 August 1870
• Parties: CHARLES HARNESS, Defendant in Error, v. DAVIES COUNTY SAVINGS ASSOCIATION, Plaintiff in Error.
• Court: Missouri Supreme Court

46 Mo. 357

CHARLES HARNESS, Defendant in Error,

v.DAVIES COUNTY SAVINGS ASSOCIATION, Plaintiff in Error.

Supreme Court of Missouri.

August Term, 1870.

Error to Fifth District Court.

Hall & Oliver, and McFerran, for plaintiff in error, urged among others the following point:

The plaintiff in error, by its course of business with the drawee, through the National Banking and Insurance Company of St. Louis, had reasonable cause for believing that its draft would be duly honored and paid upon presentation, and was entitled to notice on both the first and second presentation of said draft. (Commercial Bank v. Barksdale et al., 36 Mo. 563; Edw. Notes & Bills, 451; Lilley v. Miller, 2 Nott & McCord, 257; 12 Curtis, 250, note.)

Vories & Vories, for defendant in error.

I. There was no necessity on the part of the holder of the bill to either put the bill in circulation or present the same for payment. The defendant had no funds in the hands of the firm upon which the bill was drawn; in fact, the defendant had never had any transactions with Kelly & Co. (12 East, 170; 4 M. & Seld. 226; Cathell v. Goodwin, 1 Harris & Gill, 468; 28 Barb. C. C. 390; 1 Pars. Notes & Bills, 451, 544, 548; Edw. Notes & Bills, 598, 606, notes, also side pages 271, 275.) The question is, had defendant prepared for the taking up of this bill, and was he injured by the non-presentation and want of notice? (Dolfus v. Frosch, 1 Denio, 367; Valk v. Simmons, 4 Mason, 113; 17 Wend. 94; 4 Hill, N. Y., 263; Little v. Phœnix Bank, 2 Hill, 425.)

II. After the bill was presented for payment, and dishonored, the defendant, with a knowledge of all the facts, promised to pay the bill, which is prima facie evidence of due notice. (Dorsey v. Watson, 14 Mo. 59, 399; Edw. Notes & Bills, 396-8, 423; Chit. on Bills, 326; 23 Wend. 379; Linville v. Welsh, 29 Mo. 203.)

III. There was no consideration for such assent on plaintiff's part to a second presentment, and hence his cause of action being then good against defendant, he neither waived it nor abandoned it. It was merely a nude promise to again present the bill. (1 Pars. Cont. 427-36; Wesson v. Horner, 25 Mo. 81.)

BLISS, Judge, 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.

The petition sets forth the drawing and negotiating of the bill, its various transfers, its due presentation to the drawees for payment, and the protest; also, that after due notice of its dishonor, defendant's cashier requested the plaintiff again to present it, promising to provide means to meet it, but that it was again presented and payment refused. The petition charges that neither at the time the bill was drawn, nor at any time thereafter, had the defendant any funds in the hands of the drawees to meet it. The answer admits the drawing of the bill, but denies the putting it in circulation and its presentment and notice within a reasonable time; alleges that defendant requested the plaintiff again to present the same for payment, but that he failed to present it within a reasonable time thereafter. The answer denies that defendant had made no provision for meeting the bill, and sets up its arrangements in regard to it to show that it had reason to believe the bill would be paid.

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 the 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 went to protest.

Several technical objections were raised at the trial to the proof of presentation, to the notice, etc. To these objections, even if well taken, it might be sufficient to say that the request to again present the bill, and the promise that it should be met, with knowledge of the facts as appearing both by the pleadings and evidence, cures all those informalities and admits or waives the presentment and notice. (Clayton v. Phipps, 14 Mo. 399; Dorsey v. Watson, id. 59.) But the court gave an elaborate instruction in relation to the defendant's liability in consequence of not having placed funds with the drawee to meet the bills, instructing them upon a supposed state of facts that defendant had no reasonable expectation that funds would be placed there for that purpose.

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...