Buchanan v. Smith
Decision Date | 01 December 1872 |
Citation | 21 L.Ed. 280,16 Wall. 277,83 U.S. 277 |
Parties | BUCHANAN v. SMITH |
Court | U.S. Supreme Court |
APPEAL from the Circuit Court for the Northern District of New York, where the proofs, as conceived by the reporter, made a case essentially thus:
The Cascade Paper Manufacturing Company of Penn Yan, New York, had for a long time purchased things used in the manufacture of paper, of Buchanan & Co., merchants in the city of New York, and had habitually given notes in payment. Its dealings with them were considerable, and its credit so good that it was not limited as to time; that when extensions were asked they were given, and that up to March 3d, 1869, its notes had never lain over or been protested for nonpayment. The notes of the company were indorsed by its officers individually, except in one instance, when accident prevented. On the 3d of March, 1869, however, the company were unable to meet a note to Buchanan & Co., which came due on that day, and telegraphed the fact to these last, adding that they had sent that day a draft for half the amount, and a new note at thirty days for the balance. Buchanan & Co. replied (apparently by telegraph on the same day), that they would protect the note; but in a letter of March 4th, reciting these facts (apparently not having received the promised half remittance and new note), they say:
On the 21st of March, 1869, the company's mills were destroyed by fire. The loss was about $80,000; the insurance $45,000 or $47,000. From that time the company did no more business; and, as it afterwards appeared, it was from that time insolvent. At the time of the fire Buchanan & Co. held six notes of the company, to wit:
One for $1000, due March 25th, 1869.
One for $2501, due April 2d, 1869.
One for $1141, due April 6th, 1869.
One for $2293.19, due May 4th, 1869.
One for $2305.94, due June 4th, 1869.
One for $2318.69, due July 3d, 1869.
Two days after the fire the company wrote to Buchanan & Co., informing them of the fact, and, apparently, of the magnitude of their loss. These last replied March 23d, expressing sympathy, and 'a trust that when you get things more settled they may not turn out as bad as you now expect.' They promised in the same letter to take care of the note of the company due the 25th, and to advise in a few days about the other coming due April 2d.
Just before this fire, Mr. Goodwin, one of the firm of Buchanan & Co., had set off on a tour of business, westward. He reached Penn Yan immediately after the fire, and had an interview with the officers of the company, who informed him of the amount of their loss and insurance, and spoke of the notes, and said, They said that all they wanted was their insurance-money to pay all they owed, and as soon as they got that they would commence to pay. They asked to have the notes renewed, which was afterwards done. They said the concern would be solvent if they got their insurance-money, and expressed their expectation of getting it. No statement was made of the company's debts, and Buchanan & Co., according to their own positive testimony, had no knowledge of any particulars, or of the fact of their debts beyond supposition.
The following letters from Buchanan & Co. now were written. What replies, if any came back, did not appear.
NEW YORK, March 29th, 1869.
THE CASCADE PAPER COMPANY.
BUCHANAN & CO.
NEW YORK, April 2d, 1869.
THE CASCADE PAPER COMPANY.
BUCHANAN & CO.
NEW YORK, April 30th, 1869.
THE CASCADE PAPER COMPANY.
BUCHANAN & CO.
NEW YORK, June 5th, 1869.
MR. W. C. JOY,
Superintendent of the Cascade Paper Company.
BUCHANAN & CO.
NEW YORK, June 9th, 1869.
MR. W. C. JOY,
Superintendent of the Cascade Paper Company.
DEAR SIR: Since writing you yesterday we learn the Manhattan Insurance Company paid you some time since about $5000. Under the circumstances, think you should have paid us something on account.
As we understand the matter, there is, beside the Buffalo company, unpaid as follows:
Home, N. H., $10,000
Atlantic, 3,000
On which there is due about $18,500.
We do not know how serious the difficulties in the way of collecting from these companies may be, but from such information as we have been able to obtain, fear you may underrate them. Under the circumstances we think you should assign your claims against these companies to us, or at least enough of them to cover our claim, which, in round figures, is about $12,000.
The chances of collection in our hands will be quite as good as in yours, and probably a good deal better. If you are correct in assuming that their refusal to pay is the result of Woodruff's interference and management, the assignment to us would be the very best means you can adopt to avoid litigation and loss. We suppose you have a board of trustees, and that in case you make the assignment it will be proper to have a meeting and authorize some officers of the company to execute the assignment. Please let us hear from you by first mail.
Yours truly,
BUCHANAN & CO.
NEW YORK, June 12th, 1869.
G. R. YOUNG, ESQ.,
President of the Cascade Paper Company.
$11,619 24
For the note due May 4th we hold as collateral another note of the company for $2318.70, due July 1st, indorsed same as the others. All the above notes, excepting the one due July 4th, have been protested for non-payment. We have from time to time renewed all these notes at the request of Mr. Joy, and Mr. Raplee, treasurer of your company, for reasons given by them at the time. The last excuse given us was, that they were waiting for their insurance-money. Now, as the company have, to our knowledge, collected a large portion of their insurance-money, some $20,000 or more, we think we are entitled to our money, and that we are, under all the circumstances, very unfairly treated. We have this day written Mr. Joy, as superintendent of the company, requesting him to remit us by return mail at least one-half of the amount of our account, and at the same time informing him if it was not done we should at once instruct our lawyers to commence suits against yourself...
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