Black v. Rain

• Decision Date: 30 April 1867
• Citation: 30 Tex. 232
• Parties: H. H. BLACK ET AL. v. CALLOWAY & RAIN.
• Court: Texas Supreme Court

30 Tex. 232

H. H. BLACK ET AL.

v.CALLOWAY & RAIN.

Supreme Court of Texas.

April, 1867.

The act of 24th December, 1851, reads as follows: “The holder of any protested draft or bill of exchange, drawn within the limits of this state, upon any person or persons living beyond the limits of this state, shall, after having fixed the liability of the drawer or indorser of any such draft or bill of exchange, as provided for in the act of March 20, 1848, be entitled to recover and receive ten per cent. on the amount of such draft or bill, as damages, together with interest and costs of suit thereon accruing: Provided, That the provisions of this act shall not be so construed as to embrace drafts drawn by persons other than merchants upon their agents or factors.” Pas. Dig. art. 236, note 296. It is only by this act that the party can recover damages upon a dishonored bill; and he who claims this penalty must bring his case fairly within the provisions of the act by appropriate averments.

If the petition state that the drawer was a merchant, and the drawees their factors or agents, this averment alone would entitle them to damages on a bill protested for non-acceptance.

Where the pleadings did not aver the facts which entitled the party to damages, it was error to charge the jury that they might give damages. 9 Tex. 239;16 Tex. 596;24 Tex. 312.

Where there was no averment that either the drawer, the payee, or the drawees were merchants, doubts were expressed whether the appearance of mercantile paper could be substituted for proofs, as intimated in Pyron & Mitchell v. Butler, 27 Tex. 271.

The 6th section of the act of 29th March, 1848 (which was substituted by the act of 11th January, 1862), was in force when the draft was drawn, and it read as follows: “Three days of grace shall be allowed on all bills of exchange and promissory notes assignable and negotiable by law: Provided, That the 4th, 5th, and 6th sections of this act shall extend only to contracts between merchant and merchant, their factors and agents.” Pas. Dig. note 295; O. & W. Dig. art. 99. Until the drawee accepts the bill, the contract is between the drawer and payee, and doubts were expressed if they are not the parties who must be the “““merchant and merchant.”

APPEAL from Harrison. The case was tried before Hon. CHARLES A. FRAZER, one of the district judges.

H. H. Black, a beef-packer, of Jefferson, Texas, drew a draft on Fellows & Co., of New Orleans, dated 31st January, 1860, and due at three days' sight, in favor of A. G. Scogin, which draft Scogin indorsed to Calloway & Rain, who sent the draft to McKelroy & Bradford, of New Orleans, their agents and commission merchants, with the request to present the same to Fellows & Co. They presented the draft to Fellows & Co., who refused to accept it. McKelroy & Bradford, for Calloway & Rain, then had the draft protested for non-acceptance. Calloway & Rain, at the second term of the court, after said draft was presented, brought this suit against Black, as drawer, and Scogin, as indorser, and averred that the draft was presented and payment demanded, and the draft protested for “non-payment.” There was no averment that it was presented for acceptance, though in the amended petition it is said that, acceptance being refused, the draft was protested, of which defendants had notice. Scogin defended, on the ground that, by reason of the failure of the plaintiffs to use the proper diligence to fix his liability as indorser, he is discharged.

The plaintiffs, in their original petition, proceeded as if they expected to fix the liability of the indorser, Scogin, by bringing suit at the second term, as they attempted to show cause why suit was not brought at the first term of the court after the cause of action accrued. But, should they fail in that, they, in their amended petition, allege that the transaction was between merchant and merchant, in order to fix the liability of the indorser according to the law merchant.

The plaintiffs alleged that they purchased the draft from Scogin on the 3d day of February, 1860, and sent it immediately to their agents, McKelroy & Bradford, in New Orleans; that on the 14th of the same month it was presented and protested for “non-payment.” The record of the district court shows that the first term of the court convened on the 19th day of March, the last return day being the Tuesday preceding. A whole month intervened between the date of the presentation and the last return day.

The witness, Peete, stated that letters would sometimes reach Marshall from New Orleans in five days, and sometimes in six weeks; that the mails were irregular. He also testified that the plaintiffs' agents, McKelroy & Bradford, retained the draft in their hands, after presentation, for two months before it was mailed. There was proof tending to show that the drawer of the draft was a beef merchant, engaged in a packery, for which he purchased beef and shipped it, and drew on his commission merchant in anticipation of the proceeds. There was no proof that the payee was a merchant, nor was it averred that either the drawee or payee were merchants. It was plead in the answer that they were not.

G. & H. McKay, for Scogin. I. This court has never yet decided under the statute as to what is showing good cause why suit was not brought at the first term. Bailey v. Heald, 14 Tex. 226. The cause given by plaintiffs is certainly not a good one; for, if they did not know that the draft had been dishonored, their agents, McKelroy & Bradford, knew it, and Scogin is not to blame for the want of diligence on the part of themselves or their agents and commission merchants.

II. If the plaintiffs relied on the law merchant to fix the liability of Scogin, their case is equally hopeless. The draft was presented for acceptance on the 14th day of February, 1860. If the drawer and indorser had notice of the protest, from whom did they receive it? The notary's certificate of protest does not show that he gave them notice, as the statute requires. O. & W. Dig. arts. 97, 98.

[As the case turned on the character of the parties, this part of the argument is omitted.]

III. The witness says that McKelroy & Bradford held the draft, thinking the drawees might receive funds of the drawer. That does not relieve them from giving the notice required by the law merchant. Story, Bills, § 272; Chit. Bills, ch. 8, § 1, pp. 344, 360, 361; Bayley, Bills, ch. 7, § 2, p. 253, 5th ed.

IV. But admitting, for the sake of argument, that the demand, refusal, protest, and notice, are all regular and according to law, yet have they shown...