Carmen v. Higginson

• Decision Date: 07 June 1923
• Citation: 245 Mass. 511,140 N.E. 246
• Parties: CARMEN v. HIGGINSON et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

245 Mass. 511

140 N.E. 246

CARMEN

v.HIGGINSON et al.

Supreme Judicial Court of Massachusetts, Suffolk.

June 7, 1923.

Report from Superior Court, Suffolk County; John D. McLaughlin, Judge.

Action of contract by Kevie Carmen against Henry L. Higginson and others, doing busness as Lee, Higginson & Co. Reported from the superior court after a finding for plaintiff for an amount less than claimed. Judgment for plaintiff on the finding.

The action involved defendants' liability on a draft on a Russian bank sold plaintiff by defendants and not paid by the drawee. Plaintiff contended he was entitled to recover the value of gold Russian rubles at the date the draft was presented for payment, plus interest and 10 per cent. of principal, and defendants contended they were not liable at all, but, if liable at all, were only liable for the amount computed as prescribed in G. L. c. 107, § 9. The court found for plaintiff for $1,300, with interest from February 18, 1918, and damages at the rate of 5 per cent. on the principal, under G. L. c. 107, § 9.Dunbar, Nutter & McClennen, of Boston, for plaintiff.

Ropes, Gray, Boyden & Perkins, of Boston, for defendants.

RUGG, C. J.

This is an action of contract. The case comes before us by report wherein the following facts appear: On November 1, 1917, the plaintiff bought of the defendants a draft on the Russian Bank for Foreign Trade, Petrograd, Russia, to the order of the plaintiff in the sum of 10,000 rubles. The price paid was at the rate of about 28 1/2 cents per ruble. On the date of purchase and ever since there were funds of the defendants in the Russian bank sufficient to meet the draft. Two weeks after the purchase the plaintiff forwarded the draft to the branch of the National City Bank at Petrograd for collection. When the draft was forwarded the government of Russia was stable, but when the draft came to the possession of the branch of the National City Bank in Petrograd, or immediately thereafter, government was in a chaotic condition, all order was subverted and the usual processes of law, banking and commerce were abrogated. On or about December 27, 1917, the branch of the National City Bank and the Russian Bank for Foreign Trade, as well as all other banks in Petrograd, were seized by the Bolsheviks and remained closed for about six weeks. In the February following the Russian Bank for Foreign Trade was reopened as part of the Fourth Branch of the People's Bank, so called, but withdrawals or transfers of foreign accounts such as that of the defendant were in fact prohibited.

The judge found that soon after the Russian Bank for Foreign Trade thus reopened, and on or about February 18, 1918, the draft here in question was actually presented for payment and payment refused or (if mistaken in this) that presentment failed because, although reasonable diligence was exercised, conditions made it impossible and hence presentment was excused. The last alternative of this finding is disregarded, because there is no ground, in the absence of a report of the evidence, to assume that there was error in the finding that there was actual presentment and refusal of payment. Atlantic Maritime Co. v. Gloucester, 228 Mass. 519, 522, 117 N. E. 924. Other findings are that protest could not have been made by a notary public, but it could have been made by a respectable resident in the presence of two credible witnesses. There was no evidence as to the law of Russia concerning the rights and duties of parties in the event of the nonacceptance or nonpayment of a bill of exchange payable in Russia, but drawn in another country. On February 22, 1918, the plaintiff received a cablegram from the National City Bank branch at Petrograd informing him that the draft was not collectible and that it was being returned to the sender. He immediately showed the cablegram to the defendants, who requested him to wait until the draft was returned. It arrived in October and on October 28, 1918, the plaintiff took it and the cablegram to the manager of the foreign exchange department of the defendants, who said he would take the matter up with the partners. On November 5, 1918, the defendants wrote to the plaintiff, offering to refund the equivalent of 10,000 rubles at the rate when the draft was returned to them, or, since the obligation was to give rubles, to buy 10,000 rubles in place of American dollars, if he preferred.

On these facts the judge found that, if protest was required, the defendants waived it, and that they waived any right they had to insist that the plaintiff failed to forward the draft to Russia for presentment within a reasonable time after its issue.

The instrument sold by the defendants to the plaintiff and here in suit was a foreign bill of exchange. It was drawn in this commonwealth and payable in a foreign country. It was in form a check drawn against funds on deposit to the credit of the defendants in the Russian Bank of Foreign Trade. G. L. c. 107, §§ 149, 152, 208.

[3] The transaction between the parties was a completed contract. It constituted a sale of credit by the defendants to the plaintiff, the bill of exchange being a means of establishing and transmitting the credit. The defendants as drawers contracted with the plaintiff as payee that the bill should be accepted by the Russian Bank for Foreign Trade as drawee and be paid by it on presentment at the time when it became due, and that if not so paid, upon due notice, they would reimburse the holder in principal and damages. Powers v. Lynch, 3 Mass. 77;Blanchard v. Russell, 13 Mass. 1, 57 Am. Dec. 106;Amsinck v. Rogers, 189 N. Y. 252, 82 N. E. 134,12 L. R. A. (N. S.) 875, 121 Am. St. Rep. 858,12 Ann. Cas. 450. This draft, having no specific due date, was payable on demand if presented within a reasonable time. G. L. c. 107, §§ 29, 167, 209. There is no contention that the presentment in February, 1918, was not made within a reasonable time.

This instrument, having been made in this commonwealth is governed by our law as to its meaning and effect. Carnegie v. Morrison, 2 Metc. 381, 397;Ross v. Ross, 129 Mass. 243, 246,37 Am. Rep. 321;Brandeis v. Atkins, 204 Mass. 471, 476, 90 N. E. 861,26 L. R. A. (N. S.) 230;Shoe & Leather National Bank v. Wood, 142 Mass. 563, 8 N. E. 753. It is provided by G. L. c. 107, §§ 175, 176, that a foreign bill of exchange must be protested for dishonor and that protest-

‘may be made by (1) a notary public; or (2) by any respectable resident of the place where the bill is dishonored, in the presence of two or more credible witnesses.’

There is no presumption that the provisions of our Negotiable Instrument Act or of our common law in respect to the law merchant prevail in Russia. Aslanian v. Dostumian, 174 Mass. 328, 54 N. E. 845,47 L. R. A. 495, 75 Am. St. Rep. 348;Cuba Railroad Co. v. Crosby, 222 U. S. 473, 479, 32 Sup. Ct. 132, 56 L. Ed. 274,38 L. R. A. (N. S.) 40. The duties of the holder touching the time, manner and sufficiency of making protest and of giving notice of dishonor are determined by the law or custom of the place where the bill is payable. Whether the necessity of protest is to be determined by the place where the contract is made or by the place where the bill of exchange is payable has been the subject of divergent decisions. Amsinck v. Rogers, 189 N. Y. 252, 82 N. E. 134,12 L. R. A. (N. S.) 875, 121 Am. St. Rep. 858,12 Ann. Cas. 450; Rothschild v. Currie, 1 Q. B. 43; Hirschfield v. Smith, L. R. 1 C. P. 340; Horne v. Rouquette, 3 Q. B. D. 514. See in this connection Powers v. Lynch, 3 Mass. 77;Williams v. Wade, 1 Metc. 82;Worcester Bank v. Wells, 8 Metc. 107, 113;Cribbs v. Adams, 13 Gray, 597;Shoe & Leather National Bank v. Wood, 142 Mass. 563, 8 N. E. 753;Glidden v. Chamberlin, 167 Mass. 486, 46 N. E. 103,57 Am. St. Rep. 479;Scudder v. Union National Bank, 91 U. S. 406, 23 L. Ed. 245;Pierce v. Indseth, 106 U. S. 546, 1 Sup. Ct. 418, 27 L. Ed. 254. It is not necessary to discuss that question or collateral and subsidiary questions connected with it in the case at bar because on another ground the plaintiff can prevail.

The finding was that from the other facts found the inference was drawn that if protest was required it was waived and that notice also was waived. There was an express finding of presentment and refusal of...