City of Superior v. Ripley

• Decision Date: 26 January 1891
• Citation: 138 U.S. 93,11 S.Ct. 288,34 L.Ed. 914
• Parties: CITY OF SUPERIOR v. RIPLEY et al
• Court: U.S. Supreme Court

138 U.S. 93

11 S.Ct. 288

34 L.Ed. 914

CITY OF SUPERIOR v. RIPLEY et al.

January 26, 1891.

[Statement of Case from pages 93-95 intentionally omitted] J. M. Ragan, for plaintiff in error.

Clinton Rowell, for defendants in error.

Mr. Justice BROWN, after stating the facts as above, delivered the opinion of the court.

1. In support of its demurrer founded upon the alleged want of jurisdiction in the circuit court, the plaintiff in error insists that the plaintiffs below obtained their right to bring suit upon this order by assignment from S. K. Felton & Co., who are not alleged to be citizens of any other state than Nebraska, and hence that the plaintiffs are disqualified to sue, under the act of August 13, 1888, (25 St. 433,) the first section of which provides that no circuit or district court shall 'have cognizance of any suit, except upon foreign bills of exchange, to recover the contents of any promissory note or other chose in action, in favor of any assignee, or of any subsequent holder if such instrument be payable to bearer, and be not made by any corporation, unless such suit might have been prosecuted in such court to recover the said contents, if no assignment or transfer had been made.' The action in this case is brought upon an order drawn by S. K. Felton & Co., in which they direct the city to pay to the plaintiffs below a certain sum of money upon the completion and acceptance of certain work undertaken by them for the city, and charge the same to their contract price. This order was presented to the corporation, and formally accepted, 'provided the waterworks are fully completed, according to plans and specifications, and are duly accepted by the city,' and the city promised to pay the same in city warrants. This acceptance was a contract directly between the city and the plaintiffs below, upon which the city was immediately chargeable as a promisor to the plaintiffs. Nothing is better settled in the law of commercial paper than that the acceptance of a draft or order in favor of a certain payee constitutes a new contract between the acceptor and such payee, and that the latter may bring suit upon it without tracing title from the drawer. From the moment of acceptance, the acceptor becomes the primary debtor, and the drawer is only contingently liable, in case of non-payment by the acceptor. Dan. Neg. Inst. § 532; Fentum v. Pocock, 5 Taunt. 192; Wallace v. McConnell, 13 Pet. 136. Ever since the case of Young v. Bryan, 6 Wheat. 146, it has been the settled law of this court that the circuit court has jurisdiction of a suit, brought by the indorsee of a promissory note against his immediate indorser, whether a suit would lie against the maker or not, upon the ground, as stated by Chief Justice MARSHALL, 'that the indorsee does not claim through an assignment, but upon a new contract between himself and the indorser.' This case was approved in Mollan v. Torrance, 9 Wheat. 537; Evans v. Gee, 11 Pet. 80; and Coffee v. Bank, 13 How. 183. It needs no argument to show that the same rule would apply as between the acceptor and the payee, and, if the latter be a non-resident of the state, he may bring suit directly against the acceptor, notwithstanding the drawer of the paper is a resident of the same state as the acceptor, for the same reason that the acceptance creates a new contract, to which the drawer is not a...