Close v. Fields

• Decision Date: 31 December 1847
• Citation: 2 Tex. 232
• Parties: HIRAM CLOSE v. WM. FIELDS
• Court: Texas Supreme Court

2 Tex. 232

HIRAM CLOSE

v.WM. FIELDS

Supreme Court of Texas.

December Term, 1847.

Appeal from Galveston County.

The bona fide holder of a bill of exchange, in which a blank was left for the name of the payee, may at any time fill the blank with his own name, and having done so, he can maintain a suit against the drawer or acceptor.

Whether the mere naked possession of a bill of exchange by the acceptor affords any evidence of payment depends upon the circumstances under which it was drawn. It is, therefore, a question of evidence for the jury. If it were an accommodation bill, drawn for the purpose of obtaining a loan, the possession by the acceptor would not even be prima facie evidence of ownership, or of payment, unless it were shown the bill had been in circulation after acceptance. But if drawn against a pre-existing debt, due from the acceptor to the drawer, the possession of the bill by the acceptor would be presumptive evidence, at least, of a payment, to that extent, of the pre-existing debt.

Interest is a creature of the statute and cannot be allowed in cases not embraced in its terms. Interest on verbal or implied contracts, not being specially provided for by the statute, cannot be allowed.

This was an action brought by the appellee to recover fifteen hundred dollars, alleged to have been received by the appellant as his trustee.

The defendant below pleaded payment and setoff. The plaintiff proved the receipt of the money by the defendant, and in support of his pleas, the defendant, among other evidence, offered three drafts of the plaintiff, the signatures to which were admitted, and which were in the following words:

No. 1. “Hiram Close, Trustee,

You will please pay or order four hundred dollars, par funds, when collected, of the proceeds of a note now in your hands, drawn by Robert Rose and Robert D. Johnson, and made payable to me for six hundred dollars, par funds.

WM. FIELDS.

Galveston, March 24, 1841.”

No. 2. “Hiram Close, Esq.: Sixty days from date of this, please pay to bearer one hundred and twenty dollars, and very much oblige

WM. FIELDS.

June 5, 1841.”

No. 3. “Hiram Close, Esq.: Fifteen days from date of this, please pay Messrs. Van Alstyne & Co., or order, sixteen dollars, par funds, and oblige yours, etc.,

WM. FIELDS.

August 23, 1841.”

Across the face of the first and third of these drafts was written, “Accepted, Hiram Close.” All of them were rejected by the court as not affording evidence of payment, without proof that they had been in circulation after acceptance, or proof that they had actually been paid by the drawee.

The plaintiff obtained a verdict and judgment for $613 debt, and $201 interest, and costs of suit. The defendant moved for a new trial, upon various grounds, but relied mainly upon the alleged errors of the court in ruling out the drafts as testimony; upon the misdirection of the judge in respect to the allowance of interest, and upon an allegation of newly discovered evidence; and this motion being overruled, he appealed to this court.

J. B. Jones, for appellant, cited in support of the validity of the drafts in the hands of the defendant, 3 McCord, 482;3 Hill, 112; Chitty on Bills, 62-3.

Cole, for appellee, cited, in support of the decision of the court in ruling out the drafts, 2 Campb. N. P. 439; 2 Stark. Ev. 276; 2 Mau. & Sel. 90; 5 Taunt. 529; 13 Mass. 158.

In support of the decision overruling the motion for a new trial, he cited 8 Cow. 223;6 Id. 682;2 Wend. 352;3 Hill, 250;2 Id. 576;3 Wash. C. C. 58; 5 Cow. 21; 18 Johns. 489; 2 Kane, 260; 4 Johns. 425; 1 Hall, 382; 3 Kane, 186; 5 Wend. 114; 1 Sumner C. C. 482; 4 Wheat. 213;6 Id. 542; 5 Mason C. C. 173; 2 Scammon, 350. Upon the question of interest, he cited 9 Johns. 71;3 Cow. 432;3 Caines, 266; 2 Burr. 1077; 1 Pick. 118; 1 Marsh. 584, and 10 Wend. 96.

Mr. Justice WHEELER, having presided at the trial in the court below, did not sit in this case.

Mr. Justice LIPSCOMB, after stating the facts, delivered the opinion of the court.

The first objection taken to the admissibility of the evidence applies to the first two orders, that the name of the payee was in blank. In Bayley on Bills, 30, 31, it is said, if a bill or note be issued with a blank for the payee's name, any bona fide holder may insert his own name as payee, …. but until the blank is filled, it is not a bill or note, unless, perhaps, where it may be considered in legal operation as payable to the order of the drawer. Where a bill is payable to a fictitious person, it has been held to be, in effect, payable to bearer. Chitty on Bills 93, 6th Am. edition; and this was said to have been ruled in Gibson v. Minet, 1 H. Bl. 586. There can be no doubt, from the authorities, that if this paper is to be treated as a bill of exchange, the name of the payee could have been inserted in the blank by any bona fide holder of the paper, and would have enabled him to sue the acceptor or the drawer. The second is payable to bearer, and on protest would authorize a suit against the drawer in the name of the holder. The court below seemed to have grounded the objection to the testimony on the fact that there was no proof that these bills had ever been in circulation after acceptance; and the case of Pfiel v. Vanbatenberg, in 2 Campb. 439, is relied on as sustaining the decision. The action was for money lent, and he, the plaintiff, alleged that he had accepted and paid several bills of exchange for the defendant's accommodation. The bills were produced by the plaintiff and proved to have been drawn by the defendant; they were likewise receipted in the usual form of bills paid, but it did not appear by whom the receipts were written. It was contended that the simple production of the bills by the acceptor was prima facie evidence of payment. Lord Ellenborough said: “Show that the bills were once in circulation after being accepted, and I will presume that they got back to the acceptor's hands by his having paid them. But when he merely produces them, how do I know that they were ever in the hands of the payee or any indorsee, with his name upon them as acceptor. It is very possible that when they were left for acceptance he refused to deliver them back, and having detained them ever since, now produces them as evidence of a loan of money.” This seems to be the general doctrine as laid down by Chitty, and it has been recognized by the supreme court of Louisiana, but in the case of Bell v. The Administrator of Norwood, 7 La. 95, with this modification, that where there has been an account on a long course of commercial transactions between the parties, in which payments are charged for sums paid to take up drafts accepted by the plaintiff, the possession of the draft by the acceptor is prima facie evidence of payment. Judge Bullard, in acknowledging the general doctrine that an acceptor is bound to show that it had been put in circulation after acceptance, and its payment makes the exception, that the application of the strict principle in cases like the one before the court would be productive of great injustice, and that it should be confined to cases where the acceptor declares upon a bill of exchange against the drawer. It may, however, be...