FORD v. McClung

• Decision Date: 31 January 1872
• Citation: 5 W.Va. 156
• Court: West Virginia Supreme Court
• Parties: FORD & BURDETT v. Samuel McClung.

5 W.Va. 156

FORD & BURDETT

v.Samuel McClung.

Supreme Court of Appeals of West Virginia.

January Term, 1872.

McClung makes an order to the bank at Lewisburg payable to the order of P., who endorses it to D., who endorses it to plaintiffs F. & B. It is dated in September, 1862, but is not presented to the bank until after the war, and McO. has no notice of its non-acceptance and non-payment until that time. F. &, B. bring suit [against McC, the drawer. The parties all resided in Greenbrier county.

I. The making or drawing of the order implied the indebtedness of the drawer to the payee, to at least the amount of the order. And as the only issue between the parties in this action (nil debet) was, whether under the proofs in the case the plaintiffs were entitled to recover, it was not pertinent or material to such issue to inquire into the consideration upon which the order was founded. For, if by reason of the misconduct or negligence of the payee or his endorsees, the defendant is not liable to the plaintiff for the amount of the order, he is entitled to the benefit of it, whether it was originally drawn to pay an existing indebtedness to the payee, or for any other purpose.

IT. It was not error to refuse to instruct the jury, that if McC. had no funds in the bank at the date of the order except Confederate money, he was not entitled to notice of dishonor by non-payment; and if he had no funds in the bank at the time of drawing the order, and he knew that fact, that no notice to him was necessary.

III. There is nothing in the circumstances of this case to bring it within any of the exceptions to the rule that, the drawer and endorsees of a bill of exchange, or order, are entitled to prompt notice of the non-acceptance or non-payment, in order that the former may look after his funds and withdraw or secure the same, and the latter may take the necessary steps to secure himself; and that upon the failure to receive such notice, they are discharged from liability; and the bill, or order, as between the drawer ami payee or endorsee, will be considered paid.

IV. The law, in the case of failure to give notice, implies injury to the drawer, and nothing appears in the case to sufficiently rebut the presump lion that, if he had been been duly notified of the non-payment of the order, he might not have secured his funds or at least arranged to have paid the order out of the same.

Action of debt brought in the circuit court of. Greenbrier county, to August rules, 1866, by the firm of Ford & Burdett against Samuel McClung. Judgment for the defendant, June term, 1870.

The following check or order was the basis of the suit:

"September 10, 1862. "Cashier of the Fanners'' Bank of Virginia, at Letvisburg, Va.:

" Pay to the order of Stephen a. Porter five hundred and thirty-four dollars and forty-one cents, for value received, and charge to my account.

[$534.41.] "Samuel McClung."

Endorsed:

" Pay to the order of Smith Darnell." Pay to the order of Ford & Burdett.

Stephen a. Porter.': Smith Darnell.'

It is unnecessary to state the pleadings, as the case did not turn upon any technicality connected therewith, except that the issue was joined on nil debet.

The evidence was substantially that, in September, 1862, the plaintiffs cashed the check for Darnell, it appearing that the bank had sent off its funds from Lewisburg for safety. That after the war, Ford had called on defendant for the amount of it, and he had declined to pay. That Darnell had presented the check at the bank in September, 1862, and was informed that the funds had been carried away for safety, and was offered a check on Staunton or Lynchburg for the amount, but he declined to receive it. That on the 1st of January, 1862, defendant had a deposit in the bank of six thousand dollars, principally Confederate money; that no business was done in the bank from August, 1862, to October 15th of the same year, when it was resumed, and the business was generally transacted with Confederate money. That the check or order in suit was never again presented. Plaintiffs never mentioned to the cashier of the bank anything about the check or order until after the war.

Defendant proved that at the time of drawing the check or order he had deposits in the bank, largely in excess of the amount thereof; that defendant (by his own testimony) never heard of it again until after the war. The plaintiff offered to prove the consideration of the check, that it was given in consideration of the settlement of an estate of which the defendant was personal representative, and that he had. been allowed a credit therefor, &c. but this was refused, and he excepted.

The plaintiffs moved the court to instruct the jury as follows: "If the jury believe that at the date of the check in the case, to wit, 10th September, 1862, the defendant McClung had no funds in the Farmers' Bank at Lewisburg, except Confederate money, then the said McClung was not entitled to notice of dishonor by non-payment; and if the jury further believe that at the time of drawing the check that defendant had no money in the bank at Lewisburg, and he knowing he had none therein, then that no notice was necessary."

But the court instructed the jury as follows: "Unless the jury believe from the evidence that the plaintiffs, when they became the endorsees of the check in the declaration mentioned, used due diligence to collect the same by presentation for payment at the bank, and if dishonored, gave immediate notice thereof to the defendant, then they will find for the defendant; and the fact that the effects of the bank were removed from the banking house at the time they obtained the check would not excuse them from the duty of presentation of the check for payment, nor from giving notice of its dishonor, unless it was notoriously known that the effects had been removed; then such presentation was not necessary."

To the refusal of the court to give the instructions asked and the giving of the above instruction, the plaintiffs again excepted.

After the verdict of the jury for the defendant, plaintiffs moved to set it aside as contrary to law and evidence, which was overruled, and he again excepted.

Dernnis for the plaintiffs in error.

Mathews & Mathews for defendant in error.

If the court below erred, it was in overruling the demurrer to the declaration and sustaining the objection made to four of the special p'eas. It was not error to sustain the objection to the testimony offered by the plaintiff" to show the consideratio.i of the check, as between the defendant and S. A. Porter, tl e payee.

The plaintiffs, admitting that it was not shown necessary to the consideration of the check, yet contended that this testimony was admissible, "as a part of the res gest!" It cannot be seriously urged, in this court, that when a plaintiff sues upon negotiable paper, he may introduce testimony as to a long series of transactions, which gave rise to the making of the note sued on, and as to other transactions subsequent to the making of the paper, and do this upon the ground that such transactions are a part of the res gest. It was very evident that the plaintiff thought he could use such testimony, however illegal, with great effect upon the jury, and quite as evident that the court was constrained to exclude it. The check would have been worth no more to the plaintiffs, if Porter had paid for it with gold.

The plaintiffs say "the character of the debt which the defendant was attempting to discharge, ought to have gone to the jury in connection with his method of discharging it. As the declarations of a servant, at the time of leaving his master, are admissible as part of the res gesh, to show the motive of his departure, so the character of the debt for which the check was really given, together with the subsequent fact that McClung had gotten credit for the amount of the check, ought to have gone to the jury, if, for no other purpose, to show his motive, which was, as the plaintiffs say, to make a safe investment of his worthless Confederate money, by paying off the legacy due to these heirs, and then reimbursing himself," &c. So, upon an action of debt upon an inland bill, by a holder against the maker, you may intro duce testimony to show the motive of the maker in making the note, and to ascertain whether he was a successful specu1 ator.

It would, perhaps, be more satisfactory to both court and counsel, if the learned attorney who makes this announcement would support it by a reference to pertinent decisions.

Great sympathy is manifested, on the part of the plaintiff's, for the heirs of Charles McClung, deceased, for whom the proceeds of this check, as is alleged, were intended. These heirs and distributees are not parties, either in name or interest, to this suit, nor are they represented before this court. All that they ever received for this check was the Confederate money paid by the defendant, Ford, to Smith Darnell, and with this they have remained satisfied. If the defendant, Ford, will pay to these unfortunate distributees the amount of the check, in gold or legal currency, he may then, with some reason, complain if he cannot recover in legal currency. Having, however, paid Confederate money for it, he cannot expect to recover anything of greater value.

When he purchased the check, he knew that the bank was receiving and paying nothing but Confederate money; he knew that the prevailing, and, indeed, the exclusive currency in Greenbrier, was Confederate money: he knew, too, that the funds of the bank had been temporarily removed, and he knew that it was intended that this check should be paid with Confederate money. He was a merchant of Lewisburg, loyal to the Confederacy, selling his goods for Confederate money, of which he had, no doubt, an abundance, and which, he was on the alert to invest in almost any kind of property. The appearance of Darnell with defendant's check, was regarded by him as an opportunity for a...