May v. Quimby & Co.
| Decision Date | 10 January 1867 |
| Parties | May v. Quimby & Co. |
| Court | Kentucky Court of Appeals |
1. If the bill of exchange was received bona fide in the discharge of an existing debt, whether the person so passing it to the plaintiffs was acting rightful or wrongful, the plaintiffs would be protected by the law merchant as having received it innocently for a valuable consideration in the regular course of business. (Alexander & Co. vs Springfield Bank, 2 Met., 535.)
2. The most sure and correct test as to whether the bill of exchange was received as actual payment, or as collateral security only, is to ascertain whether the party receiving the bill has precluded himself from suing on the original cause of action, or from recovering a judgment as to so much of his debt as the bill amounts to.
3. If the bill of exchange was not received absolutely as a payment of then existing demands, they cannot be deemed innocent holders for a valuable consideration, and as having received it in the usual course of business, and protected against its infirmities.
4. There was proof conducing to show that the bill was misappropriated, and not used for the purposes of its indorsement; and the jury, instead of the instruction given should have been told that, if it was indorsed for other purposes, and then plaintiffs procured it as collateral for liabilities to them and not in discharge thereof, that this was not an innocent obtainment of it in due course of business and for a valuable consideration, and that they should find against the plaintiffs; but that, if they believed from the evidence that the plaintiffs received the bill as an absolute discharge of that much of their present demands, then this would be an innocent holding, in due course of business, upon a valuable consideration, and the indorsers responsible, no matter what was the original objects of their indorsement.
APPEAL FROM JEFFERSON COURT OF COMMON PLEAS.
WM. MIX and BODLEY & SIMRALL, For Appellant,
CITED--
1 Greenleaf on Ev., secs. 386, 390, 426, 522.
Peak. Ev., 158; 1 Starkie, 125.
Phillips on Ev., note 122, p. 161.
2 Wendell, 527; 15 Pick., 543.
7 Watts, 272; 37 Eng. C. L., 191.
12 Pick., 565; Schaak vs. Stafford.
3 Met., 246; Finnell vs. Cox.
1 Met., 575; Smith vs. Northern Bank.
2 J. J. M., 508; Pendleton vs. Speed.
1 Dana, 430; Long vs. Ray.
5 Johnson's R., 54; Ray vs. Coddington.
1 Met., 618-35; Lee's adm'r vs. Smead, Collard, and Hughes.
PIRTLE & CARUTH, For Appellees,
CITED--
2 J. J. M., 508; Pendleton vs. Speed.
1 Dana, 430; Long vs. Ray.
This was a suit by appellees against appellant and his co-indorser, W. A. Mayfield, on a bill of exchange drawn at Louisville, November 7th, 1864, at thirty days, for two thousand dollars, by Samuel Gamage to his own order, on Thomas Hughes & Co., Chicago, Illinois, accepted by them, and indorsed by Samuel Gamage, W. A. Mayfield, and W. J. May.
The defendants for defense averred that appellees were not the holders of said bill, nor had purchased it from any party thereto, or any other entitled to it, or had received it in the usual course of business, or had paid any valuable consideration for it to any party to it, or any other person entitled to it; but that it had been drawn and indorsed for the purpose of enabling the drawer to purchase beans to be shipped to May, and that Gamage handed it to Brown, of the firm of Quimby & Co., to get it discounted, and pay the proceeds over for the purpose aforesaid; and that, instead of doing so, he fraudulently retained possession of the bill; also, that Gamage had paid five hundred dollars on said bill, and denies any knowledge or notice of its dishonor.
Demurrers were sustained to the third, fourth, fifth, and seventh paragraphs of the answer; the first paragraph having been amended, the parties went to trial upon the issues substantially stated.
The third paragraph states that Brown agreed and promised to surrender the bill to these defendants on November 7th and 8th, 1864, and that he would not call upon them for it. It does not aver that Quimby & Co. were then the holders of said bill, nor upon what consideration, or indeed upon any, that said promise was made, and is, therefore, defective.
Fourth paragraph simply avers " that the draft sued upon was procured by plaintiffs by fraud; " but no facts are averred in which the fraud consisted. The demurrer was, therefore, properly sustained as to it.
Fifth and seventh paragraphs substantially aver that plaintiffs agreed with Gamage, if he would go to Nashville, Tennessee, and pay on their account five hundred dollars on certain grain contracts of plaintiffs, they would cancel said draft, and that Gamage did so go to Nashville, paid the five hundred dollars, and that plaintiffs accepted this in satisfaction of said draft; and also that, at plaintiffs' request, and for their benefit, Gamage incurred expenses on a trip to Nashville to the amount of two hundred dollars, and rendered services for them of the value of two thousand dollars, to be applied in discharge of said draft.
Although, technically, the demurrers, perhaps, should have been overruled to these, yet the evidence so palpably shows that this was false pleading, that a reversal should not be allowed unless there are other and substantial errors.
The defendants had the benefit of a plea of payment for five hundred dollars, but made no attempt to prove it, not even in the excluded deposition of Gamage; hence, all this plea of going to Nashville, paying five hundred dollars, expending two hundred dollars, and rendering service of the value of two thousand dollars, must be regarded as sham.
The jury found in favor of the plaintiffs for the full amount of the debt, and the court rendered judgment thereon; and having overruled a motion for a new trial, May prosecutes this appeal.
The first serious error assigned is the exclusion of Gamage's deposition because of his interest, notwithstanding the defendants May and Mayfield had released him " from all liability whatever that may arise or accrue from his having drawn " said bill.
If Gamage was interested in the issue, and which was not, or could not be, released by the defendants, then it is clear that he was incompetent. If it was an interest which defendants could and did release, or which they could and did release so far as to make his interest equal to the respective parties, then he was competent.
It is evident that the plaintiffs claimed to hold said bill in discharge of so much of Gamage's indebtedness to them; therefore, on this score, if their claim was sustained, it would cancel that much of said indebtedness, and he would become indebted to the defendants for the amount thereof and costs of suit, on their paying it. There can, however, be no doubt but this release would be sufficient to acquit him of the costs of the suit at least, and leave him only liable for the principal of the debt. He would then stand in equipoise as to interest.
But Gamage denies his indebtedness to Quimby & Co.; and moreover, it appears that, November 10, 1864, he deposited with May, as collateral security, jewelry, watches, & c., valued at eleven hundred and sixty-five dollars, set down at one thousand and sixty-five dollars, beside a French box, an heir-loom, not valued, as evidenced by a copy of May's receipt to Gamage of that date. It is true that J. M Secrist claims that these things were deposited with May to secure him in a draft he drew at Louisville, September 20, 1864, for eighteen hundred and fifty dollars and two cents, at ten days, addressed to Samuel Gamage;...
To continue reading
Request your trial