Pate v. M'Clure
| Decision Date | 25 March 1826 |
| Parties | Pate v. M'Clure, & c |
| Court | Virginia Supreme Court |
[Syllabus Material]
This was an appeal from the Chancery Court of Staunton, where John Pate filed his bill against William M'Clure, Alexander M'Clure, George Lynham, James Breckenridge and Andrew Hamilton. The case, so far as it is material to the present report, is briefly this. Pate became indebted to William M'Clure & Co. and executed his note for the sum of $ 6584, on the 7th day of June, 1798. Some payments were made and for the balance, Pate endorsed two sterling bills of exchange in blank, and delivered them to M'Clure & Co. drawn by George Lynham, of Norfolk, on Walter Burrows of London, payable at ninety days sight. These bills were dishonored by refusal to accept, on the 21st of October 1799, and afterwards, at the proper time, protested for non-payment. M'Clure informed Pate by letter, dated the 2d of February, 1800, that the bills were refused acceptance, and not likely to be paid, when due: that Lynham had some property, and would pay, if able; and asks his instructions how to act. A correspondence then ensued, which is particularly detailed in the opinion which follows. Pate then executed a deed of trust to Andrew Hamilton as trustee, to secure the payment of the debt due to M'Clure & Co. The land so conveyed in trust, was advertised for sale by Hamilton the trustee, to satisfy this debt.
The bill prays that this sale may be enjoined, on the grounds that M'Clure had not given timely notice of the protest of the bills, and that M'Clure had acted negligently and fraudulently in his agency; by which Pate was discharged from the debt. There are other small objections, which are sufficiently noticed in the following opinion.
The injunction was awarded to restrain the trustee from selling the land.
The defendants answered, and a variety of evidence was filed, consisting of depositions and correspondence between the parties, & c.
Hamilton, the trustee, having died during the progress of the suit, the Chancellor substituted the marshal of his Court in his place, to execute the decree, which was to the following effect: that the land should be sold, or so much thereof, as might be necessary to satisfy the claim of the defendants, by the marshal, and the purchaser at the said sale to have the benefit of a bond executed by the plaintiff with Matthew Pate and Edmund Pate, as sureties to William M'Clure & Co. for the removal of a lien upon the said land, prior to the said deed of trust. But the dissolution of the said injunction, is without prejudice to any action or actions at law, which the plaintiff may think proper to institute against the defendants Alexander and William M'Clure, or either of them, for the purpose of recovering any damages which he may have sustained by the loss of the bills of exchange drawn by George Lynham on Walter Burrows, & c. [*] And so much of his decree as dissolves the said injunction, and directs the said sale, is suspended, until the defendants Alexander and William M'Clure, or either of them, or some responsible person for them, shall execute to the plaintiff, or file with the clerk of this Court, bond with sufficient security, in the penalty of $ 6000, conditioned for paying to the plaintiffs all such damages as he may recover in any action or actions at law aforesaid.
The plaintiff appealed.
Decree entered.
Johnson, for the appellant.
Wickham, for the appellees.
The counsel for the appellant made several objections to the decree. These were, 1. That it was erroneous to make any decree against the appellant, further than dismissing the bill, even if he had not been entitled to relief. 2. The Court should not have appointed the marshal to conduct the sale, without having the heirs of Hamilton the trustee, before the Court. 3. That the decree was wrong in requiring that the purchaser should have the benefit of the bond, executed by Matthew and Edmund Pate, before the Court. 4. The injunction ought not to have been dissolved, before the right to damages had been ascertained. 5. That the M'Clures were responsible for these bills, whether they were committed to them as agents, or as a security for the debt. In either character, they were guilty of such negligence as would exonerate Pate. It was their duty carefully to preserve the security put into their hands. M'Mahon v. Fawcett53. Pothier on Obl. No. 427, 520, 521. Hays v. Ward, 4 Johns. Ch. Cas. 130. There ought besides, to have been a protest for non-acceptance. The bill was at 90 days after sight. In such case, a protest for non-acceptance was indispensable. Proof of protest cannot be furnished from any other source than the protest itself. Chitt. on Bills, 278, 279. That this evidence of protest is not sufficient, is proved by Chitt. on Bills, 280, 281.
This is a bill of injunction to stay proceedings on a deed of trust executed by the plaintiff to secure a debt to the defendants. In his bill, the plaintiff claims several small credits, as omissions in the accounts presented by the defendants; but these claims are inadmissible, as the plaintiff has settled the whole account, and acknowledged its correctness, twice at least; in 1803, when he settled with M'Credie, and executed his bond, and in 1806, when he executed a deed of trust to secure the debt then under the direction of Breckenridge; and there is no evidence whatever, that either of these settlements was procured by fraud, or any kind of concealment or misunderstanding.
Passing by these small items, we will consider the important question in the cause; that is, ought the plaintiff to receive a credit on his debt to the defendants, of 5721. 4 1 sterling, the amount of two bills of exchange, drawn by George Lynham, on Walter Burrows of London, in favor of Pate; by him endorsed in blank, and delivered to Alexander M'Clure, by whom they were endorsed to Miller, Hart & Co. or order. The circumstances are briefly these. Lynham had had property taken on the high seas, by the cruizers of Great Britain. He had made Burrows his agent, to solicit compensation from that government for these spoliations; and in the hope that he might have received funds from that source, he drew the bills on him, which he passed to Pate in payment for tobacco purchased of him. The bills were delivered to Alexander M'Clure, in the early part of September, 1799. They were payable at 90 days sight. On the 21st of October, 1799, it seems from a note of the notary public, that these bills were presented for acceptance, and dishonored by a refusal to accept. Counting the 90 days from the 21st of October, the bills would be payable the 22d of January, 1800. They were regularly presented for payment, refused and protested; as we see by a copy of them in the record. On the 2d of February, 1800, M'Clure informs Pate by letter, that the bills are refused acceptance, and are not likely to be paid when due: that they were due in January, and might be expected in March or April: that Lynham has some property, and will pay, if able; but as he is informed, there are other bills in the same predicament, he asks instructions how he shall act most for Pate's interest, and most likely to prevent loss. " For instance, (he says,) he may be unable to pay money, and willing to give West India produce, or some other equivalent, which I might, from a knowledge of his situation, be induced to accept, rather than run any further risque by delay; and you may be assured, I will do for your interest, as I would for my own." There is no answer to this letter in the record. On the 21st of March, 1800, M'Clure writes to Pate, that he has no idea the bills will be paid, and is daily expecting to receive them under protest, when he will do his best to recover them; but in the mean time, the advance is heavy and severely felt, and he therefore expects that Pate will pay up his debt, in the course of the spring. On the 21st of June, 1800, M'Clure writes Pate, that not a shilling is paid on the returned bills, and presses him for payment. On the 20th of October, he writes to him pressing payment, and says nothing has been gotten of Lynham: that two of his vessels had been taken, and one returned in ballast: that there was no species of property he could get hold of, though he had left nothing untried. On the 20th of June, 1801, Pate writes to M'Clure, stating how hardly he is pressed by the protest of Lynham's bills: that he had better have given away the tobacco; expresses a hope that something might still be gotten from him; begs indulgence, and promises the best payments he can possibly make.
I have given thus much of the correspondence, to shew, that on the protest of the bills, M'Clure immediately looked to Pate for their amount, and that Pate explicitly acknowledged himself liable, and promised payment: that in every thing M'Clure did, towards attempting to get the amount of the bills from Lynham, he considered himself acting as the friend and agent of Pate, and that Pate also considered it in the same light. Many more letters are in the record, going to prove the same points; but it is useless to notice them farther. Pate, in 1803, gave a new bond, including the amount of the bills. In 1806, he gave a deed of trust on land, to secure the same debt. By various promises of selling the land and making payment, (as Breckenridge states in his answer,) he gained time, year after year, till 1812; and it was never till after his land was advertised for sale, that the objections to payment, and the claims of credit stated in his bill, seem to have been thought of.
It is now objected, 1st, that there is no evidence in the record that he had a regular and timely notice of the protest, and that, therefore, he is released from...
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