Raborg v. Peyton

• Decision Date: 15 March 1817
• Citation: 2 Wheat. 385,15 U.S. 385,4 L.Ed. 268
• Parties: RABORG et al. v. PEYTON
• Court: U.S. Supreme Court

15 U.S. 385

2 Wheat. 385

4 L.Ed. 268

RABORG et al. v. PEYTON.

March 15, 1817

ERROR to the circuit court for the district of Columbia.

March 14th.

This cause was argued by Mr. Jones, for the plaintiffs in error, and by Mr. Taylor, for the defendant in error.

Mr. Justice STORY delivered the opinion of the court.

This is an action of debt brought against the defendant in error, as acceptor of a bill of exchange by the plaintiffs in error as endorsees. The declaration alleges that the bill was drawn, accepted, and endorsed, for value received. The only question is, whether debt lies in such a case.

The general principle has been very correctly stated by Lord Chief Baron Comyn, that debt lies upon every express contract to pay a sum certain; and he adds, also, that it lies though there be only an implied contract. (Com. Dig. Debt, a. 8. a. 9.) But it has been supposed that this principle does not apply to an action on a bill of exchange, even where the suit is brought by the payee against the acceptor and a fortiori not, where it is brought by the endorsee. It is admitted that in Hardres, 485., the court held that debt does not lie by the payee of a bill of exchange against the acceptor. The reasons given for this opinion were, first, that there is no privity of contract between the parties; and, secondly, that an acceptance is only in the nature of a collateral promise or engagement to pay the debt of another, which does not create a duty. It is very difficult to perceive how it can be correctly affirmed that there is no privity of contract between the payee and acceptor. There is, in the very nature of the engagement, a direct and immediate contract between them. The consideration may not always, although it frequently does, arise between them; but privity of contract may exist if there be an express contract, although the consideration of the contract originated aliunde. Besides, if one person deliver money to another for the use of a third person, it has been settled that such a privity exists that the latter may maintain an action of debt against the bailee. (Harris v. De Bervoir, Cro. Jac. 687.) And it is clear that an acceptance is evidence of money had and received by the acceptor for the use of the holder. (Tatlock v. Harris, 3 T. R. 174. Vere v. Lewis, 3 T. R. 182.) It is also evidence of money paid by the holder to the use of the acceptor. (Ibid, and Bailey on Bills, 164., 3d edition.) A privity of contract, and a duty to pay, would seem, in such case, to be completely established; and wherever the common law raises a duty, debt lies. The other reason would seem not better founded. An acceptance is not a collateral engagement to pay the debt of another: it is an absolute engagement to pay the money to the holder of the bill; and the engagements of all the other parties are merely collateral. Prima facie, every acceptance affords a presumption of funds of the drawer in the hands of the acceptor; and is, of itself, an express appropriation of those funds for the use of the holder. The case may, indeed, be otherwise; and then the acceptor, in fact, pays the debt of the drawer; but as between himself and the payee it is not a collateral, but an original and direct undertaking. The payee accepts the acceptor as his debtor, and he cannot resort to the drawer but upon a failure of due payment of the bill. The engagement of the drawer, therefore, may more properly be termed collateral. Yet it has been held, that debt will lie in favour of a payee against the drawer in case of non-payment by the acceptor. (Hard's case, Salk. 23. Hodges v. Steward, Skinn. 346.; and see Bishop v. Young, 2 Bos. & Pull. 78.)

The reasons, then, assigned for the decision in Hardres are not...