The Bank of the United States, Plaintiff In Error v. Andrew Donnally, Defendant In Error

• Decision Date: 01 January 1834
• Parties: THE BANK OF THE UNITED STATES, PLAINTIFF IN ERROR v. ANDREW DONNALLY, DEFENDANT IN ERROR
• Court: U.S. Supreme Court

33 U.S. 361

8 Pet. 361

8 L.Ed. 974

THE BANK OF THE UNITED STATES, PLAINTIFF IN ERROR v. ANDREW DONNALLY, DEFENDANT IN ERROR.

January Term, 1834

IN error to the district court of the United States for the western district of Virginia.

The plaintiffs in error instituted an action of debt in the district court of the western district of Virginia, to November term 1829, against the defendant, he being the only party to the instrument sued upon, who was found within the jurisdiction of the court.

The declaration contained five counts upon the following note executed by the defendant and several others:

June 26th, 1832. $12,877. Sixty days after date, we, Campbell, Vaught & Co., as principals, and David Campbell, and Steele, Donnally & Steeles, as sureties, to promise to pay, jointly and severally, to the order of the president, directors, and company of the Bank of the United States, without defalcation, twelve thousand eight hundred and seventy-seven dollars, negotiable and payable at the office of discount and deposit of the said bank, at Louisville, Kentucky, value received, with interest thereon at the rate of six per centum per annum thereafter, if not paid at maturity.

CAMPBELL, VAUGHT & CO.

DAVID CAMPBELL.

STEELE, DONNALLY & STEELES.

The first, second and third counts in the declaration set out the note as a simple contract debt, to which the defendant pleaded 'nil debet,' and the statute of limitations of Virginia; and the plaintiff filed replications, to which the defendant demurred. Judgment in favour of the defendant was entered by the court on these three counts.

The third and fourth counts were as follows:

'And whereas also the said Andrew Donnally and Richard Steele, William Steele, Robert M. Steele, and Adam Steele, partners trading under the firm of Steele, Donnally & Steeles, heretofore, to wit, on the 26th day of June 1822, and in the life time of said Adam Steele, Robert Steele, and William Steele, since deceased, at Louisville, in the state of Kentucky, to wit, at the district aforesaid, with one David Campbell, and the firm of Campbell, Vaught & Co., made their other note in writing; which said note, signed by the said firm of Steele, Donnally & Steeles, and dated the day and year aforesaid, is to the court here shown, and thereby promised jointly and severally, the said Campbell, Vaught & Co. as principals, and the said David Campbell and the said Steele, Donnally & Steeles, as sureties, sixty days after the date thereof, to pay to the order of the president, directors, and company of the Bank of the United States, without defalcation, the sum of twelve thousand eight hundred and seventy-seven dollars, negotiable and payable at the office of discount and deposit of said bank at Louisville, Kentucky, value received, with interest thereon at the rate of six per centum per annum thereafter, if not paid at maturity. And plaintiffs aver that said note in writing, so as aforesaid made at Louisville in the state of Kentucky, and payable at said place, was and is a writing without seal, stipulating for the payment of money; and that the same, by the law of Kentucky, entitled 'an act to amend the law of proceedings in civil cases, approved February 4th 1812,' (an extract from which said law, duly authenticated under the seal of the said state of Kentucky, and duly certified, is to the court here shown) is placed upon the same footing with sealed writings containing the like stipulations, receiving the same consideration in all courts of justice, and to all intents and purposes having the same force and effect as a writing under seal. And although said sum of money, in said last mentioned note specified, has long been due and payable, according to the terms of said note, yet the said Andrew Donnally, Richard Steele, Robert M. Steele, Adam Steele, and William Steele, in the life time of said Robert M., Adam, and William Steele, and the said Donnally and Richard Steele, since the death of said Robert M., William, and Adam Steele, have not, nor has either of them, nor has the said David Campbell, or the said firm of Campbell, Vaught & Co., or either of them, paid unto said plaintiffs said last mentioned sum of twelve thousand eight hundred and seventy-seven dollars, or any part thereof, but to pay the same, or any part thereof, to said plaintiff, the said firm of Steele, Donnally & Steeles in the life of the said deceased partners, and the said David Campbell, and Campbell, Vaught & Co, refused, and the said defendant and Richard Steele, surviving partners of the late firm of Steele, Donnally & Steeles, still refuse. By reason whereof an action hath accrued to said plaintiffs to demand and have of and from said defendant said last mentioned sum of twelve thousand eight hundred and seventy-seven dollars, other parcel of said sum of money above demanded.

'And for that whereas afterwards, to wit, on the 26th day of June in the year 1822, at Louisville, in the state of Kentucky, to wit, at Clarksburg, in this district, the aforesaid Campbell, Vaught & Co. as principals, and the aforesaid David Campbell and Richard Steele, Andrew Donnally, Adam Steele Robert M. Steele, and William Steele, as securities, the said Richard, Andrew, Adam, Robert, and William, acting under the firm and style of Steele, Donnally & Steeles, by their certain writing obligatory, duly executed by them, without a seal, bearing date the same day, and here shown to the court, did promise and bind themselves, jointly and severally, to pay the plaintiffs, without defalcation, another sum of twelve thousand eight hundred and seventy-seven dollars, negotiable and payable at the office of discount and deposit of the said plaintiffs, at the aforesaid town of Louisville, in Kentucky, with interest thereon at the rate of six per centum per annum thereafter, if not paid at maturity. And the said plaintiffs in fact say that, though the said last mentioned sum of money, when due and payable according to the tenor and effect of said writing, to wit, on the 28th day of August 1822, at the office of discount and deposite aforesaid, was duly demanded, the same was not paid by the said Campbell, Vaught & Co., David Campbell, and Steele, Donnally & Steeles, or by any or either of them, nor have the said Campbell, Vaught & Co., David Campbell, and Steele, Donnally & Steeles, or any or either of them, at any time paid the same, or any part thereof, but the same to pay, they, and each of them, though often requested, have altogether failed, and refused, and still do refuse; and the said plaintiffs further in fact say that the said writing wsa duly made and payable at the aforesaid town of Louisville, a place within the commonwealth of Kentucky, and subject to laws thereof; and that the same writing, executed without a seal, was, at the time of its execution, and ever has been, and is now, by the laws of the said commonwealth of Kentucky, then and still in force, upon the same footing with a sealed instrument containing like stipulations, entitled to the same consideration in all courts of justice, and having, to all intents and purposes, the same force and effect as it would if sealed. By reason thereof, the plaintiffs are entitled to demand and recover of the said Andrew Donnally, one of the said obligors in the said writing, the aforesaid sum of twelve thousand eight hundred and seventy-seven dollars, with interest as aforesaid, other parcel of the debt above demanded.'

To the fourth and fifth counts demurrers were filed by the defendant, and there was a joinder in demurrer. The district court gave judgment in favour of the demurrers. The defendant also pleaded to these counts 'nil debet' and the statute of limitations of Virginia. The plaintiffs demurred to the plea of the statute of limitations of Virginia, and to the plea of nil debet on the fourth count, and joined issue on the plea of nil debet.

The statute of limitations of Kentucky, referred to in the fourth and fifth counts, was passed February 4, 1812, and is as follows:

'An act to amend the law of proceedings in civil cases. Approved, Feb. 4, 1812.

'Sec. 8. Be it further enacted by the authority aforesaid, that all writings hereafter executed without a seal or seals, stipulating for the payment of money or property, or for the performance of any act, duty or duties, shall be placed upon the same footing with sealed writings containing the like stipulations, receiving the same consideration in all courts of justice, and to all intents and purposes having the same force and effect, and upon which the same species of action may be found as if sealed.'

The district court held the plea of the statute of limitations of Virginia a bar to all the counts, and gave judgment on all the demurrers for the defendant, with the general conclusion that the plaintiffs take nothing by their bill, &c.

The plaintiffs prosecuted the writ of error.

The case was argued by Mr. Hardin and Mr. Sergeant, for the plaintiff in error; and by Mr Ewing and Mr Binney, for the defendant.

By Mr Hardin, for the plaintiff in error, it was argued, that the whole of the case depends upon the question, can the statute of limitations of Virginia be pleaded to the note sued on, referred to in the fourth and fifth counts. The statute of Virginia only applies to simple contract debts, and not to debts secured by specialty; and the only question to be decided is, Is the writing a specialty or not?

To enable the court correctly to settle this point, further facts in the cause are to be considered. The note was executed at, and made payable in, Louisville, in the state of Kentucky. The place where a note is made payable, forms a part of the contract; 4 Littell's Reports 226. A note not under seal, is made a specialty in Kentucky: 4 Littell's Laws of Kentucky 305; and also by the decisions of the court of appeals of Kentucky, 2 Marshall 568, and 3 Marshall 284. In those cases it is expressly decided that, since that s...