Witte v. Williams
| Decision Date | 23 October 1876 |
| Citation | 8 S.C. 290 |
| Parties | WITTE v. WILLIAMS. |
| Court | South Carolina Supreme Court |
Bills of exchange, drawn by A B on C D, with blanks for the dates times of payment and names of payees, were left by the drawer in the hands of drawee for certain purposes, who afterwards in fraud of the rights of the drawer, filled up the blanks accepted the bills and transferred them before maturity to a bona fide holder for valuable consideration without notice of the circumstances under which they were drawn and left in the hands of the drawee: Held , In an action on the bills against the drawer, that the holder was entitled to recover.
The bona fide holder of a negotiable instrument transferred before due for a valuable consideration, and without notice of any defect which would render it void between antecedent parties, has a right to recover upon it, notwithstanding its want of validity as against one or more of such parties.
The acceptor of a bill of exchange, having it in his possession, may, before maturity, transfer it to a bona fide holder, and no presumption of payment arises from the fact of his possession before maturity.
A bill of exchange is not invalid as a regular and formal bill of exchange because it is payable to the drawee.
BEFORE REED, J., AT CHARLESTON, JANUARY TERM, 1876.
This was an action by Charles O. Witte against Mrs. Sally C Williams.
The complaint alleged two causes of action, as follows:
First, for a first cause of action-
1. That on the 4th day of December, 1868, at Charleston, in the State aforesaid, the defendant made and delivered to the plaintiff her bill of exchange in writing, dated on that day, and directed the same to certain persons, under their firm name of J. & J. D. Kirkpatrick, to pay to the order of this plaintiff $2,500 twelve months after the date thereof, for value received.
2. That then and there the said J. & J. D. Kirkpatrick, upon sight thereof, accepted said bill.
3. That at maturity the same was duly presented to said J. & J. D. Kirkpatrick for payment, but it was not paid, of all which due notice was given to the said defendant.
4. That no part thereof has been paid except the following amounts, viz.:
January 10, 1870, $259; June 7, 1870, $489.81; April 13, 1871, $497.35, making in all the sum of $1,246.16; but that in this last mentioned amount is included the sum of $188.43 for interest on the said bill to the 13th day of April, 1871; and that there is, therefore, now due on the said bill the sum of $1,442.27, with interest thereon from the 13th of April, 1871.
And the plaintiff further says that he is the lawful owner and holder of the said bill, and the defendant is justly indebted to him therefor in the sum of $1,442.27, with interest thereon from the 13th day of April, 1871, and $2.35 costs of protest.
Second, for a second cause of action-
That on the 15th day of December, 1868, the defendant, at Charleston aforesaid, made her other bill of exchange in writing and directed the same to J. & J. D. Kirkpatrick, at Charleston aforesaid, and thereby required the said J. & J. D. Kirkpatrick to pay to the order of the said J. & J. D. Kirkpatrick the sum of $2,500 three hundred and sixty-five days after the date thereof, which period elapsed before this suit was brought, and then and there delivered the said bill to the said J. & . J. D. Kirkpatrick, who endorsed the same and delivered it to the plaintiff; and the said plaintiff further says that the said bill was duly presented to the said J. & J. D. Kirkpatrick for acceptance, and that the said firm duly accepted the same, and at maturity that said bill was duly presented for payment but was not paid, of all which the defendant had notice.
And the plaintiff further says that he is now the lawful owner and holder of the said bill, and the defendant is justly indebted to him therefor in the sum of $2,500, principal, together with interest thereon from the eighteenth day of December, 1869, and $2.35 costs of protest.
The answer is as follows:
The defendant, answering the complaint herein, says:
First, for a defense to the first alleged cause of action-
1. Defendant denies all those allegations which are contained in paragraph 1.
2. Defendant alleges that on or about the 15th of June, 1868, she made and delivered to James D. Kirkpatrick, doing business under the name of J. & J. D. Kirkpatrick, a person other than the plaintiff, with whom defendant had business transactions, a certain bill of exchange in writing, signed by defendant, but not dated, and directed the same to the said J. & J. D. Kirkpatrick, and thereby required the said J. & J. D. Kirkpatrick to pay to the order of ______________ $2,500 ____ months after the date thereof; and defendant denies that she has any knowledge or information sufficient to form a belief whether or not said bill of exchange was subsequently dated 28th December, 1868, and made payable to the order of the plaintiff, and thereafter duly transferred and delivered to him by the lawful holder or holders thereof.
3. Defendant alleges further that said bill of exchange was delivered by her to the said J. & J. D. Kirkpatrick to cover advances of money made, or about to be made, to her by the said J. & J. D. Kirkpatrick, which advances defendant had paid and made good to the said J. & J. D. Kirkpatrick before the date of the alleged transfer and delivery of said bill of exchange to the plaintiff; and that this said bill had in fact been paid before such alleged transfer and delivery.
4. Defendant alleges that if the plaintiff is in fact the holder of said bill of exchange it was transferred and delivered to him by the said J. & J. D. Kirkpatrick as security for an indebtedness from the said J. & J. D. Kirkpatrick to the said plaintiff, and that the plaintiff well knew at the date of said transfer that the firm of J. & J. D. Kirkpatrick had long ceased to exist or transact business under such firm name, and that the said James D. Kirkpatrick, who had formerly done business as J. & J. D. Kirkpatrick, had formed a partnership with George W. Witte, and that at the date of the alleged transfer and delivery he was doing business under the firm name of Kirkpatrick & Witte.
Second, and for a defense to the second alleged cause of action, defendant says:
1. She denies that on the 18th day of December, 1868, she made her other bill of exchange in writing and directed the same to J. & J. D. Kirkpatrick, as alleged in plaintiff's second cause of action.
2. And for a further defense to said second cause of action defendant makes the same defense as the defense hereinbefore made to the first cause of action.
On March 14, 1872, an order was signed by the Court, with the consent of the attorneys, appointing Samuel Lord, Esq., Referee, and referring the case to him.
On April 14, 1875, the Referee submitted his report, as follows:
This case was referred to me with instructions to pass upon the issues of law as well as of fact involved therein.
I find, as matter of fact, that for many years prior to 1865 John Kirkpatrick and James D. Kirkpatrick carried on a large factorage and commission business in Charleston, under the style of J. & J. D. Kirkpatrick. John Kirkpatrick died in 1865 and J. D. Kirkpatrick continued the same business, under the same firm name, until August 15th, 1868, when the following notices were given, by advertisement and otherwise, to wit:
1. Dissolution.-The firm of J. & J. D. Kirkpatrick is dissolved from this date. The business of the firm will be attended to by the undersigned, in liquidation.
(Signed,)
JAMES D. KIRKPATRICK.
2. The subscribers have this day entered into a copartnership for the transaction of a factorage and commission business at No. 6 Accommodation Wharf.
(Signed,)
JAMES D. KIRKPATRICK.
GEO. W. WITTE.
The plaintiff had notice of these advertisements.
In July, 1867, J. & J. D. Kirkpatrick owed the defendant on open account about $18,000. At her request this account was closed by her taking their note at twelve months for $15,000 and their holding $3,000 subject to her order.
The defendant received money from the firm after this, from time to time, until about the 15th June, 1868. At this date she had overdrawn her account about $6,000, exclusive of the $15,000 not yet due. In consequence of this over draft, at the request of J. & J. D. Kirkpatrick, she delivered to them three drafts, or bills of exchange, directed to the firm, one for $1,000, and the other two for $2,500 each, leaving blank the dates, time of payment and name of payee. When Kirkpatrick ceased to do business under the name of J. & J D. Kirkpatrick, the defendant's account was made up, the $6,000 over draft was credited upon the $15,000 note, and a new note for the balance-namely, $8,881-was signed by J. & J. D. Kirkpatrick, and delivered to her, but the defendant omitted to take out of Kirkpatrick's hands the two drafts for $2,500 each. On the 4th and 15th of December, 1868, Kirkpatrick fraudulently filled the blanks in these drafts, accepted them in the name of J. & J. D. Kirkpatrick, and passed them off to the plaintiff, who paid over the proceeds to Kirkpatrick, taking from him certain other collateral securities. With the money thus realized, Kirkpatrick paid a debt which he had contracted under the name of J. & J. D. Kirkpatrick to Lewis F. Robertson, for which Mrs. Williams, the defendant, was not responsible. When the drafts were first seen by the plaintiff, the blanks had already been filled up. The drafts not having been paid at maturity by the acceptor, this action was brought to recover against the defendant, as drawer, the amount due thereon. His right to do so has been resisted by the defendant on various grounds, but it seems...
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