Charles Brooks vs. William S. Elgin and James H. Elgin.
December, 1847.
An unaccepted draft, drawn by a third party upon a fourth, was endorsed by a debtor to his creditor on account of a precedent debt;—acceptance was refused, and notice given to the drawer by the holder—but notice was not given to the debtor endorser for some months after such refusal. In an action by the creditor against the debtor to recover his precedent debt, the defendant cannot defeat the action to the amount of the draft, by insisting that the holder should have sued the drawee, who had funds of the drawer at the time of the presentation of the draft—the drawer being sued by the creditor, who still retained the draft.
Refusal to accept or pay a draft, established by oral proof, is a question of fact; whether notice of such refusal was given within a reasonable time, is a question of law.
Whether an assignee of a draft, delivered and received on account of a precedent debt, has or has not used due diligence in endeavoring to recover the sum assigned to him, from parties on the draft liable to the assignor, is a question of law:
Appeal from Baltimore County Court.
This was an action of assumpsit, brought on the 24th January, 1844, by the appellees against the appellants, Thomas H. Per-
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due and William JYichols, trading under the firm of Perdue, JYichols Co. The appellant only appeared below, and pleaded non-assumpsit.
The plaintiffs, to support the issue on their part, proved the partnership of the plaintiffs and defendants, as laid in the declaration; and also proved, by competent testimony, the note and account following:
“ Shannondale Furnace, April 21st, 1842.
“ $441 35. Ninety days after date, we promise to pay J. H. Elgin fy Co. or order, four hundred and forty-one dollars and thirty-five cents—negotiable and payable at the Bank of the Valley of Va. in Charlestown, without offset, for value received. Perdue, Nichols & Co.”
“ Endorsed, J. H. Elgin Co.”
Messrs. Perdue, JYichols Sf Co. To J. H. Elgin 8f Co.
Dr.—An account from 22d April to 24th November, 1842, in the aggregate $220 40.
The defendant then offered in evidence the following account and draft:
Messrs. Perdue, JYichols £f Co. To J. H. Elgin Co.
Dr.—An account from 14th April to 20th September, 1842, in the aggregate $635 18, for the same items and the promissory note of the defendants.
Cr.—A draft on the Balt, and Ohio R. R. Co. for $580, leaving a balance of $55 18 due J. H. E. Co.
The draft was as follows:
Balt, and Ohio R. R. Co.
Will please pay to Hugh Gallace, or order, five hundred and eighty dollars, for castings used in re-constructing Harper’s Ferry Viaduct, out of any monies due me on my final estimate.
J. P. Shannon.
Harpers Ferry, February 14th, 1842.
Which said draft was endorsed:
*256April 4, 1842. The within order I transfer to Messrs. Per-due, JYichols &/' Co. Hugh Gall ace.
Pay to the order J. H. Elgin fy Co.
Jlpril 8th, 1842. Perdue, Nichols & Co.
The' plaintiffs then proved by J. Q. Cobbs, that on the day the above draft was received by the plaintiffs, he came as their clerk to Baltimore, and presented the same to the Balt, and Ohio R. R. Co. when he was informed by Mr. Mhinson, he thinks, the secretary of the Company, and if not by Mr. Cann, the clerk of the chief engineer, that the said draft could not be accepted, and that the Company had no funds belonging to Mr. Shannon; that he at once called on Shannon, the drawer, about the draft, who said that he had a dispute with the R. R. Co. about the settlement of the account, and did not pay the draft. Witness subsequently returned with the draft to Harpers Ferry, and saw Perdue, one of the defendants, on or about the 1st January, 1843, who asked whether the said draft had been sent to Mr. Latrobe, for suit against Shannon, which he told him had been done. Witness ivas here told that the draft was in truth sent on the 27th May, 1843, to Mr. Latrobe. He says, however, that he is confident that this conversation took place with Perdue at the time stated, which witness fixes; and he believed the draft had been sent at the time he spoke to Perdue, though he did not, in fact, know whether it had been sent or not.
The defendant offered in evidence the final statement appended hereto, and the papers connected therewith.
Dr.—The Baltimore and Ohio R. R. Co. in account with Shannon &f Scofield, (Contractors.) Cr.
For the re-construction and new part of the wooden superstructure of the Harpers Ferry Viaduct, and the trestle work of Harpers Ferry.—Aggregate of debt, . . $61,757 14
By credits from 31st May, 1840, to the 13th September, 1842, in cash,......$ 49,576 15
Balance due S. fy S...... 12,180 99
$61,757 14
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Engineer’s Office, Balt, and Ohio R. R. Co.
Baltimore, September 14th, 1842.
To Joshua I. Atkinson, Esa.
Sec. Balt, and Ohio R. R. Co.
Sir,—Messrs. Shannon Sf Scofield, contractors for the reconstruction and new part of the Harpers Ferry Viaduct and trestling, at Harpers Ferry, have completed their work under that contract, and are entitled to be paid in full the balance of $12,080 99, appearing to be due them in the above account current, on their signing the annexed final receipt and release.
Benj. H. Latrobe, Chief Engineer.
To which was annexed the following power:
I hereby authorize and empower Mr. Joseph P. Shannon to sign any receipt in my name, that may be necessary to settle with the Balt, and Ohio R. R. Co.—the balance due from said Company to the firm of Joseph P. Shannon and Jesse Scofield—the said balance being, as per account furnished by said R. R. Co., $12,080 99.
Bated 14th September, 1842. Jesse Scofield.
To the said account current was annexed a receipt and release to the Company of the balance above mentioned by Scofield, dated 6th February, 1843.
The plaintiffs proved that the sum of $12,084 was paid over by the R. R. Co. to Shannon on the presentation of said engineer’s order, and before the 7th February, 1843, and further proved that on the 27th May, 1843, they sent the said draft or order to Mr. J. H. B. Latrobe for collection.
The defendant further proved, that no effort was ever made by plaintiffs to collect the amount of the draft from the R. R. Co. or Gallace, the party who assigned the same to defendant.
The plaintiffs also gave evidence that the draft was received as collateral security, and it was admitted that the plaintiffs *258did not send this draft for suit until 27th May, 1843, and never used any means to obtain payment of said order from the R. R. Co. except its presentation as aforesaid.
• The defendant proved by J. I. Atkinson, the secretary of the R. R. Co. that he had no recollection that this order had ever been presented to him, but that he would not say that it had not been.
The plaintiffs then offered evidence by the secretary of the Company, that in no event would he have accepted or paid the draft of one of the partners, like that in question, out of the partnership fund.
The defendant prayed the court to instruct the jury:
If the jury believe that on the 22d September, 1842, the defendant assigned to the plaintiffs the order given in evidence, which plaintiffs accepted, and gave the receipt given in evidence, that J. P. Shannon and Scofield were contractors on the Balt, and Ohio R. R. and that on the date of the order given in evidence, no final estimate had been made, but that on the 14th September, 1842, a final estimate was made, by which a balance of $12,080 94 was found to be due said Shannon and Scofield from the Balt, and Ohio R. R. Co. and that the plaintiffs in this cause never took any steps or used any legal diligence to recover the said order, or the amount thereof, from the Balt, and Ohio R. R. Co.; and if the jury further believe that such order was given on account of work done by Gallace in the re-construction of the Harpers Ferry Viaduct, that Shannon was one of the. parties contracting for the re-construction of said Viaduct; and that the plaintiffs presented said draft to some person at the Balt, and Ohio R. R. Co. who said there were no funds; that said draft was never delivered back to the defendant by the plaintiffs; and that no notice of its non-acceptance or non-payment was given to the defendant, till January, 1843; that then the plaintiffs are not entitled to recover, but for the balance of their account, after deducting the said draft or order.
If the jury believe the facts stated in defendant’s first prayer, and further find that the R. R. Co. at the time when such order *259was presented, had funds more than ample to pay such order, and continued to hold said funds till February, 1843; that the plaintiffs have not used any diligence to collect the sum from them; then the plaintiffs are not entitled to recover, for the amount of said order on the said R. R. Co.: which prayers the court, (Archer, C. J. and Purviance, A. J.) refused to grant. The defendant excepted.
The testimony on both sides being closed, and which is to be taken as forming part of this exception, the plaintiffs, by their counsel, prayed the court to instruct the jury—that if the jury shall believe that after the refusal of the R. R. Company to pay, or accept the draft of J. P. Shannon, notice within a reasonable time—of which the jury are the judges—was given to JYichols, Perdue Co. of such non-payment or non-acceptance, then the defendant is not entitled to be credited with the amount of the said draft: whicii instruction the court, (Archer, C. J. and Purviance, A. J.) gave. The defendant excepted and appealed.
The cause was argued before Dorsey, Spence, Martin and Magruder, J.
By McMahon for the appellant, and
By Latrobe for the appellee.