Arthurs v. Hart

THIS case was brought up, by writ of error, from the circuit court of the United States for the eastern district of Louisiana.

In 1847, Hart, who was a citizen of Louisiana, employed Nicholson and Armstrong, of Pittsburg, Pennsylvania, to build and put up a sugar-mill and engine upon his plantation. The mill and engine were put up, and a part of the purchase-money paid. For the balance, a bill of exchange was drawn on March 1, 1848, by Nicholson and Armstrong upon, and accepted by, Hart, to the order of James Arthurs and Brothers, and by them indorsed to Arthurs, Nicholson, and Co. The bill was payable twelve months after date, and was for the sum of $2,540.65. At maturity, the bill was presented for payment, and, payment being refused, was protested. Hart alleged that when the bill was accepted, it was with the understanding that the builders would remedy certain defects in the sugar-mill and engine, and that the holders of the bill knew of this arrangement.

In May, 1849, the plaintiffs in error, the holders of the bill, brought suit, by way of petition, according to the Louisiana practice, in the circuit court of the United States.

The cause was tried by the court without the intervention of a jury.

The following bill of exceptions states the point of evidence upon which the case came up to this court.

Be it remembered, that, on the trial of this cause, the defendant offered to prove, by the testimony of Francis Armstrong, that Mr. Arthur, Mr. Nicholson, and witness, went to the levee, on board the steamboat Luna, to see Captain Hart, in reference to the second payment; that he (Captain Hart) complained that the machinery had not worked well, that it was not then running; that he complained, that, from the bad working of the sugar-mill and engine, he had lost juice, and he required us to deduct the interest then due; that Messrs. Arthur and Nicholson suggested that Captain Hart should accept a bill of exchange for the balance then due, after deducting the interest; that it was understood that the sugar-mill and engine were to be put in first-rate order, and that Captain Hart then agreed to accept a bill; to the introduction of said evidence, or of any conversation, or of any agreement and understanding of the parties, previous to and at the time of accepting the bill sued upon, the plaintiff objected, for the reason that such evidence, or conversation, or agreement, or understanding, would tend to convert an absolute into a conditional acceptance; that it would either vary and contradict the written agreement entered into by the parties; and plaintiffs also objected to the competency of the witness, Francis Armstrong, to testify in this case, for the reason that he was one of the drawers of the bill of exchange sued upon. All of which objections were overruled by the court; to which ruling plaintiffs excepted, and tendered this their bill of exceptions, which is filed and signed by the court.

THEO. H. McCALEB, [SEAL,] U.S. Judge.

Judgment was rendered for the plaintiffs for the sum of $1,743,50 with interest.

The plaintiffs, thinking that the judgment ought to have been for the whole amount of the bill, brought the case up to this court.

It was argued by Mr. Wylie, for the plaintiffs in error, and by Mr. Lawrence, for the defendants.

Mr. Wylie, for plaintiffs in error.

There are two principal points which present themselves upon the record in this case.

First, whether the court below ought not to have entered a judgment in favor of plaintiffs, for the whole sum expressed upon the face of the bill, with interest, &c.

And second, whether this court, under its decisions, will reverse the judgment of the court below in this case, if erroneous in law.

First question. That the decision of the court was erroneous on this point would seem to be clear. In Townsend v. Sumrall, 2 Pet. 170-183, it was held by this court, that 'if the holder of a bill of exchange, at the time of taking the bill, knew that the drawee had not funds in his hands belonging to the drawer, and took the bill on the promise of the drawee to accept it, expecting to receive funds from the drawer; the promise of the drawee to accept the bill constitutes a valid contract between the parties, notwithstanding the failure of the drawer to place funds in his hands. The acceptance of the drawee of a bill binds him, although it is known to the holder that he had no funds in his hands. It is sufficient that the holder trusts to such acceptance.' And in Grant and Casy v. Elliott, 7 Wend. 227, it was held, 'in an action by the payee against the acceptor, it is no defence that the bill was accepted without consideration, and that fact known to the payee.' See also United States v. Bank of Metropolis, 15 Pet. 377; 7 Johns. Rep. 361; 7 Smedes and Marsh, 244; Byles on Bills, 150; 2 Wheat. 385; Civil Code, 2256; D'Aquir v. Barbour, 4 La Annual R. 441; Henderson v. Stone, 1 N. S. 641.

Second point. This case having been submitted to and tried by the court without a jury, a question arises, whether, under the recent decisions of this court, the erroneous judgment of the court below can be corrected. Weems v. George et al., 13 How. 190-197; Bond v. Brown, 12 How. 254.

In Weems v. George et al., Mr. Justice Grier, in delivering the opinion of the court, says: 'When the case is submitted to the judge to find the facts without the intervention of a jury, he acts as a referee by consent of the parties, and no bill of exceptions will lie to his reception or rejection of testimony, nor to his judgment of the law.'

Although this principle, thus stated, goes much beyond the doctrine laid down in Bond v. Brown, and is, indeed, considerably modified by the subsequent context of the opinion of Mr. Justice Grier itself, yet we must take it to be the law for the present case.