Boyce v. Edwards/Opinion of the Court

This was an action of assumpsit, brought in the circuit court of the United States for the district of South Carolina, upon two bills of exchange drawn by Adam Hutchinson, in favour of Timothy Edwards, the plaintiff in the court below, upon Boyce and Edwards the defendants, both bearing date on the 8th of February 1827; the one for two thousand one hundred dollars, and the other for two thousnad three hundred and thirty-one dollars, payable sixty days after sight.

The cause was tried before the district judge; and in the course of the trial, several exceptions were taken on the part of the defendants below to the admission of evidence, and the ruling of the court upon questions of law; all which are embraced in the charge to the jury, to which a general bill of exceptions was taken; and the cause comes here upon a writ of error.

The bills of exchange were duly presented for acceptance, and on refusal were protested for non-acceptance and non-payment; but the plaintiff sought to charge the defendants as acceptors, by virtue of an alleged promise to accept before the bills were drawn. And whether such liability was established by the evidence, is the main question in the cause. The evidence principally relied upon for this purpose consisted of two letters, the first as follows: 'Charleston, March 9, 1825. Mr Edwards-Dear Sir, Mr Adam Hutchinson of Augusta is authorised to draw on us for the amount of any lots of cotton which he may buy and ship to us, as soon after as opportunity will offer; such drafts shall be duly honoured by yours, respectfully, Boyce, Johnson and Henry.'

Johnson soon after died; and on the 28th of the same month of March, the defendants published a notice in the Charleston newspapers, announcing a dissolution of the partnership by the death of Johnson, and that the business would be conducted in future under the firm of Boyce and Henry. The other letter is from the defendants, of the date of the 4th of January 1827, addressed to Adam Hutchinson, in which they say, 'you are at liberty to draw on us when you send the bill of lading. We do not put you on the footing of other customers, for we do not allow them to draw for more than three-fourths in any instance. You may draw for the amount,' &c.

The defendants' counsel had objected to the admission of the first letter from Boyce, Johnson and Henry; and contended, that this did not bind Boyce and Henry to accept bills drawn on them after the dissolution of the partnership was known, and desired the court so to instruct the jury. But the court stated to the jury, that the said letter, in connexion with the other evidence in the cause, was sufficient to charge the defendants as acceptors. The other evidence referred to by the court, as would appear from other parts of the charge, was the letter of the 4th of January 1827; the notice of the dissolution of the partnership; the accounts rendered by the defendants; and the numerous bills, drawn and accepted by them, all which had been given in evidence in the course of the trial.

According to the view which we take of the instruction given by the court below at the trial, that the defendants upon the evidence were liable as acceptors, it becomes very unimportant to decide whether the letter of Boyce, Johnson and Henry should have been admitted or not. For we think, in point of law, there was a misdirection in this respect; even if the letter was properly admitted. We should incline, however, to the opinion, that this letter, at the time when it was offered and objected to, and standing alone, would not be admissible evidence against the defendants. It was dated nearly two years before the bills in question were drawn, and was from a different firm. It was evidence between other and different parties. A contract alleged to have been made by Boyce and Henry, could not be supported by evidence that the contract was made by Boyce, Johnson and Henry. It might be admissible, connected with other evidence showing that the authority had been renewed and continued by the new firm; and in support of an action on a promise to accept bills drawn on the new firm. But that was not the purpose for which it was received in evidence, or the effect given to it by the court in the part of the charge now under consideration. It was declared to be sufficient, in connexion with the other evidence, to charge the defendants as acceptors. And in this we think the court erred. Had the letter been written by the defendants themselves, it would not have been sufficient to charge them as acceptors.

The rule on this subject is laid down with great precision by this court, in the case of Coolidge vs. Payson, 2 Wheat. 75, after much consideration, and a careful review of the authorities: 'that a letter written within a reasonable time, before or after the date of a bill of exchange, describing it in terms not to be mistaken, and promising to accept it; is, if shown to the person who afterwards takes the bill on the credit of the letter, a virtual acceptance, binding the person who makes the promise.' This case was decided in the year 1817. The same question again came under consideration in the year 1828, in the case of Schimmelpennich, et al. vs. Bayard, et al. 1 Peters, 284, and received the particular attention of the court, and the same rule laid down and sanctioned; and this rule we believe to be in perfect accordance with the doctrine that prevails both in the English and American courts on this subject. At all events, we consider it no longer an open question in this court; and whenever the holder of a bill seeks to charge the drawee as acceptor, upon some collateral or implied undertaking, he must bring himself within the spirit of the rule laid down in Coolidge vs. Payson: and we think the present case is not brought within that rule.

With respect to the letter of the 9th of March 1825; in addition to the objection already mentioned, that it is not an authority to draw emanating from the drawees of these bills; it bears date nearly two years before the bills were drawn; and what is conclusive against its being considered an acceptance is, that it has no reference whatever to these particular bills, but is a general authority to draw at any time, and to any amount, upon lots of cotton shipped to them. This does not describe any particular bills in terms not to be mistaken.

The rule laid down in Coolidge vs. Payson requires the authority to be pointed at the specific bill or bills to which it is intended to be applied; in order that the party who takes the bill upon the credit of such authority may not be mistaken in its application.

And this leading objection lies also against the letter of the 4th of January 1827. It is a general authority to Hutchinson to draw, upon sending to the defendants the bills of lading for the cotton. This is a limitation upon the authority contained in the former letter, even supposing it to have been adopted by the new firm; and must be considered, pro tanto, a revocation of it. Hutchinson is only authorised to draw, upon sending the bills of lading to the defendants. And although it may fairly be collected from the evidence, that that was done in the present case; it does not remove the great objection, that it is a general authority, and does not point to any particular bills, and describe them in terms not to be mistaken, as required by the rule in Coolidge vs. Payson. The other circumstances relied on by the court to charge the defendants as acceptors, are still more vague and indefinite, and can have no such effect.

The court therefore erred in directing the jury, that the evidence was sufficient to charge the defendants as acceptors, and the judgment must be reversed.

The distinction between an action on a bill, as an accepted bill, and one founded on a breach of promise to accept, seems not to have been adverted to. But the evidence necessary to support the one or the other, is materially different. To maintain the former, as has been already shown, the promise must be applied to the particular bill alleged in the declaration to have been accepted. In the latter, the evidence may be of a more general character, and the authority to draw may be collected from circumstances, and extended to all bills coming fairly within the scope of the promise.

Courts have latterly leaned very much against extending the doctrine of implied acceptances, so as to sustain an action upon the bill. For all practical purposes, in commercial transactions in bills of exchange, such collateral acceptances are extremely inconvenient, and injurious to the credit of the bills; and this has led judges frequently to express their dissatisfaction, that the rule had been carried as far as it has; and their regret that any other act, than a written acceptance on the bill, had ever been deemed an acceptance.

As it respects the rights and the remedy of the immediate parties to the promise to accept, and all others who may take bills upon the credit of such promise; they are equally secure, and equally attainable by an action for the breach of the promise to accept, as they could be by an action on the bill itself.

In the case now before the court, the evidence is very strong, if not conclusive, to sustain an action upon a count properly framed upon the breach of the promise to accept. The bills in question appear to have been drawn for the exact amount of the cost of the cotton shipped at the very time they were drawn. And if the bills of lading accompanied the advice of the drafts, the transaction came within the authority of the letter of the 4th of January 1827; and if satisfactorily shown that the bills were taken upon the credit of such promise, and corroborated by the other circumstances given in evidence, it will be difficult for the defendants to resist a recovery for the amount of the bills.

With respect to the question of interest, we think, that if the plaintiff shall recover at all, he will only be entitled to South Carolina interest. The contract of the defendants, if any was made upon which they are responsible, was made in South Carolina. The bills were to be paid there; and although they were drawn in Georgia, they were drawn, so far as repects the defendants, with a view to the state of South Carolina for the execution of the contract.

The judgment of the circuit court must be reversed; and the cause sent back with directions to issue a venire de novo.