Edmondston v. Drake and Mitchel

ERROR to the circuit court for the district of South Carolina.

The leading facts in this case, from the record, were: Messrs John and Thomas Robson, of Columbia, in the state of South Carolina, being desirous of making a speculation in coffee, and Thomas Robson, one of the firm, being about to proceed immediately to Havana in execution of this purpose, procured from Charles Edmondston, of Charleston, the plaintiff in error, a letter of credit, dated the 16th of April 1825, to Castillo and Black of Havana, in the island of Cuba, in these words:

Charleston, 16th April, 1825.

Messrs Castillo and Black,-Gentlemen,-The present is intended as a letter of credit in favour of my regarded friends, Messrs J. and T. Robson, to the amount of forty or fifty thousand dollars, which sum they may wish to invest through you, in the purchase of your produce. Whatever engagements these gentlemen may enter into, will be punctually attended to. With my best wishes for the success of this undertaking, I am, &c. &c. C. Edmondston.

With this letter, Thomas Robson sailed for Havana, the day after its date: upon his arrival, he presented his letter of credit to Castillo and Black, who were then engaged in the execution of a similar contract, and could not act on this. Mr Black, one of the partners, introduced Mr Robson to Messrs Drake and Mitchel, the defendants in error, merchants residing in Havana; at the same time showing, but not delivering to them, Edmondston's letter of credit. After this interview, an agreement was entered into between Drake and Mitchel and the Robsons, the particulars of which are exhibited in a letter dated the 28th April, from Thomas Robson to Drake and Mitchel.

Havana, 28th April, 1825.

Messrs Drake and Mitchel,-Gentlemen,-I intend sailing to-morrow morning, in the schooner Felix, bound for Charleston, South Carolina, wind and weather permitting. I will thank you to execute the following order, at your earliest convenience; provided you feel yourselves warranted in so doing, from the letter of credit I produced; viz: two to three thousand bags of prime green Havana coffee, provided the same can be had at prices from eleven to thirteen dollars, and for extra prime, large lots, thirteen and a half. Bills on New York at sixty days, at two and a half to five per cent premium; and to be governed in said purchase by the rise or fall in foreign markets, exercising your better judgment thereon. Said coffee to be forwarded by first good opportunity to Charleston, South Carolina, on board of a good, sound and substantial vessel, addressed to the care of Boyce and Henry, Kunhart's wharf, Charleston. Bills of loading to be immediately forwarded to New York, and insurance ordered thereon to the full amount. Invoice of coffee, with duplicate bills of loading, to be made out in the name of J. and T. Robson, and forwarded with advice of drafts to the care of Boyce and Henry, Charleston. Wishing you success in said purchase; and claiming your particular attention thereto; I am, gentlemen, your obedient servant, Thomas Robson.

Please inform me the name of the house to whom the bills of loading, &c. will be addressed.

Notice of this arrangement was communicated by Drake and Mitchel to Charles Edmondston, in the following letter.

Havana, 29th April 1825.

Charles Edmondston, Esq.-Dear Sir,-In virtue of your letter of credit to Messrs Castillo and Black, in favour of Messrs J. and T. Robson, and at their request, we have consented to purchase two thousand bags of coffee, to be consigned to Messrs Boyce and Henry of your city, the insurance to be effected by Messrs Goodhue and Co. of New York, upon whom we are to draw for the amount, by reason of the facility of negotiations, Mr Robson or his friends remitting the money to these gentlemen to meet our drafts. Mr Robson, who carries this, will no doubt explain to you in person this negotiation, and we trust that there will be no demur in forwarding the necessary funds, with the cost of insurance. We are, &c. &c. Drake and Mitchel.

On the 25th of May, Charles Edmondston acknowledged the receipt of this letter in these words:

Charleston, 25th May 1825.

Messrs Drake and Mitchel,-Gentlemen,-In acknowledging the receipt of yours of the 29th of April, I cannot help expressing my grateful feelings at the manner you treated my letter of credit in Robson's favour. I am, &c. Charles Edmondston.

The shipment of coffee for the Robsons was completed by the 17th of May; and in conformity with the agreement with the Robsons, Drake and Mitchel, on the 21st of May, drew bills on New York for nearly fifteen thousand dollars, which were all regularly paid.

On that same day on which they drew their last bill on New York, they determined to alter the mode of reimbursement, as agreed on by the Robsons and themselves; and instead of drawing on New York, to draw on London for four thousand pounds sterling. Their determination to do this, and their probable motive for doing it, appear by the following letter from them to Boyce and Henry, of Charleston.

21st May 1825.

Gentlemen,-We crave reference to our last respects per brig Catharine, which vessel we hope is safely arrived at this date. We have this day received accounts from your city, and from New York, announcing to us the decline in the price of coffee; it is therefore well that we had not gone to the full extent of the instructions of Mr Robson. We also note the decline of your exchange on London, and as ours is still maintained at fourteen per cent, it has occurred to us to alter our plan of reimbursement, for the benefit of the interested in these coffee purchases, by drawing on London for the balance of our shipments for some houses here are drawing on the United States at par to one per cent, a rate which we cannot submit to-we are accordingly about to value on our friends Messrs Campbell, Bowden, and Co., to be covered by you or Messrs Goodhue and Co., as you may direct, to the amount of four thousand pounds sterling, which at four hundred and forty-four, and fourteen per cent, amounts to twenty thousand two hundred and forty-six dollars and forty cents. And we have already drawn upon Messrs Goodhue and Co. twelve thousand six hundred and ninety-nine dollars and twelve cents, with premium three, and two and a half per cent, three hundred and thirty-seven dollars and forty-three cents; and to complete this account, we have again drawn on the same, two thousand and seventy-one dollars and thirty-four cents, at two and a half per cent, two thousand one hundred and twenty-three dollars and twelve cents; making together thirty-five thousand four hundred and six dollars and seven cents; from which deducting our commission for drawing and negotiating, two and a half per cent, the remainder thirty-four thousand five hundred and twenty-two dollars will then be equal to the amount of our three invoices per Eagle, Hannah, and Catharine, as per inclosed statement. We trust that these dispositions will meet your approbation, and we pray you to make the necessary remittances to Messrs Campbell, Bowden and Co., including their commission and any other incidental charges. Coffee is still maintained here at thirteen dollars and upwards; but second qualities are plenty and cheaper in proportion; both this article and sugar are likely to decline a little, &c.

They executed this purpose on the day of the date of this letter; the Robsons being credited, on that day, with the amount of their bills on Campbell, Bowden, and Co., for four thousand pounds. They drew on the same day, according to their agreement, on New York, at two and a half per cent, which bill was duly honoured.

The Robsons, on the 4th June 1825, assented to this alteration in the mode of reimbursement, with relation to the draft for four thousand pounds; and their agents Boyce and Henry, by their direction, and according to the request of Drake and Mitchel, remitted to Campbell, Bowden and Co. a bill of exchange of J. B. Clough, on his firm of Crowder, Clough and Co. of Liverpool, at sixty days sight, on account of Drake and Mitchel: which bills were protested for non-payment.

During all these operations Mr Edmondston was wholly uninformed of the change which had been made in the mode of reimbursement, and which had been stated to him by Drake and Mitchel, in their letter of the 29th April.

On the 16th of September, Drake and Mitchel enclosed to Mr Edmondston for collection, an order on Thomas Robson, in the following words.

Havana, 16th September 1825.

Thomas Robson, Esq. Charleston,-Please pay Charles Edmondston, Esq. or order, the sum of twenty-six dollars, for balance of your account with, dear sir, your obedient servants, Drake and Mitchel.

After calling upon Mr Edmondston, as their attorney in fact, to collect the amount of the protested bills on Liverpool, from the Robsons, or from Boyce and Henry; and he not succeeding; Messrs Drake and Mitchel instituted this suit in the circuit court.

On the trial, the counsel for the defendant requested the court to charge the jury, as stated in the bill of exceptions; which being refused, and a verdict and judgment being rendered for the plaintiff, this writ of error was prosecuted.

The exceptions are stated in the opinion of the court.

The case was argued by Mr Drayton and Mr Writ, for the plaintiff in error; and by Mr Hunt and Mr Webster, for the defendant.

As to the necessity of notice to Mr Edmondston, of what was done under the letter of credit, the counsel for the plaintiff in error, cited, 1 Mason's Reports, 340. 7 Cranch, 91, 92. 1 Atk. 91. 2 Bro. C. C. 579. 2 Ves. Jun. 540. 3 Mer. 272. 2 Johns. Ch. C. 544.

As to the construction and effect of the letter of credit, 2 Sand. 403, 411. 2 New Reports, 175. 2 Maul. and Selw. 363. 3 Maul. and Selw. 502. 5 Maul. and Selw. 166. 15 East, 272. 8 Johns. Rep. 19. 3 Cranch, 492. 4 Johns. Rep. 476. 10 Johns. Rep. 188. 7 Term Rep. 254. 16 Johns. 100. 4 Taunt. 623. 3 Camp. 63. 4 Cranch, 224. 1 Stark. Rep. 153. 5 Barn. and Cress. 269. 2 Caines' Ca. Error, 1. 1 Paine's Rep. 377.

For the defendants in error, as to the liability of a guarantor, the counsel cited, Pothier on Obligations, 11. ch. 5, sect. 1. Ibid, 371. Code Napoleon, Liv. 3, Tit. 14, art. 2011. Ersk. Institutes, 326. Merle vs. Wells, 2 Camp. N. P. Rep. 413. Mason vs. Pritchard, 2 Camp. N. P. Rep. 436. 12 East. 227. Lanusse vs. Baker, 3 Wheat. 101. Russell vs. Clarke's Executors, 7 Cranch, 68. Meade vs. M'Dowell, 5 Binney, 203. Barkley vs. Lucas, 1 Term Rep. 291. 12 East. 227. 1 Maul. and Selw. 21. 12 Wheat. 516.

Mr Chief Justice MARSHALL delivered the opinion of the Court: