Hyde v. Stone

THIS case was brought up, by writ of error, from the Circuit Court of the United States for the castern district of Louisiana.

On the 2d of January, 1850, Stone, being then in New Orleans, purchased from Hyde & Oglesby a bill of exchange, of which the following is a copy, with the notarial protest thereof.

$1,500.

NEW ORLEANS, January 2d, 1850.

Sixty days after sight of this second of exchange, first unpaid, pay to the order of ourselves fifteen hundred dollars, value received, which place to account W. Barton, as advised.

HYDE & OGLESBY.

To P. Frothingham, Esq., Boston.

Endorsed: Pay H. L. STONE.

HYDE & OGLESBY.

H. L. STONE,

By H. W. HERBERT, Att'y.

[Acceptance on face:] January 15, 1850.

PETER FROTHINGHAM.

COMMONWEALTH OF MASSACHUSETTS,

Suffolk, City of Boston, ss:

On this nineteenth day of March, in the year of our Lord one thousand eight hundred and fifty, I, Henry Clark, notary public, by legal authority admitted and sworn, and dwelling in the city of Boston, at the request of J. J. Loving, Esq., cashier North Bank of Boston, went with the original bill of exchange, of which the foregoing is a true copy, to the counting-room, in this city, of Peter Frothingham, the acceptor, and presenting said bill to him, demanded payment thereof, the time therein limited and grace having elapsed, to which he answered, that said bill would not be paid.

I sent notice of the non-payment thereof to the drawers and first endorsers, requiring payment of them, by mail, to New Orleans.

Wherefore I, the said notary, at the request aforesaid, have protested, and by these presents do solemnly protest, against the drawers of said bill, and endorsers, acceptor, and all others concerned therein, for exchange, re-exchange, and all costs, charges, damages, and interest, suffered and sustained, or to be suffered and sustained, by reason or in consequence of the non-payment of said bill.

Thus done and protested, in Boston aforesaid, and my notarial seal affixed, the day and year last written.

(Signed) HENRY CLARK, [seal.]

Notary Public.

Stone brought suit upon this bill in the fifth District Court of New Orleans, in March, 1853; whereupon, the defendants filed an exception to the jurisdiction of the court, upon the ground that they had previously made a surrender of their property to their creditors in the third District Court of New Orleans, and that all proceedings were stayed against them. The exception further stated that the plaintiff was put upon their schedule as a creditor; wherefore they prayed that the suit of plaintiff be transferred and cumulated with the insolvency proceedings in the third District Court of New Orleans.

On the 31st of May, 1853, the fifth District Court sustained the exception, and ordered the costs to be paid out of the mass of property surrendered.

On the 1st of May, 1854, Stone brought his action in the Circuit Court of the United States.

The defendants pleaded in abatement, that Stone was a citizen of Louisiana, and therefore incompetent to sue in the Federal court, and in bar that the question had become res judicata by the maintenance of the exception in the fifth District Court. The case went to trial upon an agreed statement of facts, whereof those recited above are the most material; and at November term, 1855, the court gave judgment for the plaintiff. The defendants brought the case to this court by a writ of error.

It was argued by Mr. Benjamin for the plaintiffs in error, and Mr. Taylor for the defendant.

The argument of Mr. Benjamin upon the effect of the proceedings in insolvency is omitted, because the court did not think that question was raised by the record in the case. His point with regard to the notice of the dishonor of the bill was thus stated:

I. The defendants are discharged from responsibility as drawers and endorsers of the bill, by reason of the laches of the holder, in failing to give notice of non-payment.

The law of Louisiana on this subject has reference exclusively to protests made by notaries of that State. (Acts of 1855, p. 48.)

By the law merchant, it is clear, without citation or authorities, that the protest of a foreign bill of exchange is not legal evidence of any other fact than that of presentment and refusal to pay. A statement volunteered by the notary, that he put into the post office a notice of protest to the drawer, is not legal evidence of the fact.

Even if the law of Louisiana were applicable to the case under consideration, the evidence is insufficient. The protest, as annexed to the petition, and made part of it, shows that it is not such a protest as is alone permitted by that law to be received as proof of notice. It is not signed by two witnesses. (McAfee v. Doremus, 5 How., 53.)

II. In the absence of proof of notice, an attempt is made to fasten responsibility on defendants by proof of waiver of notice.

The waiver is said to result from the acknowledgment of the debt set forth in the eighth article of the statement of facts.

To this presumption of waiver there are two fatal objections:

The first is, that it is nowhere stated at what date the acknowledgment was made. If the schedule of insolvency was filed before the maturity of the bill, (and there is no proof of the contrary,) it was still the duty of insolvents to place the bill on their schedule as a debt due by them, and to put the name of the holder, if known, in the list of creditors. (Bainbridge v. Clay, 3 Martin's U.S., 262; Deslix v. Schmidt, 18 Louisiana Rep., 466.)

The second is, that an acknowledgment of the indebtedness, if it ever can be considered to amount to a waiver of laches, is confined to cases where the party making the acknowledgment knew of the laches. The proof of his knowledge of the laches must be clear, or no waiver will be presumed. (Story on Notes, secs. 362, 363, and notes; Story on Bills, sec. 320; Chitty on Bills, p. 500, Am. edi., 1842; Thornton v. Wynn, 12 Wheat., 183.)

In Louisiana, the doctrine is extremely rigid. (See the cases and principles collected in Hennen's Digest, Verbo, Bills and Notes, XI.)Mr. Taylor, for the defendant in error, made the following points:

I. The judgment on the exceptions filed in the case in the third District Court of New Orleans, in the State of Louisiana, was not a final judgment, and is no bar to any other proceedings on the cause of action set up in the case.

II. The fact that H. L. Stone, the plaintiff in the court below, was a citizen of Massachusetts, proved on the trial, and that the bill of exchange sued on was bought by him individually, and with his personal funds, as shown by the statement of facts agreed to and signed by the parties, gave the Circuit Court of the United States jurisdiction. (Constitution U.S.)

III. The defendant in error, H. L. Stone, performed no act to make himself a party to the proceedings in insolvency in the third District Court of New Orleans.

IV. The plaintiffs in error are legally bound to pay H. L. Stone the amount of the bill of exchange sued on, because, first, legal notice of its protest for non-payment was given them; and, second, they acknowledged it to be due and owing by them in their schedule filed in the proceedings in their insolvency. (Shed v. Brott, 1 Pick., 401.)

Mr. Justice CAMPBELL delivered the opinion of the court.