Page images
PDF
EPUB

Michigan State Bank t. Estate of Leavenworth.

thority to draw, and, under such an authority, it rests with the defendant to show that the place of payment was not usual in the course of business, and such as the parties could not have contemplated; 15 Conn. 475, Bridgeport v. Housatonic R. Co.

2. It is an inseperable incident to the right to draw, that the drawer (unless special provision is made) may appoint the place of payment; otherwise, he could not direct payment to be made at a bank, even in the place of the residence of the drawee ; and in the present case, the contract is silent as to the place upon which, or where, the bill should be drawn, or made payable, and purposely so, no doubt, in order that the parties might draw upon the various markets in which their funds might be received in the course of their trade.

J. Maeck and Underwood & Hard for the defendant.

The case shows that Leavenworth was a mere surety, and therefore the only consideration for his liability, was the discount by the plaintiffs, and but $5,000 of the notes in question are discounted in the life-time of Leavenworth. The law does not require notice of the death to be given, where there is no person who is bound to give it ; and notice of the death is not necessary to terminate the authority to draw, or the guaranty ; Blades v. Free, 17 E. C. L. 83; Coll. on Part. $ 120 and note, $ 538 ; Caldwell v. Stilimar, 1 Rawle, 217.

The authority to draw, and the promise to accept and pay, does not extend to any bill not drawn in pursuance of the contract.

As there is no evidence, the court must determine, from the contract alone, the extent of the liability.

The defendant living and doing business in Burlington, and executing the contract there, it is not to be inferred that he gave authority to draw drafts at sight, or on time, payable in New Orleans, St. Louis, Detroit or New York, but payable at his own place of business.

It is of great consequence to him, whether he should be at the expense to provide funds in all the commercial cities in the world to meet drafts that may be drawn on him, or be at the risk of paying large damages for exchange and re-exchange, if the drafts should be protested; Lanusse v. Baker, 4 Pet. 214.

Michigan State Bank v. Estate of Leavenworth.

The case shows that after $ 12,000 of the bills in question had matured, the plaintiff accepted other notes of Catlin, Wilkins, and J. & J. H. Peck & Co., on time, as collateral security, and retained the same, and have sued them, without other evidence, leaving the court to determine what the law will imply from this.

If the law implies a contract to wait until the result of the new security can be known, or until it matures, then Leavenworth, being a surety, is discharged. This disposes of the $ 5,000; Atkinson v. Brooks, 26 Vt.; Oakie v. Spencer, 2 Am. Lead. Ca. 170 and notes.

The opinion of the court was delivered, at the circuit session in September, 1856, by

ISHAM, J. Independent of the question, whether these bills of exchange were drawn in pursuance of the letter of credit on which the estate of Mr. Leavenworth is now sought to be made chargeable, we are satisfied that, as to those bills which fell due previous to and on the 5th of August, 1854, the estate is discharged from all liability upon them, by the arrangement made on the 15th of August in that year. At that time Mr. Catlin executed four prommissory notes amounting in all to the sum of $ 12,000, payable in 30, 40, 50 and 60 days after date, which were endorsed by Mr. Wilkins and the firm of J. & J. H. Peck & Co., the latter of whom was not a party to the original bills, nor to the letter of credit. Those notes were received as collateral security for the payment of those bills which were then due and unpaid. The letter of credit, on the authority of which these bills were drawn, was signed by Mr. Leavenworth as surety for the other parties to that instrument. The fact that it was signed by him in that manner was known to the plaintiffs at the time the bills were received by them and discounted. The effect of that arrangement was to give further time for the payment of those bills to the persons primarily liable upon them, until the new' securities had matured. It was a suspension of the right of the holder to sue the parties upon them, and an implied undertaking to wait for the payment of the original bills, until the notes fell due. The English authorities to that effect are very decisive, and such seems to be the general current of the American cases. In the case of Gould v. Robson, 8 East 576, it was

Michigan State Bank v. Estate of Leavenworth.

held that the holder, by taking a renewed bill payable at a future time, though under an express agreement that the original bills should be retained in his hands as security, impliedly agreed to give time until the new security became due, and could not sue, in the interim, on the original bill; Stedman v. Gooch, 1 Esp. Cases 14; 2 Amer. Lead. Cas. 182. We are aware that a different rule was held in the case Pring v. Clarkson, 1 Barn. & Cress. 14, in which the court, after recognizing the general principle that time given to the acceptor of a bill will discharge the other parties, observed, that “in no case has it been said, that taking a collateral security " from the acceptor shall have that effect.” That case, however, has not met with the approbation of elementary authors ; Chitty on Bills, 444; Bailey on Bills, 341 ; and is considered as overruled in the exchequer by the case of Kendrick v. Lamax, 2 Cr. & Jer. 405. The case of Okie v. Spencer, 2 Wharton 253, is a well considered and leading case in this country on that subject. In that case, the holder of a note, on the day it fell due, accepted from the maker a check drawn by him and a third person who were partners, payable six days afterwards, which, if paid at maturity, was to be in full satisfaction of the note. The court held that the check was received as collateral security, that it suspended the remedy against the maker of the note during that period, and was a discharge of the endorser. The same doctrine was held in the case of Myers v. Willis, 5 Hill 463, where a surety was discharged when a note had been accepted, payable at a future day on account of a debt for which he was liable. The same principle was subsequently sustained in the case Fellows v. Prentiss, 3 Denio 512. In all cases of that character, so far as those primarily liable for the debt are concerned, the suspension of the remedy will cease when the security has matured, and ordinarily they may then be sued on the original indebtedness. But in relation to sureties, such a suspension will effect a complete bar to the original right of action ; 2 Amer. Lead. Cas. 183, and cases cited. If Mr. Leavenworth had stood as an endorser of those bills, it would hardly be questioned, but that he would have been discharged by the acceptance of those notes. The effect is the same when they seek to render him liable on that letter of credit which he signed as surety, unless it affirmatively appears that the remedy against the principals, was reserved

Michigan State Bank v. Estate of Leavenworth.

during that period ; 2 Vt. 129. We think, therefore, the court were correct in disallowing those bills as subsisting claims against the estate of Mr. Leavenworth.

In relation to the remaining two bills of exchange, dated June 13th and 19th, amounting to the sum of $8,000, a majority of the court consider that they were also properly disallowed, on the ground that they were drawn after the decease of Mr. Leavenworth, which occurred on the 10th of May previous. The objection taken to the allowance of these bills equally affects all the others, except the first, dated on the 8th of May, 1854. The decease of Mr. Leavenworth, it is considered, was a revocation of all authority to draw bills thereafter on the strength of that letter of credit; and in this respect, it is immaterial whether the plaintiffs had notice of his death at the time they received and discounted the bills, or not. The general principle is well settled, that an authority conferred by a letter of attorney must be executed during the life of the principal; for a power to represent another, can only continue as long as there is some one to be represented ; Paley on Agency, 156 ; Bac Abg. Tit. Authority (d); Co. Litt. 52 (b.) In the case of Hunt v Rausmanier, 8 Wheat. 174, it was held, that a letter of attorney was revoked by the death of the party making it, though it may be irrevocable during his life; same case, 1 Peters 1. The same doctrine was held in Galt v. Gallaway, 4 Peters 344, in which the court observed that “no principle is better settled, than that the “powers of an agent cease on the death of his principal. If an act “ of agency be done, subsequent to the decease of the principal, “ though his death be unknown to the agent, the act is void.” The reason of that rule is, that upon the death of the principal his estate belongs to his heirs, devisees, or creditors; and their rights cannot be impaired by any act of one who was not their agent, and who has no control over their property; Harper v. Little, 2 Greenleaf, 14, 18. That rule, however, is subject to the qualification, that if the authority is coupled with an interest, it is not revoked by the death of the principal. In such case, it survives the person giving it, and may be executed after his death. That qualification is recognized by both English and American authorities; Hunt v. Rausmanier, 8 Wheat. 174; 1 Amer. Lead. Cases 567, and cases cited ; Walsh v. Whitcomb, 2 Esp. Cas. 565; Gaussen v. Morton, 10 Barn.

Michigan State Bank v. Estate of Leavenworth.

& Cress. 731 ; Smart v. Sanders, 5 Man. Gran. & Scott 894, 916. I have had some hesitancy, however, in coming to the conclusion, that these bills should be disallowed for that reason. The decease of Mr. Leavenworth probably determined the authority of Roelofson, Hatch & Co. to draw bills on him so as to bind his estate for their acceptance and payment. But Roelofson, Hatch & Co. were also authorized to draw jointly and severally upon the other parties to that letter of credit, and for such bills as were drawn upon either or all of them during a given period, Mr. Leavenworth therein gave his written guaranty that the bills should be accepted and paid. While their authority to draw on Mr. Leavenworth was determined, it is difficult to perceive why they were not still authorized, during the period limited, to draw on Mr. Catlin, or either of the other persons who were living, and who signed that letter of credit. The decease of Mr. Leavenworth, it strikes me, could not determine the authority which they had given to draw on them individually; and, if the letter of credit authorized the drafts, it would seem to follow that the plaintiffs could rely on Mr. Leavenworth’s guaranty, that they should be accepted and paid. In such case, it is not a question of agency, but of contract, and what will defeat its binding obligation. These bills, however, must be regarded as having been drawn without authority; the decease of Mr. Leavenworth having revoked the authority contained in that letter of credit. Under such circumstances, it was not necessary that notice of Mr. Leavenworth's decease, should have been given to Roelofson, Hatch & Co. in order to determine their authority under it. The revocation was effected by operation of law. In such case, the power of the agent ceases immediately, without any further act being done. But when the revocation is effected by the act of the party, such notice becomes necessary, Galt v. Galloway; 3 Kent's Com. 63, 67 ; Story on Part. 336, 7, 9. Partners bind each other by their contracts, on the principle that each is the agent of the others in their partnership transactions. That agency may be determined by operation of law, as by the death or bankruptcy of either. In such case, no notice is necessary to determine the agency of the survivors, as it is when it is determied by their voluntary act; 3 Merivale, 614; 3 Swanston 490; 16 John. 494 ; Bissett on Part. 102, 104.

« EelmineJätka »