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*SMITH and Others v. VERTUE and Another.

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A bill was accepted by the defendants," Payable on giving up bill of lading for 76 bags of clover-seed per Amazon, at the London and Westminster Bank, Borough Branch:"-Held, that this was a conditional acceptance to this extent, that the holders were only entitled to receive the amount on delivering over to the acceptors the bill of lading; but that they were not bound to present the bill on the precise day on which it became due.

THE first count of the declaration stated that certain persons using the name, style, and firm of T. B. Sands & Co., on the 24th of December, 1859, in parts beyond the seas, to wit, at New York in the United States of America, by one J. A. Edwards, their agent in that behalf, made their bill of exchange in writing, and directed the same to the defendants by the name, style, and firm of Messrs. Vertue & Sons, and thereby required the defendants to pay to the order of themselves the said T. B. Sands & Co., sixty days after sight, in London, 2281. 38. 5d., which period had elapsed before the commencement of this suit; and the defendants, so using the name, style, and firm of Vertue & Sons, accepted the said bill, payable, on giving up a bill of lading for 76 bags of clover-seed per Amazon, at the London and Westminster Bank, borough branch; and the said T. B. Sands & Co., by their aforesaid agent in that behalf, endorsed the said bill to a certain person or certain persons using the name, style, and firm of John Stewart & Co., or to his or their order; and the said person or persons so using the name, style, and firm of John Stewart & Co., endorsed the said bill to the plaintiffs; and though all things had happened and had been done, and all times had elapsed, to entitle the plaintiffs to have the said bill paid by the defendants, yet the defendants had not paid the same.

There was also a count for money payable to the plaintiffs by the defendants for money found to be due from the defendants to the plaintiffs on accounts stated between them: claim, 3007.

First plea, to the first count,-that the plaintiffs were not ready and willing to give up the said bill of lading in the declaration and in the defendants' said acceptance mentioned, as alleged.

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Second plea,-to the first count,-that the drawers of the said bill had contracted to sell to the defendants the said clover-seed in the first count mentioned, and had shipped the same on board a ship called the Amazon, under the bill of lading in the said first count mentioned, and that the defendants accepted the said bill of exchange, being the bill in the first count mentioned, in payment of the price of the said cloverseed; that, after their said acceptance, and before maturity of the said bill of exchange, the defendants contracted to sell a large portion of the said clover-seed to certain persons, the said last-mentioned contract of sale to be performed by the defendants by delivery to the said persons on or before the said 14th of March, 1860, being the day on which the said bill should become due: That on the said 14th of March, 1860, being the day on which the said bill of exchange became due and payable, and from thence until the expiration of a reasonable time after the said last-mentioned day, they, the defendants, were ready and willing to pay the same according to the tenor and effect of their said acceptance thereof, and then, on the said day, during business hours, demanded the said bill of lading of the plaintiffs, then being holders of the said bill of exchange, and possessed of the said bill of lading, and offered

the plaintiffs to pay the said bill of exchange on giving up the said bill of lading, but the plaintiffs then neglected and refused to give up the said bill of lading, nor did nor would the plaintiffs deliver up to the defendants the said bill of lading till after the expiration of a reasonable time for delivery of the said bill of lading after the said day on which the said bill of exchange became due, or until after the said persons to whom the defendants had so contracted to sell the said portion of the said clover-seed had repudiated *their said contract on

*216] account of the inability of the defendants to obtain the said bill

of lading, or to deliver the said portion of the said clover-seed so contracted to be sold to the said persons; whereby the defendants were deprived of the benefit and profits of their said contracts, and the said bill of lading by the said default of the plaintiffs became and was deteriorated in value, wherefore the defendants refused to accept the said clover-seed or bill of lading or pay the said bill of exchange.

Third plea, to the residue of the declaration,-never indebted. The plaintiffs joined issue on the first and third pleas, and demurred to the second, the ground of demurrer stated in the margin being, that the time at which the bill of lading was tendered had no connection with the liability of the defendants to pay upon their acceptance to the bill of exchange in the declaration mentioned. The defendants joined in demurrer.

The cause came on for trial before Erle, C., J., at the sittings in London after the last term, when the following facts appeared in evidence: -The plaintiffs were bankers in London, and the defendants seed merchants carrying on business in Southwark. The bill of exchange upon which the action was brought was in the following form:

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*217] *On the back of the bill were the following endorsements:

"Pay Messrs. John Stewart & Co., or order.

"T. B. SANDS & Co.,

"Per J. A. EDWARDS, attorney."

"Pay Messrs. Smith, Payne & Smiths, or order.

"JOHN STEWART & Co."

Messrs. Stewart & Co., who were American merchants residing at Manchester, and who banked with Messrs. Smith, Payne & Smiths, on the 27th of February, 1860, sent the bill of exchange in question with the bill of lading for the 76 bags of clover-seed annexed to it, to the plaintiffs, with instructions "to receive payment under discount, when

called for ;" and on the same day Stewart & Co. informed the defendants that the bill was at the plaintiffs' bank, and directed them to apply there when they wanted to take it up.

The bill arrived at maturity on the 14th of March, 1860, but was not presented for payment. If it had been, it would have been duly honoured. No inquiry was made by the defendants respecting the bill until the 15th of March, when one of the defendants called at Smith, Payne & Smiths, and asked why it had not been presented. It did not appear what answer he received; but, the bill being then presented to him, with `the bill of lading annexed, he refused to accept the latter or pay the former, saying that he had entered into a contract to ship the seed on that day to Scotland, and it was then too late to do so.

The bill was presented at the Borough branch of the London and Westminster Bank on the same day (with the bill of lading annexed), and refused payment; whereupon this action was commenced.

Upon this state of facts, the Lord Chief Justice *directed a verdict to be entered for the plaintiffs, reserving leave to the [*218

defendants to move to enter a verdict for them.

Montague Smith, Q. C., on a former day in this term, obtained a rule nisi accordingly. He submitted that time was the essence of the contract, that the delivery of the bill of lading to the defendants was a condition precedent to the holders' right to demand payment of the bill, and that that condition was not performed within the stipulated time.

It was arranged that the argument of the rule and on the demurrer should come on together.

Bovill, Q. C., and Coleridge, for the plaintiffs. (a)—The first question is, what is the effect of the defendants' acceptance,-" payable on giving

up bill of lading for 76 bags of clover-seed per Amazon, at the London and Westminster Bank, Borough Branch?" Is it a conditional acceptance, or an absolute acceptance, the payment being conditional? It is submitted that it falls within the latter description, and that the defendants are liable. Ever since the statute 1 & 2 G. 4, c. 78, which was consequent upon the decision of the House of Lords in Rowe v. Young, 2 Brod. & B. *165 (E. C. L. R. vol. 6), 2 Bligh 391, the mere addition of a place of payment is no qualification of the accept[*219 ance, unless the words "and not otherwise or elsewhere" be superadded. Here, the added words do not qualify or cut down the generality of the acceptance; the only qualification being as to the particular proceeds out of which the amount is to be paid. Assuming that this acceptance was a conditional one, it became absolute upon the condition being performed. In Bayley on Bills, 6th edit. 198, it is said: "A conditional acceptance becomes absolute as soon as its conditions are performed. Thus, an answer by the drawee that he could not accept until a navy bill should be paid, was thought (Pierson v. Dunlop, Cowp. 571) to

(a) The points marked for argument on the part of the plaintiffs on the demurrer were as follows:

"That, as the acceptor of a bill of exchange is liable to pay it at all times within six years, there is nothing disclosed in the plea to vary this general rule, or prevent its operation in this

case:

"And that the obligation on the part of the plaintiffs, if it existed at all, to deliver the bill of lading mentioned in the plea, had no connection with the duty of the defendants to pay the bill upon their acceptance, so as to relieve the defendants from their duty if it was not delivered in a reasonable time."

operate as an absolute acceptance upon the payment of the navy bill. So, an answer that the bill would not be accepted till certain goods against which it was drawn arrived, was held virtually an acceptance when they did arrive and were received: Miln v. Prest, Holt 181 (E. C. L. R. vol. 3), 4 Campb. 393." The law is laid down substantially in the same way in Byles on Bills, 7th edit. 165. In a case of Storm v. Garnons, tried before Erle, J., at Guildhall, on the 22d of February, 1848, a bill accepted payable at Messrs. Fuller & Co.'s on delivery of "the shipping documents," was held to be an absolute acceptance. If the acceptance was absolute, no presentment was necessary; for, the acceptor is bound to be ready at all times to pay the bill. And, if conditional, the condition was satisfied by the offer of the bill of lading on the following day, and the plaintiffs were entitled to the money. If it were a question for the jury, it must be taken that the jury have found for the plaintiffs. If the acceptance be absolute, then the second plea affords no defence at law, for it is immaterial whether the plaintiffs did or did not sustain prejudice from the non-presentment of the bill on the *220] *day it became due. There is no principle of law, and nothing upon the face of the document itself, to show that the presentment and delivery up of the bill of lading were to take place at any particular time. To make the plea at all available, it should have averred a positive and absolute refusal to perform the condition.

Montague Smith, Q. C., and Hannen, contrà.(a)-This was clearly a conditional acceptance. The ordinary sense of the words implies a condition. The argument derived from the statute is in the defendant's favour: it required the interference of the legislature to get rid of the conditional effect of an acceptance making a bill payable at a particular place. In Byles on Bills 165, it is said: "Qualified acceptances are of two kinds,-first, conditional, and secondly, partial, or varying from the tenor of the bill. Whether an acceptance be conditional or not, is a question of law: Sproat v. Matthews, 1 T. R. 182. Acceptances, 'to pay as remitted for' (Banbury v. Lisset, 2 Stra. 1211), to pay when in cash for the cargo of the ship Thetis' (Julian v. Shobrooke, 2 Wils. 9),' to pay when goods consigned to him (the drawee) were sold' (Smith v. Abbot, 2 Stra. 1152), an answer that a bill would not be *221] *accepted till a navy bill was paid (Pierson v. Dunlop, Cowp. 571), have respectively been held to be conditional acceptances. In none of those cases were the words so strongly conditional as are the words here. In Swan v. Cox, 1 Marsh. 176 (E. C. L. R. vol. 4), A., in June, 1811, agreed to purchase a house of B. for 1000l., paying 3007. down; full possession to be given by the 1st of June, 1812. B. was arrested in June, 1811, on which A. accepted a bill for B. in favour of B.'s creditors, payable if the house should be given up on the 1st of June,

(a) The points marked for argument on the part of the defendants on the demurrer were as follows:

"1. That the acceptance of the bill as stated in the declaration rendered it obligatory on the holders to be in a position to give up the bill of lading on the day the bill of exchange fell due:

"2. Or that, at any rate, the holder, by refusing to deliver up the bill of lading till after the expiration of a reasonable time beyond the day it fell due, discharged the acceptors from liability to pay:

"3. That the damage to the acceptors stated in the plea, caused by the act of the holders, exonerates them from liability to pay."

1812. At B.'s request, A. put his nephew into the house to take care of it while B. remained in custody. B., having a bad title to the house, gave up all claim to it, and A. purchased it of the real owner, being allowed the 300l. which he had paid to B. And it was held that the possession which A. had of the house from B. was not such a compliance with the condition of the acceptance as to support an action by the holder of the bill against A. In Story on Bills, § 239, it is said: "An acceptance is general when it imports an absolute acceptance precisely in conformity to the tenor of the bill itself. It is conditional or qualified when it contains any qualification, limitation, or condition different from what is expressed on the face of the bill, or from what the law implies upon a general acceptance. It is conditional, for example, when the drawee accepts a bill to pay when goods conveyed to him are sold,' or when in cash for the cargo of the ship A.,' or 'to accept when a navy bill is paid,' or 'to pay as remitted from thence, at usance.' And the condition may be implied from circumstances, as well as expressed. It is qualified when the drawee absolutely accepts the bill, but makes it payable at a different time or place, or for a different firm, or in a different mode from that which is in the tenor of the bill." And for this Story refers to the *cases cited in Byles. In Turner v. Hayden, 4 B. & C. 1 (E. C. L. R. vol. 10), 6 D. & R. 5 (E. C. L. R. vol. [*222

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16), R. & M. 215 (E. C. L. R. vol. 21), where the holder of a bill of exchange accepted payable at a banker's, but not made payable "there only," did not present it for payment, and the banker about three weeks afterwards failed, having had in his hands during all that time a balance in favour of the acceptor exceeding the amount of the bill,-it was held that the latter was not discharged by the omission to present the bill for payment, the acceptance being in law a general acceptance. Abbott, C. J., there says: "In Sebag v. Abitbol, 4 M. & Selw. 462, Lord Ellenborough thus defines laches, Laches is a neglect to do something which by law a man is obliged to do:' and he proceeds, Whether my neglect to call at a house where a man informs me that I may get the money amounts to laches, depends upon whether I am obliged to call there.' Now, the law did not oblige this plaintiff to present the bills at Marsh & Co.'s; we cannot, therefore, say that he has been guilty of laches because he omitted to do so." And Bayley, J., adds: "The 1 & 2 G. 4, c. 78, says that such an acceptance as that given by the defendants shall have the effect of a general acceptance, and then the holder is not bound to present the bills at any particular time or place." That implies that it would be otherwise if the acceptance were conditional. Marshall v. Powell, 9 Q. B. 779 (E. C. L. R. vol. 58), is to the same effect. Time is in general of the essence of the contract, whether it be a contract for the sale of land or for any other purpose: Sugden's Vendor and Purchaser, 13th edit. 216. The whole law upon the subject of conditional or qualified acceptances is considered very minutely in the case of Rowe v. Young, 2 Brod. & B. 165 (E. C. L. R. vol. 6), 2 Bligh 391. Best, C. J., there says (2 Brod. & B. 181): "It cannot be disputed that the drawee of a bill may accept it specially; and that such an acceptance may narrow his *responsibility below what it [*223 would have been if he had accepted the bill according to its tenor. Special acceptances are recognised by a long series of decisions of all the courts of Westminster Hall, from which it appears that the

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