Sherrod v. Rhodes

ORMOND, J. Tf¡e questions of law presented on the record are, 1. Was the defendant entitled to notice of the dishonor of the bill drawn by him. It is argued that he was not entitled to notice, because he had no funds in the hands of the drawee, and therefore could not be prejudiced by the omission to give him notice that the bill was not paid. The rule here relied on, applies only where the consideration for which the bill is drawn passes to the drawer; in such a case, he is the real debtor, and cannot allege the want of notice; but in this case, the bill was drawn by the defendant for the accommodation of the acceptor, by whom the proceeds arising from its sale was received. He therefore stood in the relation of surety to the acceptor, and was doubtless entitled to notice, as was held by this court in Shirley v. Fellows, Wadsworth & Co. [9 Porter, 300,] and again in Foard v. Wo-mack, [2 Ala. Rep. 368.] Nor does the fact that the defendant was indebted to the Rail Road Company for the use of which the bill was drawn, in a sum equal to the amount of the bill vary the case in the slightest degree. It does not appear that the bill was drawn in payment of the debt due the company, or that it was contemplated that the defendant should pay it at maturity, but the contrary is most conclusively shewn by the proof. It appears that this bill, with others, was made to raise funds for the Rail Road Company; that the company had been obtaining money in this way for some years previously, and that when the bills fell due, they were paid by the treasurer of the company, if he had the means, if not, other bills were drawn in the same way to take up the old ones. The indebtedness therefore of the defendant to the company, was an immaterial circumstance, which did not affect the defendant’s right to notice of the dishonor of the bill. 2. Does the correspondence between Mr. Deshler, the treasu — 689 — rer of the company and the defendant, establish, a liability on the part of the defendant, or show a waiver of notice. Mr. Deshler, in his letter -to the defendant, informs him that the bills are still unpaid; 'that he had received a letter from the holders who were becoming impatient, and that he feared they would sue unless.some satisfactory arrangement could be made. He proceeds to inform the defendant, that the holders would take good bills on New Orleans, and that he had written to them promising to procure such. He then reminds the defendant of his debt due the company, and 'tells him that he calculates on being aided by him, and another gentleman, who is named, and concludes by proposing that he should draw a bill on Mobile or New Orleans for seven thousand dollars. The defendant, in answer says, it is impracticable to draw the bill, as he would not have the means of paying it, and proceeds to state the amount he has to pay during the winter and ensuing spring, and concludes by saying, “ it would afford me great pleasure to do what you wish, but I think from the above expose, you will agree with me that it would be improper to do it.” It is certainly true that a promise by a drawer or endorser to pay a dishonored bill with knowledge of the facts, will be a waiver of the laches of the holder, in omitting to make demand or give notice. But we do not think any such promise was madein this case. Mr. Deshler does not intimate in his letter to the defendant that he was under any obligation to pay the dishonored bill, or even that the defendant knew that the bill was still. unpaid; but after informing him that such was the fact, state's that an arrangement can be made with the holders, by drawing another bill, which he urges the defendant to do, not because it was his duty to pay the dishonored bill, but because he was indebted to the company who had the bill to pay. It was then simply a request to the defendant to pay his debt to the company, and the fact of the dishonored bill is stated to show the urgency of the case, and as a reason why the debt due the company should be paid by the defendant. In this light it was considered by the defendant, who does not attempt to excuse himself for not paying the dishonored bill, but goes into a detail to show his inability then to pay his debt due the company. The case of Gibbon v. Coggin, [2 Campbell, 188,] relied on by the plaintiff’s counsel is entirely unlike this case. In that case, — 690 — the drawer of a-dishonored bill of exchange was told it was dishonored and called on for payment; he answered, “ that his affairs were at that moment deranged, but that he would be glad to pay it as soon as his accounts with his agent were cleared.” Lord Ellenborough held, that by this promise, he admitted his liability. In this case, the promise was made in reference to the dishonored till, but in the case at bar, not only was there no promise to pay, but the refusal was not in reference to the dishonored bill, which if was not pretended the defendant was under any obligation to pay, but respected another bill which the defendant was requested to draw, for a reason having no relation whatever to his liability on the dishonored bill. It is therefore very clear that no promise to pay the dishonored bill or waiver of the laches of the holder, can be collected from this correspondence. 3. It is further insisted that as the holders knew nothing of the circumstances under which the bills were drawn, defendant, as to them, was not entitled to notice, and that as the plaintiff has been compelled by suit, to pay the holders, he occupies the same condition they were in. It has already .been shown that an accommodation drawer is entitled to notice of the dishonor of the bill, and the circumstance that the holder was ignorant of the fact, that the drawer was a mere surety, will not vary the case. If he omits to give notice, he does so at his peril, and assumes the burden of proving that notice was unnecessary. The remaining part of the charge assumes that the holder may, on giving notice to the last endorser sue any prior party on the bill, but the law is clearly otherwise. If the holder intend to sue the drawer and endorsers of a foreign bill, he must give notice to each direct, and in due time. [Chitty on Bills, 9th Am. ed. 367, and cases there cited.] If the plaintiff when he received notice of the dishonor of the bill, had notified the drawer, that would have charged him, and would have enured to the benefit of the holder as well as the last endorser. [Byles on Bills 164, Hilton v. Shepherd, 6 East. 14. See also 2 Camp. 208, 210, 273.] The defendant not having notice of the dishonor of the bill, either from the holder or the plaintiff, as la^t endorser, is discharged from liability. 4. The remaining question arises under the last charge of the court. The charge moved for was, that if the jury believed that these bills were drawn and endorsed by members of the rail road — 691 — company, to be accepted by the company, and sold to raise funds for the benefit of the company, and were in fact so sold and permitted to be dishonered by the company, and that afterwards the plaintiff, as last endorser, was compelled by the holder to pay the bills, that the drawers and endorsers as between each other, were to be considered as sureties for the company, and that the plaintiff was therefore entitled to recover from the defendant, one third part as contribution. This charge the court refused to give, unless the plaintiff would withdraw his claim to a recovery for the whole amount against the defendant as drawer and endorser of the bills paid by him. The charge moved for, is founded on the assumption, that because, the drawer and endorsers of these bills were members of the Rail Road Company, and drew and endorsed the bills to enable the company to raise funds, that they thereby became co-surities for the company, and therefore each liable to contribute an aliquot part, if one should be compelled to pay the whole. . In the case of Brahan and Atwood, [3 Stew. 247,] the contrary was held to be law, and that the fact merely, that two or more persons were successive accommodation endorsers for another, did not make them co-sureties, but that to constitute that relation there must be an agreement between them to that effect, or some fact or circumstance must exist from which it maybe inferred that they intended to be bound as co-sureties, although they have not signed the instrument jointly, but successively. This case has been acquiesced in ever since as a sound exposition of the law, and is so in the opinion of this court, as is shown by the cases there cited. [See also McDonald v. McGruder, 3 Peters’ 470.] In this case, there appears to have been an agreement between the parties in reference to the drawing and endorsing of these bills for the purpose of raising money for the company, in which they all had an interest. What the effect of that agreement was, and whether it authorised the inference that as the money was to be raised for the benefit of a company in which all have an interest, that it should therefore be a common liability, was a question peculiarly for the consideration of the jury. But so far as we are informed by the record, that view of the case was not pressed on the jury, or urged upon the court as the law of the — 692 — case. It has been shown, that without an agreement to that effect, or some fact or circumstance from which such an agreement can be inferred, successive accommodation endorsers ai’e not in law co-sureties; the only additional facts here, are that they were members of the company, and that the bills were drawn and endorsed for the benefit of the company; but conceeding that these facts would have authorised the jury to infer that there was any agreement between them to be bound as co-sureties, the court could not so determine, and therefore correctly refused the charge. There is still another objection to the charge as requested. At common law, one surety who was compelled to pay the debt could only recover from another surety an aliquot part, or that sum which is produced by a division of the debt actually paid by the number of sureties, without regard to their solvency. [Cowell v. Edwards 2 B. & P. 268.] But the rule in a court of chancery is to divide the loss equally among the solvent sureties. This equitable rule has been made the rule at law by a statute of this State. [Meek’s Sup. 352.] By reference to the bills which are set out in the record, and which are the foundation of this suit, it appears that four persons united in drawing and endorsing them, the defendant having drawn one, and endorsed two, and the plaintiff being the last endorser on all. If these four persons, as the motion for instructions assumes were cosureties, then if one should be obliged to pay the whole, if all the other’s were solvent, he could call on each for one fourth part, if one of them was insolvent, the sum for which the remaining solvent sureties are liable, would be increased to one-third part of the sum paid; and if two were in that condition, to one-half. The defendant could not be called on for one-third part then, unless one of the sureties was insolvent. Such may be the fact, but no such proof appears upon the record, and the charge was therefore abstract, as it assumes the existence of a fact which does not appear to have been proved or admitted. From this examination, it appears that the court was justified in refusing the charge moved for; this however, the coui't did not do in unqualified terms, but offered to give it, if the plaintiff would abandon his claim for the whole amount against the defendant as drawer and endorser of two of the bills paid by the plaintiff. — 693 — We think it cannot be doubted that this requisition of the court, imposed as a condition on which the charge would be given, cannot be sustained. The theory of the action of assumpsit, is, that each count is a separate cause of action, and although most usually we know that in practice, the different counts are mere successive changes rung upon the same demand, yet each count may be, and frequently is, for a special cause of action. The plaintiff had an unquestionable right to proceed against the defendant in his separate counts as drawer and as endorser, and on the common count for money paid to his use, which would be the appropriate mode of demanding contribution from a co-surety. The court therefore had no power to require the plaintiff’ to relinquish any claim rvhich he had a right to urge before the jury upon the declaration; and it has been shown that he had the right in this case, to go against the defendant either as co-surety for contribution, or on his special counts as drawer and endorser, or for both, according to the proof he might make. Was he prejudiced by this improper requisition of the court? If the court charge the jury wrong upon an abstract question, that is, upon a proposition not warranted by any evidence in the cause, the party against whom the charge is given is not injured thereby, because the jury ought not to find for him without evidence. If, however, the court correctly refuse such a charge, and then charge the jury wrong in point of law upon facts in evidence, the cause must be reversed, as has been repeatedly held in this court, That is not the precise predicament.of this case, but we think the injurious results are the same in both. In the case first supposed, the cause is reversed, because in presumption of law, the party is injured by the error of the court, although he may have sustained no actual injury, as the jury might have been warranted in finding their verdict as they did, if the law had been correctly expounded. When the instruction under consideration, was moved for and refused, the court had virtually, by its previous charges, as the evidence was documentary, decided the case against the plaintiff on the special counts, and he had excepted to the charges so given. The acceptance by the plaintiff of the offer of the court would have been an abandonment of the exceptions so taken, and consequently of his right to urge them in this court. This the court had not the right to ask him to do. It is impossible now', that it should be known that this improper — 694 — action of the court has not prejudiced the plaintiff. If the charge had been simply refused, it may have been again propounded in terms which the evidence authorised, and which the court would have been bound to give. Indeed, the court admitted the right .of the plaintiff, to the charge in the terms in which it was proposed, but refused to give it for a reason which is not tenable. In addition, the refusal of the court to give the charge asked for unless the plaintiff would abandon his?claim on the first counts was equivalent to a declaration, that he could not, without such .abandonment recover contribution. That this was well calculated to mislead the jury, declared as it was, in their hearing, if not absolutely certain, is at least highly probable, and according to our previous decisions render it proper that the judgment should be reversed. [Cothran v. Moore, 1 Ala. 423; Toulmin v. Lessesne & Edmondson, 2 ib. 359.] Let the judgment be reversed and the cause remanded.