Phœnix Insurance v. Allen

Christiancy J.: This was an action of assumpsit brought by Allen, the plaintiff below, against the company, to recover the amount of a loss by fire under a policy issued by the company to Allen. The declaration contained counts upon the policy, and the common counts. The plea was the general issue. It appeared from the evidence introduced by the plaintiff (and of these facts there was no dispute), that on the 20th day of April, 1861, the loss under the policy had been adjusted by compromise between Allen and the company (the latter acting through one Holden, their agent, — 507 — having power to adjust losses), at the sum. of eleven hundred and six 25-100 dollars, which was agreed by said agent to be paid by a draft drawn by him on the general agents of the Phcenix Company at Cincinnati “payable in Chicago exchange.” The draft for the amount was so drawn on the same day, upon R. H. & H. M. Magill, general agents of the company at Cincinnati, payable to the order of Allen at one day’s sight. This draft was indorsed by Allen to Stephens & Beatty, of Detroit, for whose use the action was brought; the plaintiff, however, retaining some interest in it (but what, did not appear). Stephens & Beatty indorsed and transmitted this draft to Harrison & Hooper, their agents in Cincinnati, for presentment and demand of payment, who duly presented it to the drawees, on the 2nd of May, 1861, and received and accepted from the drawees, as and for a compliance with said draft or order, a bill of exchange drawn by J. H. Bussing & Co., bankers at Cincinnati, upon Hoffman & Gelpecke, bankers at Chicago, and indorsed by said R. H. & H. M. Magill, general agents as aforesaid. This last draft was in the following words and figures: “$1,106 25. Walnut Street Bank: Cincinnati, May 2, 1861. Pay to the order of R. H. & H. M. Magill, general agents, eleven hundred and six 25-100 dollars current funds. G. II. Bussing & Co. To Hoffman & Gelpecke, Chicago, III.” This draft was received by Stephens & Beatty, at Detroit, from their agents in Cincinnati, on the 4th day of May, 1861, and on the 25th day of the same month they transmitted it by mail to their agents in Chicago, for presentment and demand of payment; and, on the 29th day of the same month, it was duly presented to Hoffman & Gelpecke, the drawees, and payment demanded, which payment was refused; and it was thereupon protested for non-payment, and due notice thereof given. It was admitted there were daily mails between Detroit — 508 — and Cincinnati, between Detroit and Chicago, and between Detroit and Grand Rapids, and that the several times occupied in the transmission of the mails between these several points were as follows: Between Detroit and Cincinnati, from twelve to twenty-four hours; between Detroit and Chicago, from twelve to fourteen hours, and between Detroit and Grand Rapids, less than twelve hours. There was no other evidence touching the question of diligence in presenting the draft for payment. The draft was offered in evidence by the plaintiff, under the common counts, but rejected by the Court on the .ground that it was not negotiable, because payable in current funds, and not in cash. As the plaintiff does not complain of the judgment, and we think the draft was properly excluded for another reason, it is only important to notice this point for the bearing it may be supposed to have upon another question in the cause. But in the absence of all evidence that anything else than cash was treated as current, funds in Chicago, we do not see how the Court could assume judicially to know the fact or presume it; until this should be made to appear, the current funds in which it was made payable, should, we think, be held to be such funds only as were current by law. We must therefore treat this draft as a negotiable bill of exchange payable in money. It does not appear to have been obtained for the purposes of exchange; that is, for the purpose of transmitting funds to Chicago; but it is clear that it was received in payment of the first draft or order drawn by Holden and indorsed to Stephens & Beatty, or, in other words, in payment of the sum due the plaintiff for his loss under the policy. Whether received in absolute or conditional payment, was a question for -the jury upon the evidence. Had they found it was received as absolute payment, they could not have found for the plaintiff: as his remedy would then clearly have been confined to the draft itself, which the plaintiff was not allowed — 509 — to introduce in evidence. It is only therefore in respect to its reception as conditional payment that we are to consider the question of the plaintiff’s right to sue for the original indebtedness, and the question of diligence in presenting the draft for ■ payment. Its reception as conditional payment would operate as a suspension of the plaintiff’s original right of action till the draft should be properly presented for payment, and such payment was refused (See authorities cited 2 Am. Lead Cas. 182). And we think the plaintiff, by such acceptance, must also be understood to have accepted the duty of doing everything with respect to the paper which was necessary to fix the liability of the drawer and indorsers, and the onus of proving that he has performed this duty when he seeks to recover upon the original cause of action for which the paper was received; In Jennison v. Parker, 7 Mich. 355, it was held by a majority of this Court that where a draft drawn by a third person was indorsed by the debtor, and by him sent to the creditor to be applied when paid, the creditor made the paper his own and could not sue upon the original debt if he neglected the steps necessary to hold the debtor liable as indorser. We see no reason for departing from the rule there laid down. We think the same reasons apply here, not only with reference to the •indorser, but with at least equal force to the drawers also; since, if the drawers have been dischai’ged by the neglect of the holder to present for payment in due time, the indorsers (who, so far as the present question is concerned, may be considered as the company for whom they acted) would lose their remedy over upon the drawers; for there is nothing in the case to show that the drawers could be held liable without due presentment. In 2 Am. Lead Cases, p. 183, upon a careful review of the cases it is laid down as a general principle of the law merchant that, “a plea that the plaintiff has taken — 510 — the note or bill of a third person on account of the cause of action, is a sufficient bar to the suit, which can only be removed by showing that the ordinary course of business has been pursued with reference to the security thus taken, and that it has, notwithstanding, proved inadequate as a means of payment.” As a general rule we think this is just and equitable to all parties, though we think the same special circumstances affecting the time of presentment and notice might be shown as in cases between indorser and indorsee. Thus understood, the rule is substantially the same as that which requires presentment to be made within a reasonable time, having reference to the ordinary course of business, and the circumstances of each particular case. The law upon this subject, as a general rule, adapts itself to the ordinary course of business, or, more properly speaking, the ordinary course of business constitutes the general rule of law. When the ordinary course of business has established a rule as to time of presentment, which the law has recognized, courts are bound judicially to notice it without proof, as in the case of bills payable at a specified day or a certain number of days after date: and doubtless the ordinary course of business may, to some extent, be judicially noticed in other cases. But where the law has adopted no rule as to time of presentment, except that it shall be within a reasonable time, as in the ease of bills payable at sight, like the present; the court can not, without overlooking the objects for which such presentment and notice of non-payment are required, say, as matter of law, that any delay is reasonable beyond that which may be fairly required in the ordinary course of business without special inconvenience to the holder; or by the special circumstances of the particular case. And in a case like the present, where the paper does not appear to have been obtained for mere purposes of exchange, but in payment of a precedent debt; and was not put in circulation, but detained by the plain — 511 — tiff for twenty - one days before it was transmitted for presentment; if we can not take judicial notice that this delay was greater than required by any considerations of necessity or convenience in the usual course of business, we certainly can not, without evidence. upon the point, determine, as matter of law, that this length of time was required by any such considerations, or authorized by any usage or course of business which we can judicially notice without proof. If there was any thing in the special circumstances of the case to require it, or to excuse the delay, those circumstances should have been proved. But no such evidence was given or offered. Nothing whatever was shown to excuse or explain the .delay, or to show why the paper might not, with equal convenience to the holder or any other person, have been sent by the first, or next succeeding mail. There was, therefore, no evidence before the jury tending to show that the time was reasonable. The time — the unexplained delay of twenty-one days —was shown. But there was no evidence of any usage or course of business, nor any special circumstances connected with the particular case, from which the jury could be authorized to draw any inference that the time was reasonable. And the burden of proof upon this point rested upon the plaintiff. So far as the jury are to pass upon the question of reasonable time, their verdict must be based upon evidence before them. If from the naked fact of the length of time, the juiy are to determine its reasonableness without any evidence bearing upon the point, they must necessarily determine it as a question purely of law: and this is not within their province. The Court therefore erred in submitting the question to the jury. Had there been evidence upon the point, the questions might have arisen, which were so fully and ably discussed by the counsel, whether the reasonableness of the time was a question of fact for the jury, or — the facts being undisputed — a question of law for the Court, or, if dis — 512 — puted, of mixed law and fact, to be decided by tbe jury under the charge of the Court upon the law. But the plaintiff, upon whom the burden of proof rested, having failed to produce any. evidence tending to show that the time was .reasonable, and there being no such evidence in the case, these questions are not properly before us, and we shall not enter upon their discussion. But whatever view may be taken of these questions, we can see no ground on which the counsel for the plaintiff could be allowed to read to the jury, and to comment upon, decided cases upon the question, found in the books of reports. So far as the question was one of law, these cases and the arguments upon them were for the consideration of the Court only: so far as it was a question of fact, it was to be decided by the jury upon the facts given in evidence in the regular course of the trial: — See Darby v. Ouseley, 36 E. L. & E. 519; and the finding of courts or juries in other similar cases would be wholly inadmissible as evidence in any stage of the trial. As there was no evidence tending to show the time to be reasonable, and the Court held the question to be one of fact for the jury, and permitted the reported cases to be read to them against the objection of defendant’s counsel, the jury must naturally have inferred that they were at liberty to consider those decided cases as evidence upon which they had a right to base their verdict. The cases could only be properly read to, or considered by the jury upon the hypothesis that they were to decide the question as one of law: and such, in this ease, must have been the result, so far as their verdict may have been in any way influenced by the cases and the argument based iqion them. The judgment must be reversed, with costs, and' a new trial granted. Manning and Campbell JJ. concurred. Martin Ch. J. did not sit in this case.