Fall River Union Bank v. Willard

Hubbard, J.

It is a well established principle of the law regulating bills of exchange, that the holder of a bill, payable at a certain time after date, need not present it for acceptance prior to the day of payment. And though it is usual and safe so to do, as he thereby strengthens his security, or, in case of non-acceptance, acquires an immediate right to call on the other parties to the bill, yet he is under no legal obligation to do it, nor can the omission be taken advantage of by the drawer or indorsers. Goodall v. Dolley, 1 T. R. 712. Chit. on Bills, Part I. c. 5. 3 Kent Com. (4th ed.) 82. O'Keefe v. Dunn, 6 Taunt. 305. S. C. 1 Marsh. 613.

The question in this case, as to the first instruction, is, whether the circumstances, under which the plaintiffs took the bill, imposed a duty on them not required in common cases. The facts alleged, upon which the instruction is founded, are these : The bill was drawn by the agent of the Tiverton Print Works on Ruggles & Chace, and indorsed by the defendant for the accommodation of the Print Works ; and the same was discounted by the plaintiffs with the understanding on their part, that the drawer might substitute the acceptance of Harrison & Co. of Baltimore for the sum advanced, when such acceptance should be received. And at the same time, it was agreed that the draft was not to be presented for acceptance. The instruction was, that if such agreement, not to present the draft for acceptance, was made without the knowledge and assent of the indorser, it would discharge him, because it would alter and extend his responsibility.

The jury, by their verdict, it may be presumed, negatived any such knowledge on the part of the defendant. It is not to be understood by this instruction, that the draft was not to be presented, at any time, to the drawees for their acceptance — that is, waiving any demand upon them ; but that no presentment should be made prior to the time of the maturity of the bill. The holding of this bill as a substitute for another, as value was paid for this, has no effect upon the plaintiffs’ right. Bachellor v. Priest, 12 Pick. 399. And it is very clear that if no such agreement, in respect to keeping back the bill, had *221been made, the mere fact of the non-presentment of the bill, before the day of payment, would not avail the defendant as a defence against his liability. Shall then the agreeing not to present it vitiate the claim of the plaintiffs ? It may here be stated, that the law, as regards accommodation drawers and indorsers, and bond fide holders, is the same as between drawers and indorsers for value, and bond fide holders ; although the holder knows that the bill is an accommodation bill. Fentum v. Pocock, 5 Taunt. 192. [Story on Bills, § 191.] If it were not so, the end for which such bills are made would be defeated ; the object being to give them the same character as to value, credit and negotiability, as a bill drawn in the ordinary transactions of business.

It may be argued in a case like the present, that by such an agreement not to present the bill for acceptance, the defendant may have been injured ; as the drawees might have accepted the bill, if early presented ; or if acceptance was refused and notice of the same was duly given to the indorser, he might have paid the bill and taken measures to secure himself against the drawer. This is true. The same objection, however, might be made, with equal force, in a case where no such agreement existed, and where the holder made no demand upon the drawee till the day of payment. But in such case, there being no duty existing on the part of the holder to present, the defendant would be without redress. So here, we think the agreement of the plaintiffs not to do what in law they were under no obligation to do, cannot affect the rights of the plaintiffs against the defendant; and though a loss may have been sustained by the defendant, by reason of the non-presentment before the day of payment, yet it is damnum absque injuria. It would be introducing a new distinction in the law of bills of exchange in respect to bond fide holders of accommodation bills, in giving accommodation drawers and indorsers the character of sureties ; which might work much practical inconvenience. If the accommodation indorser chooses to impose a condition upon his indorsement, which shall affect future bond fide holders of the bill, he may do it at the time of making his indorsement, and in *222such manner, that the bondjide holder shall be apprized of it and be bound by it. And if not, then he stands in the same situation as to the bond fide holder, as any other indorser, with the same rights, and subject to the same liabilities. The agreement, in the present case, was one of mere convenience as between the drawer and holder, not affecting the rights of third parties; and the legal responsibility of the indorser, therefore, not being altered or extended by the agreement, we are of opinion that the instruction in this respect was erroneous.

The second instruction, coming directly within the reasoning which applies to the first, it is not necessary to state the facts which gave occasion to it.

In regard to the third instruction, it is very clear that if the bill was presented for acceptance, and the same was refused, it was the duty of the holder to give due notice to those parties whom he intended to charge. But the question here is, whether the facts stated constitute such a presentment of the bill as to discharge the defendant for want of notice.

The evidence which was introduced tended to show that the cashier of the Fall River Union Bank (the plaintiffs in this suit) met Chace, one of the house upon which the bill was drawn, and informed him that the bank had the draft, (now in suit,) upon which Chace told the cashier that they should not accept or pay it. And the instruction to the jury was, that if no notice thereof was given to the indorser, he was discharged. Waiving the question whether the cashier was agent for the plaintiffs for the purpose of presenting the draft for acceptance, or not, we are of opinion that this was not a due presentment of the bill for acceptance. The term presentment imports, not a mere notice of the existence of a draft which the party has in his possession, but the exhibiting of it to the person on whom it is drawn ; that he may see the same, and examine his accounts or correspondence, and judge what he shall do ; whether he shall accept the draft, or not. Here there appears to have been nothing more than a casual meeting of the parties, and the conversation on the subject of the draft ensued. If this had been communicated, « would have created no obligation on the part of the indorser *223to make present payment, and consequently such conversation imposed no present duty on the holders, as to the other parties to the bill. With this view of the case we are not satisfied with the instruction given to the jury. To confirm it, would tend to introduce a looseness of practice on the subject of presenting bills for acceptance, which will lead to disputes and difficulties greater than now exist.

Verdict set aside, and a new trial granted.