Jennison v. Parker

Campbell J.:

I concur with my brethren that the judgment should be reversed, but I do not concur with them in their reasons for reversal.

The defence set up in their plea, by the defendants below — the plaintiffs in error — was, that they had paid the demand sued upon, by a draft of Frost & Bradley, to defendant’s order, on Charles Bradley, which was received as part payment by Parker.

The proof introduced to support the defense showed affirmatively that the draft was sent and received, if the clerk’s authority is admitted, not as payment, but to be applied if paid at maturity. There was no direct evidence that it was taken on any terms whatever, but the letters in proof were sufficient to go to the jury on that point; and for the purposes of this case, inasmuch as the facté were taken from the jury, it may be admitted Parker received the draft on the terms upon which it was transmitted. The defendants proved that' the draft was not paid, although accepted; and that some time after they had been notified of its non-payment, they refused to be held liable on the draft, because they had received no further infor*362mation, and therefore claimed the right to presume it paid. The plaintiff below offered to return the draft on the trial.

No claim was set up in the plea, and no evidence was offered to prove, that the holder had been guilty of any laches in not giving proper notice of dishonor; neither was any evidence given of damage. The defendants below rested their whole defence upon the ground that, by showing the receipt of the instrument on the understanding that its proceeds should, when paid, be applied on the debt, the presumption arose that, although unpaid, the plaintiff must be assumed to have omitted doing the acts necessary to hold the drawers, and that it must be further assumed that loss had thereby accrued to the defendants to the fall amount of the bill, so that the plaintiff would be held to have made the paper his own.

This view can only be sustained by holding that there is no distinction between an absolute payment, and an agreement to apply the proceeds of a bill, if paid at maturity. Where absolute payment is made by the negotiable instrument, either of the debtor, or of another person endorsed by the debtor, the original liability is ended, and if the paper is not ’paid, the only recourse against the defendant is as a party to it. But such an agreement as is here set up, can, upon the broadest interpretation, amount to no more than a suspension of action on the original claim for the time being. Upon the dishonor of the new security, this suspension ceases. If, then, there is any right to charge the holder, it arises, not out of the original transfer of the new security, but out of some negligence or misconduct, which prevents ‘him from availing himself of the dishonor. This might arise from a failure to present for payment, or to give notice of dishonor, or from other acts.

No case can be found which holds the creditor liable for any more than the actual damage. It is admitted by all, that if the drawer waived notice, or was not entitled to it, no liability arises for not giving it. If the defendants had *363lost no rights, they clearly would have no reason to complain of a mere want of notice of dishonor. The case made does not exclude any of these possibilities, or the further one of such an identity of drawers and acceptor as would dispense with it. And it does not negative full diligence.

When the right of one party depends upon the happening of a condition precedent, the rule is a general one, that he must show performance of that condition affirmatively, or show a sufficient avoidance of it whereby the condition has been abrogated. And where that is to be made out by relying upon the negligence of the other party, such negligence is not presumable. Where one seeks to charge another with a neglect of duty, the burden of proof is on the party who alleges the neglect, although it may involve a negative. — 1 Chit. Pl. 268; 1 Greenl. Ev. §§79, 80, 81, 81 cs, and notes to §81; Crowley v. Page, 7 C. & P. 790; Brind v. Dale, 8 C. & P. 207; Beardslee v. Richardson, 11 Wend. 25; Marsh v. Horne, 5 B. & C. 322. The exceptions are special, and where parties are in the nature of insurers, as common carriers and innkeepers.

The question before us is not whether if Parker was negligent he is answerable for his negligence, but whether the draft being produced unpaid, he must be presumed, without proof, to have been guilty of negligence to the damage of the defendants. I see no ground for such a presumption. If a note is left with a bank for collection, it surely would not be sufficient, in an action for neglect to have it protested and noticed, to show simply the deposit of the note. Negligence must be satisfactorily made out. The case of the Mechanics Bank of Baltimore v. Merchants Bank, 6 Metc. 13, shows in what light the duty of such an agency is viewed.

When a bill is remitted to be collected, and applied if paid, if any duty devolves upon the recipient to have the necessary steps taken, it is a duty of agency pro hoc vice. I do not know in what other capacity a person can very well be *364assumed to act in such business. He is engaged, in this particular regard, to perform just such duties as appertain to a banker or factor, who may, or may not, have accounts on which to apply the proceeds; and his responsibility, which is entirely gratuitous, can be no greater than theirs. This is the view taken by the authorities.— Colt v. Noble, 5 Mass. 170 (Parsons Ch. J.); Hamilton v Cunningham, 2 Brock. 350; Gallagher’s Ex’s v. Roberts, 2 Wash. C. C. 191; Cromwell v. Lovett, 1 Hall, 56; Lawrence v. McCalmont, 2 How. 426. My brethren have criticised this latter case as not in point. There the defendants deposited with the plaintiff’s agents negotiable paper to collect, and apply the proceeds in payment of plaintiff’s claim. The agents represented the plaintiffs in this country, and no question arose as to their authority. Their acts were the plaintiff’s acts. The plaintiffs attempted to show diligence in protesting the paper, and failed. And after this failure, there being no proof of diligence, the court was asked to infer negligence and damage. But the court held expressly, that in the absence of proof of negligence or damage, they would presume the agents did their duty, and that in this transaction their duty was a mere agency duty, on behalf of the defendants, springing out of the particular business. The New York house were not the defendants’ general agents, but represented the English firm; and it was not pretended but that their London principals would have been responsible for their negligence.

Had the New York house been regarded as general agents of the defendants, this question could not have been imported into the case. They were to the defendants what Parker’s clerk, or Parker himself, was here to Jennison Brothers. The law of this case may be disputed, but it certainly is in point.

In Covely v. Fox, 11 Pa. St. 171, it was held that express proof of loss of a collateral security by a creditor’s laches, is not admissible to show payment, but needs a *365different issue to admit it. In Kelsey v. Roseborough, 2 Rich, 241, the onus of proving neglect and loss is held to be with the defendant. And a reference to Price v. Price, 16 M. & W. 232, will show that the affirmative of the issue is not upon the creditor.

The rule laid down in 2 Am. Lead. Cas. 185, as the result of the authorities, is that upon proof of negligence, and an omission to present the paper and give notice of dishonor, a presumption arises of damage, which presumption may be rebutted in various ways. This rule is not unreasonable. But the case of Payton v. Trull stands alone, I think, in asserting the broad doctrine that negligence will be presumed in all cases where diligence is not shown. The only case there cited, where negligence was not positively shown, was the nisi prius case of Hebden v. Hartsink, 4 Esp. 46; and in that case, the party failed to produce or account for the bill, which he certainly was bound to do, and which here was done by Parker, and by the defendants below for him. That case was decided after the statute 3 and 4 Anne, Ch. 9, — which required proof of diligence; and in Dayton v. Trull this same defect existed, so that the broad discussion became needless, although, It was not irrelevant.

The effect of such a doctrine is to abolish the distinction between conditional and absolute payments, and to raise in every case a presumption of payment; a doctrine which is not law in this state, even in the absence of express conditions.— Gardner v. Gorham, 1 Doug. Mich. 507.

I think the court below should not have excluded the draft, because the defendants might have been in a condition to follow it up with proof of negligence. Upon this ground I think the judgment should be reversed. But upon the other grounds referred to I think there was no error.

Judgment reversed.