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Rhett v. Poe. 2 H.
of the plaintiff, on Benjamin R. Smith, and accepted by Smith; and further, that upon the note was written, by the plaintiff's agent, a memorandum in the following words : “ This note is collateral security for the payment of the annexed draft of D. Timberlake on B. R. Smith of $8,000.” Upon the effect of both these instruments, as constituting parts of one transaction, the questions propounded to the circuit court, and brought hither for review, have *arisen. The further proofs contained in this record will [ * 479 ] be adverted to in the progress of this opinion, as notice of them shall become necessary to explain the instructions prayed for, and those given by the circuit court on the trial of this cause. The second series of instructions, embracing a more extended and varied survey of the evidence than is contained in that preceding it, will be first considered. It is to the first, second, third, and fifth instructions of this second series that exceptions are taken. To the first proposition affirmed by the court in this first instruction, it is difficult to imagine any just ground of objection on the part of the defendant below, as that proposition concedes almost in terms the prayer of that defendant. To the second branch of this instruction it is not perceived that any valid objection can be sustained; for, although it might have been true that at the date of acceptance of Timberlake's draft on Smith for $8,000, the latter had been in possession of $10,000 placed in his hands by Timberlake, it would not follow under the circumstances proved, or under those assumed in the instruction, that Timberlake, as the drawer of that draft, was entitled to notice. If, as the instruction supposes, the acceptances for $21,500, which Smith had come under for Timberlake, were drawn for the accommodation of the latter, upon the faith of funds to be furnished by him for their payment; that the $10,000 had been furnished by Timberlake in part for that purpose, but had been withdrawn by him for his own uses prior to the maturity of the draft for $8,000 — that he should have intercepted before the maturity of the draft all the funds against which he knew the acceptances of Smith were drawn, and that he, the drawer, and Smith, the acceptor, had, before such maturity, become notoriously insolvent, under such a predicament the law would not impose the requirement of notice to the drawer upon the holder. No useful or reasonable end could be answered by such a requisition. Where a drawer has no right to expect the payment of a bill by the acceptor, he has no claim to notice of non-payment. This is ruled in the following cases: Sharp v. Baily, 9 Barn. & Cress. 44; 4 Mann. & Ryl. 18; Bickerdike v. Bollman, 1 T. Rep. 405; Brown v. Maffey, 15 East, 221; Goodall v. Dolley, 1 T. Rep. 712; Legge v. Thorpe, 12 East, 171. If the $1,000 said to have been in
Rhett v. Poe. 2 H.
the hands of Smith were, by the agreement or understanding between Smith and Timberlake, to be applied in payment of joint claims against them, and falling due before the draft for $8,000, and had
been so applied, it had answered the sole object for which it [ * 480 ] had been raised, and could not in the * apprehension of these
parties constitute a fund against which the draft of $8,000 subsequently to become due was drawn. Those $10,000 were gone, were appropriated by these parties themselves. Then if, after this appropriation, there was, as this instruction assumes, an arrangement between Timberlake and Smith in respect to the bills drawn by Timberlake to the amount of $21,500, that he was to put Smith in funds sufficient to pay $13,500 of the amount just mentioned, which were to become payable before the $8,000 draft, and that on Timberlake's supplying those funds, Smith was to pay the $8,000 draft, and Timberlake failed to put Smith in funds to take up the $13,500, and that the drafts for the same were protested, of which Timberlake had notice, he, Timberlake, could have no claim to notice of non-payment of the draft for $8,000. There could be no reason for such a notice from the holder of the draft. Timberlake could have had no right to calculate on the payment of this draft; on the contrary, he was bound to infer its dishonor. He knew that payment of the draft for $8,000 was dependent upon a condition to be performed by himself, and he was obliged to know from the notice of the dishonor of all his bills, that he had not performed that condition, and had thereby intercepted the very funds from which the acceptances by Smith were to be met. He, therefore, quoad this draft, had never any funds in the hands of Smith, and consequently never had any claim to notice of non-payment from the holder.
The case of Claridge v. Dalton, in 4 Maule & Selw. 226, is strongly illustrative of the principle here laid down. That was a case in which the drawer had supplied the drawee with goods which were still not paid for. To this extent, then, the former unquestionably had funds in the hands of the latter; but on the day of payment of the bill the credit upon which the goods were sold had not expired, and the court thereupon unanimously ruled that quoad the obligations of the parties arising upon these transactions, the drawer must be understood as having no effects in the hands of the drawee, and, therefore, not entitled to notice. The second instruction affirms, in the first place, what must be admitted by all, and what is not understood to be matter of contest here, namely: that whenever a party to a bill or note is entitled to notice, such notice, if not given him in person, must be by a timely effort to convey it through the regular or usual and recognized channels of communication with the party or his agent, or
Rhett v. Poe. 2 H.
with his known residence or place of business. It is to so much of this instruction as is applicable to what may amount to a dispensation from the regular or ordinary modes of [ *481 ] affecting parties with notice, that objection is made; to that portion in which the court charged the jury that, if they believed from the evidence that, although Timberlake may have resided in New York, that he had, since the autumn of 1834 or 1835, made Augusta his residence, and that he had rernoved from Augusta, and out of the State of Georgia, after the bill for $8,000 was drawn, and before its maturity, that then due diligence had been used to give him notice of the dishonor of the bill. It is not considered by this court, that this charge, in any correct acceptation of it, trenches upon the legitimate province of the jury, or transcends the just limits of the authority of the court, or contravenes any established doctrine of the law. 'Tis a doctrine generally received, one which is recognized by this court in the case of The Bank of Columbia v. Lawrence, 1 Pet. 578, that, whenever the facts upon which the question of due diligence arises, are ascertained and undisputed, due diligence becomes a question of law. See also The Bank of Utica v. Bender, 21 Wendell, 643. In the case before us, every fact and circumstance in the evidence, which was to determine the residence of the drawer in Augusta, or his abandonment of that residence, or his removal from the State of Georgia; the unsettled and vagrant character of his after-life, the fruitless inquiries by the notary to find out his residence, the notoriety of his having neither domicile nor place of business in Georgia, the effort to follow him with notice of dishonor of his draft, were all submitted to the jury to be weighed by them. The charge of the court should be interpreted with reference to the testimony which is shown to have preceded it, upon which, in truth, it was prayed; with reference, also, to the reasonable conclusions which that testimony tended obviously to establish. Interpreted by this rule, it amounts to this, and this only, a declaration to the jury that if the evidence satisfied them of the residence of Timberlake in Augusta at the time of drawing the draft, of the certainty and notoriety of his having abandoned that residence and the entire State before its maturity, leaving behind him no knowledge of any place, either of his residence or for the transaction of his business, satisfied them also of the real but unavailing effort of the notary who protested the draft to discover his whereabout, they ought to infer that due diligence had been practised by the holder of the draft. In the case of an indorser, with respect to whom greatest strictness is always exacted, it has been ruled that the holder of a bill is excused for not giving regular notice of dishonor * to the indorser, [ * 482 ]
Rhett v. Poe. 2 H.
of whose place of residence he is ignorant, if he use reasonable diligence to discover where the indorser may be found. Thus, Lord Ellenborough, in Bateman v. Joseph, 2 Campb. 462, remarks: “ When the holder of a bill of exchange does not know where the indorser is to be found, it would be very hard if he lost his remedy by not communicating immediate notice of the dishonor of the bill; and I think the law lays down no such rigid rule. The holder must not allow himself to remain in a state of passive ignorance; but if he uses reasonable diligence to discover the residence of the indorser, I conceive that notice given as soon as this is discovered is due notice within the custom of merchants." See, to the same effect, 12 East, 433; Baldwin v. Richardson et al. 1 Barn. & Cress. 245; Beveridge v. Burgis, 3 Camp. 262. It has been held, in Massachusetts, that, where the maker of a promissory note had absconded before the day of payment, presentment and demand could not be required of the holder in order to charge the indorser: opinion of Parsons, C. J., in Putnam v. Sullivan, 4 Mass. 53. In Duncan v. McCullough, 4 Serg. & Rawle, 480, it was ruled that, if the maker of a promissory note is not to be found when the note becomes due, demand on him for payment is not necessary to charge the indorser, if due diligence is shown in endeavoring to make a demand. Hartford Bank v. Stedman, 3 Conn. 489, where the holder of a bill, who was ignorant of the indorser's residence, sent the notice to A, who was acquainted with it, requesting him to add to the direction the indorser's residence, it was held that reasonable diligence had been used. The measures adopted in this case by the holder of Timberlake's draft, when viewed in connection with the condition and conduct of the drawer himself, appear to come fully up to the requirement of the authorities above cited; and, therefore, in the judgment of this court, affect him with all the consequences of notice, supposing this now to be a substantial proceeding upon the draft itself.
Next and last in the order of exception, is the fifth instruction. The first position in this is given almost literally in the terms of the prayer. The court proceeds further to charge that, if the insolvency of the drawer and acceptor were known to each other, and that this bill was drawn to pay for purchases on joint account, or a transaction in which they were partners, and the property so purchased had been diverted by the drawer to his own use, and that the payment of the bills had been the subject of private arrangement between the ac
ceptor and drawer, that then the holder was excused from [*483 ) giving notice of the * non-payment of the bill for $8,000.
With respect to the exception taken to this instruction, all that seems requisite to dispose of it, is the remark that, if the drawer
Rhett v. Poe. 2 H.
of the bill was in truth the partner of the acceptor, either generally, or in the single adventure in which the bill made a part, in that event notice of dishonor of the bill, by the holder to the drawer, need not have been given. The knowledge of the one partner was the knowledge of the other, and notice to the one notice to the other. Authorities upon this point need not be accumulated; we cite upon it Porthouse u. Parker, 1 Campb. 82, where Lord Ellenborough remarks, speaking of the dishonor of the bill in that case, “ as this must necessarily have been known to one of them, the knowledge of one was the knowledge of all;" also, Bignold v. Waterhouse, 1 M. & Selw. 259; Whitney v. Sterling, 14 Johns. 215; Gowan v. Jackson, 20 Johns. 176. Recurring now to the first series of instructions prayed for, we will consider how far the two propositions presented by them were warranted by the correct principles upon which the opinion of the courts may be invoked; and how far the court was justifiable in rejecting the propositions in question, upon the ground, either of want of connection with any particular state or progress of the evidence, or of support and justification as derived from the entire testimony in the cause. It is a settled rule of judicial procedure, that the courts will never lay down as instructions to a jury, general or abstract positions, such as are not immediately connected with and applicable to the facts of a cause, but require that every prayer for an instruction should be preceded by and based upon a statement of facts, upon which the questions of law naturally and properly arise. It is equally certain that the courts will not, upon a view of the testimony, which is partial or imperfect, give an instruction which the entire evidence in a cause, when developed, would forbid. Tested by these rules, the two instructions prayed for in the first series, are deemed to be improper, they are accompanied with no statement of the testimony as their proper and immediate foundation; they are bottomed exclusively upon assumption, and such assumption, too, as the testimony taken altogether, is believed to contradict. The court, therefore, properly refused these instructions; for this refusal it was by no means necessary that the causes should be assigned by the court, in extenso; these are to be seen in the character of the instructions themselves, and in the testimony upon the record. This court has thus considered and disposed of the several prayers for instruction in this cause, and of the rulings of the circuit court thereupon. * Whilst this procedure has been proper with [ * 484 ) the view of ascertaining how far the rights of the parties have been affected by the several questions presented and adjudged in the circuit court, it is our opinion that the true merits of this controversy are to be found within a much more limited and obvious