Hunter v. Van Bomhorst & Co.

The opinion of the court was delivered by Mason, J. The first exception in this case raises the question, whether the letter of the plaintiffs to W. M. Holliday, Esq., dated the 16th October 1846, and set out in the record, is a privileged communication, and whether as such it can be used in evidence against them. If the letter stood alone, unexplained by the testimony of Mr. Holliday, it would clearly have been inadmissible as evidence, from the facts that it was written to an attorney, and upon professional business relating to, and affecting the interests of the plaintiffs. From these facts alone, the court would recognise such a relation to have existed between the parties, as to render all professional communications between them as confidential. By the testimony of Mr. Holliday, a different aspect is sought to be given to the matter, and out of this testimony arises the question to which the mind of the court is directed.

Upon being asked by the witness, subsequent to the period when the letter was written, for a fee for services rendered in pursuance of that letter, the plaintiff replied that he did not expect to pay the witness, that he considered the witness as acting for Hunter, (the defendant in the present action,) and that he expected Hunter to pay him his fee. To this the witness did not assent, but insisted upon being compensated by the plaintiffs, which was ultimately done by them. ⁵¹⁰ The view taken by the appellants’ counsel, is, that the plaintiff, in effect, disclaimed the relation of client and attorney in the conversation referred to, and that he cannot therefore, afterwards seek to avail himself of the privileges growing out of that relation. We do not so understand the conversation between the plaintiff and the witness. The transaction seems to resolve itself into this simple state of facts.

At the instance of the defendant, the plaintiffs consented to institute proceedings against Janney, under the lien lawq instead of relying upon the security they already held. In complying with this request of the defendant, it was necessary for the plaintiffs to employ counsel, and to disclose then-whole case to him ; and merely because they afterwards expressed the opinion that the fee for those services should be paid by Hunter, they are to be deemed to have thereby forfeited their claims to the benefit of the confidence which should prevail between client and attorney. The services to be rendered by Mr. Holliday in accordance with the request contained in the plaintiffs’ letter, were evidently to redound to the benefit of both Hunter and the plaintiffs. But as Hunter stood as surety to the plaintiffs, it was manifest that in their opinion, he was first and mainly to derive advantage from the proceedings to be instituted by the attorney, and therefore, he should be chargeable with the fee.

Regarding Hunter as bound and good for the debt, the proceedings against Janney was, at the time, a matter of small consequence to the plaintiffs, and merely as a matter of favor to Hunter, they were commenced, they agreed to strike at Janney’s property, rather than at Hunter, and in order to do so, they disclose the merits of their whole case to an attorney. Upon mere principles of justice, apart from rules of law, it would be hard if this defendant were now permitted to turn this act, which was designed as an act of kindness to himself, into the means of defeating the plaintiffs’ just debt. It matters not, whether in the opinion of the plaintiffs, the proceedings which they directed the witness to institute, were intended primarily for the benefit of Hunter, and therefore ought to have been paid ⁵¹¹ for by him, they nevertheless related to matters In which the plaintiffs were interested. The difference of opinion between them and Mr. Holliday, grew out of the question, who should pay the fee, and not whether the relation of client and attorney existed: and we have besides, the best evidence for supposing that even this disagreement was finally settled, and adverse to the plaintiffs’ views, in the fact that the attorney ultimately got the fee from them which he claimed.

For the reasons we have assigned, we think the county court was right in not receiving this testimony. The second exception presents the question of the sufficiency of the notice of protest. This case, in this respect, is somewhat unlike the case of Sangston vs. Graham, determined at the present term of this court. In that case the protest, which was offered to prove a demand, &c., proceeds to say: that he, (the notary,) addressed written notices to the endorsers, informing them that they were held severally liable for the payment of the note.

This evidence of notice was declared to be insufficient, because no demand upon the maker could be inferred from it. In the case now before us, the protest, after setting out demand, &c., proceeds to say: that written notices were addressed to the endorsers, informing them that the note had not been paid, and that they would be held responsible for the payment thereof. Such a notice as this will he sufficient, where the note is made payable and remains for collection at a bank, but where it is not, it would be insufficient notice. Though no special form of notice is necessary, still, in some form, the fact must he substantially stated, that the note is dishonored by default of the promissor.

Where a note is made payable at a bank, it is the duty of the maker to pay it at the bank on the last day of grace, if the note is there for collection, and if he fails to do so, the note is dishonored. Notice in such a case to the endorser, that the note is unpaid, is a notice that it is dishonored; whereas in other cases, notice in the same -words, that the note is unpaid, would not necessarily imply that it was dishonored, because the noté might remain unpaid, while, in fact, it may never ⁵¹² have been presented to the maker for payment. The evidence on this point is, however, defective in the fact, that it does not show, in addition to the notes being made payable at the bank, that it was in fact at the bank on the day it became due, ready to be handed over to the maker on being paid. This omission presents the inference of dishonor, that would follow if the note were at the bank to be paid on the day it fell due.

In the case we are now considering, the protest is not the only evidence before the court in regard to the notice. Its omissions are supplied by other proof, and that is to be found in the letter of the defendant himself to the plaintiffs, dated 24th September 1846. In that letter he admits he received notice of protest; and in the case of Barry vs. Crowley, 4 Gill, 202 , the court say, that this expression, “in substance, states a demand on the drawer, and notice of non-paymentand whether that letter, (as was contended in argument,) refers or not to the protest offered in this case, is immaterial; it is no contradiction o.f the evidence contained in the protest, but merely enlarges it, by supplying material omissions. It appears also from Hunter’s letter, referred to, and from admissions contained in the record, as to the length of time required for letters to pass between Baltimore, Pittsburgh and Fredericksburg, that due diligence was used in transmitting notice of protest to the endorser.

We think the ruling of the pourt on this exception was right. Among other evidence offered by the defepdant, two drafts were produced, dated 16th October 1846, respectively for $414.55, payable fifteen days after date, and for $417,63, payable thirty days after date, drawn by the plaintiffs and accepted by Jannpy, the promissor in the original note; also a letter dated the 9th of November 1846, addressed to the defendant by the plaintiffs, Upon this evidence, the pourt was asked to instruct the jury, that if they believe the two drafts last named were given in lieu of the one for $813, and which forms in part the basis of the present action, that the ⁵¹³ plaintiffs thereby released the defendant from his liability as endorser on said note of $813, unless said drafts were drawn with the consent of the defendant. This prayer the county court rejected. There is no difficulty in laying down the general rule of law upon this subject: it is, that where the holder of a promissory note or bill of exchange enters into an agreement, founded on a valuable consideration with the drawer, to give him further time for payment, without the assent of the endorsers, they will thereby he released from their liability to pay the same.

This ride is based upon the equitable principle, that the surety has a right to insist, that the contract into which he entered for the principal, shall not be varied in anyway without his assent. Giving time to the maker of a note, would necessarily work such a result. If the holder enters into a valid contract for delay with the maker, he thereby suspends his remedy on the note until the stipulated time expires, and were the endorser to tender the payment of the bill in the meantime, so as to consummate his right of action against the principal, the holder would he bound in good faith to the contract for delay into which he had entered, to refuse the payment; for if he accepted it, and the endorser could thereby, eo instanti, commence suit against the maker, it is apparent, that the advantages of the contract would thus be lost to him. If on the other hand payment were refused, the endorser would find his original obligation so altered, as to be materially prejudiced thereby.

If he had been allowed to pay the debt at the time when he contracted that it should be paid, the principal debtor might then have the means of repaying him, while, on the contrary, before the expiration of the extended period for payment, the principal might have become insolvent. The difficulty with the courts grows out of the application of the general rule to particular cases, out of the necessity of determining what constitutes an agreement to give time, and whether there exists a sufficient consideration to support the agreement. It is conceded in all fhe cases, that if the agree ⁵¹⁴ ment suspends the right of action on the original debt, it amounts to a discharge of the endorser. There need not be an extinguishment of the original cause of