Schuchardt v. Hall

Bartol, C. J., delivered the opinion of the Court. This suit was brought by the appellants, bankers of New York, against the appellees, as drawers of a bill of exchange, dated May 22d, 1868, at sixty days sight, on Joseph and Charles Sturge, Birmingham, England; drawn against a cargo of red wheat, per brig “Ocean Belle,” and payable in London. Upon the day of the date of the bill, the appellees sold and endorsed the same to the appellants, and on the same day, by letter of hypothecation, “lodged the bill of lading for the cargo with the appellants as collateral security for the acceptance and payment of the bill, and authorized the appellants, in case they thought it necessary, to place said red wheat on arrival in the hands of the appellants’ brokers for immediate sale, and to apply the proceeds in or towards payment of the bill.” The bill of exchange was sent by the plaintiffs in due course of mail, together with the-collateral documents, to the Union Bank of London, and was by it transmitted to the “ Birmingham and Midland Bank,” Birmingham, to procure ⁶⁰⁰ acceptance. The drawees, Joseph and Charles Sturge, declined to accept the bill, considering themselves not bound to do so by their contract with Hall & Loney, the drawers, unless they were put in possession of the bill of lading of the cargo against which it was drawn.

The Union Bank of London, the agent of the plaintiffs, considering that by the letter of hypothecation, it was entitled to hold the bill of lading as “ collateral security for the payment of the draft,” retained possession of the same. The bill was protested for non-acceptance, and notice thereof was transmitted to the defendants, the drawers. Upon the dishonor of the bill, the cargo was sold under the direction of the London agents of the appellants, and the net proceeds applied towards payment of the amount of the bill; but being insufficient, this suit was brought to recover the deficiency arid statutory damages; after notice of all the facts to the appellees, and demand of payment from them. At the ti'ial of the case, one prayer was offered by the plaintiffs which was rejected, and an instruction was given to the jury “ that there was no sufficient evidence in the case, from which they could find due presentment for acceptance of the bill of exchange offered in evidence, and that the plaintiffs were not entitled to recover.” It appears from the proof that the presentment was made by the notary’s elerlc to a clerk in the employ of Messrs.

Joseph and Charles Sturge, at their counting house or place of business. The clerk of the notary was competent to act, as was decided in Munroe vs. Woodruff & Robinson, 17 Md., 159 , and Fulton vs. Maccracken, 18 Md., 528 . But it is objected that the presentment ought to have been made to the Messrs. Sturge, and that a presentment to their clerk was not sufficient.

But this depends upon whether the clerk was their agent in the premises duly authorized to accept or refuse. Such authority may be proved by parol; and “the proof may, as in other cases of agency, be circumstantial and indirect.” 1 Parsons on Bills and Notes, 349; Nelson vs. ⁶⁰¹ Fotterall, 7 Leigh, 179 ; Stainback vs. The Bank of Va., 11 Grattan, 260. We think that in this case there was evidence, competent and sufficient to be submitted to the jury to prove, that the clerk of the drawees was authorized to refuse acceptance of the bill; and therefore the instruction given to the jury was erroneous. But in the view we have taken of this case, it is not important to discuss this question further, because we are of opinion that under the circumstances stated in the testimony, the defendants were not entitled to require formal presentment for acceptance and notice of non-acceptance of the bill of exchange.

There can be no doubt of the correctness of the appellants’ position, that the effect of the delivery of the bill of lading to them, together with the letter of hypothecation as collateral security, both for the acceptance and payment of the bill of exchange, was to entitle them to hold the same till the bill should be paid; they were not legally bound to surrender the security, upon the acceptance of the bill, and to trust to the personal liability of the acceptor's, for its payment. This exonerated the drawees from their obligation to accept;