THIS was an action of assumpsit, instituted in the Circuit Court of the United States, for the southern Circuit of New-York; by William Konig, a merchant of Amsterdam, carrying on business under the firm of William Konig Co. against the defendants, merchants in New-York, trading under the firm of Le Roy, Bayard Co.
The action was upon a foreign bill of exchange, and the declaration charges, that the same was drawn at Baltimore, on the 2d day of September, 1822, by John C. Delprat, on N. J. R. Van Staphorst, of Amsterdam, in Holland, at sixty days sight, for 21,500 florins, in favour of the defendants, and made payable to them, or order. That the defendants, on the fourth of September, in the same year, endorsed the same to L.H. Huder, who endorsed it to Rougemont Behrends — and that they, on the 25th of November, 1822, presented the bill, (the same being unaccepted and unpaid,) to the drawees, for acceptance, by whom acceptance was refused, and the bill protested for non-acceptance; and that the plaintiff on the same day, at Amsterdam, to prevent the bill from being sent back to the defendants, did, under that protest, and for the honour and account of the defendants, accept the bill, in writing, and gave notice thereof to the defendants.
That the bill was afterwards, and before payment, endorsed by Rougemont Behrends to N.M. Rothschild, who endorsed it to M. Rothschild Sons, who endorsed it to B.J. De Jongh Fils; and the last endorsees, when the bill became due and payable, viz. on the 25th of January, 1823, at Amsterdam, presented it to the drawees for payment; that payment was refused; and the holders, being the last endorsees aforesaid, caused the bill to be protested for non-payment; and the plaintiff thereupon, upon the protest, and for the honour and account of the defendants, the first endorsers, paid the bill to B.J. De Jongh Fils, together with two thousand guilders for the cost of the protest, and other charges, and gave due notice thereof to the defendants.
The declaration also contained the usual money counts; upon which the general issue was pleaded; and upon the trial of the cause, a verdict was taken for the plaintiff, for 9852 dollars 78 cents; subject to the opinion of the Court on the following case; with liberty to either party to turn the same into a special verdict, or bill of exceptions.
It was admitted that the bill was drawn by John C. Delprat, in favour of defendants; and that on the 18th day of October, 1822, the defendants endorsed it, and transmitted it to Messrs. Rougemont Behrends, at London; and that afterwards the bill was endorsed by Messrs. Rougemont Behrends to N.M. Rothschild, who endorsed it to M. Rothschild Sons, who endorsed it to B.J. De Jongh Fils, as charged in the declaration. And in order to prove that the bill was duly protested for non-acceptance and non-payment, and that after the same was so protested for non-acceptance, the same was accepted, supra protest, by the plaintiff, for the honour and account of the defendants, the endorsers; and that after the said bill was protested for non-payment, the same was paid, supra protest, by the plaintiff, for the honour and account of the defendants, the endorsers; the plaintiff read in evidence the protest for non-acceptance and non-payment, which were admitted by the counsel of the defendants to be read in evidence for that purpose.
The endorsements on the bill were:
Pay Mr. L. Huder, or order, value received. New-York, 4th Sept. 1822. Signed, LE ROY, BAYARD CO. Pay to the order of Messrs. Rougemont Behrends, of London, value in account. New-York, 1st October, 1822. Signed, L.H. HUDER. Dec. 28, No. 279, presented for stamp at Amsterdam, 22d Nov. 1822. Received with the augmentation, fl. 13 75. Signed, ELVESTER.
The protest for non-acceptance, stated, that on the application of the notary to the drawees, N. J. R. Van Staphorst, Amsterdam, they refused to accept the bill, stating, "that whereas the drawer has quite wrongfully drawn his bill, we, therefore, cannot accept the same, and moreover regret, that in order to preserve our just rights against him, (meaning the drawer,) we cannot even interfere in behalf of those to whom this bill was passed."
The protest also stated the following "Act of Intervention:"
And forthwith appeared and came forward, those same gentlemen, Messrs. Wm. Konig Co., who declared that they were actually ready, on account, and for the honour of the firm of Messrs. Le Roy, Bayard Co. as endorsers upon this same bill of exchange, to accept the said bill, and for the purpose of paying the amount thereof on the day of its maturity; and accordingly, the same gentlemen, Messrs. Wm. Konig Co., in fact did, and have signed the same.
The protest for non-payment, stated the same answer to have been given by the drawees, when payment of the bill was demanded, as made when acceptance was applied for, and also that, after the protest for non-payment.
Subsequently, the gentlemen, Messrs. Konig Co. commission merchants, residing in this city, at the Cloveniers Burgwal, duly patented for the past year, as appears by their certificate, dated 24th June, No. 1333, to us the Notaries exhibited, who, after having previously examined and read the aforecopied bill of exchange, as likewise this present protest, declared, that they, in consequence of their acceptance, under protest, should honour and pay this bill of exchange, and which, in fact, they have done, for the honour and on account of Messrs. Le Roy, Bayard Co., as the first endorsers thereon, reserving, at the same time, their right against them, and all the others thereby interested.
The following letters were offered in evidence on the part of the defendants, and objected to on the part of the plaintiff; but the objection being overruled by the Court, they were read in evidence as follows: —
Messrs. ROUGEMONT BEHRENDS, London.
New-York, 18 th October 1822.
Gentlemen — We have now simply to request you to obtain acceptance of the enclosed draft; we do not wish it negotiated until it should be first accepted, either for the honour of the drawer, or for ours and endorsers; we only wish that it may appear as having been sent to you for negotiation by the last endorser. It is drawn by the agent of the Amsterdam house, and as we enclose it as such, we wish it to be returned with the regular formality of law, should it not, contrary to our expectations, be accepted.
With respect, we are, c. LE ROY, BAYARD CO.
It was admitted, that the above letter was not transmitted, nor the contents thereof communicated by Messrs. Rougemont and Behrends, to the plaintiff.
ROUGEMONT BEHRENDS to Messrs. WILLIAM KONIG CO. Amsterdam.
London, 19 th November 1822.
We beg you to have the enclosed accepted 1st of fl. 21,500, 60 days on N. J. R. Van Staphorst, and hold the same to the disposal of the 2d 3d, and 4th. You will oblige me by mentioning the day of acceptance, and, in case of refusal, you will have the bill protested. If accepted, please let us know the amount of stamp duties, c.
The defendants also read in evidence the following extracts of letters from the plaintiff to Rougemont Behrends.
Amsterdam, 22 d November 1822.
Messrs. ROUGEMONT BEHRENDS, London.
We had this pleasure 19th instant, and are to-day in possession of your favour. The enclosed fl. 21,500 on N. J. R. Van Staphorst, will be presented for acceptance, and kept to the disposal of duplicate; for stamp duty we debit you in postage account, which is fl. 14.5s. Messrs. Van Staphorst have deferred the answer whether they will accept said bill till to-morrow. We cannot inform you of the result until Tuesday, and in case of refusal will forward you the protest.
Amsterdam, 26 th of November 1822.
Messrs. ROUGEMONT BEHRENDS, London.
We refer to our respects of the 22d instant. Messrs. N. J. R. Van Staphorst, after having deferred the acceptance of the bill of fl. 21,500, 60 days, till yesterday, now refuse to accept; we had also the bill presented for non-acceptance, at the same time honouring it for account of Le Roy, Bayard Co. in New-York. The bill has also been accepted on the 25th of November, and will be due on the 24th of January next. We will keep it at the disposition of the 1st, 3d, or 4th, or any copy authenticated by your endorsement.
They also read in evidence the following letters from the plaintiff to the defendants.
Amsterdam, 26 th of November 1822.
Messrs. LE ROY, BAYARD CO. New-York.
Gentlemen — Having been charged by Messrs. Rougemont Behrends of London, to procure the acceptance of a second of exchange of bill of fl. 21,500, Mr. John C. Delprat at Baltimore, of 2d September, to your order, on Messrs. N. J. R. Van Staphorst. These gentlemen have refused to accept it, expressing their regret at being unable on this occasion even to protect your signature, and save you heavy damages. We have determined to offer it, on the assurance that this intervention would be agreeable to you, and we remit you annexed, in consequence, the protest for non-acceptance, and the act of intervention for the fl.21,500, becoming due 24th January — accepted 25th November for your account. At maturity we will send you all the papers in order, and as it appears certain that Messrs. Van Staphorst will not pay the draft of Mr. Delprat, you can at present admit that you will leave it to reimburse us this intervention, with commission, expenses, and interest. We renew, gentlemen, on this occasion, the offer of our services, desirous that it may be agreeable to you to require them.
Amsterdam, 28 th January 1823.
Messrs. LE ROY, BAYARD CO. New-York.
Gentlemen — We have the honour to confirm our letter of 26th November, of which a triplicate is annexed, and to inform you that Messrs. N. J. R. Van Staphorst, having persisted in their refusal to pay the bill of exchange of fl. 21,500, of Mr. John C. Delprat to your order upon them, we have paid it under protest, and act of intervention, for your honour.
Accompanying this you receive the papers consisting of first draft in first and second. 2. Protest of act of intervention. 3. Amount relative thereto. Will you, gentlemen, please to acknowledge the accuracy of this amount, on 24th January, fl. 21,647, and credit us the amount.
Amsterdam, 2 d September 1823.
Messrs. LE ROY, BAYARD CO. New-York.
Gentlemen — On the 26th of November past year, we informed you of our having intervened with acceptance, for your honour and account, as endorsers, a draft of fl. 21,500, John C. Delprat's draft 60 ds. sight, Baltimore, 2d September, in your favour, protested for non-acceptance against the said drawer, while on the 28th January we had the honour to inform you that we had paid the above bill, by intervention, for your account; handing you, at the same time, the original bill duly discharged, together with necessary protest and act of intervention. Since that time we have only received your lines of the 31st January last, by which you thank us for the intervention made by us, but observe, that Messrs. N. J. R. Van Staphorst had, at the same time, informed you, that they had guarantied to us the reimbursement of that draft, for which reason you refer us to these gentlemen.
To our letter returning to you duly discharged, and paid by us for your account, the aforementioned bill, you did not give us any reply. Messrs. N. J. R. Van Staphorst have only guarantied us in case we should not be able to recover our reimbursement from you, for whose account we intervened; and they are thus entitled to ask from us, that we enforce that payment from you, to which measure that guarantee obliges us, and the effect of which we cannot but maintain, so that, in order to obtain that payment which you owe us, we have now valued this day on you at sixty days; $8,600, $3,400, $1,932.80, order Gulian Ludlow, Esq. at the exchange of 50 stg. — fl. 22,332, being the exact amount of our intervention, together with interest and charges to this day, as per note annexed, which we recommend to your protection, and request you to honour in payment of the amount expended by us for your account. If you, against our expectation, refuse to pay this bill, we must inform you, that we have given our most strict and precise order immediately to enforce payment by force of law, to which purpose we must then demand from you the original bill paid, with protest, c. which we request and authorize you, by the present, to deliver to Gulian Ludlow, Esq. of your city, whom we have empowered to give receipt for these documents; which are our property till you have paid us for them. We are obliged to do this act of devoir; in order to obtain final reimbursement; while we hope and trust you cannot take this measure necessary to us, in any evil light.
We remain, very sincerely, gentlemen, Your most obedient servants, WILLIAM KONIG CO.
The following letter from N. J. R. Van Staphorst to the defendants, was also offered in evidence, and objected to on the part of the plaintiff, but the objection being overruled by the Court, was read, as follows: —
Messrs. LE ROY, BAYARD CO. New-York.
Amsterdam, 25 th November 1822.
Gentlemen — We confirm our last respects of 12th inst. and have since received your esteemed letters of the 4th and 5th ult. first of which accuses receipt of our sundry letters up to the 23d of July, inclusive.
The draft advised in your esteemed favour of 5th ult. 60 days sight — No. 368 — fl. 7,000 — favour John Telfair, meets due honour at presentation to the debit of your account. We have yesterday received letters from Mr. Delprat, dated 10th, 11th, and 15th of October, of which we cannot fail to communicate in a few words the purport. It is such as we might expect; instead of attempting to clear up any of the distressing items alluded to in our letters to him, or to refute any of the arguments which founded our conduct, Mr. D. merely falls on our circulars, as he calls them, (written at the time to only four of those who were owing us moneys at Baltimore, and of which we annex copy in our defence,) as having injured his credit; and further declaims against an answer, which he had been erroneously informed that we had given in the protest of one of his bills; further, Mr. Delprat chiefly writes, that he is very desirous to have his accounts closed, and sent up to him; so that, all items being properly brought therein, it may be approved by him, and our intercourse finally closed. We, of course, shall not be backward in complying with that wish; and, on correctness and justice, you will easily believe that Mr. Delprat can safely calculate. When we wrote to you our last letters, and therein stated the amount drawn by Mr. Delprat, so much above any thing that prudence or correctness warranted, we were indeed far from prepared for the appearance of a fresh draft of Mr. D., valued (as the French term it) de but enblanc, without any light being spread by the letter of advice attached to it.
Fl. 21,500 — Baltimore, 2d September, at 60 ds. sight in your favour. This draft, confirmed in no letter of Mr. Delprat, and dated at such an ominous time, was calculated to yield much matter to think on. If Mr. Delprat knew of the protests of his former drafts, to what ought this new flourish to serve; if not, what was his intention by drawing such a large sum again over and above all his former dispositions; a valuation which, placing all possible folly and imprudence on our side, it could not yet possibly be thought that we should honour without attempting to explain the matter. We have merely to express our regret at observing again your endorsement on the bill, and notwithstanding your silence in your last favour of 4th and 5th instant, with regard to former interventions, in fact rather disagreeable to us, and whatever might be the intentions of Mr. D. at drawing the bill, we were too much your friends, my dear sirs, not immediately to come forward on account of your signature; but consulting our legal adviser on this so strange and surprising incident, we were sorry to find that it was his positive opinion, that in this peculiar case we ought not to value at all this draft, nor in the least manner to allow that such a draft might properly have been issued by the drawer, and thus that we ought not to consider it at all, nor to meddle with it in the least. So firm was our counsel in that idea, that he was completely against our intervening on behalf of any endorser, as being prejudicial to the system we ought to follow with regard to this bill; but he thought that it was proper to note in the protest our reason for non-acceptance and non-intervention. We were thus put in a disagreeable position; as on the one side we did not wish to act contrary to his advice, and to depart from a system which he though necessary to us; and, on the other, we were fully determined, at all events, not to suffer your signature to go back without being honoured. In this predicament, we applied to our friends Messrs. Wm. Konig Co. who had the said bill in hand, informed them of the whole case, and requested these gentlemen, under our guarantee, to intervene on behalf of your signature, with acceptance and payment of above bill; which favour these gentlemen have not refused to us, so that, without our prejudice, and completely without yours, we have duly protected your interest. We are well persuaded you would not wish us to have done any act which we might think detrimental to us, and we thus are confident, that you will duly appreciate our conduct in this truly awkward affair.
Mr. Chief Justice MARSHALL delivered the opinion of the Court: —
This suit was brought in the Court of the United States, for the second Circuit and district of New-York, on a bill of exchange, drawn by John C. Delprat, of Baltimore, on Messrs. N. J. R. Van Staphorst, of Amsterdam, in favour of Le Roy, Bayard Co. of New-York, and endorsed by them. The bill was regularly presented and protested, after which it was accepted and paid by the plaintiff, for the honour of the defendants. The jury found a verdict for the plaintiff, subject to the opinion of the Court, on a case stated by the parties. The Judges of the Circuit Court were divided in opinion, on the following points:
1. Whether the letters offered in evidence by the defendants, and objected to, ought to have been admitted.
2. Whether the plaintiff had a right, under the circumstances, to accept and pay the bill in question, under protest, for the honour of the defendants; and is entitled to recover the amount, with charges and interest.
The first question is understood to be waived. It is a question which was decided by the Court, at the trial, and could not arise after verdict, unless a motion had been made for a new trial.
The second requires an examination of the case stated by counsel. The bill was transmitted by Le Roy, Bayard Co. to Messrs. Rougemont Bebrings, of London, to have it presented for acceptance, who enclosed it to the plaintiff, in a letter, from which the following is an extract: "We beg you to have the enclosed accepted, 1st, of fl. 21,500, 60 days, on N. J. R. Van Staphorst, and hold the same to the disposal of 2d 3d, and 4th. You will oblige me by mentioning the day of acceptance, and in case of refusal, you will have the bill protested."
The plaintiff gave immediate notice of the dishonour of the bill, and of their intervention, for the honour of the defendants.
Messrs. N. J. R. Van Staphorst addressed a letter to the defendants, dated the 26th of November, 1822, giving notice that the bill was dishonoured; the drawer having no right to draw, and that they were advised by counsel not to interpose, in their own names, for the honour of the defendants. The letter adds, "In this predicament, we applied to our friends, William Konig Co. who had the said bill in hand, informed them of the whole case, and requested these gentlemen, under our guarantee, to intervene on behalf of your signature, with acceptance and payment of the above bill; which favour these gentlemen have not refused to us; so that, without our prejudice, and completely without yours, we have duly protected your interest."
The defendants also gave in evidence, a letter from the plaintiff, stating that he had intervened, at the request of N. J. R. Van Staphorst, and under their guarantee; but that they required him to proceed against the defendants, as preliminary to the performance of that guarantee.
It was admitted that the bill was drawn by J.C. Delprat, on his own account, and not on any shipment for a debt due from him to the defendants, for advances previously made to him; and that he had given to the defendants an order on N. J. R. Van Staphorst, for all balances due from them to him.
It is not alleged that the drawees had any funds of the drawer in their hands.
The plaintiff in this case must be considered as the agent of N. J. R. Van Staphorst, and as having paid the bill at their instance. All parties concur in stating this fact. The Van Staphorsts adopted this circuitous course, instead of interposing directly in their own names, under the advice of counsel. They however immediately stated the transaction in its genuine colours, to the defendants. It is impossible to doubt, that a person may thus intervene, through an agent, if it be his will to do so. The suspicion which might be excited by proceeding, unnecessarily, in this circuitous manner, cannot affect a transaction, which was immediately communicated, with all its circumstances, to the persons in whose behalf the intervention had been made; unless those persons were exposed to some inconvenience, to which they would not have been exposed, had the interposition been direct. This is not the case in the present instance, since it cannot be doubted that the defendants might have availed themselves of every defence in this action, of which they could have availed themselves, had N. J. R. Van Staphorst been plaintiffs. The case shows plainly, that the bill was not drawn on funds, and that the drawees were not bound to accept or pay it. No reason, therefore, can be assigned, why the person who has made himself the holder of the bill, by accepting and paying it under protest, should not recover its amount from the drawer and endorsers.
This cause came on to be heard, on a certificate of division of opinion of the Judges of the Circuit Court of the United States, for the southern district of New-York, and on the points on which the said Judges were divided in opinion, and was argued by counsel, on consideration whereof, This Court is of opinion, that the plaintiff had a right, under the circumstances, to accept and pay the bill in question, under protest, for the honour of the defendants, and is entitled to recover the amount, with charges and interest; which is ordered to be certified to the said Circuit Court.