This Court is bound by the finding of a jury in an action at
law, properly submitted to them on conflicting evidence.
A bill of exchange is not negotiated within the meaning of
§ 537, Rev.Stats. Missouri ed. 1879, § 723, ed. 1889,
while it remains in the ownership or possession of the payee.
The obligation to perform a verbal agreement, made in Missouri,
to accept and pay, on presentation at the place of business of the
promisor in Illinois, all drafts drawn upon him by the promisee for
livestock to be consigned by the promisee from Missouri to the
promisor in Illinois, is to be determined by the law of Illinois,
the place of performance, and not by the law of Missouri.
The case was stated by the court as follows:
This is an action of assumpsit. It is based upon an alleged
verbal agreement made on or about April 1, 1886, at Marshall,
Missouri, between the defendants in error, plaintiffs below, doing
business at that place as bankers, under the name of Cordell &
Dunnica, and the plaintiffs in error, doing business at the Union
Stockyards, Chicago, Illinois, under the name of Hall Bros. &
Co. There was a verdict and judgment in favor of the plaintiffs for
$5,785.79.
The alleged agreement was, in substance, that Hall Bros. &
Co. would accept and pay, or pay on presentation, all drafts made
upon them by one George Farlow in favor of Cordell & Dunnica,
for the cost of any livestock bought by Farlow and shipped by him
from Missouri to Hall Bros. & Co. at the Union Stockyards at
Chicago.
There was proof before the jury tending to show that on or about
July 13, 1886, Farlow shipped from Missouri nine carloads of cattle
and one carload of hogs, consigned to Hall Bros. & Co. at the
Union Stockyards, Chicago; that such cattle and hogs were received
by the consignees, and by them
Page 142 U. S. 117
were sold for account of Farlow; that out of the proceeds they
retained the amount of the freight on the shipment, the expenses of
feeding the stock on the way and at the stockyards, the charges at
the yards and of the persons who came to Chicago with the stock,
the commissions of the consignees on the sale, the amount Farlow
owed them for moneys paid on other drafts over and above the net
proceeds of livestock received and sold for him on the market, and
$2,000 due from Farlow to Hall Bros. & Co. on certain past-due
promissory notes given for money loaned to him; that at the time of
the above shipment, Farlow, at Marshall, Missouri, the place of
agreement, made his draft, of date July 13, 1886, upon Hall Bros.
& Co. at the Union Stockyards, Chicago, in favor of Cordell
& Dunnica, for $11,274, the draft stating that it was for the
nine carloads of cattle and one carload of hogs; that this draft
was discounted by Cordell & Dunnica, and the proceeds placed to
Farlow's credit on their books; that the proceeds were paid out by
the plaintiffs on his checks in favor of the parties from whom he
purchased the stock mentioned in the draft, and for the expenses
incurred in the shipment; that the draft covered only the cost of
the stock to Farlow; that, upon its presentation to Hall Bros.
& Co., they refused to pay it, and the same was protested for
nonpayment, and that subsequently Cordell & Dunnica received
from Hall Bros. & Co. only the sum of $5,936.55, the balance of
the proceeds of the sale of the above cattle and hogs, consigned to
them as stated, after deducting the amounts retained by the
consignees out of such proceeds on the several accounts above
mentioned.
Page 142 U. S. 118
MR. JUSTICE HARLAN, after stating the facts in the foregoing
language, delivered the opinion of the Court.
There was evidence on behalf of the defendants tending to show
that no such agreement was made as that alleged. But the issues of
fact were fairly submitted to the jury, and we must assume on this
writ of error that the jury found from the evidence that the
alleged agreement was made between the parties.
Our examination must be restricted to the questions of law
involved in the rulings of the court below. And the only one which,
in our judgment, it is necessary to notice is that arising upon the
instructions asked by the defendant, and which the court refused to
give, to the effect that the agreement in question, having been
made in Missouri, and not having been reduced to writing, was
invalid under the statutes of that state, and could not be
recognized in Illinois as the basis of an action there against the
defendants.
Page 142 U. S. 119
The statute of Missouri referred to is as follows:
"§ 533. No person within this state shall be charged as an
acceptor of a bill of exchange unless his acceptance shall be in
writing, signed by himself or his lawful agent."
"§ 534. If such acceptance be written on a paper other than
the bill, it shall not bind the acceptor except in favor of a
person to whom such acceptance shall have been shown and who, upon
the faith thereof, shall have received the bill for a valuable
consideration."
"§ 535. An unconditional promise in writing to accept a
bill before it is drawn shall be deemed an actual acceptance in
favor of every person to whom such written promise shall have been
shown and who upon the faith thereof shall have received the bill
for a valuable consideration."
"§ 536. Every holder of a bill presenting the same for
acceptance may require that the acceptance be written on the bill,
and a refusal to comply with such request shall be deemed a refusal
to accept, and the bill may be protested for nonacceptance."
"§ 537. The preceding sections shall not be construed to
impair the right of any person to whom a promise to accept a bill
may have been made, and who on the faith of such promise shall have
drawn or negotiated the bill, to recover damages of the party
making such promise, on his refusal to accept such bill."
1 Rev.Stats.Missouri, ed. 1879, p. 84; ed. 1889, p. 253,
§§ 719, 723; Wagner's Stats.Missouri, 1872, p. 214,
§§ 1 to 5.
The contention of the plaintiffs in error is that the rights of
the parties are to be determined by the law of the place where the
alleged agreement was made. If this be so, it may be that the
judgment could not be sustained; for the statute of Missouri
expressly declares that no person within that state shall be
charged as an acceptor of a bill of exchange unless his acceptance
be in writing. And the statute, as construed by the highest court
of Missouri, equally embraces within its inhibitions an action upon
a parol promise to accept a bill, except as provided in section
537.
Flato v. Mulhall, 72 Mo. 522, 526;
Rousch v.
Duff, 35 Mo. 312, 314. But if the law of Missouri governs,
this action could not be maintained under that section, because, as
held in
Flato v. Mulhall, above cited, the plaintiffs,
being the payees in the bill
Page 142 U. S. 120
drawn by Farlow upon Hall Bros. & Co., could not, within the
meaning of the statute, be said to have "negotiated" it. The
Missouri statute is a copy of a New York statute, in respect to
which Judge Duer, in
Blakiston v. Dudley, 5 Duer 373, 377,
said:
"We think that to negotiate a bill can only mean to transfer it
for value, and that it is a solecism to say that a bill has been
negotiated by a payee who has never parted with its ownership or
possession. The fact that the plaintiffs had given value for the
bill when they received it only proves its negotiation by the
drawer, its negotiation to, and not by, them. . . . Their putting
their names upon the back of the bill was not an endorsement, but a
mere authority to the agent whom they employed to demand its
acceptance and payment. The manifest intention of the legislature
in § 10 [similar to § 537 of the Missouri statutes] was
to create an exception in favor of those who, having transferred a
bill for value on the faith of the promise of the drawee to accept
it, have, in consequence of his refusal to accept, been rendered
liable, and been subjected to damages, as drawers or
endorsers."
The plaintiffs in error therefore cannot rest their case upon
section 537.
We are however of opinion that upon principle and authority, the
rights of the parties are not to be determined by the law of
Missouri. The statute of that state can have no application to an
action brought to charge a person in Illinois upon a parol promise
to accept and pay a bill of exchange payable in Illinois. The
agreement to accept and pay, or to pay upon presentation, was to be
entirely performed in Illinois, which was the state of the
residence and place of business of the defendants. They were not
bound to accept or pay elsewhere that at the place to which, by the
terms of the agreement, the stock was to be shipped. Nothing in the
case shows that the parties had in view, in respect to the
execution of the contract, any other law than the law of the place
of performance. That law consequently must determine the rights of
the parties.
Coghlan v. South Carolina Railroad Co., ante,
142 U. S. 101, and
the authorities there cited. In this connection it is well to state
that in
New York & Virginia State Stock Bank v.
Page 142 U. S. 121
Gibson, 5 Duer 583, a case arising under the statute of
New York above referred to, the court said:
"Those provisions manifestly embrace all bills, wherever drawn,
that are to be accepted and paid within this state, and were the
terms of the statute less explicit than they are, the general rule
of law would lead us to the same conclusion -- that the validity of
a promise to accept a bill of exchange depends upon the law of the
place where the bill is to be accepted and paid."
Citing
Boyce v.
Edwards, 4 Pet. 111.
Looking, then at the law of Illinois, there is no difficulty in
holding that the defendants were liable for a breach of their parol
agreement, made in Missouri, to accept and pay, or to pay upon
presentation, in Illinois, the bills drawn by Farlow pursuant to
that agreement in favor of the plaintiffs. It was held in
Scudder v. Union National Bank, 91 U. S.
406,
91 U. S. 413,
that in Illinois, a parol acceptance of, or a parol promise to
accept, upon a sufficient consideration, a bill of exchange was
binding on the acceptor.
Mason v. Dousay, 35 Ill. 424,
433;
Nelson v. First Nat. Bank of Chicago, 48 Ill. 36, 40;
Sturges v. Fourth National Bank of Chicago, 75 Ill. 595;
St. Louis National Stock Yards v. O'Reilly, 85 Ill. 546,
551.
The views we have expressed were substantially those upon which
the court below proceeded in its refusal of the defendants'
requests for instructions, as well as in its charge to the jury.
The suggestion that there was a material variance between the
averments of the original and amended declaration and the proof
adduced by the plaintiffs is without foundation. The real issue was
fairly submitted to the jury, and their verdict must stand.
Judgment affirmed.
MR. JUSTICE GRAY was not present at the argument, and did not
participate in the decision.
