Thomas H. Allen & Co. v. John S. Hornor & Son
Thomas H. Allen & Co. v. John S. Hornor & Son
Opinion of the Court
On the 11th day of December, 18S2, a man representing himself as W. B. Reeves, of W. B. Reeves ,& Bro., entered the banking house of defendants, Hornor & Son, in Helena Ark., and asked the senior member of the house if the bank would discount a draft drawn by him (Reeves) on the house of Thos. H. Allen & Co., of New Orleans, offering a bill of lading for twenty-one boles of cotton as collateral security. The firm of Hornor & Son declined to discount his draft, not knowing Reeves, unless he first obtained authority from said Thos. H. Allen & Co. to do so. Reeves volunteered to obtain authority from either the house of Thos. H. Allen & Co., in Memphis, or the one in New Orleans. He left the bank, and in about the time necessary to send and receive a telegram from New Orleans, returned with the following:
“ Will pay draft of $700 against twenty-one bales.
(Signed) Thos. H. Allen & Co¡”
This being an answer to Reeves’ telegram, which read :
“ Thos. H. Allen & Co.:
“ Have shipped you twenty-one bales of cotton per steamer Chouteau. “Will you honor our draft for $700?
(Signed) W. R. Reeves & Bro.”
Hornor «fe Son, recognizing the bill of lading to be property Bigned — as they held at that time other bills of lading signed on that trip by the clerk of the Chouteau, the clerk using a fac-simile stamp — and considering Reeves as a correspondent of Thos. H. Allen <fe Co., with limited authority to draw upon them, took the bill of lading and telegram, discounted the draft in good faith, and forwarded all together to Burbridge & Co., by whom said draft was presented to Thos. H. Allen & Co., and by them paid without hesitation or comment. Some days afterwards, upon the arrival of the Chouteau, it was for the first time discovered that the bill of lading had been altered, the only thing shipped being a box of cotton seed consigned to Thos. H. Allen & Co.
Plaintiffs bring suit against Hornor <fc Son and J. W. Bur-bridge & Co., who endorsed the draft and collected it from plaintifls.
The facts disclose, that Reeves & Co. were unknown to either party — that this was the first transaction of any character ever had with them. It is evident that the dispatch of Allen & Co. was induced by no faith whatever in Reeves, but by the shipment to them of twenty-one bales of cotton.
Their agreement, therefore, was not properly an acceptance of the draft of Reeves ; it was a promise to pay a drát't against twenty-one bales of cotton shipped by steamer Chouteau, or an authority to Reeves to draw on them on the condition that twenty-one bales of cotton were shipped to them by said steamer. None of the essential elements of negotiability attached to a draft or bill of exchange could be implied, that would bind an acceptor under the rules of commercial law — nothing to indicate that faith in the drawer, which excludes all theory of a claim for indemnity against or recourse to the holder of the instrument. Strictly speaking, therefore, conditional drafts, or conditional acceptances, are not commercial paper, their payment is due upon condition, and not in any event; the general rule of commercial law is not therefore applicable; the very condition they express disposes of the privileges granted in favor of commerce to negotiable instruments, which closes the avenues of defence open to all other and ordinary transactions.
The defendants are not third persons, they are primarily the real parties. They received from Reeves the bill of lading, the representative of the twenty-one bales of cotton, knowing .full well that the condition upon which plaintifls would pay the draft discounted by them, was the shipment of the cotton, and besides inserting in the body of the draft a reference to the
We have fully discussed and determined our view of the law governing bills of lading in the case of John Phelps & Co. vs. Mechanics’ & Farmers’ Bank, 2 McGloin, 11, and in adhering to those views, do not consider it necessary to determine the proposition; that the delivery of the bill of lading to plaintiffs was a fulfilment of the condition imposed by their dispatch.
The law as held by us in Agnel vs. Ellis, 1 McGloin, 61, is applicable to this case, and we must be governed by the laws of Louisiana.
The present action is not brought to rescind a contract under Arts. 2045, 2047 C. C. It is based on Arts. 1898, 2302 C. C.
The position of the plaintiffs is, that we paid to you seven hundred dollars on the delivery to us of twenty-one bales of cotton; that you transferred to us what purported to represent said, property — a bill of lading; in fact, you transferred to us nothing — neither the cotton specified, nor a bill of lading. The inducement for the payment to you was the supposition that you transferred the property; that was the cause and motive for our payment. You must return to us the money paid you in error.
The plea urged by defendants, that this action mu3t be dismissed because no tender was made of the box of cotton seed, or the draft or the bill of lading, is made on erroneous views of the conditions of this controversy. As to the box of
The necessity for default implies, on the part of him who seeks a recovery, a neglect of some duty imposed by law, the performance of some condition precedent, which he should first perform or offer to perform before requiring performance from the defendant. In the present case the plaintiffs occupied the position of holding the condition precedent in their favor. They could not have been required to pay the draft before the delivery to them of the 21 bales of cotton or its representative, the bill of lading. Before defendants could have recovered on the draft, they would have been compelled to tender the property, but the fact that the plaintiffs paid the draft on the inducement or motive that defendants had complied with their agreement, did not require plaintiffs to place defendants in default for a failure to deliver, the cause never existed, there was in law and fact no inducement, and the obligation that existed before the payment of the draft, still existed with defendants as a condition precedent to deliver the property. The plaintiffs having received nothing, secured no benefits of which defendants were deprived; they, plaintiff's, had nothing to restore, the only ones benefitted by the transaction, speaking now of the draft and its payment, were defendants-
There is no dispute that timely and proper notice was given defendants of the forgery and failure of the cause of the contract; there are no averments, no proof that the acts of plaintiff's, in this regard, have occasioned loss to defendants.
Similar questions have frequently arisen in our courts, where parties have brought suit to recover back money paid in error> e. g., by an acceptor of a bill, who had paid in error to a holder’ who had no right to receive payment. Dick vs. Leverich, 11 La. 576.
By an endorser against the holder, who had failed to have note
Where a payment was made on an account rendered and a receipt given, when the account was false. Massios vs. Gasquet, 4 Rob. 137.
In affirmance of the.same principle and on analogous facts; 11 Rob. 102; 2 La. 129; 5 La. An. 15; 14 La. An. 499; 16 La. An. 217; 19 La. An. 328; 15 La. An. 268, 353.
The question of putting in moni was not raised, nor is there any intimation in any of the decisions of the propriety or necessity for the plea. Surely from such a chain of decisions the conclusion is irresistible that the principle invoked under the facts of the present case can have no application.
Judgment affirmed.
Concurring Opinion
Concurring Opinion.
After being for a time of opinion that the judgment appealed from in this cause should be reversed, and after having even conveyed to my colleague my dissent from the conclusions reached by him, I have, after further consideration finally been convinced that there is no error in the judgment which has been brought up.
It is conceded, in this case, that J. W. Burbridge & Co. weré merely acting for John S. Hornor & Son, for the purpose of collecting this draft; hence, the parties really to the transaction and litigation are only John S. Hornor & Son and plaintifis, Thos. H. Allen & Co. Neither of these are innocent third persons, in the sense of the commercial law, and hence, the question of negotiability vd non oi the draft in question, is not one necessary to the case, and I abstain from declaring that the said draft was not commercial in its character.
Between John S. Hornor & Son and Thos. H. Allen, there is nothing which can arise so as to bar out matters of defence or exception. 1 consider that the telegram of Thos, H. Allen & Co. to Reeves, constituted the warrant or authority to said Reeves to draw the draft in question. It may be likened in a way to a
Nor do I consider that, in a case such as this, upon general principles, Thos. H. Allen & Co., had they received, at the time of taking up the draft, anything of real value, would have been excused from the duty of restoring what was thus received, and even of tendering it as a condition precedent to instituting their suit. The evidence, however, does not show that Thos. H. Allen & Co. received the box of cotton seed. Under ordinary circumstances, a bill of lading represents the property constituting the shipment, and possession of the bill of lading constitutes a legal possession, perhaps, of the property in question. But these principles can have no application in presence of a piece of paper which has lost, by means of a fraudulent alteration, its character as a bill of lading, having been altered so as to purport to cover twenty-one bales of cotton, it could serve no longer as evidence of a contract for the delivery of one box of cotton seed. The carrier would, no doubt, ignore it entirely as a document rendered null and void by alteration of its tenor, and there arises; therefore, no presumption against plaintiffs, that, because they held this paper, they did receive, or could have received, the box of cotton seed in question. I consider this so-called bill of
To maintain that Thos. H. Allen & Co. bad to make a tender of these two instruments, before instituting this suit, would belo compel them to tender what had no appreciable value, and lienee, to do what practically would be a vain thing.
We have a maxim ude minimis non curat lex,” and if courts would concern themselves to defeat just rights, simply upon matters involving practically no more than 'wo scraps of useless paper, they would be violating the spirit, if not the letter, of this maxim, and be compelling the law to recognize and deal with what was trifling indeed.
It may be proper to state, in closing, that the difficulty which prevented me, originally, from agreeing with my learned colleague in the conclusion he had arrived at, related solely to this question of tender, and that upon the other questions involved, I saw no difficulty, considering the case, as to them, clearly with the plaintiffs.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.