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[promissory note – bill of exchange]
McLaren
v. Lyons
Supreme Court of New South Wales
Dowling C.J. and Stephen J.,
13 March 1841
Source: Sydney Herald,
16 March 1841
SATURDAY. – In
Banco, before the Chief Justice and Mr. Justice Stephen.
In this case
there had been an argument on a demurrer, on a previous day, and
the Chief Justice now proceeded to deliver judgment as follows:-
This is a declaration by an endorsee against the endorsers
of a promissory note for £1200, dated the 24th September, 1840,
payable three months after date, and drawn by one Lewis Samuel,
in favour of the defendants. The special plea is, that before the
endorsement of this note, a bill of exchange had been drawn by defendant
upon and accepted by one John Walker for £1050, and by him dishonoured
at maturity, and that the Union Bank, of which plaintiff was inspector,
applied to defendants to pay them the amount of that bill, representing
themselves to be the holders, and entitled to recover the amount
thereof, and promised defendants if they would take up the said
bill to deliver the same to them, and that defendants delivered
the promissory note mentioned in the declaration to the Bank, for
the express purpose of taking up the said bill, and for no other
consideration whatever, and that the Bank accepted and received
the same for that and for no other purpose or consideration, and
did not nor would then, or at any other time re-deliver the said
bill to them, concluding with a verification. Replication that after
the promise by the Bank to take up the bill of exchange, and after
the delivery the promissory note, and before the commencement of
this suit, to wit, the 20th November, 1840, the Bank were ready
and willing, and then tendered and offered, and from thence continually
hitherto have been, and still are ready and willing to deliver the
bill of exchange, which defendants then wholly refused to accept
or receive, concluding with a verification. Demurrer to the replication,
that it does not shew that the Bank was ready at all times after
the endorsement and delivery of the note to the Bank, and before
the tender alleged to deliver the bill of exchange according to
the terms of the payment set out in the plea, and admitted by the
Directors. I am of opinion that the readinesss of the Bank to deliver
the bill of exchange to the defendants on the
20th November, 1840, being nearly two months after
the endorsement of the promissory note to the Bank by the defendants,
in consideration of the Bank taking up the bill is an immaterial
issue on these pleadings. This opinion involves the reasonable construction
of the agreement set forth in the defendant’s plea, from the obligations
of which, the plaintiff has not shown by pleading, any matter of
excuse. Without criticising the looseness of the phrases used in
the plea, the substance of it in this:- The Bank being holders (which
we must understand to mean having an immediate manual control over,
and possession of Walker’s dishonoured bill, and entitled to recover
the amount against defendant) they promised that they would retire
and deliver it up, in consideration of receiving the promissory
note in question, upon having the note delivered to them, which
for the purpose of this case must be considered as a payment in
cash to retire, the bill, it appears to me in the absence of any
cause shown by pleading, that they were bound forthwith, or within
a reasonable time after, to give up the bill of exchange, and that
it is no excuse that they were ready and willing, and tendered it,
nearly two months afterwards. Whether they kept it an unreasonable
time is a matter for the jury to determine, if the object of the
agreement was to retire the bill, and deliver it up, upon or immediately
after receiving the note; this was an act requiring no special request
on the part of the defendants. The consideration for giving the
note having failed, I think the Bank was bound to show that they
were at all times ready to deliver the note without request, or
that they were ready to deliver within a reasonable time, that they
tendered within that time, or to show by pleading some excuse for
the breach of the agreement. The Court cannot by mere construction
of law hold, that the retention of the bill for nearly two months
after receiving the note, is a reasonable retention when it is shown,
and admitted that on the 24th September, 1840, they were then the
holders of the bill, and entitled to recover it against the defendants,
and for the retirement of which bill this note was given; prima
facia the holder of a bill of exchange is bound to deliver it
up to the party liable upon it, as soon as the latter has discharged
his liability, either by payment in cash, or by the substitution
of another security, ac[LINE OMITTED] It is true, that the plaintiff
in terms negatives the allegation in the plea “that the Bank did
not at any time re-deliver the bill to them,” but he does not cover
the important allegation that they did not then, viz. – when the
note was given, deliver up the bill. That is the material part of
the plea, and not whether the Bank was ready to deliver at a time
long subsequent. Judgment for defendant on demurrer.
Mr. Justice Stephen
concurred with the Chief Justice.
This judgment applied to two other assets in which the same
plaintiff’s name appeared on the list.
Source: Dowling, Select Cases,
Vol. 6, State Records of New South Wales, 2/3464, p. 187
[p.187]
[1841]
[Jno Cunningham
Maclaren
v
AG. & Saul Lyons]
In Banco
Saturday 13th March 1841
Dowling CJ. Judgment
Declaration by indorsee against
the indorsers of promissory note for 1200£ date 24th Sept 1840 payable three months after date and drawn
by one Lewis Samuel in favour of the Defts. Special plea
- That before the indorsement of the note, a Bill of Exchange had
been drawn by Defts upon & accepted by one John Walker
for 1050£ and by him dishonored at maturity, & that the Union
Bank, of which Plf was Inspector, applied to Defts to pay them the
amount of that Bill "representing themselves to be the holders
and entitled to recover the amount thereof, and then promised
Defts, if they would take up the said Bill to deliver the
same to them, - and that Defts delivered the promissory note mentioned
for the express purpose of taking up the said Bill & for no
other reason whatever, & that the Bank accepted & received
the same for that an for no other purpose or reason and did not
nor [p.188] would then, or at any other time redeliver
the said Bill to them, concluding with a verification: - Replication,
that after the promise by the Bank to take up the Bill of Exchange,
and after the delivery of the promissory note C before the commencement
of this suit, to writ on 20th December 1840 the Bank were
ready & willing & then tendered & offered C from
them continually hitherto has been & still are ready & willing
to deliver the Bill of Exchange, which Defts then wholly refused
to accept or receive, concluding with a verification. Demurrer,
to the replication that it does not shew that the Bank was ready
at all times after the indorsement & delivery of the note
to the Bank, C before the tender alleged, to deliver the Bill
of Exchange according to the terms of the agreement set out in the
plea, and admitted by the decton [sic]. Joinder in demurrer.
[p.189]
I am of opinion that the readiness of the Bank to deliver the Bill
of Exchange to the defts on the 20th Nov. 1840 - being nearly two months after the promissory
note to the Bank by the Deft, in consideration of the Bank taking
up the Bill is an immaterial issue on these pleadings. This opinion
involves the reasonable construction of the agreement set forth
in the Defts plea, from the obligations of which the Plf has not
shewn by pleading, any matter of excuse. Without criticizing
[sic] the looseness of the phrazes used in the plea, the substance
of it is this: The Bank being holders (which we must understand
to mean - having an immediate manual control over & possession)
of Walker dispossessed Bill & entitled to recover
the amount against Defts they promised that they would retire
& deliver it up, in consideration of receiving the promissory
in question. Upon having the note delivered to them, which for the
purpose of this case must be considered as a payment in cash to
retire the Bill, it appears to me, (in the absence of any excuse
shewn [p.190] by the pleading), that they were bound forthwith,
or within reasonable time to give up the Bill of Exchange, and that
it is no excuse that they were ready & willing & tendered
it, nearly two months afterwards. Whether they kept it an unreasonable
time is matter for a Jury to determine. If the affect of the agreement
was to retire the Bill & deliver it up upon or immediately after
receiving the note, this was an act requiring no special request
on the part of the Defts. The consideration for giving the note
having failed, I think the Bank was bound to shew that they were
at all time ready to deliver the note, or that they were ready to
deliver within a reasonable time that they tendered within that
time, without request, or to shew by pleading some excuse for the
breach of the agreement. The Court cannot by mere construction of
law hold, that the retention of the Bill for nearly two months after
receiving the note, is a reasonable retention when it is shewn,
and admitted that on the 24th Sept 1840 they were then the holders
of the Bill and entitled to recover [p.191] upon it against the
Defts, & for the retirement of which Bill this note was given.
Prima Facie the holder of a bill of Exchange is bound deliver
it up to the party liable upon it, as soon as the latter has discharged
his liability either by payment in cash, or by the substitution
of another security accepted by the holder of the Bill as payment.
It is true that the Plf in terms negatives the allegation in the
plea, that the Bank did not "at any other time redeliver the
Bill to them", but he does not cover the important allegation,
that they did not then, viz- when the note was given, deliver
up the Bill. That is the material part of the plea, &
not whether the Bank was ready to deliver at a time subsequent.
Stephen J. concur.
Judgment for Deft on demurrer.
The like judgment in 2 other
cases upon the same note.
Dowling
C.J., Burton and Stephen JJ, 19 October 1841
Source: Sydney Herald, 20 October 1841[2]
JOHN
M[C]LAREN V. A. AND S. LYONS.
This was an action
in which the plaintiff, as Inspector of the Union Bank of Australia, sought to recover from the defendants,
as indorsers of a promissory note, made by one Lewis Samuel in favour
of the defendants, for £1200, payable three months after date, and
indorsed by the defendants to the Bank.
The defence was, that before the indorsement and delivery
of the note to the Bank, a certain bill of exchange had been drawn
by the defendants upon one Walker, to the sum of £1050. accepted by and dishonoured
by him; that afterwards the Bank applied to the defendants to take
it up, and promised to redeliver the bills if they would do so;
that the defendants delivered the note to the Bank for the express
purpose of taking up Walker’s acceptance.
This defence the plaintiffs denied.
The cause was tried on the 9th of August last before his
honour Mr. Justice Stephen and a Special Jury, when a verdict was
found for the plaintiff – damages, £1264.
Messrs. Windeyer and Broadhurst
now moved that a new trial be granted, on the grounds that
the verdict was – 1st, against law; 2nd, against evidence; and 3rd,
against the misdirection of the learned Judge who tried the case.
Messrs. Foster and Darvall showed
cause; and
Mr. Windeyer being about to reply,
The Chief Justice said, the learned Judge who tried the cause has
notified to us that he was surprised at the verdict, and that it
was not satisfactory to his mind. On the part of the plaintiffs
it has been urged that the defence set up was matter of special
contract which had not been proved. But it appears to me that the
defendant has relied merely upon the legal effect of the transaction
itself. We think that if a party agrees to take another’s security
in lieu of payment of a security he holds, the other party is entitled
to have the original security given up to him. The question is,
did the defendant give the note declared on upon condition that
he was to have the accepted bill? By law he was entitled to have
it upon giving the note, if the plaintiffs took the note as payment,
so as completely to discharge the defendant’s liability upon the
bill. Did the defendant waive that right by agreeing to take one
of the non-accepted bills as the consideration for his promissory
note? There is no evidence at all of that fact. If all the parties,
Simpson, Lyons, and Sea, were speaking in their different
conversations of the accepted bill and no other, it appears to me
that the plea was made out. It is plain that Sea and Lyons were. Sea himself believed, at the time
he came with the protest, that he had the accepted bill in his hands.
Is it not manifest that Sea himself was speaking of the accepted
bill, and not of any other of the set? It appears to me, therefore,
upon the evidence, that the jury have come to a wrong conclusion.
The legal effect of the contract was proved, because as soon as
the plaintiffs agreed to take the defendant’s note, the defendant
was entitled to have the accepted bill. Therefore, the true question
was, whether the defendant gave his note on condition of his having
the accepted bill. There was no evidence of his having waived his
rights.
Mr. Justice Burton – I have also no doubt upon the subject; at the time
the plaintiff demanded payment of the bill they were not in a situation
to demand it, because they were not in possession of the accepted
bill. But they did demand payment, and what took place between them
and the defendant I think amounted to payment. The note was given
as payment and not as security. Is not the defendant then in the
same situation as if he had paid money, and entitled to the same
rights as if he had paid money? Then was there any evidence of a
contract on his part, to waive what the law entitled him to? If,
on the contrary, Sea said that he would bring up the bill, and there
was no evidence that he was to have the second or third part, which
might not be the accepted part. Rodd’s evidence shews that Sea intended
to fetch the accepted bill. The only inference on the other side
is, from his having seen the protest with the non accepted bill
annexed, and it is therefore urged that with his [eyes] open, he
waived his right to the accepted part. As to that point, much has
been assumed which was not in evidence. It has been urged that the
defendant must have known that no ship had arrived by which any
other bill of the set could have arrived. That appears to me to
be coming to a conclusion not warranted by the evidence. It not
unfrequently happens that two parts of a bill arrive by the same
ship.
Mr. Justice Stephen repeated that he was surprised at the verdict.
Mr. Want, Attorney for the Plaintiff; Mr. Rodd, Attorney
for Defendant.
Notes
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