until the second of March, 1843, four days after it reached maturity. Under such circumstances, it is very clear that if this comes within the operation of the general rule established by the commercial law, with respect to instruments of this character, the drawers would be considered as discharged. The correctness of this principle was not controverted by the counsel for the appellants. But it was contended, that there were no funds in the hands of the drawees to meet the draft; that the funds sent forward for this purpose were withdrawn and diverted from their original destination by the drawers before the maturity of the draft; that with this knowledge the drawers could not have believed, and had no right to expect, that their draft would be paid, and that in this predicament of the case the usual requisition of demand and notice was unnecessary, according to the principle enunciated in Bickerdike v. Bollman, 1 T. R. 405, as being only a useless form, not calculated to change or improve the condition of the drawers. This is substantially the proposition insisted on by the counsel for the appellants. And the questions propounded by the prayers for the decision of the court below were, whether the facts and circumstances of this case, as shown by the evidence, amounted in legal contemplation to a dispensation of demand and notice, so as to subject the drawers to responsibility on the bill; and whether, if they were discharged from liability on the draft, there could be any recovery against them on the count for money had and received.

Whether the circumstances of the particular case are to be treated as amounting to a dispensation of demand and notice, is always a question of law addressed to the judgment of the court. In Cathell v. Goodwin, 1 Har. & G. 470, the court of appeals, when inquiring if the drawer had, in that case, reasonable grounds to expect that his bill would be honored, say: "The reasonableness of such expectation is a matter for the court and not for the jury to decide. If the facts upon which the question arises be admitted or be undeniable, then the question becomes exclusively a matter of law to be pronounced by the court; but if the facts be controverted, or the proof be equivocal or contradictory, then it becomes a mixed question both of law and fact in which the court hypothetically instruct the jury as to the law to be by them pronounced, accordingly as they may find the facts."

We proceed, therefore, to examine the facts in this case, in reference to which there is no dispute, or found by the jury to be true under defendants' prayers; but before this is done it is

AM. DEC. VOL. LII-45

necessary to ascertain with precision the rule of law by which the case is to be governed, as it has been explained, modified, and restricted by the courts since the decision pronounced by the court of the king's bench in 1786, in Bickerdike v. Bollman, 1 T. R. 405. A reference to a few of the leading cases will be sufficient for this purpose:

In Claridge v. Dalton, 4 Mau. & Sel. 230, Lord Ellenborougn said: "That where there were any funds in the hands of the drawee, so that the drawer has a right to expect, or even where there are not any funds, if the bill be drawn under such circumstances as may induce the drawer to entertain a reasonable expectation, that the bill will be accepted and paid, the person so drawing it is entitled to notice." And Mr. Justice Le Blanc also said: "That it is not necessary that the drawer should have effects or money in the hands of the drawee, either at the time the bill is drawn or when it becomes due. For if the bill be drawn in the fair and reasonable expectation, that in the ordinary course of mercantile transactions it will be accepted or paid when due, the case does not range itself under that class of cases of which Bickerdike v. Bollman is the first."

The rule of law on this subject is stated with great clearness and precision by Shaw, C. J., in Kinsley v. Robinson, 21 Pick. 328. He says: "It seems to be now the settled rule of law in an action by the indorsee against the drawer of a bill of exchange, if it appear that the drawer had no effects in the hands of the drawee from the time the bill was drawn till the time it became due, he is liable, without proof of demand and notice. But this is to be taken with some exception of special cases where the drawee has something equivalent to effects, or has made an express or implied engagement to accept and pay, or the drawer has, on any ground, a reasonable expectation that the bill will be accepted and paid: Dickens v. Beal, 10 Pet. 577,"

In Clopper v. The Union Bank, 7 Har. & J. 102 [16 Am. Dec. 294], the court of appeals, when speaking of this rule, said: "A drawer who has no effects in the hands of the drawee, and has no reason to expect the bill would be paid when it became due, is not entitled to notice." Again, this court in Eichelberger v. Finley, Id. 386 [16 Am. Dec. 312], declared, that the true rule, applicable to cases of this kind, appeared to be, that notice is dispensed with where the drawer, at the time when presentment should be made, had no effects in the hands of the drawee, or having such effects, should withdraw them before presentment, and in neither case should have any reasonable

grounds that his bill would be honored." And in the subsequent case of Cathell v. Goodwin, 1 Har. & G. 471, the court, 'n defining what are the reasonable grounds required in such cases, by law, announce: "That they are not such as would excite an idle hope, a wild expectation, or a remote probability that the bill might be honored, but such as create a full expectation, a strong probability of its payment; such, indeed, as would induce a merchant of common prudence and ordinary regard for his commercial credit to draw a like bill."

The authorities to which we have referred furnish us with the rule by which this case is to be decided. The right to demand and notice does not depend upon the fact, that the drawees had, at the maturity of the draft, funds in the hands of the drawers, as ascertained by ulterior events, adequate to its payment. There is to be found in the adjudications on this subject no such stringent rule. On the contrary, we consider the principle as now established to be, that if the drawers, at the time when the bill should have been presented, had the right to expect, reasoning upon the state of facts connected with the transactions as they then existed between the drawees and themselves, that their bill would be honored, they were entitled to demand and notice. The drawing of a bill under such circumstances is not to be treated as a fraud. And as the transaction before us is to be tested by this rule, we think it very clear, that a case is presented in which demand and notice were indispensable; for we are satisfied, after a careful examination of the facts, in reference to which there can be no dispute, that the drawers of this bill, throughout the entire period from the drawing of the draft up to the time when it became due, acted under the full expectation, honestly entertained, and based upon reasonable grounds, that it would be paid by the drawees at its maturity. We will state some of the principal reasons by which we have been conduced to this conclusion.

That Menifee & Slaughter had the authority and permission of Clarke & Kellog to draw this bill of exchange upon the faith of consignments, can not be questioned. It was directly proved by Poumairot, and recognized by the letter, to which he referred in his deposition, as well as by the letter of the seventh of January, 1843. It is true, that this authority was limited to three fourths of the market value of the cargo at New Orleans. With respect, however, to the first draft, this agreement was not strictly adhered to; and the argument is, we think, legitimate, that this fact was calculated to impress upon the mind of the

drawers the belief that the drawees would deviate from the strict letter of their authority, if it became necessary for the honor of the bill.

This bill was drawn on the seventeenth of December, 1842. On the nineteenth of the same month, the drawees were advised of this draft, and of a shipment by the Radius to meet it. A bill of lading, operating as a transmutation of the legal title from the drawers to the drawees, for one hundred hogsheads of sugar by the Radius, was also forwarded. The record shows, that this shipment by the Radius was received and sold on time, for a sum exceeding seven thousand dollars, prior to the maturity of this bill. And we have the pregnant fact in the letter of Clarke & Kellog, referred to by Poumairot, and placed in the cause without objection, that the drawees acknowledged the receipt of the letter of advice of the nineteenth of December, and promised to honor the draft when presented. This promise may be regarded as equivalent to an acceptance of the draft.

It has been urged, however, on the authority of the case of Hoffman v. Smith, 1 Cai. 157, that the acceptance of the bill does not render notice of non-payment necessary in a case where there were no funds. This may be true; but all must agree, that on the question, whether the drawers had the right to expect that their draft would be honored, it is a fact of the most commanding character. It rests on the plain proposition that the drawers could not presume that the drawees would violate or evade their express engagement. And as a circumstance calculated to generate in the minds of the drawers the belief that their draft would be paid, it may be considered as conclusive, unless mitigated or explained.

It can not be maintained that Menifee & Slaughter are to be treated as having fraudulently intercepted the funds against which this bill was drawn by their subsequent drafts, so as to place this case within the range of Rhett v. Poe, 2 How. 457. There is no similitude between the cases. In the case before us, large shipments were made to meet the subsequent drafts. These drafts, although accepted, were not paid prior to the maturity of this bill.

It is very manifest, we think, that the parties to this draft, both the drawers and drawees, contemplated that the shipment by the Radius, or so much of it as might be necessary, should be appropriated to its payment. We do not mean to say, that there was a technical appropriation of the fund produced by the

sale of this cargo to this draft, but that this was the expectation of the drawers, as it certainly was the intention and purpose of Clarke & Kellog. And it is, therefore, a fair inference, that if the shipments forwarded to meet these various drafts had proved inadequate, so that some of them would have remained unpaid, that the drawees, looking to their express promise to pay this draft, and the implied understanding that it was to be answered by the cargo of the Radius, would have honored it, had it been duly presented, even at the sacrifice of some other draft. Be this however as may, it is impossible, we think, to doubt with this array of facts before us, that the drawers of this bill, both at the time when it was drawn and at the period of its maturity, had reasonable grounds for the expectation that it would be. honored. They were therefore entitled to demand and notice, and the court below were correct in rejecting the plaintiffs' first prayer, and in granting the prayers of the defendants.

The condition of the case, as to the right of the drawers to demand and notice, is not altered by the fact assuming it to be true, that the drawees were insolvent. The insolvency of the drawees furnished no excuse for the negligence of the holders of the bill, in this respect: Story on Bills, sec. 306; Byles on Bills, 148.

The plaintiffs' second prayer raises the question, whether there can be any recovery against the defendants on the money counts, assuming that they were discharged from liability on the draft.

The court below were clearly correct in rejecting this prayer. There was no money paid by the drawees to the drawers for the purpose of being applied to this bill, as in Baker v. Birch, 3 Camp. 107. In Penn v. Flack, 3 Gill & J. 369, the note was exhibited and relied on as evidence under the money counts of an indebtment between the parties. But in this case, the drawers are absolved from responsibility on the draft, by the laches of the holders. And Judge Story, in his treatise on bills, sections 112, 227, when speaking of the obligation to present the draft for payment as soon as it has arrived at maturity, states the rule to be: "That a default in this respect will discharge the party, in respect to whom there has been any such default, and who otherwise would be bound to pay the same, from all responsibility, on account of the non-acceptance or non-payment of the bill, and will operate as a satisfaction of any debt or demand or value for which it was given."

Judgment affirmed.