Kelly v. Lynch

Crocker, J. delivered the opinion of the Court—Cope, C. J. and Norton, J. concurring. The plaintiffs, who are merchants at Mazatlan, advanced a sum of money to one Goldbaum, on a draft and bill of lading, signed by the master of a vessel, representing a shipment by Goldbaum of eight hundred and ninety-six hides and a quantity of bones and horns, deliverable at San Francisco. Goldbaum drew the draft for $2,100 on Moore & Folger, of San Francisco, payable at three days’ sight, to the plaintiffs or order, and indorsed the bill of lading, directing the hides, etc., to be delivered to Moore & Folger upon payment of the draft. Goldbaum being indebted to the house of Alsua, Dorn & Co., of Mazatlan, gave them also a draft on Moore & Folger for $1,000, payable to their order at three days’ sight, and with plaintiffs’ consent made another indorsement on the bill of lading, directing that “ after payment of the above mentioned draft of $2,100,” the draft for $1,000 was to be paid before the delivery of the contents of the bill of lading. Alsua, Dorn & Co. indorsed their draft over to the plaintiffs, with instructions to pay the proceeds, when collected, to the defendants, who were their correspondents in San Francisco. The plaintiffs then indorsed over both drafts for collection, and forwarded them, with the bill of lading, to Barron & Co., of San Francisco. When the vessel arrived, Barron & Co. applied to Moore & Folger to accept the drafts and receive the consignment. They were willing to receive the con[665]signment, accept the draft for $2,100, and pay over the surplus on the draft for $1,000, but were not willing to accept the latter draft. Barron & Co. then went to the defendants, showed them the papers and the letter of Moore & Folger, and after some hesitation, they accepted the draft of $2,100 for the interest of their correspondents, Alsua, Dorn & Co., and not for the honor or on the credit of Goldbaum. Moore & Folger indorsed their refusal to accept on the drafts, and Barron & Co. indorsed and assigned the bill of lading and the draft for $1,000 to the defendants. When the hatches of the vessel were opened, it was discovered that there were only about thirty-one hides, and the balance of the cargo consisted of bones and horns, of no value—showing a gross fraud perpetrated by Goldbaum and the master of the vessel. The vessel and cargo were sold, and the net proceeds realized therefrom, which came to the hands of the defendants, was the sum of four hundred and sixty-six dollars and sixty-three cents, which they tendered to Barron & Co. for the plaintiffs, in payment of the draft, who refused to receive it. This action is brought against the defendants as acceptors, to recover the amount of the draft of $2,100 with interest and costs.