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Fullerton v. Bank of the United States, 26 U.S. 1 Pet. 604 604 (1828)

Fullerton v. Bank of the United States

26 U.S. (1 Pet.) 604


The State of Ohio not having been admitted into the Union until 1802, the Act of Congress passed May 8, 1792, which is expressly confined in its operations to the day of its passage, in adopting the practice of the state courts into the courts of the United States, could have no operation in that state, but the district court of the United States established in that state in 1803 was vested with all the powers and jurisdiction of the District Court of Kentucky, which exercised full circuit court jurisdiction, with power to create a practice for its open government. The District Court of Ohio did not create a system for itself, but, finding one established in the state in the true spirit of the policy pursued by the United States, proceeded to administer justice according to the practice of the state courts, and by a single rule adopted the state system of practice. When in 1807 the Seventh Circuit was established, the judge assigned to that circuit, found the practice of the state adopted in fact into the Circuit Court of the United States, and the same has since, so far as it was found practicable and convenient, by a uniform understanding been pursued without any positive rule upon the subject.

The Act of 18 February, 1820, relative to proceedings against parties to promissory notes, was a very wise and benevolent law, and its salutary effects produced its immediate adoption into the practice of the courts of the United States, and the suits have in many instances been prosecuted under it.

It will not be contended that the practice of a court can only be sustained by written rules, nor that a party pursuing a form or mode of proceeding sanctioned by the most solemn acts of the court through the course of years, is to be surprised and turned out of court upon a ground which has no bearing upon the merits. Written rules are unquestionably to be preferred because of their certainty, but there can be no want of certainty where long acquiescence has established it to be the law of the court that the state practice shall be its practice as far as it has the means of carrying it into effect or until deviated from by positive rules of its own making.

The course of prudence and duty in judicial proceedings in the United States when cases of difficult distribution as to power and right present themselves is to yield, rather than encroach. The duty is reciprocal, and will no doubt be met in the spirit of moderation and comity. In the conflicts of power and opinion inseparable, from our very peculiar relations, cases may occur in which the maintenance of principles and the administration of justice according to its innate and inseparable attributes may require a different course, and when such cases do occur, our courts must do their duty; but until then, it is administering justice in the spirit of the Constitution to conform as nearly as possible to the administration of justice in the courts of the several states.

Although the act of the Legislature of Ohio regulating the mode of proceeding in actions on promissory notes was passed after the making of the

Page 26 U. S. 605

note upon which this action was brought, yet the Circuit Court of the United States for the District of Ohio, having incorporated the action under that statute, with all its incidents, into its course of practice and having full power by law to adopt it, there does not appear any legal objection to its doing so in the prosecution of the system under which it has always acted.

Modern decisions go to establish that if a note be at, the place where it is payable on the day it falls due, the onus of proving payment falls upon the parties who are liable to pay it, and the instructions of the circuit court in this case were more favorable to the parties to the note, where the court said, upon the sufficiency of the demand, that on an article or a note made payable at a particular bank, it is sufficient to show that the note had been discounted and become the property of the bank, and that it was in the bank, and not paid when at maturity.

This was a writ of error brought to reverse a judgment rendered in the Circuit Court of the United States for the District of Ohio in favor of the Bank of the United States, the present defendants in error. The declaration contains a common count for money lent and advanced. The plea is non assumpserunt. There is another plea of nonassumpsit, filed by H. Fullerton alone, and under it a notice that he will offset a large sum of money, $3,957.33 1/3, due by the bank to the said Fullerton, being the avails of a certain note (the note on which the action was brought) which was discounted by the said Fullerton at the office of discount and deposit in Cincinnati, and the proceeds of which he had never checked out. There is another notice of offset by all the defendants -- that the plaintiffs are indebted to the defendant Fullerton in a large sum of money, $5,000 -- being the avails of a certain promissory note (the note on which plaintiff's action is founded) which has never been paid by the bank to Fullerton or received by him, but retained by the plaintiffs, and Fullerton applies the same by way of discharge and setoff to the said note made to plaintiffs. The cause was tried by a jury, and on the trial the plaintiff exhibited in evidence, a certain note, a copy of which follows:

"$4,000 Cincinnati, February 1, 1820"

"Sixty days after date, I promise to pay John Carlisle or order, at the office of discount and deposit of the Bank of the United States at Cincinnati, four thousand dollars for value received."

"[Signed] ISAAC COOK"

"Endorsed -- John Carlisle, John Waddle, Humphrey Fullerton"

Isaac Cook, the drawer of the note, died pending the suit and before the trial. To the introduction of this note in evidence the defendants objected, as evidence of a several contract of the drawers and each one of the endorsers, and not of any

Page 26 U. S. 606

joint undertaking or liability of the defendants. This objection was overruled by the court, and the note permitted to be read in evidence under the eighth section of the Act of the General Assembly of Ohio entitled

"An act to regulate judicial proceedings, where banks and bankers are parties, and prohibit the issuing bank bills of a certain description, passed 18 February, 1820, to which decision of the court the defendants excepted."

The eighth section of the act provides

"That when any sum of money due and owing to any bank or banker shall be secured by endorsements on the bill, note, or obligation for the same, it shall be lawful for such bank or banker to bring a joint action against all the drawers or endorsers, in which action the plaintiff or plaintiffs may declare against the defendants jointly for money lent and advanced, and may obtain a joint judgment and execution for the amount found to be due, and each defendant may make the same separate defense against such action either by plea or upon trial that he could have made against a separate action, and if in the case herein provided for, the bank or banker shall institute separate action against drawers and endorsers, such bank or bankers shall recover no costs. Provided always that in all suits or actions prosecuted by a bank or banker or persons claiming as their assignees or under them in any way for their use or benefit, the sheriff, upon any execution in his hands in favor of such bank or banker, their or his assignee as aforesaid, shall receive the note or notes of such bank or banker from the defendant in discharge of the judgment, and if such bank or banker, their or his assignee or other person suing in trust for the use of such bank or banker shall refuse to receive such note from the sheriff, the sheriff shall not be liable to any proceedings whatever at the suit or upon the complaint of the bank or banker, their or his assignee as aforesaid."

The facts of the case, so far as they were considered as important to the decision of the Court are fully stated in the opinion delivered by MR. JUSTICE JOHNSON.

Page 26 U. S. 611

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