THIS case came up by writ of error to the Circuit Court of the United States for the district of South Carolina.
The suit was brought in the court below, by Poe, the cashier of the bank, against Rhett as the endorser upon a note for $8,000 under the following circumstances:
Dixon Timberlake was a merchant who, it appeared from the evidence, had been for several years prior to 1837, in the habit of going from New York to the south, during the cotton buying season, and then returning to New York. In the winter of 1836-7, he was at Augusta, in Georgia, with large letters of credit from various houses in New York, and also one from Benjamin R. Smith, then a merchant in Charleston, South Carolina. By the aid of these letters he acquired a credit at the Bank of Augusta, and purchased considerable quantities of cotton and some bank and other stocks in the course of the season. Some of these purchases were upon the joint account of Smith and himself, but the evidence was contradictory as to the particular purchases thus made.
In February and March, 1837, Timberlake, being in Augusta, drew several bills upon Smith in Charleston, which all became due in May. The whole amount of the bills thus due in May, was $21,500. A separate bill for $14,000 is not included amongst these, because it was paid.
This sum of $21,500 was divided into two classes; one class consisting of $8,000 and the other of $13,500.
It appeared by the evidence, that Smith was to provide for the first class of $8,000, and Timberlake for the remaining $13,500.
In order to carry out the arrangement respecting the first class, a bill was discounted drawn by Timberlake upon Smith for $8,000, and the note which was the subject of the present suit offered and accepted as collateral security. The note was as follows: $8,000.
Charleston, May 9th, 1837.
Sixty days after date, I promise to pay to W. E. Haskell, or order, eight thousand dollars, for value received.
BENJAMIN R. SMITH.
Endorsed, W. E. HASKELL, per attorney B. R. SMITH.
R. BARNWELL SMITH, per attorney B. R. SMITH.
R. Barnwell Smith, whose name it was admitted was placed upon the note by proper authority, was the same person as R. Barnwell Rhett, his name having been changed after the time of the endorsement.
Timberlake having made no provisions for the other class of bills, amounting to $13,500, Smith was unable to take them up, and they were protested.
On the 2d of June, Smith made an assignment of his property for the benefit of his creditors, in a certain order which it is unnecessary to state; and it was further proved that at and before the maturity of the note on which the action was brought, Benjamin R. Smith was insolvent.
On the 11th of July, both the bill drawn by Timberlake upon Smith for $8,000, and the note in question for $8,000, became due; but neither being paid, the note was regularly protested and certain proceedings had upon the bill which constitute the defence in this case, where suit is brought upon the note.