Bank of Laddonia v. Bright-Coy Commission Co.

120 S.W. 648, 139 Mo. App. 110, 1909 Mo. App. LEXIS 463

• Court: Missouri Court of Appeals
• Decided: June 8, 1909
• Status: Published

Opinion

GOODE, J.

(after stating the facts). — The verdict in this case should have been given on the separate counts, for though the first count may be taken as a broad statement of what is more particularly set forth in the other two, the third declares on a canse of action distinct from that stated in the second. The latter declares on a general agreement between defendant and Hobson for Hobson to purchase stock from various persons, and ship them to defendant, which would, thereupon, pay the price of the stock to plaintiff; whereas the third count declares on a special agreement with reference to the Bailey cattle. Wherefore a genera] verdict was improper. [Brady v. Connelly, 52 Mo. 19; State to use v. Berning, 74 Mo. 87; Campbell v. King, 32 Mo. App. 38.] It is doubtful if the form of the verdict was as pointedly challenged as it should have been in the motion in arrest, which merely said the verdict was not responsive to the issues. Nevertheless, it is proper to call attention to the irregularity in the verdict, because this case cannot be understood or determined rightly, without reference to the diverse causes of action stated in the second and third counts of the petition and study of whether the evidence tends to support both causes. The first count is of a general nature, and while a verdict on it would stand if supported by proof of the substance of either the agreement stated in the second count or of that stated in the third, proof of one or the other would be essential to a recovery by plaintiff on any count. It is impossible to ascertain wrhich agreement the jury found had been made, and this is an important matter; for the evidence tended to prove Hobson and defendant agreed specially as alleged in the third count, but not in the particulars therein alleged, with reference to the Bailey cattle, and the cattle were shipped pursuant to their agreement; but no evidence was adduced which tended to establish a general agreement between Hobson and defendant, that Hobson should buy cattle, ship them to defendant and the latter would pay the purchase price to plaintiff, or reliance on such an agreement by plaintiff in the transactions between it and Hobson, as alleged in the second count. What evidence there is of the particular contract alleged in the third count, is the testimony of the bank’s cashier McOune, that he heard Hobson say to Bright through the telephone he (Hobson) would have to draw on defendant for the price of the Bailey cattle and Bright, in response say: “All right.”

The question occurs just here whether a verdict would stand on either the first or third counts, upon what facts were in testimony regarding the Bailey shipment. The answer to this inquiry depends on the adequacy of the telephone conversation between Hobson and Bright, to entitle plaintiff, in equity and good conscience, to recover the proceeds of the Bailey cattle as money had and received to its use. Counsel for both parties have treated this point as though it were controlled by our statutes requiring an acceptance of a bill of exchange to be in writing. [R. S. 1899, sec. 443; Neg. Inst. Law, sec. 132, 1 Mo. Ann. Stat., sec. 463; Clements v. Yeats, 69 Mo. 623; Flato v. Mulhall, 72 Mo. 522.] The draft was not an inland but a foreign bill of exchange. [Neg. Inst. Act., sec. 129; 1 Mo. Ann. Stat., sec. 463.] Hence we do not see that our statute cuts any figure, as the law of the place of performance of the agreement Avould govern, and that is Illinois. What the law of Illinois is in this respect was not proved, and the common law must furnish our rule of decision. At common law a breach of a verbal agreement to accept a bill of exchange when draAvn, gives sufficient ground for an action against the promisor by the payee, if the latter relied on the promise in taking and discounting the draft. [2 Randolph, Com. Paper, secs. 604, 609, 613 and 614; Hall v. Bank, 133 Ill. 234; Brown v. Ambner, 66 Md. 391; Ruiz v. Renauld, 100 N. Y. 256; Seaboard Bank v. Burleigh, 147; Bissell v. Lewis, 4 Mich. 450.] And the authority to be cited next, says there has been no statutory change in Illinois to require an acceptance, or agreement to accept, to be in writing. As to the point in hand, this case is identical, in principle with Hall v. Cordell, 142 . In that case it appeared Hall Brothers & Company of Chicago, had agreed to accept and pay, or pay on presentation, all drafts made on them by George Farlow in favor of Cordell & Dunnica, for the price of live stock bought by Farlow and shipped by him. to Hall Brothers & Company at the Union Stock Yards, Chicago. On July 18,1886, Farlow shipped from Missouri nine carloads of cattle and one carload of hogs consigned to said firm, which received the shipment, sold the same for the account of Farlow, paid certain expenses and applied' the balance of the proceeds in discharge of overdrafts Farlow had previously made on the firm and an indebtedness for money lent him. At the date of the shipment Farlow drew a draft at Marshall, Missouri, in favor of Cordell & Dunnica for $11,724 on Hall Brothers & Company, the draft stating it was for the nine carloads of cattle and one carload of hogs. This draft was discounted by Cordell & Dunnica, the proceeds placed to Farlow’s credit in the bank, and Farlow drew checks on the account thus created in his name, in favor of the persons from whom he had purchased the stock. On presentation of the draft Hall Bros. .& Company refused to pay it, it was protested and subsequently Cordell & Dunnica were paid a balance by Hall Brothers & Company of about $6,000 out of the proceeds of the stock, instead of being paid the full amount of the proceeds. An action of assumpsit was brought on the verbal agreement of Hall Brothers & Company to accept and pay all drafts Farlow might draw on them in favor of Cordell & Dunnica for shipments of stock, and the contract having been made in Missouri, the drawees contended it was invalid. The Supreme Court of the United States, pointed out the Supreme Court of Missouri had construed the statute of that State requiring the acceptance of bills of exchange to be in writing, to embrace not only an acceptance, but an agreement to accept; then said if the Missouri statute governed, no action could be maintained either on the agreement to accept or on the Missouri statute, which recognized the right of a person to whom a promise to accept a bill has been made, and who had drawn and negotiated the bill on the faith of the promise, to recover damages of the promisor if he refused to accept. [R. S. 1899, sec. 447.] The latter point was determined against the plaintiffs because they were the payees of the draft and it could not be held they had negotiated it in the meaning of said statute; and so it would be in the case at bar. But the Supreme Court of the United States declared that on principle and authority, the rights of the parties were not to be determined by the statute of Missouri, as said statute could have no application to a case brought to charge a person in Illinois upon a parol promise to accept and pay a bill of exchange in said State; declaring, further, the law of Illinois, that being the place of performance, should govern; and according to said law there was “no difficulty in holding the defendants were liable for a breach of their parol agreement, made in Missouri, to accept and pay, or pay upon presentation, in Illinois the bills drawn by Farlow pursuant to that agreement in favor of plaintiffs;” . . . since “in Illinois a parol acceptance, or a parol promise to accept, upon a sufficient consideration, a bill of exchange, was binding upon the acceptor.” That was an action of assumpsit, but we hold an action for money had and received would lie on the facts we have here, for the proceeds of the Bailey shipment, as well as assumpsit on defendant’s agreement to pay the draft drawn against the shipment. In discounting the draft plaintiff must have relied on defendant’s promise to pay, and there was ample evidence to prove this element of recovery. An instruction hypothesizing the requisite facts in testimony regarding the agreement to honor the draft for the Bailey shipment, and telling the jury to return a verdict if they found the facts as stated, would have been correct. We overrule the error assigned for the refusal of the court to grant the sixth instruction requested by defendant; and for the reasons given supra, and on the authority of the decision of the Supreme Court of the United States, we overrule the error assigned for the refusal of defendant’s third request; inasmuch as a verbal agreement by defendant to accept any drafts drawn by Hobson in favor of plaintiff against shipments of cattle, would entitle plaintiff to redress if the agreement was not kept.

Where is the proof of a general agreement between Hobson and defendant of the nature stated in the second count; to-wit, for Hobson to buy stock, ship it to defendant and defendant to remit the proceeds to plaintiff? In repeated perusals of the record we have not been able to find a trace of evidence of that kind. On the contrary, the entire testimony for plaintiff goes to establish a contract made by McCune as plaintiff’s cashier, with Bright, president of defendant company, and Hobson — a direct contract between the bank and defendant, and not one between Hobson and defendant on which the bank relied. Neither was there any testimony to support a contract of the latter character given by the witnesses for defendant; for they swore unequivocally the transaction in regard to Hobson’s shipment of the cattle and the disposition of the proceeds, • was not based on a particular arrangement of any species. If the contract stated in the second count had been proved, we think likely plaintiff might have maintained an action on it as one made for its benefit, since the cases now hold a third party may maintain an action on a contract entered into for his benefit, even though he was not named in it; if it was not merely for indemnity — that is, to save the obligee harmless in •designated particulars — but to do affirmative acts like paying money. [Bank v. Leyser, 116 Mo. 51; State v. Railroad, 125 Mo. 596; Porter v. Woods, 138 Mo. 539; Crow v. Stinde, 156 Mo. 262.] If the agreement alleged in the second count had been established, then so far as plaintiff’s right to sue on it is- concerned, it would appear to fall within the following exception to the rule that strangers to a contract cannot sue on it; to-wit, where property is placed in the hands of another person, who agrees to deliver tiie proceeds thereof to a third person, the latter has a cause of action against the one in whose hands- the property was placed. [State v. Railroad, 125 Mo. loc. cit. 615.] And, we apprehend, in such an event the third party might sue the promisor for the proceeds of the property as money had and received to the plaintiff’s use, instead of suing directly on the contract. Suffice to say there was no evidence of the agreement alleged in the second count, and the first and second instructions granted for plaintiff erred in leaving to the jury the question of whether such a contract had been formed. For the same reason the second instruction requested by defendant was right in theory, but to be precise, should exclude an agreement to pay drafts. Likely it was refused because it required a verdict for defendant, unless the jury believed defendant had agreed with plaintiff to pay for the cattle; but as all the evidence which tended to prove any agreement by defendant, tended to prove one with plaintiff and not with Hobson, the instruction fitted the proof.

The circumstance that defendant had habitually honored Hobson’s drafts in favor of plaintiff or else had remitted the proceeds of shipments to plaintiff, knowing the latter had furnished money to pay for the cattle, would not bind defendant to turn over the proceeds of any particular shipment to plaintiff unless there was some agreement, general or special, to do so. That is to say, a commission merchant is not bound to send to a certain bank the proceeds of property he sells for a customer, merely because he knows said bank had been furnishing the customer money to buy the shipments and the proceeds had been remitted to the bank pursuant to the customer’s order. The bank would not have a lien on a shipment or its proceeds unless a bill of lading or some kind of security was taken. If defendant was bound by no engagement of any kind, then it was under no obligation to plaintiff; and. the question of its right to retain the proceeds would be one between it and Hobson. Contra, if the defendant had agreed to remit the proceeds of shipments to plaintiff, or to honor drafts drawn against them, and plaintiff had acted on the agreement. [Bank v. Gordon, 45 Mo. App. 295.]

We hold no error was committed in refusing the fourth and fifth instructions asked by defendant, because each of them was too narrow in the facts hypothesized. They failed to take account of the evidence tending to establish a contract between defendant and plaintiff about the disposition of the proceeds of shipments.

The judgment is reversed and the cause remanded.

All concur.