Bridges Co., Inc. v. Bank of Fergus Co.

251 P. 1057, 77 Mont. 524, 1926 Mont. LEXIS 184

• Court: Montana Supreme Court
• Decided: December 6, 1926
• Docket: No. 6,042.
• Status: Published

Opinion

MR. CHIEF JUSTICE CALLAWAY

delivered the opinion of the court.

In this action, after trial before the court sitting without a jury) judgment was rendered in favor of defendant, from which plaintiff has appealed.

In plaintiff’s complaint it is alleged in substance that in the month of August, 1920, the defendant consigned to the plaintiff certain wool-clips aggregating 92,457 pounds, in consideration of which the plaintiff advanced to the defendant $23,114.25, and the defendant agreed to pay plaintiff a commission of two and one-half cents per pound for selling the wool, and to repay the cash advanced with all necessary advancements which should be paid out by plaintiff in order to protect and care for the wool, with interest at eight per cent per annum; that the plaintiff made advancements for freight, insurance, cartage, drayage and labor, and for scouring wool, and that the advancements, with interest and commissions, exceeded the sum for which the wool was sold in the sum of $11,841.83; that plaintiff rendered an account of the sale of the wool-clips showing the indebtedness, and made demand for payment, but defendant failed, neglected and refused to pay the same or any part thereof except the sum of $577.31, paid on October 18, 1921. Hence plaintiff prayed judgment.

All of the foregoing allegations of the complaint were denied by the defendant except that it admitted plaintiff had rendered an account of sales of certain wool and had demanded that defendant pay plaintiff certain sums of money, which defendant had refused to pay. Thereupon defendant alleged the truth to be that on or about the months of July and August, 1920, one Patterson, “representing himself to be the agent of the plaintiff, for the consignment and sale of wool-clips in Fergus county, Montana, called upon the defendant and asked concerning the consignment and sale of wool-clips belonging to the customers of defendant bank”; that Patterson was advised that certain customers of the bank had their wool-clips stored in the Fergus County Wool Warehouse and elsewhere in Fergus county, and Patterson then and there well knew and understood that the wool-clips were not the property of the defendant but were the property of defendant’s customers; that Patterson then negotiated for the consignment and sale of the wool-clips; that for the convenience of and at the request of plaintiff defendant allowed partial settlements for the clips to be made to it at its office in Lewistown, in its name, but with full knowledge and understanding on part of the plaintiff and the wool-growers that the defendant was acting merely as agent of the plaintiff and the customers to receive the money from plaintiff for distribution to the customers, and not otherwise; and that in so doing the defendant was acting as an intermediary only. The plaintiff by reply denied that defendant was acting as agent of the plaintiff and the customers of the bank in the handling of the wool-clips and alleged that the consignment of the wool-clips was negotiated with the bank and as the individual property of the bank.

To sustain its ease the plaintiff offered in evidence the depositions of Mr. Patterson and three others. As a part of Patterson’s testimony there were offered documents designated as Exhibits “A,” “B,” “C” and “D.” Exhibit “A” is as follows:

“August 2, 1920.

“In consideration of Eighty-six Hundred Fifty-two 50/100 Dollars, to me in hand paid by S. W. Bridges & Co., Inc., the receipt whereof is hereby acknowledged, I do hereby agree to consign to them, for sale, my wool clip of 192 — , from about ■- head of sheep, weighing about 34,610 pounds; which wool clip I warrant to deliver to S. W. Bridges & Co., Inc., or their representatives at Lewistown, in good merchantable order and condition, on or before - upon payment to me by them of a total advance payment against said consignment of 25 cents per pound with customary allowance for tags, and dead wool and fine bucks; it being understood that the sum of $8,652.50 already paid to me, is to be considered and taken as part of said advance payment.

“I agree to pay said S. W. Bridges & Co., Inc., 2y2 cents commission for said sale, and current rates of interest on all advances; also delivery charges from the point of shipment to the Boston Warehouse.

“Peter J. Osweiler, “Agt Cashir

“S. W. Bridges & Co., Inc.

“By John R. Patterson.

“See back hereof.”

While the signature “Peter J. Osweiler” and “Agt” are written in ink, “Cashir” is written dimly in lead pencil; the evidence does not indicate who wrote it. On the back of Exhibit “A” appears the following:

“Norman Lot B 2..........................5113 lbs.

Minlschmidt Lot B 3......................3883 lbs.

Hamilton Lot B 4.........................8061 lbs.

Hogeland Lot B 5........................6348 lbs.

Boe Lot B 6.......................,......9305 lbs.

Allyn Lot B 7............................1900 lbs.

34610”

Exhibit “B” is substantially the same as Exhibit'“A” except that it is dated on August 6, 1920; the sum of money is $13,181; the number of pounds is 52,724. It is signed “Bank of Fergus County, by D. B. Bolton, Ass’t Cashier.” On the back of the instrument appear the names of seventeen persons. Each name is followed with figures and letters representing the amount of wool and the money advanced; for instance: Anderson & Mauland, 3304 lbs. $826.00.

Contemporaneously with the execution of Exhibits “A” and “B” Patterson delivered to the defendant drafts (designated Exhibits “C” and “D”) upon S. W. Bridges & Co., Inc., at Boston, directing that concern on demand to pay to the order of the Bank of Fergus County the amounts called for, which are respectively $8,652.25 and $13,181. These were paid upon presentation to plaintiff.

In the view we take of the case it is unnecessary to discuss the objections, some serious, which counsel for defendant raised during the trial, and upon motion for a nonsuit, and now insist upon, against the maintenance of plaintiff’s alleged cause of action.

The burden of showing error in the judgment rests upon the plaintiff. If upon any view of the case the defendant was entitled to prevail the judgment must be affirmed.

At the trial each party charged the other with attempting to add to and to vary the terms of a written contract contrary to the provisions of sections 7520 and 10517, Revised Codes of 1921. For example, over defendant’s objections plaintiff offered testimony to show that while Peter J. Osweiler signed Exhibit “A,” designating himself as agent, in fact he signed the same as cashier of the bank and the bank and not himsAlf was the real party in interest; also that defendant’s agents agreed orally to repay advances; likewise to show the custom at Boston respecting the advancement of money by consignees to pay freight, drayage, storage, insurance and the like upon consigned wool-clips. The court received the testimony, reserving rulings as to its admissibility, and pursued the same course with respect to the testimony offered by defendant, which was received over plaintiff’s objections.

It is not necessary to pass upon defendant’s objections to plaintiff’s proffered testimony. We are satisfied the evidence offered by the defendant comes within the well-supported rule announced by this court in McCaull-Dinsmore Co. v. Stevens, 59 Mont. 206, 194 Pac. 213.

Defendant’s proof is quite sufficient to sustain findings to the effect that plaintiff knew the wool-clips which were consigned to it were not the property of defendant but were the property of defendant’s customers and that the defendant, for the accommodation of plaintiff as well as the customers, acted as a mere go-between.

At the threshold of the transactions which eventually resulted in this lawsuit Patterson, plaintiff’s agent, called at defendant bank saying his company was in a position to advance twenty-five cents per pound on growers’ wools, and he desired to he introduced by the bank’s officers to customers of the bank or others who might have wool for sale or consignment. In response Mr. Belden, president of the bank, told Mr. Patterson that certain customers of the bank had not as yet sold or consigned their wool so far as he knew, the wool at that time being stored in the Fergus County Wool Warehouse. The two then went to the warehouse where the wool was found, sacked, with the name or brand of the grower and the weight of each sack marked in paint thereon. Mr. Belden told Mr. Patterson that the wool belonged to the bank’s customers. Belden and Patterson had been acquainted for years and Patterson treated the bank as his headquarters. Mr. Miller, who described himself as the field agent of the bank, testified that at the request of Mr. Osweiler, the cashier, he conveyed Patterson by automobile to see a number of wool-growers. Patterson endeavored to get consignments of wool from these men. One was Mr. Sibbert, whose name appears upon Exhibit “B.” Patterson told Sibbert his firm was “taking consignments of wool and advancing twenty-five cents.” Thereafter Mr. Patterson requested Mr. Osweiler to receive the draft for $8,652.25, Exhibit “C,” for his (Patterson’s) convenience, saying: “I would much prefer to give one draft than to split it up into so many settlements.” Exhibit “A” was not signed until after the draft was delivered to Osweiler. This instrument, said Osweiler, was signed at Patterson’s request. Patterson told him it was necessary “to have one of these instruments to report to the house.” Osweiler did not understand that either the bank or himself was consigning any wool and he did not deliver any wool to plaintiff, either as cashier or individually. The bank did not own any wool. He acted, he said, as agent for Patterson in making settlements and in some cases for the wool-growers. Osweiler paid the proceeds of the draft to the. growers, according to the memorandum on the back of Exhibit “A,” in accordance with the weights furnished by Patterson. Exhibit “B” was signed by Mr. Bolton, assistant cashier of the bank. This document, with the draft for $13,181, was presented to Bolton on August 6, just a little before train time. Osweiler was absent at the time. Bolton testified: “I took the draft from Mr. Patterson and I asked Mr. Patterson at the time why these papers had to be signed by the bank, or if they were to be signed by the bank, and he said, ‘Yes, just put the stamp on it.’ I was familiar with the transaction in a way but I was not familiar with how I was signing it. I knew what the transaction was. I knew that the bank was simply acting as a clearing-house, distributing the proceeds of the draft which he handed to me. I knew the proceeds were to be delivered to the parties as the names were shown.”

The proceeds of the draft were disbursed to the different parties shown on the back of Exhibit “B.” The bank did not receive any compensation from either the plaintiff or its customers for its service in the matter.

Shortly before leaving Lewistown, Patterson told Osweiler he expected to receive the Buffalo Banch Company’s wool but he did not want to wait any longer, and when the weights were delivered at the bank to draw on the plaintiff for the twenty-five cents advance. Upon August 14, accordingly, Osweiler wrote to plaintiff a letter in which he said: “We are to-day drawing draft on you for $1,280.75 to cover a 25^ advance on the wool of the Buffalo Ranch Company. This is in accordance with instructions left with us by Mr. J. R. Patterson. We are enclosing railway bill covering weights on the wool.” The draft was honored and the proceeds were delivered to the Buffalo Ranch Company.

All of the witnesses for defendant who were interrogated upon the subject testified that there never was an agreement on the part of the bank to repay any advances made by the plaintiff. The subsequent actions of the parties have illuminating features. There was testimony showing that the plaintiff had correspondence directly with one of the wool-growers, Mr. Allyn, with respect to a sale of a portion of the wool consigned, which defendant claims tends to show that plaintiff recognized that the wool was consigned by Allyn and not by defendant.

When it became evident that the wool would not sell for a sum sufficient to cover the amounts advanced, plaintiff on November 24, 1920, wrote defendant, saying in part: “Owing to the depressed condition of the wool market we feel obliged to ask you to reduce the margin which we advanced against the wool you have consigned to us.” Upon December 3 defendant dispatched a telegram requesting plaintiff to send a list of customers who had consigned wool to plaintiff. The next day plaintiff by its vice-president, who conducted most of the correspondence between plaintiff and defendant, wrote the defendant a letter which reads in part as follows: “Tour telegram of the 3rd inst. is at hand and carefully noted. We annex herewith a list of customers who consigned wool to us through your bank.” The list inclosed included the names of those appearing upon the backs of Exhibits “A” and “B,” with possibly one exception, and included Buffalo Ranch Company, On December 27, 1920, plaintiff requested defendant to sign a note. In answer defendant said: “We have'your letter of December 27, enclosing note for $13,100 at ninety days covering a refund on moneys advanced on wool consigned in the name of the Bank of Fergus County by customers of the bank,” and then went on to say the bank would procure the notes of the wool-growers covering the amount and forward the same as early as possible. “By consulting with your Mr. Patterson, you will find that for consigning and handling these wools were bunched and consigned in the name of the bank, and the bank does not feel that it is liable on the contract as the matter was arranged in accordance with the wishes of Mr Patterson, simply to facilitate the matter of shipping, etc.” In conclusion defendant assured plaintiff that the notes would be “perfectly good.”

On April 13, 1921, Mr. Belden wrote plaintiff, saying: “We are submitting herewith a list of the securities which the Bank of Fergus County has taken in your interest to protect you against loss on certain wool consignments on which you made advances in 1920. These notes are all dated on January 15th, 1921, and all mature on April 15th, 1921, and each is made payable to the order of S. W. Bridges & Co., Inc., bearing interest from date at the rate of eight per cent per annum”: and then follow the names of seventeen wool-growers with the amounts of the notes set opposite their names. Plaintiff ignored this letter.

On October 18, 1921, defendant sent plaintiff a draft for $577.31, “covering the amount due you from Anderson & Mauland and from J. M. Allyn $205.19.” The plaintiff credited this amount upon defendant’s account.

The trial court was warranted in holding, in effect, that the plaintiff knew the defendant was not the owner of the wool consigned, was not bound to deliver it, was not entitled to the money advanced upon it; that the defendant at plaintiff’s request and without compensation acted merely as a go-between for the mutual benefit of plaintiff and its own customers.

In McCaull-Dinsmore Co. v. Stevens, supra, this court held that parol evidence was admissible to show that the con tract there under consideration was delivered to plaintiff’s agent for a purpose other than that for which the plaintiff was attempting to make use of it — as the basis of an action. In that respect the situation is identical with the one here presented.

Defendant’s evidence was competent, relevant, material and did not infringe the parol evidence rule. We quote again from Peugh v. Davis, 96 U. S. 332, 24 L. Ed. 776 [see, also, Rose’s U. S. Notes] : ‘ ‘ The rule which excludes parol testimony to contradict or vary a written instrument has reference to the language used by the parties. That cannot be qualified or varied from its natural import, but must speak for itself. The rule does not forbid an inquiry into the object of the parties in executing and receiving the instrument.” (McCaull-Dinsmore Co., supra; Barkemeyer Grain & Seed Co. v. Hannant, 66 Mont. 120, 213 Pac. 208.)

The face of an instrument is not always conclusive of its purpose. The rule regards the circumstances of the parties and executes their real intention, and prevents either of the parties to the instrument from committing a fraud on the other by claiming it to be what it in fact is not. In other words, the real transaction may be proved. (Cabrera v. American Colonial Bank, 214 U. S. 224, 53 L. Ed. 974, 29 Sup. Ct. Rep. 623 [see, also, Rose’s U. S. Notes] ; Western Underwriting & Mortgage Co. v. Valley Bank of Phoenix, 237 Fed. 45; Arizona Copper Estate v. Watts, 237 Fed. 585.) To permit the plaintiff to recover upon the facts found by the trial court upon competent evidence would permit the perpetration of a gross injustice.

The judgment is right and is affirmed.

Affirmed.

Justices Galen, Stark and Matthews and Honorable Henry G. Rodgers, District Judge, sitting in place of Mr. Justice Holloway, absent on account of illness, concur.