Melcher v. Exchange Bank

85 Mo. 362
CourtSupreme Court of Missouri
DecidedOctober 15, 1884
StatusPublished
Cited by2 cases

This text of 85 Mo. 362 (Melcher v. Exchange Bank) is published on Counsel Stack Legal Research, covering Supreme Court of Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Melcher v. Exchange Bank, 85 Mo. 362 (Mo. 1884).

Opinion

DeAkmond, C.

This is a proceeding by injunction to restrain defendants from collecting certain promissory notes signed by plaintiff as surety or guarantor, and to compel defendant, Aultman, to assign and deliver such notes to him and the other defendant to pay over to him the amount collected by it on a specified note. Melcher lived in Cole county, Missouri, Aultman in Ohio. The firm of C. Russell & Company had been adjudged bankrupts in a federal court in Ohio and Aultman appointed their assignee. Melcher had sold machinery for Russell' & Company, and later made sales for their assignee under a contract, for the performance of which he gave bond. By this contract Melcher was required to guarantee in writing the payment of all notes taken by him for machinery sold for the assignee. This he did. But he fell behind in his accounts with Aultman and became insolvent. In course of time Aultman sent to Ewing & Hough, attorneys at Jefferson City, for collection an account against him for about six hundred dollars, and five promissory notes signed by him as guarantor, aggregating in amount about five hundred dollars. Not being able to obtain payment from the makers of these notes the attorneys turned to the guarantor and applied to him for payment of the notes as well as the account. The notes were shown to him and “figured up” and their amount ascertained in his [365]*365presence. Negotiations for compromise and settlement began between J. R. Edwards, of Edwards So Davison, attorneys representing Melcher, and A. M. Hough, of Ewing& Hough, representing Aultman. They ended in a settlement, the terms . and scope of- which are in dispute in this action.

Edwards paid Hough four hundred and fifty dollars, and this receipt was passed: “.Received of J. R. Edwards the sum of four hundred and fifty dollars, in full of all claims in our hands for collection against Nick. Melcher in favor of C. Aultman, assignee of Russell So Company, bankrupts, the same being an entire and full settlement between the said Aultman, assignee as aforesaid, for all notes, machinery and repairs of whatever kind and description, and all notes and claims of which Melcher is security or guarantor. All notes to be assigned to him for his own -benefit.

“Ewing So Hough,

“ForC. Aultman, Assignee.”

Respecting this receipt Mr. Edwards in his testimony says this: “When I handed Hough the receipt to sign he made some objection to it, and asked me to put it in these words : 1 In our hands.’ I said to him, ‘Well, Hough, I don’t know whether it makes any difference, as we are settling the whole matter' between Melcher and Aultman, and- if you prefer it I will add those words;’ he said, ‘ I understand we are settling all Melcher’s indebtedness to Aultman, but I don’t want that fellow to coifie back on me if there should be other notes out; I don’t know of any, and my understanding is that these are all the notes against Melcher.’ With this understanding and at the request of Mr. Hough I made the addition of the words in the receipt.”

The six hundred dollar account was receipted and the five notes, after being assigned “ without recourse ” by Aultman to Melcher, were handed- by Hough to Edwards in an envelope. By the settlement Melcher acquired the property in five machines and a lot of repairs, [366]*366theretofore belonging to Aultman, asssignee, valued at two hundred and fifty dollars. Some of the notes turned ■over were signed in German and Edwards did not notice what or how many notes were in the envelope. He swears positively that the settlement was of all Melcher’s indebtedness to Aultman, and that all the notes signed by Melcher as surety or guarantor were to be by Aultman assigned to Melcher, for Melcher’s own use and benefit. Neither Edwards nor Hough knew how many notes Melcher had so assigned. Neither knew that there were any such notes except the five put into Ewing & Hough’s hands for collection. Hough told Edwards the five notes amounted to about five hundred dollars. No mention was made by Melcher of Edwards of any notes other than those five, and what Hough said on this point is shown in the evidence of Mr. Edwards above transcribed. Hough thought they were settling all the notes, as will further appear. Some time after this settlement, Melcher called at Edwards & Davison’s office to get a note on one Phillip Koeppel. It was not in the envelope where the five notes, before in the hands of Ewing & Plough, were found. Upon inquiry it was learned that this Koeppel note which was for about one hundred and seventy dollars, was with another note for about one hundred and seventy-five dollars, and still another for seventy-five dollars, in the Exchange Bank for collection. These three notes were payable to Aultman, assignee, and signed by Melcher as guarantor, and had been placed in the bank by Aultman. Thereupon, Edwards, as attorney for Melcher, called upon Hough and told him what he had just learned, and asked Hough his recollection of their settlement. Hough expressed surprise at the turn of affiairs, and as indicative of his understanding wrote Aultman the following letter, which Edwards, to whom he showed it, agreed was according to his understanding, too:

“C Aultman, Canton, Ohio.

“Deab Sib: Yours of the 28th ult. received. [367]*367Our understanding was that we were settling Melcher’s account with you as assignee. Nothing had been said about any other notes than those we held for collection in your letters to us or ours to you, and we were under the impression that the notes we held for collection and the account was the whole of his indebtedness. Melcher mentioned no other notes to us. While our • receipts covered only the notes held by us and the account, we supposed that settled the whole of Melcher’ s .indebtedness to you. Mr. Edwards to-day served a •notice on us that he would on the fourteenth of March, 1881, present a petition to our circuit judge to restrain the collection of the notes held by the Exchange Bank and to compel a delivery and endorsement of them to Melcher. . ,

“Very Truly,'

“Ewfñg & Hough.”

Meanwhile the bank collected the Koeppel note of one hundred and sevénty dollars, and Melcher sued out a temporary injunction to restrain the collection of the other notes and the payment to Aultman of the one hundred and seventy dollars 'already collected, and to compel Aultman to assign and deliver to him, Melcher, all the notes signed by him as guarantor or surety as aforesaid, and to compel the bank to pay him the one hundred and seventy dollars. Aultman never gave his attorneys any authority to include in the compromise any notes except the five in their hands for collection. He understood the settlement to cover no notes except those five; Melcher understood it to cover all the notes he had signed in manner as before stated. There is nothing in the record to show whether or not Aultman has still other notes signed by Melcher as guarantor or surety. Among the letters that passed between Aultman and his attorneys are these :

“ City of Jefferson, Mo., Jan. 21, 1881.

“C. Aultman, Assignee, Canton, Ohio.

“Dear Sir: We have just this day succeeded in [368]*368getting a statement and proposition of Nicholas Melcher in regard to the indebtedness due you as assignee. He says he has three old machines, one here, one at Mt. Pleasant, Miller county, and one at Osage City, this county, and about twenty-five dollars’ worth of repairs.

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Bluebook (online)
85 Mo. 362, Counsel Stack Legal Research, https://law.counselstack.com/opinion/melcher-v-exchange-bank-mo-1884.