Nichols, Shepard & Co. v. Kern

• Decision Date: 02 July 1888
• Citation: 32 Mo.App. 1
• Parties: NICHOLS, SHEPARD & Co., Appellant, v. R. D. KERN et al., Respondents.
• Court: Kansas Court of Appeals

32 Mo.App. 1

NICHOLS, SHEPARD & Co., Appellant, v. R. D. KERN et al., Respondents.

Court of Appeals of Missouri, Kansas City.

July 2, 1888

Appeal from Livingston Circuit Court. --HON. JAMES M. DAVIS, Judge.

AFFIRMED.

The case is stated in the opinion.

Frank Sheetz, for the appellant.

(1) The written agreement between defendant Blackhurst and Jacobs was no defence to the action of plaintiff and should not have been admitted in evidence, because Jacobs had no authority to make it. Benny v. Rhodes, 18 Mo. 149; Palmer v Hatch, 48 Mo. 585; Wheeler v. Givan, 65 Mo. 89. (2) His authority is shown and limited by the contract read in evidence by defendant, between Jacobs and Nichols, Shepard & Co. State v. Bank, 45 Mo. 528; Bank v Schaumberg, 38 Mo. 228; Schell v. Stephens, 50 Mo. 379; Klosterman v. Loos, 58 Mo. 290. (3) Because said agreement between defendant and Jacobs was the individual agreement of W. A. Jacobs and bound him only. Chouteau v. Paul, 3 Mo. 186; Overton v Stephens, 8 Mo. 622; Schell v. Stephens, 50 Mo. 375; Klosterman v. Loos, 58 Mo. 290. (4) Notice to Jacobs was inadmissible. He was not at his place of business, nor engaged in the line of his employment at the time notice was sent, and the evidence was immaterial and foreign to the issue. (5) Answer states no facts constituting any defence to the action of plaintiff. It does not state that Jacobs had any authority to make the agreement with defendant Blackhurst, nor that there was any consideration for the said agreement.

E. J. Broaddus, for the respondents.

(1) Notice to Jacobs, the agent, was notice to appellant, the principal. See Hayward v. Ins. Co., 52 Mo. 181; Bier v. Blume, 80 Mo. 179. (2) In order to bind the principal it is not necessary that the contract should be executed in the name and as the act of the principal. See Story on Agency, secs. 160 a, 161, and cases there cited. See also Briggs v. Menchon, 56 Mo. 466. (3) The evidence shows that Jacobs was at the time acting for his principal. Respondents could not recover damages of the agent, because there was no consideration and no mutuality.

HALL J.

The plaintiff, as a corporation under the laws of the state of Michigan, instituted this suit against the defendants on two promissory notes, executed by them and payable to the plaintiff's order. The two Kerns made no defence and judgment was rendered against them.

The petition was in two counts. To both counts the defendant Blackhurst made the same answer which is as follows:

" The defendant Wm. Blackhurst for his answer to the petition herein admits the execution of the note therein described, but he further states that as an inducement for the execution of the same on his part, the said B. D. Kern and Wm. E. Kern, who were the principals, agreed with this defendant, if he would execute said note to plaintiff, as their security, they would secure him against any loss for so doing in the event they were unable or failed to pay the same when it became due, by giving him a mortgage on certain stock then owned by them, consisting of cattle and horses; that, at the time said note was accepted by the plaintiff, through their agent, W. A. Jacobs, said agreement and understanding was made known to the said agent, and, for the purpose of carrying out the same it was agreed between this defendant, said agent, and the said Kerns, that in the event the said B. D. and Wm. E. Kern failed or refused to secure the defendant, as their security on said note to the plaintiff, that the said agent would cancel defendant's name from the same; that, at said time, last aforesaid, to-wit, August 23, 1882, said agreement was reduced to writing by said agent and signed by him and delivered to this defendant. Said writing is in words and figures as follows, to-wit: ‘ If B. D. and W. E. Kern fail to give Wm. Blackhurst the security in stock promised him in consideration of having signed their notes for Nichols-Shepard thresher, I agree to cancel his name from notes 8, 23, 82. W. A. Jacobs.’ Said writing is filed herewith and marked ‘ A’ ; that after the execution of said note and said writing the defendant applied to the said B. D. and W. E. Kern for a mortgage in accordance with said agreement, but the said B. D. and W. E. Kern failed and refused to execute the same to secure this defendant as their security to the plaintiff as aforesaid; that thereupon this defendant notified the said W. A. Jacobs, plaintiff's agent as aforesaid, of the failure of his codefendants to secure him as was agreed and understood as aforesaid, and demanded of him that he cancel his name on said note according to the agreement hereinbefore set forth, but that said agent of plaintiff failed and refused to cancel his name on said note and still fails and refuses to do so."

The plaintiff did business in Battle Creek, Michigan, and sent its machines to W. A. Jacobs, at Chillicothe, Missouri, to be sold by him as its factor on commission. The contract between plaintiff and Jacobs, under which the latter acted, contained many specific instructions for his guidance in making sales of the machines sent to him. But there was no evidence that the defendant was aware of any such instructions.

Jacobs, on the twenty-third day of August, 1882, sold a machine, which had been sent by plaintiff to him for sale, to the two Kerns. Under his instructions it was the duty of Jacobs to take from the two Kerns their notes for the purchase price of the machine, executed also by at least one other party as their surety possessing certain qualifications designated in the contract between him and the plaintiff, which need not be mentioned further here, and also a chattel mortgage on the machine to secure the payment of the notes. The notes were required to be payable to plaintiff.

The evidence showed that the defendant Blackhurst was induced by the two Kerns and by Jacobs, in the manner and by the means alleged in the answer, to execute the notes given by the Kerns for the purchase price of the machine bought by them as their surety. The case then is this: The defendant Blackhurst agreed to execute the notes in suit as the surety of his co-makers, if the plaintiff's agent would agree to cancel his name to the notes should the other makers fail to give to him the security promised by them in consideration of his execution of the notes; the plaintiff's agent so agreed and executed a written agreement to that effect at the time Blackhurst executed the notes. The question is, does the agreement thus made by its agent bind the plaintiff? The circuit court held the agreement binding upon the plaintiff. That ruling is presented here for...