American Nat. Bank v. National Wall-Paper Co.

• Decision Date: 05 November 1896
• Docket Number: 718.
• Citation: 77 F. 85
• Parties: AMERICAN NAT. BANK v. NATIONAL WALL-PAPER CO. [1]
• Court: U.S. Court of Appeals — Eighth Circuit

77 F. 85

AMERICAN NAT. BANK v. NATIONAL WALL-PAPER CO. ^[1]

No. 718.

United States Court of Appeals, Eighth Circuit.

November 5, 1896

The American National Bank of Denver, the plaintiff in error, was a creditor of A. Gauthier, a wall-paper and paint merchant doing business in Denver, in a sum exceeding $14,000. To secure payment of this sum, the bank attached the entire stock of its debtor, which was afterwards sold under the attachment by the sheriff, and purchased by the bank, or by one of the bank's agents or officers in trust for the bank. Not being able to effect a lump sale of the stock, the bank was compelled to sell the goods at retail, and to secure a proper agency for that purpose it caused a corporation to be organized styled in A. Gauthier Decorating Company, to whom it turned over the stock, to be managed and sold for the benefit of the bank. To work off the old stock successfully, it was necessary to buy fresh goods from time to time. These fresh goods were ordered in the name of the bank's dummy corporation, namely, the A. Gauthier Decorating Company, from the defendant in error. The following is a copy of the heading of one of these orders:

'Ordered of Creswell & Washburn.

'By A. Gauthier Dec. Co.

'Bundles.

'Soon as possible. Denver, Col.

'Via any way. Run by American National Bank.'

Here follows a description of the goods ordered.

On receipt of the first order, and before filling the same, the defendant in error addressed to the A. Gauthier Decoration Company, the following letter:

'National Wall-Paper Company, 1286 Broadway.

'New York, N.Y., Oct. 3, 1892.

'The A. Gauthier Dec. Co., Denver, Colorado-- Gentlemen: Your order to Creswell & Washburn branch of the National Wall-Paper Company has been referred to the credit department for action. We would be pleased to have you let us know if the American National Bank is responsible for the purchases of your company, and, if not, what the present condition of your affairs are.

'Yours, truly, National Wall-Paper Co., Credit Mn'gr.'

Thereupon the following correspondence took place between the defendant in error on the one side and the plaintiff in error and the A. Gauthier Decorating Company on the other:

'Telephone 621.

'The A. Gauthier Decorating Co., 916-918 Fifteenth St.

'Denver, Colo., Oct. 7th, 1892.

'National Wall-Paper Company, 1286 Broadway, N.Y.-- A. H. Hamilton, Credit Manager: Replying to yours of Oct. 3rd in re our order to the Creswell-Washburn branch of the National Wall-Paper Co. If you are not satisfied with statement and assurances given you by the American National Bank, let us know what discount you will make for cash, and, if we find it impossible to do business with you on a credit basis, we will see if we can do business with you on a cash basis.

'Yours, etc., The A. Gauthier Decorating Co.

'By C. Westervelt, Sec'y and Trea'r.'

'National Wall-Paper Co., 1286 Broadway.

'New York, N.Y., Oct. 10, 1892.

'The A. Gauthier Dec. Co., 916-918 Fifteenth street-- Dear Sirs: We have yours of the 7th, and contents noted, but we do not exactly understand your position, as we have no statement or assurances of any kind from the American National Bank. If the bank will make a statement to the effect that they are responsible for the bills of the A. Gauthier Dec. Co., we will be pleased to ship the goods and bill for our regular terms.

'Yours truly, National Wall-Paper Company, Credit Mn'gr.'

'American National Bank of Denver. Capital, $1,000,000.

'Denver, Colo., 29th Sept., 1892.

'Messrs. Creswell & Washburn, 18th and Washington Ave., Philadelphia, Pen.--Gentlemen: Your letter of the 26th instant to the A. Gauthier Decorating Company has been referred to me, and I will say that this company is perfectly solvent, and at its request I will state that the amount of the bill for the order, a copy of which is inclosed, will be paid by us when approved by the company in case they do not pay it.

'Yours, truly,

Howard Evans, Cashier.' 'October 24th, 1892. 'Mr. Howard Evans, Cashier, Denver, Colo.-- Dear Sir: Your favor under date of Sept. 29th to the Creswell & Washburn branch has been referred to this office, and in accordance with the condition therein we have accepted all the orders from the various branches of the company for the A. Gauthier Dec. Co. received to date. We do this with the understanding that your bank is responsible for the payment of the bills of all orders made to date.

Yours, truly, National Wall-Paper Co., Credit Mn'gr.'

'The American National Bank of Denver.

'Denver, Colo., 27th Oct. 1892.

'National Wall-Paper Co., 1286 Broadway, New York-- Gentlemen: Your favor of the 24th in reference to an order from the A. Gauthier Decorating Co. is received. I do not quite understand your letter. You say that you have accepted all the orders from the various branches of the company received from the A. Gauthier Decorating Co. I only know of one order that we agreed to become responsible for.

'Yours truly,

Howard Evans, Cashier.'

'Oct. 31, 1892.

'Mr. Howard Evans, Cashier-- Dear Sir: We are in receipt of your favor of the 27th, in which you state that your bank is responsible for only one bill of goods ordered by the A. Gauthier Decorating Company. We have received several orders from your company given to the several branches of the National Wall-Paper Company. We understood that your company owned and controlled this Co., and were responsible for these purchases. If we are mistaken in our supposition, and that you only desire to guaranty the payment of one bill ordered through the Creswell & Washburn branch, we will only ship the goods on that order, and will cancel the balance. Awaiting your instructions in the matter, we remain,

'Yours, truly, National Wall-Paper Company, Credit Mn'gr.'

'American National Bank of Denver.

'Denver, Colo., Nov. 4, 1892.

'A. H. Hamilton, Esq., 1286 Broadway, New York-- Dear Sir: Your favor of the 31st received. In reply to same I will state that in my letter of the 27th ulto. I meant to say that we had only written about one order of the Gauthier Decorating Co. to Messrs. Creswell & Washburn. You are perfectly correct in your understanding that this bank controls and virtually owns, the Gauthier Decorating Co., and you will be warranted in filling such orders as have been given by the manager of the company here. We are negotiating for the sale of the company's assets, but the bills will be paid whether we succeed in doing so or not.

'Yours, truly, Howard Evans, Cashier.'

'Aug. 15, 1893.

'A. Gauthier Decorating Co. Denver, Colo.-- Dear Sirs: Inclosed herewith we hand you statement of your account showing credits on the bills which were shipped you, and which you could not receive; also credit for your optional rebate. We trust it will be convenient for you to favor us with a check for the amount owing by return mail.

'Yours, truly, National Wall-Paper Co., Credit Mn'gr.'

'American National Bank of Denver.

'Denver, Colo., Aug. 31, 1893.

'National Wall-Paper Co., 1286 Broadway, New York-- Gentlemen: Your favor of the 15th of Aug. inclosing statement showing balance due of $3,185.67. We have been very much disappointed in the wall-paper business, and somewhat behind on account of it. I write to ask if you will not accept a cash payment of three thousand dollars ($3,000) and cancel your claim against the A. Gauthier Decorating Co.

'Yours, truly, The A. Gauthier Decorating-- Cashier.

'By Howard Evans. '

'Sept. 4th, 1893.

'A. Gauthier Decorating Co., Denver, Colo.-- Gentlemen: We are in receipt of your favor of the 31st ult., which has crossed our letter of the same date. In rendering you this statement, we have already given you 1 per cent. discount on $3,554.42 to which you are not really entitled. This is all the concession we can make in the matter.

'yours truly, Credit Manager,

'National Wall-Paper Co.' 'Sept. 18th, 1893.

'The A. Gauthier Decorating Company Denver, Colo.-- Dear Sirs: Not Hearing from you in reply to our letter of the 6th, we have this day drawn on you at sight for $3,166.40. With the request that you protect this draft, we beg to remain.

'yours, truly, Credit Manager,

'National Wall-Paper Co.'

'American National Bank of Denver.

'Denver, Colo., Sept. 22, 1893.

'National Wall-Paper Co., 1286 Broadway, New York-- Gentlemen: Your favor of the 18th, inclosing draft on the A. Gauthier Decorating Co. for $3,166.40 has been received. I understand that it will be arranged for in a few days.

'Yours, truly, Howard Evans, Cashier.'

'October 17, 1893.

'Mr. Howard Evans, Cashier American National Bank, Denver, Colo.-- Dear Sir: Under date of Sept. 22nd, you wrote that the affairs of the A. Gauthier Decorative Company would be adjusted in a few days. We wrote you on the 5th, calling your attention to the matter, but have heard nothing from you in reply. We would be pleased to hear from you by return mail as to when this account is to be settled.

'Yours, truly. Credit Manager,

'National Wall-Paper Company.'

'American National Bank of Denver.

'Denver, Colo., October 25, 1893.

'A. H. Hamilton, Credit Manager of the Nat. Wall-Paper Co., 1286 Broadway, N.Y.-- Dear Sir: Your favor of the 17th received. I have seen the young man who manages the A. Gauthier Decorative Co., and think there is no doubt that he will be able to have the draft paid in a day or two. It will be taken care of without doubt before long, at any rate.

'Yours, truly, Howard Evans, Cashier.'

'American National Bank of Denver.

'Denver, Colo., Dec. 21, 1893.

'National Wall-Paper Co., New York City-- Gentlemen: Owing to my absence from the city, your telegram of the 12th did

...