Bank of Laddonia v. Bright-Coy Commission Co.

• Decision Date: 08 June 1909
• Parties: BANK OF LADDONIA v. BRIGHT-COY COMMISSION CO.
• Court: Missouri Court of Appeals

120 S.W. 648

139 Mo. App. 110

BANK OF LADDONIA v. BRIGHT-COY COMMISSION CO.

St. Louis Court of Appeals. Missouri.

June 8, 1909.

1. TRIAL (§ 330)—VERDICT—GENERAL VERDICT—SEVERAL COUNTS.

Where two counts of a petition declare on separate and distinct causes of action, the verdict should be given on the separate counts, though a third count might be taken as a broad statement of what is more particularly set out in the other two.

2. BILLS AND NOTES (§ 13)—"FOREIGN BILL OF EXCHANGE."

A draft drawn on a company without the state is a "foreign bill of exchange" under Negotiable Instruments Act (Laws 1905, p. 258) § 129 (Ann. St. § 463-129), providing that any bill except one which is or on its face purports to be both drawn and payable within the state is a foreign bill.

3. BILLS AND NOTES (§ 67)—ACCEPTANCE— WHAT LAW GOVERNS.

Where an agreement to accept a bill of exchange was to be performed in Illinois, the law of that state governed as to rights upon its breach.

4. EVIDENCE (§ 80)—PRESUMPTIONS—LAW OF SISTER STATE.

The law of that state not being proved, it will be presumed that the common-law rule prevails there.

5. BILLS AND NOTES (§ 85)—ACCEPTANCE— VERBAL AGREEMENT TO ACCEPT.

At common law a breach of a verbal agreement to accept a bill of exchange when drawn would support an action against the promisor by the payee if the payee relied on the promise in taking and discounting the bill.

6. CONTRACTS (§ 28)—EVIDENCE.

Evidence held to show that there was an agreement among a bank, a commission company, and a buyer of cattle for the company that the bank would furnish funds for buying cattle, and that the commission company would reimburse the bank, either by honoring drafts drawn on it against shipments of cattle made to the company by the buyer, or by remitting the proceeds of sales of the shipments when no drafts were drawn.

7. MONEY RECEIVED (§ 15)—NATURE AND FORM OF REMEDY.

The bank having discounted a draft drawn against a shipment of cattle, on the commission company, relying on its promise to honor it, and the company having failed to honor it or to remit the proceeds of the shipment, an action by the bank against the commission company for money had and received would lie for the proceeds of the shipment, as well as assumpsit on the company's agreement to pay the draft.

8. CONTRACTS (§ 187)—BREACH—RIGHTS OF THIRD PERSON TO SUE.

A third person may sue on a contract made for his benefit, though he was not named in it, if it was not merely for indemnity, and, if property were placed in the hands of one who agreed to deliver the proceeds thereof to a third person, the third person would have a cause of action against the one in whose hands the property was placed.

9. BROKERS (§ 96)—PROCEEDS OF SALES— DUTY TO REMIT.

A broker is not bound to send to a certain bank the proceeds of a particular shipment of property he sells for a customer merely because he knows that the bank has been furnishing the customer money to buy such shipments, and that the proceeds have been usually remitted to the bank pursuant to the customer's order, and the bank would not have a lien on the shipment or its proceeds unless a bill of lading or some security were taken.

Error to St. Louis Circuit Court; Wm. M. Kinsey, Judge.

Action by the Bank of Laddonia against the Bright-Coy Commission Company. Judgment for plaintiff, and defendant brings error. Reversed and remanded.

Action for $1,875.37 as money had and received by defendant, but belonging to plaintiff. The facts out of which the controversy arose may be summarized from the evidence for plaintiff as follows: Prior to September, 1905, the firm of Cunningham & Hobson had been engaged in buying cattle in Audrain county and shipping them to defendant under an arrangement, to which said firm plaintiff and defendant were parties. Plaintiff is a banking corporation whose place of business is in said county, and the Bright-Coy Commission Company handles stock on commission and otherwise at the National Stockyards in Illinois, across the Mississippi river from St. Louis. The arrangement was like this: Cunningham & Hobson would buy cattle from farmers and pay for them with checks drawn on plaintiff bank in favor of the sellers. To get funds into the bank to meet these checks, Cunningham & Hobson would draw drafts at the same time in favor of the bank on the Bright-Coy Commission Company, defendant, to which they shipped and consigned the cattle. Plaintiff would put the amount drawn against each shipment to Cunningham & Hobson's credit on its books, thereby giving the firm an account wherewith to meet the checks drawn in favor of the man from whom the cattle were bought, would transmit the drafts to plaintiff's correspondent in St. Louis, which would present them to the drawee, the Bright-Coy Commission Company, and the latter would pay them with the money obtained by selling the cattle against which they had been drawn. Either that plan was followed, or occasionally Cunningham & Hobson would draw no draft on defendant, but nevertheless plaintiff bank would give said firm credit on the books of enough money to discharge checks drawn to pay for a car load of cattle, and, when the cattle had been shipped to defendant and sold by it, defendant would remit the proceeds, less a commission, to plaintiff. Both methods were authorized by the tripartite agreement. In September, 1905, Hobson wished to do business on his own account, and defendant wished to do business with him just as it had with the firm of Cunningham & Hobson. Testimony for plaintiff goes to prove Hobson, plaintiff, and M. A. Bright, representing defendant, agreed Hobson should go ahead with the business, the bank should furnish money for the purchase of cattle, and defendant reimburse the bank, either by honoring drafts the bank might draw on defendant against shipments of cattle, or by remitting the proceeds of the sales of shipments to the bank when no drafts were drawn. In May or June, 1906, Hobson purchased 32 head of cattle from a man named Bailey for $2,200 or more, and plaintiff furnished the money to pay for them pursuant to the aforesaid agreement. In this deal, as in most instances, Hobson drew a draft dated June 9, 1906, on defendant in favor of plaintiff's cashier; whereupon plaintiff gave him credit for said sum on its books, and honored the check issued by him to pay for the cattle. Instead of Hobson's draft being honored on presentation as had been agreed and was customary, defendant refused payment, and it was protested. Later, on June 12, 1906, defendant transmitted to plaintiff on account of the sale of the Bailey cattle which had been shipped to defendant a balance of $374.63, directing plaintiff to place it to the credit of John Hobson. The shipment of cattle was sold by defendant for about $2,200, of which sum defendant applied $1,700 or $1,800 in discharge of an account Hobson owed it for feed and other things, remitting the balance to the bank. The present action was instituted to recover the sum retained by defendant on the ground that in equity and good conscience, and pursuant to the business arrangement among the parties, the bank was entitled to it. After defendant had refused to pay the draft, plaintiff's cashier went to the National Stockyards to see about the matter; whereupon Bright admitted the arrangement he had made with plaintiff's cashier was for the bank to furnish Hobson money to buy cattle on defendant's promise to reimburse the bank out of the proceeds of the shipments, but said defendant had applied the proceeds of the Bailey cattle in discharge of what Hobson owed it, that said transaction was a cold business proposition between plaintiff and defendant, and had nothing to do with the arrangement made between plaintiff's cashier and Bright. We have stated the case according to the testimony for plaintiff. For defendant it was equally strong in its tendency to prove no such arrangement as plaintiff insists on had been made; that defendant never promised either to honor drafts drawn by Hobson in favor of plaintiff or remit to plaintiff the proceeds of sales of stock shipped to it by Hobson; that the business was according to the ordinary course of such dealings, and amounted to this: Hobson would ship the cattle to defendant, defendant would sell them, and remit the net proceeds to the bank to be put to Hobson's credit, not pursuant to any agreement with plaintiff to do that, but simply because Hobson directed his money to be sent to the bank. Hobson himself gave testimony in support of defendant's theory of the transaction, as did other witnesses; and the sum of the matter is there was a square conflict in the evidence on the main issue of fact.

The first count of the petition alleges defendant received on June 12, 1906, $2,250 which belonged to plaintiff, and it then and thereby became defendant's duty to pay the whole of said amount to plaintiff, but defendant only paid plaintiff $374.63 and retained $1,875.37, for which plaintiff prayed judgment. The second count averred defendant and John Hobson entered into an agreement prior to June 10, 1906, by which Hobson was to purchase cattle and other live stock and ship them to defendant to sell; that defendant agreed with Hobson, if he would do this, defendant would pay the purchase price of the stock to plaintiff; that long prior to said date, and pursuant to said agreement, Hobson had been buying cattle and shipping them to defendant, and the latter had paid for them by remitting the purchase price to plaintiff; that plaintiff was aware of said agreement and its terms, and that defendant was solvent and Hobson was not; that, relying on said agreement, plaintiff paid for all live stock bought by Hobson by honoring his checks, and thereupon would notify defendant of the amount of the purchase price, and defendant would remit the amount immediately; that, in accordance with said agreement, Hobson on June 9th bought...