Barnes v. Thuet

• Decision Date: 12 April 1902
• Citation: 89 N.W. 1085,116 Iowa 359
• Parties: BARNES v. THUET ET AL.
• Court: Iowa Supreme Court

116 Iowa 359

89 N.W. 1085

BARNES

v.THUET ET AL.

Supreme Court of Iowa.

April 12, 1902.

Appeal from district court, Woodbury county; John F. Oliver, Judge.

Action in equity to impress a trust upon money in the hands of the defendants. Judgment for the plaintiff. The defendants appeal. Affirmed.A. L. Beardsley, for appellants.

M. J. Sweeley and B. Radcliffe, for appellee.

SHERWIN, J.

The plaintiff is a banker in the town of Marcus, Iowa. The defendants are live stock commission men, doing business in Sioux City, Iowa. For some time prior to January, 1900, one W. F. Lindley had been buying stock at points other than Marcus, and shipping the same to the defendants at Sioux City for sale. Lindley had but a small amount of capital, and by arrangement with the defendants he drew on them through local banks where he was buying stock for the larger part of the money necessary to pay therefor. In January, 1900, he commenced buying stock in and around Marcus, and made several shipments therefrom. He opened an account with the plaintiff's bank, and drew drafts on the defendants for about the amount of each shipment, and shipped some of the stock to them at Sioux City, and the rest to Clay, Robinson & Co., of Chicago, consigned to the defendants. All of the drafts so drawn on the defendants, up to the one involved in this controversy, were honored by them without question. On the 3d day of February, 1900, Lindley took in two car loads of cattle, and drew on the defendants, through the plaintiff's bank, for $2,250, which amount was placed to his credit, and he checked thereon to pay the balance due on the bunch of cattle ($2,201.56); he having previously paid $50 on the purchase price. On the day following the cattle were shipped to Clay, Robinson & Co., Chicago, for account of these defendants. The draft was sent by the plaintiff to his correspondent in Sioux City, and was presented to the defendants for payment early Monday forenoon, February 5th. It was not paid, nor was its payment then refused, but the Sioux City bank was told that the defendants had not yet seen or heard from Lindley, which would be necessary before they could determine whether they would pay the draft. They were called over the telephone several times during the day, and asked about the matter, and gave the same answer, until late in the afternoon, when they refused to pay it on the ground that it was an overdraft. About an hour after their refusal they received telegraphic information that a part of the stock shipped February 4th had been sold, and the proceeds thereof credited to them. The defendants' bookkeeper was in Marcus on the 4th and a part of the 5th of February, and learned as early as the evening of the 4th, at least, that the stock had been shipped to Chicago, and that a draft to procure the money to pay for the same had been drawn on the defendants. He returned to Sioux City during the forenoon of the 5th. The rest of the stock was sold in Chicago on the 7th of February, and the proceeds therefrom credited to the defendants. The plaintiff knew that the money he had advanced on the draft went to pay for this stock, and that it was to be shipped to Chicago, consigned to the defendants.

The cattle were sold for less than the amount advanced by the plaintiff, and he seeks to recover only the amount received by the defendants on account thereof. And this we think he is entitled to, upon principles of equity, and that, from the clear and practically undisputed showing in this case, the defendants are not entitled to one dollar of this money. It is manifest that up to the time of the last shipment all parties had been acting in the utmost good faith. The plaintiff had been advancing money on the strength of the defendants' responsibility. and with their approval, for all parties knew that Mr. Lindley was not able to handle these stock transactions; and this is equally as true as to the last shipment, so far as the plaintiff was concerned, for the money for this purchase was procured exactly as had been done for the others. The defendants, however, seemed to think this an opportune time to balance accounts with Lindley at the expense of the plaintiff, and not only refused to honor his draft, but now attempt to hold enough of...