Bridge v. Welda State Bank
| Decision Date | 04 April 1927 |
| Docket Number | No. 15861.,15861. |
| Parties | BRIDGE et al. v. WELDA STATE BANK. |
| Court | Missouri Court of Appeals |
Appeal from Circuit Court, Jackson County; E. E. Porterfield, Judge.
Action by George S. Bridge and another, copartners doing business under the firm name and style of Bridge & Leonard, against the Welda State Bank, a corporation. Judgment for plaintiffs, and defendant appeals. Reversed and remanded.
Burns & White, of Kansas City, and J. Q. Wycoff, of Garnett, Kan., for appellant.
Henry I. Eager and Charles M. Blackmar, both of Kansas City (Haff, Meservey, Michaels, Blackmar & Newkirk, of Kansas City, of counsel), for respondents.
This is an action upon an alleged contract arising out of certain transactions between plaintiffs, one M. S. Brecheisen, and the defendant.
Plaintiffs George S. Bridge and John R. Leonard are a copartnership doing business under the firm name and style of Bridge & Leonard, as commission merchants dealing in hay on the Chicago Board of Trade at Chicago, Ill. The defendant is a banking institution, operationg under the laws of the state of Kansas, located at Weida in Anderson county, in that state. It appears that four brothers, viz., M. S., David, W. C., and A. A. Brecheisen, residents of Anderson county, Kan., were engaged in buying and shipping hay to plaintiffs at Chicago, Ill., for sale on commission; that prior to the transaction giving rise to this suit M. S. Brecheisen, a depositor and stockholder in defendant bank, had transactions with plaintiffs in the shipment and sale of hay, but these had all been completed, and accounts relative thereto closed, and they do not enter into this case.
On August 20, 1923, plaintiffs received from defendant bank the following letter:
Gentlemen:
It appears that, prior to the receipt of said letter, plaintiffs had not permitted overdrafts on shipments by M. S. Brecheisen. Beginning almost immediately upon receipt of this letter, M. S. Brecheisen began shipping to plaintiffs prairie hay in carload lots for sale on commission, drawing a draft on plaintiffs with bill of lading attached. The details of these shipments are set out in a stipulation between the parties as follows:
"It is hereby stipulated and agreed by and between the parties to this cause that between August 1, 1923, and November 2, 1923, various cars of hay were shipped by one M. S. Brecheisen to plaintiffs to be sold by the latter on commission; that all of said hay was sold by plaintiffs on behalf' of said Brecheisen at the fair and reasonable market price at the times in question and for the best prices obtainable for the respective amount and class of all such hay so shipped; that various drafts were drawn by said Brecheisen on plaintiffs in connection with the shipping and sale of such hay, all of which drafts were promptly paid by plaintiffs, and that the total of the four drafts drawn by plaintiffs on M. S. Brecheisen, dated respectively, October 25, 1923, October 26, 1923, and November 2, 1923, in the respective amounts of $833.15, $221.75, $344.87, and $436.81, correctly represented, and do represent (except for the credits hereinafter mentioned), the difference between the total amount of the drafts drawn by said Brecheisen on plaintiffs and paid by plaintiffs and the net amount realized from the sales of his said hay; that the draft drawn by plaintiffs on M. S. Brecheisen dated August 27, 1924, in the amount of $1,880.58, correctly represented the sum of said four drafts previously drawn by plaintiffs on said M. S. Brecheisen, less certain credits which had accrued in the meantime on account of claims collected from various railroads, with interest figured at 6 per cent. per annum on the amount claimed to be due plaintiffs, and interest also figured at the same rate on all credits to August 27, 1924; that the face amount of said last mentioned draft, to wit, $1,880.58, represented the net amount claimed to be due plaintiffs at the date thereof on account of the sales of said hay; that additional credits have accrued since August 27, 1924, on account of claims collected from railroad companies in the amounts of $2.45 as of May 15, 1925, and $93.92 as of October 29, 1924; that, if defendant is liable to plaintiffs by reason of the matters and things set up in this cause, for the entire difference between the total amount of the drafts drawn by said M. S. Brecheisen on plaintiffs and paid by plaintiffs, and the net amount realized from the sales of said hay, then defendant is indebted to plaintiffs in the sum of $1,880.58, with interest at 6 per cent. per annum from August 27, 1924, less the two last mentioned credits, with interest thereon; but nothing herein contained shall be construed as a waiver of any right defendant may have to contend that it is not liable to plaintiffs for the amount of any one or more of the drafts mentioned herein."
It further appears that the four drafts dated the 25th, 26th, and 29th of October and the 2d of November, in the respective amounts mentioned in the stipulation, were sent to the Weida State Bank for collection, and in each instance they were returned marked "payment refused by drawee." These drafts were marked "no protest," and in fact were not protested.
It appears that, by the terms of another stipulation between the parties, on August 27, 1924, a draft in the sum of $1,880.58 was drawn by plaintiffs on M. S. Brecheisen at sight, payable to the order of the National Bank of Commerce, Garnett, Kan. This draft, accompanied by a statement of account, was presented for payment to M. S. Brecheisen at Welda, Kan., and demand made on September 1, 1924. Payment was refused; the reason assigned by drawee being that the amount was incorrect, and that he did not owe the drawer thereof anything. On the day of the presentation of the draft to drawee, the defendant bank was notified of the nonpayment of the draft, and demand was made on the bank and its cashier, Charles E. Simon, for payment of the same, which was refused, and the draft was duly protested.
The parties hereto agreed that the statement attached to the stipulation was a correct showing of the manner of arriving at the amount of the draft. This statement is not here set out, as there is no dispute as to its being a true copy of the statement which accompanied the draft. Payment of the draft having been refused by defendant bank, this suit was instituted to recover.
The petition, charges the necessary formal matters, sets out the items composing the amount of the draft for $1,880.58, the presentation and nonpayment of the draft, pleads the letter upon which this suit is based, and attaches said letter as an exhibit. Judgment is sought in the sum of $1,880.58, with 6 per cent. interest from August 27, 1924.
The answer admits defendant is a banking corporation, as alleged; pleads sections 101 and 117, c. 9, Rev. Stat. Kan. 1923; and also pleads the case of Ingersoll et al. v. Kansas State Bank, 110 Kan. 122, 202 P. 837; alleges the letter sued on was ultra vires, not having been authorized by the defendant bank, nor by its board of directors; that it was written by the cashier of said defendant, wholly without authority from the board of directors, and was without consideration; that said alleged agreement or contract is contrary to section 101, Rev. Stat. Kan. 1923, and to the holding of the Supreme Court of Kansas in Ingersoll v. Bank, supra; that the contract sued on is a guaranty for said M. S. Brecheisen, and was the loan of defendant's credit to him; that, at the time said letter was written, and at the time the drafts were drawn, said Brecheisen owed defendant bank $2,400; that he did not have sufficient funds to his credit in defendant bank to meet said drafts; and that the payment of said drafts by defendant would have increased the loans of defendant Brecheisen to more than 15 per cent. of the capital stock and surplus of defendant, in violation of the provisions of section 117, c. 9, Rev. Stat. Kan. 1923.
The answer further denies defendant's liability upon the grounds that plaintiffs had not complied with the terms and conditions set forth in the instrument sued on, in that plaintiffs did not draw sight drafts back on M. S. Brecheisen, with itemized statement attached; that plaintiffs have never furnished defendant an itemized statement of account between plaintiffs and Brecheisen; and that plaintiffs further violated the terms and conditions of said letter, in that no draft was drawn upon said Brecheisen through general banking channels within a reasonable time after the alleged indebtedness arose. The answer also includes a general denial.
The reply is, first, a general denial, and plaintiffs specifically plead that the letter upon which the suit is based was not ultra vires, and defendant is estopped from asserting that it was, for the reason that the said contract was in good faith fully performed by plaintiffs, and, relying thereon, plaintiffs acted to their detriment in permitting Brecheisen to overdraw; that, at the time said letter was written, and at all times since, said Brecheisen...
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