Chicago Herald Co. v. Bryan

• Decision Date: 31 January 1906
• Citation: 195 Mo. 574,92 S.W. 902
• Parties: CHICAGO HERALD CO. v. BRYAN.
• Court: Missouri Supreme Court

92 S.W. 902

195 Mo. 574

CHICAGO HERALD CO. v. BRYAN.

Supreme Court of Missouri, Division No. 2.

January 31, 1906.

RELEASE — JOINT TORT-FEASOR — SATISFACTION OF INJURY.

Where plaintiff delivered his notes to a corporation to discount for plaintiff, and the corporation intrusted the discounting to defendant, who effected such purpose, but converted the proceeds, and the corporation made a settlement with plaintiff, fully satisfying the injury, plaintiff could not subsequently maintain an action against defendant.

Appeal from St. Louis Circuit Court; Jesse A. McDonald, Judge.

Action by the Chicago Herald Company against William S. Bryan. From a judgment in favor of plaintiff, defendant appeals. Reversed.

S. T. G. Smith and Thos. S. Meng, for appellant. Selden P. Spencer, for respondent.

GANTT, J.

This suit was instituted in the circuit court of the city of St. Louis, October 13, 1902, by the Chicago Herald Company, an Illinois corporation. The petition alleged: That on September 23, 1902, the plaintiff delivered to N. D. Thompson three promissory notes, dated October 1, 1902, payable January 2, 1903, aggregating $10,967.40; all of said notes being made by plaintiff to the order of N. D. Thompson Publishing Company. That said notes were delivered to Thompson to be discounted by the publishing company and proceeds returned to plaintiff for the purpose of paying certain other notes due October 1, 1902, aggregating $10,800. That the publishing company failed to discount the notes and delivered the same to defendant, who represented that he would have the same discounted and return the money to Thompson to be forwarded to the plaintiff. That defendant did have the notes discounted and received the proceeds and wrongfully converted the same to his own use. That plaintiff demanded of defendant the delivery of said money on October 10, 1902. Plaintiff asked judgment for the sum of $10,967.40, with interest from October 1, 1902. The second amended answer, upon which the case was tried, admits that plaintiff executed the notes to the publishing company as alleged, and that the same were delivered by the publishing company to defendant, and denies all the other allegations in the petition. The answer further stated that the notes were negotiable and payable to the order of the publishing company, and that the publishing company indorsed the same before maturity and delivered the same to defendant to be indorsed by him and sold, and that he did indorse and sell said notes, and credited the proceeds to an indebtedness of the publishing company to him without notice of any interest of plaintiff therein. The answer further set up, in bar to the action, that the publishing company had settled with plaintiff in full for any and all claims which they might have either to said notes or their proceeds. The answer further states: That since the time of said settlement this action has been prosecuted in the name of the plaintiff, but solely and entirely by the publishing company, and for the use and benefit of the publishing company. That in 1899 a contract was entered into between the publishing company and defendant for the publication of a book called "Our Island Possessions," under which contract the profits arising from the sales of said publication were to be divided between defendant and said publishing company, in proportion of one-third to defendant and two-thirds to the publishing company. That continually since the date of said contract the publishing company had been engaged in the sale of said publication, and had realized therefrom, after deducting the cost thereof, profits amounting to the sum of $150,000, to one-third of which defendant was entitled, and which amount was due and owing from the publishing company. That the publishing company was insolvent, and that defendant could not realize from it the money so due him by the ordinary process of law. The answer further prayed that an accounting might be had to determine the amount due defendant on account of said profit sharing contract. The answer further prayed that the indebtedness from the publishing company to defendant on account of said contract should be taken and treated as an offset against the claim for the proceeds of the notes sued for in this case. The reply to this answer was a general denial. The case was heard on March 11, 1903, before the court.

At the hearing the plaintiff produced as a witness A. A. McCormick, secretary and general manager of the Chicago Herald Company, who testified: That the Chicago Herald Company had been buying of the publishing company large quantities of the publication known as "Our Island Possessions." That the books were purchased on 12 months' time, the first 6 months to be without interest and the next 6 months with interest. That from time to time, as purchases were made, six months' notes were to be given, without interest, and as the maturity of these notes approached plaintiff was to deliver to the publishing company other notes of like amount, to be discounted by them and the proceeds returned in time to be applied to the payment of the notes first maturing. That in accordance with this arrangement the plaintiff had given certain notes to the publishing company for book purchases in April, 1902, these notes aggregating $10,800. That the notes in controversy were delivered to Thompson in September, to be by the publishing company discounted and the proceeds returned to plaintiff in time to be applied to the payment of the original notes. The witness further testified that on the day the notes were discounted by the defendant, or the day after, the publishing company notified the plaintiff of the fact and turned over to plaintiff, in Chicago, 4,000 sets of the publication called "Our Island Possessions," being of value sufficient to cover the amount of the notes in controversy, as security for the claim of plaintiff for the proceeds of the notes in controversy here, which proceeds plaintiff was entitled to receive from the publishing company, but did not receive. That plaintiff had been buying these books from the publishing company from a period commencing about January 1, 1902, and that it continued to purchase them up to about the end of December, 1902, covering a period of approximately one year. That in December, 1902, a settlement was had between plaintiff and the publishing company covering their book purchases up to that time. That in this settlement the publishing company was given credit for all the "Island" books which had been delivered to plaintiff, including the 4,000 sets delivered on October 7, or 8, 1902, as security. That the publishing company was charged with the full amount of the proceeds of the notes in controversy here, and that plaintiff gave to the publishing company a note for the balance due it, and that the account between plaintiff and defendant was closed on plaintiff's books. That Mr. N. D. Thompson was present at this settlement and consented thereto and approved of the same. That it was further agreed that whatever amount plaintiff might be able to realize out of this suit should be turned over to the publishing company and the suit should be prosecuted at the expense of the publishing company. Mr. McCormick also testified that at the time the "Island" books were delivered to plaintiff as security, which was five days prior to the institution of this suit, it was agreed between plaintiff and the publishing company that all of the expenses of the litigation to recover the proceeds of these notes from defendant should be borne by the publishing company. That this was the agreement from the beginning. That Mr. Thompson had selected the attorneys to be employed in the matter. The witness further testified that Judge Spencer, who appeared for the plaintiff at the trial of the cause, did not really represent the Chicago Herald Company in this litigation, although he afterwards stated that he had written a letter which was offered in evidence authorizing Judge Spencer to appear in this cause on behalf of plaintiff, provided, however, that plaintiff should be at no expense whatever for his services. The witness also testified that the three notes discounted by W. S. Bryan were each indorsed by the said W. S. Bryan.

Plaintiff also produced N. D. Thompson as a witness, who testified as to the sales of the "Island" books to the Chicago Herald Company. He testified: That the business amounted to $20,000 a month. That Mr. Bryan, the defendant, was interested in the contract with the Chicago Herald Company and was as familiar with its terms as the witness. That when the notes had been delivered to him by the Chicago Herald Company in September he had attempted to have them discounted in Chicago through brokers there. That these brokers had agreed to place the paper to the amount of $100,000, but had stated that they were unable to discount this paper, giving as a reason a monetary flurry at the time in Wall street. That the notes were then sent to St. Louis, and that he attempted to discount them through brokers there, and also with a party in East St. Louis. That his bank had told him that they had enough Record-Herald paper and did not want any more of it. He had therefore defaulted in his obligation with the plaintiff to deliver them funds on or before October 1st with which to take up the maturing notes. He stated that, while matters stood this way, Mr. Bryan called upon him at his office and he explained the situation to him. That Mr....