Churchill v. Yeatman-Gray Grocer Company

• Court: Arkansas Supreme Court
• Writing for the Court: WOOD, J.
• Citation: Churchill v. Yeatman-Gray Grocer Company, 164 S.W. 283, 111 Ark. 529 (Ark. 1914)
• Decision Date: 23 February 1914
• Parties: CHURCHILL v. YEATMAN-GRAY GROCER COMPANY

164 S.W. 283

111 Ark. 529

CHURCHILL v. YEATMAN-GRAY GROCER COMPANY

Supreme Court of Arkansas

February 23, 1914

Appeal from Independence Circuit Court; R. E. Jeffery, Judge affirmed.

STATEMENT BY THE COURT.

This suit was begun in the justice of the peace court by appellee against appellants upon an itemized account. The complaint alleged that the defendants were indebted to the plaintiff in the sum of $ 209.30. The itemized account attached amounted to $ 487.90, and after deducting the credits it was claimed that the balance due was $ 209.30.

The defendants, in an oral defense, set up payment of the account. Judgment in the justice court was in favor of the plaintiff, and the defendants appealed to the circuit court. In the circuit court the defendants tendered $ 5 in full satisfaction of the debt, which the plaintiff refused. The cause was submitted on the same issues in the circuit court the court sitting as a jury to try the same.

To support their plea of payment the appellants claimed that the account had been paid by the delivery of two checks of $ 100 each, bearing dates respectively April 20, 1911, and May 15 1911. They were post dated and delivered to the plaintiff by defendants early in April, 1911, to be presented to the bank on which they were drawn on their respective dates. The plaintiff admitted the receipt of the checks, but claimed that it received them with the understanding that it was to hold the same until the drawer, Woods Thomas, made a deposit with the bank, when plaintiffs were to present the same, and if the checks were paid the amount thus received was to be credited on the account of the plaintiff.

The sole issue presented to the court on the facts was as to whether the defendants were entitled to have the amount represented by these checks credited on their account. There was a sharp conflict in the evidence as to whether the checks were received by appellee in payment of the account sued on.

The only witness for the appellants testified that he bought the goods; that he turned over to the plaintiff two checks given by Woods Thomas; that the plaintiff agreed to take these checks and hold them until Woods Thomas made a deposit to meet them. He never deposited the money. He was to have deposited for the first check on the 20th of April and for the second check on May 15, 1911. The checks were returned to witness after about forty days, not protested. The checks were endorsed by witness. Plaintiff did not notify witness that the checks had not been paid until June 2. After the checks became due and were not paid and before witness received any notice that they had not been paid he sold goods to Thomas, the drawer of the checks, amounting to the sum of $ 200, thinking the checks had been paid off. The failure on the part of the plaintiff to give witness notice that the checks had not been paid thus damaged defendants in the sum of $ 200.

Witness did not remember writing the plaintiff asking it to hold up presenting the first check for a few days about the time the same became due. After the checks became due and same were not paid witness never promised to pay plaintiff's account. Witness did not remember writing to a member of the firm of plaintiff requesting him to hold up the presentation of the first check. Witness did write the following letter to Charlie Cole, the attorney for the plaintiff, of date November 21, 1911: "Dear Sir: Your letter came yesterday in regard to Northern-Yeatman account. Now, I think they ought to join in with me and try to collect this account from Thomas. Of course, I don't aim to try to beat them out of this amount, but I feel like they ought to help induce the old man to pay it. I aim to settle everything by the first of the year and of course their account will be considered."

Witness stated that he intended that the above letter should be construed to mean that he would settle everything if the Thomas matter was collected.

The testimony on behalf of the plaintiff was substantially as follows: The checks were presented to plaintiff by one of the defendants who requested that plaintiff present them to the bank on the dates on which they were to be paid. They were post dated. Plaintiff agreed to do this, and a few days before they were due defendants wrote plaintiff to hold up the checks a few days; but plaintiff presented the checks to the bank, left them with the cashier of the bank and asked him, if the money was deposited there, to protect the checks and he agreed to do so.

The plaintiff received from the defendants a letter written by Woods Thomas, addressed to defendants, in which he stated as follows: "The check I gave you for $ 100 due the 20th I fear will not be honored if presented on that date, as it will be after that date before we get returns for the lumber we shipped out; and you will remember, Mr. Yates, what I told you about a certain note against this mill for $ 130, which has to be paid now, or the 'fur is going to fly.' I hope you can hold our checks along so as to make them fit in with my bank account." (Signed) "Woods Thomas."

On this letter Yates, for Churchill & Yates, endorsed the following "I send you Mr. Thomas's letter he sent me today. If you can take care of that check for him a few days it will be an accommodation to him as well as me." And, with this notation, the letter was sent to plaintiff.

The witness, continuing his testimony, stated that the checks were turned over to plaintiff for collection. We were to apply the amount of the checks to the account when collected. We presented them before they were due; left them with the cashier of the bank, and after payment was refused we returned them to Churchill & Yates and told them they were not paid. Plaintiff had not endorsed them. The letter returning the checks to Churchill & Yates was dated June 5, 1911, addressed to Churchill & Yates, and stated: "Gentlemen: We hand you herein checks signed by Woods Thomas as we are unable to get them cashed." Signed by plaintiff. The defendants returned the checks by the next mail and asked plaintiff to try again and plaintiff wrote them that it was useless to try.

Defendants made some payment on their account after that--on June 22 a payment of $ 40, and on August 19 a payment of $ 50.

Plaintiff, after the above transaction, sent defendants statement of their account the first of every month. These statements did not show that plaintiff had given defendants any credit for the amount of the checks and defendants never made any objections to the statements mailed them because they failed to contain a credit of the amount of the checks.

On cross examination the witness testified that Yates, for the defendants, agreed to turn the checks over to plaintiff on his indebtedness, or to be credited on his account when they were paid, but if they were not paid he was not to have credit. "It was a conditional payment. If we collected we were to credit his account, otherwise no credit was to be given him." Yates endorsed the checks when he turned them over to plaintiff. The checks were endorsed in blank. Plaintiff explained to the cashier, in fact showed him, the letter requesting plaintiff to hold up the checks, and every few days one of the firm of plaintiff would call there and ask if the money had been deposited and the cashier would say that it had not. Plaintiffs presented the checks for payment on the date they were due and they were not paid. Plaintiff notified Yates that the checks had not been paid on the 5th of June. Yates bought some goods from plaintiff after the checks had been presented, which goods were charged on the books of plaintiff, and they made some payments on their account after that time, amounting to $ 90. The understanding with defendants was that plaintiffs were to give credit for the amount of the checks if they were paid. Defendants gave them to plaintiff with the understanding that if there was a surplus after the checks were paid, defendants were to take the amount of such surplus in trade. The statements were rendered to the defendants by plaintiff on the first of May and the first of June. The checks were not taken to the bank until about the time the last one was due; then they were both taken to the bank and left with the cashier. A statement was sent to the defendants on July 1 which showed a credit of $ 40 paid June 22 and also a statement was sent on September 1, which showed a credit of $ 50 on August 19.

Upon the above facts the court rendered judgment in favor of the plaintiff in the sum of $ 209.30 with interest from February 1, 1912, and this appeal has been duly prosecuted.

Judgment affirmed.

Samuel M. Casey, for appellants.

1. The failure of the appellee to give notice to appellants of the nonpayment of the checks released them from any liability thereon as endorsers. 31 Am. St. Rep. 552, and cases cited; 118 Am. St. Rep. 537; 7 Cyc. 1082-3 et seq.; 33 Ark. 49; Id. 778; 37 Ark. 281; 84 Ark. 366.

2. If appellee took the checks in conditional payment, as appellee claims, that does not alter the status of the case. Arkansas cases, supra; 83 Am. Dec. 756; 7 Cyc. 970; 143 S.W. 597.

3. Appellants, having been discharged from liability on the checks by reason of the...