Dyas v. Hanson

• Decision Date: 20 November 1883
• Citation: 14 Mo.App. 363
• Parties: ADAM C. DYAS ET AL., Appellants, v. CHRIST HANSON, Respondent.
• Court: Missouri Court of Appeals

14 Mo.App. 363

ADAM C. DYAS ET AL., Appellants,

v.CHRIST HANSON, Respondent.

St. Louis Court of Appeals, Missouri.

Nov. 20, 1883.

APPEAL from the St. Louis Circuit Court, LUBKE, J.

Affirmed.

THOS. A. RUSSELL, for the appellants: The answer does not set up facts constituting a counter-claim.-- Chaneboret v. Cagney, 10 Abb. Pr. 36; Edgerton v. Page, 20 N. Y. 285. In pleading a counter-claim the defendant must allege the same facts he would be required to allege if he had himself been suing the plaintiffs.--Bliss on Code Pleading, sect. 367, and cases cited; Holzbauer v. Heine, 37 Mo. 444; Vassear v. Livingston, 13 N. Y. 252; Ritchie v. Haywood, 171 Mo. 362.

BROADHEAD & HAEUSSLER, for the respondent: The facts set up in the answer constitute a cause of action arising on contract.-- Ritchie v. Hayward, 71 Mo. 560; Curtis v. Barnes, 30 Barb. 225; McAdow v. Ross, 53 Mo. 199. Drafts payable on demand, and checks, are governed by the same rules of law in respect to presentment, demand and notice.--Bigelow on Bills (1882), p. 80. The general rule in regard to presentment is, that the bill must be presented within reasonable time, and what will be a reasonable time must depend upon all the circumstances of each particular case.--Story on Bills, 231, and cases cited; Bigelow on Bills (1882), p. 207, and cases cited; Mullman v. D. Eguine, 2 H. Black. 565 (cited at length in Bigelow, 207); Salisbury v. Renick, 44 Mo. 554. Sight drafts must be presented on the day after their receipt at the place where the drawee resides.-- Harker v. Anderson, 21 Wend. 376; Rosenblatt v. Haberman, 8 Mo. App. 486. The party relying on a waiver of liability must prove that it was made with a full knowledge upon the part of the drawer of the negligence of the holder.-- Bullin v. Betcke, 11 Iowa, 204; Story on Prom. Notes, sect. 275, and notes; Parsons on Notes and Bills, 601; Morgan v. Peet, 32 Ill. 281.

THOMPSON, J., delivered the opinion of the court.

The plaintiffs were wholesale merchants in St. Louis, and the defendant was a merchant doing business in the country. For about two years prior to the transaction in controversy the defendant had been in the habit of making purchases of the plaintiffs from time to time, and of remitting to them for credit upon the running account thus kept up, drafts on other persons for collection. On the 14th of August, 1880, the defendant ordered of the plaintiffs a small bill of goods, amounting to less than $100, and, in a separate letter in the same mail, he sent them a sight draft for $1,100, on the Yeager Milling Company of St. Louis, with this instruction: “Please place same to my credit until called for.”

The plaintiffs received these two letters on the 16th of August. They filled the order for the goods, except as to an item of coffee, which they could not fill because they had not the kind ordered. They at the same time placed the draft to the defendant's credit on their books and deposited it for collection in the Bank of Commerce in St. Louis, in which they kept their account. They also, on the same day, advised the defendant that they had received the draft, had placed the same to his credit as requested, and that his order was being filled. This was Monday. The Bank of Commerce allowed the following day, Tuesday, to pass without presenting the draft to the Yeager Milling Company and demanding payment. On that day the Yeager Milling Company was solvent, and if the draft had been presented then, it would have been paid. On Tuesday night the mill of the Yeager Milling Company was destroyed by fire, and the company immediately suspended payment and became insolvent. On Wednesday the draft was presented to the Yeager Milling Company, payment refused, and it was returned by the Bank of Commerce to the plaintiffs, who immediately advised the defendant by telegraph of its dishonor. He having received a letter from the Yeager Milling Company saying that they would pay it in a few days, wrote to the plaintiffs, advising them to hold it and collect it as soon as they could. They held it more than a month, after which further correspondence took place touching it, between them and the defendant, which we need not set out, the result of which was that the defendant refused to allow the draft to be returned to him, and insisted that the plaintiffs were liable to him for the failure to collect it. In the meantime, the defendant had continued to purchase goods of the plaintiffs on credit until he had purchased an amount nearly equal to the amount of the draft.

For the amount of the goods so purchased, the plaintiffs have brought the present suit. The correctness of their account stands admitted. The only defence we have to consider arises on a count of the answer, which sets up by way of counter-claim the damages which accrued to the defendant by reason of the negligence of the plaintiffs, whereby the amount of the draft was lost to the defendant.

1. It is objected that the matter so set up is not within our statute relating to counter-claims. Rev. Stats., sect. 3522. We take a different view. In our opinion, the undertaking of the plaintiffs to collect this draft was a contractual engagement; their failure to do so with reasonable diligence, if such was the fact, was a breach of this engagement, and consequently, the count of the answer setting up such failure presents a cause of action “arising on contract” within the meaning of the statute. Empire Transportation Co. v. Boggiano, 52 Mo. 294.

2. Then as to the merits of this counter-claim. The plaintiffs offered to prove an universal custom among the wholesale merchants of St. Louis, on receipt of drafts from their customers and others to deposit the same for collection in bank, just as the plaintiffs did, which evidence the court excluded. We think this ruling was right, for two reasons: 1. It was not satisfactorily shown that the defendant had any knowledge of such a custom. A custom to collect drafts in this way might be universal among the wholesale merchants of St. Louis, and a country merchant might know nothing about it. Certainly, the defendant was not bound to know of the existence of such a custom, nor was there any presumption springing out of its universality, that he did know it. Such a custom, even if known to the defendant, would not exonerate the plaintiffs, because a custom which exonerates an undertaker, or contractor, or bailee, from the consequences of his own or his agent's negligence, would not be a good custom. 2. But the evidence of custom, such as was here offered, was wholly irrelevant. It must be borne in mind that the plaintiffs did not offer to prove a custom of banks and collecting agents in St. Louis not to present sight drafts for payment on the day after receiving them; but they offered to prove that it was the universal custom among wholesale merchants in St. Louis, when receiving drafts drawn upon St. Louis, from their customers for collection, to deposit them in bank for that purpose. The defendant might have admitted such a custom without any prejudice whatever to his counter-claim; because the fact that it is customary for a particular class of merchants to select a particular class of agents to discharge a particular kind of duty for them, has no tendency whatever to exonerate such a merchant from his liability for the negligence of such an agent. It would be a new idea in the law which would exempt the principal from liability for the acts of his agent merely upon showing that it was customary to do the particular act through such an agent. Where, from the nature of the act to be done, individuals and corporations are obliged to do it through agents, the law does not thus exonerate them. It is not only a custom for a corporation, for instance, to do all its acts through agents, but from its very nature it can only act through agents; and yet it would be reversing the whole course of modern law on the subject of corporate liability to hold that this necessity should operate to exonerate the corporation from liability for the acts of its agents. The question here was not, whether the defendants were personally negligent in placing this bill of exchange in the hands of the Bank of Commerce for collection. It may be granted, for the purposes of this case, that they were not. But when they selected the Bank of Commerce as their agent for that purpose, they became answerable to the defendant for the diligence of such agent, just as any other principal is answerable for the diligence of his agent; and their own personal diligence was wholly an immaterial question. Such a rule would have exonerated the defendant from liability in the case of Gerhardt v. Boatmen's Saving Institution (38 Mo. 60); because, without doubt, an universal custom, universally known, could have been shown on the part of banks to resort to a notary for the purpose of making demand of the payor of matured paper, and of giving notice to drawers and indorsers. Indeed, such a defence was set up in a case in New York, but without avail. That court said: “It was proved in the progress of the trial that it was usual for bankers to resort to a notary; but there was nothing to show that the custom affected or varied the legal liability of the bank, or its liability for the due performance of all the acts necessary. There was evidence from others that the custom was uniform to hand them to a notary. But practice and usuage of business adopted for their own convenience can not vary the contract between them and their dealers.” Ayrault v. Pacific Bank, 47 N. Y. 574. As this evidence was properly excluded, the instruction which the plaintiffs asked relating to such a custom was, of course, rightly refused.

3. The court instructed the jury in substance that it was the duty of the plaintiffs to present the draft for payment within a reasonable time, and that, if they failed to present it within a reasonable time, the loss arising out of the failure to collect it must...