Garrettson v. North Atchison Bank

• Decision Date: 02 November 1891
• Citation: 47 F. 867
• Parties: GARRETTSON et al. v. NORTH ATCHISON BANK.
• Court: U.S. District Court — Western District of Missouri

47 F. 867

GARRETTSON et al. v. NORTH ATCHISON BANK.

United States Circuit Court, W.D. Missouri, Saint Joseph Division.

November 2, 1891

By stipulation of parties, a jury in this case was waived, and the trial of the cause submitted to the court on the following agreed statement of facts:

'(1) Defendant is a banking incorporation, as alleged. Plaintiffs are and have been partners, as alleged.

'(2) Plaintiffs and defendant are citizens of different states as alleged.

'(3) The Muscatine Cattle Company was a corporation, as alleged, and sold James Tate, a citizen of Missouri, cattle to the amount and of the value alleged. On September 28, 1888, said company was ready to deliver Tate one thousand head of cattle at Pueblo, Colo., which the latter had bought for $22,000. In payment, said Tate offered to give said company a check on defendant. But said cattle company refused to deliver the cattle and to receive said check without first communicating with defendant. Thereupon A. J. Streeter, agent for said cattle company, sent defendant the following telegram: "PUEBLO, COLO., Sept. 28, 1888.

"To North Atchison Bank, Westboro, Mo.: Will you pay James Tate's check on you, twenty-two thousand dollars. Answer. Ja. J. STREETER.'

'Defendant received said telegram, and sent in answer the following, which was duly delivered to said Streeter:

"WESTBORO, MO., Sept. 29, 1888.

"To A. J. Streeter, Pueblo, Colo.: James Tate is good. Send on your paper. NORTH ATCHISON BANK.'

'(4) On receipt of this telegram from defendant, and on the faith thereof, the Muscatine Cattle Company delivered said cattle to Tate, and accepted a check from him on defendant as follows:

"WESTBORO, MO., Sept. 28, 1888.

"No.-- . North Atchison Bank: Pay to the order of Muscatine Cattle Company, twenty-two thousand dollars, with exchange.

"$22,000. JAMES TATE.'

'(5) Said Muscatine Cattle Company was at the time indebted to plaintiffs in a sum equal to or exceeding the amount of said check.

'(6) The said cattle company then offered said check to plaintiffs on account of said indebtedness, and showed the plaintiffs copies of the telegrams of September 28 and 29, 1888, to and from defendant concerning said check.

'(7) Plaintiffs thereupon accepted said check on the faith of said telegrams so shown them, and thereupon credited the amount of the check on the indebtedness of the Muscatine Cattle Company to it.

'(8) The check was afterwards duly presented to defendant for payment, which was refused for want of funds.

'(9) On October 5, 1888, plaintiffs sent defendant the following telegram:

''MUSCATINE, Oct. 5, 1888.

"North Atchison Bank, Westboro, Mo.: Cattle were delivered, and Tate's check, twenty-two thousand dollars, taken, on your telegram that check would be paid. Now notified that check has been protested. We look to you for money, and will try to collect of you. G.A. GARRETTSON & CO.'

'Defendant on the same day sent the following telegram in reply:

''WESTBORO, Oct. 5, 1888.

"G.A. Garrettson & Co., Muscatine, Iowa: This bank did not send telegram that it would pay Tate's check. NORTH ATCHISON BANK.'

'(10) On October 12, 1888, one of the plaintiffs in person called on defendant bank, and again presented the check and the telegram of September 29, 1888, and demanded payment of the check. This was again refused by defendant, and it stated that Tate had countermanded the check before its presentment.'

Karnes, Holmes & Krauthoff, for plaintiffs.

Lancaster, Hall & Pike, for defendant.

PHILIPS J.

(after stating the facts as above.) The question as to whether or not the correspondence between Streeter, the agent of the Muscatine Cattle Company, and the defendant bank, by means of telegrams, amounted in law to the certification of the check, was considered by this court on the demurrer to the petition. See 39 F. 163. The facts as now agreed upon confirm the conclusion reached. That such a contract may be as well consummated by telegram as by letter is well settled. Brinkman v. Hunter, 73 Mo. 179. The facts show that the check was drawn and offered in payment for the cattle before the first telegram was sent. This fact was clearly enough conveyed to defendant by the phraseology of the telegram of September 28: 'Will you pay James Tate's check on you, twenty-two thousand dollars? ' Defendant was not inquired of simply as to the solvency of Tate, nor in words, whether his check was or might be good; but the direct question was, in effect, will you pay his check on you for $22,000? The answer must be read and interpreted in connection with the question asked. It was not only that Tate is good, with the necessary implication to the extent of $22,000, but it went further, and said, 'Send on your paper,' clearly indicating that it was acceptable, and would be paid on its arrival. On the faith of that assurance, the vendor parted with the cattle, and accepted the check in payment; and on the faith of the telegrams the plaintiffs accepted the check in discharge of the cattle company's debt to them, and thereupon Tate was permitted to take away the cattle. A more complete estoppel could not well arise. Without affirming or denying all that is said in the opinion in Bank of Springfield v. First Nat. Bank, 30 Mo.App. 271, it is sufficient to say that the case turned upon mere parol representations as to the solvency of the drawer of the check, and did not present the case of the sufficiency of the terms employed in a written correspondence, like the present one, to constitute the certification of the check. The case of Adoue v. Fox, same volume, page 101, shows that that court observed the distinction.

Request for reconsideration of the opinion herein is made, particularly, as to the assumption therein of the applicability of the Missouri statute relative to the acceptance of bills of exchange. The contention now is that the contract was made in Colorado, and that it was only to be performed in Missouri; therefore, the contract of acceptance is to be construed according to the lex loci contractus. Where was the contract made as between the cattle company and the defendant? While the cattle company was for the time being, by its agent, at Pueblo, Colo., the defendant certainly was not there, either in person or by agent. The whole negotiation was conducted between them by telegraphic correspondence. I understand the rule of law to be, respecting the making of contracts by correspondence, that the contract is completed when the proposal made by one side is communicated by letter, and the other party deposits in the post-office his letter of acceptance. The moment the letter is mailed, and not until then, is the contract completed and the parties concluded and bound. Tayloe v. Insurance Co., 9 How. 390-401. This is 'the general principle of law governing contracts entered into by absent parties. ' Supra. See Lungstrass v. Insurance Co., 48 Mo. 201-204. This contract, therefore, was completed in Missouri, and was to be performed here by the presentation at the banking house of defendant of the check for payment. The acceptor's liability being dependent upon his acceptance, it should necessarily follow that it is to be governed by the law of the place of acceptance. Scudder v. Bank, 91 U.S. 412, 413; Tied.Com.

Paper, Sec. 507; 1 Daniel, Neg. Inst. Secs. 867, 896; 1 Rand.Com.Paper, Sec. 21; Boyce v. Edwards, 4 Pet. 111. 'A contract by telegram is complete when a properly directed message of acceptance is delivered to the telegraph company for transmission. ' Gray, Tel. Sec. 112; Trevor v. Wood, 36 N.Y. 307; Minnesota Linseed Oil Co. v. Collier White-Lead Co., 4 Dill. 431-434; Baker v. Holt, 56 Wis. 100, 14 N.W. 8; Squier v. Telegraph Co., 98 Mass. 232; True v. Telegraph Co., 60 Me. 9.

The next proposition asserted by defendant is that a check like the one in question is not a bill of...