Ladenberg v. Beal-Doyle Dry Goods Company

• Decision Date: 08 July 1907
• Citation: 104 S.W. 145,83 Ark. 440
• Parties: LADENBERG v. BEAL-DOYLE DRY GOODS COMPANY
• Court: Arkansas Supreme Court

104 S.W. 145

83 Ark. 440

LADENBERG v. BEAL-DOYLE DRY GOODS COMPANY

Supreme Court of Arkansas

July 8, 1907

Appeal from Pulaski Circuit Court; Edward W. Winfield, Judge affirmed.

Judgment affirmed.

Rose Hemingway, Cantrell & Loughborough, for appellants.

Where a debt has been assigned, and the debtor has notice of the assignment, he must pay to the assignee; and if he pays to the original creditor, it is at his peril. 4 Cyc. p. 90; 10 Ark. 429; 91 N.Y.S. 520; 120 A.D. 247; 74 N.E. 1126. There is no element of agency in this case--no delegation of authority. Mechem on Agency, § 342; Dunlap's Paley on Agency, 274; 2 Sand. Ch. 325; 28 N.J.Eq. 13; 1 Vern. 150; 68 N.Y. 130; 103 N.Y. 556; 9 N.E. 323; 5 Iowa 459; 46 Ark 211; 65 Id. 325; 75 Id. 170. Nor were appellants estopped on the assumption of not objecting to the payments made to the Brown Company. There can be no estoppel unless the person setting it up has been deceived by the conduct of his adversary. 11 Am. & Eng. Enc. Law pp. 421, 422, 424, 434; Colebrooke, Coll. Sec. §§ 433; Bigelow on Estoppel (5 Ed.), p. 570; 15 Ark. 55; 22 Id. 489; 24 Id. 251; 30 Id. 407; 39 Id. 131; 53 Id. 196; 54 Id. 465; 63 Id. 300; 72 Id. 83; 76 Id. 472.

Moore, Smith & Moore, for appellee.

Appellee made the payments to the Brown Company, believing it to be the agent of appellants, and appellants are estopped by their acquiescence. 39 Ark. 134-5; 53 Id. 201.

2. Appellants are not the real parties in interest, and cannot maintain this suit except in the name of their assignor. Kirby's Digest, § 6000; 47 Ark. 548.

MCCULLOCH, J. BATTLE, J., dissents.

OPINION

MCCULLOCH, J.

The plaintiffs (appellants), Ladenberg, Thalman & Co., are bankers in the city of New York, and advanced large sums of money during the year 1903 to the James Freeman Brown Company (hereinafter called the Brown Company) who were mill agents in said city, selling the product of various cloth factories. They sold merchandise to wholesale merchants throughout the country, and as they made sales they pledged the accounts against their customers to the plaintiffs, and other bankers making advances to them, as collateral security for said advances.

When they made sales to customers, duplicate invoices were made out, one on a bill-head of plaintiffs, reciting that it was for merchandise delivered by James Freeman Brown Company, and bearing the following indorsement in red ink: "Make all remittances to Ladenberg, Thalman & Company, P. O. Box 375, New York." This was delivered to plaintiffs, and by them mailed to the purchaser. The other was made out on their own bill-head, bearing the following indorsement in type: "This bill is payable to Ladenberg, Thalman & Company, 25 Broad St., New York. Make checks payable to order Ladenberg, Thalman & Company, and mail direct." This was also mailed to the customer by the Brown Company.

The defendant, Beal-Doyle Dry Goods Company, a corporation engaged in the wholesale dry goods business in the city of Little Rock, was a customer of the Brown Company, and in the spring of 1903 gave an order to the Brown Company for goods aggregating about $ 30,000 in price. These goods were shipped from time to time up to and including the month of August, 1903, and invoices therefor were sent in the manner just described. All of these invoices were not, however, pledged to plaintiffs, but some were pledged to other bankers.

The Brown Company became insolvent in December, 1903, and went into bankruptcy; and the plaintiffs instituted this action to recover the sum of $ 739.42 on three invoices of goods sold to defendant and pledged to the plaintiffs, aggregating the above-named amount. Defendant had paid these sums direct to the Brown Company when the bills fell due, as well as many other invoices pledged to plaintiffs, and had also made remittances to plaintiff covering other invoices. All of the other remittances made to the Brown Company covering invoices which had been assigned to plaintiffs were, it appears, reported to plaintiffs by the Brown Company and satisfactorily accounted for in some way, but no report of the payment of these invoices was made. All these transactions occurred before the Brown Company went into bankruptcy. After the adjudication in bankruptcy, appellants wrote to appellee for the first time demanding payment of these invoices.

When defendant gave the order for the goods to the travelling salesman of the Brown Company, none of its (defendant's) officers or agents were apprised of any interest of the plaintiffs in the sales, and the only notice or information given to defendant of the pledges of the invoices to plaintiffs was the indorsements upon the invoices already described. Plaintiffs communicated no objection to defendant to the payments made direct to the Brown Company, though it is shown by the evidence that defendant made remittances from time to time direct to plaintiffs after having made remittances to the Brown Company, on the pledged invoices, some of which remittances were reported to plaintiffs and accounted for as already stated. Was the jury unwarranted, under these circumstances, in returning a verdict in favor of the defendant?

The court gave the following instruction over the objection of the plaintiff:

"If you find from the evidence that the debt from Beal-Doyle Company to James Freeman Brown Company was pledged to plaintiffs, and that the goods for the purchase of which the debt was created were delivered to Beal-Doyle Company with notice to pay the price therefor to plaintiffs, and Beal-Doyle accepted the goods with said notice, then an implied promise arose on the part of Beal-Doyle to pay plaintiffs therefor, and payment to James Freeman Brown would not discharge that promise, and your verdict will be for plaintiffs, unless you find from the evidence that Ladenberg Thalman & Company, the plaintiffs, prior to the payment of the accounts in question to James Freeman Brown Company, knew that Beal-Doyle Dry Goods Company were making payments to James Freeman Brown Company as agent of plaintiffs on accounts assigned to plaintiffs, or had knowledge of such circumstances as would put a reasonably...