Lee v. Dodd

• Decision Date: 05 January 1886
• Parties: J. H. LEE ET AL., Plaintiffs in Error, v. S. M. DODD ET AL., Defendants in Error.
• Court: Missouri Court of Appeals

20 Mo.App. 271

J. H. LEE ET AL., Plaintiffs in Error,

v.S. M. DODD ET AL., Defendants in Error.

St. Louis Court of Appeals, Missouri.

Jan. 5, 1886.

ERROR to the St. Louis Circuit Court, W. H. HORNER, Judge.

Affirmed.

HENRY HITCHCOCK, for the plaintiffs in error: The second defence averred that the agreement between Dodd, Brown & Company, and Woods was unlawful and void, while the third defence relied upon such agreement, although alleged to be void, as an accord and satisfaction. This is such inconsistency as the statute forbids. Rev. Stat., sect. 3523; Fugate v. Pierce, 49 Mo. 441, 449; McAdow v. Ross, 53 Mo. 203. The defendants' instruction, number six, not only was not based on the evidence, but was contradicted by it. The proof was positive and undisputed that Herrick, George & Graham executed the receipt of July 9, 1881, without authority, and without the knowledge or consent of the plaintiffs, and that said receipt was repudiated by the plaintiffs' attorneys forthwith, as soon as known to them; nor was there any proof that the plaintiffs' attorneys received or collected said draft with any knowledge of what had been done. This instruction, as well as those above mentioned, was calculated to mislead the jury, and was wholly unsupported by the evidence. Atkins v. Nicholson, 31 Mo. 488; Turner v. Chillicothe & D. M. City R. R. Co., 51 Mo. 510; Lester v. Kansas City R. R. Co., 60 Mo. 268; C. B. & Q. R. R. Co. v. Dickson, 88 Ill. 431; Howe S. M. Co. v. O. Layman, 88 Ill. 39; Hill v. Canfield, 56 Pa. St. 454.

MADILL & RALSTON, for the defendants in error: The plaintiffs, by their reply, and by going to trial on the pleadings, waived their motion to elect, and the error, if any, is the action of the court thereon. Bliss, Code Pl., ch. 20, sect. 420, p. 502; Stevenson v. Judy, 49 Mo. 227; Scovill v. Glasner, 79 Mo. 449-454, et seq. The acts of the parties constituted a perfect accord and satisfaction, executed by the tender and its acceptance. 2 Pars. Cont. (7 Ed) 817, et seq., and notes; Babcock v. Hawkins, 23 Vt. 561; 2 Whart. Cont., ch. 31, p. 350, et seq., sects. 1001, 1002, and notes; Brooks v. White, 2 Metc. 283; Keeler v. Salisbury, 33 N. Y. 648. This evidence clearly shows that the contract was executed under the above representations of Woods, as to the object, purpose, and effect of the erasure, and upon the faith of said representations. Hence, the execution of the contract upon the faith of such representations constitutes an equitable defence to any liability of the defendants under it above thirty-three and one-third per cent. of the claims therein set forth. The State v. St. Louis Life Ins. Co., 3 Mo. App. 207; Wheelton v. Hardisty, 8 El. & Bl. 231, 273 to 283; Wood v. Dwarris, 11 Hurl. & G. Ex. 493-502, et seq.

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

The facts in this case are very complicated, and have been set out in the statements of the opposing counsel with great fullness of detail. We shall limit ourselves to stating only what appears to be necessary for the purposes of this decision.

The plaintiffs' case, as claimed by them, is this: In June, 1881, Hunter Brothers, a firm of merchants at Wellington, Kansas, made an assignment to one Woods, under the Kansas statute, of their property, for the equal benefit of their creditors. Among these creditors were the plaintiffs, a mercantile firm doing business in Boston, and the defendants, a mercantile firm doing business in St. Louis. After the assignment, such negotiations were had between the assignee, the defendants in this suit, and representatives of other creditors, that a contract was entered into between the assignee and the defendants, by which the assignee turned over all the assets of Hunter Brothers, so assigned to him, to the defendants, in consideration of an agreement on their part, among other things, to pay the debts due by Hunter Brothers to their other creditors, among them, an indebtedness to these plaintiffs in the sum of $2,308.61. The plaintiffs bring the present suit upon this contract, admitting that an amount equal to thirty-three and one-third per cent. of the indebtedness of Hunter Brothers to them has been paid by these defendants, and suing for the balance with interest.

The answer, among other things, admits that Hunter Brothers were indebted to these plaintiffs in the sum above named, and admits that the contract sued on (which was in writing, filed as an exhibit with the petition) embodied certain features of the agreement which was made, and then proceeds to set up three separate defences. The substance of the first is, that the plaintiffs agreed with Hunter Brothers to settle their claim against Hunter Brothers for thirty-three and one-third cents on the dollar, together with the unsecured notes to Hunter Brothers for forty per cent. additional, which payment of thirty-three and one-third cents on the dollar has been made by these defendants for Hunter Brothers, and which notes have been tendered to the plaintiffs and refused; whereby there has been an accord and satisfaction. The second pleads the provisions of the statute of Kansas, relating to assignments for the benefit of creditors, and sets up that the contract between Woods, the assignee, and these defendants, whereby Woods assumed to turn over to these defendants all the assigned assets of Hunter Brothers, instead of administering them under the orders of the district court for the benefit of the creditors of Hunter Brothers, as required by the statute, was illegal and void. The third sets up in a somewhat different manner, the defendants' version of the contract as stated in the first; alleging, in substance, a compromise agreement between Hunter Brothers, Woods, their assignee, these defendants, and the representatives of certain creditors, whereby the assigned assets in the hands of Woods were to be turned over to these defendants, they paying Woods (who is a secured creditor) a certain sum; paying to the other creditors who were parties to the agreement, thirty-three and one-third per cent. of their demands against Hunter Brothers, and undertaking to satisfy the creditors who were not parties to the agreement; charging that these plaintiffs had an additional secret agreement unknown to the defendants, whereby they were to get, in addition to this thirty-three and one-third per cent. of their demand, the unsecured notes of Hunter Brothers, “payable in a reasonable time;” and that, afterwards and before the bringing of this suit, these notes were delivered to the duly authorized agents of the plaintiffs. It also sets up that this composition agreement, as originally drawn up, obliged the defendants to pay the debts of Hunter Brothers, “only to the sum of $2,650, on the basis of thirty-three and one-third per cent.,” and explains how this clause came to be stricken out at the request of the assignee and for his protection.

I. A reply was filed in the usual form denying the new matter set up in the answer. More than a year thereafter, the cause came on for trial, and a special jury was impaneled, and then the plaintiffs moved the court to compel the defendants to elect between their second and third defences, which motion the court overruled. We think the motion was correctly overruled. There was no repugnance of fact between the two defences. Both might be true. And the rule is, that where two defences are pleaded, the defendant can not be driven to an election, where both may be true. Keane v. Kyne, 2 Mo. App. 317. The contract may have been made according to the version of it given by the defendants in their third separate defence, and if valid under the law of Kansas, it would constitute a good defence to the action. At the same time, the defendants might be able to prove that the law of Kansas was as alleged in their second count, and this, if true, might, as a mere conclusion of law, prevent the plaintiffs from recovering. The defendants do not claim any right, as against the plaintiffs, under the contract sued on. They are thus in a position to set up both its illegality and its performance. It would be otherwise if the establishment of the contract were an essential element of the defence.

The cause then went to trial, and in consequence of the rulings of the court in admitting evidence and giving and refusing instructions, the plaintiffs were driven to a voluntary non-suit.

II. The evidence was conclusive upon the following points: that Tenney, Flower & Cratty, attorneys of Chicago, Illinois, were the attorneys of the plaintiffs, with full power to bind them by a settlement such as the one which was here made; that MacLaren, an employe of Tenney, Flower & Cratty, had whatever power they had in the premises; that Page was the agent of the defendants; that Herrick, George & Graham, attorneys, of Wellington, Kansas, were the attorneys of Hunter Brothers; that MacLaren had been to Wellington soon after the failure and had made a proposition of settlement, which had not been accepted, and that he had returned to Chicago, leaving no legal representative of the plaintiffs on the ground, but with the understanding that Herrick, George & Graham would inform Tenney, Flower & Cratty if anything important transpired; that Page, being at Wellington, representing the defendants, on the seventh of July, 1881, Herrick, George & Graham, telegraphed to Tenney, Flower & Cratty, as follows:

“If creditors will all accept thirty-three and one-third cents on the dollar on claims against Hunter Brothers, payable in thirty, sixty, and ninety days, secured, settlement can be made: will your clients accept? Answer.”

To which Tenney, Flower & Cratty responded by telegraph as follows:

“No, but we will take the settlement and debtors' unsecured notes for forty cents additional, and give them time.”

No acceptance of this counter proposition was communicated in terms to Tenney, Flower & Cratty, at the time.

On July 7, at the time their telegram was sent, Herrick,...