Liggett v. Levy

• Citation: 136 S.W. 299,233 Mo. 590
• Parties: LIGGETT v. LEVY et al.
• Decision Date: 31 March 1911
• Court: United States State Supreme Court of Missouri

136 S.W. 299

233 Mo. 590

LIGGETT v. LEVY et al.

Supreme Court of Missouri, Division No. 1.

March 31, 1911.

1. TRIAL (§ 136)—CONSTRUCTION OF WRITTEN INSTRUMENTS—QUESTION FOR COURT.

The construction of a written instrument pleaded as the basis of an action set forth in the petition is for the court.

2. BANKS AND BANKING (§ 191)—LETTERS OF CREDIT.

A letter written by an officer of a national bank, addressed "To whom it may concern," and reciting, "This letter will be presented to you by [a person named] in the interest of [a company] who are valued customers of this bank. Their business has always been very satisfactory to us, and we consider them wide-awake business men. Any favors shown to him will be highly appreciated,"—if construed as a letter of credit or a letter of recommendation, includes the person named, as well as the company named.

3. BANKS AND BANKING (§ 191)—CONTRACTS —"LETTER OF CREDIT."

The letter is not a letter of credit, which is a letter containing a general or special request to pay the bearer or person named money, or sell him some commodity on credit, or give him something of value, and look to the writer of the letter for recompense, and which partakes of the nature of a negotiable instrument.

4. CONTRACTS (§ 152) — CONSTRUCTION — MEANING OF WORDS.

The court, in construing a written instrument, may not, to fasten liability on a party thereto, add or take away words and thereby alter the sense of the instrument, but nontechnical words must be taken in their ordinary and usual acceptance.

5. FRAUD (§ 20)—ACTIONABLE MISREPRESENTATIONS.

A letter written by an officer of a national bank, addressed "To whom it may concern," and reciting, "This letter will be presented to you by [a person named] in the interest of [a company] who are valued customers of this bank. Their business has always been very satisfactory to us, and we consider them wide-awake business men. Any favors shown to him will be highly appreciated"—is not a commercial recommendation on which an action for fraud will lie against the bank because of false representations therein made, inducing one to loan money to the person named in the instrument, because of the absence of any natural connection between the letter and the loan.

6. FRAUDS, STATUTE OF (§ 149)—GUARANTY —PLEADING.

Under Rev. St. 1909, § 2785, requiring assurance concerning the credit of another to be in writing, subscribed by the party to be charged thereby, or by a person thereunto by him lawfully authorized, a petition in an action against a national bank on a written assurance on the letter heads of the bank, signed by its second vice president, must show the authority of the officer to execute the instrument as a binding obligation of the bank.

Appeal from Circuit Court, Jackson County; Jno. G. Park, Judge.

Action by J. W. Liggett against J. B. Levy and another. From a judgment of dismissal rendered on sustaining a demurrer to the petition interposed by defendant the Union National Bank, after the dismissal of the suit as to defendant named, plaintiff appeals. Affirmed.

Aleshire & Gundlach, for appellant. Warner, Dean, McLeod & Timmonds, for respondents.

LAMM, J.

In 1907, plaintiff sued one Levy and his corporate codefendant, the Union National Bank, in the Jackson circuit court; his petition in six counts, each sounding in tort.

The suit was dismissed as to Levy. The bank demurred; one ground being that no count states facts sufficient to constitute a cause of action. The demurrer was sustained. Thereat plaintiff, electing to stand and refusing to plead over, suffered judgment, and comes up by appeal.

Each count states a separate cause of action, bottomed on a certain writing, designated by the pleader as a "letter of credit or commendation," alleged to have been issued by the bank to Levy. That letter, set forth in the petition in hæc verba, reads: "David T. Beals, Pres. Fernando F. Neal, V. Pres. W. H. Seeger, 2 V. Pres. Edwin W. Zea, Cashier. No. 3,637. Union National Bank, Capital & Surplus, $1,000,000. January 16, 1906, Kansas City, Missouri. To Whom It May Concern: This letter will be presented to you by J. B. Levy in the interest of the Preferred Bond & Investment Company, who are valued customers of this bank. Their business has always been very satisfactory to us and we consider them wide-awake business men. Any favors shown to him will be highly appreciated. Yours respectfully, W. H. Seeger, 2 V. Pres." To understand questions raised, we need not reproduce the petition word for word, nor consider each count to itself.

Taking the first count, it alleges that Levy was connected with the Preferred Bond & Investment Company, a corporation, doing business in Kansas City; that defendant bank is a corporation organized under the laws of the United States and engaged in banking in said city; that on January 24, 1905, Levy, by his negotiable promissory note of that date, promised to pay plaintiff for value received $1,000 on or before six months after date, with interest from date at 6 per cent. per annum, payable annually; that the year of the date of the note was a mistake; it should have been "1906"; that on the 16th day of January, 1906, defendant bank issued, signed, and delivered to Levy its "letter of credit or commendation," directed "To whom it may concern," in which said letter the public were told that Levy, its bearer, and the investment company were valued customers of said bank (here the foregoing letter is set forth); that Levy called upon plaintiff with said letter in his charge and possession, and plaintiff, relying upon the truthfulness of the letter and upon the statements therein contained, entered into an agreement whereby he loaned Levy $3,000; that on January 24, 1906, plaintiff paid over to Levy $1,000 of said loan, and thereafter, on February 8, 1906, paid him the other $2,000; that at the time of paying the first $1,000 plaintiff took from Levy his note, of date January 24th, first above described; that plaintiff afterwards learned that Levy and the investment company were both insolvent, and that the statements in the bank's letter were false and untrue, and learned that neither Levy nor the investment company was, at the date of the letter, nor had they been prior thereto, "valued customers" of the said bank; that the bank well knew that Levy and the investment company were insolvent and financially worthless, and knew that fact when the said letter of credit or commendation was issued and delivered; that the statements in the letter were false, fraudulent, and untrue, were made without any acquaintance with Levy or the investment company, and were made, well knowing at the time they were false and untrue, "or were made without any knowledge of the truth or falsity thereof"; that plaintiff relied upon said statements as true, and so relying was induced to loan and did loan said Levy said $1,000.

The first count concludes as follows: "That by reason of said false statements so made by defendant bank, it became and is now liable to plaintiff for the said sum of $1,000, and for which amount, together with interest thereon from January 24, 1906, plaintiff asks judgment, * * * together with costs."

The second count is to recover $2,000 loaned Levy on the 8th day of February, 1906, evidenced by his promissory note of that date; said $2,000 being the remainder of the $3,000 loan referred to in the first count. The third is to recover a loan of $5,000 made Levy on February 10, 1906, evidenced by his note of that date. The fourth is to recover a loan of $2,500 made Levy on the 19th day of February, 1906, evidenced by his note of that date. The fifth is to recover a loan of $2,000 made Levy on the 5th day of March, 1906, evidenced by a note of that date. The sixth is to recover the money paid Levy on a sight draft drawn by him on plaintiff for $250 on the 24th day of March, 1906. Counts 2 to 6, inclusive, refer to said letter of commendation or credit, and, mutatis mutandis, make the same allegations in regard to the falsity of the statements made in the first count. The question is, Does the petition, in any count, state a cause of action against the bank?

(a) The letter, being the foundation of each cause of action and appearing in totidem verbis in the petition, is here for judicial construction. It is for the court, not the pleader, to construe a written instrument pleaded as the basis of a suit and appearing in his petition. Donovan v. Boeck, 217 Mo., loc. cit. 83, 116 S. W. 543, et seq. See Ray County Bank v. Hutton, 224 Mo., loc. cit. 65, et seq., 123 S. W. 47; Bank v. Trust Co., 179 Mo. 648, 78 S. W. 618.

(b) One proposition advanced to support the ruling on the demurrer is that the letter does not purport to be one of credit or commendation of Levy. To sustain that proposition, learned counsel submit these comments: "The letter says that it will be presented by J. B. Levy in the interest of the Preferred Bond & Investment Company, `who (the company) are valued customers of this bank. Their (the company's) business has always been very satisfactory to us, and we consider them (the company) wide-awake business men. There is nothing there warranting or justifying anybody in relying upon the financial standing or ability of J. B. Levy; nor anything to warrant or justify anybody in making indiscriminate loans of money to him. If plaintiff had had some dealing with the Bond & Investment Company, whereby he had lost money or property, he might, with some degree of plausibility, have complained of the bank; but it does not appear that he did have any dealings with that company, or that he lost any money or property by or through it, or on its account."

Those comments (for the purpose of the argument alone) run on the theory that the letter is a "letter of credit or commendation," using the phrase of the petition. They say the letter stopped with the investment company, and did not include Levy in its...