McDonald v. American Nat. Bank

• Decision Date: 15 July 1901
• Citation: 65 P. 896,25 Mont. 456
• Parties: McDONALD v. AMERICAN NAT. BANK. COONEY v. SAME.
• Court: Montana Supreme Court

65 P. 896

25 Mont. 456

McDONALD v. AMERICAN NAT. BANK.

COONEY v. SAME.

Supreme Court of Montana

July 15, 1901

Appeal from district court, Lewis and Clarke county;

M. H Parker, Judge.

Actions by Angus McDonald and by Tom D. Cooney against the American National Bank. From judgments in favor of plaintiffs defendant appeals. Reversed.

Carpenter & Carpenter and H. G. McIntire, for appellant.

The draft for $96,800 was not forwarded to the bank as trustee for plaintiffs, or either of them, nor for the benefit of them, or either of them. McDonald consented to receive $15,000 of that money and Miller's note for $15,000 as payment. Cooney consented to receive $7,000 of that money and Miller's note for $10,000 as payment. The beneficiaries could consent to the new arrangement. Bank v Lobdell, 78 Ill.App. 602. All of the money received by the bank was paid out with the approval of plaintiffs. If plaintiffs have suffered damage, they may not recover in an action for money had and received. "In order to maintain the action, there must be money in the defendant's hands to which the plaintiff is immediately entitled." The money must actually have been received by the defendant. 4 Wait, Act. & Def. 470; Beardsley v. Root, 11 Johns 466, 6 Am. Dec. 386; Clark v. Sherman (Wash.) 32 P. 771; Distler v. Dabney (Wash.) 28 P. 335; Thill v. Hoyt (Sup.) 56 N.Y.S. 78; 2 Enc. Pl. & Prac. p. 1021; Southwick v. Bank, 84 N.Y. 420. If plaintiffs surrendered any rights through misrepresentation, their remedy is through an action for damages for the deceit. The orders and consents by plaintiffs were admissible in evidence for the defense. Edson v. Weston, 7 Cow. 281; Wilt v. Ogden, 13 Johns. 56; 18 Am. & Eng. Enc. Law, p. 540, note 9; Abb. Tr. Ev. p. 281; Civ. Code, § 4606. Plaintiffs may not possibly recover against defendant without first surrendering or canceling the notes. 6 Wait, Act & Def. p. 563; Holmes v. De Camp, 1 Johns. 34, 3 Am. Dec. 293; Gifford v. Carvil, 29 Cal. 595; Maloy v. Berkin, 11 Mont. 144-146, 27 P. 442. An indefinite agreement as to amounts will not support assumpsit. Harvey v. Condensed-Milk Co. (Me.) 42 A. 342. The amount that was owing and to be paid to plaintiffs from the $96,800 was designated by Miller and plaintiffs. The defendant could not establish that amount, but whatever was agreed upon between plaintiffs and Miller would have to be satisfactory to and binding upon defendant. If plaintiffs chose to enter into a new contract with Miller for a smaller purchase price, that price would be controlling upon the bank; and, if the bank paid plaintiffs a larger amount than thus agreed upon, it would be liable to Miller for the excess.

Again, under the pleading in this case, in order to recover, it was necessary for the plaintiffs to show: (1) A receiving by the defendant bank of money to the use of plaintiffs, respectively; (2) a demand by the plaintiffs, respectively, for the same, and a refusal or neglect on the part of the bank to comply with such demand. Proof of demand is essential in this class of actions. Civ. Code, § 2451. There was no demand.

From the seventh clause of the agreement it appears: (1) That there had been an agreement for at least one cash payment of pounds sterling5,000 before the cash payment of pounds sterling5,000 mentioned in said seventh clause was to be made. (2) That the cash payment of pounds sterling5,000 and the loan of pounds sterling15,000 were not to be made to Miller by handing the money directly to him, but part or the whole thereof was to be applied through the American National Bank in such a way as to aid Miller in acquiring and transferring, and the company in obtaining, a good title to the property, and be equivalent to payment to him, and only the surplus was to be paid to Miller. (3) That evidently Nimmo and Mitchell supposed some attachments, liens, incumbrances, claims, and demands existed against the property which Miller had contracted to purchase, and also that at least part of the purchase price had not been paid by Miller. (4) That the plain intention of the parties, as derived from the language of the seventh clause, was that the company should acquire a good title to the property to be conveyed to it by Miller, and that Miller should furnish a good title by the discharge of all liens and incumbrances that might injuriously affect the property, whether they were attachment liens, mechanics' liens, or vendors' liens, or all combined. (5) That it evidently occurred to Nimmo and Mitchell that, if the pounds sterling>20,000 were handed directly to Miller, he might not arrange matters so as to convey a satisfactory title to the company, and the acquisition of the mines by the company might fail. (6) That the money, therefore, with consent of Miller, was to be sent to the American National Bank, to secure the discharge of such liens, and make such payments of purchase money as would enable Miller to convey a satisfactory title to the company; the number and amount of the claims against the property being unknown to Nimmo and Mitchell. (7) That the purpose of paying through the bank any money due as purchase price was not to benefit McDonald and Cooney, but to protect the company, and, if McDonald and Cooney were thereby benefited, the benefit to them was only incidental. Nimmo and Mitchell owed neither a debt nor a duty to McDonald or Cooney, and there is not the slightest indication of an intention to create a trust or make a contract for the benefit of McDonald or Cooney. (8) That the bank was in no respect a trustee for McDonald or Cooney. If a trustee at all, it was for Nimmo and Mitchell or the company; Miller consenting to the arrangement, so that the proposed transfer of the mines to the company could be carried into effect. (9) That the bank was simply an agent for the company to watch the transfer of title. Its duty was that of an ordinary agent of the company, to do what the company itself might have done with Miller's consent to secure a good title.

The company had no concern for Miller's debts, or his creditors. It owed no duty or obligation to plaintiffs, and sought only its own protection. To Miller it was a matter of indifference whether the money paid certain claims or went to him. Only Miller, or the company, or Nimmo and Mitchell could complain of any breach of contract by the bank. Under the Codes of Montana, and the authorities to which we shall call the attention of the court, that agreement was not entered into for the benefit of plaintiffs, and was clearly not admissible in evidence. In the court below counsel for plaintiffs contended that the contract made the defendant the trustee of an express trust for the benefit of plaintiffs and that the contract could be enforced by plaintiffs, because it was made expressly for their benefit; and cited the following sections of the Civil Code to support their contention: Sections 2951, 2953, 2956, 3001, 2103. It will plainly appear that those sections do not tend in any way to support the contentions of the respondent. Section 3000 of the Civil Code is as follows: "Sec. 3000. The provisions of this chapter apply only to express trusts, created for the benefit of another than the trustor, and in which the title to the trust property is vested in the trustee; not including, however, those of executors, administrators and guardians, as such." It is doubtful whether the chapter containing that section was intended to apply to any trust property except real estate. The only section of our statutes authorizing the creation of express trusts is section 1314 of the Civil Code. That section is substantially section 55 of an article of uses and trusts, at page 728, 1 Rev. St. N.Y. That section appeared in Field's Proposed New York Civil Code, and came to Montana from California. In New York, except as used in the Code of Civil Procedure, the term "express trust" signified only a trust relating to real estate. Considerant v. Brisbane, 22 N.Y. 395; Brown v. Cherry, 56 Barb. 644. It seems to have been used with that meaning in section 3000 of the Civil Code of Montana. The language of the chapter is all applicable to trusts relating to real estate, and but little applicable to the simple disbursement of money by an agent. That the signification of "express trust," as used in the Civil Code, is as above stated, appears from section 570 of the Code of Civil Procedure. That section, as originally enacted in New York, did not contain the words, "a person with whom or in whose name a contract is made for the benefit of another is a trustee of an express trust within the meaning of this section." Voorhies' New York Code, § 113. Those words were added to the section in New York on the ground that "express trusts" were only trusts relating to real estate; and the section as amended has been adopted in Montana, together with substantially the section which declares what "express trusts" may be created, showing that in Montana "express trusts," as used in the Civil Code, were intended to apply only to real estate. If an express trust, in the broadest common-law sense of the term, was created by Exhibit A, it was not for the benefit of McDonald or Cooney. From the reading of the agreement it has already appeared that the arrangement as to the discharge of liens and unpaid purchase price was simply for the benefit and protection of the company, and provided a scheme for the purpose of such protection. Section 3001 of the Civil Code is simply a partial repetition of said section 2103, and to give it any application to this case it must be established that an express trust has been created for the benefit of another than the trustor, and that the title to the trust property has been vested in the trustee. This section 3001 states only one...