McGarry v. Tanner & Bakes Co.

• Decision Date: 23 November 1899
• Parties: JAMES MCGARRY, APPELLANT, v. TANNER & BAKES COMPANY, A CORPORATION, RESPONDENT
• Court: Utah Supreme Court

59 P. 93

21 Utah 16

JAMES MCGARRY, APPELLANT, v. TANNER & BAKES COMPANY, A CORPORATION, RESPONDENT

Supreme Court of Utah

November 23, 1899

Appeal from the Fifth District Court, Beaver County, Hon. E. V. Higgins, Judge.

Action to recover money loaned defendant company at the request of its manager. From a judgment for defendant plaintiff appealed.

Reversed and remanded.

T Marioneaux, Esq., for appellant.

"An action for assumpsit for money had and received is an equitable remedy that lies in favor of one person against another, when the other person has received money either from the plaintiff himself or third persons, under such circumstances that in equity and good conscience he ought not to retain the same, and which ex aequo et bono belongs to the plaintiff." Soderberg v. Kings County, 45 P 785; White Pine Co. Bank v. Sadler, 6 P. 941; Reed v. Calderwood, 22 Cal. 463; Kreutz v Livingston, 15 Cal. 347; State v. Village of St. Johnsburg, 1P A., 531; P. H. Zang B. Co. v. Bernheim, 44 P. 380; Pauley v. Pauley, 40 P. 29; Winningham v. Foucher, 52 Mo.App. 458; McGeorge v. Harrison Chem. Co., 21 A. 671.

And this is true although defendant is in ignorance of the fact that it is the plaintiff's money. Walsh v. National Bank, 32 N.Y.S. 794, s. c. 33 N.Y.S. 998; Newman v. N. A. S. Co., 113 Mass. 362.

Proof of the delivery of the money to Bakes was alone sufficient evidence for the jury on the question of receipt of the money. Newman v. N. A. S. Co., 113 Mass. 362; Abbott's Trial Evidence, 275; Tuttle v. Mayo, 7 Johns 132.

It is true that a note was taken by the lender in each case from Bakes and Edwards individually, and while in the absence of all evidence to the contrary this fact may raise an inference of an intent upon the part of the lenders to take these notes as payment; this is but a presumption which yields to evidence of a contrary intention. Story on Prom. Notes, Secs. 104-5, 404; Daniels on Negotiable Inst., Sec. 1261, Vol. 2, p. 256; Dellapiazza v. Foley, 44 P. 727; Torney v. Hadley, 27 Barb. (N.Y.) 192; Nael v. Murray, 13 N.Y. 167; Schermerhorn v. Laines, 7 Johns. (N.Y.) 311; King v. Lowry, 20 Barb. (S.Ct.) 532; 18 Am. & Eng. Ency. of Law, pp. 167 and 171; Higby v. N.Y., etc., R. R. Co., 13 Bosw. (N.Y.) 497, s. c. 7 Abb. Pr. (N.Y.) 259.

William F. Knox, Esq., and D. D. Houtz, Esq., for respondent.

Plaintiff having brought this action upon an expressed contract alone, can not recover upon any other. Clark v. Sherman, 32 P. 771; Distler v. Dabney, 28 P. 335; Hinkle v. San Francisco, etc., 55 Cal. 627; Jeffersonville v. Worland, 50 Ind. 339; Woolsey v. Ellenville, 23 N.Y.S. 41; Christian College v. Hindley, 49 Cal. 347; Werlni v. Collins, 54 N.Y. 365; Prixler v. Nichols, 8 Iowa 106.

The only contracts, shown by the evidence, then, are those contained in the writings; Bakes and Edwards only are liable upon them. Tiedeman on Commercial Paper, Sec. 87; Randolph on Commercial Paper, Sec. 147; Slackpole v. Arnold, 11 Mass. 27; Bedford Com. Ins. Co. v. Covell, 8 Metc., 442; Slawson v. Lasing, 5 Allen, 340; Davis v. England, 141 Mass. 587; Tucker v. Mfg. Co., 98 Mass. 101; Moffat v. Hampton, 31 S.W. 881; Casco Nat'l Bank v. Clark, 139 N.Y. 307; Sparks v. Dispatch Co., 15 S.W. 417.

There being no original authority in Bakes to borrow money, his doing so could only become binding upon the respondent by its ratifying his acts. Knowledge of the material facts is a prerequisite to a ratification. Mechem on Agency, Secs. 128-9, 148; 1 Am. & Eng. Ency. Law, 432. Bakes could not rectify his act. Mechem on Agency, Sec. 121.

We hold that though a person may be present when money is borrowed by another for him, and though it may be delivered there to him, he would not be liable for its return without his agreement to pay it in case the borrower failed. Railroad National Bank v. The City of Lowell, 109 Mass. 214; Kelley v. Lindsey, 7 Gray 287; Henry v. Wilkes, 37 N.Y. 562; Spooner v. Thompson, 48 Vt. 259.

BARTCH, C. J. MINER, J., and BASKIN, J., concur.

OPINION

BARTCH, C. J.

The material allegations in the complaint in this case are substantially as follows: That W. H. Bakes was the active manager and superintendent and had sole and exclusive charge of the business of the defendant, a corporation; that on February 13, 1896, Bakes requested the plaintiff to loan the corporation $ 250, and agreed, on behalf of the corporation, that if plaintiff would loan it that sum, the corporation would repay him, on or before August 2, 1896, with interest at 12% per annum from date until paid; that then and there, in consideration of said promise of repayment, the plaintiff delivered $ 250 to Bakes, as the agent of the corporation, and for its use and benefit; that the agent Bakes immediately delivered the money to the corporation, which immediately received it and applied the same to its own use and benefit, with the knowledge that the money had been furnished by the plaintiff; that, as security for the loan to the corporation, Bakes delivered to the plaintiff a promissory note, dated February 13, 1896, for $ 250, payable to plaintiff on or before August 2, 1896, with interest at 12% per annum from date thereof until paid, signed by Bakes and Moses Edwards; that at maturity of the note the plaintiff demanded payment from the makers, and, upon their failing to pay, demanded payment of the $ 250 loaned, from the defendant, but it also refused and still refuses to pay; and that the whole sum remains due and payable to the plaintiff by the corporation.

The complaint contains substantially the same allegations for a second cause of action, in respect to a loan, made to the defendant, by one W. P. Smith, of the same amount, on March 10, 1896, payable June 10, 1896, together with an allegation showing an assignment of Smith's cause of action to plaintiff.

The answer admits the corporate existence of the defendant, denies generally the allegations of the complaint, and as affirmative matter, alleges that Edwards, who signed the notes with Bakes, was indebted to the corporation, and to reduce the indebtedness he borrowed the sums of money sued for, and gave the notes with Bakes as surety, and afterward paid the same to Bakes requesting him to apply it to such indebtedness, and that Bakes credited the amount to the account of Edwards.

At the trial, when the plaintiff rested, on motion of defendant a non-suit was granted, and on this appeal the action of the court in the premises has been assigned as error.

The motion, as shown by the transcript, was made on the ground "that the evidence introduced, on the part of plaintiff, does not establish the allegations of his complaint -- does not prove the facts therein stated." This motion presented no question of variance, nor did it attack the sufficiency of the complaint. Much of the argument of counsel in their briefs, therefore, is not relevant to the controlling question presented by the motion, which is simply whether the proof established a prima facie case.

It will be noticed from the pleadings that the two sums of money sued for were admittedly borrowed from the plaintiff, and his assignor, and the material issue, therefore, was as to who actually borrowed it -- whether Edwards or the corporation.

To determine whether or not a prima facie case was made out, we must ascertain what the proof was upon this issue.

From the testimony it appears that W. H. Bakes, at the time the transactions in question took place, and for a number of years prior thereto, carried on the...