Melcher v. Exch. Bank of Jefferson City

• Decision Date: 31 October 1884
• Citation: 85 Mo. 362
• Parties: MELCHER v. THE EXCHANGE BANK OF JEFFERSON CITY, et al., Appellants.
• Court: Missouri Supreme Court

85 Mo. 362

MELCHER

v.THE EXCHANGE BANK OF JEFFERSON CITY, et al., Appellants.

Supreme Court of Missouri.

October Term, 1884.

Appeal from Cole Circuit Court.--HON. E. L. EDWARDS, Judge.

REVERSED.

Smith & Krauthoff and A. M. Hough for appellants.

(1) Injunction is not a proper remedy in this case. It is a well settled rule that an injunction will not be granted where there is a full and adequate remedy at law. High on Injunction, section 30. The plaintiff had his remedy at law. Milliken v. Shapleigh, 36 Mo. 596; Wilson v. Smith, 3 How. 763; Wells on Replevin, sec. 59; Groff v. Shannon, 7 Ia. 508; Murray v. Burling, 10 Johns. 172; Bissel v. Drake, 19 Johns. 66; Wilkins v. Hogue, 2 Jones' Eq. 479; Bigelow v. Andress, 31 Ill. 322; Waterman v Johnson, 49 Mo. 410. (2) But if injunction was the proper remedy, the right of the case on the evidence is with the defendants. The receipt shows that only the notes in the hands of Ewing & Hough were covered by the settlement. Grumley v. Webb, 44 Mo. 444; Maddux v. Bevan, 39 Md. 485. (3) Even if the settlement of Ewing & Hough was broad enough to cover other notes than those in their hands, they had no authority to include them o bind Aultman to deliver them. The power to compromise is not possessed by an attorney, unless expressly conferred by the client. Davidson v. Rozier, 23 Mo. 387; Walden v. Bolton, 55 Mo. 405; Spears v. Ledergerber, 56 Mo. 465; Weeks on Attorneys, 397, and notes.

G. T. White and Edwards & Davison for respondent.

(1) Injunction is a proper remedy. High on Injunction, section 12; Dunneroder v. Thias, 51 Mo. 100; Turner v. Stewart, 78 Mo. 480. (2) It was not necessary that there should have been any charge of insolvency or proof of the same. R. S., 1879, sec. 2722; Turner v. Stewart, 78 Mo. 480. But even if this was necessary, it stands admitted in the record that C. Russell & Company were bankrupts, and that Aultman was their assignee, that these notes were executed to him as such assignee, and that he was a citizen of the state of Ohio. The Exchange Bank was only a nominal party. (3) The attempt to construe the receipt given by Melcher's attorney, executed after the contract was made, into a contract of compromise cannot be sustained. (4) The statement that Edwards was fully advised as to what notes and accounts were being settled is unfounded in fact. The evidence of Edwards shows that no account was taken of the amount being settled, but the attorneys were settling the indebtedness between Melcher and Aultman, and this is not denied by Hough or any one else. (5) Aultman had full knowledge of the fact that his attorney had compromised with Melcher and he received the amount paid them in the compromise, and whether he had previously authorized them to compromise and settle with Melcher is immaterial. Semple v. Atkinson, 64 Mo. 504; Grumley v. Webb, 48 Mo. 584.

DEARMOND, C.

This is a proceeding by injunction to restrain defendants from collecting certain promissory notes signed by plaintiff as surety or guarantor, and to compel defendant, Aultman, to assign and deliver such notes to him and the other defendant to pay over to him the amount collected by it on a specified note. Melcher lived in Cole county, Missouri, Aultman in Ohio. The firm of C. Russell & Company had been adjudged bankrupts in a federal court in Ohio and Aultman appointed their assignee. Melcher had sold machinery for Russell & Company, and later made sales for their assignee under a contract, for the performance of which he gave bond. By this contract Melcher was required to guarantee in writing the payment of all notes taken by him for machinery sold for the assignee. This he did. But he fell behind in his accounts with Aultman and became insolvent. In course of time Aultman sent to Ewing & Hough, attorneys at Jefferson City, for collection an account against him for about six hundred dollars, and five promissory notes signed by him as guarantor, aggregating in amount about five hundred dollars. Not being able to obtain payment from the makers of these notes the attorneys turned to the guarantor and applied to him for payment of the notes as well as the account. The notes were shown to him and “figured up” and their amount ascertained in his presence. Negotiations for compromise and settlement began between J. R. Edwards, of Edwards & Davison, attorneys representing Melcher, and A. M. Hough, of Ewing & Hough, representing Aultman. They ended in a settlement, the terms and scope of which are in dispute in this action.

Edwards paid Hough four hundred and fifty dollars, and this receipt was passed: “Received of J. R. Edwards the sum of four hundred and fifty dollars, in full of all claims in our hands for collection against Nick. Melcher in favor of C. Aultman, assignee of Russell & Company, bankrupts, the same being an entire and full settlement between the said Aultman, assignee as aforesaid, for all notes, machinery and repairs of whatever kind and description, and all notes and claims of which Melcher is security or guarantor. All notes to be assigned to him for his own benefit.

EWING & HOUGH,

For C. AULTMAN, Assignee.”

Respecting this receipt Mr. Edwards in his testimony says this: “When I handed Hough the receipt to sign he made some objection to it, and asked me to put it in these words: ‘In our hands.’ I said to him, ‘Well, Hough, I don't know whether it makes any difference, as we are settling the whole matter between Melcher and Aultman, and if you prefer it I will add those words;’ he said, ‘I understand we are settling all Melcher's indebtedness to Aultman, but I don't want that fellow to come back on me if there should be other notes out; I don't know of any, and my understanding is that these are all the notes against Melcher.’ With this understanding and at the request of Mr. Hough I made the addition of the words in the receipt.”

The six hundred dollar account was receipted and the five notes, after being assigned “without recourse” by Aultman to Melcher, were handed by Hough to Edwards in an envelope. By the settlement Melcher acquired the property in five machines and a lot of repairs, theretofore belonging to Aultman, asssignee, valued at two hundred and fifty dollars. Some of the notes turned over were signed in German and Edwards did not notice what or how many notes were in the envelope. He swears positively that the settlement was of all Melcher's indebtedness to Aultman, and that all the notes signed by Melcher as surety or guarantor were to be by Aultman assigned to Melcher, for Melcher's own use and benefit. Neither Edwards nor Hough knew how many notes Melcher had so assigned. Neither knew that there were any such notes except the five put into Ewing & Hough's hands for collection. Hough told Edwards the five notes amounted to about five hundred dollars. No mention was made by Melcher or Edwards of any notes other than those five, and what Hough said on this point is shown in the evidence of Mr. Edwards above transcribed. Hough thought they were settling all the notes, as will further appear. Some time after this settlement, Melcher called at Edwards & Davison's office to get a note on one Phillip Koeppel. It was not in the envelope where the five notes, before in the hands of Ewing & Hough, were found. Upon inquiry it was learned that this Koeppel note which was for about one hundred and seventy dollars, was with another note for about one hundred and seventy-five dollars, and still another for seventy-five dollars, in the Exchange Bank for collection. These three notes were payable to Aultman, assignee, and signed by Melcher as guarantor, and had been placed in the bank by Aultman. Thereupon, Edwards, as attorney for Melcher, called upon Hough and told him what he had just learned, and asked Hough his recollection of their settlement. Hough expressed surprise at the turn of affiairs, and as indicative of his understanding wrote Aultman the following letter, which Edwards, to whom he showed it, agreed was according to his understanding, too:

“ C Aultman, Canton, Ohio.

DEAB SIR: Yours of the 28th ult. received. Our understanding was that we were settling Melcher's account with you as assignee. Nothing had been said about any other notes than those we held for collection in your letters to us or ours to you, and we were under the impression that the notes we held for collection and the account was the whole of his indebtedness. Melcher mentioned no other notes to us. While our receipts covered only the notes held by us and the account, we supposed that settled the whole of Melcher's indebtedness to you. Mr. Edwards to-day served a notice on us that he would on the fourteenth of March, 1881, present a petition to our circuit judge to restrain the collection of the notes held by the Exchange Bank and to compel a delivery and endorsement of them to Melcher.

Very Truly,

EWING & HOUGH.”

Meanwhile the bank collected the Koeppel note of one hundred and seventy dollars, and Melcher sued out a temporary injunction to...