Montgomery Door & Sash Co. v. Atlantic Lumber Co.

• Decision Date: 20 May 1910
• Citation: 92 N.E. 71,206 Mass. 144
• Parties: MONTGOMERY DOOR & SASH CO. v. ATLANTIC LUMBER CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

206 Mass. 144

92 N.E. 71

MONTGOMERY DOOR & SASH CO. v. ATLANTIC LUMBER CO.

Supreme Judicial Court of Massachusetts, Suffolk.

May 20, 1910

The following are the findings of the court referred to in the opinion:

'The plaintiff in April, 1904, made a contract to purchase eight car loads of lumber of the Ironton Door & Manufacturing Company. This lumber was delivered in four shipments in June and July, 1904. The price for these eight car loads after deductions for freight, shortages and differences in grading, was $1,932.60. Seven of these car loads had been purchased of the defendant by the Ironton Door & Manufacturing Company, and the price for these seven car loads after making similar deductions was $1,642.13. When each shipment was made by the Ironton Door & Manufacturing Company to the plaintiff, the Second National Bank of Ironton, Ohio, advanced to the Ironton Door & Manufacturing Company a sum of money representing the net estimated value of the invoice, and these advances were secured by an assignment of the debt for said shipments, and by notes for the amounts advanced signed by the Ironton Door & Manufacturing Company and payable to the Second National Bank. The invoice in each case was turned over to the bank with a carbon copy of an order which the Ironton Door & Manufacturing Company sent at the same time to the plaintiff requesting the plaintiff to pay the amount of the invoice when due to the bank. At the same time the bank sent the plaintiff notices to the effect that for advances made the Ironton Door & Manufacturing Company had given it orders for the shipments respectively and requesting the plaintiff to settle with the bank. Said advances amounted in all to $1,990, and were made as follows: June 18th $750; June 24th, $540; July 2d, $500; July 14th, $200. The bank took these assignments and made these advances in good faith in the regular course of business.

'On September 11, 1904, the plant of the Ironton Door & Manufacturing Company was burned and this was followed by the appointment of a receiver for the company and later by bankruptcy proceedings.

'In October, 1904, the defendant through its attorney one Wilson represented to the plaintiff that the Ironton Door & Manufacturing Company was insolvent when it ordered the lumber, and that the lumber which the plaintiff had purchased from the Ironton Door & Manufacturing Company was the property of the defendant and that the defendant alone was entitled to payment for the same from the plaintiff.

'The defendant further represented to the plaintiff that the supposed assignment of the debt for the lumber from the Ironton Door & Manufacturing Company to the Second National Bank not having been accepted by the plaintiff did not amount to anything in law.

'Thereupon the plaintiff paid the defendant through its attorney $1,899.42, being the net price for said eight car loads of lumber, one of which car loads had never been owned by the defendant, and the defendant being requested by the plaintiff to give the plaintiff an agreement which would indemnify the plaintiff against loss in making said payment, the defendant in consideration of said payment gave the plaintiff an agreement in the following form and represented that this agreement would so indemnify it.

"Montgomery Lycoming Co., pa.,

10/4 1904.

"Montgomery Door & Sash Co., Montgomery, Pa.

"Gentlemen: We will hold you harmless in respect to claims against you of the receiver of the Ironton Door & Manufacturing Co. to the amount of your indebtedness to them this day paid to us in accordance with the letter of attorney for said receiver, dated Oct. 3, 1904.

Yours truly,

"The Atlantic Lumber Co.

"By Wallace Wilson.'

'The plaintiff made said payment relying upon the defendant's said representations and believing that said agreement bound the defendant to indemnify the plaintiff against loss by reason of making said payment to the amount of said payment. The letter referred to in this agreement is a letter which said Wilson obtained from the attorney for the receiver of the Ironton Door & Manufacturing Company and delivered to the plaintiff. It stated in substance that it appeared to said attorney for the receiver that the defendant was entitled to a return of the goods or the money and that he as attorney for the receiver would not contest any action which the defendant might bring for a preference. The plaintiff was represented in all of these dealings with said attorney by one Henderson, its treasurer and business manager.

'Thereafter in the United States Circuit Court for the Middle District of Pennsylvania judgment was obtained by the Ironton Door & Manufacturing Company for the use of the Second National Bank of Ironton against the plaintiff, for the price of said eight car loads of lumber with interest and costs, amounting to $2,163.71, which the plaintiff paid on January 27, 1906.

'The court finds that the Ironton Door & Manufacturing Company was not insolvent when it ordered the lumber, that the lumber when invoiced to the plaintiff was the property of the Ironton Door & Manufacturing Company, and that the Ironton Company and those holding under it were entitled to the proceeds of the lumber and that the statement that the assignment to the Second National Bank did not amount to anything in law, was not true.

'The court finds that at the time when said money was paid by the plaintiff to the defendant, the plaintiff was indebted for said eight car loads of lumber to the Ironton Door & Manufacturing Company subject to the rights of the Second National Bank under said assignment, and that the defendant had no title to said lumber either legal or equitable which it could assert either against the said Ironton Door & Manufacturing Company or its receiver or its trustee in bankruptcy, or against the said Second National Bank. In making these findings as to the liability of the plaintiff the court has not considered the judgment obtained against it in the United States Circuit Court.

'The court finds that the plaintiff is entitled to recover under said agreement to the amount of the indebtedness paid the defendant by the plaintiff, which was $1,899.42, with interest from January 27, 1906, the date when the plaintiff actually paid for this lumber the second time. Payment was demanded of the defendant by the plaintiff January 17, 1906.'

COUNSEL

Fish, Richardson, Herrick & Neave (Jos. O. Proctor, Jr., and Harrison F. Lyman, of counsel), for plaintiff.

J. E. Hannigan and I.

Fox, for defendant.

OPINION

BRALEY, J.

The very full and complete findings of fact made by the judge before whom the case was tried without a jury, having been well warranted by the evidence so far as it appears in the record, are conclusive. American Malting Co. v. Souther Brewing Co., 194 Mass. 89, 80 N.E. 526. It is manifest that the plaintiff paid over the money in controversy upon the material misrepresentations made to its treasurer and business manager by the defendant's counsel and agent accompanied by the written promise of reimbursement if it was subsequently called upon to repay the amount to the Ironton Door & Manufacturing Company from which it purchased the lumber, or to the bank to whom the debt had been assigned. The defendant contends that under the declaration the rulings upon the findings as to its liability, which were given at the plaintiff's request were erroneous, and that its requests so far as not granted, were wrongly refused. The fourth and sixth counts were disposed of in the defendant's favor, and the demurrer to the seventh count although not expressly waived has not been pressed. But even if redundant this count sets out a good cause of action for money had and received, while the fifth count expressly declares upon the promise in writing. Woodbury v. Post, 158 Mass. 140, 33 N.E. 86. Nor was the plaintiff required to allege or prove, that the defendant's agent, whom the judge found was not aware of their falsity, knew that the representations were untrue. The plaintiff was induced to act to its harm and injury by relying upon what the agent said, and the defendant cannot escape repayment upon the ground, that although the statements were unfounded, the money can be retained, because at the time it believed them to be as represented. Talbot v. National Bank of the Commonwealth, 129 Mass. 67, 37 Am. Rep. 302; Chatham Furnace Co. v. Moffatt, 147 Mass. 403, 18 N.E. 168, 9 Am. St. Rep. 727; Nash v. Minnesota Title Insurance & Trust Co., 163 Mass. 574, 580, 40 N.E....