Odell v. Gray & Co.

• Decision Date: 31 October 1851
• Citation: 15 Mo. 337
• Parties: ODELL & FRINK v. GRAY & CO.
• Court: Missouri Supreme Court

15 Mo. 337

ODELL & FRINK

v.GRAY & CO.

Supreme Court of Missouri.

October Term, 1851.

ERROR TO ST. LOUIS COURT OF COMMON PLEAS.

This was an action of assumpsit, brought by Odell & Frink against the defendants, to recover from them a sum of money paid to them by one Griffin. The defendants pleaded the statutory plea. The record discloses the following facts: On the 26th day of February, 1848, plaintiffs left with Lake & Co. of New York, bankers, a note, made by Isaac Griffin, payable to the order of the plaintiffs, for the sum of $382 53, dated August 20th, 1847, payable in seven months from date, at the Bank of Missouri. The note was indorsed in blank by Odell & Frink, the plaintiffs, and was left with Lake & Co. for collection. Lake & Co. indorsed said note over to the defendants, and sent it to them at St. Louis for collection. The amount of the note was paid to defendants on the 23rd of March, and put to the credit of Lake & Co., who were, at that time, indebted to the defendants. On the 25th of March, 1848, defendants addressed a letter to Lake & Co. as follows:

“BANKING HOUSE, GEORGE E. H. GRAY & Co.

)

ST. LOUIS, March 25th, 1848.

)

Messrs. JOSEPH S. LAKE & Co. New York.--We sent you 23rd instant $186--we learn nothing from you to reply to--no mail for the last three days from the east: we have to your credit Isaac Griffin's, note paid $382 53-100. Please send us at your leisure account current of last month.

We remain yours, truly,

GEORGE E. H. GRAY & Co.”

On the 28th of March, Lake & Co. suspended payment, and about the middle of April of the same year, Franciscus, one of the defendants, visited New York, and had several conversations with Joseph S. Lake, of the firm of Lake & Co. At one of their conversations, Lake told him that the note of Griffin was left with Lake & Co. for collection; Franciscus said that Gray & Co. had put the amount to the credit of Lake & Co., and a settlement was made with defendants, and the amount allowed to them by said Lake & Co., although Lake & Co. had not charged the amount of said note to Gray & Co., on their book: they acted under legal advice in not doing so. Joseph S. Lake & Co. collected time and sight drafts for Gray & Co.; received money on deposit for them, and acted generally as bankers for them. Lake & Co. received from Gray & Co. from $25,000 to $30,000 per month, more or less. Geo. E. H. Gray & Co. collected promissory notes and bank bills for Lake & Co., payable at St. Louis, and in that neighborhood, as also defendants &c. Gray & Co. never discounted any paper for Lake & Co.; Lake & Co. told defendants, or one of them, at or before the settlement, that the plaintiffs claimed the amount of them. There was an understanding between Gray & Co. and Lake & Co., by which they could draw upon each other, whether they had funds in hand or not. The course of dealing between them was in accordance with that understanding, that drafts remitted were passed to the credit of the firm remitting. At the time the Griffin note was passed, Lake & Co. were indebted to Gray & Co. The Griffin note was indorsed in blank by plaintiffs, and by Lake & Co. indorsed to Gray & Co. and was remitted in the ordinary way in which other notes were remitted to Geo. E. H. Gray & Co. by Lake & Co.

It was admitted on the trial that Gray & Co. were private bankers, and that the following note was the identical note paid by Griffin to defendants:

$382 53:

NEW YORK, August 20, 1847.

Seven months after date, I, the subscriber, of Belleville, State of Illinois, promise to pay to the order of Odell & Frink three hundred eighty-two and fifty-three hundreth dollars, at the Bank of Missouri at St. Louis: Value received.”

Indorsed. “Odell & Frink, pay George E. H. Gray & Co., or order. JOSEPH S. LAKE & Co.”

Plaintiffs further proved by Pierce C. Grace, that on the 20th of April, 1848, he demanded the proceeds of said note of the defendants, and the defendants refused to pay the same, stating to him that they had passed it to the credit of Lake & Co. Upon this state of facts, the plaintiffs asked the following instruction which was given: 1. If the jury believe from the evidence, that George E. H. Gray & Co., at the time of the receipt of the Griffin note, had notice, either express or implied, that Joseph S. Lake & Co. had no interest in said note, and that it had been transmitted to said defendants for collection, merely as agents, then Gray & Co. were not entitled to retain, against the plaintiffs, the proceeds of said note for the general balance of their account against Lake & Co.

The following, asked by the plaintiff, were refused: 2. And if Gray & Co. had not notice that Lake & Co. were merely agents, but regarded and treated them as owners of the said note, yet Gray & Co. are not entitled to retain the proceeds of said note against the plaintiffs who were the real owners, unless credit was given to Lake & Co. or balances were suffered to remain in their hands to be met by these notes, or by such negotiable paper transmitted or expected to be transmitted in the usual course of the dealings between the banking-houses of Gray & Co. and Lake & Co. 3. In order to entitle the defendants to retain the proceeds of said note by virtue of their lien as bankers, the jury must find from the evidence, that the defendants made advances or gave new credit on account of their note or on account of the expectation of the transmission of such notes without notice that their note was sent for collection merely by Lake & Co. as agents for the owner. 4. If the jury believe from the evidence, that the collection of notes by the house of Gray & Co. for the house of Lake & Co. was only an occasional transaction, that the principal and legitimate business between said banking-houses, was in buying and selling exchange on each other, pursuant to an agreement or arrangement made before the Griffin note was sent to the defendants for collection and that defendants did not make any advances on the note to Lake & Co. or give Lake & Co. credit for any advances then made or to be made, upon the deposit of said note with them or upon the transmission of such paper to defendants by Lake & Co. in the usual course of their mutual dealings of the like nature, and that the plaintiffs were the real owners of said note and indorsed it to Lake & Co, for collection only, and that the defendants have received the proceeds of said note from Griffin, the maker, and have not since the receiving of said proceeds paid them over to Lake & Co., previous to the notice of the plaintiffs' interest in said note, then the jury will find for the plaintiffs and assess the damages at the amount of the note, with interest from the time payment thereof was demanded of defendants, deducting therefrom the usual commission allowed to brokers for collecting such paper. 5. The note in question, not being negotiable by the law of Missouri, the defendants in this action could not acquire a lien on the proceeds thereof by virtue of the assignment of Lake & Co.

The court, on defendant's motion, gave the following instructions: 1. If the jury find from the evidence that the note of Isaac Griffin, sued upon in this case, was indorsed by Odell & Frink to Lake & Co. and by Lake & Co. indorsed to the defendants, and that defendants received the money and put the same money to the credit of Lake & Co. before their failure in the ordinary course of business as brokers and in accordance with their business also with Lake & Co., and at the time of so putting it to the credit of Lake & Co., said Lake & Co. were indebted to the defendants in a sum larger than said note, and that defendants had no notice of plaintiffs' claim to said note, they will find for the defendants. 2. If Lake & Co. were indebted to the defendants at the time they collected their money on the note in question, the defendants were authorized to place it to the credit of Lake & Co. (if said defendants had no notice of a special claim or ownership on the part of the plaintiffs), and if the jury find from the evidence that this was in the ordinary course of business between Lake & Co. and defendants, it is equivalent to payment, and is sufficient to exonerate the defendants from liability to the plaintiffs and they will therefore find for the defendants. The plaintiffs became non-suited with leave to move to set the same aside. The motion was overruled and the plaintiffs sued out a writ of error.

HILL, for Plaintiffs. I. Odell & Frink never put this note in circulation by their indorsement; it was never treated by defendants as a note in circulation, it was sent to them for collection only; it was received and treated by defendants as such paper, and they claimed the proceeds by virtue of their lien as bankers, and not as holders for value. II. The usages of trade and the customs of bankers prove this paper to have been sent for collection and not for discount; and defendants so treated it and claimed no other title. 1 Peters, 29, 30; 6 Conn. R. 521. III. The real owners of the note are the plaintiffs, and the defendants claim it, because plaintiffs trusted defendants' sub-agents and intimate correspondents with it, for collection. Defendants have no claim against plaintiffs, but would take their money to pay for the losses of the defendants by their misplaced confidence in Lake & Co., their brokering agents in New York. IV. Defendants and Lake & Co. were intimate friends and agents of each other; plaintiffs knew nothing of defendants, but as plaintiffs trusted Lake & Co. with a note for collection; defendants claim the right to appropriate it to their own use. It is humbly submitted, that this should be done in due form of law, and with all reasonable solemnity. V. Defendants gave no credit to Lake & Co. on the receipt of this note, and the money collected is now in defendants' hand; it does not belong to defendants, but does belong to plaintiffs; and the proceeds should be awarded to the rightful owners. VI....