Rogers v. Union Stone Co.

• Decision Date: 08 April 1881
• Citation: 130 Mass. 581
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: Thomas M. Rogers & another v. Union Stone Company

130 Mass. 581

Thomas M. Rogers & another v. Union Stone Company

Supreme Court of Massachusetts

April 8, 1881

Argued May 10, 1879; October 1, 1878; October 3, 1879

Worcester. Contract, in two counts. The first count alleged that the plaintiffs were the assignees in bankruptcy of a corporation named the Wood and Light Machine Company; that before the bankruptcy, Buchanan, Ware and Company made an order upon the defendant, a copy of which was annexed directing it to deliver certain goods, therein specified, to the Wood and Light Machine Company; that the defendant duly accepted said order, and thereby became liable to deliver to said company said goods, to the value of two thousand dollars; and that the defendant, though often requested, had failed to deliver said goods to said company, or to the plaintiffs, as their assignees in bankruptcy.

The second count, which was for the same cause of action, alleged that the defendant made an agreement in writing, a copy of which was annexed, agreeing to deliver to the Wood and Light Machine Company certain goods, therein specified, to the value of two thousand dollars; and that the defendant, though often requested, had refused to deliver said goods to said company, or to the plaintiffs, as its assignees in bankruptcy.

The copy annexed to both counts was as follows: "Worcester January 8, 1876. Union Stone Co., Boston, Mass. Please deliver Wood and Light Machine Company, or order, two thousand dollars in emery wheels and emery goods, hones, slips, &c. as per our order of October 20, 1875. Buchanan, Ware & Co."

Across the face of this order was written: "Two thousand dollars emery goods at our list prices. Accepted, January 8, 1876. J. F. Wood, Treas."

Answer: 1. A general denial. 2. That the order or agreement was never presented to, or demand made upon, the defendant, and that payment was never refused. 3. That the order and agreement were given as collateral security for the payment of certain notes which had been fully paid and satisfied; and that said original claims were never possessed by the plaintiffs.

Trial in the Superior Court, without a jury, before Aldrich, J., who found the facts to be as follows:

Buchanan, Ware and Company signed the order declared on, and the acceptance was signed by the treasurer of the defendant corporation. On January 10, 1876, the order so accepted was delivered to the Wood and Light Machine Company, to be held by it as collateral security for the payment of five promissory notes by Buchanan, Ware and Company, and payable to their order. On January 12, 1876, the Wood and Light Machine Company filed a voluntary petition in bankruptcy. The first note was paid by Buchanan, Ware and Company, but the others are unpaid, though due. The plaintiffs made a demand on the defendant for the goods mentioned in the order, and the defendant refused to deliver the goods.

The defendant asked the judge to rule that the plaintiffs could not recover. The judge refused so to rule; and ordered judgment for the plaintiffs, for the amount of the four notes unpaid. The defendant alleged exceptions.

Exceptions sustained.

F. T. Blackmer & F. W. Griffin, for the defendant.

F. P. Goulding, for the plaintiffs.

Endicott, J. Field, J., absent.

OPINION

Endicott, J.

It appears that Buchanan, Ware and Company had a contract with the defendant for the delivery of certain goods, and on January 8, 1876, they signed an order directed to the defendant to deliver to the Wood and Light Machine Company two thousand dollars in the said goods. The order was accepted by the defendant's treasurer on the same day, and, on January 10 following, was given to the company to hold as collateral security for the payment of five promissory notes of that date, signed by Buchanan, Ware and Company.

This order was for the delivery of two thousand dollars to be paid in merchandise, and is not negotiable. Gushee v. Eddy, 11 Gray 502. It was said by Mr. Justice Metcalf in Sears v. Lawrence, 15 Gray 267, "The law and incidents of a bill of exchange do not attach to such an instrument."

By the acceptance merely of this order the defendant entered into no contract with the Wood and Light Machine Company. The company was no party to the contract, and if the defendant made any binding contract by accepting the order, it was with Buchanan, Ware and Company.

This case falls within the rule laid down in numerous decisions in our reports, and which is well stated in Exchange Bank v. Rice, 107 Mass. 37, "that a person who is not a party to a simple contract, and from whom no consideration moves, cannot sue on the contract, and consequently that a promise made by one person to another, for the benefit of a third person who is a stranger to the consideration, will not support an action by the latter." See also Millard v. Baldwin, 3 Gray 484; Field v. Crawford, 6 Gray 116; Dow v. Clark, 7 Gray 198; Pettee v. Peppard, 120 Mass. 522; Gamwell v. Pomeroy, 121 Mass. 207; Cottage Street Church v. Kendall, 121 Mass. 528; Prentice v. Brimhall, 123 Mass. 291.

The exceptions to this rule, so far as they have been at any time recognized in this Commonwealth, are stated and discussed in Mellen v. Whipple, 1 Gray 317, as well as in Exchange Bank v. Rice, and need not be further considered, inasmuch as the case at bar does not fall within them.

Nor do the cases of Walker v. Sherman, 11 Met. 170, Sears v. Lawrence, 15 Gray 267, and Eastern Railroad v. Benedict, 15 Gray 289, furnish any support to the plaintiffs. The facts in those cases distinguish them from this case.

In Walker v. Sherman, it was held that a suit could be maintained by the payee against the acceptor of an order for merchandise, upon proof that the drawer was in debt to the payee when the order was drawn, that it was given in payment of the debt, and was accepted at the request of the drawee when it was drawn; all the parties being present at the acceptance. The fact that the order was given in payment is relied on in the opinion by Mr. Justice Wilde, as showing that the plaintiff could maintain no action except on the order; and as loss to the plaintiff, as well as benefit to the defendant, would be a good consideration, there was a sufficient consideration to support the promise. And even if it was not given in payment of the debt, yet the other facts would authorize the inference that the plaintiff agreed to forbear suing the drawer on receiving the order. It is upon this last ground that the case is cited as authority by Mr. Justice Wilde in Johnson v. Wilmarth, 13 Met. 416, 421; by Chief Justice Shaw in Boyd v. Freize, 5 Gray 553, 555; and by Mr. Justice Bigelow in Mecorney v. Stanley, 8 Cush. 85, 88. As the payee was present when the order was accepted, the facts would have also warranted the inference of a direct promise to the plaintiff by the acceptor. There is no evidence in the case before us, that there was any agreement to forbear to sue the drawer by the payee, as the debt for which he finally took the order, as collateral security, apparently was not contracted until after the order was drawn and accepted; and, if it were, the defendant had no knowledge of the transaction. Ellis v. Clark, 110 Mass. 389.

In Sears v. Lawrence, it was held that an oral promise by the drawer of an order payable in merchandise, after he knew it had not been fulfilled, to deliver the merchandise, would not support an action. The remark of Mr. Justice Metcalf in delivering the judgment, that the plaintiff could maintain an action against the acceptor if there was a legal consideration for the acceptance, must be understood to mean, if the acceptance was made after the order passed into the hands of the plaintiff, by a promise to him. The remark, not being necessary to the decision of the case, is not so carefully limited and qualified as it would otherwise have been.

In Eastern Railroad v. Benedict, one Fuller agreed with the defendant to deliver him a quantity of goods to be paid for in the stock of a corporation, and afterwards drew his order on the defendant to give a certain number of shares to the plaintiff, and the defendant promised the plaintiff to deliver the stock accordingly, and the action was maintained. In the case at bar there was no promise to the plaintiffs by the defendant, at the time the order was drawn or afterwards, to pay the order or deliver the merchandise. And, in the opinion of a majority of the court, the case as presented to us falls within the general rule stated in Exchange Bank v. Rice.

Exceptions sustained. ^[*]

A new trial was had at September term 1879, before Pitman, J., without a jury. The plaintiffs were allowed, against the defendant's objection that the same was not admissible under the pleadings, and otherwise, to put in evidence tending to show the following facts:

On or about January 8, 1876, the Wood and Light Machine Company had completed a lathe which it had been manufacturing on account and on the order of Buchanan, Ware and Company, who had employed the Wood and Light Machine Company to manufacture it in consequence of an order which they had received from the defendant. Buchanan, Ware and Company had agreed to pay cash for said lathe; and, on January 8, Ware, of the firm of Buchanan, Ware and Company, Wood, the treasurer of the defendant, and Howland, the agent of the Wood and Light Machine Company, met in Worcester. At this interview Ware asked Howland to take the notes of Buchanan, Ware and Company for the lathe; Howland refused, but offered to take them if indorsed by the defendant. Wood objected that he had, as treasurer, no authority to indorse notes. Thereupon it was agreed between all the parties that Buchanan, Ware and Company should pay one thousand dollars in...