Scanlan v. Hodges, 20.

• Decision Date: 03 October 1892
• Docket Number: 20.
• Citation: 52 F. 354
• Parties: SCANLAN et al. v. HODGES et al.
• Court: U.S. Court of Appeals — Eighth Circuit

52 F. 354

SCANLAN et al. v. HODGES et al.

No. 20.

United States Court of Appeals, Eighth Circuit.

October 3, 1892

Statement by CALDWELL, Circuit Judge:

This suit was brought in the circuit court of the United States for the district of Minnesota by Lyman F. Hodges and Samuel Y. Hyde, the defendants in error, against Michael Scanlan and O. G. Wall, the plaintiffs in error, to recover the value of 24 car loads of wheat, alleged to be of the value of $8,601.90. The defendants in error were dealers in wheat on the Southern Minnesota Railroad, with headquarters at La Crosse, Wis. The plaintiffs in error were bankers, doing business under the name of Bank of Lanesboro, at Lanesboro, a station on the railroad, in Minnesota, about 50 miles west of La Crosse. At Lanesboro there was a firm engaged in operating flour mills under the name of Lanesboro Milling Company.

The complaint alleges 'that in the year 1884 the plaintiffs and the defendants entered into an agreement and arrangement whereby the Lanesboro Milling Company, a company doing business as millers in said Lanesboro, were to order from the plaintiffs such wheat as they desired to use in their milling business, and that the plaintiffs would deliver said wheat free on board of cars to said defendants, and the same should be consigned by rail to said defendants under their style of Bank of Lanesboro. That said bank would receive said wheat and hold possession thereof until the said Lanesboro Milling Company paid for the same, when the bank was to remit therefor to the plaintiffs; or, in default of so holding possession, defendants agreed to pay for said wheat themselves. That under said agreement and arrangement wheat was shipped by plaintiffs to the Bank of Lanesboro, as ordered by the Lanesboro Milling Company, almost daily from May, 1884, up to April 9, 1889. The wheat was consigned in the same way, and the said defendants have during all of said time, up to March, 1889, paid on presentation the bills for the price of said wheat. ' That between March 8 and April 9, 1889, plaintiffs, at the request of the milling company shipped to defendants 24 cars of wheat, which 'was all received by the defendants under the agreement above stated. * * * That the said defendants, in violation of their contract with plaintiffs, allowed said Lanesboro Milling Company to take possession of and use said wheat without collecting or receiving the price therefor;' and that the mill company has not paid for the same, and is insolvent; and they demand judgment for the value of the wheat.

In their answer the defendants admit that the plaintiffs sold wheat to the milling company, and shipped it by rail consigned to the defendants; 'but the defendants never had, nor was it agreed or understood that they should have possession of or dominion over or any responsibility for the said wheat, except to give an order for its delivery on payment therefor, and to transmit to the plaintiffs, less exchange, on payment therefor to them by the said milling company. ' They deny that they ever authorized deliver to the milling company of any of the wheat shipped under that arrangement until it was demanded and paid for by that company, or that any wheat was delivered to them by the plaintiffs.

Prior to June, 1884, one Easton owned and managed the Bank of Lanesboro, and there existed between him and the defendants in error and the milling company an arrangement by which the wheat sold by the defendants in error to the milling company was consigned to the bank upon the understanding expressed in the following letter:

'La Crosse, Wis., May 12th, 1884.

'Bank of Lanesboro, Lanesboro, Minn.-- Gents: Hereafter our agent on the railroad will send bill of wheat shipped you for Lanesboro Milling Company, and we shall expect you to collect on those bills, and not wait for a bill from our office, unless you stand in the gap,-- that is, become responsible for the wheat. If there are any errors, the mill company and our firm can adjust afterwards. We inclose a list of freights from stations that are liable to ship there. We will advise our agents to put rate of freight on bills.

'Yours, truly, HODGES & HYDE.

'We ship the wheat to you to collect before the wheat is delivered.

'H. & H.'

About the 1st of June, 1884, the plaintiffs in error became the owners of Bank of Lanesboro, and succeeded to its business, which they continued to conduct in that name. At their respective dates the defendants in error wrote the plaintiffs in error the following letters:

'HODGES & HYDE.

'Dealers in Grain and Produce on the Southern Minnesota Division of the C.,

C., M. & St. P. Ry.

'La Crosse, Wis., June 6th, 1884.

'Bank of Lanesboro, Lanesboro, Minn.-- Gents: Your favor 5th inst., with statement, at hand. If possible, we will examine account before this letter is mailed. We are surprised at your inquiry, how about wheat shipped to Lanesboro Milling Co.? as we supposed you knew all about it, and had been following method as follows: We ship wheat from certain stations to Bank of Lanesboro. At time of shipment, our agent at station shipped from, mails an invoice to Bank of Lanesboro. On arrival of car of wheat, Bank of Lanesboro collects the bill from and delivers the wheat to Lanesboro Milling Co. Bk. of L. then credits our account with the amount collected. Why the inquiry? Has Bk. of L. changed proprietors?

'HODGES & HYDE. 'CLARKE.' 'June 18th, 1884.

'Messrs. Scanlan & Wall, Home Exchange Bank, Lanesboro, Minn.-- GENTLEMEN: We have sold to Lanesboro Milling Company eleven cars of wheat, which will be shipped to you. The price of wheat is 91 cents per bushel, less freight to of each car please collect amount from Lanesboro Milling Company, then deliver wheat, and remit proceeds to us. * * *

'Your friends, HODGES & HYDE.

'CLARKE.' The course of business was this: When a car of wheat was shipped to the bank the defendants in error sent to the bank a bill therefor in the following form:

'WELLS, MINN., March 14th, 1889.

'Bank of Lanesboro, Lanesboro, Minn., to Hodges & Hyde, Dr., Dealers in Coal, Grain, and Produce: 'On Southern Minnesota Division, C., M. & St. P. Railroad.

'1 car wheat, No. 5,594, Am't.

'467 bushels, at 85c. $396.95.'

At the same time the milling company was advised of the shipment by a notice in the following form:

"LA CROSSE, WIS., March 8th, 1889. "Wheat shipped to Lanesboro, Minn. "Bought of Hodges & Hyde, "Dealers in "Grain and Produce. "On the Southern Minnesota Division, C., M. & St. P. Railway. "DATE. CAR. WHERE FROM. BUSHELS. GRADE. PRICE. AM'T. "One (1) car wheat. "5304 Mapleton 462 76c. "Tare 15 4 1/2 --------- -------- "447 80 1/2 $359.80."

The defendants in error continued to ship wheat to the bank and the bank continued to collect and remit, less its exchange, for the wheat consigned and billed to it from June, 1884, until May, 1889. The shipments amounted on an average to 6 car loads of wheat per week, averaging in value about $350 per car, making the total value of all shipments for the while period between $500,000 and $600,000. During this time the business was conducted to the satisfaction of both parties, and without complaint, save in one instance, the occasion and the nature of which is shown by the following correspondence: On the 6th day of January, 1889, the defendants in error wrote the plaintiffs in error the following letter:

'(Confidential.) JAN. 6th.

'Bank of Lanesboro, Lanesboro, Minn.-- GENTS: There are 34 cars wheat billed to your bank by us that has not been paid for. We understand they have been, or most of them have been, unloaded. Now, will you please tell us just how this matter stands? We are holding you, and we suppose you are holding the R.R. Co. We presume this matter is all right, but it implies a good deal of money, which we want before you give orders to have it unloaded. Have they the wheat on hand that is not paid for? We hope this matter will come out O.K. without trouble; and please consider this letter confidential.

Yours truly, HODGES & HYDE.'

To this letter the plaintiffs in error made the following answer: 'M. SCANLAN, President. O.G. WALL, Cashier.

'Bank of Lanesboro. Scanlan & Wall, Successors to J. C. Easton.

'LANESBORO, MINN., 1-7-1889.

'Messrs Hodges & Hyde, La Crosse-- DEAR SIRS: Yours 6th at hand. The railroad company, through its agent here, had permitted L. M. Co. to unload cars without orders from us, we exacting payment for all cars delivered by order. The auditor of the road came along one day this week, and checked up agent, and got 'onto' the arrangement, which precipitated a crisis. I delivered the company (its agent) orders fort b cars, taking a bill of sale of all wheat, flour, and stock in the mills, and an assignment of all insurance covering the same, ($9,000.) There was, approximately, $9,000 to $10,000 worth of wheat on hand, or in flour ready for shipment, at this time. I have since then remitted you nearly $3,000, and would have been able to have remitted you $2,000 more to-day had it been possible to handle the cars, but the push engine is off bucking snow, and will not be back until to-night, if then. If the stock can be gotten out, I will be able to remit you $2,000 or $3,000 to-morrow. It will be ready for the cars, and I trust we will be able to get them set in where they can be loaded. I have taken every precaution to be on the safe side, and think everything safe, and assure you that it will be looked after with more anxiety on our part than you can feel. If the cars can be handled, the while matter can be cleaned up by the middle of next week. Car '20 Tyler,' 600 bushels, is not unloaded yet, and will not be until all else is cleaned up. Please send me a statement of all...